TRUMPS CASTLE FUNDING INC, 10-K, 1999-03-31

TRUMPS CASTLE FUNDING INC
10-K, 1999-03-31
MISCELLANEOUS AMUSEMENT & RECREATION

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

--------------------------

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE

ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES

EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ________ TO ________

COMMISSION FILE NO.: 1-9029

--------------------------

TRUMP'S CASTLE HOTEL & CASINO, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)

NEW JERSEY 11-2735914
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

HURON AVENUE AND BRIGANTINE BOULEVARD
ATLANTIC CITY, NEW JERSEY 08401
(609) 441-6060
(Address, Including Zip Code and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)

TRUMP'S CASTLE FUNDING, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)

NEW JERSEY 11-2739203
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

TRUMP'S CASTLE ASSOCIATES, L.P.
------------------------------------------------------
(Exact name of registrant as specified in its charter)

NEW JERSEY 22-2608426
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
11 3/4% Mortgage Notes due 2003 American Stock Exchange, Inc.
Increasing Rate Subordinated American Stock Exchange, Inc.
Pay-In-Kind Notes due 2005

--------------------------

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

--------------------------

Indicate by check mark whether the Registrants (1) have filed all Reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) have been subject to such
filing requirements for the past 90 days. Yes X No.
--- ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrants' knowledge, in definitive proxy or formation statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Indicate by check mark whether the Registrants have filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes X No.
--- ---

Trump's Castle Hotel & Casino, Inc. and Trump's Castle Funding, Inc. meet
the conditions set forth in General Instructions J(1)(a) and (b) of Form 10-K
and are therefore filing this form with the reduced disclosure format.

As of March 23, 1999, there were 200 shares of Trump's Castle Funding,
Inc.'s Common Stock outstanding.

As of March 23, 1999 there were 100 shares of Trump's Castle Hotel &
Casino, Inc.'s Common Stock, no par value, outstanding. The aggregate market
value of the voting stock of Trump's Castle Hotel & Casino, Inc., Trump's Castle
Funding, Inc. and Trump's Castle Associates, L.P. held by non-affiliates as of
March 30, 1999 of the Registrants was $0.

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<PAGE>
FORM 10-K
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Item Page
- ---- -----
<S> <C>
PART I.............................................................................1

ITEM 1. BUSINESS.............................................................1
General.......................................................................1
Trump Marina..................................................................2
Trademark/Licensing...........................................................5
Certain Indebtedness of the Partnership.......................................6
Atlantic City Market..........................................................7
Competition...................................................................8
Gaming and Other Laws and Regulations........................................11
ITEM 2. PROPERTIES...........................................................17
ITEM 3. LEGAL PROCEEDINGS....................................................18
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..................20

PART II...........................................................................20
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.............20
ITEM 6. SELECTED FINANCIAL DATA..............................................21
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS......................22
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK...........26
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA..........................26
ITEM 9. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE................................................26

PART III..........................................................................27
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS.....................................27
ITEM 11. EXECUTIVE COMPENSATION...............................................31
Employment Agreements........................................................32
Compensation of the Board of Directors.......................................32
Compensation Committee Interlocks and Insider Participation..................32
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.......34
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................34

PART IV...........................................................................35
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.......35

IMPORTANT FACTORS RELATING TO FORWARD LOOKING STATEMENTS..........................39

SIGNATURES........................................................................40
TRUMP'S CASTLE HOTEL & CASINO, INC.............................................40
TRUMP'S CASTLE FUNDING, INC....................................................41
TRUMP'S CASTLE ASSOCIATES, L.P.................................................41

INDEX TO FINANCIAL STATEMENTS....................................................F-1
</TABLE>

<PAGE>

PART I

ITEM 1. BUSINESS.

GENERAL

Trump's Castle Funding, Inc. ("Funding") was incorporated under the
laws of the State of New Jersey in May 1985 and is wholly owned by Trump's
Castle Associates, L.P. (the "Partnership"). Funding was formed to serve as a
financing corporation to raise funds for the benefit of the Partnership. Trump's
Castle Hotel & Casino, Inc. ("TCHI"), the general partner of the Partnership,
was incorporated under the laws of the State of New Jersey in April 1985, and is
wholly owned by Trump Hotels & Casino Resorts Holdings, L.P. ("THCR Holdings").
Since Funding and TCHI have no business operations, their ability to service
their indebtedness is completely dependent upon funds they receive from the
Partnership. Accordingly, the discussion in this Form 10-K relates primarily to
the Partnership and its operations.

The Partnership was formed in 1985 for the sole purpose of acquiring
and operating Trump's Castle Casino Resort, a luxury casino hotel located in the
Marina District of Atlantic City, New Jersey (the "Marina District"). During the
second quarter of 1997 the Partnership rethemed the property with a nautical
emphasis and renamed it Trump Marina Hotel Casino ("Trump Marina"). Prior to the
acquisition of Trump Marina (which at that time was Trump's Castle Casino
Resort) (the "Castle Acquisition") on October 7, 1996 by THCR Holdings, the
partners in the Partnership were TC/GP, Inc., currently known as Trump Casinos
II, Inc. ("TCI-II"), which had a 37.5% interest in the Partnership, Donald J.
Trump ("Trump"), who had a 61.5% interest in the Partnership, and TCHI, which
had a 1% interest in the Partnership. Trump, by virtue of his ownership of
TCI-II and TCHI, was the beneficial owner of 100% of the common equity interest
in the Partnership, subject to the right of holders of warrants for 50% of the
common stock of TCHI (the "Castle Warrants") to acquire an indirect beneficial
interest in 0.5% of the common equity interest in the Partnership. Subsequent to
the Castle Acquisition, the partners in the Partnership are THCR Holdings, which
has a 99% limited partnership interest in the Partnership, and TCHI, which has a
1% general partnership interest in the Partnership. THCR Holdings, by virtue of
its ownership of TCHI, is the beneficial owner of 100% of the common equity
interest in the Partnership.

The Castle Acquisition has further strengthened the position of Trump
Hotels & Casino Resorts, Inc. ("THCR") as an industry leader. The Castle
Acquisition has provided THCR with a significant presence in the Marina
District, the principal focus of expansion in the Atlantic City gaming market
(the "Atlantic City Market"). In addition, the Castle Acquisition has provided
further opportunities for operational efficiencies and economies of scale and
eliminated the perceived conflict of interest caused by the differing ownership
of Trump Marina and the other THCR properties in Atlantic City. Ownership of
Trump Marina will enable THCR to retain patrons that may be drawn from The
Boardwalk to the Marina District by new casino development in the Marina
District. The Castle Acquisition has also enabled THCR to benefit from (i) the
excellent condition of the current facilities at Trump Marina, which have been
designed to accommodate additional development with minimal disruption to
existing operations, and (ii) the proximity of Trump Marina to the "H-Tract," an
approximately 150-acre parcel of land proposed to be Atlantic City's newest area
of casino hotel development (the "H-Tract").

On October 23, 1996, Trump Casino Services, L.L.C., ("TCS"), Trump
Plaza Associates ("Plaza Associates"), Trump Taj Mahal Associates ("Taj
Associates") and the Partnership entered into an Amended and Restated Services
Agreement pursuant to which TCS provides each of Plaza Associates, Taj
Associates and the Partnership certain management, financial and other functions
and services necessary and incidental to the respective operations of each of
their casino hotels. Management believes that TCS's services to the Partnership
will result in cost savings and operational synergies. Trump Communications,
L.L.C., ("Trump Communications"), a New Jersey limited liability company and a
subsidiary of TCS, was formed on January 31, 1997 for the purpose of realizing
cost savings and operational synergies by consolidating advertising functions
of, and providing certain services to, each of Plaza Associates, Taj Associates
and the Partnership.

The Partnership operates in only one industry segment. See "Selected
Financial Data."

<PAGE>

TRUMP MARINA

The Partnership owns and operates Trump Marina, a luxury casino hotel
located on 14.7 acres in the Marina District approximately two miles from The
Boardwalk. Trump Marina is approximately one-quarter mile from the H-Tract.
Trump Marina consists of a 27-story hotel tower with 728 rooms, including 153
suites, 97 of which are "Crystal Tower" luxury suites, and contains
approximately 75,900 square feet of gaming space. Trump Marina offers 2,167 slot
machines, 92 table games, 8 restaurants, approximately 58,000 square feet of
convention, ballroom and meeting space, a 9-story parking garage, which can
accommodate approximately 3,000 cars, a 540-seat cabaret theater, two cocktail
lounges, a swimming pool, tennis courts, a health club and a roof-top helipad.
In addition, Trump Marina operates a 645-slip marina which is adjacent to the
casino hotel. An elevated enclosed walkway connects Trump Marina to a two-story
building which contains offices, a nautically themed retail store, a cocktail
lounge and a 240-seat gourmet restaurant that overlooks the marina and the
Atlantic City skyline. As a result of its high quality amenities, its
exceptional customer service and its geographical location, Trump Marina
distinguishes itself as a desirable alternative to the Atlantic City casinos
located on The Boardwalk.

MARKETING STRATEGY

Management's recent retheming of Trump Marina is intended to build upon
the casino's established customer base by attracting a younger crowd to the
facility. In keeping with this initiative, management has aimed to differentiate
Trump Marina from other Atlantic City casinos by offering contemporary
entertainment attractions and introducing its current "Wild Side" marketing
campaign. The "Wild Side" marketing program consists of a coordinated
advertising, entertainment and marketing campaign that is geared toward a
younger generation of patrons but will not exclude Trump Marina's established
customer base. Management, which developed the "Wild Side" marketing program
after careful study of the Atlantic City market, seeks to accomplish its goals
via an advertising campaign with a fun and youthful appeal, as well as providing
varied and extensive contemporary entertainment in the Grand Cayman Ballroom,
"The Shell" (a cabaret style theater), "The Wave" (a night club), "The Deck"
(for outdoor summertime entertainment) and large outdoor performances billed as
"Rock the Dock" concerts.

Service. By providing and maintaining a first-class facility and
exceptional service, Trump Marina has earned the Five Star Diamond Award from
the American Academy of Hospitality Sciences, the American Automobile
Association's "Four Diamond" rating and a "Four Star" Mobil Travel Guide rating.
Trump Marina provides a broadly diversified gaming and entertainment experience
consistent with the "Trump" name and reputation for quality amenities and
first-class service.

Gaming Environment. To stay abreast of current gaming trends in
Atlantic City, Trump Marina's management continuously monitors the configuration
of the casino floor and the games it offers to patrons with a view towards
making changes and improvements. A sophisticated computerized slot tracking and
marketing system is employed to perform this analysis. This monitoring has
confirmed a recent trend in the Atlantic City market towards fewer table games
and more slot machines. For example, slot machine revenue for the Atlantic City
market increased from 54.6% of the industry gaming revenue in 1988 to 70.8% of
industry gaming revenue in 1998. Trump Marina experienced a similar increase,
with slot revenue increasing from 52.5% of gaming revenue in 1988 to 71.4% of
gaming revenue in 1998. In response to this trend, management devoted more of
its casino floor space to slot machines between 1994 and 1998, and has replaced
substantially all of its slot machines with newer machines. Trump Marina has
also responded to this trend by introducing its Monte Carlo club for high-end
slot players.

"Comping" Strategy. In order to compete effectively with other Atlantic
City casino hotels, Trump Marina offers complimentaries primarily to patrons
with a demonstrated propensity to wager at Trump Marina. The policy at Trump
Marina is to focus promotional activities, including complimentaries, on middle
and upper middle market "drive-in" patrons who visit Atlantic City frequently
and have proven to be the most profitable market segment. A patron's propensity
to wager is determined by a review of the patron's prior gaming history at Trump
Marina as well as other gaming establishments in Atlantic City. Each patron is
analyzed to ensure that the

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<PAGE>

patron's gaming activity, net of any complimentaries, is profitable to the
Partnership.

Entertainment and Special Events. Trump Marina pursues a coordinated
program of headline entertainment and special events. Trump Marina offers
headline entertainment approximately twenty times a year in its main ballroom,
complimented by contemporary acts each weekend in the cabaret theater. As a part
of its marketing plan, Trump Marina offers special events aimed at its core,
middle and upper-middle market segments. Trump Marina also hosts special events
on an invitation-only basis in an effort to attract existing targeted gaming
patrons and build loyalty among these patrons. These special events include golf
tournaments, theme parties and gaming tournaments. Headline entertainment is
scheduled to complement these special events. In addition, as part of its "Wild
Side" marketing campaign, Trump Marina features outdoor bands nightly (in
season) as well as outdoor concerts promoted under the "Rock the Dock" theme.
Recent performances have included the Beach Boys, the Atlantic City premiere of
Van Halen, the artist formerly known as Prince, and comedian Chris Rock.

Player Development and Casino Hosts. Trump Marina has contracts with
sales representatives in New Jersey, New York and other states to promote the
casino hotel. Trump Marina has sought to attract more middle market slot
patrons, as well as premium players, through its "junket" marketing operations,
which involve attracting groups of patrons by providing airfare, gifts and room
accommodations. Player development personnel host special events, offer
incentives and contact patrons directly in an effort to attract high-limit table
game patrons.

The casino hosts at Trump Marina assist table game patrons, and the
slot sales representatives at Trump Marina assist slot patrons on the casino
floor, make room and dinner reservations and provide general assistance. Slot
sales representatives also solicit Marina Card (the frequent player
identification slot card) sign-ups in order to increase Trump Marina's marketing
base.

Promotional Activities. The Marina Card constitutes a key element in
the direct marketing program of Trump Marina. Slot machine players are
encouraged to register for and utilize their personalized Marina Card to earn
various complimentaries based upon their level of play. The Marina Card is
inserted during play into a card reader attached to the slot machine for use in
computerized rating systems. These computer systems record data about the
cardholder, including playing preferences, frequency and denomination of play
and the amount of gaming revenues produced. Slot sales and management personnel
are able to monitor the identity and location of the cardholder and the
frequency and denomination of the cardholder's slot play. They also use this
information to provide attentive service to the cardholder on the casino floor.

Trump Marina designs promotional offers, conveyed via direct mail and
telemarketing, to patrons expected to provide revenues based upon their
historical gaming patterns. Such information is gathered on slot wagering by the
Marina Card and on table wagering by the casino games supervisor. Trump Marina
conducts slot machine and table game tournaments in which cash prizes are
offered to a select group of players invited to participate in the tournament
based upon their tendency to play. Such players tend to play at their own
expense during "off-hours" of the tournament. At times, tournament players are
also offered special dining and entertainment privileges that encourage them to
remain at Trump Marina.

Credit Policy. Historically, Trump Marina has extended credit on a
discretionary basis to certain qualified patrons. Credit play, as a percentage
of total dollars wagered, was approximately 31.4%, 32.4% and 30.1% for 1996,
1997 and 1998, respectively. As part of Trump Marina's business strategy, Trump
Marina has imposed stricter standards on applications for new or additional
credit. Trump Marina bases credit limits on each individual patron's
creditworthiness, as determined by an examination of the following criteria: (i)
checking each patron's personal checking account for current and average
balances; (ii) performing a credit check on each domestic patron; and (iii)
checking each patron's credit limits and indebtedness at all casinos in the
United States as well as many island casinos. The above determination of a
patron's continued creditworthiness is performed for continuing patrons on a
yearly basis or more frequently if Trump Marina deems a re-determination of
credit

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worthiness is necessary. In addition, depositing of markers is regulated by the
State of New Jersey. Markers in increments of $1,000 or less are deposited in a
maximum of 7 days; markers of increments of $1,001 to $5,000 are deposited in a
maximum of 14 days; and markers in increments of over $5,001 are deposited in a
maximum of 45 days. Markers may be deposited sooner at the request of patrons or
at Trump Marina's discretion.

Bus Program. Trump Marina has a bus program which transports
approximately 725 gaming patrons per day during the week and 750 per day on the
weekends. The Partnership's bus program offers incentives and discounts to
certain scheduled and chartered bus customers. Based on historical surveys,
management has determined that gaming patrons who arrive by special charters as
opposed to scheduled bus lines or who travel distances greater than 60 miles are
more likely to create higher gaming revenue. Accordingly, Trump Marina's
marketing efforts are focused on such bus patrons.

TRUMP MARINA RETHEMING

In 1997, Trump Marina completed a project to retheme the casino hotel
with a nautical emphasis, targeting younger customers by offering contemporary
entertainment attractions and emphasizing Trump Marina's energetic, lively
atmosphere.

EMPLOYEES AND LABOR RELATIONS

As of December 31, 1998, the Partnership employed approximately 3,400
full and part-time employees, of whom approximately 1,200 were subject to
collective bargaining agreements. The Partnership's collective bargaining
agreement with Local No. 54 expires on September 15, 1999. Such agreement
extends to approximately 900 employees. In addition, four other collective
bargaining agreements, which expire in the year 2000, cover approximately 300
maintenance employees. The Partnership believes that its relationships with its
employees are satisfactory. Funding and TCHI have no employees.

Certain employees of the Partnership must be licensed by or registered
with the New Jersey Casino Control Commission (the "CCC"), depending on the
nature of the position held. Casino employees are subject to more stringent
licensing requirements than non-casino employees, and must meet applicable
standards pertaining to such matters as financial responsibility, good
character, ability, casino training, experience and New Jersey residency. Such
regulations have resulted in significant competition for employees who meet
these requirements.

HISTORICAL BACKGROUND

General. Funding was incorporated under the laws of the State of New
Jersey in May 1985 and is wholly owned by the Partnership. Funding was formed to
serve as a financing corporation to raise funds as an agent of the Partnership.
TCHI, the general partner of the Partnership, was incorporated under the laws of
the State of New Jersey in April 1985, and is wholly owned by THCR Holdings.
Since Funding and TCHI have no business operations, their ability to service
their indebtedness is completely dependent upon funds they receive from the
Partnership. Accordingly, the following discussion is related primarily to the
Partnership and its operations.

PIK Note Acquisition. On June 23, 1995, the Partnership entered into an
agreement with Hamilton Partners, L.P. ("Hamilton") which granted the
Partnership an option (the "Option") to acquire the Increasing Rate Subordinated
Pay-in-Kind Notes due 2005 of Funding (the "PIK Notes") (which are currently
subordinated to the New Senior Notes (as defined), the Working Capital Loan (as
defined) and the Mortgage Notes (as defined)) owned by Hamilton (the "Option
Agreement"). The Option was granted to the Partnership in consideration of $1.9
million of aggregate payments to Hamilton. The Option was exercisable at a price
equal to 60% of the aggregate principal amount of the PIK Notes delivered by
Hamilton, with accrued but unpaid interest, plus 100% of the PIK Notes issued to
Hamilton as interest subsequent to June 23, 1995. Pursuant to the terms of the
Option Agreement, upon the occurrence of certain events within 18 months of the
time the Option is exercised, the Partnership was required to make an additional
payment to Hamilton of up to 40% of the principal amount of the PIK Notes. On
May 21, 1996, the Partnership assigned the Option to THCR Holdings, which, on
that same date, exercised the Option and

4
<PAGE>

acquired approximately 90% of the then outstanding PIK Notes for approximately
$38.7 million, in exchange for which THCR Holdings received an aggregate of
approximately $59.3 million principal amount of PIK Notes.

Castle Acquisition. On October 7, 1996, THCR Holdings acquired from
Trump all of the outstanding equity of the Partnership. The following
transactions were effected in connection with the Castle Acquisition:

(i) Trump contributed to THCR Holdings his 61.5% equity interest in the
Partnership, in consideration of which he received a 9.52854% limited
partnership interest in THCR Holdings, exchangeable into 3,626,450 shares
of THCR's Common Stock, par value $.01 per share (the "THCR Common Stock")
(valuing each such share at $30.00 (the "THCR Stock Contribution Value"));

(ii) TCI-II contributed to THCR Holdings its 37.5% equity interest in
the Partnership in consideration of which it received a 5.81009% limited
partnership interest in THCR Holdings, exchangeable into 2,211,250 shares
of THCR Common Stock (valuing each such share at the THCR Stock
Contribution Value); and

(iii) THCR-TCHI Merger Corp., a Delaware corporation and a wholly owned
subsidiary of THCR Holdings ("Castle Merger Sub"), merged (the "TCHI
Merger") with and into TCHI (holder of a 1% equity interest in the
Partnership) whereupon (x) each share of common stock of TCHI, par value
$.01 per share (the "TCHI Common Stock"), outstanding immediately prior to
the TCHI Merger was converted into the right to receive $.8845 in cash (the
"TCHI Consideration") and each share of common stock of Castle Merger Sub
was converted into the right to receive one share of common stock of the
surviving corporation of the TCHI Merger and (y) each holder of the Castle
Warrants issued under a warrant agreement, dated as of December 30, 1993,
between TCHI and First Bank National Association, as warrant agent, became
entitled to receive, for each former share of TCHI Common Stock for which
each Castle Warrant was exercisable, an amount in cash equal to the TCHI
Consideration.

In the aggregate, Trump received (i) a limited partnership interest in
THCR Holdings convertible into 5,837,700 shares of THCR Common Stock and (ii)
$884,550 in cash. On October 7, 1996, the closing sale price of the THCR Common
Stock on the New York Stock Exchange was $22.625 per share.

As a result of the Castle Acquisition, on October 7, 1996, THCR's and
Trump's beneficial equity interest in THCR Holdings was approximately 63.4% and
36.6%, respectively, and Trump's beneficial equity interest in THCR Holdings was
exchangeable into 13,918,723 shares of THCR Common Stock. The Castle Acquisition
was approved by the stockholders of THCR on September 30, 1996.

April 1998 Refinancing. On April 17, 1998, Funding refinanced a portion
of the Partnership's outstanding debt, on a consolidated basis, consisting of
$38 million outstanding on a term loan with a bank (the "Term Loan") and its
11 1/2% Senior Secured Notes due 2000 (the "Old Senior Notes") by issuing
10 1/4% Senior Secured Notes due 2003 (the "New Senior Notes"). The proceeds
from the issuance of the New Senior Notes were used to redeem all of the issued
and outstanding Old Senior Notes at 100% of their principal amount and to repay
the Term Loan in full. In conjunction with this refinancing, TCHI obtained a
working capital credit facility (the "Working Capital Loan"). Both the New
Senior Notes and the Working Capital Loan are guaranteed by the Partnership. The
New Senior Notes have an outstanding principal amount of $62,000,000, bear
interest at the rate of 10 1/4% per annum, payable semi-annually each April and
October and mature on April 30, 2003. The Working Capital Loan has an
outstanding principal amount of $5,000,000, bears interest at the rate of
10 1/4% per annum, payable semi-annually each April and October and matures on
April 30 , 2003.

TRADEMARK/LICENSING

Subject to certain restrictions, THCR has the exclusive right to use
the "Trump" name and likeness in connection with gaming and related activities
(the "License") pursuant to a trademark license agreement between Trump and THCR
(the "License Agreement"). Pursuant to the License Agreement, Trump granted to
THCR the world-wide right and license to use the names "Trump," "Donald Trump"
and "Donald J. Trump" (including

5
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variations thereon, the "Trump Names") and related intellectual property rights
(collectively, the "Marks") in connection with casino and gaming activities and
related services and products. The License Agreement does not restrict or
restrain Trump from the right to use or further license the Trump Names in
connection with services and products other than casino services and products.

The License is for a term of the later of: (i) June 2015; (ii) such
time as Trump and his affiliates no longer hold a 15% or greater voting interest
in THCR; or (iii) such time as Trump ceases to be employed or retained pursuant
to an employment, management, consulting or similar services agreement with
THCR. Upon expiration of the term of the License, Trump will grant THCR a
non-exclusive license for a reasonable period of transition on terms to be
mutually agreed upon between Trump and THCR. Trump's obligations under the
License Agreement are secured by a security agreement (the "Trademark Security
Agreement"), pursuant to which Trump granted THCR a first priority security
interest in the Marks for use in connection with casino services, as well as
related hotel, bar and restaurant services.

CERTAIN INDEBTEDNESS OF THE PARTNERSHIP

The Mortgage Notes bear interest, payable semi-annually in cash, at
11 3/4% and mature on November 15, 2003 (the "Mortgage Notes"). The Mortgage
Notes may be redeemed at Funding's option at a specified percentage of the
principal amount commencing in 1998.

The Mortgage Notes are secured by a promissory note of the Partnership
to Funding (the "Partnership Note") in an amount and with payment terms
necessary to service the Mortgage Notes. The Partnership Note is secured by a
mortgage on Trump Marina and substantially all of the other assets of the
Partnership. The Partnership Note has been assigned by Funding to the trustee of
the indenture under which the Mortgage Notes were issued to secure the repayment
of the Mortgage Notes. In addition, the Partnership has guaranteed the payment
of the Mortgage Notes (the "Guaranty"), which is secured by a mortgage on Trump
Marina and substantially all of the assets of the Partnership. The Partnership
Note and the Guaranty are expressly subordinated to the indebtedness of the New
Senior Notes and the Working Capital Loan (collectively, the "Senior
Indebtedness") and the liens of the mortgages securing the Partnership Note and
the Guaranty are subordinate to the liens securing the Senior Indebtedness.

