Source: https://code.dccouncil.us/dc/council/code/titles/29/chapters/2/
Timestamp: 2019-04-25 18:14:51+00:00

Document:
D.C. Law Library - Chapter 2. Entity Transactions.
↪ Chapter 2. Entity Transactions.
This chapter may be cited as the “Entity Transactions Act of 2010”.
(1) “Acquired entity” means the entity, all of one or more classes or series of interests in which are acquired in an interest exchange.
(C) Conduct any required proceedings or otherwise obtain any required votes or consents of the governors or interest holders.
(4) “Conversion” means a transaction authorized by subchapter IV of this chapter.
(5) “Converted entity” means the converting entity as it continues in existence after a conversion.
(6) “Converting entity” means the domestic entity that approves a plan of conversion pursuant to § 29-204.03 or the foreign entity that approves a conversion pursuant to the law of its jurisdiction of formation.
(7) “Domestic entity” means an entity whose internal affairs are governed by the law of the District.
(8) “Domesticated entity” means the domesticating entity as it continues in existence after a domestication.
(9) “Domesticating entity” means the domestic entity that approves a plan of domestication pursuant to § 29-205.03 or the foreign entity that approves a domestication pursuant to the law of its jurisdiction of formation.
(10) “Domestication” means a transaction authorized by subchapter V of this chapter.
(11) “Interest exchange” means a transaction authorized by subchapter III of this chapter.
(13) “Merger” means a transaction in which 2 or more merging entities are combined into a surviving entity pursuant to a filing with the Mayor.
(14) “Merging entity” means an entity that is a party to a merger and exists immediately before the merger becomes effective.
(15) “Plan” means a plan of merger, interest exchange, conversion, or domestication.
(16) “Plan of conversion” means a plan under § 29-204.02.
(17) “Plan of domestication” means a plan under § 29-205.02.
(18) “Plan of interest exchange” means a plan under § 29-203.02.
(19) “Plan of merger” means a plan under § 29-202.02.
(D) An agreement that is binding on any of the governors or interest holders of an entity on the effective date of this chapter.
(21) “Statement of conversion” means a statement under § 29-204.05.
(22) “Statement of domestication” means a statement under § 29-205.05.
(23) “Statement of interest exchange” means a statement under § 29- 203.05.
(24) “Statement of merger” means a statement under § 29-202.05.
(25) “Surviving entity” means the entity that continues in existence after, or is created by, a merger under subchapter 2 of this chapter.
§ 29–201.03. Relationship of chapter to other laws.
(b) This chapter shall not authorize an act prohibited by, and does not affect the application or requirements of, law other than this chapter.
(2) If the corporation survives the transaction, the approval of the plan is by a vote of the shareholders or directors which would be sufficient to create or impair the right or obligation directly under the provision.
§ 29–201.04. Required notice or approval.
(a) A domestic or foreign entity that is required to give notice to, or obtain the approval of, a governmental agency or District Government Official to be a party to a merger shall give the notice, or obtain the approval, to be a party to an interest exchange, conversion, or domestication.
(b) Property held for a charitable purpose under the law of the District by a domestic or foreign entity immediately before a transaction under this chapter becomes effective shall not, as a result of the transaction, be diverted from the objects for which it was donated, granted, devised, or otherwise transferred, unless, to the extent required by or pursuant to the law of the District concerning cy pres or other law dealing with nondiversion of charitable assets, the entity obtains an appropriate order of the Superior Court specifying the disposition of the property.
(c) A bequest, devise, gift, grant, or promise contained in a will or other instrument of donation, subscription, or conveyance that is made to a merging entity that is not the surviving entity and that takes effect or remains payable after the merger inures to the surviving entity. A trust obligation that would govern property if transferred to the nonsurviving entity applies to property that is transferred to the surviving entity under this section.
The 2013 amendment by D.C. Law 19-210 substituted “District Government official” for “officer” in (a); substituted “devised, or otherwise transferred” for “or devised” in (b); and added (c).
§ 29–201.05. Status of filings.
A filing under this chapter signed by a domestic entity shall become part of the public organic record of the entity if the entity’s organic law provides that similar filings under that law become part of the public organic record of the entity.
The fact that a transaction under this chapter produces a certain result shall not preclude the same result from being accomplished in any other manner permitted by law other than this chapter.
