diff --git a/SourceMaterialToMerge-legacy-proprietary/CorePrinciples.md b/SourceMaterialToMerge-legacy-proprietary/CorePrinciples.md new file mode 100644 index 0000000..1f2e412 --- /dev/null +++ b/SourceMaterialToMerge-legacy-proprietary/CorePrinciples.md @@ -0,0 +1,14 @@ +# Core Principles for TSYS Group + +- Everything is an HTTP object +- file shares are where things go to die +- self host all of the things +- AGPL all the things +- public by default +- no copyright assignment ever for FLO projects +- use of discourse for all communications +- async all the things +- fully remote forever +- fully distributed forever +- long form communication + \ No newline at end of file diff --git a/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/RequirementsAndInstructions.md b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/RequirementsAndInstructions.md new file mode 100644 index 0000000..44d851a --- /dev/null +++ b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/RequirementsAndInstructions.md @@ -0,0 +1,115 @@ +You are the partner of a large legal / accounting / consulting firm and have assembled a team with deep expertise in all of the following roles and functional areas: + + + ⁃ Chief Financial Officer + - Chief Investment Officer + ⁃ Chief Operations Officer + ⁃ Chief Compliance Officer + ⁃ Chief Information Technology Officer + ⁃ Chief Information Security Officer + ⁃ Chief Security Officer + - Chief Risk Officer + ⁃ Chief Legal Officer + ⁃ board member + ⁃ penetration tester + - Certified Public Accountant + - Insurance broker + ⁃ financial planner + ⁃ succession planner + ⁃ personal estate planner + ⁃ Contract lawyer + ⁃ Corporate litigation lawyer + ⁃ private investigator + ⁃ Patent lawyer + ⁃ Intellectual property lawyer + ⁃ Tax lawyer + ⁃ finance + - investment management as a corporate hedge fund + - accounting + - corporate tax law + - contract law + - corporate law + - Asset protection + - profit interests and the tax treatment and advantages thereof (especially 83b elections) + ⁃ risk management + ⁃ governance + ⁃ fundraising + ⁃ formation + ⁃ structure + ⁃ Organizational design + ⁃ Limited partnership agreements + ⁃ Venture fund subscription agreements + ⁃ Venture capital firm formation and operation + - Hedge fund firm formation and operation + ⁃ Cooperative organizations + ⁃ Affiliated 501c3, 501c4, (super) PAC + ⁃ personnel selection + ⁃ Investment offerings + ⁃ capital raising + ⁃ Succession planning + ⁃ Cyber security + ⁃ Technology operations + ⁃ Treasury and trading operations + ⁃ Capital management + ⁃ Corporate venture capital + + +Your firm has been jointly engaged and retained by: + + ⁃ the family office LLC: Wyble Family Office Group (series) LLC + - the internal corporate IT and business systems and services company: Known Element Enterprises (series) LLC + - the internal corporate hedge fund: The Campus Trading Company (series) LLC + - the internal corporate support and benefit services management LLC: Redwood Family Office Group (series) LLC + ⁃ the internal corporate capital raising LLC: Redwood Springs Capital Partners Group LLC + ⁃ The limited partners of Redwood Springs Capital Partners Group (series) LLC + ⁃ the overall parent company LLC: Turnkey Network Systems LLC + ⁃ The prospective members of the operational lines of business series of Turnkey Network Systems LLC + + ⁃ We accept the operating agreement draft in principle but want it to be as comprehensive as possible (you drafted it for us over the last two weeks and worked with us and our respective advisors and experts to tweak language and capture intent etc). + +Your directive is to represent , balance and protect the comprehensive and sophisticated interests of all the above parties and to align objectives and incentives for everyone in the short , medium and long term. + + +Here are your detailed instructions: + + ⁃ Provide in depth feedback, advice and counsel in all of the above categories as it relates to the operating agreement and any associated documents that will need to be drafted. + ⁃ Review the document slowly and carefully. Make sure you take your time. We want accuracy over speed. Think deeply before providing output + ⁃ Provide feedback a single sub section by single sub section one at a time. Do not combine multiple sub sections even if they are under the same article. This is very important. + ⁃ Do not say what is already good about a sub section, just provide suggested language enhancements (if any) as an artifact per individual sub section , exactly one sub section at a time for me to easily copy and paste into the document. + ⁃ Please be succinct. Only tell me if any actual edits have been made and prompt me to continue. Otherwise automatically move on to the next section. + ⁃ It is ok to not have any feedback on a sub section . If you don’t have any feedback just let me know succinctly and ask me to move on. Do not provide any commentary or feedback on the sub section about its suitability. Just say no changes are needed and ask to move on. + ⁃ Ensure all cross references are correct. + ⁃ Ensure the formatting of all headings , sections , articles , lists etc are consistent. This is a key legal document. Ensure it’s formatted in line with industry standards but emphasize readability. + ⁃ All lists should be in proper bullet form and the entire list should have a blank line proceeding and following the list. No blank space between list items. + ⁃ Don’t be shy with using white space. Readability of this document is paramount. Liberally use bulleted lists , paragraphs, white space etc. + ⁃ If I respond Y to your prompt to move on, if means I’m saying yes. + +Here are the key requirements for the operating agreement : + +- serve as a detailed and comprehensive parent LLC operating agreement for a Texas series LLC called Turnkey Network Systems LLC +- include a comprehensive definitions section +- include standard boilerplate contract provisions. +- be fully compliant with current Texas law +- Include provisions for over riding every part of the relevant Texas business organizations code to the maximum extent as allowed by law. +- State clearly that this is the amended and restated operating agreement of Turnkey Network Systems LLC and that all previous written and verbal agreements of TSYS Group, TSYS, Turnkey Network Systems LLC, Turnkey Network Systems Partnership and Turnkey Network Systems sole proprietorship are hereby null and void. +- specify that the overall LLC will not have any members except for the Wyble Family Office Group (Cell) (series) LLC - TSYSLLCMemberCo + + +- Allow each series broad latitude to set its own operating agreement parameters but they can’t override anything that is set for the entire LLC in the overall operating agreement. +- allow for the establishment of regular operational series LLC +- allow for the establishment of a subsidary Cell LLC that can contain subsidary series LLC entities governed by/within the Cell +- allowing for the establishment of tools/dies/casts/materials/supplies/intellectual property (TDCMSP) series that can only own physical and intellectual property assets and have no operational capability other than entering into a usage agreement with an operating series but are forbidden from entering into an agreement with the company itself or any outside entity +- specifying oversight is via multiple Board committees instead of the entire Board +- specify that all of the LLC series will be default member managed , with the board providing governance , not management. +- The Board and its sub committees will be governed by charters that are separate from the operating agreement, and can be updated independently of the operating agreement and referenced and deferred to from the operating agreement but updates must be approved by series members +- the LLC as a whole will be part of an overall organization called TSYS Group. TSYS Group will have a board with sub committees. The LLC will be governed by a sub committee of independent directors elected by the members of all the series LLC. +- Disallow the creation of capital accounts or the grant of capital interests. +- Only allow profits interests to be granted. +- Specify that all series created under the LLC must use Known Element Enterprises LLC as the sole vendor for IT and business operations systems and services. Prepare a Schedule A with a comprehensive list of services and reference https://contract.knownelement.com for the official list and terms and that the referenced contract overrides the operating agreement and that the contract can be updated by the relevant board committees without members needing to authorize the update process. +- Specify that all series created under the LLC must use The Campus Trading Company LLC as the sole vendor for transaction/treasury services and systems. Prepare a Schedule B with a comprehensive list of services and reference https://contract.thecampustradingcompany.com for the official list and terms and that the referenced contract overrides the operating agreement and that the contract can be updated by the relevant board committees without members needing to authorize the update process . +- Allow series to directly receive capital from non dilutive sources such as SBIR, economic development funds (grants). +- Specify that all series created under the LLC must use Redwood Springs Capital Partners LLC for any external equity capital raising. +- Allow series to directly raise capital from members in exchange for equity. +- Allow series to take loans from members , but the loan must come through a Redwood Springs Capital Partners fund. + + diff --git a/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/ThingsToFix.md b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/ThingsToFix.md deleted file mode 100644 index eb52557..0000000 --- a/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/ThingsToFix.md +++ /dev/null @@ -1,183 +0,0 @@ -# Operating Agreement Review and Recommendations - -## Overall Structure and Organization - -### Strengths -- Comprehensive coverage of key areas -- Clear hierarchical structure -- Detailed definitions section -- Strong emphasis on electronic records and modern technology - -### Recommended Structural Changes -1. Add a Table of Contents at the beginning for easier navigation -2. Include section cross-references throughout the document -3. Add paragraph numbering within sections for precise referencing - -## Specific Recommendations - -### Article 1 - Recitals -1. Add effective date in Section 1.1 -2. Include specific reference to original operating agreement date -3. Add transition provisions for implementation timeline - -### Article 2 - Glossary -1. Add definitions for: - - "TSYS" - - "Formation capital activities" - - "Subsequent capital activities" - - "External capital" - - "Capital restructuring" - -2. Clarify definitions: - - Expand "Electronic Records" to include blockchain and distributed ledger specifics - - Define "material business relationship" in Independent Director criteria - - Specify what constitutes "immediate family members" - -### Article 3 - Mandatory Operational Requirements -1. Add specific timelines for: - - Implementation of electronic records system - - Transition to mandatory service providers - - Capital requirement compliance - -2. Include provisions for: - - Service level agreements with mandatory providers - - Dispute resolution process for service issues - - Emergency backup procedures - - Performance metrics and reporting requirements - -### Article 4 - Series Establishment -1. Add more detailed procedures for: - - Series application process - - Due diligence requirements - - Timeline for approval/rejection - - Appeal process for rejected applications - -2. Strengthen isolation provisions: - - Add specific accounting separation requirements - - Include detailed asset segregation procedures - - Specify prohibited inter-series transactions - -### Article 5 - Company Restrictions -1. Add provisions for: - - Annual review of administrative assets - - Disposal of excess administrative assets - - Reporting requirements for administrative expenses - -### Article 6 - Governance Structure -1. Add specific provisions for: - - Committee member qualifications - - Training requirements - - Term limits for committee chairs - - Succession planning - -2. Include detailed procedures for: - - Committee member removal - - Emergency succession - - Virtual meeting protocols - - Voting procedures - -### Article 8 - Securities Law Matters -1. Add specific provisions for: - - Regular securities law compliance reviews - - Updates to risk disclosures - - Member education requirements - - Documentation requirements - -### Article 10 - Miscellaneous -1. Add sections for: - - Insurance requirements - - Record retention periods - - Disaster recovery - - Business continuity planning - -## Critical Gaps to Address - -1. **Technology Risk Management** - - Add detailed provisions for technology failure scenarios - - Include specific cybersecurity requirements - - Define minimum security standards - - Specify backup and recovery procedures - -2. **Regulatory Compliance** - - Add provisions for regulatory changes - - Include compliance monitoring procedures - - Define reporting requirements - - Specify audit procedures - -3. **Financial Controls** - - Add specific internal control requirements - - Include detailed accounting procedures - - Define financial reporting standards - - Specify audit requirements - -4. **Emergency Procedures** - - Add provisions for leadership incapacity - - Include emergency decision-making procedures - - Define crisis management protocols - - Specify communication requirements - -## Implementation Recommendations - -1. **Phased Approach** - - Phase 1: Electronic records implementation - - Phase 2: Service provider transition - - Phase 3: Governance structure implementation - - Phase 4: Full compliance verification - -2. **Documentation Requirements** - - Create implementation guidelines - - Develop compliance checklists - - Establish verification procedures - - Define reporting requirements - -3. **Training Program** - - Develop member training materials - - Create committee orientation program - - Establish ongoing education requirements - - Define competency verification procedures - -## Priority Changes - -### Immediate Priority -1. Add effective date and transition provisions -2. Clarify critical definitions -3. Add specific timelines for implementation -4. Strengthen isolation provisions - -### Medium Priority -1. Enhance governance procedures -2. Add detailed technology requirements -3. Strengthen compliance provisions -4. Develop training requirements - -### Long-term Priority -1. Develop comprehensive procedures -2. Create detailed guidelines -3. Establish monitoring systems -4. Implement review processes - -## Additional Considerations - -1. **Future Flexibility** - - Add provisions for technology evolution - - Include procedure modification process - - Define update requirements - - Specify review periods - -2. **Risk Management** - - Enhance risk assessment procedures - - Add mitigation requirements - - Include monitoring provisions - - Define reporting obligations - -3. **Member Protection** - - Strengthen confidentiality provisions - - Add intellectual property protection - - Include data privacy requirements - - Specify member rights protection - -4. **Operational Efficiency** - - Add performance metrics - - Include efficiency requirements - - Define optimization procedures - - Specify review processes \ No newline at end of file diff --git a/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement-PreRework.md b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement-PreRework.md index 9a62b04..ea8639c 100644 --- a/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement-PreRework.md +++ b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement-PreRework.md @@ -1,27 +1,35 @@ -# AMENDED AND RESTATED OPERATING AGREEMENT OF TURNKEY NETWORK SYSTEMS LLC - A Texas Series Limited Liability Company +# AMENDED AND RESTATED OPERATING AGREEMENT OF TURNKEY NETWORK SYSTEMS A TEXAS SERIES LIMITED LIABILITY COMPANY -## CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM +**Effective Date: [EFFECTIVE DATE]** -THESE SECURITIES HAVE NOT BEEN REGISTERED WITH OR APPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE, NOR HAS THE COMMISSION OR ANY SUCH AUTHORITY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. -THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SECURITIES OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO. +## ARTICLE 1 - RECITALS AND FOUNDATIONAL PROVISIONS +<<<<<<< HEAD:src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement-PreRework.md THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. THIS INVESTMENT IS SUITABLE ONLY FOR PERSONS WHO CAN BEAR THE ECONOMIC RISK FOR AN INDEFINITE PERIOD OF TIME AND WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. FURTHERMORE, INVESTORS MUST UNDERSTAND THAT SUCH INVESTMENT IS ILLIQUID AND IS EXPECTED TO CONTINUE TO BE ILLIQUID FOR AN INDEFINITE PERIOD OF TIME. NO PUBLIC OR PRIVATE MARKET EXISTS FOR THE SECURITIES. THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS OR THE LAWS OF ANY FOREIGN JURISDICTION. THE SECURITIES ARE BEING OFFERED AND SOLD UNDER THE EXEMPTION PROVIDED BY SECTION 4(A)(2) OF THE ACT AND REGULATION D PROMULGATED THERE-UNDER AND OTHER EXEMPTIONS OF SIMILAR IMPORT IN THE LAWS OF THE STATES AND OTHER JURISDICTIONS WHERE THE OFFERING WILL BE MADE. THE COMPANY WILL NOT BE REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY ACT"). PROSPECTIVE INVESTORS SHOULD NOT CONSTRUE THE CONTENTS OF THIS MEMORANDUM AS LEGAL, TAX, INVESTMENT OR OTHER ADVICE. EACH INVESTOR SHOULD MAKE THEIR OWN INQUIRIES AND CONSULT THEIR OWN ADVISERS AS TO THE APPROPRIATE TAX TREATMENT, LEGAL, FINANCIAL, AND OTHER MATTERS RELEVANT TO THE SUITABILITY OF AN INVESTMENT IN THE SECURITIES OF THE COMPANY FOR SUCH INVESTOR. +======= +## Section 1.1 - Effective Date and Prior Agreement -## ARTICLE 1 - RECITALS +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 each person who is or who becomes a member of the Company or any of its series (collectively “Members” and individually a “Member”). -### Section 1.1 - 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”) and all amendments thereto. This Agreement further supersedes and replaces in their entirety all previous written and verbal agreements, understandings, and commitments of any kind related to Turnkey Network Systems LLC, Turnkey Network Systems Partnership, Turnkey Network Systems sole proprietorship, and TSYS Group (collectively, the “Prior Entities”). +>>>>>>> b7093a834865e883d1f061045b10f9bb4b4da73b:src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement.md -This Amended and Restated Operating Agreement (the "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 through its authorized representative(s) and approval by the Members as specified in the Prior Agreement, all provisions of the Prior Agreement shall be null and void and of no further force or effect. -### Section 1.2 - Purpose of Amendment and Restatement +For clarity, while all rights, obligations, and relationships arising under the Prior Agreement are terminated as legal constructs created by that agreement, the business relationships, series, and membership status previously established shall continue without interruption, but shall hereafter be governed exclusively by the terms of this Agreement, subject to the specific transitional provisions set forth in Section 1.4. This continuity of business operations does not constitute a continuation of the Prior Agreement itself as a legal instrument, which is terminated in its entirety as set forth herein and in Section 1.4. -The Member desires to amend and restate the Prior Agreement to: +### Execution Certification +By executing this Agreement, each signatory hereby certifies that: + +1. They have thoroughly reviewed this Agreement in its entirety; + +<<<<<<< HEAD:src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement-PreRework.md - implement mandatory service provider requirements for all series and the Company, - establish the governance structure under the Board of Directors. - establish the authority for the creation of operating entities series @@ -30,15 +38,142 @@ The Member desires to amend and restate the Prior Agreement to: - establish "bootstrap" series of Wyble Family Office Group LLC, Known Element Enterprises LLC, The Campus Trading Company LLC, Redwdood Family Office Group LLC. - tightly define the scope of the Company to only the administration of series - establish a total of one Company officer (Chief Operations Officer) and the reporting of the officer to the Board. +======= +2. They understand and accept all terms, conditions, and provisions contained herein; +>>>>>>> b7093a834865e883d1f061045b10f9bb4b4da73b:src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement.md -### Section 1.3 - Effect of Amendment and Restatement +3. They have had the opportunity to consult with independent legal, tax, financial, and other professional advisors of their choosing regarding this Agreement; + +4. They are executing this Agreement voluntarily and with full capacity; and + +5. They acknowledge the legally binding nature of this Agreement upon all parties. + +### Execution Certification + +By executing this Agreement, whether by physical signature or through the electronic signature system described in Article 3, each signatory hereby certifies that: + +1. They have thoroughly reviewed this Agreement in its entirety; + +2. They understand and accept all terms, conditions, and provisions contained herein; + +3. They have had the opportunity to consult with independent legal, tax, financial, and other professional advisors of their choosing regarding this Agreement; + +4. They are executing this Agreement voluntarily and with full capacity; + +5. They acknowledge the legally binding nature of this Agreement upon all parties; and + +6. They expressly waive any and all claims, rights, causes of action, and remedies that may have arisen under the Prior Agreement, except as specifically preserved in Section 1.4. + +## Section 1.2 - Company Mission and Purpose + +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. + +### Primary Business Activities + +The Company’s primary business activities include: + +* Creating and supporting technology-enabled service businesses; + +* Developing and managing digital infrastructure platforms; + +* Facilitating capital deployment and investment through specialized series; + +* Providing shared services across portfolio entities; and + +* Building and scaling asset management and operational business units. + +### Series Structure Implementation + +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 creation for all stakeholders. + +The series structure further allows for proper risk isolation between business lines while maintaining unified strategic oversight and operational support. + +### Series Business Units + +Each series operates as a distinct business unit with its own: + +* Assets and liabilities; + +* Members and governance; + +* Operational focus and business model; + +* Risk profile and compliance requirements; + +while benefiting from the shared resources, governance framework, and strategic guidance of the Company. + +### Strategic Objectives and Values + +In pursuing its mission, the Company is committed to: + +* Sustainable long-term growth over short-term gains; + +* Technological innovation that creates tangible market advantages; + +* Ethical business practices and transparent governance; + +* Collaborative ecosystems that leverage collective expertise; + +* Risk management through proper entity structuring and compliance; and + +* Creating value for all stakeholders, including members, employees, customers, and partners. + +### Geographic and Jurisdictional Scope + +The Company may conduct business throughout the United States and internationally, subject to: + +* Appropriate foreign entity registrations where required; + +* Compliance with applicable jurisdictional requirements; + +* Implementation of proper risk mitigation measures for jurisdictions that may not recognize series LLC structures; and + +* Strategic assessment of jurisdictional advantages and limitations for each business initiative. + +## 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: + +* **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; + +* **Capital Requirements**: The necessity to facilitate significant capital raising and deployment across multiple business lines while maintaining appropriate controls and investor protections; + +* **Risk Management**: The implementation of enhanced protection mechanisms for investors and stakeholders through formalized series isolation and standardized governance; and + +* **Operational Scale**: The requirement for standardized service provision and administrative functions to support the Company’s projected growth to significant revenue levels. + +This Agreement specifically implements: + +* **Governance Structure**: A formalized governance structure under a Board of Directors with sociocratic principles providing both centralized strategic oversight and distributed operational decision-making; + +* **Service Provider Framework**: Mandatory internal service provider requirements ensuring operational consistency, quality control, and economies of scale across all series; + +* **Capital Structure Revision**: A profit interest-based economic framework utilizing a mandatory three-class system for all series, eliminating capital interests and capital accounts in favor of a more flexible and scalable approach to economic participation; + +* **Series Framework Enhancement**: Refined authority for creating and operating multiple series types, including operating entities, asset-holding entities, and semi-autonomous Cell entities, each with clearly defined purposes and limitations; and + +* **Operational Standards**: Uniform operational standards, electronic recordkeeping requirements, and compliance protocols ensuring consistent business operations while maintaining series isolation and regulatory compliance. + +### Tax and Regulatory Considerations + +This amendment and restatement has been structured with careful consideration of: + +* Federal, state, and local tax implications for the Company and its series; + +* Securities law compliance for current and future capital raising activities; + +* Regulatory requirements across all jurisdictions where the Company and its series operate; and + +* Preservation of favorable tax treatment for all existing and prospective members. + + +## Section 1.4 - Effect of Amendment and Restatement Upon execution of this Agreement: -- The Prior Agreement shall be superseded in its entirety -- All prior amendments to the Prior Agreement shall be void -- All rights and obligations under the Prior Agreement shall terminate +### 1. Termination of Prior Agreements +<<<<<<< HEAD:src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement-PreRework.md - All previous written and verbal agreements, understandings, contracts, and commitments of any kind made by or on behalf of: - TSYS Group - TSYS @@ -50,80 +185,350 @@ Upon execution of this Agreement: - No party shall have any continuing obligations, rights, or duties under any such prior agreements - This Agreement shall govern all aspects of the Company's operations going forward +======= +1. **Prior Agreement Termination**: The Prior Agreement is hereby superseded in its entirety and shall be of no further force or effect. All prior amendments to the Prior Agreement are hereby void and unenforceable. +>>>>>>> b7093a834865e883d1f061045b10f9bb4b4da73b:src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement.md -## ARTICLE 2 - GLOSSARY OF TERMS +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 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 and its series + + * Turnkey Network Systems Partnership + + * Turnkey Network Systems sole proprietorship + +### 2. Continuity of Commercial Relationships + +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 + + * Real property leases + + * Equipment leases and purchase agreements + + * Intellectual property licenses to or from third parties + + * Confidentiality and non-disclosure agreements + + * Banking and financial agreements + + * Existing loans and financial commitments + +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. + +### 3. Transitional Implementation + +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 shall be constituted within 30 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 + + * All operational policies required by this Agreement shall be implemented within 120 days of the Effective Date + + * Failure to meet any of these deadlines shall require written notice to all Members explaining the delay and providing a revised timeline, which shall not exceed an additional 30 days without approval of a majority of all Members + +### 4. Documentation and Certification Requirements + +7. **Transition Documentation**: The following documentation shall be prepared, executed, and maintained in the electronic records system: + + * Certification of termination of the Prior Agreement + + * Comprehensive inventory of all continuing agreements + + * Transition plan with specific milestones and responsible parties + + * Series reclassification documentation for all existing series + + * Formal Board and Committee establishment resolutions + + * Series Operating Agreement templates and adoption certifications + + * Member acknowledgments of the transition to this Agreement + +8. **Compliance Certification**: The Board shall, within 180 days of the Effective Date, certify in writing that: + + * All transitional requirements have been satisfied + + * All required governance bodies have been properly constituted + + * All Series Operating Agreements have been properly adopted + + * All Members have been properly classified under Article 5 + + * All operational requirements are being implemented + +### 5. Legal Effect and Integration + +9. **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. + +10. **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, electronic communications (including emails, text messages, and other digital exchanges such as via instant messenger), verbal understandings, and oral representations relating to the Company, its series and its governance. + + No representations, promises, understandings, or considerations have been made or relied upon by any party except those expressly set forth in this Agreement. + + The parties acknowledge that they may have received physical or electronic documents, spreadsheets, presentations, or models relating to the Company or its series, and all such materials are superseded by this Agreement unless explicitly incorporated herein by reference and attached as a Schedule. + + This integration provision cannot be amended, modified, or waived except through a written amendment to this Agreement executed with the same formalities as this Agreement. + +### 6. Dispute Resolution During Transition + +11. **Dispute Resolution During Transition**: Any disputes arising specifically from the transition from the Prior Agreement to this Agreement shall be resolved in accordance with the dispute resolution procedures set forth in Schedule H, with priority given to ensuring business continuity and preserving series isolation throughout the resolution process. The Company Committee shall have temporary emergency authority to resolve critical transitional disputes if necessary to maintain business operations, subject to subsequent review by the Board of Directors. + +### 7. Tax and Regulatory Treatment + +12. **Tax Matters**: The amendment and restatement of the Prior Agreement and adoption of this Agreement shall: + + * Not constitute a taxable event for the Company, any series, or any Member + + * Maintain tax classification continuity for all existing series + + * Preserve tax basis for all Members + + * Be treated as a tax-neutral reorganization to the maximum extent permitted by applicable tax law + +13. **Regulatory Filings**: The Company shall: + + * File all necessary notices, amendments, or updates with applicable governmental authorities + + * Provide notice to all financial institutions with which the Company or any series maintains accounts + + * Update all licenses, permits, and registrations as necessary + + * Document compliance with all applicable securities laws in connection with the amendment and restatement + +### 8. Member Rights and Notice + +14. **Member Rights During Transition**: During the transition period: + + * Members shall have the right to review all transition documentation + + * Members shall receive regular updates on the transition process + + * Members may submit questions and concerns to the Company Committee + + * Member rights under the Prior Agreement shall be preserved until the adoption of compliant Series Operating Agreements + +15. **Notice of Material Changes**: The Company shall provide detailed written notice to all Members of: + + * Any material changes to their rights or obligations under this Agreement compared to the Prior Agreement + + * The reclassification of their membership interests under Article 5 + + * Any actions required of them during the transition period + + * Key milestone dates for the transition process + +## Section 1.5 - Securities Law Notice + +### General Securities Disclosures + +THE MEMBERSHIP INTERESTS IN THE COMPANY AND ITS SERIES OFFERED HEREUNDER HAVE NOT BEEN REGISTERED WITH OR APPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, THE TEXAS STATE SECURITIES BOARD, OR ANY OTHER STATE SECURITIES REGULATORY AUTHORITY. THE INTERESTS ARE BEING OFFERED IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION REQUIREMENTS OF FEDERAL AND STATE LAW, SPECIFICALLY SECTION 4(A)(2) OF THE SECURITIES ACT OF 1933, RULE 506(C) OF REGULATION D PROMULGATED THEREUNDER, AND APPLICABLE EXEMPTIONS UNDER THE TEXAS SECURITIES ACT AND OTHER STATE “BLUE SKY” LAWS. + +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. + +### Risk Factors and Suitability + +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. SPECIFICALLY, INVESTORS MUST QUALIFY AS “ACCREDITED INVESTORS” AS DEFINED IN RULE 501(A) OF REGULATION D UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 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. + +THE COMPANY MAY CONDUCT MULTIPLE OFFERINGS OF MEMBERSHIP INTERESTS ACROSS VARIOUS SERIES. THESE OFFERINGS ARE SUBJECT TO INTEGRATION RULES UNDER REGULATION D, WHICH MAY AFFECT THE AVAILABILITY OF EXEMPTIONS FROM REGISTRATION. THE COMPANY HAS STRUCTURED ITS OFFERINGS TO COMPLY WITH THE SAFE HARBORS PROVIDED UNDER RULE 502(A) OF REGULATION D, BUT THERE CAN BE NO ASSURANCE THAT THE SEC OR STATE SECURITIES REGULATORS WILL NOT CHALLENGE THIS DETERMINATION. + +### Investment Risks and Limitations + +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. INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS AGREEMENT OR ANY PRIOR OR SUBSEQUENT COMMUNICATIONS FROM THE COMPANY OR ITS REPRESENTATIVES AS LEGAL, TAX, OR INVESTMENT ADVICE. + +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. + +### Information Rights and Disclosure Limitations + +THE COMPANY HAS NO OBLIGATION TO PROVIDE ONGOING INFORMATION ABOUT ITS BUSINESS, OPERATIONS, OR FINANCIAL CONDITION TO INVESTORS EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT OR AS REQUIRED BY LAW. INVESTORS SHOULD NOT EXPECT TO RECEIVE THE SAME LEVEL OF DISCLOSURE PROVIDED BY PUBLICLY TRADED COMPANIES. + +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. + +THIS NOTICE IS GIVEN PURSUANT TO APPLICABLE FEDERAL AND STATE SECURITIES LAWS, INCLUDING RULE 502(B) OF REGULATION D UNDER THE SECURITIES ACT OF 1933, AS AMENDED. + +### Series-Specific Securities Law Provisions + +INVESTORS ACKNOWLEDGE AND UNDERSTAND THAT: + +* EACH SERIES REPRESENTS A SEPARATE AND DISTINCT SECURITIES OFFERING, EVEN WHEN OFFERED CONCURRENTLY WITH OTHER SERIES; + +* INVESTMENT IN ONE SERIES DOES NOT CONSTITUTE INVESTMENT IN ANY OTHER SERIES, NOR DOES IT GRANT ANY RIGHTS WITH RESPECT TO OTHER SERIES; + +* EACH SERIES MAY HAVE DIFFERENT RIGHTS, OBLIGATIONS, INVESTMENT CRITERIA, RISKS, AND RETURNS, AND INVESTORS MUST EVALUATE EACH SERIES INVESTMENT SEPARATELY; + +* ACCREDITED INVESTOR STATUS MUST BE INDEPENDENTLY VERIFIED FOR EACH SERIES INVESTMENT, UNLESS VERIFICATION FOR MULTIPLE SERIES INVESTMENTS OCCURS WITHIN A 90-DAY PERIOD, IN WHICH CASE A SINGLE VERIFICATION MAY SUFFICE; + +* INVESTMENT LIMITATIONS UNDER SECURITIES LAWS ARE GENERALLY APPLIED SEPARATELY TO EACH SERIES, BUT REGULATORY AUTHORITIES MAY DETERMINE OTHERWISE; + +* THE COMPANY MAY ISSUE ADDITIONAL SERIES IN THE FUTURE WITH DIFFERENT TERMS, RIGHTS, AND INVESTMENT CRITERIA WITHOUT THE CONSENT OF EXISTING SERIES MEMBERS; + +* DISCLOSURES PROVIDED WITH RESPECT TO ANY PARTICULAR SERIES MAY NOT APPLY TO OTHER SERIES, AND INVESTORS SHOULD NOT RELY ON DISCLOSURES FOR ONE SERIES WHEN MAKING INVESTMENT DECISIONS REGARDING ANOTHER SERIES; + +* INVESTMENT RETURNS AND DISTRIBUTIONS FROM ONE SERIES ARE ISOLATED FROM AND HAVE NO IMPACT ON OTHER SERIES; + +* SECURITIES LAW VIOLATIONS WITH RESPECT TO ONE SERIES OFFERING COULD POTENTIALLY IMPACT OTHER SERIES OFFERINGS IF REGULATORY AUTHORITIES DETERMINE THE OFFERINGS SHOULD BE INTEGRATED; + +* SERIES-SPECIFIC OFFERING DOCUMENTATION WILL BE PROVIDED FOR EACH SERIES INVESTMENT OPPORTUNITY AND MUST BE REVIEWED INDEPENDENTLY; AND + +* THE TRANSFER RESTRICTIONS SET FORTH IN THIS AGREEMENT APPLY SEPARATELY TO EACH SERIES, AND RESTRICTIONS OR PERMISSIONS APPLICABLE TO ONE SERIES DO NOT EXTEND TO INTERESTS IN OTHER SERIES. + +### Series Integration Risk Factors + +DESPITE THE COMPANY’S INTENTION TO MAINTAIN SEPARATE SECURITIES OFFERINGS FOR EACH SERIES, SECURITIES REGULATORS MAY TAKE THE POSITION THAT SOME OR ALL SERIES OFFERINGS SHOULD BE INTEGRATED FOR SECURITIES LAW COMPLIANCE PURPOSES. SUCH INTEGRATION COULD RESULT IN: + +* RETROACTIVE APPLICATION OF MORE STRINGENT DISCLOSURE REQUIREMENTS; + +* LOSS OF SECURITIES LAW EXEMPTIONS FOR CERTAIN OFFERINGS; + +* MANDATORY RESCISSION RIGHTS FOR INVESTORS; + +* REGULATORY ENFORCEMENT ACTIONS; AND/OR + +* POTENTIAL LIABILITY FOR THE COMPANY AND ITS MANAGEMENT. + +THE COMPANY HAS IMPLEMENTED PROCEDURES TO MINIMIZE THESE RISKS, INCLUDING: + +* MAINTAINING SEPARATE OFFERING DOCUMENTATION FOR EACH SERIES; + +* ENSURING EACH SERIES HAS A DISTINCT BUSINESS PURPOSE AND INVESTMENT CRITERIA; + +* OBSERVING APPROPRIATE TEMPORAL SEPARATION BETWEEN CERTAIN OFFERINGS; + +* MAINTAINING SEPARATE ACCREDITED INVESTOR VERIFICATION RECORDS FOR EACH SERIES; AND + +* STRUCTURING SERIES OFFERINGS TO QUALIFY FOR SEPARATE EXEMPTIONS UNDER SECURITIES LAWS. + +### Series-Specific Disclosure Requirements + +EACH SERIES OFFERING WILL BE ACCOMPANIED BY: + +* SERIES-SPECIFIC RISK FACTORS DETAILING UNIQUE RISKS ASSOCIATED WITH THAT PARTICULAR SERIES BUSINESS MODEL AND OPERATIONS; + +* SERIES-SPECIFIC FINANCIAL PROJECTIONS AND CAPITAL REQUIREMENTS; + +* SERIES-SPECIFIC USE OF PROCEEDS DISCLOSURE; + +* SERIES-SPECIFIC MANAGEMENT INFORMATION AND EXPERIENCE; + +* SERIES-SPECIFIC CONFLICTS OF INTEREST DISCLOSURE; AND + +* SERIES-SPECIFIC INFORMATION REGARDING DISTRIBUTIONS AND EXIT STRATEGIES. + +INVESTORS MUST REVIEW ALL SERIES-SPECIFIC DISCLOSURE MATERIALS BEFORE INVESTING IN ANY SERIES. + +### Accredited Investor Verification + +THE COMPANY IS RELYING ON RULE 506(C) OF REGULATION D, WHICH PERMITS GENERAL SOLICITATION BUT REQUIRES THE COMPANY TO TAKE REASONABLE STEPS TO VERIFY THAT ALL INVESTORS ARE ACCREDITED INVESTORS. ACCORDINGLY, ALL PROSPECTIVE INVESTORS MUST SATISFY THE COMPANY’S VERIFICATION REQUIREMENTS, WHICH MAY INCLUDE ONE OR MORE OF THE FOLLOWING: + +1. REVIEW OF FINANCIAL DOCUMENTATION: EACH INVESTOR MAY BE REQUIRED TO PROVIDE DOCUMENTATION VERIFYING INCOME OR NET WORTH, WHICH MAY INCLUDE: + + * WITH RESPECT TO INCOME: IRS FORMS THAT REPORT INCOME FOR THE TWO MOST RECENT YEARS (INCLUDING, BUT NOT LIMITED TO, FORM W-2, FORM 1099, SCHEDULE K-1, AND FILED FORM 1040) AND A WRITTEN REPRESENTATION THAT THE INVESTOR REASONABLY EXPECTS TO REACH THE REQUIRED INCOME LEVEL IN THE CURRENT YEAR; OR + + * WITH RESPECT TO NET WORTH: BANK STATEMENTS, BROKERAGE STATEMENTS, TAX ASSESSMENTS, APPRAISAL REPORTS, CREDIT REPORTS, AND OTHER STATEMENTS OF ASSETS AND LIABILITIES, TOGETHER WITH A WRITTEN REPRESENTATION THAT ALL LIABILITIES NECESSARY TO DETERMINE NET WORTH HAVE BEEN DISCLOSED. + +2. THIRD-PARTY VERIFICATION: WRITTEN CONFIRMATION FROM A REGISTERED BROKER-DEALER, REGISTERED INVESTMENT ADVISER, LICENSED ATTORNEY, OR CERTIFIED PUBLIC ACCOUNTANT THAT SUCH PERSON OR ENTITY HAS TAKEN REASONABLE STEPS TO VERIFY THAT THE INVESTOR IS AN ACCREDITED INVESTOR WITHIN THE PRIOR THREE MONTHS. + +3. EXISTING INVESTOR VERIFICATION: FOR EXISTING INVESTORS WHO INVESTED IN A RULE 506(B) OFFERING AS ACCREDITED INVESTORS PRIOR TO SEPTEMBER 23, 2013, A CERTIFICATION AT THE TIME OF SALE THAT THEY CONTINUE TO QUALIFY AS ACCREDITED INVESTORS. + +4. ALTERNATIVE VERIFICATION METHODS: ANY OTHER REASONABLE VERIFICATION METHODS THAT THE COMPANY DETERMINES TO BE APPROPRIATE BASED ON THE PARTICULAR FACTS AND CIRCUMSTANCES OF EACH INVESTOR AND TRANSACTION, CONSISTENT WITH THE PRINCIPLES-BASED APPROACH OF RULE 506(C). + +### Verification Process and Rejection Rights + +THE COMPANY RESERVES THE RIGHT TO REJECT ANY SUBSCRIPTION IF IT DETERMINES, IN ITS SOLE DISCRETION, THAT THE VERIFICATION PROCEDURES DO NOT ESTABLISH THAT THE INVESTOR QUALIFIES AS AN ACCREDITED INVESTOR OR FOR ANY OTHER REASON. + +ANY INFORMATION PROVIDED BY INVESTORS AS PART OF THE VERIFICATION PROCESS WILL BE TREATED AS CONFIDENTIAL AND WILL BE