earn-in agreement

Discussion in 'Legal Terminology' started by Translaphone, Dec 2, 2012.

  1. Translaphone New Member

    Spanish
    ...pursuant to the terms of any option agreement, earn-in agreement or similar agreement...

    Cuál es el significado de un "earn-in agreement"

    Mi intento: contrato de opción de compra; sin embargo sería lo mismo que un "option agreement???
     
  2. RicardoElAbogado Senior Member

    SF Bay Area, California
    American English
    I have heard of earn-out agreements but not earn-in. An earn-out agreement is between a buyer and seller of a business. The buyer agrees to pay one price for the business (let's call it the basic price) and more for the business if the profits of the business meet or exceed an agreed on level (which we can call the earn-out price). If the business does not produce the profits (that is, earnings) that meet the target, all the seller gets is the basic price.

    Earn-out agreements are also common in acquisitions by merger, and the additional payment to the seller can be in stock of the buyer rather than cash.
     

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