EXHIBIT 1
XXXXX FAMILY PARTNERSHIP
1997 AMENDED AND EXTENDED PARTNERSHIP AGREEMENT
THIS 1997 AMENDED AND EXTENDED PARTNERSHIP AGREEMENT (this
"Agreement") is made as of November 1, 1997, among XXXXXXX X. XXXXX, XXXXX
XXXXXXXX XXXXX, XXXXX X. XXXXX, Y. XXXXXX XXXXX, III, and XXXXXX X. XXXXX,
individuals residing in Louisville, Kentucky (hereinafter referred to as
the "Partners").
W I T N E S S E T H:
WHEREAS, the Partners are the continuing parties to a Partnership
Agreement dated in 1990 (the "1990 Agreement") creating the Xxxxx Family
Partnership (the "Partnership") and relating to the respective interests of
the parties thereto in the shares of the common stock, no par value (the
"Stock") of Xxxxxxxxx Downs Incorporated, a Kentucky corporation (the
"Company");
WHEREAS, the Partners have from time to time consented to the
continuation of the Partnership beyond the nominal termination date recited
in the 1990 Agreement;
WHEREAS, the Partners desire to continue the original objectives
of the Partnership, which include maintaining ownership of such Stock
within the family group consisting of the Partners; and
WHEREAS, the Partners desire to update and amend the 1990
Agreement in certain particulars.
NOW THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, and intending to be legally bound hereby, the
Partners agree to amend, extend and restate fully the 1990 Agreement as
follows:
1. CONTINUATION OF THE PARTNERSHIP. The Partners hereby agree to
continue the Partnership for the purpose of holding any and all Stock now
owned or hereafter acquired by any of them, except as otherwise expressly
provided herein, and for undertaking such other activities as are
incidental to or desirable in connection with the foregoing purpose.
2. NAME AND PLACE OF BUSINESS. The name of the Partnership remains
"The Xxxxx Family Partnership" and its principal place of business remains
c/o Security Management Company, 0000 Xxxxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxx 00000.
3. PARTNERS' CAPITAL CONTRIBUTIONS AND INTERESTS. The current
capital of the Partnership consists of the Stock heretofore contributed to
it by the Partners as set forth in the table below. For purposes of the
capital accounts of the Partners, the value of all shares of the Stock so
contributed and any additional shares of the Stock so contributed, whenever
contributed, shall be $20 per share, notwithstanding that the fair market
value of the Stock at the date so contributed was more or less than such
amount. The present interests of the Partners in the Partnership (the
"Interests") are as follows:
Stock
PARTNER CONTRIBUTION INTEREST
Xxxxxxx X. Xxxxx 74,815 Shares 35.5365%
Xxxxx Xxxxxxxx Xxxxx 25,955 Shares 12.3284%
Xxxxx X. Xxxxx 32,485 Shares 15.4301%
Y. Xxxxxx Xxxxx, III 36,745 Shares 17.4536%
Xxxxxx X. Xxxxx 40,530 Shares 19.2514%
Totals 210,530 Shares 100.0000%
If any additional Stock is contributed by a Partner pursuant to Section 4A,
or any Stock (or proceeds from the sale of Stock) is distributed to a
Partner pursuant to Section 10E, or any Stock is withdrawn from the
Partnership pursuant to Section 4B or Section 11B,
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then the respective capital accounts and Interests of the Partners shall
be appropriately adjusted to recognize such fact. Each reference herein to
the Interests of any Partner or Partners in connection with any act,
entitlement, or obligation of the Partnership or any Partner or Partners
shall be deemed a reference to the Interests calculated immediately prior to
the time of any such act or the determination of any such entitlement or
obligation.
4. ADDITIONAL CONTRIBUTIONS; WITHDRAWALS.
A. Each Partner hereby agrees that if he acquires any
additional Stock, he will contribute such Stock to the Partnership except
that additional Stock acquired by a Partner and either [i] contributed to a
family partnership or other estate planning vehicle or [ii] disposed of by
a present gift shall not be subject to this requirement.