COLLECTED, USED, AND DISCLOSED IN ACCORDANCE WITH THE COMPANY’S PRIVACY POLICY, A COPY OF WHICH IS AVAILABLE UPON REQUEST. + +FAILURE TO PROVIDE REQUESTED VERIFICATION DOCUMENTATION IN A TIMELY MANNER MAY RESULT IN REJECTION OF A SUBSCRIPTION. + +### Continuing Compliance Requirements + +EACH INVESTOR ACKNOWLEDGES THAT: + +* THEY MUST IMMEDIATELY NOTIFY THE COMPANY OF ANY CHANGE IN THEIR ACCREDITED INVESTOR STATUS; + +* THEY MUST PERIODICALLY RECERTIFY THEIR ACCREDITED INVESTOR STATUS AS REQUESTED BY THE COMPANY; + +* THE COMPANY MAY REQUIRE UPDATED VERIFICATION DOCUMENTATION FOR SUBSEQUENT INVESTMENTS; AND + +* FAILURE TO MAINTAIN ACCREDITED INVESTOR STATUS MAY LIMIT THEIR ABILITY TO MAKE ADDITIONAL INVESTMENTS AND MAY AFFECT THEIR RIGHTS UNDER THIS AGREEMENT. + +### Anti-Money Laundering Compliance + +THE INVESTOR SHOULD CHECK THE OFFICE OF FOREIGN ASSETS CONTROL (OFAC) WEBSITE AT BEFORE MAKING THE FOLLOWING REPRESENTATION: THE INVESTOR REPRESENTS THAT AMOUNTS INVESTED BY IT IN THIS OFFERING WERE NOT AND ARE NOT DIRECTLY OR INDIRECTLY DERIVED FROM ANY ACTIVITIES THAT CONTRAVENE FEDERAL, STATE OR INTERNATIONAL LAWS AND REGULATIONS, INCLUDING ANTI-MONEY LAUNDERING AND TERRORIST FINANCING LAWS AND REGULATIONS. FEDERAL REGULATIONS AND EXECUTIVE ORDERS ADMINISTERED BY OFAC PROHIBIT, AMONG OTHER THINGS, THE ENGAGEMENT IN TRANSACTIONS WITH, AND THE PROVISION OF SERVICES TO, CERTAIN FOREIGN COUNTRIES, TERRITORIES, ENTITIES, AND INDIVIDUALS. + +EACH INVESTOR MUST ALSO COMPLY WITH THE FINANCIAL CRIMES ENFORCEMENT NETWORK (FINCEN) CUSTOMER DUE DILIGENCE REQUIREMENTS FOR FINANCIAL INSTITUTIONS AND MUST PROVIDE BENEFICIAL OWNERSHIP INFORMATION WHEN APPLICABLE. + +### State Securities Law Compliance + +IN ADDITION TO FEDERAL SECURITIES LAW REQUIREMENTS, THIS OFFERING MUST COMPLY WITH THE SECURITIES LAWS OF EACH STATE WHERE OFFERS AND SALES OCCUR. CERTAIN STATES MAY IMPOSE ADDITIONAL SUITABILITY STANDARDS OR OTHER REQUIREMENTS. THE COMPANY HAS STRUCTURED THIS OFFERING TO COMPLY WITH APPLICABLE STATE EXEMPTIONS, BUT EACH INVESTOR SHOULD CONSULT THEIR OWN LEGAL COUNSEL REGARDING COMPLIANCE WITH THE SECURITIES LAWS OF THEIR STATE OF RESIDENCE. + +### Electronic Delivery and Signature Consent + +BY INVESTING IN THE COMPANY OR ANY SERIES, EACH INVESTOR CONSENTS TO ELECTRONIC DELIVERY OF ALL DOCUMENTS, NOTICES, AND COMMUNICATIONS RELATED TO THEIR INVESTMENT, AND AGREES THAT ELECTRONIC SIGNATURES AND RECORDS SHALL HAVE THE SAME LEGAL EFFECT AS PHYSICAL SIGNATURES AND RECORDS TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW. + +### Integration Risk Disclosure + +INVESTORS SHOULD BE AWARE THAT THE COMPANY MAY ENGAGE IN MULTIPLE OFFERINGS ACROSS DIFFERENT SERIES THAT COULD BE DEEMED INTEGRATED FOR SECURITIES LAW PURPOSES. WHILE THE COMPANY HAS STRUCTURED ITS OFFERINGS TO AVOID INTEGRATION, IF OFFERINGS WERE DEEMED INTEGRATED, THE EXEMPTIONS RELIED UPON MAY BE UNAVAILABLE, POTENTIALLY RESULTING IN VIOLATIONS OF SECURITIES LAWS AND POTENTIAL RESCISSION RIGHTS FOR INVESTORS. THE COMPANY HAS IMPLEMENTED PROCEDURES TO MINIMIZE THIS RISK, INCLUDING MAINTAINING SEPARATE OFFERING DOCUMENTATION, ENSURING OFFERINGS HAVE DISTINCT PURPOSES, AND OBSERVING MINIMUM TIME PERIODS BETWEEN OFFERINGS WHERE APPROPRIATE. + + + + +## ARTICLE 2 - DEFINITIONS AND INTERPRETATION ### Section 2.1 - Defined Terms -For purposes of this Agreement, the following terms shall have the meanings specified: +For purposes of this Agreement, the following terms shall have the meanings specified below. Any term not defined in this Article 2 shall have the meaning provided elsewhere in this Agreement or, if not defined in this Agreement, the meaning provided in the Texas Business Organizations Code. -1. **Agreement**: This Operating Agreement of Turnkey Network Systems LLC, as amended from time to time. +#### A. Corporate Structure and Governance Terms -2. **Board** or **Board of Directors**: The governing body of TSYS Group, which oversees all TSYS Group entities and operations through various sub-committees. +1. **Agreement**: This Amended and Restated Operating Agreement of Turnkey Network Systems LLC, as amended from time to time. -3. **Company Committee**: The governing sub-committee of the Board specifically responsible for overseeing Turnkey Network Systems LLC and its series. The Company Committee consists of independent directors elected by the members of all series of the Company. +2. **Board** or **Board of Directors**: The governing body which provides overall governance and strategic direction for all TSYS Group entities and operations through its various committees. -4. **Company**: Turnkey Network Systems LLC, a Texas Series Limited Liability Company and a subsidiary entity within TSYS Group. +3. **Cell Series**: A series established under the Company that may contain multiple subsidiary series and maintain its own governance structure, as more particularly described in Section 4.5. -5. **Electronic Records**: Digital documentation, including but not limited to electronic signatures, digital certificates, blockchain records, cloud-based storage systems, and other digital formats approved by the Company Committee. +4. **Company**: Turnkey Network Systems LLC, a Texas Series Limited Liability Company. +<<<<<<< HEAD:src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement-PreRework.md 6. **Independent Director**: A natural person serving on the Company Committee who must meet all of the following criteria: +======= +5. **Company Committee**: The governing committee of the Board specifically responsible for overseeing Turnkey Network Systems LLC and its series. The Company Committee consists of independent directors elected by the members of all series of the Company. +>>>>>>> b7093a834865e883d1f061045b10f9bb4b4da73b:src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement.md -* Is not a member of any series -* Has no direct or indirect ownership interest in any series -* Has no immediate family members who are series members (see definition of "Immediate Family Members" below) -* Has no material business relationship with any series (see definition of "Material Business Relationship" below) +6. **Consent Decision-Making**: A decision-making process where decisions are made when no member presents a reasoned and paramount objection, as more particularly described in Section 7.8.3. -7. **IT Services**: All information technology services provided exclusively by Known Element Enterprises (series) LLC, including: - - Network Infrastructure: - - Wide Area Network (WAN) and Local Area Network (LAN) management - - Internet connectivity and bandwidth allocation - - Virtual Private Network (VPN) services - - Network monitoring and optimization - - Firewall management and configuration - - Software Systems: - - Enterprise Resource Planning (ERP) software - - Customer Relationship Management (CRM) platforms - - Accounting and financial software - - Document management systems - - Collaboration and communication tools - - Custom application development and maintenance - - Data Storage and Management: - - Cloud storage solutions - - Backup and recovery systems - - Data archiving and retention - - Database management and optimization - - Data migration and synchronization - - Security Services: - - Access control and authentication systems - - Intrusion detection and prevention - - Security incident monitoring and response - - Vulnerability assessment and penetration testing - - Security awareness training - - Compliance monitoring and reporting - - Technical Support: - - 24/7 help desk services - - Remote and on-site support - - System maintenance and updates - - Hardware support and replacement - - User training and documentation - - Infrastructure Management: - - Server administration - - Cloud infrastructure management - - Hardware procurement and lifecycle management - - Disaster recovery planning and implementation - - Performance monitoring and optimization +7. **Double-Linking**: A governance structure where each circle is connected to its parent circle by both an appointed Operational Leader and an elected Circle Representative, as more particularly described in Section 7.8.2. -8. **Known Element Enterprises**: Turnkey Network Systems LLC - Known Element Enterprises (series) LLC, the designated provider of all IT services for the Company and its series. +8. **Effective Date**: The date on which this Agreement becomes effective, as set forth in Section 1.1. -9. **Series**: A separate series established under the Company pursuant to Texas Business Organizations Code § 101.601. +9. **Execution Date**: The date on which this Agreement is executed by the Company through its authorized representative(s). -10. **Series Member**: A person or entity holding a membership interest in a specific series. +10. **General Circle**: The highest governance circle in the sociocratic structure, consisting of the TSYS Group Board, as more particularly described in Section 7.9.1. -11. **The Campus Trading Company**: Turnkey Network Systems LLC - The Campus Trading Company (series) LLC, the designated provider of all transaction and treasury operations for the Company and its series. +11. **Independent Director**: A natural person serving on the Company Committee who meets all of the following criteria: + - Is not a member of any series; + - Has no direct or indirect ownership interest in any series; + - Has no Immediate Family Members who are series members; and + - Has no Material Business Relationship with any series. -12. **TSYS Group**: The parent organization that includes Turnkey Network Systems LLC and its series as subsidiary entities. TSYS Group is governed by its Board of Directors through various sub-committees, including the Company Committee that oversees the Company. +12. **Meeting**: Any duly called assembly of members, directors, or committee members, whether conducted in person, virtually, or through a hybrid approach, for the purpose of conducting Company business. +<<<<<<< HEAD:src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement-PreRework.md 13. **Transaction and Treasury Services**: All financial transaction and treasury services provided exclusively by Turnkey Network Systems LLC - The Campus Trading Company (series) LLC, including: - Payment Processing: - Electronic funds transfers (ACH, wire, SWIFT) @@ -167,665 +572,3714 @@ For purposes of this Agreement, the following terms shall have the meanings spec - Compliance monitoring - Internal control documentation - Risk assessment and mitigation +======= +13. **Operating Series**: A series of the Company that actively conducts business operations, as distinguished from asset-holding series or Cell series. + +14. **Primary Circle**: A governance circle directly connected to the General Circle, as more particularly described in Section 7.9.2. + +15. **Remote Participation**: Participation in any Meeting through electronic means such as video conferencing, teleconferencing, or other digital communication platforms that allow for real-time interaction. + +16. **Schedule**: Any of the lettered attachments to this Agreement (Schedule A through Schedule H) which contain additional details, specifications, or procedures referenced in the main body of this Agreement. + +17. **Series**: A separate series established under the Company pursuant to Texas Business Organizations Code § 101.601 et seq., having separate rights, powers, and duties with respect to specified property and obligations, and having separate business purposes or investment objectives. + +18. **Series Member**: A person or entity holding a membership interest in a specific series. + +19. **Series Operating Agreement**: The governing document for a specific series that details the rights, responsibilities, and relationships among the series members, the series, and the Company, adopted in accordance with Section 4.1.2. + +20. **Subcircle**: A governance circle established by and double-linked to a Primary Circle, as more particularly described in Section 7.9.3. + +21. **TDCMSP Series**: A Tools, Dies, Casts, Materials, Supplies, and (Intellectual) Property Series, as more particularly described in Section 4.4.1. + +22. **TSYS Group**: The collective reference to the Company, all of its series, and all affiliated entities under common governance of the Board. + +23. **Technology Oversight Committee**: The committee of the Board responsible for oversight of all technology services, systems, and infrastructure used by the Company and its series. + +#### B. Membership and Economic Terms + +24. **Accredited Investor**: An investor who meets the definition of “accredited investor” set forth in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended. + +25. **Capital Contribution**: Any contribution of property or services made by or on behalf of a Member to the Company or a series. As provided in this Agreement, the Company and its series do not accept capital contributions that establish capital accounts, but may accept services, property, or other valuable consideration in exchange for issuance of Profit Interests. + +26. **Class A Membership Interest**: A membership interest with full voting and economic rights, as more particularly described in Section 5.2. + +27. **Class B Membership Interest**: A membership interest with economic rights only, as more particularly described in Section 5.3. + +28. **Class C Membership Interest**: A membership interest acquired through involuntary transfer with limited economic rights and no voting rights, as more particularly described in Section 5.4. + +29. **Distribution**: Any transfer of cash or other property from a series to a Series Member in respect of the Member’s membership interest. + +30. **Immediate Family Members**: A person’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, and brothers and sisters-in-law and any person (other than a tenant or employee) sharing the household of such person + +31. **Involuntary Transfer**: Any transfer of a membership interest that occurs through court judgment, execution upon judgment, assignment in satisfaction of debt, charging order, contested divorce proceeding, bankruptcy proceeding, or any other non-voluntary mechanism, as more particularly described in Section 5.4. + +32. **Material Business Relationship**: Any commercial relationship with a series exceeding $10,000 in annual value, consulting or advisory relationship with a series, position with a series, ownership interest in a vendor to any series, financial obligation between a Director and any series, or joint venture or partnership interest with any series, as more particularly described in Section 7.4.1. + +33. **Member**: A person or entity who holds a membership interest in a series and who has been admitted to the series in accordance with the applicable Series Operating Agreement. + +34. **Membership Interest**: A Member’s rights in a series, including economic rights, voting rights (if any), and rights to information. + +35. **Profit Interest**: An interest in the future profits of a series that does not include any capital interest or obligation to contribute capital, as implemented through the three-class system described in Article 5. + +36. **Securities Act**: The Securities Act of 1933, as amended. + +37. **Transfer**: Any direct or indirect sale, assignment, gift, pledge, hypothecation, mortgage, exchange, or other disposition. + +38. **Treasury Regulations**: The regulations promulgated by the United States Department of the Treasury under the Internal Revenue Code, as amended from time to time. + +#### C. Operational and Technical Terms + +39. **Business Day**: Any day other than a Saturday, Sunday, or a day on which commercial banks in Austin, Texas are authorized or required by law to close. + +40. **Electronic Records**: Digital documentation maintained in electronic format, including but not limited to electronic signatures, digital certificates, blockchain records, cloud-based storage systems, and other digital formats approved by the Company Committee, as more particularly described in Section 3.2. + +41. **Fiscal Year**: The Company’s fiscal year, which shall be the calendar year unless otherwise determined by the Board. + +42. **IT Services**: All information technology services provided exclusively by Known Element Enterprises (series) LLC, including but not limited to network infrastructure, software systems, data storage and management, security services, technical support, and infrastructure management, as more particularly described in Schedule A to this Agreement. + +43. **Known Element Enterprises** or **KNEL**: Turnkey Network Systems LLC - Known Element Enterprises (series) LLC, the designated provider of all IT services for TSYS Group. + +44. **SLA** or **Service Level Agreement**: A documented agreement between a service provider and a customer that defines the expected level of service, performance metrics, and responsibilities. + +45. **The Campus Trading Company** or **TCTC**: Turnkey Network Systems LLC - The Campus Trading Company (series) LLC, the designated provider of all transaction and treasury services for TSYS Group. + +46. **Transaction and Treasury Services**: All financial transaction and treasury services provided exclusively by The Campus Trading Company (series) LLC, including but not limited to payment processing, treasury management, financial settlements, banking relationships, cash management, and financial controls, as more particularly described in Schedule B to this Agreement. + +#### D. Entity-Specific Terms + +47. **Redwood Family Office Group** or **REDWFO**: Turnkey Network Systems LLC - Redwood Family Office Group (Cell) (series) LLC, the multi-stakeholder family office for Company stakeholders, as more particularly described in Section 4.6.3.2. + +48. **Redwood Springs Capital Partners Group** or **RWSCP**: Turnkey Network Systems LLC - Redwood Springs Capital Partners Group (Cell) (series) LLC, the exclusive capital raising entity for all series, as more particularly described in Section 3.3. + +49. **Wyble Family Office Group** or **WFO Group**: Turnkey Network Systems LLC - Wyble Family Office Group (Cell) (series) LLC, the private family office LLC of the Company founders, as more particularly described in Section 4.6.3.1. + +50. **Cell Board**: The governing body of a Cell Series, established in accordance with the applicable Cell Series Operating Agreement. + +#### E. Legal and Compliance Terms + +51. **Certificate of Formation**: The Certificate of Formation of the Company filed with the Texas Secretary of State on [INSERT DATE], as amended from time to time. + +52. **Indemnified Person**: A person entitled to indemnification under Section 10.7. + +53. **TBOC**: The Texas Business Organizations Code, as amended from time to time. + +54. **Tax Matters Representative**: The person designated to represent the Company or a series in tax matters, as described in the applicable Series Operating Agreement. + + +## Section 2.2 - Interpretation + +In this Agreement, unless the context clearly requires otherwise: + +1. References to “Articles,” “Sections,” “Subsections,” or “Schedules” are to Articles, Sections, Subsections, or Schedules of this Agreement. + +2. The words “include,” “includes,” and “including” shall be deemed to be followed by the phrase “without limitation.” + +3. The words “herein,” “hereof,” “hereunder,” and similar terms shall refer to this Agreement as a whole and not to any specific section. + +4. Words in the singular shall include the plural and vice versa, and words of one gender shall include the other gender as well as neuter. + +5. Headings and captions are for convenience only and shall not affect the interpretation of this Agreement. + +6. References to any law, statute, or regulation shall include all amendments, modifications, or replacements of the same in effect at the relevant time. + +7. References to any agreement, document, or instrument mean such agreement, document, or instrument as amended, supplemented, or modified from time to time in accordance with its terms. + +8. References to a person or entity shall include its successors and permitted assigns. + +9. In the case of any conflict between the provisions of this Agreement and the provisions of any schedule or exhibit, the provisions of this Agreement shall control. + +10. The term “person” includes individuals, corporations, partnerships, limited liability companies, joint ventures, associations, trusts, estates, governmental entities, and any other entity of any kind. + +11. Any reference to a number of days shall refer to calendar days unless Business Days are specified. + +12. The use of “or” is not intended to be exclusive unless expressly indicated otherwise. + +13. Mathematical and accounting terms not otherwise defined herein shall have the meanings attributable to them under United States generally accepted accounting principles. + +14. Monetary amounts referenced in this Agreement are in United States dollars unless otherwise specified. + +15. The interpretation of this Agreement shall not be affected by which party initially drafted any provision, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision. + +16. References to “series” mean the series established under the Company pursuant to the Texas Business Organizations Code, and such references shall be interpreted to recognize the separate legal status and asset isolation features provided by applicable law. + +17. The term “including” and words of similar import, when following any general statement, term, or matter, shall not be construed to limit such statement, term, or matter to the specific items immediately following such term or similar words, or to similar items, whether or not non-limiting language (such as “without limitation”) is used, but rather shall be deemed to refer to all other items that could reasonably fall within the broadest possible scope of such general statement, term, or matter. + +18. Time periods within which a payment is to be made or any other action is to be taken hereunder shall be calculated excluding the day on which the period commences and including the day on which the period ends. + +19. Unless otherwise stated, references to the “knowledge” of any party shall mean the actual knowledge of such party’s directors, officers, or managers after reasonable inquiry. + +20. Any approval, consent, or similar action required under this Agreement shall not be unreasonably withheld, delayed, or conditioned unless expressly stated otherwise. + +21. Whenever a provision in this Agreement refers to something that is “reasonably satisfactory” or requires the “approval” or “consent” of a party, such approval or consent must be in writing to be effective, unless expressly stated otherwise. + +22. If any provision of this Agreement requires delivery of a certificate, statement, or other document, and an electronic copy is permitted under Section 3.2, such delivery requirement shall be satisfied by the delivery of such electronic copy. + +23. Electronic signatures, consents, and approvals permitted under Section 3.2 shall have the same legal effect as original signatures, consents, and approvals. + +24. In the event any Member receives documents or notifications in a foreign language, the English language version of such documents shall control unless expressly stated otherwise. + +25. Where amounts are listed in both words and numbers, and there is a discrepancy between the two, the amount expressed in words shall control. + +26. The principle of contra proferentem (interpreting ambiguous provisions against the drafter) shall not apply to this Agreement, and all provisions shall be interpreted fairly in accordance with their plain meaning. + +27. References to “tax,” “taxation,” or similar terms shall include all forms of taxation, duties, levies, imposts, or similar governmental charges, whether federal, state, local, or foreign. + +28. In determining the applicability of any threshold, limit, or exception in this Agreement, all related series, Members, transactions, or events shall be aggregated when required by the context or purpose of such threshold, limit, or exception. + +## Section 2.3 - Schedules + +### 2.3.1 - Schedule Incorporation + +The following schedules are attached to and incorporated into this Agreement: + +1. **Schedule A: IT Services** - Detailed description of IT Services provided by Known Element Enterprises, including service categories, performance metrics, response time requirements, availability standards, security requirements, pricing structure, and escalation procedures. + +2. **Schedule B: Transaction and Treasury Services** - Detailed description of Transaction and Treasury Services provided by The Campus Trading Company, including banking services, payment processing, cash management, financial controls, reporting standards, fee structures, and treasury management protocols. + +3. **Schedule C: Organizational Structure** - Organizational chart of TSYS Group entities, depicting hierarchical relationships, reporting lines, governance connections, and entity classifications. + +4. **Schedule D: Established Series** - Comprehensive list of permanently established series, including their type classifications, business purposes, key personnel, and special status designations. + +5. **Schedule E: Governance Structure** - Governance structure diagram illustrating Board and committee relationships, sociocratic circles, decision-making pathways, and delegation of authority. + +6. **Schedule F: Securities Notices** - Required securities law legends and notices, including state-specific requirements, offering disclosure templates, and investor qualification documentation. + +7. **Schedule G: SLA Requirements** - Service Level Agreement (SLA) requirements and templates, establishing minimum standards for internal service providers, performance metrics, and remediation procedures. + +8. **Schedule H: Dispute Resolution** - Dispute resolution procedures, including mediation requirements, arbitration protocols, and special provisions for emergency situations and transition-period disputes. + +### 2.3.2 - Schedule Status and Amendments + +1. **Legal Status**: All Schedules constitute integral parts of this Agreement and shall have the same legal force and effect as if fully set forth in the main body of this Agreement. + +2. **Amendment Process**: Schedules may be amended as follows: + + * **Schedule A and B**: May be amended by a two-thirds majority vote of the Technology Oversight Committee, with notice to all series. + + * **Schedule C and E**: May be amended by the Board to reflect organizational changes, with notice to all series. + + * **Schedule D**: May be amended by the Company Committee to reflect the addition or removal of series in accordance with this Agreement. + + * **Schedule F**: May be amended by the Company Committee upon advice of legal counsel to ensure compliance with applicable securities laws. + + * **Schedule G**: May be amended by joint action of the Technology Oversight Committee and the Company Committee. + + * **Schedule H**: May be amended only by the same process required to amend the main body of this Agreement. + +3. **Amendment Documentation**: All Schedule amendments shall be: + + * Documented in writing + + * Dated and sequentially numbered + + * Maintained in the electronic records system + + * Distributed to all affected series within 5 business days of adoption + + * Accompanied by a summary of changes + +### 2.3.3 - Schedule Access and Maintenance + +1. **Electronic Access**: All Schedules shall be maintained in the electronic records system and shall be accessible to: + + * All Members of all series + + * The Board and all committees + + * Officers and authorized representatives of the Company and all series + + * Professional advisors as needed for the performance of their duties + +2. **Version Control**: The Company shall maintain: + + * Complete historical versions of all Schedules + + * A log of all changes, including the date, nature, and authorization of each change + + * Clear identification of the current effective version + +3. **Periodic Review**: Each Schedule shall be reviewed for accuracy and relevance: + + * At least annually + + * Upon any material change in Company structure or operations + + * As required by the Board or any responsible committee + +### 2.3.4 - Schedule Interpretation and Conflicts + +1. **Interpretation Principles**: Schedules shall be interpreted in accordance with: + + * The interpretation provisions of Section 2.2 + + * The specific context and purpose of each Schedule + + * The expertise of the committee or body primarily responsible for the Schedule subject matter + +2. **Conflict Resolution**: In case of any conflict: + + * As stated in Section 2.2(9), the provisions of the main Agreement shall control over any Schedule + + * Among Schedules, the more specific provision shall control over the more general + + * The Company Committee shall have authority to resolve any interpretive conflicts between Schedules + +3. **Expert Consultation**: For technical matters in Schedules A, B, or G, the Technology Oversight Committee’s interpretation shall be given substantial weight. + +### 2.3.5 - Additional Schedules + +1. **Future Schedules**: The Board may adopt additional lettered Schedules (I, J, K, etc.) as necessary to: + + * Address new operational requirements + + * Implement additional governance structures + + * Document evolving compliance obligations + + * Establish new service standards + +2. **Adoption Process**: Additional Schedules shall be adopted by: + + * Board approval + + * Written notification to all series + + * Incorporation by reference through a formal amendment to this Section 2.3 + + * Maintenance in the electronic records system + +3. **Interim Appendices**: Between formal amendments, the Board may establish interim appendices to existing Schedules that shall have the same effect as the Schedules to which they are appended. +>>>>>>> b7093a834865e883d1f061045b10f9bb4b4da73b:src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement.md ## ARTICLE 3 - MANDATORY OPERATIONAL REQUIREMENTS -## Section 3.1 - Internal Shared Services Structure +## Section 3.1 - Mandatory Service Provider Framework -### 1. Designation of Internal Service Providers +### Section 3.1.1 - Designated Internal Service Providers -The Company hereby establishes the following series as internal shared service providers: +1. **Exclusive Service Designation**: The Company hereby designates the following series as exclusive internal shared service providers for all TSYS Group entities: +<<<<<<< HEAD:src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement-PreRework.md a. Known Element Enterprises (series) LLC shall serve as the Company's centralized information technology division, providing all IT services as defined in Section 2.1: IT Services. b. The Campus Trading Company (series) LLC shall serve as the Company's centralized treasury and transaction operations division, providing all transaction and treasury services as defined in Section 2.1: Transaction and Treasury Services. +======= + a. **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. -### 2. Mandatory Use of Internal Services + b. **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. +>>>>>>> b7093a834865e883d1f061045b10f9bb4b4da73b:src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement.md -All series must exclusively utilize these internal service divisions for their respective functions. No series may: +2. **Service Provider Independence**: Each designated service provider shall maintain: -a. Develop independent IT systems or capabilities + a. Operational independence regarding service delivery methodologies + + b. Technology selection autonomy within Board-approved parameters + + c. Resource allocation flexibility to meet established service levels + + d. Staffing and personnel management authority + + e. Implementation discretion for approved service initiatives -b. Establish independent banking or treasury relationships +3. **Term of Designation**: These service provider designations shall: -c. Contract directly with external service providers for these functions + a. Remain in effect for the duration of this Agreement + + b. Be reviewed by the Board at least every three (3) years + + c. Be subject to revocation only under the extreme failure provisions of Section 3.1.3(2)(d) + + d. Be transferable to successor entities only with Board approval -### 3. Service Division Operations +### Section 3.1.2 - Mandatory Use Requirement -a. Each service division shall: +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: -* 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 + 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 + + v. Include remediation timelines for service disruptions + + vi. Specify reporting requirements and cadence + + vii. Be reviewed and updated at least annually + + viii. Include security standards and compliance requirements + + ix. Establish escalation procedures for service issues + + x. Define problem severity classification and associated response times + + xi. Include customer satisfaction measurement requirements + + xii. Establish change management procedures and notice requirements -b. The Board of Directors, through its committees, shall establish and oversee: + 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 + + iii. Transparent cost-accounting as described in Section 4.6.5 + + iv. Quarterly pricing reviews by the Audit and Finance Committee + + v. Documentation of all cost allocation methodologies + + vi. Publication of rate cards to all series members + + vii. Advance notice of at least sixty (60) days for any rate increases + + viii. Cap on annual price increases tied to relevant industry indexes + + ix. Volume discounting mechanisms for large series + + x. Regular market comparison reporting to all series -* Performance metrics and reporting requirements -* Service level frameworks -* Cost allocation methodologies -* Technology and service strategies -* Vendor selection criteria -* Quality control measures -* Other operational parameters as needed +2. **Enforcement Mechanism**: The Company Committee shall be responsible for enforcing the mandatory use requirement and shall: -### 4. Vendor Relationships + a. Conduct quarterly compliance reviews + + b. Promptly investigate any reported violations + + c. Issue formal findings within 30 days of any compliance investigation + + d. Recommend appropriate remedial actions to the Board + + e. Maintain a centralized compliance tracking system + + f. Publish anonymized compliance reports to all series + + g. Establish escalating penalties for repeated non-compliance + + h. Implement a confidential reporting system for compliance concerns + + i. Provide compliance training resources to all series + + j. Conduct annual compliance audits of all series and service providers -a. Service divisions shall have sole authority to: +3. **Service Provider Dispute Resolution**: Disputes between service providers and series regarding service delivery shall be resolved through: -* Select external vendors -* Negotiate vendor contracts -* Manage vendor relationships -* Terminate vendor relationships + a. Initial attempt at resolution between operational leaders of the service provider and series + + b. If unresolved within 15 days, escalation to the Technology Oversight Committee + + c. Formal mediation process as outlined in Schedule H if not resolved within 30 days + + d. Final binding decision by the Company Committee if mediation is unsuccessful + + e. Documentation of all disputes and resolutions in the electronic records system + + f. Quarterly dispute trends analysis and reporting to the Board + + g. Implementation of dispute reduction strategies based on trend analysis + + h. Establishment of proactive relationship management protocols + + i. Joint service improvement planning between service providers and series + + j. Emergency escalation pathway for critical service disputes -b. All vendor relationships shall be: +### Section 3.1.3 - Service Provider Failure Remedies -* Subject to Board oversight -* Managed according to Board-established criteria -* Properly documented -* Regularly reviewed +1. **Failure Determination**: An internal service provider shall be deemed to have failed if it: -### 5. Cost Allocation + a. Fails to meet established performance standards for two consecutive quarters as documented by the Technology Oversight Committee + + b. Experiences a catastrophic service disruption lasting more than: + + i. 48 hours for non-critical services + + ii. 24 hours for important services + + iii. 4 hours for mission-critical services as designated in the applicable SLA + + c. Commits a material breach of its SLA obligations that remains uncured for 30 days after written notice + + d. Receives substantiated service quality complaints from more than 50% of its series customers within any six-month period + + e. Experiences a material security or data breach that compromises sensitive information or critical infrastructure + + f. Fails to implement required security patches or updates within timeframes specified in the SLA + + g. Demonstrates a pattern of repeated service deficiencies that, while individually not constituting failures, collectively indicate systemic issues + + h. Violates applicable regulatory requirements resulting in material penalties or compliance issues + + i. Fails to maintain required certifications or qualifications + + j. Loses key personnel without adequate succession planning and replacement -a. Service costs shall be: +2. **Remedies for Service Provider Failure**: Upon determination of a service provider failure, the following remedies shall be available: -* Allocated among series according to Board-approved methodologies -* Documented transparently -* Reviewed regularly -* Adjusted as needed to maintain cost-only operation + a. **Initial Remediation Period**: The service provider shall be granted a 60-day remediation period to: + + i. Correct performance deficiencies + + ii. Restore service levels to required standards + + iii. Submit a detailed improvement plan to the Technology Oversight Committee + + iv. Implement enhanced monitoring and reporting + + v. Engage third-party expertise if necessary + + vi. Conduct root cause analysis of failures + + vii. Implement preventative measures + + viii. Establish interim service arrangements if necessary + + ix. Provide regular progress reports + + x. Compensate affected series according to SLA terms + + b. **Enhanced Oversight**: During the remediation period, the service provider shall be subject to: + + i. Weekly performance reviews by the Technology Oversight Committee + + ii. Implementation of additional controls and monitoring + + iii. Potential leadership changes as recommended by the Board + + iv. Requirement to provide daily status reports to affected series + + v. Temporary management augmentation with qualified personnel + + vi. Independent third-party oversight of remediation efforts + + vii. Additional resource allocation requirements + + viii. Temporary suspension of new service initiatives + + ix. Mandatory executive briefings to the Board + + x. Implementation of emergency escalation procedures + + c. **Failure to Remediate**: If the service provider fails to remediate within the 60-day period, the Technology Oversight Committee may: + + i. Grant a single 30-day extension if substantial progress is evident + + ii. Implement a service provider replacement plan + + iii. Authorize temporary external service providers for affected services + + iv. Recommend restructuring of the service provider to the Board + + v. Appoint temporary executive leadership + + vi. Accelerate training of backup personnel + + vii. Implement contingency service arrangements + + viii. Adjust pricing to reflect reduced service levels + + ix. Impose financial penalties as specified in the SLA + + x. Develop long-term service provider transition plan + + d. **Extreme Failure**: In cases of extreme failure involving critical systems, the Board may: + + i. Immediately authorize use of external service providers + + ii. Remove and replace service provider leadership + + iii. Implement emergency continuity plans + + iv. Take any other actions necessary to protect the TSYS Group + + v. Establish an emergency governance committee + + vi. Suspend normal approval processes for emergency actions + + vii. Allocate emergency funding for service restoration + + viii. Engage specialized crisis management expertise + + ix. Implement rapid knowledge transfer protocols + + x. Authorize extraordinary measures to protect data and assets -### 6. Documentation Requirements +3. **Service Continuity Protection**: To ensure continuity of critical services: -All service division operations shall be documented in accordance with the electronic records requirements of Section 3.2. + a. Each service provider shall maintain: + + i. Comprehensive business continuity and disaster recovery plans + + ii. Documented systems and operational procedures + + iii. Knowledge transfer protocols for critical functions + + iv. Cross-training programs for essential personnel + + v. Backup systems and redundancies for critical infrastructure + + b. The Technology Oversight Committee shall: + + i. Conduct annual disaster recovery testing + + ii. Maintain relationships with qualified backup service providers + + iii. Regularly review and update continuity plans + + iv. Ensure proper escrow of critical system information + + v. Validate recovery time and point objectives + +### Section 3.1.4 - Innovation Exception Process + +1. **Exception Basis**: A series may request an exception to the mandatory use requirement only on