<PAGE>1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 24, 1996
TRUMP'S CASTLE FUNDING, INC.
(Exact name of registrant as specified in its charter)
New Jersey 1-9029 11-2739203
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
One Castle Boulevard
Atlantic City, New Jersey 08401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 340-5191
TRUMP'S CASTLE ASSOCIATES
(Exact name of registrant as specified in its charter)
New Jersey 1-9029 22-2608486
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
One Castle Boulevard
Atlantic City, New Jersey 08401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 340-5191
<PAGE>2
Item 1 to Item 4: None.
Item 5: Other Events.
On June 24, 1996, Trump Hotels & Casino Resorts, Inc. ("THCR"), Trump
Hotels & Casino Resorts Holdings, L.P. ("THCR Holdings"), TC/GP, Inc. ("TC/GP"),
Trump's Castle Hotel & Casino Inc. ("TCHI") and Donald J. Trump ("Trump")
entered into an agreement pursuant to which THCR Holdings will acquire from
Trump 100% of the equity of Trump's Castle Associates ("Castle Associates"), the
owner and operator of Trump's Castle Casino Resort. Trump will receive limited
partnership interests in THCR Holdings exchangeable into 5,837,700 shares of
THCR's Common Stock, par value $.01 per share (the "THCR Common Stock") and
approximately $885,000 in cash. The limited partnership interests to be received
by Trump (as well as the number of shares of THCR Common Stock into which they
are exchangeable) are subject to adjustment downward if the average of the
closing sale prices of the THCR Common Stock on the New York Stock Exchange for
the twenty trading day period ending three trading days prior to the closing of
the transaction exceeds $38 per share. Upon consummation of the transaction,
neither THCR nor THCR Holdings will be responsible for any of the outstanding
indebtedness of Castle Associates.
The transaction is expected to close on about September 30, 1996. The
closing is subject to satisfaction of a number of conditions, including the
affirmative vote of a majority of the outstanding shares of THCR Common Stock
(excluding shares held by Trump and the other officers and directors of THCR and
their affiliates) and the receipt of various third party approvals and consents.
Reference is made to (i) the Agreement, dated as of June 24, 1996,
among THCR, THCR Holdings, TC/GP, TCHI and Trump and (ii) the news release of
THCR, dated June 24, 1996, attached as Exhibits hereto. Both Exhibits are
incorporated herein by reference.
Item 6: None.
Item 7: Financial Statements and Exhibits.
(a)-(b): None.
(c) Exhibits:
2.1: Agreement, dated as of June 24, 1996, by and among Trump Hotels
& Casino Resorts, Inc., Trump Hotels & Casino Resorts Holdings,
L.P., TC/GP, Inc., Trump's Castle Hotel & Casino, Inc. and
Donald J. Trump
99.1: News Release of Trump Hotels & Casino Resorts, Inc., dated June
24, 1996
Item 8: None.
<PAGE>3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, each registrant has duly caused this Current Report to be signed on its
behalf by the undersigned hereunto duly authorized.
TRUMP'S CASTLE FUNDING, INC..
June 25, 1996 /s/ Robert E. Schaffhauser
-------------------------------------------------
By: Robert E. Schaffhauser
Title: Assistant Treasurer
TRUMP'S CASTLE ASSOCIATES
By: TC/GP, Inc., its general partner
June 25, 1996 /s/ Robert E. Schaffhauser
-------------------------------------------------
By: Robert E. Schaffhauser
Title: Assistant Treasurer
<PAGE>4
EXHIBIT INDEX
Sequentially
Exhibit No. Description Numbered Page
2.1 Agreement, dated as of June 24, 1996,
by and among Trump Hotels & Casino
Resorts, Inc., Trump Hotels & Casino
Resorts Holdings, L.P., TC/GP, Inc.,
Trump's Castle Hotel & Casino, Inc.
and Donald J. Trump
99.1 News Release of Trump
Hotels & Casino Resorts,
Inc., dated June 24, 1996
<PAGE>1
EXHIBIT 2.1
AGREEMENT
BY AND AMONG
TRUMP HOTELS & CASINO RESORTS, INC.
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
TC/GP, INC.
TRUMP'S CASTLE HOTEL & CASINO, INC.
AND
DONALD J. TRUMP
-------------------------------
Dated as of June 24, 1996
-------------------------------
<PAGE>2
TABLE OF CONTENTS *
ARTICLE I DEFINITIONS........................................................2
Section 1.01. Definitions...........................................2
ARTICLE II THE CONTRIBUTION..................................................8
Section 2.01. The Contribution; Consideration.......................8
Section 2.02. Closing..............................................10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF TRUMP AND THE CASTLE ENTITIES.10
Section 3.01. Corporate Organization...............................10
Section 3.02. Capitalization; Title................................11
Section 3.03. Subsidiaries.........................................11
Section 3.04. SEC Reports; Financial Statements....................11
Section 3.05. Absence of Certain Changes or Events.................12
Section 3.06. Authorization........................................12
Section 3.07. No Conflict or Violation.............................13
Section 3.08. Consents and Approvals...............................13
Section 3.09. Litigation...........................................14
Section 3.10. Taxes................................................14
Section 3.11. Contracts and Leases.................................14
Section 3.12. Compliance with Laws.................................14
Section 3.13. Absence of Undisclosed Liabilities...................15
Section 3.14. THCR Proxy Statement.................................15
Section 3.15. Takeover Provisions Inapplicable.....................15
Section 3.16. Brokerage/Finder's Fees..............................15
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE THCR ENTITIES...............16
Section 4.01. Corporate Organization...............................16
Section 4.02. Capitalization.......................................16
Section 4.03. Subsidiaries.........................................17
Section 4.04. SEC Reports; Financial Statements....................17
Section 4.05. Absence of Certain Changes or Events.................18
Section 4.06. Authorization........................................18
Section 4.07. No Conflict or Violation.............................19
Section 4.08. Consents and Approvals...............................20
Section 4.09. Litigation...........................................20
Section 4.10. Taxes................................................20
Section 4.11. Contracts and Leases.................................20
Section 4.12. Compliance with Laws.................................21
Section 4.13. Absence of Undisclosed Liabilities...................21
Section 4.14. THCR Proxy Statement.................................21
Section 4.15. Takeover Provisions Inapplicable.....................22
Section 4.16. Brokerage/Finder's Fees..............................22
ARTICLE V COVENANTS OF TRUMP AND THE CASTLE ENTITIES........................22
<PAGE>3
Section 5.01. Conduct Pending the Contribution.....................22
Section 5.02. No Solicitation......................................23
Section 5.03. Letters of Accountants...............................24
ARTICLE VI COVENANTS OF THE THCR ENTITIES...................................24
Section 6.01. Conduct Pending the Contribution.....................24
Section 6.02. THCR Proxy Statement.................................25
Section 6.03. Stockholders Meeting.................................25
ARTICLE VII OTHER AGREEMENTS................................................25
Section 7.01. Registration Rights; Partnership Agreement...........25
Section 7.02. Additional Agreements; Consents......................26
Section 7.03. Access to Information; Confidentiality...............26
Section 7.04. Notification of Certain Matters......................27
Section 7.05. HSR Act..............................................28
Section 7.06. Merger Agreement.....................................28
Section 7.07. Indemnification......................................28
Section 7.08. Voting Agreement.....................................29
ARTICLE VIII CONDITIONS TO THE CONTRIBUTION.................................29
Section 8.01. Conditions of Each Party.............................29
Section 8.02. Conditions of Trump..................................30
Section 8.03. Conditions of the THCR Entities......................31
ARTICLE IX TERMINATION......................................................32
Section 9.01. Termination..........................................32
Section 9.02. Effect of Termination................................32
ARTICLE X MISCELLANEOUS.....................................................32
Section 10.01. Notices.............................................32
Section 10.02. Survival............................................33
Section 10.03. Amendment...........................................33
Section 10.04. Waiver..............................................34
Section 10.05. Successors and Assigns..............................34
Section 10.06. Governing Law.......................................34
Section 10.07. Gaming Laws.........................................34
Section 10.08. Integration.........................................34
Section 10.09. Third Party Beneficiaries...........................34
Section 10.10. Specific Performance................................34
Section 10.11. Remedies Cumulative.................................35
Section 10.12. Publicity...........................................35
Section 10.13. Fees and Expenses...................................35
Section 10.14. Headings; Counterparts; Effectiveness...............35
<PAGE>4
AGREEMENT
AGREEMENT, dated as of June 24, 1996 (the "Agreement"), by and among
TRUMP HOTELS & CASINO RESORTS, INC., a Delaware corporation ("THCR"), TRUMP
HOTELS & CASINO RESORTS HOLDINGS, L.P., a Delaware limited partnership ("THCR
Holdings" and, collectively with THCR, the "THCR Entities"), TC/GP, INC., a
Delaware corporation ("TC/GP"), TRUMP'S CASTLE HOTEL & CASINO, INC., a New
Jersey corporation ("TCHI" and, together with TC/GP, the "Castle Entities"), and
Donald J. Trump ("Trump"). All foregoing parties to this Agreement are
collectively referred to as the "Parties" and individually as a "Party."
