By
Lisa A. Lori
and Esq.
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Earn-out provisions provide additional consideration or funds to the seller based on future performance of the company or achievement of milestones (such as future revenue). In other words, some buyers will provide sellers with additional purchase price money if the company does well in the future.
Earn-outs and escrows have been the subject of much M&A litigation. As a result, it is imperative to draft the provisions as precisely as possible and free from vagueness or doubt.
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Lisa A. Lori
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