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src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement.md

@@ -4,11 +4,11 @@
 
 This Amended and Restated Operating Agreement (the “Agreement”) is made and entered into effective as of [EFFECTIVE DATE] (the “Effective Date”), by and among Turnkey Network Systems LLC, a Texas series limited liability company (the “Company”), and the members of the Company (collectively “Members” and individually a “Member”). 
 
-This Agreement supersedes and replaces in its entirety that certain Operating Agreement of Turnkey Network Systems LLC dated [ORIGINAL DATE] (the “Prior Agreement”) upon execution by the Company and requisite approval of the Members as specified in the Prior Agreement.
+This Agreement supersedes and replaces in its entirety that certain Operating Agreement of Turnkey Network Systems LLC dated [ORIGINAL DATE] (the “Prior Agreement”) upon execution by the Company and approval by the Members as specified in the Prior Agreement.
 
 ## Section 1.2 - Company Mission and Purpose
 
-The Company exists to develop, implement, and manage a comprehensive ecosystem of interrelated business entities operating as independent series of the Company. 
+The Company exists to develop, implement, and manage a comprehensive ecosystem of business entities operating as independent series that create sustainable value through technological innovation, operational excellence, and strategic capital deployment.
 
 The Company’s primary business activities include:
 
@@ -22,36 +22,31 @@ The Company’s primary business activities include:
 
 5. Building and scaling asset management and operational business units.
 
-The Company creates aligned incentives, operational efficiencies, and enhanced value for all stakeholders by utilizing the Texas series LLC structure to provide centralized infrastructure, governance, and support while enabling the formation and growth of innovative business ventures.
+The Company utilizes the Texas series LLC structure to provide centralized infrastructure, governance, and support while enabling the formation and growth of innovative business ventures with aligned incentives, operational efficiencies, and enhanced value for all stakeholders.
 
 ## Section 1.3 - Purpose of Amendment and Restatement
 
 The Company hereby amends and restates the Prior Agreement to implement comprehensive changes to the Company’s governance, operational structure, and capital framework, necessitated by:
 
-1. **Strategic Evolution**: The need to adapt the Company’s structure to accommodate planned growth, diversification, and operational sophistication;
+1. **Strategic Evolution**: The need to adapt the Company’s structure to accommodate its planned growth into multiple verticals, diversification of business lines, and increased operational sophistication;
 
-2. **Capital Requirements**: The need to facilitate significant capital raising and deployment across multiple business lines while maintaining appropriate controls;
+2. **Capital Requirements**: The necessity to facilitate significant capital raising and deployment across multiple business lines while maintaining appropriate controls and investor protections;
 
-3. **Risk Management**: The implementation of enhanced protection for investors and stakeholders through formalized series isolation; and
+3. **Risk Management**: The implementation of enhanced protection mechanisms for investors and stakeholders through formalized series isolation and standardized governance; and
 
 4. **Operational Scale**: The requirement for standardized service provision and administrative functions to support the Company’s projected growth to significant revenue levels.
 
-Specifically, this Agreement implements:
+This Agreement specifically implements:
 
-1. **Governance Structure**: Establishing a formalized governance structure under a Board of Directors and implementing sociocratic principles to provide both centralized strategic oversight and distributed operational decision-making;
+1. **Governance Structure**: A formalized governance structure under a Board of Directors with sociocratic principles providing both centralized strategic oversight and distributed operational decision-making;
 
-2. **Service Provider Framework**: Implementing mandatory internal service provider requirements to ensure operational consistency, quality control, and economies of scale across all series;
+2. **Service Provider Framework**: Mandatory internal service provider requirements ensuring operational consistency, quality control, and economies of scale across all series;
 
-3. **Capital Structure Revision**: Specifying that the LLC and its series shall not grant any capital interests or maintain capital accounts, and shall instead utilize profit interests exclusively through a mandatory three-class system for all series;
+3. **Capital Structure Revision**: A profit interest-based economic framework utilizing a mandatory three-class system for all series, eliminating capital interests and capital accounts;
 
