diff --git a/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement.md b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement.md index b604add..219e540 100644 --- a/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement.md +++ b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement.md @@ -181,657 +181,1167 @@ The following schedules are attached to and incorporated into this Agreement: 4. Schedule D: List of permanently established series 5. Schedule E: Governance structure diagram - ## ARTICLE 3 - MANDATORY OPERATIONAL REQUIREMENTS -The Company hereby specifies the following series as primary internal shared service providers: +### Section 3.1 - Mandatory Service Provider Framework -a. Known Element Enterprises (series) LLC shall serve as the Company’s primary information technology provider, offering all IT services as defined in Section 2.1.7. +#### 3.1.1 - Designated Internal Service Providers -b. The Campus Trading Company (series) LLC shall serve as the Company’s primary treasury and transaction operations provider, offering all transaction services as defined in Section 2.1.13. +The Company hereby designates the following series as exclusive internal shared service providers for all TSYS Group entities: -### 2. Service Provider Requirements +1. **Information Technology Services Provider**: Known Element Enterprises (series) LLC shall serve as the Company’s exclusive provider of all IT Services as defined in Article 2 and further detailed in Schedule A to this Agreement. -a. **Primary Use Requirement**: All series shall utilize these internal service providers as their primary service solutions, subject to the following: +2. **Financial Services Provider**: The Campus Trading Company (series) LLC shall serve as the Company’s exclusive provider of all Transaction and Treasury Services as defined in Article 2 and further detailed in Schedule B to this Agreement. - i. **Performance Standards**: Internal service providers must meet or exceed industry standard service level agreements (SLAs) established by the Technology Oversight Committee. - - ii. **Competitive Pricing**: Internal service providers must offer services at pricing comparable to market rates for equivalent services, as verified annually by independent audit. +#### 3.1.2 - Mandatory Use Requirement -b. **Service Provider Failure Remedies**: If an internal service provider fails to meet established performance standards for two consecutive quarters: +1. **Primary Provider Obligation**: All series shall utilize the designated internal service providers as their exclusive service solution providers for the services described in Section 3.1.1, subject to the following conditions: - i. The affected series may petition the Technology Oversight Committee for a temporary waiver to use external providers. - - ii. The Technology Oversight Committee must respond to such petitions within 30 days. - - iii. If approved, waivers shall be granted for a specific scope and duration. + a. **Performance Standards**: Internal service providers must meet or exceed the service level agreements (SLAs) established by the Technology Oversight Committee, which shall: + i. Be documented in writing and incorporated by reference into this Agreement; + ii. Include specific, measurable performance metrics for each service category; + iii. Establish response time requirements for various service priorities; + iv. Define availability requirements for critical systems; and + v. Be reviewed and updated at least annually. -c. **Innovation Exception**: Series may request permission to utilize specialized external services not offered by internal providers when: + b. **Competitive Pricing**: Internal service providers must offer services at pricing comparable to market rates for equivalent services, as verified by: + i. Annual independent third-party audit; + ii. Benchmark comparison against at least three comparable external providers; and + iii. Transparent cost-accounting as described in Section 4.6.5. - i. The service represents a significant competitive advantage. - - ii. The internal service provider cannot reasonably develop equivalent capabilities within 90 days. - - iii. Such exceptions require Technology Oversight Committee approval. +2. **Enforcement Mechanism**: The Company Committee shall be responsible for enforcing the mandatory use requirement and shall: + a. Conduct quarterly compliance reviews; + b. Promptly investigate any reported violations; and + c. Recommend appropriate remedial actions to the Board. -### 3. Service Division Operations +#### 3.1.3 - Service Provider Failure Remedies -a. Each service division shall: +1. **Failure Determination**: An internal service provider shall be deemed to have failed if it: + a. Fails to meet established performance standards for two consecutive quarters as documented by the Technology Oversight Committee; or + b. Experiences a catastrophic service disruption lasting more than 48 hours. - * Operate as a cost center pursuant to Section 4.6.5 - * Maintain transparent cost accounting - * Be subject to Board oversight through appropriate committees - * Select and manage external vendors as needed - * Develop and maintain appropriate service standards - * Conduct annual customer satisfaction surveys among series - * Implement continuous improvement processes +2. **Temporary External Provider Authorization**: + a. Upon a determination of failure, the affected series may petition the Technology Oversight Committee for a temporary waiver to use external providers. + b. The petition must: + i. Identify the specific services affected; + ii. Document the performance failures; + iii. Propose specific external providers; and + iv. Include a plan for transitioning back to the internal provider. + c. The Technology Oversight Committee must respond to such petitions within 30 calendar days. + d. If approved, waivers shall: + i. Be granted for a specific scope of services; + ii. Have a defined duration not to exceed 180 days; + iii. Include monitoring requirements; and + iv. Establish criteria for return to the internal provider. -b. The Board of Directors, through its committees, shall establish and oversee: +3. **Remediation Requirements**: During any waiver period, the failed internal service provider must: + a. Develop and implement a remediation plan approved by the Technology Oversight Committee; + b. Provide biweekly progress reports to the Technology Oversight Committee; + c. Demonstrate compliance with performance standards for at least 60 consecutive days before the waiver expires; and + d. Submit to enhanced monitoring for 180 days following the expiration of any waiver. - * Performance metrics and reporting requirements - * Service level frameworks - * Cost allocation methodologies - * Technology and service strategies - * Vendor selection criteria - * Quality control measures - * Dispute resolution procedures for service conflicts - * Other operational parameters as needed +#### 3.1.4 - Innovation Exception Process +1. **Innovation Exception Criteria**: Series may request permission to utilize specialized external services not offered by internal providers when: + a. The service represents a significant competitive advantage that would materially enhance the requesting series’ business operations; + b. The internal service provider has confirmed in writing that it cannot reasonably develop equivalent capabilities within 90 days; and + c. The requesting series has conducted and documented a thorough evaluation of alternatives. + +2. **Exception Request Process**: + a. Requests must be submitted in writing to the Technology Oversight Committee; + b. Requests must include: + i. Detailed description of the required service; + ii. Documentation of business necessity; + iii. Analysis of competitive advantage; + iv. Proposed external provider information; + v. Security and compliance assessment; and + vi. Implementation timeline. + c. The Technology Oversight Committee must respond within 45 days. + +3. **Exception Implementation**: + a. Approved exceptions shall be documented in the series’ electronic records; + b. The Technology Oversight Committee shall conduct quarterly reviews of all approved exceptions; + c. Exceptions shall expire after 12 months unless renewed through the same process; and + d. The Technology Oversight Committee shall maintain a catalog of all approved exceptions. + +#### 3.1.5 - Service Division Operations + +1. **Operational Requirements**: Each service division shall: + a. Operate as a cost center pursuant to Section 4.6.5; + b. Maintain transparent cost accounting with quarterly reporting to all series; + c. Be subject to Board oversight through appropriate committees; + d. Select and manage external vendors as needed following procurement guidelines established by the Board; + e. Develop and maintain appropriate service standards and SLAs; + f. Conduct annual customer satisfaction surveys among series; + g. Implement continuous improvement processes with measurable objectives; and + h. Maintain appropriate cybersecurity and compliance certifications. + +2. **Board Oversight Responsibilities**: The Board of Directors, through its committees, shall establish and oversee: + a. Performance metrics and reporting requirements; + b. Service level frameworks; + c. Cost allocation methodologies; + d. Technology and service strategies; + e. Vendor selection criteria; + f. Quality control measures; + g. Dispute resolution procedures for service conflicts; and + h. Other operational parameters as needed. + +3. **Service Roadmap Requirements**: Each service provider shall: + a. Maintain a three-year service development roadmap; + b. Conduct quarterly roadmap reviews with all series; + c. Incorporate series feedback into roadmap updates; and + d. Align roadmap priorities with overall TSYS Group strategic objectives. ### Section 3.2 - Electronic Records Requirement -1. All records shall be maintained exclusively in electronic format, including: +#### 3.2.1 - Exclusive Electronic Record Keeping - - Corporate Records: - - Articles of organization and amendments - - Operating agreements (Company and series) - - Board meeting minutes and resolutions - - Series establishment documentation - - Regulatory filings and correspondence - - Annual reports and compliance documents +All records of the Company and its series shall be maintained exclusively in electronic format, including but not limited to: - - Financial Documentation: - - Financial statements and reports - - Tax returns and supporting documents - - Bank statements and reconciliations - - Audit reports and working papers - - Budget and forecasting documents - - Expense documentation and approvals +1. **Corporate Records**: + a. Articles of organization and amendments; + b. Operating agreements (Company and series); + c. Board and committee meeting minutes and resolutions; + d. Series establishment documentation; + e. Regulatory filings and correspondence; and + f. Annual reports and compliance documents. - - Member Information: - - Series membership records - - Ownership transfer documentation - - Member contact information - - Voting records and proxies - - Capital contribution records - - Distribution documentation +2. **Financial Documentation**: + a. Financial statements and reports; + b. Tax returns and supporting documents; + c. Bank statements and reconciliations; + d. Audit reports and working papers; + e. Budget and forecasting documents; and + f. Expense documentation and approvals. - - Contracts and Agreements: - - Service provider agreements - - Vendor contracts - - Client agreements - - Employment contracts - - Non-disclosure agreements - - License and permit documentation +3. **Member