§ 29–201.07. Reference to external facts.
A plan may refer to facts ascertainable outside of the plan if the manner in which the facts will operate upon the plan is specified in the plan. The facts may include the occurrence of an event or a determination or action by a person, whether or not the event, determination, or action is within the control of a party to the transaction.
§ 29–201.08. Alternative means of approval of transactions.
Except as otherwise provided in the organic law or organic rules of a domestic entity, approval of a transaction under this chapter by the unanimous vote or consent of its interest holders shall satisfy this chapter for approval of the transaction.
(2) The organic rules provide such limit.
(3) In the case of a business corporation, by action of its governors.
(c) If an interest holder is entitled to contractual appraisal rights under subsection (b) of this section and the entity’s organic law does not provide procedures for the conduct of an appraisal rights proceeding, subchapter XI of Chapter 3 of this title shall apply to the extent practicable or as otherwise provided in the entity’s organic rules or the plan.
This section is referenced in § 29-202.06, § 29-203.06, § 29-204.06, and § 29-205.06.
(2) Two or more foreign entities may merge into a domestic entity.
(b) Except as otherwise provided in this section, by complying with the provisions of this subchapter applicable to foreign entities a foreign entity may be a party to a merger under this subchapter or may be the surviving entity in such merger if the merger is authorized by the law of the foreign entity’s jurisdiction of formation.
(9) Subchapter VII of Chapter 12 of this title.
The 2013 amendment by D.C. Law 19-210 substituted “formation” for “organization” in (b); and substituted “Subchapter VII” for “Subchapter XII” in (c)(9).
§ 29–202.02. Plan of merger.
(7) Any other provision required by the law of a merging entity’s jurisdiction of formation or the organic rules of a merging entity.
(b) A plan of merger may contain any other provision not prohibited by law.
This section is referenced in § 29-201.02.
The 2013 amendment by D.C. Law 19-210 substituted “formation” for “organization” in (a)(1), (a)(2), and (a)(7); substituted “money” for “cash” in (a)(3) and substituted “record” for “document” in (a)(4) and (a)(5).
Section 2(b)(4)(B) of D.C. Law 19-210 purported to amend § 29-202.02(c). Because this section does not have a subsection (c), the amendment could not be implemented.
§ 29–202.03. Approval of merger.
(b) A merger under this chapter involving a foreign merging is not effective unless it is approved by the foreign entity in accordance with the law of the foreign entity’s jurisdiction of formation.
§ 29–202.04. Amendment or abandonment of plan of merger.
(C) Any other terms or conditions of the plan, if the change would adversely affect the interest holder in any material respect.
(2) Unless prohibited by the plan, by a domestic merging entity in the same manner as the plan was approved.
(3) A statement that the merger has been abandoned in accordance with this section.
§ 29–202.05. Statement of merger; effective date.
(a) A statement of merger shall be signed on behalf of each merging entity and delivered to the Mayor for filing.
(8) If the surviving entity is a foreign entity that is not a registered foreign entity, a mailing address to which process may be served pursuant to § 29-202.06(e).
(c) In addition to the requirements of subsection (b) of this section, a statement of merger may contain any other provision not prohibited by law.
(d) If the surviving entity is a domestic entity, its public organic record, if any, shall satisfy the requirements of the law of the District, except that it does not need to be signed and may omit any provision that is not required to be included in a restatement of the public organic record.
(e) A plan of merger that is signed on behalf of all of the merging entities and meets all of the requirements of subsection (b) of this section may be delivered to the Mayor for filing instead of a statement of merger and, upon filing by the Mayor, shall have the same effect. If a plan of merger is filed as provided in this subsection, references in this chapter to a statement of merger refer to the plan of merger filed under this subsection.
(f) A statement of merger shall be effective upon the date and time of filing or the later date and time specified in the statement of merger.
The 2013 amendment by D.C. Law 19-210 substituted “delivered to the Mayor for filing” for “filed with the Mayor” in (a) and (e); substituted “formation” for “organization” and “and type of entity” for “type” throughout (b); substituted “record” for “document” in (b)(5) and throughout (d); substituted “registered” for “qualified” in (b)(8); and added “by the Mayor” after “filing” in (e).
§ 29–202.06. Effect of merger.
