1

MASSACHUSETTS LLC ACTANNOTATED LAWS OF MASSACHUSETTS

PART I. ADMINISTRATION OF THE GOVERNMENTTITLE XXII. CORPORATIONS

CHAPTER 156C. LIMITED LIABILITY COMPANY ACT

CURRENT THROUGH CHAPTER 37, 6/20/05

§ 1. Massachusetts Limited Liability Company Act. .................................................................................................... 3

§ 2. Definitions. ................................................................................................................................................................ 3

§ 3. Name of Limited Liability Company; Requirements. ........................................................................................... 4

§ 4. Exclusive Right to Use of Name; Reservation Procedure. .................................................................................... 5

§ 5. Office in Commonwealth Required; Resident Agent for Service of Process....................................................... 5

§ 6. Powers of Limited Liability Company; Requirements as to Rendering Professional Services. ........................ 5

§ 7. Rights and Obligations of Member or Manager as to Limited Liability Company. .......................................... 5

§ 8. Indemnification of Member or Manager by Limited Liability Company. .......................................................... 6

§ 9. Record Keeping Requirements................................................................................................................................ 6

§ 10. Rights of Member or Manager to Information Regarding Condition of Business, Tax Returns, and Other

Reasonable Information. ................................................................................................................................... 7

§ 11. Good Faith Reliance by Member or Manager on Written Operating Agreement and Certain Statements or

Reports. ............................................................................................................................................................... 7

§ 12. Certificate of Organization; Filing; Contents; Time of Formation; Substantial Compliance; Annual

Report; Fees........................................................................................................................................................ 7

§ 13. Amendment of Certificate of Organization; Effective Date of Amendment. .................................................... 8

§ 14. Certificate of Organization Cancelled Upon Dissolution. ................................................................................... 8

§ 15. Execution of Certificates; Execution as Affirmation of Truth under Penalty of Perjury. ............................... 9

§ 16. Failure or Refusal to Execute Certificate, Operating Agreement or Amendment; Right to Petition Superior

Court. .................................................................................................................................................................. 9

§ 17. Original Signed Copy and Duplicate of Certificates Filed; Duplicate Returned. ............................................. 9

§ 18. Filing of Certificate of Organization as Notice of Certain Facts. ..................................................................... 10

§ 19. Integration of Amendments into Restated Certificate of Organization........................................................... 10

§ 20. Acquiring a Limited Liability Company Interest; Time Person is Admitted as Member. ............................ 11

§ 21. Operating Agreement; Creation of Classes or Groups of Members; Voting Rights. ..................................... 11

§ 23. Designation as Manager of Limited Liability Company. .................................................................................. 12

§ 24. Management of Limited Liability Company Vested in Members; Operating Agreement May Provide for

Managers........................................................................................................................................................... 12

§ 25. Manager Need Not be Member of Limited Liability Company. ...................................................................... 12

§ 26. Powers and Duties of Managers Provided by the Operating Agreement; Classes and Groups of Managers;

Voting Rights. ................................................................................................................................................... 12

§ 27. Form of Contribution to Limited Liability Company. ...................................................................................... 13

2

§ 28. Obligation to Contribute Promised Property or Services; Cash in Lieu of Property or Service; Specific

Performance; Compromise. ............................................................................................................................ 13

§ 29. Allocation of Profits and Losses Among Members. ........................................................................................... 13

§ 30. Distributions of Cash and Other Assets Among Members. .............................................................................. 14

§ 31. When Member Entitled to Receive Distributions. ............................................................................................. 14

§ 32. Distribution to Member Upon Resignation. ....................................................................................................... 14

§ 33. Distribution Limited to Cash; Exceptions Provided in Operating Agreement. .............................................. 14

§ 34. Remedies of Creditor Available with Respect to Distribution; Record Date. ................................................. 14

§ 35. Member May Be Personally Liable for Unlawful Distribution; Contribution; Limitation Period for

Bringing Action. ............................................................................................................................................... 14

§ 36. Resignation of Member; Damages for Breach of Operating Agreement......................................................... 15

§ 37. Resignation of Manager; Damages for Breach of Operating Agreement........................................................ 15

§ 38. Limited Liability Company Interest is Personal Property................................................................................ 15

§ 39. Assignability of Limited Liability Company Interest. ....................................................................................... 15

§ 40. Judgment Creditor of Member May Acquire Rights of Assignee in Limited Liability Company Interest;

Applicability of Exemption Laws.................................................................................................................... 16

§ 41. Assignee May Become a Member; Procedure; Rights and Liabilities as Member; Continued Liability of

Assignor............................................................................................................................................................. 16

§ 42. Effect of Death or Incompetency of Individual Member, or Dissolution or Termination of Corporate, Trust

or Other Entity Member.................................................................................................................................. 16

§ 43. Conditions for Dissolution of Limited Liability Company................................................................................ 17

§ 44. Superior Court May Decree Dissolution. ........................................................................................................... 17

§ 45. Winding Up Limited Liability Company's Affairs. ........................................................................................... 17

§ 46. Distribution of Assets of Dissolved Limited Liability Company. ..................................................................... 17

§ 47. Foreign Limited Liability Company; Activities; Liabilities and Defenses....................................................... 18

§ 48. Foreign Limited Liability Company; Doing Business Within Commonwealth Defined; Registration

Requirement; Filing Fee. ................................................................................................................................. 18

§ 49. Examination and Approval of Application for Registration by Foreign Limited Liability Company.......... 19

§ 50. Foreign Limited Liability Company May Use Any Name Authorized Under Limited Liability Company

Act...................................................................................................................................................................... 19

§ 51. Foreign Limited Liability Company Must Appoint Resident Agent................................................................ 19

§ 52. False Statement or Change in Facts; Filing of Amendment or Correction. .................................................... 20

§ 53. Registration of Foreign Limited Liability Company; Cancellation or Withdrawal. ...................................... 20

§ 54. Failure to Register Foreign Limited Liability Company; Fine; Service of Process. ....................................... 20

§ 55. Suit Against Limited Liability Company; Name. .............................................................................................. 21

§ 56. Who May Bring Suit on Behalf of the Limited Liability Company. ................................................................ 21

§ 57. Payment of Expenses On Termination of Derivative Suit................................................................................. 21

3

§ 58. Lack of Authority for Bringing Suit as Defense or Basis for Subsequent Suit................................................ 22

§ 59. Consolidation or Merger of Domestic Limited Liability Company; Other Business Entity Defined............ 22

§ 60. Approval of Consolidation or Merger by Members of Domestic Limited Liability Company Required;

Exception........................................................................................................................................................... 22

§ 61. Limited Liability Company Resulting from Consolidation or Merger; Filing Requirements....................... 22

§ 62. Effect of Consolidation or Merger of Domestic Limited Liability Company; Rights and Liabilities Vested in

Resulting or Surviving Entity.......................................................................................................................... 23

§ 63. Definition of "Person" as Including Limited Liability Company; Member or Manager's Good Faith

Reliance on Operating Agreement.................................................................................................................. 24

§ 64. Implementation of Court Ordered Plan of Reorganization.............................................................................. 24

§ 65. Liability Insurance Requirement for Limited Liability Company; Regulations. ........................................... 24

§ 66. Recordable Instrument Regarding Real Property Executed by Person Authorized in Certificate of

Organization or Application for Registration, in Name of Limited Liability Company, Binding. ........... 24

§ 67. Certification as to Incumbency of Manager or Member, or Authority of Person to Act for Limited Liability

Company. .......................................................................................................................................................... 25

§ 68. Certificate by Secretary of Commonwealth that Limited Liability Company Appears to Exist, is in Good

Standing, and Identifies Persons Authorized to Act With Respect to Real Property; Fee. ....................... 25

§ 69. Conversion to a Limited Liability Company...................................................................................................... 25

§ 1. Massachusetts Limited Liability Company Act.

This chapter may be cited as the Massachusetts Limited Liability Company Act.

§ 2. Definitions.

As used in this chapter, the following words shall unless the context clearly otherwise requires have the followingmeanings:--

(1) "Bankruptcy", the occurrence of any of the following events:

(a) a member:

(1) makes an assignment for the benefit of creditors;

(2) files a voluntary petition in bankruptcy;

(3) is adjudged a bankrupt or insolvent, or has entered against him an order for relief, in any bankruptcy orinsolvency proceeding;

(4) files a petition or answer seeking for himself any reorganization, arrangement, composition, readjustment,liquidation, dissolution or similar relief under any statute, law or regulation;

(5) files an answer or other pleading, admitting or failing to contest the material allegations of a petition filedagainst him in any proceeding of this nature;

(6) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the member or of allor any substantial part of his properties; or

4

(b) one hundred and twenty days after the commencement of any proceeding against the member seekingreorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, lawor regulation, if the proceeding has not been dismissed, or if within ninety days after the appointment without hisconsent or acquiescence of a trustee, receiver or liquidator of the member or of all or any substantial part of hisproperties, the appointment is not vacated or stayed, or within ninety days after the expiration of any such stay, theappointment is not vacated.

(2) "Certificate of organization", the certificate referred to in section twelve, and the certificate as amended.

(3) "Contribution", any cash, property, services rendered or a promissory note or other obligation to contribute cashor property or to perform services, which a person contributes to a limited liability company in his capacity as amember.

(4) "Foreign limited liability company", a limited liability company formed under the laws of any state other thanthe commonwealth or under the laws of any foreign country or other foreign jurisdiction and denominated as such underthe laws of such state or foreign country or other foreign jurisdiction.