Information**: + a. Series membership records; + b. Ownership transfer documentation; + c. Member contact information; + d. Voting records and proxies; + e. Distribution documentation; and + f. Membership interest certificates. -2. Electronic Record Requirements: +4. **Contracts and Agreements**: + a. Service provider agreements; + b. Vendor contracts; + c. Client agreements; + d. Employment and contractor agreements; + e. Non-disclosure and confidentiality agreements; and + f. License and permit documentation. - - System Architecture: - - Cloud-based primary storage with geographic redundancy - - Real-time backup and disaster recovery systems - - Multi-factor authentication access controls - - Encryption at rest and in transit - - API integration capabilities +#### 3.2.2 - Electronic Record System Requirements - - Audit Trail Requirements: - - Automated version control - - Change logging with user identification - - Time and date stamping - - Document access history - - Modification tracking - - User activity logs +1. **System Architecture Requirements**: + a. Cloud-based primary storage with geographic redundancy across at least three separate regions; + b. Real-time backup and disaster recovery systems with recovery time objective of less than four hours; + c. Multi-factor authentication access controls for all users; + d. Minimum AES-256 encryption at rest and TLS 1.3 encryption in transit; + e. Comprehensive API integration capabilities for authorized systems; and + f. Automated compliance monitoring and reporting. - - Access Controls: - - Role-based access management - - Granular permission settings - - Secure user authentication - - Session monitoring and timeout - - Remote access protocols +2. **Audit Trail Requirements**: + a. Immutable version control with blockchain verification; + b. Comprehensive change logging with user identification; + c. Cryptographically secured time and date stamping; + d. Complete document access history retention; + e. Detailed modification tracking with before/after comparisons; and + f. User activity logs retained for a minimum of seven years. - - Retention and Archiving: - - Automated retention scheduling - - Secure archiving protocols - - Legal hold implementation - - Destruction procedures - - Archive access controls +3. **Access Control Requirements**: + a. Role-based access management with principle of least privilege; + b. Granular permission settings at the document and field level; + c. Secure user authentication with biometric options; + d. Automatic session monitoring and timeout after 15 minutes of inactivity; + e. Comprehensive remote access protocols with enhanced security; and + f. Quarterly access rights review and certification. + +4. **Retention and Archiving Requirements**: + a. Automated retention scheduling based on document type; + b. Secure archiving protocols with integrity verification; + c. Legal hold implementation capabilities; + d. Defensible destruction procedures with verification; + e. Archive access controls with separate authentication; and + f. Retention periods compliant with all applicable regulations. + +#### 3.2.3 - Compliance and Security Standards + +1. **Required Compliance Standards**: The electronic records system shall comply with: + a. SOC 2 Type II standards; + b. ISO 27001 Information Security standards; + c. NIST Cybersecurity Framework; + d. Applicable industry-specific regulations; and + e. All federal, state, and local records retention requirements. + +2. **Security Protocols**: + a. Quarterly vulnerability assessments; + b. Annual penetration testing by independent third parties; + c. Continuous security monitoring; + d. Incident response plan with testing; + e. Employee security awareness training; and + f. Data loss prevention controls. + +3. **System Administration**: + a. Centralized administration by Known Element Enterprises; + b. Documentation of all system configurations; + c. Change management processes for system modifications; + d. Segregation of duties for administrative functions; and + e. Backup administrator credentials securely stored with the Company Committee. ### Section 3.3 - Mandatory Capital Raising Requirements -1. Capital Activities Restrictions +#### 3.3.1 - Exclusive Capital Channel -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: +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: + a. All capital raising activities of any kind; + b. Any external investment into a series; + c. Any debt or equity financing activities; + d. Any capital restructuring; + e. Any activities involving external capital; and + f. Any transaction with a capital component exceeding $250,000 in value. - * All capital raising activities - * Any external investment into a series - * Any financing activities - * Any capital restructuring - * Any activities involving external capital +2. **Implementation Requirements**: + a. All capital discussions must include Redwood Springs Capital Partners Group LLC representatives; + b. Term sheets must be reviewed and approved by Redwood Springs Capital Partners Group LLC before presentation to potential investors; + c. All investor communications must be coordinated through Redwood Springs Capital Partners Group LLC; and + d. All capital documentation must be prepared or approved by Redwood Springs Capital Partners Group LLC. -2. Capital Management Requirements +#### 3.3.2 - Capital Management Requirements - * All capital transactions must be processed through The Campus Trading Company LLC systems - * Each series may deploy its capital as it determines appropriate, provided all transactions are executed and processed through The Campus Trading Company LLC systems +1. **Transaction Processing**: + a. All capital transactions must be processed through The Campus Trading Company LLC systems; + b. All investor funds must flow through designated accounts established by The Campus Trading Company LLC; + c. All capital documentation must be maintained in the electronic records system; and + d. All capital deployments must be tracked through The Campus Trading Company LLC systems. +2. **Capital Deployment Authority**: + a. Each series may deploy its capital as it determines appropriate, subject to: + i. Compliance with its series operating agreement; + ii. Board and committee oversight as applicable; + iii. Execution and processing through The Campus Trading Company LLC systems; and + iv. Adherence to all applicable laws and regulations. + b. Capital deployment decisions remain with the series, with the mandatory requirements applying only to the mechanics of execution. -3. Prohibited Capital Activities +#### 3.3.3 - Prohibited Capital Activities -Series may not +1. **Prohibited Activities**: Series may not under any circumstances: + a. Independently raise capital from sources other than through Redwood Springs Capital Partners Group LLC; + b. Accept capital from any source other than through Redwood Springs Capital Partners Group LLC; + c. Establish direct banking or investment relationships outside of The Campus Trading Company LLC framework; + d. Issue securities, profit interests, or other investment instruments without Redwood Springs Capital Partners Group LLC approval; + e. Engage in direct negotiations with potential investors; or + f. Implement capital structures not approved by Redwood Springs Capital Partners Group LLC. - * Independently raise capital from sources other than Redwood Springs Capital Partners Group LLC - * Accept capital from any source other than Redwood Springs Capital Partners Group LLC +2. **Violations and Remedies**: + a. Any attempted violation of these prohibitions shall be void and of no effect; + b. Any series member, officer, or representative who attempts to circumvent these requirements shall be subject to immediate removal; + c. Any series that violates these requirements shall be subject to: + i. Immediate audit; + ii. Potential restructuring; + iii. Enhanced oversight; and + iv. Other remedial measures as determined by the Board. + +#### 3.3.4 - Limited Exceptions + +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: + a. The transaction is documented in the electronic records system; + b. The Campus Trading Company LLC systems are used for processing; + c. The transaction is reported to Redwood Springs Capital Partners Group LLC within 10 business days; and + d. The transaction does not involve issuance of securities or profit interests. + +2. **Emergency Exception**: In case of bona fide emergencies threatening the immediate viability of a series, temporary emergency funding may be accepted with: + a. Prior written approval of the Board Chair or their designee; + b. Notification to Redwood Springs Capital Partners Group LLC within 24 hours; + c. Full documentation submitted within 3 business days; and + d. Restructuring of the emergency funding through proper channels within 30 days. ## ARTICLE 4 - SERIES ESTABLISHMENT AND MAINTENANCE ### Section 4.1 - Series Creation -1. New series may be established upon: +#### 4.1.1 - Series Establishment Requirements - - Company Committee approval - - Filing of required notices with the Texas Secretary of State - - Execution of a series operating agreement +1. **Authorization Requirements**: New series may be established only upon: + a. Submission of a formal series establishment proposal to the Company Committee; + b. Approval by a majority vote of the Company Committee; + c. Filing of required notices with the Texas Secretary of State; + d. Execution of a series operating agreement; and + e. Compliance with all requirements set forth in this Section 4.1. -2. Each series shall have its own: +2. **Series Establishment Proposal**: Any proposal for establishing a new series must include: + a. Proposed business purpose and scope of operations; + b. Three-year business plan with financial projections; + c. Management structure and key personnel; + d. Initial members and proposed membership interests; + e. Draft series operating agreement; + f. Risk assessment and mitigation strategy; + g. Compliance plan for all mandatory requirements; and + h. Integration strategy with existing TSYS Group entities. - - Operating agreement - - Management structure - - Membership interests - - Business purpose +3. **Series Documentation Requirements**: Each series must maintain: + a. A series operating agreement executed by all initial members and the Company Committee; + b. A certificate of series filing with the Texas Secretary of State; + c. A unique federal Employer Identification Number (EIN); + d. Separate books and records as required by Section 3.2; and + e. All registrations, licenses, and permits required for its business operations. -3. Series Operating Agreement Flexibility: +#### 4.1.2 - Series Operating Agreement Requirements - - Series shall have broad latitude to establish their own operating parameters (within the broad parameters of this agreement) (we take a states rights approach for series of the Company). - - Series may create unique governance structures - - Series may set custom economic terms - - Series may establish specialized membership rights - - Series may implement unique operational procedures - - Series may define custom distribution structures +1. **Required Elements**: Each series operating agreement shall include provisions addressing: + a. Business purpose and operational scope; + b. Membership structure and classes; + c. Profit interest allocation and distribution; + d. Governance structure and decision-making processes; + e. Management rights and responsibilities; + f. Transfer restrictions; + g. Dispute resolution procedures; + h. Term and dissolution provisions; and + i. Compliance with all mandatory Company