The PIK Notes bear interest payable, at Funding's option in whole or in
part in cash and through the issuance of additional PIK Notes, semi-annually at
the rate of 7% through September 30, 1994 and 13 7/8% through November 15, 2003.
After November 15, 2003, interest on the PIK Notes is payable in cash at the
rate of 13 7/8%. The PIK Notes mature on November 15, 2005. The PIK Notes may be
redeemed at Funding's option at 100% of the principal amount under certain
conditions, as described in the indenture governing the PIK Notes, and are
required to be redeemed from a specified percentage of any equity offering which
includes the Partnership. Interest has been accrued using the effective interest
method. On May 15, 1998 and November 15, 1998, the semi-annual interest payments
of $5.6 million and $6.0 million, respectively, were paid by the issuance of
additional PIK Notes.

The PIK Notes are secured by a subordinated promissory note of the
Partnership to Funding (the "Subordinated Partnership Note"), which has been
assigned to the trustee for the PIK Notes, and the Partnership has issued a
subordinated guaranty (the "Subordinated Guaranty") of the PIK Notes. The
Subordinated Partnership Note and the Subordinated Guaranty are expressly
subordinated to the Senior Indebtedness, the Partnership Note and the Guaranty.

The New Senior Notes bear interest, payable semi-annually in cash, at
10 1/4% and mature on April 30, 2003. Similar to the Mortgage Notes, the New
Senior Notes are secured by an assignment of a promissory note of the
Partnership (the "Senior Partnership Note") which is in turn secured by a
mortgage on Trump Marina and substantially all of the other assets of the
Partnership. The Partnership has guaranteed the payment of the New Senior Notes
(the "Senior Guaranty"), which Senior Guaranty is secured by a mortgage on Trump
Marina and substantially all of the assets of the Partnership. The Partnership
has also guaranteed the payment of the Working

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Capital Loan (the "TCHI Guaranty"), which TCHI Guaranty is secured by a mortgage
on Trump Marina and substantially all of the assets of the Partnership.

The terms of the Notes, the Mortgage Notes and the PIK Notes include
limitations on the amount of additional indebtedness the Partnership may incur,
distributions of the Partnership's capital, investments and other business
activities.

ATLANTIC CITY MARKET

The Atlantic City Market has demonstrated continued growth despite the
recent proliferation of new gaming venues across the country. The 12 casino
hotels in Atlantic City generated approximately $4.05 billion in gaming revenues
in 1998, an approximately 3.3% increase over 1997 gaming revenues of
approximately $3.91 billion. From 1992 to 1998, total gaming revenues in
Atlantic City have increased approximately 25.8%, while hotel rooms increased by
34.0% during that period. Although total visitor volume to Atlantic City
remained relatively constant in 1998, the volume of bus customers increased to
9.9 million in 1998, still representing a decline from 11.7 million in 1991. The
volume of customers traveling by other means to Atlantic City has grown from
20.4 million in 1992 to 24.4 million in 1998.

Casino revenue growth in Atlantic City has lagged behind that of other
traditional gaming markets, principally Las Vegas, for the last five years.
Management believes that this relatively slower growth is primarily attributable
to two key factors. First, there were no significant additions to hotel capacity
in Atlantic City until 1996. Las Vegas visitor volumes have increased, in part,
due to the continued addition of new hotel capacity. Both markets have exhibited
a strong correlation between hotel room inventory and total casino revenues.
Secondly, the regulatory environment and infrastructure problems in Atlantic
City have made it more difficult and costly to operate. Total regulatory costs
and tax levies in New Jersey have exceeded those in Nevada since inception, and
there is generally a higher level of regulatory oversight in New Jersey than in
Nevada. The infrastructure problems, manifested by impaired accessibility of the
casinos, downtown Atlantic City congestion and the condition of the areas
surrounding the casinos have made Atlantic City less attractive to the gaming
customer.

Total Atlantic City slot revenues increased 3.9% in 1998 from 1997,
continuing a trend of increases over the past six years. From 1992 through 1998,
slot revenue growth in Atlantic City has averaged 5.6% per year. Total table
game revenue increased 2.1% in 1998, while table game revenue from 1992 to 1998
has increased on average 1.0% per year. Management believes the slow growth in
table game revenue is primarily attributable to two factors. First, the slot
product has been significantly improved over the last five years. Bill
acceptors, new slot machines, video poker and blackjack and other improvements
have increased the popularity of slot play among a wider universe of casino
patrons. Casino operators in Atlantic City have added slot machines in favor of
table games due to increased public acceptance of slot play and due to slot
machines' comparatively higher profitability as a result of lower labor and
support costs. Since 1992, the number of slot machines in Atlantic City has
increased by 58.8%, while the number of table games has increased by 6.4%. Slot
revenues increased from 66% of total casino revenues in 1992 to 69.8% in 1998.
The second reason for historic slow growth in table game revenue is that table
game players are typically higher end players and are more likely to be
interested in overnight stays and other amenities. During peak season and
weekends, room availability in Atlantic City is currently inadequate to meet
demand, making it difficult for casino operators to aggressively promote table
play.

The regulatory environment in Atlantic City has improved over the past
several years. Most significantly, 24-hour gaming has been approved, poker and
keno have been added and regulatory burdens have been reduced. In particular,
comprehensive amendments to New Jersey gaming laws were made in January 1995,
which have eliminated duplicative regulatory oversight and channeled a certain
portion of operator's funds through 2003 from regulatory support into uses of
the New Jersey Casino Reinvestment Development Authority (the "CRDA").
Administrative costs of regulation will be reduced while increasing funds will
be available for new development in Atlantic City. In addition, in 1994,
legislation was enacted which eliminated the requirement that a casino consist
of a "single room" in a casino hotel. A casino may now consist of "one or more
locations or rooms" approved by the CCC for casino gaming.

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Atlantic City's new convention center, with approximately 500,000
square feet of exhibit and pre-function space, 45 meeting rooms, food-service
facilities and a 1,600-car underground parking garage, is the largest exhibition
space between New York City and Washington, D.C. It is located at the base of
the Atlantic City Expressway and opened in May 1997. Atlantic City's old
convention center is located on The Boardwalk, physically connected to the Trump
Plaza Hotel and Casino ("Trump Plaza") and owned by the New Jersey Sports and
Exposition Authority (the "NJSEA"). Its East Hall, which was completed in 1929
and is listed on the National Register of Historic Places, will, with funding
approved by the CRDA, in February 1999, undergo a $72 million renovation to be
completed by the summer of 2001. These improvements, while preserving the
historic features of this landmark, will convert it into a modern special events
venue and will include new seating for 10,000 to 14,000 in its main auditorium,
and new lighting, sound and television-ready wiring systems. Construction will
halt in both September 1999 and September 2000 to avoid disrupting the Miss
America Pageant presentations during those years.

In addition to the planned casino expansions, major infrastructure
improvements have been completed. The CRDA oversaw the development of the $88
million "Grand Boulevard" corridor that links the new convention center with The
Boardwalk. The project was completed in early 1998. Furthermore, as set forth in
a November 1998 agreement with the CRDA, a $20.8 million beautification project
is now in progress for the five block Virginia and Maryland Avenue corridors
which connect the thirty acre Boardwalk site of the Trump Taj Mahal Casino
Resort (the "Taj Mahal") to Absecon Boulevard (Route 30), one of Atlantic City's
principal access roadways. This comprehensive project includes the repair,
resurfacing and resignalizing of these roads and the installation of new
roadside lighting, the acquisition and demolition of deteriorated structures on
Virginia Avenue and, to a lesser extent, Maryland Avenue, and the installation
and maintenance of roadside landscaping on those sites, the construction of a
twenty-two unit subdivision of two-story, single unit and duplex residences
which will front on opposing sides of Virginia Avenue, and the improvement of
the exterior facades of selected Virginia Avenue and other structures, with
consents of the owners, to achieve a harmony and continuity of design among
closely proximate properties. Construction of the roadway and housing elements
of this project is expected to commence during or about the summer of 1999.

Management believes that these gaming regulatory reforms will serve to
permit future reductions in operating expenses of casinos in Atlantic City and
to increase the funds available for additional infrastructure development
through the CRDA. Due principally to an improved regulatory environment, general
improvement of economic conditions and high occupancy rates, significant
investment in the Atlantic City Market has been initiated and/or announced.
Management believes that these increases in hotel capacity, together with
infrastructure improvements, will be instrumental in stimulating future revenue
growth in the Atlantic City Market. See "-Competition."

COMPETITION

Atlantic City. Competition in the Atlantic City Market is intense.
Trump Marina competes with other casino hotels located in Atlantic City,
including the Trump Plaza and the Taj Mahal which are under the common ownership
of THCR Holdings. At present, there are 12 casino hotels located in Atlantic
City, including Trump Marina, Trump Plaza and the Taj Mahal, all of which
compete for patrons. Trump Marina primarily competes with other Atlantic City
casinos by, among other things, providing superior products and facilities,
premier locations, name recognition and targeted marketing strategies. In
addition, there are several sites on The Boardwalk and in the Marina District on
which casino hotels could be built in the future and various applications for
casino licenses have been filed and announcements with respect thereto made from
time to time (including a casino resort joint venture (the "Mirage Joint
Venture") between Mirage and the Boyd Gaming Corporation to be built in the
Marina District which will contain 1,200 rooms and is scheduled to be completed
in the spring of 2002, and a casino resort by MGM Grand, Inc. to be built on The
Boardwalk after MGM Grand, Inc. purchases the land chosen as the site for the
casino resort). Although management is not aware of any current construction on
such sites by third parties, infrastructure improvements in the area have begun.
Mirage intends to build a casino resort called Le Jardin which will contain
3,500-4,000 rooms and will be linked to the resort created as a result of the
Mirage Joint Venture. Substantial new expansion and development activity has
recently been completed or has been announced in Atlantic City, including the
expansion at Harrah's, Hilton, Caesar's, Resorts,

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Tropicana and Bally's Wild West Casino, which intensifies competitive pressures
in the Atlantic City Market. While management believes that the addition of
hotel capacity would be beneficial to the Atlantic City Market generally, there
can be no assurance that such expansion would not be materially disadvantageous
to Trump Marina. There also can be no assurance that the Atlantic City
development projects which are planned or are underway will be completed.

Trump Marina also competes, or will compete, with facilities in the
northeastern and mid-Atlantic regions of the United States at which casino
gaming or other forms of wagering are currently, or in the future may be,
authorized. To a lesser extent, Trump Marina faces competition from gaming
facilities nationwide, including land-based, cruise line, riverboat and dockside
casinos located in Colorado, Illinois, Indiana, Iowa, Louisiana, Mississippi,
Missouri, Nevada, South Dakota, Ontario (Windsor and Niagara Falls), the
Bahamas, Puerto Rico and other locations inside and outside the United States,
and from other forms of legalized gaming in New Jersey and in its surrounding
states such as lotteries, horse racing (including off-track betting), jai alai,
bingo and dog racing, and from illegal wagering of various types. New or
expanded operations by other persons can be expected to increase competition and
could result in the saturation of certain gaming markets. In September 1995, New
York introduced a keno lottery game, which is played on video terminals that
have been set up in approximately 1,800 bars, restaurants and bowling alleys
across the state. Bay Cruises is operating a gambling cruise ship where patrons
are taken from a pier in Sheepshead Bay in Brooklyn, New York to international
waters to gamble. In September 1997, another gambling cruise ship was launched
off the coast of Montauk, New York. On April 24, 1998, Freeport Casino Cruises
began operating a gambling ship in Long Island, New York. Manhattan Cruises, a
company offering gambling cruises departing from Manhattan, New York City since
January 28, 1998, suspended operations in early May 1998, but has announced
plans to resume operations shortly. Other companies (including South Shore
Cruise Lines, President Casino and Circle Line) are currently seeking permission
to operate similar cruises in the New York City area. On December 5, 1997, the
mayor of New York City proposed the construction of a casino on Governors
Island, located in the middle of New York Harbor; however, the proposal would
require an amendment to the New York State Constitution and the sale of the
island to New York by the federal government. In Delaware, a total of
approximately 2,600 slot machines were installed at three horse racetracks in
1996. Initial legislation allowed a maximum of 1,000 slot machines at each of
the three racetracks. In 1998, the Delaware legislature approved a bill which
would more than double the number of slot machines allowed at the three
racetracks. At the end of 1998, there was a total of approximately 3,000 slot
machines installed and the additional approved machines have become operational
during the first quarter of 1999. West Virginia also permits slot machines at
racetracks, and track owners in several other states, including Maryland and
Pennsylvania, are seeking to do the same. In December 1996, the temporary Casino
Niagara opened in Niagara Falls, Ontario. Ontario officials expect that
two-thirds of Casino Niagara's patrons will come from the United States,
predominantly from western New York. In February 1998, the Ontario Casino
Commission designated a consortium whose principal investor is Hyatt Hotels
Corporation as the preferred developer of the permanent Casino Niagara.
Moreover, Trump Marina may also face competition from various forms of internet
gambling.

In addition to competing with other casino hotels in Atlantic City and
elsewhere, by virtue of their proximity to each other and the common aspects of
certain of their respective marketing efforts, including the common use of the
"Trump" name, Trump Marina competes directly with Trump Plaza and the Taj Mahal
for gaming patrons.

Other Competition. In addition, Trump Marina faces competition from
casino facilities in a number of states operated by federally recognized Native
American tribes. Pursuant to the Indian Gaming Regulatory Act ("IGRA"), which
was passed by Congress in 1988, any state which permits casino-style gaming
(even if only for limited charity purposes) is required to negotiate gaming
compacts with federally recognized Native American tribes. Under IGRA, Native
American tribes enjoy comparative freedom from regulation and taxation of gaming
operations, which provides them with an advantage over their competitors,
including Trump Marina. In March 1996, the United States Supreme Court struck
down a provision of IGRA which allowed Native American tribes to sue states in
federal court for failing to negotiate gaming compacts in good faith. Management
cannot predict the impact of this decision on the ability of Native American
tribes to negotiate compacts with states.

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In 1991, the Mashantucket Pequot Nation opened Foxwoods, a casino
facility in Ledyard, Connecticut, located in the far eastern portion of such
state, an approximately three-hour drive from New York City and an approximately
two and one- half hour drive from Boston, which currently offers 24-hour gaming
and contains approximately 6,000 slot machines. An expansion at Foxwoods,
completed in April 1998, includes additional hotel rooms, restaurants and retail
stores. A high-speed ferry operates seasonally between New York City and
Foxwoods. The Mashantucket Pequot Nation has also announced plans for a
high-speed train linking Foxwoods to the interstate highway and an airport
outside Providence, Rhode Island. In addition, in October 1996, the Mohegan
Nation opened the Mohegan Sun Resort in Uncasville, Connecticut, located 10
miles from Foxwoods. Developed by Sun International Hotels, Ltd., the Mohegan
Sun Resort has 3,000 slot machines. The Mohegan Nation has announced plans for
an expansion of the casino facilities and the construction of a hotel,
convention center and entertainment center to be completed in the fall of 2001.
In addition, the Eastern Pequots are seeking formal recognition as a Native
American tribe for the purpose of opening a casino in the North Stonington area.
There can be no assurance that any continued expansion of gaming operations of
the Mashantucket Pequot Nation, the gaming operations of the Mohegan Nation or
the commencement of gaming operations by the Eastern Pequots would not have a
materially adverse impact on the operations of Trump Marina.

A group in Cumberland County, New Jersey calling itself the "Nanticoke
Lenni Lenape" tribe has filed a notice of intent with the Bureau of Indian
Affairs seeking formal federal recognition as a Native American tribe. In March
1998, the Oklahoma-based Lenape/Delaware Indian Nation, which originated in New
Jersey and already has federal recognition, filed a lawsuit against the city of
Wildwood claiming that the city is built on ancestral land. The city of
Wildwood, which has supported the plan to build a casino, has entered settlement
negotiations, offering to deed municipal land to the tribe. The plan, which is
opposed by the State of New Jersey, required state and federal approval. In
early 1999, however, the Delaware Indian Nation's lawsuit was dismissed. In July
1993, the Oneida Nation opened a casino featuring 24-hour table gaming and
electronic gaming systems, but without slot machines, near Syracuse, New York.
The Oneida Nation opened a hotel in October 1997 that included expanded gaming
facilities, and has constructed a golf course and convention center.
Representatives of the St. Regis Mohawk Nation signed a gaming compact with New
York State officials for the opening of a casino, without slot machines, in the
northern portion of the state close to the Canadian border. The St. Regis
Mohawks have also announced their intent to open a casino at the Monticello Race
Track in the Catskill Mountains region of New York; however, any Native American
gaming operation in the Catskills is subject to the approval of the Governor of
New York. The Seneca Nation plans to negotiate with New York State to open a
casino in Western New York; however, the proposed casino would be subject to the
purchase of additional property that is declared reservation territory by the
federal government. The Narragansett Nation of Rhode Island, which has federal
recognition, is seeking to open a casino in Rhode Island. The Aquinnah Wampanoag
Tribe is seeking to open a casino in Massachusetts. Other Native American
nations are seeking federal recognition, land and negotiation of gaming compacts
in New York, Pennsylvania, Connecticut and other states near Atlantic City.

State Legislation. Legislation permitting other forms of casino gaming
has been proposed, from time to time, in various states, including those
bordering New Jersey. Six states have presently legalized riverboat gambling
while others are considering its approval, including New York and Pennsylvania.
Several states are considering or have approved large scale land-based casinos.
Additionally, since 1993, the gaming space in Las Vegas has expanded
significantly, with additional capacity planned and currently under
construction. The operations of Trump Marina could be adversely affected by such
competition, particularly if casino gaming were permitted in jurisdictions near
or elsewhere in New Jersey or in other states in the Northeast. In December
1993, the Rhode Island Lottery Commission approved the addition of slot machine
games on video terminals at Lincoln Greyhound Park and Newport Jai Alai, where
poker and blackjack have been offered for over two years. Currently, casino
gaming, other than Native American gaming, is not allowed in other areas of New
Jersey or in Connecticut, New York or Pennsylvania. On November 17, 1995, a
proposal to allow casino gaming in Bridgeport, Connecticut was voted down by
that state's Senate. On June 18, 1998, the New York State Senate and General
Assembly failed to enact a constitutional amendment to legalize casino gambling
in certain areas of New York State, effectively postponing any referendum to
authorize such a constitutional amendment until not earlier than November 2001.
To the extent that legalized gaming becomes more prevalent in New Jersey or
other jurisdictions near Atlantic City, competition would intensify. In
particular, proposals have been introduced to legalize gaming in other

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locations, including Philadelphia, Pennsylvania. In February 1999, the
Pennsylvania State General Assembly approved a bill allowing in May 1999 a
non-binding public referendum on a variety of legalized gaming issues including
riverboats, video poker in taverns and slot machines at racetracks, but the
Pennsylvania State Senate failed to enact the General Assembly Bill. In
addition, legislation has from time to time been introduced in the New Jersey
State Legislature relating to types of statewide legalized gaming, such as video
games with small wagers. To date, no such legislation, which may require a state
constitutional amendment, has been enacted. Management is unable to predict
whether any such legislation, in New Jersey, Indiana, Illinois or elsewhere,
will be enacted or whether, if passed, it would have a material adverse impact
on Trump Marina.

GAMING AND OTHER LAWS AND REGULATIONS

The following is only a summary of the applicable provisions of the
Casino Control Act and certain other laws and regulations. It does not purport
to be a full description thereof and is qualified in its entirety by reference
to the Casino Control Act and such other laws and regulations.

NEW JERSEY GAMING REGULATIONS

In general, the New Jersey Casino Control Act (the "Casino Control
Act") and its implementing regulations contain detailed provisions concerning,
among other things: the granting and renewal of casino licenses; the suitability
of the approved hotel facility, and the amount of authorized casino space and
gaming units permitted therein; the qualification of natural persons and
entities related to the casino licensee; the licensing of certain employees and
vendors of casino licensees; the rules of the games; the selling and redeeming
of gaming chips; the granting and duration of credit and the enforceability of
gaming debts; management control procedures, accounting and cash control methods
and reports to gaming agencies; the security standards; the manufacture and
distribution of gaming equipment; the simulcasting of horse races by casino
licensees; equal employment opportunities for employees of casino operators,
contractors of casino facilities and others; and advertising, entertainment and
alcoholic beverages.

Casino Control Commission. The ownership and operations of casino/hotel
facilities in Atlantic City are the subject of strict state regulation under the
Casino Control Act. The CCC is empowered to regulate a wide spectrum of gaming
and non-gaming related activities and to approve the form of ownership and
financial structure of not only a casino licensee, but also its entity
qualifiers and intermediary and holding companies and any other related entity
required to be qualified ("CCC Regulations").

Operating Licenses. In June 1995, the CCC renewed the Partnership's
casino license and approved Trump as a natural person qualifier through May
1999. This license is not transferable and its renewal will include a financial
review of the Partnership. Upon revocation, suspension for more than 120 days or
failure to renew a casino license, the Casino Control Act provides for the
appointment of a conservator to take possession of the hotel and casino's
business and property, subject to all valid liens, claims and encumbrances.
Timely applications have been filed for renewal of the Plaza Associates, Taj
Associates, TCS and the Partnership's casino licenses, and a petition has been
filed with the CCC seeking consolidation of the hearings on the casino license
renewals. It is anticipated that the CCC will act favorably on the petition
seeking consolidation of the license renewal hearings, and extend the casino
licenses, allowing for a consolidated hearing on the license renewals to be
conducted in June 1999.

Casino License. No casino hotel facility may operate unless the
appropriate license and approvals are obtained from the CCC, which has broad
discretion with regard to the issuance, renewal, revocation and suspension of
such licenses and approvals, which are non-transferable. The qualification
criteria with respect to the holder of a casino license includes its financial
stability, integrity and responsibility; the integrity and adequacy of its
financial resources which bear any relation to the casino project; its good
character, honesty and integrity; and the sufficiency of its business ability
and casino experience to establish the likelihood of a successful, efficient
casino operation. The casino license currently held by the Partnership is
renewable for periods of up to four years.

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The CCC may reopen licensing hearings at any time, and must reopen a licensing
hearing at the request of the Division of Gaming Enforcement (the "Division").

Each casino license entitles the holder to operate one casino. Further,
no person may be the holder of a casino license if the holding of such license
will result in undue economic contraction in Atlantic City casino operations by
that person. On May 17, 1995, the CCC adopted a regulation defining the criteria
for determining undue economic concentration which codifies the content of
existing CCC precedent with respect to the subject.

To be considered financially stable, a licensee must demonstrate the
following ability: to pay winning wagers when due; to achieve an annual gross
operating profit; to pay all local, state and federal taxes when due; to make
necessary capital and maintenance expenditures to insure that it has a superior
first-class facility; and to pay, exchange, refinance or extend debts which will
mature or become due and payable during the license term.

In the event a licensee fails to demonstrate financial stability, the
CCC may take such action as it deems necessary to fulfill the purposes of the
Casino Control Act and protect the public interest, including: issuing
conditional licenses; approvals or determinations; establishing an appropriate
cure period; imposing reporting requirements; placing restrictions on the
transfer of cash or the assumption of liability; requiring reasonable reserves
or trust accounts; denying licensure; or appointing a conservator. See
"-Conservatorship."

Management believes that it has adequate financial resources to meet
the financial stability requirements of the CCC for the foreseeable future.

Pursuant to the Casino Control Act, CCC Regulations and precedent, no
entity may hold a casino license unless each officer, director, principal
employee, person who directly or indirectly holds any beneficial interest or
ownership in the licensee, each person who in the opinion of the CCC has the
ability to control or elect a majority of the board of directors of the licensee
(other than a banking or other licensed lending institution which makes a loan
or holds a mortgage or other lien acquired in the ordinary course of business)
and any lender, underwriter, agent or employee of the licensee or other person
whom the CCC may consider appropriate, obtains and maintains qualification
approval from the CCC. Qualification approval means that such person must, but
for residence, individually meet the qualification requirements as a casino key
employee.

