Common use of Borrower Deposits Clause in Contracts

Borrower Deposits. If, with respect to any Investment, any borrower is required to make a good faith deposit in addition to a commitment fee, and the loan is not closed for reasons due to such borrower’s failure to perform its obligations as described in the loan application, then Principal shall recommend to Lender, based on its standard of practice as to such deposits, whether such deposit should be refunded after deduction of any due diligence expenses incurred by Principal or an affiliate, which recommendation Lender shall approve or disapprove in its sole discretion in writing within five (5) business days of receiving such notice. If such deposit is not refunded, such deposit (net of such due diligence deductions) shall be promptly forwarded to Lender. If such deposit is not refunded to such borrower and such borrower subsequently commences legal proceedings related to such deposit, then (a) if Lender has retained such deposit against the recommendation of Principal, Lender shall pay all costs associated with defending such legal proceedings, and (b) if Lender has retained such deposit in accordance with the recommendation of Principal, Lender shall pay all costs associated with defending such legal proceedings provided that Principal has provided to Lender all information otherwise required by this Agreement. In the case of Section 4.05(b), Principal shall be responsible for all such costs in the event of a failure by Principal to provide all such information.