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Investment Fund : Approval Process :

Approval Process

Transaction Approval Process Summary

Transactions will be approved by the unanimous vote of the Managers of New Mexico Community Capital, LLC (NMCC, LLC), which is the for-profit investment management subsidiary of New Mexico Community Capital (NMCC). NMCC, LLC's Manager consists of: NMCC's CEO; the Managing Director, the individual who directs the operations of NMCC, LLC; and a member of NMCC's Board of Directors (appointed by that body). This action will not be taken without a favorable recommendation by the Managing Director acting with the counsel of the Investment Committee, which has the ability to deny NMCC from making an investment. The Investment Committee will consist of at least three individuals with significant private equity investment experience as well as operating experience

Application Process

NMCC, LLC has implemented a staged application process that minimizes the time required for applicants to prepare submittals and reduces the resources required for review. Investee candidates that pass the first investment screen will be asked to prepare more detailed information for the next review stage.

Applicants that pass the first screen will be asked to submit a complete business plan as well as detailed historic operating information. The most extensive transaction review process will take place during our due diligence examination which will commence when an agreement has been achieved with an applicant through the execution of a Term Sheet.

Initial Application

NMCC will automate the application review process by employing technological resources as effectively as possible. NMCC's website (www.nmccap.org) will be the initial intake mechanism for the first round of all submittals. The online system will capture major elements of the application for a database and timestamp the application.

Applicants will fill out an electronic form with approximately 25 fields reflecting NMCC's Investment Criteria as well as capturing key applicant data and will submit an Executive Summary no more than two pages in length. The applicant will be informed in less than 10 days whether NMCC will deny the application or proceed to the next review stage.

Second Application

If the initial application conforms to NMCC's Investment Criteria, Applicants will be asked to submit more detailed information about their company including a business plan, historic financial and operating information and biographic information on key employees/owners.

Subsequent Process

If the second application suggests a viable investment candidate, the Fund Manager will send information on the applicant to the Investment Committee which will work with the Fund Manager to determine whether the transaction is viable and, if so, how a Term Sheet should be constructed. Term Sheets will be reviewed by the Investment Committee and then presented to the Managers (described above) of NMCC LLC, the General Partner of the Fund. If the Manager unanimously approves the Term Sheet, it will be issued to the Applicant.

The process of negotiating a Term Sheet will involve direct meetings with the applicant and at least one site visit. If an agreement is achieved on Term Sheet conditions the formal due diligence process will commence. The major elements of due diligence will involve:

• Review of all legal and contract documents related to Applicant
• Further review and verification of financial information
• Background & reference checks on applicant's principals

Once it is apparent that due diligence issues can be satisfied, transaction documents will be prepared. The entire application process (barring delays on the applicant's part) will take approximately 120-160 days from receipt of the completed initial application to closing.