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Mezzanine Debt Term Sheet
"Need a Mezzanine Debt Term Sheet for a Singapore-based technology company seeking SGD 20 million in growth capital, with PIK interest options and potential warrant coverage of 15%, to be executed by March 2025."
1. Parties: Identification of lender(s), borrower(s), and any guarantors
2. Background: Context of the mezzanine financing arrangement
3. Definitions: Key terms used throughout the term sheet
4. Facility Amount: Size and nature of the mezzanine facility
5. Interest Rate and Payment Terms: Interest rates, payment schedules, and calculation methods
6. Security Package: Details of collateral and security arrangements
7. Ranking and Subordination: Priority position relative to other debt
8. Covenants: Financial and operational commitments
9. Events of Default: Circumstances triggering default
1. Equity Kickers: Optional provisions for equity participation rights when lender requires potential equity upside
2. Board Rights: Provisions for lender representation on borrower's board, typically for larger facilities with significant control rights
3. PIK Interest Provisions: Payment-in-kind interest terms when cash conservation is a priority
1. Security Assets Schedule: Detailed list of assets forming security package
2. Financial Covenants Schedule: Detailed financial ratios and thresholds
3. Form of Compliance Certificate: Template for periodic covenant compliance reporting
4. Conditions Precedent: List of required documents and conditions for closing
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