Control Persons. An entity qualifier or intermediary or holding
company, such as Funding, is required to register with the CCC and meet the same
basic standards for approval as a casino licensee; provided, however, that the
CCC, with the concurrence of the Director of the Division, may waive compliance
by a publicly-traded corporate holding company with the requirement that an
officer, director, lender, underwriter, agent or employee thereof, or person
directly or indirectly holding a beneficial interest or ownership of the
securities thereof, individually qualify for approval under casino key employee
standards so long as the CCC and the Director of the Division are, and remain,
satisfied that such officer, director, lender, underwriter, agent or employee is
not significantly involved in the activities of the casino licensee, or that
such security holder does not have the ability to control the publicly-traded
corporate holding company or elect one or more of its directors. Persons holding
five percent or more of the equity securities of such holding company are
presumed to have the ability to control the company or elect one or more of its
directors and will, unless this presumption is rebutted, be required to
individually qualify. Equity securities are defined as any voting stock or any
security similar to or convertible into or carrying a right to acquire any
security having a direct or indirect participation in the profits of the issuer.

Financial Sources. The CCC may require all financial backers,
investors, mortgagees, bond holders and holders of notes or other evidence of
indebtedness, either in effect or proposed, which bear any relation to any
casino project, including holders of publicly-traded securities of an entity
which holds a casino license or is an entity qualifier, subsidiary or holding
company of a casino licensee (a "Regulated Company"), to qualify as financial
sources. In the past, the CCC has waived the qualification requirement for
holders of less than 15% of the Mortgage Notes and the PIK Notes so long as the
bonds remained widely distributed and freely traded in the public market and the
holder had no ability to control the casino licensee. The CCC has, in the past,
ruled that the publicity-traded Mortgage Notes and PIK Notes are
widely-distributed and freely-traded in the public market. The

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CCC may require holders of less than 15% of a series of debt to qualify as
financial sources even if not active in the management of the issuer or the
casino licensee.

Institutional Investors. An institutional investor ("Institutional
Investor") is defined by the Casino Control Act as any retirement fund
administered by a public agency for the exclusive benefit of federal, state or
local public employees; any investment company registered under the Investment
Company Act of 1940, as amended; any collective investment trust organized by
banks under Part Nine of the Rules of the Comptroller of the Currency; any
closed end investment trust; any chartered or licensed life insurance company or
property and casualty insurance company; any banking and other chartered or
licensed lending institution; any investment advisor registered under the
Investment Advisers Act of 1940, as amended; and such other persons as the CCC
may determine for reasons consistent with the policies of the Casino Control
Act.

An Institutional Investor may be granted a waiver by the CCC from
financial source or other qualification requirements applicable to a holder of
publicly-traded securities, in the absence of a prima facie showing by the
Division that there is any cause to believe that the holder may be found
unqualified, on the basis of CCC findings that: (i) its holdings were purchased
for investment purposes only and, upon request by the CCC, it files a certified
statement to the effect that it has no intention of influencing or affecting the
affairs of the issuer, the casino licensee or its holding or intermediary
companies; provided, however, that the Institutional Investor will be permitted
to vote on matters put to the vote of the outstanding security holders; and (ii)
if (x) the securities are debt securities of a casino licensee's holding or
intermediary companies or another subsidiary company of the casino licensee's
holding or intermediary companies which is related in any way to the financing
of the casino licensee and represent either (A) 20% or less of the total
outstanding debt of the company or (B) 50% or less of any issue of outstanding
debt of the company, (y) the securities are equity securities and represent less
than 10% of the equity securities of a casino licensee's holding or intermediary
companies or (z) the securities so held exceed such percentages, upon a showing
of good cause. There can be no assurance, however, that the CCC will make such
findings or grant such waiver and, in any event, an Institutional Investor may
be required to produce for the CCC or the Antitrust Division of the Department
of Justice upon request, any document or information which bears any relation to
such debt or equity securities.

Generally, the CCC requires each institutional holder seeking waiver of
qualification to execute a certification to the effect that (i) the holder has
reviewed the definition of Institutional Investor under the Casino Control Act
and believes that it meets the definition of Institutional Investor; (ii) the
holder purchased the securities for investment purposes only and holds them in
the ordinary course of business; (iii) the holder has no involvement in the
business activities of and no intention of influencing or affecting, the affairs
of the issuer, the casino licensee or any affiliate; and (iv) if the holder
subsequently determines to influence or affect the affairs of the issuer, the
casino licensee or any affiliate, it shall provide not less than 30 days' prior
notice of such intent and shall file with the CCC an application for
qualification before taking any such action. If an Institutional Investor
changes its investment intent, or if the CCC finds reasonable cause to believe
that it may be found unqualified, the Institutional Investor may take no action
with respect to the security holdings, other than to divest itself of such
holdings, until it has applied for interim casino authorization and has executed
a trust agreement pursuant to such an application. See "-Interim Casino
Authorization."

Ownership and Transfer of Securities. The Casino Control Act imposes
certain restrictions upon the issuance, ownership and transfer of securities of
a Regulated Company, and defines the term "security" to include instruments
which evidence a direct or indirect beneficial ownership or creditor interest in
a Regulated Company including, but not limited to, mortgages, debentures,
security agreements, notes and warrants. Currently, each of Funding and the
Partnership is deemed to be a Regulated Company, and instruments evidencing a
beneficial ownership or creditor interest therein, including partnership
interest, are deemed to be the securities of a Regulated Company.

If the CCC finds that a holder of such securities is not qualified
under the Casino Control Act, it has the right to take any remedial action it
may deem appropriate, including the right to force divestiture by such
disqualified holder of such securities. In the event that certain disqualified
holders fail to divest themselves of such

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securities, the CCC has the power to revoke or suspend the casino license
affiliated with the Regulated Company which issued the securities. If a holder
is found unqualified, it is unlawful for the holder (i) to exercise, directly or
through any trustee or nominee, any right conferred by such securities or (ii)
to receive any dividends or interest upon any such securities or any
remuneration, in any form, from its affiliated casino licensee for services
rendered or otherwise.

With respect to non-publicly-traded securities, the Casino Control Act
and CCC Regulations require that the corporate charter or partnership agreement
of a Regulated Company establish a right in the CCC of prior approval with
regard to transfers of securities, shares and other interests and an absolute
right in the Regulated Company to repurchase at the market price or the purchase
price, whichever is the lesser, any such security, share, or other interest in
the event that the CCC disapproves a transfer. With respect to the
publicly-traded securities, such corporate charter or partnership agreement is
required to establish that any such securities of the entity are held subject to
the condition that, if a holder thereof is found to be disqualified by the CCC,
such holder shall dispose of such securities.

Under the terms of the indentures pursuant to which the New Senior
Notes, the Mortgage Notes and the PIK Notes were issued, if a holder of such
securities does not qualify under the Casino Control Act when required to do so,
such holder must dispose of its interest in such securities and the Partnership
and Funding may redeem the securities at the lesser of the outstanding amount or
fair market value.

Interim Casino Authorization. Interim casino authorization is a process
which permits a person who enters into a contract to obtain property relating to
a casino operation or who obtains publicly-traded securities relating to a
casino licensee to close on the contract or own the securities until plenary
licensure or qualification. During the period of interim casino authorization,
the property relating to the casino operation or the securities is held in
trust.

Whenever any person enters into a contract to transfer any property
which relates to an ongoing casino operation, including a security of the casino
licensee or a holding or intermediary company or entity qualifier, under
circumstances which would require that the transferee obtain licensure or be
qualified under the Casino Control Act, and that person is not already licensed
or qualified, the transferee is required to apply for interim casino
authorization. Furthermore, except as set forth below with respect to
publicly-traded securities, the closing or settlement date in the contract at
issue may not be earlier than the 121st day after the submission of a complete
application for licensure or qualification together with a fully executed trust
agreement in a form approved by the CCC. If, after the report of the Division
and a hearing by the CCC, the CCC grants interim authorization, the property
will be subject to a trust. If the CCC denies interim authorization, the
contract may not close or settle until the CCC makes a determination on the
qualifications of the applicant. If the CCC denies qualification, the contract
will be terminated for all purposes and there will be no liability on the part
of the transferor.

If, as a result of a transfer of publicly-traded securities of a
licensee, a holding or intermediary company or entity qualifier of a licensee,
or a financing entity of a licensee, any person is required to qualify under the
Casino Control Act, that person is required to file an application for licensure
or qualification within 30 days after the CCC determines that qualification is
required or declines to waive qualification. The application must include a
fully executed trust agreement in a form approved by the CCC or, in the
alternative, within 120 days after the CCC determines that qualification is
required, the person whose qualification is required must divest such securities
as the CCC may require in order to remove the need to qualify.

The CCC may grant interim casino authorization where it finds by clear
and convincing evidence that: (i) statements of compliance have been issued
pursuant to the Casino Control Act; (ii) the casino hotel is an approved hotel
in accordance with the Casino Control Act; (iii) the trustee satisfies
qualification criteria applicable to key casino employees, except for residency;
and (iv) interim operation will best serve the interest of the public.

When the CCC finds the applicant qualified, the trust will terminate.
If the CCC denies qualification to a person who has received interim casino
authorization, the trustee is required to endeavor, and is authorized, to sell,

14
<PAGE>

assign, convey or otherwise dispose of the property subject to the trust to such
persons who are licensed or qualified or shall themselves obtain interim casino
authorization.

Where a holder of publicly-traded securities is required, in applying
for qualifications as a financial source or qualifier, to transfer such
securities to a trust in application for interim casino authorization and the
CCC thereafter orders that the trust become operative: (i) during the time the
trust is operative, the holder may not participate in the earnings of the casino
hotel or receive any return on its investment or debt security holdings; and
(ii) after disposition, if any, of the securities by the trustee, proceeds
distributed to the unqualified holder may not exceed the lower of their actual
cost to the unqualified holder or their value calculated as if the investment
had been made on the date the trust became operative.

Approved Hotel Facilities. The CCC may permit an existing licensee,
such as the Partnership, to increase its casino space if the licensee agrees to
add a prescribed number of qualifying sleeping units within two years after the
commencement of gaming operations in the additional casino space. However, if
the casino licensee does not fulfill such agreement due to conditions within its
control, the licensee will be required to close the additional casino space, or
any portion thereof that the CCC determines should be closed.

Persons who are parties to the lease for an approved hotel building or
who have an agreement to lease a building which may in the judgment of the CCC
become an approved hotel building are required to hold a casino license unless
the CCC, with the concurrence of the Attorney General of the State of New
Jersey, determines that such persons do not have the ability to exercise
significant control over the building or the operation of the casino therein.

Unless otherwise determined by the CCC, agreements to lease an approved
hotel building or the land under the building must be for durational term
exceeding 30 years, must concern 100% of the entire approved hotel building or
the land upon which it is located and include a buy-out provision conferring
upon the lessee the absolute right to purchase the lessor's entire interest for
a fixed sum in the event that the lessor is found by the CCC to be unsuitable.

Agreement for Management of Casino. Each party to an agreement for the
management of a casino is required to hold a casino license, and the party who
is to manage the casino must own at lease 10% of all the outstanding equity
securities of the casino licensee. Such an agreement shall: (i) provide for the
complete management of the casino; (ii) provide for the unrestricted power to
direct the casino operations; and (iii) provide for a term long enough to ensure
the reasonable continuity, stability and independence and management of the
casino.

License Fees. The CCC is authorized to establish annual fees for the
renewal of casino licenses. The renewal fee is based upon the cost of
maintaining control and regulatory activities prescribed by the Casino Control
Act, and may not be less than $200,000 for a four-year casino license.
Additionally, casino licensees are subject to potential assessments to fund any
annual operating deficits incurred by the CCC or the Division. There is also an
annual license fee of $500 for each slot machine maintained for use or in use in
any casino.

Gross Revenue Tax. Each casino licensee is also required to pay an
annual tax of 8% on its gross casino revenues. For the years ended December 31,
1996, 1997 and 1998, the Partnership's gross revenue tax was approximately $19.9
million, $21.1 million and $21.1 million, respectively, and its license,
investigation and other fees and assessments totaled approximately $4.0 million,
$3.5 million and $3.7 million, respectively.

Investment Alternative Tax Obligations. An investment alternative tax
imposed on the gross casino revenues of each licensee in the amount of 2.5% is
due and payable on the last day of April following the end of the calendar year.
A licensee is obligated to pay the investment alternative tax for a period of 30
years. Estimated payments of the investment alternative tax obligation must be
made quarterly in an amount equal to 1.25% of estimated gross revenues for the
preceding three-month period. Investment tax credits may be obtained by making
qualified investments or by the purchase of bonds issued by the CRDA ("CRDA
Bonds"). CRDA Bonds may have

15
<PAGE>

terms as long as 50 years and bear interest at below market rates, resulting in
a value lower than the face value of such CRDA Bonds.

For the first ten years of its tax obligation, the licensee is entitled
to an investment tax credit against the investment alternative tax in an amount
equal to twice the purchase price of the CRDA Bonds issued to the licensee.
Thereafter, the licensee (i) is entitled to an investment tax credit in an
amount equal to twice the purchase price of such CRDA Bonds or twice the amount
of its investments authorized in lieu of such bond investments or made in
projects designed as eligible by the CRDA and (ii) has the option of entering
into a contract with the CRDA to have its tax credit comprised of direct
investments in approved eligible projects which may not comprise more than 50%
of its eligible tax credit in any one year.

From the monies made available to the CRDA, the CRDA was required to
set aside $175 million for investment in hotel development projects in Atlantic
City undertaken by a licensee which result in the construction or rehabilitation
of at least 200 hotel rooms. These monies were used to fund up to 27% of the
cost to casino licensees of expanding their hotel facilities to provide
additional hotel rooms, a portion of which has been required to be available
with respect to the new Atlantic City Convention Center.

Minimum Casino Parking Charges. As of July 1, 1993, each casino
licensee was required to pay the New Jersey State Treasurer a $1.50 charge for
every use of a parking space for the purpose of parking motor vehicles in a
parking facility owned or leased by a casino licensee or by any person on behalf
of a casino licensee. This amount is paid into a special fund established and
held by the New Jersey State Treasurer for the exclusive use of the CRDA. The
Partnership currently charges its parking patrons $2.00 in order to make its
required payments to the New Jersey State Treasurer and cover related expenses.
Amounts in the special fund will be expended by the CRDA for eligible projects
in the corridor region of Atlantic City related to improving the highways,
roads, infrastructure, traffic regulation and public safety of Atlantic City or
otherwise necessary or useful to the economic development and redevelopment of
Atlantic City in this regard.

Atlantic City Fund. On each October 31 during the years 1996 through
2003, each casino licensee shall pay into an account established in the CRDA and
known as the Atlantic City Fund, its proportional share of an amount related to
the amount by which annual operating expenses of the CCC and the Division are
less than a certain fixed sum. Additionally, a portion of the investment
alternative tax obligation of each casino licensee for the years 1994 through
1998 allocated for projects in northern New Jersey shall be paid into and
credited to the Atlantic City Fund. Amounts in the Atlantic City Fund will be
expended by the CRDA for economic development projects of a revenue producing
nature that foster the redevelopment of Atlantic City other than the
construction and renovation of casino hotels.

Conservatorship. If, at any time, it is determined that TCHI, Funding,
the Partnership or any other entity qualifier has violated the Casino Control
Act or that any of such entities cannot meet the qualification requirements of
the Casino Control Act, such entity could be subject to fines or the suspension
or revocation of its license or qualification. If the Partnership's license is
suspended for a period in excess of 120 days or is revoked, or if the CCC fails
or refuses to renew such casino license, the CCC could appoint a conservator to
operate or dispose of the Partnership's casino hotel facilities. A conservator
would be vested with title to all property of the Partnership relating to the
casino and the approved hotel subject to valid liens and/or encumbrances. The
conservator would be required to act under the direct supervision of the CCC and
would be charged with the duty of conserving, preserving, and, if permitted,
continuing the operation of the casino hotel. During the period of the
conservatorship, a former or suspended casino licensee is entitled to a fair
rate of return out of net earnings, if any, on the property retained by the
conservator. The CCC may also discontinue any conservatorship action and direct
the conservator to take such steps as are necessary to effect an orderly
transfer of the property of a former or suspended casino licensee. Such events
could result in an event of default under the indentures pursuant to which the
Senior Notes, the Mortgage Notes and the PIK Notes were issued.

Qualification of Employees. Certain employees of the Partnership must
be licensed by or registered with the CCC, depending on the nature of the
position held. Casino employees are subject to more stringent

16
<PAGE>

requirements than non-casino employees and must meet applicable standards
pertaining to financial stability, integrity and responsibility, good character,
honesty and integrity, business ability and casino experience and New Jersey
residency. These requirements have resulted in significant competition among
Atlantic City casino operators for the services of qualified employees.

Gaming Credit. The Partnership's casino games are conducted on a credit
as well as a cash basis. Gaming debts arising in Atlantic City in accordance
with applicable regulations are enforceable in the courts of the State of New
Jersey. The extension of gaming credit is subject to regulations that detail
procedures which casinos must follow when granting gaming credit and recording
counter checks which have been exchanged, redeemed or consolidated.

Control Procedures. Gaming at Trump Marina is conducted by trained and
supervised personnel. The Partnership employs extensive security and internal
controls. Security checks are make to determine, among other matters, that job
applicants for key positions have had no criminal history or associations.
Security controls utilized by the surveillance department include closed circuit
video cameras to monitor the casino floor and money counting areas. The count of
moneys from gaming is also observed daily by representatives of the CCC.

OTHER LAWS AND REGULATIONS

The United States Department of the Treasury (the "Treasury") has
adopted regulations pursuant to which a casino is required to file a report of
each deposit, withdrawal, exchange of currency, gambling tokens or chips, or
other payments or transfers by, through or to such casino which involves a
transaction in currency of more than $10,000 per patron, per gaming day. Such
reports are required to be made on forms prescribed by the Secretary of the
Treasury and are filed with the Internal Revenue Service (the "Service"). In
addition, the Partnership is required to maintain detailed records (including
the names, addresses, social security numbers and other information with respect
to its gaming customers) dealing with, among other items, the deposit and
withdrawal of funds and the maintenance of a line of credit.

In the past, the Service had taken the position that gaming winnings
from the table games by nonresident aliens were subject to a 30% withholding
tax. The Service, however, subsequently adopted a practice of not collecting
such tax. Recently enacted legislation exempts from withholding tax table game
winnings by nonresident aliens, unless the Secretary of the Treasury determines
by regulation that such collections have become administratively feasible.

The Partnership is subject to other federal, state and local
regulations and, on a periodic basis, must obtain various licenses and permits,
including those required to sell alcoholic beverages in the State of New Jersey
as well as in other jurisdictions. Management believes all required licenses and
permits necessary to conduct its business have been obtained for operations in
New Jersey.

ITEM 2. PROPERTIES.

The Casino Parcel. Trump Marina is located in the Marina District on an
approximately 14.7 acre triangular-shaped parcel of land, which is owned by the
Partnership in fee, located at the intersection of Huron Avenue and Brigantine
Boulevard directly across from the marina, approximately two miles from The
Boardwalk.

Trump Marina has approximately 75,900 square-feet of gaming space which
accommodates 92 table games, 2,167 slot machines and race simulcasting
facilities. In addition to the casino, Trump Marina consists of a 27-story hotel
with 728 guest rooms, including 153 suites, of which 97 are "Crystal Tower"
luxury suites. Renovation of 210, 90 and 64 of the guest rooms was completed in
1996, 1997 and 1998, respectively. The facility also offers eight restaurants,
540-seat cabaret theater, two cocktail lounges, 58,000 square-feet of
convention, ballroom and meeting space, a swimming pool, tennis courts and a
sports and health club facility. Trump Marina has been designed so that it can
be enlarged in phases into a facility containing 2,000 rooms and a 1,600-seat
cabaret theater. Trump Marina also has a nine-story garage providing on-site
parking for

17
<PAGE>

approximately 3,000 vehicles and a helipad which is located atop the parking
garage, making Trump Marina the only Atlantic City casino with access by land,
sea and air.

Between 1994 and 1998, management replaced substantially all of its
slot machines with newer more popular models and upgraded its computerized slot
tracking and slot marketing system. During 1997 the property was rethemed with a
nautical emphasis and renamed Trump Marina. In 1994, management completed a
3,000 square-foot expansion to its casino which enabled Trump Marina to
accommodate the addition of simulcast race track wagering and expended in excess
of $2 million on renovations to its hotel facility. The casino expansion also
increased casino access and casino visibility for hotel patrons. In 1993, Trump
Marina completed the construction of a Las Vegas-style marquee and reader board,
the largest of its kind on the East Coast.

The Marina. Pursuant to an agreement with the New Jersey Division of
Parks and Forestry (the "Marina Agreement"), the Partnership in 1987 began
operating and renovating the marina at Trump Marina, including docks containing
approximately 645 slips. An elevated pedestrian walkway connecting Trump Marina
to a two-story building at the marina was completed in 1989. The Partnership
constructed the two-story building, which contains a 240-seat restaurant and
offices as well as a snack bar and a large nautical theme retail store. Pursuant
to the Marina Agreement and a certain lease between the State of New Jersey, as
landlord, and the Partnership, as tenant, dated as of September 1, 1990 (the
"Marina Lease"), the Partnership commenced leasing the marina and the
improvements thereon for an initial term of twenty-five years. The Marina Lease
is a net lease pursuant to which the Partnership, in addition to the payment of
annual rent equal to the greater of (i) a certain percentage of gross revenues
of the Partnership from operation of the marina during the lease year and (ii)
minimum base rent of $300,000 annually (increasing every five years to $500,000
in 2011), is responsible for all costs and expenses related to the premises,
including but not limited to, all maintenance and repair costs, insurance
premiums, real estate taxes, assessments and utility charges. Any improvements
made to the marina (which is owned by the State of New Jersey), excluding the
elevated pedestrian walkway, automatically become the property of the State of
New Jersey upon their completion.

The Parking Parcel. The Partnership also owns an employee parking lot
located on Route 30, approximately two miles from Trump Marina, which can
accommodate approximately 1,000 cars.

ITEM 3. LEGAL PROCEEDINGS.

The Partnership, its partners, certain members of the former Executive
Committee, Funding and certain of their employees are involved in various legal
proceedings. Such persons and entities are vigorously defending the allegations
against them and intend to contest vigorously any future proceedings. The
Partnership and Funding have agreed to indemnify such persons against any and
all losses, claims, damages, expenses (including reasonable costs, disbursements
and counsel fees) and liabilities (including amounts paid or incurred in
satisfaction of settlements, judgments, fines and penalties) incurred by them in
said legal proceedings.

On August 14, 1996, certain stockholders of THCR filed two derivative
actions in the Court of Chancery in Delaware (Civil Action Nos. 15148 and 15160)
(the "Delaware Cases") against each of the members of the Board of Directors of
THCR, THCR, THCR Holdings, the Partnership and TCI-II. The plaintiffs claim that
the directors of THCR breached their fiduciary duties in connection with the
Castle Acquisition by purchasing these interests at an excessive price in a
self-dealing transaction. The complaint sought to enjoin the transaction, and
also sought damages and an accounting. The injunction was never pursued. These
plaintiffs served a notice of dismissal in the Delaware cases on December 29,
1997. The Court of Chancery has not yet ordered the Delaware cases dismissed.

On October 16, 1996, a stockholder of THCR filed a derivative action in
the United States District Court, Southern District of New York (96 Civ. 7820)
against each member of the Board of Directors of THCR, THCR, THCR Holdings, the
Partnership, Trump Casinos, Inc. ("TCI"), TCI-II, TCHI and Salomon Brothers, Inc
("Salomon"). The plaintiff claims that certain of the defendants breached their
fiduciary duties and engaged in ultra vires acts in connection with the Castle
Acquisition and that Salomon was negligent in the issuance of its

18
<PAGE>

fairness opinion with respect to the Castle Acquisition. The plaintiff also
alleges violations of the federal securities laws for alleged omissions and
misrepresentations in THCR's proxies, and that Trump, TCI-II and TCHI breached
the acquisition agreement by supplying THCR with untrue information for
inclusion in the proxy statement delivered to THCR's stockholders in connection
with the Castle Acquisition. The plaintiff seeks removal of the directors of
THCR, and an injunction, rescission and damages.