-4. **Series Framework Enhancement**: Reaffirming and enhancing the authority for the creation of:
+4. **Series Framework Enhancement**: Refined authority for creating and operating multiple series types, including operating entities, asset-holding entities, and semi-autonomous Cell entities; and
-   - Operating entity series
-   - Asset-holding, non-operational entity series
-   - Semi-autonomous Cell entity series
 
-5. **Operational Standards**: Establishing uniform operational standards, electronic recordkeeping requirements, and compliance protocols to ensure consistent business, technology and compliance operations across all series while maintaining series isolation;
+5. **Operational Standards**: Uniform operational standards, electronic recordkeeping requirements, and compliance protocols ensuring consistent business operations while maintaining series isolation.
-
-6. **Investor Protection**: Strengthening investor protections through enhanced disclosure requirements, standardized membership interest classifications, and clear transfer restrictions.
 
 ## Section 1.4 - Effect of Amendment and Restatement
 
@@ -61,14 +56,14 @@ Upon execution of this Agreement:
 
 2. **Rights and Obligations**: All rights, obligations, and relationships under the Prior Agreement are hereby terminated, and all parties shall hereafter be governed solely by the terms of this Agreement.
 
-3. **Termination of Specified Prior Commitments**: All previous written and verbal agreements, understandings, contracts, and commitments of any kind relating specifically to the governance, structure, and operation of the following entities are hereby terminated, rescinded, and rendered null and void in their entirety with immediate effect:
+3. **Termination of Specified Prior Commitments**: All previous written and verbal agreements, understandings, contracts, and commitments relating specifically to the governance, structure, and operation of the following entities are hereby terminated, rescinded, and rendered null and void:
    - Turnkey Network Systems LLC
    - Turnkey Network Systems Partnership
    - Turnkey Network Systems sole proprietorship
 
-4. **Exceptions to Termination**: Notwithstanding the foregoing, the following types of agreements shall remain in full force and effect unless specifically terminated by separate written agreement:
+4. **Exceptions to Termination**: The following agreements shall remain in full force and effect unless specifically terminated by separate written agreement:
    - Commercial agreements with third-party vendors and clients
-   - Employment and independent contractor agreements with individuals
+   - Employment and independent contractor agreements
    - Real property leases
    - Equipment leases and purchase agreements
    - Intellectual property licenses to or from third parties
@@ -76,18 +71,20 @@ Upon execution of this Agreement:
    - Banking and financial agreements
    - Existing loans and financial commitments
 
-5. **Continuation of Business**: Notwithstanding the termination of prior governance agreements, the business of the Company shall continue without interruption or dissolution. The adoption of this Agreement shall not constitute a termination or dissolution of the Company.
+5. **Continuation of Business**: The business of the Company shall continue without interruption or dissolution. The adoption of this Agreement shall not constitute a termination or dissolution of the Company.
 
 6. **Transitional Matters**: The following transitional provisions shall apply:
    - All actions duly taken under the Prior Agreement shall remain valid and enforceable;
    - All series established under the Prior Agreement shall continue under this Agreement;
    - All Members shall retain their membership interests, subject to the reclassification provisions in Article 5;
-   - The Board of Directors and Company Committee shall be constituted within 30 days of the Effective Date;
+   - The Board of Directors shall be constituted within 30 days of the Effective Date;
-   - All series shall adopt compliant Series Operating Agreements within 90 days of the Effective Date.
+   - The Company Committee shall be constituted within 45 days of the Effective Date;
+   - All existing series shall adopt compliant Series Operating Agreements within 90 days of the Effective Date; and
+   - All operational policies required by this Agreement shall be implemented within 120 days of the Effective Date.
 
-7. **Forward-Looking Governance**: This Agreement shall govern all aspects of the Company’s operations from the Effective Date forward. No party shall have any continuing obligations, rights, or duties under any prior governance agreements.
+7. **Binding Effect**: This Agreement shall be binding upon, and inure to the benefit of, all current and future series members, officers, directors, and representatives of the Company and its series.
 