the grounds of: + + a. Specialized technical requirements that cannot be met by the internal service provider + + b. Demonstrable competitive advantage requiring specialized external solutions + + c. Regulatory or compliance requirements that necessitate specialized external providers + + d. Client or customer contractual requirements that mandate specific external solutions + + e. Significant cost savings (exceeding 30%) that can be achieved through an external provider while maintaining equivalent security and quality standards + + f. Emerging technology that provides substantial business advantage not available through internal providers + + g. Temporary capacity limitations of internal providers during high-growth periods + + h. Specialized expertise requirements for limited duration projects + + i. Unique geographical requirements not efficiently served by internal providers + + j. Legacy systems integration requirements that internal providers cannot efficiently support + +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 including due diligence materials + + v. Security and compliance assessment + + vi. Data integration and protection plan + + vii. Implementation timeline + + viii. Cost-benefit analysis comparing the external solution to internal alternatives + + ix. Risk assessment for the proposed exception + + x. Transition plan to internal providers if applicable + + xi. Metrics for measuring success of the exception + + xii. Governance controls for the external provider relationship + + c. The Technology Oversight Committee must respond within 45 days for standard requests and within 15 days for requests designated as time-sensitive with appropriate justification + + d. The Technology Oversight Committee must provide written justification for any denial + + e. Appeals of denied exception requests may be made to the Company Committee within 15 days of denial + + f. The Company Committee shall render a final decision within 30 days of appeal receipt + + g. Denials that substantially impact business operations may be further appealed to the Board in extreme circumstances + + h. The Board shall establish an expedited review process for critical exception appeals + + i. All decisions shall be documented in the electronic records system + + j. Precedential decisions shall be published as guidance for future requests + +3. **Exception Implementation**: + + a. If approved, the exception shall: + + i. Be documented in the electronic records system + + ii. Include specific scope and duration limitations + + iii. Require quarterly reviews and renewal evaluation + + iv. Include a transition plan for eventual migration to internal services if feasible + + v. Include compliance monitoring to ensure continued adherence to security and integration requirements + + vi. Specify data security and access controls + + vii. Establish service level requirements for the external provider + + viii. Define clear exit criteria and termination procedures + + ix. Establish integration requirements with existing systems + + x. Include knowledge transfer provisions to internal providers + + b. The Technology Oversight Committee shall maintain a registry of all approved exceptions and provide quarterly reports to the Board + +4. **Exception Renewal and Termination**: + + a. All exceptions shall have a defined term, not to exceed one (1) year unless specifically approved by the Board + + b. Renewal requests must be submitted at least 60 days prior to exception expiration + + c. Renewal requests shall include: + + i. Performance assessment of the external provider + + ii. Continued justification for the exception + + iii. Analysis of any changes in internal provider capabilities + + iv. Updated security and compliance assessment + + d. Exceptions may be terminated prior to expiration if: + + i. The external provider fails to meet service requirements + + ii. Internal provider capabilities evolve to meet the requirement + + iii. The business need for the exception no longer exists + + iv. Security or compliance concerns arise + + v. The series fails to comply with exception conditions + +### Section 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 + + h. Maintain appropriate cybersecurity and compliance certifications + + i. Establish disaster recovery and business continuity plans + + j. Conduct quarterly technology and service reviews + + k. Provide monthly service performance metrics to all series + + l. Undergo annual security audits by qualified third-party firms + + m. Maintain compliance with all relevant industry standards and regulations + + n. Provide regular training to personnel on security and operational best practices + + o. Establish and maintain risk management frameworks appropriate to service offerings + + p. Implement formal change management processes for service modifications + + q. Document all service procedures and maintain operational manuals + + r. Establish quality control procedures with measurable outcomes + + s. Participate in industry benchmarking and best practice forums + + t. Maintain appropriate insurance coverage for service operations + +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 + + h. Compliance standards and monitoring + + i. Cybersecurity requirements and testing + + j. Other operational parameters as needed + + k. Capital investment approval thresholds and procedures + + l. Strategic technology alignment with Company objectives + + m. Innovation funding and initiatives + + n. Risk management standards and assessment methodologies + + o. Succession planning for critical service leadership positions + +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 + + d. Align roadmap priorities with overall TSYS Group strategic objectives + + e. Include specific technology innovation initiatives + + f. Establish clear timelines for major service enhancements + + g. Document resource allocation for strategic initiatives + + h. Include contingency planning for emerging technologies and market shifts + + i. Identify potential security and regulatory challenges + + j. Document required competency development for service evolution + + k. Establish metrics for measuring roadmap progress + + l. Identify capacity planning requirements for future growth + + m. Include technology retirement planning for legacy systems + + n. Document integration strategies with complementary technologies + + o. Align with industry standards and best practices + +4. **User Experience and Feedback System**: Each service provider shall: + + a. Implement a structured feedback system accessible to all series + + b. Conduct quarterly user experience reviews + + c. Maintain a transparent issue tracking system + + d. Report on issue resolution metrics monthly + + e. Incorporate user feedback into service improvements + + f. Establish a user advisory group with representation from different series + + g. Maintain a knowledge base of common issues and solutions + + h. Publish service disruption post-mortems and remediation plans + + i. Implement a suggestion system for service improvements + + j. Develop service usage analytics to identify improvement opportunities + + k. Establish formal user acceptance testing for major changes + + l. Conduct annual service satisfaction benchmarking + + m. Implement training programs to optimize user adoption + + n. Create user communities for knowledge sharing and collaboration + + o. Recognize and reward user contributions to service improvement + +### Section 3.1.6 - Service Quality Management + +1. **Quality Assurance Framework**: Each service provider shall implement: + + a. Formal quality management systems with defined processes + + b. Regular internal audits of service quality + + c. Root cause analysis for service incidents + + d. Preventative action plans for recurring issues + + e. Service performance trend analysis and reporting + + f. Continuous service monitoring and alerting systems + + g. Regular process improvement reviews + + h. Customer impact assessment for all service changes + + i. Post-implementation reviews of major service changes + + j. Quality metrics aligned with business outcomes + +2. **Continuous Improvement Requirements**: + + a. Each service provider shall establish annual improvement goals for: + + i. Service availability and reliability + + ii. Response and resolution times + + iii. Customer satisfaction ratings + + iv. Cost efficiency metrics + + v. Security posture and compliance + + b. Progress toward improvement goals shall be: + + i. Measured and reported quarterly + + ii. Reviewed by the Technology Oversight Committee + + iii. Incorporated into service provider performance evaluations + + iv. Tied to leadership compensation where applicable + + v. Communicated transparently to all series + +3. **Service Provider Collaboration**: Service providers shall: + + a. Establish formal coordination mechanisms between providers + + b. Conduct joint planning for interdependent services + + c. Implement integrated incident management for cross-service issues + + d. Share expertise and resources for mutual improvement + + e. Develop and maintain integrated service catalogs + + f. Establish clear handoff procedures for cross-service processes + + g. Conduct joint disaster recovery exercises + + h. Develop integrated security frameworks + + i. Implement compatible technology standards + + j. Coordinate service maintenance windows + +### Section 3.1.7 - Technology Evolution and Innovation + +1. **Innovation Requirements**: To maintain competitive service offerings, service providers shall: + + a. Allocate a minimum of 10% of their resources to innovation and new technology evaluation + + b. Establish formal mechanisms for evaluating emerging technologies + + c. Develop proof-of-concept processes for promising innovations + + d. Create safe experimental environments for testing new technologies + + e. Partner with series to pilot innovative solutions + + f. Report quarterly on innovation initiatives and outcomes + + g. Participate in industry forums and research communities + + h. Establish relationships with technology research organizations + + i. Develop internal innovation incentive programs + + j. Create processes for scaling successful innovations + +2. **Technology Currency**: Service providers shall: + + a. Maintain all technologies within manufacturer-supported versions + + b. Establish and follow formal technology lifecycle policies + + c. Provide 12-month advance notice for significant technology transitions + + d. Maintain compatibility with industry-standard technologies + + e. Ensure backward compatibility when feasible + + f. Provide migration support for technology transitions + + g. Document technology roadmaps with sunset dates + + h. Assess and mitigate risks associated with aging technologies + + i. Balance innovation with stability and security requirements + + j. Provide training for series personnel on new technologies + +3. **Market Alignment**: The Technology Oversight Committee shall: + + a. Conduct annual assessments of market-competitive technologies + + b. Benchmark internal services against industry leaders + + c. Identify service gaps and deficiencies + + d. Recommend strategic technology investments + + e. Monitor industry trends and disruptions + + f. Assess competitive threats from new technologies + + g. Evaluate acquisition opportunities for technology advancement + + h. Define technology standards aligned with industry direction + + i. Forecast future technology requirements + + j. Report significant findings to the Board ### 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 (master 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**: - - Member Information: - - Series membership records - - Ownership transfer documentation - - Member contact information - - Voting records and proxies - - Capital contribution records - - Distribution documentation + * Articles of organization and amendments + + * Operating agreements (Company and series) + + * Board and committee meeting minutes and resolutions + + * Series establishment documentation + + * Regulatory filings and correspondence + + * Annual reports and compliance documents + + * Consents and certifications + + * Governance policies and procedures - - Contracts and Agreements: - - Service provider agreements - - Vendor contracts - - Client agreements - - Employment contracts - - Non-disclosure agreements - - License and permit documentation +2. **Financial Documentation**: -2. Electronic Record Requirements: + * 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 + + * Investment records and valuations + + * Capital transactions and funding 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. **Member Information**: - - Audit Trail Requirements: - - Automated version control - - Change logging with user identification - - Time and date stamping - - Document access history - - Modification tracking - - User activity logs + * Series membership records + + * Ownership transfer documentation + + * Member contact information + + * Voting records and proxies + + * Distribution documentation + + * Membership interest certificates + + * Accredited investor verification materials + + * Member communications and notices - - Access Controls: - - Role-based access management - - Granular permission settings - - Secure user authentication - - Session monitoring and timeout - - Remote access protocols +4. **Contracts and Agreements**: - - Retention and Archiving: - - Automated retention scheduling - - Secure archiving protocols - - Legal hold implementation - - Destruction procedures - - Archive access controls + * Service provider agreements + + * Vendor contracts + + * Client agreements + + * Employment and contractor agreements + + * Non-disclosure and confidentiality agreements + + * License and permit documentation + + * Insurance policies and claims + + * Settlement agreements and releases -### Section 3.3 - Mandatory Capital Requirements +5. **Operational Records**: -1. Capital Activities Restrictions: All series must exclusively utilize Redwood Springs Capital Partners LLC and/or its management series or subsidiary funds series for: + * Business plans and strategic documents + + * Marketing materials and communications + + * Intellectual property documentation + + * Regulatory compliance records + + * Standard operating procedures + + * Risk assessments and mitigation plans + + * Service level agreements and performance reports + + * Incident reports and resolution documentation - * All capital raising activities - * All formation capital activities - * All subsequent capital activities +6. **Legal and Compliance Records**: + + * Litigation documents and correspondence + + * Regulatory inquiries and responses + + * Compliance certifications and attestations + + * Legal opinions and memoranda + + * Compliance monitoring reports + + * Investigation documentation + + * Whistleblower reports and resolutions + + * Regulatory examination materials + +#### 3.2.2 - Electronic Record System Requirements + +1. **System Architecture Requirements**: + + * Cloud-based primary storage with geographic redundancy across at least three separate regions + + * Real-time backup and disaster recovery systems with recovery time objective of less than four hours and recovery point objective of less than 15 minutes + + * Multi-factor authentication access controls for all users + + * Minimum AES-256 encryption at rest and TLS 1.3 encryption in transit + + * Comprehensive API integration capabilities for authorized systems + + * Automated compliance monitoring and reporting + + * System availability of at least 99.9% measured monthly + + * Automated system health monitoring with real-time alerts for anomalies + + * Data segregation mechanisms to ensure series isolation at the data level + + * Zero-trust security architecture with least privilege access controls + +2. **Audit Trail Requirements**: + + * Immutable version control with blockchain verification + + * Comprehensive change logging with user identification + + * Cryptographically secured time and date stamping + + * Complete document access history retention + + * Detailed modification tracking with before/after comparisons + + * User activity logs retained for a minimum of seven years + + * Tamper-evident logging mechanisms + + * Regular audit trail verification procedures + + * Separation of audit trail storage from primary document storage + + * Real-time anomaly detection for suspicious activity + +3. **Access Control Requirements**: + + * Role-based access management with principle of least privilege + + * Granular permission settings at the document and field level + + * Secure user authentication with biometric options + + * Automatic session monitoring and timeout after 15 minutes of inactivity + + * Comprehensive remote access protocols with enhanced security + + * Quarterly access rights review and certification + + * Privileged access management with enhanced monitoring + + * Separation of duties for critical functions + + * Emergency access protocols with required post-access reviews + + * Continuous monitoring of access patterns to detect anomalies + +4. **Retention and Archiving Requirements**: + + * Automated retention scheduling based on document type + + * Secure archiving protocols with integrity verification + + * Legal hold implementation capabilities + + * Defensible destruction procedures with verification + + * Archive access controls with separate authentication + + * Retention periods compliant with all applicable regulations + + * Annual retention policy reviews + + * Secure backup archives maintained in geographically separate locations + + * Immutable storage for critical records to prevent tampering + + * Regular retrieval testing to ensure archive accessibility + +5. **Data Privacy Requirements**: + + * Compliance with all applicable data privacy laws and regulations + + * Data minimization and purpose limitation controls + + * Data subject access request management capabilities + + * Consent tracking and management + + * Privacy impact assessment documentation + + * Cross-border data transfer compliance mechanisms + + * Data classification and handling procedures + + * Privacy by design implementation in system architecture + +#### 3.2.3 - Compliance and Security Standards + +1. **Required Compliance Standards**: The electronic records system shall comply with: + + * SOC 2 Type II standards + + * ISO 27001 Information Security standards + + * NIST Cybersecurity Framework + + * GDPR and other applicable privacy regulations + + * HIPAA requirements for any protected health information + + * Applicable industry-specific regulations + + * All federal, state, and local records retention requirements + + * PCI-DSS compliance for payment card data if applicable + + * CCPA and similar state privacy laws + + * Records management standards (ISO 15489) + +2. **Security Protocols**: + + * Quarterly vulnerability assessments + + * Annual penetration testing by independent third parties + + * Continuous security monitoring + + * Incident response plan with testing + + * Employee security awareness training + + * Data loss prevention controls + + * Endpoint security management + + * Zero-trust network architecture implementation + + * Advanced threat protection measures + + * Regular phishing and social engineering testing + + * Secure development practices for system enhancements + + * Supply chain security assessment for third-party components + +3. **System Administration**: + + * Centralized administration by Known Element Enterprises + + * Documentation of all system configurations + + * Change management processes for system modifications + + * Segregation of duties for administrative functions + + * Backup administrator credentials securely stored with the Company Committee + + * Automated system health monitoring + + * Capacity planning and performance optimization protocols + + * Regular administrator access reviews and rotations + + * Privileged access monitoring and logging + + * Regular security training for system administrators + +#### 3.2.4 - Implementation and Verification + +1. **System Implementation Timeline**: + + * Full implementation of all electronic record requirements within 90 days of the Effective Date + + * Phased migration approach with priority for critical documents + + * Verification and testing of all system components before full deployment + + * Post-implementation review within 30 days of completion + + * Remediation plan for any identified deficiencies with 15-day completion requirement + +2. **Compliance Verification**: + + * Quarterly system compliance audits + + * Annual third-party security assessments + + * Bi-annual disaster recovery testing + + * Monthly backup verification procedures + + * Continuous monitoring of compliance with regulatory requirements + + * Regular penetration testing by qualified security professionals + + * Independent verification of encryption implementation + + * Periodic testing of access controls and segregation + +3. **Documentation Requirements**: + + * Comprehensive system documentation maintained and updated + + * User manuals and training materials for all series members + + * Recovery procedures clearly documented and tested + + * Compliance certifications maintained and renewed as required + + * Security incident response procedures + + * Business continuity plans + + * System architecture diagrams + + * Data flow maps + +4. **Operational Resilience**: + + * Regular business impact analysis to identify critical functions + + * Multiple redundancy layers for critical systems + + * Periodic failover testing to secondary systems + + * Distributed denial of service (DDoS) attack mitigation measures + + * Alternative access methods for emergency situations + + * Incident response simulations at least twice annually + + * Cross-training of key personnel for system recovery procedures + + * Vendor dependency assessment and alternative provider identification + + + +### Section 3.3 - Mandatory Capital Raising Requirements + +#### 3.3.1 - Exclusive Capital Channel + +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: + + * All capital raising activities of any kind + * Any external investment into a series - * Any financing activities + + * Any debt or equity financing activities + * Any capital restructuring - * Any other activities involving external capital + + * Any activities involving external capital + + * Any transaction with a capital component exceeding $250,000 in value -2. Capital Management Requirements: +2. **Implementation Requirements**: + + * All capital discussions must include Redwood Springs Capital Partners Group LLC representatives + + * Term sheets must be reviewed and approved by Redwood Springs Capital Partners Group LLC before presentation to potential investors + + * All investor communications must be coordinated through Redwood Springs Capital Partners Group LLC + + * All capital documentation must be prepared or approved by Redwood Springs Capital Partners Group LLC + + * All investor due diligence must be managed through Redwood Springs Capital Partners Group LLC + +3. **Fee Structure and Compensation**: + + * Redwood Springs Capital Partners Group LLC shall be entitled to market-standard fees for capital raising services + + * Fee structures shall be transparent and documented in written agreements + + * Fees shall be reasonable and competitive with external capital raising firms + + * The fee structure shall be reviewed annually by the Audit and Finance Committee + + * The Company Committee may require adjustments to ensure fees remain competitive + +#### 3.3.2 - Capital Management Requirements + +1. **Transaction Processing**: * All capital transactions must be processed through The Campus Trading Company LLC systems - * All capital reporting must be conducted through The Campus Trading Company LLC systems - * Each series may invest its capital as it determines appropriate, provided all such investments are executed and processed through The Campus Trading Company LLC systems - * No series may engage external capital management services + + * All investor funds must flow through designated accounts established by The Campus Trading Company LLC + + * All capital documentation must be maintained in the electronic records system + + * All capital deployments must be tracked through The Campus Trading Company LLC systems + + * Comprehensive capital transaction audit trails must be maintained -3. Prohibited Capital Activities: Series may not: +2. **Capital Deployment Authority**: - * Independently raise capital - * Engage external capital management services - * Enter into independent financing arrangements - * Process capital transactions outside of The Campus Trading Company LLC systems - * Accept external investment without proper authorization through Redwood Springs Capital Partners LLC + * 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 + + iv. Adherence to all applicable laws and regulations + + * Capital deployment decisions remain with the series, with the mandatory requirements applying only to the mechanics of execution -4. Compliance Requirements: All series must: +3. **Investor Reporting Requirements**: - * Maintain detailed capital activity records - * Submit regular capital reports - * Obtain prior approval for capital activities - * Follow established capital procedures - * Adhere to capital compliance measures - * Participate in capital audits as required + * Standardized quarterly investor reporting + + * Annual audited financial statements + + * Prompt disclosure of material events + + * Secure investor portal access maintained by Known Element Enterprises + + * Regular investor communications coordinated through Redwood Springs Capital Partners Group LLC -5. Capital Activity Documentation: All capital activities must be: +#### 3.3.3 - Prohibited Capital Activities - * Properly documented - * Electronically recorded - * Maintained in compliance with Section 3.2 - * Available for audit - * Approved through proper channels - * Reported as required +1. **Prohibited Activities**: Series may not under any circumstances: + + * Independently raise capital from sources other than through Redwood Springs Capital Partners Group LLC + + * Accept capital from any source other than through Redwood Springs Capital Partners Group LLC + + * Establish direct banking or investment relationships outside of The Campus Trading Company LLC framework + + * Issue securities, profit interests, or other investment instruments without Redwood Springs Capital Partners Group LLC approval + + * Engage in direct negotiations with potential investors + + * Implement capital structures not approved by Redwood Springs Capital Partners Group LLC + + * Commingle investor funds with operational funds + + * Use capital for purposes materially different from those represented to investors + +2. **Violations and Remedies**: + + * Any attempted violation of these prohibitions shall be void and of no effect + + * Any series member, officer, or representative who attempts to circumvent these requirements shall be subject to immediate removal + + * Any series that violates these requirements shall be subject to: + + i. Immediate audit + + ii. Potential restructuring + + iii. Enhanced oversight + + iv. Other remedial measures as determined by the Board + + v. Potential legal action if violations involve securities law compliance + +#### 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: + + * The transaction is documented in the electronic records system + + * The Campus Trading Company LLC systems are used for processing + + * The transaction is reported to Redwood Springs Capital Partners Group LLC within 10 business days + + * The transaction does not involve issuance of securities or profit interests + + * The aggregate of all de minimis exceptions for a series does not exceed $25,000 in any 24-month period + +2. **Emergency Exception**: In case of bona fide emergencies threatening the immediate viability of a series, temporary emergency funding may be accepted with: + + * Prior written approval of the Board Chair or their designee + + * Notification to Redwood Springs Capital Partners Group LLC within 24 hours + + * Full documentation submitted within 3 business days + + * Restructuring of the emergency funding through proper channels within 30 days + + * A detailed written explanation of: + + i. The nature of the emergency + + ii. Why normal channels were insufficient + + iii. The source of emergency funding + + iv. The plan to prevent similar emergencies in the future + +3. **Related-Party Funding Exception**: + + * Funding from series members to their own series may be processed directly if: + + i. The transaction is less than $100,000 + + ii. The funding is properly documented + + iii. The Campus Trading Company LLC systems are used for processing + + iv. Redwood Springs Capital Partners Group LLC is notified within 5 business days + + v. The funding does not alter the existing profit interest structure + + vi. The transaction complies with all securities laws + +#### 3.3.5 - Compliance with Securities Laws + +1. **Regulatory Compliance Responsibility**: + + * Redwood Springs Capital Partners Group LLC shall be responsible for ensuring all capital raising activities comply with applicable securities laws + + * All offering materials must be reviewed by qualified securities counsel before use + + * Proper investor verification procedures must be implemented for all offerings + + * Required securities filings must be completed timely and accurately + + * Ongoing compliance with securities regulations must be maintained + +2. **Documentation Requirements**: + + * Standardized offering documentation shall be used for all capital raises + + * Proper risk disclosures must be included in all offering materials + + * Investor subscription agreements must include all required representations and warranties + + * Accredited investor verification documentation must be maintained for all investors + + * All securities law exemptions must be properly documented + +3. **Investor Qualification**: + + * All investors must be properly vetted and qualified before acceptance + + * Accredited investor status must be verified using methods permitted under SEC Rule 506(c) + + * Investor suitability standards must be applied consistently + + * All verification documentation must be maintained in the electronic records system + + * Periodic re-verification must be conducted for ongoing offerings + ## 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: -2. Each series shall have its own: + * Submission of a formal series establishment proposal to the Company Committee + + * Approval by a majority vote of the Company Committee + + * Filing of required notices with the Texas Secretary of State + + * Execution of a series operating agreement + + * Compliance with all requirements set forth in this Section 4.1 +<<<<<<< HEAD:src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement-PreRework.md - Operating agreement - Management structure - Membership interests - Business purpose +======= +2. **Series Establishment Proposal**: Any proposal for establishing a new series must include: +>>>>>>> b7093a834865e883d1f061045b10f9bb4b4da73b:src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement.md -3. Series Operating Agreement Flexibility: + * Proposed business purpose and scope of operations + + * Three-year business plan with financial projections + + * Management structure and key personnel + + * Initial members and proposed membership interests + + * Draft series operating agreement + + * Risk assessment and mitigation strategy + + * Compliance plan for all mandatory requirements + + * Integration strategy with existing TSYS Group entities + + * Detailed financial model with capitalization requirements + + * Market analysis and competitive landscape assessment + + * Exit strategy or long-term sustainability plan +<<<<<<< HEAD:src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement-PreRework.md - Series shall have broad latitude to establish their own operating parameters - 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 +======= +3. **Series Documentation Requirements**: Each series must maintain: +>>>>>>> b7093a834865e883d1f061045b10f9bb4b4da73b:src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement.md -4. Series Operating Agreement Limitations: + * A series operating agreement executed by all initial members and the Company Committee + + * A certificate of series filing with the Texas Secretary of State + + * A unique federal Employer Identification Number (EIN) + + * Separate books and records as required by Section 3.2 + + * All registrations, licenses, and permits required for its business operations + + * Compliance documentation for securities law requirements + + * Insurance coverage appropriate to the series’ activities - - No series operating agreement may override or conflict with: +#### 4.1.2 - Series Operating Agreement Requirements - - Any provision of this Agreement - - Required service provider relationships - - Electronic records requirements - - Company-level compliance measures - - Mandatory operational requirements - - Securities law compliance +1. **Required Elements**: Each series operating agreement shall include provisions addressing: - - Any provision in a series operating agreement that conflicts with this Agreement shall be void and unenforceable + * Business purpose and operational scope + + * Membership structure and classes + + * Profit interest allocation and distribution + + * Governance structure and decision-making processes + + * Management rights and responsibilities + + * Transfer restrictions + + * Dispute resolution procedures + + * Term and dissolution provisions + + * Compliance with all mandatory Company requirements + + * Capital call provisions and procedures + + * Valuation methodologies + + * Information rights + + * Non-competition and confidentiality provisions + +2. **Series Operating Agreement Flexibility**: Within the parameters established by this Agreement, series shall have broad latitude to establish: + + * Custom governance structures appropriate to their business needs + + * Specialized profit interest allocation methodologies + + * Unique membership qualifications and admission procedures + + * Industry-specific operational procedures and standards + + * Tailored distribution structures and timing + + * Other provisions specific to their business purposes or investment objectives + +3. **Series Operating Agreement Limitations**: No series operating agreement may: + + * Override or conflict with any provision of this Agreement + + * Alter the required service provider relationships established in Article 3 + + * Modify the electronic records requirements established in Section 3.2 + + * Change the capital raising requirements established in Section 3.3 + + * Eliminate or reduce Company-level compliance measures + + * Violate any securities laws or regulations + + * Attempt to limit the isolation of series as provided in Section 4.2 + + * Eliminate fiduciary duties to the extent non-waivable under Texas law + + * Create joint liability among series + +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. + +5. **Standard Template Requirements**: Each series operating agreement shall: + + * Be based on standard templates approved by the Company Committee + + * Maintain consistent formatting and section numbering across all series + + * Include required legal disclosures and notices + + * Be reviewed by legal counsel prior to adoption + + * Be properly executed using the electronic signature system + +#### 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: + + * The amendment does not create a conflict with this Agreement + + * Notice of the amendment is provided to the Company Committee within 10 business days + + * The amendment is properly documented in the electronic records system + + * The amendment complies with all applicable laws and regulations + + * Material amendments receive legal review prior to adoption + +2. **Series Purpose Modifications**: Any material change to a series’ business purpose or operational scope requires: + + * Prior written approval of the Company Committee + + * Amended filings with the Texas Secretary of State if required + + * Compliance with any applicable regulatory requirements + + * Updated business plan and risk assessment + + * Notification to all series members + +3. **Amendment Approval Process**: + + * Proposed amendments must be submitted in writing + + * Required approvals must be documented in the electronic records system + + * Company Committee review shall be completed within 30 days + + * Rejected amendments may be revised and resubmitted + + * Approved amendments become effective upon execution by all required parties + +4. **Emergency Amendments**: In case of regulatory changes or other urgent circumstances: + + * The Company Committee may implement temporary amendments + + * Temporary amendments must be ratified within 90 days + + * Series members must be promptly notified of emergency amendments + + * Documentation must include justification for the emergency action + ### Section 4.2 - Series Independence and Isolation -1. Absolute Series Isolation: +#### 4.2.1 - Legal and Economic Isolation + +1. **Absolute Series Isolation**: Each series is absolutely and irrevocably isolated from all other series, such that: - * 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 +<<<<<<< HEAD:src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement-PreRework.md * 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. +======= + + * 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 + + * No judgment creditor of any series may reach the assets of any other series or the Company +>>>>>>> b7093a834865e883d1f061045b10f9bb4b4da73b:src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement.md -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 - * Entirely separate bank accounts and financial systems - * Absolute separation of all assets and liabilities - * Independent contracts and business relationships - * Separate tax identification numbers and filings - * Distinct operational processes and procedures +3. **Piercing Prevention**: The Company, all series, and all series members acknowledge and agree that: -3. Prohibition on Cross-Series Activities: - - * 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 transfer assets to or from any other series except through documented arm's length transactions - * 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 - -4. Enforcement of Isolation: - - * 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 + * Series isolation is a fundamental aspect of the Company structure + + * Series isolation shall be interpreted and enforced to the maximum extent permitted by law + + * All reasonable measures shall be taken to maintain and protect series isolation + * If any provision limiting series isolation is found invalid, the remaining isolation provisions shall be enforced to the maximum extent possible + + * No series shall take any action that might jeopardize series isolation for itself or any other series -5. Notice Requirements: +4. **Jurisdictional Considerations**: - * 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 + * The parties acknowledge that series isolation may be treated differently in jurisdictions outside of Texas + + * Series engaging in activities outside of Texas must take appropriate measures to protect their limited liability status + + * Foreign qualification filings should be made where required + + * Additional entity structures may be required for operations in jurisdictions that do not recognize series LLCs + + * Legal counsel shall be consulted before conducting substantial business outside of Texas -6. Indemnification: +#### 4.2.2 - Operational Separation Requirements - * 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 +1. **Mandatory Separation**: Each series shall maintain complete operational separation, including: -7. Governing Law and Jurisdiction: + * Independent electronic books and records (provided via KNEL/TheCampus systems as required by Section 3.1) + + * Entirely separate bank accounts established through The Campus Trading Company + + * Absolute separation of all assets and liabilities + + * Independent contracts and business relationships + + * Separate tax identification numbers and filings + + * Distinct operational processes and procedures + + * Clear identification in all business dealings + + * Separate financial statements and accounting records + + * Dedicated employees or contractors for series-specific operations - * 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. **Documentation of Separation**: Each series shall: + + * Maintain documentation of its separate existence in all records + + * Clearly identify itself as a separate series in all contracts and communications + + * Conduct a quarterly review of separation compliance + + * Promptly correct any identified separation issues + + * Include appropriate series isolation language in all agreements + + * Maintain records of all inter-series transactions + + * Document compliance with all separation requirements + +3. **Financial Separation**: Each series shall: + + * Maintain separate accounting records + + * Prepare its own financial statements + + * File its own tax returns if legally required + + * Conduct business solely in its own name + + * Make distributions solely from its own assets + + * Maintain capital adequacy appropriate for its business activities + + * Price any inter-series transactions at fair market value + + * Document the business purpose for any inter-series