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27LETTEROFINTENTLOIAnon-bindingdocumentthatsetsoutcertaintermsofatransactionagreedtoinprinciplebetweenpartiesthatisnegotiatedandsignedatthebeginningofatransaction.AlthoughnotlegallybindinganLOImaycontaincertainnon-economictermsthatarelegallybinding.MEzzANINEDEBTAdebtobligationthatranksinprioritybehindseniordebtbutaheadofeuityoftenunsecuredhigh-yieldsubordinateddebtandcommonlyconertibleintoeuityoftheborrower.NON-CONTROLINvESTMENTThepurchaseoracuisitionofaninterestinabusinesswithoutgainingeconomicandotingcontrolofthecompanyalthoughtheinestorgenerallyhastheabilitytoexercisecontroloercertainmajorcorporatedecisions.PORTFOLIOCOMPANYAportfoliocompanyisacompanyinwhichapriateeuityfirmhasinested.PREFERREDSECURITYAclassofeuitysecurityinanentitythattypicallyentitlestheholderstocertainpreferencesandrightsoerthecommonholderssuchastherighttoreceiediidendsandtherighttoreceieprioritydistributionsupontheentitysdissolutionorliuidation.PRIvATEEqUITYFIRMApriateeuityfirmisaninestmentmanagerthatmakesinestmentsinpriatelyownedoperatingcompanies.Theseinestmentsaretypicallymadethroughafundwhichismostoftenalimitedpartnershipthathasbeenestablishedbythepriateeuityfirm.Eachfundraisesmoneythroughcapitalcommitmentsfromariousinestorssuchaspublicpensionfundscorporationsendowmentsandhighnetworthindiidualsallofwhombecomelimitedpartnersinthefund.Thepriateeuityfirmwillmanageoneormorefundseachofwhichwillhaeparticularcriteriafortheportfoliocompaniesincludedinthatfund.PROCESSTheactiitiesinwhichacompanyengagesinconnectionwithacapitaltransactionsuchasasaleprocess.qUALITYOFEARNINGSAnassessmentofthetrueearningsofanentitybyexaminingrecurringandnon-recurringitemsnon-businessrelatedexpensesandsimilaritems.STRATEGICBUYERAnoperatingcompanymakinganacuisitionforstrategicratherthaninestmentreasons.Generallyastrategicbuyeroperatesinthesameindustryasthecompanyitislookingtobuy