EXHIBIT 10.1
STOCKHOLDER SUPPORT AGREEMENT
STOCKHOLDER SUPPORT AGREEMENT, dated as of October 5, 1999 (this
"Agreement"), by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("Stockholder") to and for the benefit of
Isle of Capri Casinos, Inc., a Delaware corporation ("Buyer").
WHEREAS, as of the date hereof, Stockholder owns of record and
beneficially 2,226,409 shares (such shares, together with any other voting or
equity securities of Lady Luck Gaming Corporation, a Delaware corporation ("Lady
Luck"), hereafter acquired by Stockholder prior to the termination of this
Agreement, being referred to herein collectively as the "Shares") of common
stock, par value $0.006 per share ("Lady Luck Common Stock");
WHEREAS, concurrently with the execution of this Agreement, Buyer, Isle
Merger Corp., a Delaware corporation and a wholly owned subsidiary of Buyer
("Merger Sub"), and Lady Luck are entering into an Agreement and Plan of Merger,
dated as of the date hereof (the "Merger Agreement"; capitalized terms used and
not otherwise defined herein shall have the respective meanings assigned to them
in the Merger Agreement), pursuant to which, upon the terms and subject to the
conditions thereof, Merger Sub will be merged with and into Lady Luck such that
Lady Luck will become a wholly owned subsidiary of Buyer (the "Merger"); and
WHEREAS, as a condition to the willingness of Buyer and Merger Sub to
enter into the Merger Agreement, Buyer has requested that the Stockholder agree,
and in order to induce Buyer and Merger Sub to enter into the Merger Agreement
the Stockholder is willing to agree, to vote in favor of adopting the Merger
Agreement and approving the Merger, upon the terms and subject to the conditions
set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereby agree, severally and not jointly, as follows:
Section 1. Voting of Shares. Until the termination of this Agreement in
accordance with the terms hereof, Stockholder hereby agrees that, at the Lady
Luck Stockholders' Meeting or any other meeting of the stockholders of Lady
Luck, however called, and in any action by written consent of the stockholders
of Lady Luck, Stockholder will vote all of his Shares (a) in favor of adoption
of the Merger Agreement and approval of the Merger and the other transactions
contemplated by the Merger Agreement, (b) against any proposal for any
recapitalization, merger (other than the Merger), sale of assets or other
business combination between Lady Luck and any person or entity (other than
Buyer or any subsidiary of Buyer) or any other action or agreement that would
result in a breach of any covenant, representation or warranty or any other
obligation or agreement of Lady Luck under the Merger Agreement or which could
result in any of the conditions to the Merger Agreement not being fulfilled and
(c) in favor of any other matter
necessary to the consummation of the transactions contemplated by the Merger
Agreement and considered and voted upon by the stockholders of Lady Luck (or any
class thereof). In addition, Stockholder agrees that he will, upon request by
Buyer, furnish written confirmation, in form and substance reasonably acceptable
to Buyer, of such Stockholder's vote in favor of the Merger Agreement and the
Merger. Stockholder acknowledges receipt and review of a copy of the Merger
Agreement.
Section 2. Proxy. Subject to any required approval under the Lady Luck
Gaming Laws, the Stockholder, by this Agreement, and for so long as this
Agreement shall remain in effect, does hereby constitute and appoint Buyer, or
any nominee of Buyer, with full power of substitution, as such Stockholder's
irrevocable proxy and attorney-in-fact to vote the Shares as indicated in
Section 1, in the event such Stockholder fails to comply with his obligations
under such section. Stockholder intends this proxy to be irrevocable and coupled
with an interest and will take such further action and execute such other
instruments as may be necessary to effectuate the intent of this proxy and
hereby revokes any proxy previously granted by him with respect to its Shares.
Section 3. Transfer of Shares. Stockholder covenants and agrees that he
will not, without the consent of Buyer, prior to the termination of this
Agreement in accordance with the terms hereof, directly or indirectly, (a) sell,
assign, transfer (including by merger, testamentary disposition, interspousal
disposition pursuant to a domestic relations proceeding or otherwise by
operation of law), pledge, encumber or otherwise dispose of any of the Shares,
(b) deposit any of the Shares into a voting trust or enter into a voting
agreement or arrangement with respect to the Shares or grant any proxy or power
of attorney with respect thereto which is inconsistent with this Agreement or
(c) other than the Option (as defined below), enter into any contract, option or
other arrangement or undertaking with respect to the direct or indirect sale,
assignment, transfer (including by merger, testamentary disposition,
interspousal disposition pursuant to a domestic relations proceeding or
otherwise by operation of law) or other disposition of any Shares. The consent
of the Buyer shall not be unreasonably withheld with respect to (i) transfers in
connection with Stockholder's estate planning or (ii) testamentary transfers by
the Stockholder, in which in both cases, each transferee agrees to be bound by
the terms of this Agreement prior to the acceptance of any transfer. Buyer shall
be deemed to have consented to the transfer of 11,739 shares of Lady Luck Common
Stock to ▇▇▇▇▇ ▇▇▇▇▇▇ pursuant to his agreement with the Stockholder (the
"▇▇▇▇▇▇ Agreement").