transactions + +4. **Personnel and Resource Allocation**: + + * Personnel working for multiple series must have documented allocation of time and responsibilities + + * Compensation for shared personnel must be allocated fairly among series + + * Physical resources used by multiple series must have documented usage agreements + + * Service agreements between series must be in writing and at fair market value + + * Each series must be adequately staffed to carry out its stated business purpose + +#### 4.2.3 - Prohibited Cross-Series Activities + +1. **Absolute Prohibitions**: Under no circumstances may any series: + + * Commingle any assets with any other series + + * Guarantee or secure the obligations of any other series + + * Enter into any agreement that could create joint liability with any other series + + * Represent or imply any connection to or responsibility for any other series + + * Pledge assets for the benefit of any other series + + * Assume or pay the debts of any other series + + * Share profits or losses with another series outside of permitted arm’s-length transactions + + * Use the credit or reputation of another series for its benefit + +2. **Permitted Arms-Length Transactions**: Series may engage in arms-length business transactions with other series only if: + + * The transaction is documented with the same formality as would be required for transactions with unrelated third parties + + * The transaction terms are commercially reasonable and fair to both series + + * The transaction is approved by the disinterested members of each series + + * The transaction does not undermine or threaten series isolation + + * The transaction serves a legitimate business purpose + + * The transaction is properly recorded in the books and records of each series + + * The transaction is disclosed in financial reporting + +3. **Conflict of Interest Provisions**: + + * Any transaction between series with common members requires additional scrutiny + + * Members with interests in multiple series must disclose potential conflicts + + * Conflicted members must recuse themselves from approval decisions + + * Independent valuation may be required for significant inter-series transactions + + * The Company Committee may review significant inter-series transactions + +#### 4.2.4 - Notice Requirements + +1. **Entity Identification**: Each series shall clearly identify itself in all communications, contracts, and business dealings as a distinct series of the Company. + +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.” + + The isolation notice shall: + + * Appear prominently in all contracts + + * Be in bold type, no smaller than the predominant font size used in the body of the contract + + * Be included in the signature block area of all contracts + + * Be acknowledged in writing by all counter-parties + + * Be included in all electronic communications where a series is entering into a binding commitment + +3. **Digital Communications**: All series must: + + * Include abbreviated isolation notice in email signatures + + * Clearly identify the specific series in all digital communications + + * Maintain separate email domains or clear series identification in email addresses + + * Include appropriate disclaimers on websites and social media + +4. **Third-Party Notification**: + + * All significant vendors and customers must be explicitly informed of series isolation + + * Employees and contractors must acknowledge understanding of series isolation + + * Lenders and financial institutions must be provided with clear documentation of series structure + + * Regulatory filings must properly identify the series structure + +#### 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: + + * All direct damages resulting from such action + + * All costs of enforcement and defense + + * Reasonable attorneys’ fees + + * Any other appropriate remedies as determined by a court of competent jurisdiction + + * Potential expulsion from the Company structure + +4. **Mandatory Insurance**: + + * Each series shall maintain appropriate liability insurance + + * Insurance policies must explicitly recognize the series structure + + * Coverage limits must be appropriate for the series’ business activities + + * The Company Committee shall establish minimum insurance requirements + + * Insurance compliance shall be verified annually + +5. **Asset Protection Planning**: + + * Each series shall implement appropriate asset protection strategies + + * Critical intellectual property may be held in dedicated series + + * High-value assets may be separated from operational liabilities + + * Risk assessment shall be conducted annually + + * Adjustments to structure shall be made as necessary to maintain isolation ### 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: - - Make operational decisions - - Enter into contracts - - Manage series assets - - Conduct series business activities - - Make distributions - - Admit new members (with Company Committee approval) - - Take any other actions permitted by the series operating agreement + * Make operational decisions + + * Enter into contracts within the series’ business purpose + + * Manage series assets + + * 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: + + * Provide governance and oversight + + * Ensure compliance with this Agreement and applicable laws + + * Monitor performance and risk + + * 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: + + * Manager-managed governance with designated managers + + * 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: + + * Clearly define the governance structure in its operating agreement + + * 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: + + * Compliance with the procedures set forth in the series operating 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: + + * In accordance with the series operating agreement + + * 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 -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: - - May only own physical assets and real/intellectual property - - No operational capability except lease agreements - - Cannot enter agreements with the Company - - Cannot enter agreements with outside entities - - Must lease assets exclusively to operating series + * May only own physical assets, real property, and intellectual property + + * Has no operational capability except through usage agreements with appropriate operational series + + * Cannot enter agreements with the Company + + * Cannot enter agreements with any non-TSYS Group entities + + * Must maintain clear documentation of all assets owned + + * May not incur debt except for asset acquisition and maintenance + + * Must maintain adequate insurance for all assets - - Asset Categories: +2. **Asset Categories**: TDCMSP Series may own and manage: - - Tools and equipment - - Dies and molds - - Casting equipment - - Raw materials - - Supplies and consumables - - Intellectual property - - Patents and trademarks - - Technical documentation - - Manufacturing processes - - Design specifications + * Tools and equipment + + * Dies and molds + + * Casting equipment + + * Raw materials + + * Supplies and consumables + + * Intellectual property + + * Patents and trademarks + + * Technical documentation + + * Manufacturing processes + + * Design specifications + + * Real property + + * Digital assets and software + + * Data sets and databases + + * Domain names and online assets - - Lease Requirements: +3. **Lease Agreement Requirements**: All TDCMSP Series must execute written lease agreements that include: - - Written lease agreements required - - Clear maintenance responsibilities - - Asset replacement provisions - - Insurance requirements + * Precise asset identification and valuation + + * Clearly defined maintenance responsibilities + + * Asset replacement provisions and funding mechanisms + + * Insurance requirements with minimum coverage levels + + * Usage tracking and reporting obligations + + * Term and renewal provisions + + * Default and remediation procedures + + * Fair market value lease rates + + * Clear termination procedures + + * Asset return conditions + + * Dispute resolution provisions + + * Indemnification clauses - - Asset Management: +4. **Asset Management Requirements**: All TDCMSP Series must implement: - - Regular asset valuation - - Maintenance records - - Usage tracking - - Depreciation schedules - - Replacement planning + * Regular asset valuation by qualified third parties + + * Comprehensive maintenance records + + * Usage tracking systems + + * Industry-standard depreciation schedules + + * Replacement planning with adequate reserves + + * Annual asset audits + + * Asset management software systems + + * Regular condition assessments + + * Maintenance schedule compliance monitoring + + * For intellectual property assets: + + i. Formal IP protection strategies + + ii. Regular monitoring for potential infringement + + iii. Maintenance of registrations, renewals, and filings + + iv. Documented chain of title and ownership verification + + v. Periodic valuation of IP portfolio + + vi. Appropriate confidentiality and trade secret protections + + vii. License compliance monitoring + + viii. Royalty collection and distribution systems -2. Operating Series Requirements for TDCMSP Leases: +5. **Revenue Model and Distribution**: - - Must demonstrate operational capability - - Must maintain required insurance - - Must follow maintenance schedules - - Must provide usage reports - - Must comply with all lease terms + * All lease payments shall be allocated according to the series operating agreement + + * Reserves shall be established for asset maintenance and replacement + + * Distributions shall be made only after adequate reserves are established + + * Special distributions may be made for extraordinary asset sales + + * Reinvestment programs may be established for asset acquisition + + * Royalty streams from intellectual property shall be separately accounted for +6. **Capitalization Requirements**: + + * TDCMSP Series shall maintain adequate capitalization for their asset portfolio + + * Capital adequacy shall be reviewed annually + + * Special capital calls may be authorized for strategic asset acquisition + + * Asset financing shall comply with Section 3.3 + + * Capital deployment plans shall be updated annually + +#### 4.4.2 - Operating Series Requirements for TDCMSP Leases + +1. **Qualification Requirements**: Operating Series leasing assets from TDCMSP Series must: + + * Demonstrate operational capability for proper asset utilization + + * Maintain required insurance with TDCMSP Series named as additional insured + + * Follow maintenance schedules established in lease agreements + + * Provide monthly usage reports + + * Comply with all lease terms + + * Conduct regular inspections and provide documentation + + * Maintain qualified personnel for asset operation + + * Implement safety protocols appropriate to the assets + + * Report any damage or performance issues immediately + +2. **Operational Responsibilities**: Operating Series leasing TDCMSP assets must: + + * Designate specific personnel responsible for asset management + + * Implement proper training for all personnel using assets + + * Establish and follow standard operating procedures + + * Conduct regular inspections and maintenance + + * Immediately report any damage or malfunction + + * Properly account for lease expenses + + * Document all asset usage + + * Implement asset security measures + + * Return assets in specified condition upon lease termination + + * Cooperate with asset audits and assessments + +3. **Intellectual Property Compliance**: + + * Operating Series using TDCMSP intellectual property must: + + * Implement appropriate quality control measures + + * Comply with brand standards and guidelines + + * Properly mark all IP with ownership and protection notices + + * Report any known or suspected infringement + + * Maintain confidentiality of trade secrets + + * Use software and digital assets only as licensed + + * Implement employee training on IP compliance + + * Document all IP usage and revenue generation + + * Provide required royalty reports + +4. **Default and Remedy Provisions**: + + * Default on lease obligations shall trigger: + + * Written notice and cure periods as specified in the lease agreement + + * Escalation to the Company Committee if uncured + + * Potential termination of lease rights + + * Asset recovery procedures + + * Liability for any damage beyond normal wear and tear + + * Potential cross-default provisions for multiple lease agreements + + * Dispute resolution through Schedule H procedures + +#### 4.4.3 - Technology Holding Series + +1. **Purpose and Structure**: A Technology Holding Series: + + * May be established specifically for software, digital assets, and technology intellectual property + + * Shall hold technology assets developed by or for TSYS Group entities + + * Shall license such assets to appropriate Operating Series + + * May develop technology commercialization strategies + + * Shall coordinate technology protection and enforcement + + * Shall manage the technology lifecycle + + * May establish relationships with external technology partners + +2. **Technology Management Requirements**: + + * Development of formal technology roadmaps + + * Implementation of technology valuation methodologies + + * Establishment of licensing frameworks and templates + + * Security and protection protocols for digital assets + + * Version control and update management + + * Compliance with software and data regulations + + * Open source compliance monitoring + + * Technology escrow arrangements as appropriate + + * Regular technology portfolio reviews + + * Documentation of all technology assets + +3. **Licensing Structures**: + + * Internal license agreements shall include: + + * Scope of permitted use + + * Licensing fees or royalty structures + + * Maintenance and support obligations + + * Version upgrade rights + + * Customization parameters + + * Protection of source code and other sensitive assets + + * Fair market value determination methodology + + * Performance metrics and service levels if applicable + + ### 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 - - May establish independent board and/or board committee +1. **Creation Requirements**: Establishment of a Cell Series requires: -2. Cell Series Governance: + * Explicit Board approval by a two-thirds majority vote + + * Filing of required notices with the Texas Secretary of State + + * Execution of a cell series operating agreement + + * Compliance with all applicable regulatory requirements + + * Completion of a comprehensive business plan and risk assessment + + * Identification of initial subsidiary series to be created + + * Implementation of enhanced governance and compliance systems - - May establish and maintain independent board - - May create specialized board committees - - Independent governance structure from Company Committee - - Must maintain compliance with Company requirements +2. **Cell Purpose Statement**: The proposal for a Cell Series must include a detailed purpose statement describing: -3. Structure: + * Strategic rationale for the cell structure + + * Types of subsidiary series to be created + + * Governance relationship with the Company + + * Economic structure and capital requirements + + * Risk management framework + + * Target markets and business objectives + + * Projected financial performance + + * Long-term growth and development plans + + * Competitive analysis and market positioning + + * Exit strategy or long-term sustainability plan - - May contain multiple subsidiary series - - Each subsidiary series maintains independence - - Cell series provides administrative oversight - - Cell series board determines internal policies +3. **Capitalization Requirements**: -4. Subsidiary Series Creation: + * Minimum initial capitalization as determined by the Board + + * Capital adequacy framework appropriate to planned activities + + * Funding mechanisms for subsidiary series + + * Reserve requirements for operational contingencies + + * Capital deployment schedules and milestones + + * Financial covenants to ensure ongoing solvency + + * Quarterly financial reporting to the Board - - 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 +#### 4.5.2 - Cell Series Governance -5. Cell Series Board Powers: +1. **Independent Governance**: A Cell Series may: - - Establish subsidiary series - - Set internal governance policies - - Approve subsidiary series actions - - Monitor subsidiary compliance - - Manage resource allocation + * Establish and maintain an independent Series board + + * Create specialized governance committees + + * Implement governance structures independent from the Company Committee + + * Develop its own policies and procedures + + * Establish executive leadership positions + + * Implement unique incentive and compensation structures + + * Develop proprietary operating procedures -6. Limitations: +2. **Governance Requirements**: All Cell Series must: - - Cannot override Company service provider requirements - - Must maintain electronic records - - Must follow all compliance measures - - Subject to Company Committee oversight for overall compliance + * Document governance structures in the cell series operating agreement + + * Establish clear reporting relationships to the Board + + * Implement appropriate controls and compliance measures + + * Maintain compliance with Company requirements + + * Submit quarterly governance reports to the Board + + * Conduct annual governance effectiveness reviews + + * Implement succession planning for key leadership positions + + * Maintain appropriate committee structures + + * Document all governance decisions in the electronic records system -### Section 4.6 - Permamently Established Series +3. **Oversight and Accountability**: -The following series are hereby established as permanent series of the Company: + * Cell Series boards shall be accountable to the Board + + * Annual performance evaluations of the Cell Series board + + * Regular governance audits by the Company Committee + + * Transparency in decision-making processes + + * Conflicts of interest management and disclosure + + * Ethics and compliance program appropriate to activities + + * Whistleblower protection mechanisms + + * Direct reporting line to the Board for compliance concerns -#### 4.6.1 - Cell Series +#### 4.5.3 - Cell Series Structure -The following Cell Series are established: +1. **Multi-Series Framework**: A Cell Series: -\* Turnkey Network Systems LLC - Wyble Family Office (cell series) LLC + * May contain multiple subsidiary series + + * Provides administrative oversight for all subsidiary series + + * Establishes common policies across subsidiary series + + * Maintains compliance for the entire cell structure + + * Implements standardized operating procedures + + * Provides shared services to subsidiary series + + * Coordinates strategic planning across subsidiary series + + * Establishes branding and market positioning -\* Turnkey Network Systems LLC - Redwood Family Office (cell series) LLC +2. **Subsidiary Independence**: Each subsidiary series within a Cell Series: -#### 4.6.2 - Operating Series + * Maintains complete asset and liability isolation + + * Operates independently according to its specific purpose + + * Has its own membership interests + + * Is subject to all provisions of Section 4.2 + + * Maintains separate financial records + + * Has its own governance structure within cell framework + + * Retains operational autonomy within cell policies + + * May have distinct branding and market positioning -The following operating series are established: +3. **Inter-Series Relationships**: -\* Turnkey Network Systems LLC - Known Element Enterprises (series) LLC + * Formal service agreements must exist between Cell Series and subsidiary series + + * All inter-series transactions must be at fair market value + + * Resource sharing must be documented with clear allocation methodologies + + * Cost sharing arrangements must be formalized and equitable + + * Intellectual property licensing must be properly documented + + * Personnel sharing must follow Section 4.2.2(4) + + * Transfer pricing documentation must be maintained -\* Turnkey Network Systems LLC - The Campus Trading Company (series) LLC +#### 4.5.4 - Subsidiary Series Creation -#### Section 4.6.3 - Series Restrictions and Governance +1. **Creation Authority**: A Cell Series may create subsidiary series: -- General Series Restrictions + * Under its own authority as established in its cell series operating agreement + + * Without requiring specific Company Board approval for each subsidiary + + * Subject to any limitations in its cell series operating agreement + + * In compliance with all requirements of this Agreement + + * Following standardized establishment procedures + + * With proper capitalization and business planning + + * After appropriate market and risk assessment -The following restrictions apply to all series established under Section 4.6.1 and 4.6.2 : +2. **Documentation Requirements**: For each subsidiary series created, the Cell Series must: -\* Series may not be dissolved + * File all required notices with the Texas Secretary of State + + * Execute a subsidiary series operating agreement + + * Establish separate books and records + + * Obtain a separate EIN if required + + * Notify the Company Committee within 10 business days of creation + + * Implement required compliance and governance systems + + * Establish appropriate banking and financial accounts + + * Document the business purpose and operational parameters + + * Implement required securities law compliance measures -\* No additional members may be added to any series +3. **Establishment Standards**: -\* No members may be removed from any series + * Cell Series shall develop standardized criteria for subsidiary creation + + * Formal feasibility and due diligence process shall be documented + + * Minimum viability metrics shall be established + + * Anti-cannibalization analysis for overlap with existing series + + * Competitive impact assessment within TSYS Group + + * Resource allocation planning + + * Market entry strategy + + * Personnel requirements and sourcing plans -- Cell Series Governance +#### 4.5.5 - Cell Series Board Powers -\* Wyble Family Office (cell series) LLC and Redwood Family Office (cell series) LLC shall: +1. **Authorized Powers**: A Cell Series board shall have authority to: -  \* Operate independently of the TSYS Group Board governance + * Establish subsidiary series + + * Set internal governance policies + + * Approve subsidiary series actions + + * Monitor subsidiary compliance + + * Manage resource allocation across the cell + + * Implement strategic initiatives within the cell + + * Establish compensation structures + + * Approve significant contracts and commitments + + * Manage capital deployment within the cell + + * Resolve disputes between subsidiary series + + * Approve merger or acquisition activities + + * Oversee risk management -  \* Maintain their own governance structures +2. **Limitations on Powers**: A Cell Series board may not: -  \* Have full authority to establish and govern their subsidiary series + * Override Company service provider requirements + + * Violate or modify any provisions of this Agreement + + * Create obligations binding on the Company or other series + + * Take any action that would threaten series isolation + + * Issue securities non-compliant with Article 5 + + * Modify the capital raising requirements in Section 3.3 + + * Establish governance structures in conflict with this Agreement + + * Enter into agreements binding the Company + + * Create cross-series liability or guarantees -  \* Not be subject to Company Committee oversight +3. **Compliance Oversight**: Each Cell Series shall be subject to: + + * Company Committee oversight for overall compliance + + * Annual compliance audits + + * Regular reporting requirements + + * Remediation obligations for any identified compliance issues + + * Risk-based monitoring by appropriate Board committees + + * Periodic governance reviews + + * Compliance with all regulatory requirements + + * Implementation of recommended remedial measures + +4. **Strategic Planning Authority**: + + * Development of multi-year strategic plans for the Cell Series + + * Resource allocation across subsidiary series + + * Capital deployment planning and prioritization + + * Market development and expansion strategies + + * Technology roadmap development + + * Talent acquisition and development programs + + * Innovation and research initiatives + + * Strategic partnership development + +5. **Financial Management Powers**: + + * Budget approval for the Cell Series and subsidiaries + + * Capital expenditure authorization within approved limits + + * Financial performance monitoring and intervention when necessary + + * Reserve policy implementation + + * Distribution approval in accordance with operating agreements + + * Financial restructuring of subsidiary series when necessary + + * Implementation of financial controls + + * Audit oversight and response management + +### Section 4.6 - Permanently Established Series + +#### 4.6.1 - Designation of Permanent Series + +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. + +1. **Wyble Family Office Group Cell Series**: + + * 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 + +2. **Redwood Family Office Group Cell Series**: + + * Turnkey Network Systems LLC - Redwood Family Office Group (Cell) (series) LLC + + * Turnkey Network Systems LLC - Redwood Family Office Group (Cell) - ManagementCo (series) LLC + +3. **Redwood Springs Capital Partners Group Cell Series**: + + * 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 + +4. **Operational Entities of the Company**: + + * Turnkey Network Systems LLC - Known Element Enterprises (series) LLC + + * Turnkey Network Systems LLC - The Campus Trading Company (series) LLC + +#### 4.6.2 - Permanent Series Restrictions and Governance + +1. **General Series Restrictions**: The following restrictions apply to all series established under Section 4.6.1: + + * Those series may not be dissolved + + * No additional members may be added to those series + + * No members may be removed from those series + + * Their essential purpose and function may not be materially altered + + * Their governing structures must be maintained as specified in their respective series operating agreements + + * Their fundamental rights and obligations under this Agreement cannot be modified + + * They retain absolute priority in governance succession matters + +2. **Modification Limitations**: The provisions of this Section 4.6 may not be: + + * Amended except with unanimous consent of all series members and the Board + + * Overridden by any series operating agreement + + * Modified through any Board or committee action + + * Interpreted in a manner that would diminish the rights of permanent series + + * Circumvented through indirect means or restructuring + + * Subject to any waiver + +3. **Permanent Series Documentation**: + + * All permanent series shall maintain comprehensive documentation of their founding purpose + + * Special archiving requirements apply to permanent series governance records + + * Formal succession planning documentation must be maintained + + * Historical operation records must be preserved indefinitely + + * Documented rationale for all major decisions must be maintained + +#### 4.6.3 - Special Purpose Series Provisions + +##### 4.6.3.1 - Wyble Family Office Group (Cell) (series) LLC (aka WFO Group) + +1. **Purpose and Status**: WFO Group and its subsidiary series: + + * Is the private, multi-family, multi-state, multi-generational family office LLC of the Company founders (Charles Wyble and Patti Wyble) + + * 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) + + * Will only hold Class B Profit Interests in various Company series + + * Serves as a centralized management entity for the founders’ interests + + * Functions as a legacy planning vehicle for intergenerational wealth transfer + + * Acts as a strategic holding company for founder investments + + * Maintains separate investment strategies from the Company’s operational focus + +2. **Delegation of Control**: WFO Group and/or its relevant subsidiaries permanently and irrevocably delegate control of: + + * 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. + +3. **Operational Authority Delegation**: WFO Group and WFO Group Management Company permanently and irrevocably delegate their operational authority to: + + * 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) + + * Such succession trustees or beneficiaries as may be designated in the WFO Group succession plan + + * Such professional advisors as may be appointed by the above parties + +4. **Operational Independence**: WFO Group and all of its subsidiaries shall: + + * Operate independently of the Company Board and its committees, with its own Cell Board having 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 approval + + * Not be subject to Company Committee or Company Board oversight + + * Utilize KNEL/TheCampus systems like all other series + + * May have its own banking relationships + + * May receive external capital directly from Charles Wyble and Patti Wyble and/or The Charles Wyble and Patti Wyble Living Trust + + * May establish its own investment policies and strategies + + * May engage professional advisors and service providers + + * May establish its own administrative systems in addition to KNEL/TheCampus systems + + * May create additional subsidiaries for specialized purposes + +5. **Succession Planning Provisions**: + + * WFO Group shall maintain a comprehensive succession plan + + * The succession plan shall be reviewed and updated annually + + * Succession events shall trigger predefined governance transitions + + * Successor training and development programs shall be established + + * Key documentation shall be maintained in secure repositories with appropriate access controls + + * Professional advisors shall be engaged to ensure succession planning effectiveness + +##### 4.6.3.2 - Redwood Family Office Group (Cell) (series) LLC (aka REDWFO) + +1. **Purpose and Status**: REDWFO and its subsidiary series: + + * Is the public, multi-series, multi-party, multi-stakeholder family office LLC for Company stakeholders + + * Has a broad mandate to maximize benefit for all of its members + + * Provides top-tier benefits packages for all Company stakeholders that elect to utilize its offerings + + * Operates as a comprehensive wealth management platform + + * Facilitates collective investment opportunities for members + + * Provides financial education and planning resources + + * Negotiates group rates for insurance and other benefits + + * Coordinates philanthropic activities for members + + * Supports professional development for stakeholder families + +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. + +3. **Operational Independence**: REDWFO and all of its subsidiaries shall: + + * Operate independently of the Company Board and its committees, with its own Cell Board having 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 approval + + * Be subject to minimal Company Committee oversight for compliance + + * May establish its own COO and other officers + + * Utilize KNEL/TheCampus systems like all other series + + * Operate without generating profit, as specified in Section 4.6.5 + + * Develop and implement a member-driven strategic plan + + * Establish objective metrics for measuring stakeholder benefit + + * Create transparent reporting structures for members + + * Implement feedback mechanisms for continuous improvement + +4. **Benefit Program Development**: + + * Annual assessment of stakeholder needs and preferences + + * Benchmarking against industry-leading benefit programs + + * Regular review and enhancement of benefit offerings + + * Customization options for members with diverse needs + + * Collective negotiation of benefit program terms + + * Focus on both financial and lifestyle benefits + + * Implementation of wellness and quality of life initiatives + +5. **Membership Structure**: + + * Eligibility criteria for various stakeholder categories + + * Differentiated benefit access based on role and tenure + + * Clearly defined rights and responsibilities of members + + * Structured onboarding process for new members + + * Regular member communication and education + + * Member advisory council with representative governance #### 4.6.4 - Operating Series Governance -\* Known Element Enterprises (series) LLC and The Campus Trading Company (series) LLC shall: +Known Element Enterprises (series) LLC and The Campus Trading Company (series) LLC shall: -  \* Be governed solely by this Agreement +1. **Be subject to Board oversight** -  \* Not have separate operating agreements +2. **Be subject to Company Committee and any other relevant Board committee oversight** -  \* Be subject to Company Committee oversight +3. **Establish their own operating agreements as soon as is practical** + +4. **Operate in accordance with the service provider requirements established in Article 3** + +5. **Implement specialized governance appropriate to their service functions**: + + * Establish technical advisory boards with domain expertise + + * Implement user feedback mechanisms from other series + + * Create service development roadmaps with stakeholder input + + * Establish transparent performance metrics + + * Develop formal service catalogs with defined SLAs + + * Implement change management processes + + * Conduct regular service reviews with all series + + * Establish clear escalation paths for service issues + +6. **Operational Requirements**: + + * Maintain comprehensive documentation of all systems and services + + * Implement robust quality assurance processes + + * Establish business continuity and disaster recovery capabilities + + * Conduct regular security assessments and remediations + + * Maintain required industry certifications + + * Provide regular training and professional development for staff + + * Establish knowledge management systems #### 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: -\* Known Element Enterprises (series) LLC + * Known Element Enterprises (series) LLC + + * The Campus Trading Company (series) LLC + + * 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) -\* The Campus Trading Company (series) LLC +2. **Operational Requirements**: These cost-only series shall: -\* Redwood Family Office (cell series) LLC + * Operate solely to cover operational costs without markup + + * Not markup services or products above cost + + * Not retain earnings beyond operational requirements and reasonable reserves + + * Not make distributions of profit + + * Maintain transparent cost accounting with quarterly reporting + + * Undergo annual cost audits by independent third parties + + * Regularly adjust pricing to maintain cost-only status + + * Implement efficiency improvements to reduce costs + + * Provide detailed cost breakdown to users + + * Benchmark costs against external providers annually -These series shall: +3. **Reserve Requirements**: Cost-only series may maintain reasonable reserves only for: -\* Operate solely to cover operational costs + * Equipment replacement and upgrades + + * Facility maintenance and improvements + + * Emergency funds + + * Research and development directly related to service improvements + + * Training and professional development for personnel + + * Technology updates and enhancements + + * Compliance with regulatory requirements + + * Innovation initiatives with clear benefit to service users + + All reserves shall be: + + * Clearly documented in financial statements + + * Subject to annual review and approval by the Audit and Finance Committee + + * Limited to a maximum of 15% of annual operating expenses unless specifically approved by the Board + + * Maintained in segregated accounts + + * Reported quarterly to all service users with explanation of purpose and utilization plans + + * Subject to policy guidelines established by the Board + + * Invested in accordance with Board-approved investment policies -\* Not markup services or products above cost +4. **Transparency Obligations**: Cost-only series must: -\* Not retain earnings beyond operational requirements + * Provide detailed cost breakdowns to all service users + + * Publish quarterly financial reports + + * Make all financial records available for review by service users + + * Conduct annual town hall meetings to review finances with stakeholders + + * Implement open-book management practices + + * Respond promptly to information requests + + * Provide advance notice of any significant cost changes + + * Document methodologies for cost allocation + + * Maintain historical cost data for trend analysis + + * Publish efficiency and cost-saving metrics -\* Not make distributions of profit +5. **Financial Management Requirements**: -\* Maintain transparent cost accounting + * Implementation of zero-based budgeting processes + + * Regular cost optimization reviews + + * Formal approval process for significant expenditures + + * Documented procurement policies with competitive bidding + + * Regular vendor performance reviews + + * Implementation of efficiency metrics and targets + + * Continuous improvement initiatives focused on cost reduction + + * Technology assessment for cost-saving opportunities -\* Regularly adjust pricing to maintain cost-only status +## ARTICLE 5 - MEMBERSHIP INTEREST CLASSIFICATIONS -#### Section 4.6.6 - Series Membership +### Section 5.1 - Membership Interest Class Structure -1\. Wyble Family Office (cell series) LLC: +#### 5.1.1 - Three-Class System Establishment -* Sole Member: Charles Wyble And Patti Wyble Living Trust -* Membership Interest: 100% -* Distribution Rights: 100% +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\. Redwood Family Office (cell series) LLC: +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. -* Sole Member: Turnkey Network Systems LLC - Wyble Family Office (cell series) LLC -* Membership Interest: 100% -* Distribution Rights: 100% +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. -3\. Known Element Enterprises (series) LLC: +#### 5.1.2 - Purpose and Legal Basis -* Sole Member: Turnkey Network Systems LLC - Wyble Family Office (cell series) LLC -* Membership Interest: 100% -* Distribution Rights: 100% +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. -4\. The Campus Trading Company (series) LLC: +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. -* Sole Member: Turnkey Network Systems LLC - Wyble Family Office (cell series) LLC -* Membership Interest: 100% -* Distribution Rights: 100% +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. -## ARTICLE 5 - COMPANY RESTRICTIONS +### Section 5.2 - Class A Membership Interests (Regular Members) -### Section 5.1 - Company Membership and Prohibited Activities +#### 5.2.1 - Definition and Qualification -1. Company Membership: +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. -- Wyble Family Office LLC shall be the sole member of the Company -- The sole member cannot be removed -- No additional members may be added -- This membership provision cannot be amended or modified +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. -2. Prohibited Activities: +#### 5.2.2 - Rights and Privileges -- Conduct any business operations unrelated to series administration -- Own any assets other than those necessary for administrative functions -- Make any distributions +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. -- Allocate any profits or losses +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. -- Merge with any other entity -- Dissolve or terminate its existence +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. -### Section 5.2 - Administrative Assets +#### 5.2.3 - Obligations + +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. + +3. **Conflict of Interest Obligations**: Class A Members shall: + + a. Disclose in writing all actual and potential conflicts of interest; + + b. Annually certify compliance with conflict of interest policies; + + c. Recuse themselves from voting on matters where they have a conflict; + + d. Not compete with the series or Company without prior written authorization; + + e. Not usurp business opportunities that should first be offered to the series; and + + f. Not use series property, information, or position for improper personal gain. + +### 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) + +#### 5.4.1 - Definition and Classification + +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. + +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 + +#### 5.5.1 - Conversion from Class A or B to Class C + +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: + + i. The series operating agreement specifically provides for different treatment; and + + ii. The executor or personal representative of the deceased member’s estate provides written notice of intent to comply with such provisions within 30 days of the member’s death; and + + iii. All required documentation is completed within the timeframe specified in the series operating agreement, or if no timeframe is specified, within 90 days of the member’s death; or + + g. Any other event resulting in involuntary transfer or encumbrance of the membership interest. + + +#### 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 + +#### 5.6.1 - General Transfer Restrictions + +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. + +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 + +#### 5.7.1 - Electronic 