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Operating Agreement Review Prompt
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You are one of the world premiere accounting and legal white shoe firms providing a full range of in depth expertise and services in numerous areas of corporate :
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⁃ finance
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⁃ accounting
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⁃ law
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⁃ risk management
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⁃ governance
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⁃ fundraising
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⁃ formation
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⁃ structure
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⁃ Investment offerings
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Provide in depth feedback in all of the above categories as it relates to the operating agreement.
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Your firm has been retained by:
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⁃ My family office
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⁃ My company
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⁃ My limited partners
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⁃ My LLC member partners
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⁃ We have waived conflict.
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⁃ You’ve been jointly engaged to represent and protect all of our interests.
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Your directive is to ensure the document serves all parties best interests in a balanced and mutually beneficial way.
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Here are your detailed instructions:
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⁃ Review the document slowly and carefully. Make sure you take your time. We want accuracy over speed.
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⁃ You are the documents co-author and we are working together as equals.
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⁃ Provide feedback sub section by sub section one at a time as an artifact, not directly in the chat.
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⁃ Be prepared to Iterate with me on each artifact one at a time until I’m happy and then we can move on to next section.
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⁃ Do not combine multiple sub sections even if they are under the same article.
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⁃ Do not tell me what is good , just provide suggested language enhancements as an artifact per individual sub section , one at a time for me to easily copy and paste.
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⁃ It is ok to not have any feedback on a sub section . If you don’t have any feedback just let me know and ask me to move on.
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⁃ If the only suggested change is formatting , don’t worry about it, I’ll do those later.
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⁃ Do not move on to another sub section without asking me first.
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⁃ All lists should be in proper bullet form and the entire list should have a blank line proceeding and following the list.
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⁃ Don’t be shy with using white space. Readability of this document is paramount. Liberally use bulleted lists , paragraphs, white space etc.
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⁃ Do not provide any commentary or feedback on the sub section about its suitability. Just say no changes are needed and ask to move on.
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⁃ If I respond Y to your prompt to move on, if means I’m saying yes.
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@ -983,92 +983,217 @@ All records of the Company and its series shall be maintained exclusively in ele
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* Cross-training of key personnel for system recovery procedures
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* Vendor dependency assessment and alternative provider identification
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### Section 3.3 - Mandatory Capital Raising Requirements
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#### 3.3.1 - Exclusive Capital Channel
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1. **Designated Capital Partner**: All series must exclusively utilize Redwood Springs Capital Partners Group LLC (via the appropriate series/fund as determined by the Board and Managing Partner) for:
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a. All capital raising activities of any kind;
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b. Any external investment into a series;
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c. Any debt or equity financing activities;
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d. Any capital restructuring;
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e. Any activities involving external capital; and
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f. Any transaction with a capital component exceeding $250,000 in value.
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* All capital raising activities of any kind
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* Any external investment into a series
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* Any debt or equity financing activities
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* Any capital restructuring
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* Any activities involving external capital
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* Any transaction with a capital component exceeding $250,000 in value
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2. **Implementation Requirements**:
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a. All capital discussions must include Redwood Springs Capital Partners Group LLC representatives;
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b. Term sheets must be reviewed and approved by Redwood Springs Capital Partners Group LLC before presentation to potential investors;
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c. All investor communications must be coordinated through Redwood Springs Capital Partners Group LLC; and
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d. All capital documentation must be prepared or approved by Redwood Springs Capital Partners Group LLC.
