SB 133 — Colorado Artist Companies

(b) THATTHATTHEARTISTICMISSIONANDFINANCIALOBJECTIVESAREOF THE ARTISTIC MISSION AND FINANCIAL OBJECTIVES ARE OF EQUAL PRIORITY;ORPRIORITY ;OR (c) ANYA NY OTHER PRIORITY OR BALANCING BETWEEN THE ARTISTIC MISSION AND FINANCIAL OBJECTIVE.OBJECTIVES.

(1)PAGE A3-SENATE LIMITEDBILL LIABILITY26-133 COMPANY(1) THATALIMITEDLIABILITYCOMPANYTHATISNOTANARTISTCOMPANY ISMAY NOTELECT TO BECOME AN ARTIST COMPANY MAYBY COMPLYING WITH THIS SECTION.T O ELECT TO BECOME AN ARTIST COMPANY BYA COMPLYINGLIMITED WITHTHISSECTION .TOELECTTOBECOMEANARTISTCOMPANY ,ALIMITED LIABILITY COMPANY SHALL:SHALL :

(a) AMEND ITS ARTICLES OF ORGANIZATION T:TO :

(I) SSTATE TATE THE ARTISTIC MISSION OF THE LIMITED LIABILITY COMPANY ;

-5- 133 (II) TATESTATE THAT THE LIMITED LIABILITY COMPANY ELECTS TO BE GOVERNED BY THIS PART12PART 12 AS AN ARTIST COMPANY;ANDCOMPANY ;AND (III) ICLUDEINCLUDE ANY OTHER PROVISIONS REQUIRED BY SECTIONS 7-80-1203AND7-80-1203 AND 7-80-1206;

(b) EENSURETHAT NSURE,ATTHETIMEOFELECTION THAT,,ONE ATORMORE THE TIME OF ELECTION,ONE OR MORE ARTISTS OWNOWNNOTLESSTHANFIFTY NOT-ONEPERCENTOFTHEVOTINGSECURITIESOFTHE LESSENTITY; THAN FIFTY ONE PERCENT OF THE VOTING SECURITIES OF THE ENTI;Y (c) O BTAIN APPROVAL FOR THE ELECTION BY THE VOTE OR CONSENT REQUIRED TO AMEND THE ARTICLES OF ORGANIZATION PURSUANTTOTHELIMITEDLIABILITYCOMPANY SOPERATINGAGREEMENT OR, IF THE OPERATING AGREEMENT DOES NOT SPECIFY THE VOTE OR CONSENTREQUIRED BYTHEUNANIMOUSCONSENTOFALLMEMBERS ;AND (d) FILE THE AMENDED ARTICLES OF ORGANIZATION WITH THE SECRETARY OF STATE IN ACCORDANCE WITH SECTION7-90-301.

(2)(c) UPONOBTAINAPPROVALFORTHEELECTIONBYTHEVOTEORCONSENT REQUIRED TO AMEND THE FILINGARTICLES OF ORGANIZATION PURSUANT TO THE LIMITED LIABILITY COMPANY S OPERATING AGREEMENT OR , IF THE OPERATING AGREEMENT DOES NOT SPECIFY THE VOTE OR CONSENT REQUIRED ,BY THE UNANIMOUS CONSENT OF ALL MEMBERS ;AND (d) F ILE THE AMENDED ARTICLES OF ORGANIZATION PURSUANTWITH TOTHE SUBSECTIONSECRETARY (1)(dOFOF THISSTATE SECTIO:IN ACCORDANCE WITH SECTION 7-90-301.

(a)(2) TELIMITEDLIABILITYCOMPANYCONTINUESTOBETHESAMEU ENTITYPON THATTHE EXISTEDFILING BEFOREOF THEAMENDED ELECTIO;ARTICLES OF ORGANIZATION PURSUANT TO SUBSECTION (1)(d)OF THIS SECTIO:

(b)(a) ALLTHE RIGHTS,TITL,LIMITED ANDLIABILITY INTERESTSCOMPANY CONTINUES TO ALLBE REAL PROPERTY AND OTHER PROPERTY OWNED BY THE LIMITEDSAME LIABILITYENTITY COMPANYTHAT REMAINEXISTED VESTEDBEFORE IN THE ARTISTELECTION COMPAN;;

(c)(b) ALLALLRIGHTS LIABILITIES,TITLE,ANDINTERESTSTOALLREALPROPERTY AND OBLIGATIONSOTHER OFPROPERTY OWNED BY THE LIMITED LIABILITY COMPANY REMAIN LIABILITIESVESTED ANDIN OBLIGATIONS OF THE ARTIST COMPANY ;

(d)(c) ALLRIGHTSOFCREDITORSANDALLLIENSUPONANYPROPERTYA OFLL THELIABILITIES LIMITEDAND LIABILITYOBLIGATIONS COMPANYOF ARE PRESERVED UNIMPAIR;D (e) ANY ACTION OR PROCEEDING PENDING AGAINST THE LIMITED -6- 133 LIABILITY COMPANYPAGE MAY4-SENATE BEBILL CONTINUED26-133 AGAINSTCOMPANYREMAINLIABILITIESANDOBLIGATIONSOFTHEARTISTCOMPANY THE; ARTIST COMPANY AS IF THE ELECTION HAD NOT OCCURRE;AND (f) TE ARTIST COMPANY IS SUBJECT TO THIS PA12.

(3)(d) ANALL ELECTIONRIGHTS CONDUCTEDOF PURSUANTCREDITORS TOAND THISALL SECTIONLIENS DOESUPON NOTCONSTITUTEADISSOLUTIONANY ,TERMINATION,ORTRANSFEROFASSETSPROPERTY OF THE LIMITED LIABILITY COMPAN.COMPANY ARE PRESERVED UNIMPAIRED ;

(4)(a)THEELECTIONTOBECOMEANARTISTCOMPANYPURSUANT(e) TOA THISNY SECTIONACTION DOESOR NOTPROCEEDING AFFECTPENDING AAGAINST MEMBERTHE SLIMITED LIABILITYLIABILITYCOMPANYMAYBECONTINUEDAGAINSTTHEARTISTCOMPANYAS FORIF OBLIGATIONS OF THE LIMITEDELECTION LIABILITYHAD COMPANYNOT INCURREDOCCURRED PRIOR;AND TO(f) THE ELECTIONARTIST BECOMINGCOMPANY EFFECTIVE.IS SUBJECT TO THIS PART12.

(b)(3) UNLESSANELECTIONCONDUCTEDPURSUANTTOTHISSECTIONDOESNOT OTHERWISECONSTITUTEADISSOLUTION AGREED,TERMINATION TO,ORTRANSFEROFASSETSOFTHE BY THE MEMBERS,ELECTION TOBECOMEANARTISTCOMPANYDOESNOTAFFECTAMEMBER SEXISTING RIGHTS UNDER THE OPERATING AGREEMENT OF THE LIMITED LIABILITY COMPANY EXCEPTTOTHEEXTENTTHERIGHTSAREUNDERANOPERATING. AGREEMENT ENTERED INTO ON OR AFTER THE EFFECTIVE DATE OF THIS PART 12AND ARE INCONSISTENT WITH THE REQUIREMENTS OF THIS PART 12.

(4) (a) TE ELECTION TO BECOME AN ARTIST COMPANY PURSUANT TOTHISSECTIONDOESNOTAFFECTAMEMBER 'SLIABILITYFOROBLIGATIONS OF THE LIMITED LIABILITY COMPANY INCURRED PRIOR TO THE ELECTION BECOMING EFFECTIVE .

(b) UNLESS OTHERWISE AGREEDTOBY THE MEMBERS ,ELECTION TO BECOME AN ARTIST COMPANY DOES NOT AFFECT A MEMBER 'S EXISTING RIGHTS UNDER THE OPERATING AGREEMENT OF THE LIMITED LIABILITY COMPANY ,EXCEPT TO THE EXTENT THE RIGHTS ARE UNDER AN OPERATING AGREEMENTENTEREDINTOONORAFTERTHEEFFECTIVEDATEOFTHISPART AND ARE INCONSISTENT WITH THE REQUIREMENTS OF THIS PART 12.

(1) E XCEPT AS OTHERWISE PROVIDED IN THIS PART 12, THE PROVISIONSPROVISIONSOFTHISARTICLE OF80THATAREAPPLICABLETOLIMITEDLIABILITY THIS ARTICLE 80 THAT ARE APPLICABLE TO LIMITED LIABILITY COMPANIES APPLY TO ARTIST COMPANI.SCOMPANIES (2) IN THE EVENT OF A CONFLICT BETWEEN THIS PART12 AND OTHER PROVISIONS OF THIS ARTICL80,THIS PAR12 CONTROLS .

(3)(2) NOTWITHSTANDINGSECTIONITHEEVENTOFACONFLICTBETWEENTHISPART 7-80-108ORANOTHERPROVISION12ANDOTHER OFTHISARTICLE 80,THEREQUIREMENTSIMPOSEDBYSECTIONS 7-80-1203 (1)(c)AND 7-80-1214 (2)SHALL NOT BE ALTERED IN AN OPERATING AGREEMENT .A LL OTHER PROVISIONS OF THIS PA12MAYARTICLE80,THIS BEPART12 MODIFIEDCONTROLS -7-. 133 BY THE OPERATING AGREEMENT TO THE EXTENT PERMITTED BY SECTION 7-80-108AND THIS PART12.

(3) NOTWITHSTANDING SECTION 7-80-108OR ANOTHER PROVISION OF THIS ARTICLE80,THE REQUIREMENTS IMPOSED BY SECTIONS 7-80-1203 (1)(c)AND 7-80-1214 (2) SHALL NOT BE ALTERED IN AN OPERATING AGREEMENT .ALLOTHERPROVISIONSOFTHISPART 12MAYBEMODIFIEDBY PAGE 5-SENATE BILL 26-133 THE OPERATING AGREEMENT TO THE EXTENT PERMITTED BY SECTION 7-80-108 AND THIS PART12.

Formation of artist company - articles of organization-organization - public benefit artist company requirements.

(1) APERSONMAYFORMANARTISTCOMPANYBYFILINGARTICLESA OFORGANIZATIONWITHTHESECRETARYOFSTATEPURSUANTTOSECTIONPERSON 7-90-301MAY THATFORM MEETAN THEARTIST REQUIREMENTSCOMPANY SETBY FORTHFILING INARTICLES SECTIONSOF 7-80-204ANDORGANIZATION 7-80-1203ANDWITH SUBSECTIONTHE (7)OFSECRETARY THISOF STATE PURSUANT TO SECTION IF7-90-301 THETHAT ARTISTMEET COMPANYTHE WILLREQUIREMENTS BESET AFORTHINSECTIONS PUBLIC7-80-204 BENEFITAND ARTIST7-80-1203 COMPAN,AND WHICHSUBSECTION ARTICLES(7) OF ORGANIZATIONTHIS MUSTSECTION INCLUDEIF ,THE INARTIST ADDITIONCOMPANYWILLBEAPUBLICBENEFITARTISTCOMPANY TO,WHICHARTICLESOF THEORGANIZATIONMUSTINCLUDE INFORMATIONINADDITIONTOTHEINFORMATIONREQUIRED REQUIRED BY SUBSECTION 7-80-204:

(b) A STATEMENT REGARDING THE PRIORITY OF THE ARTISTIC MISSIONANDFINANCIALOBJECTIVESMISSION AND FINANCIAL OBJECTIVES AS PROVIDEDINSECTIONPROVIDED IN SECTION 7-80-1203 (3);AND (c) ASTATEMENTA ASSTATEMENTASTOWHETHERTHE TO WHETHER THE ARTIST COMPANYCOMPANYELECTSTO ELECTS TO BE AAPUBLICBENEFIT PUBLIC BENEFIT ARTIST COMPANYCOMPANYSUBJECTTOSECTIONS SUBJECT7-80-1215 TO SECTIONS7-80-1217 7-80-1215TOAND 7-80-1217AND ,IF SUCH ELECTION IS MA,ONEMAD,ONE OR MORE SPECIFIC PUBLIC BENEFITS TO BE PROMOTED BY THE ARTIST COMP.NY (2) T HE INCORPORATORS MAY ALSO MAKE ELECTIONS IN THE ARTICLES OF ORGANIZATION OF AN ARTIST COMPANY REGARDING. THE FOLLOWING :