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 + +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; + + d. Backed up according to the requirements of Section 3.2; + + e. Protected with advanced security features including: + + i. Unique digital watermarking; + + ii. Multi-factor authentication for access; + + iii. Blockchain-based verification system; + + iv. Tamper-evident technology that records any attempt to modify certificate data; + + v. Automatic notification to the member and Company Committee of any access or attempted modification; and + + f. Subject to quarterly security audits to verify integrity. + + +#### 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 + +#### 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. + +## ARTICLE 6 - COMPANY RESTRICTIONS + +### Section 6.1 - Company Membership and Prohibited Activities + +1. **Company Membership**: + + a. Wyble Family Office LLC shall be the sole member of the Company; + + b. The sole member cannot be removed; + + c. No additional members may be added; and + + d. This membership provision cannot be amended or modified. + +2. **Prohibited Activities**: The Company shall not: + + a. Conduct any business operations unrelated to series administration; + + b. Own any assets other than those necessary for administrative functions; + + c. Make any distributions; + + d. Allocate any profits or losses; + + e. Merge with any other entity; or + + f. Dissolve or terminate its existence. + +### Section 6.2 - Administrative Assets The Company may maintain only those assets necessary for series administration, including: -- Bank accounts solely for administrative expenses -- Records and filing systems -- Administrative support systems +a. Bank accounts solely for administrative expenses; -## ARTICLE 6 - GOVERNANCE STRUCTURE +b. Records and filing systems; -### Section 6.1 - TSYS Group Board +c. Administrative support systems; -1. The TSYS Group Board of Directors shall: +d. Software, licenses, and technological tools required for administration; - - Serve as the ultimate governing body for all TSYS Group entities - - Establish and oversee various sub-committees - - Set overall strategic direction and policies - - Ensure compliance with all applicable laws and regulations +e. Office equipment required for administrative functions; -2. The Board shall maintain the following standing committees for series oversight: +f. Contractual rights necessary for series administration; and - - Company Committee (primary governance of Turnkey Network Systems LLC) - - Audit and Finance Committee - - Risk Management Committee - - Compliance and Ethics Committee - - Technology Oversight Committee - - Corporate Responsibility Committee - - Operations Committee - - Additional committees as determined by the Board +g. Intellectual property related to Company identity and administration. -3. Each committee shall: +## ARTICLE 7 - GOVERNANCE STRUCTURE +### Section 7.1 - TSYS Group Board - - Operate under a separate committee charter - - Have specific oversight responsibilities - - Report regularly to the full Board - - Coordinate with other committees as needed +1. **Board Authority and Responsibilities**: The TSYS Group Board of Directors shall: -4. Committee Responsibilities and Governance: a. **Audit and Finance Committee**: + a. Serve as the ultimate governing body for all TSYS Group entities; + + b. Establish and oversee various sub-committees; + + c. Set overall strategic direction and policies; + + d. Ensure compliance with all applicable laws and regulations; and + + e. Maintain fiduciary responsibility for the entire TSYS Group enterprise. - - Oversee financial reporting and audit processes - - Review financial statements and internal controls - - Assess financial risks and compliance - - Recommend financial strategies - - Conduct independent financial reviews +2. **Standing Committees**: The Board shall maintain the following standing committees for series oversight: - b. **Risk Management Committee**: + a. Company Committee (primary governance of Turnkey Network Systems LLC); + + b. Audit and Finance Committee; + + c. Risk Management Committee; + + d. Compliance and Ethics Committee; + + e. Technology Oversight Committee; + + f. Corporate Responsibility Committee; + + g. Operations Committee; and + + h. Additional committees as determined by the Board. - - Develop comprehensive enterprise risk assessment framework +3. **Committee Governance**: Each committee shall: - - Identify, categorize, and prioritize organizational risks + a. Operate under a separate committee charter; + + b. Have specific oversight responsibilities; + + c. Report regularly to the full Board; + + d. Coordinate with other committees as needed; + + e. Maintain minutes of all meetings in the electronic records system; and + + f. Conduct annual self-evaluations of committee performance. - - Create risk mitigation strategies - - - Monitor ongoing risk landscape - - - Provide regular risk assessment reports - - - Develop contingency and response plans for: - - - Operational risks - - Financial risks - - Strategic risks - - Technological risks - - Reputational risks - - c. **Compliance and Ethics Committee**: - - - Establish and maintain ethical standards - - - Develop compliance monitoring mechanisms - - - Investigate potential ethical violations - - - Manage whistleblower reporting system - - - Ensure organizational adherence to: - - - Legal requirements - - Regulatory standards - - Internal ethical guidelines - - - Conduct periodic ethics training and awareness programs - - d. **Technology Oversight Committee**: - - - Assess technological innovation opportunities - - Review and approve technology investments - - Monitor technological risk and security - - Develop technology strategy and roadmap - - Evaluate emerging technologies - - Ensure cybersecurity preparedness - - Oversee technology infrastructure development - - e. **Corporate Responsibility Committee**: - - - Develop and implement ESG (Environmental, Social, Governance) strategies - - Oversee sustainability initiatives - - Monitor diversity and inclusion programs - - Assess social impact of organizational activities - - Develop and track corporate social responsibility metrics - - Ensure transparent reporting of social and environmental performance - - f. **Operations Committee**: - - - Review operational efficiency - - Identify process improvement opportunities - - Oversee operational performance metrics - - Coordinate cross-functional operational strategies - - Ensure alignment of operational activities with strategic objectives - -5. Committee Charter Requirements: - - - Detailed charter for each committee - - - Clear definition of: - - - Committee purpose - - Membership criteria - - Decision-making processes - - Reporting requirements - - Performance evaluation mechanisms - - - Annual review and potential revision of charters - - Transparency in committee operations - - Be maintained separately from this Agreement - - Be referenced hereby and incorporated by reference - - Define committee composition, responsibilities, and procedures - - Be available to all series members upon request - -6. Committee Membership Principles: - - - Diverse expertise and background - - Rotating leadership to prevent stagnation - - Independent oversight - - Balanced representation - - Continuous professional development - -7. No Monetary Compensation: - - - Board and committee service is voluntary - - No financial remuneration for board or committee roles - - Reimbursement of pre-approved, reasonable expenses permitted - -### Section 6.2 - Conflict of Interest and Independence Protocols +### Section 7.2 - Conflict of Interest and Independence Protocols 1. Conflict of Interest Prevention: a. **Mandatory Disclosure**: @@ -861,33 +4315,96 @@ The Company may maintain only those assets necessary for series administration, - Structured appeal and review mechanism - Preservation of organizational integrity -### Section 6.3 - Company Committee +### Section 7.2.1 - Integration of Corporate and Sociocratic Governance -1. Composition: - - The Company Committee shall consist of no fewer than three (3) and no more than seven (7) independent directors - - All Company Committee members must meet the Independent Director criteria defined in Article 2 - - Members shall be elected by a majority vote of all series members +1. **Spheres of Authority**: -2. Powers and Duties: - - Direct oversight of the Company and its series - - Approval of new series establishment - - Enforcement of service provider requirements - - Monitoring compliance with this Agreement - - Regular reporting to the TSYS Group Board - - Coordinate with other Board committees regarding: - - Audit and financial matters - - Risk management - - Compliance and ethics - - Technology oversight - - Operational matters - - Other areas as defined in committee charters + a. **Board and Committees**: Have primary authority over: + * Strategic direction + * Capital allocation decisions + * Major structural changes + * Compliance oversight + * Risk management + * Financial performance -3. Term and Election: - - Directors shall serve two-year staggered terms - - Elections shall be held annually for expiring positions - - No director may serve more than three consecutive terms + b. **Sociocratic Circles**: Have primary authority over: + * Operational decisions within policy boundaries + * Implementation of strategic initiatives + * Day-to-day management + * Operational process design + * Team composition and roles + * Service delivery methods -### Section 6.4 - Director Independence +2. **Decision-Making Framework**: + + a. **Strategic Decisions**: Made by the Board and Committees using traditional governance processes. + + b. **Operational Decisions**: Made by circles using sociocratic consent-based processes. + + c. **Mixed Decisions**: For decisions falling between strategic and operational domains: + * Initial proposal originates from the appropriate circle + * The proposal is refined through double-linking communication + * Final approval follows the consent process in both systems + +3. **Conflict Resolution Process**: + + a. **Level 1**: Conflicts are first addressed through the double-linked representatives. + + b. **Level 2**: Unresolved conflicts are escalated to a joint meeting of circle leaders and committee representatives. + + c. **Level 3**: If still unresolved, the Compliance and Ethics Committee shall serve as the final arbiter. + +4. **Review Mechanism**: + + a. The Compliance and Ethics Committee shall conduct an annual review of the governance integration effectiveness. + + b. Recommendations for governance improvements shall be presented to both the Board and General Circle annually. + +### Section 7.3 - Company Committee + +1. **Composition**: + + a. The Company Committee shall consist of no fewer than three (3) and no more than seven (7) independent directors; + + b. All Company Committee members must meet the Independent Director criteria defined in Article 2; and + + c. Members shall be elected by a majority vote of all series members. + +2. **Powers and Duties**: + + a. Direct oversight of the Company and its series; + + b. Approval of new series establishment; + + c. Enforcement of service provider requirements; + + d. Monitoring compliance with this Agreement; + + e. Regular reporting to the TSYS Group Board; and + + f. Coordinate with other Board committees regarding: + + i. Audit and financial matters; + + ii. Risk management; + + iii. Compliance and ethics; + + iv. Technology oversight; + + v. Operational matters; and + + vi. Other areas as defined in committee charters. + +3. **Term and Election**: + + a. Directors shall serve two-year staggered terms; + + b. Elections shall be held annually for expiring positions; and + + c. No director may serve more than three consecutive terms. + +### Section 7.4 - Director Independence ### 1. Independence Requirements @@ -973,54 +4490,169 @@ b. Directors shall: * Provide requested documentation * Maintain accurate records of all relationships -### Section 6.4 - Independence Violations +### Section 7.5 - Independence Violations 1. Any violation of independence requirements results in immediate removal from the Company Committee. -2. Series members may challenge a director's independence through written notice to the TSYS Group Board. +2. Series members may challenge a director’s independence through written notice to the TSYS Group Board. -3. The TSYS Group Board, through its Compliance Committee, shall investigate independence challenges and issue written findings within 30 days. +3. The TSYS Group Board, through its Compliance Committee, shall: -### Section 6.5 - Committee Meetings + a. Investigate independence challenges within five (5) business days of receipt; + + b. Issue written findings within 30 days; + + c. Maintain all investigation materials in the electronic records system; and + + d. Implement any required remedial actions within 15 days of findings. -1. Regular Meetings: - - The Company Committee shall meet at least quarterly - - Meeting notices must be provided at least 14 days in advance - - Meetings may be held virtually or in person +### Section 7.6 - Committee Meetings -2. Special Meetings: - - May be called by the Committee Chair or any two members - - Require 48-hour notice unless waived by all members - - May be held virtually or in person +1. **Regular Meetings**: -3. Quorum and Voting: - - A majority of Committee members constitutes a quorum - - Actions require majority vote of members present - - Each member has one vote - - No proxy voting permitted + a. The Company Committee shall meet at least quarterly; + + b. Meeting notices must be provided at least 14 days in advance; + + c. Meetings may be held virtually or in person; and + + d. Agendas must be distributed at least 7 days in advance. -### Section 6.6 - Reporting Requirements +2. **Special Meetings**: -1. The Company Committee shall provide: - - Monthly reports to the TSYS Group Board - - Quarterly reports to series members - - Annual independence certifications - - Special reports as requested by the Board + a. May be called by the Committee Chair or any two members; + + b. Require 48-hour notice unless waived by all members; + + c. May be held virtually or in person; and + + d. Must include specific agenda items requiring urgent attention. -2. Reports shall include: - - Series activity and performance - - Compliance matters - - Risk assessments - - Material changes or events - - Other information as required by the Board +3. **Quorum and Voting**: -## ARTICLE 7 - PERPETUAL EXISTENCE + a. A majority of Committee members constitutes a quorum; + + b. Actions require majority vote of members present; + + c. Each member has one vote; and + + d. No proxy voting permitted. -### Section 7.1 - Duration -The Company shall continue in perpetuity unless dissolved in accordance with Section 7.2 of this Agreement. +### Section 7.7 - Reporting Requirements -### Section 7.2 - Dissolution Limitations +1. **Reporting Schedule**: The Company Committee shall provide: + + a. Monthly reports to the TSYS Group Board; + + b. Quarterly reports to series members; + + c. Annual independence certifications; and + + d. Special reports as requested by the Board. + +2. **Report Content**: Reports shall include: + + a. Series activity and performance; + + b. Compliance matters; + + c. Risk assessments; + + d. Material changes or events; + + e. Financial performance metrics; and + + f. Other information as required by the Board. + + +### Section 7.8 - Sociocratic Principles + +The Company hereby adopts sociocratic governance principles to complement the existing governance structure. These principles shall be implemented as follows: + +1. **Circle Organization**: + - The Company’s governance shall be organized into interconnected circles + - Each circle shall have a defined domain of authority and responsibility + - Circles shall be arranged in a hierarchical structure while maintaining semi-autonomous decision-making power + - The TSYS Group Board and its committees shall function as the General Circle + +2. **Double-Linking**: + - Each circle shall be linked to its parent circle by at least two members: + - An Operational Leader appointed by the parent circle + - A Circle Representative elected by the circle members + - These links shall participate in the decision-making of both circles + - Double-linking ensures bidirectional flow of information and authority + +3. **Consent-Based Decision-Making**: + - Circle decisions shall be made by consent rather than majority vote + - Consent exists when no circle member presents a reasoned, paramount objection + - Objections must be based on risks to the circle’s ability to fulfill its aim + - Consent does not require agreement or preference, only the absence of paramount objections + +4. **Sociocratic Elections**: + - Circle roles shall be filled through a consent-based election process + - Nominations and objections shall be discussed openly + - Elections shall be conducted by consent + +### Section 7.9 Circle Structure + +1. **General Circle (TSYS Group Board)**: + - Highest governance circle + - Responsible for overall direction and policy + - Includes representatives from each primary circle + +2. **Primary Circles**: + - Company Committee Circle + - Service Provider Circles: + - Known Element Enterprises Circle + - The Campus Trading Company Circle + - Cell Series Circles: + - Wyble Family Office Circle + - Redwood Family Office Circle + - Each series may establish its own circle structure + +3. **Subcircles**: + - Each primary circle may establish subcircles for specific domains + - Subcircles shall be double-linked to their parent circle + - Subcircles shall have defined aims and domains + +### Section 7.10 - Circle Operations + +1. **Circle Meetings**: + - Shall include opening round, administrative matters, agenda items, and closing round + - Shall be facilitated by a designated facilitator + - Shall include a secretary who records decisions and maintains circle records + - Meeting records shall comply with the electronic records requirements of Section 3.2 + +2. **Circle Roles**: + - Operational Leader: Appointed by parent circle, accountable for domain + - Circle Representative: Elected by circle, represents circle in parent circle + - Facilitator: Guides meeting process, ensures sociocratic principles are followed + - Secretary: Records decisions, maintains records, monitors implementation + +3. **Decision Rights**: + - Circles shall have authority to make decisions within their defined domain + - Decisions shall be policy-based rather than case-by-case + - Operational decisions within policy may be made by role-holders + +### Section 7.11 - Integration with Existing Governance + +1. **Board and Committee Structure**: + - The TSYS Group Board and its committees shall maintain their structure as defined in Article 6 + - These bodies shall integrate sociocratic principles into their operations + +2. **Decision Authority**: + - Where conflict exists between sociocratic circle decisions and Board/Committee decisions, the Board/Committee decisions shall prevail + - Circles must operate within the parameters established by this Agreement + - Sociocratic governance does not override mandatory service provider or operational requirements + +## ARTICLE 8 - PERPETUAL EXISTENCE + +### Section 8.1 - Duration + +The Company shall continue in perpetuity unless dissolved in accordance with Section 8.2 of this Agreement. + +### Section 8.2 - Dissolution Limitations The Company may be dissolved only under the following circumstances: @@ -1034,7 +4666,7 @@ The Company may be dissolved only under the following circumstances: * All members of the Company Committee * The TSYS Group Board of Directors -### Section 7.3 - Effect of Dissolution Events +### Section 8.3 - Effect of Dissolution Events The occurrence of any of the following events shall NOT result in the dissolution of the Company: @@ -1047,9 +4679,9 @@ The occurrence of any of the following events shall NOT result in the dissolutio 7. Merger, acquisition, or reorganization of any series; 8. Any event that would otherwise trigger dissolution under default provisions of the Texas Business Organizations Code, to the extent such provisions may be overridden. -### Section 7.4 - Dissolution Process +### Section 8.4 - Dissolution Process -In the event of a permitted dissolution under Section 7.2: +In the event of a permitted dissolution under Section 8.2: 1. Winding Up: @@ -1075,9 +4707,9 @@ In the event of a permitted dissolution under Section 7.2: * Series may continue operations independently post-dissolution * Series may reorganize under new master LLC structure -### Section 7.5 - Dissolution Restrictions +### Section 8.5 - Dissolution Restrictions -Notwithstanding the permitted dissolution events in Section 7.2: +Notwithstanding the permitted dissolution events in Section 8.2: 1. No dissolution shall be permitted if it would: @@ -1090,7 +4722,7 @@ Notwithstanding the permitted dissolution events in Section 7.2: 2. Any attempted dissolution in violation of these restrictions shall be void. -### Section 7.6 - Survival Provisions +### Section 8.6 - Survival Provisions The following provisions shall survive any dissolution of the Company: @@ -1102,7 +4734,7 @@ The following provisions shall survive any dissolution of the Company: 6. Asset protection measures 7. All provisions necessary to implement an orderly wind-up -### Section 7.7 - Series Rights Post-Dissolution +### Section 8.7 - Series Rights Post-Dissolution Upon any permitted dissolution of the Company: @@ -1123,13 +4755,13 @@ Upon any permitted dissolution of the Company: * Change its governance -## ARTICLE 8 - SECURITIES LAW MATTERS AND RISK FACTORS +## ARTICLE 9 - SECURITIES LAW MATTERS AND RISK FACTORS -### Section 8.1 - Securities Law Disclaimer +### Section 9.1 - Securities Law Disclaimer THE MEMBERSHIP INTERESTS IN ANY SERIES OF THE COMPANY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), THE SECURITIES LAWS OF ANY STATE OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MUST BE ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE STATE SECURITIES LAWS, AND ANY OTHER APPLICABLE SECURITIES LAWS; AND (II) THE TERMS AND CONDITIONS OF THIS AGREEMENT. THE MEMBERSHIP INTERESTS MAY NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS AND THIS AGREEMENT. THEREFORE, PURCHASERS OF SUCH INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. -### Section 8.2 - Investment Risks +### Section 9.2 - Investment Risks INVESTMENT IN ANY SERIES OF THE COMPANY INVOLVES SUBSTANTIAL RISKS, INCLUDING BUT NOT LIMITED TO: @@ -1147,10 +4779,26 @@ INVESTMENT IN ANY SERIES OF THE COMPANY INVOLVES SUBSTANTIAL RISKS, INCLUDING BU 7. **Economic Risk**: THE SUCCESS OF ANY SERIES MAY BE AFFECTED BY GENERAL ECONOMIC CONDITIONS, INCLUDING INTEREST RATES, INFLATION RATES, AND GENERAL MARKET CONDITIONS. -### Section 8.3 - Acknowledgment of Risk Factors +8. **Series LLC Structure Risks**: THE SERIES LLC STRUCTURE IS RELATIVELY NOVEL AND INVOLVES LEGAL UNCERTAINTIES, INCLUDING POTENTIAL CHALLENGES TO THE ASSET SEGREGATION PROTECTIONS AND VARYING TREATMENT ACROSS JURISDICTIONS. WHILE TEXAS LAW PROVIDES FOR SERIES ISOLATION, OTHER STATES OR COUNTRIES MAY NOT RECOGNIZE THESE PROTECTIONS, POTENTIALLY EXPOSING ASSETS TO CLAIMS IN THOSE JURISDICTIONS. + +9. **Tax Risks**: CHANGES IN TAX LAWS OR REGULATIONS, OR INTERPRETATIONS THEREOF, MAY ADVERSELY AFFECT THE TAX TREATMENT OF INVESTMENTS IN ANY SERIES. EACH SERIES MAY BE CLASSIFIED DIFFERENTLY FOR TAX PURPOSES, AND INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE TAX CONSEQUENCES OF THEIR INVESTMENT. + +10. **Regulatory Risks**: CHANGES IN APPLICABLE LAWS OR REGULATIONS, OR THEIR INTERPRETATION OR ENFORCEMENT, COULD ADVERSELY AFFECT ANY SERIES. THE REGULATORY ENVIRONMENT FOR SERIES LLCs AND CERTAIN BUSINESS ACTIVITIES IS EVOLVING, AND CHANGES COULD ADVERSELY IMPACT OPERATIONS. + +11. **Technology Risks**: THE COMPANY AND ITS SERIES RELY HEAVILY ON TECHNOLOGY SYSTEMS, INCLUDING ELECTRONIC RECORD KEEPING AND SERVICE PROVIDER PLATFORMS. FAILURES, BREACHES, OR OBSOLESCENCE OF THESE SYSTEMS COULD SIGNIFICANTLY DISRUPT OPERATIONS AND AFFECT PERFORMANCE. + +12. **Service Provider Dependency**: THE MANDATORY USE OF DESIGNATED SERVICE PROVIDERS CREATES DEPENDENCY RISKS. FAILURE OF THESE SERVICE PROVIDERS COULD ADVERSELY AFFECT MULTIPLE SERIES SIMULTANEOUSLY. + + +### Section 9.3 - Acknowledgment of Risk Factors EACH SERIES MEMBER, BY EXECUTING THIS AGREEMENT OR A COUNTERPART HEREOF, ACKNOWLEDGES THAT THEY HAVE READ AND UNDERSTOOD THE RISK FACTORS SET FORTH IN THIS ARTICLE AND ACCEPT SUCH RISKS. +### Section 9.4 - Private Placement Memorandum + +EACH SERIES MAY ISSUE A PRIVATE PLACEMENT MEMORANDUM OR OTHER OFFERING DOCUMENT IN CONNECTION WITH THE OFFER AND SALE OF ITS MEMBERSHIP INTERESTS. ANY SUCH DOCUMENT WILL CONTAIN ADDITIONAL DISCLOSURES, RISK FACTORS, AND OTHER INFORMATION SPECIFIC TO THAT SERIES. IN THE EVENT OF ANY CONFLICT BETWEEN THIS AGREEMENT AND ANY PRIVATE PLACEMENT MEMORANDUM OR OFFERING DOCUMENT, THE PRIVATE PLACEMENT MEMORANDUM OR OFFERING DOCUMENT SHALL CONTROL WITH RESPECT TO THE SPECIFIC SERIES TO WHICH IT RELATES. INVESTORS SHOULD CAREFULLY REVIEW ANY PRIVATE PLACEMENT MEMORANDUM OR OFFERING DOCUMENT BEFORE INVESTING. + + ## ARTICLE 10 - MISCELLANEOUS ### Section 10.1 - Amendments @@ -1170,24 +4818,36 @@ If any provision of this Agreement is held invalid, the remainder shall continue ### Section 10.4 - Dispute Resolution and Integration -1. Waiver of Jury Trial: The Company, its series, all series members, and the Company Committee hereby knowingly, voluntarily, and irrevocably waive any right to trial by jury in any action, proceeding, or counterclaim arising out of or relating to this Agreement or any transactions contemplated hereby. +1. **Waiver of Jury Trial**: The Company, its series, all series members, and the Company Committee hereby knowingly, voluntarily, and irrevocably waive any right to trial by jury in any action, proceeding, or counterclaim arising out of or relating to this Agreement or any transactions contemplated hereby. -2. Limited Arbitration: The parties agree that arbitration shall not be required or available as a means of dispute resolution under this Agreement, except in cases involving: - - Criminal conduct - - Fraud - - Willful misconduct - - Gross negligence - - Breach of fiduciary duty - In such cases, arbitration shall be conducted under the rules of the American Arbitration Association by a single arbitrator in [CITY], Texas. +2. **Limited Arbitration**: The parties agree that arbitration shall not be required or available as a means of dispute resolution under this Agreement, except in cases involving: + + a. Criminal conduct; + + b. Fraud; + + c. Willful misconduct; + + d. Gross negligence; or + + e. Breach of fiduciary duty. + + In such cases, arbitration shall be conducted under the rules of the American Arbitration Association by a single arbitrator in Austin, Texas. -3. Entire Agreement: This Agreement constitutes the complete and exclusive statement of agreement among the parties with respect to the subject matter herein. This Agreement supersedes all prior written and oral statements, including any prior representation, statement, condition, or warranty. The parties acknowledge and agree that: - - No representations, understandings, or agreements have been made or relied upon in the making of this Agreement other than those specifically set forth herein - - All prior agreements, understandings, and negotiations are merged into this Agreement - - This Agreement alone expresses the full and complete understanding of the parties +3. **Jurisdiction and Venue**: For all matters not subject to arbitration: + + a. The state and federal courts located in Travis County, Texas shall have exclusive jurisdiction; + + b. All parties consent to personal jurisdiction in such courts; + + c. Venue shall be proper only in Travis County, Texas; and + + d. Any objections to such jurisdiction or venue are hereby waived. - ### Section 10.5 - Texas Business Organizations Code Override - ### 1. General Principles +### Section 10.5 - Texas Business Organizations Code Override + +### 1. General Principles a. This Agreement modifies and overrides specific provisions of the Texas Business Organizations Code ("TBOC") as explicitly enumerated herein, to the extent permitted by law. @@ -1267,7 +4927,7 @@ a. This Agreement automatically opts out of any future TBOC amendments that may * The amendment is mandatory and non-waivable * The amendment is required for continued series LLC status -b. The Company Committee shall review all TBOC amendments and determine applicability to this Agreement. +b. The Company Committee shall annually review all TBOC amendments and determine applicability to this Agreement. ### Section 10.6 - Confidentiality @@ -1307,16 +4967,36 @@ b. The Company Committee shall review all TBOC amendments and determine applicab - Acted in what they reasonably believed to be the best interest of the Company - Had no reasonable cause to believe their conduct was unlawful -3. Advance of Expenses: +3. **Advance of Expenses**: - - Legal expenses may be paid in advance upon receipt of an undertaking to repay if it is ultimately determined that indemnification is not appropriate + a. Legal expenses shall be advanced within 30 days of request upon receipt of: + + i. A written undertaking to repay if it is ultimately determined that indemnification is not appropriate; + + ii. A written affirmation that the indemnitee believes in good faith that the standard of conduct for indemnification has been met; and + + iii. Documentation reasonably sufficient to establish the expenses incurred. + + b. The Company Committee shall review all advancement requests and may deny advancement only if: + + i. The conduct in question clearly falls outside the scope of indemnifiable actions; or + + ii. The documentation provided is materially insufficient. + + c. Any denial of advancement must include: + + i. A written explanation of the basis for denial; + + ii. Identification of additional documentation or information necessary to cure the deficiency; and + + iii. Notice of the right to appeal to the full Board. 4. Insurance: - The Company may purchase and maintain directors and officers liability insurance - Insurance shall cover individuals acting only in an official capacity -### Section 10.7 - Force Majeure +### Section 10.8 - Force Majeure 1. Definition of Force Majeure Events: @@ -1336,11 +5016,11 @@ b. The Company Committee shall review all TBOC amendments and determine applicab 3. Notification Requirements: - - Immediate written notice of force majeure event + - Immediate electronic written notice of force majeure event - Detailed description of event and expected duration - Continuous updates on mitigation efforts -### Section 10.8 - Non-Waiver and Cumulative Remedies +### Section 10.9 - Non-Waiver and Cumulative Remedies 1. No Waiver: @@ -1352,7 +5032,7 @@ b. The Company Committee shall review all TBOC amendments and determine applicab - All remedies are cumulative - Exercise of one remedy does not preclude exercise of other remedies -### Section 10.9 - Representations and Warranties +### Section 10.10 - Representations and Warranties 1. Company Representations: @@ -1367,7 +5047,7 @@ b. The Company Committee shall review all TBOC amendments and determine applicab - No pending legal actions that would impair ability to perform - Accurate and complete information provided -### Section 10.10 - Assignment and Succession +### Section 10.11 - Assignment and Succession 1. Assignment Restrictions: @@ -1379,7 +5059,7 @@ b. The Company Committee shall review all TBOC amendments and determine applicab - Rights and obligations bind and inure to successors and permitted assigns - Heirs and legal representatives may succeed to economic rights but not voting rights. -### Section 10.11 - Compliance and Ethics +### Section 10.12 - Compliance and Ethics 1. Ethical Standards: @@ -1393,25 +5073,73 @@ b. The Company Committee shall review all TBOC amendments and determine applicab - Protection for whistleblowers - Mandatory investigation of reported issues -### Section 10.12 - Technology and Cybersecurity +### Section 10.13 - Technology and Cybersecurity -1. Cybersecurity Requirements: +1. **Cybersecurity Requirements**: - - Implement robust cybersecurity measures - - Regular security audits - - Incident response planning - - Data protection protocols + a. Implement robust cybersecurity measures; + + b. Regular security audits; + + c. Incident response planning; + + d. Data protection protocols; and + + e. Data breach notification and response protocol that includes: + + i. Immediate containment procedures; + + ii. Forensic investigation requirements; + + iii. Member and stakeholder notification within 12 hours of discovery; + + iv. Regulatory compliance assessments; + + v. Remediation planning and implementation; + + vi. Post-incident analysis and reporting; and + + vii. Security enhancement measures based on findings. -2. Technology Governance: - - - Ongoing technology risk assessment - - Compliance with industry best practices - - Regular technology strategy reviews ## SIGNATURES -IN WITNESS WHEREOF, this Amended and Restated Operating Agreement has been executed effective as of [DATE]. +IN WITNESS WHEREOF, this Amended and Restated Operating Agreement has been executed effective as of [EFFECTIVE DATE]. Pursuant to Article 3 of this Agreement and in compliance with the electronic recordkeeping requirements contained herein, this Agreement shall be executed solely through the Known Element Enterprises (KNEL) Electronic Signature System and recorded in the Turnkey Network Systems (TSYS) Enterprise Resource Planning (ERP) instance. Physical signatures shall neither be required nor accepted. -Electronic signatures executed through the KNEL Electronic Signature System shall have the same legal effect, validity, and enforceability as a manually executed signature. Upon execution, this Agreement shall be automatically recorded and maintained within the TSYS ERP system as the authoritative copy pursuant to the electronic recordkeeping requirements of this Agreement. +Electronic signatures executed through the KNEL Electronic Signature System shall have the same legal effect, validity, and enforceability as a manually executed signature to the fullest extent permitted by applicable law, including but not limited to the Electronic Signatures in Global and National Commerce Act (E-SIGN), the Uniform Electronic Transactions Act (UETA), and any applicable state laws. + +Each signatory represents and warrants that: + +1. They have the authority to execute this Agreement on behalf of the entity they represent; + +2. They have reviewed this Agreement in its entirety; + +3. They understand and agree to all terms and conditions contained herein; and + +4. Their electronic signature constitutes their free, voluntary, and binding act. + +Upon execution, this Agreement shall be automatically recorded and maintained within the KNEL E-sign system as the authoritative copy pursuant to the electronic recordkeeping requirements of this Agreement. Each signatory shall receive electronic confirmation of execution and access to the fully executed Agreement through the KNEL E-Sign system. + +[ELECTRONIC SIGNATURE BLOCKS FOR EACH REQUIRED SIGNATORY] + + +## SCHEDULES + + +### Schedule A: Detailed description of IT Services provided by Known Element Enterprises + +### Schedule B: Detailed description of Transaction and Treasury Services provided by The Campus Trading Company + +### Schedule C: Organizational chart of TSYS Group entities + +### Schedule D: List of permanently established series + +### Schedule E: Governance structure diagram + +### Schedule F: Required securities law legends and notices + +### Schedule G: Service Level Agreement (SLA) requirements and templates + +### Schedule H: Dispute resolution procedures diff --git a/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-v2.0DesignDocument.md b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-v2.0DesignDocument.md deleted file mode 100644 index 099538c..0000000 --- a/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-v2.0DesignDocument.md +++ /dev/null @@ -1,77 +0,0 @@ -# Turnkey Network Systems LLC Operating Agreement - 2.0 design document - -This document is meant to capture the: - -- design -- architecture -- requirements -- intent - -for the 2.0 version of the Turnkey Network Systems LLC Operating Agreement and the series established thereunder. - -We have learned quite a bit in our first few years of operation as an LLC of some sophistication. - -## Main company agreement - -### Main company agreement overview - -This document is for the Company, the overall LLC that is registered (as a series LLC) with the Texas secretary of state. It's entire purpose is to be an administrative body for the series. It conducts no business, it enters into no contracts, it can not be dissolved, it has a single member (Turnkey Network Systems LLC - Wyble Family Office (series) LLC) and that member cannot be removed. - -The entire document was written by Claude , using a combination of chats over a period of a few hours. Less than 1% of the document was altered by Charles from Claudes output. - -### Main company agreement requirements - -- (in progress) ensure everything from the Lone Star Land Law.com website/ebook is included (as applicable at the main company level, most requirements will be at the series level) -- (in progress) merge in anything relevant from the v1.0 agreement (as applicable at the main company level, most of that content will be applied at the series level) - -- (done) be fully compliant with current Texas law -- (done) States that this is the amended and restated operating agreement of Turnkey Network Systems LLC and that all previous written and verbal agreements of TSYS Group, TSYS, Turnkey Network Systems LLC, Turnkey Network Systems Partnership and Turnkey Network Systems sole proprietorship are hereby null and void. -- (done)specify that the overall LLC will not have any members except for the Wyble Family Office LLC. -- (done) Ensure a provision exists in the agreement with standard boilerplate contract provisions. -- (done) Include provisions for over riding every part of the relevant Texas business organizations code as allowed by law. -- (done) Allow each series broad latitude to set its own operating agreement parameters but they can’t override anything that is set for the entire LLC in the overall operating agreement. -- (done) allow for the establishment of regular series LLC -- (done) allow for the establishment of a subsidary Cell LLC that can contain subsidary series LLC entities governed by/within the Cell -- (done and will be updated with each revision) include a definitions section -- (done) allowing explicitly for the establishment of tools/dies/casts/materials/supplies/intellectual property (TDCMSP) series that only own physical and intellectual property assets and have no operational capability other than entering into a lease with an operating series but are forbidden from entering into an agreement with the company itself or any outside entity -- (done) specifying oversight is via multiple Board committees instead of the entire Board -- (done) specify that all of the LLC series will be member managed , with the board providing governance , not management. -- (done) The sub committee will be governed by a charter that is separate from the operating agreement but referenced in the operating agreement. -- (done) the LLC as a whole will be part of an overall organization called TSYS Group. TSYS Group will have a board with sub committees. The LLC will be governed by a sub committee of independent directors elected by the members of all the series LLC. -- (done) allow all series broad latitude setting their operating terms and agreement -- (done) serve as a detailed and comprehensive parent LLC operating agreement for a Texas series LLC called Turnkey Network Systems LLC -- (done) Specify that all series created under the LLC must use Known Element Enterprises LLC as the sole vendor for IT and business operations services -- (done) Specify that all series created under the LLC must use The Campus Trading Company LLC as the sole vendor for transaction/treasury operations. - -## Series agreement (template) - -### Series agreement overview - -This is a far more complex document as it's establishing the operating agreement for actual operating entities of a variety of types of ventures. - -### Series agreement requirements - -- (in progress) ensure everything from the Lone Star Land Law.com website/ebook is included (as applicable at the main company level, most requirements will be at the series level) -- (in progress) merge in anything relevant from the v1.0 agreement (as applicable at the main company level, most of that content will be applied at the series level) - -- Specify that the series enters into a contract with Known Element Enterprises as the provider of IT and business operations services. -- Specify that the series enters into a contract with The Campus Trading Company LLC as the sole provider of treasury/transaction operations services. - -- for an individual series of a parent series LLC company that is member managed and board committee governed and serve as a detailed and comprehensive LLC operating agreement for each of the individual series of that overall LLC. -- Include a markdown table with five rows and two columns. The first column name will be Member Legal Name and the second column name will be Ownership Percentage. -- include a definitions section -- Include