The Delaware Cases were amended and refiled in the Southern District of
New York and consolidated with the federal action for all purposes, including
pretrial proceedings and trial. On or about January 17, 1997, the plaintiffs
filed their Consolidated Amended Derivative Complaint (the "First Amended
Complaint"), reflecting the consolidation. On or about March 24, 1997, the
plaintiffs filed their Second Consolidated Amended Derivative Complaint (the
"Second Amended Complaint"). In addition to the allegations made in the First
Amended Complaint, the Second Amended Complaint claims that certain of the
defendants breached their fiduciary duties and wasted corporate assets in
connection with a previously contemplated transaction with Colony Capital, Inc.
("Colony Capital"). The Second Amended Complaint also includes claims against
Colony Capital for aiding and abetting certain of these violations. In addition
to the relief sought in the First Amended Complaint, the Second Amended
Complaint sought to enjoin the previously contemplated transaction with Colony
Capital or, if it was effectuated, to rescind it. On March 27, 1997, THCR and
Colony Capital mutually agreed to end negotiations with respect to such
transaction. On June 26, 1997, plaintiffs served their Third Consolidated
Amended Derivative Complaint (the "Third Amended Complaint"), which omitted the
claims against Colony Capital. THCR and the other defendants in the action moved
to dismiss the Third Amended Complaint on August 5, 1997. The plaintiffs opposed
the defendants' motions to dismiss the Third Amended Complaint by response dated
October 24, 1997. The defendant's reply was served December 9, 1997. By letter
dated April 2, 1998, the plaintiff's sought the Court's permission to amend
further the Third Amended Complaint to add certain additional factual
allegations. The defendant opposed the motion and court has not yet ruled on it.

Other Litigation. On March 13, 1997, THCR filed a lawsuit in the United
States District Court, District of New Jersey, against Mirage, the State of New
Jersey ("State"), the New Jersey Department of Transportation ("NJDOT"), the
South Jersey Transportation Authority ("SJTA"), the CRDA, the New Jersey
Transportation Trust Fund Authority and others. THCR was seeking declaratory and
injunctive relief to recognize and prevent violations by the defendants of the
casino clause of the New Jersey State Constitution and various federal
securities and environmental laws relating to proposed infrastructure
improvements in the Atlantic City marina area. While this action was pending,
defendants State and CRDA then filed an action in the New Jersey State Court
seeking a declaratory judgment as to the claim relating to the casino clause of
the New Jersey State Constitution. On May 1, 1997, the United States District
Court dismissed the federal claims and ruled that the State constitutional
claims should be pursued in State Court. On April 2, 1998, the United States
Court of Appeals for the Third Circuit affirmed the dismissal and THCR's
petition to the Third Circuit for a rehearing was denied. On May 14, 1997 the
State Court granted judgment in favor of the State and CRDA. On March 20, 1998,
the Appellate Division affirmed. THCR intends to seek review in the State
Supreme Court, which heard argument on January 21, 1999.

On June 26, 1997, THCR filed an action against NJDOT, SJTA, Mirage and
others, in the Superior Court of New Jersey, Chancery Division, Atlantic County
(the "Chancery Division Action"). THCR is seeking to declare unlawful and enjoin
certain actions and omissions of the defendants arising out of and relating to a
certain Road Development Agreement dated as of January 10, 1997, by and among
NJDOT, SJTA and Mirage (the "Road Development Agreement") and the public funding
of a certain road and tunnel project to be constructed in Atlantic City, as
further described in the Road Development Agreement. THCR moved to consolidate
this action with other previously filed related actions. Defendants opposed
THCR's motion to consolidate the Chancery Division Action, initially moved to
dismiss this action on procedural grounds and subsequently moved to dismiss this
action on substantive grounds. On October 20, 1997, the Chancery Court denied
the defendants' motion to dismiss this action on procedural grounds, but entered
summary judgment dismissing this action on substantive grounds. This decision is
currently being appealed.

On June 26, 1997, THCR also filed an action, in lieu of prerogative
writs, against the CRDA, in the Superior Court of New Jersey, Law Division,
Atlantic County, seeking review of the CRDA's April 15, 1997

19
<PAGE>

approval of funding ($120 million principal amount plus interest) for the road
and tunnel project discussed above, a declaratory judgment that the said project
is not eligible for such CRDA funding, and an injunction prohibiting the CRDA
from contributing such funding to the said project. Defendants have moved to
dismiss this action on procedural grounds and have also sought to transfer this
action to New Jersey's Appellate Division. On October 3, 1997, the New Jersey
Superior Court transferred this action to the Appellate Division where it is
currently pending.

On September 9, 1997, Mirage filed a complaint against Trump, THCR and
Hilton Hotels Corporation, in the United States District Court for the Southern
District of New York. The complaint seeks damages for alleged violations of
antitrust laws, tortious interference with prospective economic advantage and
tortious inducement of a breach of fiduciary duties arising out of activities
purportedly engaged in by defendants in furtherance of an alleged conspiracy to
impede Mirage's efforts to build a casino resort in the Marina district of
Atlantic City, New Jersey. Among other things, Mirage contends that the
defendants filed several frivolous lawsuits and funded others that challenge the
proposed state funding mechanisms for the construction of a proposed roadway and
tunnel that would be paid for chiefly through government funds and which would
link the Atlantic City Expressway with the site of Mirage's proposed new casino
resort. On November 10, 1997, THCR and Trump moved to dismiss the complaint. On
December 18, 1998 the Court denied the motion to dismiss brought by Trump and
THCR.

Various other legal proceedings are now pending against the
Partnership. The Partnership considers all such proceedings to be ordinary
litigation incident to the character of its business. Management believes that
the resolution of these claims will not, individually or in the aggregate, have
a material adverse effect on the financial condition or results of operations of
the Partnership.

From time to time, the Partnership may be involved in routine
administrative proceedings involving alleged violations of certain provisions of
the Casino Control Act. However, the Partnership believes that the final outcome
of these proceedings will not, either individually or in the aggregate, have a
material adverse effect on the Partnership or on its ability to otherwise retain
or renew any casino or other licenses required under the Casino Control Act for
the operation of Trump Marina.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters were submitted by the Registrants to their security holders
during the fourth quarter of 1998.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

There is no established public trading market for Funding's or TCHI's
outstanding common stock or for the Partnership's partnership interests.

As of December 31, 1998, the Partnership is the sole holder of the
outstanding common stock of Funding, THCR Holdings is the sole holder of the
outstanding common shares of TCHI and THCR Holdings is a 99% limited partner of
the Partnership and TCHI is a 1% general partner.

Funding and TCHI have paid no cash dividends on its common stock, and
except as set forth under "Business-Trump Marina-Historical Background", the
Partnership has made no general distributions with respect to its equity
interests.

<PAGE>

ITEM 6. SELECTED FINANCIAL DATA.

The following table sets forth certain selected consolidated financial
information from Funding's and the Partnership's Consolidated Statements of
Operations for the years ended December 31, 1994, 1995, the period from January
1, 1996 through October 6, 1996, the period from October 7, 1996 (the date of
the Castle Acquisition) through December 31, 1996 and the years ended December
31, 1997 and 1998, respectively, and the Consolidated Balance Sheets as of
December 31, 1994, 1995, October 6, 1996, December 31, 1996, December 31, 1997
and December 31, 1998, respectively (see note (1) below). All financial
information should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations," and the consolidated
financial statements and the related notes thereto included elsewhere in this
Form 10-K.

PERIOD FROM
PERIOD FROM OCTOBER 7,
JANUARY 1, 1996
YEARS ENDED DECEMBER 31, 1996 THROUGH THROUGH YEARS ENDED DECEMBER 31,
------------------------ OCTOBER 6, DECEMBER 3, ------------------------
1994 1995 1996 1996(1) 1997 1998
---------- -------- ----------- ------------ --------- --------
PREDECESSOR SUCCESSOR
-------------------------------------- ----------------------------------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Gross Revenues............... $316,074 $ 339,516 $ 245,956 $ 62,984 $ 325,760 $ 322,573
Less-Promotional Allowances.. 34,521 37,288 31,229 8,238 41,084 38,659
-------- --------- --------- --------- --------- ---------
Net Revenues................. 281,553 302,228 214,727 54,746 284,676 283,914
Total Costs and Expenses..... 252,729 267,867 207,691 57,213 263,160 256,073
-------- --------- --------- --------- --------- ---------
Income (Loss) from Operations 28,824 34,361 7,036 (2,467) 21,516 27,841
Other Income................. - - 3,000 - - -
Interest Income.............. 636 504 386 217 452 869
Interest Expense............. (44,173) (46,017) (36,949) (11,553) (49,892) (52,264)
-------- --------- --------- --------- --------- ---------
Net Loss..................... $(14,713) $ (11,152) $ (26,527) $ (13,803) $ (27,924) $ (23,554)
======== ========= ========= ========= ========= =========
BALANCE SHEET DATA
Cash and Cash Equivalents.... $ 19,122 $ 21,038 $ 19,373 $ 15,380 $ 14,472 $ 19,723
======== ========= ========= ========= ========= =========
Total Assets................. $368,797 $ 370,581 $ 363,468 $ 548,011 $ 541,406 $ 536,888
======== ========= ========= ========= ========= =========
Current Liabilities.......... $ 34,084 $38,402 $ 47,427 $ 40,931 $ 61,665 $ 54,704
======== ========= ========= ========= ========= =========
Total Long-Term Debt, Net of
Current Maturities......... $314,433 $ 323,015 $ 330,665 $ 335,584 $ 341,343 $ 368,529
======== ========= ========= ========= ========= =========
Total Capital................ $ 16,965 $ 5,813 $ (20,714) $ 166,592 $ 133,668 $ 110,114
======== ========= ========= ========= ========= =========

</TABLE>

- -----------

(1) THCR Holdings acquired on October 7, 1996 all of the outstanding equity
interest of the Partnership. This acquisition has been accounted for as a
purchase. The excess of the purchase price over the fair value of the net
assets acquired of $196,109,000 (including transaction costs, the purchase
of the outstanding TCHI warrants and the historical negative book value of
the Partnership of $20,714,000) has been recorded on the books of the
Partnership and has been allocated to property, plant and equipment based
upon an appraisal. As a result of the acquisition, a new basis of
accounting was established and financial statements prior to October 7,
1996 are presented as Predecessor financial statements. The financial
statements from October 7, 1996 are presented as Successor financial
statements.

<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

The financial information presented below reflects the financial condition
and results of operations of the Partnership. Funding is a wholly owned
subsidiary of the Partnership and conducts no business other than collecting
amounts due under certain intercompany notes from the Partnership for the
purpose of paying principal of, premium, if any, and interest on its
indebtedness, which Funding issued as a nominee for the Partnership.

THCR Holdings acquired the Partnership on October 7, 1996. For purposes of
this "Management's Discussion and Analysis of Financial Condition and Results of
Operations", the Partnership's results of operations for the year ended December
31, 1996 include both the results of operations of the Partnership's predecessor
from January 1, 1996 through October 6, 1996 and the Partnership from October 7,
1996 through December 31, 1996. The net effect of the Castle Acquisition was to
increase the carrying value of property, plant and equipment. The Partnership's
subsequent results of operations reflect such increased depreciation expense.

Gaming revenues are the primary source of the Partnership's revenues and
primarily consist of slot machine and table game win. The following table
details activity for the major components of gaming revenue:

YEARS ENDED DECEMBER 31,
----------------------------------------------
1996 1997 1998
---- ---- ----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Table Game Revenue....................................... $ 64,207 $ 76,128 $ 72,893
Increase (Decrease) from Prior Period.................... $ 11,921 $ (3,235)
Table Game Drop.......................................... $ 494,778 $ 498,536 $ 452,599
Increase (Decrease) from Prior Period.................... $ 3,758 $ (45,937)
Table Game Win Percentage................................ 13.0% 15.3% 16.1%
Increase from Prior Period............................... 2.3 pts. .8 pts.
Number of Table Games.................................... 87 91 92
Increase from Prior Period............................... 4 1
Slot Revenue............................................. $ 182,287 $ 183,233 $ 186,729
Increase from Prior Period............................... $ 946 $ 3,496
Slot Handle.............................................. $2,253,051 $ 2,266,988 $2,321,939
Increase from Prior Period............................... $ 13,937 $ 54,951
Slot Win Percentage...................................... 8.1% 8.1% 8.0%

Decrease from Prior Period............................... - (.1) pts.
Number of Slot Machines.................................. 2,297 2,198 2,167
Decrease from Prior Period............................... (99) (31)

Poker Revenue............................................ $ 722 $ 457 $ -
Decrease from Prior Period............................... $ (265) $ (457)
Number of Poker Tables................................... 6 5 -
Decrease from Prior Period............................... (1) (5)

Other Gaming Revenue..................................... $ 1,122 $ 1,621 $ 1,987
Increase from Prior Period............................... $ 499 $ 366
Total Gaming Revenue..................................... $ 248,338 $ 261,439 $ 261,609
Increase from Prior Period............................... $ 13,101 $ 170

</TABLE>

<PAGE>

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1998

Table game revenues decreased by approximately $3.2 million (4.2%) to $72.9
million for the year ended December 31, 1998 from $76.1 million for the year
ended December 31, 1997, primarily due to reduced table game drop. The reduced
table game drop was partially offset by a higher table game win percentage. The
reduction in table game drop is a result of the increased gaming capacity in the
Atlantic City market as well as management's decision to reduce promotional
gaming costs in an effort to eliminate less profitable programs. Table game
revenues represent the amount retained by the Partnership from amounts wagered
at table games. The table game win percentage tends to be fairly constant over
the long term, but may vary significantly in the short term, due to the large
wagers by "highrollers." The Atlantic City industry table game win percentages
were 15.0% and 15.3% for the years ended December 31, 1997 and 1998,
respectively.

Slot revenues increased by approximately $3.5 million (1.9%) to $186.7
million for the year ended December 31, 1998 from $183.2 million for the year
ended December 31, 1997, primarily due to an increased slot handle. The
increased slot handle is due to a more aggressive marketing approach targeted
towards the slot customer.

Nongaming revenues, in the aggregate, decreased by approximately $3.3
million (5.1%) to $61.0 million for the year ended December 31, 1998 from $64.3
million for the year ended December 31, 1997, primarily as a result of a
decrease in rooms revenue due to a reduction in complimentary room rates. The
complimentary room rates were reduced by management to more closely conform to
current industry practice. Industry-wide room rates have recently decreased as a
result of increased room inventory in the Atlantic City market.

The majority of the decrease in nongaming revenues was offset by a
corresponding decrease in promotional allowances. Promotional allowances
decreased by approximately $2.4 million (5.8%) to $38.7 million for the year
ended December 31, 1998 from $41.1 million for the year ended December 31, 1997,
primarily as a result of a decrease in complimentary room rates related to
marketing activities.

Gaming costs and expenses decreased by approximately $4.1 million (2.4%)
to $166.5 million for the year ended December 31, 1998 from $170.6 for the year
ended December 31, 1997. This decrease is primarily the result of a decrease in
promotional and complimentary expenses achieved by eliminating less profitable
programs.

General and administrative expenses decreased approximately $2.6 million
(4.1%) to $60.1 million for the year ended December 31, 1998 from $62.7 million
for the year ended December 31, 1997 primarily due to reduced advertising
expenses and insurance costs. During 1998, self-insurance reserves decreased due
to an internally focused aggressive policy where potential lawsuits are
challenged immediately. Additionally, a more aggressive litigation policy was
pursued to deter present and future frivolous lawsuits. The Partnership also
retained an outside consultant to comprehensively review certain claims and to
assist the Partnership in establishing the estimated reserves at December 31,
1998.

Interest expense increased approximately $2.4 million (4.8%) to $52.3
million for the year ended December 31, 1998 from $49.9 million for the year
ended December 31, 1997 primarily due to an increase in the outstanding
principal related to the PIK Notes.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997

Table game revenues represent the amount retained by the Partnership from
amounts wagered at table games. The table game win percentage tends to be fairly
constant over the long term, but may vary significantly in the short term, due
to the large wagers by "highrollers." The Atlantic City industry table game win
percentages were 15.0% and 15.4% for the years ended December 31, 1997 and 1996,
respectively.

Nongaming revenues, in the aggregate, increased by approximately $3.7
million (6.1%) to $64.3 million for the year ended December 31, 1997 from $60.6
million for the year ended December 31, 1996, primarily as the

<PAGE>

result of increases in food and beverage and entertainment revenues in
connection with the retheming of the property.

Promotional allowances increased by approximately $1.6 million (4.1%) to
$41.1 million for the year ended December 31, 1997 from $39.5 million for the
year ended December 31, 1996, primarily as a result of increases in
complimentary rooms and food and beverage relating to marketing activities.

Gaming costs and expenses increased by approximately $5.9 million (3.6%)
to $170.6 million for the year ended December 31, 1997 from $164.7 for the year
ended December 31, 1996. This increase is primarily the result of an increase in
promotional spending, gaming taxes, complimentary activity and headline
entertainment, in an effort to stimulate gaming revenues.

Rooms and food and beverage costs and expenses decreased by approximately
$1.1 million (8.0%) to $12.7 million for the year ended December 31, 1997 from
$13.8 million for the year ended December 31, 1996. This decrease is primarily
due to the increased level of complimentary food, beverage and hotel services
provided to patrons. The cost of such complementaries have been included in
gaming costs and expenses.

General and administrative expenses decreased approximately $6.7 million
(9.7%) to $62.7 million for the year ended December 31, 1997 from $69.4 million
for the year ended December 31, 1996 primarily due to reduced salaries and
employee benefits resulting from cost containment measures and operational
synergies from combining certain administrative functions with affiliated
entities.

Other non-operating income of $3.0 million during 1996 represents the
non-refundable license fee resulting from an energy service agreement entered
into with Atlantic Thermal Systems, Inc.

Interest expense increased approximately $1.4 million (2.9%) to $49.9
million for the year ended December 31, 1997 from $48.5 million for the year
ended December 31, 1996 primarily due to an increase in the outstanding
principal related to the PIK Notes.

CAPITAL RESOURCES AND LIQUIDITY

Cash flow from operating activities is the Partnership's principal source
of liquidity. For the year ended December 31, 1998, the Partnership's net cash
flow provided by operating activities was $10.0 million.

In addition to funding operations, the Partnership's principal uses of cash
are capital expenditures and debt service.

Capital expenditures for 1998 were approximately $2.8 million and
principally consisted of hotel room and restaurant renovations, as well as
ongoing casino floor improvements.

The Partnership's debt consists primarily of (i) the Mortgage Notes, (ii)
the PIK Notes, (iii) the New Senior Notes, and (iv) the Working Capital Loan.

The Mortgage Notes have an outstanding principal amount of approximately
$242.1 million, bear interest at the rate of 11-3/4 per annum and mature on
November 15, 2003.

The PIK Notes have an outstanding principal amount of approximately $92.5
million and mature on November 15, 2005. Interest is currently payable
semi-annually at the rate of 13-7/8%. On or prior to November 15, 2003, interest
on the PIK Notes may be paid in cash or through the issuance of additional PIK
Notes. During 1998, interest in the amount of $11.6 million was paid through the
issuance of additional PIK Notes and the Partnership anticipates that additional
interest due in 1999 of approximately $13.3 million will be paid through the
issuance of additional PIK Notes.

<PAGE>

On April 17, 1998, Funding refinanced its Old Senior Notes and its Term
Loan by issuing the New Senior Notes. The proceeds from the issuance of the New
Senior Notes were used to redeem all of the issued and outstanding Old Senior
Notes at 100% of their principal amount and to repay the Term Loan in full. In
conjunction with this refinancing, TCHI obtained the Working Capital Loan and
loaned the proceeds to the Partnership.

The New Senior Notes have an outstanding principal amount of $62.0 million
and bear interest at the rate of 10 1/4% per annum, payable semi-annually each
April and October. The entire principal balance of the New Senior Notes mature
on April 30, 2003.

The Working Capital Loan has an outstanding principal amount of $5.0
million and bears interest at the rate of 10 1/4% per annum, payable
semi-annually each April and October. The entire principal balance of the
Working Capital Loan matures on April 30, 2003.

The Partnership's total cash debt service requirement was approximately
$40.0 million during 1998 and the Partnership anticipates that approximately
$37.7 million in cash will be required during 1999 to meet its debt service
obligations. The Partnership has the authority to obtain a working capital
facility of up to $10.0 million (of which approximately $5.4 million is
outstanding), although there can be no assurance that such financing will be
available, or on terms acceptable to the Partnership.

The ability of Funding and the Partnership to pay their indebtedness when
due will depend on the ability of the Partnership to either generate cash from
operations sufficient for such purposes or to refinance such indebtedness on or
before the date on which it becomes due. Cash flow from operations may not be
sufficient to repay a substantial portion of the principal amount of the debt at
maturity. The future operating performance of the Partnership and the ability to
refinance this debt will be subject to the then prevailing economic conditions,
industry conditions and numerous other financial, business and other factors,
many of which are beyond the control of Funding, TCHI or the Partnership. There
can be no assurance that the future operating performance of the Partnership
will be sufficient to meet these repayment obligations or that the general state
of the economy, the status of the capital markets or the receptiveness of the
capital markets to the gaming industry will be conducive to refinancing this
debt or other attempts to raise capital.

YEAR 2000

The Partnership has assessed the Year 2000 issue and has begun implementing
a plan to insure its systems are Year 2000 compliant. Analysis has been made of
the Partnership's various customer support and internal administration systems
with appropriate modifications having been made or underway. Testing the
modifications was ongoing during 1998 and is expected to be completed during
early 1999. The Partnership is approximately 50% complete in its modifications.

The Partnership believes that the issues of concern are predominantly
software related versus hardware related. Further, the Partnership relies upon
third party suppliers for support of their individual systems provided to the
Partnership. These are primarily support of property, plant and equipment, such
as telephones, elevators and fire safety systems. Contact has been made with all
significant system suppliers and the Partnership is at various stages of
assessment, negotiation and implementation. When necessary, contracts have been
issued to update these systems so as to insure Year 2000 compliance. The cost of
addressing the Year 2000 issue is not expected to be material, and will be
funded out of operations.

If the Partnership did not assess the Year 2000 issue and provide for its
compliance, it would be forced to convert to manual systems to carry on its
business. Since the Partnership expects to be fully Year 2000 compliant, it
does not feel that a contingency plan is necessary at this time. However, the
Partnership will continually be assessing the situation and considering whether
a contingency plan is necessary as the millennium approaches.

This Year 2000 disclosure constitutes Year 2000 readiness disclosure within
the meaning of the Year 2000 Information and Readiness Disclosure Act.

<PAGE>

IMPACT OF NEW ACCOUNTING STANDARDS

The Partnership has assessed the impact of newly issued accounting
standards expected to go into effect during 1999 in accordance with Staff
Accounting Bulletin No. 74 and, where applicable, disclosures have been provided
in the financial statements. Additionally, the Partnership has also reviewed the
impact of new accounting standards which went into effect during 1998 and, where
applicable, the Partnership has provided the required disclosures.

SEASONALITY

The gaming industry in Atlantic City is seasonal, with the heaviest
activity occurring during the period from May through September. Consequently,
the Partnership's operating results during the two quarters ending in March and
December would not likely be as profitable as the two quarters ending in June
and September.

INFLATION

There was no significant impact on the Partnership's operations as a result
of inflation in 1996, 1997 or 1998.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Management has reviewed the disclosure requirements for Item 7A and, based
upon the Partnership, Funding and TCHI's current capital structure, scope of
operations and financial statement structure, management believes that such
disclosure is not warranted at this time. Since conditions may change, the
Partnership, Funding and TCHI will periodically review its compliance with this
disclosure requirement to the extent applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

An index to financial statements and required financial statement schedules
is set forth in Item 14.

ITEM 9. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

<PAGE>

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS.

All decisions affecting the business and affairs of the Partnership,
including the operation of Trump Marina, are decided by the general partners
acting by and through a Board of Partner Representatives, which includes a
minority of Representatives elected indirectly by the holders of the Mortgage
Notes and PIK Notes (the "Noteholder Representatives"). As currently
constituted, the Board of Partner Representatives consists of Messrs. Donald J.
Trump, Chairman, Nicholas L. Ribis, John P. Burke, Robert M. Pickus, Asher O.
Pacholder, Thomas F. Leahy and Arthur S. Bahr. TCHI's Board of Directors
consists of the members of the Board of Partner Representatives.

The sole director of Funding is Trump. Trump also serves as its Chairman of
the Board, President and Treasurer.

Set forth below are the names, ages, positions and offices held with
Funding and the Partnership, and a brief account of the business experience
during the past five years of each member of the Board of Partner
Representatives, the executive officers of Funding and the Partnership, and the
director of Funding.