(5) "Limited liability company" and "domestic limited liability company", an unincorporated organization formedunder this chapter and having 1 or more members.

(6) "Limited liability company interest", a member's share of the profits and losses of a limited liability companyand the member's right to receive distributions of the limited liability company's assets.

(7) "Manager", a person who is designated as a manager of a limited liability company pursuant to the operatingagreement.

(8) "Member", a person who has been admitted to a limited liability company as a member as provided in sectiontwenty or, in the case of a foreign limited liability company, in accordance with the laws of the state or foreign countryor other foreign jurisdiction under which the foreign limited liability company is organized, and whose membership hasnot been terminated pursuant to the operating agreement or the operation of law.

(9) "Operating agreement", any written or oral agreement of the members as to the affairs of a limited liabilitycompany and the conduct of its business.

(10) "Person", a natural person, partnership, whether general or limited and whether domestic or foreign, limitedliability company, foreign limited liability company, trust, estate, association, corporation, custodian, nominee or anyother individual or entity in its own or any representative capacity.

(11) "State", the District of Columbia or the Commonwealth of Puerto Rico or any state, territory, possession, orother jurisdiction of the United States other than the commonwealth.

§ 3. Name of Limited Liability Company; Requirements.

The name of each limited liability company as set forth in its certificate of organization:

(1) shall contain the words "limited liability company", "limited company", or the abbreviation "L.L.C.", "L.C.","LLC" or "LC";

(2) may contain the name of a member or manager; and

(3) may not be the same as, or deceptively similar to the name of any corporation, limited partnership or limitedliability company reserved or organized under the laws of the commonwealth or licensed or registered as a foreigncorporation, foreign limited partnership or foreign limited liability company in the commonwealth, except with thewritten consent of said corporation, limited partnership or limited liability company previously filed with the statesecretary.

5

§ 4. Exclusive Right to Use of Name; Reservation Procedure.

(a) The exclusive right to the use of a name may be reserved by:

(1) any person intending to organize a limited liability company under this chapter and to adopt such name;

(2) any domestic limited liability company or any foreign limited liability company registered in thecommonwealth which, in either case, intends to adopt such name;

(3) any foreign limited liability company intending to register in the commonwealth and adopt such name; and

(4) any person intending to organize a foreign limited liability company and intending to have it register in thecommonwealth and adopt such name.

(b) The reservation of a specified name shall be made by filing with the state secretary, an application, executed bythe applicant, specifying the name to be reserved and the name and address of the applicant. If the state secretary findsthat the name is available for use by a domestic or foreign limited liability company, he shall reserve the name for theexclusive use of the applicant for a period of thirty days. The state secretary may extend the reservation for an additionalthirty days upon written request of the applicant. The right to the exclusive use of a reserved name may be transferred toany other person by filing in the office of the state secretary a notice of the transfer, executed by the applicant for whomthe name was reserved, specifying the name to be transferred and the name and address of the transferee.

§ 5. Office in Commonwealth Required; Resident Agent for Service of Process.

Each limited liability company shall have and maintain in the commonwealth:

(1) an office, which may but need not be a place of its business in the commonwealth at which shall be kept therecords required by section nine to be maintained; and

(2) a resident agent for service of process on the limited liability company, which agent must be an individualresident of the commonwealth, a domestic corporation, or a foreign corporation authorized to do business in thecommonwealth.

§ 6. Powers of Limited Liability Company; Requirements as to Rendering Professional Services.

(a) Except as otherwise expressly provided by law, a limited liability company may carry on any lawful business,trade, profession, purpose or activity.

(b) A limited liability company shall possess and may exercise all the powers and privileges granted by this chapteror by any other law or by the operating agreement, together with any powers incidental thereto, so far as such powersand privileges are necessary or convenient to the conduct, promotion or attainment of the business, trade, profession,purposes or activities of the limited liability company. Without limitation of the foregoing and except as otherwiseexpressly set forth in a written operating agreement, a limited liability company shall have the power to makeguarantees of the obligations of another person or entity.

(c) A limited liability company or foreign limited liability company which is organized to render a professionalservice as defined in section two of chapter one hundred and fifty-six A shall (i) indicate in its certificate of organizationor application for registration the specific professional services which it shall render, (ii) be subject to any conditions orlimitations established by any applicable regulating boards as defined in said section two, including the provision ofliability insurance required by section sixty-five, and (iii) include with its certificate of organization or application forregistration a certificate by the applicable regulating board which indicates compliance as of the date of organization orregistration by the members and managers with any eligibility standards established by such regulating board.

§ 7. Rights and Obligations of Member or Manager as to Limited Liability Company.

Except as provided in a written operating agreement, a member or manager may lend money to, borrow money from,act as a surety, guarantor or endorser for, guarantee or assume one or more specific obligations of, provide collateral for,

6

and transact other business with a limited liability company and, subject to other applicable law, has the same rights andobligations with respect to any such matter as a person who is not a member or manager.

§ 8. Indemnification of Member or Manager by Limited Liability Company.

(a) Subject to such standards and restrictions, if any, as are set forth in its certificate of organization or a writtenoperating agreement, a limited liability company may, and shall have the power to, indemnify and hold harmless anymember or manager or other person from and against any and all claims and demands whatsoever. Such indemnificationmay include payment by the limited liability company of expenses incurred in defending a civil or criminal action orproceeding in advance of the final disposition of such action or proceeding, upon receipt of an undertaking by theperson indemnified to repay such payment if he shall be adjudicated to be not entitled to indemnification under thissection which undertaking may be accepted without reference to the financial ability of such person to make repayment.Any such indemnification may be provided although the person to be indemnified is no longer a member or manager.

No indemnification shall be provided for any person with respect to any matter as to which he shall have beenadjudicated in any proceeding not to have acted in good faith in the reasonable belief that his action was in the bestinterest of the limited liability company.

(b) The certificate of organization or a written operating agreement may eliminate or limit the personal liability of amember or manager for breach of any duty to the limited liability company or to another member or manager.

§ 9. Record Keeping Requirements.

(a) Each limited liability company shall keep at the office referred to in clause (1) of section five the following:

(1) a current list of the full name and last known address of each member and manager;

(2) a copy of the certificate of organization and all certificates of amendment thereto, together with executed copiesof any powers of attorney pursuant to which any certificate has been executed;

(3) copies of the limited liability company's federal, state, and local income tax returns and reports, if any, for thethree most recent years;

(4) copies of any then effective written operating agreements and of any financial statements of the limited liabilitycompany for the three most recent years; and

(5) unless contained in a written operating agreement, a writing setting out:

(i) the amount of cash and a description and statement of the agreed value of the other property or servicescontributed by each member and which each member has agreed to contribute;

(ii) the times at which or events on the happening of which any additional contributions agreed to be made by eachmember are to be made;

(iii) any right of a member to receive, or of a manager to make, distributions to a member; and

(iv) any events upon the happening of which the limited liability company is to be dissolved and its affairs woundup.

(b) Records kept under this section shall be subject to inspection and copying at the reasonable request and at theexpense of any member or manager during ordinary business hours.

(c) The current list of names and addresses of the members shall be made available to the state secretary within fivebusiness days of receipt of a written request by said state secretary or by the director of the securities division of thestate secretary's office stating that such information is required in connection with an investigatory or enforcementproceeding.

7

§ 10. Rights of Member or Manager to Information Regarding Condition of Business, Tax Returns, and OtherReasonable Information.

Each member or manager of a limited liability company has the right, subject to such reasonable standards, includingstandards governing what information and documents are to be furnished at what time and location and at whoseexpense, as may be set forth in the operating agreement or otherwise established by the manager or, if there is nomanager, then by the members, to obtain from the limited liability company from time to time upon reasonable demandin writing for any purpose reasonably related to the member's or manager's interest as a member or manager of thelimited liability company (i) true and full information regarding the state of the business and financial condition of thelimited liability company, (ii) promptly after becoming available, a copy of the limited liability company's federal, stateand local income tax returns for each year, and (iii) other information regarding the affairs of the limited liabilitycompany as is just and reasonable.

§ 11. Good Faith Reliance by Member or Manager on Written Operating Agreement and Certain Statements orReports.

A member or manager of a limited liability company shall be fully protected in relying in good faith upon theprovisions of a written operating agreement and the records of the limited liability company and upon such information,opinions, reports or statements presented to the limited liability company by any of its other managers, members,officers, employees, or committees or by any other person, as to matters the member or manager reasonably believes arewithin such other person's professional or expert competence and who has been selected with reasonable care by or onbehalf of the limited liability company, including information, opinions, reports or statements as to the value andamount of the assets, liabilities, profits or losses of the limited liability company or any other facts pertinent to theexistence and amount of assets from which distributions to members might properly be paid.

§ 12. Certificate of Organization; Filing; Contents; Time of Formation; Substantial Compliance; AnnualReport; Fees.

(a) In order to form a limited liability company, one or more authorized persons must execute a certificate oforganization. The certificate of organization shall be filed in the office of the state secretary and set forth:

(1) the name of the limited liability company;

(2) the address of the office in the commonwealth required to be maintained by section five;

(3) the name and address of the resident agent for service of process for the limited liability company required to bemaintained by section five;

(4) if the limited liability company is to have a specific date of dissolution, the latest date on which the limitedliability company is to dissolve;

(5) if the limited liability company has managers at the time of its formation, the name and address of eachmanager;

(6) the name of any other person in addition to any manager who is authorized to execute any documents to be filedwith the office of the state secretary and at least one such person shall be named if there are no managers;

(7) the general character of the limited liability company's business;

(8) if desired, the names of one or more persons authorized to execute, acknowledge, deliver and record anyrecordable instrument purporting to affect an interest in real property, whether to be recorded with a registry of deeds ora district office of the land court; and

(9) any other matters the authorized persons determine to be included therein.