WHEREAS, Trump owns beneficially all of the outstanding equity interest
of Trump's Castle Associates ("Castle Associates"), a New Jersey general
partnership and the owner and operator of Trump's Castle Casino Resort,
directly, as well as indirectly through TCHI and TC/GP, each wholly owned by
Trump (the "Castle Equity");
WHEREAS, Trump and TC/GP each desire to contribute Trump's and TC/GP's
respective equity interests of Castle Associates to THCR Holdings in exchange
for limited partnership interests in THCR Holdings and THCR Holdings desires to
accept such consideration;
WHEREAS, Trump, TCHI and the THCR Entities desire to effect a merger of
a subsidiary of THCR Holdings with and into TCHI;
WHEREAS, as a result of the contributions and merger described in the
immediately preceding recitals (the "Contribution"), the THCR Entities will own
all the Castle Equity;
WHEREAS, simultaneously with the Contribution, Castle Associates shall
be converted from a general partnership to a limited partnership pursuant to an
amendment to the Second Amended and Restated Partnership Agreement of Castle
Associates, dated as of December 30, 1993 (the "Castle Associates Partnership
Agreement");
WHEREAS, prior to or simultaneously with the Contribution, THCR
Holdings Contributions LLC, a Delaware limited liability company and a wholly
owned subsidiary of THCR Holdings ("Contribution Sub"), THCR-TCHI Merger Corp.,
a Delaware corporation and a wholly owned subsidiary of THCR Holdings ("Merger
Sub 1.0"), TCHI, Castle Associates and Trump's Castle Funding, Inc., a New
Jersey corporation wholly owned by Castle Associates ("Castle Funding"), each
shall have been designated "unrestricted subsidiaries" under the indenture (as
supplemented and amended, the "Senior Note Indenture") pursuant to which the
$155 million aggregate principal amount of 15-1/2% Senior Secured
<PAGE>5
Notes due 2005 of THCR Holdings and Trump Hotels & Casino Resorts
Funding, Inc., a Delaware corporation ("THCR Funding"), were issued;
WHEREAS, the Special Committee (the "THCR Special Committee") of the
Board of Directors of THCR (the "THCR Board") has received a fairness opinion
from Salomon Brothers Inc ("Salomon") with respect to the fairness, from a
financial point of view to THCR, of the consideration to be paid by the THCR
Entities in the Contribution (the "Salomon Fairness Opinion");
WHEREAS, the THCR Special Committee and the THCR Board have determined
that the Contribution is consistent with and in furtherance of the long-term
business strategy of the THCR Entities;
WHEREAS, the THCR Special Committee and the THCR Board have determined
that the Contribution is fair to, and in the best interests of, THCR and the
holders of THCR's Common Stock, par value $.01 per share (the "THCR Common
Stock"); and
WHEREAS, the THCR Special Committee and the THCR Board have approved
the Contribution and this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein, the
Parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. As used in this Agreement the following
terms shall have the respective meanings set forth below (terms defined in the
singular shall have the same meanings when used in the plural and vice versa):
"Acquisition Proposal" with respect to any Person shall mean any
proposed (i) merger, consolidation, share exchange or similar transaction
involving such Person or a Subsidiary of such Person, as a result of which the
consolidated assets of such Person and its Subsidiaries, taken as a whole,
increase or decrease by 25% or more, (ii) sale, lease or other disposition
directly or indirectly (other than by merger, consolidation, share exchange or
similar transaction) of assets of such Person or its Subsidiaries representing
25% or more of the consolidated assets of such Person and its Subsidiaries,
(iii) issue, sale, or other disposition (other than by merger, consolidation,
share exchange or similar transaction) of securities (or options, rights or
warrants to purchase, or securities convertible into, such securities)
representing 25% or more of the voting power of such Person or (iv) transaction
in which any Person shall acquire
<PAGE>6
beneficial ownership, or the right to acquire beneficial ownership, or any
"group" (as such term is defined under the Exchange Act) shall have been formed
which beneficially owns or has the right to acquire beneficial ownership, of 25%
or more of the outstanding common stock of such Person (other than Persons or
groups having such beneficial ownership as of the date hereof).
"Agreement" shall have the meaning set forth in the Preamble.
"Castle Associates" shall have the meaning set forth in the Recitals.
"Castle Associates Partnership Agreement" shall have the meaning set
forth in the Recitals.
"Castle Entities" shall have the meaning set forth in the Preamble.
"Castle Equity" shall have the meaning set forth in the Recitals.
"Castle Equity Consideration" shall have the meaning set forth in
Section 2.01.
"Castle Funding" shall have the meaning set forth in the Recitals.
"Castle Material Adverse Effect" shall mean a material adverse
effect with respect to the business, results of operations, properties,
operations or financial condition of Castle Associates and Castle Funding,
taken as a whole.
"Castle Mortgage Notes" shall mean the 11-3/4% Mortgage Notes due
2003 of Castle Funding guaranteed by Castle Associates.
"Castle PIK Notes" shall mean the Increasing Rate
Subordinated Pay-in-Kind Notes due 2005 of Castle Funding guaranteed by Castle
Associates.
"Castle SEC Reports" shall have the meaning set forth in Section 3.04.
"Castle Senior Notes" shall mean the 11-1/2% Senior Secured Notes due
2000 of Castle Funding guaranteed by Castle Associates.
"Castle Warrant Agent" shall mean First Bank National Association, as
Warrant Agent under the Castle Warrant Agreement.
"Castle Warrant Agreement" shall mean the Warrant Agreement, dated
as of December 30, 1993, between TCHI and the Castle Warrant Agent.
<PAGE>7
"Castle Warrantholders" shall mean the holders of the Castle Warrants.
"Castle Warrants" shall mean the warrants issued under the
Castle Warrant Agreement.
"Castle Warrant Consideration" shall have the meaning set forth in
Section 2.01.
"Closing" shall have the meaning set forth in Section 2.02.
"Closing Date" shall have the meaning set forth in Section 2.02.
"Confidential Information" shall mean all information about a
Party, whether furnished before or after the date hereof, and regardless of
the manner in which it is furnished, together with all analyses,
compilations, studies, summaries, extracts or other documents, which contain
or otherwise reflect such information. Confidential Information shall not
include information which the recipient can clearly demonstrate falls within
any of the following categories: (i) information which has come within the
public domain through no fault or action of the recipient or its affiliates
(including, without limitation, all information contained in publicly
available documents filed with the SEC); (ii) information which was known to
the recipient on a non-confidential basis prior to its disclosure by a Party;
or (iii) information which becomes available to the recipient on a
non-confidential basis from any third party, the disclosure of which to, or
the receipt of which by, the recipient, to the knowledge of the recipient
after due inquiry, does not violate any contractual or legal
obligation said third party has to the disclosing party or any other Person
with respect to such information.
"Contribution" shall have the meaning set forth in the Recitals.
"Contribution Sub" shall have the meaning set forth in the Recitals.
"DGCL" shall mean the Delaware General Corporation Law.
"Disclosing Party" shall mean any Party that discloses or
provides Confidential Information to any other Party to this Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934 and
the rules and regulations promulgated thereunder.
<PAGE>8
"Exchange Rights Agreement" shall mean the Amended and
Restated Exchange and Registration Rights Agreement, dated as of April 17,
1996, among THCR, Trump and Trump Casinos.
"Gaming Authority" shall mean the New Jersey Casino Control
Commission, the New Jersey Division of Gaming Enforcement, the Indiana Gaming
Commission or any other governmental agency which regulates gaming in a
jurisdiction in which either THCR or its Subsidiaries or Castle Associates or
its Subsidiary, as the case may be, conduct gaming activities.
"Gaming Laws" shall mean any laws, rules, regulations or
ordinances governing gaming activities and any administrative rules or
regulations promulgated thereunder, and any other corresponding
statutes, rules and regulations.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"Indemnified Party" shall have the meaning set forth in Section 7.07.
"Indemnifying Party" shall have the meaning set forth in Section 7.07.
"Liabilities" shall have the meaning set forth in Section 7.07.
"Lien" shall mean any mortgage, charge, pledge, lien (statutory
or otherwise), privilege, security interest, hypothecation, or other
encumbrance upon or with respect to any property of any kind, real or
personal, movable or immovable, now owned or hereafter acquired.
"Merger Sub 1.0" shall have the meaning set forth in the Recitals.
"Midlantic Credit Agreement" shall mean the Amended and Restated
Credit Agreement, dated as of December 28, 1993, among Castle Associates,
Castle Funding and Midlantic National Bank.
"NJBCA" shall mean the New Jersey Business Corporation Act.
"NYSE" shall mean the New York Stock Exchange.
"Party" shall have the meaning set forth in the Preamble.
"Person" shall mean any individual, partnership, corporation,
trust, association, limited liability company, governmental agency or any other
entity.
"Receiving Party" shall mean any Party that receives or
obtains Confidential Information from a Disclosing Party.
<PAGE>9
"Salomon" shall have the meaning set forth in the Recitals.
"Salomon Fairness Opinion" shall have the meaning set forth in the
Recitals.
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Senior Note Indenture" shall have the meaning set forth in the
Recitals.
"Stock Incentive Plan" shall mean the 1995 Stock Incentive Plan
of THCR.
"Subsidiary" shall mean, with respect to any Person, any other
Person in which such first Person, directly or indirectly, owns, controls or
has the power to vote a majority of the outstanding securities generally
entitled to vote upon the election of directors. For the purposes of this
Agreement, the term "Subsidiary" shall also include, with respect to THCR,
THCR Holdings, Trump Atlantic City Associates and Trump Plaza Associates.
"TC/GP" shall have the meaning set forth in the Preamble.
"TC/GP Common Stock" shall mean the Common Stock, par value $.01
per share, of TC/GP.
"TC/GP Consideration" shall have the meaning set forth in Section
2.01.
"TCHI" shall have the meaning set forth in the Preamble.
"TCHI Common Stock" shall mean the Common Stock, without par value,
of TCHI.
"TCHI Consideration" shall have the meaning set forth in Section 2.01.
"TCHI Merger" shall have the meaning set forth in Section 2.01.
"THCR" shall have the meaning set forth in the Preamble.
"THCR Board" shall have the meaning set forth in the Recitals.
<PAGE>10
"THCR Class B Common Stock" shall mean the Class B Common Stock,
par value $.01 per share, of THCR.
"THCR Common Stock" shall have the meaning set forth in the Recitals.
"THCR Entities" shall have the meaning set forth in the Preamble.
"THCR Funding" shall have the meaning set forth in the Recitals.
"THCR Holdings" shall have the meaning set forth in the Preamble.
"THCR Holdings Limited Partnership Interest" shall mean a
limited partnership interest of THCR Holdings issued pursuant to the THCR
Holdings Partnership Agreement and which is convertible into shares of THCR
Common Stock pursuant to the Exchange Rights Agreement.
"THCR Holdings Partnership Agreement" shall mean the Second Amended
and Restated Partnership Agreement, dated as of April 17, 1996, of THCR
Holdings.
"THCR Indemnified Party" shall have the meaning set forth in Section
7.07.
"THCR/LP" shall mean THCR/LP Corporation, a New Jersey
corporation wholly owned by THCR.
"THCR Material Adverse Effect" shall mean a material adverse
effect with respect to the business, results of operations, properties,
operations or financial condition of THCR and its Subsidiaries, taken as a
whole.
"THCR Meeting" shall have the meaning set forth in Section 6.03.
"THCR Proxy Statement" shall mean the proxy statement of THCR
with respect to the THCR Meeting.
"THCR SEC Reports" shall have the meaning set forth in Section 4.04.
"THCR Special Committee" shall have the meaning set forth in the
Recitals.
"THCR Stock Contribution Value" shall have the meaning set forth
in Section 2.01.
<PAGE>11
"THCR Stock Market Value" shall mean the average of the closing
sale prices on the NYSE of a share of THCR Common Stock for the twenty day
trading period ending three trading days immediately preceding the Closing
Date, or any other meaning as the Parties shall mutually agree.
