ESCROW AGREEMENT
ESCROW AGREEMENT (the "Escrow Agreement"), dated October 5, 1999,
among XXXXXX X. XXXXXXXX (the "Stockholder"), ISLE OF CAPRI CASINOS, INC.,
a Delaware corporation (the "Buyer"), and XXXXXXX BERLIN SHEREFF XXXXXXXX,
LLP (the "Escrow Agent").
WHEREAS, the Stockholder, Isle Merger Corp., a Delaware
corporation and a wholly-owned subsidiary of Buyer ("Merger Sub"), the
Buyer and Lady Luck Gaming Corporation, a Delaware corporation ("Lady
Luck"), have entered into an Agreement and Plan of Merger dated October 5,
1999 (the "Merger Agreement") pursuant to which Merger Sub will be merged
with and into Lady Luck such that Lady Luck will become a wholly-owned
subsidiary of Buyer (the "Merger");
WHEREAS, the Stockholder and the Buyer have further entered into a
Stockholder Support Agreement, dated October 5, 1999 (the "Support
Agreement"), with respect to which the Stockholder agrees to vote all
shares of Lady Luck owned by him in favor of adopting the Merger Agreement
and approving the Merger;
WHEREAS, the Stockholder owns of record and beneficially 2,226,409
shares of common stock of Lady Luck (the "Shares"); and
WHEREAS, to effect the Support Agreement, the Buyer has required
that the Stockholder deposit, and the Stockholder has agreed to deposit,
the Shares into escrow on the date hereof (the "Escrow Shares").
NOW THEREFORE, in consideration of the premises and the mutual
agreements contained herein, intending to be legally bound hereby, the
parties hereto agree as follows:
1. Escrow. On the date hereof, the Stockholder shall deliver to
the Escrow Agent the certificate or certificates evidencing the Escrow
Shares to be held in escrow in accordance with the terms and provisions of
this Escrow Agreement. The Escrow Agent acknowledges receipt of the Escrow
Shares.
2. Release of Escrow Shares. The Escrow Agent shall hold the
Escrow Shares until it delivers the Escrow Shares to the Buyer or the
Stockholder, as the case may be, as provided in this Section 2 (the "Escrow
Account").
(a) Delivery Pursuant to Written Instructions of Both
Parties. If, at any time, the Escrow Agent shall receive written
instructions executed jointly by the Stockholder, on the one hand, and the
Buyer, on the other, stating that either the Effective Time (as defined in
the Merger Agreement) of the Merger has occurred or that the Support
Agreement has been terminated in accordance with Section 7 of the Support
Agreement, and directing the Escrow Agent to release the Escrow Shares out
of the Escrow Account, as directed in such notice, the
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Escrow Agent shall deliver the Escrow Shares as specified in such
instructions as promptly as practicable after the Escrow Agent's receipt of
such written instructions.
(b) Court Order. The Escrow Agent shall be obligated to
deliver any or all of the Escrow Shares or take any other action hereunder
in accordance with the terms of any final non-appealable order issued by a
court of competent jurisdiction (in form and substance acceptable to it).
3. Fees and Expenses. The Escrow Agent shall not be entitled to
any fee for acting as such, but shall be reimbursed for any out-of-pocket
expenses incurred in connection herewith, which shall be borne by the
Buyer. Except as otherwise provided herein, each party (other than the
Escrow Agent) shall be responsible for its own legal and accounting fees
and expenses.
4. Responsibilities of Escrow Agent. The Escrow Agent's acceptance
of its duties under this Escrow Agreement is subject to the following terms
and conditions, which shall govern and control with respect to its rights,
duties, liabilities and immunities:
(a) The Escrow Agent makes no representation or warranty
and has no responsibility as to the validity of the Merger Agreement, the
Support Agreement or any other agreement executed in connection with the
Merger between the Stockholder, the Buyer and any other signatories
thereto, and the agreements and documents referred to therein (other than
this Escrow Agreement) (collectively, the "Agreements"), or as to the
correctness of any statement contained therein, and the Escrow Agent shall
not be required to inquire as to the performance of any obligation under
the Agreements. The Escrow Agent is not bound by any agreement or document
other than this Escrow Agreement.