(b) A limited liability company is formed at the time of the filing of the initial certificate of organization in theoffice of the state secretary or at any later date specified in the certificate of organization if, in either case, there hasbeen substantial compliance with the requirements of this section. A limited liability company formed under this chapter

8

shall be a separate legal entity, the existence of which as a separate legal entity shall continue until cancellation of thelimited liability company's certificate of organization.

(c) All limited liability companies formed under this chapter shall also file an annual report with the state secretarysetting forth the information required in subsection (a).

(d) The fee for the filing of the certificate of organization required by subsection (a) shall be five hundred dollars.The fee for the filing of the annual report required by subsection (c) shall be five hundred dollars. Such fees shall bepaid to the state secretary at the time the certificate of organization or the annual report is filed.

§ 13. Amendment of Certificate of Organization; Effective Date of Amendment.

(a) A certificate of organization may be amended by filing a certificate of amendment thereto in the office of the statesecretary. The certificate of amendment shall set forth:

(1) the name of the limited liability company;

(2) the date of filing of its certificate of organization; and

(3) the amendment to the certificate of organization.

(b) A manager or, it there is no manager, then any member, who becomes aware that any statement in a certificateof organization was false when made, or that any matter described in the certificate of organization has changed,making the certificate of organization false in any material respect, shall promptly amend the certificate of organizationto correct such matter.

(c) A certificate of organization shall be amended to reflect (i) the designation of managers of a limited liabilitycompany which theretofore did not have managers or (ii) any change in the managers of a limited liability company orother authorized signatories.

(d) A certificate of organization may be amended at any time for any other proper purpose.

(e) Unless otherwise provided in this chapter or unless a later effective date, which shall be a date certain, isprovided for in the certificate of amendment, a certificate of amendment shall be effective at the time of its filing withthe state secretary.

§ 14. Certificate of Organization Cancelled Upon Dissolution.

A certificate of organization shall be cancelled upon the dissolution and the completion of winding up of a limitedliability company, or at any other time there are no members, or upon the filing of a certificate of consolidation ormerger if the limited liability company is not the resulting or surviving entity in a consolidation or merger. A certificateof cancellation shall be filed in the office of the state secretary to accomplish the cancellation of a certificate oforganization upon the dissolution and the completion of winding up of a limited liability company or at any other timethere are no members and shall set forth:

(1) the name of the limited liability company;

(2) the date of filing of its certificate of organization;

(3) the reason for filing the certificate of cancellation;

(4) the effective date, which shall be a date certain, of cancellation if it is not to be effective upon the filing of thecertificate; and

(5) any other information the person filing the certificate of cancellation determines.

9

§ 15. Execution of Certificates; Execution as Affirmation of Truth under Penalty of Perjury.

(a) Each certificate required by this chapter to be filed in the office of the state secretary shall be executed:

(1) by any manager if the limited liability company has managers or by any other authorized person set forth in thecertificate of organization or any amendment thereto;

(2) if the limited liability company has not been formed, by the person or persons forming the limited liabilitycompany; or

(3) if the limited liability company is in the hands of a receiver, trustee, or other court-appointed fiduciary, by suchreceiver, trustee or fiduciary.

(b) Unless otherwise provided in the operating agreement, any person may sign any certificate or amendmentthereto or enter into the operating agreement or amendment thereto by an agent, including an attorney-in-fact. Anauthorization, including a power of attorney, to sign any certificate or amendment thereto or to enter into the operatingagreement or amendment thereto need not be in writing, need not be sworn to, verified or acknowledged, and need notbe filed in the office of the state secretary, but if in writing, must be retained by the limited liability company.

(c) The execution of a certificate by an authorized person constitutes an affirmation, under the penalties of perjury,that the facts stated therein are true.

§ 16. Failure or Refusal to Execute Certificate, Operating Agreement or Amendment; Right to Petition SuperiorCourt.

(a) If a person required to execute a certificate required by this chapter fails or refuses to do so, any other person whois adversely affected by the failure or refusal may petition the superior court department of the trial court to direct theexecution of the certificate. If the court finds that the execution of the certificate is proper and that any person sodesignated has failed or refused to execute the certificate, it shall order the state secretary to record an appropriatecertificate.

(b) If a person required to execute an operating agreement or amendment thereto fails or refuses to do so, anyperson who is adversely affected by the failure or refusal may petition the superior court department of the trial court todirect the execution of the operating agreement or amendment thereto. If the court finds that the operating agreement oramendment thereto should be executed and that any person required to execute the operating agreement or amendmentthereto has failed or refused to do so, it shall enter an order granting appropriate relief.

§ 17. Original Signed Copy and Duplicate of Certificates Filed; Duplicate Returned.

(a) The original signed copy of the certificate of organization and of any certificates of amendment or cancellation orof any judicial decree of amendment or cancellation, and of any certificate of consolidation or merger or conversion andof any restated certificate shall be delivered to the state secretary, together with a duplicate copy which may be aphotocopy or a duplicate original. A person who executes a certificate as an attorney-in-fact or fiduciary shall not berequired to exhibit evidence of his authority as a prerequisite to filing. Any certificate authorized to be filed with thestate secretary under any provision of this chapter shall be originally signed except as otherwise required by this chapteror permitted from time to time by the state secretary. Unless the state secretary finds that any certificate does notconform to law, he shall:

(1) confirm that the certificate of organization, the certificate of amendment, the certificate of cancellation or of anyjudicial decree of amendment or cancellation, the certificate of consolidation or merger or the restated certificate hasbeen filed in his office by endorsing upon the original certificate and the duplicate certificate the word "filed", and thedate and time of the filing. Said endorsement shall be conclusive of the date and time of its filing in the absence ofactual fraud;

(2) file the endorsed certificate; and

(3) return to the person who filed it or his representative the duplicate copy of the original signed instrument,similarly endorsed.

10

(b) Upon the filing of a certificate of amendment or judicial decree of amendment or restated certificate in theoffice of the state secretary, or upon the effective date of a certificate of amendment or judicial decree thereto or restatedcertificate, as provided for therein, the certificate of organization shall be amended or restated as set forth therein. Uponthe filing of a certificate of cancellation or a judicial decree thereof, or a certificate of consolidation or merger whichacts as a certificate of cancellation, or upon the effective date of a certificate of cancellation or a judicial decree thereofor of a certificate of consolidation or merger which acts as a certificate of cancellation, as provided for therein, saidcertificate of organization shall be cancelled.

§ 18. Filing of Certificate of Organization as Notice of Certain Facts.

The fact that a certificate of organization is on file in the office of the state secretary shall be notice that the entityformed in connection with the filing of the certificate of organization is a limited liability company formed under thelaws of the commonwealth and shall be notice of all other facts set forth therein which are required to be set forth in acertificate of organization by section twelve.

§ 19. Integration of Amendments into Restated Certificate of Organization.

(a) A limited liability company may at any time, integrate into a single instrument all of the provisions of itscertificate of organization which are then in effect and operative as a result of there having theretofore been filed withthe state secretary one or more certificates or other instruments pursuant to any of the sections referred to in this chapterand it may at the same time also further amend its certificate of organization by adopting a restated certificate oforganization.

(b) If a restated certificate of organization merely restates and integrates but does not further amend the initialcertificate of organization, as theretofore amended or supplemented by any instrument that was executed and filedpursuant to any of the sections in this chapter, it shall be specifically designated in its heading as a "restated certificateof organization" together with such other words as the limited liability company may deem appropriate and shall beexecuted by an authorized person and filed as provided in section seventeen in the office of the state secretary. If arestated certificate restates and integrates and also further amends in any respect the certificate of organization, astheretofore amended or supplemented, it shall be specifically designated in its heading as an "amended and restatedcertificate of organization" together with such other words as the limited liability company may deem appropriate andshall be executed by at least one authorized person, and filed as provided in section seventeen in the office of the statesecretary.

(c) A restated certificate of organization shall state, either in its heading or in an introductory paragraph, the limitedliability company's present name, and, if such name has been changed, the name under which it was originally filed, thedate of filing of its original certificate of organization with the state secretary, and the effective date, which shall be adate certain, of the restated certificate if it is not to be effective upon the filing of the restated certificate. A restatedcertificate shall also state that it was duly executed and is being filed in accordance with this section. If a restatedcertificate only restates and integrates and does not further amend a limited liability company's certificate oforganization as theretofore amended or supplemented and there is no difference between the provisions of suchcertificate of organization and the provisions contained in the restated certificate, it shall state the fact of suchdifference.

(d) Upon the filing of a restated certificate of organization with the state secretary, or upon the future effective dateof a restated certificate of organization as provided for therein, the initial certificate of organization, as theretoforeamended or supplemented, shall be superseded by such restated certificate; thereafter, the restated certificate oforganization, including any further amendment or changes made thereby, shall be the certificate of organization of thelimited liability company, but the original effective date of organization shall remain unchanged.

(e) Any amendment or change effected in connection with the restatement and integration of the certificate oforganization shall be subject to any other provision of this chapter, not inconsistent with this section, which would applyif a separate certificate of amendment were filed to effect such amendment or change.

11

§ 20. Acquiring a Limited Liability Company Interest; Time Person is Admitted as Member.

