A "termination for cause" clause allows a party to end a contract if the other party breaches the terms or engages in misconduct. This clause typically outlines specific conditions or actions that justify termination, providing legal protection and delineating the process for ending the agreement.
Termination for Cause Notice. A written notice by the Potential Partners terminating this Agreement pursuant to Section 7.03(b) or by Gevo terminating this Agreement pursuant to Section 7.03(c) is referred to herein as a “Termination for Cause Notice.” The Termination for Cause Notice shall specify the date on which such termination for cause shall be effective, which shall be no longer than ninety (90) days following the delivery of the Termination for Cause Notice (such date, the “Termination for Cause Effective Date”).
Termination for Cause by the Potential Partners. The Potential Partners may jointly agree to terminate this Agreement upon delivering a Termination for Cause Notice to Gevo if an Event of Default with respect to Gevo occurs. In the event of termination pursuant to this Section 7.03(b), the Potential Partners shall be relieved of all further obligations to Gevo under this Agreement from and after the delivery of the Termination for Cause Notice. For the avoidance of doubt, upon such termination, the Potential Partners shall not be relieved of payment obligations due and owing to Gevo, including the obligation to cause any applicable JV Entity to satisfy such JV Entity’s payment obligations due and owing to Gevo, in each case, pursuant to Article V hereof, as of the Termination for Cause Effective Date; provided, however, the Potential Partners shall be entitled to (i) withhold, or cause any applicable JV Entity to withhold, as applicable, any such payments due and owing to Gevo pursuant to Article V hereof until the dispute that gave rise to the applicable Event of Default has been fully resolved, or (ii) setoff, or cause any applicable JV Entity to setoff, as applicable, any such payments due and owing to Gevo pursuant to Article V hereof against any amounts then due and owing to the Potential Partners or any JV Entity pursuant to this Agreement.
Termination for Cause by Gevo. Gevo may terminate this Agreement upon delivering a Termination for Cause Notice to the Potential Partners if an Event of Default with respect to the Potential Partners occurs (other than an Event of Default under Section 6.01(b) with respect to the Potential Partners). In the event of termination pursuant to this Section 7.03(c), Gevo shall be relieved of all further obligations to the Potential Partners under this Agreement from and after the Termination for Cause Effective Date. For the avoidance of doubt, upon such termination, the Potential Partners shall not be relieved of payment obligations due and owing to Gevo, including the obligation to cause any applicable JV Entity to satisfy such JV Entity’s payment obligations due and owing to Gevo, in each case, pursuant to Article V hereof, as of the Termination for Cause Effective Date.
(c) EXECUTIVE shall not have the right to receive termination benefits pursuant to Section 3 hereof upon Termination for Cause. The term “Termination for Cause” shall mean termination because of EXECUTIVE’s intentional failure to perform stated duties, personal dishonesty, incompetence, willful misconduct, any breach of fiduciary duty involving personal profit, willful violation of any law, rule, regulation (other than traffic violations or similar offenses) or final cease and desist order, or any material breach of any material provision of this Agreement. In determining incompetence, the acts or omissions shall be measured against standards generally prevailing in the financial institutions industry. Notwithstanding the foregoing, EXECUTIVE shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to EXECUTIVE a copy of a resolution duly adopted by the affirmative vote of not less than a majority the members of the Board at a meeting of the Board called and held for that purpose, finding that in the good faith opinion of the Board, EXECUTIVE was guilty of conduct justifying Termination for Cause and specifying the particulars thereof in detail. EXECUTIVE shall not have the right to receive compensation or other benefits for any period after Termination for Cause.
2.3 Termination for Cause. Termination for Cause may be effected by Company at any time during the term of this Agreement and may be effected by written notification to Employee; provided, however, that no Termination for Cause will be effective unless Employee has been provided with the prior written notice and opportunity for remedial action described in Section 2.1. Upon Termination for Cause, Employee is to be immediately paid all accrued salary, incentive compensation to the extent earned, vested deferred compensation (other than pension plan or profit sharing plan benefits, which will be paid in accordance with the applicable plan), and accrued vacation pay, all to the date of termination, but Employee will not be paid any severance compensation.