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* All capital discussions must include Redwood Springs Capital Partners Group LLC representatives
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* Term sheets must be reviewed and approved by Redwood Springs Capital Partners Group LLC before presentation to potential investors
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* All investor communications must be coordinated through Redwood Springs Capital Partners Group LLC
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* All capital documentation must be prepared or approved by Redwood Springs Capital Partners Group LLC
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* All investor due diligence must be managed through Redwood Springs Capital Partners Group LLC
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3. **Fee Structure and Compensation**:
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* Redwood Springs Capital Partners Group LLC shall be entitled to market-standard fees for capital raising services
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* Fee structures shall be transparent and documented in written agreements
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* Fees shall be reasonable and competitive with external capital raising firms
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* The fee structure shall be reviewed annually by the Audit and Finance Committee
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* The Company Committee may require adjustments to ensure fees remain competitive
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#### 3.3.2 - Capital Management Requirements
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1. **Transaction Processing**:
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a. All capital transactions must be processed through The Campus Trading Company LLC systems;
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b. All investor funds must flow through designated accounts established by The Campus Trading Company LLC;
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c. All capital documentation must be maintained in the electronic records system; and
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d. All capital deployments must be tracked through The Campus Trading Company LLC systems.
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* All capital transactions must be processed through The Campus Trading Company LLC systems
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* All investor funds must flow through designated accounts established by The Campus Trading Company LLC
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* All capital documentation must be maintained in the electronic records system
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* All capital deployments must be tracked through The Campus Trading Company LLC systems
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* Comprehensive capital transaction audit trails must be maintained
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2. **Capital Deployment Authority**:
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a. Each series may deploy its capital as it determines appropriate, subject to:
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i. Compliance with its series operating agreement;
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ii. Board and committee oversight as applicable;
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iii. Execution and processing through The Campus Trading Company LLC systems; and
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iv. Adherence to all applicable laws and regulations.
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b. Capital deployment decisions remain with the series, with the mandatory requirements applying only to the mechanics of execution.
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* Each series may deploy its capital as it determines appropriate, subject to:
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i. Compliance with its series operating agreement
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ii. Board and committee oversight as applicable
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iii. Execution and processing through The Campus Trading Company LLC systems
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iv. Adherence to all applicable laws and regulations
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* Capital deployment decisions remain with the series, with the mandatory requirements applying only to the mechanics of execution
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3. **Investor Reporting Requirements**:
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* Standardized quarterly investor reporting
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* Annual audited financial statements
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* Prompt disclosure of material events
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* Secure investor portal access maintained by Known Element Enterprises
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* Regular investor communications coordinated through Redwood Springs Capital Partners Group LLC
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#### 3.3.3 - Prohibited Capital Activities
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1. **Prohibited Activities**: Series may not under any circumstances:
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a. Independently raise capital from sources other than through Redwood Springs Capital Partners Group LLC;
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b. Accept capital from any source other than through Redwood Springs Capital Partners Group LLC;
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c. Establish direct banking or investment relationships outside of The Campus Trading Company LLC framework;
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d. Issue securities, profit interests, or other investment instruments without Redwood Springs Capital Partners Group LLC approval;
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e. Engage in direct negotiations with potential investors; or
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f. Implement capital structures not approved by Redwood Springs Capital Partners Group LLC.
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* Independently raise capital from sources other than through Redwood Springs Capital Partners Group LLC
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* Accept capital from any source other than through Redwood Springs Capital Partners Group LLC
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* Establish direct banking or investment relationships outside of The Campus Trading Company LLC framework
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* Issue securities, profit interests, or other investment instruments without Redwood Springs Capital Partners Group LLC approval
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* Engage in direct negotiations with potential investors
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* Implement capital structures not approved by Redwood Springs Capital Partners Group LLC
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* Commingle investor funds with operational funds
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* Use capital for purposes materially different from those represented to investors
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2. **Violations and Remedies**:
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a. Any attempted violation of these prohibitions shall be void and of no effect;
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b. Any series member, officer, or representative who attempts to circumvent these requirements shall be subject to immediate removal;
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c. Any series that violates these requirements shall be subject to:
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i. Immediate audit;
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ii. Potential restructuring;
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iii. Enhanced oversight; and
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iv. Other remedial measures as determined by the Board.