(a) In connection with the formation of a limited liability company, a person acquiring a limited liability companyinterest is admitted as a member of the limited liability company upon the later to occur of:

(1) the formation of the limited liability company; or

(2) the time provided in and upon compliance with the operating agreement or, if the operating agreement does notso provide, when the person's admission is reflected in the records of the limited liability company.

(b) After the formation of a limited liability company, a person acquiring a limited liability company interest isadmitted as a member of the limited liability company:

(1) in the case of a person acquiring a limited liability company interest directly from the limited liability company,at the time provided in and upon compliance with a written operating agreement or, if a written operating agreementdoes not so provide, upon the consent of all members; or

(2) in the case of an assignee of a limited liability company interest, as provided in section forty-one.

(c) A person may be admitted to a limited liability company as a member and may receive an interest in the limitedliability company without making a contribution or being obligated to make a contribution to the limited liabilitycompany.

§ 21. Operating Agreement; Creation of Classes or Groups of Members; Voting Rights.

(a) An operating agreement may provide for classes or groups of members having such relative rights, powers andduties as the operating agreement may provide, and may make provision for the future creation in the manner providedin the operating agreement of additional classes or groups of members having such relative rights, powers and duties asmay from time to time be established, including rights, powers and duties senior to existing classes and groups ofmembers. An operating agreement may provide for the taking of an action, including the amendment of the operatingagreement, without the vote or approval of any member or class or group of members, including an action to createunder the provisions of the operating agreement a class or group of limited liability company interests that was notpreviously outstanding.

(b) An operating agreement may grant to all or certain identified members or a specified class or group of themembers the right to vote separately or with all or any class or group of the members or managers, on any matter.Voting by members may be on a per capita, number, financial interest, class group or any other basis.

(c) An operating agreement which grants members a right to vote may set forth provisions relating to notice of thetime, place or purpose of any meeting at which any matter is to be voted on by any members, waiver of any such notice,action by consent without a meeting, the establishment of a record date, quorum requirements, voting in person or byproxy, or any other matter with respect to the exercise of any such right to vote.

(d) If an operating agreement does not provide for the voting rights of members, the decision of members who ownmore than fifty percent of the unreturned contributions to the limited liability company determined in accordance withsection twenty-nine shall be controlling.

§ 22. Obligations and Liabilities of Limited Liability Company; Personal Liability Based on Status as Member orManager.

Except as otherwise provided by this chapter, the debts, obligations and liabilities of a limited liability company,whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the limited liabilitycompany; and no member or manager of a limited liability company shall be personally liable, directly or indirectly,including, without limitation, by way of indemnification, contribution, assessment or otherwise, for any such debt,obligation or liability of the limited liability company solely by reason of being a member or acting as a manager of thelimited liability company.

12

§ 23. Designation as Manager of Limited Liability Company.

A person may be named or designated as a manager of the limited liability company as defined in clause seven ofsection two.

§ 24. Management of Limited Liability Company Vested in Members; Operating Agreement May Provide forManagers.

(a) Unless otherwise provided in the operating agreement, the management of a limited liability company shall bevested in its members. An operating agreement may provide for the management, in whole or in part, of a limitedliability company by one or more managers, who shall hold office and have the duties set forth in the operatingagreement. Subject to section thirty-seven, a manager shall cease to be a manager as provided in the operatingagreement.

(b) If a limited liability company has at least 1 manager, then unless otherwise provided in the operating agreement,the manager shall manage and control the limited liability company and no member shall manage or control the limitedliability company. If a limited liability company has no manager then, unless otherwise provided in the operatingagreement, the members shall manage and control the limited liability company.

(c) If a limited liability company has at least 1 manager then, unless otherwise provided in the operating agreement,each manager may execute documents and act for the limited liability company and no member shall execute documentsor act for the limited liability company. If a limited liability company has no manager then, unless otherwise provided inthe operating agreement, each member may execute documents and act for the limited liability company.

(d) Unless otherwise provided in the operating agreement, a member or manager of a limited liability company maydelegate some or all of such member's or manager's rights and powers to execute documents and act for and manage andcontrol the business and affairs of the limited liability company, including delegating to agents and employees of amember or manager of the limited liability company, and delegating by a management agreement or another agreementwith, or otherwise to, other persons. Unless otherwise provided in the operating agreement, such delegation by amember or manager of a limited liability company shall not cause the member or manager to cease to be a member ormanager, as the case may be, of the limited liability company.

§ 25. Manager Need Not be Member of Limited Liability Company.

A manager need not be a member of the limited liability company.

§ 26. Powers and Duties of Managers Provided by the Operating Agreement; Classes and Groups of Managers;Voting Rights.

(a) An operating agreement may provide for classes or groups of managers having such relative rights, powers andduties as the operating agreement may provide, and may make provision for the future creation in the manner providedin the operating agreement of additional classes or groups of managers having such relative rights, powers and duties asmay from time to time be established, including rights, powers and duties senior to existing classes and groups ofmanagers. An operating agreement may provide for the taking of an action, including the amendment of the operatingagreement, without the vote or approval of any manager or class or group of managers.

(b) The operating agreement may grant to all or certain identified managers or a specified class or group of themanagers the right to vote, separately or with all or any class or group of managers or members, on any matter. Votingby managers may be on a per capita, number, financial interest, class, group or any other basis.

(c) An operating agreement which grants managers a right to vote may set forth provisions relating to notice of thetime, place or purpose of any meeting at which any matter is to be voted on by any manager or class or group ofmanagers, waiver of any such notice, action by consent without a meeting, the establishment of a record date, quorumrequirements, voting in person or by proxy, or any other matter with respect to the exercise of any such right to vote.

13

(d) If an operating agreement does not provide for the voting rights of managers, the decision of a majority innumber of the managers shall be controlling.

§ 27. Form of Contribution to Limited Liability Company.

The contribution of a member to a limited liability company may be in cash, property or services rendered, or apromissory note or other obligation to contribute cash or property or to perform services.

§ 28. Obligation to Contribute Promised Property or Services; Cash in Lieu of Property or Service; SpecificPerformance; Compromise.

(a) Except as provided in a written operating agreement, a member is obligated to a limited liability company toperform any promise to contribute cash or property or to perform services, even if he is unable to perform because ofdeath, disability or any other reason. If a member does not make the required contribution of property or services, he isobligated at the option of the limited liability company to contribute cash equal to that portion of the agreed value asstated in the records of the limited liability company of the contribution that has not been made. The foregoing optionshall be in addition to, and not in lieu of, any other rights, including the right to specific performance, that the limitedliability company may have against such member under an operating agreement or applicable law.

(b) Unless otherwise provided in a written operating agreement, the obligation of a member to make a contributionor return money or other property paid or distributed in violation of this chapter may be compromised only by consentof all the members. Notwithstanding the compromise, a creditor of a limited liability company who extends credit, afterthe entering into of the operating agreement or an amendment thereto which, in either case, reflects the obligation, andbefore the amendment thereof to reflect the compromise, may enforce the original obligation to the extent that, inextending credit, the creditor reasonably relied on the obligation of a member to make a contribution or return. Aconditional obligation of a member to make a contribution or return money or other property to a limited liabilitycompany may not be enforced unless the conditions of the obligation have been satisfied or waived as to or by suchmember. Conditional obligations include contributions payable upon a discretionary call of a limited liability companyprior to the time the call occurs.

(c) An operating agreement may provide that the interest of a member who fails to make any contribution or otherpayment that the member is required to make shall be subject to specified remedies for, or specified consequences of,the failure. The remedy or consequence may take the form of reducing the defaulting member's interest in the limitedliability company, subordinating the defaulting member's interest in the limited liability company to that of thenondefaulting members, a forced sale of the interest in the limited liability company, forfeiture of the interest in thelimited liability company, the lending by the nondefaulting members of the amount necessary to meet the commitment,a fixing of the value of the member's interest in the limited liability company by appraisal or by formula and redemptionand sale of the member's interest in the limited liability company at that value, or other remedy or consequences.

§ 29. Allocation of Profits and Losses Among Members.

(a) The profits and losses of a limited liability company shall be allocated among the members, and among classes orgroups of members, in the manner provided in the operating agreement. If an operating agreement does not so provide,profits and losses shall be allocated on the basis of the agreed value as stated in the records of the limited liabilitycompany of the contributions of each member to the extent they have been received by the limited liability companyand have not been returned.

(b) For purposes of this chapter, a member receives a return of his contribution to the extent that a distribution tohim reduces his share of the fair value of the net assets of the limited liability company below the value, as set forth inthe records required to be kept under this chapter, of his contribution which has not been distributed to him.

14

§ 30. Distributions of Cash and Other Assets Among Members.

Distributions of cash or other assets of a limited liability company shall be allocated among the members, and amongclasses or groups of members, in the manner provided in the operating agreement. If the operating agreement does notso provide, distributions shall be made on the basis of the agreed value as stated in the records of the limited liabilitycompany of the contributions of each member to the extent they have been received by the limited liability companyand have not been returned.

§ 31. When Member Entitled to Receive Distributions.

Except as provided in sections thirty-two and forty-six, a member is entitled to receive distributions from a limitedliability company only to the extent and at the times or upon the happening of the events specified in the operatingagreement or, if the operating agreement does not so specify, as determined by the members or managers pursuant tosection twenty-one or section twenty-six.

§ 32. Distribution to Member Upon Resignation.

Upon resignation, a resigning member is entitled to receive any distribution to which he is entitled upon resignationunder a written operating agreement. If not otherwise provided in a written operating agreement, a resigning member isentitled to receive, within a reasonable time after resignation, the fair value of his limited liability company interest as ofthe date of resignation based upon his right to share in distributions from the limited liability company.

