Mandatory Prepayment ‑ Exit Clause Samples

The Mandatory Prepayment – Exit clause requires the borrower to repay the outstanding loan balance in full upon the occurrence of a specified exit event, such as the sale of the business or a change in control. This clause typically outlines the types of exit events that trigger immediate repayment and may specify the timing and method of payment. Its core function is to protect the lender by ensuring that the loan is settled promptly if the borrower's ownership or business structure changes significantly, thereby mitigating the lender's risk of non-repayment in such scenarios.