(a)(2) THE STRUCTUREINCORPORATORS OFMAY EQUITYALSO OWNERSHIPMAKE FROMELECTIONS IN THE OPTIONSARTICLES PROVIDEDOF INORGANIZATION SECTION7-80-1207;OF AN ARTIST COMPANY REGARDING THE FOLLOWING :

(b)T(a) T HE STRUCTURE OFTHEGOVERNINGBODYFROMTHEOF EQUITY OWNERSHIP FROM THE OPTIONS PROVIDED IN SECTION7-80-1208;SECTION 7-80-1207;

-8-(b) 133THE (c)STRUCTURE WHETHEROF FIDUCIARYTHE DUTIESGOVERNING APPLYBODY ASFROM THE OPTIONS PROVIDED IN SECTION 7-80-1211;7-80-1208;

(d)(c) W HICHHETHER EXISTINGFIDUCIARY ARTISTICDUTIES WORKAPPLY SHOULD BE ASSIGNED OR EXCLUSIVELY LICENSED TO THE ARTIST COMPANY AS PROVIDED IN SECTION 7-80-1212;7-80-1211;

(e)(d) W HETHERHICH EXISTING ARTISTIC WORK CREATEDSHOULD BYBE MEMBERSASSIGNED DURINGOR THEIRPAGE MEMBERSHIP6-SENATE ISBILL ASSIGNED26-133 OR EXCLUSIVELY LICENSED TO THE ARTIST COMPANY AS PROVIDED IN SECTION7-80-1213SECTION (1);7-80-1212;

(f)T(e) HEW TAXHETHERARTISTICWORKCREATEDBYMEMBERSDURINGTHEIR TREATMENTMEMBERSHIP OFIS ASSIGNED OR EXCLUSIVELY LICENSED TO THE ARTIST COMPANY;COMPANY AS PROVIDED IN SECTION 7-80-1213 (1);

(f) THE TAX TREATMENT OF THE ARTIST COMPANY ;

(h) BASICB ASIC PROVISIONS REGARDING TERMINATION OF A MEMBERSMEMBER S MEMBERSHIP INTEREST UPON WITHDRAWALFROMWITHDRAWAL FROM THE ARTIST COMPANY , ADMISSION OF NEW MEMBERS ,,AND AND RIGHTS TO ARTISTIC WORK UPON MEMBERWITHDRAWALANDTERMINATIONOFMEMBERSHIPINTERESTMEMBER WITHDRAWAL AND TERMINATION OF MEMBERSHIP INTEREST ;AND (i)W(i) HETHERCERTAINDECISIONSREQUIREARTISTSUPERMAJORITYWHETHER CERTAIN DECISIONS REQUIRE ARTIST SUPERMAJORITY OR UNANIMOUS APPROVAL .

(3) FIF THE ELECTION IS MADE UNDER SUBSECTION(2)(eOFSUBSECTION (2)(e)OF THIS SECTION, THE ARTICLES OF ORGANIZATION MUST ALSO INCLUDE A NARRATIVE DESCRIPTION OF THE ARTISTIC WORK TO BE CREATED BY THE ARTISTCOMPANYTOSETFORTHTHESCOPEOFARTISTICWORKSUBJECTTOARTIST COMPANY TO SET FORTH THE SCOPE OF ARTISTIC WORK SUBJECT TO THE ASSIGNMENT OR EXCLUSIVE LICENSE.LICENSE .

(4) ANA N ELECTION REGARDING WHETHER SELECTED TERMS IN THE ARTICLES OF ORGANIZATION MAY BE SUPERSEDED BY A SUBSEQUENTLY ADOPTED OPERATING AGREEMENT :

(a) W ITHOUT AMENDMENT TO THE ARTICLES OFORGANIZATION ;OR (b) O NLY WITH CONCURRENT AMENDMENT TO THE ARTICLES OF ORGANIZATION;ORGANIZATION .

-9-(5) 133ARTICLESOFORGANIZATIONFILEDPURSUANTTOSUBSECTION OR(1) (b)OF ONLYTHIS WITHSECTION CONCURRENTMAY AMENDMENTINCLUDE TOOTHER PROVISIONS CONSISTENT WITH LAW AS THE ARTICLESINCORPORATORS OFELECT ORGANIZATIONTO INCLUDE .

(5)PAGE ARTICLESOFORGANIZATIONFILEDPURSUANTTOSUBSECTION7-SENATE (1)OFBILL THIS26-133 SECTION(6) MAYIF INCLUDEAN OTHERARTIST PROVISIONSCOMPANY CONSISTENTELECTS WITHTO LAWBECOME ASA THEPUBLIC INCORPORATORSBENEFIT ELECTARTIST COMPANY PURSUANT TO INCLUD.SECTION 7-80-1215,THE ARTIST COMPANY SHALLSTATEINTHEHEADINGOFITSARTICLESOFORGANIZATIONTHATITIS A "PUBLIC BENEFIT ARTIST COMPANY ".

8ACERTIFICATE (6)IFOF ANMEMBERSHIP ARTISTINTEREST COMPANYOR ELECTSOTHER TOSECURITY BECOMEISSUED BY A PUBLIC BENEFIT ARTIST COMPANY PURSUANTMUST TONOTE SECTIONCONSPICUOUSLY 7-80-1215,THAT THE ARTISTPUBLIC COMPANY SHALL STATE IN THE HEADING OF ITS ARTICLES OF ORGANIZATION THAT IT IS A "PUBLIC BENEFIT ARTIST COMPANY".COMPANYISAPUBLICBENEFITARTISTCOMPANYFORMEDPURSUANTTOTHIS PART 12.

A(7) CERTIFICATEANARTISTCOMPANY OFMEMBERSHIPINTERESTSNAMEMAYCONTAINTHEWORDS OR"ARTIST OTHERCOMPANY SECURITY"ORTHEABBREVIATIONS ISSUED"ALLC","AC BYORP A","AC",OR PUBLICBENEFITARTISTCOMPANYMUSTNOTECONSPICUOUSLYTHATTHE"A.C."IN PUBLICLIEU BENEFITOF ARTISTOR COMPANYIN ISADDITION ATO PUBLICANY BENEFITTERM ARTISTOR COMPANYABBREVIATION FORMEDOTHERWISE PURSUANTPERMITTED TOBY THISSECTION PART12.7-90-601 (3)(c).

(7) A N ARTIST COMPANY S NAME MAY CONTAIN THE WORDS "ARTISTCOMPANY "ORTHEABBREVIATIONS "ALLC","AC ORP","AC",OR "A.C." IN LIEU OF OR IN ADDITION TO ANY TERM OR ABBREVIATION OTHERWISE PERMITTED BY SECTION7-90-601 (3)(c).

(1) SUBJECTS UBJECT TO THE REQUIREMENTS SET FORTH IN SECTION 7-80-1203 (1)(c),N(1)(c),AN ARTIST COMPANY HAS THE SAME OPTIONS WITH RESPECTRESPECTTOEQUITYOWNERSHIPPROVIDEDTOLIMITEDLIABILITYCOMPANIES TO EQUITY OWNERSHIP PROVIDED TO LIMITED LIABILITY COMPANIES GENERALLY UNDER THIS ARTICLE80.ARTICLE 80.

(2) THETHEINCORPORATORSOFANARTISTCOMPANYMAYELECTINTHE INCORPORATORSARTICLES OF ANORGANIZATION ARTISTONE COMPANYOF MAY ELECT IN THE ARTICLESFOLLOWING OFORGANIZATIONSTRUCTURES ONE OFTHE FOLLOWINGSTRUCTURES FOR EQUITY OWNERSHIP:OWNERSHIP :

-10- 133 (a) OWNERSHIPO WNERSHIP BASED ON THE SALE OF UNITS , INCLUDING FRACTIONAL UNITS;UNITS ;

(b) PRO RATA OWNERSHIP BASED ON THE NUMBER OF MEMBERS;MEMBERS ;

(c) PROP RO RATA OWNERSHIP BASED ON CAPITAL CONTRIBUTIONS , INCLUDINGIN-KINDCONTRIBUTIONSOFCASHINCLUDING ,PROPERTY,ARTISTICWORKIN-KIND ,CONTRIBUTIONS ROYALTYOF SHARINGCASH ,,PROPERTY REVENUE,ARTISTIC PARTICIPATIONWORK, RIGHTSROYALTYSHARING ,,REVENUEPARTICIPATIONRIGHTS OR,OROTHERINTANGIBLE OTHER INTANGIBLE ASSETS;OR (d) FIXED OWNERSHIP PERCENTAGES BY INDIVIDUAL MEMBER.MEMBER .

(3) UNLESSOTHERWISEU SPECIFIEDINANOPERATINGAGREEMENTNLESS OTHERWISE SPECIFIED IN AN OPERATING AGREEMENT , ALLOCATIONS AND DISTRIBUTIONS MUST BE MADE BASED ON OWNERSHIP PERCENTAGES ;EXCEPTTHATTHEOPERATINGAGREEMENTMAYESTABLISH;EXCEPT THAT THE OPERATING AGREEMENT MAY ESTABLISH PAGE 8-SENATE BILL 26-133 ALTERNATIVE ALLOCATION OR DISTRIBUTION MECHANISMS ,INCLUDING ALLOCATIONS OR DISTRIBUTIONS BASED ON REVENUE PARTICIPATION , ROYALTY SHARING , RECOUPMENT WATERFALLS , OR OTHER CRITERIA INDEPENDENT OF OWNERSHIP PERCENTAGES .

(1) ANA N ARTIST COMPANY HAS THE SAME GOVERNANCE OPTIONS PROVIDED TO LIMITED LIABILITY COMPANIES GENERALLY UNDER THIS ARTICLE 80.

(2) THETHEINCORPORATORSOFANARTISTCOMPANYMAYELECTINTHE INCORPORATORSARTICLES OF ANORGANIZATION ARTISTONE COMPANYOF MAYTHE ELECTFOLLOWING INGOVERNANCE THEARTICLESOFORGANIZATION ONEOFTHEFOLLOWINGGOVERNANCE STRUCTURES :

(a) GGOVERNANCEBYMEMBERS OVERNANCEWITHVOTINGBASEDONOWNERSHIP BY MEMBERS , WITH VOTING BASED ON OWNERSHIP PERCENTAGES ;

(b) GOVERNANCEG OVERNANCE BY A SINGLE MANAGER ,WITH THE MANAGER ELECTED BY MEMBERS ;OR (c) GOVERNANCEG OVERNANCE BY A BOARD OF MANAGERS ,WITH, MANAGERSWITH -11-MANAGERS 133 ELECTED BY MEMBERS .

(3) MMORE ORE COMPLEX GOVERNANCE STRUCTURES , INCLUDING SEPARATEVOTINGFORARTISTICDECISIONSVERSUSBUSINESSDECISIONSSEPARATE ,VOTING FOR ARTISTIC DECISIONS VERSUS BUSINESS DECISIONS MAY BE SPECIFIED IN AN OPERATING AGREEMENT.

