I don't have direct experience with this, but thinking through this it seems logical that the seller note would have a personal guarantee attached to it. Post-transaction, the buyer would have control over the business cash flows, and if there was no personal guarantee there seems to be an incentive for the buyer to take more money out of the business and make it harder for the seller to access these funds to repay a seller note if the business is deteriorating. Not sure if it's common, but maybe a structure where the buyer agrees to a certain salary during the term of the seller note might work when it comes to getting around a personal guarantee? Curious to hear how common this is!

Yes, I agree with the previous comments. However, from the Seller's perspective, we like to provide for set-off rights in the documentation, because, theoretically, you could have concurrent indemnification or other monetary claims against the seller for breaches of the acquisition agreement, but without a right to set them up, the guaranteed note obligations may be much more quickly litigated and enforced than breach claims in the APA, resulting in the buyer providing more capital to the seller to fight the underlying claims. Setoff rights would allow a dollar amount to be setoff against an amount due under the note, by virtue of the Buyer's claims against the Seller. At a minimum, if you can get an accelerated resolution of the Buyer's claims, through mediated settlement or binding arbitration, and have the Seller's note payments stayed until all claims are liquidated, it will allow for a final financial resolution that is less one-sided.