Donald J. Trump--Trump, 52 years old, has been Chairman of the Board of
Directors of THCR and Trump Hotels & Casino Resorts Funding, Inc. ("THCR
Funding") since their formation in 1995. Trump was a 50% shareholder, Chairman
of the Board of Directors, President and Treasurer of TP/GP, Inc. ("Trump Plaza
GP") and the managing general partner of Plaza Associates prior to June 1993.
Trump was Chairman of the Executive Committee and President of Plaza Associates
from May 1986 to May 1992 and was a general partner of Plaza Associates until
June 1993. Trump has been a director of Trump Atlantic City Holding, Inc.
("Trump AC Holding") since February 1993 and was President of Trump AC Holding
from February 1993 until December 1997. Trump was a partner in Trump Atlantic
City Associates ("Trump AC") from February 1993 until June 1995. Trump has been
Chairman of the Board of Directors of Trump Atlantic City Funding, Inc. ("Trump
AC Funding") since its formation in January 1996 and the Chairman of the Board
of Directors of Trump Atlantic City Funding II, Inc. ("Funding II") and Trump
Atlantic City Funding III, Inc. ("Funding III") since their formation in
November 1997. Trump has been Chairman of the Board of Directors of THCR Holding
Corp. ("THCR Holding Corp.") and THCR/LP Corporation ("THCR/LP") since October
1991, President and Treasurer of THCR Holding Corp. since March 4, 1991;
Chairman of the Board of Directors, President and Treasurer of TCI since June
1988; Chairman of the Executive Committee of Taj Associates from June 1988 to
October 1991; and President and sole Director of Trump Taj Mahal Realty Corp.
("Realty Corp.") since May 1986. Trump has been the sole director of Trump
Atlantic City Corporation ("TACC") since March 1991. Trump was President and
Treasurer of TACC from March 1991 until December 1997. Trump has been the sole
director of Trump Indiana, Inc. ("Trump Indiana") since its formation. Trump has
been Chairman of the Board of Partner Representatives of the Partnership since
May 1992; and was Chairman of the Executive Committee of the Partnership from
June 1985 to May 1992. Trump is the Chairman of the Board of Directors of
Funding and served as President and Treasurer of Funding until April 1998. Trump
is the Chairman of the Board and Treasurer of TCHI. Trump is the President,
Treasurer, sole director and sole shareholder of TCI-II. Trump has been a
Director of THCR Enterprises, Inc., a Delaware corporation ("THCR Enterprises"),
since its formation in January 1997. Trump is also the President of The Trump
Organization, which has been in the business, through its affiliates and
subsidiaries, of acquiring, developing and managing real estate properties for
more than the past five years. Trump was a member of the Board of Directors of
Alexander's Inc. from 1987 to March 1992.

Nicholas L. Ribis--Mr. Ribis, 54 years old, has been President, Chief
Executive Officer and a director of THCR and THCR Funding and Chief Executive
Officer of THCR Holdings since their formation in 1995. Mr. Ribis has been the
Chief Executive Officer of Plaza Associates since February 1991, was President
from April 1994 to February 1995, was a member of the Executive Committee of
Plaza Associates from April 1991 to May 29, 1992 and was a director and Vice
President of Trump Plaza GP from May 1992 until June 1993. Mr. Ribis served as
Vice President of Trump AC Holding from February 1995 until December 1997. Mr.
Ribis has served as President

<PAGE>

of Trump AC Holding since December 1997. Mr. Ribis has served as a director of
Trump AC Holding since June 1993. Mr. Ribis has been Chief Executive Officer,
President and a director of Trump AC Funding since its formation in January 1996
and Chief Executive Officer, President and a director of Funding II and Funding
III since their formation in November 1997. Mr. Ribis served as Vice President
of TACC until December 1997. Mr. Ribis has served as the President of TACC since
December 1997. Mr. Ribis has been the President and Chief Executive Officer of
Trump Indiana since its formation. Mr. Ribis has been a Director of THCR/LP and
THCR Holding Corp. since October 1991 and was Vice President of THCR/LP and THCR
Holding Corp. until June 1995; Chief Executive Officer of Taj Associates since
February 1991; Vice President of TCI since February 1991 and Secretary of TCI
since September 1991; Director of Realty Corp. since October 1991; and a member
of the Executive Committee of Taj Associates from April 1991 to October 1991.
Mr. Ribis has served as Vice President of THCR/LP and THCR Holding Corp. since
February 1998. He has also been Chief Executive Officer of the Partnership since
March 1991 and President of the Partnership until April 1998; member of the
Executive Committee of the Partnership from April 1991 to May 1992; member of
the Board of Partner Representatives of the Partnership since May 1992; and has
served as the Vice President and Assistant Secretary of TCHI since December 1993
and January 1991, respectively until April 1998. Mr. Ribis is now a director of
TCHI. Since April 1998 Mr. Ribis has served as President and Chief Executive
Officer of TCHI and Funding. Mr. Ribis has served as Vice President of TCI-II
since December 1993 and had served as Secretary of TCI-II from November 1991 to
May 1992. Mr. Ribis has been Vice President of Trump Corp. since September 1991.
Mr. Ribis has been the President and a director of THCR Enterprises since
January 1997. From January 1993 to January 1995 Mr. Ribis served as the Chairman
of the Casino Association of New Jersey and has been a member of the Board of
Trustees of the CRDA since October 1993. From January 1980 to January 1991, Mr.
Ribis was Senior Partner in, and from February 1991 to December 1995, was
Counsel to the law firm of Ribis, Graham & Curtin (now practicing as Graham,
Curtin & Sheridan, A Professional Association), which serves as New Jersey legal
counsel to all of the above-named companies and certain of their affiliated
entities.

Robert M. Pickus--Mr. Pickus, 44 years old, has been Executive Vice
President and Secretary of THCR since its formation in 1995. He has also been
the Executive Vice President of Corporate and Legal Affairs of Plaza Associates
since February 1995. From December 1993 to February 1995, Mr. Pickus was the
Senior Vice President and General Counsel of Plaza Associates. Mr. Pickus served
as the Assistant Secretary of Trump AC Holding from April 1994 until February
1998. Since February 1998, Mr. Pickus has served as the Secretary of Trump AC
Holding. Mr. Pickus has been Secretary and a director of Trump AC Funding since
its formation in January 1996 and Secretary and a director of Funding II and
Funding III since their formation in November 1997. Mr. Pickus has been the
Executive Vice President and Secretary of Trump Indiana since its inception. Mr.
Pickus has been the Executive Vice President of Corporate and Legal Affairs of
Taj Associates since February 1995, and a Director of THCR Holding Corp. and
THCR/LP since November 1995. He was the Senior Vice President and Secretary of
Funding from June 1988 to December 1993 and General Counsel of the Partnership
from June 1985 to December 1993. Mr. Pickus has served as the Secretary of
Funding since April 1998. Mr. Pickus served as the Assistant Secretary of TACC
until February 1998. Since February 1998, Mr. Pickus has served as the Secretary
of TACC. Mr. Pickus was also Secretary of TCHI from October 1991 until December
1993. Mr. Pickus is a director of TCHI, and has served as the Assistant
Secretary of TCHI from February 1998 until April 1998. Since April 1998 Mr.
Pickus has served as the Secretary of TCHI. Mr. Pickus has been the Executive
Vice President of Corporate and Legal Affairs of the Partnership since February
1995, Secretary of the Partnership since February 1996 and a member of the Board
of Partner Representatives of the Partnership since October 1995. Mr. Pickus is
currently the Secretary of THCR Holding Corp., has been the Vice President,
Secretary and Director of THCR Enterprises since January 1997 and has been
Executive Vice President of TCS since its inception and its President since
November 1998. He has been admitted to practice law in the states of New York
and New Jersey since 1980, and in the Commonwealth of Pennsylvania since 1981.

John P. Burke--Mr. Burke, 51 years old, served as the Senior Vice President
of Corporate Finance of THCR from January 1996 until June 1997. Mr. Burke served
as the Senior Vice President of THCR, THCR Holdings and THCR Funding from June
1997 to January 1999. Mr. Burke has served as Executive Vice President of THCR,
THCR Holdings and THCR Funding since January 1999. Mr. Burke has been the
Corporate Treasurer of THCR, THCR Holdings and THCR Funding since their
formation in 1995. He has also been Corporate

<PAGE>

Treasurer of Plaza Associates and Taj Associates since October 1991. Mr. Burke
has been the Treasurer of Trump Indiana since its formation. Mr. Burke has been
Treasurer of Trump AC Funding since its formation in January 1996 and Treasurer
of Funding II and Funding III since their formation in November 1997. Mr. Burke
has been Treasurer of TACC since February 1998. Mr. Burke was a Director of
THCR/LP and THCR Holding Corp. from October 1991 to April 1996 and was Vice
President of THCR/LP until June 1995. Mr. Burke has served as the Assistant
Treasurer of THCR Holding Corp. and THCR/LP since February 1998. Mr. Burke has
been the Corporate Treasurer of the Partnership since October 1991, the Vice
President of the Partnership, Funding, TCI-II and TCHI since December 1993
Assistant Treasurer of TCHI since April 1998, Treasurer of Funding since April
1998, a member of the Board of Partner Representatives of the Partnership since
March 1997 and the Vice President-Finance of The Trump Organization since
September 1990. Mr. Burke was an Executive Vice President and Chief
Administrative Officer of Imperial Corporation of America from April 1989
through September 1990. Mr. Burke has been the Vice President and Treasurer of
THCR Enterprises since January 1997.

Mark A. Brown--Mr. Brown, 38 years old, joined the Partnership as Executive
Vice President of Operations in July 1995 and, effective November 1997, serves
as President and Chief Operating Officer. Mr. Brown also serves as Vice
President of TCHI. Previously, Mr. Brown served as Senior Vice President of
Eastern Operations for Caesar's World Marketing Corporation, National and
International Divisions from 1993 until 1995. Prior to that, Mr. Brown served as
Vice President of Casino Operations at the Taj Mahal from 1989 until 1993. From
1979 until 1989, Mr. Brown worked for Resorts International Hotel Casino
departing as Casino Shift Manager in December 1989.

Lawrence J. Mullin--Mr. Mullin, 36 years old, joined the Partnership as
Vice President of Slot Operations and Marketing in August 1995, and effective
June 1998, serves as Senior Vice President of Marketing. Previously, Mr. Mullin
served as Vice President of Slot and Casino Marketing from 1992 until 1995 at
the Taj Mahal.

Stephen S. Oskiera--Mr. Oskiera, 40 years old, serves as Vice
President of Finance of the Partnership, as well as Chief Financial Officer,
Chief Accounting Officer and Assistant Treasurer of Funding and Assistant
Treasurer and Chief Financial Officer of TCHI since October 1998. Mr. Oskiera
served as Executive Director of Finance for both the Partnership and TCS from
October 1995 to October 1998. Previously, Mr. Oskiera served as Corporate
Controller of American Gaming & Entertainment, Ltd., a casino development
company, from December 1993 to October 1995 and, prior to that, served as
Financial Controller for Greate Bay Hotel & Casino, Inc. d/b/a/ the Sands Hotel
& Casino in Atlantic City, New Jersey from May 1987 to December 1993.

Asher O. Pacholder--Dr. Pacholder, 61 years old, has been a partner
representative of the Board of Partner Representatives since May 1992. Dr.
Pacholder served as a director and the President of TCI-II from May 1992 to
December 1993. He has served as the Chairman of the Board of Directors and Chief
Financial Officer of ICO, Inc., an oil field services and petrochemicals
processing company, since February 1995 and Chief Operating Officer and a
director of Wedco Technology, Inc. since May 1996. Dr. Pacholder has served as
Chairman of the Board and Managing Director of Pacholder Associates, Inc., an
investment advisory firm, since 1983. In addition, Dr. Pacholder is Chairman of
the Board of Directors of USF&G Pacholder Fund, Inc., a closed-end investment
company, and he serves on the Board of Directors of Southland Corporation, which
owns and operates convenience stores.

Thomas F. Leahy--Mr. Leahy, 61 years old, has been a partner representative
on the Board of Partner Representatives since June 1993. Mr. Leahy served as a
director and Treasurer of TCI-II from May 1992 to December 1993. From 1991 to
July 1992, Mr. Leahy served as Executive Vice President of CBS Broadcast Group,
a unit of CBS, Inc. Mr. Leahy retired from CBS, Inc. in 1992, having served in
various executive capacities over a 30-year period. Since November 1992, Mr.
Leahy has served as President of The Theater Development Fund, a service
organization for the performing arts. Since July 1992, Mr. Leahy has served as
Chairman of VT Properties, Inc., a privately-held corporation which invests in
literary, stage and film properties.

<PAGE>

Arthur S. Bahr--Mr. Bahr, 67 years old, has been a partner representative
on the Board of Partner Representatives since June 1995 and previously served as
a director of TCI-II from August 1993 to January 1994. Mr. Bahr retired in
February 1994 after serving in various senior investment positions for General
Electric Investment Corporation since 1970. Mr. Bahr serves on the Board of
Directors of Renaissance Reinsurance and the Korean International Investment
Fund.

Each member of the Board of Partner Representatives and all of the other
persons listed above have been licensed or found qualified by the CCC.

The employees of the Partnership serve at the pleasure of the Board of
Partner Representatives subject to any contractual rights contained in any
employment agreement.

<PAGE>

ITEM 11. EXECUTIVE COMPENSATION.

Executive officers of Funding and TCHI do not receive any additional
compensation for serving in such capacity. In addition, Funding, TCHI and the
Partnership do not offer their executive officers stock option or stock
appreciation right plans, long-term incentive plans or defined benefit pension
plans.

Summary Compensation Table. The following table sets forth compensation
paid or accrued during the years ended December 31, 1998, 1997 and 1996 to the
Chairman of the Board of Partner Representatives, the Chief Executive Officer,
two executive officers of the Partnership whose cash compensation, including
bonuses and deferred compensation, exceeded $100,000 for the year ended December
31, 1998 and one executive officer whose cash compensation would have exceeded
$100,000 if he had been employed in his current position for the entire year of
1998. Compensation accrued during one year and paid in another is recorded under
the year of accrual. Information relating to long-term compensation is
inapplicable and has therefore been omitted from the table.

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

ANNUAL COMPENSATION(1)
NAME AND ------------------------------ OTHER ANNUAL ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) COMPENSATION
------------------ ---- ------ ----- --------------- ------------
<S> <C> <C> <C> <C> <C>
Donald J. Trump......................... 1998 _ _ _ _
Chairman of the Board 1997 _ _ _ _
1996 _ _ _ _

Nicholas L. Ribis....................... 1998 $399,300 _ _ $1,000(2)
Chief Executive Officer 1997 399,300 _ _ 950(2)
1996 499,125 _ _ 594(2)

Mark A. Brown........................... 1998 $436,323 $75,000 _ $4,286(2)
President / Chief Operating Officer 1997 352,383 75,000 _ 2,375(2)
1996 359,160 75,000 _ 2,375(2)

Lawrence J. Mullin...................... 1998 $207,746 _ _ $4,286(2)
Senior Vice President Marketing 1997 160,992 $40,000 _ 2,375(2)
1996 154,705 40,000 _ 2,375(2)

Stephen S. Oskiera (3).................. 1998 $ 13,462 _ _ $404(2)
Vice President Finance 1997 _ _ _ _
1996 _ _ _ _
</TABLE>

- -----------

(1) Represents the dollar value of annual compensation not properly categorized
as salary or bonus, including amounts reimbursed for income taxes and
director's fee. Following rules of the Securities and Exchange Commission
(the "Commission"), perquisites and other personal benefits are not
included in this table of the aggregate amount if that compensation is the
lesser of either $50,000 or 10% of the total salary and bonus for that
officer.

(2) Represents vested and unvested contributions made by the Partnership under
the Trump's Castle Hotel & Casino Retirement Savings Plan. Funds
accumulated for an employee, which consist of a certain percentage of the
employee's compensation plus Partnership contributions equaling 50% of the
participant's contributions, are retained until termination of employment,
attainment of age 59 1/2 or financial hardship, at which time the employee
may withdraw his or her vested funds.

(3) Mr. Oskiera became Vice President of Finance during October 1998.
Compensation earned in previous positions prior to this date is not
reflected in this table.

<PAGE>

EMPLOYMENT AGREEMENTS

Mr. Ribis had an employment agreement with Partnership pursuant to which
Mr. Ribis acted as Chief Executive Officer of the Partnership. The agreement
provided that in the event the Partnership, or any entity which acquires
substantially all of the equity interests or assets of the Partnership, proposes
to engage in an offering of common shares to the public, the Partnership and Mr.
Ribis would agree to negotiate new compensation arrangements which shall include
equity participation for Mr. Ribis. This agreement was terminated upon
consummation of the Castle Acquisition and now Mr. Ribis is compensated for his
services to the Partnership under an employment agreement with THCR and THCR
Holdings (the "Ribis THCR Agreement"). Under the Ribis THCR Agreement, Mr.
Ribis's annual salary is $1,996,500. Mr. Ribis's annual salary is paid on an
allocation basis by THCR, Taj Associates, Plaza Associates and the Partnership.

The Partnership, on March 6, 1998, entered into an employment agreement
with Mark A. Brown (the "Brown Agreement") pursuant to which Mr. Brown serves as
the Partnership's President and Chief Operating Officer. The Brown Agreement
expires on December 31, 2000 unless terminated early by the Partnership for
Cause (as defined in the Brown Agreement) or terminated by Mr. Brown upon the
occurrence of a Change of Control (as defined in the Brown Agreement). The Brown
Agreement provides for an annual base salary of $450,000 in 1998, $475,000 in
1999 and $500,000 in 2000.

The Partnership entered into an employment agreement with Lawrence J.
Mullin on July 24, 1995, as amended (the "Mullin Agreement"), pursuant to which
Mr. Mullin serves as the Partnership's Senior Vice President of Marketing. The
Mullin Agreement expires on December 31, 2000 unless terminated by Mr. Mullin
upon the occurrence of a Change of Control (as defined in the Mullin Agreement).
The Mullin Agreement provides for an annual base salary of $235,000 in 1998,
$245,000 in 1999 and $260,000 in 2000.

COMPENSATION OF THE BOARD OF DIRECTORS

Each Partner Representative of the Partnership (other than Messrs. Trump,
Ribis, Burke and Pickus) receives an annual fee of $50,000. In addition, each
Partner Representative of the Partnership (other than Messrs. Trump, Ribis,
Pickus and Burke) receives $2,500 per meeting attended, plus reasonable
out-of-pocket expenses incurred in attending any meeting of the Board of Partner
Representatives.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

In general, the compensation of executive officers of the Partnership is
determined by the Board of Partners Representatives, which is composed of Trump,
Nicholas L. Ribis, John P. Burke, Asher O. Pacholder, Thomas F. Leahy, Arthur S.
Bahr and Robert M. Pickus. The compensation of Nicholas L. Ribis is set forth in
his employment agreement. The Partnership has delegated the responsibility over
certain matters, such as the bonus of Mr. Ribis, to Trump. Executive officers of
Funding do not receive any additional compensation for serving in such capacity.

Castle Acquisition. On October 7, 1996, THCR Holdings acquired from Trump
all of the outstanding equity of the Partnership. See "Business-Trump
Marina-Historical Background-Castle Acquisition."

Services Agreement. On December 28, 1993, the Partnership entered into a
Services Agreement with TCI-II (the "Services Agreement"). In general, the
Services Agreement obligates TCI-II to provide to the Partnership, from time to
time when reasonably requested, consulting services on a non-exclusive basis,
relating to marketing, advertising, promotional and other services (the
"Services") with respect to the business and operations of the Partnership, in
exchange for certain fees to be paid only in those years in which EBITDA (EBITDA
represents income from operations before depreciation, amortization,
restructuring costs and the non-cash write-down of CRDA investments) exceeds
prescribed amounts.

<PAGE>

In consideration for the Services to be rendered by TCI-II, the Partnership
will pay an annual fee (which is identical to the fee which was payable under
the previously existing management agreement) to TCI-II in the amount of $1.5
million for each year in which EBITDA exceeds the following amounts for the
years indicated: 1993-$40.5 million; 1994-$45.0 million; 1995 and
thereafter-$50.0 million. If EBITDA in any fiscal year does not exceed the
applicable amount, no annual fee is due. In addition, TCI-II will be entitled to
an incentive fee beginning with the fiscal year ending December 31, 1994 in an
amount equal to 10% of EBITDA in excess of $45.0 million for such fiscal year.
The Partnership will also be required to advance to TCI-II $125,000 a month
which will be applied toward the annual fee, provided, however, that no advances
will be made during any year if and for so long as the Managing Partner (defined
in the Services Agreement as Trump) determines, in his good faith reasonable
judgment, that the Partnership's budget and year-to-date performance indicate
that the minimum EBITDA levels (as specified above) for such year will not be
met. If for any year during which annual fee advances have been made it is
determined that the annual fee was not earned, TCI-II will be obligated to
promptly repay any amounts previously advanced. For purposes of calculating
EBITDA under the Services Agreement, any incentive fees paid in respect of 1994
or thereafter shall not be deducted in determining net income. During the years
ended 1997 and 1998, there were no fees payable by the Partnership under the
Services Agreement. As the Partnership did not meet the required level of EBITDA
during 1996, the monthly advances to TCI-II related to the Services Agreement
were suspended and on October 6, 1996, the Partnership recorded a receivable in
the amount of $1.25 million which represents the amounts advanced to TCI-II
during the year. This amount will be offset against future fees. The Services
Agreement expires on December 31, 2005.

Trump has granted the Partnership a license to use the Marks in connection
with the operations of Trump Marina since June 17, 1985. See
"Business-Trademark/Licensing."

Other Relationships. The Commission requires registrants to disclose the
existence of any other corporation in which both (i) an executive officer of the
registrant serves on the board of directors and/or compensation committee, and
(ii) a director of the registrant serves as an executive officer. Messrs. Ribis,
Pickus and Burke, executive officers of the Partnership, serve on the Board of
Directors of other entities in which members of the Board of Partner
Representatives (namely, Messrs. Trump, Ribis, Burke and Pickus) serve and
continue to serve as executive officers. The Partnership believes that such
relationships have not affected the compensation decisions made by the Board of
Partner Representatives in the last fiscal year.

Trump is the sole director of TACC, a general partner of Plaza Associates,
of which Messrs. Trump, Ribis and Pickus are executive officers. Messrs. Trump
and Ribis also serve on the Board of Directors of Trump AC Holding, of which
Messrs. Trump, Ribis and Burke are also executive officers. Trump is not
compensated by such entities for serving as an executive officer, however, he
has entered into a personal services agreement with the Plaza Associates and
THCR. Messrs. Ribis and Burke are not compensated by the foregoing entities,
however, they are compensated by Plaza Associates for their service as executive
officers.

Messrs. Trump, Ribis, Pickus and Burke serve on the Board of Directors of
THCR Holding Corp., which held, prior to April 17, 1996, an indirect equity
interest in Taj Associates, of which Trump is an executive officer. Such persons
also serve on the Board of Directors of THCR/LP, the former managing general
partner of Taj Associates, of which Messrs. Trump and Ribis are executive
officers.

Mr. Ribis also serves on the Board of Directors of Realty Corp. which,
prior to April 17, 1996, leased certain real property to Taj Associates, of
which Trump is an executive officer. Trump, however, does not receive any
compensation for serving as an executive officer of Realty Corp.

Messrs. Trump and Ribis serve on the Board of Directors of THCR of which
Trump is Chairman of the Board. Messrs. Ribis, Pickus and Burke are executive
officers of THCR and are compensated for their services by THCR.

<PAGE>

John Barry, Trump's brother-in-law, is a partner of Tompkins, McGuire,
Wachenfeld & Barry, a New Jersey law firm which provides, from time to time,
legal services to the Partnership.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth information with respect to the amount of
Funding's Common Stock and TCHI's Common Stock owned by beneficial owners of
more than 5% of Funding's Common Stock or 5% of TCHI's Common Stock. Neither
Funding nor TCHI have another class of equity securities outstanding.

AMOUNT AND NATURE OF PERCENT OF
TITLE OR CLASS NAME AND ADDRESS OF BENEFICIAL OWNERS BENEFICIAL OWNERS CLASS
-------------- ------------------------------------- -------------------- ----------
<S> <C> <C> <C>
Funding's Common Stock Trump's Castle Associates, L.P. 200 shares 100%
Huron Avenue and Brigantine Blvd.
Atlantic City, New Jersey 08401

TCHI's Common Stock Trump Hotels & Casino Resorts Holdings, L.P. 100 shares 100%
2500 Boardwalk
Atlantic City, New Jersey 08401

</TABLE>

All of the equity interests of the Partnership are beneficially owned by
THCR Holdings. THCR Holdings is a 99% limited partner of the Partnership and
TCHI, a wholly owned subsidiary of THCR Holdings, is a 1% general partner.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Affiliate party transactions are governed by the provisions of the
indentures pursuant to which the Mortgage Notes, the New Senior Notes and the
PIK Notes were issued, which provisions generally require that such transactions
be on terms as favorable as would be obtainable from an unaffiliated party, and
require the approval of a majority of the Noteholder Representatives of the
Board of Partner Representatives for certain affiliated transactions.

Trump, Ribis and certain affiliates have engaged in certain related party
transactions with respect to the Partnership. See "Executive
Compensation-Compensation Committee Interlocks and Insider
Participation-Services Agreement" and "-Other Relationships."