(1) UNLESSU NLESS OTHERWISE PROVIDED IN THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT OF AN ARTIST COMPANY :

(a) AAQUORUMFORAMEETINGOFMEMBERSORMANAGERSCONSISTS QUORUM FOR A MEETING OF MEMBERS OR MANAGERS CONSISTS OF A MAJORITY OF THE VOTING INTERESTS OR MANAGERS,AS APPLICABLEAPPLICABLE, ,ENTITLEDENTITLED TO VOTE AT THE MEETIN;MEETING;

(b) EXCEPTEXCEPTASPROVIDEDINSUBSECTION AS(1)(cOFTHISSECTION PROVIDED,AN IN SUBSECTION(1)(cOF THIS SECTIO, AN ACT OF THE MEMBERS OR MANAGERS REQUIRES APPROVAL BY A MAJORITY OFOFTHOSEPRESENTATAMEETINGATWHICHAQUORUMISPRESENT THOSE;EXCEPT PRESENTPAGE AT9-SENATE ABILL MEETING26-133 AT WHICH A QUORUM IS PRESENT ;EXCEPT THAT THE FOLLOWING ACTIONSREQUIREACTIONS APPROVALBYREQUIRE APPROVAL BY A MAJORITY OF ALL VOTING INTERESTS OF THE MEMBER:MEMBERS :

(III) MMERGER ERGER, CONSOLIDATION ,,CONVERSION CONVERSION,CHANGEOFCONTROL , CHANGEOR OF CONTROL ,OR OTHER BUSINESS COMBINATION TRANSACTION ;

(IV) D ISSOLUTION OF THE ARTIST COMPAN;COMPANY ;

(V) E LECTIONLECTIONTOBECOMEORCEASETOBEAPUBLICBENEFITARTIST TO BECOME OR CEASE TO BE A PUBLIC BENEFIT ARTIST COMPANY ;AND (VI) O THER MATTERS AS MAY BE SPECIFIED IN THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT ;AND (c) THETHEFOLLOWINGACTIONSREQUIREAPPROVALBYAMAJORITYOF FOLLOWING ACTIONS REQUIRE APPROVALBY A MAJORITY OF ALL VOTING INTERESTS OF ARTIS-MEMBERSARTIST ,EVENMEMBERS , EVEN IF THE ACTION IS -12-EFFECTUATED 133BY EFFECTUATEDBYANAMENDMENTTOTHEARTICLESOFORGANIZATIONORAN AMENDMENT TO THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT :

(I) ANANACTIONMATERIALLYAFFECTINGTHEOWNERSHIP ACTION,LICENSING MATERIALLY AFFECTING THE OWNERSHIP , LICENSING,TRANSFER,ORTRANSFER ,OR REVERSIONARY RIGHTS OF ARTISTIC WORK OF THE ARTIST COMPANY OR ARTIS-MEMBERSARTIST MEMBERS ;

(II) CHANGINGC HANGING THE DEFINITION OR SCOPE O"PUBLICOF BENEFI""PUBLIC UNDERTHEARTICLESOFORGANIZATIONOROPERATINGAGREEMENTBENEFIT" OFAUNDER THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT OF A PUBLIC BENEFIT ARTIST COMPAN;COMPANY ;

(III) EECTINGELECTING TO BECOME OR CEASING TO BE A PUBLIC BENEFIT ARTIST COMPANY ;

(IV) CEASINGC EASING TO BE ANARTISTAN COMPANY,INCLUDINGARTIST COMPANY ,INCLUDING AN ACTION THAT CAUSES THE ENTITY TO NO LONGER MEET THE REQUIREMENTS SET FORTH IN SECTION7-80-1203SECTION 7-80-1203 (1);

(V) M ODIFYINGODIFYINGTHEGOVERNINGCONTROLOFTHEARTISTCOMPANY THE, GOVERNINGINCLUDINGWITHRESPECTTOMANAGEMENTSTRUCTURE CONTROL,VOTINGRIGHTS OF,OR THEPAGE ARTIST10-SENATE COMPANYBILL ,INCLUDING26-133 WITHDECISION-MAKING RESPECTAUTHORITY TO;AND MANAGEMENT(VI) STRUCTUREA ,PPROVING VOTINGTHE RIGHTS,ORANNUAL DECISIO-MAKINGOPERATING AUTHORITYBUDGET ;ANDOF (VI)THE APPROVINGTHEANNUALOPERATINGBUDGETOFTHEARTISTARTIST COMPANY .

(2) HEFOLLOWINGISNOTINDIVIDUALLYANINDICATIONOFLACKTHE FOLLOWING IS NOT INDIVIDUALLY AN INDICATION OF LACK OF GOOD GOVERNANCE ,GROUNDS, GROUNDS FOR PIERCING THE LIMITED LIABILITY VEIL,OR EVIDENCE OF IMPROPER CORPORATE FORMALITIE:FORMALITIES :

(a) FAILURE TO PREPARE WRITTEN MINUTES OF MEETINGS OF THE GOVERNING BODY IFTHEREIF THERE IS ADEQUATEWRITTENEVIDENCEADEQUATE OFFORMALWRITTEN EVIDENCE OF FORMAL APPROVALS TAKEN BY THE GOVERNING BODY ;

(b) FAILUREFAILURETOHOLDANNUALMEETINGSOFMEMBERSOFANARTIST TO HOLD ANNUAL MEETINGS OF MEMBERS OF AN ARTIST COMPANY ;OR (c) FAILURE OF AN ARTIST COMPANY TO OBSERVE OTHER -13- 133 FORMALITIES CUSTOMARILY ASSOCIATED WITH COLORADOC OLORADO LIMITED LIABILITY COMPANIES OR OTHER ENTITY FORMS.FORMS .

(a) GRANTSG ;RANTS;

(b) REFUNDABLER EFUNDABLE GRANTS ;

(c) FIRST LOSS CAPITA;CAPITAL;

(e) M ISSIO-RELATEDISSION-RELATED INVESTMENTS ;

(f) AFINANCIALAGREEMENTFORIMPACTRETURNSINVESTMENTSA FINANCIAL AGREEMENT FOR IMPACT RETURNS INVESTMENTS ;

(g) DEBTD EBT INSTRUMENTS ;

PAGE 11-SENATE BILL 26-133 (i) CONVERTIBLE INVESTMENT INSTRUMENTS ;

(j) FINANCIALFNANCIALINSTRUMENTS INSTRUMENTS,INCLUDINGINCLUDINGREVENUE REVENUECASHFLOW ,CASH,AND FLOW , AND PROFIT PARTICIPATION RIGHT;RIGHTS;

(k) ROYALTY SHARING RIGHTS ;AND (l) I-KINDCONTRIBUTIONSN INCLUDINGINTELLECTUALPROPERTYKIND CONTRIBUTIONS ,INCLUDING INTELLECTUAL PROPERTY SUCH AS ARTISTIC WORK.WORK .

(2) IFIANDTOTHEEXTENTTHATADONOR ANDWITHRESPECTTOGRANTS TOOR THEREFUNDABLE EXTENTGRANTS THAT, AIS REQUIRED TO EXERCISE EXPENDITURE RESPONSIBILITY,THE DONOR ,WITHIS RESPECTENTITLED TO GRANTSORREFUNDABLEGRANTSTHE ,ISREQUIREDTOEXERCISEEXPENDITURESTATEMENTS RESPONSIBILITY,THEDONORISENTITLEDTOTHESTATEMENTSPREPAREDPREPARED FOR MEMBERS AS SET FORTH IN SECTION7-80-1217.SECTION 7-80-1217.

(3) IF AND TO THE EXTENT THAT A DONOR REQUESTS THAT DONATIONSDONATIONSBETAXDEDUCTIBLE BE,UNLESSANDUNTILTHEFEDERALINTERNAL TAX DEDUCTIBLE ,UNLESS AND UNTIL THE FEDERAL INTERNAL REVENUE SERVICE PROVIDES THAT ARTIST COMPANIES ARE ENTITLEDTOSTATUSASTAXEXEMPTORGANIZATIONSENTITLED ,DONATIONSTOANTO -14-STATUS 133AS TAX EXEMPT ORGANIZATIONS , DONATIONS TO AN ARTIST COMPANY MAY BE MADE THROUGH A SEPARATE TAX EXEMPT ORGANIZATION .

(1) ECEPTASOTHERWISEPROVIDEDINTHISSECTIONEXCEPT ,THEDUTIESAS OFMEMBERSANDMANAGERSOFANARTISTCOMPANYAREGOVERNEDBYOTHERWISE PROVIDED IN THIS SECTION ,THE DUTIES OF MEMBERS AND MANAGERS OF AN ARTIST COMPANY ARE GOVERNED BY SECTION 7-80-404.

(2) IIADDITIONTOTHEDUTIESSPECIFIEDINSECTION ADDITION7-80-404, TO THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT OF AN ARTIST COMPANY MAY SPECIFY DUTIES SPECIFIEDOF INMEMBERS SECT7-80-404,OR THEARTICLESOFORGANIZATIONOROPERATINGAGREEMENTOFANARTISTMANAGERS COMPANYMAYSPECIFYDUTIESOFMEMBERSORMANAGERSWITHRESPECTWITH TOTHEARTISTICMISSIONOFTHEARTISTCOMPANYRESPECT ,INCLUDINGDUTIESTOTO :THE ARTISTIC MISSION OF THE ARTIST COMPANY,INCLUDING DUTIES TO:

(a) PESERVEANDPROMOTETHEARTISTICMISSIONOFTHEARTISTPRESERVE AND PROMOTE THE ARTISTIC MISSION OF THE ARTIST COMPANY ;

(b) BALANCEBALANCETHEARTISTICMISSIONWITHTHEFINANCIALINTERESTS THEOFTHEARTISTCOMPANYANDTHEPECUNIARYINTERESTSOFTHEMEMBERS ARTISTIC; MISSION WITH THE FINANCIAL INTERESTS OF THE ARTIST COMPANY AND THE PECUNIARY INTERESTS OF THE MEMBERS ;OR (c) CONSULT WITHOROBTAINAPPROVALFROMARTIST -MEMBERS ON DECISIONS MATERIALLY AFFECTING THE ARTISTIC DIRECTION OR CREATIVE OUTPUT OF THE ARTIST COMPANY.

(3)OR THEPAGE DUTIES12-SENATE SPECIFIEDBILL IN26-133 SUBSECTIO(1)AND(c) (2)OFCONSULTWITHOROBTAINAPPROVALFROMARTIST THIS-MEMBERSON SECTIONDECISIONS MAYMATERIALLY BEAFFECTING MODIFIED BY THE ARTICLESARTISTIC OFDIRECTION ORGANIZATION OR OPERATINGCREATIVE AGREEMENTOUTPUT OF ANTHE ARTIST COMPANY TO. THE EXTENT PERMITTED BY SECTIONS7-80-108AND 7-80-204.

(4)(3) FT ORHE PUBLICDUTIES BENEFITSPECIFIED ARTISTIN COMPANIES,THESUBSECTIONS DUTIES(1)AND (2)OF THIS SECTION MAY BE MODIFIED BY THE ARTICLES OF MEMBERSANDMANAGERSAREFURTHERSPECIFIEDINSECTIONORGANIZATION 7-80-1216.OR OPERATINGAGREEMENTOFANARTISTCOMPANYTOTHEEXTENTPERMITTED BY SECTIONS 7-80-108 AND 7-80-204.

(5)(4) THEF ARTICLESOR OFPUBLIC ORGANIZATIONBENEFIT MAYARTIST INCLUDECOMPANIES ELECTIONS, ALLOWING INCORPORATORS TO ACCEPT THE DEFAULT DUTIES DESCRIBEDOF UNDERMEMBERS THISAND SECTIONMANAGERS ORARE TOFURTHER MODIFYSPECIFIED SPECIFICIN DUTIESSECTION AS7-80-1216. PERMITTED BY -15- 133 SUBSECTION (3)OF THIS SECTIO.

(5) T HE ARTICLES OF ORGANIZATION MAY INCLUDE ELECTIONS ALLOWING INCORPORATORS TO ACCEPT THE DEFAULT DUTIES DESCRIBED UNDER THIS SECTION OR TO MODIFY SPECIFIC DUTIES AS PERMITTED BY SUBSECTION (3) OF THIS SECTIO.

(1) A MEMBER OF AN ARTIST COMPANY MAY ASSIGN OR EXCLUSIVELY LICENSE TOTOTHE THE ARTIST COMPANY INTELLECTUALINTELLECTUALPROPERTY PROPERTY, ,INCLUDINGARTISTICWORKORANYRIGHTORRIGHTSRELATEDINCLUDING TOTHEARTISTICWORKARTISTIC ,ASINWORK KINDCAPITALCONTRIBUTIONSOR ANY RIGHT OR RIGHTS RELATED TO THE ARTISTIC WORK ,AS IN-KIND CAPITAL CONTRIBUTIONS ,INCLUDING AS THE INITIAL CAPITAL CONTRIBUTION OF THE MEMBER TO BECOME A MEMBER OF THE ARTIST COMPANY .

