12 Oct Fall Out from Earn Out
A decision of the High Court in I-Health Limited v iSoft NZ Limited has highlighted the care that is required in the drafting of earn out provisions and related liability limitations under sale and purchase agreements. Background I-Health and iSoft are both health information technology companies. In December 2003, I-Health and iSoft entered into a sale and purchase agreement under which iSoft agreed to purchase the business and assets of I-Health. The purchase price was to be not less than $1,475,000 and was subject to an earn out arrangement linked to software revenue made by the iSoft group from the sale of I-Health products...