"Trump" shall have the meaning set forth in the Preamble.
"Trump Casinos" shall mean Trump Casinos, Inc., a New Jersey
corporation wholly owned by Trump.
"Trump Consideration" shall have the meaning set forth in Section
2.01.
"Trump Indemnified Party" shall have the meaning set forth in Section
7.07.
"Trump Warrants" shall mean the warrants to purchase 1,800,000
shares of THCR Common Stock held by Trump of which (i) 600,000 shares may be
purchased on or before April 17, 1999 at $30.00 per share, (ii) 600,000
shares may be purchased on or before April 17, 2000 at $35.00 per share and
(iii) 600,000 shares may be purchased on or before April 17, 2001 at $40.00
per share.
<PAGE>12
ARTICLE II
THE CONTRIBUTION
Section 2.01. The Contribution; Consideration. (a) The aggregate
consideration payable hereunder for the Castle Equity shall be $176.9 million
(the "Castle Equity Consideration"), which amount represents: (A) $525.0 million
(a value for the business and operations of Castle Associates agreed by the
Parties as of the date hereof for purposes of the specific transactions
contemplated by this Agreement) minus (B) $314.0 million (the sum of all the
aggregate principal amounts of (i) Castle capital lease obligations and
indebtedness outstanding under the Midlantic Credit Agreement, (ii) Castle PIK
Notes not held by THCR Holdings, (iii) Castle Senior Notes and (iv) Castle
Mortgage Notes outstanding as of the date hereof) minus (C) $40.8 million (the
aggregate principal amount of all Castle PIK Notes held by THCR Holdings
estimated to be outstanding as of the Closing Date less the aggregate discount
at which Trump may repurchase the Castle PIK Notes held by THCR Holdings
pursuant to agreements entered into prior to the date hereof) plus (D) $6.7
million (the estimated amount of excess cash over the operating needs of Castle
Associates as of the Closing Date). On the terms and subject to the conditions
set forth in this Agreement, including, without limitation, paragraph (b) below,
and in reliance upon the Parties' representations set forth below, the
Contribution shall take place, and the Castle Equity Consideration shall be
payable, on the Closing Date (as defined below) as follows:
(i) Trump shall, on the Closing Date, contribute to THCR Holdings and
THCR Holdings shall accept as a contribution from Trump, the 61.5% limited
partnership interest in Castle Associates owned beneficially and of record by
Trump, in consideration of which Trump shall receive at the Closing a 9.52854%
THCR Holdings Limited Partnership Interest (the "Trump Consideration"),
exchangeable into 3,626,450 shares of THCR Common Stock (valuing each such share
at $30.00 per share (the "THCR Stock Contribution Value"));
(ii) TC/GP shall, on the Closing Date, contribute to THCR Holdings,
and THCR Holdings shall accept as a contribution from TC/GP, the 37.5% limited
partnership interest in Castle Associates owned beneficially and of record by
TC/GP, in consideration of which TC/GP shall receive at the Closing a 5.81009%
THCR Holdings Limited Partnership Interest (the "TC/GP Consideration"),
exchangeable into 2,211,250 shares of THCR Common Stock (valuing each such share
at the THCR Stock Contribution Value);
(iii) the THCR Entities, Trump and TCHI shall, on the Closing Date,
cause Merger Sub 1.0 to be merged with and into
<PAGE>13
TCHI in accordance with the NJBCA and the DGCL, whereupon (x) the separate
existence of Merger Sub 1.0 shall cease and TCHI shall be the surviving
corporation (the "TCHI Merger"), (y) at the effective time of the TCHI Merger,
(A) each share of TCHI Common Stock outstanding immediately prior to the TCHI
Merger shall be converted into the right to receive $.8845 in cash (the "TCHI
Consideration") and (B) each share of common stock of Merger Sub 1.0 shall be
converted into the right to receive one share of common stock of the surviving
corporation of the TCHI Merger and (z) a provision shall be made for the Castle
Warrantholders to receive, in accordance with the terms of the Castle Warrant
Agreement, for each former share of TCHI Common Stock for which each Castle
Warrant was exercisable immediately prior to the effective time of the TCHI
Merger, an amount in cash equal to the TCHI Consideration (the "Castle Warrant
Consideration"), to be delivered to the Castle Warrant Agent on behalf of the
Castle Warrantholders pursuant to the terms of the Castle Warrant Agreement,
representing the consideration that the Castle Warrantholders are entitled to
receive, as a result of the TCHI Merger, pursuant to Section 7.2 of the Castle
Warrant Agreement;
(iv) Trump, TC/GP and TCHI shall, simultaneously with the
Contribution, enter into an amendment to the Castle Associates Partnership
Agreement, in order to, among other things, convert Castle Associates from a
general partnership to a limited partnership, with TCHI as the sole general
partner and Trump and TC/GP as the limited partners; and
(v) THCR Holdings shall, immediately upon receipt of the 61.5% and
37.5% limited partnership interests in Castle Associates from Trump and TC/GP,
respectively, contribute such limited partnership interests to Contribution Sub,
whereupon Contribution Sub will own a 99% limited partnership interest in Castle
Associates and the surviving corporation of the TCHI Merger will own a 1%
general partnership interest in Castle Associates.
(b) The Parties agree that if the THCR Stock Market Value is higher
than $38.00, then each of the Trump Consideration (and the number of shares of
THCR Common Stock into which it is exchangeable) and TC/GP Consideration (and
the number of shares of THCR Common Stock into which it is convertible) shall be
reduced appropriately as of the Closing Date so that no value will be received
by Trump or TC/GP in respect of any appreciation of the THCR Common Stock above
$38.00 per share.
Section 2.02. Closing. (a) Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been abandoned
pursuant to Section 9.01, the closing of the Contribution (the "Closing") shall
take place as promptly as practicable (and in any event within two business
days) after satisfaction or waiver of the conditions set forth in Article VIII
(the "Closing Date"),
<PAGE>14
at the offices of Willkie Farr & Gallagher, 153 East 53rd Street, New York, New
York, or at such other date, time and location as the Parties shall mutually
agree.
(b) The Contribution shall be effected on the Closing Date by
execution and delivery by the appropriate Parties of duly executed stock
certificates, partnership certificates or certificates of interest or
assignment, as the case may be, and by the delivery by the THCR Entities of the
TCHI Consideration and the Castle Warrant Consideration by wire transfer of
immediately available funds to such account as Trump and the Castle Entities,
and the Castle Warrant Agent, respectively, shall designate, or by any other
method of payment as the Parties, or the THCR Entities and the Castle Warrant
Agent (in the case of the Castle Warrant Consideration), shall mutually agree.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
TRUMP AND THE CASTLE ENTITIES
Trump and each of the Castle Entities represents and warrants to the
THCR Entities that:
Section 3.01. Corporate Organization. (a) TCHI is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New Jersey, and has all requisite corporate power and authority to own its
properties and assets and to conduct its businesses as now conducted. TCHI is
duly qualified and in good standing in each jurisdiction in which the property
owned, leased or operated by it makes such qualification necessary.
(b) TC/GP is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, and has all requisite
corporate power and authority to own its properties and assets and to conduct
its businesses as now conducted. TC/GP is duly qualified and in good standing in
each jurisdiction in which the property owned, leased or operated by it makes
such qualification necessary.
(c) Castle Associates is a general partnership validly existing under
the laws of the State of New Jersey, and has all requisite partnership power and
authority to own its properties and assets and to conduct its businesses as now
conducted.
Section 3.02. Capitalization; Title. (a) The authorized capital
stock of TCHI consists of 2,500,000 shares of TCHI Common Stock. An aggregate
of 1,000,000 shares of TCHI Common Stock are
<PAGE>15
issued and outstanding. The outstanding shares of TCHI Common Stock have
been duly authorized and validly issued and are fully paid, nonassessable and
free of preemptive rights. The outstanding shares of TCHI Common Stock are
the sole outstanding capital stock of TCHI. There are no options, warrants
or other rights to purchase debt or equity securities of TCHI outstanding,
other than the Castle Warrants. Trump owns all outstanding shares of TCHI
Common Stock free and clear of any Liens, except for Liens granted to
certain of Trump's personal creditors as set forth on a schedule previously
delivered to the THCR Entities.
(b) Trump, TC/GP and TCHI own a 61.5%, 37.5% and 1% general
partnership interest, respectively, in Castle Associates, free and clear of any
Liens, except for Liens granted to certain of Trump's personal creditors as set
forth on a schedule previously delivered to the THCR Entities. Trump, TC/GP and
TCHI are the only partners of Castle Associates.
(c) Pursuant to the terms of the Castle Warrant Agreement, the Castle
Warrants entitle the Castle Warrantholders to purchase up to an aggregate of
1,000,000 shares of TCHI Common Stock, representing, in the aggregate, an
indirect interest in one-half of one percent (.5%) of the Castle Equity.
Section 3.03. Subsidiaries. TCHI and TC/GP have no Subsidiaries. Castle
Associates has no Subsidiaries other than Castle Funding. Castle Funding (i) is
a corporation duly organized, validly existing and in good standing under the
laws of the State of New Jersey and has all requisite corporate power and
authority to own its properties and conduct its business and operations as
currently conducted and (ii) is duly qualified and in good standing in each
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification necessary, except where
the failure to be so qualified does not have and would not be reasonably
expected to have a Castle Material Adverse Effect.
Section 3.04. SEC Reports; Financial Statements. Trump has previously
furnished the THCR Entities with true and complete copies of the Castle
Associates and Castle Funding (i) Annual Report on Form 10-K for the fiscal year
ended December 31, 1995, as filed with the SEC, (ii) Quarterly Report on Form
10-Q for the quarter ended March 31, 1996, as filed with the SEC, and (iii) all
other reports or registration statements filed with the SEC since January 1,
1996 through the date hereof (clauses (i) through (iii) being referred to herein
collectively as the "Castle SEC Reports"). As of their respective filing dates,
the Castle SEC Reports complied in all material respects with the requirements
of the Securities Act or the Exchange Act, as the case may be. As of their
respective dates, the Castle SEC Reports, including, without limitation, any
financial statements
<PAGE>16
included therein, did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The audited consolidated financial statements and
unaudited interim financial statements included in the Castle SEC Reports comply
as to form in all material respects with applicable accounting requirements and
with the published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with generally accepted accounting principles
applied on a basis consistent with prior periods (except as may be indicated
therein or in the notes thereto), present fairly the financial position of the
entities to which they relate as of the dates thereof and the results of their
operations and cash flows for the periods presented therein subject, in the case
of the unaudited interim financial statements, to normal year-end audit
adjustments, any other adjustments described therein and the fact that certain
information and notes have been condensed or omitted in accordance with the
Securities Act or the Exchange Act, as the case may be, and are, in all material
respects, in accordance with the books of account and records of Castle
Associates and Castle Funding.
