ESCROW HOLD-BACK + SELLER NOTE = NO DEAL?

During the LOI negotiation process, we were accused of "double-dipping" because we proposed a seller note[redacted]% of purchase price) and, separately, an escrow hold-back (5% of purchase price) to protect against a potential R&W breach post-close. The seller note is not structured as a "forgivable" seller note. Furthermore, we proposed that, assuming no R&W breach, the amount held in escrow would be released to the seller after 12 months. Are we being unreasonable by proposing a structure that includes a seller note (with no attached contingencies) and a 5% escrow hold-back? Any guidance and/or color would be greatly appreciated. Also, does anyone know of a source that has data on the use of escrow hold-backs in the lower middle market? Thank you!






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