(10) The interests in each merging entity that are to be converted in the merger shall be converted, and the interest holders of those interests shall be entitled only to the rights provided to them under the plan of merger and to any appraisal rights they have under § 29-201.09 and the merging entity’s organic law.
(b) Except as otherwise provided in the organic law or organic rules of a merging entity, a merger under this chapter does not give rise to any rights that an interest holder, governor, or third party would otherwise have upon a dissolution, liquidation, or winding-up of the merging entity.
(c) When a merger under this chapter becomes effective, a person that did not have interest holder liability with respect to any of the merging entities and that becomes subject to interest holder liability with respect to a domestic entity as a result of a merger has interest holder liability only to the extent provided by the organic law of the entity and only for those debts, obligations, and other liabilities that arise after the merger becomes effective.
(4) The person shall have whatever rights of contribution from any other person as are provided by law other than this title or the organic rules of the domestic merging entity with respect to any interest holder liability preserved under paragraph (1) of this subsection as if the merger had not occurred.
(e) When a merger under this chapter becomes effective, a foreign entity that is the surviving entity may be served with process in the District for the collection and enforcement of any liabilities of a domestic merging entity in the manner provided in § 29-104.12.
(f) When a merger under this chapter becomes effective, the registration to do business in the District of any foreign merging entity that is not the surviving entity is canceled.
This section is referenced in § 29-202.05 and § 29-406.58.
§ 29–203.01. Interest exchange authorized.
(2) All of one or more classes or series of interests of a domestic entity may be acquired by another domestic or foreign entity in exchange for interests, securities, obligations, rights to acquire interests or securities, money, or other property, or any combination of the foregoing.
(b) Except as otherwise provided in this section, by complying with the provisions of this subchapter applicable to foreign entities a foreign entity may be the acquiring or acquired entity in an interest exchange under this subchapter if the interest exchange is authorized by the law of the foreign entity’s jurisdiction of formation.
(c) If a protected agreement contains a provision that applies to a merger of a domestic entity, but does not refer to an interest exchange, the provision shall apply to an interest exchange in which the domestic entity is the acquired entity as if the interest exchange were a merger until the provision is amended after the effective date of this chapter.
(2) Section 29-609.05, to the extent inconsistent with that section.
The 2013 amendment by D.C. Law 19-210 substituted “money” for “cash” in (a)(2); and substituted “formation” for “organization” in (b).
§ 29–203.02. Plan of interest exchange.
(6) Any other provision required by the law of the District or the organic rules of the acquired entity.
(b) A plan of interest exchange may contain any other provision not prohibited by law.
The 2013 amendment by D.C. Law 19-210 inserted “of entity” following “type” in (a)(1); substituted “formation, and type” for “organization, and type” in (a)(2); substituted “money” for “cash” in (a)(3); and substituted “record, if any” for “document” in (a)(4).
§ 29–203.03. Approval of interest exchange.
(b) An interest exchange involving a foreign acquired entity shall not be effective unless it is approved by the foreign entity in accordance with the law of the foreign entity’s jurisdiction of formation.
(c) Except as otherwise provided in its organic law or organic rules, the interest holders of the acquiring entity shall not be required to approve the interest exchange.
(d) A provision of the organic law of a domestic acquired entity that would permit a merger between the acquired entity and the acquiring entity to be approved without the vote or consent of the interest holders of the acquired entity because of the percentage of interests in the acquired entity held by the acquiring entity shall not apply to approval of an interest exchange under subsection (a)(1)(B) of this section.
The 2013 amendment by D.C. Law 19-210 substituted “formation” for “organization” in (b).
§ 29–203.04. Amendment or abandonment of plan of interest exchange.
(C) Any other terms or conditions of the plan if the change would adversely affect the interest holder in any material respect.
(2) Unless prohibited by the plan, in the same manner as the plan was approved.
(3) A statement that the interest exchange has been abandoned in accordance with this section.
The 2013 amendment by D.C. Law 19-210 rewrote (a) and (c).
§ 29–203.05. Statement of interest exchange; effective date.
(a) A statement of interest exchange shall be signed on behalf of a domestic acquired entity and delivered to the Mayor for filing.
(5) Any amendments to the acquired entity’s public organic record approved as part of the plan of interest exchange.
(c) In addition to the requirements of subsection (b) of this section, a statement of interest exchange may contain any other provision not prohibited by law.