(2) THE ARTICLESARTICLESOFORGANIZATIONOROPERATINGAGREEMENTOF OFANARTISTCOMPANYMAYPROVIDEFORTHEVALUATIONOFARTISTICWORK ORGANIZATION, OR OPERATINGANY AGREEMENTRIGHT OFOR ANRIGHTS RELATED TO THE ARTISTIC WORK ,ASSIGNED OR EXCLUSIVELY LICENSED TO THE ARTIST COMPANY MAYPURSUANT PROVIDETO FORTHIS SECTION .F,PRIOR TO THE VALUATIONTIME OF ARTISTICASSIGNMENT WORKOR EXCLUSIVE LICENSING , ORTHE ANYGOVERNING RIGHTBODY OF THE ARTIST COMPANY AND THE ASSIGNING OR RIGHTSEXCLUSIVE RELATEDLICENSING MEMBER FAIL TO THEAGREE ARTISTICON WORKA VALUATION , ASSIGNEDOREXCLUSIVELYLICENSEDTOTHEARTISTCOMPANYPURSUANTTHE MEMBER MAY ELECT TO THISEITHER SECTIO.:

F,PRIOR(a) D ECLINE TO ASSIGN OR EXCLUSIVELY LICENSE THE TIMEARTISTIC OFWORK ASSIGNMENT,OR ANY RIGHT OR EXCLUSIVERIGHTS LICENSING,THERELATED GOVERNINGTO BODYTHE OFARTISTIC WORK ,TO THE ARTIST COMPANY AND;OR THEPAGE ASSIGNING13-SENATE ORBILL EXCLUSIVE26-133 LICENSING(b) MEMBERH FAILAVE AN INDEPENDENT PROFESSIONAL VALUATOR MUTUALLY AGREED TO AGREEBY ONTHE APARTIES DETERMINE THE VALUATION ,THEOF MEMBERTHE MAYARTISTIC ELECTWORK TOAT EITHER:THE ARTIST COMPANY S COST ,WHICH DETERMINATION IS FINAL AND BINDING .

(a)(3) DECLINEA TONY ASSIGNASSIGNMENT OR EXCLUSIVELYEXCLUSIVE LICENSELICENSING THEOF ARTISTIC WORK ,ORANYRIGHTORRIGHTSRELATEDTOTHEARTISTICWORKTO ,TOTHEAN ARTIST COMPANY ;ORPURSUANT (b)TO HAVEANINDEPENDENTPROFESSIONALVALUATORMUTUALLYTHIS AGREEDTOBYTHEPARTIESDETERMINETHEVALUATIONOFTHEARTISTICSECTION MAY BE LIMITED IN SCOPE TO INCLUDE ONLY THE ARTISTIC WORK AT,OR ANY RIGHT OR RIGHTS RELATED TO THE ARTISTARTISTIC COMPANYWORK S,REQUIRED COST,WHICHFOR DETERMINATIONTHE ISARTISTIC FINALMISSION ANDOF BINDING.THE ARTIST COMPANY .

(3)(4) ANYASSIGNMENTOREXCLUSIVELICENSINGOFARTISTICWORKUNLESS TOOTHERWISE SPECIFIED IN THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT OF AN ARTIST COMPANY , ARTISTIC WORK ASSIGNED OR EXCLUSIVELY LICENSED TO THE ARTIST COMPANY PURSUANT TO THIS SECTION MAYIS BEASSIGNED LIMITEDOR INEXCLUSIVELY SCOPELICENSED SUBJECT TO INCLUDETHE ONLYREVERSIONARY THERIGHTS ARTISTICSET WOR,ORFORTH ANYIN RIGHTSECTION OR7-80-1221(2)(a)(I)WHICHREVERSIONARYRIGHTSCONSTITUTEARETAINED RIGHTSINTEREST -16-THAT 133DOES RELATEDTOTHEARTISTICWORKNOT ,REQUIREDFORTHEARTISTICMISSIONOFTRANSFER TO THE ARTIST COMPANY.COMPANY AND IS NOT AVAILABLE TO CREDITORS OF THE ARTIST COMPANY .

(4)NTELLECTUAL UNLESSPROPERTY OTHERWISECONTRIBUTED SPECIFIED IN THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT OF AN ARTIST COMPANY , ARTISTIC WORK ASSIGNED OR EXCLUSIVELY LICENSED TO THE ARTIST COMPANY PURSUANT TO THIS SECTION IS ASSIGNED OR EXCLUSIVELY LICENSED SUBJECT TO THE REVERSIONARY RIGHTS SET FORTH IN SECTION 7-80-1221 (2)(a)(I)WHICH REVERSIONARY RIGHTS CONSTITUTE A RETAINED INTEREST THAT DOES NOT TRANSFERCONSTITUTEARTISTICWORKISNOTSUBJECTTOTHEREVERSIONARYRIGHTS TO THE ARTIST COMPANY AND IS NOTAN AVAILABLEASSET TO CREDITORS OF THE ARTIST COMPANY .

INTELLECTUAL PROPERTY CONTRIBUTED TO THE ARTIST COMPANY THAT DOES NOT CONSTITUTE ARTISTIC WORK IS NOT SUBJECT TO THE REVERSIONARY RIGHTS AND IS AN ASSET OF THE ARTIST COMPA.Y 7-80-1213.

(1) THETHEARTICLESOFORGANIZATIONOROPERATINGAGREEMENT ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT OF AN ARTIST COMPANY MAY REQUIRE ARTIST-MEMBERSARTIST MEMBERS TO ASSIGN OR EXCLUSIVELYLICENSETOTHEARTISTCOMPANYARTISTICWORKCREATEDEXCLUSIVELY BYLICENSE THE ARTIST-MEMBERS DURING MEMBERSHIP THAT RELATES TO THE ARTISTICMISSIONOFTHEARTISTCOMPANY .ARTISTICWORKASSIGNEDOR EXCLUSIVELYLICENSEDPURSUANTTOTHISSUBSECTION (1)ISSUBJECTTO THE REVERSIONARY RIGHTS SET FORTH IN SECTIO7-80-1221 (2)(a)(I), WHICH REVERSIONARY RIGHTS CONSTITUTE A RETAINED INTEREST THAT DOESNOT TRANSFERTOTHE ARTIST COMPANY ANDARTISTIC ISWORK NOTCREATED AVAILABLEBY TO CREDITORSOFTHEARTISTCOMPANY .INTELLECTUALPROPERTYCREATED ON BEHALF OF THE ARTIST COMPANY-MEMBERS THATDURING DOESMEMBERSHIP NOTTHAT CONSTITUTERELATES ARTISTICWORKISNOTTO SUBJECTTHE TOTHEREVERSIONARYRIGHTSANDISANARTISTIC -17-MISSION 133 ASSET OF THE ARTIST COMPANY.COMPANY .

(2)RTISTIC IFWORK THEASSIGNED ASSIGNMENT OR EXCLUSIVEEXCLUSIVELY LICENSINGLICENSED TERMSPURSUANT DESCRIBEDTO INTHIS SUBSECTION (1)OF(1)IS THISSUBJECT SECTIONTO ARETHE INCLUDEDREVERSIONARY RIGHTS SET FORTH IN ANSECTION ARTIST7-80-1221 COMPANY(2)(a)(I), 'SWHICH ARTICLESREVERSIONARY OFRIGHTS ORGANIZATIONCONSTITUTE ORA OPERATINGRETAINED AGREEMENTINTEREST ,THEARTICLESOFORGANIZATIONOROPERATINGAGREEMENTTHAT OFTHEARTISTCOMPANYMUSTALSOINCLUDEANARRATIVEDESCRIPTIONDOES OFNOT TRANSFER TO THE ARTISTICARTIST WORKCOMPANY AND IS NOT AVAILABLE TO BECREDITORSOFTHEARTISTCOMPANY CREATED.NTELLECTUALPROPERTYCREATEDON BYBEHALF OF THE ARTIST COMPANY TOTHAT DELINEATEDOES THENOT SCOPECONSTITUTE OF ARTISTIC WORK IS NOT SUBJECT TO ASSIGNMENTTHE ORREVERSIONARY EXCLUSIVERIGHTS LICENSING.AND IS AN ASSET OF THE ARTIST COMPANY .

(3)PAGE AN14-SENATE ARTIST-MEMBERBILL MAY26-133 RETAIN(2) SPECIFIEDFTHEASSIGNMENTOREXCLUSIVELICENSINGTERMSDESCRIBED ARTISTICINSUBSECTION WORK(1)OFTHISSECTIONAREINCLUDEDINANARTISTCOMPANY CREATEDS BYARTICLES THEOF ARTISTORGANIZATION MEMBEROR DURINGOPERATING THEAGREEMENT ,THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT OFTHE ARTIST MEMBERCOMPANY SMUST MEMBERSHIPALSO BYINCLUDE PROVIDINGA WRITTENNARRATIVE NOTICEDESCRIPTION OF THE ARTISTIC WORK TO BE CREATED BY THE ARTIST COMPANY DESCRIBINGTHEARTISTICWORKTOBERETAINEDBYTHEARTISTTO -MEMBERDELINEATE THE SCOPE OF ARTISTIC WORK SUBJECT TO ASSIGNMENT OR EXCLUSIVE LICENSING .

T(3) HEA WRITTENN NOTICEARTIST-MEMBER MAY BERETAIN PROVIDEDSPECIFIED ATARTISTIC THEWORK TIMECREATED THEBY ARTIST-MEMBER JOINS THE ARTIST COMPANYMEMBER ORDURING WITHIN THIRTY DAYS AFTER THE GENERATIONARTIST OFMEMBER THES ARTISTICMEMBERSHIP WOR.IFBY APROVIDING WRITTEN NOTICE ISTO PROVIDED ,THE ARTISTMEMBER SHALL GRANT THE ARTIST COMPANY ADESCRIBING NONEXCLUSIVE , PERPETUAL, IRREVOCABLE LICENSE TO THE ARTISTIC WORK TO THEBE EXTENTRETAINED THATBY THE ARTIST MEMBER USES THE ARTISTIC WORK IN THE ARTISTMEMBER S. WORK FOR THE ARTIST COMPANY.

(4)THE ALLARTISTICWRITTEN WORKNOTICE ASSIGNEDMAY ORBE EXCLUSIVELYPROVIDED LICENSEDAT TOTHE ORTIME CREATEDTHE BYARTIST-MEMBER ARTIST-MEMBERSJOINS ON BEHALF OF THE ARTIST COMPANY MUSTOR BEWITHIN OWNEDTHIRTY BYDAYS EITHERAFTER THE ARTISTGENERATIONOFTHEARTISTICWORK -MEMBERS.IFAWRITTENNOTICEISPROVIDED OR,THE ARTIST-MEMBER SHALL GRANT THE ARTIST COMPANY ANDA ISNONEXCLUSIVE SUBJECT, TOPERPETUAL THE,IRREVOCABLE REVERSIONARYLICENSE RIGHTSTO DESCRIBEDTHE IN SECTION 7-80-1221 (2)(a)(I).HE ARTISTIC WORK SHALL NOT BE TRANSFERRED TO ,OWNEDTHE BYEXTENT ,ASSIGNEDTHAT TO,ORTHE EXCLUSIVELYARTIST LICENSEDMEMBER TOUSES NONARTISTTHE MEMBERSARTISTIC ORWORK INVESTORS OR OTHER NONARTIST THIRD -18- 133 PARTIES EXCEPT THROUGH LICENSES OR OTHER CONTRACTUAL AGREEMENTS ENTERED INTO WITH UNAFFILIATED THIRD PARTIES IN THE ORDINARYARTIST-MEMBER COURSES OFWORK BUSINESS FOR BONATHE FIDEARTIST COMMERCIALCOMPANY PURPOSE..

L(4) ICENSESALLARTISTICWORKASSIGNEDOREXCLUSIVELYLICENSEDTOOR ANDCREATED CONTRACTUALBY AGREEMENTSARTIST DESCRIBEDMEMBERS INON THISBEHALF SUBSECTIONOF (4)ARE SUBJECT TO THE REVERSIONARYARTIST RIGHTSCOMPANY DESCRIBEDMUST INBE SECTIONOWNED 7-80-1221BY (2)(a)(I)HEEITHER ARTICLESTHE OFARTIST-MEMBERS ORGANIZATION OR OPERATINGTHE AGREEMENTARTIST MAYCOMPANY ADDRESSAND :ISSUBJECTTOTHEREVERSIONARYRIGHTSDESCRIBEDINSECTION 7-80-1221 (2)(a)(I).

(a)T TREATMENT OF ARTISTIC WORK UPONSHALLNOT ANBE ARTIST-MEMBERTRANSFERRED STO DEPARTURE,OWNED FROMBY THE, ARTISTASSIGNED COMPANYTO ,INCLUDING, WHETHEROR THEEXCLUSIVELY ARTISTICWORKREMAINSWITHTHEARTISTCOMPANYORREVERTSTOTHELICENSED DEPARTEDTO ARTIST-MEMBERNONARTIST MEMBERS OR INVESTORSOROTHERNONARTISTTHIRDPARTIESEXCEPTTHROUGHLICENSES OROTHERCONTRACTUALAGREEMENTS ENTEREDINTOWITHUNAFFILIATED THIRD PARTIES IN SPECIFIEDTHE DEPARTUREORDINARY SCENARIO;COURSE OF BUSINESS FOR BONA FIDE COMMERCIAL PURPOSES .

