We are structured to transition our daily operations to our Integrator, but the buyer wants us to take a forty percent seller note while they install their own management team. How do we structure the note covenants to protect our payout if their new team fails to run our EOS processes?

Question

Tyler Smith · Accepted Answer

This is a classic dilemma where you are asked to take on the risk of a business you no longer control. To protect your note, you must convert this predicament into a structured set of covenants based on your current operational operating system. First, do not let them dismantle your EOS® tools. Your seller note should include covenants requiring the buyer to maintain the EOS Accountability Chart, hold weekly Level 10 Meetings™, and keep your proven Integrator in place with full authority unless they hit predefined financial defaults. If they want to change the leadership structure, they must pay down a portion of the note early. Second, utilize a monthly compliance certificate where their new management must attest that the V/TO® metrics are being tracked and key Rocks are being met. This acts as an early warning system. By tying the note security to the disciplined execution of the business systems that made you successful in the first place, you reduce the risk of a post-close operational collapse. This is not about being rigid; it is about protecting your equity by ensuring the buyer does not pay a heavy dumb tax on your dime.