Section 3.05. Absence of Certain Changes or Events. Except as described
in the Castle SEC Reports, during the period since March 31, 1996, (i) the
business of Castle Associates and Castle Funding has been conducted only in the
ordinary course, consistent with past practice, (ii) neither Castle Associates
nor Castle Funding has entered into any material transaction other than in the
ordinary course, consistent with past practice, and (iii) there has not been any
event or change that has had a Castle Material Adverse Effect.
Section 3.06. Authorization. (a) Trump has the capacity to carry out
his obligations hereunder and each of TC/GP and TCHI has the corporate power to
consummate the Contribution and the transactions contemplated thereby. The
execution and delivery of this Agreement, the performance of each of the
obligations hereunder and the consummation of the Contribution and the other
transactions contemplated thereby have been duly authorized and approved by all
necessary corporate action by each of the Board of Directors of TC/GP and TCHI.
Trump, as sole shareholder of TC/GP and TCHI, has approved the terms of the
Contribution and the other transactions contemplated thereby. This Agreement has
been duly executed and delivered by Trump and the Castle Entities and
constitutes the valid and binding obligation of Trump and the Castle Entities,
enforceable against them in accordance with its terms, except (i) to the extent
that enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors' rights
<PAGE>17
generally and (ii) that the availability of equitable remedies, including
specific performance, is subject to the discretion of the court before which any
proceeding therefor may be brought.
(b) No other corporate proceedings on the part of TC/GP and TCHI are
necessary to authorize the Contribution and the transactions contemplated
thereby.
Section 3.07. No Conflict or Violation . Assuming receipt of the
consents and approvals set forth in Section 3.08 of this Agreement, the
execution, delivery and performance by Trump and the Castle Entities of this
Agreement and the consummation of the Contribution and the transactions
contemplated thereby do not and will not violate or conflict with any provision
of the charter documents or by-laws of TC/GP, TCHI or Castle Funding or the
Castle Associates Partnership Agreement and do not and will not violate any
provision of law, or any order, judgment or decree of any court or other
governmental or regulatory authority, nor violate or result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
contract, lease, loan agreement, mortgage, security agreement, trust indenture
or other agreement or instrument to which either Trump, TC/GP, TCHI, Castle
Associates or Castle Funding is a party or by which each is bound or to which
each of their respective properties or assets are subject, nor result in the
creation or imposition of any lien, charge or encumbrance of any kind whatsoever
upon any of their properties or assets, nor adversely affect or result in the
cancellation, modification, revocation or suspension of any of their licenses,
franchises, permits, authorizations or approvals issued or granted to them by
the United States, any state or local government, any foreign national or local
government, or any department, agency, board, commission, bureau or
instrumentality of any of the foregoing, except as would not be reasonably
expected to have a Castle Material Adverse Effect or as would not prevent
consummation of the transactions contemplated by the Contribution.
Section 3.08. Consents and Approvals. The execution, delivery and
performance of this Agreement by Trump, and the performance of the transactions
contemplated hereby by Trump and the Castle Entities, do not and will not
require any material consent, waiver, authorization or approval of any
governmental or regulatory authority, domestic or foreign, or of any other
Person (other than certain of Trump's personal creditors), and no material
declaration or notification to, or filing or registration with, or permit of,
any governmental or regulatory authority, except as it (i) may be required in
connection or compliance with applicable provisions of the DGCL, the NJBCA, the
Exchange Act, the Securities Act, the HSR Act, blue sky or other state
securities laws or Gaming Laws, (ii) may be required from certain creditors of
Castle Associates and Castle Funding in
<PAGE>18
connection with the Contribution and the transactions contemplated thereby,
including, without limitation, the modification of certain terms of the
agreements to which such creditors are parties, (iii) would not be reasonably
expected to have a Castle Material Adverse Effect, (iv) would not prevent
consummation of the transactions contemplated by the Contribution or (v) is
otherwise contemplated in this Agreement.
Section 3.09. Litigation. Except as disclosed in the Castle SEC
Reports, there are no actions, suits, investigations or proceedings
(adjudicatory, rulemaking or otherwise) pending or, to the knowledge of Trump,
threatened against either TC/GP, TCHI, Castle Associates or Castle Funding, or
any property of theirs in any court or before any arbitrator of any kind or
before or by any governmental or regulatory authority, domestic or foreign,
except actions, suits, investigations or proceedings which, individually or in
the aggregate, do not have and would not be reasonably expected to result in a
Castle Material Adverse Effect.
Section 3.10. Taxes. TC/GP, TCHI, Castle Associates and Castle Funding
have filed all federal, state, county, local and foreign tax returns required to
be filed by them, and have paid all taxes shown to be due thereon, other than
taxes for which appropriate reserves have been made in their respective
financial statements (and, to the extent material, such reserves have been
accurately described to the THCR Entities). There are no assessments or
adjustments that have been asserted in writing against TC/GP, TCHI, Castle
Associates or Castle Funding for any period for which they have not made
appropriate reserves in their financial statements.
Section 3.11. Contracts and Leases. The Castle SEC Reports contain a
complete listing of all material contracts, leases, agreements or
understandings, whether written or oral, required to be described therein or
filed as exhibits thereto pursuant to the Securities Act or the Exchange Act, as
the case may be. Each of such contracts, leases, agreements and understandings
is in full force and effect and (i) none of Castle Associates or Castle Funding
or, to the best knowledge of Trump, any other party thereto, has breached or is
in default thereunder, (ii) no event has occurred which, with the passage of
time or the giving of notice would constitute such a breach or default, (iii) no
claim of material default thereunder has, to the best knowledge of Trump, been
asserted or threatened and (iv) none of Castle Associates or Castle Funding or,
to the best knowledge of Trump, any other party thereto is seeking the
renegotiation thereof or substitute performance thereunder, except where such
breach or default, or attempted renegotiation or substitute performance,
individually or in the aggregate, does not have and would not be reasonably
expected to have a Castle Material Adverse Effect.
<PAGE>19
Section 3.12. Compliance with Laws. (a) Castle Associates is not in
material violation of any laws, ordinances, governmental rules or regulations to
which it is subject, including, without limitation, Gaming Laws and laws or
regulations relating to the environment or to occupational health and safety,
and no material expenditures are or will be required in order to cause its
current operations or properties to comply with any such laws, ordinances,
governmental rules or regulations.
(b) Castle Associates has all licenses, permits, franchises or other
governmental authorizations necessary to the ownership of its property or to the
conduct of its businesses, which if not obtained or, if the terms of which are
violated, might have a Castle Material Adverse Effect. Castle Associates has not
finally been denied any application for any such licenses, permits, franchises
or other governmental authorizations necessary to its business.
Section 3.13. Absence of Undisclosed Liabilities. Except as disclosed
in the Castle SEC Reports, neither Castle Associates nor Castle Funding has any
debt, obligation or liability (whether accrued, absolute, contingent, liquidated
or otherwise, whether due or to become due, whether or not known to Trump)
arising out of any transaction entered into at or prior to the Closing, or any
act or omission at or prior to the Closing, or any state of facts existing at or
prior to the Closing, including taxes with respect to or based upon the
transactions or events occurring at or prior to the Closing, and including,
without limitation, unfunded past service liabilities under any pension, profit
sharing or similar plan, except current liabilities incurred and obligations
under agreements entered into, in the usual and ordinary course of business,
none of which (individually or in the aggregate) could have a Castle Material
Adverse Effect.
Section 3.14. THCR Proxy Statement. None of the information supplied or
to be supplied by either Trump, TC/GP, TCHI, Castle Associates or Castle Funding
with respect to each of them for inclusion or incorporation by reference in the
THCR Proxy Statement will, at the time it is mailed, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. If at any time
prior to the Closing any event with respect to either Trump, TC/GP, TCHI, Castle
Associates or Castle Funding, or their officers and directors, should occur
which is required to be described in an amendment of, or a supplement to, such
proxy statement, Trump shall promptly notify THCR thereof.
<PAGE>20
Section 3.15. Takeover Provisions Inapplicable. As of the date hereof
and at all times on or prior to the Closing, Section 203 of the DGCL is, and
shall be, inapplicable to the Castle Entities in connection with the
Contribution and the transactions contemplated thereby.
Section 3.16. Brokerage/Finder's Fees. No broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or commission in
connection with the Contribution based upon arrangements made by or on behalf of
either Trump or TC/GP, TCHI, Castle Associates or Castle Funding.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE THCR
ENTITIES
Each of the THCR Entities represents and warrants to Trump and the
Castle Entities that:
Section 4.01. Corporate Organization. (a) THCR is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has all requisite corporate power and authority to own its
properties and assets and to conduct its businesses as now conducted. THCR is
duly qualified and in good standing in each jurisdiction in which the property
owned, leased or operated by it makes such qualification necessary, except where
the failure to be so qualified and in good standing would not be reasonably
expected to have a THCR Material Adverse Effect.
(b) THCR Holdings is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has
all requisite partnership power and authority to own its properties and assets
and to conduct its businesses as now conducted. THCR Holdings is duly qualified
and in good standing in each jurisdiction in which the property owned, leased or
operated by it makes such qualification necessary, except where the failure to
be so qualified and in good standing would not be reasonably expected to have a
THCR Material Adverse Effect.
Section 4.02. Capitalization. (a) The authorized capital stock of
THCR consists of 50,000,000 shares of THCR Common Stock, 1,000 shares of THCR
Class B Common Stock and 1,000,000 shares of Preferred Stock, par value $1.00
per share. An aggregate of 24,140,090 and 1,000 shares of THCR Common Stock
and THCR Class B Common Stock, respectively, are issued and outstanding. All
<PAGE>21
outstanding shares of THCR Class B Common Stock are beneficially owned by Trump.
The outstanding shares of THCR Common Stock and THCR Class B Common Stock have
been duly authorized and validly issued and are fully paid, nonassessable and
free of preemptive rights. The outstanding shares of THCR Common Stock and THCR
Class B Common Stock are the sole outstanding capital stock of THCR.
