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</o:shapelayout></xml><![endif]--></head><body lang=EN-US link=blue vlink=purple><div class=WordSection1><p class=MsoNormal><span style='font-size:11.0pt;color:#1F497D'>I am helping a partnership with revising the buy-sell provisions of its partnership agreement.</span><span style='font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D'> </span>The partnership is owned by 3 partners – an s-corp who owns 70%, and 2 individuals, each owning 25% and 5%. They own a commercial real estate in CA as tenants-in-common, and have a partnership agreement to govern how they will manage their business relationship. The partnership agreement (which was drafted over 20 years ago) allows for any amendments to be made by partner owning 50% or more interest. We are now doing an amendment to the buy-sell provisions in the partnership agreement. The partners owning 95% want to leave the amendment provision the same (i.e., allowing partner with 50% or more interest to made amendments), and the 5% owner is insisting that amendment shouldn’t be allowed without a unanimous consent. <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>The partnership agreement doesn’t have a governing law section, but the s-corp partner and the 25% guy are in WA, but the 5% partner and the commercial real estate that the partners own are in CA. The atty in CA who represents the 5% partner told me that, under CA statute, the amendment provision in the partnership agreement as written will not hold up in court. This is not true for WA – in WA, most of the default partnership rules can be contracted around. <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>1. I wanted to know whether that CA atty’s statement is true (i.e., a partnership agreement that allows for amendments with vote of partner owning more than 50% interest rather than by unanimous vote). <o:p></o:p></p><p class=MsoNormal>2. And, for buy-sell agreements, do you always require unanimous consent to make amendments? Personally, I have seen plenty of partnership and LLC agreements that contain buy-sell provisions that do not require unanimous consent to amend.<o:p></o:p></p><p class=MsoNormal>3. In this situation, if the 5% partner decides not to sign the amendment, can the amendment still be enforceable against him?<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>If you have any insights on this, I would really appreciate it.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal style='background:white'><span style='font-size:11.0pt;color:#1F497D'>Best regards,<o:p></o:p></span></p><p class=MsoNormal style='background:white'><span style='font-size:11.0pt;color:#1F497D'> <o:p></o:p></span></p><p class=MsoNormal style='background:white'><span style='font-size:11.0pt;color:#1F497D'>Jennifer Y. Sohn</span><span style='color:#1F497D'><o:p></o:p></span></p><p class=MsoNormal style='background:white'><span style='font-size:11.0pt;color:#1F497D'>Attorney at Law <o:p></o:p></span></p><p class=MsoNormal style='background:white'><span style='font-size:11.0pt;color:#1F497D'>(Licensed in CA and WA)</span><span style='color:#1F497D'><o:p></o:p></span></p><p class=MsoNormal style='background:white'><span style='font-size:11.0pt;color:#1F497D'>Sohn Law PLLC<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;color:#1F497D;background:white'>10900 NE 4th Street, Suite 1850<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:11.0pt;color:#1F497D;background:white'>Bellevue, WA 98004</span><span style='color:#1F497D'><o:p></o:p></span></p><p class=MsoNormal style='background:white'><span style='font-size:11.0pt;color:#1F497D'>Tel: 206.617.7874<o:p></o:p></span></p><p class=MsoNormal style='background:white'><span style='font-size:11.0pt;color:#1F497D'>Fax: 425.732.9748 <b><o:p></o:p></b></span></p><p class=MsoNormal style='background:white'><span style='font-size:11.0pt;color:#1F497D'>Email: <a href="mailto:jennifer@sohn-law.com" target="_blank"><span style='color:#0563C1'>jennifer@sohn-law.com</span></a><o:p></o:p></span></p><p class=MsoNormal style='background:white'><span style='font-size:11.0pt;color:#1F497D'><a href="http://www.sohn-law.com/" target="_blank"><span style='color:#0563C1'>http://www.sohn-law.com</span></a></span><span style='color:#1F497D'><o:p></o:p></span></p><p class=MsoNormal style='background:white'><span style='font-size:11.0pt;color:#1F497D'> <o:p></o:p></span></p><p class=MsoNormal style='background:white'><span style='font-size:11.0pt;color:#1F497D'>Confidential. 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