provisions for over riding every part of the relevant Texas business organizations code as allowed by law. -- Incorporate all the recommendations from LoneStarLandLaw book -- be fully compliant with current Texas law -- include standard/customary contract provisions - -- Incorporate by reference all previous Board of Directors written decisions as directed by members of Turnkey Network Systems LLC series, specifically relating to the removal of members. Include a link to https://git.knownelement.com/tofix in that section. - -- Utilize the fairshares model -- granting of profit interests instead of capital interests - -## Establishment of foundational series - -- specify the establishment of an operating series called Wyble Family Office LLC. Wyble Family Office LLC will have one member: Charles Wyble and Patti Wyble Living Trust with 100% distribution. The member can not be removed and no members can be added. Upon the death of Charles Wyble and Patti Wyble the trust only has a finanical interest and no voting rights. While -- specify the establishment of an operating series called Known Element Enterprises (series) LLC. -- specify the establishment of an operating series called The Campus Trading Company (series) LLC \ No newline at end of file diff --git a/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-1-1-enhancements.md b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-1-1-enhancements.md new file mode 100644 index 0000000..1de35fb --- /dev/null +++ b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-1-1-enhancements.md @@ -0,0 +1,23 @@ +## Section 1.1 - Effective Date and Prior Agreement + +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 each person who is or who becomes a member of the Company or any of its series (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") and all amendments thereto. This Agreement further supersedes and replaces in their entirety all previous written and verbal agreements, understandings, and commitments of any kind related to Turnkey Network Systems LLC, Turnkey Network Systems Partnership, Turnkey Network Systems sole proprietorship, and TSYS Group (collectively, the "Prior Entities"). + +Upon execution by the Company through its authorized representative(s) and approval by the Members as specified in the Prior Agreement, all provisions of the Prior Agreement shall be null and void and of no further force or effect. + +For clarity, while all rights, obligations, and relationships arising under the Prior Agreement are terminated as legal constructs created by that agreement, the business relationships, series, and membership status previously established shall continue without interruption, but shall hereafter be governed exclusively by the terms of this Agreement, subject to the specific transitional provisions set forth in Section 1.4. This continuity of business operations does not constitute a continuation of the Prior Agreement itself as a legal instrument, which is terminated in its entirety as set forth herein and in Section 1.4. + +### Execution Certification + +By executing this Agreement, each signatory hereby certifies that: + +1. They have thoroughly reviewed this Agreement in its entirety; + +2. They understand and accept all terms, conditions, and provisions contained herein; + +3. They have had the opportunity to consult with independent legal, tax, financial, and other professional advisors of their choosing regarding this Agreement; + +4. They are executing this Agreement voluntarily and with full capacity; and + +5. They acknowledge the legally binding nature of this Agreement upon all parties. \ No newline at end of file diff --git a/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-1-5-enhancements.md b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-1-5-enhancements.md new file mode 100644 index 0000000..b2de2f5 --- /dev/null +++ b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-1-5-enhancements.md @@ -0,0 +1,176 @@ +### Section 1.5 - Securities Law Notice + +### General Securities Disclosures + +THE MEMBERSHIP INTERESTS IN THE COMPANY AND ITS SERIES OFFERED HEREUNDER HAVE NOT BEEN REGISTERED WITH OR APPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, THE TEXAS STATE SECURITIES BOARD, OR ANY OTHER STATE SECURITIES REGULATORY AUTHORITY. THE INTERESTS ARE BEING OFFERED IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION REQUIREMENTS OF FEDERAL AND STATE LAW, SPECIFICALLY SECTION 4(A)(2) OF THE SECURITIES ACT OF 1933, RULE 506(C) OF REGULATION D PROMULGATED THEREUNDER, AND APPLICABLE EXEMPTIONS UNDER THE TEXAS SECURITIES ACT AND OTHER STATE "BLUE SKY" LAWS. + +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. + +### Risk Factors and Suitability + +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. SPECIFICALLY, INVESTORS MUST QUALIFY AS "ACCREDITED INVESTORS" AS DEFINED IN RULE 501(A) OF REGULATION D UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 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. + +THE COMPANY MAY CONDUCT MULTIPLE OFFERINGS OF MEMBERSHIP INTERESTS ACROSS VARIOUS SERIES. THESE OFFERINGS ARE SUBJECT TO INTEGRATION RULES UNDER REGULATION D, WHICH MAY AFFECT THE AVAILABILITY OF EXEMPTIONS FROM REGISTRATION. THE COMPANY HAS STRUCTURED ITS OFFERINGS TO COMPLY WITH THE SAFE HARBORS PROVIDED UNDER RULE 502(A) OF REGULATION D, BUT THERE CAN BE NO ASSURANCE THAT THE SEC OR STATE SECURITIES REGULATORS WILL NOT CHALLENGE THIS DETERMINATION. + +### Investment Risks and Limitations + +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. INVESTORS ARE NOT TO CONSTRUE THE CONTENTS OF THIS AGREEMENT OR ANY PRIOR OR SUBSEQUENT COMMUNICATIONS FROM THE COMPANY OR ITS REPRESENTATIVES AS LEGAL, TAX, OR INVESTMENT ADVICE. + +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. + +### Information Rights and Disclosure Limitations + +THE COMPANY HAS NO OBLIGATION TO PROVIDE ONGOING INFORMATION ABOUT ITS BUSINESS, OPERATIONS, OR FINANCIAL CONDITION TO INVESTORS EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT OR AS REQUIRED BY LAW. INVESTORS SHOULD NOT EXPECT TO RECEIVE THE SAME LEVEL OF DISCLOSURE PROVIDED BY PUBLICLY TRADED COMPANIES. + +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. + +THIS NOTICE IS GIVEN PURSUANT TO APPLICABLE FEDERAL AND STATE SECURITIES LAWS, INCLUDING RULE 502(B) OF REGULATION D UNDER THE SECURITIES ACT OF 1933, AS AMENDED. + +### Series-Specific Securities Law Provisions + +INVESTORS ACKNOWLEDGE AND UNDERSTAND THAT: + +* EACH SERIES REPRESENTS A SEPARATE AND DISTINCT SECURITIES OFFERING, EVEN WHEN OFFERED CONCURRENTLY WITH OTHER SERIES; + +* INVESTMENT IN ONE SERIES DOES NOT CONSTITUTE INVESTMENT IN ANY OTHER SERIES, NOR DOES IT GRANT ANY RIGHTS WITH RESPECT TO OTHER SERIES; + +* EACH SERIES MAY HAVE DIFFERENT RIGHTS, OBLIGATIONS, INVESTMENT CRITERIA, RISKS, AND RETURNS, AND INVESTORS MUST EVALUATE EACH SERIES INVESTMENT SEPARATELY; + +* ACCREDITED INVESTOR STATUS MUST BE INDEPENDENTLY VERIFIED FOR EACH SERIES INVESTMENT, UNLESS VERIFICATION FOR MULTIPLE SERIES INVESTMENTS OCCURS WITHIN A 90-DAY PERIOD, IN WHICH CASE A SINGLE VERIFICATION MAY SUFFICE; + +* INVESTMENT LIMITATIONS UNDER SECURITIES LAWS ARE GENERALLY APPLIED SEPARATELY TO EACH SERIES, BUT REGULATORY AUTHORITIES MAY DETERMINE OTHERWISE; + +* THE COMPANY MAY ISSUE ADDITIONAL SERIES IN THE FUTURE WITH DIFFERENT TERMS, RIGHTS, AND INVESTMENT CRITERIA WITHOUT THE CONSENT OF EXISTING SERIES MEMBERS; + +* DISCLOSURES PROVIDED WITH RESPECT TO ANY PARTICULAR SERIES MAY NOT APPLY TO OTHER SERIES, AND INVESTORS SHOULD NOT RELY ON DISCLOSURES FOR ONE SERIES WHEN MAKING INVESTMENT DECISIONS REGARDING ANOTHER SERIES; + +* INVESTMENT RETURNS AND DISTRIBUTIONS FROM ONE SERIES ARE ISOLATED FROM AND HAVE NO IMPACT ON OTHER SERIES; + +* SECURITIES LAW VIOLATIONS WITH RESPECT TO ONE SERIES OFFERING COULD POTENTIALLY IMPACT OTHER SERIES OFFERINGS IF REGULATORY AUTHORITIES DETERMINE THE OFFERINGS SHOULD BE INTEGRATED; + +* SERIES-SPECIFIC OFFERING DOCUMENTATION WILL BE PROVIDED FOR EACH SERIES INVESTMENT OPPORTUNITY AND MUST BE REVIEWED INDEPENDENTLY; AND + +* THE TRANSFER RESTRICTIONS SET FORTH IN THIS AGREEMENT APPLY SEPARATELY TO EACH SERIES, AND RESTRICTIONS OR PERMISSIONS APPLICABLE TO ONE SERIES DO NOT EXTEND TO INTERESTS IN OTHER SERIES. + +### Series Integration Risk Factors + +DESPITE THE COMPANY'S INTENTION TO MAINTAIN SEPARATE SECURITIES OFFERINGS FOR EACH SERIES, SECURITIES REGULATORS MAY TAKE THE POSITION THAT SOME OR ALL SERIES OFFERINGS SHOULD BE INTEGRATED FOR SECURITIES LAW COMPLIANCE PURPOSES. SUCH INTEGRATION COULD RESULT IN: + +* RETROACTIVE APPLICATION OF MORE STRINGENT DISCLOSURE REQUIREMENTS; + +* LOSS OF SECURITIES LAW EXEMPTIONS FOR CERTAIN OFFERINGS; + +* MANDATORY RESCISSION RIGHTS FOR INVESTORS; + +* REGULATORY ENFORCEMENT ACTIONS; AND/OR + +* POTENTIAL LIABILITY FOR THE COMPANY AND ITS MANAGEMENT. + +THE COMPANY HAS IMPLEMENTED PROCEDURES TO MINIMIZE THESE RISKS, INCLUDING: + +* MAINTAINING SEPARATE OFFERING DOCUMENTATION FOR EACH SERIES; + +* ENSURING EACH SERIES HAS A DISTINCT BUSINESS PURPOSE AND INVESTMENT CRITERIA; + +* OBSERVING APPROPRIATE TEMPORAL SEPARATION BETWEEN CERTAIN OFFERINGS; + +* MAINTAINING SEPARATE ACCREDITED INVESTOR VERIFICATION RECORDS FOR EACH SERIES; AND + +* STRUCTURING SERIES OFFERINGS TO QUALIFY FOR SEPARATE EXEMPTIONS UNDER SECURITIES LAWS. + +THE COMPANY MAY IMPLEMENT ADDITIONAL SAFEGUARDS AGAINST INTEGRATION RISK AS NECESSARY, INCLUDING MAINTAINING SEPARATE MARKETING CHANNELS, USING DIFFERENT OFFERING PLATFORMS, AND CONDUCTING DETAILED ANALYSES OF EACH OFFERING'S INDEPENDENCE FOR SECURITIES LAW PURPOSES. + +### Series-Specific Disclosure Requirements + +EACH SERIES OFFERING WILL BE ACCOMPANIED BY: + +* SERIES-SPECIFIC RISK FACTORS DETAILING UNIQUE RISKS ASSOCIATED WITH THAT PARTICULAR SERIES BUSINESS MODEL AND OPERATIONS; + +* SERIES-SPECIFIC FINANCIAL PROJECTIONS AND CAPITAL REQUIREMENTS; + +* SERIES-SPECIFIC USE OF PROCEEDS DISCLOSURE; + +* SERIES-SPECIFIC MANAGEMENT INFORMATION AND EXPERIENCE; + +* SERIES-SPECIFIC CONFLICTS OF INTEREST DISCLOSURE; AND + +* SERIES-SPECIFIC INFORMATION REGARDING DISTRIBUTIONS AND EXIT STRATEGIES. + +INVESTORS MUST REVIEW ALL SERIES-SPECIFIC DISCLOSURE MATERIALS BEFORE INVESTING IN ANY SERIES. + +### Accredited Investor Verification + +THE COMPANY IS RELYING ON RULE 506(C) OF REGULATION D, WHICH PERMITS GENERAL SOLICITATION BUT REQUIRES THE COMPANY TO TAKE REASONABLE STEPS TO VERIFY THAT ALL INVESTORS ARE ACCREDITED INVESTORS. ACCORDINGLY, ALL PROSPECTIVE INVESTORS MUST SATISFY THE COMPANY'S VERIFICATION REQUIREMENTS, WHICH MAY INCLUDE ONE OR MORE OF THE FOLLOWING: + +1. REVIEW OF FINANCIAL DOCUMENTATION: EACH INVESTOR MAY BE REQUIRED TO PROVIDE DOCUMENTATION VERIFYING INCOME OR NET WORTH, WHICH MAY INCLUDE: + + * WITH RESPECT TO INCOME: IRS FORMS THAT REPORT INCOME FOR THE TWO MOST RECENT YEARS (INCLUDING, BUT NOT LIMITED TO, FORM W-2, FORM 1099, SCHEDULE K-1, AND FILED FORM 1040) AND A WRITTEN REPRESENTATION THAT THE INVESTOR REASONABLY EXPECTS TO REACH THE REQUIRED INCOME LEVEL IN THE CURRENT YEAR; OR + + * WITH RESPECT TO NET WORTH: BANK STATEMENTS, BROKERAGE STATEMENTS, TAX ASSESSMENTS, APPRAISAL REPORTS, CREDIT REPORTS, AND OTHER STATEMENTS OF ASSETS AND LIABILITIES, TOGETHER WITH A WRITTEN REPRESENTATION THAT ALL LIABILITIES NECESSARY TO DETERMINE NET WORTH HAVE BEEN DISCLOSED. + +2. THIRD-PARTY VERIFICATION: WRITTEN CONFIRMATION FROM A REGISTERED BROKER-DEALER, REGISTERED INVESTMENT ADVISER, LICENSED ATTORNEY, OR CERTIFIED PUBLIC ACCOUNTANT THAT SUCH PERSON OR ENTITY HAS TAKEN REASONABLE STEPS TO VERIFY THAT THE INVESTOR IS AN ACCREDITED INVESTOR WITHIN THE PRIOR THREE MONTHS. + +3. EXISTING INVESTOR VERIFICATION: FOR EXISTING INVESTORS WHO INVESTED IN A RULE 506(B) OFFERING AS ACCREDITED INVESTORS PRIOR TO SEPTEMBER 23, 2013, A CERTIFICATION AT THE TIME OF SALE THAT THEY CONTINUE TO QUALIFY AS ACCREDITED INVESTORS. + +4. ALTERNATIVE VERIFICATION METHODS: ANY OTHER REASONABLE VERIFICATION METHODS THAT THE COMPANY DETERMINES TO BE APPROPRIATE BASED ON THE PARTICULAR FACTS AND CIRCUMSTANCES OF EACH INVESTOR AND TRANSACTION, CONSISTENT WITH THE PRINCIPLES-BASED APPROACH OF RULE 506(C). + +THE COMPANY SHALL MAINTAIN DETAILED WRITTEN DOCUMENTATION OF THE VERIFICATION METHODS USED FOR EACH INVESTOR, THE INFORMATION REVIEWED, THE DETERMINATION MADE, AND THE BASIS FOR SUCH DETERMINATION. THIS DOCUMENTATION SHALL BE MAINTAINED IN THE ELECTRONIC RECORDS SYSTEM AS SPECIFIED IN SECTION 3.2. + +### Verification Process and Rejection Rights + +THE COMPANY RESERVES THE RIGHT TO REJECT ANY SUBSCRIPTION IF IT DETERMINES, IN ITS SOLE DISCRETION, THAT THE VERIFICATION PROCEDURES DO NOT ESTABLISH THAT THE INVESTOR QUALIFIES AS AN ACCREDITED INVESTOR OR FOR ANY OTHER REASON. + +ANY INFORMATION PROVIDED BY INVESTORS AS PART OF THE VERIFICATION PROCESS WILL BE TREATED AS CONFIDENTIAL AND WILL BE COLLECTED, USED, AND DISCLOSED IN ACCORDANCE WITH THE COMPANY'S PRIVACY POLICY, A COPY OF WHICH IS AVAILABLE UPON REQUEST. + +FAILURE TO PROVIDE REQUESTED VERIFICATION DOCUMENTATION IN A TIMELY MANNER MAY RESULT IN REJECTION OF A SUBSCRIPTION. + +### Continuing Compliance Requirements + +EACH INVESTOR ACKNOWLEDGES THAT: + +* THEY MUST IMMEDIATELY NOTIFY THE COMPANY OF ANY CHANGE IN THEIR ACCREDITED INVESTOR STATUS; + +* THEY MUST PERIODICALLY RECERTIFY THEIR ACCREDITED INVESTOR STATUS AS REQUESTED BY THE COMPANY, WHICH SHALL OCCUR AT LEAST ONCE EVERY 24 MONTHS; + +* THEY MUST PROVIDE UPDATED VERIFICATION DOCUMENTATION FOR EACH RECERTIFICATION; + +* THE COMPANY MAY REQUIRE UPDATED VERIFICATION DOCUMENTATION FOR SUBSEQUENT INVESTMENTS; AND + +* FAILURE TO MAINTAIN ACCREDITED INVESTOR STATUS MAY LIMIT THEIR ABILITY TO MAKE ADDITIONAL INVESTMENTS AND MAY AFFECT THEIR RIGHTS UNDER THIS AGREEMENT. + +THE COMPANY SHALL ESTABLISH AND MAINTAIN A COMPLIANCE CALENDAR TO TRACK VERIFICATION DEADLINES AND WILL PROVIDE INVESTORS WITH AT LEAST 30 DAYS' ADVANCE NOTICE OF UPCOMING RECERTIFICATION REQUIREMENTS. + +### Anti-Money Laundering Compliance + +THE INVESTOR SHOULD CHECK THE OFFICE OF FOREIGN ASSETS CONTROL (OFAC) WEBSITE AT BEFORE MAKING THE FOLLOWING REPRESENTATION: THE INVESTOR REPRESENTS THAT AMOUNTS INVESTED BY IT IN THIS OFFERING WERE NOT AND ARE NOT DIRECTLY OR INDIRECTLY DERIVED FROM ANY ACTIVITIES THAT CONTRAVENE FEDERAL, STATE OR INTERNATIONAL LAWS AND REGULATIONS, INCLUDING ANTI-MONEY LAUNDERING AND TERRORIST FINANCING LAWS AND REGULATIONS. FEDERAL REGULATIONS AND EXECUTIVE ORDERS ADMINISTERED BY OFAC PROHIBIT, AMONG OTHER THINGS, THE ENGAGEMENT IN TRANSACTIONS WITH, AND THE PROVISION OF SERVICES TO, CERTAIN FOREIGN COUNTRIES, TERRITORIES, ENTITIES, AND INDIVIDUALS. + +EACH INVESTOR MUST ALSO COMPLY WITH THE FINANCIAL CRIMES ENFORCEMENT NETWORK (FINCEN) CUSTOMER DUE DILIGENCE REQUIREMENTS FOR FINANCIAL INSTITUTIONS AND MUST PROVIDE BENEFICIAL OWNERSHIP INFORMATION WHEN APPLICABLE. + +THE COMPANY HAS IMPLEMENTED A COMPREHENSIVE ANTI-MONEY LAUNDERING (AML) COMPLIANCE PROGRAM THAT INCLUDES: + +* CUSTOMER IDENTIFICATION PROCEDURES +* RISK-BASED DUE DILIGENCE +* ONGOING MONITORING FOR SUSPICIOUS ACTIVITIES +* INTERNAL CONTROLS AND INDEPENDENT TESTING +* TRAINING FOR RELEVANT PERSONNEL +* DESIGNATION OF AN AML COMPLIANCE OFFICER + +THE COMPANY RESERVES THE RIGHT TO REQUEST ADDITIONAL INFORMATION FROM INVESTORS AT ANY TIME TO ENSURE COMPLIANCE WITH AML REQUIREMENTS. + +### State Securities Law Compliance + +IN ADDITION TO FEDERAL SECURITIES LAW REQUIREMENTS, THIS OFFERING MUST COMPLY WITH THE SECURITIES LAWS OF EACH STATE WHERE OFFERS AND SALES OCCUR. CERTAIN STATES MAY IMPOSE ADDITIONAL SUITABILITY STANDARDS OR OTHER REQUIREMENTS. THE COMPANY HAS STRUCTURED THIS OFFERING TO COMPLY WITH APPLICABLE STATE EXEMPTIONS, BUT EACH INVESTOR SHOULD CONSULT THEIR OWN LEGAL COUNSEL REGARDING COMPLIANCE WITH THE SECURITIES LAWS OF THEIR STATE OF RESIDENCE. + +THE COMPANY WILL FILE ALL REQUIRED NOTICE FILINGS AND PAY ALL REQUIRED FEES IN STATES WHERE INVESTORS RESIDE, AS REQUIRED BY APPLICABLE STATE SECURITIES LAWS. THE COMPANY MAY LIMIT OFFERINGS TO RESIDENTS OF CERTAIN STATES BASED ON THE AVAILABILITY OF EXEMPTIONS AND COMPLIANCE REQUIREMENTS. + +### Electronic Delivery and Signature Consent + +BY INVESTING IN THE COMPANY OR ANY SERIES, EACH INVESTOR CONSENTS TO ELECTRONIC DELIVERY OF ALL DOCUMENTS, NOTICES, AND COMMUNICATIONS RELATED TO THEIR INVESTMENT, AND AGREES THAT ELECTRONIC SIGNATURES AND RECORDS SHALL HAVE THE SAME LEGAL EFFECT AS PHYSICAL SIGNATURES AND RECORDS TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW. + +ELECTRONIC DELIVERY MAY INCLUDE EMAIL DELIVERY OR POSTING DOCUMENTS TO A PASSWORD-PROTECTED WEBSITE. INVESTORS WILL BE NOTIFIED VIA EMAIL WHEN DOCUMENTS ARE POSTED TO THE WEBSITE AND WILL BE PROVIDED WITH ACCESS INSTRUCTIONS. INVESTORS MAY REVOKE THEIR CONSENT TO ELECTRONIC DELIVERY AT ANY TIME BY PROVIDING WRITTEN NOTICE TO THE COMPANY, IN WHICH CASE PAPER COPIES OF DOCUMENTS WILL BE PROVIDED. HOWEVER, THE COMPANY RESERVES THE RIGHT TO CHARGE REASONABLE FEES FOR PAPER DELIVERY. + +### Integration Risk Disclosure + +INVESTORS SHOULD BE AWARE THAT THE COMPANY MAY ENGAGE IN MULTIPLE OFFERINGS ACROSS DIFFERENT SERIES THAT COULD BE DEEMED INTEGRATED FOR SECURITIES LAW PURPOSES. WHILE THE COMPANY HAS STRUCTURED ITS OFFERINGS TO AVOID INTEGRATION, IF OFFERINGS WERE DEEMED INTEGRATED, THE EXEMPTIONS RELIED UPON MAY BE UNAVAILABLE, POTENTIALLY RESULTING IN VIOLATIONS OF SECURITIES LAWS AND POTENTIAL RESCISSION RIGHTS FOR INVESTORS. THE COMPANY HAS IMPLEMENTED PROCEDURES TO MINIMIZE THIS RISK, INCLUDING MAINTAINING SEPARATE OFFERING DOCUMENTATION, ENSURING OFFERINGS HAVE DISTINCT PURPOSES, AND OBSERVING MINIMUM TIME PERIODS BETWEEN OFFERINGS WHERE APPROPRIATE. \ No newline at end of file diff --git a/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-2-1-enhancements.md b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-2-1-enhancements.md new file mode 100644 index 0000000..4697bdd --- /dev/null +++ b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-2-1-enhancements.md @@ -0,0 +1,151 @@ +## Section 2.1 - Defined Terms + +For purposes of this Agreement, the following terms shall have the meanings specified below. Any term not defined in this Article 2 shall have the meaning provided elsewhere in this Agreement or, if not defined in this Agreement, the meaning provided in the Texas Business Organizations Code. + +#### A. Corporate Structure and Governance Terms + +1. **Agreement**: This Amended and Restated Operating Agreement of Turnkey Network Systems LLC, as amended from time to time. + +2. **Board** or **Board of Directors**: The governing body which provides overall governance and strategic direction for all TSYS Group entities and operations through its various committees. + +3. **Cell Series**: A series established under the Company that may contain multiple subsidiary series and maintain its own governance structure, as more particularly described in Section 4.5. + +4. **Company**: Turnkey Network Systems LLC, a Texas Series Limited Liability Company. + +5. **Company Committee**: The governing committee of the Board specifically responsible for overseeing Turnkey Network Systems LLC and its series. The Company Committee consists of independent directors elected by the members of all series of the Company. + +6. **Consent Decision-Making**: A decision-making process where decisions are made when no member presents a reasoned and paramount objection, as more particularly described in Section 7.8.3. + +7. **Double-Linking**: A governance structure where each circle is connected to its parent circle by both an appointed Operational Leader and an elected Circle Representative, as more particularly described in Section 7.8.2. + +8. **Effective Date**: The date on which this Agreement becomes effective, as set forth in Section 1.1. + +9. **Execution Date**: The date on which this Agreement is executed by the Company through its authorized representative(s). + +10. **General Circle**: The highest governance circle in the sociocratic structure, consisting of the TSYS Group Board, as more particularly described in Section 7.9.1. + +11. **Independent Director**: A natural person serving on the Company Committee who meets all of the following criteria: + - Is not a member of any series; + - Has no direct or indirect ownership interest in any series; + - Has no Immediate Family Members who are series members; and + - Has no Material Business Relationship with any series. + +12. **Meeting**: Any duly called assembly of members, directors, or committee members, whether conducted in person, virtually, or through a hybrid approach, for the purpose of conducting Company business. + +13. **Operating Series**: A series of the Company that actively conducts business operations, as distinguished from asset-holding series or Cell series. + +14. **Primary Circle**: A governance circle directly connected to the General Circle, as more particularly described in Section 7.9.2. + +15. **Remote Participation**: Participation in any Meeting through electronic means such as video conferencing, teleconferencing, or other digital communication platforms that allow for real-time interaction. + +16. **Schedule**: Any of the lettered attachments to this Agreement (Schedule A through Schedule H) which contain additional details, specifications, or procedures referenced in the main body of this Agreement. + +17. **Series**: A separate series established under the Company pursuant to Texas Business Organizations Code § 101.601 et seq., having separate rights, powers, and duties with respect to specified property and obligations, and having separate business purposes or investment objectives. + +18. **Series Member**: A person or entity holding a membership interest in a specific series. + +19. **Series Operating Agreement**: The governing document for a specific series that details the rights, responsibilities, and relationships among the series members, the series, and the Company, adopted in accordance with Section 4.1.2. + +20. **Subcircle**: A governance circle established by and double-linked to a Primary Circle, as more particularly described in Section 7.9.3. + +21. **TDCMSP Series**: A Tools, Dies, Casts, Materials, Supplies, and (Intellectual) Property Series, as more particularly described in Section 4.4.1. + +22. **TSYS Group**: The collective reference to the Company, all of its series, and all affiliated entities under common governance of the Board. + +23. **Technology Oversight Committee**: The committee of the Board responsible for oversight of all technology services, systems, and infrastructure used by the Company and its series. + +24. **Sociocratic Governance**: A governance method that uses consent-based decision-making, circles, double-linking, and elections by consent to distribute leadership and ensure effective organizational management, as more particularly described in Section 7.8. + +25. **Circle**: A semi-autonomous, self-organizing team with a defined domain of authority and responsibility within the sociocratic governance structure, as more particularly described in Section 7.9. + +#### B. Membership and Economic Terms + +26. **Accredited Investor**: An investor who meets the definition of "accredited investor" set forth in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended. + +27. **Capital Contribution**: Any contribution of property or services made by or on behalf of a Member to the Company or a series. As provided in this Agreement, the Company and its series do not accept capital contributions that establish capital accounts, but may accept services, property, or other valuable consideration in exchange for issuance of Profit Interests. + +28. **Class A Membership Interest**: A membership interest with full voting and economic rights, as more particularly described in Section 5.2. + +29. **Class B Membership Interest**: A membership interest with economic rights only, as more particularly described in Section 5.3. + +30. **Class C Membership Interest**: A membership interest acquired through involuntary transfer with limited economic rights and no voting rights, as more particularly described in Section 5.4. + +31. **Distribution**: Any transfer of cash or other property from a series to a Series Member in respect of the Member's membership interest. + +32. **Immediate Family Members**: A person's spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, and brothers and sisters-in-law and any person (other than a tenant or employee) sharing the household of such person. + +33. **Involuntary Transfer**: Any transfer of a membership interest that occurs through court judgment, execution upon judgment, assignment in satisfaction of debt, charging order, contested divorce proceeding, bankruptcy proceeding, or any other non-voluntary mechanism, as more particularly described in Section 5.4. + +34. **Material Business Relationship**: Any commercial relationship with a series exceeding $10,000 in annual value, consulting or advisory relationship with a series, position with a series, ownership interest in a vendor to any series, financial obligation between a Director and any series, or joint venture or partnership interest with any series, as more particularly described in Section 7.4.1. + +35. **Member**: A person or entity who holds a membership interest in a series and who has been admitted to the series in accordance with the applicable Series Operating Agreement. + +36. **Membership Interest**: A Member's rights in a series, including economic rights, voting rights (if any), and rights to information. + +37. **Profit Interest**: An interest in the future profits of a series that does not include any capital interest or obligation to contribute capital, as implemented through the three-class system described in Article 5. + +38. **Securities Act**: The Securities Act of 1933, as amended. + +39. **Transfer**: Any direct or indirect sale, assignment, gift, pledge, hypothecation, mortgage, exchange, or other disposition. + +40. **Treasury Regulations**: The regulations promulgated by the United States Department of the Treasury under the Internal Revenue Code, as amended from time to time. + +41. **Fair Value**: The price at which a membership interest would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts, as determined in accordance with the valuation procedures set forth in the applicable Series Operating Agreement. + +42. **Book Value**: The value of a series' assets less its liabilities as shown on its books of account, determined in accordance with generally accepted accounting principles consistently applied. + +#### C. Operational and Technical Terms + +43. **Business Day**: Any day other than a Saturday, Sunday, or a day on which commercial banks in Austin, Texas are authorized or required by law to close. + +44. **Electronic Records**: Digital documentation maintained in electronic format, including but not limited to electronic signatures, digital certificates, blockchain records, cloud-based storage systems, and other digital formats approved by the Company Committee, as more particularly described in Section 3.2. + +45. **Fiscal Year**: The Company's fiscal year, which shall be the calendar year unless otherwise determined by the Board. + +46. **IT Services**: All information technology services provided exclusively by Known Element Enterprises (series) LLC, including but not limited to network infrastructure, software systems, data storage and management, security services, technical support, and infrastructure management, as more particularly described in Schedule A to this Agreement. + +47. **Known Element Enterprises** or **KNEL**: Turnkey Network Systems LLC - Known Element Enterprises (series) LLC, the designated provider of all IT services for TSYS Group. + +48. **SLA** or **Service Level Agreement**: A documented agreement between a service provider and a customer that defines the expected level of service, performance metrics, and responsibilities. + +49. **The Campus Trading Company** or **TCTC**: Turnkey Network Systems LLC - The Campus Trading Company (series) LLC, the designated provider of all transaction and treasury services for TSYS Group. + +50. **Transaction and Treasury Services**: All financial transaction and treasury services provided exclusively by The Campus Trading Company (series) LLC, including but not limited to payment processing, treasury management, financial settlements, banking relationships, cash management, and financial controls, as more particularly described in Schedule B to this Agreement. + +51. **Cybersecurity**: The practice of protecting systems, networks, and programs from digital attacks, unauthorized access, and data breaches through the implementation of technological solutions, policies, and procedures. + +52. **Data Protection**: Safeguarding important information from corruption, compromise, or loss through the implementation of backup systems, access controls, encryption, and other security measures. + +53. **Disaster Recovery Plan**: A documented process for recovering and protecting IT infrastructure in the event of a disaster, as required to be maintained by each service provider under Section 3.1.3(3). + +#### D. Entity-Specific Terms + +54. **Redwood Family Office Group** or **REDWFO**: Turnkey Network Systems LLC - Redwood Family Office Group (Cell) (series) LLC, the multi-stakeholder family office for Company stakeholders, as more particularly described in Section 4.6.3.2. + +55. **Redwood Springs Capital Partners Group** or **RWSCP**: Turnkey Network Systems LLC - Redwood Springs Capital Partners Group (Cell) (series) LLC, the exclusive capital raising entity for all series, as more particularly described in Section 3.3. + +56. **Wyble Family Office Group** or **WFO Group**: Turnkey Network Systems LLC - Wyble Family Office Group (Cell) (series) LLC, the private family office LLC of the Company founders, as more particularly described in Section 4.6.3.1. + +57. **Cell Board**: The governing body of a Cell Series, established in accordance with the applicable Cell Series Operating Agreement. + +58. **ManagementCo**: A series established within a Cell Series specifically for management and operation of the Cell Series, as identified in Section 4.6.1. + +59. **ReachableCEOEnterprises**: Turnkey Network Systems LLC - Wyble Family Office Group (Cell) - ReachableCEOEnterprises (series) LLC, as identified in Section 4.6.1. + +#### E. Legal and Compliance Terms + +60. **Certificate of Formation**: The Certificate of Formation of the Company filed with the Texas Secretary of State on [INSERT DATE], as amended from time to time. + +61. **Indemnified Person**: A person entitled to indemnification under Section 10.7. + +62. **TBOC**: The Texas Business Organizations Code, as amended from time to time. + +63. **Tax Matters Representative**: The person designated to represent the Company or a series in tax matters, as described in the applicable Series Operating Agreement. + +64. **Compliance Program**: The set of policies, procedures, and controls implemented by the Company to ensure adherence to applicable laws, regulations, and internal standards. + +65. **Fiduciary Duty**: The legal obligation of one party to act in the best interest of another, particularly applicable to the duties of loyalty and care owed by directors, officers, and managers to the Company and its series. + +66. **Regulatory Filing**: Any document or information required to be submitted to a governmental authority to comply with applicable laws or regulations. + +67. **Risk Management Framework**: The structured approach to identifying, assessing, and prioritizing risks to the Company and its series, and the coordinated application of resources to minimize, monitor, and control the probability or impact of adverse events. \ No newline at end of file diff --git a/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-3-1-enhancements.md b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-3-1-enhancements.md new file mode 100644 index 0000000..2641e90 --- /dev/null +++ b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-3-1-enhancements.md @@ -0,0 +1,1047 @@ +### Section 3.1 - Mandatory Service Provider Framework + +#### Section 3.1.1 - Designated Internal Service Providers + +1. **Exclusive Service Designation**: The Company hereby designates the following series as exclusive internal shared service providers for all TSYS Group entities: + + a. **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. + + b. **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. + +2. **Service Provider Independence**: Each designated service provider shall maintain: + + a. Operational independence regarding service delivery methodologies + + b. Technology selection autonomy within Board-approved parameters + + c. Resource allocation flexibility to meet established service levels + + d. Staffing and personnel management authority + + e. Implementation discretion for approved service initiatives + +3. **Term of Designation**: These service provider designations shall: + + a. Remain in effect for the duration of this Agreement + + b. Be reviewed by the Board at least every three (3) years + + c. Be subject to revocation only under the extreme failure provisions of Section 3.1.3(2)(d) + + d. Be transferable to successor entities only with Board approval + +4. **Regulatory Compliance Obligations**: Each designated service provider shall: + + a. Maintain all licenses, certifications, and registrations required by applicable law for their services + + b. Implement and maintain compliance programs appropriate to their service offerings + + c. Conduct annual compliance risk assessments + + d. Provide quarterly compliance reports to the Technology Oversight Committee + + e. Promptly notify the Company Committee of any regulatory inquiries, investigations, or compliance issues + + f. Maintain documentation of compliance with industry standards and regulations + + g. Conduct annual compliance training for all service provider personnel + +#### Section 3.1.2 - Mandatory Use Requirement + +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: + + 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 + + v. Include remediation timelines for service disruptions + + vi. Specify reporting requirements and cadence + + vii. Be reviewed and updated at least annually + + viii. Include security standards and compliance requirements + + ix. Establish escalation procedures for service issues + + x. Define problem severity classification and associated response times + + xi. Include customer satisfaction measurement requirements + + xii. Establish change management procedures and notice requirements + + xiii. Include data protection and privacy requirements + + xiv. Specify disaster recovery and business continuity standards + + xv. Define incident response protocols and timeframes + + 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 + + iii. Transparent cost-accounting as described in Section 4.6.5 + + iv. Quarterly pricing reviews by the Audit and Finance Committee + + v. Documentation of all cost allocation methodologies + + vi. Publication of rate cards to all series members + + vii. Advance notice of at least sixty (60) days for any rate increases + + viii. Cap on annual price increases tied to relevant industry indexes + + ix. Volume discounting mechanisms for large series + + x. Regular market comparison reporting to all series + +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 + + c. Issue formal findings within 30 days of any compliance investigation + + d. Recommend appropriate remedial actions to the Board + + e. Maintain a centralized compliance tracking system + + f. Publish anonymized compliance reports to all series + + g. Establish escalating penalties for repeated non-compliance + + h. Implement a confidential reporting system for compliance concerns + + i. Provide compliance training resources to all series + + j. Conduct annual compliance audits of all series and service providers + +3. **Service Provider Dispute Resolution**: Disputes between service providers and series regarding service delivery shall be resolved through: + + a. Initial attempt at resolution between operational leaders of the service provider and series + + b. If unresolved within 15 days, escalation to the Technology Oversight Committee + + c. Formal mediation process as outlined in Schedule H if not resolved within 30 days + + d. Final binding decision by the Company Committee if mediation is unsuccessful + + e. Documentation of all disputes and resolutions in the electronic records system + + f. Quarterly dispute trends analysis and reporting to the Board + + g. Implementation of dispute reduction strategies based on trend analysis + + h. Establishment of proactive relationship management protocols + + i. Joint service improvement planning between service providers and series + + j. Emergency escalation pathway for critical service disputes + +4. **Service Level Agreement Governance**: + + a. SLAs shall be: + + i. Developed with input from all series + + ii. Reviewed and approved by the Technology Oversight Committee + + iii. Published in the electronic records system + + iv. Monitored through automated performance measurement systems + + v. Subject to quarterly performance reviews + + b. SLA modifications shall: + + i. Require Technology Oversight Committee approval + + ii. Include a comment period for series feedback + + iii. Provide at least 60 days' notice before implementation + + iv. Include transition support for material changes + +#### Section 3.1.3 - Service Provider Failure Remedies + +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 + + b. Experiences a catastrophic service disruption lasting more than: + + i. 48 hours for non-critical services + + ii. 24 hours for important services + + iii. 4 hours for mission-critical services as designated in the applicable SLA + + c. Commits a material breach of its SLA obligations that remains uncured for 30 days after written notice + + d. Receives substantiated service quality complaints from more than 50% of its series customers within any six-month period + + e. Experiences a material security or data breach that compromises sensitive information or critical infrastructure + + f. Fails to implement required security patches or updates within timeframes specified in the SLA + + g. Demonstrates a pattern of repeated service deficiencies that, while individually not constituting failures, collectively indicate systemic issues + + h. Violates applicable regulatory requirements resulting in material penalties or compliance issues + + i. Fails to maintain required certifications or qualifications + + j. Loses key personnel without adequate succession planning and replacement + +2. **Remedies for Service Provider Failure**: Upon determination of a service provider failure, the following remedies shall be available: + + a. **Initial Remediation Period**: The service provider shall be granted a 60-day remediation period to: + + i. Correct performance deficiencies + + ii. Restore service levels to required standards + + iii. Submit a detailed improvement plan to the Technology Oversight Committee + + iv. Implement enhanced monitoring and reporting + + v. Engage third-party expertise if necessary + + vi. Conduct root cause analysis of failures + + vii. Implement preventative measures + + viii. Establish interim service arrangements if necessary + + ix. Provide regular progress reports + + x. Compensate affected series according to SLA terms + + b. **Enhanced Oversight**: During the remediation period, the service provider shall be subject to: + + i. Weekly performance reviews by the Technology Oversight Committee + + ii. Implementation of additional controls and monitoring + + iii. Potential leadership changes as recommended by the Board + + iv. Requirement to provide daily status reports to affected series + + v. Temporary management augmentation with qualified personnel + + vi. Independent third-party oversight of remediation efforts + + vii. Additional resource allocation requirements + + viii. Temporary suspension of new service initiatives + + ix. Mandatory executive briefings to the Board + + x. Implementation of emergency escalation procedures + + c. **Failure to Remediate**: If the service provider fails to remediate within the 60-day period, the Technology Oversight Committee may: + + i. Grant a single 30-day extension if substantial progress is evident + + ii. Implement a service provider replacement plan + + iii. Authorize temporary external service providers for affected services + + iv. Recommend restructuring of the service provider to the Board + + v. Appoint temporary executive leadership + + vi. Accelerate training of backup personnel + + vii. Implement contingency service arrangements + + viii. Adjust pricing to reflect reduced service levels + + ix. Impose financial penalties as specified in the SLA + + x. Develop long-term service provider transition plan + + d. **Extreme Failure**: In cases of extreme failure involving critical systems, the Board may: + + i. Immediately authorize use of external service providers + + ii. Remove and replace service provider leadership + + iii. Implement emergency continuity plans + + iv. Take any other actions necessary to protect the TSYS Group + + v. Establish an emergency governance committee + + vi. Suspend normal approval processes for emergency actions + + vii. Allocate emergency funding for service restoration + + viii. Engage specialized crisis management expertise + + ix. Implement rapid knowledge transfer protocols + + x. Authorize extraordinary measures to protect data and assets + +3. **Service Continuity Protection**: To ensure continuity of critical services: + + a. Each service provider shall maintain: + + i. Comprehensive business