Your team took an active part in negotiations and according to the latest information the Seller and the Buyer have not agreed on a final price for the 100% of the equity. Your senior manager Diana Raub says: "we need to develop an earn-out structure that will help to bridge the gap in price expectations of the two parties". It was agreed between the buyer and the seller that the owner of the business will remain in charge of the Target company operations within the New Company for the next three years. Major investment and financing decisions would be done under the supervision of the EU board of directors, while the majority of operating decisions remain with the Seller. The initial fixed payment is agreed to be $200M and the proposed benchmark and actual EBITDA are provided in the table below. The agreement is that the buyer will compensate 3.5 times the excess of operating cash flows over the benchmark numbers. The buyer is applying the multiple of 7 to calculate the increase in shareholders value In 2020 due to COVID, it was agreed by both parties to ignore 2020 and only use 2021-2023 results. Table 4. 2020 2021 2022 2023 Benchmark EBITDA 45 45 48 53 Actual EBITDA 33 42 50 59 1) Explain what is earnout and how it helps to complete the deal 2) Based on the performance provided in the table what will be the amount paid to or paid by Mr. Garbour? 3) What is the potential increase in shareholders' value for the buyer