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

@@ -1344,11 +1344,28 @@ Known Element Enterprises (series) LLC and The Campus Trading Company (series) L
    g. Regularly adjust pricing to maintain cost-only status.
 
 3. **Reserve Requirements**: Cost-only series may maintain reasonable reserves only for:
+
    a. Equipment replacement and upgrades;
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    b. Facility maintenance and improvements;
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    c. Emergency funds;
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    d. Research and development directly related to service improvements; and
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    e. Training and professional development for personnel.
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+   All reserves shall be:
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+   f. Clearly documented in financial statements;
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+   g. Subject to annual review and approval by the Audit and Finance Committee;
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+   h. Limited to a maximum of 15% of annual operating expenses unless specifically approved by the Board;
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+   i. Maintained in segregated accounts; and
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+   j. Reported quarterly to all service users with explanation of purpose and utilization plans.
 
 4. **Transparency Obligations**: Cost-only series must:
    a. Provide detailed cost breakdowns to all service users;