(b) The Escrow Agent shall be protected in acting or
failing to act upon any written notice, instruction, request, waiver,
consent, receipt or other paper or document from any officer or authorized
agent of the Buyer or the Stockholder, not only as to its due execution and
the validity and effectiveness of its provisions, but also as to the truth
of any information therein contained and what it purports to be.
(c) The Escrow Agent shall not be liable for any error of
judgment, or for any mistake of fact or law, or for anything which it may
do or refrain from doing in connection herewith, except as may result from
its own gross negligence or willful misconduct.
(d) The Escrow Agent may consult with legal counsel
selected by it (including any member of its firm) and shall not be liable
for any action taken or omitted by it in good faith in accordance with the
advice of such counsel. Any fees and expenses of such counsel (which may be
paid to retained attorneys or represents the fair value of legal services
rendered to itself) shall be considered part of the fees and expenses
described in Section 3 hereof.
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(e) The Stockholder and the Buyer, jointly and severally,
agree to indemnify the Escrow Agent against and save it harmless from any
and all claims, liabilities, costs, payments and expenses, including
reasonable fees and expenses of counsel either paid to retained attorneys
(who may be selected by the Escrow Agent) or amounts representing the fair
value of legal services rendered to itself, incurred as a result of or in
connection with the performance of this Escrow Agreement (other than the
costs of the preparation of this Escrow Agreement), except as a result of
the Escrow Agent's own gross negligence or willful misconduct.
(f) The Escrow Agent shall have no duties or
responsibilities except those expressly set forth herein. It shall not be
bound by any modification of this Escrow Agreement unless in writing and
signed by all the parties hereto and, if its duties as Escrow Agent
hereunder are affected, unless it shall have given prior written consent
thereto.
(g) The duties of the Escrow Agent hereunder are solely
ministerial in nature, and the Escrow Agent shall not have any liability
under, or duty to inquire into, the terms and provisions of any other
agreement or document including, but not limited to, the Agreements. Each
of the Stockholder and the Buyer acknowledge that the Escrow Agent serves
as counsel to the Stockholder and expressly waive any conflict of interest
arising on account of such representation by the Escrow Agent and its
service as the Escrow Agent hereunder. The participation of Xxxxxxx Berlin
Shereff Xxxxxxxx, LLP as Escrow Agent is being undertaken as an
accommodation to the parties hereto and shall in no way hinder or limit the
present or future ability of Xxxxxxx Berlin Shereff Xxxxxxxx, LLP to act as
counsel to the Stockholder with respect to any matter including, but not
limited to, disputes between the Stockholder and the Buyer arising from the
Agreements or with regard to this Escrow Agreement; provided, however, that
such representation shall not affect the Escrow Agent's obligations
hereunder and shall be at the cost and expense of the Stockholder.
(h) In the case any property held by the Escrow Agent
hereunder shall be attached, garnished or levied upon by an order of court,
or the delivery thereof shall be stayed or enjoined by an order of any
court, or any other writ, order, judgment or decree shall be entered or
issued by any court affecting such property, or any part thereof, or any
act of the Escrow Agent, the Escrow Agent is hereby expressly authorized in
its sole discretion to obey and comply with all writs, orders, judgments or
decrees so entered or issued, whether with or without jurisdiction, and if
the Escrow Agent obeys and complies with any such writ, order, judgment or
decree, it shall not be liable to any person, firm or corporation by reason
of such compliance notwithstanding the fact that such writ, order, judgment
or decree may be subsequently reversed, modified, annulled, set aside or
vacated. The Escrow Agent agrees to notify the Buyer in writing of its
receipt of written notice to the effect that any third party is asserting a
lien, security interest or other right to the Escrow Shares.