(b) THCR is the sole general partner of THCR Holdings. Trump, Trump
Casinos and THCR/LP are the only limited partners of THCR Holdings. THCR holds
an approximately 71% general partnership interest in THCR Holdings. Trump and
Trump Casinos hold in the aggregate an approximately 25% limited partnership
interest in THCR Holdings, which is convertible, at their option, into 8,081,023
shares of THCR Common Stock (subject to certain adjustments set forth in the
Exchange Rights Agreement). THCR/LP holds an approximately 4% limited
partnership interest in THCR Holdings. Assuming no further equity issuances by
THCR Holdings and no adjustments pursuant to Section 2.01(b) hereof, immediately
after the Closing, (i) THCR shall hold an approximately 60.0% general
partnership interest in THCR Holdings, (ii) Trump, Trump Casinos and TC/GP shall
hold in the aggregate an approximately 36.6% limited partnership interest in
THCR Holdings, which shall be exchangeable, at their option, into 13,918,723
shares of THCR Common Stock (subject to certain adjustments set forth in the
Exchange Rights Agreement) and (iii) THCR/LP shall hold an approximately 3.4%
limited partnership interest in THCR Holdings. Upon the exchange of limited
partnership interests for THCR Common Stock by Trump, Trump Casinos or TC/GP,
the interests in THCR Holdings held by THCR and any subsidiary that is also a
partner of THCR Holdings will effectively be increased in the aggregate by an
amount equal to such exchanged interests.
(c) THCR has authorized and reserved for issuance that number of
shares of THCR Common Stock (i) into which the THCR Holdings Limited Partnership
Interests held by Trump and Trump Casinos immediately prior to the consummation
of the Contribution are convertible, (ii) that underlie the Trump Warrants,
(iii) that are issuable pursuant to the Stock Incentive Plan and (iv) into which
the THCR Holdings Limited Partnership Interests to be issued to Trump and TC/GP
pursuant to Section 2.01 hereof are convertible. Upon conversion into THCR
Common Stock of the THCR Holdings Limited Partnership Interests to be issued to
Trump and TC/GP pursuant to Section 2.01 hereof, such shares of THCR Common
Stock will be validly issued, fully paid and non-assessable and their issuance
will not be subject to any preemptive or similar rights.
Section 4.03. Subsidiaries. Each Subsidiary of the THCR Entities (i)
is a corporation or other legal entity duly organized, validly existing and (if
applicable) in good standing
<PAGE>22
under the laws of the jurisdiction of its organization and has the full power
and authority to own its properties and conduct its business and operations as
currently conducted, except where the failure to be duly organized, validly
existing or in good standing does not have, and would not be reasonably expected
to have, a THCR Material Adverse Effect, and (ii) is duly qualified and in good
standing in each jurisdiction in which the property owned, leased or operated by
it or the nature of the business conducted by it makes such qualification
necessary, except where the failure to be so qualified does not have and would
not be reasonably expected to have a THCR Material Adverse Effect.
Section 4.04. SEC Reports; Financial Statements. The THCR Entities have
previously furnished Trump with true and complete copies of their respective (i)
Annual Report on Form 10-K for the fiscal year ended December 31, 1995, as filed
with the SEC, (ii) Quarterly Report on Form 10-Q for the quarter ended March 31,
1996, as filed with the SEC, (iii) proxy statements relating to all meetings of
stockholders (whether annual or special) since January 1, 1996 and prior to the
date hereof and (iv) all other reports or registration statements filed with the
SEC since January 1, 1996 through the date hereof (clauses (i) through (iv)
being referred to herein collectively as the "THCR SEC Reports"). As of their
respective filing dates, the THCR SEC Reports complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be. As of their respective filing dates, the THCR SEC Reports, including,
without limitation, any financial statements included therein, did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
audited consolidated financial statements and unaudited interim financial
statements included in the THCR SEC Reports comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with prior periods (except as may be indicated therein or in the
notes thereto), present fairly the financial position of the entities to which
they relate as of the dates thereof and the results of their operations and cash
flows for the periods presented therein subject, in the case of the unaudited
interim financial statements, to normal year-end audit adjustments, any other
adjustments described therein and the fact that certain information and notes
have been condensed or omitted in accordance with the Securities Act or the
Exchange Act, as the case may be, and are, in all material respects, in
accordance with the books of account and records of the THCR Entities.
Section 4.05. Absence of Certain Changes or Events. Except as described
in the THCR SEC Reports, during the period since March 31, 1996, (i) the
business of THCR and its Subsidiaries has been conducted only in the ordinary
course, consistent with past practice, (ii) neither THCR nor any of its
Subsidiaries has entered into any material transaction other than in the
ordinary course, consistent with past practice, and (iii) there has not been any
change or event that has had a THCR Material Adverse Effect.
Section 4.06. Authorization . (a) THCR and THCR Holdings have the
corporate and partnership power, respectively, to enter into this Agreement and
to carry out their obligations hereunder and, subject to the approval by the
affirmative vote of a majority of the outstanding shares of THCR Common Stock
and THCR Class B Common Stock, voting as a single class, have the power to
consummate the Contribution and the other transactions contemplated thereby. The
execution and delivery of this Agreement, the performance of THCR's obligations
hereunder and the consummation of the Contribution have been duly authorized by
all necessary corporate action by the THCR Special Committee and the THCR Board.
Salomon has delivered to the THCR Special Committee the Salomon Fairness
Opinion, dated June 24, 1996, that the consideration to be paid by the THCR
Entities in the Contribution, is fair, from a financial point of view, to THCR.
The THCR Special Committee and the THCR Board have unanimously approved the
terms of the Contribution and this Agreement on behalf of THCR, in its own
capacity and as the sole general partner of THCR Holdings. This Agreement has
been duly executed and delivered by the THCR Entities and constitutes the valid
and binding obligation of the THCR Entities enforceable against them in
accordance with its terms, except (i) to the extent that enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally and (ii) that the
availability of equitable remedies, including specific performance, is subject
to the discretion of the court before which any proceeding therefor may be
brought.
(b) Except for the approval of the Contribution by the holders of THCR
Common Stock and THCR Class B Common Stock, no other corporate proceedings on
the part of the THCR Entities or their Subsidiaries are necessary to authorize
this Agreement and the transactions contemplated hereby.
Section 4.07. No Conflict or Violation. Assuming receipt of the
consents and approvals set forth in Section 4.08 of this Agreement, the
execution, delivery and performance by the THCR Entities of this Agreement, the
consummation of the Contribution and the transactions contemplated thereby, do
not and will not violate or conflict with any provision of the charter documents
or by-laws or partnership agreements, as the case may be, of the
<PAGE>23
THCR Entities or their Subsidiaries and do not and will not violate any
provision of law, or any order, judgment or decree of any court or other
governmental or regulatory authority, nor violate or result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
contract, lease, loan agreement, mortgage, security agreement, trust indenture
or other agreement or instrument to which the THCR Entities or their
Subsidiaries are a party or by which they are bound or to which their respective
properties or assets are subject, nor result in the creation or imposition of
any lien, charge or encumbrance of any kind whatsoever upon any of the
properties or assets of the THCR Entities or their Subsidiaries, nor adversely
affect or result in the cancellation, modification, revocation or suspension of
any of the licenses, franchises, permits, authorizations or approvals issued or
granted to the THCR Entities or their Subsidiaries by the United States, any
state or local government, any foreign national or local government, or any
department, agency, board, commission, bureau or instrumentality of any of the
foregoing, except as would not be reasonably expected to have a THCR Material
Adverse Effect or as would not prevent consummation of the transactions
contemplated by the Contribution.
Section 4.08. Consents and Approvals. The execution, delivery and
performance of this Agreement by the THCR Entities do not and will not require
any material consent, waiver, authorization or approval of any governmental or
regulatory authority, domestic or foreign, or of any other Person (other than
the approval of the Contribution by the holders of the THCR Common Stock and
THCR Class B Common Stock), and no material declaration or notification to, or
filing or registration with, or permit of, any governmental or regulatory
authority, except as it (i) may be required in connection or compliance with
applicable provisions of the DGCL, the Exchange Act, the Securities Act, the HSR
Act, blue sky or other state securities laws or Gaming Laws, (ii) would not be
reasonably expected to have a THCR Material Adverse Effect, (iii) would not
prevent consummation of the transactions contemplated by the Contribution or
(iv) is otherwise contemplated in this Agreement.
Section 4.09. Litigation. Except as disclosed in the THCR SEC Reports,
there are no actions, suits, investigations or proceedings (adjudicatory,
rulemaking or otherwise) pending or, to the knowledge of the THCR Entities,
threatened against the THCR Entities or any of their Subsidiaries, or any
property of the THCR Entities or any such Subsidiary in any court or before any
arbitrator of any kind or before or by any governmental or regulatory authority,
domestic or foreign, except actions, suits, investigations or proceedings which,
individually or in the aggregate, do not have and would not be reasonably
expected to result in a THCR Material Adverse Effect.
<PAGE>24
Section 4.10. Taxes. The THCR Entities and their Subsidiaries have
filed all federal, state, county, local and foreign tax returns required to be
filed by them, and have paid all taxes shown to be due thereon, other than taxes
for which appropriate reserves have been made in the financial statements of the
THCR Entities and their Subsidiaries (and, to the extent material, such reserves
have been accurately described to Trump). There are no assessments or
adjustments that have been asserted in writing against the THCR Entities or
their Subsidiaries for any period for which the THCR Entities or their
Subsidiaries have not made appropriate reserves in their financial statements.
Section 4.11. Contracts and Leases. The THCR SEC Reports contain a
complete listing of all material contracts, leases, agreements or
understandings, whether written or oral, required to be described therein or
filed as exhibits thereto pursuant to the Securities Act or the Exchange Act, as
the case may be. Each of such contracts, leases, agreements and understandings
is in full force and effect and (i) none of the THCR Entities or their
Subsidiaries or, to the best knowledge of the THCR Entities, any other party
thereto, has breached or is in default thereunder, (ii) no event has occurred
which, with the passage of time or the giving of notice would constitute such a
breach or default, (iii) no claim of material default thereunder has, to the
best knowledge of the THCR Entities, been asserted or threatened and (iv) none
of the THCR Entities or their Subsidiaries or, to the best knowledge of the THCR
Entities, any other party thereto is seeking the renegotiation thereof or
substitute performance thereunder, except where such breach or default, or
attempted renegotiation or substitute performance, individually or in the
aggregate, does not have and would not be reasonably expected to have a THCR
Material Adverse Effect.