(d) A plan of interest exchange that is signed on behalf of a domestic acquired entity and meets all of the requirements of subsection (b) of this section may be delivered to the Mayor for filing instead of a statement of interest exchange and upon filing by the Mayor has the same effect. If a plan of interest exchange is filed as provided in this subsection, references in this chapter to a statement of interest exchange shall refer to the plan of interest exchange filed under this subsection.
(e) A statement of interest exchange shall be effective upon the date and time of filing or the later date and time specified in the statement of interest exchange.
The 2013 amendment by D.C. Law 19-210 substituted “delivered to the Mayor for filing” for “filed with the Mayor” in (a) and (d); substituted “formation, and type of entity” for “organization, and type” in (b)(2); substituted “record” for “document” in (b)(5); and added “by the Mayor” following “filing” in the second sentence of (d).
§ 29–203.06. Effect of interest exchange.
(B) In the case of an acquired entity that is not a business corporation or nonprofit corporation, any other person that is a party to an agreement that is part of the acquired entity’s private organic rules.
(b) Except as otherwise provided in the organic law or organic rules of the acquired entity, the interest exchange shall not give rise to any rights that an interest holder, governor, or third party would otherwise have upon a dissolution, liquidation, or winding-up of the acquired entity.
(c) When an interest exchange becomes effective, a person that did not have interest holder liability with respect to the acquired entity and that becomes subject to interest holder liability with respect to a domestic entity as a result of the interest exchange shall have interest holder liability only to the extent provided by the organic law of the entity and only for those liabilities that arise after the interest exchange becomes effective.
(4) The person has whatever rights of contribution from any other person as are provided by law other than this title or the organic rules of the domestic acquired entity with respect to any interest holder liability preserved under paragraph (1) of this subsection as if the interest exchange had not occurred.
The 2013 amendment by D.C. Law 19-210 substituted “record” for “document” in (a)(3); and substituted “law other than this title or the” for “the organic law or” in (d)(4).
(2) A foreign entity of a different type if the conversion is authorized by the law of the foreign jurisdiction.
(b) Except as otherwise provided in this section, by complying with the provisions of this subchapter applicable to foreign entities, a foreign entity may become a domestic entity of a different type if the conversion is authorized by the law of the foreign entity’s jurisdiction of formation.
(c) If a protected agreement contains a provision that applies to a merger of a domestic entity but does not refer to a conversion, the provision shall apply to a conversion of the entity as if the conversion were a merger until the provision is amended after the effective date of this chapter.
§ 29–204.02. Plan of conversion.
(7) Any other provision required by the law of the District or the organic rules of the converting entity.
(b) A plan of conversion may contain any other provision not prohibited by law.
This section is referenced in § 29-201.02 and § 29-1001.09.
The 2013 amendment by D.C. Law 19-210 substituted “formation, and type of entity” for “organization and type” in (a)(2); substituted “money” for “cash” in (a)(3); and substituted “record” for “document” in (a)(4).
§ 29–204.03. Approval of conversion.
(b) A conversion of a foreign converting entity shall not be effective unless it is approved by the foreign entity in accordance with the law of the foreign entity’s jurisdiction of formation.
§ 29–204.04. Amendment or abandonment of plan of conversion.
(3) A statement that the conversion has been abandoned in accordance with this section.
§ 29–204.05. Statement of conversion; effective date.
(a) A statement of conversion shall be signed on behalf of the converting entity and delivered to the Mayor for filing.
(7) If the converted entity is a foreign entity that is not a registered foreign entity, a mailing address to which process may be served pursuant to § 29-204.06(e).
(c) In addition to the requirements of subsection (b) of this section, a statement of conversion may contain any other provision not prohibited by law.
(d) If the converted entity is a domestic entity, its public organic record, if any, shall satisfy the requirements of the law of the District, except that it does not need to be signed and may omit any provision that is not required to be included in a restatement of the public organic record.
(e) A plan of conversion that is signed on behalf of a domestic converting entity and meets all of the requirements of subsection (b) of this section may be delivered to the Mayor for filing instead of a statement of conversion and, upon filing by the Mayor, shall have the same effect. If a plan of conversion is filed as provided in this subsection, references in this chapter to a statement of conversion shall refer to the plan of conversion filed under this subsection.