The Partnership has joint insurance coverage with Taj Associates and Plaza
Associates, for which the annual premiums paid by the Partnership, Taj
Associates and Plaza Associates were approximately $3.9 million for the year
ending December 31, 1998.

Plaza Associates leased portions of its warehouse facility located in Egg
Harbor Township, New Jersey to the Partnership. Lease payments by the
Partnership to Plaza Associates totaled $5,000 in 1996. The Partnership did not
make any lease payments to Plaza Associates in 1997 or 1998.

The Partnership has entered into a services agreement with TCS pursuant to
which TCS provides the Partnership with certain management, financial and other
functions and services necessary and incidental to the operations of Trump
Marina.

<PAGE>

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a) Financial Statements. See the Index immediately following the
signature page.

(b) Reports on Form 8-K. The Registrants did not file any reports on
Form 8-K during the quarter ended December 31, 1998.

(c) Exhibits. All exhibits listed below are filed with this Annual
Report on Form 10-K unless specifically stated to be incorporated by reference
to other documents previously filed with the Securities and Exchange Commission.

EXHIBIT NO.

3(1) Amended and Restated Certificate of Incorporation of Trump's Castle
Funding, Inc.

3.1(1) Bylaws of Trump's Castle Funding, Inc.

3.2-3.6 Intentionally omitted.

3.7.1(2) Second Amended and Restated Partnership Agreement of Trump's Castle
Associates.

3.7.2(12) Amendment to the Second Amended and Restated Partnership Agreement
of Trump's Castle Associates, dated as of October 7, 1996.

3.7.3(12) Third Amended and Restated Partnership Agreement of Trump's Castle
Associates, L.P., dated as of October 7, 1996.

3.8(15) Restated Certificate of Incorporation of Trump's Castle Hotel &
Casino, Inc.

3.9(15) By-Laws of Trump's Castle Hotel & Casino, Inc.

4.1-4.10 Intentionally omitted.

4.11(2) Indenture, among Trump's Castle Funding, Inc. as issuer, Trump's
Castle Associates, as guarantor, and the Mortgage Note Trustee, as
trustee.

4.12(2) Indenture of Mortgage between Trump's Castle Associates, as
Mortgagor, and Funding, as Mortgagee.

4.13(2) Assignment Agreement between Trump's Castle Funding, Inc. and the
Mortgage Note Trustee.

4.14(2) Partnership Note of Trump's Castle Associates.

4.15 Form of Mortgage Note (included in Exhibit 4.11).

4.16 Form of Partnership Guarantee (included in Exhibit 4.11).

4.17(2) Indenture between Trump's Castle Funding, Inc., as issuer, Trump's
Castle Associates, as guarantor, and the PIK Note Trustee, as
trustee.

4.18(2) Pledge Agreement between Trump's Castle Funding, Inc. and the PIK
Note Trustee.

4.19(2) Subordinated Partnership Note.

4.20 Form of PIK Note (included in Exhibit 4.17).

4.21 Form of Subordinated Partnership Guarantee (included in Exhibit
4.17).

4.22(1) Letter Agreement between Trump's Castle Associates and the Proposed
Senior Secured Note Purchasers regarding the Senior Secured Notes.

4.23(2) Note Purchase Agreement for 11 1/2% Series A Senior Secured Notes of
Trump's Castle Associates due 1999.

4.24(2) Indenture, among Trump's Castle Funding, Inc., as issuer, Trump's
Castle Associates, as guarantor, and the Senior Secured Note
Trustee, as trustee.

4.25(2) Indenture of Mortgage and Security Agreement between Trump's Castle
Associates, as mortgagor/debtor, and Trump's Castle Funding, Inc. as
mortgagee/secured party (Senior Note Mortgage).

4.26(2) Registration Rights Agreement by and among Trump's Castle Associates
and certain purchasers.

4.27 Intentionally omitted.

35
<PAGE>

4.28(2) Guarantee Mortgage.

4.29(2) Senior Partnership Note.

4.30(2) Indenture of Mortgage and Security Agreement between Trump's Castle
Associates as mortgagor/debtor and the Senior Note Trustee as
mortgagee/secured party (Senior Guarantee Mortgage).

4.31(2) Assignment Agreement between Trump's Castle Funding, Inc., as
assignor, and the Senior Note Trustee, as assignee (Senior
Assignment Agreement). 4.32(2) Amended and Restated Nominee
Agreement.

4.33(14) Note Purchase Agreement, dated as of April 17, 1998, for 10 1/4%
Series A Senior Secured Notes due 2003 of Trump's Castle Hotel &
Casino, Inc.

4.34(14) Indenture, dated as of April 17, 1998, by and among Trump's Castle
Hotel & Casino, Inc., as issuer, Trump's Castle Associates, L.P., as
guarantor, and U.S. Bank National Association, as trustee.

4.35(14) Indenture, dated as of April 17, 1998, by and among Trump's Castle
Funding, Inc., as issuer, Trump's Castle Associates, L.P., as
guarantor, and U.S. Bank National Association, as trustee.

4.36(14) Registration Rights Agreement, dated as of April 17, 1998, between
Trump's Castle Hotel & Casino, Inc., Trump's Castle Associates, L.P.
Trump's Castle Funding, Inc. and funds managed by Putnam Investment
Management.

4.37(14) Intercreditor Agreement, dated as of April 17, 1998, between Trump's
Castle Associates, L.P., Trump's Castle Funding, Inc., Trump,
Trump's Castle Hotel & Casino, Inc. and U.S. Bank National
Association.

4.38(14) Indenture of Mortgage and Security Agreement, dated as of April 17,
1998, between Trump's Castle Associates, L.P., as Mortgagor/Debtor,
and Trump's Castle Funding, Inc., as Mortgagee/Secured Party.

4.39(14) Indenture of Mortgage and Security Agreement, dated as of April 17,
1998, between Trump's Castle Associates, L.P., as Mortgagor/Debtor,
and U.S. Bank National Association, as Mortgagee/Secured Party.

4.40(14) Senior Assignment Agreement, dated as of April 17, 1998, by Trump's
Castle Funding, Inc., as Assignor, to U.S. Bank National
Association, as Assignee.

4.41(14) Indenture of Mortgage and Security Agreement, dated as of April 17,
1998, between Trump's Castle Associates, L.P. as Mortgagor/Debtor,
and Trump's Castle Hotel & Casino, Inc., as Mortgagee/ Secured
Party.

4.42(14) Indenture of Mortgage and Security Agreement, dated as of April 17,
1998, between Trump's Castle Associates, L.P., as Mortgagor/Debtor,
and U.S. Bank National Association, as Mortgagee/Secured Party.

4.43(14) Senior TCHI Assignment Agreement, dated as of April 17, 1998, by
Trump's Castle Hotel & Casino, Inc., as Assignor, to U.S. Bank
National Association, as Assignee.

10.1-10.2 Intentionally omitted.

10.3(3) Employment Agreement dated January 17, 1991, between Trump's Castle
Associates and Roger P. Wagner.

10.4(4) Second Amendment to Employment Agreement dated January 17, 1991
between Trump's Castle Associates, Trump's Castle Hotel & Casino,
Inc., and Roger P. Wagner.

10.5(5) Form of License Agreement between Trump's Castle Associates and
Donald J. Trump.

10.6-10.10 Intentionally omitted.

10.11(11) Employment Agreement between Trump Hotels & Casino Resorts Holdings,
L.P. and Nicholas L. Ribis (with exhibits).

10.12(6) Trump's Castle Hotel & Casino Retirement Savings Plan, effective as
of September 1, 1986.

36
<PAGE>

10.13-10.18 Intentionally omitted.

10.19(3) Lease Agreement by and between State of New Jersey acting through
its Department of Environmental Protection, Division of Parks and
Forests, as Landlord, and Trump's Castle Associates, as tenant,
dated September 1, 1990.

10.20-10.26 Intentionally omitted.

10.27(1) Services Agreement.

10.28-10.31 Intentionally omitted.

10.32(7) Employment Agreement dated December 20, 1993, between Patricia M.
Wild and Trump's Castle Associates.

10.33 Intentionally omitted.

10.34(7) Amended and Restated Credit Agreement, dated as of December 28,
1993, among Midlantic, Trump's Castle Associates and Trump's Castle
Funding, Inc.

10.35(7) Amendment No. 1 to Amended and Restated Indenture of Mortgage,
between Trump's Castle Associates, as Mortgagor and Midlantic, as
Mortgagee.

10.36(7) Amended and Restated Indenture of Mortgage, between Trump's Castle
Associates, as Mortgagor and Midlantic, as Mortgagee, dated as of
May 29, 1992.

10.37(7) Amendment No. 1 to Amended and Restated Assignment of Leases and
Rents, between Trump's Castle Associates, as assignor, and
Midlantic, as assignee.

10.38(7) Amended and Restated Assignment of Leases and Rents, between Trump's
Castle Associates, as assignor, and Midlantic, as assignee, dated as
of May 29, 1992.

10.39(7) Amendment No. 1 to Amended and Restated Assignment of Operating
Assets, between Trump's Castle Associates, as assignor and
Midlantic, as assignee.

10.40(7) Amended and Restated Assignment of Operating Assets, between Trump's
Castle Associates, as assignor, and Midlantic, as assignee, dated as
of May 29, 1992.

10.41(7) Intercreditor Agreement, by and among Midlantic, the Senior Note
Trustee, the Mortgage Note Trustee, the PIK Note Trustee, Trump's
Castle Funding, Inc. and Trump's Castle Associates.

10.42(8) Option Agreement, dated as of June 23, 1995, between Hamilton
Partners, L.P. and Trump's Castle Associates.

10.43(9) Form of Amended and Restated Term Note, dated as of May 28, 1995,
between Midlantic Bank, N.A. and Trump's Castle Associates.

10.44(11) Severance Agreement dated June 16, 1995, between Robert E.
Schaffhauser and Trump's Castle Associates.

10.45(11) Employment Agreement dated July 10, 1995, between Mark A. Brown and
Trump's Castle Associates.

10.46(12) Thermal Energy Service Agreement, dated as of September 27, 1996, by
and between Atlantic Jersey Thermal Systems, Inc. and Trump's Castle
Associates.

10.47(12) Amended and Restated Services Agreement, dated as of October 23,
1996, by and among Trump Plaza Associates, Trump Taj Mahal
Associates, Trump's Castle Associates, L.P. and Trump Casino
Services, L.L.C.

10.48(13) Employment Agreement between R. Bruce McKee and Trump Taj Mahal
Associates, dated August 1, 1994.

10.49 Employment Agreement, dated July 24, 1995, as amended, between
Lawrence J. Mullin and Trump's Castle Associates, L.P.

21 List of Subsidiaries of Trump's Castle Hotel & Casino, Inc., Trump's
Castle Associates, L.P. and Trump's Castle Funding, Inc.

27.1 Financial Data Schedule of Trump's Castle Funding, Inc.

27.2 Financial Data Schedule of Trump's Castle Associates, L.P.

27.3 Financial Data Schedule of Trump's Castle Hotel & Casino, Inc.
- -----------

37
<PAGE>

(1) Incorporated herein by reference to the Exhibit to Trump's Castle Funding,
Inc. and Trump's Castle Associates' Registration Statement on Form S-4,
Registration No. 33-68038.

(2) Incorporated herein by reference to the Exhibit to Amendment No. 5 to the
Schedule 13E-3 of TC/GP, Inc. and the Partnership, File No. 5-36825, filed
with the SEC on January on January 11, 1994.

(3) Incorporated herein by reference to the Exhibit to Trump's Castle Funding,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1990.

(4) Incorporated herein by reference to the Exhibit to Trump's Castle Funding,
Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 1992.

(5) Incorporated herein by reference to the Exhibit to Trump's Castle Funding,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1991.

(6) Incorporated herein by reference to the Exhibit to Trump's Castle Funding,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1986.

(7) Incorporated herein by reference to the identically numbered Exhibit to
Trump's Castle Funding, Inc.'s Registration Statement on Form S-4,
Registration Number 33-52309 filed with the SEC on February 17, 1994.

(8) Incorporated herein by reference to the identically numbered Exhibit to
Trump's Castle Funding, Inc.'s and Trump Castle Associates' Current Report
on Form 8-K dated as of June 23, 1995.

(9) Incorporated herein by reference to the identically numbered Exhibit to
Trump's Castle Funding, Inc.'s and Trump's Castle Associates' Quarterly
Report on Form 10-Q for the quarter ended June 30, 1995.

(10) Incorporated herein by reference to the identically numbered Exhibit in
the Quarterly Report on Form 10-Q of Trump Hotels & Casino Resorts
Holdings, L.P. and Trump Hotels & Casino Resorts Funding, Inc. for the
quarter ended June 30, 1995.

(11) Incorporated herein by reference to the identically numbered Exhibit in
the Annual Report on Form 10-K of Trump's Castle Funding, Inc. and Trump's
Castle Associates for the year ended December 31, 1995.

(12) Incorporated herein by reference to the identically numbered Exhibit to
Trump's Castle Funding, Inc.'s and Trump Castle Associates' Quarterly
Report on Form 10-Q for the quarter ended September 30, 1996.

(13) Incorporated herein by reference to the Exhibit in the Quarterly Report on
Form 10-Q of Trump Taj Mahal Funding, Inc. for the quarter ended September
30, 1994.

(14) Incorporated herein by reference to the identically numbered Exhibit to
Trump's Castle Funding, Inc. and Trump's Castle Associates, L.P.'s
Quarterly Report on Form 10-Q for the quarter ended March 31, 1998.

(15) Incorporated herein by reference to the Exhibit to Trump's Castle Hotel &
Casino, Inc., Trump's Castle Funding, Inc. and Trump's Castle Associates
L.P.'s Registration Statement on Form S-4, Registration No.
333-56865.

(d) Financial Statement Schedules. See "Financial Statements and
Supplementary Data-Index to Financial Statements and Financial Statement
Schedules" for a list of the financial statement schedules included in this
Annual Report.

<PAGE>

IMPORTANT FACTORS RELATING TO FORWARD LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements so long as those statements are
identified as forward-looking and are accompanied by meaningful cautionary
statements identifying important factors that could cause actual results to
differ materially from those projected in such statements. In connection with
certain forward-looking statements contained in this Annual Report on Form 10-K
and those that may be made in the future by or on behalf of the Registrant, the
Registrant notes that there are various factors that could cause actual results
to differ materially from those set forth in any such forward-looking
statements. The forward-looking statements contained in this Annual Report were
prepared by management and are qualified by, and subject to, significant
business, economic, competitive, regulatory and other uncertainties and
contingencies, all of which are difficult or impossible to predict and many of
which are beyond the control of the Registrant. Accordingly, there can be no
assurance that the forward-looking statements contained in this Annual Report
will be realized or that actual results will not be significantly higher or
lower. The statements have not been audited by, examined by, compiled by or
subjected to agreed-upon procedures by independent accountants, and no
third-party has independently verified or reviewed such statements. Readers of
this Annual Report should consider these facts in evaluating the information
contained herein. In addition, the business and operations of the Registrant are
subject to substantial risks which increase the uncertainty inherent in the
forward-looking statements contained in this Annual Report. The inclusion of the
forward-looking statements contained in this Annual Report should not be
regarded as a representation by the Registrant or any other person that the
forward-looking statements contained in this Annual Report will be achieved. In
light of the foregoing, readers of this Annual Report are cautioned not to place
undue reliance on the forward-looking statements contained herein.

39
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, THE REGISTRANTS HAVE DULY CAUSED THIS ANNUAL REPORT TO BE SIGNED ON
THEIR BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON THE 30TH DAY OF
MARCH, 1999.

TRUMP'S CASTLE HOTEL & CASINO, INC.

By: /s/ Nicholas L. Ribis
---------------------------
BY: NICHOLAS L. RIBIS
TITLE: PRESIDENT

TRUMP'S CASTLE FUNDING, INC.

By: /s/ Nicholas L. Ribis
---------------------------
BY: NICHOLAS L. RIBIS
TITLE: PRESIDENT

TRUMP'S CASTLE ASSOCIATES, L.P.

By: /s/ Donald J. Trump
---------------------------
BY: DONALD J. TRUMP
TITLE: CHAIRMAN OF THE BOARD OF PARTNER REPRESENTATIVES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, THIS ANNUAL REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON
BEHALF OF THE REGISTRANTS AND IN THE CAPACITIES AND ON THE DATE INDICATED.

SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
TRUMP'S CASTLE HOTEL & CASINO, INC.

/s/ DONALD J. TRUMP Chairman of the Board March 30, 1999
- ----------------------------------
Donald J. Trump

/s/ NICHOLAS L. RIBIS Director, President (Principal Executive March 30, 1999
- ---------------------------------- Officer)
Nicholas L. Ribis

/s/ ASHER O. PACHOLDER Director March 30, 1999
- ----------------------------------
Asher O. Pacholder

/s/ ARTHUR S. BAHR Director March 30, 1999
- ----------------------------------
Arthur S. Bahr

/s/ THOMAS F. LEAHY Director March 30, 1999
- ----------------------------------
Thomas F. Leahy

</TABLE>

40
<PAGE>

<S> <C> <C>
/s/ ROBERT M. PICKUS Director March 30, 1999
- ----------------------------------
Robert M. Pickus

/s/ JOHN P. BURKE Director, Vice President, Assistant March 30, 1999
- ---------------------------------- Treasurer (Principal Financial Officer)
John P. Burke

TRUMP'S CASTLE FUNDING, INC.

/s/ DONALD J. TRUMP Chairman of the Board March 30, 1999
- ----------------------------------
Donald J. Trump

/s/ NICHOLAS L. RIBIS President (Principal Executive Officer) March 30, 1999
- ----------------------------------
Nicholas L. Ribis

/s/ JOHN P. BURKE Treasurer (Principal Financial Officer) March 30, 1999
- ----------------------------------
John P. Burke

TRUMP'S CASTLE ASSOCIATES, L.P.

/s/ DONALD J. TRUMP Chairman of the Board of Partner March 30, 1999
- ---------------------------------- Representatives
Donald J. Trump

/s/ NICHOLAS L. RIBIS Board of Partner Representatives March 30, 1999
- ----------------------------------
Nicholas L. Ribis

/s/ ASHER O. PACHOLDER Board of Partner Representatives March 30, 1999
- ----------------------------------
Asher O. Pacholder

/s/ ARTHUR S. BAHR Board of Partner Representatives March 30, 1999
- ----------------------------------
Arthur S. Bahr

/s/ THOMAS F. LEAHY Board of Partner Representatives March 30, 1999
- ----------------------------------
Thomas F. Leahy

/s/ ROBERT M. PICKUS Board of Partner Representatives March 30, 1999
- ----------------------------------
Robert M. Pickus

/s/ JOHN P. BURKE Board of Partner Representatives, March 30, 1999
- ---------------------------------- Treasurer and Chief Accounting
John P. Burke Officer of the Partnership

</TABLE>

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 BY REGISTRANTS WHICH HAVE NOT
REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT

The Registrants have not sent (and do not intend to send) an annual
report to security holders covering the Registrants' last fiscal year and have
not sent (and do not intend to send) a proxy statement, form of proxy or other
proxy soliciting materials to security holders.

<PAGE>

INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

PAGE
----
<S> <C>
Trump's Castle Associates, L.P. and Subsidiary

Reports of Independent Public Accountants................................................. F-2

Consolidated Balance Sheets as of December 31, 1997 and 1998.............................. F-4

Consolidated Statements of Operations for the period from January 1, 1996 through October
6, 1996, the period from October 7, 1996 through December 31, 1996, and the years ended
December 31, 1997 and 1998.............................................................. F-5

Consolidated Statements of Partners' Capital for the period from January 1, 1996 through
October 6, 1996, the period from October 7, 1996 through December 31, 1996, and the
years ended December 31, 1997 and 1998 ................................................. F-6

Consolidated Statements of Cash Flows for the period from January 1, 1996 through October
6, 1996, the period from October 7, 1996 through December 31, 1996, and the years ended
December 31, 1997 and 1998 ............................................................. F-7

Notes to Consolidated Financial Statements................................................ F-8

Financial Statement Schedule

Schedule II -- Valuation and Qualifying Accounts for the period from January 1, 1996 through
October 6, 1996, the period from October 7, 1996 through December 31, 1996, and the years
ended December 31, 1997 and 1998 ....................................................... S-1

</TABLE>

Other Schedules are omitted for the reason that they are not required or are not
applicable, or the required information is included in the consolidated
financial statements or notes thereto.

F-1

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Trump's Castle Associates, L.P. and Subsidiary:

We have audited the accompanying consolidated balance sheets of Trump's
Castle Associates, L.P. (a New Jersey limited partnership) and Subsidiary as of
December 31, 1997 and 1998, and the related consolidated statements of
operations, partners' capital and cash flows for the period from October 7, 1996
through December 31, 1996 and for the years ended December 31, 1997 and 1998.
These consolidated financial statements and the schedule referred to below are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these consolidated financial statements and schedule based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Trump's Castle Associates,
L.P. and Subsidiary as of December 31, 1997 and 1998, and the results of their
operations and their cash flows for the period from October 7, 1996 through
December 31, 1996 and for the years ended December 31, 1997 and 1998, in
conformity with generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index to the
financial statements is presented for the purpose of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in our audits of the basic financial statements, and in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.

ARTHUR ANDERSEN LLP

Roseland, New Jersey
February 2, 1999

F-2

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Trump's Castle Associates, L.P. and Subsidiary:

We have audited the accompanying consolidated statements of operations,
partners' capital and cash flows for the period from January 1, 1996 through
October 6, 1996 of Trump's Castle Associates, L.P. (a New Jersey limited
partnership) and Subsidiary. These consolidated financial statements and the
schedule referred to below are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these consolidated
financial statements and schedule based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the results of operations and cash flows for the
period from January 1, 1996 through October 6, 1996 of Trump's Castle
Associates, L.P. and Subsidiary, in conformity with generally accepted
accounting principles.

Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index to the
financial statements is presented for the purpose of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in our audit of the basic financial statements, and in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.

ARTHUR ANDERSEN LLP

Roseland, New Jersey
February 7, 1997

F-3

<PAGE>

TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>

DECEMBER 31, DECEMBER 31,
1997 1998
------------ ------------
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents...................................... $ 14,472 $ 19,723
Trade receivables, less allowance for doubtful accounts
of $1,479 and $1,920, respectively (Note 3)................ 7,465 7,098
Other receivables.............................................. 563 1,303
Inventories (Note 3) .......................................... 3,090 3,020
Prepaid expenses and other current assets...................... 1,713 1,884
---------- ----------
Total current assets.................................. 27,303 33,028
---------- ----------

PROPERTY AND EQUIPMENT (Notes 2, 3, and 4)
Land and land improvements..................................... 90,918 92,204
Buildings and building improvements............................ 405,290 406,296
Furniture, fixtures and equipment.............................. 25,175 28,559
---------- ----------
521,383 527,059
Less-Accumulated depreciation.................................. 21,870 38,314
---------- ----------
499,513 488,745
---------- ----------
DUE FROM AFFILIATE (Note 5)......................................... 1,250 1,250
---------- ----------
OTHER ASSETS........................................................ 13,340 13,865
---------- ----------
Total assets.......................................... $ 541,406 $ 536,888
========== ==========

LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES
Current maturities-long term debt (Note 4)..................... $ 7,954 $ 1,277
Trade accounts payable......................................... 7,360 10,147
Due to affiliates (Note 5)..................................... 23,949 21,602
Accrued payroll and related expenses........................... 5,568 5,498
Accrued interest payable (Note 4)............................. 4,020 4,777
Gaming liabilities ............................................ 2,232 2,273
Self insurance reserves........................................ 5,527 4,330
Other.......................................................... 5,055 4,800
---------- ----------
Total current liabilities............................. 61,665 54,704

LONG-TERM DEBT, LESS CURRENT MATURITIES (Note 4).................... 341,343 368,529
OTHER LONG-TERM LIABILITIES......................................... 4,730 3,541
---------- ----------
Total liabilities..................................... 407,738 426,774
---------- ----------
COMMITMENTS AND CONTINGENCIES (Note 6)..............................

PARTNERS' CAPITAL (Notes 2, 4 and 5)................................
Contributed capital............................................ 175,395 175,395
Accumulated deficit............................................ (41,727) (65,281)
---------- ----------
Total partners' capital............................... 133,668 110,114
---------- ----------
Total liabilities and partners' capital............... $ 541,406 $ 536,888
========== ==========
</TABLE>

The accompanying notes to consolidated financial
statements are an integral part of these consolidated balance sheets.

