Earn-Out Agreement

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Earn-Out Agreement

An agreement in which one pays a lump sum to buy a company and states that he/she will pay a further sum if certain, stated conditions are met. An earn-out agreement is a type of contingent contract.
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An earnout agreement requires flexibility on the part of both parties, she added.
Deferred consideration of up to a maximum EUR 300,000 will be satisfied in shares and is subject to an earnout agreement, which is contingent on a revenue target for Wbase for the 12 months immediately following completion.
Deferred consideration of up to a maximum 300,000 will be satisfied in shares and is subject to an earnout agreement, which is contingent on a revenue target for Wbase for the 12 months immediately following completion.
The Miami Herald reports that part of the deal contained an "earnout agreement" whereby the Dubai government backed Istithmar will earn an undisclosed bonus "in the event the state of legalized gaming in Florida, in the future, facilitates gaming" at the Fontainebleau; effectively allowing Istithmar to retrospectively collect what its share would be worth if the Fontainebleau had a casino.
Each of these metrics can be manipulated by the buyer after the transaction, so the seller should include various protections in the purchase agreement or earnout agreement.
The primary subject matter of this case concerns the cross-cultural negotiation of an earnout agreement between Denshi Global Holdings, a publicly-traded Japanese company, and Informatica de Sistemas, S.A,.(IDS) a private Spanish company that Denshi is seeking to acquire.
To resolve this issue, Katsumi has proposed an "earnout agreement" with payment by Denshi to Javier of all or a portion of the "valuation gap" based on IDS performance in the future.
In addition, the transaction includes an earnout agreement, under which positive net income, if any, generated by Fullscope from the Process Development Business Unit payments will be passed through and paid to the former Fullscope stockholders.
An earnout agreement based on future sales may contribute additional revenues.
RWS has now bought the remainder for an additional USD23.3m following an earnout agreement which included Inovia's sales, EBITDA and the translation work which the Inovia system directed to RWS.
THE LAST PHASE OF THE NEGOTIATIONS--THE EARNOUT AGREEMENT
Around PS700,000 of cash is payable immediately, and PS400,000 will be deferred in four equal six monthly instalments starting six months from completion of the acquisition, 461,538 ordinary shares in Northern Bear which are valued at approximately PS400,000 and a maximum of PS1.4m of contingent cash payable under various earnout agreements.