Earnouts are primarily used in connection with acquisitions of privately held companies, although in some rare instances earnouts are incorporated in acquisitions of publicly held companies. Earnouts are typically structured so that EBITDA, gross revenues, or gross profits milestones need to be met. Earnouts are typically structured so that EBITDA, gross revenues, or gross profits milestones need to be met. The Earnout Payments will continue for a period of three (3) years after the Closing Date (the “Earnout Period”). Earnout Payments, or the right to receive Earnout Payments, may not be pledged, assigned or transferred.

Source: Forbes June 26, 2021 12:56 UTC