(f) A statement of conversion shall be effective upon the date and time of filing or the later date and time specified in the statement of conversion.
This section is referenced in § 29-201.02 and § 29-516.
The 2013 amendment by D.C. Law 19-210 substituted “delivered to the Mayor for filing” for “filed with the Mayor” in (a) and (e); substituted “formation, and type of entity” for “organization, and type” in (b)(1) and (b)(2); substituted “formation” for “organization” in (b)(4); substituted “record” for “document” in (b)(5) and throughout (d); substituted “registered” for “qualified” in (b)(7); and substituted “upon filing with the Mayor” for “upon filing” in (e).
§ 29–204.06. Effect of conversion.
(9) The interests in the converting entity shall be converted, and the interest holders of the converting entity shall be entitled only to the rights provided to them under the plan of conversion, and to any appraisal rights they have under § 29-201.09 and the converting entity’s organic law.
(b) Except as otherwise provided in the organic law or organic rules of the converting entity, the conversion shall not give rise to any rights that an interest holder, governor, or third party would otherwise have upon a dissolution, liquidation, or winding-up of the converting entity.
(c) When a conversion becomes effective, a person that did not have interest holder liability with respect to the converting entity and that becomes subject to interest holder liability with respect to a domestic entity as a result of a conversion shall have interest holder liability only to the extent provided by the organic law of the entity and only for those liabilities that arise after the conversion becomes effective.
(4) A person has whatever rights of contribution from any other person as are provided by the organic law or organic rules of the domestic converting entity with respect to any interest holder liability preserved under paragraph (1) of this subsection as if the conversion had not occurred.
(e) When a conversion becomes effective, a foreign entity that is the converted entity may be served with process in the District for the collection and enforcement of any of its liabilities in the manner provided in § 29-104.12.
(f) If the converting entity is a registered foreign entity, the certificate of registration or other foreign qualification of the converting entity shall be canceled when the conversion becomes effective.
(g) A conversion shall not require the entity to wind up its affairs and shall not constitute or cause the dissolution of the entity.
(C) The transfer of title or other interest in real property from the converting entity to the converted entity.
(C) There is no change in the interest holders of the converted entity or in the allocation to any interest holder in the profits and losses of the converted entity during the 12-month period following the effective date of the conversion, other than by reason of the death of an interest holder or the involuntary dissolution of the converted entity.
(3) The tax exemptions enumerated in paragraph (1) of this subsection shall be effective regardless of whether the deed or transfer to the converted entity is from nominees or trustees for the converting entity or from the converting entity itself.
This section is referenced in § 29-204.05, § 29-406.58, § 42-1102, § 42-3404.02, and § 47-902.
The 2013 amendment by D.C. Law 19-210 substituted “Formed” for “Organized” in (a)(1)(A); substituted “transfer” for “assignment” in (a)(2); substituted “continue as debts, obligations, or other liabilities” for “continue as liabilities” in (a)(3); substituted “record” for “document” in (a)(6); substituted “registered” for “qualified” in (f); and added (h).
(a) Except as otherwise provided in this section, by complying with this subchapter, a domestic entity may become a domestic entity of the same type in a foreign jurisdiction if the domestication is authorized by the law of the foreign jurisdiction.
(b) Except as otherwise provided in this section, by complying with the provisions of this subchapter applicable to foreign entities, a foreign entity may become a domestic entity of the same type in the District if the domestication is authorized by the law of the foreign entity’s jurisdiction of formation.
(c) If a protected agreement contains a provision that applies to a merger of a domestic entity but does not refer to a domestication, the provision shall apply to a domestication of the entity as if the domestication were a merger until the provision is amended after the effective date of this chapter.
(3) A limited liability company subject to subchapter IX of Chapter 8 of this title.
The 2013 amendment by D.C. Law 19-210 substituted “formation” for “organization” in (b); repealed former (c), which read: “When the term ”domestic entity’ is used in this subchapter with reference to a foreign jurisdiction, it means an entity whose internal affairs are governed by the law of the foreign jurisdiction.”; redesignated former (d) and (e) as present (c) and (d), respectively; and substituted “This subchapter does not apply to the domestication of the following entities” for “The following entities shall not engage in a domestication under this subchapter” in the introductory language of (d).
§ 29–205.02. Plan of domestication.
