Exit fee or profit share

About this business activity

An exit fee or profit share may be used to protect the interests of both parties in the event that the agreement is terminated prematurely.

Profit Share Agreement (Property)

A profit share provision is a type of arrangement that may be used with a real estate finance facility agreement. Under this arrangement, the borrower agrees to pay an exit fee or profit share to the lender if certain events occur. The fee is calculated by deducting the acquisition and development costs relating to a property from its sale proceeds or latest valuation.

What to watch out for

  • The borrower may have to pay an exit fee or profit share to the lender if certain events occur
  • The fee is calculated by deducting the acquisition and development costs relating to a property from its sale proceeds or latest valuation
  • This type of arrangement may also be referred to as a profit participation
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    Relevant Contract Types

    πŸͺ™ Profit sharing agreement

    A profit sharing agreement is a contract between an employer and an employee in which the employer agrees to share profits with the employee. The agreement may specify how the profits will be shared, how often the payments will be made, and how the payments will be calculated.

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