F-4

<PAGE>

TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
(NOTE 2)
<TABLE>
<CAPTION>
PREDECESSOR SUCCESSOR
---------------- ----------------------------------------------------
PERIOD PERIOD YEAR YEAR
FROM JANUARY 1, FROM OCTOBER 7, ENDED ENDED
1996 THROUGH 1996 THROUGH DECEMBER 31, DECEMBER 31,
OCTOBER 6, 1996 DECEMBER 31, 1996 1997 1998
--------------- ----------------- ------------ --------------
<S> <C> <C> <C> <C>
REVENUES
Gaming (Note 3)........................ $197,878 $ 50,460 $261,439 $261,609
Rooms.................................. 14,959 3,958 19,055 16,121
Food and beverage...................... 26,034 6,860 34,105 34,037
Other.................................. 7,085 1,706 11,161 10,806
-------- -------- -------- --------
Gross revenues.................... 245,956 62,984 325,760 322,573
Less-Promotional allowances (Note 3)... 31,229 8,238 41,084 38,659
-------- -------- -------- --------
Net revenues...................... 214,727 54,746 284,676 283,914
-------- -------- -------- --------
COST AND EXPENSES
(Notes 2, 5, 6 and 7)
Gaming................................. 130,932 33,741 170,634 166,525
Rooms.................................. 2,303 781 2,833 3,283
Food and beverage...................... 8,415 2,257 9,882 9,599
General and administrative............. 53,788 15,615 62,722 60,054
Depreciation and amortization (Note 3) 12,253 4,819 17,089 16,612
-------- -------- -------- --------
207,691 57,213 263,160 256,073
-------- -------- -------- --------
Income (loss) from operations..... 7,036 (2,467) 21,516 27,841
OTHER INCOME (Note 9)..................... 3,000 - - -
INTEREST INCOME........................... 386 217 452 869
INTEREST EXPENSE (Note 4)................. (36,949) (11,553) (49,892) (52,264)
-------- -------- -------- --------
Net loss.......................... $(26,527) $(13,803) $(27,924) $(23,554)
========= ========= ======== ========

</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these consolidated statements.

F-5

<PAGE>

TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
(IN THOUSANDS)
(NOTE 2)
<TABLE>
<CAPTION>
CONTRIBUTED ACCUMULATED
CAPITAL DEFICIT TOTAL
----------- ------------ ------------
<S> <C> <C> <C>
Balance at December 31, 1995 (Predecessor).................. $ 73,395 $ (67,582) $ 5,813
Net loss for the period from January 1, 1996 through
October 6, 1996...................................... - (26,527) (26,527)
--------- ---------- -----------
Balance at October 6, 1996 (Predecessor).................... 73,395 (94,109) (20,714)

Capital contributed by THCR Holdings.................... 5,000 - 5,000
Adjustment to reflect acquisition of the Partnership by
THCR Holdings........................................ 102,000 94,109 196,109
Net loss for the period from October 7, 1996 through
December 31, 1996.................................... - (13,803) (13,803)
--------- ---------- -----------
Balance at December 31, 1996 (Successor).................... 180,395 (13,803) 166,592

Reclassification of 1996 capital contributed by THCR
Holdings to debt..................................... (5,000) - (5,000)
Net loss................................................ - (27,924) (27,924)
--------- ----------- -----------
Balance at December 31, 1997 (Successor).................... 175,395 (41,727) 133,668
Net loss................................................ - (23,554) (23,554)
--------- ---------- -----------
Balance at December 31, 1998 (Successor).................... $ 175,395 $ (65,281) $ 110,114
========= --========== ===========

</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these consolidated statements.

F-6

<PAGE>

TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(NOTE 2)
<TABLE>
<CAPTION>

PREDECESSOR SUCCESSOR
--------------- -----------------------------------------------
PERIOD PERIOD YEAR YEAR
FROM JANUARY 1, FROM OCTOBER 7, ENDED ENDED
1996 THROUGH 1996 THROUGH DECEMBER 31, DECEMBER 31,
OCTOBER 6, 1996 DECEMBER 31, 1996 1997 1998
--------------- ----------------- ------------ -------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss.................................... $ (26,527) $ (13,803) $ (27,924) $ (23,554)
Adjustments to reconcile net loss to
net cash flows provided by (used in)
operating activities -- Depreciation
and amortization........................ 12,253 4,819 17,089 16,612
Issuance of PIK debt in exchange for
accrued interest........................ 4,292 4,589 10,156 11,614
Accretion of bond discount................ 2,061 681 3,213 3,754
Provision for losses on receivables....... 1,340 63 1,450 951
Amortization of CRDA tax credits.......... 305 258 33 33
Valuation allowance -- CRDA investments... 710 100 1,368 1,116
(Increase) decrease in receivables........ (1,290) 1,626 (1,782) (1,324)
Decrease (increase) in inventories........ 122 147 (1,792) 70
Decrease (increase) in prepaid
expenses and other current assets....... 2,131 707 (153) 182
Decrease (increase) in other assets...... 182 935 (1,254) 111
Increase in due to affiliates............. 576 1,136 19,557 123
Increase (decrease) in current
liabilities ............................ 7,050 (4,801) (5,781) 1,535
Increase (decrease) in other
liabilities ............................ 2,419 (3,647) (174) (1,189)
--------- --------- --------- ---------
Net cash flows provided by (used in)
operating activities.................. 5,624 (7,190) 14,006 10,034
--------- --------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment, net (4,235) (362) (5,972) (2,761)
Purchases of CRDA investments............. (2,143) (397) (3,273) (3,241)
--------- --------- --------- ---------
Net cash flows used in investing
activities............................ (6,378) (759) (9,245) (6,002)
--------- --------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of other borrowings............. (2,649) (1,044) (6,069) (64,480)
Proceeds of other borrowings.............. 1,738 - 400 67,000
Cost of issuing debt...................... - - - (1,301)
Capital contribution...................... - 5,000 - -
--------- --------- --------- ---------
Net cash flows (used in) provided by
financing activities.................. (911) 3,956 (5,669) 1,219
--------- --------- --------- ---------
Net (decrease) increase in cash and
cash equivalents...................... (1,665) (3,993) (908) 5,251
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD.......................... 21,038 19,373 15,380 14,472
--------- --------- --------- ---------

CASH AND CASH EQUIVALENTS AT END
OF PERIOD................................. $ 19,373 $ 15,380 $ 14,472 $ 19,723
========= ========= ========= =========

</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these consolidated statements.

F-7

<PAGE>

TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) ORGANIZATION AND OPERATIONS

The accompanying consolidated financial statements include those of Trump's
Castle Associates, L.P., a New Jersey limited partnership (the "Partnership"),
and its wholly owned subsidiary, Trump's Castle Funding Inc., a New Jersey
corporation ("Funding"). The Partnership is 99% owned by Trump Hotels & Casino
Resorts Holdings, L.P., a Delaware limited partnership ("THCR Holdings") and 1%
by Trump's Castle Hotel & Casino, Inc., a New Jersey corporation ("TCHI") . TCHI
is wholly owned by THCR Holdings, and THCR Holdings is currently a 63.4% owned
subsidiary of Trump Hotels & Casino Resorts, Inc., a Delaware corporation
("THCR").

All significant intercompany balances and transactions have been eliminated
in the consolidated financial statements.

The Partnership operates the Trump Marina Hotel Casino ("Trump Marina"), a
luxury casino hotel located in the Marina District of Atlantic City, New Jersey.
The primary portion of Trump Marina's revenues are derived from its gaming
operations. Competition in the Atlantic City gaming market is intense and the
Partnership believes that the competition will continue to intensify due to
expansion by existing operators and new entrants to the gaming industry becoming
operational.

Since Funding has no business operations, its ability to repay the
principal and interest on the $62,000,000 10 1/4% Senior Secured Notes due 2003
(the "New Senior Notes"), the 11 3/4% Mortgage Notes due 2003 (the "Mortgage
Notes") and its Increasing Rate Subordinated Pay-in-Kind Notes due 2005 (the
"PIK Notes") is completely dependent upon the operations of the Partnership.
(See Note 4).

Since TCHI has no operations, its ability to repay the principal and
interest on the $5,000,000 10 1/4% Senior Secured Notes due 2003 (the "Working
Capital Loan") is completely dependent on the operations of the Partnership.
(See Note 4).

(2) ACQUISITION OF THE PARTNERSHIP AND BASIS OF PRESENTATION

Pursuant to the terms of the Agreement dated as of June 24, 1996, as
amended (the "Agreement") between THCR Holdings and entities owned by Donald J.
Trump ("Trump"), THCR Holdings acquired on October 7, 1996, all of the
outstanding equity interest of the Partnership (the "Acquisition"). The
Acquisition has been accounted for as a purchase. For his equity interest in the
Partnership, Trump received a 15.33863% limited partnership interest in THCR
Holdings valued at $168,126,000, which is exchangeable into 5,837,700 shares of
Common Stock of THCR, par value $.01 per share (the "THCR Common Stock"). The
excess of the purchase price over the fair value of the net assets acquired of
$196,109,000 (including transaction costs, the purchase of the outstanding TCHI
warrants and the historical negative book value of the Partnership of
$20,714,000) has been recorded on the books of the Partnership and has been
allocated to property, plant and equipment based upon an appraisal.

The Acquisition resulted in an increase of $196,109,000 to the carrying
value of property, plant and equipment, an increase to contributed capital of
$102,000,000 and an elimination of the accumulated deficit of $94,109,000.

As a result of the Acquisition, a new basis of accounting was established
and financial statements prior to October 7, 1996 are presented as Predecessor
financial statements. The financial statements from October 7, 1996 forward are
presented as Successor financial statements.

F-8

<PAGE>

TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following unaudited pro forma information has been prepared assuming
the Acquisition had occurred as of January 1, 1996. The pro forma information is
presented for informational purposes only and is not necessarily indicative of
what would have occurred if the Acquisition had been made on January 1, 1996. In
addition, the pro forma information is not intended to be a projection of future
results.

PERIOD FROM JANUARY 1, 1996
THROUGH OCTOBER 6, 1996
---------------------------
(UNAUDITED)

Net Revenues ....................... $214,727,000
============
Income from Operations ............. $ 3,005,000
============
Net Loss ........................... $(30,558,000)
============

(3) ACCOUNTING POLICIES

Use of Estimates

The preparation of these financial statements in conformity with generally
accepted accounting principles requires the Partnership to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results may differ from these estimates.

Revenue Recognition

Casino revenues consist of the net win from gaming activities, which is the
difference between gaming wins and losses. Revenues from hotel and other
services are recognized at the time the related services are performed.

The Partnership provides an allowance for doubtful accounts arising from
casino, hotel and other services, which is based upon a specific review of
certain outstanding receivables and historical collection performance. In
determining the amount of the allowance, the Partnership is required to make
certain estimates and assumptions and actual results may differ from these
estimates and assumptions.

Promotional Allowances

Gross revenues include the retail value of the complimentary food, beverage
and hotel services provided to patrons. The retail value of these promotional
allowances is deducted from gross revenues to arrive at net revenues. The costs
of such complementaries have been included in gaming costs and expenses in the
accompanying consolidated statements of operations and consist of:

PREDECESSOR SUCCESSOR
--------------- -------------------------------------------------
PERIOD FROM
PERIOD OCTOBER 7, YEAR YEAR
FROM JANUARY 1, 1996 THROUGH ENDED ENDED
1996 THROUGH DECEMBER 31, DECEMBER 31, DECEMBER 31,
OCTOBER 6, 1996 1996 1997 1998
---------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Rooms....................................... $ 8,862,000 $2,434,000 $11,257,000 $11,258,000
Food and Beverage........................... 16,878,000 4,877,000 21,830,000 21,904,000
Other....................................... 2,574,000 743,000 5,618,000 5,082,000
----------- ---------- ----------- ------------

$28,314,000 $8,054,000 $38,705,000 $38,244,000
=========== ========== =========== ===========
</TABLE>

F-9

<PAGE>

TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Income Taxes

The accompanying consolidated financial statements do not include a
provision for federal income taxes of the Partnership, since any income or
losses allocated to the partners are reportable for federal income tax purposes
by the partners.

Under the New Jersey Casino Control Act (the "Casino Control Act") and the
regulations promulgated thereunder, the Partnership and Funding are required to
file a consolidated New Jersey corporation business tax return.

As of December 31, 1998, the Partnership had New Jersey state net operating
loss carryforwards of approximately $136,853,000, which are available to offset
taxable income through the year 2005. The net operating loss carryforwards
result in a deferred tax asset of $12,317,000, which has been offset by a
valuation allowance of $12,317,000, as utilization of such carryforwards is not
considered to be more likely than not.

Inventories

Inventories of provisions and supplies are carried at the lower of cost
(first-in, first-out basis) or market.

Property and Equipment

Property and equipment are recorded at cost and depreciated on the
straight-line method over the estimated useful lives of the related assets.
During the second quarter of 1997, the Partnership revised its estimates of the
useful lives of buildings, building improvements and furniture and fixtures
which were acquired in 1996. Buildings and building improvements were
reevaluated to have a forty year life and furniture and fixtures were determined
to have a five to seven year life. The Partnership believes these changes more
appropriately reflect the timing of the economic benefits to be received from
these assets during their estimated useful lives. During 1997 and 1998, the net
effect of applying these new lives was to decrease the net loss by $4,226,000
and $4,696,000, respectively.

Long-Lived Assets

The provisions of Statement of Financial Accounting Standards No. 121
"Accounting for the Impairment of Long-Lived Assets" requires, among other
things, that an entity review its long-lived assets and certain related
intangibles for impairment whenever changes in circumstances indicate that the
carrying amount of an asset may not be fully recoverable. As a result of its
review, the Partnership does not believe that any such changes have occurred.

F-10

<PAGE>

TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

Statements of Cash Flows

For purposes of the statements of cash flows, the Partnership considers all
highly liquid debt instruments purchased with a maturity of three months or
less, at the time of purchase, to be cash equivalents.

Supplemental disclosures relating to the statements of cash flows are as
follows:

PREDECESSOR SUCCESSOR
-------------- -------------------------------------------------
PERIOD FROM
PERIOD OCTOBER 7, YEAR YEAR
FROM JANUARY 1, 1996 THROUGH ENDED ENDED
1996 THROUGH DECEMBER 31, DECEMBER 31, DECEMBER 31,
OCTOBER 6, 1996 1996 1997 1998
--------------- ----------------- ------------ ------------
<S> <C> <C> <C> <C>
Cash paid during the period for interest
(net of amounts capitalized)................ $ 18,209,000 $ 18,278,000 $ 36,192,000 $ 35,962,000
============ ============= ============= =============

</TABLE>

Reclassifications

Certain reclassifications have been made to the prior period financial
statements in order to conform to the 1998 presentation.

(4) LONG TERM DEBT

Long term debt consists of:

DECEMBER 31, DECEMBER 31,
1997 1998
------------ ------------
<S> <C> <C> >
Mortgage Notes, due 2003
(Net of discount of $30,170,000 and $26,807,000, respectively).......... $211,971,000 $215,334,000
PIK Notes, due 2005
(Net of discount of $7,197,000 and $6,806,000, respectively)........... 73,699,000 85,704,000
New Senior Notes, due 2003................................................. -- 62,000,000
Working Capital Loan, due 2003............................................. -- 5,000,000
Other borrowings........................................................... 59,933,000 --
Capital lease obligations.................................................. 3,694,000 1,768,000
------------ ------------
Total debt............................................................ 349,297,000 369,806,000
Less-current maturities.................................................... 7,954,000 1,277,000
------------ ------------

Long term debt........................................................ $341,343,000 $368,529,000
============ ============

</TABLE>

The Mortgage Notes bear interest at 11-3/4%, payable in cash semi-annually,
and mature on November 15, 2003. The Mortgage Notes may be redeemed at Funding's
option at a rate of 105-7/8% of the principal amount commencing on December 31,
1998, which declines gradually thereafter.

The PIK Notes bear interest at 13-7/8% payable at Funding's option in whole
or in part in cash and through the issuance of additional PIK Notes through
November 15, 2003. After November 15, 2003, interest on the PIK Notes is payable
in cash at the rate of 13-7/8%. The PIK Notes mature on November 15, 2005. The
PIK Notes may be redeemed at Funding's option at 100% of the principal amount
under certain conditions, as defined in the PIK Note Indenture, and a specified
percentage are required to be redeemed from the proceeds of any equity offering
of the Partnership. Interest payments of $10,156,000 and $11,614,000 in 1997 and
1998, respectively, were satisfied

F-11

<PAGE>

TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

by the issuance of additional PIK Notes. The Partnership anticipates that
interest due in 1999 will be satisfied through the issuance of additional PIK
Notes.

On May 21, 1996, THCR Holdings acquired approximately 90% of the PIK Notes
for approximately $38,700,000 in exchange for which THCR Holdings received an
aggregate of approximately $59,300,000 of PIK Notes.

The terms of both the Mortgage Notes and PIK Notes include limitations on
the amount of additional indebtedness the Partnership may incur, distributions,
investments and other business activities of the Partnership.

The Mortgage Notes are secured by a promissory note of the Partnership to
Funding (the "Partnership Note") in an amount and with payment terms necessary
to service the Mortgage Notes. The Partnership Note is secured by a mortgage on
Trump Marina and substantially all of the other assets of the Partnership. The
Partnership Note has been assigned by Funding to the Trustee to secure the
repayment of the Mortgage Notes. In addition, the Partnership has guaranteed
(the "Guaranty") the payment of the Mortgage Notes, which Guaranty is secured by
a mortgage on Trump Marina. The Partnership Note and the Guaranty are expressly
subordinated to the indebtedness of the New Senior Notes and the Working Capital
Loan (collectively, the "Senior Indebtedness") and the liens of the mortgages
securing the Partnership Note and the Guaranty are subordinate to the liens
securing the Senior Indebtedness.

The PIK Notes are secured by a subordinated promissory note of the
Partnership to Funding (the "Subordinated Partnership Note"), which has been
assigned to the Trustee for the PIK Notes, and the Partnership has issued a
subordinated guaranty (the "Subordinated Guaranty") of the PIK Notes. The
Subordinated Partnership Note and the Subordinated Guaranty are expressly
subordinated to the Senior Indebtedness, the Partnership Note and the Guaranty.

On April 17, 1998, Funding refinanced its 11 1/2% Senior Secured Notes due
2000 (the "Old Senior Notes") and its term loan with a bank (the "Term Loan") by
issuing the New Senior Notes. The New Senior Notes have a priority mortgage lien
ahead of the Partnership's Mortgage Notes and are further secured by virtually
all of the Partnership's assets. The New Senior Notes have an outstanding
principal amount of $62,000,000, bear interest at the rate of 10 1/4% per annum,
payable semi-annually and mature on April 30, 2003.

In connection with the refinancing discussed above, TCHI obtained a
$5,000,000 working capital loan, the proceeds of which were loaned to the
Partnership. The Working Capital Loan has an outstanding principal amount of
$5,000,000, bears interest at the rate of 10 1/4% per annum, and matures on
April 30, 2003. Both the New Senior Notes and the Working Capital Loan are
guaranteed by the Partnership.

The ability of Funding and the Partnership to pay their indebtedness when
due, will depend on the ability of the Partnership to either generate cash from
operations sufficient for such purposes or to refinance such indebtedness on or
before the date on which it becomes due. Cash flow from operations may not be
sufficient to repay a substantial portion of the principal amount of the debt at
maturity. The future operating performance of the Partnership and the ability to
refinance this debt will be subject to the then prevailing economic conditions,
industry conditions and numerous other financial, business and other factors,
many of which are beyond the control of Funding, TCHI or the Partnership. There
can be no assurance that the future operating performance of the Partnership
will be sufficient to meet these repayment obligations or that the general state
of the economy, the status of the capital markets or the receptiveness of the
capital markets to the gaming industry will be conducive to refinancing this
debt or other attempts to raise capital.

F-12

<PAGE>

TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(5) RELATED PARTY TRANSACTIONS

Trump Management Fee

The Partnership has a Services Agreement (the "Services Agreement") with
Trump Casinos II, Inc. ("TCI-II"), a corporation wholly-owned by Trump. Pursuant
to the terms of the Services Agreement, TCI-II is obligated to provide the
Partnership, from time to time, when reasonably requested, consulting services
on a non-exclusive basis, relating to marketing, advertising, promotional and
other similar and related services with respect to the business and operations
of the Partnership, including such other services as the Managing Partner may
reasonably request.

Pursuant to the Services Agreement, the Partnership is required to pay an
annual fee in the amount of $1,500,000 to TCI-II for each year in which Earnings
Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), as defined,
exceeds certain levels. In addition, TCI-II is to receive an incentive fee equal
to 10% of the excess EBITDA over $45,000,000 for such fiscal year.

For all periods presented, the Partnership incurred no fees and expenses
under the Services Agreement. As the Partnership did not meet the required level
of EBITDA during 1996, the monthly advances to TCI-II related to the Services
Agreement were suspended and, at October 6, 1996, the Partnership recorded an
amount due from affiliate of $1,250,000, which represents the amounts advanced
during the year, and will be offset against future management fees. The
Partnership made no monthly advances to TCI-II related to the Services Agreement
during 1997 or 1998. The Services Agreement expires on December 31, 2005.

Transactions with Affiliates

At December 31, 1997 and 1998 amounts due to affiliates were $23,949,000
and $21,602,000, respectively. The Partnership has engaged in limited
intercompany transactions with Trump Plaza Associates ("Plaza Associates"),
Trump Taj Mahal Associates ("Taj Associates"), Trump Casino Services, L.L.C.
("TCS"), and the Trump Organization, all of which are affiliates of Trump.

TCS, which was formed for the purpose of realizing cost savings and
operational synergies, provides certain administrative functions and certain
services to Plaza Associates, Taj Associates and the Partnership.

In 1997, the Partnership reclassified $5,000,000 of capital contributed in
1996 by THCR Holdings into a note payable. The note bears interest at the prime
rate plus 1%, which was 8 3/4% at December 31, 1998. During June 1997, the
Partnership repaid $2,000,000 plus accrued interest on this note. In January
1998, the Partnership repaid an additional $2,550,000.

Partnership Agreement

Under the terms of the Partnership Agreement, the Partnership is required
to pay all costs incurred by TCI-II. For the period from January 1, 1996 through
October 6, 1996, the period from October 7, 1996 through December 31, 1996, and
the years ended December 31, 1997 and 1998, the Partnership paid $1,572,000,
$72,000, $0 and $0, respectively, of expenses on behalf of TCI-II which were
charged to general and administrative expense in the accompanying consolidated
financial statements.

F-13

<PAGE>

TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(6) COMMITMENTS AND CONTINGENCIES

Casino License Renewal

The Partnership is subject to regulation and licensing by the New Jersey
Casino Control Commission (the "CCC"). The Partnership's casino license must be
renewed periodically, is not transferable, is dependent upon the financial
stability of the Partnership, and can be revoked at any time. Due to the
uncertainty of any license renewal application, there can be no assurance that
the license will be renewed. Upon revocation, suspension for more than 120 days,
or failure to renew the casino license due to the Partnership's financial
condition or for any other reason, the Casino Control Act provides that the CCC
may appoint a conservator to take possession of and title to the hotel and
casino's business and property, subject to all valid liens, claims and
encumbrances.

On June 22, 1995, the CCC renewed the casino license of the Partnership
through 1999, subject to certain continuing reporting and compliance conditions.

Self Insurance Reserves

Self insurance reserves represent the estimated amounts of uninsured claims
related to employee health medical costs, workers compensation and other legal
proceedings in the normal course of business. These reserves are established by
the Partnership based upon a specific review of open claims as of the balance
sheet date as well as historical claims settlement experience, with
consideration of incurred but not reported claims as of the balance sheet date.
During 1998 self insurance reserves decreased due to an internally focused
aggressive policy where potential lawsuits are challenged immediately.
Additionally, a more aggressive litigation policy was pursued to deter present
and future frivolous lawsuits. The Partnership also retained an outside
consultant to comprehensively review certain claims and to assist the
Partnership in establishing certain estimated reserves at December 31, 1998. The
costs of the ultimate disposition of these claims may differ from these reserve
amounts.

Employment Agreements

The Partnership has entered into employment agreements with certain key
employees which expire at various dates through December 31, 2000. Total minimum
commitments on these agreements at December 31, 1998 were approximately
$4,184,000.

Legal Proceedings

The Partnership is involved in legal proceedings incurred in the normal
course of business. In the opinion of management and its counsel, if adversely
decided, none of these proceedings would have a material effect on the
consolidated financial position of the Partnership.