Section 4.12. Compliance with Laws. (a) Neither the THCR Entities nor
their Subsidiaries are in material violation of any laws, ordinances,
governmental rules or regulations to which they are subject, including, without
limitation, Gaming Laws and laws or regulations relating to the environment or
to occupational health and safety, and no material expenditures are or will be
required in order to cause their current operations or properties to comply with
any such laws, ordinances, governmental rules or regulations.
(b) The THCR Entities and their Subsidiaries have all licenses,
permits, franchises or other governmental authorizations necessary to the
ownership of their property or to the conduct of their businesses, which if not
obtained or, if the terms of which are violated, might have a THCR Material
Adverse Effect. Neither the THCR Entities nor their Subsidiaries have
<PAGE>25
finally been denied any application for any such licenses, permits, franchises
or other governmental authorizations necessary to their business.
Section 4.13. Absence of Undisclosed Liabilities. Except as disclosed
in the THCR SEC Reports, none of the THCR Entities has any debt, obligation or
liability (whether accrued, absolute, contingent, liquidated or otherwise,
whether due or to become due, whether or not known to the THCR Entities) arising
out of any transaction entered into at or prior to the Closing, or any act or
omission at or prior to the Closing, or any state of facts existing at or prior
to the Closing, including taxes with respect to or based upon the transactions
or events occurring at or prior to the Closing, and including, without
limitation, unfunded past service liabilities under any pension, profit sharing
or similar plan, except current liabilities incurred and obligations under
agreements entered into, in the usual and ordinary course of business, none of
which (individually or in the aggregate) could have a THCR Material Adverse
Effect.
Section 4.14. THCR Proxy Statement. None of the information supplied or
to be supplied by the THCR Entities with respect to the THCR Entities and their
Subsidiaries for inclusion or incorporation by reference in the THCR Proxy
Statement will, at the time it is mailed, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. If at any time prior to
the Closing any event with respect to the THCR Entities or any of their
Subsidiaries, or their officers and directors, should occur which is required to
be described in an amendment of, or a supplement to, such proxy statement, the
THCR Entities shall notify Trump thereof.
Section 4.15. Takeover Provisions Inapplicable. As of the date hereof
and at all times on or prior to the Closing, Section 203 of the DGCL, is, and
shall be, inapplicable to the THCR Entities in connection with the Contribution
and the transactions contemplated thereby.
Section 4.16. Brokerage/Finder's Fees. Except for Salomon, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the Contribution based upon arrangements made
by or on behalf of the THCR Entities or their Subsidiaries, and the fees and
commissions payable to Salomon, as contemplated by this Section, will be paid in
full by the THCR Entities.
<PAGE>26
ARTICLE V
COVENANTS OF TRUMP
AND THE CASTLE ENTITIES
Section 5.01. Conduct Pending the Contribution. From and after the date
of this Agreement and until the Closing, Trump and the Castle Entities shall,
and shall cause Castle Associates and Castle Funding to, conduct their business
solely in the ordinary course consistent with past practice and Trump and the
Castle Entities shall, and shall cause Castle Associates and Castle Funding not
to, except with the prior written consent of the THCR Entities or as required or
permitted pursuant to the terms hereof or as contemplated in the Castle SEC
Reports filed through the date hereof or by the terms of the Contribution:
(i) make any material change in the conduct of their businesses and
operations or enter into any transaction, other than in the ordinary course of
business consistent with past practice;
(ii) make any change in their certificate of incorporation or by-laws
or partnership agreement, as the case may be, issue any additional shares of
capital stock or equity securities, grant any option, warrant or right to
acquire any capital stock or equity securities, issue any security convertible
into or exchangeable for their capital stock, alter in any material respect the
terms of any of their outstanding securities, or make any change in their
outstanding shares of capital stock or in their capitalization, whether by
reason of a reclassification, recapitalization, stock split or combination,
exchange or readjustment of shares, stock dividend or otherwise;
(iii) incur, assume or guarantee any indebtedness for borrowed money,
issue any notes, bonds, debentures or other corporate securities or grant any
option, warrant or right to purchase any thereof, other than in the ordinary
course of business consistent with past practice;
(iv) make any sale, assignment, transfer, abandonment or other
conveyance of any of their assets or any part thereof, except in the ordinary
course of business consistent with past practices;
(v) subject any of their assets, or any part thereof, to any lien or
suffer such to be imposed other than such liens as may arise in the ordinary
course of business consistent with past practice or by operation of law;
(vi) redeem, retire, purchase or otherwise acquire, directly or
indirectly, any shares of their capital stock or declare, set aside or pay any
dividends or make any other
<PAGE>27
distribution in respect of such shares or make any other distributions in
respect of equity interests;
(vii) increase the compensation payable or to become payable to their
executive officers or employees, except for increases in the ordinary course of
business in accordance with past practices, or grant any severance or
termination pay to, or enter into any employment or severance agreement (other
than in the ordinary course of business) with, any director or executive
officer, or establish, adopt, enter into or amend in any material respect or
take action to accelerate any rights or benefits under any collective
bargaining, bonus, profit sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust fund, policy or
arrangement for the benefit of any director, executive officer or employee;
(viii) take any other action that would cause any of the
representations and warranties made in this Agreement not to remain true and
correct; or
(ix) commit themselves to do any of the foregoing.
Section 5.02. No Solicitation. Neither Trump nor the Castle Entities
shall, directly or indirectly, take (nor shall any of them authorize or permit
Castle Associates or Castle Funding, or their officers, directors, employees,
representatives, investment bankers, attorneys, accountants or other agents or
affiliates, to take) any action (i) to knowingly encourage, solicit or initiate
the submission of any Acquisition Proposal, (ii) to enter into any agreement
with respect to any Acquisition Proposal or (iii) to participate in any way in
discussions or negotiations with, or furnish any information to, any Person in
connection with, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes, or may reasonably be expected to lead
to, any Acquisition Proposal. Notwithstanding the foregoing, the Parties agree
that in the event Trump or TCHI receives an unsolicited Acquisition Proposal by
any other Person relating to a transaction involving the sale of the TCHI Common
Stock or any merger, consolidation or other business combination or acquisition
of all or substantially all of the assets or securities of TCHI, Trump or TCHI,
as the case may be, may review and act upon such unsolicited Acquisition
Proposal solely as it relates to such transaction only in the event that Trump
and/or TCHI, as the case may be, determines in good faith, after consultation
with and based upon the advice of his and/or its financial and legal advisors,
that failing to review and act upon such proposal would constitute a breach of
fiduciary duty. Trump will promptly communicate to the THCR Entities any
solicitation by or of TC/GP, TCHI, Castle Associates or Castle Funding and the
terms of any proposal or inquiry, including the identity of the
<PAGE>28
Person and its affiliates making the same, that it may receive in respect of any
such transaction, or of any such information requested from it or of any such
negotiations or discussions being sought to be initiated with it. Prior to the
date hereof, Trump and the Castle Entities shall have delivered to the THCR
Entities all written materials relating to all Acquisition Proposals received by
Trump and the Castle Entities from January 1, 1995 through the date hereof, if
any.
Section 5.03. Letters of Accountants. Trump shall use his reasonable
best efforts to cause to be delivered to the THCR Entities "comfort letters" of
Arthur Andersen LLP, the Castle Associates' independent public accountants,
dated and delivered the date on which the THCR Proxy Statement is mailed and as
of the Closing Date, and addressed to the THCR Special Committee and the THCR
Board, in form and substance reasonably satisfactory to the THCR Entities and
reasonably customary in scope and substance for letters delivered by independent
public accountants in connection with transactions such as those contemplated by
this Agreement.
ARTICLE VI
COVENANTS OF THE THCR ENTITIES
Section 6.01. Conduct Pending the Contribution. From and after the date
of this Agreement and until the Closing, the THCR Entities shall, and shall
cause each of their Subsidiaries to, conduct their business solely in the
ordinary course consistent with past practice and, without the prior written
consent of Trump and the Castle Entities, the THCR Entities shall not, and shall
cause each of their Subsidiaries not to, except as required or permitted
pursuant to the terms hereof or as contemplated in the THCR SEC Reports filed
through the date hereof or by the terms of the Contribution:
(i) make any material change in the conduct of their businesses and
operations or enter into any transaction other than in the ordinary course of
business consistent with past practice;
(ii) make any change in its certificate of incorporation or by-laws or
partnership agreement, as the case may be, or make any material change in their
outstanding shares of capital stock or in their capitalization, whether by
reason of a reclassification, recapitalization, stock split or combination,
exchange or readjustment of shares, stock dividend or otherwise;
(iii) redeem, retire, purchase or otherwise acquire, directly or
indirectly, any shares of their capital stock or
<PAGE>29
declare, set aside or pay any dividends or make any other distribution in
respect of such shares or make any other distributions in respect of equity
interests;
(iv) take any other action that would cause any of the representations
and warranties made in this Agreement not to remain true and correct; or
(v) commit themselves to do any of the foregoing.
Section 6.02. THCR Proxy Statement. (a) As promptly as reasonably
practicable after the execution of this Agreement, THCR shall prepare and file
with the SEC the preliminary THCR Proxy Statement. As promptly as reasonably
practicable after comments are received from the SEC with respect to the THCR
Proxy Statement and after the satisfactory response thereto by THCR, THCR shall
file with the SEC the definitive THCR Proxy Statement. Thereafter, THCR shall
distribute the definitive THCR Proxy Statement and related proxy card to its
stockholders. THCR shall cause the THCR Proxy Statement to comply as to form in
all material respects with the provisions of the Exchange Act.
Section 6.03. Stockholders Meeting. THCR shall take all action
necessary, in accordance with applicable law and its certificate of
incorporation and by-laws, to convene a special meeting of the holders of the
THCR Common Stock and the THCR Class B Common Stock (the "THCR Meeting") as
promptly as practicable for the purpose of approving the Contribution. Subject
to its fiduciary duties, as advised by outside counsel, the THCR Board will
recommend that holders of THCR Common Stock vote in favor of and approve the
Contribution at the THCR Meeting.
ARTICLE VII
OTHER AGREEMENTS
Section 7.01. Registration Rights; Partnership Agreement. (a) THCR and
Trump agree to amend the Exchange Rights Agreement to afford Trump the
registration rights and exchange privileges contained in the Exchange Rights
Agreement with respect to the THCR Holdings Limited Partnership Interests that
Trump and TC/GP shall receive pursuant to Section 2.01 hereof.
(b) THCR and Trump shall, and shall cause the other limited partners
of THCR Holdings to, amend the THCR Holdings Partnership Agreement or to waive
any provisions thereof as shall be necessary to effect the transactions
contemplated by this Agreement.