B. Each Partner may from time to time withdraw Stock from the
Partnership not in excess of his then pro rata portion of the Stock held by
the Partnership for the purpose of either [i] contributing such Stock to a
family partnership or other estate planning vehicle or [ii] effecting a
present gift of such Stock. To the extent that the Partnership has
creditors at the effective time of such withdrawal (other than in
connection with loans for the benefit of other Partners contemplated by
Section 10F), such Partner shall contribute to the Partnership against
receipt of his Stock, for distribution to its creditors, a pro rata portion
of such liability, based upon the number of shares of Stock withdrawn in
relation to the total number of shares of Stock held by the Partnership
immediately prior to such withdrawal. In addition, to the extent the
Partnership has a loan for the benefit of such Partner pursuant to Section
10F, such Partner shall repay, against
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receipt of his Stock, a pro rata portion of such loan, based upon the number
of shares of Stock withdrawn in relation to the total number of shares of
the Stock represented by such Partner's Interest in the Partnership
immediately prior to such withdrawal.
5. MEETINGS. Meetings of the Partners may be called upon at least
three business days prior written notice of any Partner. An annual meeting
of the Partners shall be held on the third Tuesday of March in each year
(the "Annual Meeting").
6. ALLOCATION OF PROFITS AND LOSSES.
A. All profits and losses, and all items of deduction, credit
and income arising from the ownership, development and operation of the
Partnership's business, shall be allocated among the Partners in proportion
to their respective Interests.
B. For Federal, state and local income tax purposes only, the
income of the Partnership from the sale or other disposition of the Stock
shall be allocated among the Partners as follows:
[1] All of such income shall first be allocated to the
Partner(s) contributing such Stock (based upon the
identification of the shares sold for Federal income
tax purposes) to the extent of the difference between
the agreed value per share of the Stock sold and the
contributing Partner's basis therefor.
[2] The balance of such income shall be allocated among the
Partners in proportion to their respective Interests.
7. PARTNERSHIP BANK ACCOUNTS. The Partnership shall maintain one or
more bank accounts in such depository or depositories as the Managing
Partner (as hereinafter defined) may determine. All cash receipts of the
Partnership of every kind shall be deposited in such accounts. All
expenses and indebtedness of the Partnership shall be paid from such
accounts.
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8. DISTRIBUTIONS. As soon as reasonably practicable following the
receipt by the Partnership of dividends on the Stock, the Managing Partner
shall distribute to the Partners in accordance with their respective
Interests such dividends, net of the Partnership's accrued expenses and, to
the extent the Managing Partner deems necessary, its obligations.
9. PARTNERSHIP BOOKS OF ACCOUNTS. The books of account and other
records of the Partnership shall be maintained by the Managing Partner.
Such books of account shall be kept in accordance with generally accepted
accounting principles (except that the cash receipts and disbursements method
of accounting shall be used) with a fiscal year ending December 31 of each
year and shall reflect the assets, liabilities, costs, expenditures,
receipts, profits and losses of the Partnership. Such books and records
shall be available for inspection by the Partners or their agents at all
times upon reasonable notice to the Managing Partner.
10. LIMITATION ON SALE OF INTERESTS.
A. No Partner shall agree or commit (by the grant of option or
otherwise) to sell, transfer, pledge, assign or otherwise dispose all or
any portion of his Interest without complying with the terms of this
Section 10; provided, however, that transfers permitted by Section 4B shall
not be subject to this Section 10.
B. If a Partner receives a bona fide written offer acceptable
to him to sell all or any portion of his Interest or the Stock which such
Interest represents (in either case, the "Offered Interest") to any person,
including another Partner, such Partner (the "Seller") shall immediately
give notice thereof to the Managing Partner, together with a copy of the
offer. The Managing Partner shall, within three business days, mail to all
of the other
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Partners written notice of the terms and conditions of the offer and a form
to be returned by each Partner whereby a Partner who desires to purchase all
or a portion of the Offered Interest (a "Purchasing Partner") can indicate
the portion of the Offered Interest which such Purchasing Partner elects to
purchase. Failure of a Partner to return the form to the Managing Partner
within twenty (20) days of the date of the notice shall constitute a waiver
of that Partner's right to purchase any portion of the Offered Interest.