Section 4. Representations and Warranties of Stockholder. Stockholder
hereby represents and warrants to Buyer with respect to himself and his
ownership of the Shares as follows:
a. Ownership of Shares. On the date hereof, the Shares are owned
of record and beneficially by Stockholder, are not subject to a pledge
and do not otherwise serve as collateral for any indebtedness. Upon the
exercise of the Option, except with respect to
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11,739 shares of Lady Luck Common Stock which are subject to the
▇▇▇▇▇▇ Agreement, Buyer will receive good and marketable title to the
Shares, free and clear of all liens, claims, encumbrances and security
interests of any kind. Stockholder has sole power and authority to vote
and to sell the Shares, without restrictions, with respect to all of
the Shares.
b. Power, Binding Agreement. Stockholder has the legal capacity,
power and authority to enter into and perform all of his obligations
under this Agreement. The execution, delivery and performance of this
Agreement by Stockholder will not violate any other agreement to which
Stockholder is a party, including, without limitation, any voting
agreement, stockholders' agreement, partnership agreement or voting
trust. This Agreement has been duly and validly executed and delivered
by Stockholder and constitutes a valid and binding obligation of
Stockholder, enforceable against Stockholder in accordance with its
terms.
c. No Conflicts. The execution and delivery of this Agreement do
not, and the consummation of the transactions contemplated hereby will
not, conflict with or result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation or
to loss of a material benefit under, any provision of any loan or
credit agreement, note, bond, mortgage, indenture, lease, or other
agreement, instrument, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Stockholder or any of his properties or assets, other
than such conflicts, violations or defaults or terminations,
cancellations or accelerations which individually or in the aggregate
do not materially impair the ability of Stockholder to perform his
obligations hereunder. No consent, approval, order or authorization of,
or registration, declaration, or filing with, any governmental entity
is required by or with respect to the execution and delivery of this
Agreement by Stockholder and the consummation by Stockholder of the
transactions contemplated hereby.
Section 5. Option to Purchase Shares. Stockholder hereby grants to
Buyer (i) an option to purchase that portion of the Shares equal to 34.99% of
the issued and outstanding shares of the Lady Luck Common Stock and (ii)
effective upon a breach by Stockholder of the provisions of Section 1, an option
to purchase the remainder of the Shares, except for Shares subject to the ▇▇▇▇▇▇
Agreement (each, an "Option" and collectively, the "Options"), at a price of
$12.00 per Share (or such higher price as Buyer may determine), until the
termination of this Agreement in accordance with Section 7 hereof. Buyer agrees
that if either of the Options are exercised (which exercise shall be evidenced
by payment for the Shares) and Buyer disposes of the Shares within six months
after the date of the exercise of such Option, Buyer will pay to Stockholder
one-half of the net profit (after reduction for Buyer's expenses incurred for
brokerage commissions (net of any reimbursements) in connection with the
exercise of such Option and disposition of such Shares) to Buyer from such
disposition (the "Profit Amount"), provided that
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the Profit Amount is not subject to disgorgement under Section 16 of the
Securities Exchange Act of 1934, as amended. Solely for income tax purposes,
Buyer and Stockholder shall treat any portion of the Profit Amount paid to
Stockholder as additional consideration paid by Buyer to Stockholder for
purchase of the Shares. Subject to any required approval under the Lady Luck
Gaming Laws, either Option may be exercised by Buyer at any time upon two (2)
business days' prior written notice to Stockholder, against payment of the
purchase price for the Shares that are subject to such Option. Stockholder
agrees to cooperate with Buyer at Buyer's expense and use all commercially
reasonable efforts to assist Buyer in obtaining any approvals required under the
Lady Luck Gaming Laws.
Section 6. No Solicitation. Stockholder agrees that (i) in his
individual capacity, as opposed to his capacity as a director of Lady Luck, he
will not, nor will he authorize or permit any of his employees, agents and
representatives to, directly or indirectly, (a) initiate, solicit or encourage
(including by way of furnishing information) or take any other action to
facilitate any inquiries or proposals that constitute, or could reasonably be
expected to lead to, an Acquisition Proposal, (b) agree to or recommend any
Acquisition Proposal, or (c) engage in negotiations or discussions with a Third
Party concerning, or provide any non-public information to any person or entity
relating to, any Acquisition Proposal and (ii) he will notify Buyer as soon as
possible (and in any event within 48 hours) if any such inquiries or proposals
are received by, any information or document is requested from, or any
negotiations or discussions are sought to be initiated or continued with him,
any of his affiliates or his legal or financial advisors
Section 7. Termination. This Agreement shall terminate upon the
earliest to occur of (i) the Effective Time, (ii) the termination of the Merger
Agreement pursuant to Section 7.1(a), Section 7.1(c), Section 7.1(e), Section
7.1(g), Section 7.1(h), Section 7.1(i), Section 7.1(j), Section 7.1(k) or
Section 7.1(l) of the Merger Agreement, and (iii) December 31, 2000; provided
that the provisions of Section 9 of this Agreement shall survive any termination
of this Agreement; and provided further that no such termination shall relieve
any party of liability for a breach hereof prior to termination.
Section 8. Escrow of Shares. On the date hereof, Stockholder has
deposited with ▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP (the "Escrow Agent")
certificates representing all of the Shares. Buyer and Stockholder agree that
the Escrow Agent shall hold the Shares as escrowee in accordance with the terms
and conditions of the Escrow Agreement, dated the date hereof, among Buyer,
Stockholder and the Escrow Agent.
Section 9. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
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Section 10. Miscellaneous.
a This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes
all prior agreements and understandings, both written and oral, between
the parties with respect thereto. This Agreement may not be amended,
modified or rescinded except by an instrument in writing signed by each
of the parties hereto.
b. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination
that any term or other provision is invalid, illegal or incapable of
being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by
applicable law in a mutually acceptable manner in order that the terms
of this Agreement remain as originally contemplated to the fullest
extent possible.
c. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware without regard to the principles
of conflicts of law thereof.
d. This Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which together shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed as of the date first written above.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Agreed and Acknowledged:
ISLE OF CAPRI CASINOS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Its: Executive Vice President,
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General Counsel and Secretary
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