<PAGE>30
Section 7.02. Additional Agreements; Consents. Subject to the terms and
conditions herein provided, each of the Parties agrees, and Trump agrees to
cause each of TC/GP, TCHI, Castle Associates and Castle Funding to agree, to use
all reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by the Contribution, including using all reasonable efforts to
obtain all necessary waivers, consents and approvals, to effect all necessary
registrations and filings (including, but not limited to, filings with all
applicable governmental agencies) and to lift any injunction or other legal bar
to the transactions contemplated by this Agreement (and, in such case, to
proceed with the transactions contemplated by this Agreement as expeditiously as
possible).
Section 7.03. Access to Information; Confidentiality. (a) Each of the
Parties shall, and Trump and the Castle Entities shall cause each of Castle
Associates and Castle Funding to, afford to the other Parties and to their
accountants, counsel and other representatives full access during normal
business hours (and at such other times as the Parties may mutually agree)
throughout the period until the Closing to all of its properties, books,
contracts, commitments, records and personnel and, during such period, each
shall furnish promptly to the others (i) a copy of each report, schedule and
other document filed or received by it pursuant to the requirements of federal
or state securities laws or Gaming Laws and (ii) all other information
concerning its business, properties and personnel, both past and present, as
such party may reasonably request.
(b) A Receiving Party shall (i) keep confidential and not disclose or
reveal to any Person, other than those employed by the Receiving Party or acting
on the Receiving Party's behalf and directly participating in the performance of
such party's obligations under this Agreement, all Confidential Information,
(ii) cause their respective affiliates and the directors, officers, employees,
agents, advisors and controlled or controlling Persons of such party and its
affiliates to observe the terms of this Section and to keep confidential and not
disclose or reveal to any Person all Confidential Information and (iii) not use
Confidential Information for any purpose other than in connection with the
transactions contemplated by this Agreement and in a manner approved by the
Disclosing Party.
(c) In the event that a Receiving Party is requested or required by
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process or required (as advised in writing by
its outside counsel) to disclose any of the Confidential Information, the
Receiving Party shall provide the Disclosing Party with prompt
<PAGE>31
written notice so that it may seek a protective order or other appropriate
remedy. In the event such protection or other remedy is not obtained, the
Receiving Party may disclose such Confidential Information pursuant to such
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process or other law; provided, however, that
the Receiving Party shall exercise best efforts to obtain assurance that
confidential treatment will be accorded to such Confidential Information.
(d) Without prejudice to the rights and remedies otherwise available
to a Disclosing Party, a Disclosing Party shall be entitled to equitable relief
by way of injunction if the Receiving Party or any of the Receiving Party's
affiliates and the directors, officers, employees, agents, advisors and
controlled or controlling Persons of such Receiving Party and its affiliates
breach or threaten to breach any of the provisions of this Section.
Section 7.04. Notification of Certain Matters. Trump and the THCR
Entities shall give prompt notice to each other of:
(i) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(ii) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement;
(iii) any action, suit, claim, investigation or proceeding commenced
or, to its knowledge, threatened against, relating to or involving or otherwise
affecting Trump, TC/GP, TCHI, Castle Associates or Castle Funding and the THCR
Entities or any of their Subsidiaries, which is reasonably likely to have a
Castle Material Adverse Effect (in the case of Trump, TC/GP, TCHI, Castle
Associates or Castle Funding) or a THCR Material Adverse Effect (in the case of
the THCR Entities or their Subsidiaries) or prevent the consummation of the
transactions contemplated by this Agreement or cause any of such transactions to
be rescinded following consummation;
(iv) the occurrence, or failure to occur, of any event or change in
circumstances where such occurrence or failure to occur would be likely to cause
any representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Closing Date; and
(v) any material failure of such party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that no such notification shall affect the
representations or warranties of
<PAGE>32
the parties or the conditions to the obligations of the parties hereunder.
Section 7.05. HSR Act. The Parties shall, and Trump and the Castle
Entities shall cause Castle Associates and Castle Funding to, use their
respective best efforts to file or cause to be filed as soon as practicable all
the required notifications under the HSR Act in connection with the
Contribution, and to respond as promptly as practicable to any inquiries
received from the Federal Trade Commission and the Antitrust Division of the
Department of Justice for additional information or documentation and to respond
as promptly as practicable to all inquiries and requests received from any State
Attorney General or other governmental authority in connection with antitrust
matters.
Section 7.06. Merger Agreement. To the extent required under the DGCL,
NJBCA or any other applicable state law relating to mergers, TCHI shall, and
THCR and THCR Holdings shall cause Merger Sub 1.0 to, enter into a plan of
merger in order to effect the TCHI Merger on the terms set forth in Section 2.01
of this Agreement.
Section 7.07. Indemnification. (a) Trump and the Castle Entities hereby
agree, and agree to cause Castle Associates and Castle Funding to, indemnify the
THCR Entities and each of their officers, directors, partners, controlling
persons, affiliates, agents and employees (other than Trump), and their
respective heirs, successors and assigns (each a "THCR Indemnified Party"),
against any losses, claims, damages, expenses (including the reasonable fees and
expenses of their respective attorneys), liabilities, actions, proceedings,
investigations (formal or informal), inquiries or threats thereof (collectively,
the "Liabilities") to which a THCR Indemnified Party may become subject to and
arising in any matter out of or in connection with (i) any breach of any
representation or warranty made by Trump or the Castle Entities in this
Agreement and (ii) any breach of any covenant or agreement of Trump or the
Castle Entities in this Agreement.
(b) The THCR Entities hereby agree to indemnify Trump and his heirs,
successors and assigns (each a "Trump Indemnified Party" and collectively with a
THCR Indemnified Party, an "Indemnified Party") against any Liabilities to which
a Trump Indemnified Party may become subject to and arising in any matter out of
or in connection with (i) any breach of any representation or warranty made by
the THCR Entities in this Agreement and (ii) any breach of any covenant or
agreement of the THCR Entities in this Agreement.
(c) Each Indemnified Party shall give notice to the Party required
to provide indemnification (the "Indemnifying Party")
<PAGE>33
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom; provided
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld) and the
Indemnified Party may participate in such defense at such party's expense
(unless the Indemnified Party shall have reasonably concluded that there may be
a conflict of interest between the Indemnifying Party and the Indemnified Party
in such action, in which case the fees and expenses of counsel shall be at the
expense of the Indemnifying Party); and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section, unless the
Indemnifying Party is materially prejudiced thereby. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party (which consent shall not unreasonably be withheld),
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a full and unconditional release from all liability
in respect to such claim or litigation. Each Indemnified Party shall furnish
such information regarding itself or the claim in question as an Indemnifying
Party may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
Section 7.08. Voting Agreement. Trump, the beneficial owner of all the
outstanding shares of THCR Class B Common Stock, hereby agrees to vote or cause
to be voted at the THCR Meeting all of such shares and any shares of THCR Common
Stock that he beneficially owns, for approval of the Contribution, which
approval will include the approval and adoption of this Agreement.
ARTICLE VIII
CONDITIONS TO THE CONTRIBUTION
Section 8.01. Conditions of Each Party. The respective obligations of
the THCR Entities and Trump and the Castle Entities to consummate the
transactions contemplated by this Agreement are subject to the fulfillment, at
or prior to the Closing, of each of the following conditions, any or all of
which may be waived in whole or in part, to the extent permitted by applicable
law:
<PAGE>34
(i) the Contribution shall have been duly approved and adopted by the
affirmative vote of a majority of the outstanding shares of THCR Common Stock
and THCR Class B Common Stock, voting as a single class, in accordance with the
DGCL and the certificate of incorporation of THCR;
(ii) the Contribution shall have been duly approved by the affirmative
vote of a majority of the outstanding shares of THCR Common Stock (excluding
shares held by officers and directors of THCR and their affiliates);
(iii) the consent of certain of Trump's personal creditors necessary
to consummate the Contribution and the transactions contemplated thereby shall
have been obtained, and all Liens in favor of any such creditors on the Castle
Equity shall have been released;
(iv) all filings required to be made prior to the Closing with, and
all consents, approvals, permits and authorizations required to be obtained
prior to the Closing from any governmental and regulatory authorities
(including, without limitation, Gaming Authorities) in connection with the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby shall have been made or obtained (as the case
may be) without restrictions, except where the failure to obtain such consents,
approvals, permits and authorizations could not be reasonably be expected to
have a Castle Material Adverse Effect or a THCR Material Adverse Effect, as the
case may be;
(v) no court or governmental or regulatory authority of competent
jurisdiction (including, without limitation, Gaming Authorities) shall have
enacted, issued, promulgated, enforced or entered any statute, rule, regulation,
judgment, decree, injunction or other order (whether temporary, preliminary or
permanent) or taken any action that prohibits the consummation of the
transactions contemplated by this Agreement; provided, however, that the parties
invoking this condition shall use their best efforts to have any such judgment,
decree, injunction or order vacated; and
(vi) the waiting period applicable to the consummation of the
Contribution under the HSR Act shall have expired or been terminated.
Section 8.02. Conditions of Trump. The obligations of Trump and the
Castle Entities to consummate the transactions contemplated by this Agreement
are subject to the fulfillment, at or prior to the Closing, of each of the
following conditions, any or all of which may be waived in whole or in part by
Trump and the Castle Entities to the extent permitted by applicable law:
<PAGE>35
(i) each of the THCR Entities shall have performed in all material
respects all of its respective obligations hereunder required to be performed by
it at or prior to the Closing;
(ii) each of the representations and warranties of the THCR Entities
contained in this Agreement and in any certificate or other writing delivered by
the THCR Entities pursuant hereto shall be true in all material respects at and
as of the Closing Date as if made at and as of such time (except to the extent
it relates to a particular date); and
(iii) Trump shall have received a certificate from THCR, in its own
capacity and as the sole general partner of THCR Holdings, signed by an
executive officer of THCR, to the effect set forth in clauses (i) and (ii) of
this Section.
