Common use of Forgiveness Clause in Contracts

Forgiveness. The Borrower will not be responsible for any loan payment if Borrower provides to Lender, in its sole and absolute discretion, sufficient documentation that (i) the Borrower used all of the loan proceeds for forgivable purposes described below and (ii) employee and compensation levels are maintained. The actual amount of loan forgiveness will depend, in part, on the total amount of payroll costs, payments of interest on mortgage obligations incurred before February 15, 2020, rent payments on leases dated before February 15, 2020, and utility payments under service agreements dated before February 15, 2020, over the eight-week period following the date of the loan. Not more than 25 percent of the loan forgiveness amount may be attributable to non-payroll costs. The following is an exhaustive list of forgivable purposes: 1) payroll costs (as defined in the Act and in 2.f.); 2) costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums; 3) mortgage interest payments (but not mortgage prepayments or principal payments); 4) rent payments; 5) utility payments; 6) interest payments on any other debt obligations that were incurred before February 15, 2020; and/or 7) refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020.