diff --git a/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement.md b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement.md index f5269ab..8157235 100644 --- a/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement.md +++ b/src/TXSOS-Registered-ForProfit/TurnkeyNetworkSystemsLLC/TurnkeyNetworkSystemsLLC-OperatingAgreement.md @@ -1385,76 +1385,198 @@ All records of the Company and its series shall be maintained exclusively in ele #### 4.2.1 - Legal and Economic Isolation 1. **Absolute Series Isolation**: Each series is absolutely and irrevocably isolated from all other series, such that: - a. The assets, liabilities, obligations, and debts of each series are completely separate and distinct from all other series; - b. No series shall have any claim, right, interest, obligation, duty, responsibility, or liability whatsoever in any other series; - c. Each series operates as if it were a completely separate legal entity; and - d. The bankruptcy, insolvency, dissolution, liquidation, or termination of any series shall have no effect whatsoever on any other series or the Company as a whole. + + * The assets, liabilities, obligations, and debts of each series are completely separate and distinct from all other series + + * No series shall have any claim, right, interest, obligation, duty, responsibility, or liability whatsoever in any other series + + * Each series operates as if it were a completely separate legal entity + + * The bankruptcy, insolvency, dissolution, liquidation, or termination of any series shall have no effect whatsoever on any other series or the Company as a whole + + * No judgment creditor of any series may reach the assets of any other series or the Company 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. 3. **Piercing Prevention**: The Company, all series, and all series members acknowledge and agree that: - a. Series isolation is a fundamental aspect of the Company structure; - b. Series isolation shall be interpreted and enforced to the maximum extent permitted by law; - c. All reasonable measures shall be taken to maintain and protect series isolation; and - d. If any provision limiting series isolation is found invalid, the remaining isolation provisions shall be enforced to the maximum extent possible. + + * 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 + +4. **Jurisdictional Considerations**: + + * 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 #### 4.2.2 - Operational Separation Requirements 1. **Mandatory Separation**: Each series shall maintain complete operational separation, including: - a. Independent electronic books and records (provided via KNEL/TheCampus systems as required by Section 3.1); - b. Entirely separate bank accounts established through The Campus Trading Company; - c. Absolute separation of all assets and liabilities; - d. Independent contracts and business relationships; - e. Separate tax identification numbers and filings; - f. Distinct operational processes and procedures; and - g. Clear identification in all business dealings. + + * 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 2. **Documentation of Separation**: Each series shall: - a. Maintain documentation of its separate existence in all records; - b. Clearly identify itself as a separate series in all contracts and communications; - c. Conduct a quarterly review of separation compliance; and - d. Promptly correct any identified separation issues. + + * 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: - a. Maintain separate accounting records; - b. Prepare its own financial statements; - c. File its own tax returns if legally required; - d. Conduct business solely in its own name; and - e. Make distributions solely from its own assets. + + * 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: - a. Commingle any assets with any other series; - b. Guarantee or secure the obligations of any other series; - c. Enter into any agreement that could create joint liability with any other series; - d. Represent or imply any connection to or responsibility for any other series; - e. Pledge assets for the benefit of any other series; or - f. Assume or pay the debts of any other series. + + * 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: - a. The transaction is documented with the same formality as would be required for transactions with unrelated third parties; - b. The transaction terms are commercially reasonable and fair to both series; - c. The transaction is approved by the disinterested members of each series; and - d. The transaction does not undermine or threaten series isolation. + + * 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: - a. Appear prominently in all contracts; + * Appear prominently in all contracts - b. Be in bold type, no smaller than the predominant font size used in the body of the contract; + * Be in bold type, no smaller than the predominant font size used in the body of the contract - c. Be included in the signature block area of all contracts; + * Be included in the signature block area of all contracts - d. Be acknowledged in writing by all counter-parties; and + * Be acknowledged in writing by all counter-parties - e. Be included in all electronic communications where a series is entering into a binding commitment. + * 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 @@ -1463,10 +1585,40 @@ All records of the Company and its series shall be maintained exclusively in ele 2. **Costs of Enforcement**: Each series shall bear all costs of maintaining and enforcing its isolation. 3. **Isolation Breach Liability**: Any series that takes action to breach, undermine, or threaten series isolation shall be liable for: - a. All direct damages resulting from such action; - b. All costs of enforcement and defense; - c. Reasonable attorneys’ fees; and - d. Any other appropriate remedies as determined by a court of competent jurisdiction. + + * 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