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

@@ -1620,6 +1620,7 @@ All records of the Company and its series shall be maintained exclusively in ele
    
    * Adjustments to structure shall be made as necessary to maintain isolation
 
+
 ### Section 4.3 - Series Management Structure
 
 #### 4.3.1 - Basic Management Framework
@@ -1627,51 +1628,182 @@ All records of the Company and its series shall be maintained exclusively in ele
 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.
 
 2. **Operational Authority**: Series members shall retain full authority to:
-   a. Make operational decisions;
+
-   b. Enter into contracts within the series’ business purpose;
+   * Make operational decisions
-   c. Manage series assets;
+   
-   d. Conduct series business activities;
+   * Enter into contracts within the series’ business purpose
-   e. Make distributions in accordance with the series operating agreement;
+   
-   f. Make investments; and
+   * Manage series assets
-   g. Take any other actions permitted by the series operating agreement and not in conflict with this Agreement.
+   
+   * Conduct series business activities
+   
+   * Make distributions in accordance with the series operating agreement
+   
+   * Make investments
+   
+   * Take any other actions permitted by the series operating agreement and not in conflict with this 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;
+   * Provide governance and oversight
-   c. Monitor performance and risk;
+   
-   d. Establish and enforce Company-wide policies; but
+   * Ensure compliance with this Agreement and applicable laws
-   e. Not participate in the day-to-day management of any series unless:
+   
-      i. Expressly authorized by the series operating agreement;
+   * Monitor performance and risk
-      ii. Necessary to address a material compliance issue; or
+   
-      iii. Required to prevent or mitigate significant harm to the Company or other series.
+   * Establish and enforce Company-wide policies; but
+   
+   * 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
+      
+      iii. Required to prevent or mitigate significant harm to the Company or other series
+
+4. **Annual Performance Reviews**: Each series shall:
+
+   * Submit to an annual performance review by the appropriate Board committee
+   
+   * Provide documentation of compliance with all applicable requirements
+   
+   * Demonstrate adherence to strategic objectives
+   
+   * Respond to any concerns or recommendations within 60 days
+   
+   * Implement required remedial measures within agreed timeframes
+
+5. **Required Management Documentation**: Each series shall maintain:
+
+   * Organizational chart with clear reporting lines
+   
+   * Written delegation of authority guidelines
+   
+   * Documented policies and procedures for key operational areas
+   
+   * Risk management framework appropriate to its business
+   
+   * Succession plans for key positions
+   
+   * Emergency response protocols
 
 #### 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;
+   * Manager-managed governance with designated managers
-   c. Officer-led governance with designated officer positions; or
+   
-   d. Hybrid approaches combining elements of multiple structures.
+   * Board-managed governance with a series board of directors
+   
+   * Officer-led governance with designated officer positions
+   
+   * Hybrid approaches combining elements of multiple structures
+   
+   * Sociocratic governance with interconnected circles
+   
+   * Professional management with executive team
 
 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;
+   * Clearly define the governance structure in its operating agreement
-   c. Define the relationship between its governance structure and the Board; and
+   
-   d. Document all governance decisions in accordance with Section 3.2.
+   * Establish clear lines of authority and decision-making procedures
+   
+   * Define the relationship between its governance structure and the Board
+   
+   * Document all governance decisions in accordance with Section 3.2
+   
+   * Establish accountability measures and performance metrics
+   
+   * Define term limits and succession planning for leadership positions
+   
+   * Create clear procedures for resolving governance disputes
+
+3. **Fiduciary Responsibilities**: All persons exercising management authority within a series shall:
+
+   * Act with care, loyalty, and good faith toward the series and its members
+   
+   * Make decisions in the best interest of the series
+   
+   * Disclose and manage conflicts of interest
+   
+   * Maintain confidentiality of series information
+   
+   * Exercise business judgment appropriate to their role
+   
+   * Not usurp series opportunities
+   
+   * Not compete with the series without authorization
+
+4. **Governance Transparency Requirements**:
+
+   * Regular reporting to series members on governance matters
+   
+   * Documentation of all major decisions and rationale
+   
+   * Clear communication of strategic initiatives
+   
+   * Accessible records of governance proceedings
+   
+   * Published governance calendar with key decision points
 
 #### 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;
+   * Compliance with the procedures set forth 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.
+   * Approval by existing series members as specified in the series operating agreement
+   
+   * Company Committee approval, which shall not be unreasonably withheld
+   
+   * Execution of a membership interest subscription agreement and acknowledgment of this Agreement
+   
+   * Verification of accredited investor status if applicable
+   
+   * Completion of required background checks and due diligence
+   
+   * Compliance with all applicable securities laws
 
 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;
+   * In accordance with the series operating agreement
-   c. Following all required notice and cure periods; and
+   
-   d. With proper documentation in the electronic records system.
+   * For cause as defined in the series operating agreement
+   
+   * Following all required notice and cure periods
+   
+   * With proper documentation in the electronic records system
+   
+   * Following any required buyout of the member’s interest
+   
+   * In compliance with all procedural requirements
+   
+   * With fair valuation of the member’s interest if applicable
+
+3. **Member Rights and Remedies**:
+
+   * Members shall have inspection rights as specified in the series operating agreement
+   
+   * Members may bring derivative actions on behalf of the series in accordance with the TBOC
+   
+   * Members shall have access to information as provided in Section 5.2.2(3)
+   
+   * Members may seek mediation or arbitration of disputes as provided in Schedule H
+   
+   * Members may exercise statutory rights under the TBOC to the extent not validly waived
+
+4. **Membership Interest Valuation**:
+
+   * Membership interests shall be valued in accordance with the methodology specified in the series operating agreement
+   
+   * In the absence of a specified methodology, fair market value shall be determined by an independent appraiser
+   
+   * Valuation shall be required for significant membership transactions
+   
+   * The Company Committee may establish valuation guidelines
+   
+   * Valuations shall be documented and maintained in the electronic records system
 
 ### Section 4.4 - Special Series Types