§ 33. Distribution Limited to Cash; Exceptions Provided in Operating Agreement.

Except as provided in a written operating agreement, a member, regardless of the nature of his contribution, has noright to demand and receive any distribution from a limited liability company in any form other than cash. Except asprovided in a written operating agreement, a member may not be compelled to accept a distribution of any asset in kindfrom a limited liability company to the extent that the percentage of the asset distributed to him exceeds a percentage ofthe asset which is equal to the percentage in which he shares in distributions from the limited liability company.

§ 34. Remedies of Creditor Available with Respect to Distribution; Record Date.

Except as provided in the operating agreement, and subject to section forty-six, at the time a member becomesentitled to receive a distribution, he has the status of, and is entitled to all remedies available to, a creditor of the limitedliability company with respect to the distribution. An operating agreement may provide for the establishment of a recorddate with respect to allocations and distributions by a limited liability company.

§ 35. Member May Be Personally Liable for Unlawful Distribution; Contribution; Limitation Period forBringing Action.

(a) A member or manager who votes for or assents to a distribution in violation of the operating agreement shall bepersonally liable to the limited liability company for the amount of the distribution that exceeds what could have beendistributed without violating the operating agreement.

(b) Each member or manager held liable under subsection (a) for an unlawful distribution is entitled to contribution:

(1) from each other member or manager who could be held liable under said subsection (a) for the unlawfuldistribution; and

(2) from each member for the amount the member received knowing that the distribution was made in violation ofthe operating agreement.

15

(c) A proceeding under this section is barred unless it is commenced within two years after the date of thedistribution.

§ 36. Resignation of Member; Damages for Breach of Operating Agreement.

A member may resign as a member of a limited liability company at the time or upon the happening of eventsspecified in the operating agreement and in accordance with the operating agreement. An operating agreement mayprovide that a member shall not have the right to resign as a member of a limited liability company. Regardless ofwhether an operating agreement provides that a member does not have the right to resign as a member of a limitedliability company, a member may resign as a member of a limited liability company upon not less than six months' priorwritten notice to the limited liability company at its office in the commonwealth as set forth in the certificate oforganization filed in the office of the state secretary and to each other member and each manager at each other member'sand each manager's address as set forth on the records of the limited liability company as of the date of the notice. If theresignation of a member violates the operating agreement, in addition to any remedies otherwise available underapplicable law, a limited liability company may recover from the resigning member damages for breach of the operatingagreement and offset the damages against any amounts otherwise distributable to the resigning member.

§ 37. Resignation of Manager; Damages for Breach of Operating Agreement.

A manager may resign as a manager of a limited liability company at the time or upon the happening of eventsspecified in the operating agreement and in accordance with the operating agreement. An operating agreement mayprovide that a manager shall not have the right to resign as a manager of a limited liability company. Regardless ofwhether the operating agreement provides that a manager does not have the right to resign as a manager of a limitedliability company, a manager may resign as a manager of a limited liability company at any time upon prior writtennotice to each member and each other manager at each member's and each other manager's address as set forth on therecords of the limited liability company as of the date of the notice. If the resignation of a manager violates theoperating agreement, in addition to any remedies otherwise available under applicable law, a limited liability companymay recover from the resigning manager damages for breach of the operating agreement and offset the damages againstany amounts otherwise distributable to the resigning manager.

§ 38. Limited Liability Company Interest is Personal Property.

A limited liability company interest is personal property. A member has no interest in specific limited liabilitycompany property.

§ 39. Assignability of Limited Liability Company Interest.

(a) A limited liability company interest is assignable in whole or in part except as provided in the operatingagreement. The assignee of a member's limited liability company interest shall have no right to participate in themanagement of the business and affairs of a limited liability company except:

(1) upon the approval of all of the members of the limited liability company other than the member assigning thelimited liability company interest; or

(2) upon compliance with any procedure provided for in a written operating agreement.

(b) Unless otherwise provided in the operating agreement:

(1) an assignment entitles the assignee to share in such profits and losses, to receive such distribution ordistributions, and to receive such allocation of income, gain, loss, deduction, or credit or similar items to which theassignor was entitled, to the extent assigned; and

(2) a member ceases to be a member and to have the power to exercise any rights or powers of a member uponassignment of all of his limited liability company interest. Unless otherwise provided in the operating agreement, the

16

pledge of, or granting of a security interest, lien or other encumbrance in or against, any or all of the limited liabilitycompany interest of a member shall not cause the member to cease to be a member or to have the power to exercise anyrights or powers of a member.

(c) An operating agreement may provide that a member's interest in a limited liability company may be evidencedby a certificate of limited liability company interest issued by the limited liability company.

(d) Unless otherwise provided in the operating agreement and except to the extent assumed by agreement, until anassignee of a limited liability company interest becomes a member, the assignee shall have no liability as a membersolely as the result of the assignment.

§ 40. Judgment Creditor of Member May Acquire Rights of Assignee in Limited Liability Company Interest;Applicability of Exemption Laws.

On application to a court of competent jurisdiction by any judgment creditor of a member, the court may charge thelimited liability company interest of the member with payment of the unsatisfied amount of the judgment with interest.To the extent so charged, the judgment creditor has only the rights of an assignee of the limited liability companyinterest. This chapter does not deprive any member of the benefit of any exemption laws applicable to his limitedliability company interest.

§ 41. Assignee May Become a Member; Procedure; Rights and Liabilities as Member; Continued Liability ofAssignor.

(a) An assignee of a limited liability company interest may become a member:

(1) upon the approval of all of the members of the limited liability company other than the member assigning thelimited liability company interest; or

(2) upon compliance with any procedure provided for in a written operating agreement.

(b) An assignee who has become a member has, to the extent assigned, the rights and powers, and is subject to therestrictions and liabilities, of a member under the operating agreement and this chapter. Notwithstanding the foregoing,unless otherwise provided in the operating agreement, an assignee who becomes a member is liable for the obligationsof his assignor to make contributions as provided in section twenty-eight, but shall not be liable for the obligations ofhis assignor under section thirty-five. However, the assignee is not obligated for liabilities, including the obligations ofhis assignor to make contributions as provided in section twenty-eight, unknown to the assignee at the time he became amember and which could not be ascertained from the operating agreement.

(c) Whether or not an assignee of a limited liability company interest becomes a member, the assignor is notreleased from his liability to a limited liability company under sections thirty-one to thirty-seven, inclusive.

§ 42. Effect of Death or Incompetency of Individual Member, or Dissolution or Termination of Corporate, Trustor Other Entity Member.

Unless otherwise provided in the operating agreement, if a member who is an individual dies or a court of competentjurisdiction adjudges him to be incompetent to manage his person or his property, the member's executor, administrator,guardian, conservator or other legal representative may exercise all of the member's rights for the purpose of settling hisestate or administering his property, including any power under the operating agreement of an assignee to become amember. Unless otherwise provided in an operating agreement, if a member is a corporation, trust or other entity and isdissolved or terminated, the powers of that member may be exercised by its legal representative or successor.

17

§ 43. Conditions for Dissolution of Limited Liability Company.

A limited liability company is dissolved and its affairs shall be wound up upon the first to occur of the following:

(1) the time specified in the operating agreement;

(2) the happening of an event as specified in the operating agreement;

(3) the written consent of all members;

(4) with respect to a limited liability company formed prior to January 1, 1997, except as provided in a writtenoperating agreement, the death, insanity, retirement, resignation, expulsion, bankruptcy or dissolution of a member orthe occurrence of any other event which terminates the membership of a member in the limited liability company unlessthe business of the limited liability company is continued either by the consent of all the remaining members withinninety days following the occurrence of any such event or pursuant to a right to continue stated in a written operatingagreement; or

(5) the entry of a decree of judicial dissolution under section forty-four.

§ 44. Superior Court May Decree Dissolution.

On application by or for a member or manager the superior court department of the trial court may decree dissolutionof a limited liability company whenever it is not reasonably practicable to carry on its business in conformity with thecertificate of organization or the operating agreement.

§ 45. Winding Up Limited Liability Company's Affairs.

(a) Unless otherwise provided in an operating agreement, a manager who has not wrongfully dissolved a limitedliability company or, if none, the members or a person approved by the members pursuant to the operating agreement,or if there is no operating agreement, pursuant to section twenty-one, may wind up the limited liability company'saffairs; but the superior court department of the trial court, upon cause shown, may wind up the limited liabilitycompany's affairs upon application of any member or manager, his legal representative or assignee, and in connectiontherewith, may appoint a liquidating trustee.

(b) Upon dissolution of a limited liability company and until the filing of a certificate of cancellation as provided insection fourteen, the persons winding up the limited liability company's affairs may, in the name of, and for and onbehalf of, the limited liability company, prosecute and defend suits, whether civil, criminal or administrative, graduallysettle and close the limited liability company's business, dispose of and convey the limited liability company's property,discharge or make reasonable provision for the limited liability company's liabilities, and distribute to the members anyremaining assets of the limited liability company, all without affecting the liability of members and managers andwithout imposing liability on a liquidating trustee.

§ 46. Distribution of Assets of Dissolved Limited Liability Company.

(a) Upon the winding up of a limited liability company, the assets shall be distributed as follows:

(1) to creditors, including members and managers who are creditors, to the extent otherwise permitted by law, insatisfaction of liabilities of the limited liability company, whether by payment or the making of reasonable provision forpayment thereof, other than liabilities for which reasonable provision for payment has been made and liabilities fordistributions to members under section thirty-one or section thirty-two;

(2) unless otherwise provided in the operating agreement, to members and former members in satisfaction ofliabilities for distributions under section thirty-one or section thirty-two; and

18

(3) unless otherwise provided in the operating agreement, to members first for the return of their contributions andsecond respecting their limited liability company interests, in the proportions in which the members share indistributions.

