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Financial Definitions & Language

Sample Irrevocable Payment Language:
The obligation to make payments to the Company hereunder is absolute and unconditional and the rights of said Company shall not be subject to any defense, set-off, counterclaim or recoupment which the undersigned may have against the Company or by reason of any indebtedness or liability at any time owing by the Company to the undersigned. The Company, its successors, assigns and endorsees shall in all respects be deemed a holder in due course, and any rights to assert that such holder or subsequent holder is not a holder in due course are hereby expressly waived.
 
Sample Take or Pay Language:
The obligation to make payments to the Company hereunder is absolute and unconditional and the rights of said Company shall not be subject to any defense, set-off, counterclaim or recoupment which the undersigned may have against the Company or by reason of any indebtedness or liability at any time owing by the Company to the undersigned. The Company, its successors, assigns and endorsees shall in all respects be deemed a holder in due course, and any rights to assert that such holder or subsequent holder is not a holder in due course are hereby expressly waived.
 
Mezzanine Financing:

Mezzanine capital, in finance, refers to a subordinated debt or preferred equity instrument that represents a claim on company's assets, which is senior only to that of the common shares. Mezzanine financings can be structured either as debt (typically an unsecured and subordinated note) or preferred stock.

Mezzanine capital often is a more expensive financing source for a company than secured debt or senior debt. The higher cost of capital associated with mezzanine financings is the result of its location as an unsecured, subordinated (or junior) obligation in a company's capital structure (i.e., in the event of default, the mezzanine financing is less likely to be repaid in full after all senior obligations have been satisfied). Additionally, mezzanine financings, which are usually private placements are also often used by smaller companies and may also involve greater overall leverage levels than issuers in the High Yield market and as such involve additional risk. In compensation for the increased risk, mezzanine debt holders will require a higher return for their investment than secured or other more senior lenders.

 
Private Equity:

In finance, private equity is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange. Investments in private equity most often involve either an investment of capital into an operating company or the acquisition of an operating company. Capital for private equity is raised primarily from institutional investors. There is a wide array of types and styles of private equity and the term private equity has different connotations in different countries.

Among the most common investment strategies in private equity include leveraged buyouts, venture capital, growth capital, distressed investments and mezzanine capital. In a typical leveraged buyout transaction, the private equity firm buys majority control of an existing or mature firm. This is distinct from a venture capital or growth capital investment, in which the private equity firm typically invests in young or emerging companies, and rarely obtain majority control.

 
Real Estate Sale-Leaseback
Real Estate Sale-leasebacks for Investment-grade tenants with Triple Net Leases. A triple net lease is a leasing arrangement in which an investment-grade tenant is responsible for payment of rent on a property or equipment, and is also responsible for all other expenses associated with that property, including and not limited to maintenance and repairs, real estate taxes, etc.
The tenant’s responsibility runs for the duration of the lease, allowing the owner of the real estate to “set it and forget it,” since the lease payments cover all property-related expenses.
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