Casino Reinvestment Development Authority Obligations

Pursuant to the provisions of the Casino Control Act, the Partnership must
either obtain investment tax credits, as defined in the Casino Control Act, in
an amount equivalent to 1 1/4% of its gross casino revenues, as defined in the
Casino Control Act, or pay an alternative tax of 2 1/2% of its gross casino
revenues. Investment tax credits may be obtained by making qualified
investments, as defined, or by depositing funds which may be converted to bonds
by the Casino Reinvestment Development Authority (the "CRDA"), both of which
bear interest at below market interest rates. The Partnership is required to
make quarterly deposits with the CRDA to satisfy its investment obligations.

From time to time the Partnership has elected to donate funds that it has
on deposit with the CRDA in return for tax credits to satisfy substantial
portions of the Partnership's future investment alternative tax

F-14

<PAGE>

TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

obligations. For the period from January 1, 1996 through October 6, 1996, the
period from October 7, 1996 through December 31, 1996, and the years ended
December 31, 1997 and 1998, the Partnership charged to operations $305,000,
$258,000, $33,000 and $33,000, respectively, which represents amortization of
the tax credits received.

For the period from January 1, 1996 through October 6, 1996, the period
from October 7, 1996 through December 31, 1996, and the years ended December 31,
1997 and 1998, the Partnership charged to operations $710,000, $100,000,
$1,368,000 and $1,116,000, respectively, to give effect to the below market
interest rates of associated CRDA deposits and bonds.

(7) EMPLOYEE BENEFIT PLANS

The Partnership has a retirement savings plan for its nonunion employees
under Section 401(k) of the Internal Revenue Code. Employees are eligible to
contribute up to 15% (effective January 1, 1999, 20%) of their earnings to the
plan up to the maximum amount permitted by law, and the Partnership will match
50% of an eligible employee's contributions up to a maximum of 6% of the
employee's earnings. The Partnership recorded charges of approximately $765,000,
$212,000, $937,000 and $1,138,000 for matching contributions for the period from
January 1, 1996 through October 6, 1996, the period from October 7, 1996 through
December 31, 1996, and the years ended December 31, 1997 and 1998, respectively.

The Partnership makes payments to various trusted multi-employer pension
plans under industry-wide union agreements. The payments are based on the hours
worked by or gross wages paid to covered employees. It is not practical to
determine the amount of payments ultimately used to fund pension benefit plans
or the current financial condition of the plans. Under the Employee Retirement
Income Security Act, the Partnership may be liable for its share of the plans'
unfunded liabilities, if any, if the plans are terminated or if the Partnership
withdraws from participation in such plans. Pension expense charged to
operations for the period from January 1, 1996 through October 6, 1996, the
period from October 7, 1996 through December 31, 1996, and the years ended
December 31, 1997 and 1998 were $389,000, $109,000, $547,000 and $598,000,
respectively.

The Partnership provides no other material post employment benefits.

(8) FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of the following financial instruments of the
Partnership and Funding approximate fair value, as follows: (a) cash and cash
equivalents, receivables and payables based on the short-term nature of these
financial instruments, (b) CRDA bonds and deposits based on the allowances to
give effect to the below market interest rates.

The fair values of the Mortgage Notes and PIK Notes are based on quoted
market prices as follows:

DECEMBER 31, 1997
CARRYING AMOUNT FAIR VALUE
--------------- ---------------
11 3/4% Mortgage Notes.............. $211,971,000 $225,191,000
PIK Notes........................... $ 73,699,000 $ 75,233,000

DECEMBER 31, 1998
CARRYING AMOUNT FAIR VALUE
--------------- ---------------
11 3/4% Mortgage Notes.............. $215,334,000 $198,556,000
PIK Notes........................... $ 85,704,000 $ 83,259,000

F-15

<PAGE>

TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

There are no quoted market prices for the Partnership's New Senior Notes
and Working Capital Loan. A reasonable estimate of their value could not be made
without incurring excessive costs.

(9) LICENSE REVENUE

During 1996, the Partnership entered into an agreement with Atlantic
Thermal Systems, Inc. ("Atlantic Thermal") pursuant to which Atlantic Thermal
was granted an exclusive license to use, operate and maintain certain steam and
chilled water production facilities located at Trump Marina. In consideration of
the license, Atlantic Thermal paid the Partnership a $3,000,000 non-refundable
license fee. This amount has been included in other non-operating income in the
Partnership's accompanying consolidated statements of operations.

(10) FINANCIAL INFORMATION OF FUNDING

Financial information relating to Funding is as follows:

DECEMBER 31, DECEMBER 31,
1997 1998
------------- -------------
<S> <C> <C>
Total Assets (including Mortgage Notes Receivable of $242,141,000, net of
unamortized discount of $30,170,000 and $26,807,000 at December 31, 1997
and December 31, 1998, PIK Notes Receivable of $80,896,000, net of
unamortized discount of $7,197,000 at December 31, 1997 and $92,510,000,
net of unamortized discount of $6,806,000 at December 31, 1998, Old Senior
Notes Receivable of $27,000,000 at December 31, 1997 and New Senior Notes
Receivable of $62,000,000 at December 31, 1998)................................... $312,670,000 $363,038,000
============ ============
- ------------------------------------------------------------------------
Total Liabilities and Capital (including Mortgage Notes Payable of $242,141,000,
net of unamortized discount of $30,170,000 and $26,807,000 at December 31,
1997 and December 31, 1998, PIK Notes Payable of $80,896,000, net of
unamortized discount of $7,197,000 at December 31, 1997 and $92,510,000,
net of unamortized discount of $6,806,000 at December 31, 1998, Old Senior
Notes Payable of $27,000,000 at December 31, 1997 and New Senior Notes
Payable of $62,000,000 at December 31, 1998)...................................... $312,670,000 $363,038,000
============ ============
<CAPTION>

YEAR ENDED DECEMBER 31,
------------------------------
1997 1998
------------- -------------
<S> <C> <C>
Interest Income......................................................................... $ 44,961,000 $ 49,274,000
Interest Expense........................................................................ 44,961,000 49,274,000
------------- -------------
Net Income.............................................................................. $ -- $ --
============= =============
</TABLE>

F-16

<PAGE>

TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(11) FINANCIAL INFORMATION OF TCHI

Financial information relating to TCHI is as follows:

DECEMBER 31, DECEMBER 31,
1997 1998
------------ ------------
<S> <C> <C>
Total Assets (including Working Capital Loan Receivable of
$5,000,000 at December 31, 1998).......................... $ - $ 5,000,000
============== ===========
Total Liabilities and Capital (including Working Capital Loan
Payable of $5,000,000 at December 31, 1998)............... $ - $ 5,000,000
============== ===========
<CAPTION>
YEAR ENDED DECEMBER 31,
1997 1998
-------------- -----------
<S> <C> <C>
Interest Income................................................ $ - $ 362,000
Interest Expense............................................... $ - 362,000
-------------- -----------
Net Income..................................................... $ - $ -
============== ===========

</TABLE>

F-17

<PAGE>

<TABLE>

SCHEDULE II

TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND OTHER END OF
OF PERIOD EXPENSES CHARGES PERIOD
------------ ------------ --------------- -------------
<S> <C> <C> <C> <C>
PERIOD FROM JANUARY 1, 1996 THROUGH
OCTOBER 6, 1996
Allowance for doubtful accounts................ $ 1,969,000 $ 1,340,000 $(1,302,000)(A) $ 2,007,000
============ ============ ============ ============
Valuation allowance for interest differential
on CRDA bonds................................ $ 1,744,000 $ 710,000 $ (38,000)(B) $ 2,416,000
============ ============ ============ ============
PERIOD FROM OCTOBER 7, 1996 THROUGH
DECEMBER 31, 1996
Allowance for doubtful accounts................ $ 2,007,000 $ 63,000 $ (526,000)(A) $ 1,544,000
Valuation allowance for interest differential ============ ============ ============ ============
on CRDA bonds................................ $ 2,416,000 $ 100,000 $ (12,000)(B) $ 2,504,000
============ ============ ============ ============
YEAR ENDED DECEMBER 31, 1997
Allowance for doubtful accounts................ $ 1,544,000 $ 1,450,000 $(1,515,000)(A) $ 1,479,000
============ ============ ============ ============
Valuation allowance for interest differential
on CRDA bonds................................ $ 2,504,000 $ 1,368,000 $ (430,000)(B) $ 3,442,000
============ ============ ============ ============
YEAR ENDED DECEMBER 31, 1998
Allowance for doubtful accounts................ $ 1,479,000 $ 951,000 $ (510,000)(A) $ 1,920,000
============ ============ ============ ============
Valuation allowance for interest differential
on CRDA bonds................................ $ 3,442,000 $ 1,116,000 $ - $ 4,558,000
============ ============ ============ ============
</TABLE>

(A) Write-off of uncollectible accounts.

(B) Write-off of allowance applicable to contribution of CRDA deposits.

S-1
<PAGE>

EXHIBIT INDEX

EXHIBIT
NO. DESCRIPTION OF EXHIBIT
------- ----------------------
10.49 Employment Agreement, dated July 24, 1995, as amended, between
Lawrence J. Mullin and Trump's Castle Associates, L.P.
21 List of Subsidiaries of Trump's Castle Hotel & Casino, Inc., Trump's
Castle Associates, L.P. and Trump's Castle Funding, Inc.
27.1 Financial Data Schedule of Trump's Castle Funding, Inc.
27.2 Financial Data Schedule of Trump's Castle Associates, L.P.
27.3 Financial Data Schedule of Trump's Castle Hotel & Casino, Inc.

July 24, 1995

Mr. Larry Mullin

Dear Mr. Mullin:

This letter will serve to confirm our understanding and agreement pursuant to
which Trump's Castle Associates ("TCA") has agreed to employ you, and you have
agreed to be employed by TCA for the Term defined and set forth in Paragraph 2,
unless terminated earlier by TCA pursuant to Paragraph 13 hereof:

1. You shall be employed by TCA in the capacity of Vice President of Slot
Operations or in such other position as determined solely by TCA to perform
such duties as are commonly attendant upon such office.

2. Your employment with TCA shall commence on July 31, 1995, and continue for
a period of three (3) years thereafter, expiring on July 30, 1998.

3. a. During the first year of this Agreement, you shall be paid an annual
base salary at the rate of One Hundred Fifty Thousand ($150,000) Dollars
payable periodically in accordance with TCA's regular payroll practices.
During the second and third years of this Agreement, you shall be paid an
annual base salary at the rate of One Hundred Sixty ($160,000) dollars
payable periodically in accordance with TCA's regular payroll practices.

b. Upon the commencement of your employment with TCA, you shall receive a
bonus in the amount of Ten Thousand ($10,000) Dollars.

c. TCA shall reimburse you for the cost of health insurance coverage under
COBRA during your first ninety (90) days of employment.

d. You shall be entitled to three (3) weeks vacation on the first
anniversary of your employment. Thereafter, you will earn vacation in
accordance with TCA's regular policies therefor.

4. You shall be afforded coverage under TCA's employee insurance programs in
such form and at such levels as TCA, in its sole and absolute discretion,
may hereafter elect to provide for similarly situated executives.

5. a. You shall be entitled to participate in TCA's executive benefit programs
in such form and at such levels as TCA, in its sole and absolute
discretion, may hereafter elect to provide similarly situated executives.

b. You shall be entitled to participate in any management profit sharing or
bonus plan established by TCA for similarly situated executives, but in no
event shall you receive a bonus of less than Thirty Thousand ($30,000)
Dollars in 1995 (payable in December 1995) and Forty Thousand ($40,000)
Dollars per year in 1996 and 1997.

c. You shall, in addition to monetary compensation, receive a car allowance
of Seven Hundred Fifty ($750) Dollars per month.

6. You agree that until the Expiration Date and/or so long as TCA continues to
pay your salary as provided herein, you shall not accept employment, either
as an employee, consultant or independent contractor, for or on behalf of
any other casino hotel located in Atlantic City, New Jersey. You
acknowledge and agree that this restrictive covenant is reasonable as to
duration, terms and geographical area and that the same is necessary to
protect the legitimate interests of TCA, imposes no undue hardship on you
and is not injurious to the public.

7. You hereby agree that throughout the term of this Agreement you shall
devote your full time, attention and efforts to TCA's business and shall
not, directly or indirectly, work for, consult with or otherwise engage in
any other activities of a business nature for any other person or entity,
without TCA's prior written consent. You will promptly communicate to TCA,
in writing when requested, all marketing strategies, technical designs and
concepts, and other ideas pertaining to TCA's business which are conceived
or developed by you, alone or with others, at any time (during or after
business hours) while you are employed by TCA. You acknowledge that all of
those ideas will be TCA's exclusive property. You agree to sign any
documents which TCA deems necessary to confirm its ownership of those
ideas, and you agree to otherwise cooperate with TCA in order to allow TCA
to take full advantage of those ideas.

8. You acknowledge that you have access to information which is proprietary
and confidential to TCA. This information includes, but is not limited to,
(1) the identity of customers and prospects, (2) names, addresses and
telephone numbers of individual contacts, (3) pricing policies, marketing
strategies, product strategies and methods of operation, and (4) expansion
plans, management policies and other business strategies and policies. You
acknowledge and understand that this information must be maintained in
strict confidence in order for TCA to protect its business and its
competitive position in the marketplace. Accordingly, both during and after
termination of your employment, you agree that you will not disclose any of
this information for any purpose or remove materials containing this
information from TCA's premises. Upon termination of your employment, you
will immediately return to TCA all correspondence files, business card
files, customer and prospect lists, price books, technical data, notes and
other materials which contain any of this information, and you will not
retain copies of those materials. Notwithstanding the foregoing, you may
maintain and use information and data as described herein of which you are
aware prior to your employment by TCA. Nothing in this paragraph is
intended to prevent you from utilizing information which was not developed
by TCA during the course of your employment at TCA.

9. You also agree that for a period of forty-five (45) days after termination
of your employment, you will not solicit or contact, directly or through
any other Atlantic City casino, any customers whom you have developed or
continued to develop during your tenure with TCA.

10. You represent to TCA that there are no restrictions or agreements to which
you are a party which would be violated by our execution of this Agreement
and your employment hereunder.

11. You hereby agree to comply with all of the rules, regulations, policies
and/or procedures adopted by TCA during the term of this Agreement, as well
as all applicable state, federal and local laws, regulations and
ordinances.

12. You hereby represent that you presently hold the New Jersey Casino Control
Commission license required in connection with your employment hereunder
and will take appropriate steps to renew said license in a timely manner.

13. TCA may at any time, at its election, terminate this Agreement and your
employment under this Agreement prior to the end of its term because of (a)
dishonesty by you; (b) negligence or willful malfeasance by you in the
performance of your duties under this Agreement; (c) breach by you of any
of the terms of this Agreement; (d) failure to observe any written policies
and procedures established from time to time by TCA; (e) failure to obtain
or maintain any licenses, permits or any such other documents required by
any governmental authority having jurisdiction over TCA or deemed necessary
or beneficial by TCA or failure to comply with any applicable law, rule,
regulation or requirements of any such authority; (f) physical or mental
disability which prevents you from performing your duties under this
Agreement for a consecutive period of at least sixty (60) days or for at
least ninety (90) days in a period of one hundred eighty (180) days; or (g)
willful and continued (after notice) failure to substantially perform your
assigned duties. This Agreement will terminate automatically, with no
further action on the part of TCA, in the event of your death.

14. TCA shall indemnify, defend and hold your harmless, including the payment
of reasonable attorney fees, if TCA does not directly provide your defense,
from and against any and all claims made by anyone, including, but not
limited to, a corporate entity, company, other employee, agent, patron or
member of the general public with respect to any claim which asserts as a
basis, any acts, omissions or other circumstances involving the performance
of your employment duties hereunder unless such claim is based upon your
gross negligence or any willful and/or wanton act.

15. You represent that you are a citizen of the United States or that you
possess the proper visa and/or work permits necessary to perform your
functions hereunder.

16. You acknowledge that it would be extremely difficult to measure the damages
that might result from any breach by you of your promises in Sections 6, 7,
8 and 9 of this Agreement and that a breach may cause irreparable injury to
TCA which could not be compensated by money damages. Accordingly, TCA will
be entitled to enforce this Agreement by obtaining a court order
prohibiting you (and any others involved) from breaching this Agreement. If
a court decides that any part of this agreement is too broad, the court may
limit that part and enforce it as limited.

17. This Agreement shall be governed by and construed in accordance with the
laws of the State of New Jersey and in any lawsuit involving this
Agreement, you consent to the jurisdiction and venue of any state or
federal court located in New Jersey. This Agreement represents the entire
agreement between the parties and may not be modified or amended without
the written agreement of both parties. This Agreement supersedes all other
agreements between the parties.

If the foregoing correctly sets forth our understanding, kindly sign and return
to me the duplicated copy of this letter enclosed herewith.

Very truly yours,

TRUMP'S CASTLE ASSOCIATES

Agreed & Consented to:

By: /s/ ROGER P. WAGNER /s/ LARRY MULLIN
-------------------------- ------------------------
Roger P. Wagner Larry Mullin
President/Chief
Operating Officer

<PAGE>

February 22, 1996

Mr. Larry J. Mullin
1108 Lavender Lane
Absecon, NJ 08201

Re: July 24, 1995 Employment Agreement

Dear Mr. Mullin:

This will confirm our agreement to amend the July 24, 1995 Employment Agreement
between you and Trump's Castle Associates ("Agreement") as follows:

1. For the calendar year 1996, in addition to the bonus specified in
Paragraph 5.b. of the Agreement, you shall be entitled to an additional
bonus amount to be awarded based on the following schedule:

Trump's Castle's 1996 Additional
Gross Operating Profit Bonus Amount
----------------------- ------------
$60,000,000-$60,999,999 $25,000
$61,000,000-$61,999,999 $35,000
$62,000,000-$62,999,999 $45,000
$63,000,000 or higher $55,000

"Gross Operating Profit" shall mean the aggregate revenues of Trump's
Castle less operating expenses of a nature contained in the 1996
Operating Budget previously approved by the Trump's Castle Associates
Board of Partner Representatives. Gross Operating Profit shall be
calculated by Trump's Castle's Chief Financial Officer and verified by
the annual audit conducted by Trump's Castle's independent outside
auditors. The payment of the additional bonus amount set forth herein
shall take place upon completion of the independent annual audit, in or
about February or March 1997.

2. This Amendment shall be subject to the approval of the New Jersey Casino
control Commission, pursuant to N.J.S.A. 5:12-104A(3).

<PAGE>

3. All other terms of the Agreement shall remain in full force and effect.

If the foregoing is acceptable to you, kindly sign and return to me the enclosed
duplicate copy of this letter.

Very truly yours,

/s/ ROGER P. WAGNER
- -----------------------------
Roger P. Wagner
President/Chief Operating Officer

I hereby accept and agree to the foregoing amendment.

/s/ LARRY J. MULLIN
------------------------
Larry J. Mullin

<PAGE>

March 17, 1998

Mr. Larry J. Mullin
1108 Lavender Lane
Absecon, NJ 08201

RE: JULY 24, 1995 EMPLOYMENT AGREEMENT ("AGREEMENT")
SECOND AMENDMENT

Dear Larry:

This letter will confirm our agreement to amend the Agreement by
extending the term set forth in paragraph 2 for an additional twenty-nine (29)
month period terminating on December 31, 2000. As consideration for this
extension, your annual base salary as stated in paragraph 3 a. of the Agreement
shall be increased as follows: (1) on August 1, 1998, your base salary shall be
increased to Two Hundred Thirty-five Thousand ($235,000) Dollars; (2) on January
1, 1999, your base salary shall be increased to Two Hundred Forty-five Thousand
($245,000) Dollars; and (3) on January 1, 2000, your base salary shall be
increased to Two Hundred Sixty Thousand ($260,000) Dollars. There will no longer
be car allowances issued to TCA executives. However, your annual base salary has
been increased to reflect said allowance. You will be entitled to participate in
any management profit sharing or bonus plan as outlined in paragraph 5 a. of
your original Employment Agreement and not as agreed upon in paragraph 1 of the
letter Amendment dated February 22, 1996.

In addition to Paragraph 13 of your Employment Agreement you may
terminate the Agreement upon written notice to Trump at any time following a
Change of Control, which termination shall be effective on the thirtieth day
after such notice. For purposes of this paragraph, a Change in Control means (i)
the acquisition of Trump or over thirty-five (35%) percent of THCR's common
stock or equivalent limited partnership interests by an unrelated entity, (ii)
Nicholas L. Ribis is no longer employed as the President and Chief Executive
Officer of THCR, (iii) Mark A. Brown is no longer employed as the President and
Chief Operating Officer of Trump's Castle Associates d/b/a Trump Marina Hotel
Casino or (iv) the sale or long-term lease of all or substantially all of the
assets of Trump.

All other terms of your employment shall remain as stated in the
Agreement.

<PAGE>

If the foregoing is acceptable to you, kindly sign and return to me the
enclosed duplicate copy of this letter.

Very truly yours,

/s/ MARK A. BROWN
-------------------------------------
Mark A. Brown
President/Chief Operating Officer

I hereby accept and agree to the foregoing.

By: /s/ LARRY J. MULLIN
------------------------
Larry J. Mullin

EXHIBIT 21

SUBSIDIARIES OF TRUMP'S CASTLE HOTEL & CASINO, INC.

Trump's Castle Associates, L.P. (New Jersey limited partnership) -
1% ownership

Trump's Castle Funding, Inc. (New Jersey corporation) - wholly owned by
Trump's Castle Associates, L.P.

SUBSIDIARIES OF TRUMP'S CASTLE ASSOCIATES, L.P.:

Trump's Castle Funding, Inc. (New Jersey corporation)

SUBSIDIARIES OF TRUMP'S CASTLE FUNDING, INC.:

None

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information from Trump's Castle
Funding, Inc. This data has been extracted from the Consolidated Balance Sheets
and Consolidated Statement of Operations for the three and twelve month periods
ended December 31, 1998 and is qualified in its entirety by reference to such
Financial Statements.
</LEGEND>

<CIK> 0000770618
<NAME> TRUMP'S CASTLE FUNDING, INC.
<MULTIPLIER> 1,000

<S> <C> <C>
<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1998
<PERIOD-START> OCT-01-1998 JAN-01-1998
<PERIOD-END> DEC-31-1998 DEC-31-1998
<CASH> 0 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 363,038 363,038
<CURRENT-LIABILITIES> 0 0
<BONDS> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 363,038 363,038
<SALES> 0 0
<TOTAL-REVENUES> 12,663 49,274
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 12,663 49,274
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 0 0
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0

</TABLE>

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information from Trump's Castle
Associates, L.P. This data has been extracted from the Consolidated Balance
Sheets and Consolidated Statement of Operations for the three and twelve month
periods ended December 31, 1998 and is qualified in its entirety by reference
to such Financial Statements.
</LEGEND>
<CIK> 0000911534
<NAME> TRUMP'S CASTLE ASSOCIATES, L.P.
<MULTIPLIER> 1,000

<S> <C> <C>
<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1998
<PERIOD-START> OCT-01-1998 JAN-01-1998
<PERIOD-END> DEC-31-1998 DEC-01-1998
<CASH> 19,723 19,723
<SECURITIES> 0 0
<RECEIVABLES> 8,401<F1> 8,401<F1>
<ALLOWANCES> 0 0
<INVENTORY> 3,020 3,020
<CURRENT-ASSETS> 1,884 1,884
<PP&E> 527,059 527,059
<DEPRECIATION> 38,314 38,314
<TOTAL-ASSETS> 536,888 536,888
<CURRENT-LIABILITIES> 54,704 54,704
<BONDS> 368,529 368,529
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 536,888 536,888
<SALES> 0 0
<TOTAL-REVENUES> 68,809 283,914
<CGS> 0 0
<TOTAL-COSTS> 59,570 239,461
<OTHER-EXPENSES> 4,254<F2> 16,612<F2>
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 14,001 52,264
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (8,701) (23,554)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
<FN>
<F1>Asset values represent net amounts.
<F2>Represents depreciation and amortization expenses.
</FN>

</TABLE>

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information from Trump's Castle Hotel &
Casino, Inc. This data has been extracted from the Consolidated Balance Sheets
and Consolidated Statement of Operations for the three and twelve month periods
ended December 31, 1998 and is qualified in its entirety by reference to such
Financial Statements.
</LEGEND>

<CIK> 0001063882
<NAME> TRUMP'S CASTLE HOTEL & CASINO, INC.
<MULTIPLIER> 1,000

<S> <C> <C>
<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1998
<PERIOD-START> OCT-01-1998 JAN-01-1998
<PERIOD-END> DEC-31-1998 DEC-31-1998
<CASH> 0 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 5,000 5,000
<CURRENT-LIABILITIES> 0 0
<BONDS> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 5,000 5,000
<SALES> 0 0
<TOTAL-REVENUES> 129 362
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 129 362
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 0 0
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0

</TABLE>