(b) A limited liability company which has dissolved shall pay or make reasonable provision to pay all claims andobligations, including all contingent, conditional or unmatured claims and obligations, known to the limited liabilitycompany and all claims and obligations which are known to the limited liability company but for which the identity ofthe claimant is unknown. If there are sufficient assets, such claims and obligations shall be paid in full and any suchprovision for payment made shall be made in full. If there are insufficient assets, such claims and obligations shall bepaid or provided for according to their priority and, among claims and obligations of equal priority, ratably to the extentof assets available therefor. Unless otherwise provided in an operating agreement, any remaining assets shall bedistributed as provided in this chapter. Any liquidating trustee winding up a limited liability company's affairs who hascomplied with this section shall not be personally liable to the claimants of the dissolved limited liability company byreason of such person's actions in winding up the limited liability company.

§ 47. Foreign Limited Liability Company; Activities; Liabilities and Defenses.

A foreign limited liability company shall not do any business in the commonwealth which is prohibited to a limitedliability company organized under this chapter. A member, manager or other agent of a foreign limited liabilitycompany shall be subject to the liabilities, and shall have the defenses, with respect to the limited liability company, asofficers, directors and other agents of a foreign corporation have under section 15.11 of subdivision A of Part 15 ofchapter 156D. Subject to the constitution of the commonwealth, a foreign limited liability company's organization andinternal affairs and the liability of its members and managers shall be governed by the laws of the jurisdiction underwhich it is organized. A foreign limited liability company may not be denied registration by reason of any differencebetween such laws and the laws of the commonwealth.

§ 48. Foreign Limited Liability Company; Doing Business Within Commonwealth Defined; RegistrationRequirement; Filing Fee.

A foreign limited liability company shall be considered to be doing business in the commonwealth for the purpose ofthis section if it would be considered to be doing business in the commonwealth for the purpose of Part 15 ofsubdivision A of chapter 156D if it were a foreign corporation. Every foreign limited liability company doing businessin the commonwealth shall submit to the state secretary, within ten days after it commences doing business in thecommonwealth, an application for registration as a foreign limited liability company, which shall be signed and swornto by an authorized person. The application shall be in such form as the state secretary shall require and shall beaccompanied by a certificate of legal existence or comparable certificate of the foreign limited liability company, issuedby an officer or agency properly authorized in the jurisdiction in which the foreign limited liability company isorganized, or such other evidence of legal existence as the state secretary shall approve. If the certificate or suchevidence is in a foreign language, a translation thereof, under oath of the translator, shall be attached thereto.

The application for registration shall set forth the following information:

(1) the name of the foreign limited liability company and, if different, the name under which it proposes to dobusiness in the commonwealth;

(2) the jurisdiction where such limited liability company was organized and the date of its organization;

(3) the general character of the business the foreign limited liability company proposes to do in the commonwealth;

(4) the address of the principal office of the foreign limited liability company;

(5) if the foreign limited liability company has managers, the name and address of each manager;

(6) the address of the principal office of the foreign limited liability company in the commonwealth, if any;

(7) the name and address of the resident agent of the foreign limited liability company;

19

(8) if the foreign limited liability company has a specific date of dissolution, the latest date on which the foreignlimited liability company is to dissolve; and

(9) if desired, the name of one or more persons authorized to execute, acknowledge, deliver and record anyrecordable instrument purporting to affect an interest in real property, whether to be recorded with a registry of deeds ora district office of the land court.

If the foreign limited liability company's certificate of organization from its jurisdiction of organization sets forthany part of the information required to be set forth in the application for registration in the commonwealth, the foreignlimited liability company may submit a certified copy of such certificate, with a sworn translation, if necessary, in lieuof such part of the application for registration.

Each foreign limited liability company formed under this chapter shall also file with the state secretary an annualreport setting forth, in updated form, the information contained in the application for registration.

The fee for the filing of the application of registration and each annual report shall be five hundred dollars payableto the state secretary and due at the time of filing.

§ 49. Examination and Approval of Application for Registration by Foreign Limited Liability Company.

The state secretary shall examine and endorse his approval on the application for registration if the business of theforeign limited liability company is not prohibited by law to a limited liability company formed under this chapter and ifthe state secretary determines that the application complies with section forty-eight. Upon such approval, the applicationshall be deemed to be filed with the state secretary and the foreign limited liability company shall be deemed to beregistered to do business in the commonwealth. The state secretary shall keep the records and have the other duties withrespect to foreign limited liability companies as provided in subsection (c) of section 15.03 of subdivision A of Part 15of chapter 156D.

§ 50. Foreign Limited Liability Company May Use Any Name Authorized Under Limited Liability CompanyAct.

A foreign limited liability company may register with the state secretary and do business in the commonwealth underany name, whether or not it is the name under which it is registered in its jurisdiction of organization, that could beassumed by a limited liability company organized under this chapter.

§ 51. Foreign Limited Liability Company Must Appoint Resident Agent.

Each foreign limited liability company doing business in the commonwealth shall appoint a resident agent as its trueand lawful attorney upon whom all lawful processes in any action or proceeding against such foreign limited liabilitycompany in the commonwealth may be served. The resident agent shall be either an individual who is a resident of andhas a business address in the commonwealth, a corporation organized under the laws of the commonwealth, or acorporation organized under the laws of any other state of the United States, which has complied with of section 15.03of subdivision A of Part 15 of chapter 156D and which has an office in the commonwealth. Such appointment shallbecome effective upon the filing in the office of the state secretary of a certificate, signed under the penalties of perjuryby an authorized person, setting forth the name and business address of the resident agent. Such foreign limited liabilitycompany may revoke any such appointment or appoint a new resident agent, which revocation shall become effectiveupon filing with the state secretary of a certificate setting forth the fact of such revocation or the appointment of a newresident agent and, in the case of the appointment of a new resident agent, the name and business address of such agent.In the event of any change in the business address of the resident agent of any foreign limited liability company, acertificate setting forth the new business address of such resident agent, signed under the penalties of perjury by suchresident agent, shall be filed with the state secretary within five days of such change. Any resident agent of a foreignlimited liability company may resign as such agent by filing with the state secretary a certificate signed under thepenalties of perjury by such agent setting forth the fact of his resignation and the effective date thereof, which shall benot less than thirty days after the date of the filing of such certificate, and stating that a copy of such certificate has been

20

mailed, postage prepaid, to the foreign limited liability company at the address of the principal office of the foreignlimited liability company in the commonwealth currently on file with the state secretary or, if that office is also theoffice of the resident agent, at the address most recently furnished to such agent by the foreign limited liability companyas the address to which copies of all process served upon him as such agent are to be forwarded. Compliance with thissection shall be deemed compliance with the provisions of section five of chapter two hundred and twenty-seven.

§ 52. False Statement or Change in Facts; Filing of Amendment or Correction.

If any statement in the application for registration of a foreign limited liability company was false when made or anyarrangements or other facts described have changed, making the application inaccurate in any respect, the foreignlimited liability company shall promptly file in the office of the state secretary a certificate, signed and sworn to by anauthorized person, correcting or amending such statement.

§ 53. Registration of Foreign Limited Liability Company; Cancellation or Withdrawal.

(a) The registration of a foreign limited liability company doing business in the commonwealth shall be canceled inthe manner and at such times as are provided in section fourteen, except that the certificate of cancellation requiredunder section fourteen shall, in addition to the information required thereunder, set forth either that all taxes and feesowed the commonwealth have been paid or provided for or that such foreign limited liability company has no assets. Aforeign limited liability company doing business in this commonwealth may withdraw from the commonwealth bysubmitting to the state secretary a certificate of withdrawal, in such form as said state secretary shall require, signed andsworn to by an authorized person, stating:

(1) the name of such foreign limited liability company and, if different, the name under which it is registered anddoing business in the commonwealth;

(2) the address of the principal office of such foreign limited liability company;

(3) the address of the principal office in the commonwealth of such foreign limited liability company, if any, andthe name and business address of its resident agent in the commonwealth;

(4) that such foreign limited liability company is not doing business in the commonwealth; and

(5) that all taxes and fees owed the commonwealth have been paid or provided for.

The state secretary shall examine and endorse his approval on the certificate of withdrawal if he determines thatthe certificate complies with this section. Upon such approval, the certificate of withdrawal shall be deemed to be filedwith the state secretary.

§ 54. Failure to Register Foreign Limited Liability Company; Fine; Service of Process.

(a) A foreign limited liability company doing business in the commonwealth which fails to register with the statesecretary shall, for each year that such failure shall continue, be fined not more than five hundred dollars. No suchfailure shall affect the validity of any contract involving the foreign limited liability company, nor is a member or amanager of a foreign limited liability company liable for the obligations of the foreign limited liability company solelyby reason of such failure, but no action shall be maintained or recovery had by the foreign limited liability company inany of the courts of the commonwealth as long as such failure continues. The failure of a foreign limited liabilitycompany to register with the state secretary shall not prevent the foreign limited liability company from defending anyaction, suit or proceeding in any of the courts of the commonwealth.

