THE
PROCESS
Meridian
as a private investment trust does not have the bureaucracy and
cumbersome organizational structure of other types of capital
provider organizations. As a result, processing of a Transaction is
typically quick, simple and easy:
·
Step
1
- The Business and its Principals submit a completed Meridian
Application For Business Capital for a particular type of
Transaction described above. [See: Application Download webpage
where you can register and download an Application].
You should only submit an Application if you are
serious about following through with the Transaction if approved. If
you are still shopping around for capital, please do not submit an
Application until you are committed.
·
Step
2
- The Application is processed immediately upon receipt of the
completed and signed Application
·
Step
3
- Meridian notifies your Business of
the approval or denial of the Application, typically within one
business day after completing the processing of the
Application.
·
Step
4
- If the Application is approved, Meridian delivers a written Offer
& Commitment to you, specifying the nature, purpose, amount
and terms of the offered capital
transaction.
Meridian policy prohibits issuance of open ended
offers and offers that remain open for longer than two days after
issuance. The reason for this is that open offers reduces the number
of Transactions that Meridian can process at any given
time and presumably, a Client has only submitted an Application when
they are serious about following through with a proposed
Transaction.
·
Step
5
– You review the Offer & Agreement, and if acceptable, sign it
and return it with the Commitment Payment described
below.
·
Step
6
– Upon receipt of the signed Offer & Commitment with the
Commitment Payment, underwriting of the Transaction is completed and
Transaction Documents are delivered for your signature, generally
within five business days following receipt of the signed Offer
& Commitment with the Commitment
Payment.
·
Step
7
– Within five days following Meridian’s receipt of the signed Transaction
Documents and all information requested, Meridian will
schedule Closing of the transaction.
COMMITMENT
PAYMENT
Meridian
policy requires that a Client have a financial commitment to the
Transaction of 10%-15% of the Transaction amount. This percentage
varies with each Transaction depending on the type of transaction;
nature of the business and the perceived risk of the
Transaction.
The
reason for this is that when a prospective Client submits an
Application For Business Capital, the Client causes Meridian to
incur various costs and expenses in reviewing, evaluating,
underwriting, documenting, and preparing the proposed Transaction
for Closing.(the “Costs & Expenses”).
If
after signing and accepting the Offer & Commitment, the Client
does not complete and close the Transaction, Meridian incurs a substantial loss for these
Costs & Expenses as well as the costs incurred in providing
collateral to secure Meridian’s investors for the
Transaction.
Unfortunately,
over the years, Meridian and its management have
experienced numerous situations where Clients, for one reason or
another, do not complete and close the Transaction. These reasons
are varied, and include but are not limited to, the Client continues
to shop the proposed Transaction for better terms from others; or
the Client has a change in plans and elects not to complete and
close the Transaction; or the Client has provided inaccurate or
false information and statements in their Application which prevent
Meridian from completing and closing the
Transaction.
As
a result, Meridian’s management implemented
the Commitment Payment policy which requires that the
Client tender a Commitment Payment upon accepting and
signing the Offer & Commitment.
The
Commitment Payment provides reasonable assurance to Meridian that the Client has the funds
necessary to complete the Transaction and that the Client is
seriously committed to complete the Transaction once the Offer &
Commitment is signed and submitted to Meridian.
The
Commitment Payment is NOT an additional fee imposed on the
Transaction; rather, it will apply to the payments specified in the
Offer & Commitment at Closing of the
Transaction.
More
importantly, Meridian agrees in writing that it will repay the
Commitment Payment to the Client should Meridian fail to close
the Transaction as specified in the Offer & Commitment, provided
that such failure by Meridian to complete and close the Transaction
is not attributable to actions or failures to act by the Client. The
Offer & Commitment will specify the following in
writing:
"Commitment
Payment; Repayment Of Commitment Payment Amount. Firm
has granted approval of the Application based upon the Application
and Information submitted to Firm by Applicants as of the date of
issuance of this Offer & Commitment. Applicants, in accepting
and signing this Offer & Commitment, are committing to complete
the transaction(s) set forth herein (the “Commitment”). Firm, in
processing this Agreement, will incur certain costs and expenses
associated therewith (“Costs”), including but not limited to, (a)
verification of the Information provided by Applicants, (b)
completion of the underwriting process, and (c) drafting, preparing
and finalizing the Transaction Documents required to consummate the
Transaction contemplated herein. In order to partially protect Firm
against losses which may be incurred from Applicants failing to
complete the Transaction contemplated herein (the “Completion”)
and/or Applicants causing Firm to be unable to effect Completion,
and to evidence Applicants’ good faith intent to do all things and
refrain from all things necessary and required for Completion,
Applicants shall tender with this signed Agreement, the Commitment
Payment set forth herein. In the event Firm does not provide
such Completion, and the failure to provide such Completion is not
attributable, directly or indirectly, to: Applicants’ failure to
comply with the terms and conditions hereof; or to Applicants’
breach of any of the terms and conditions contained herein; or to
Applicants having made any material misrepresentations to Firm in
the Information; or to Applicants’ failure to fully disclose an
adverse material fact to Firm; or to Applicants failure to timely
perform any act necessary to achieve Completion as set forth herein;
or to Applicants’ failure to refrain from any act which would
prevent Completion, all of the preceding being referred to as the
“Conditions”; then upon written notice to Firm by Applicants, Firm
shall pay Applicants an amount equal to the Commitment Payment
amount. In the event that Firm provides or offers to provide such
Completion and Applicants do not accept and consummate such
Completion, or in the event that Firm cannot and/or does not provide
such Completion as a result of Applicants having violated one or
more of the Conditions, Firm shall not pay and shall not be liable
for payment of an amount equal to the Commitment Payment amount
to Applicants. In the event that Firm provides such Completion and
the Transaction is accepted and consummated by Applicants, the
Commitment Payment shall be applied to the payments set forth
in this Offer & Agreement."
