This is a very important element of an earn-out agreement. They must define specific conditions of how the transaction is managed after the takeover by the buyer. For example, you could define a condition that the organization`s leaders and superiors keep their jobs. If some departments still need your leadership, you can set a condition to keep management control of those services after graduation. This will ensure that the organization is always managed efficiently, allowing for earnings and paying out earn-outs. Earn-Out is therefore essentially a mechanism to reward the supplier if the supplier`s forecasts prove to be accurate. Earn-Outs also protect the buyer if the seller`s forecasts are not put in place. Since depreciation is revenue-related, the buyer doesn`t have to pay as much if the income isn`t high.