投资律师事务所：监管兜底条款概述

Spring 2026 What Is a Regulatory Put? The Regulatory Put is gaining prevalence in processes as a mechanism to protect investorsagainst sudden and unforeseen regulatory changes for a pre-negotiated period of time. How It Works A Regulatory Put is a contractual provision embedded in an MSO investmentagreement that allows an investor to require the law firm to buy back the assets TRIGGER:A regulatory authority, such as a PURPOSE:Protects from regulatory or legal changes that invalidate the MSO structure (and therefore theeconomic interest in the platform) and provides state bar association, formallydetermines that the firm’s structure •Per agreed formulaor negotiated price Defining the “Regulatory Event” Key Issue #1: Critical and increasingly contested as market matures; three distinct negotiation battlegrounds. What Is the BroaderPlatform Impact? Who Determines theTriggering Event? What Is theGeographic Scope? If the MSO is part of a larger platform,does one firm’s Regulatory Eventtrigger puts for all other firms on Which regulatory body’s decisioncounts? Do all appeals need to beexhausted before the put is triggered? Does a ruling in one state trigger theput for a multi-state firm? What if thatstate is a small share of revenue? •Seller-friendly: Final, non-appealable orderrequired•Buyer-friendly: Any adverse determinationtriggers immediately •How would this impact a potential acquisitionstrategy?•Firms not practicing in the affected jurisdictionshould be carved out •States where firm actively operates?•Jurisdictions above a negotiated revenuethreshold? HEAVILY NEGOTIATED EMERGING ISSUE MOST FUNDAMENTAL Calculating the “Put Price” Critical Drafting Points Key Issue #2: Due to transaction dynamics, MSO rollover equity is wiped out in most cases. •The Regulatory Event itself may outlawthe primary formula (e.g., if the barprohibits all MSO revenue structures), soalternative/fallback mechanics thatremain valid regardless of the regulatoryoutcome must also be in place; Put Price Spectrum Buyer-Friendly •The ultimate goal of the Regulatory Putis to create a way to unwind or alter aninvestment, should regulations shiftduring a specified time window; this Seller-Friendly Hybrid Buyer-Friendly A combination of the slidingscale and a full put, whichprotects in both scenarios Potential to build a slidingscale where there is anadjustment to the purchase Full right to recover initialinvested capital, plus any otherterms added (e.g., IRR hurdle,portion of stated LTM MSOrevenue, etc.) for any - In a scenario where the MSO isfound to be in violation, irrespectiveof how it is set up, then providing Allows for a sliding scale forcapital recovery (both ways)in some situations, whileproviding a mechanism for a Would be a dissolution of theMSO and provide a way to fullyunwind the transaction, should Can be useful in cases whereMSO-level EBITDA is found tobe improper and therefore - Investors are looking to mitigate anyunforeseen regulatory risk, given thenovelty of this vehicle •A properly structured Regulatory Put isdesigned to be fair to both parties andaims to offer mutual benefits Payment Mechanics Key Issue #3: Structured to avoid placing an impossible financial burden on the law firm, while giving the investor some ability to recoup their investment; lump-sumpayment is rare. PAYMENT TIMING NOTE SECURITY Security on the seller note requires significant flexibility; the investorshould have discretion over what collateral secures the note Lump-sum payments are rare and generally avoided; they place animmediate and potentially impossible financial burden on the law firmat exactly the moment its operations may be impaired Key Risk •A Regulatory Event could make it illegal for the firm to pledge its AccountsReceivable or agree to cash sweeps, the most common forms of note security•If the MSO fee structure is invalidated, A/R derived from legal fees may be off- At Closing •An initial percentage of the total Put Price is paid in cash at the time theRegulatory Event closes •Percentage is negotiated at signing but can be subject to adjustmentbased on performance and timing of Regulatory Event Permissible Security Alternatives •MSO-owned assets (equipment, IP, technology infrastructure)•Firm real estate or leasehold interests (where permissible)•Other non-legal, non-A/R collateral at investors’ discretion Seller Note •The remainder is structured as a promissory note (debt instrument)payable over time Appendix:Overview of Houlihan Lokey Houlihan Lokey Is the No. 1 M&A Advisor Houlihan Lokey is a leading global investment bank with expertise in mergers and acquisitions, capitalsolutions, financial restructuring, and financial and valuation advisory. Houlihan Lokey is the trusted advisor to more top decision-makers than any other independent global investment bank. Learn more about howour advisors can serveyour needs: No. 1M&A Advisor for All GlobalBusiness Services Transact