(b) A foreign limited liability company shall be liable to be sued and to have its property attached in the samemanner and to the same extent as persons who are residents of other jurisdictions. Every foreign limited liabilitycompany doing business in the commonwealth without having registered as prescribed in this chapter, and every foreignlimited liability company having registered as prescribed in this chapter but whose resident agent cannot after a diligentsearch by an officer authorized to serve legal process be found at the business address of such resident agent stated in itsmost recent certificate filed with the state secretary pursuant to this chapter, and every foreign limited liability company

21

whose resident agent refuses to act as such, shall be deemed to have appointed the state secretary to be its true andlawful attorney upon whom all process in any action or proceeding may be served so long as any liability incurred in thecommonwealth while it was doing business shall remain outstanding.

Service of process in all actions and proceedings in the commonwealth against such a foreign limited liabilitycompany may be made upon the state secretary. Service of process in all actions and proceedings in the commonwealthagainst a foreign limited liability company formerly doing business in the commonwealth that has not complied with theprovisions of section forty-eight or against a foreign limited liability company formerly doing business in thecommonwealth that has withdrawn from the commonwealth pursuant to this chapter, may be made upon the statesecretary if the action or proceeding involves a liability alleged to have been incurred by the foreign limited liabilitycompany while it was doing business in the commonwealth.

When lawful process in any action or proceeding against any foreign limited liability company which pursuant tothis section may be made upon the state secretary is served upon the state secretary, he shall immediately forward theprocess by mail, postage prepaid, directed to such foreign limited liability company at its last known principal office or,in the case of a foreign limited liability company established in a foreign country, to the resident manager, if any, in theUnited States. The state secretary shall keep a record of all such process, which shall show the date of service.

In the case of service of process on a foreign limited liability company that has not complied with the provisions ofsection forty-eight, the notice herein provided for shall be mailed by the state secretary to the proper address of theforeign limited liability company furnished to him by the plaintiff or his attorney.

Service of process upon a foreign limited liability company for violation of any criminal law of the commonwealthmay be made in the manner hereinabove provided.

§ 55. Suit Against Limited Liability Company; Name.

Suit may be brought by or against a limited liability company in its own name.

§ 56. Who May Bring Suit on Behalf of the Limited Liability Company.

Except as otherwise provided in a written operating agreement, suit on behalf of the limited liability company may bebrought in the name of the limited liability company by:

(a) any member or members of a limited liability company, whether or not the operating agreement vestsmanagement of the limited liability company in one or more managers, who are authorized to sue by the vote ofmembers who own more than fifty percent of the unreturned contributions to the limited liability company determinedin accordance with section twenty-nine; provided, however, that in determining the vote so required, the vote of anymember who has an interest in the outcome of the suit that is adverse to the interest of the limited liability companyshall be excluded; or

(b) any manager or managers of a limited liability company, if the operating agreement vests management of thelimited liability company in one or more managers, who are authorized to sue by the vote of a majority in number of themanagers; provided, however, that, in determining the vote so required, the vote of any manager who has an interest inthe outcome of the suit that is adverse to the interest of the limited liability company shall be excluded.

§ 57. Payment of Expenses On Termination of Derivative Suit.

On termination of the derivative suit, the court may:

(a) order the limited liability company to pay the plaintiff's reasonable expenses, including counsel fees, incurred inthe proceeding if it finds that the suit has resulted in a substantial benefit to the limited liability company; or

(b) order the plaintiff to pay any defendant's reasonable expenses, including counsel fees, incurred in defending thesuit if it finds that the suit was commenced or maintained without reasonable cause or for an improper purpose.

22

§ 58. Lack of Authority for Bringing Suit as Defense or Basis for Subsequent Suit.

The lack of authority of a member or manager to sue on behalf of the limited liability company may not be assertedas a defense to an action by the limited liability company or by the limited liability company as a basis for bringing asubsequent suit on the same cause of action.

§ 59. Consolidation or Merger of Domestic Limited Liability Company; Other Business Entity Defined.

(a) As used in sections 59 to 63, inclusive, the words "other business entity" shall mean a corporation to which section17.01 of Part 17 of chapter 156D applies, a professional corporation and a foreign professional corporation each asdefined in section 2 of chapter 156A, a foreign corporation, an association or a trust, as defined in section 1 of chapter182, a partnership whether general or limited and whether domestic or foreign, as defined, respectively, in section 6 ofchapter 108A and section 1 of chapter 109, and a foreign limited liability company as defined in this chapter.

(b) Pursuant to an agreement of consolidation or merger, a domestic limited liability company may consolidate ormerge with or into one or more domestic limited liability companies or other business entities formed or organizedunder the law of the commonwealth or any other state of the United States or any foreign country or other foreignjurisdiction, with such domestic limited liability company or other business entity as the agreement shall provide beingthe resulting or surviving domestic limited liability company or other business entity.

(c) In connection with a consolidation or merger under this chapter, rights or securities of, or interests in, adomestic limited liability company or other business entity which is a constituent party to the consolidation or mergermay be exchanged for or converted into cash, property, rights or securities of, or interests in, the resulting or survivingdomestic limited liability company or other business entity or, in addition to or in lieu thereof, may be exchanged for orconverted into cash, property, rights or securities of, or interests in, a domestic limited liability company or otherbusiness entity which is not the resulting or surviving limited liability company or other business entity in theconsolidation or merger.

§ 60. Approval of Consolidation or Merger by Members of Domestic Limited Liability Company Required;Exception.

(a) Unless otherwise provided in a written operating agreement, a consolidation or merger shall be approved by eachdomestic limited liability company which is to consolidate or merge by the members or, if there is more than one classor group of members, then by each class or group of members, in either case, by members who own more than fiftypercent of the unreturned contributions to the domestic limited liability company, determined in accordance with sectiontwenty-nine, owned by all of the members or by the members in each class or group, as appropriate.

(b) The exclusive remedy of a member of a domestic limited liability company, which has voted to consolidate orto merge with another entity under the provisions of sections fifty-nine to sixty-three, inclusive, who objects to suchconsolidation or merger, shall be the right to resign as a member and to receive any distribution with respect to hislimited liability company interest, as provided in sections thirty-one to thirty-seven, inclusive. Such members and theresulting or surviving entity shall have the rights and duties, and shall follow the procedure set forth in said sections.

(c) Notwithstanding prior approval, an agreement of consolidation or merger may be terminated or amendedpursuant to a provision for such termination or amendment contained in the agreement of consolidation or merger.

§ 61. Limited Liability Company Resulting from Consolidation or Merger; Filing Requirements.

(a) If a domestic limited liability company is consolidating or merging under this chapter, the domestic limitedliability company or other business entity resulting from or surviving in the consolidation or merger shall file in themanner described in section seventeen a certificate of consolidation or merger in the office of the state secretary. Thecertificate of consolidation or merger shall be executed in the manner described in section fifteen and shall state:

23

(1) the name and jurisdiction of formation or organization of each of the domestic limited liability companies orother business entities which is to consolidate or merge;

(2) that an agreement of consolidation or merger has been approved and executed by each of the domestic limitedliability companies or other business entities which is to consolidate or merge;

(3) the name of the resulting or surviving domestic limited liability company or other business entity;

(4) the future effective date or time, which shall be a date or time certain, of the consolidation or merger if it is notto be effective upon the filing of the certificate of consolidation or merger;

(5) that the agreement of consolidation or merger is on file at a place of business of the resulting or survivingdomestic limited liability company or other business entity, and shall state the address thereof;

(6) that a copy of the agreement of consolidation or merger will be furnished by the resulting or surviving domesticlimited liability company or other business entity, on request and without cost, to any member of any domestic limitedliability company or any person holding an interest in any other business entity which is to consolidate or merge; and

(7) if the resulting or surviving entity is not an entity organized under the laws of the commonwealth, a statementthat the resulting or surviving entity agrees that, if the entity does not continuously maintain an agent for service ofprocess in the commonwealth, to appoint irrevocably the state secretary to be its true and lawful attorney upon whom alllawful process in any action or proceeding in the commonwealth may be served in the manner set forth in subsections(d), (e), (f) and (g) of section 15.10 of subdivision A of Part 15 of chapter 156D relative to foreign corporations.

(b) Unless a future effective date or time is provided in a certificate of consolidation or merger, in which event aconsolidation or merger shall be effective at any such future effective date or time, a consolidation or merger shall beeffective upon the filing in the office of the state secretary of a certificate of consolidation or merger.

(c) A certificate of consolidation or merger shall act (1) as a certificate of cancellation for a domestic limitedliability company which is not the resulting or surviving entity in the consolidation or merger and (2) as a final annualreport for an association or trust, as defined in section one of chapter one hundred and eighty-two.

(d) An agreement of consolidation or merger approved in accordance with section sixty may (1) effect anyamendment to the operating agreement or (2) effect the adoption of a new operating agreement, for a domestic limitedliability company if it is the resulting or surviving entity in the consolidation or merger. Any amendment to an operatingagreement or adoption of a new operating agreement made pursuant to the foregoing sentence shall be effective at theeffective time or date of the consolidation or merger. The provisions of this subsection shall not be construed to limit theaccomplishment of a merger or of any of the matters referred to herein by any other means provided for in the operatingagreement, or other agreement, or as otherwise permitted by law; the operating agreement of any constituent limitedliability company to the consolidation or merger including a limited liability company formed for the purpose ofconsummating a consolidation or merger may be the operating agreement of the resulting or surviving limited liabilitycompany.

§ 62. Effect of Consolidation or Merger of Domestic Limited Liability Company; Rights and Liabilities Vested inResulting or Surviving Entity.