requirements. -4. Series Operating Agreement Limitations: +2. **Series Operating Agreement Flexibility**: Within the parameters established by this Agreement, series shall have broad latitude to establish: + a. Custom governance structures appropriate to their business needs; + b. Specialized profit interest allocation methodologies; + c. Unique membership qualifications and admission procedures; + d. Industry-specific operational procedures and standards; + e. Tailored distribution structures and timing; and + f. Other provisions specific to their business purposes or investment objectives. - - No series operating agreement may override or conflict with: +3. **Series Operating Agreement Limitations**: No series operating agreement may: + a. Override or conflict with any provision of this Agreement; + b. Alter the required service provider relationships established in Article 3; + c. Modify the electronic records requirements established in Section 3.2; + d. Change the capital raising requirements established in Section 3.3; + e. Eliminate or reduce Company-level compliance measures; + f. Violate any securities laws or regulations; or + g. Attempt to limit the isolation of series as provided in Section 4.2. - - Any provision of this Agreement - - Required service provider relationships - - Electronic records requirements - - Company-level compliance measures - - Mandatory operational requirements - - Securities law compliance +4. **Conflict Resolution**: Any provision in a series operating agreement that conflicts with this Agreement shall be void and unenforceable. In case of any ambiguity or dispute regarding potential conflicts, the Company Committee shall have final authority to interpret and resolve such conflicts. - - Any provision in a series operating agreement that conflicts with this Agreement shall be void and unenforceable +#### 4.1.3 - Series Amendment Process + +1. **Series Operating Agreement Amendments**: Any series operating agreement may be amended according to its own terms, provided that: + a. The amendment does not create a conflict with this Agreement; + b. Notice of the amendment is provided to the Company Committee within 10 business days; + c. The amendment is properly documented in the electronic records system; and + d. The amendment complies with all applicable laws and regulations. + +2. **Series Purpose Modifications**: Any material change to a series’ business purpose or operational scope requires: + a. Prior written approval of the Company Committee; + b. Amended filings with the Texas Secretary of State if required; and + c. Compliance with any applicable regulatory requirements. ### Section 4.2 - Series Independence and Isolation -1. Absolute Series Isolation: +#### 4.2.1 - Legal and Economic Isolation - * Each series is absolutely and irrevocably isolated from all other series - * The assets, liabilities, obligations, and debts of each series are completely separate and distinct from all other series - * No series shall have any claim, right, interest, obligation, duty, responsibility, or liability whatsoever in any other series - * Each series operates as if it were a completely separate legal entity - * The bankruptcy, insolvency, dissolution, liquidation, or termination of any series shall have no effect whatsoever on any other series or the Company as a whole. +1. **Absolute Series Isolation**: Each series is absolutely and irrevocably isolated from all other series, such that: + a. The assets, liabilities, obligations, and debts of each series are completely separate and distinct from all other series; + b. No series shall have any claim, right, interest, obligation, duty, responsibility, or liability whatsoever in any other series; + c. Each series operates as if it were a completely separate legal entity; and + d. The bankruptcy, insolvency, dissolution, liquidation, or termination of any series shall have no effect whatsoever on any other series or the Company as a whole. -2. Mandatory Separation: +2. **Statutory Basis**: This isolation is established pursuant to and in accordance with Texas Business Organizations Code § 101.601 et seq., which provisions are hereby incorporated by reference. - Each series shall maintain: - - * Completely independent books and records (provided via KNEL/TheCampus) - * Entirely separate bank accounts - * Absolute separation of all assets and liabilities - * Independent contracts and business relationships - * Separate tax identification numbers and filings - * Distinct operational processes and procedures (other than utilizing KNEL/TheCampus provided systems) +3. **Piercing Prevention**: The Company, all series, and all series members acknowledge and agree that: + a. Series isolation is a fundamental aspect of the Company structure; + b. Series isolation shall be interpreted and enforced to the maximum extent permitted by law; + c. All reasonable measures shall be taken to maintain and protect series isolation; and + d. If any provision limiting series isolation is found invalid, the remaining isolation provisions shall be enforced to the maximum extent possible. -3. Prohibition on Cross-Series Activities: +#### 4.2.2 - Operational Separation Requirements - * No series may commingle any assets with any other series - * No series may guarantee or secure the obligations of any other series - * No series may enter into any agreement that could create joint liability with any other series - * No series may represent or imply any connection to or responsibility for any other series +1. **Mandatory Separation**: Each series shall maintain complete operational separation, including: + a. Independent electronic books and records (provided via KNEL/TheCampus systems as required by Section 3.1); + b. Entirely separate bank accounts established through The Campus Trading Company; + c. Absolute separation of all assets and liabilities; + d. Independent contracts and business relationships; + e. Separate tax identification numbers and filings; + f. Distinct operational processes and procedures; and + g. Clear identification in all business dealings. -4. Enforcement of Isolation: +2. **Documentation of Separation**: Each series shall: + a. Maintain documentation of its separate existence in all records; + b. Clearly identify itself as a separate series in all contracts and communications; + c. Conduct a quarterly review of separation compliance; and + d. Promptly correct any identified separation issues. - * The isolation of series shall be absolute and enforceable against all creditors and claimants - * No creditor or claimant of any series shall have any right or claim against any other series - * Any attempt to pierce the isolation between series shall be void and unenforceable - * The isolation of series shall be interpreted and enforced to the maximum extent permitted by law - * If any provision limiting series isolation is found invalid, the remaining isolation provisions shall be enforced to the maximum extent possible +3. **Financial Separation**: Each series shall: + a. Maintain separate accounting records; + b. Prepare its own financial statements; + c. File its own tax returns if legally required; + d. Conduct business solely in its own name; and + e. Make distributions solely from its own assets. -5. Notice Requirements: +#### 4.2.3 - Prohibited Cross-Series Activities - * All contracts entered into by any series must include explicit notice of series isolation - * All series must maintain clear identification of their separate status in all dealings - * No series may take any action that could create confusion about its separate status +1. **Absolute Prohibitions**: Under no circumstances may any series: + a. Commingle any assets with any other series; + b. Guarantee or secure the obligations of any other series; + c. Enter into any agreement that could create joint liability with any other series; + d. Represent or imply any connection to or responsibility for any other series; + e. Pledge assets for the benefit of any other series; or + f. Assume or pay the debts of any other series. -6. Indemnification: +2. **Permitted Arms-Length Transactions**: Series may engage in arms-length business transactions with other series only if: + a. The transaction is documented with the same formality as would be required for transactions with unrelated third parties; + b. The transaction terms are commercially reasonable and fair to both series; + c. The transaction is approved by the disinterested members of each series; and + d. The transaction does not undermine or threaten series isolation. - * Each series shall indemnify all other series against any claim attempting to breach series isolation - * Each series shall bear all costs of maintaining and enforcing its isolation - * No series shall have any obligation to contribute to the debts, liabilities, or obligations of any other series +#### 4.2.4 - Notice Requirements -7. Governing Law and Jurisdiction: +1. **Series Identification**: In all contracts, agreements, and instruments, each series shall: + a. Clearly identify itself as a specific series of the Company; + b. Include the complete series name including “(series) LLC”; + c. Use its own letterhead, email signatures, and business materials; and + d. Maintain separate branding and visual identity as appropriate. - * This series isolation provision shall be governed by and construed in accordance with Texas law - * The series isolation provisions of the Texas Business Organizations Code are hereby incorporated by reference - * To the extent permitted by law, series isolation shall be interpreted to provide the maximum possible protection and separation between series +2. **Isolation Notice**: All contracts entered into by any series must include an explicit notice of series isolation substantially in the following form: + “NOTICE OF LIMITED LIABILITY: [Series Name] is a series of Turnkey Network Systems LLC, a Texas series limited liability company. Under Texas law, the debts, liabilities, obligations, and expenses incurred, contracted for, or otherwise existing with respect to this series are enforceable against the assets of this series only, and not against the assets of Turnkey Network Systems LLC generally or any other series thereof. Similarly, none of the debts, liabilities, obligations, and expenses incurred, contracted for, or otherwise existing with respect to Turnkey Network Systems LLC generally or any other series thereof shall be enforceable against the assets of this series.” + +#### 4.2.5 - Indemnification for Isolation Breach + +1. **Cross-Indemnification**: Each series shall indemnify, defend, and hold harmless all other series against any claim attempting to breach series isolation. + +2. **Costs of Enforcement**: Each series shall bear all costs of maintaining and enforcing its isolation. + +3. **Isolation Breach Liability**: Any series that takes action to breach, undermine, or threaten series isolation shall be liable for: + a. All direct damages resulting from such action; + b. All costs of enforcement and defense; + c. Reasonable attorneys’ fees; and + d. Any other appropriate remedies as determined by a court of competent jurisdiction. ### Section 4.3 - Series Management Structure -1. Each series shall be member-managed, with day-to-day operations and business decisions made by its members in accordance with its series operating agreement. +#### 4.3.1 - Basic Management Framework -2. The Board and its committees shall provide governance and oversight but shall not participate in the day-to-day management of any series. +1. **Member-Managed Default**: Unless otherwise specified in a series operating agreement, each series shall be member-managed, with day-to-day operations