I would like to know how exactly seller equity rollover is structured in deals. Assume a company valued at $10M, let's say we do 10% equity rollover. Let's say we structure this as $5M in equity and $5M in debt. 

1. Do we pay only $9M (in which case $4M in equity and $5M debt) for 90% of the company and let the seller hold onto 10%? 

2. Do we pay the entire $10M and then let the seller invest $500K in the equity portion for 10% rollover? 

3. Only some searchers have said #2 is the standard. Assuming it is, what if we do not want #2 as an option. Can we pay only $9M and have the seller retain 10% in common shares? 

4. As an extension of my question #3 - what gives a better economic upside from a searchers' standpoint - having the seller retain 10% as preferred or as common shares? 

5. If the searcher team is a funded searcher with traditional 70-30 split, will the searchers now have up to 30% equity in the 90% of the company excluding the rollover 10%?

Common shares seem a better option in deals where the equity rollover is for some of the company executives who want to stay on after sale and will be reporting up to the searcher-CEOs,