When any consolidation or merger becomes effective as hereinbefore provided, for all purposes of the laws of thecommonwealth, all of the rights, privileges and powers of each of the domestic limited liability companies and otherbusiness entities that have consolidated or merged, and all property, real, personal and mixed, and all debts due to anyof said domestic limited liability companies and other business entities, as well as all other things and causes of actionbelonging to each of such domestic limited liability companies and other business entities, shall be vested in theresulting or surviving domestic limited liability company or other business entity, and shall thereafter be the property ofthe resulting or surviving domestic limited liability company or other business entity as they were of each of thedomestic limited liability companies and other business entities that have consolidated or merged, and the title to anyreal property vested by deed or otherwise, under the laws of the commonwealth, in any of such domestic limitedliability companies and other business entities, shall not revert or be in any way impaired by reason of this chapter; butall rights of creditors and all liens upon any property of any of said domestic limited liability companies and otherbusiness entities shall be preserved unimpaired, and all debts, liabilities and duties of each of the said domestic limitedliability companies and other business entities that have consolidated or merged shall thenceforth attach to the resulting

24

or surviving domestic limited liability company or other business entity, and may be enforced against it to the sameextent as if said debts, liabilities and duties had been incurred or contracted by it. Unless otherwise agreed, aconsolidation or merger of a domestic limited liability company, including a domestic limited liability company whichis not the resulting or surviving entity in the consolidation or merger, shall not require such domestic limited liabilitycompany to wind up its affairs under section forty-five or pay its liabilities and distribute its assets under section forty-six.

§ 63. Definition of "Person" as Including Limited Liability Company; Member or Manager's Good FaithReliance on Operating Agreement.

(a) Unless the provisions of this chapter or the context indicate otherwise, each reference in the General Laws to a"person", where such reference includes any partnership, whether general or limited and whether domestic or foreign,shall be deemed to include a limited liability company.

(b) To the extent that, at law or in equity, a member or manager has duties, including fiduciary duties, and liabilitiesrelating thereto to a limited liability company or to another member or manager, (1) any such member or manageracting under the operating agreement shall not be liable to the limited liability company or to any such other member ormanager for the member's or manager's good faith reliance on the provision of the operating agreement, and (2) themember's or manager's duties and liabilities may be expanded or restricted by provisions in the operating agreement.

§ 64. Implementation of Court Ordered Plan of Reorganization.

(a) Any limited liability company, a plan of reorganization of which, pursuant to the provisions of any applicablestatute of the United States relating to reorganizations of corporations or limited liability companies, has been or shallbe confirmed by the decree or order of a court of competent jurisdiction, may put into effect and carry out the plan andthe decrees and orders of the court relative thereto and may take any proceeding and do any act provided in the plan ordirected by such decrees and orders, without further action by its members or managers. Such power and authority maybe exercised, and such proceedings and acts may be taken, as may be directed by such decrees or orders, by the trusteeor trustees of such limited liability company appointed by the court in the reorganization proceedings or a majoritythereof or if none be appointed and acting, by designated members or managers of the limited liability company, or by amaster or other representative appointed by the court, with like effect as if exercised and taken by unanimous action ofthe members and managers of the limited liability company.

(b) The provisions of this section shall cease to apply to such limited liability company upon the entry of a finaldecree in the reorganization proceedings closing the case and discharging the trustee or trustees, if any.

§ 65. Liability Insurance Requirement for Limited Liability Company; Regulations.

(a) The regulating boards, as defined in subsection (c) of section two of chapter one hundred and fifty-six A, shalladopt regulations requiring the designated amount of required liability insurance to be maintained by limited liabilitycompanies and members subject to their jurisdiction pursuant to subsection (c) of section six. The term designatedamount shall be the amount deemed appropriate by the regulating board to cover negligence, wrongful acts, errors andomissions and that insures the company and its members.

§ 66. Recordable Instrument Regarding Real Property Executed by Person Authorized in Certificate ofOrganization or Application for Registration, in Name of Limited Liability Company, Binding.

Any recordable instrument purporting to affect an interest in real property, including without limitation, any deed,lease, notice of lease, mortgage, discharge or release of mortgage, assignment of mortgage, easement and certificate offact, executed in the name of a limited liability company by any person who is identified on the certificate oforganization, as amended, of a domestic limited liability company, or on the application for registration, as amended, ofa foreign limited liability company, as a manager or as a person authorized to execute, acknowledge, deliver and record

25

recordable instruments affecting interests in real property, shall be binding on the limited liability company in favor of aseller, purchaser, grantor, grantee, lessor, lessee, mortgagor, mortgagee, and any other person relying in good faith onsuch instrument, notwithstanding any inconsistent provisions of the operating agreement, side agreements among themembers or managers, by-laws or rules, resolutions or votes of the limited liability company.

§ 67. Certification as to Incumbency of Manager or Member, or Authority of Person to Act for Limited LiabilityCompany.

Any person who is identified on the certificate of organization, as amended, of a domestic limited liability company,or on the application for registration, as amended, of a foreign limited liability company, as a manager or as a personwho is authorized to execute any documents to be filed with the office of the state secretary, may certify as to theincumbency of any manager or member and as to the authority of any person, whether or not such person is identifiedon the certificate of organization or on the application for registration, to act for the limited liability company, includingwithout limitation with respect to the matters referred to in section sixty-six, and any such certification shall be bindingon the limited liability company in favor of a person relying in good faith on such certification, notwithstanding anyinconsistent provisions of the operating agreement, side agreements among the members, the managers or both, by-lawsor rules, resolutions or votes of the limited liability company.

§ 68. Certificate by Secretary of Commonwealth that Limited Liability Company Appears to Exist, is in GoodStanding, and Identifies Persons Authorized to Act With Respect to Real Property; Fee.

A limited liability company shall be deemed to be in good standing with the secretary of the commonwealth if suchlimited liability company appears from the records of the said secretary to exist and has paid all fees then due to thesecretary, and no certificate of cancellation has been filed by or with respect to the limited liability company. Upon therequest of any person and payment of such fee as may be prescribed by law, the secretary of the commonwealth shallissue a certificate stating, in substance, as to any limited liability company meeting the requirements of this section, thatsuch limited liability company appears from the records in his office to exist and to be in good standing and the identityof any and all managers and persons authorized to act with respect to real property instruments who are named in thecertificate of organization of the limited liability company, as amended.

§ 69. Conversion to a Limited Liability Company.

(a) As used in this section the term "other business entity" shall mean an association or trust as defined in section 1 ofchapter 182, and a partnership, whether general or limited and whether domestic or foreign as each may be defined insection 6 of chapter 108A or section 1 of chapter 109, including a foreign or domestic registered limited liabilitypartnership as defined in section 2 of said chapter 108A.

(b) Any other business entity may convert to a domestic limited liability company by complying with subsection(h) and filing with the office of the state secretary in accordance with section 17:

(1) a certificate of conversion to a limited liability company that has been executed in accordance with section 15;and

(2) a certificate of organization of a limited liability company that complies with section 12 and has been executedin accordance with said section 15.

(c) The certificate of conversion to a limited liability company shall state:

(1) the date on which, and jurisdiction in which, the other business entity was first created, incorporated orotherwise came into being and, if it has changed, its jurisdiction immediately prior to its conversion to a domesticlimited liability company;

(2) the name of the other business entity immediately prior to the filing of the certificate of conversion to a limitedliability company;

26

(3) the name of the limited liability company as set forth in its certificate of organization filed in accordance withsubsection (b); and

(4) the future effective date, which shall be a date certain, of the conversion to a limited liability company if it is notto be effective upon the filing of the certificate of conversion and certificate of organization.

(d) Upon the effective date of the filing of the certificate of conversion and certificate of organization in the officeof the state secretary, the other business entity shall be converted into a domestic limited liability company and thelimited liability company shall thereafter be subject to this chapter.

(e) The conversion of any other business entity into a domestic limited liability company shall not be deemed toaffect any obligations or liabilities of the other business entity incurred prior to such conversion or the personal liabilityof any person incurred prior to such conversion.

(f) When a conversion becomes effective under this section, for all purposes of the laws of the commonwealth, allof the rights, privileges and powers of the other business entity that has converted and all property, real, personal andmixed, and all debts due to such other entity, as well as all other things and causes of action belonging to such otherentity, shall be vested in the domestic limited liability company and shall thereafter be the property of the domesticlimited liability company as they were of such other entity. The title to any real property vested by deed or otherwiseunder the laws of the commonwealth in such other entity shall not revert or be in any way impaired by reason of thischapter, but all rights of creditors and all liens upon any property of such other entity shall be preserved unimpaired andall debts, liabilities and duties of such other entity shall then attach to the domestic limited liability company and may beenforced against it to the same extent as if the debts, liabilities and duties had been incurred or contracted by it.

(g) Unless otherwise agreed or required under the laws of another jurisdiction applicable to the other businessentity, such other entity shall not be required to wind up its affairs or pay its liabilities and distribute its assets and theconversion shall not be deemed to constitute a dissolution of such other entity.

(h) Prior to filing a certificate of conversion to a limited liability company with the state secretary, the conversionand the operating agreement of the limited liability company shall be approved by the other business entity in themanner provided in its governing documents or the laws applicable to it for authorization of a merger of the otherbusiness entity into a limited liability company or, in the absence of such provisions, in the manner of a sale of all orsubstantially all of its assets.

(i) This section shall not be construed to limit the ability of another business entity to change its governinglaw, its legal status or its domicile by any other means provided for in its governing documents,instruments or agreements or by applicable laws, including by amendment of the governing documents oroperating agreement.

C:\J2\Statutes, regulations and admin. rulings.doc\Mass LLC Act - as in effect on 6-27-05.doc