(b)LICENSES RAND IGHTSCONTRACTUAL OFAGREEMENTS DEPARTEDDESCRIBED ARTISTIN -MEMBERSTHIS SUBSECTION (4)ARE SUBJECT TO CONTINUETHE RECEIVINGREVERSIONARY ROYALTIESRIGHTS ORDESCRIBED REVENUESIN FROMSECTION ARTISTIC7-80-1221 WORK(2)(a)(I).HE CREATEDARTICLES DURINGOF THEIRORGANIZATION MEMBERSHIPOR ;OPERATING AGREEMENT MAY ADDRESS :

(c)(a) RIGHTST REATMENT OF REMAININGARTISTIC ARTISMEMBERSWORK TOUPON CONTINUEAN USINGARTIST ORMEMBER EXPLOITINGS ARTISTICDEPARTUREFROMTHEARTISTCOMPANY WORKINCLUDINGWHETHERTHEARTISTIC CREATEDWORKREMAINSWITHTHE JOINTLYARTIST WITHCOMPANY OR REVERTS TO THE DEPARTED ARTIST-MEMBERSARTIST-MEMBER IN SPECIFIED DEPARTURE SCENARIOS ;

(d)(b) PROCEDURESANDCONSENTREQUIREMENTSFORANYSALERIGHTSOFDEPARTEDARTIST ORMEMBERSTOCONTINUERECEIVING ASSIGNMENTPAGE OF15-SENATE ARTISTICBILL WORK26-133 TOROYALTIES NONARTISTOR THIRDREVENUES PARTIES,WHICHFROM MUST INCLUDE THE CONSENT OFTHE ARTISTMEMBER WHO CREATEDTHE ARTISTIC WORK ANDCREATED PROVIDEDURING FORTHEIR CONSIDERATIONMEMBERSHIP TO; BE PAID TO THE ARTIST-MEMBER FOR RELINQUISHMENT OF THE ARTIST MEMBER S REVERSIONARY RIGHTS IF THE REVERSIONARY RIGHTS ARE TO BE INCLUDED IN THE SALE OR ASSIGNMEN;AND (e) UPON DISSOLUTION OF THE ARTIST COMPAN,REVERSIONARY RIGHTS AS DESCRIBED IN SECTIO7-80-1221 (2)(a)(I).

(c) RIGHTSOFREMAININGARTIST MEMBERSTOCONTINUEUSINGOR EXPLOITING ARTISTIC WORK CREATED JOINTLY WITH DEPARTED ARTIST-MEMBERS ;

(d) PROCEDURES AND CONSENT REQUIREMENTS FOR ANY SALE OR ASSIGNMENTOFARTISTICWORKTONONARTISTTHIRDPARTIES ,WHICHMUST INCLUDETHECONSENTOFTHEARTIST -MEMBERWHOCREATEDTHEARTISTIC WORK AND PROVIDE FOR CONSIDERATION TO BE PAID TO THE ARTIST-MEMBER FOR RELINQUISHMENT OF THE ARTIST-MEMBER 'S REVERSIONARY RIGHTS IFTHE REVERSIONARYRIGHTSARE TOBE INCLUDED IN THE SALE OR ASSIGNMENT;AND (e) UPON DISSOLUTION OF THE ARTIST COMPANY ,REVERSIONARY RIGHTS AS DESCRIBED IN SECTION-80-1221 (2)(a)(I).

Separation of economic rights from governance -19- 133 and control.

(1) THETHEARTICLESOFORGANIZATIONOROPERATINGAGREEMENT ARTICLES OF ORGANIZATIONAN ORARTIST OPERATINGCOMPANY AGREEMENTMAY OFANARTISTCOMPANYMAYPROVIDEFORTHESEPARATIONOFECONOMICPROVIDE FOR THE SEPARATION OF ECONOMIC RIGHTS FROM GOVERNANCE AND CONTROL RIGHTS .

(2) ANY GOVERNANCE AND CONTROLRIGHTSCONTROL RIGHTS MUST AT ALLTIMESALL REMAINWITHARTISTTIMES -MEMBERSINACCORDANCEWITHSECTIONREMAIN WITH ARTIST-MEMBERS IN ACCORDANCE WITH SECTION 7-80-1203 (1)(c).

NNARTIST INVESTORS MAY HOLD ECONOMIC RIGHTS,INCLUDING RIGHTS TO,INCLUDING DISTRIBUTIONSRIGHTSTODISTRIBUTIONS ,ROYALTIES,,ROYALTIES,REVENUEPARTICIPATION REVENUE,OROTHER PARTICIPATIONFINANCIALRETURNS ,OR,WITHOUTCORRESPONDINGGOVERNANCEORCONTROL OTHERFINANCIALRETURNSRIGHTS. ,WITHOUTCORRESPONDINGGOVERNANCEOR CONTROL RIGHTS .

(3) A N OPERATING AGREEMENT MAY SPECIFY THE EXTENT AND NATUREOFECONOMICRIGHTSHELDBYNONARTISTINVESTORSNATURE ,INCLUDINGOF ECONOMIC RIGHTS HELD BY NONARTIST INVESTORS,INCLUDING PRIORITY OF DISTRIBUTION,REVENUEDISTRIBUTIONS,REVENUE PARTICIPATION ARRANGEMENTS , RECOUPMENT PROVISIONS ,AND OTHER FINANCIAL TERMS .

(1) AAN N ARTIST COMPANY MAY ELECT AT FORMATION OR BY AMENDINGPAGE ITS16-SENATE ARTICLESBILL OF26-133 ORGANIZATIONAMENDINGITSARTICLESOFORGANIZATIONINACCORDANCEWITHTHISPART IN ACCORDANCE WITH THIS PART 12 TO BE A PUBLIC BENEFIT ARTIST COMPANY :YBY: (a) STATING IN THE HEADING OF ITS ARTICLES OF ORGANIZATION THAT IT IS "PUBLIC BENEFIT ARTIST COMPANY";

(b)(a) SETTINGSTATING FORTH IN ITSTHE ARTICLESHEADING OF ORGANIZATION AND IN ITS OPERATINGAGREEMENTARTICLES ,IFANY,ONEORMORESPECIFICPUBLICBENEFITSOF TOORGANIZATION BETHAT PROMOTED BY THE ARTIST COMPANY ;AND (c) STATING IN ITS OPERATING AGREEMENT,IF AN,THAT IT IS AAPUBLIC PUBLIC BENEFIT ARTIST COMPANY.COMPANY ";

(2)(b) ASETTING NFORTH ARTISTIN COMPANYITS THATARTICLES ISOF NOTORGANIZATION FORMEDAND ASIN AITS PUBLICOPERATINGAGREEMENT BENEFIT,IFANY ,ONEORMORESPECIFICPUBLICBENEFITSTO BE PROMOTED BY THE ARTIST COMPANY MAY;AND BECOME(c) STATING IN ITS OPERATING AGREEMENT , IF ANY,THAT IT IS A PUBLIC BENEFIT ARTIST -20- 133 COMPANY BY. :

(a)(2) AMENDINGANARTIST ITSCOMPANYTHAT ARTICLESISNOT OFFORMEDASAPUBLICBENEFIT ORGANIZATIONARTIST ANDCOMPANY OPERATINGMAY AGREEMENTBECOME TOCOMPLYWITHTHEA REQUIREMENTSPUBLIC OFSUBSECTIONBENEFIT (1)OFARTIST THISCOMPANY SECTIO;AND (b) OBTAININGAPPROVALOFTHEELECTIONBYAMAJORITYOFALL VOTINGINTERESTSOFTHEMEMBERSASREQUIREDBYSECTION 7-80-1209 (1)(b)(V) AND THE MAJORITY OF ALL VOTING INTERESTS OF ARTIST-MEMBERS AS REQUIRED BY SECTION7-80-1209: (1)(c)(III).

(3)(a) A PUBLICMENDING BENEFITITS ARTISTARTICLES COMPANYOF MAYORGANIZATION CEASEAND OPERATING AGREEMENT TO BECOMPLY WITH THE REQUIREMENTS OF SUBSECTION (1)OF THIS SECTION;AND (b) OBTAINING APPROVAL OF THE ELECTION BY A PUBLICMAJORITY BENEFITOF ARTISTALL COMPANYVOTING B:INTERESTS OF THE MEMBERS AS REQUIRED BY SECTION 7-80-1209 (1)(b)(V) AND THE MAJORITY OF ALL VOTING INTERESTS OF ARTIST-MEMBERS AS REQUIRED BY SECTION 7-80-1209 (1)(c)(III).

(a)(3) AMENDINGA ITSPUBLIC ARTICLESBENEFIT OFARTIST ORGANIZATIONCOMPANY TOMAY REMOVECEASE THETO DESIGNATIONBE AS A PUBLIC BENEFIT ARTIST COMPANY AND THE SPECIFIC PUBLIC BENEFIT;AND (b) OBTAININGAPPROVALOFTHEAMENDMENTBYAMAJORITYOF ALL VOTING INTERESTS OF THE MEMBERS AS REQUIRED BY SECTION: 7-80-1209 (1)(b)(V)ND THE MAJORITY OF ALL VOTING INTERESTS OF ARTIST-MEMBERS AS REQUIRED BY SECTION7-80-1209 (1)(c)(III).

(4)(a) A MENDING ITS ARTICLES OF ORGANIZATION TO REMOVE THE DESIGNATION AS A PUBLIC BENEFIT ARTIST COMPANY THATAND ELECTSTHE TOSPECIFIC CEASEPUBLIC BEINGAPUBLICBENEFITARTISTCOMPANYREMAINSSUBJECTTOTHISPARTBENEFITS;AND 12(b) O BTAINING APPROVAL OF THE AMENDMENT BY A MAJORITY OF ALL VOTING INTERESTS OF THE MEMBERS AS ANREQUIRED ARTISTBY COMPANY.SECTION 7-80-1209 (1)(b)(V) AND THE MAJORITY OF ALL VOTING INTERESTS OF ARTIST-MEMBERS AS REQUIRED BY SECTION 7-80-1209 (1)(c)(III).

(5)(4) IA THE EVENT OF ANY INCONSISTENCY BETWEEN THE PUBLIC BENEFITSTOBEPROMOTEDBYAPUBLICBENEFITARTISTCOMPANYASSETBENEFIT FORTHARTIST INCOMPANY ITSTHAT OPERATINGELECTS AGREEMENTTO ANDCEASE INBEING ITSA ARTICLESPUBLIC OFBENEFIT ORGANIZATIONARTIST ,THECOMPANY OPERATINGREMAINS AGREEMENTSUBJECT CONTROLS AMONG THE MEMBERS ,THE MANAGERS ,AND OTHER PERSONS THAT ARE PARTY TO ORTHIS OTHERWISEPART BOUNDAS BYAN THEARTIST OPERATINGCOMPANY AGREEMENT .

(6)PAGE A17-SENATE MANAGERBILL OF26-133 A(5) PUBLICIN BENEFITTHE ARTISTEVENT COMPANY,OROF ,IFANY -21-INCONSISTENCY 133BETWEEN THERETHE ISPUBLIC NOBENEFITS MANAGERTO ,ANYBE MEMBERPROMOTED OFBY A PUBLIC BENEFIT ARTIST COMPANY ,THATBECOMESAWARETHATTHESPECIFICPUBLICBENEFITSTOAS BESET PROMOTEDBYTHEPUBLICBENEFITARTISTCOMPANYSETFORTHINITSFORTH IN ITS OPERATING AGREEMENT AREAND INACCURATELY SET FORTH IN ITS ARTICLES OF ORGANIZATION SHALL, PROMPTLYTHE AMENDOPERATING AGREEMENT CONTROLS AMONG THE ARTICLESMEMBERS OF,THE ORGANIZATIONMANAGERS IN,AND ACCORDANCEOTHER WITHPERSONS SECTIONTHAT 7-80-1209ARE (1)(c)(II).PARTY TO OR OTHERWISE BOUND BY THE OPERATING AGREEMENT .