(7) Any other provision required by the law of the District or the organic rules of the domesticating entity.
(b) A plan of domestication may contain any other provision not prohibited by law.
The 2013 amendment by D.C. Law 19-210 substituted “formation” for “organization” in (a)(2); substituted “money” for “cash” in (a)(3); and substituted “record” for “document” in (a)(4).
§ 29–205.03. Approval of domestication.
(b) A domestication of a foreign domesticating entity shall not be effective unless it is approved in accordance with the law of the foreign entity’s jurisdiction of formation.
§ 29–205.04. Amendment or abandonment of plan of domestication.
(3) A statement that the domestication has been abandoned in accordance with this section.
The 2013 amendment by D.C. Law 19-210 substituted “money” for “cash” in (a)(2)(A); substituted “record” for “document” in (a)(2)(B); and in (c), twice substituted “delivered to the Mayor for filing” for “filed with the Mayor”, substituted “the statement of domestication” for “the filing”, and added “by the Mayor” following “upon filing” in (c).
§ 29–205.05. Statement of domestication; effective date.
(a) A statement of domestication shall be signed on behalf of the domesticating entity and delivered to the Mayor for filing.
(7) If the domesticated entity is a foreign entity that is not a registered foreign entity, a mailing address to which the process may be served pursuant to § 29-205.06(e).
(c) In addition to the requirements of subsection (b) of this section, a statement of domestication may contain any other provision not prohibited by law.
(d) If the domesticated entity is a domestic entity, its public organic record, if any, shall satisfy the requirements of the law of the District, except that it does not need to be signed and may omit any provision that is not required to be included in a restatement of the public organic record.
(e) A plan of domestication that is signed on behalf of a domesticating domestic entity and meets all of the requirements of subsection (b) of this section may be delivered to the Mayor for filing instead of a statement of domestication and, upon filing by the Mayor, shall have the same effect. If a plan of domestication is filed as provided in this subsection, references in this chapter to a statement of domestication shall refer to the plan of domestication filed under this subsection.
(f) A statement of domestication shall be effective upon the date and time of filing or the later date and time specified in the statement of domestication.
The 2013 amendment by D.C. Law 19-210 substituted “delivered to the Mayor for filing” for “filed with the Mayor” in (a) and (e); substituted “formation, and type” for “organization, and type” in (b)(1); substituted “formation” for “organization” in (b)(2) and (4); substituted “record” for “document” in (b)(5) and throughout (d); substituted “registered” for “qualified” in (b)(7); and substituted “upon filing by the Mayor” for “upon filing” in (e).
§ 29–205.06. Effect of domestication.
(9) The interests in the domesticating entity shall be converted to the extent and as approved in connection with the domestication, and the interest holders of the domesticating entity shall be entitled only to the rights provided to them under the plan of domestication, and to any appraisal rights they have under § 29-201.09 and the domesticating entity’s organic law.
(b) Except as otherwise provided in the organic law or organic rules of the domesticating entity, the domestication shall not give rise to any rights that an interest holder, governor, or third party would otherwise have upon a dissolution, liquidation, or winding-up of the domesticating entity.
(c) When a domestication becomes effective, a person that did not have interest holder liability with respect to the domesticating entity and that becomes subject to interest holder liability with respect to a domestic entity as a result of the domestication shall have interest holder liability only to the extent provided by the organic law of the entity and only for those liabilities that arise after the domestication becomes effective.
(4) A person shall have whatever rights of contribution from any other person as are provided by the organic law or organic rules of a domestic domesticating entity with respect to any interest holder liability preserved under paragraph (1) of this subsection as if the domestication had not occurred.
(e) When a domestication becomes effective, a foreign entity that is the domesticated entity may be served with process in the District for the collection and enforcement of any of its liabilities in the manner provided in § 29-104.12.
(f) If the domesticating entity is a registered foreign entity, the certificate of registration or other foreign qualification of the domesticating entity shall be canceled when the domestication becomes effective.
(g) A domestication shall not require the entity to wind up its affairs and shall not constitute or cause the dissolution of the entity.
This section is referenced in § 29-205.05.
The 2013 amendment by D.C. Law 19-210 substituted “transfer” for “assignment” in (a)(2); substituted “record” for “document” in (a)(6); and substituted “registered” for “qualified” in (f).

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