Abort Fee

A fee which is payable to certain advisors in the event that a proposed transaction, such an as IPO or merger, where the party that employed the advisor decides not to proceed. The abort fee is usually designed to compensate the advisor for the time and expense devoted to a project where their payment, had it been concluded, would be on a commission basis.  The term is also sometimes used to refer to a break-up fee. The amounts and circumstances under which the abort fee is payable are usually set forth in the engagement letter or engagement agreement.