C. Each Partner may elect to purchase all or a portion of the
Offered Interest. If the notices provided by the Purchasing Partners
indicate that they desire to purchase less than all of the Offered
Interest, the Managing Partner shall notify the Purchasing Partners of such
fact. If the Purchasing Partners do not then elect to purchase all of the
Offered Interest, none of Offered Interest shall be purchased by the
Purchasing Partners and the provisions of Section 10E shall apply. If the
Purchasing Partners elect to purchase more than the Offered Interest, then
each Purchasing Partner shall be entitled: (1) to purchase that portion of
the Offered Interest up to, but not exceeding, such Partner's then pro rata
portion of the Offered Interest, such pro rata portion to be the Interest
of such Purchasing Partner divided by the Interests of all Partners,
excluding the Seller, as of the date of the notice from the Managing
Partner; and, in addition, if any portion of the Offered Interest then
remains unpurchased and if a Purchasing Partner elects to purchase a
portion of the Offered Interest in excess of such Partner's then pro rata
portion as set forth in clause (1) above, (2) to purchase a pro rata
portion of the remainder of the Offered Interest, such pro rata portion to
be the total portion of the Offered Interest which the Purchasing Partner
elected to purchase divided by the total portions of the Offered
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Interest which all Purchasing Partners elected to purchase; and, in addition,
if any portion of the Offered Interest remains unpurchased, then those
Purchasing Partners who have elected to purchase pursuant to clauses (1) and
(2) above shall have the right (3) to purchase the remainder of the Offered
Interest pro rata according to their respective Interests.
D. The Managing Partner shall promptly notify the Seller of
whether the Purchasing Partners have elected to purchase all of the Offered
Interest. If so, the closing of the purchase of such Offered Interest
shall be no later than 30 days after the date of such notice from the
Managing Partner to the Seller. Such purchase of the Offered Interest will
be on the same terms and conditions as set forth in the offer received by
the Seller.
E. If the Purchasing Partners do not elect to purchase all of
the Offered Interest, then the Partnership shall distribute to the Seller
the number of shares of Stock represented by the offer (but not in excess
of the Seller's then pro rata portion of the Stock held by the Partnership,
based upon the Seller's Interest).
F. If a Partner desires to borrow funds and secure such
borrowing by a pledge of his then pro rata portion of the Stock held by the
Partnership, the Managing Partner is hereby authorized to pledge such Stock
as security for the Partner's loan. If the lender is unwilling to make the
loan on that basis solely because of a concern regarding the enforceability
of the pledge by the Partnership of such Stock, then the Managing Partner
is hereby authorized to cause the Partnership to (i) borrow from the
proposed lender on a non-recourse basis the amount which the Partner
desired to borrow on terms acceptable to such Partner, (ii) pledge a number
of shares of Stock not in excess of such
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Partner's then pro rata portion of the Stock as security for such loan, and
(iii) make a loan to such Partner on the same terms and conditions on which
it borrowed from the lender, secured by such Partner's Interest. The
Partnership shall at all times hold all shares of the Stock owned by it in
a bank custodial account or lock box at a banking institution in the
Louisville, Kentucky area except for [i] shares pledged pursuant to this
Section 10F and [ii] shares equal to the Interest of any Partner who consents
to their being held elsewhere.
G. If a Partner who has no loan outstanding pursuant to Section
10F desires to take possession of a certificate for shares of the Stock not
exceeding such Partner's then pro rata portion of the Stock held by the
Partnership, he shall send a notice to the Managing Partner to that effect.
The Managing Partner shall as soon as reasonably practicable arrange for a
certificate for the Stock registered in the Partnership's name to be sent
to such Partner. It is understood that such Partner shall have no power to
dispose of such Stock except in compliance with this Agreement and shall
return such certificate to the Managing Partner whenever, in his judgment,
it is necessary or appropriate for the Partnership to resume possession
thereof.
H. To the extent the Partnership has creditors at the effective
time of any sale, transfer, assignment or other disposition by a Partner of
all or any portion of his Interest pursuant to this Section 10, such
Partner shall contribute to the Partnership at the closing of such
transaction, for distribution to its creditors, his then pro rata portion
of such liability, based upon the amount of the Interest involved in
relation to all of the Interests immediately prior to such transaction. In
addition, to the extent the Partnership
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has a loan for the benefit of such Partner pursuant to Section 10F, such
Partner shall repay such loan in full.
11. DURATION OF PARTNERSHIP.
A. Unless sooner terminated as provided herein, the Partnership
shall continue in full force and effect from the date hereof until December
31, 2002 and shall further continue thereafter unless and until the
Partners then owning a majority of the Interests adopt a resolution to
terminate the Partnership, such termination to be effective on the date
specified in such resolution. Upon termination of the Partnership, the
Managing Partner shall distribute to each Partner his then pro rata portion
of the Stock held by the Partnership, based upon such Partner's Interest at
the time of such distribution. To the extent that the Partnership has
creditors at the time of such distribution, each Partner shall contribute
to the Partnership against receipt of his Stock, for distribution to the
creditors, his then pro rata portion of such liability, based upon his
Interest at the time of such distribution.