Section 8.03. Conditions of the THCR Entities. The obligation of the
THCR Entities to consummate the transactions contemplated by this Agreement is
subject to the fulfillment, at or prior to the Closing, of each of the following
conditions, any or all of which may be waived in whole or in part by the THCR
Entities to the extent permitted by applicable law:
(i) Castle Associates shall have been converted into a limited
partnership and the Castle Associates Partnership Agreement shall have been
amended in form and substance satisfactory to the THCR Entities;
(ii) TCHI shall have complied with Section 7.2 of the Castle Warrant
Agreement and all other relevant provisions thereof and the Castle Warrants
shall have been canceled or appropriate provision shall have been made therefor;
(iii) the consent of certain creditors of Castle Associates and Castle
Funding to modify certain terms of the agreements to which such creditors are
parties (in form and substance satisfactory to the THCR Entities) shall have
been obtained;
(iv) Trump and the Castle Entities shall have performed, and shall
have caused Castle Associates and Castle Funding to perform, in all material
respects all of their obligations hereunder required to be performed by them at
or prior to the Closing;
(v) each of the representations and warranties of Trump and the Castle
Entities contained in this Agreement and in any certificate or other writing
delivered by Trump and the Castle Entities pursuant hereto shall be true in all
material respects at and as of the Closing Date as if made at and as of such
time (except to the extent it relates to a particular date); and
<PAGE>36
(vi) the THCR Entities shall have received a certificate signed by
Trump and the Castle Entities to the effect set forth in clauses (iv) and (v) of
this Section.
ARTICLE IX
TERMINATION
Section 9.01. Termination. This Agreement may be terminated and the
Contribution may be abandoned at any time prior to the Closing (whether before
or after approval of this Agreement by the stockholders of THCR):
(i) by joint written consent of Trump, the Castle Entities and the
THCR Entities;
(ii) by Trump and the Castle Entities if any of the conditions
specified in Sections 8.01 or 8.02 have not been satisfied or waived by Trump or
the Castle Entities at such time as such condition is no longer capable of
satisfaction;
(iii) by Trump or TCHI, as the case may be, to act upon an
unsolicited Acquisition Proposal as set forth in Section 5.02 hereof;
(iv) by the THCR Entities if any of the conditions specified in
Sections 8.01 or 8.03 have not been satisfied or waived by the THCR Entities at
such time as such condition is no longer capable of satisfaction; or
(v) by any Party if the Contribution has not been consummated on or
before December 31, 1996; provided, however, that a party may not terminate this
Agreement pursuant to this clause if the failure of such party to fulfill any of
its obligations under this Agreement shall have been the reason that the
Contribution shall not have been consummated on or before said date.
Section 9.02. Effect of Termination. In the event of termination of
this Agreement pursuant to this Article, this Agreement shall forthwith
terminate and (except for the willful breach of this Agreement by any Party)
there shall be no liability on the part of any Party; provided, however, that
Sections 3.16, 4.16, 7.03 (b), (c) and (d), 9.02, 10.01, 10.05, 10.06, 10.07,
10.09, 10.11 and 10.13 and the last sentence of Section 10.03 shall survive the
termination of this Agreement.
<PAGE>37
ARTICLE X
MISCELLANEOUS
Section 10.01. Notices. All notices, requests and other
communications to any Party hereunder shall be in writing (including facsimile
or similar writing) and shall be given:
(i) if to Trump and the Castle Entities to:
Donald J. Trump
725 Fifth Avenue
New York, New York 10022
Facsimile: (212) 755-3230
with copies to:
Andrews & Kurth L.L.P.
425 Lexington Avenue
New York, New York 10017
Facsimile: (212) 850-2800
Attention: Emanuel S. Cherney, Esq.
(ii) if to the THCR Entities to:
Trump Hotels & Casino Resorts, Inc.
Mississippi Avenue and The Boardwalk
Atlantic City, New Jersey 08401
Facsimile: (609) 441-7926
Attention: Robert M. Pickus, Esq.
with copies to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Facsimile: (212) 821-8111
Attention: Daniel D. Rubino, Esq.
or such other address or facsimile number as such Party may hereafter specify by
notice to the other Parties. Each such notice, request or other communication
shall be effective (i) if given by facsimile, when such facsimile is transmitted
to the facsimile number specified in this Section and the appropriate
confirmation is provided, (ii) if given via United States mail, three days after
such notice is deposited in the mail in a postage pre-paid envelope or (iii) if
given by any other means, when delivered at the address specified in this
Section.
Section 10.02. Survival. All the representations, warranties,
agreements or
<PAGE>38
covenants contained herein shall survive the Closing Date for a period of two
years.
Section 10.03. Amendment. Any provision of this Agreement may be
amended by the Parties at any time prior to the Closing, provided that any such
amendment made after the approval of the Contribution by the stockholders of
THCR shall not, without further approval of such stockholders, (i) alter or
change the amount, kind or manner of payment of the consideration to be received
by or (ii) change any other terms or conditions of this Agreement, if any of
such changes, alone or in the aggregate, would materially and adversely affect
the stockholders of THCR. Any amendment to this Agreement shall be in writing
signed by all the Parties.
Section 10.04. Waiver. At any time prior to the Closing, the Parties
may, unless otherwise set forth in this Agreement, (i) extend the time for the
performance of any agreement of the other Party or Parties, (ii) waive any
accuracy in the representations and warranties contained herein or in any
document delivered pursuant hereto or (iii) waive compliance with any agreement
or condition of the other Party or Parties contained herein. Any agreement on
the part of any Party to any such extension or waiver shall be effective only if
set forth in a writing signed on behalf of such Party and delivered to the other
Party or Parties. No failure or delay by any Party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other right, power or privilege.
Section 10.05. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the Parties and their
respective successors and assigns; provided, however, that no Party may assign
or otherwise transfer any of its rights under this Agreement without the consent
of each of the other Parties.
Section 10.06. Governing Law. Except to the extent set forth in Section
10.07 or in the DGCL, this Agreement shall be construed in accordance with and
governed by the internal laws of the State of New York without regard to
principles of conflict of laws.
Section 10.07. Gaming Laws. Each of the provisions of this Agreement
is subject to and shall be enforced in compliance with the Gaming Laws.
Section 10.08. Integration. This Agreement embodies the entire
agreement and understanding among the Parties and supersedes all
<PAGE>39
prior agreements and understandings relating to the subject matter hereof.
Section 10.09. Third Party Beneficiaries. Except as otherwise provided
herein, this Agreement (including the documents and instruments referred to
herein) is not intended to confer upon any other Person any rights or remedies
hereunder.
Section 10.10. Specific Performance. The Parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the Parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, this being in addition to any other remedy to
which they are entitled at law or in equity.
Section 10.11. Remedies Cumulative. All rights, powers and remedies
provided under this Agreement otherwise available at law or in equity shall be
cumulative and not alternative, and the exercise or beginning of any thereof by
any Party shall not preclude the simultaneous or later exercise of any other
such right, power or remedy by such Party.
Section 10.12. Publicity. So long as this Agreement is in effect, each
of the Parties agrees to consult with each other in issuing any press release or
otherwise making any public statement with respect to the Contribution, and none
of them shall issue any press release or make any public statement prior to such
consultation, except as may be required by law or by obligations pursuant to any
listing agreement with any national securities exchange. The commencement of
litigation relating to this Agreement or any proceedings in connection therewith
shall not be deemed a violation of this Section.
Section 10.13. Fees and Expenses. Whether or not the Contribution is
consummated, (i) any costs and expenses incurred by a Party in connection with
the Contribution and the transactions contemplated thereby shall be borne in
full by such Party and (ii) Trump and the Castle Entities shall cause each of
Castle Associates and Castle Funding to pay for their own costs and expenses
incurred in connection with the Contribution and the transactions contemplated
thereby.
Section 10.14. Headings; Counterparts; Effectiveness. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each Party shall have
received counterparts hereof signed by the other Parties.
<PAGE>40
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
TRUMP HOTELS & CASINO RESORTS, INC.
/s/ Nicholas L. Ribis
By: Nicholas L. Ribis
Title: President and Chief
Executive Officer
TRUMP HOTELS & CASINO RESORTS
HOLDINGS, L.P.
By: Trump Hotels & Casino Resorts,
Inc., as general partner
/s/ Nicholas L. Ribis
By: Nicholas L. Ribis
Title: President and Chief
Executive Officer
TC/GP, INC.
/s/ Donald J. Trump
By: Donald J. Trump
Title: President
TRUMP'S CASTLE HOTEL & CASINO, INC.
/s/ Nicholas L. Ribis
By: Nicholas L. Ribis
Title: Vice President and Assistant Secretary
/s/ Donald J. Trump
Donald J. Trump
* The Table of Contents is not part of this Agreement.
<PAGE>1
EXHIBIT 99.1
NEWS RELEASE
FROM: The Marcus Group, Inc. CONTACT: Ilene D. Manahan
500 Plaza Drive (201) 902-9000
Secaucus, NJ 07096-3309
John Burke
(212) 688-8629
FOR: Trump Hotels & Casino Resorts, Inc.
FOR IMMEDIATE RELEASE: June 25, 1996
TRUMP HOTELS & CASINO RESORTS (NYSE:DJT) ANNOUNCES
PROPOSED ACQUISITION OF TRUMP'S CASTLE HOTEL & CASINO
ATLANTIC CITY, NJ -- Trump Hotels & Casino Resorts, Inc. (THCR)
(NYSE:DJT) and Donald J. Trump, chairman of the board of THCR, announced today
that they have entered into an agreement under which Trump Hotels & Casino
Resorts Holdings, L.P. (THCR-LP), a subsidiary of THCR, will acquire the 100%
equity interest in Trump's Castle owned by Donald J. Trump for equity interests
in THCR-LP exchangeable into 5,837,700 shares of THCR common stock and
approximately $885,000 in cash. The number of shares issuable in the transaction
will be subject to adjustment downward if the average of the THCR closing stock
prices for the 20 trading day period ending three trading days prior to the
closing exceeds $38 per share. The number of shares issuable will not otherwise
be adjustable.
Assuming a THCR stock price of $30 per share, the transaction values
Trump's Castle, including the approximately $314 million of assumed Trump's
Castle debt not currently owned by THCR-LP, at approximately $525 million.
THCR-LP recently acquired $59.3 million of the Increasing Rate Subordinated
Pay-In-Kind Notes due 2005 of Trump's Castle Funding Inc. (representing 90% of
the total issue) for approximately $38.7 million, subject to certain rights in
favor of Mr. Trump to repurchase such notes in the event THCR does not acquire
Trump's Castle.
The transaction is expected to close on or about September 30, 1996.
The closing will be subject to satisfaction of a number of conditions, including
the affirmative vote of a majority of the outstanding shares of THCR common
stock (excluding shares held by Mr. Trump and other THCR officers and directors)
and the receipt of various third party approvals and consents.
The agreement was unanimously approved by a committee consisting of
THCR's independent directors. The committee received an opinion from Salomon
Brothers Inc, its financial advisor, that, as of its date, the consideration
to be paid in the transaction is fair, from a financial point of view, to THCR.