(d) Termination for Cause. Executive shall not have the right to receive termination benefits or other compensation or benefits pursuant to Section 4 hereof upon Termination for Cause. The term “Termination for Cause” shall mean termination because of the Executive’s personal dishonesty, incompetence, willful misconduct that in the judgment of the Board will likely cause economic damage to the Bank or injury to the business reputation of the Bank, any breach of fiduciary duty involving personal profit, intentional failure to perform stated duties after written notice thereof from the Board, willful violation of any law, rule, or regulation (other than traffic violations or similar offenses) or final cease-and-desist order, or material breach of any material provision of this Agreement. In determining incompetence, the acts or omissions shall be measured against standards generally prevailing in the banking industry. Following [his/her] Termination for Cause, Executive shall have a right to a hearing for reinstatement and the provision of back pay and benefits at a meeting of the Board of Directors called and held for that purpose (after reasonable notice to the Executive and an opportunity for [him/her], together with counsel, to be heard before the Board at such meeting and which such meeting shall be held not more than 30 days from the date of notice of termination). If in the good faith opinion of the Board, the Executive was guilty of conduct justifying Termination for Cause, neither reinstatement nor payment of back pay or benefits shall be provided.
2.1.1 “Termination for Cause” shall mean termination by Corporation of Employee’s employment by Corporation by reason of Employee’s willful dishonesty towards, fraud upon, or deliberate injury or attempted injury to, Corporation or by reason of Employee’s willful material breach of this Agreement which has resulted in material injury to Corporation.
2.3 Termination For Cause. Termination For Cause may be effected by Corporation at any time during the term of this Agreement and shall be effected by written notification to Employee. Upon Termination For Cause, Employee shall promptly be paid all accrued earnings, bonus compensation to the extent earned, any benefits under any plans of the Corporation in which Employee is a participant to the full extent of Employee’s rights under such plans, accrued vacation pay and any appropriate business expenses incurred by Employee in connection with his duties hereunder, all to the date of termination, but the Employee shall not be paid any other compensation or reimbursement of any kind, including without limitation, severance compensation.
1.12. "Termination for Cause" and "Cause" shall have the same definition specified in any effective severance or employment agreement existing on the date hereof or hereafter entered into between the Executive and the Bank. If the Executive is not a party to a severance or employment agreement containing a definition of termination for cause, Termination for Cause means the Bank terminates the Executive's employment because of (a) fraud; (b) embezzlement; ( c) conviction of or plea of nolo contendere by the Executive of any felony; ( d) a material breach of, or the willful failure or refusal by the Executive to perform and discharge the Executive's duties, responsibilities and obligations under this Agreement; (e) any act of moral turpitude or willful misconduct by the Executive intended to result in personal enrichment of the Executive at the expense of the Employer, or any of its affiliates or which has a material adverse impact on the business or reputation of the Employer or any of its affiliates (such determination to be made by the Board in its reasonable judgment); (f) intentional material damage to the property or business of the Employer; (g) gross negligence; or (h) the ineligibility of the Executive to perform his duties because of a ruling, directive or other action by any agency of the United States or any state of the United States having regulatory authority over the Employer.
Termination for Cause: If the Retention Bonus is not earned because Employee is terminated for cause, Employee agrees to repay any previous Installment Payments already made within 10 business days of being notified of such termination. The Company agrees to provide Employee with notice of this fact and request that repayment of all previous Installment Payments be made within 10 business days. Employee further understands that if he fails to repay the previous Installment Payment already made within the 10 business days, that Employee will be in breach of this Agreement and that the Company can take legal action to recover the any previous Installment Payments made but unearned.
2.3 Termination For Cause. Termination For Cause may be effected by Corporation at any time during the term of this Agreement and shall be effected by written notification to Officer. Upon Termination For Cause, Officer immediately shall be paid all accrued salary, bonus compensation, if any, to the extent earned, vested deferred compensation (other than defined contribution plan or profit sharing plan benefits which will be paid in accordance with the applicable plan), any benefits under any plans of Corporation in which Officer is a participant to the full extent of Officer’s rights under such plans, accrued vacation pay and any appropriate business expenses incurred by Officer in connection with his duties hereunder, all to the date of termination, but Officer shall not be paid any other compensation or reimbursement of any kind, including without limitation, severance compensation.
