Pryor Cashman Partner John Crowe, co-chair of the Corporate Group and Mergers + Acquisitions (M+A) practice, talked to Super Lawyers about certain deal terms that should get extra attention in the merger process.

In “Merging Risks and Rewards,” John says parties to an M+A deal need to be careful of certain binding terms in the Letter of Intent, such as exclusivity and confidentiality. He also says to keep an eye on tax implications and payment terms:

“The first thing you need to do is check with your tax group,” Crowe says. “The way the deal is structured could have different tax implications.”

When it comes to the actual payment terms, Crowe advises sellers to be wary of earn-outs. It’s always better to get cash up front. You may think the financial targets for earn-outs can be reached, based on your current business, but that may not be true when someone else is running it.

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