(7)(6) THEAMANAGEROFAPUBLICBENEFITARTISTCOMPANY ELECTION,OR TOIFTHERE ADOPTISNOMANAGER A,ANYMEMBEROFAPUBLICBENEFITARTISTCOMPANY PUBLIC,THAT BENEFITSBECOMES PROVISIONAWARE MAYTHAT FACILITATECERTIFICATIONOFANARTISTCOMPANYUNDERTHIRDTHE -PARTYSPECIFICPUBLICBENEFITSTOBE STANDARDSPROMOTED APPLICABLEBY TOTHE PUBLIC BENEFIT ARTIST COMPANI.SCOMPANY 7-80-1216.SET FORTH IN ITS OPERATING AGREEMENT ARE INACCURATELY SET FORTH IN ITS ARTICLES OF ORGANIZATION SHALL PROMPTLY AMEND THE ARTICLES OF ORGANIZATION IN ACCORDANCE WITH SECTION 7-80-1209 (1)(c)(II).

(7) T HE ELECTION TO ADOPT A PUBLIC BENEFITS PROVISION MAY FACILITATE CERTIFICATION OF AN ARTIST COMPANY UNDER THIRD -PARTY STANDARDS APPLICABLE TO PUBLIC BENEFIT ARTIST COMPANIES .

7-80-1216.

(1) THET HE MEMBERS OR MANAGERS OR OTHER PERSONS WITH AUTHORITYAUTHORITYTOMANAGEORDIRECTTHEBUSINESSANDAFFAIRSOFAPUBLIC TO MANAGE OR DIRECT THE BUSINESS AND AFFAIRS OF A PUBLIC BENEFIT ARTIST COMPANY SHALL MANAGE OR DIRECT THE BUSINESS AND AFFAIRS OF THE PUBLIC BENEFIT ARTIST COMPANY IN A MANNER THAT BALANCES :

(a) THE PECUNIARY INTERESTS OF THE MEMBER;MEMBERS ;

(b) THE BEST INTERESTS OFTHOSEOF THOSE MATERIALLY AFFECTED BY ITS CONDUCT ;

(c) THE SPECIFIC PUBLIC BENEFITS SET FORTH IN ITS ARTICLES OF ORGANIZATION AND OPERATING AGREEMENT ,IF ANY;AND (d) ISITS ARTISTIC MISSI.NMISSIO. (2) UNLESSOTHERWISEPROVIDEDINANOPERATINGAGREEMENT , AMEMBER ,AMANAGER OROTHERPERSONWITHAUTHORITYTOMANAGE OR DIRECT THE BUSINESS AND AFFAIRS OF A PUBLIC BENEFIT ARTIST COMPANY DOES NOT HAVE ANY LIABILITY FOR MONETARY DAMAGES FOR THE FAILURE TO MANAGE OR DIRECT THE BUSINESS AND AFFAIRS OF THE -22- 133 PUBLICBENEFITARTISTCOMPANYASPROVIDEDINSUBSECTION (1)OFTHIS SECTION.

(3)(2) AUNLESSOTHERWISE PROVIDEDINANOPERATINGAGREEMENT ,A MEMBER OR,A MANAGER OF,OR AOTHER PUBLICPERSON BENEFITWITH ARTISTAUTHORITY COMPANYTO MANAGE OR ANOTHERPAGE PERSONWITHAUTHORITYTOMANAGE18-SENATE ORDIRECTBILL THEBUSINESSANDAFFAIRSOFAPUBLICBENEFITARTISTCOMPANYSHALL26-133 NOTDIRECT ,BYTHE VIRTUEBUSINESS OFTHEAND PUBLICAFFAIRS BENEFITSOF PROVISIONSA OFTHISPUBLIC P12ORBENEFIT SUBSECTIONARTIST (1)COMPANY OFDOESNOTHAVEANYLIABILITYFORMONETARYDAMAGESFORTHE THISFAILURE SECTIO, HAVE ANY DUTY TO AMANAGE PERSONOR ONDIRECT ACCOUNTTHE OFBUSINESS ANYAND INTERESTAFFAIRS OF THE PERSONPUBLIC INBENEFIT THEARTIST PUBLICCOMPANY BENEFITSAS SETPROVIDED FORTH IN ITSSUBSECTION ARTICLES(1)OF OFTHIS ORGANIZATIONSECTION. AND OPERATING AGREEMEN, IFANY ORONACCOUNTOFANYINTERESTMATERIALLYAFFECTEDBYTHE PUBLIC BENEFIT ARTIST COMPANYS CONDUCT .

(4)(3) WA ITHMEMBERORMANAGEROFAPUBLICBENEFIT RESPECTARTIST TOCOMPANY AORANOTHERPERSONWITHAUTHORITYTOMANAGEORDIRECTTHEBUSINESS DECISIONANDAFFAIRSOFAPUBLICBENEFITARTISTCOMPANYSHALLNOT IMPLICATING,BYVIRTUE THEOFTHEPUBLICBENEFITSPROVISIONSOFTHISPART BALANCE12 REQUIREMENTSETFORTHINSUBSECTIONORSUBSECTION (1)OFTHISSECTION(1)OF ,AMEMBERTHISSECTION ,,HAVEANYDUTYTOAPERSONONACCOUNTOFANYINTEREST AOF MANAGERTHE ,OR OTHER PERSON WITHIN AUTHORITYTHE TOPUBLIC MANAGEBENEFITS ORSET DIRECTFORTH THEIN BUSINESSITS ANDARTICLES AFFAIRS OF AORGANIZATION PUBLICAND BENEFITOPERATING ARTISTAGREEMENT COMPANY,IF ISANY, DEEMEDOR TOON SATISFYACCOUNT THEOF PERSONSANY FIDUCIARYINTEREST DUTIESMATERIALLY TOAFFECTED MEMBERSBY AND THE PUBLIC BENEFIT ARTIST COMPANY IFTHES PERSOSCONDUCT DECISION IS BOTH INFORMED AND DISINTERESTED AND NOT A DECISION THAT A PERSON OF ORDINARY ,SOUND JUDGMENT WOULD NOT APPROVE .

(4) W ITH RESPECT TO A DECISION IMPLICATING THE BALANCE REQUIREMENT SET FORTH IN SUBSECTION (1)OF THIS SECTION,A MEMBER , A MANAGER ,OR OTHER PERSON WITH AUTHORITY TO MANAGE OR DIRECT THE BUSINESS AND AFFAIRS OF A PUBLIC BENEFIT ARTIST COMPANY IS DEEMEDTOSATISFYTHEPERSON SFIDUCIARYDUTIESTOMEMBERSANDTHE PUBLIC BENEFIT ARTIST COMPANY IF THE PERSON S DECISION IS BOTH INFORMED AND DISINTERESTED AND NOT A DECISION THAT A PERSON OF ORDINARY ,SOUND JUDGMENT WOULD NOT APPROVE .

Publicbenefitartistcompany-annualstatements.Public benefit artist company - annual statements.

(1) A PUBLICPUBLICBENEFITARTISTCOMPANYSHALLATLEASTANNUALLY BENEFIT ARTIST COMPANY SHALL AT LEAST ANNUALLY PROVIDE ITS MEMBERS AND DONORS WITH A STATEMENT SPECIFYING:SPECIFYING :

(a) THET HE PUBLIC BENEFIT ARTIST COMPANYSCOMPANY S PROMOTION OF THE PUBLIC BENEFITS SET FORTH IN ITS ARTICLES OF ORGANIZATION AND OPERATING AGREEMENT ,IF AN;ANY;

(b) THET HE PUBLIC BENEFIT ARTIST COMPAN'SCOMPANY S FULFILLMENT OF ITS -23- 133 ARTISTIC MISSION;AND (c) THEBESTINTERESTSOFTHOSEMATERIALLYAFFECTEDBYTHETHE BEST INTERESTS OF THOSE MATERIALLY AFFECTED BY THE PUBLIC BENEFIT ARTIST COMPANY'SCOMPANY CONDUCT.'S CONDUCT .

(2) THE STATEMENT REQUIREDREQUIREDBY BY SUBSECTION (1)OF(1)OFTHIS THIS SECTION PAGE 19-SENATE BILL 26-133 MUST INCLUDE :

(a) THETHEOBJECTIVESTHATHAVEBEENESTABLISHEDTOPROMOTETHE OBJECTIVES THAT HAVE BEEN ESTABLISHED TO PROMOTE THE PUBLIC BENEFIT ARTIST COMPANY 'S PUBLIC BENEFITS,ARTISTIC MISSION,ANDMISSION, AND INTERESTS ;

(b) THET STANDARDSTHATHE HAVEBEENADOPTEDTOMEASURESTANDARDS THAT HAVE BEEN ADOPTED TO MEASURE THE PUBLICBENEFITARTISTPUBLIC BENEFIT ARTIST COMPANY SPROGRESSINPROMOTINGTHEPUBLICS PROGRESS IN PROMOTING THE PUBLIC BENEFIT ARTIST COMPANY S PUBLIC BENEFIT,BENEFITS , ARTISTIC MISSIO,ANDMISSION, INTERESTS;AND INTERESTS ;

(c) OBJECTIVEFACTUALINFORMATIONBASEDONTHESTANDARDSO DESCRIBEDINSUBSECTIONBJECTIVE (2)(b)OFTHISSECTIONREGARDINGTHEPUBLICFACTUAL INFORMATION BASED ON THE STANDARDS DESCRIBED IN SUBSECTION (2)(b)OF THIS SECTION REGARDING THE PUBLIC BENEFIT ARTIST COMPANY 'S SUCCESS IN MEETING THE OBJECTIVES FOR PROMOTINGTHEPUBLICBENEFITSPROMOTING ,ARTISTICMISSION,ANDINTERESTSTHE ANDPUBLIC BENEFITS ,ARTISTIC MISSION,AND INTERESTS ;AND (d) A N ASSESSMENT OF THE PUBLIC BENEFIT ARTIST COMPANYSCOMPANY 'S SUCCESS IN MEETING THE OBJECTIVES AND PROMOTING THE PUBLIC BENEFITS,ARTISTIC MISSION,AND INTERESTS.INTERESTS .

(3) THESTATEMENTREQUIREDBYTHISSECTIONMAYBEINCLUDEDTHE INORPROVIDEDCONCURRENTLYWITHANYOTHERREPORTORSTATEMENTSTATEMENT REQUIRED BY THIS SECTION MAY BE INCLUDED IN OR PROVIDED CONCURRENTLY WITH ANY OTHER REPORT OR STATEMENT PROVIDED TO MEMBERS .

(a) PROCEDURESPROCEDURESFORADMISSIONOFNEWMEMBERSANDDEPARTURE FOR, ADMISSIONWITHDRAWAL OF,EXPULSION NEW,OR MEMBERSDISSOCIATION ANDOF DEPARTUREEXISTING ,WITHDRAWALMEMBERS ,EXPULSION,,SO ORLONG DISSOCIATIONAS OFARTISTS EXISTINGRETAIN -24-OWNERSHIP 133IN MEMBERSACCORDANCE ,SOLONGASARTISTSRETAINOWNERSHIPINACCORDANCEWITHWITH THE REQUIREMENTS OF SECTION 7-80-1203 (1)(c);

(b) RIGHTSR IGHTS TO ARTISTIC WORK,ROYALTYWORK ,ROYALTY SHARING RIGHTS,AND REVENUE PARTICIPATION RIGHTS UPON,AND AREVENUEPARTICIPATIONRIGHTSUPONAMEMBER MEMBER'SDEPARTURE S,INCLUDING DEPARTURE , INCLUDING :

(I) W HETHERHETHERARTISTICWORKASSIGNEDOREXCLUSIVELYLICENSED ARTISTICBY WORKTHE ASSIGNEDDEPARTING ORARTIST EXCLUSIVELY-MEMBER LICENSEDBYTHEDEPARTINGARTISTREMAINS MEMBERREMAINSWITHTHEARTISTWITH THE ARTIST COMPANY OR REVERTS TO THE MEMBER ,IN WHOLE OR IN PAR;PART;

PAGE 20-SENATE BILL 26-133 (II) WHETHERW HETHER ARTISTIC WORK CREATED DURING THE MEMBER S MEMBERSHIP REMAINS WITH THE ARTIST COMPANY OR REVERTS TO THE ARTIST-MEMBERARTIST-MEMBERINSPECIFIEDDEPARTURESCENARIOS IN,INWHOLEORINPART SPECIFIED DEPARTURE SCENARIOS,IN WHOLE OR IN PART ;

(III) W HETHER AND ON WHAT TERMS THE DEPARTING ARTIST-MEMBER RETAINS RIGHTS TO RECEIVE ROYALTIES OR REVENUES FROM ARTISTIC WORK CREATED DURING THEIR MEMBERSHIP IN SPECIFIED DEPARTURE SCENARIOS ;AND (IV) W HETHER AND ON WHAT TERMS THE DEPARTING ARTIST-MEMBERARTIST-MEMBERRETAINSRIGHTSTOUSECOLLECTIVENAMES RETAINS,TRADEMARKS RIGHTS TO USE COLLECTIVE NAMES , TRADEMARKSOR ,OR OTHER IDENTIFIERS ASSOCIATED WITH THE ARTIST COMPANYCOMPANY; ;

(c) C ONTINUING ECONOMIC RIGHTS OF DEPARTED MEMBERS , INCLUDING DISTRIBUTION RIGHTS,RIGHTS , ROYALTY SHARING ,AND, AND REVENUE PARTICIPATION;

(d) RIGHTSRIGHTSANDOBLIGATIONS ANDOFREMAININGMEMBERS OBLIGATIONS,INCLUDING OF REMAINING MEMBERS , INCLUDING RIGHTS TO CONTINUE EXPLOITING ARTISTIC WORK JOINTLY CREATED WITH DEPARTED ARTIST-MEMBERSARTIST MEMBERS ;

(e) V ALUATION AND BUYOUT PROVISIONS FOR A DEPARTING -25- 133 MEMBER S INTERES;ANDINTEREST;AND (f) DISPUTE RESOLUTION PROCEDURES.PROCEDURES .