and business decisions made by its members in accordance with its series operating agreement. -3. Series members shall retain full authority to: +2. **Operational Authority**: Series members shall retain full authority to: + a. Make operational decisions; + b. Enter into contracts within the series’ business purpose; + c. Manage series assets; + d. Conduct series business activities; + e. Make distributions in accordance with the series operating agreement; + f. Make investments; and + g. Take any other actions permitted by the series operating agreement and not in conflict with this Agreement. - - Make operational decisions - - Enter into contracts - - Manage series assets - - Conduct series business activities - - Make distributions - - Make investments - - Admit new members (with Company Committee approval) - - Take any other actions permitted by the series operating agreement +3. **Board Oversight Relationship**: The Board and its committees shall: + a. Provide governance and oversight; + b. Ensure compliance with this Agreement and applicable laws; + c. Monitor performance and risk; + d. Establish and enforce Company-wide policies; but + e. Not participate in the day-to-day management of any series unless: + i. Expressly authorized by the series operating agreement; + ii. Necessary to address a material compliance issue; or + iii. Required to prevent or mitigate significant harm to the Company or other series. + +#### 4.3.2 - Series Governance Options + +1. **Alternative Governance Structures**: A series operating agreement may establish alternative governance structures, including: + a. Manager-managed governance with designated managers; + b. Board-managed governance with a series board of directors; + c. Officer-led governance with designated officer positions; or + d. Hybrid approaches combining elements of multiple structures. + +2. **Governance Documentation Requirements**: Any series with an alternative governance structure must: + a. Clearly define the governance structure in its operating agreement; + b. Establish clear lines of authority and decision-making procedures; + c. Define the relationship between its governance structure and the Board; and + d. Document all governance decisions in accordance with Section 3.2. + +#### 4.3.3 - Series Membership Decisions + +1. **New Member Admission**: The admission of new members to a series requires: + a. Compliance with the procedures set forth in the series operating agreement; + b. Approval by existing series members as specified in the series operating agreement; + c. Company Committee approval, which shall not be unreasonably withheld; and + d. Execution of a membership interest subscription agreement and acknowledgment of this Agreement. + +2. **Member Removal**: Members may be removed from a series only: + a. In accordance with the series operating agreement; + b. For cause as defined in the series operating agreement; + c. Following all required notice and cure periods; and + d. With proper documentation in the electronic records system. ### Section 4.4 - Special Series Types -1. TDCMSP Series (Tools, Dies, Casts, Materials, Supplies, and (Intellectual) Property Series) +#### 4.4.1 - TDCMSP Series (Tools, Dies, Casts, Materials, Supplies, and (Intellectual) Property Series) - - Purpose and Limitations: +1. **Purpose and Limitations**: A TDCMSP Series: + a. May only own physical assets, real property, and intellectual property; + b. Has no operational capability except through usage agreements with appropriate operational series; + c. Cannot enter agreements with the Company; and + d. Cannot enter agreements with any non-TSYS Group entities. - - May only own physical assets, real property and intellectual property - - No operational capability except usage agreements with appropriate series(s) - - Cannot enter agreements with the Company - - Cannot enter agreements with any non TSYS Group entities +2. **Asset Categories**: TDCMSP Series may own and manage: + a. Tools and equipment; + b. Dies and molds; + c. Casting equipment; + d. Raw materials; + e. Supplies and consumables; + f. Intellectual property; + g. Patents and trademarks; + h. Technical documentation; + i. Manufacturing processes; + j. Design specifications; and + k. Real property. - - Asset Categories: +3. **Lease Agreement Requirements**: All TDCMSP Series must execute written lease agreements that include: + a. Precise asset identification and valuation; + b. Clearly defined maintenance responsibilities; + c. Asset replacement provisions and funding mechanisms; + d. Insurance requirements with minimum coverage levels; + e. Usage tracking and reporting obligations; + f. Term and renewal provisions; and + g. Default and remediation procedures. - - Tools and equipment - - Dies and molds - - Casting equipment - - Raw materials - - Supplies and consumables - - Intellectual property - - Patents and trademarks - - Technical documentation - - Manufacturing processes - - Design specifications +4. **Asset Management Requirements**: All TDCMSP Series must implement: + a. Regular asset valuation by qualified third parties; + b. Comprehensive maintenance records; + c. Usage tracking systems; + d. Industry-standard depreciation schedules; + e. Replacement planning with adequate reserves; and + f. Annual asset audits. - - Lease Requirements: +#### 4.4.2 - Operating Series Requirements for TDCMSP Leases - - Written lease agreements required - - Clear maintenance responsibilities - - Asset replacement provisions - - Insurance requirements +1. **Qualification Requirements**: Operating Series leasing assets from TDCMSP Series must: + a. Demonstrate operational capability for proper asset utilization; + b. Maintain required insurance with TDCMSP Series named as additional insured; + c. Follow maintenance schedules established in lease agreements; + d. Provide monthly usage reports; and + e. Comply with all lease terms. - - Asset Management: - - - Regular asset valuation - - Maintenance records - - Usage tracking - - Depreciation schedules - - Replacement planning - -2. Operating Series Requirements for TDCMSP Leases: - - - Must demonstrate operational capability - - Must maintain required insurance - - Must follow maintenance schedules - - Must provide usage reports - - Must comply with all lease terms +2. **Operational Responsibilities**: Operating Series leasing TDCMSP assets must: + a. Designate specific personnel responsible for asset management; + b. Implement proper training for all personnel using assets; + c. Establish and follow standard operating procedures; + d. Conduct regular inspections and maintenance; + e. Immediately report any damage or malfunction; and + f. Properly account for lease expenses. ### Section 4.5 - Cell Series Provisions -1. Establishment of Cell Series: +#### 4.5.1 - Cell Series Establishment - - Requires explicit Board approval for creation - - Must file required notices with Texas Secretary of State - - Must execute cell series operating agreement +1. **Creation Requirements**: Establishment of a Cell Series requires: + a. Explicit Board approval by a two-thirds majority vote; + b. Filing of required notices with the Texas Secretary of State; + c. Execution of a cell series operating agreement; and + d. Compliance with all applicable regulatory requirements. -2. Cell Series Governance: +2. **Cell Purpose Statement**: The proposal for a Cell Series must include a detailed purpose statement describing: + a. Strategic rationale for the cell structure; + b. Types of subsidiary series to be created; + c. Governance relationship with the Company; + d. Economic structure and capital requirements; and + e. Risk management framework. - - May establish and maintain independent Series board - - May create specialized Company board committees - - Independent governance structure from Company Committee - - Must maintain compliance with Company requirements +#### 4.5.2 - Cell Series Governance -3. Structure: +1. **Independent Governance**: A Cell Series may: + a. Establish and maintain an independent Series board; + b. Create specialized governance committees; + c. Implement governance structures independent from the Company Committee; and + d. Develop its own policies and procedures. - - May contain multiple subsidiary series - - Each subsidiary series maintains independence - - Cell series provides administrative oversight - - Cell series board determines internal policies +2. **Governance Requirements**: All Cell Series must: + a. Document governance structures in the cell series operating agreement; + b. Establish clear reporting relationships to the Board; + c. Implement appropriate controls and compliance measures; + d. Maintain compliance with Company requirements; and + e. Submit quarterly governance reports to the Board. -4. Subsidiary Series Creation: +#### 4.5.3 - Cell Series Structure - - Created by cell series authority - - No Company Board approval required - - Must comply with all Company requirements - - Independent operations and assets - - Separate membership interests - - Subject to cell series board oversight +1. **Multi-Series Framework**: A Cell Series: + a. May contain multiple subsidiary series; + b. Provides administrative oversight for all subsidiary series; + c. Establishes common policies across subsidiary series; and + d. Maintains compliance for the entire cell structure. -5. Cell Series Board Powers: +2. **Subsidiary Independence**: Each subsidiary series within a Cell Series: + a. Maintains complete asset and liability isolation; + b. Operates independently according to its specific purpose; + c. Has its own membership interests; and + d. Is subject to all provisions of Section 4.2. - - Establish subsidiary series - - Set internal governance policies - - Approve subsidiary series actions - - Monitor subsidiary compliance - - Manage resource allocation +#### 4.5.4 - Subsidiary Series Creation -6. Limitations: +1. **Creation Authority**: A Cell Series may create subsidiary series: + a. Under its own authority as established in its cell series operating agreement; + b. Without requiring specific Company Board approval for each subsidiary; + c. Subject to any limitations in its cell series operating agreement; and + d. In compliance with all requirements of this Agreement. - - Cannot override Company service provider requirements - - Subject to Company Committee oversight for overall compliance +2. **Documentation Requirements**: For each subsidiary series created, the Cell Series must: + a. File all required notices with the Texas Secretary of State; + b. Execute a subsidiary series operating agreement; + c. Establish separate books and records; + d. Obtain a separate EIN if required; and + e. Notify the Company Committee within 10 business days of creation. -### Section 4.6.0 - Permamently Established Series +#### 4.5.5 - Cell Series Board Powers -The following series are hereby established as permanent series LLC of the Company. They all adopt and operate under this operating agreement until such time as they adopt their own. +1. **Authorized Powers**: A Cell Series board shall have authority to: + a. Establish subsidiary series; + b. Set internal governance policies; + c. Approve subsidiary series actions; + d. Monitor subsidiary compliance; + e. Manage resource allocation across the cell; and + f. Implement strategic initiatives within the cell. +2. **Limitations on Powers**: A Cell Series board may not: + a. Override Company service provider requirements; + b. Violate or modify any provisions of this Agreement; + c. Create obligations binding on the Company or other series; or + d. Take any action that would threaten series isolation. -#### Wyble Family Office Group (Cell) (series) LLC +3. **Compliance Oversight**: Each Cell Series shall be subject to: + a. Company Committee oversight for overall compliance; + b. Annual compliance audits; + c. Regular reporting requirements; and + d. Remediation obligations for any identified compliance issues. -* Turnkey Network Systems LLC - Wyble Family Office Group (Cell) (series) LLC -* Turnkey Network Systems LLC - Wyble Family Office Group (Cell) - ManagementCompany (series) LLC - -* Turnkey Network Systems LLC - Wyble Family Office Group (Cell) - ReachableCEOEnterprises (series) LLC - -* Turnkey Network Systems LLC - Wyble Family Office Group (Cell) - TSYSCompanyMember (series) LLC -* Turnkey Network Systems LLC - Wyble Family Office Group (Cell) - REDWFO-ManagementCo-Member (series) LLC -* Turnkey Network Systems LLC - Wyble Family Office Group (Cell) - RWSCP-ManagementCo-Member (series) LLC -* Turnkey Network Systems LLC - Wyble Family Office Group (Cell) - KNELMember (series) LLC -* Turnkey Network Systems LLC - Wyble Family Office Group (Cell) - TCTCMember (series) LLC +### Section 4.6 - Permanently Established Series +#### 4.6.1 - Designation of Permanent Series -#### Redwood Family Office Group (Cell) (series) LLC +The following series are hereby established as permanent series of the Company. They shall adopt and operate under this Agreement until such time as they adopt their own series operating agreements consistent with this Agreement. -- Turnkey Network Systems LLC - Redwood Family Office Group (Cell) (series) LLC -- Turnkey Network Systems LLC - Redwood Family Office Group (Cell) - ManagementCo (series) LLC +1. **Wyble Family Office Group Cell Series**: + a. Turnkey Network Systems LLC - Wyble Family Office Group (Cell) (series) LLC + b. Turnkey Network Systems LLC - Wyble Family Office Group (Cell) - ManagementCompany (series) LLC + c. Turnkey Network Systems LLC - Wyble Family Office Group (Cell) - ReachableCEOEnterprises (series) LLC + d. Turnkey Network Systems LLC - Wyble Family Office Group (Cell) - TSYSCompanyMember (series) LLC + e. Turnkey Network Systems LLC - Wyble Family Office Group (Cell) - REDWFO-ManagementCo-Member (series) LLC + f. Turnkey Network Systems LLC - Wyble Family Office Group (Cell) - RWSCP-ManagementCo-Member (series) LLC + g. Turnkey Network Systems LLC - Wyble Family Office Group (Cell) - KNELMember (series) LLC + h. Turnkey Network Systems LLC - Wyble Family Office Group (Cell) - TCTCMember (series) LLC -#### Redwood Springs Capital Partners Group (Cell) (series) LLC - -- Turnkey Network Systems LLC - Redwood Springs Capital Partners Group (Cell) (series) LLC -- Turnkey Network Systems LLC - Redwood Springs Capital Partners Group (Cell) - ManagementCo (series) LLC +2. **Redwood Family Office Group Cell Series**: + a. Turnkey Network Systems LLC - Redwood Family Office Group (Cell) (series) LLC + b. Turnkey Network Systems LLC - Redwood Family Office Group (Cell) - ManagementCo (series) LLC -#### Operational entities of the Company - -- Turnkey Network Systems LLC - Known Element Enterprises (series) LLC -- Turnkey Network Systems LLC - The Campus Trading Company (series) LLC +3. **Redwood Springs Capital Partners Group Cell Series**: + a. Turnkey Network Systems LLC - Redwood Springs Capital Partners Group (Cell) (series) LLC + b. Turnkey Network Systems LLC - Redwood Springs Capital Partners Group (Cell) - ManagementCo (series) LLC -#### Section 4.6.3 - Series Restrictions and Governance +4. **Operational Entities of the Company**: + a. Turnkey Network Systems LLC - Known Element Enterprises (series) LLC + b. Turnkey Network Systems LLC - The Campus Trading Company (series) LLC -- General Series Restrictions +#### 4.6.2 - Permanent Series Restrictions and Governance -The following restrictions apply to all series established under Section 4.6.0 : +1. **General Series Restrictions**: The following restrictions apply to all series established under Section 4.6.1: + a. Those series may not be dissolved; + b. No additional members may be added to those series; and + c. No members may be removed from those series. -* Those series may not be dissolved -* No additional members may be added to those series -* No members may be removed from those series +2. **Modification Limitations**: The provisions of this Section 4.6 may not be: + a. Amended except with unanimous consent of all series members and the Board; + b. Overridden by any series operating agreement; or + c. Modified through any Board or committee action. -#### Section 4.6.3.1 - Wyble Family Office Group (Cell) (series) LLC (aka WFO Group) +#### 4.6.3 - Special Purpose Series Provisions -WFO Group and it’s subsidiary series is the private, multi family, multi state, multi generational family office LLC of the Company founders (Charles Wyble and Patti Wyble) and shall have no voting rights in the Company or its series. Voting rights in Company operational series will be held directly by Charles Wyble and/or Patti Wyble. +##### 4.6.3.1 - Wyble Family Office Group (Cell) (series) LLC (aka WFO Group) -WFO Group (and/or the relevant series of WFO Group) will only hold Class B Profit Interests in various Company series. This is to ensure WFO remains funded from proceeds of various Company series it’s a member of and is able to carry out its various missions (charity work, supporting foundations etc) without disruption long after Charles Wyble and Patti Wyble have passed away. It ensures a clean separation of concerns between the family wealth/personal affairs of the founders and the operations and management of the Company and its series. -  -WFO Group and/or it’s relevant subsidiaries permanently and irrevocably delegate control of: +1. **Purpose and Status**: WFO Group and its subsidiary series: + a. Is the private, multi-family, multi-state, multi-generational family office LLC of the Company founders (Charles Wyble and Patti Wyble); + b. Shall have no voting rights in the Company or its series (voting rights in Company operational series will be held directly by Charles Wyble and/or Patti Wyble); and + c. Will only hold Class B Profit Interests in various Company series. - - the Company - - the permanent Company series it’s the sole member of (KNEL/TheCampus/RWSCP/REDWFO and/or subsidiaries thereof) - -to the relevant Board and/or officers as appropriate per the relevant operating agreement provisions. +2. **Delegation of Control**: WFO Group and/or its relevant subsidiaries permanently and irrevocably delegate control of: + a. The Company; + b. The permanent Company series it’s the sole member of (KNEL/TheCampus/RWSCP/REDWFO and/or subsidiaries thereof); + to the relevant Board and/or officers as appropriate per the relevant operating agreement provisions. -WFO Group and WFO Group Management Company permanently and irrevocalby delegate their operational authority to : +3. **Operational Authority Delegation**: WFO Group and WFO Group Management Company permanently and irrevocably delegate their operational authority to: + a. Charles Wyble and Patti Wyble; + b. The Charles Wyble And Patti Wyble Living Trust; and + c. The WFO Group Board (which shall consist of Charles Wyble and Patti Wyble as founding members). -- Charles Wyble and Patti Wyble -- the Charles Wyble And Patti Wyble Living Trust -- the WFO Group Board (which shall consist of Charles Wyble and Patti Wyble as founding members) +4. **Operational Independence**: WFO Group and all of its subsidiaries shall: + a. Operate independently of the Company Board and its committees, with its own Cell Board having full authority over WFO Group funds; + b. Maintain its own governance structure; + c. Have full authority to establish and govern its subsidiary series without needing the Company Board approval; + d. Not be subject to Company Committee or Company Board oversight; + e. Utilize KNEL/TheCampus systems like all other series; + f. May have its own banking relationships; and + g. May receive external capital directly from Charles Wyble and Patti Wyble and/or The Charles Wyble and Patti Wyble Living Trust. -WFO Group and all of it’s subsidiaries shall: +##### 4.6.3.2 - Redwood Family Office Group (Cell) (series) LLC (aka REDWFO) -- Operate independently of the Company Board and its committees. WFO Group will have its own Cell Board with full authority over WFO Group funds. -- Maintain its own governance structure. -- Have full authority to establish and govern its subsidiary series without needing the Company Board to approve. -- Not be subject to Company Committee or Company Board oversight. -- Utilize KNEL/TheCampus systems like all other series. -- May have it’s own banking relationships -- May receive external capital directly from Charles Wyble and Patti Wyble and/or The Charles Wyble and Patti Wyble Living Trust. -  +1. **Purpose and Status**: REDWFO and its subsidiary series: + a. Is the public, multi-series, multi-party, multi-stakeholder family office LLC for Company stakeholders; + b. Has a broad mandate to maximize benefit for all of its members; and + c. Provides top-tier benefits packages for all Company stakeholders that elect to utilize its offerings. -#### Section 4.6.3.2 - Redwood Family Office Group (Cell) (series) LLC (aka REDWFO) +2. **Balancing Role**: REDWFO is established as a balancing entity to the Board and Founder/Investor class members, recognizing that benefits are a core component of stakeholder value rather than merely a cost of doing business. -REDWFO and it’s subsidiary series is the public, multi series, multi party, multi stakeholder family office LLC for Company stakeholders. It has a broad mandate to maximize benefit for all of its members. Providing top tier benefits package for all Company stakeholders that elect to utilize its offerings. - -As such, REDWFO is setup as a kind of… adversarial / balancing entity to the Board and Founder/Investor class members. In most organizations, benefits are seen as a “cost of doing business” and are begrudgingly granted to “employees”. Of course, no concept of employee exists anywhere in TSYS Group. As we all know, employment is a joke, designed to make other people rich. - -Much more about REDWFO will be forthcoming in its operating agreement, website, plan etc. This is not the medium to expound on it. - -REDWFO and all of it’s subsidiaries shall: - -- Operate independently of the Company Board and its committees. REDWFO will have its own Cell Board with full authority over REDWFO funds and operations. -- Maintain its own governance structure. -- Have full authority to establish and govern its subsidiary series without needing the Company Board to approve. -- Be subject to minimal Company Committee oversight for compliance. -- May establish it’s own COO and other officers -- Utilize KNEL/TheCampus systems like all other series. - +3. **Operational Independence**: REDWFO and all of its subsidiaries shall: + a. Operate independently of the Company Board and its committees, with its own Cell Board having full authority over REDWFO funds and operations; + b. Maintain its own governance structure; + c. Have full authority to establish and govern its subsidiary series without needing the Company Board approval; + d. Be subject to minimal Company Committee oversight for compliance; + e. May establish its own COO and other officers; + f. Utilize KNEL/TheCampus systems like all other series; and + g. Operate without generating profit, as specified in Section 4.6.5. #### 4.6.4 - Operating Series Governance -* Known Element Enterprises (series) LLC and The Campus Trading Company (series) LLC shall: - - * Be subject to Board oversight - * Be subject to Company Committee and any other relevant Board committee oversight - * Establish their own operating agreements as soon as is practical +Known Element Enterprises (series) LLC and The Campus Trading Company (series) LLC shall: +1. Be subject to Board oversight; +2. Be subject to Company Committee and any other relevant Board committee oversight; +3. Establish their own operating agreements as soon as is practical; and +4. Operate in accordance with the service provider requirements established in Article 3. #### 4.6.5 - Cost-Only Operation Requirements -The following series shall operate on a cost-only basis and shall not generate profit: +1. **Cost-Only Designation**: The following series shall operate on a cost-only basis and shall not generate profit: + a. Known Element Enterprises (series) LLC; + b. The Campus Trading Company (series) LLC; and + c. Redwood Family Office Group (series) LLC (any profit generated from investment shall be automatically invested back into itself to provide additional benefit to its stakeholders). -* Known Element Enterprises (series) LLC +2. **Operational Requirements**: These cost-only series shall: + a. Operate solely to cover operational costs without markup; + b. Not markup services or products above cost; + c. Not retain earnings beyond operational requirements and reasonable reserves; + d. Not make distributions of profit; + e. Maintain transparent cost accounting with quarterly reporting; + f. Undergo annual cost audits by independent third parties; and + g. Regularly adjust pricing to maintain cost-only status. -* The Campus Trading Company (series) LLC +3. **Reserve Requirements**: Cost-only series may maintain reasonable reserves only for: + a. Equipment replacement and upgrades; + b. Facility maintenance and improvements; + c. Emergency funds; + d. Research and development directly related to service improvements; and + e. Training and professional development for personnel. -* Redwood Family Office Group (series) LLC (any profit generated from investment shall be automatically invested back into itself to provide additional benefit to it’s stakeholders) - -These series shall: - -* Operate solely to cover operational costs - -* Not markup services or products above cost - -* Not retain earnings beyond operational requirements - -* Not make distributions of profit - -* Maintain transparent cost accounting - -* Regularly adjust pricing to maintain cost-only status +4. **Transparency Obligations**: Cost-only series must: + a. Provide detailed cost breakdowns to all service users; + b. Publish quarterly financial reports; + c. Make all financial records available for review by service users; and + d. Conduct annual town hall meetings to review finances with stakeholders. ## ARTICLE 5 - MEMBERSHIP INTEREST CLASSIFICATIONS ### Section 5.1 - Membership Interest Class Structure -1. **Membership Interest Classes**: - - - All membership interests in any series shall be divided into (at least these) three classes: - - - Class A Membership Interests (“Regular Members”) - - Class B Membership Interests (“Economic Interest Members”) - - Class C Membership Interests (“Involuntary Members”) +#### 5.1.1 - Three-Class System Establishment -2. **Purpose of Classification**: - - - This class structure is established to protect the integrity of the Company and its series - - The structure prevents members from being forced into unwanted business relationships with creditors, ex-spouses, or other parties who may acquire interests through involuntary transfers - - This classification system ensures operational continuity and prevents dissolution or asset liquidation by involuntary members +1. **Mandatory Classification Structure**: All membership interests in any series shall be divided into the following three classes: + a. Class A Membership Interests (“Regular Members”) + b. Class B Membership Interests (“Economic Interest Members”) + c. Class C Membership Interests (“Involuntary Members”) + +2. **No Unclassified Interests**: No series may issue or maintain any membership interest that is not classified within one of these three classes. Any attempt to create an unclassified membership interest shall be void and of no effect. + +3. **No Capital Interests**: As specified in Section 1.2, no series shall issue capital interests or maintain capital accounts. All economic rights shall be structured exclusively as profit interests through the three-class system established in this Article. + +#### 5.1.2 - Purpose and Legal Basis + +1. **Protective Purpose**: This mandatory class structure is established to: + a. Protect the integrity of the Company and its series; + b. Prevent members from being forced into unwanted business relationships with creditors, ex-spouses, or other parties who may acquire interests through involuntary transfers; + c. Ensure operational continuity and business stability; + d. Prevent dissolution or asset liquidation by involuntary members; and + e. Establish a clear framework for the allocation of governance and economic rights. + +2. **Legal Basis**: This classification system is established pursuant to: + a. The contractual freedom provided by the Texas Business Organizations Code § 101.052; + b. The series provisions of the Texas Business Organizations Code § 101.601 et seq.; + c. The rights of companies to restrict transfers under Texas Business Organizations Code § 101.108; and + d. Applicable case law upholding the enforceability of membership class distinctions. + +3. **Acknowledgment of Member Agreement**: By acquiring any membership interest in any series, each member explicitly acknowledges and agrees to: + a. The classification system established in this Article; + b. The automatic conversion provisions of Section 5.5; + c. The transfer restrictions of Section 5.6; and + d. All other provisions relating to membership interests contained in this Agreement. ### Section 5.2 - Class A Membership Interests (Regular Members) -1. **Definition and Qualification**: - - - Class A Members are individuals who have acquired their membership interests through: - - - Issuance of new membership interests with proper approval by series members and the Board. - -2. **Rights and Privileges**: - - - Full voting rights on all matters requiring member approval - - Right to participate in governance and decision-making - - Right to serve in circles - - Right to participate in Board meetings - - Right to receive distributions as determined by the applicable series - - Right to access books and records - - Right to participate in meetings and consent processes - - All other rights granted to members under this Agreement and applicable series agreements +#### 5.2.1 - Definition and Qualification -3. **Transfer Restrictions**: +1. **Class A Definition**: Class A Membership Interests are membership interests with full voting and economic rights, acquired exclusively through: + a. Initial issuance upon series formation; + b. Issuance of new membership interests with proper approval by existing series members and the Company Committee; + c. Transfer from an existing Class A member with all required approvals as specified in the applicable series operating agreement and Section 5.6; or + d. Conversion from another class as specifically authorized in a series operating agreement and approved by the Company Committee. - - As specified in the relevant series operating agreement. - - All transfers must comply with securities laws and this Agreement - - Involuntary transfers shall result in automatic conversion to Class C interests +2. **Qualification Requirements**: To qualify for and maintain Class A membership, a person must: + a. Be a natural person or an entity approved by the existing Class A members and the Company Committee; + b. Meet any additional qualification requirements specified in the applicable series operating agreement; + c. Execute a subscription agreement and any other required documentation; + d. Acknowledge and agree to be bound by this Agreement and the applicable series operating agreement; and + e. Not be subject to any disqualification events as defined in the applicable series operating agreement. -### Section 5.3 - Class B Membership Interests (Distribution Only ) +#### 5.2.2 - Rights and Privileges -1. **Definition and Classification**: +1. **Governance Rights**: Class A Members shall have: + a. Full voting rights on all matters requiring member approval, with voting power as specified in the applicable series operating agreement; + b. Right to participate in governance and decision-making processes; + c. Right to serve in circles and on committees as established under the sociocratic governance structure; + d. Right to participate in series meetings and Board meetings as specified in the applicable governance documents; + e. Right to propose and vote on series actions; + f. Right to participate in consent decision-making processes; and + g. Any other governance rights specified in the applicable series operating agreement. - - Class B Members are individuals or entities who have been granted only economic interest/distribution rights. +2. **Economic Rights**: Class A Members shall have: + a. Right to receive distributions of available cash flow as determined by the applicable series and in accordance with the profit interest allocation specified in the series operating agreement; + b. Right to receive allocations of profits and losses for tax purposes; + c. Right to participate in liquidation proceeds upon dissolution of the series; and + d. Other economic rights specified in the applicable series operating agreement. -2. **Limited Rights**: +3. **Information Rights**: Class A Members shall have: + a. Right to access books and records maintained in the electronic records system; + b. Right to receive regular financial reports; + c. Right to receive tax information; + d. Right to inspect contracts and material agreements; and + e. Other information rights specified in the applicable series operating agreement. - - Right to receive distributions if and when declared (economic rights only) - - Right to receive financial reports and tax information necessary for tax reporting - - Right to transfer the Class B interest subject to the same restrictions and automatic conversion rules +#### 5.2.3 - Obligations -3. **Restrictions and Limitations**: - - No voting rights on any matter - - No right to participate in management or operations - - No right to participate in any company meetings - - No right to serve on boards, committees, or in circles - - No right to inspect books and records. - - No right to initiate dissolution, liquidation, or asset sales - - No right to force distributions - - No right to participate in discussions at meetings - - No right to approve or object to company actions - +1. **Compliance Obligations**: Class A Members shall: + a. Comply with all provisions of this Agreement and the applicable series operating agreement; + b. Adhere to all policies and procedures established by the series and the Board; + c. Maintain the confidentiality of series information; + d. Discharge any fiduciary duties applicable to their role; and + e. Fulfill any other obligations specified in the applicable series operating agreement. + +2. **Notification Requirements**: Class A Members must immediately notify the series and the Company Committee of: + a. Any legal proceedings that may affect their membership interest; + b. Any bankruptcy proceedings; + c. Any divorce proceedings where the membership interest may be contested; + d. Any creditor claims against their membership interest; and + e. Any other event that could trigger conversion to Class C status under Section 5.5. + +### Section 5.3 - Class B Membership Interests (Economic Interest Members) + +#### 5.3.1 - Definition and Classification + +1. **Class B Definition**: Class B Membership