B. Any Partner may withdraw from the Partnership as of the end
of any calendar year provided that he shall given notice to the General
Partner not later than December 1 of such year. As soon as practicable
after the end of the calendar year, the Managing Partner shall distribute
to the withdrawing Partner his then pro rata portion of the Stock held by
the Partnership, based upon such Partner's Interest at the effective time
of his withdrawal. To the extent that the Partnership has creditors at the
effective time of such withdrawal, the withdrawing Partner shall contribute
to the Partnership against receipt of his Stock, for distribution to its
creditors, his then pro rata portion of such
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liability, based upon his Interest at the effective time of such withdrawal.
In addition, to the extent the Partnership has a loan for the benefit of such
Partner pursuant to Section 10F, such Partner shall repay such loan in full,
against receipt of his Stock.
C. The Partnership shall dissolve upon the withdrawal, death or
bankruptcy of any Partner. Notwithstanding such dissolution, the remaining
Partners and the successor-in-interest to the deceased or bankrupt Partner
shall be obligated to continue the business of the Partnership as a
reconstituted partnership under the terms of this Agreement until further
reconstituted or terminated pursuant to paragraph A above.
12. DESIGNATION OF MANAGING PARTNER. A managing partner of the
Partnership (the "Managing Partner") shall be elected at each Annual
Meeting upon the vote of the Partners then owning a majority of the
Interests and shall serve as such until the next Annual Meeting and until
his successor is elected. A Managing Partner may be elected to successive
terms without limitation. Xxxxxxx X. Xxxxx shall continue to serve until
the next Annual Meeting. A Managing Partner may be removed at any time,
and a new Managing Partner elected, upon the vote of Partners then owning a
majority of the Interests.
13. ACTION OF THE PARTNERSHIP. Any and all action to be taken by the
Partnership or documents to be executed by the Partnership shall be
approved by the vote of Partners then owning a majority of the Interests.
Any consent required to be given by the Partners may be given or taken
pursuant to the written authorization of the Partners.
14. NEW PARTNERS. New Partners may be admitted to the Partnership
upon (i) contributing Stock to the Partnership, and (ii) approval by the
Partners then owning a majority of the Interests.
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15. NOTICES. Any notice, request or report or other instrument which
may be required or permitted to be furnished to or served upon any Partner
shall be deemed sufficiently given, furnished or served, if in writing and
delivered in person against a receipt or deposited in the United States
mail, first class, postage prepaid, and addressed to such Partner as set
forth below:
Xxxxxxx X. Xxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxx Xxxxxxxx Xxxxx
000 XxXxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxx X. Xxxxx
000 XxXxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Y. Xxxxxx Xxxxx, III
000 XxXxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxxx X. Xxxxx
00000 XX Xxxxxxx 00
Xxxxxx, Xxxxxxxx 00000
or such other address of which any Partner may notify the other Partners in
accordance with this paragraph. Instruments and communications delivered
personally shall be deemed received when so delivered. Instruments and
communications mailed shall be deemed received 48 hours after deposit
thereof in the United States mail.
16. REMEDIES. The Partners agree that legal remedies for breach of
this Agreement will be inadequate and that this Agreement may be enforced
by injunctive or other equitable relief.
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17. SUCCESSORS. Subject to the provisions hereof imposing
limitations and conditions upon the sale or the disposition of the
Interests of the Partners, all of the provisions hereof shall inure to the
benefit of, and be binding upon, the successors and assigns of the
Partners.
18. COMPLETE AGREEMENT. This Agreement contains all the covenants,
terms and undertaking of the Partners with respect to the Partnership and
may not be amended or modified in any respect except by an instrument
signed in writing by all of the Partners.
19. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Kentucky.
IN WITNESS WHEREOF, the Partners have executed this Agreement as
of the date set forth above.
/S/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
/S/ Xxxxx Xxxxxxxx Xxxxx
Xxxxx Xxxxxxxx Xxxxx
/S/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
/S/ Xxxxxx Xxxxx, III
Y. Xxxxxx Xxxxx, III
/S/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
