STOCKHOLDER SUPPORT AGREEMENT
STOCKHOLDER SUPPORT AGREEMENT, dated as of October 5, 1999 (this
"Agreement"), by Andrew H. Tompkins ("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,
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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 Alain Uboldi pursuant to his agreement with the
Stockholder (the "Uboldi 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 11,739 shares of Lady Luck Common Stock which are
subject to the Uboldi 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.
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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 Uboldi 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 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
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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 Swidler Berlin Shereff Friedman, 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.
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.
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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.
ANDREW H. TOMPKINS
/s/ Andrew H. Tompkins
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Agreed and Acknowledged:
ISLE OF CAPRI CASINOS, INC.
By: /s/ Allan B. Solomon
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Its: Executive Vice President,
General Counsel and Secretary
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