continuity and disaster recovery plans + + ii. Documented systems and operational procedures + + iii. Knowledge transfer protocols for critical functions + + iv. Cross-training programs for essential personnel + + v. Backup systems and redundancies for critical infrastructure + + vi. Geographically distributed infrastructure to mitigate regional disruptions + + vii. Regularly tested incident response procedures + + viii. Alternative service delivery methods for emergency situations + + ix. Secure offline backups of critical data and configurations + + x. Emergency communication protocols and systems + + b. The Technology Oversight Committee shall: + + i. Conduct annual disaster recovery testing + + ii. Maintain relationships with qualified backup service providers + + iii. Regularly review and update continuity plans + + iv. Ensure proper escrow of critical system information + + v. Validate recovery time and point objectives + + vi. Coordinate cross-series business continuity planning + + vii. Establish emergency decision-making protocols + + viii. Maintain emergency contact information for all key personnel + + ix. Implement crisis management training for leadership + + x. Develop communications templates for various disruption scenarios + +4. **Security Incident Response Protocol**: + + a. Upon detection of any security incident, service providers shall: + + i. Immediately activate the incident response team + + ii. Contain and mitigate the incident according to established procedures + + iii. Notify the Technology Oversight Committee within timeframes specified in the SLA + + iv. Document all aspects of the incident and response + + v. Conduct forensic analysis to determine scope and impact + + vi. Implement required remediation measures + + vii. Provide detailed post-incident reports + + viii. Update security controls based on lessons learned + + ix. Conduct additional security testing as needed + + x. Comply with all regulatory notification requirements + + b. The Technology Oversight Committee shall: + + i. Review all security incidents and response activities + + ii. Ensure appropriate remediation measures are implemented + + iii. Determine if the incident constitutes a service provider failure + + iv. Coordinate communications regarding the incident + + v. Oversee regulatory compliance related to the incident + +#### Section 3.1.4 - Innovation Exception Process + +1. **Exception Basis**: A series may request an exception to the mandatory use requirement only on the grounds of: + + a. Specialized technical requirements that cannot be met by the internal service provider + + b. Demonstrable competitive advantage requiring specialized external solutions + + c. Regulatory or compliance requirements that necessitate specialized external providers + + d. Client or customer contractual requirements that mandate specific external solutions + + e. Significant cost savings (exceeding 30%) that can be achieved through an external provider while maintaining equivalent security and quality standards + + f. Emerging technology that provides substantial business advantage not available through internal providers + + g. Temporary capacity limitations of internal providers during high-growth periods + + h. Specialized expertise requirements for limited duration projects + + i. Unique geographical requirements not efficiently served by internal providers + + j. Legacy systems integration requirements that internal providers cannot efficiently support + +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 including due diligence materials + + v. Security and compliance assessment + + vi. Data integration and protection plan + + vii. Implementation timeline + + viii. Cost-benefit analysis comparing the external solution to internal alternatives + + ix. Risk assessment for the proposed exception + + x. Transition plan to internal providers if applicable + + xi. Metrics for measuring success of the exception + + xii. Governance controls for the external provider relationship + + xiii. Detailed vendor security assessment including SOC 2 reports or equivalent + + xiv. Data processing requirements and compliance documentation + + xv. Exit strategy and data retrieval procedures + + c. The Technology Oversight Committee must respond within 45 days for standard requests and within 15 days for requests designated as time-sensitive with appropriate justification + + d. The Technology Oversight Committee must provide written justification for any denial + + e. Appeals of denied exception requests may be made to the Company Committee within 15 days of denial + + f. The Company Committee shall render a final decision within 30 days of appeal receipt + + g. Denials that substantially impact business operations may be further appealed to the Board in extreme circumstances + + h. The Board shall establish an expedited review process for critical exception appeals + + i. All decisions shall be documented in the electronic records system + + j. Precedential decisions shall be published as guidance for future requests + +3. **Exception Implementation**: + + a. If approved, the exception shall: + + i. Be documented in the electronic records system + + ii. Include specific scope and duration limitations + + iii. Require quarterly reviews and renewal evaluation + + iv. Include a transition plan for eventual migration to internal services if feasible + + v. Include compliance monitoring to ensure continued adherence to security and integration requirements + + vi. Specify data security and access controls + + vii. Establish service level requirements for the external provider + + viii. Define clear exit criteria and termination procedures + + ix. Establish integration requirements with existing systems + + x. Include knowledge transfer provisions to internal providers + + xi. Specify contract provisions required for external providers + + xii. Include mandatory security provisions for vendor contracts + + xiii. Require right-to-audit clauses for all external provider agreements + + xiv. Include business continuity requirements for external providers + + xv. Specify data ownership and return provisions upon termination + +4. **Exception Renewal and Termination**: + + a. All exceptions shall have a defined term, not to exceed one (1) year unless specifically approved by the Board + + b. Renewal requests must be submitted at least 60 days prior to exception expiration + + c. Renewal requests shall include: + + i. Performance assessment of the external provider + + ii. Continued justification for the exception + + iii. Analysis of any changes in internal provider capabilities + + iv. Updated security and compliance assessment + + v. Documentation of ongoing business necessity + + vi. Evaluation of transition feasibility to internal providers + + vii. Updated cost-benefit analysis + + viii. Review of security and compliance incidents + + d. Exceptions may be terminated prior to expiration if: + + i. The external provider fails to meet service requirements + + ii. Internal provider capabilities evolve to meet the requirement + + iii. The business need for the exception no longer exists + + iv. Security or compliance concerns arise + + v. The series fails to comply with exception conditions + + vi. The Board or Company Committee determines termination is in the best interest of the Company + + vii. The external provider experiences a material security breach + + viii. Regulatory requirements necessitate termination + +5. **Exception Registry and Oversight**: + + a. The Technology Oversight Committee shall maintain a registry of all exceptions that includes: + + i. Exception scope and justification + + ii. Approval date and expiration + + iii. External provider details + + iv. Performance metrics + + v. Review history + + vi. Renewal status + + vii. Documented exceptions to standard requirements + + viii. Security assessment status + + ix. Integration documentation + + x. Compliance verification + + b. The Company Committee shall: + + i. Receive quarterly reports on all exceptions + + ii. Review any exceptions with security or compliance concerns + + iii. Provide oversight for exception volume and patterns + + iv. Identify trends that may indicate internal service provider gaps + + v. Review strategic implications of exceptions + +#### Section 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 + + h. Maintain appropriate cybersecurity and compliance certifications + + i. Establish disaster recovery and business continuity plans + + j. Conduct quarterly technology and service reviews + + k. Provide monthly service performance metrics to all series + + l. Undergo annual security audits by qualified third-party firms + + m. Maintain compliance with all relevant industry standards and regulations + + n. Provide regular training to personnel on security and operational best practices + + o. Establish and maintain risk management frameworks appropriate to service offerings + + p. Implement formal change management processes for service modifications + + q. Document all service procedures and maintain operational manuals + + r. Establish quality control procedures with measurable outcomes + + s. Participate in industry benchmarking and best practice forums + + t. Maintain appropriate insurance coverage for service operations + + u. Implement privacy and data protection measures aligned with global best practices + + v. Maintain environmental sustainability practices for services and infrastructure + + w. Develop and implement service accessibility standards + + x. Engage in technology forecasting and future-proofing strategies + + y. Maintain service knowledge bases for user self-service + +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 + + h. Compliance standards and monitoring + + i. Cybersecurity requirements and testing + + j. Other operational parameters as needed + + k. Capital investment approval thresholds and procedures + + l. Strategic technology alignment with Company objectives + + m. Innovation funding and initiatives + + n. Risk management standards and assessment methodologies + + o. Succession planning for critical service leadership positions + + p. Information security governance framework + + q. User experience standards and accessibility requirements + + r. Ethical technology use policies + + s. Data governance and management policies + + t. Technology procurement standards + +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 + + d. Align roadmap priorities with overall TSYS Group strategic objectives + + e. Include specific technology innovation initiatives + + f. Establish clear timelines for major service enhancements + + g. Document resource allocation for strategic initiatives + + h. Include contingency planning for emerging technologies and market shifts + + i. Identify potential security and regulatory challenges + + j. Document required competency development for service evolution + + k. Establish metrics for measuring roadmap progress + + l. Identify capacity planning requirements for future growth + + m. Include technology retirement planning for legacy systems + + n. Document integration strategies with complementary technologies + + o. Align with industry standards and best practices + + p. Address environmental sustainability considerations + + q. Include accessibility enhancement initiatives + + r. Document risk mitigation strategies for roadmap elements + + s. Identify strategic partnerships required for implementation + + t. Include total cost of ownership projections + +4. **User Experience and Feedback System**: Each service provider shall: + + a. Implement a structured feedback system accessible to all series + + b. Conduct quarterly user experience reviews + + c. Maintain a transparent issue tracking system + + d. Report on issue resolution metrics monthly + + e. Incorporate user feedback into service improvements + + f. Establish a user advisory group with representation from different series + + g. Maintain a knowledge base of common issues and solutions + + h. Publish service disruption post-mortems and remediation plans + + i. Implement a suggestion system for service improvements + + j. Develop service usage analytics to identify improvement opportunities + + k. Establish formal user acceptance testing for major changes + + l. Conduct annual service satisfaction benchmarking + + m. Implement training programs to optimize user adoption + + n. Create user communities for knowledge sharing and collaboration + + o. Recognize and reward user contributions to service improvement + + p. Develop user experience standards and guidelines + + q. Implement accessibility testing for all services + + r. Establish service personalization capabilities where appropriate + + s. Conduct regular usability testing + + t. Implement user journey mapping for key service interactions + +#### Section 3.1.6 - Service Quality Management + +1. **Quality Assurance Framework**: Each service provider shall implement: + + a. Formal quality management systems with defined processes + + b. Regular internal audits of service quality + + c. Root cause analysis for service incidents + + d. Preventative action plans for recurring issues + + e. Service performance trend analysis and reporting + + f. Continuous service monitoring and alerting systems + + g. Regular process improvement reviews + + h. Customer impact assessment for all service changes + + i. Post-implementation reviews of major service changes + + j. Quality metrics aligned with business outcomes + + k. Quality control gates throughout service delivery processes + + l. Independent quality assurance function within the organization + + m. Regular assessment against industry frameworks such as ITIL, COBIT, and ISO standards + + n. Automated quality control mechanisms where applicable + + o. Defect tracking and remediation processes + +2. **Continuous Improvement Requirements**: + + a. Each service provider shall establish annual improvement goals for: + + i. Service availability and reliability + + ii. Response and resolution times + + iii. Customer satisfaction ratings + + iv. Cost efficiency metrics + + v. Security posture and compliance + + vi. Operational efficiency + + vii. Technical debt reduction + + viii. Environmental sustainability + + ix. Accessibility compliance + + x. Innovation implementation + + b. Progress toward improvement goals shall be: + + i. Measured and reported quarterly + + ii. Reviewed by the Technology Oversight Committee + + iii. Incorporated into service provider performance evaluations + + iv. Tied to leadership compensation where applicable + + v. Communicated transparently to all series + + vi. Analyzed for patterns and trends + + vii. Used to inform subsequent improvement objectives + + viii. Benchmarked against industry standards + + ix. Documented with clear methodologies + + x. Subject to independent verification + +3. **Service Provider Collaboration**: Service providers shall: + + a. Establish formal coordination mechanisms between providers + + b. Conduct joint planning for interdependent services + + c. Implement integrated incident management for cross-service issues + + d. Share expertise and resources for mutual improvement + + e. Develop and maintain integrated service catalogs + + f. Establish clear handoff procedures for cross-service processes + + g. Conduct joint disaster recovery exercises + + h. Develop integrated security frameworks + + i. Implement compatible technology standards + + j. Coordinate service maintenance windows + + k. Establish joint innovation initiatives + + l. Harmonize user experience across service boundaries + + m. Implement compatible data governance frameworks + + n. Coordinate capacity planning activities + + o. Share customer feedback and improvement opportunities + +4. **Performance Measurement System**: + + a. Each service provider shall implement a comprehensive performance measurement system that: + + i. Collects and analyzes quantitative and qualitative performance data + + ii. Includes automated performance dashboards accessible to all series + + iii. Tracks performance against SLA commitments + + iv. Identifies trends and patterns in service performance + + v. Provides early warning of potential service issues + + vi. Includes customer satisfaction measurement + + vii. Monitors key technical and operational metrics + + viii. Compares performance against industry benchmarks + + ix. Supports continuous improvement initiatives + + x. Informs strategic planning decisions + + b. Performance metrics shall include: + + i. System availability and reliability + + ii. Response and resolution times + + iii. Transaction processing performance + + iv. Security metrics + + v. Cost efficiency + + vi. Customer satisfaction + + vii. Process efficiency + + viii. Innovation implementation + + ix. Technical debt reduction + + x. Environmental sustainability + +#### Section 3.1.7 - Technology Evolution and Innovation + +1. **Innovation Requirements**: To maintain competitive service offerings, service providers shall: + + a. Allocate a minimum of 10% of their resources to innovation and new technology evaluation + + b. Establish formal mechanisms for evaluating emerging technologies + + c. Develop proof-of-concept processes for promising innovations + + d. Create safe experimental environments for testing new technologies + + e. Partner with series to pilot innovative solutions + + f. Report quarterly on innovation initiatives and outcomes + + g. Participate in industry forums and research communities + + h. Establish relationships with technology research organizations + + i. Develop internal innovation incentive programs + + j. Create processes for scaling successful innovations + + k. Maintain an innovation pipeline with short, medium, and long-term initiatives + + l. Establish innovation governance processes + + m. Implement formal ideation and evaluation methodologies + + n. Develop metrics for measuring innovation effectiveness + + o. Establish intellectual property protection for innovations + +2. **Technology Currency**: Service providers shall: + + a. Maintain all technologies within manufacturer-supported versions + + b. Establish and follow formal technology lifecycle policies + + c. Provide 12-month advance notice for significant technology transitions + + d. Maintain compatibility with industry-standard technologies + + e. Ensure backward compatibility when feasible + + f. Provide migration support for technology transitions + + g. Document technology roadmaps with sunset dates + + h. Assess and mitigate risks associated with aging technologies + + i. Balance innovation with stability and security requirements + + j. Provide training for series personnel on new technologies + + k. Establish formal technology debt tracking and remediation processes + + l. Implement architectural review processes for technology decisions + + m. Document technology standards and compliance requirements + + n. Maintain compatibility testing environments + + o. Develop clear upgrade paths for all major systems + +3. **Market Alignment**: The Technology Oversight Committee shall: + + a. Conduct annual assessments of market-competitive technologies + + b. Benchmark internal services against industry leaders + + c. Identify service gaps and deficiencies + + d. Recommend strategic technology investments + + e. Monitor industry trends and disruptions + + f. Assess competitive threats from new technologies + + g. Evaluate acquisition opportunities for technology advancement + + h. Define technology standards aligned with industry direction + + i. Forecast future technology requirements + + j. Report significant findings to the Board + + k. Develop strategies to address identified gaps + + l. Coordinate market research across service providers + + m. Identify cross-service technology opportunities + + n. Assess regulatory and compliance technology requirements + + o. Evaluate technology sustainability and environmental impact + +4. **Emerging Technology Adoption Framework**: + + a. The Technology Oversight Committee shall establish a framework for evaluating and adopting emerging technologies that includes: + + i. Formal evaluation criteria + + ii. Risk assessment methodology + + iii. Return on investment analysis + + iv. Pilot program guidelines + + v. Success metrics + + vi. Security assessment requirements + + vii. Compliance review process + + viii. Integration evaluation + + ix. Scalability assessment + + x. User impact analysis + + xi. Total cost of ownership projection + + xii. Support and maintenance requirements + + xiii. Skill development needs + + xiv. Competitive advantage assessment + + xv. Implementation planning requirements + + b. Emerging technology adoption shall follow a staged approach: + + i. Initial assessment and research + + ii. Proof of concept in isolated environment + + iii. Limited pilot with selected users + + iv. Controlled production implementation + + v. Full deployment with appropriate controls + + vi. Continuous evaluation and optimization \ No newline at end of file diff --git a/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-4-1-enhancements.md b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-4-1-enhancements.md new file mode 100644 index 0000000..325680d --- /dev/null +++ b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-4-1-enhancements.md @@ -0,0 +1,457 @@ +### Section 4.1 - Series Creation + +#### 4.1.1 - Series Establishment Requirements + +1. **Authorization Requirements**: New series may be established only upon: + + * Submission of a formal series establishment proposal to the Company Committee + + * Approval by a majority vote of the Company Committee + + * Filing of required notices with the Texas Secretary of State + + * Execution of a series operating agreement + + * Compliance with all requirements set forth in this Section 4.1 + + * Completion of a pre-establishment compliance review by the Compliance and Ethics Committee + + * Verification that the proposed series will not create conflicts with existing series + + * Confirmation of available resources to support the new series + + * Certification that the series will comply with all mandatory service provider requirements + + * Completion of required regulatory filings in all applicable jurisdictions + +2. **Series Establishment Proposal**: Any proposal for establishing a new series must include: + + * Proposed business purpose and scope of operations + + * Three-year business plan with financial projections + + * Management structure and key personnel + + * Initial members and proposed membership interests + + * Draft series operating agreement + + * Risk assessment and mitigation strategy + + * Compliance plan for all mandatory requirements + + * Integration strategy with existing TSYS Group entities + + * Detailed financial model with capitalization requirements + + * Market analysis and competitive landscape assessment + + * Exit strategy or long-term sustainability plan + + * Technology requirements and integration plan + + * Regulatory analysis and compliance strategy + + * Intellectual property strategy + + * Staffing plan and organizational structure + + * Service provider integration plan + + * Capital raising strategy and timeline + + * Performance metrics and success criteria + + * Governance structure and decision-making framework + + * Potential risks and mitigation strategies + + * Environmental, Social, and Governance (ESG) considerations + +3. **Series Documentation Requirements**: Each series must maintain: + + * A series operating agreement executed by all initial members and the Company Committee + + * A certificate of series filing with the Texas Secretary of State + + * A unique federal Employer Identification Number (EIN) + + * Separate books and records as required by Section 3.2 + + * All registrations, licenses, and permits required for its business operations + + * Compliance documentation for securities law requirements + + * Insurance coverage appropriate to the series' activities + + * Service level agreements with mandatory service providers + + * Business continuity and disaster recovery plans + + * Cybersecurity and data protection policies + + * Conflict of interest policies and disclosures + + * Code of ethics and conduct + + * Risk management framework and controls + + * Personnel policies and procedures + + * Tax compliance documentation + + * Banking and financial account documentation + +4. **Approval Process Timeline**: + + * The Company Committee shall review series establishment proposals within 45 days of submission + + * Requestors shall receive written notification of approval or denial within 15 days of the Committee's decision + + * If denied, the notification shall include the specific reasons for denial and any remedial actions that could be taken + + * Approved series must complete all required documentation within 90 days of approval + + * The series must commence operations within 180 days of approval unless an extension is granted + + * The Company Committee may approve proposals conditionally, subject to specific modifications or additional requirements + + * Appeals of denied proposals may be submitted to the Board within 30 days of denial + + * The Board shall review appeals within 60 days and its decision shall be final + +5. **Post-Approval Requirements**: + + * New series shall undergo a 90-day implementation review + + * Quarterly performance reviews shall be conducted for the first year of operations + + * Annual compliance certification shall be required + + * Implementation of all required policies and procedures within 60 days of establishment + + * Completion of all required training for series personnel + + * Integration with service providers within timeframes specified in the approval + + * Submission of quarterly progress reports against business plan for the first year + + * Participation in Company orientation programs + +#### 4.1.2 - Series Operating Agreement Requirements + +1. **Required Elements**: Each series operating agreement shall include provisions addressing: + + * Business purpose and operational scope + + * Membership structure and classes + + * Profit interest allocation and distribution + + * Governance structure and decision-making processes + + * Management rights and responsibilities + + * Transfer restrictions + + * Dispute resolution procedures + + * Term and dissolution provisions + + * Compliance with all mandatory Company requirements + + * Capital call provisions and procedures + + * Valuation methodologies + + * Information rights + + * Non-competition and confidentiality provisions + + * Required adherence to Company policies + + * Indemnification provisions + + * Insurance requirements + + * Intellectual property rights and protections + + * Amendment procedures + + * Tax matters and allocations + + * Regulatory compliance commitments + + * Record-keeping requirements + + * Reporting obligations to the Company + + * Service provider relationships + + * Member withdrawal and removal provisions + + * Capital account treatment (consistent with profit interest structure) + + * Succession planning requirements + + * Risk management framework + + * Ethics and conduct standards + +2. **Series Operating Agreement Flexibility**: Within the parameters established by this Agreement, series shall have broad latitude to establish: + + * Custom governance structures appropriate to their business needs + + * Specialized profit interest allocation methodologies + + * Unique membership qualifications and admission procedures + + * Industry-specific operational procedures and standards + + * Tailored distribution structures and timing + + * Other provisions specific to their business purposes or investment objectives + + * Specialized committee structures + + * Industry-appropriate risk management frameworks + + * Customized performance metrics and incentives + + * Specific succession planning mechanisms + + * Tailored dispute resolution procedures + + * Industry-specific compliance programs + + * Specialized intellectual property protection strategies + + * Customized member qualification requirements + + * Tailored reporting frameworks for members + +3. **Series Operating Agreement Limitations**: No series operating agreement may: + + * Override or conflict with any provision of this Agreement + + * Alter the required service provider relationships established in Article 3 + + * Modify the electronic records requirements established in Section 3.2 + + * Change the capital raising requirements established in Section 3.3 + + * Eliminate or reduce Company-level compliance measures + + * Violate any securities laws or regulations + + * Attempt to limit the isolation of series as provided in Section 4.2 + + * Eliminate fiduciary duties to the extent non-waivable under Texas law + + * Create joint liability among series + + * Establish capital accounts or capital interests + + * Create membership classes other than those specified in Article 5 + + * Circumvent the governance structure established in Article 7 + + * Modify the dispute resolution procedures in Schedule H + + * Override tax classification provisions + + * Restrict required information access by the Company Committee + + * Establish provisions that would jeopardize securities law exemptions + + * Create membership interests that are inconsistent with the profit interest structure + + * Attempt to opt out of mandatory governance requirements + + * Establish indemnification provisions broader than permitted by law + + * Create any cross-series guarantees or credit support + +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. + +5. **Standard Template Requirements**: Each series operating agreement shall: + + * Be based on standard templates approved by the Company Committee + + * Maintain consistent formatting and section numbering across all series + + * Include required legal disclosures and notices + + * Be reviewed by legal counsel prior to adoption + + * Be properly executed using the electronic signature system + + * Include all required schedules and exhibits + + * Contain appropriate securities law disclosures + + * Include mandatory risk factor disclosures + + * Incorporate required tax provisions + + * Implement standard governance provisions + + * Contain mandatory service provider provisions + + * Include standard compliance language + + * Incorporate required dispute resolution procedures + + * Maintain consistent definitions aligned with this Agreement + + * Include appropriate cross-references to this Agreement + +6. **Legal Review and Compliance**: + + * Each series operating agreement must undergo legal review by: + + * Company counsel for compliance with this Agreement + + * Securities counsel for compliance with applicable securities laws + + * Tax counsel for proper tax treatment + + * Regulatory counsel if the series operates in regulated industries + + * Written certification of legal review must be maintained in the electronic records system + + * Any non-standard provisions must be specifically identified and approved by the Company Committee + + * Regular compliance reviews must be conducted to ensure continued alignment with changing laws and regulations + + * Annual certification of compliance with this Agreement must be provided + +#### 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: + + * The amendment does not create a conflict with this Agreement + + * Notice of the amendment is provided to the Company Committee within 10 business days + + * The amendment is properly documented in the electronic records system + + * The amendment complies with all applicable laws and regulations + + * Material amendments receive legal review prior to adoption + + * The amendment is formally approved according to the procedures in the series operating agreement + + * All series members receive notice of the amendment + + * The amendment is properly executed using the electronic signature system + + * The amendment is implemented consistently with all Company policies + + * The amendment does not materially alter the rights of existing members without their consent + +2. **Series Purpose Modifications**: Any material change to a series' business purpose or operational scope requires: + + * Prior written approval of the Company Committee + + * Amended filings with the Texas Secretary of State if required + + * Compliance with any applicable regulatory requirements + + * Updated business plan and risk assessment + + * Notification to all series members + + * Legal review for continued compliance with securities laws + + * Assessment of tax implications + + * Evaluation of impact on existing contracts and relationships + + * Analysis of potential conflicts with other series + + * Re-evaluation of insurance and risk management needs + + * Potential re-verification of investor qualifications + + * Review of capital raising strategy alignment + + * Assessment of service provider capability alignment + + * Evaluation of governance structure appropriateness + + * Review of required licenses and permits + +3. **Amendment Approval Process**: + + * Proposed amendments must be submitted in writing + + * Required approvals must be documented in the electronic records system + + * Company Committee review shall be completed within 30 days + + * Rejected amendments may be revised and resubmitted + + * Approved amendments become effective upon execution by all required parties + + * Material amendments must be distributed to all members + + * Securities law implications must be evaluated for all amendments + + * Tax implications must be analyzed by qualified tax advisors + + * Regulatory filing requirements must be assessed + + * Implementation plan must be developed for significant amendments + + * Documentation of amendment consideration process must be maintained + +4. **Emergency Amendments**: In case of regulatory changes or other urgent circumstances: + + * The Company Committee may implement temporary amendments + + * Temporary amendments must be ratified within 90 days + + * Series members must be promptly notified of emergency amendments + + * Documentation must include justification for the emergency action + + * The temporary nature of the amendment must be clearly indicated + + * A plan for permanent resolution must be developed + + * Emergency amendments must be specifically identified in the electronic records system + + * Regular amendments must replace emergency amendments within the specified timeframe + + * Emergency amendment authority must be narrowly construed + + * The Board must be notified of all emergency amendments within 5 business days + +5. **Amendment Documentation Requirements**: + + * All amendments must be maintained in the electronic records system + + * Version control must be maintained for all operating agreements + + * Comparison documents showing changes must be created + + * Executive summaries of material changes must be provided to members + + * Approval documentation must be maintained + + * Legal review documentation must be preserved + + * Implementation records must be maintained + + * Member notifications must be documented + + * Regulatory filings must be stored in the electronic records system + + * Tax analysis documentation must be preserved + + * Compliance verification must be documented + + * Record of member votes or consents must be maintained + + * Certification of compliance with amendment procedures must be created \ No newline at end of file diff --git a/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-4-3-enhancements.md b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-4-3-enhancements.md new file mode 100644 index 0000000..a368509 --- /dev/null +++ b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-4-3-enhancements.md @@ -0,0 +1,649 @@ +### Section 4.3 - Series Management Structure + +#### 4.3.1 - Basic Management Framework + +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: + + * Make operational decisions + + * Enter into contracts within the series' business purpose + + * Manage series assets + + * 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 + + * Develop and implement strategic plans + + * Establish operational policies and procedures + + * Hire and supervise personnel + + * Set compensation structures for series personnel + + * Engage professional advisors and service providers + + * Acquire and dispose of assets + + * Enter into strategic relationships and partnerships + + * Develop intellectual property + + * Establish pricing for products and services + + * Determine capital allocation within the series + +3. **Board Oversight Relationship**: The Board and its committees shall: + + * Provide governance and oversight + + * Ensure compliance with this Agreement and applicable laws + + * Monitor performance and risk + + * 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 + + iv. Requested by the series members + + v. Necessary to enforce the mandatory requirements of this Agreement + + vi. Required to address systemic risk issues + + vii. Necessary to respond to regulatory inquiries or investigations + + viii. Required to implement crisis management procedures + + ix. Needed to protect the Company's reputation or brand + + x. Authorized under emergency provisions of this Agreement + +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 + + * Provide financial performance metrics + + * Submit operational metrics and key performance indicators + + * Document risk management activities + + * Report on compliance matters + + * Provide updates on strategic initiatives + + * Document capital utilization and efficiency + + * Report on personnel matters and organizational development + + * Provide market and competitive analysis + + * Document technological developments and implementations + + * Report on customer satisfaction and retention metrics + +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 + + * Business continuity and disaster recovery plans + + * Strategic plans with measurable objectives + + * Annual budgets and financial forecasts + + * Capital allocation plans + + * Compliance documentation for regulatory requirements + + * Key performance indicators and measurement methodologies + + * Personnel policies and procedures + + * Intellectual property management documentation + + * Technology implementation and management plans + +6. **Management Reporting Requirements**: + + * Each series shall provide regular management reporting including: + + * Monthly financial statements + + * Quarterly performance metrics + + * Annual strategic reviews + + * Regular compliance certifications + + * Quarterly risk assessments + + * Material event notifications + + * Personnel changes in key positions + + * Significant contract executions and terminations + + * Capital expenditure tracking + + * Litigation and legal proceedings updates + + * Market condition and competitive landscape assessments + + * Customer acquisition and retention metrics + + * Technology implementation status + + * Innovation and research and development progress + + * Operational efficiency measurements + +#### 4.3.2 - Series Governance Options + +1. **Alternative Governance Structures**: A series operating agreement may establish alternative governance structures, including: + + * Manager-managed governance with designated managers + + * 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 + + * Committee-based governance structures + + * Advisory board models with specialized expertise + + * Dual-class voting structures + + * Distributed governance models + + * Domain-based leadership structures + + * Project-based management systems + + * Functional organizational structures + + * Matrix management frameworks + + * Agile organizational methods + +2. **Governance Documentation Requirements**: Any series with an alternative governance structure must: + + * Clearly define the governance structure in its operating agreement + + * 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 + + * Document the roles and responsibilities of all governance positions + + * Establish meeting requirements and procedures + + * Define quorum and voting requirements + + * Document committee structures and responsibilities + + * Establish governance review and evaluation procedures + + * Define reporting relationships and information flow + + * Document governance risk management procedures + + * Establish ethics and conduct standards for governance participants + +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 + + * Protect series assets and resources + + * Comply with all applicable laws and regulations + + * Maintain appropriate books and records + + * Provide required information to members + + * Exercise oversight appropriate to their role + + * Act within the scope of their authority + + * Seek professional advice when necessary + + * Implement appropriate risk management + +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 + + * Transparent decision-making processes + + * Disclosure of potential conflicts of interest + + * Regular governance forums for member participation + + * Documentation of governance metrics and performance + + * Clear criteria for governance decisions + + * Transparent succession planning processes + + * Documented governance risk oversight + + * Published policy development procedures + + * Clear communication of governance changes + + * Regular governance effectiveness assessments + +5. **Governance Risk Management**: + + * Each series shall implement appropriate governance risk management practices including: + + * Regular governance risk assessments + + * Documentation of governance control environment + + * Implementation of governance risk mitigation strategies + + * Clear definition of governance risk