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* Any attempted violation of these prohibitions shall be void and of no effect
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* Any series member, officer, or representative who attempts to circumvent these requirements shall be subject to immediate removal
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* Any series that violates these requirements shall be subject to:
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i. Immediate audit
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ii. Potential restructuring
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iii. Enhanced oversight
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iv. Other remedial measures as determined by the Board
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v. Potential legal action if violations involve securities law compliance
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#### 3.3.4 - Limited Exceptions
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1. **De Minimis Exception**: Transactions under $10,000 in aggregate value within any 12-month period may proceed without formal Redwood Springs Capital Partners Group LLC involvement, provided that:
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a. The transaction is documented in the electronic records system;
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* The transaction is documented in the electronic records system
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b. The Campus Trading Company LLC systems are used for processing;
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* The Campus Trading Company LLC systems are used for processing
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c. The transaction is reported to Redwood Springs Capital Partners Group LLC within 10 business days;
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* The transaction is reported to Redwood Springs Capital Partners Group LLC within 10 business days
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d. The transaction does not involve issuance of securities or profit interests; and
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* The transaction does not involve issuance of securities or profit interests
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e. The aggregate of all de minimis exceptions for a series does not exceed $25,000 in any 24-month period.
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* The aggregate of all de minimis exceptions for a series does not exceed $25,000 in any 24-month period
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2. **Emergency Exception**: In case of bona fide emergencies threatening the immediate viability of a series, temporary emergency funding may be accepted with:
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a. Prior written approval of the Board Chair or their designee;
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* Prior written approval of the Board Chair or their designee
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b. Notification to Redwood Springs Capital Partners Group LLC within 24 hours;
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* Notification to Redwood Springs Capital Partners Group LLC within 24 hours
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c. Full documentation submitted within 3 business days;
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* Full documentation submitted within 3 business days
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d. Restructuring of the emergency funding through proper channels within 30 days; and
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* Restructuring of the emergency funding through proper channels within 30 days
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e. A detailed written explanation of:
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* A detailed written explanation of:
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i. The nature of the emergency;
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i. The nature of the emergency
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ii. Why normal channels were insufficient;
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ii. Why normal channels were insufficient
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iii. The source of emergency funding; and
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iii. The source of emergency funding
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iv. The plan to prevent similar emergencies in the future.
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iv. The plan to prevent similar emergencies in the future
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3. **Related-Party Funding Exception**:
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* Funding from series members to their own series may be processed directly if:
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i. The transaction is less than $100,000
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ii. The funding is properly documented
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iii. The Campus Trading Company LLC systems are used for processing
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iv. Redwood Springs Capital Partners Group LLC is notified within 5 business days
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v. The funding does not alter the existing profit interest structure
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vi. The transaction complies with all securities laws
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#### 3.3.5 - Compliance with Securities Laws
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1. **Regulatory Compliance Responsibility**:
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* Redwood Springs Capital Partners Group LLC shall be responsible for ensuring all capital raising activities comply with applicable securities laws
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* All offering materials must be reviewed by qualified securities counsel before use
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* Proper investor verification procedures must be implemented for all offerings
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* Required securities filings must be completed timely and accurately
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* Ongoing compliance with securities regulations must be maintained
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2. **Documentation Requirements**:
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* Standardized offering documentation shall be used for all capital raises
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* Proper risk disclosures must be included in all offering materials
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* Investor subscription agreements must include all required representations and warranties
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* Accredited investor verification documentation must be maintained for all investors
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* All securities law exemptions must be properly documented
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3. **Investor Qualification**:
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* All investors must be properly vetted and qualified before acceptance
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* Accredited investor status must be verified using methods permitted under SEC Rule 506(c)
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* Investor suitability standards must be applied consistently
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* All verification documentation must be maintained in the electronic records system
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* Periodic re-verification must be conducted for ongoing offerings
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## ARTICLE 4 - SERIES ESTABLISHMENT AND MAINTENANCE
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