Interests are membership interests with economic rights only and no governance rights, which may be: + a. Issued directly as Class B interests upon series formation; + b. Issued as new Class B interests with proper approval as specified in the applicable series operating agreement; + c. Transferred from an existing Class B member with required approvals; or + d. Created through voluntary conversion of Class A interests as provided in a series operating agreement. + +2. **Purpose of Class B Interests**: Class B interests are designed to: + a. Allow for profit sharing without governance participation; + b. Facilitate estate planning and generational wealth transfer; + c. Enable strategic economic alignments with partners; + d. Support profit-sharing arrangements with stakeholders; and + e. Separate economic participation from operational decision-making. + +#### 5.3.2 - Limited Rights + +1. **Economic Rights Only**: Class B Members shall have: + a. Right to receive distributions if and when declared (economic rights only); + b. Right to receive allocations of profits and losses for tax purposes; + c. Right to receive financial reports and tax information necessary for tax reporting; + d. Right to receive notice of material events affecting economic rights; and + e. Right to transfer the Class B interest subject to the same restrictions and automatic conversion rules applicable to all membership interests. + +2. **Right to Information**: Class B Members shall receive: + a. Annual financial statements of the series; + b. Tax information necessary for income tax reporting; + c. Notice of any material events that could reasonably be expected to materially and adversely affect their economic rights; and + d. Such other information as may be specified in the applicable series operating agreement. + +#### 5.3.3 - Restrictions and Limitations + +1. **No Governance Rights**: Class B Members shall have: + a. No voting rights on any matter; + b. No right to participate in management or operations; + c. No right to participate in any company meetings except as specifically permitted in the series operating agreement; + d. No right to serve on boards, committees, or in circles; + e. No right to inspect books and records beyond financial reports and tax information; + f. No right to initiate dissolution, liquidation, or asset sales; + g. No right to force distributions; + h. No right to participate in discussions at meetings; and + i. No right to approve or object to company actions. + +2. **Additional Limitations**: Class B Members: + a. May not represent the series in any capacity; + b. May not bind the series to any obligation; + c. May not use series property except as specifically authorized; + d. May not access confidential operational information; and + e. Have no fiduciary duties to the series or other members. ### Section 5.4 - Class C Membership Interests (Involuntary Members) -1. **Definition and Classification**: - - Class C Members are individuals or entities who have acquired their membership interests through: - - - Court judgments or executions upon judgments - - Assignments of membership interests in satisfaction of a debt - - Charging orders - - Contested divorce proceedings - - Bankruptcy proceedings - - Any other involuntary transfer mechanism - - Any Class A or Class B interest that is transferred through any of these mechanisms shall automatically convert to a Class C interest without further action required +#### 5.4.1 - Definition and Classification -2. **Limited Rights**: - - - Right to receive notices of meetings - - Right to attend meetings as observers only - - Right to receive distributions if and when declared (economic rights only) - - Right to receive financial reports and tax information necessary for tax reporting - - Right to transfer the Class B interest subject to the same restrictions and automatic conversion rules +1. **Class C Definition**: Class C Membership Interests are membership interests with severely limited rights that result exclusively from: + a. Court judgments or executions upon judgments affecting a membership interest; + b. Assignments of membership interests in satisfaction of a debt; + c. Charging orders against membership interests; + d. Contested divorce proceedings involving membership interests; + e. Bankruptcy proceedings involving a member; + f. Involuntary transfer by operation of law; or + g. Any other involuntary transfer mechanism. -3. **Restrictions and Limitations**: - - No voting rights on any matter - - No right to participate in management or operations - - No right to serve on boards, committees, or in circles - - No right to inspect books and records beyond financial reports - - No right to initiate dissolution, liquidation, or asset sales - - No right to force distributions - - No right to participate in discussions at meetings - - No right to approve or object to company actions +2. **Automatic Classification**: Any Class A or Class B interest that is involuntarily transferred through any mechanism listed in Section 5.4.1(1) shall automatically convert to a Class C interest without further action required, as provided in Section 5.5. + +#### 5.4.2 - Limited Rights + +1. **Minimal Rights**: Class C Members shall have only: + a. Right to receive notices of meetings as an observer; + b. Right to receive distributions if and when declared (economic rights only); + c. Right to receive tax information necessary for tax reporting; + d. Right to transfer the Class C interest subject to the same restrictions and automatic conversion rules; and + e. Such other minimal rights as may be required by non-waivable provisions of applicable law. + +2. **Financial Information**: Class C Members shall receive only: + a. Annual financial reports containing summary balance sheet and income statement information; + b. Tax information necessary for income tax reporting; and + c. Notice of dissolution of the series. + +#### 5.4.3 - Restrictions and Limitations + +1. **Comprehensive Restrictions**: Class C Members shall have: + a. No voting rights on any matter; + b. No right to participate in management or operations; + c. No right to serve on boards, committees, or in circles; + d. No right to inspect books and records beyond the financial reports specified in Section 5.4.2(2); + e. No right to initiate dissolution, liquidation, or asset sales; + f. No right to force distributions; + g. No right to participate in discussions at meetings; + h. No right to approve or object to company actions; + i. No right to access company facilities; + j. No right to company information beyond the minimum specified in Section 5.4.2; and + k. No right to transfer Class C interests except as provided in Section 5.6. + +2. **Additional Limitations**: Class C interests: + a. Shall not accrue any additional rights through the passage of time; + b. May be redeemed by the series at any time for fair value as determined by the series; + c. Shall not create any fiduciary duties owed to the holder; and + d. Shall not entitle the holder to any information about company operations, strategy, customers, or any other business matters. ### Section 5.5 - Automatic Conversion Provisions -1. **Conversion from Class A or B to Class C**: - - - Conversion shall occur automatically and immediately upon: - - - Service of a charging order - - Entry of a judgment affecting the membership interest - - Filing of divorce proceedings where the membership interest is contested - - Assignment to a creditor - - Bankruptcy filing - - Any other event resulting in involuntary transfer +#### 5.5.1 - Conversion from Class A or B to Class C -2. **Documentation of Conversion**: - - - The Company Committee shall document the conversion in the electronic records - - Notice of conversion shall be provided to the affected parties - - New electronic certificates shall be issued reflecting the Class B status +1. **Automatic Conversion Events**: Conversion from Class A or Class B to Class C shall occur automatically and immediately upon: + a. Service of a charging order affecting the membership interest; + b. Entry of a judgment affecting the membership interest; + c. Filing of divorce proceedings where the membership interest is contested; + d. Assignment of the membership interest to a creditor; + e. Filing of bankruptcy by or against the member; + f. Death of a member (unless the series operating agreement specifically provides for a different treatment); or + g. Any other event resulting in involuntary transfer or encumbrance of the membership interest. -3. **No Conversion from Class C or B to Class A**: - - - Class C or B interests shall not be convertible back to Class A interests. - - The only method to regain Class A status is through a new, voluntary acquisition approved by the applicable governing body +2. **Immediate Effect**: The conversion shall: + a. Take effect immediately upon the occurrence of any triggering event, without requiring any action by the series, the Company, or any other party; + b. Apply to the entire membership interest affected, not merely a portion; and + c. Be permanent and irreversible except as specifically provided in Section 5.5.3. + +3. **Notice Requirement**: While conversion is automatic and does not depend on notice, the member experiencing a conversion event must provide notice to the series and the Company Committee within five business days of the event. Failure to provide notice does not prevent or delay the conversion but may result in: + a. Liability for any damages caused by the failure to notify; and + b. Potential additional penalties as specified in the series operating agreement. + +#### 5.5.2 - Documentation of Conversion + +1. **Record of Conversion**: Upon becoming aware of a conversion event, the series shall: + a. Document the conversion in the electronic records system; + b. Issue a notice of conversion to the affected member and any transferee; + c. Update the membership records to reflect the Class C status; + d. Issue a new electronic certificate reflecting the Class C status; and + e. Notify other members of the series as required by the series operating agreement. + +2. **Content of Notice**: The notice of conversion shall include: + a. Identification of the affected membership interest; + b. Description of the conversion event; + c. Effective date of conversion; + d. Summary of Class C rights and limitations; + e. Reference to the governing provisions in this Agreement; and + f. Any other information required by the series operating agreement. + +3. **Effect on Series Operations**: The series may take any actions necessary to address the conversion, including: + a. Redistributing governance responsibilities; + b. Adjusting quorum and voting requirements to account for the converted interest; + c. Implementing contingency plans established for such events; and + d. Other actions specified in the series operating agreement. + +#### 5.5.3 - Prohibition on Reconversion + +1. **No Automatic Reconversion**: Class C interests shall not be automatically convertible back to Class A or Class B interests under any circumstances. + +2. **Limited Redemption Option**: A series may, in its sole discretion and if permitted by its operating agreement: + a. Redeem a Class C interest for fair value; + b. Reissue a new Class A or Class B interest to the original holder after resolving the conversion trigger event; or + c. Implement other remediation measures specified in its operating agreement. + +3. **Requirements for New Issuance**: Any reissuance of membership interests under Section 5.5.3(2) shall: + a. Be treated as an entirely new issuance, not a reconversion; + b. Require all approvals applicable to new membership interests; + c. Require