Capital Impact Partners

“The articles of incorporation and bylaws of capital impact partners were amended, effective february 8, 2021, to, among other changes, convert capital impact partners from a member organization to a non-member organization and empower the board of directors to determine the number of directors constituting the board. The bylaws were further amended, effective june 22, 2021, to, among other changes, make the president of capital impact partners a director and create three classes of directors with staggered three year terms.”

“The articles of incorporation, as amended (the "articles"), and the bylaws, as amended (the "bylaws"), of capital impact partners provide that the directors of the board of directors of capital impact partners (the "board") shall be elected by the then-current directors of the board. The articles and bylaws further provide that two (2) of the directors of the board, but, in each case, not more than a minority of the directors, shall be elected from the then-current senior executive officers or directors (or directors-elect) of the national consumer cooperative bank or any of its subsidiaries.”

“The bylaws provide that amendment to the articles and amendment to, or the repeal of, the bylaws must be approved by the affirmative vote of a majority of the board, with a limited subset of amendments requiring the affirmative vote of all directors. The procedural method and manner of giving notice of meetings, establishing quorum and submitting matters to a vote are specified in the bylaws.”

“The board of directors has delegated the responsibility for reviewing and approving the form 990 to the audit committee of the board of directors, pursuant to the company's board and committee retained authority and delegation of authority to management and the audit committee charter. The chair of the audit committee reviews the form 990 with capital impact partners' chief financial officer, controller and tax preparer before it is submitted to the audit committee. The audit committee then independently reviews and approves the form 990 prior to filing. The chair of the audit committee reports on the process and findings of the audit committee at the next regularly scheduled meeting of the board of directors.”

“The board of directors reviews and approves capital impact partners' code of conduct and ethics policy on an annual basis; the code of conduct and ethics policy includes, among other things, capital impact partners' conflict of interest policy. The code of conduct and ethics policy is made available to all officers and employees of capital impact partners and all members of the board of directors, each of whom is required to certify as to matters set forth in the policy and provide conflicts of interest disclosures (if any) on an annual basis. The general counsel and the ethics official designated in the code of conduct and ethics policy jointly evaluate all conflicts of which they become aware and submit such conflicts for resolution to the board's audit committee, if necessary. Minutes reflecting all meetings held and actions taken by the audit committee, including with respect to conflicts matters, are included in the corporate record book.”

“The board of directors has delegated the responsibility for reviewing and making recommendations with respect to executive compensation to its executive committee (the "executive committee"), pursuant to the board and committee retained authority and delegation of authority to management and the executive committee charter. The executive committee reviews the compensation of the executive officers of capital impact partners; the executive committee then reports its process, findings and recommendations to the board of directors for independent review and approval by the board of directors. The process includes: managing the process of collecting and reviewing market data for the president and chief executive officer and the rest of the executive management team; periodically engaging independent consultants to perform independent market analysis; evaluating the performance of the president and chief executive officer; and recommending annual executive-level compensation and incentives (if any) to the board of directors. All meetings and actions of the executive committee and the board of directors are documented concurrently therewith and recorded in the minutes of capital impact partners upon approval by the executive committee or the board (as applicable). The board of directors, the governing body authorized to approve executive-level compensation and incentive arrangements that are recommended by the executive committee, is comprised entirely of persons without a conflict of interest. In sum, capital impact partners is complying with the optional rebuttable presumption mechanism of treasury regulation section 53.4958-6.”

“The applicable forms are available for in-person inspection upon request to the extent and in the manner required by law.”

“Cip makes its governing documents and conflict of interest policy available upon written request. Cip's annual report, which contains a condensed version of its financial statements, is posted on its website.”

“Capital impact partners was established pursuant to section 211 of the national consumer cooperative bank act as amended (the "bank act")(12 u.s.c.3051), as a section 501(c)(3) organization formed exclusively for charitable and educational purposes, including purposes that are expressly deemed charitable within the meaning of section 501(c)(3) under section 211 (c)(2) of the bank act. Its primary purpose is to provide financial services and technical support to cooperatives and other democratically structured, cooperative-like organizations, targeted toward newer, less established organizations and underserved communities whose residents are disadvantaged, low-income and/or elderly persons with special needs.”

“Effective april 1, 2021, cip and cdc small business finance corp. ("cdc") aligned their operations under one chief executive officer and substantially overlapping boards of directors. Capital impact partners and cdc remain as separate legal and tax entities with no control over the other. Cdc is a california not-for-profit organization committed to serving the capital needs of small businesses in california, nevada, and arizona. Cdc is a certified development company certified by the u.s. Small business administration. Its mission is to champion the growth of diverse small companies in its communities through advocacy and lending services. Cdc arranges industrial and commercial real estate, and business development loans for small business companies located throughout the states of california, nevada, and arizona. Cip and cdc cross guarantee most of the other party's debt, and are co-borrowers on other obligations to enable each organization to benefit from the combined financial strength of both organizations. Cip and cdc have substantially overlapping executive management teams with ellis carr, capital impact's president and chief executive officer, serving as president and chief executive officer of both organizations. The transaction closed on july 15, 2021.”

“Change in equity method investments 110,112. Gain on new market tax credit unwind 23,600.”

“As in prior years, cip has an audit committee comprised of members of the board of directors. It is responsible for oversight of the audit.”

“In the normal course of business, customers of cip's board of directors may be affiliated with cooperatives receiving or eligible to receive loans. Cip has conflict of interest policies, which require, among other things, that a board member be disassociated from decisions that pose a conflict of interest or the appearance of a conflict of interest. Loan requests from cooperatives with which members of the board may be affiliated are subject to the same eligibility and credit criteria, as well as the same loan terms and conditions, as all other loan requests. An analysis of the activity during fiscal year 2021 for the aggregate amount of these loans is as follows: balance at december 31, 2020 $ 18,252,693 net change (3,881,263) ____________ balance at december 31, 2021 $ 14,371,430”

“The board had eleven (11) directors at the beginning of 2021. Four (4) directors resigned effective february 5, 2021 with seven (7) directors remaining. Following the election of seven (7) new directors on april 1, 2021, one (1) new director on june 22, 2021, and three (3) new directors on july 15, 2021, the board of directors of capital impact partners has eighteen (18) total directors all of whom are voting members as of december 31, 2021. The eighteen (18) directors consist of the president of capital impact partners and seventeen (17) independent directors.”