-8. **Binding Effect**: This Agreement shall be binding upon, and inure to the benefit of, all current and future series members, officers, directors, and representatives of the Company and its series.
+8. **Integration Clause**: This Agreement constitutes the entire understanding among the parties concerning the subject matter hereof and supersedes all prior agreements, correspondence, memoranda, term sheets, and oral understandings relating to the Company and its governance. No representations, promises, or considerations have been made or relied upon by any party except those expressly set forth in this Agreement.
 
 ## Section 1.5 - Securities Law Notice
 
@@ -95,13 +92,15 @@ THE MEMBERSHIP INTERESTS IN THE COMPANY AND ITS SERIES OFFERED HEREUNDER HAVE NO
 
 THE INTERESTS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER APPLICABLE FEDERAL AND STATE SECURITIES LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
 
-MEMBERSHIP INTERESTS MAY ONLY BE OFFERED TO AND ACQUIRED BY PERSONS WHO MEET THE INVESTOR SUITABILITY REQUIREMENTS ESTABLISHED BY THE COMPANY AND SET FORTH IN ARTICLE 5 OF THIS AGREEMENT. THE COMPANY RESERVES THE RIGHT TO REJECT ANY SUBSCRIPTION FOR ANY REASON AND IS NOT OBLIGATED TO ACCEPT ANY SUBSCRIPTION EVEN IF AN INVESTOR MEETS ALL SUITABILITY REQUIREMENTS.
+MEMBERSHIP INTERESTS ARE HIGH-RISK, ILLIQUID INVESTMENTS SUITABLE ONLY FOR PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. MEMBERSHIP INTERESTS MAY ONLY BE OFFERED TO AND ACQUIRED BY PERSONS WHO MEET THE INVESTOR SUITABILITY REQUIREMENTS ESTABLISHED BY THE COMPANY AND SET FORTH IN ARTICLE 5 OF THIS AGREEMENT. THE COMPANY RESERVES THE RIGHT TO REJECT ANY SUBSCRIPTION FOR ANY REASON AND IS NOT OBLIGATED TO ACCEPT ANY SUBSCRIPTION EVEN IF AN INVESTOR MEETS ALL SUITABILITY REQUIREMENTS.
 
 EACH INVESTOR MUST BE PREPARED TO BEAR THE ECONOMIC RISK OF THIS INVESTMENT FOR AN INDEFINITE PERIOD AND BE ABLE TO WITHSTAND A TOTAL LOSS OF THEIR INVESTMENT. EACH INVESTOR MUST HAVE SUFFICIENT KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS TO BE CAPABLE OF EVALUATING THE MERITS AND RISKS OF THIS INVESTMENT.
 
 IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY, ITS SERIES, THIS AGREEMENT, AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED.
 
-NO REPRESENTATIONS OR WARRANTIES OF ANY KIND ARE INTENDED OR SHOULD BE INFERRED WITH RESPECT TO THE ECONOMIC RETURN OR TAX ADVANTAGES WHICH MAY ACCRUE TO THE INVESTORS. NO ASSURANCE CAN BE GIVEN THAT EXISTING TAX LAWS WILL NOT BE CHANGED OR INTERPRETED ADVERSELY.
+NO REPRESENTATIONS OR WARRANTIES OF ANY KIND ARE INTENDED OR SHOULD BE INFERRED WITH RESPECT TO THE ECONOMIC RETURN OR TAX ADVANTAGES WHICH MAY ACCRUE TO THE INVESTORS. NO ASSURANCE CAN BE GIVEN THAT EXISTING TAX LAWS WILL NOT BE CHANGED OR INTERPRETED ADVERSELY, WHICH COULD REDUCE THE ANTICIPATED TAX BENEFITS ASSOCIATED WITH AN INVESTMENT IN THE COMPANY OR ITS SERIES.
+
+THE SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OF ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING MATERIALS. THESE SECURITIES ARE OFFERED UNDER AN EXEMPTION FROM REGISTRATION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THESE SECURITIES ARE EXEMPT FROM REGISTRATION.
 
 ## ARTICLE 2 - DEFINITIONS AND INTERPRETATION