(d) Termination for Cause. Termination for Cause shall mean termination because of, in the good faith determination of the Board, Officer’s: (i) personal dishonesty; (ii) willful misconduct; (iii) incompetence; (iv) breach of fiduciary duty involving personal profit; (v) intentional failure to perform stated duties; (vi) willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order; or (vii) material breach by Officer of any provision of this Agreement. Notwithstanding the foregoing, Officer shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to Officer a notice of termination which shall include a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the disinterested members of the Board that Officer was guilty of the conduct described above.
“Termination for Cause” means a decision by the Company to terminate the Executive’s employment for (i) violation of an ELG covenant, (ii) conduct involving a felony criminal offense under U.S. federal or state law or an equivalent violation of the laws of any other country, (iii) dishonesty, fraud, self-dealing, or material violations of civil law in the course of fulfilling the Executive’s employment duties; (iv) breach of the Executive’s intellectual property agreement or other written agreement with the Company; or (v) willful misconduct injurious to the Company, as determined by the Committee.
1.18 Termination For Cause. For the purposes of this Agreement, a Termination for “Cause” shall be defined as it is in any existing Employment Agreement between the parties. In the event no such Employment Agreement exists, then a Termination for “Cause” shall be defined as a Termination because of any of the following: A. The Executive’s charge of or conviction by, or entry of a plea of guilty or nolo contendere in a court of competent jurisdiction, for any crime involving moral turpitude or a felony in the jurisdiction involved; B. The Executive’s willful refusal or negligent failure to perform their duties as required under the terms of any Employment Agreement or as required by virtue of the position held; C. The Executive’s gross negligence, insubordination or material violation of any duty of loyalty or fiduciary duty to the Bank or any other material misconduct on the part of Executive; D. The Executive’s revocation of any approval required by the FDIC or the DBO for the Executive to perform their assigned duties and responsibilities with Bank, including without limitation, the Executive’s removal or prohibition from participating in the conduct of the Bank’s affairs by an order issued under section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act 12 U.S.C §1818 (e)(3) and (g)(1); E. The Executive’s material failure to comply with all applicable federal, state and local laws, regulations and/or ordinances governing their duties with the Bank, OR F. The Executive’s material breach of any other provision of this Agreement.
Termination for cause is a provision in a contract that allows one party to terminate the agreement if the other party fails to meet specific obligations or breaches the terms. This type of termination is typically motivated by an occurrence that significantly undermines the relationship or the basis of the contract. Some common reasons for termination for cause include gross negligence, misconduct, failure to perform contractual duties, or breach of key terms.
You should consider using termination for cause when:
It is crucial to evaluate the situation thoroughly and ensure that reasonable opportunities to remedy the breach have been provided before proceeding with termination for cause.
When drafting a termination for cause clause, consider including the following elements:
Definition of Cause: Clearly define what constitutes a “cause” for termination within the specific context of the contract.
Notification Requirement: Specify the process for notifying the breaching party, including the required format (e.g., written notice), timeline, and delivery method (e.g., email, certified mail).
Cure Period: Provide a period during which the breaching party can rectify the breach to avoid termination. This demonstrates good faith and offers the other party a chance to correct issues.
Consequences of Breach: Detail the steps to be taken upon terminations, such as return of property, final payments, or transfer of responsibilities.
Dispute Resolution: Outline how disputes regarding alleged breaches will be handled. This could include mediation, arbitration, or legal proceedings.
Example of a termination for cause clause:
“Either party may terminate this Agreement immediately upon written notice if the other party materially breaches any term or condition of this Agreement and fails to cure such breach within 30 days after receipt of written notice thereof.”
Termination for cause clauses are commonly found in various types of contracts, including but not limited to:
Each contract will have its own specific requirements and nuances for termination clauses, so it’s important to tailor the language to fit the unique context of each agreement.
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Dive deeper into the world of clauses and learn more about these other clauses that are used in real contracts.
The "termination for convenience" clause allows one party to unilaterally terminate a contract without cause, typically requiring specified notice and potentially incurring a penalty or termination fee. This provision provides flexibility by enabling parties to exit agreements for strategic or unforeseen reasons without alleging breach or fault.
The "Termination of Contract" clause outlines the conditions and procedures under which either party can end the agreement before its natural expiration. It typically includes definitions of breach, notice periods, acceptable grounds for termination, and any associated penalties or obligations upon termination.
The "Termination of Employment" clause outlines the conditions under which an employment contract can be terminated by either the employer or the employee. It typically includes details on notice periods, grounds for termination, severance pay, and any obligations or rights of both parties post-termination.
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