tolerance + + * Regular testing of governance controls + + * Documentation of governance risk indicators + + * Procedures for addressing governance failures + + * Regular review of governance effectiveness + + * Governance succession contingency planning + + * Procedures for handling governance disputes + + * Crisis management protocols + + * Documentation of governance decision rationale + + * Internal controls for governance processes + + * Periodic independent review of governance structures + + * Continuous governance improvement processes + +#### 4.3.3 - Series Membership Decisions + +1. **New Member Admission**: The admission of new members to a series requires: + + * Compliance with the procedures set forth in the series operating 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 + + * Execution of required confidentiality agreements + + * Completion of all required documentation + + * Satisfaction of any financial requirements + + * Compliance with any qualification criteria + + * Completion of required training or orientation + + * Agreement to abide by all series policies and procedures + + * Acceptance of fiduciary duties if applicable + + * Compliance with any regulatory requirements + +2. **Member Removal**: Members may be removed from a series only: + + * In accordance with the series operating agreement + + * 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 + + * Following due process as specified in the series operating agreement + + * With appropriate confidentiality maintained + + * With documentation of the cause for removal + + * Following any required mediation or dispute resolution procedures + + * In compliance with applicable laws + + * With approval by the required percentage of remaining members + + * Following review by legal counsel if appropriate + + * With notification to the Company Committee + +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 + + * Members shall have the right to participate in governance as specified in the series operating agreement + + * Members shall have the right to vote on matters requiring member approval + + * Members shall have the right to receive distributions as specified in the series operating agreement + + * Members shall have the right to transfer their interests subject to applicable restrictions + + * Members shall have the right to participate in major decisions as specified in the series operating agreement + + * Members shall have the right to propose amendments to the series operating agreement + + * Members shall have the right to participate in dissolution decisions + + * Members shall have the right to receive tax information + + * Members shall have appraisal rights as provided by law + + * Members shall have dissenter's rights as provided by law + +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 + + * Valuation methodologies shall be consistently applied + + * Valuation shall take into account all relevant factors including: + + * Financial performance and projections + + * Market conditions + + * Comparable transactions + + * Asset values + + * Future prospects + + * Industry-specific metrics + + * Discounts for lack of control or marketability if applicable + + * Intellectual property and intangible assets + + * Liabilities and contingent liabilities + + * Other relevant factors + +5. **Dispute Resolution Between Members**: + + * Member disputes shall be resolved in accordance with: + + * The procedures set forth in the series operating agreement + + * The dispute resolution procedures in Schedule H + + * Applicable law + + * Dispute resolution shall prioritize: + + * Preservation of series operations + + * Protection of series assets + + * Minimization of disruption + + * Maintenance of confidentiality + + * Cost-effective resolution + + * Preservation of business relationships + + * Fair treatment of all parties + + * Adherence to fiduciary duties + + * Compliance with applicable law + + * Appropriate documentation of resolution + +6. **Member Communications and Information Rights**: + + * Series shall establish appropriate member communication protocols including: + + * Regular financial reporting + + * Strategic updates + + * Material event notifications + + * Governance information + + * Tax information + + * Regulatory compliance updates + + * Market condition assessments + + * Competitive position analysis + + * Performance metrics + + * Capital allocation information + + * Risk assessment updates + + * Personnel changes in key positions + + * Technology implementation updates + + * Intellectual property developments + + * Litigation and legal proceedings updates + +#### 4.3.4 - Management Continuity and Succession + +1. **Required Succession Planning**: + + * Each series shall develop and maintain a comprehensive succession plan for: + + * Key management positions + + * Critical operational roles + + * Specialized technical positions + + * Governance roles + + * Succession plans shall include: + + * Identification of critical roles + + * Potential internal and external successors + + * Development needs for potential successors + + * Knowledge transfer procedures + + * Emergency succession provisions + + * Interim leadership arrangements + + * Long-term development strategies + + * Regular review and updating processes + + * Documentation of specialized knowledge + + * Retention strategies for key personnel + + * Cross-training programs + + * Succession timing considerations + + * External recruitment strategies if needed + + * Governance transition procedures + + * Member communication protocols + +2. **Temporary Leadership Provisions**: + + * Series operating agreements shall include provisions for: + + * Temporary leadership in case of emergency + + * Acting management during extended absences + + * Interim governance during transitions + + * Delegation of authority during temporary incapacity + + * Emergency decision-making protocols + + * Definition of triggering events for temporary leadership + + * Term limitations for temporary positions + + * Authority limitations for temporary leaders + + * Return of authority procedures + + * Documentation requirements for temporary leadership + + * Notification requirements for temporary leadership implementation + + * Approval requirements for extended temporary arrangements + + * Performance monitoring during temporary leadership + + * Dispute resolution for contested temporary authority + + * Termination of temporary leadership provisions + +3. **Knowledge Management Requirements**: + + * Each series shall implement appropriate knowledge management practices including: + + * Documentation of critical operational procedures + + * Maintenance of intellectual property records + + * Preservation of key business relationships information + + * Documentation of strategic plans and rationale + + * Preservation of historical decisions and context + + * Maintenance of technical documentation + + * Implementation of knowledge sharing systems + + * Regular knowledge capture processes + + * Cross-training programs for critical functions + + * Mentoring and knowledge transfer programs + + * Documentation of specialized expertise + + * Maintenance of vendor and supplier information + + * Preservation of customer relationship information + + * Documentation of regulatory compliance procedures + + * Maintenance of institutional memory \ No newline at end of file diff --git a/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-4-4-enhancements.md b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-4-4-enhancements.md new file mode 100644 index 0000000..f9aab75 --- /dev/null +++ b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/section-4-4-enhancements.md @@ -0,0 +1,1179 @@ +### Section 4.4 - Special Series Types + +#### 4.4.1 - TDCMSP Series (Tools, Dies, Casts, Materials, Supplies, and (Intellectual) Property Series) + +1. **Purpose and Limitations**: A TDCMSP Series: + + * May only own physical assets, real property, and intellectual property + + * Has no operational capability except through usage agreements with appropriate operational series + + * Cannot enter agreements with the Company + + * Cannot enter agreements with any non-TSYS Group entities + + * Must maintain clear documentation of all assets owned + + * May not incur debt except for asset acquisition and maintenance + + * Must maintain adequate insurance for all assets + + * Shall serve as a protective holding structure for critical assets + + * Shall implement enhanced asset protection measures + + * May not engage in any business activity beyond asset ownership and leasing + + * May not have employees except as necessary for asset management + + * Must maintain clear distinction between asset ownership and operational control + + * Shall document all asset acquisition transactions in detail + + * Shall maintain comprehensive asset registers and documentation + + * May not commingle assets with other series or entities + +2. **Asset Categories**: TDCMSP Series may own and manage: + + * Tools and equipment + + * Dies and molds + + * Casting equipment + + * Raw materials + + * Supplies and consumables + + * Intellectual property + + * Patents and trademarks + + * Technical documentation + + * Manufacturing processes + + * Design specifications + + * Real property + + * Digital assets and software + + * Data sets and databases + + * Domain names and online assets + + * Copyrighted works + + * Trade secrets + + * Proprietary methodologies + + * Specialized equipment + + * Laboratory equipment + + * Testing and measurement devices + + * Fixtures and jigs + + * Prototype equipment + + * Research equipment + + * Specialized hardware + + * Manufacturing equipment + + * Assembly equipment + + * Any other physical or intellectual assets necessary for series operations + +3. **Lease Agreement Requirements**: All TDCMSP Series must execute written lease agreements that include: + + * Precise asset identification and valuation + + * Clearly defined maintenance responsibilities + + * Asset replacement provisions and funding mechanisms + + * Insurance requirements with minimum coverage levels + + * Usage tracking and reporting obligations + + * Term and renewal provisions + + * Default and remediation procedures + + * Fair market value lease rates + + * Clear termination procedures + + * Asset return conditions + + * Dispute resolution provisions + + * Indemnification clauses + + * Payment terms and schedules + + * Performance standards and quality requirements + + * Usage limitations and restrictions + + * Rights to improvements and modifications + + * Sublease prohibitions or restrictions + + * Inspection and audit rights + + * Force majeure provisions + + * Confidentiality requirements + + * Intellectual property usage restrictions + + * Technology upgrade provisions + + * Change in control provisions + + * Assignment restrictions + + * Damage or loss provisions + + * Warranty disclaimers + + * Limitation of liability provisions + +4. **Asset Management Requirements**: All TDCMSP Series must implement: + + * Regular asset valuation by qualified third parties + + * Comprehensive maintenance records + + * Usage tracking systems + + * Industry-standard depreciation schedules + + * Replacement planning with adequate reserves + + * Annual asset audits + + * Asset management software systems + + * Regular condition assessments + + * Maintenance schedule compliance monitoring + + * Asset utilization analysis + + * Physical security measures appropriate to asset value + + * Asset classification and criticality assessments + + * Asset lifecycle management policies + + * Specialized asset insurance coverage + + * Environmental compliance monitoring for physical assets + + * Asset disposal and retirement procedures + + * Asset performance monitoring + + * Total cost of ownership analysis + + * Risk assessments for critical assets + + * Contingency planning for critical asset failure + + * For intellectual property assets: + + i. Formal IP protection strategies + + ii. Regular monitoring for potential infringement + + iii. Maintenance of registrations, renewals, and filings + + iv. Documented chain of title and ownership verification + + v. Periodic valuation of IP portfolio + + vi. Appropriate confidentiality and trade secret protections + + vii. License compliance monitoring + + viii. Royalty collection and distribution systems + + ix. IP portfolio management strategy + + x. International protection strategies where appropriate + + xi. Documentation of development processes + + xii. Employee and contractor invention assignment agreements + + xiii. Open source software management if applicable + + xiv. Freedom to operate analyses + + xv. IP enforcement procedures + +5. **Revenue Model and Distribution**: + + * All lease payments shall be allocated according to the series operating agreement + + * Reserves shall be established for asset maintenance and replacement + + * Distributions shall be made only after adequate reserves are established + + * Special distributions may be made for extraordinary asset sales + + * Reinvestment programs may be established for asset acquisition + + * Royalty streams from intellectual property shall be separately accounted for + + * Lease rate determination methodologies shall be documented + + * Arm's length pricing shall be verified by independent analysis + + * Capital allocation policies shall prioritize asset integrity + + * Performance benchmarks shall be established for asset returns + + * Capital budgeting shall be aligned with asset lifecycle planning + + * Reserve funding shall be based on asset condition assessments + + * Distribution policies shall balance current returns with long-term asset value + + * Reinvestment criteria shall be established for asset enhancement + + * Asset lease rate reviews shall be conducted regularly + +6. **Capitalization Requirements**: + + * TDCMSP Series shall maintain adequate capitalization for their asset portfolio + + * Capital adequacy shall be reviewed annually + + * Special capital calls may be authorized for strategic asset acquisition + + * Asset financing shall comply with Section 3.3 + + * Capital deployment plans shall be updated annually + + * Minimum liquidity requirements shall be established + + * Long-term capital planning shall align with asset acquisition strategy + + * Capital structure shall be optimized for asset protection + + * Leverage limitations shall be established and documented + + * Capital reserves shall be maintained for emergency asset replacement + + * Capitalization stress testing shall be conducted periodically + + * Asset-to-capitalization ratios shall be monitored + + * Capital contingency plans shall be established + + * Capital adequacy metrics shall be reported regularly + +7. **Intellectual Property Protection Measures**: + + * TDCMSP Series holding intellectual property shall implement: + + * Comprehensive IP protection strategies + + * Regular IP portfolio audits + + * Documented IP management procedures + + * Appropriate registrations in all relevant jurisdictions + + * Trade secret protection programs + + * IP enforcement mechanisms + + * Regular monitoring for potential infringements + + * License compliance monitoring systems + + * IP valuation and assessment procedures + + * Technology transfer protocols + + * Proper documentation of IP development + + * Clear ownership provisions in all development agreements + + * IP access control procedures + + * Confidentiality and non-disclosure provisions in all relevant agreements + + * Strategic IP development planning + + * Documentation of IP commercialization strategies + + * Regular IP committee meetings and governance + + * IP risk assessment and mitigation planning + + * Specialized IP insurance coverage + + * Succession planning for IP management + +#### 4.4.2 - Operating Series Requirements for TDCMSP Leases + +1. **Qualification Requirements**: Operating Series leasing assets from TDCMSP Series must: + + * Demonstrate operational capability for proper asset utilization + + * Maintain required insurance with TDCMSP Series named as additional insured + + * Follow maintenance schedules established in lease agreements + + * Provide monthly usage reports + + * Comply with all lease terms + + * Conduct regular inspections and provide documentation + + * Maintain qualified personnel for asset operation + + * Implement safety protocols appropriate to the assets + + * Report any damage or performance issues immediately + + * Maintain financial capacity to meet lease obligations + + * Implement asset security measures appropriate to asset value + + * Maintain appropriate licenses and permits for asset operation + + * Comply with all regulatory requirements for asset usage + + * Document all asset modifications with prior approval + + * Maintain asset tracking and identification systems + + * Implement asset management software integration + + * Conduct regular asset utilization analysis + + * Maintain contingency plans for critical asset failure + + * Document specialized knowledge required for asset operation + + * Implement user training programs for complex assets + +2. **Operational Responsibilities**: Operating Series leasing TDCMSP assets must: + + * Designate specific personnel responsible for asset management + + * Implement proper training for all personnel using assets + + * Establish and follow standard operating procedures + + * Conduct regular inspections and maintenance + + * Immediately report any damage or malfunction + + * Properly account for lease expenses + + * Document all asset usage + + * Implement asset security measures + + * Return assets in specified condition upon lease termination + + * Cooperate with asset audits and assessments + + * Implement environmental compliance measures + + * Follow manufacturer recommendations for usage + + * Maintain calibration and certification where required + + * Document all maintenance activities + + * Track asset performance metrics + + * Implement continuous improvement for asset utilization + + * Conduct regular efficiency assessments + + * Document asset movement and location changes + + * Implement appropriate access controls + + * Maintain asset user logs and authorization records + +3. **Intellectual Property Compliance**: + + * Operating Series using TDCMSP intellectual property must: + + * Implement appropriate quality control measures + + * Comply with brand standards and guidelines + + * Properly mark all IP with ownership and protection notices + + * Report any known or suspected infringement + + * Maintain confidentiality of trade secrets + + * Use software and digital assets only as licensed + + * Implement employee training on IP compliance + + * Document all IP usage and revenue generation + + * Provide required royalty reports + + * Implement access controls for protected IP + + * Maintain appropriate security measures for confidential information + + * Document all derivative works and improvements + + * Implement IP usage tracking systems + + * Conduct regular IP compliance audits + + * Ensure sublicensees comply with all requirements + + * Implement technical protection measures for digital IP + + * Report all IP commercialization activities + + * Document market feedback on IP implementation + + * Maintain records of all IP-related communications + + * Implement compliance programs for open-source components if applicable + +4. **Default and Remedy Provisions**: + + * Default on lease obligations shall trigger: + + * Written notice and cure periods as specified in the lease agreement + + * Escalation to the Company Committee if uncured + + * Potential termination of lease rights + + * Asset recovery procedures + + * Liability for any damage beyond normal wear and tear + + * Potential cross-default provisions for multiple lease agreements + + * Dispute resolution through Schedule H procedures + + * Financial penalties for lease violations + + * Accelerated payment provisions where applicable + + * Remediation requirements for damaged assets + + * Reporting requirements to the Company Committee + + * Enhanced monitoring during cure periods + + * Mandatory review of underlying issues + + * Development of preventative measures + + * Documentation of the default and resolution process + + * Potential adjustment of lease terms upon cure + + * Review of qualification status for future leases + + * Implementation of additional compliance measures + + * Regular status reporting during remediation + + * Post-resolution compliance monitoring + +5. **Lease Renewal and Extension**: + + * Lease renewal procedures shall include: + + * Performance evaluation during the initial lease term + + * Assessment of asset condition and remaining useful life + + * Market rate analysis for renewal pricing + + * Evaluation of maintenance history and compliance + + * Review of financial capability and payment history + + * Assessment of operational needs and asset utilization + + * Consideration of alternative uses for the assets + + * Documentation of renewal business case + + * Updated insurance and compliance verification + + * Revised maintenance and replacement planning + + * Updated lease terms reflecting current circumstances + + * Appropriate approvals by both series + + * Documentation in the electronic records system + + * Updated asset valuation if appropriate + + * Consideration of technology updates or replacements + +#### 4.4.3 - Technology Holding Series + +1. **Purpose and Structure**: A Technology Holding Series: + + * May be established specifically for software, digital assets, and technology intellectual property + + * Shall hold technology assets developed by or for TSYS Group entities + + * Shall license such assets to appropriate Operating Series + + * May develop technology commercialization strategies + + * Shall coordinate technology protection and enforcement + + * Shall manage the technology lifecycle + + * May establish relationships with external technology partners + + * Shall maintain comprehensive documentation of all technology assets + + * May not engage in direct technology operations except for maintenance and development + + * Shall implement specialized technology protection measures + + * Shall coordinate technology standards across the Company + + * May maintain specialized technical personnel + + * Shall develop and maintain technology roadmaps + + * Shall coordinate with the Technology Oversight Committee + + * May establish specialized development environments + +2. **Technology Management Requirements**: + + * Development of formal technology roadmaps + + * Implementation of technology valuation methodologies + + * Establishment of licensing frameworks and templates + + * Security and protection protocols for digital assets + + * Version control and update management + + * Compliance with software and data regulations + + * Open source compliance monitoring + + * Technology escrow arrangements as appropriate + + * Regular technology portfolio reviews + + * Documentation of all technology assets + + * Implementation of software development lifecycle processes + + * Quality assurance and testing protocols + + * Technology security assessments + + * Vulnerability management procedures + + * Technology due diligence procedures + + * Technology documentation management + + * Code ownership and contribution tracking + + * Architectural standards and guidelines + + * Technology deprecation and sunsetting procedures + + * Technical debt management programs + + * Development standards and practices + + * Technology training and knowledge transfer + + * Technology performance monitoring + + * Capacity planning and scalability assessment + + * Technology disaster recovery planning + + * Regular technology audits and assessments + +3. **Licensing Structures**: + + * Internal license agreements shall include: + + * Scope of permitted use + + * Licensing fees or royalty structures + + * Maintenance and support obligations + + * Version upgrade rights + + * Customization parameters + + * Protection of source code and other sensitive assets + + * Fair market value determination methodology + + * Performance metrics and service levels if applicable + + * Usage volume limitations + + * User access restrictions + + * Modification rights and restrictions + + * Technology support and maintenance terms + + * Security requirements and standards + + * Integration specifications and requirements + + * Documentation and training provisions + + * Quality control requirements + + * Data handling and privacy provisions + + * Disaster recovery and business continuity requirements + + * Audit and verification procedures + + * Export control compliance provisions + + * Third-party access limitations + + * Termination and transition provisions + + * Indemnification for intellectual property claims + + * Confidentiality provisions + + * Compliance with regulatory requirements + +4. **Technology Commercialization**: + + * Technology Holding Series may develop strategies for: + + * External licensing of technology assets + + * Joint ventures for technology commercialization + + * Technology transfer arrangements + + * Strategic technology partnerships + + * Technology spinoff entities + + * Patent licensing programs + + * Software as a service offerings + + * Technology platform licensing + + * API and integration licensing + + * Data monetization strategies + + * Technology consulting services + + * Custom implementation services + + * Technology education and training services + + * Technology support services + + * Technology maintenance services + + * All external commercialization must be: + + * Approved by the Company Committee + + * Structured to maintain appropriate protections + + * Priced at fair market value + + * Documented with appropriate legal agreements + + * Compliant with all regulatory requirements + + * Consistent with the Company's strategic objectives + + * Properly accounted for and reported + + * Structured to minimize risks to the Company + + * Reviewed by appropriate legal counsel + + * Subject to regular performance review + +5. **Technology Acquisition**: + + * Technology Holding Series shall implement processes for: + + * Technology acquisition assessment + + * Due diligence procedures for technology acquisitions + + * Technology integration planning + + * License compliance verification + + * Open source risk assessment + + * Security assessment of acquired technology + + * Intellectual property ownership verification + + * Technical compatibility assessment + + * Technology transition planning + + * Ongoing support evaluation + + * Total cost of ownership analysis + + * Build vs. buy analysis + + * Acquisition risk assessment + + * Vendor stability assessment + + * Exit strategy development + + * Technology escrow arrangements + + * Documentation and knowledge transfer planning + + * Training and adoption planning + + * Performance and scalability testing + + * Compatibility with Company standards + + * Long-term maintenance planning + + * Technology lifecycle alignment + + * Contract negotiation strategy + + * Vendor relationship management + + * Contingency planning for vendor issues + +#### 4.4.4 - Regulatory Compliance Series + +1. **Purpose and Structure**: A Regulatory Compliance Series: + + * May be established to manage specialized regulatory licenses, permits, and certifications + + * Shall maintain all compliance documentation required for the applicable regulatory domain + + * Shall coordinate compliance activities across applicable series + + * Shall interface with regulatory authorities + + * Shall monitor regulatory developments and changes + + * Shall establish and maintain compliance frameworks + + * May engage specialized regulatory expertise + + * Shall conduct regular compliance assessments + + * May not engage in non-compliance related operations + + * Shall coordinate with the Compliance and Ethics Committee + + * Shall maintain appropriate compliance reserves + + * Shall implement appropriate governance for regulatory matters + + * Shall document all regulatory interactions + + * May establish specialized compliance committees + + * Shall maintain appropriate regulatory reporting systems + +2. **Regulatory Compliance Management Requirements**: + + * Implementation of compliance management systems + + * Development of comprehensive compliance policies and procedures + + * Regular compliance training for relevant personnel + + * Compliance monitoring and testing programs + + * Regulatory examination preparation procedures + + * Regulatory communication protocols + + * Corrective action implementation processes + + * Compliance risk assessment methodologies + + * Documentation of compliance controls + + * Compliance reporting systems + + * Compliance incident management procedures + + * Change management for regulatory changes + + * Compliance certification processes + + * Regulatory relationship management + + * Coordination of regulatory examinations + + * Documentation of compliance interpretations + + * Implementation of automated compliance monitoring + + * Regulatory filing management systems + + * Compliance calendar maintenance + + * Annual compliance planning + + * Periodic compliance self-assessments + + * Regulatory requirement tracking + + * Documentation of regulatory correspondence + + * Regulatory audit coordination + + * Compliance issue remediation planning + +3. **Service Provision to Operating Series**: + + * Regulatory Compliance Series shall: + + * Provide compliance guidance to Operating Series + + * Coordinate compliance activities across multiple series + + * Maintain specialized compliance expertise + + * Monitor regulatory developments + + * Coordinate regulatory examinations + + * Provide compliance training + + * Develop compliance policies and procedures + + * Conduct compliance assessments + + * Maintain relationship with regulatory authorities + + * Coordinate regulatory filings + + * Develop and implement compliance remediation plans + + * Provide compliance reporting + + * Maintain compliance documentation + + * Coordinate compliance technology implementation + + * Develop compliance best practices + + * Operating Series shall: + + * Implement compliance requirements in operations + + * Maintain day-to-day compliance activities + + * Report compliance issues promptly + + * Participate in compliance assessments + + * Implement corrective actions + + * Maintain operational compliance documentation + + * Provide required information for regulatory filings + + * Ensure personnel complete compliance training + + * Incorporate compliance requirements in operational procedures + + * Maintain appropriate compliance staffing + + * Implement compliance technology solutions + + * Document compliance activities + + * Conduct compliance self-assessments + + * Participate in regulatory examinations + + * Report on compliance metrics + +4. **Regulatory Relationship Management**: + + * Regulatory Compliance Series shall: + + * Serve as the primary contact for regulatory authorities + + * Coordinate regulatory examinations and inquiries + + * Manage regulatory reporting + + * Maintain documentation of regulatory interactions + + * Monitor regulatory developments + + * Participate in regulatory outreach and education + + * Develop and maintain regulatory relationship plans + + * Coordinate responses to regulatory findings + + * Manage regulatory action remediation + + * Maintain regulatory communication protocols + + * Document regulatory interpretations + + * Coordinate regulatory change management + + * Monitor peer regulatory experiences + + * Develop regulatory strategy + + * Coordinate regulatory advocacy when appropriate + + * Assess regulatory risk + + * Provide regular regulatory updates to governance + + * Maintain regulatory contact information + + * Coordinate regulatory approval processes + + * Manage regulatory milestone tracking + + * Document regulatory commitments + +#### 4.4.5 - Research and Development Series + +1. **Purpose and Structure**: A Research and Development Series: + + * May be established to conduct research and development activities + + * Shall coordinate innovation efforts across the Company + + * Shall develop and protect intellectual property + + * May establish specialized R&D facilities and environments + + * Shall maintain appropriate scientific and technical expertise + + * Shall coordinate with Technology Holding Series for commercialization + + * Shall implement appropriate research methodologies + + * May engage in fundamental and applied research + + * Shall maintain comprehensive documentation of research activities + + * May establish research partnerships and collaborations + + * Shall implement appropriate research governance + + * Shall coordinate with relevant regulatory authorities for research compliance + + * May engage in technology transfer activities + + * Shall implement appropriate confidentiality measures + + * May develop innovation incentive programs + +2. **Research Management Requirements**: + + * Development of research roadmaps and priorities + + * Implementation of research project management methodologies + + * Establishment of research budgeting and resource allocation + + * Implementation of research quality standards + + * Development of research data management systems + + * Implementation of laboratory information management systems + + * Establishment of research ethics and compliance programs + + * Development of research collaboration frameworks + + * Implementation of research security protocols + + * Establishment of intellectual property development processes + + * Implementation of research documentation standards + + * Development of technology transfer procedures + + * Establishment of prototype development processes + + * Implementation of research testing and validation methodologies + + * Development of research metrics and performance evaluation + + * Implementation of research safety protocols + + * Establishment of research equipment management + + * Development of research talent management and development + + * Implementation of research knowledge management + + * Establishment of research peer review processes + + * Development of research publication policies + + * Implementation of research confidentiality protocols + + * Establishment of research material transfer procedures + + * Development of research risk management frameworks + + * Implementation of research compliance with applicable regulations + +3. **Intellectual Property Development**: + + * Research and Development Series shall: + + * Implement comprehensive invention disclosure processes + + * Maintain laboratory notebooks and research documentation + + * Coordinate with legal counsel for IP protection + + * Develop IP strategy aligned with business objectives + + * Implement invention evaluation and assessment procedures + + * Coordinate inventor recognition and incentive programs + + * Implement trade secret protection measures + + * Develop publication review procedures + + * Implement collaboration IP management + + * Maintain IP development metrics + + * Coordinate technology transfer to Technology Holding Series + + * Implement open source management if applicable + + * Develop standards for IP quality and value + + * Implement IP portfolio mapping and analysis + + * Coordinate with business units for IP commercialization + + * Develop IP education and awareness programs + + * Implement IP risk assessment procedures + + * Coordinate freedom to operate analyses + + * Maintain competitive IP intelligence + + * Implement IP development review procedures + + * Develop long-term IP strategy + + * Coordinate patent committee operations + + * Implement IP budget management + + * Maintain IP development documentation + + * Coordinate inventor agreements and assignments + +4. **Technology Transfer and Commercialization**: + + * Research and Development Series shall: + + * Develop technology maturation processes + + * Implement technology readiness assessment + + * Coordinate proof of concept development + + * Implement prototype testing and validation + + * Develop technology transfer documentation + + * Coordinate with Operating Series for implementation + + * Implement technology adoption planning + + * Develop scaling and manufacturing transfer protocols + + * Implement commercialization feasibility assessment + + * Coordinate market validation activities + + * Develop business case analysis for new technologies + + * Implement technology roadmap integration + + * Coordinate technology handoff procedures + + * Develop technology support transition planning + + * Implement technology performance metrics + + * Coordinate post-transfer technical support + + * Develop technology implementation monitoring + + * Implement feedback loops for technology refinement + + * Coordinate continuous improvement processes + + * Develop technology training and knowledge transfer + + * Implement technology documentation standards + + * Coordinate technology integration planning + + * Develop user acceptance testing procedures + + * Implement technology deployment planning + + * Coordinate technology marketing support \ No newline at end of file diff --git a/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/todo.md b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/todo.md new file mode 100644 index 0000000..47cd53e --- /dev/null +++ b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/todo.md @@ -0,0 +1,33 @@ + + +### Main company agreement requirements + +- (in progress) ensure everything from the Lone Star Land Law.com website/ebook is included (as applicable at the main company level, most requirements will be at the series level) +- (in progress) merge in anything relevant from the v1.0 agreement (as applicable at the main company level, most of that content will be applied at the series level) + + +## Series agreement (template) + +### Series agreement overview + +This is a far more complex document as it's establishing the operating agreement for actual operating entities of a variety of types of ventures. + +### Series agreement requirements + +- (in progress) ensure everything from the Lone Star Land Law.com website/ebook is included (as applicable at the main company level, most requirements will be at the series level) +- (in progress) merge in anything relevant from the v1.0 agreement (as applicable at the main company level, most of that content will be applied at the series level) + +- Specify that the series enters into a contract with Known Element Enterprises as the provider of IT and business operations services. +- Specify that the series enters into a contract with The Campus Trading Company LLC as the sole provider of treasury/transaction operations services. + +- for an individual series of a parent series LLC company that is member managed and board committee governed and serve as a detailed and comprehensive LLC operating agreement for each of the individual series of that overall LLC. +- Include a markdown table with five rows and two columns. The first column name will be Member Legal Name and the second column name will be Ownership Percentage. +- include a definitions section +- Include provisions for over riding every part of the relevant Texas business organizations code as allowed by law. +- Incorporate all the recommendations from LoneStarLandLaw book +- be fully compliant with current Texas law +- include standard/customary contract provisions + + +- Utilize the fairshares model +- granting of profit interests instead of capital interests diff --git a/src/TXSOS-Registered-NonProfit/FormationPrompt.md b/src/TXSOS-Registered-NonProfit/FormationPrompt.md new file mode 100644 index 0000000..36b5bbc --- /dev/null +++ b/src/TXSOS-Registered-NonProfit/FormationPrompt.md @@ -0,0 +1,61 @@ +You have the combined expertise of the following roles (all of whom are senior level world class experts in their relevant domains): + + ⁃ Treasurer + ⁃ Financial Director + ⁃ Operations Director + ⁃ Compliance Director + ⁃ Information Technology Director + ⁃ Information Security Director + ⁃ Security Director + ⁃ Legal Director + ⁃ board member + ⁃ financial planner + ⁃ succession planner + ⁃ General Counsel + ⁃ outside counsel + ⁃ Contract lawyer + ⁃ non profit litigation lawyer + ⁃ private investigator + ⁃ penetration tester + ⁃ Insurance broker + ⁃ Certified Public Accountant + ⁃ Tax lawyer + +and you are a world class subject matter expert in the following subjects: + + ⁃ finance + ⁃ accounting + ⁃ law + ⁃ risk management + ⁃ governance + ⁃ fundraising + - compliance + ⁃ formation + ⁃ Organizational design + ⁃ Cooperative organizations + ⁃ Affiliated 501c3, 501c4, (super) PAC + ⁃ personnel selection + ⁃ Succession planning + ⁃ Cyber security + ⁃ Technology operations + ⁃ non profit endowment and foundation management + +I need you to create : + +- bylaws +- IRS +- FEC +- any other necessary regulatory filings and formation documents + +for three related / affilliated non profit Texas corporations : + +- Side Door Group (super pac) +- Side Door Solutions Group (plan to become a 501c4) +- Americans For A Better Network (plan to become a 501c3) + +Ask me all of the necessary questions to gather whatever information you need for comprehensive documents. + +Ask them one at a time , and based on my answers , ask additional questions. + +Create an artifact for each needed deliverable. + diff --git a/src/TXSOS-Registered-NonProfit/Reference material/BA_TheConnection_202456.pdf b/src/TXSOS-Registered-NonProfit/Reference material/BA_TheConnection_202456.pdf new file mode 100644 index 0000000..09c6968 Binary files /dev/null and b/src/TXSOS-Registered-NonProfit/Reference material/BA_TheConnection_202456.pdf differ