(i) The Escrow Agent may at any time resign and be
discharged from its duties hereunder by providing written notice to the
Stockholder and the Buyer and depositing the Escrow Shares with a successor
escrow agent designated jointly by the Stockholder, on the one
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hand, and the Buyer, on the other. Upon receipt of the Escrow Agent's
resignation, the Stockholder and the Buyer shall promptly appoint a
successor escrow agent. If no successor shall have been appointed within
ten business days after the mailing of notice of resignation by the Escrow
Agent, the Escrow Agent shall be entitled to petition a court of competent
jurisdiction in New York, New York for the appointment of a successor
escrow agent and transfer into the custody of that court or any other court
of competent jurisdiction all or any part of the Escrow Shares.
5. Amendment and Termination. This Escrow Agreement may be amended
or terminated only by a writing signed by the Buyer, the Stockholder and
the Escrow Agent. Once the Escrow Shares have been fully distributed in any
manner provided for herein, this Escrow Agreement shall terminate and the
Escrow Agent shall have no further duties or responsibilities hereunder;
provided, however, the fee and expense provisions of Sections 3 and 4, and
the exculpatory and indemnifications provisions of Section 4 shall survive
termination.
6. Notices. All notices and other communications which are
required or permitted hereunder shall be in writing and shall be deemed to
have been duly given when delivered by hand, one business day after
delivery to a reputable overnight carrier or four business days after
delivery to the U.S. Postal Services, if sent by first class mail,
certified or registered mail with postage prepaid, or upon receipt if sent
by telecopy with a copy following by hand or by overnight carrier or
mailed, certified or registered mail with postage prepaid:
(a) If to the Stockholder to:
Xxxxxx X. Xxxxxxxx
c/o Lady Luck Casino Hotel
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxx, XX 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
with a copy to:
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
Phone: (000) 000-0000
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If to the Buyer to:
Isle of Capri Casinos, Inc.
711 Xx. Xxxxxx Xxxxxx Xxxx, Xx. Boulevard
Biloxi, Mississippi 39530
Attention: Chief Financial Officer
Fax: (000) 000-0000
Phone: (000) 000-0000
with a copy to:
Xxxxx Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Fax: (000) 000-0000
Phone: ( 000) 000-0000
If to the Escrow Agent to:
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
Phone: (000) 000-0000
or to such other person or address as any party shall furnish to the other
parties in writing. Copies of all notices hereunder to the Escrow Agent
shall, if sent by the Stockholder, also be furnished promptly by the
Stockholder to the Buyer, and, if sent by the Buyer, also be furnished
promptly by the Buyer to the Stockholder.
7. Governing Law; Consent to Jurisdiction. This Escrow Agreement
shall be construed in accordance with, and governed by, the internal laws
of the State of New York as applied to contracts made and to be performed
entirely within the State of New York. Any legal action, suit or proceeding
arising out of or relating to this Escrow Agreement may be instituted in
any state or federal court located within the County of New York, State of
New York, and each party hereto agrees not to assert, by way of motion, as
a defense, or otherwise, in any such action, suit or proceeding, any claim
that it is not subject personally to the jurisdiction of such court, that
such action was brought in an inconvenient forum, that the venue of the
action, suit or proceeding is improper or that this Escrow Agreement or the
subject matter hereof may not be enforced in or by such court. Each party
hereto further irrevocably submits to the jurisdiction of any such court in
any such action, suit or proceeding.
8. Miscellaneous. This Escrow Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors,
assigns and legal representatives. The headings in this Escrow Agreement
are for convenience of reference only and shall not define or limit the
provisions hereof. This Escrow Agreement may be executed in one or more
counterparts, each of which is an original but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be executed as of the date first above written.
ISLE OF CAPRI CASINOS, INC.
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President,
General Counsel and Secretary
/s/ Xxxxxx X. Xxxxxxxx
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XXXXXX X. XXXXXXXX
XXXXXXX BERLIN SHEREFF XXXXXXXX, LLP
as Escrow Agent
By: /s/ Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
----------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Partner
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