new subscription documentation; and + d. Be discretionary, not mandatory, regardless of resolution of the triggering event. ### Section 5.6 - Transfer and Assignment Restrictions -1. **Comprehensive Transfer Restrictions**: - - All transfers, whether voluntary or involuntary, are subject to the restrictions in this Article - - Any attempted transfer in violation of these restrictions shall be void - - The Company and its series shall not recognize or record prohibited transfers +#### 5.6.1 - General Transfer Restrictions -2. **Permitted Transfers**: - - Voluntary transfers may be permitted with proper approval - - All transfers must comply with securities laws - - Transfers to Class B status do not require approval but will result in the limitations described herein +1. **Comprehensive Restriction**: All transfers of membership interests, whether voluntary or involuntary, are subject to: + a. The restrictions in this Article; + b. Any additional restrictions in the applicable series operating agreement; + c. Securities law restrictions; + d. The approval requirements specified in this Section; and + e. Proper documentation in the electronic records system. -3. **Notice Requirements**: - - Members must immediately notify the Company Committee of any: - - Legal proceedings that may affect their membership interest - - Bankruptcy filings - - Divorce proceedings - - Creditor claims against their membership interest - - Any other event that could trigger conversion to Class B status +2. **Void Transfers**: Any attempted transfer in violation of the restrictions in this Agreement or the applicable series operating agreement shall be: + a. Void and of no effect; + b. Not recognized by the Company or the series; + c. Not recorded in the records of the Company or series; and + d. Not binding on the Company or any series. + +3. **Enforcement**: The Company and each series: + a. Shall strictly enforce all transfer restrictions; + b. Shall not recognize or record prohibited transfers; + c. May take all actions necessary to prevent or reverse attempted prohibited transfers; and + d. May seek injunctive relief and damages for attempted prohibited transfers. + +#### 5.6.2 - Permitted Voluntary Transfers + +1. **Transfer Requirements**: Voluntary transfers of membership interests may be permitted only if: + a. The transfer is specifically permitted by the applicable series operating agreement; + b. The transfer receives all approvals required by the series operating agreement; + c. The transfer complies with all securities laws; + d. The transfer is properly documented according to Section 5.7; + e. The transferee meets all qualification requirements for the applicable class; and + f. The transfer does not result in more than 100 members for any series. + +2. **Approval Process**: The approval process for voluntary transfers shall: + a. Be as specified in the applicable series operating agreement; + b. Include review by the Company Committee; + c. Require documentation of securities law compliance; and + d. Be completed before any transfer becomes effective. + +3. **Right of First Refusal**: Unless otherwise specified in a series operating agreement, all proposed voluntary transfers of Class A interests shall be subject to: + a. A first right of refusal in favor of other Class A members of the series; + b. A secondary right of refusal in favor of the series itself; and + c. Procedures for exercise of such rights as detailed in the series operating agreement. + +#### 5.6.3 - Notice Requirements + +1. **Notification Obligation**: Members must immediately notify the series and the Company Committee in writing of: + a. Any offer to purchase their membership interest; + b. Any legal proceedings that may affect their membership interest; + c. Any bankruptcy filings; + d. Any divorce proceedings; + e. Any creditor claims against their membership interest; + f. Any planned voluntary transfer; and + g. Any other event that could trigger conversion to Class C status. + +2. **Notification Process**: The notification must: + a. Be in writing; + b. Be delivered to both the series and the Company Committee; + c. Include all material details of the event or proposed transfer; + d. Include copies of any relevant legal documents; and + e. Be provided within five business days of the event or offer. ### Section 5.7 - Documentation and Certificates -1. **Electronic Certificates**: - - - All membership interests shall be evidenced by electronic certificates - - Certificates shall clearly indicate Class A or Class B or Class C status - - Certificates shall contain appropriate restrictive legends - - Certificates shall be maintained in accordance with Section 3.2 +#### 5.7.1 - Electronic Certificates -2. **Certificate Requirements**: - - - Each certificate shall include: - - Series identification - - Class identification - - Number of units represented - - Holder identification - - Issue date - - Reference to governing agreements - - Required securities law legends - - Class B or C limitations (for Class B or C certificates) +1. **Certificate Requirement**: All membership interests shall be evidenced by electronic certificates maintained in the electronic records system that: + a. Clearly indicate Class A, Class B, or Class C status; + b. Contain appropriate restrictive legends; + c. Include all information required by Section 5.7.2; and + d. Are maintained in accordance with Section 3.2. + +2. **Certificate Issuance**: Electronic certificates shall be: + a. Issued upon the initial issuance of membership interests; + b. Updated upon any transfer or conversion of membership interests; + c. Accessible to the member through the electronic records system; and + d. The definitive record of membership interest ownership. + +#### 5.7.2 - Certificate Requirements + +1. **Required Content**: Each membership interest certificate shall include: + a. Company name and series identification; + b. Class identification (Class A, B, or C); + c. Number of units or percentage interest represented; + d. Holder identification with legal name and address; + e. Issue date; + f. Certificate identification number; + g. Reference to governing agreements; + h. Required securities law legends; and + i. Class-specific limitation notices for Class B and Class C certificates. + +2. **Required Legends**: All certificates shall include: + a. Securities law legends as required by applicable federal and state securities laws; + b. The following transfer restriction legend: “THE TRANSFER OF THE MEMBERSHIP INTEREST EVIDENCED BY THIS CERTIFICATE IS RESTRICTED BY THE COMPANY’S OPERATING AGREEMENT AND APPLICABLE SERIES OPERATING AGREEMENT. NO TRANSFER MAY BE MADE WITHOUT COMPLIANCE WITH THOSE RESTRICTIONS.”; + c. Class-specific legends as specified in Section 5.7.3; and + d. Any additional legends required by the Board or Company Committee. + +3. **Electronic Authentication**: All certificates shall be: + a. Electronically signed by at least one authorized officer; + b. Cryptographically secured to prevent alteration; + c. Maintained with full version control and audit trail; and + d. Backed up according to the requirements of Section 3.2. + +#### 5.7.3 - Class-Specific Certificate Requirements + +1. **Class A Certificate Legend**: In addition to the legends required by Section 5.7.2(2), Class A certificates shall include: + “THIS CERTIFICATE EVIDENCES CLASS A MEMBERSHIP INTERESTS WITH FULL GOVERNANCE AND ECONOMIC RIGHTS, SUBJECT TO THE COMPANY’S OPERATING AGREEMENT AND APPLICABLE SERIES OPERATING AGREEMENT. THESE INTERESTS AUTOMATICALLY CONVERT TO CLASS C INTERESTS UPON CERTAIN EVENTS AS SPECIFIED IN THE OPERATING AGREEMENT.” + +2. **Class B Certificate Legend**: In addition to the legends required by Section 5.7.2(2), Class B certificates shall include: + “THIS CERTIFICATE EVIDENCES CLASS B MEMBERSHIP INTERESTS WITH ECONOMIC RIGHTS ONLY AND NO GOVERNANCE RIGHTS. THE HOLDER HAS NO VOTING RIGHTS AND NO RIGHT TO PARTICIPATE IN MANAGEMENT. THESE INTERESTS AUTOMATICALLY CONVERT TO CLASS C INTERESTS UPON CERTAIN EVENTS AS SPECIFIED IN THE OPERATING AGREEMENT.” + +3. **Class C Certificate Legend**: In addition to the legends required by Section 5.7.2(2), Class C certificates shall include: + “THIS CERTIFICATE EVIDENCES CLASS C MEMBERSHIP INTERESTS WITH SEVERELY LIMITED RIGHTS. THE HOLDER HAS NO VOTING RIGHTS, NO MANAGEMENT RIGHTS, AND LIMITED ECONOMIC RIGHTS AS SPECIFIED IN THE OPERATING AGREEMENT.” ### Section 5.8 - Implementation -1. **Existing Membership Interests**: - - - All existing membership interests shall be classified as Class A interests unless conditions for Class B status already exist - - Classification shall be determined by the Company Committee - - Holders of existing membership interests shall be notified of classification - - New certificates shall be issued reflecting classifications within 90 days +#### 5.8.1 - Classification of Existing Membership Interests + +1. **Initial Classification**: All existing membership interests as of the Effective Date shall be classified as follows: + a. Interests held by active participating members shall be classified as Class A interests unless conditions for Class B or Class C status already exist; + b. Interests held solely for economic participation without governance involvement shall be classified as Class B interests; and + c. Interests that have been subject to involuntary transfer events specified in Section 5.4.1(1) shall be classified as Class C interests. + +2. **Classification Process**: + a. The Company Committee shall determine the initial classification of all existing membership interests within 60 days of the Effective Date; + b. The Company Committee shall provide written notice of classification to all holders; + c. Members may appeal their classification to the Company Committee within 30 days of notice; and + d. The Company Committee shall resolve all appeals within 30 days, with its decision being final. + +#### 5.8.2 - Issuance of New Certificates + +1. **Certificate Issuance Timeline**: New electronic certificates reflecting the classifications determined under Section 5.8.1 shall be issued: + a. Within 90 days of the Effective Date; + b. Through the electronic records system; + c. With all required content and legends as specified in Section 5.7; and + d. With notice to all members. + +2. **Member Verification Requirement**: Each member shall: + a. Verify the accuracy of their certificate information; + b. Report any discrepancies within 30 days of issuance; and + c. Be deemed to have accepted the certificate if no discrepancies are reported within the 30-day period. + +#### 5.8.3 - Future Issuances + +1. **Classification Requirement**: All new membership interests issued after the Effective Date shall: + a. Be explicitly classified as Class A or Class B at the time of issuance; + b. Be evidenced by electronic certificates as specified in Section 5.7; + c. Be properly documented in the electronic records system; and + d. Comply with all applicable securities laws. + +2. **Documentation Requirements**: All new issuances shall be documented with: + a. A subscription agreement executed by the member; + b. Securities law compliance documentation; + c. Member qualification verification; + d. Appropriate approvals as required by this Agreement and the applicable series operating agreement; and + e. Electronic certificates issued immediately upon completion of the issuance. + + -2. **New Issuances**: - - - All new membership interests issued after the effective date of this Amendment shall be issued as Class A interests unless conditions for Class B status exist - - No unclassified membership interests may be issued ## ARTICLE 6 - COMPANY RESTRICTIONS