Note Forgiveness Clause Samples
The Note Forgiveness clause specifies the conditions under which a borrower's obligation to repay a promissory note is partially or fully forgiven. Typically, this clause outlines specific events or milestones—such as completion of a service period, achievement of certain performance targets, or occurrence of hardship—that trigger forgiveness of the debt. By clearly defining when and how forgiveness applies, this clause provides both parties with certainty regarding potential debt relief and helps incentivize desired actions or outcomes.
Note Forgiveness. If Employee is terminated pursuant to Section 5(a), (b) or (d) or terminates pursuant to Section 5(e), (g) or (h), the Company shall (i) forgive that portion of the principal balance of the Share Purchase Note equal to (A) the outstanding balance of the Share Purchase Note on the Termination Date less (B) an amount equal to the average closing price for the Company's shares during the 20 trading days prior to the Termination Date times the number of Program Shares held by Employee on the Termination Date, multiplied by (C) a fraction, the numerator of which is the number of Program Shares held by Employee on the Termination Date and the denominator is the number of original issue Program Shares purchased with the proceeds of the Share Purchase Note and 1997 Note, and (ii) pay a Gross-Up Payment to Employee in consideration of such Note forgiveness. If Employee is terminated pursuant to a Hostile Change in Control, the Company shall forgive the entire principal balance of the Share Purchase Note and pay a Gross-Up Payment to Employee in consideration of such Note forgiveness. Unless surrendered to the Company for cancellation, all Program Shares purchased with the proceeds of the Share Purchase Note and/or the 1997 Note which are held by Employee as of the date of any Share Purchase Note forgiveness (other than upon a Hostile Change in Control) and which have an aggregate value (as determined under Section 6(e)(B)) equal to or less than the amount of the principal balance of the Share Purchase Note shall be cancelled on the books of the Company and the value of those cancelled Shares shall be applied toward the principal balance of the Share Purchase Note, with any remaining Shares whose value exceeds such principal balance to be retained by Employee. Employee designates the Secretary or any Assistant Secretary of the Company as his attorney-in-fact to effect such cancellation, which power is coupled with an interest and shall survive the death, Disability or incompetence of Employee. No Program Shares shall be cancelled in connection with a Share Purchase Note forgiveness upon a Hostile Change in Control. Notwithstanding the foregoing, the Compensation Committee shall have discretion to permit Employee or his estate to retain all Program Shares. All other rights and obligations of the Company and Employee under this Agreement (other than Sections 8, 9 and 10, which shall survive termination) shall cease as of the Termination Date.
Note Forgiveness. Immediately prior to the Effective Time, the principal and interest shall be forgiven on the note dated April 10, 2006 from Employee to Company and the note shall be treated as paid in full.
6. A new Section 14 is added, effective as of the Effective Time: 2009:
Note Forgiveness. Unless the Maker of the Loan hereunder is either of the Company or any Guarantor, the Holder may not forgive any amounts owing under this intercompany note.
Note Forgiveness. In the event Employee exercises his option to receive severance compensation under subparagraph 12.(a) hereof, Employer shall, in addition to, and not in lieu of, the payment of such severance compensation, forgive the balance due, if any, relative to Employee's debt obligation to Employer represented by the promissory note of Employee dated January 17, 1995 in the original principal amount of $99,530.34.
Note Forgiveness. Commencing on April 30, 1998, the Company shall forgive the payment of the Note at the rate of one-third of the original principal amount each year (plus accrued interest on the forgiven portion thereof), prorated for each month of Executive's employment, as more fully set forth in an amended and restated promissory note to be executed and delivered by Executive and the Company in the form attached as Exhibit A hereto.
Note Forgiveness. GOFFMAN agrees to forgive, and USD shall not be required to pay, the next nine (9) payments which would otherwise be owing under the Note, totalling $150,000 and commencing with the payment which would otherwise be due on October 1, 1997. Payments under the Note will resume as scheduled on July 1, 1998 and will continue through the final payment due on November 1, 1998.
Note Forgiveness. Resources shall forgive the final one-third principal amount of that certain Amended and Restated Promissory Note dated January 1, 1999, made by Executive in favor of Resources (plus accrued interest on the forgiven portion thereof) in equal monthly amounts until September 30, 2001 at which time said Note shall be deemed fully paid and cancelled; provided, that, if Executive is terminated prior to such date the entire remaining unpaid balance, including accrued interest thereon, shall be forgiven and cancelled unless such termination was for Cause (as defined below) prior to the end of the Initial Period.