(2) INI THE ABSENCE OF PROVISIONS ADDRESSING MEMBER DEPARTUREDEPARTUREINTHEARTICLESOFORGANIZATIONOROPERATINGAGREEMENT IN THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT OF AN ARTIST COMPANY :

(a) ADEPARTINGADEPARTINGMEMBER MEMBERSOWNERSHIPINTERESTISSUBJECTTOTHE S OWNERSHIP INTEREST IS SUBJECT TO THE DEFAULT PROVISIONS OF THIS ARTICL80;ARTICLE80;

(b) ARTISTICWORKASSIGNEDOREXCLUSIVELYLICENSEDARTISTIC WORK ASSIGNED OR EXCLUSIVELY LICENSED BY THE MEMBER IF,IF AN ARTIS-MEMBER ,TO THE ARTIST COMPANY REMAINS THE PROPERTY OF THE ARTIST COMPANY , SUBJECT TO ANY REVERSIONARY RIGHTS PROVIDED IN SECTIO7-80-1221SECTION7-80-1221 (2)(a)(I);

(c) ARTISTICA RTISTIC WORK CREATED BY THE MEMBER , IF AN ARTIST-MEMBER , DURING THEIR MEMBERSHIP SHALL BE TREATED IN PAGE 21-SENATE BILL 26-133 ACCORDANCE WITH ANY ASSIGNMENT OR EXCLUSIVE LICENSING TERMS INCLUDEDINTHEARTICLESOFORGANIZATIONOROPERATINGAGREEMENTINCLUDED PURSUANTTOSECTIONIN 7-80-1213(1)OR,INTHEABSENCEOFSUCHTERMSTHE ,ARTICLES ISOF GOVERNEDORGANIZATION BYOR FEDERALOPERATING INTELLECTUALAGREEMENT PROPERTYPURSUANT LAW;ANDTO (d)SECTION T7-80-1213(1) HEOR,IN DEPARTINGTHE MEMBERABSENCE HASOF NOSUCH CONTINUINGTERMS RIGHTS, TOIS DISTRIBUTIONS,ROYALTIES,ORGOVERNED REVENUES EXCEPT AS MAY BE REQUIRED BY SECTIONFEDERAL 7-80-1213INTELLECTUAL (4OR7-80-1221PROPERTY (2)(a)(I).LAW ;

(3)AND (d) T HE ADMISSIONDEPARTING OF A NEW MEMBER MUSTHAS INCLUDENO THECONTINUING CONSENTRIGHTS SPECIFIEDTO INDISTRIBUTIONS THEROYALTIES ARTICLES,ORREVENUESEXCEPTASMAYBEREQUIREDBY OFSECTION ORGANIZATION7-80-1213 OR(4)OR OPERATING7-80-1221 AGREEMENT(2)(a)(I). OF AN ARTIST COMPANY OR , IN THE ABSENCE OF SUCH SPECIFICATION,THE CONSENT REQUIRED BY SECTION7-80-701.

(3) THEADMISSIONOFANEWMEMBERMUSTINCLUDETHECONSENT SPECIFIED IN THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT OF AN ARTIST COMPANY OR ,IN THE ABSENCE OF SUCH SPECIFICATION,THE CONSENT REQUIRED BY SECTION 7-80-701.

A NARTISTNARTISTCOMPANYSHALLFILETHEPERIODICREPORTREQUIREDOF COMPANY SHALLFILE THE PERIODICREPORT REQUIRED -26- 133 OF LIMITED LIABILITY COMPANIES UNDER SECTI7-90-501.SECTION 7-90-501.

(1) A PERSONPERSONSHALLNOTHAVEAPRIVATERIGHTOFACTIONAGAINST SHALLANARTISTCOMPANY NOT,ITSGOVERNINGBODY HAVE,ITSMANAGER A,ORITSMEMBERS PRIVATE RIGHT OF ACTION AGAINST AN ARTIST COMPANY,ITS GOVERNING BODY ITS MANAGER ,OR ITS MEMBERS BASED ON:ON :

(a) THETHEARTISTCOMPANY ARTIST'SFAILURETOPURSUEORCREATEAPUBLIC COMPANYBENEFIT; S FAILURE TO PURSUE OR CREATE A PUBLIC BENEFI;

(b) THET HE ARTIST COMPANY 'S FAILURE TO FULFILL ITS ARTISTIC MISSION;OR (c) A NY ALLEGED BREACH OF DUTIES DESCRIBED IN SECTION 7-80-1216.

(2) THET HE LIMITATION ON PRIVATE RIGHTS OF ACTION SET FORTH IN THISTHISSECTIONDOESNOT SECTION DOES NOT LIMIT ANYANYOTHERRIGHTSORREMEDIESAVAILABLE OTHER RIGHTS OR REMEDIES AVAILABLE UNDER LAW .

PAGE 22-SENATE BILL 26-133 (1) DISSOLUTION OF AN ARTIST COMPANY IS GOVERNED BY PART 8 OFTHISOF ARTICL80,EXCEPTTHIS ARTICLE80,EXCEPT AS OTHERWISE PROVIDED IN THIS SECTI.NSECTIO. (2) (a)(IEXCEPTASISNECESSARYTOCOMPLYWITHAPPLICABLE FEDERAL INCOME TAX LAW , INCLUDING SECTION 704 AND OTHER APPLICABLE PROVISIONS OF SUBCHAPTERK OF THE INTERNAL REVENUE CODEOF 1986,ASAMENDED ,UPONDISSOLUTIONOFANARTISTCOMPANY , ALL RIGHTS TO ARTISTIC WORK ASSIGNED OR EXCLUSIVELY LICENSED BY ARTIST-MEMBERS TO THE ARTIST COMPANY OR CREATED BY ARTIST-MEMBERSOFTHEARTISTCOMPANYDURINGTHEARTIST -MEMBER S MEMBERSHIP REVERT TO THE ARTIST -MEMBERS THAT ASSIGNED , EXCLUSIVELY LICENSED, OR CREATED SUCH ARTISTIC WORK AND ANY -27- 133 APPLICABLE ASSIGNMENT OR EXCLUSIVE LICENSE AUTOMATICALLY TERMINATES .

THE(2) OPERATING(a) AGREEMENT(I) OFEEPT ANYAS ARTISTIS COMPANYNECESSARY TREATEDTO ASCOMPLY AWITH PARTNERSHIPAPPLICABLE FOR FEDERAL INCOME TAX PURPOSESLAW MUST INCLUDE ALLOCATION , DISTRIBUTIO,INCLUDING VALUATIONSECTION ,CAPITAL704 ACCOUNT , AND OTHER ECONOMICAPPLICABLE PROVISIONS REASONABLYOF DESIGNEDSUBCHAPTER ,K TOOF THE EXTENTINTERNAL PERMITTEDREVENUE BYCODE APPLICABLEOF FEDERAL1986,AS INCOMEAMENDED TAX,UPON LAWDISSOLUTION ,TOOF FACILITATEAN THEARTIST REVERSIONCOMPANY OF, ALL RIGHTS TO ARTISTIC WORK ASSIGNED OR EXCLUSIVELY LICENSED BY ARTIST-MEMBERS TO THE ART-MEMBERSARTIST UNDERCOMPANY THISOR SUBSECTIONCREATED (2)(a)(I)INCLUDINGBY PROVISIONSARTIST-MEMBERS GOVERNINGOF THE DISTRIBUTIONARTIST OFCASHCOMPANY ANDOTHERPROPERTYOTHERDURING THANTHE ARTIST-MEMBER 'S MEMBERSHIP REVERT TO THE ARTIST-MEMBERS THAT ASSIGNED , EXCLUSIVELY LICENSED , OR CREATED SUCH ARTISTIC WORK ;AND ANY APPLICABLE ASSIGNMENT OR EXCLUSIVE LICENSE AUTOMATICALLY TERMINATES .

THE ALLOCATIONOPERATING AGREEMENT OF ITEMSANY OFARTIST INCOM,COMPANY GAIN,LOSS,DEDUCTIONTREATED ,AS ANDA CREDITPARTNERSHIP ;ANDFOR THEFEDERAL PRESERVATIONINCOME ORTAX SATISFACTIONPURPOSES OFMUST CONTINUINGINCLUDEALLOCATION ,DISTRIBUTIONVALUATION ,CAPITALACCOUNT ,AND OTHER ECONOMIC RIGHTSPROVISIONS WITHREASONABLY RESPECTDESIGNED , TO REVERTEDTHE EXTENT PERMITTED BY APPLICABLE FEDERAL INCOME TAX LAW,TO FACILITATE THE REVERSION OF ARTISTIC WORK .TO THE ARTIST MEMBERS UNDER THIS SUBSECTION (2)(a)(I),INCLUDING PROVISIONS GOVERNING THE DISTRIBUTIONOFCASHANDOTHERPROPERTYOTHERTHANARTISTICWORK ;

ORTHE JOINTLYALLOCATION CREATEDOF WORKSITEMS ,ASSIGNEDOF ORINCOME EXCLUSIVELY, LICENSEDGAIN, RIGHTSLOSS,DEDUCTION REVERT, TOAND THECREDIT; APPLICABLE ARTIST:

(A)AND ASTHE SPECIFIEDPRESERVATION INOR THESATISFACTION ARTICLES OF ORGANIZATIONCONTINUING ORECONOMIC OPERATINGRIGHTS AGREEMENTWITH OFRESPECT THETO ARTISTREVERTED COMPANYARTISTIC ;WORK .

(B)FOR IJOINTLY FCREATED NOTWORKS SPECIFIED,ASSIGNED IN THE ARTICLES OF ORGANIZATION OR OPERATINGAGREEMENTOFTHEARTISTCOMPANYEXCLUSIVELY ASMUTUALLYAGREEDLICENSED UPONRIGHTS BYREVERT TO THE APPLICABLE ARTISTS;ORARTISTS (C)(A) IFASSPECIFIEDINTHEARTICLESOFORGANIZATIONOROPERATING MUTUAL AGREEMENT CANNOTOF BE REACHED BY THE APPLICABLEARTISTSARTIST ASJOINTLYOWNEDARTISTICWORKINACCORDANCECOMPANY FEDERAL; INTELLECTUAL PROPERTY LAW .

(II)(B) INTELLECTUALIF PROPERTYNOT THATSPECIFIED DOESIN NOTTHE CONSTITUTEARTICLES ARTISTICWORKISNOTSUBJECTTOTHEREVERSIONARYRIGHTSDESCRIBEDOF INORGANIZATION THISOR SECTIONOPERATING ANDAGREEMENT SHALLOF THE ARTIST COMPANY ,AS MUTUALLY AGREED UPON BY THE APPLICABLE ARTISTS;OR (C) F MUTUAL AGREEMENT CANNOT BE DISTRIBUTEDREACHED PURSUANTBY TOTHE SUBSECTIONAPPLICABLE (3)OFARTISTS,AS THISJOINTLY SECTIO.OWNED ARTISTIC WORK IN ACCORDANCE FEDERAL INTELLECTUAL PROPERTY LAW .

(III)(II) EXCEPTIELLECTUALPROPERTYTHATDOESNOTCONSTITUTEARTISTIC ASWORK IS NECESSARYNOT SUBJECT TO COMPLY WITH APPLICABLE -28- 133 FEDERAL INCOME TAX LAW ,INCLUDING SECTION 704 AND OTHER APPLICABLE PROVISIONS OF SUBCHAPTER K OF THE INTERNAL REVENUE CODE OF 1986,AS AMENDED ,THE REVERSIONARY RIGHTS DESCRIBED IN SUBSECTIONTHIS (2)(a)(IOFTHISSECTIONCONSTITUTEPAGE RETAINEDINTERESTS23-SENATE THATBILL WERE26-133 NEVERSECTIONANDSHALLBEDISTRIBUTEDPURSUANTTOSUBSECTION FULLY(3)OFTHIS TRANSFERREDSECTION TO. THE ARTIST COMPANY AND THEREFORE ARE NOT ASSETS OF THE ARTIST COMPANY AVAILABLE TO CREDITORS OR NONARTIST INVESTORS.

(b)(III) TE HEXCEPT AS IS NECESSARY TO COMPLY WITH APPLICABLE FEDERAL INCOME TAX LAW , INCLUDING SECTION 704 AND OTHER APPLICABLE PROVISIONS OF SUBCHAPTER K OF THE INTERNAL REVENUE CODE OF 1986,AS AMENDED , THE REVERSIONARY RIGHTS DESCRIBED IN SUBSECTION (2)(a)(I)F(2)(a)(IOF THIS SECTION ARECONSTITUTE SUBJECTRETAINED :OINTERESTS (I)THAT PERFECTEDWERE SECURITYNEVER INTERESTSFULLY ORTRANSFERRED LIENSTO GRANTEDTHE BYARTIST THECOMPANY ARTISTCOMPANYWITHTHEEXPRESSWRITTENCONSENTOFTHEARTISTORAND ARTISTSTHEREFORE HOLDINGARE NOT ASSETS OF THE REVERSIONARYARTIST RIGHT;COMPANY AVAILABLE TO CREDITORS OR NONARTIST INVESTORS .

(II)(b) EXISTING LICENSES TO THIRD PARTIES ENTERED INTO IN THE ORDINARYREVERSIONARYRIGHTSDESCRIBEDINSUBSECTION COURSE(2)(a)(I) OF BUSINESS;ANDTHIS (III)SECTION CONTINUINGARE ROYALTYSUBJECT SHARINGTO: ,REVENUE PARTICIPATION OBLIGATIONS ,RECOUPMENT PROVISIONS,RETURN OFCAPITAL ,OR OTHER ECONOMICOBLIGATIONSSPECIFIEDINTHEARTICLESOFORGANIZATIONOR OPERATING AGREEMENT OF THE ARTIST COMPANY .

(c)(I) THEPERFECTED ARTICLESSECURITY OFINTERESTS ORGANIZATION OR OPERATINGLIENS AGREEMENTGRANTED OFBY ANTHE ARTIST COMPANY MAYWITH SPECIFY THE TERMSEXPRESS WRITTEN CONSENT OF ATHE REVERSIONARTIST ,OR INCLUDINGARTISTS :HOLDING THE REVERSIONARY RIGHT ;

(I)(II) PIORITYAMONGARTISTSINCLAIMINGREVERSIONARYRIGHTSEXISTING ;LICENSES TO THIRD PARTIES ENTERED INTO IN THE ORDINARY COURSE OF BUSINESS ;AND (III) C ONTINUING ROYALTY SHARING ,REVENUE PARTICIPATION OBLIGATIONS ,RECOUPMENT PROVISIONS , RETURN OF CAPITAL ,OR OTHER ECONOMIC OBLIGATIONS SPECIFIED IN THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT OF THE ARTIST COMPANY .

(II)(c) ALLOCATIONTHE ARTICLESOFORGANIZATIONOROPERATINGAGREEMENT OF REVERSIONARYANARTISTCOMPANYMAYSPECIFYTHETERMSOFAREVERSION RIGHTS,INCLUDING: IN JOINT WORK;

(III)(I) CONTINUINGPRIORITY OBLIGATIONSAMONG TOARTISTS SHAREIN ROYALTIESCLAIMING ORREVERSIONARY REVENUESRIGHTS FROM; REVERTED ARTISTIC WORK ;AND (IV) RIGHTSTOUSECOLLECTIVENAMES ,TRADEMARKS ,OROTHER IDENTIFIERS.

-29-(II) 133ALLOCATION (3)OF UPONREVERSIONARY DISSOLUTION,AFTERRIGHTS GIVING EFFECT TO ANY ARTISTIC WORKREVERSIONARYRIGHTSDESCRIBEDINSUBSECTION (2)(a)(OFTHIS SECTION,AND AFTER PAYMENT OR PROVISION FOR LIABILITI:S (a) ASETSSHALLBEDISTRIBUTEDINACCORDANCEWITHPRIORITY AND DISTRIBUTION PROVISIONS IN THEJOINT ARTICLESWORKS OF; ORGANIZATION OR OPERATING AGREEMENT OF THE ARTIST COMPANY , INCLUDING PREFERENCESFORHOLDERSOFREVENUEPARTICIPATIONRIGHTS ROYALTY SHARING RIGHTS,OR OTHER ECONOMIC INTERESTS;OR (b) INOTSPECIFIED,ASSETSSHALLBEDISTRIBUTEDPRORATATO MEMBERS BASED ON OWNERSHIP PERCENTAGES .

(4)(III) THECNTINUINGOBLIGATIONSTOSHAREROYALTIESORREVENUES ARTICLESFROM OFREVERTED ORGANIZATIONARTISTIC ORWORK OPERATING;AND AGREEMENT(IV) OFR ANIGHTS ARTISTTO COMPANYUSE MAYCOLLECTIVE SPECIFY:NAMES ,TRADEMARKS ,OR OTHER IDENTIFIERS.

(a)PAGE PRIORITY24-SENATE OFBILL DISTRIBUTIONS26-133 AMONG(3) DIFFERENTU CLASSESPON OFDISSOLUTION ECONOMIC,AFTER INTERESTS;GIVING EFFECT TO ANY ARTISTIC WORK REVERSIONARY RIGHTS DESCRIBED IN SUBSECTION (2)(a)(IOF THIS SECTION,AND AFTER PAYMENT OR PROVISION FOR LIABILITIES:

(a) ASSETS SHALL BE DISTRIBUTED IN ACCORDANCE WITH PRIORITY AND DISTRIBUTION PROVISIONS IN THE ARTICLES OF ORGANIZATION OR OPERATINGAGREEMENTOFTHEARTISTCOMPANY INCLUDINGPREFERENCES FOR HOLDERS OF REVENUE PARTICIPATION RIGHTS ,ROYALTY SHARING RIGHTS,OR OTHER ECONOMIC INTERESTS ;OR (b) TEATMENTOFUNVESTEDORCONTINGENTECONOMICRIGHTSIF ;NOT SPECIFIE,ASSETS SHALL BE DISTRIBUTED PRO RATA TO MEMBERS BASED ON OWNERSHIP PERCENTAGES .

(c)(4) ALLOCATIONOFREMAININGINTELLECTUALPROPERTYVALUETHE ;ARTICLESOFORGANIZATIONOROPERATINGAGREEMENTOF AN ARTIST COMPANY MAY SPECIFY :

OR(a) (d)P OTHERRIORITY DISSOLUTIONOF ANDDISTRIBUTIONS DISTRIBUTIONAMONG TERM.DIFFERENT CLASSES OF ECONOMIC INTERESTS ;

(b) TREATMENT OF UNVESTED OR CONTINGENT ECONOMIC RIGHTS ;

(c) ALLOCATIONOFREMAININGINTELLECTUALPROPERTYVALUE ;OR (d) OTHER DISSOLUTION AND DISTRIBUTION TERMS .

THIST HIS PART12DOES NOT AFFECT A STATUTE ORORRULE RULE OFLAWTHAT IS APPLICABLE TO A LIMITED LIABILITY COMPANY THAT IS NOT AN ARTIST COMPANY .

(1) APERSONFROMAJURISDICTIONOTHERTHANA CPERSON OLORADOMAYFROM FORM A LIMITEDJURISDICTION LIABILITYOTHER COMPANYTHAN ASCOLORADO ANMAY ARTISTFORMALIMITEDLIABILITYCOMPANYASANARTISTCOMPANYPURSUANTTO COMPANYTHIS PURSUANTPART TO12 THISOR PART12OR CAUSE AN EXISTING LIMITED LIABILITY COMPANY TO BECOMEBECOMEANARTISTCOMPANYBYAMENDINGITSARTICLESOFORGANIZATION AN ARTIST COMPANY BY AMENDING ITS ARTICLES OF -30- 133 ORGANIZATION IN ACCORDANCE WITH THIS PART12.PART 12.

(2) THE FORMATIONOFANARTISTFORMATIONOFANARTISTCOMPANYUNDERTHISPART COMPANYUNDERTHISPART 12 IS PAGE 25-SENATE BILL 26-133 GOVERNED BY THE LAWS OF THE STATE ,AND AN ARTIST COMPANY FORMEDUNDERTHISPARTFORMED 12ISADOMESTICLIMITEDLIABILITYCOMPANYUNDER THIS PART 12 IS A DOMESTIC LIMITED LIABILITY COMPANY FOR ALL PURPOSES UNDER THIS ARTICLE 80, REGARDLESS OF THE RESIDENCE OR DOMICILE OF ITS ART-MEMBERSARTIST-MEMBERS .

(3) NOTHINGN OTHING IN THIS SECTION AFFECTS THE REQUIREMENTS FOR FOREIGNFOREIGNLIMITEDLIABILITYCOMPANIESUNDER LIMITEDPART LIABILITY9 COMPANIESOFTHIS UNDER PAR9OF THIS ARTICLE 80.

(1) NNO O LATER THAN JULY 1,1,2027, 2027,THETHE SECRETARY OF STATE SHALL MAKE ANY CHANGES NECESSARY TO IMPLEMENT THIS PART 12, INCLUDING ACCEPTING ARTICLES OF ORGANIZATION AND AMENDED ARTICLES OF ORGANIZATION FILED PURSUANT TO THIS PA12.PART 12.

(2) THIS SECTION IS REPEAL,EFFECTIVEJULYREPEALED,EFFECTIVE JULY 1, 2028.

SECTIONSECTION2. 2.

Appropriation.Appropriation.(1) Forthe2026-27statefiscalyear, $93,878 is appropriated to the department of state.

(1)This Forappropriation theis 2026-27fromthe department of state fiscalcash year,fund $93,878created isin appropriatedsection to24-21-104 the(3)(b), departmentC.R.S.Toimplementthisact,thedepartment ofmayuse state.this appropriationas follows:

This(a) appropriationisfromthedepartmentof$5,478forusebythebusinessandlicensingdivisionforpersonal statecashfundcreatedinsectionservices, 24-21-104which (3)(b),amount C.R.S.is based on an assumption that the division will require an additional 0.1 FTE;

To implement this act, the department mayuse this appropriation as follows:

(a) $5,478 for use by the business and licensing division for personal services, which amount is based on an assumption that the division will require an additional 0.1 FTE;

on the day following the expiration of the -31-ninety-day 133period ninety-dayperiodafterfinaladjournmentofthegeneralassembly(Augustafter final adjournment of the general assembly (August 12, 2026, if adjournment sine die is on May 13, 2026);

except that, if a referendumreferendumpetitionisfiledpursuanttosection1(3)ofarticleVofthestate petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless approvedPAGE by26-SENATE theBILL people26-133 atapprovedbythepeopleatthegeneralelectiontobeheldinNovember2026 the general election to be held in November 2026 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.

-32-____________________________ 133____________________________ James Rashad Coleman, Sr.

Julie McCluskie PRESIDENT OF SPEAKER OF THE HOUSE THE SENATE OF REPRESENTATIVES ____________________________ ____________________________ Esther van Mourik Vanessa Reilly SECRETARY OF CHIEF CLERK OF THE HOUSE THE SENATE OF REPRESENTATIVES APPROVED________________________________________ (Date and Time) _________________________________________ Jared S.

Polis GOVERNOR OF THE STATE OF COLORADO PAGE 27-SENATE BILL 26-133