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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 [FEE REQUIRED]
For the Fiscal Year Ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______ to _______
Commission File No.: 2-0219
TRUMP PLAZA FUNDING, INC.
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(Exact Name of Registrant as specified in its charter)
New Jersey 13-3339198
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(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
Mississippi Avenue and The Boardwalk
Atlantic City, New Jersey 08401
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 441-6526
TRUMP PLAZA HOLDING ASSOCIATES
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(Exact Name of Registrant as specified in its charter)
New Jersey 22-3213714
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(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
Mississippi Avenue and The Boardwalk
Atlantic City, New Jersey 08401
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 441-6526
TRUMP PLAZA ASSOCIATES
----------------------------------------
(Exact Name of Registrant as specified in its charter)
New Jersey 22-3241643
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(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
Mississippi Avenue and The Boardwalk
Atlantic City, New Jersey 08401
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (609) 441-6526
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
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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
Registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. Yes X No
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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 the Registrants' knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]
The aggregate market value of the voting stock of Trump Plaza Funding, Inc.
held by non-affiliates as of March 29, 1995 was approximately: $ 0
Indicate by check mark whether the Registrants have filed all documents and
reports required to be filed by Section 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
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As of March 29, 1995, there were 100 shares of Trump Plaza Funding, Inc.'s
Common Stock outstanding.
Documents Incorporated by Reference -- Not applicable.
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FORM 10-K
TABLE OF CONTENTS
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Item Page
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PART I.................................................. 1
ITEM 1. BUSINESS....................................... 1
ITEM 2. PROPERTIES..................................... 31
ITEM 3. LEGAL PROCEEDINGS.............................. 37
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS........................................ 40
PART II................................................. 41
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS.................... 41
ITEM 6. SELECTED FINANCIAL DATA........................ 42
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.. 43
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.... 51
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE..................................... 51
PART III................................................ 52
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS.............. 52
ITEM 11. EXECUTIVE COMPENSATION........................ 56
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT......................... 62
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS.................................. 63
PART IV................................................. 67
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K........................... 67
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PART I
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ITEM 1. BUSINESS.
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(A) GENERAL DEVELOPMENT OF BUSINESS
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Trump Plaza Associates (the "Partnership") owns and operates the
Trump Plaza Hotel and Casino ("Trump Plaza"), a luxury casino hotel located on
The Boardwalk in Atlantic City, New Jersey. The Partnership was organized in
June 1982 as a general partnership under the laws of the State of New Jersey.
Trump Plaza Funding, Inc. (the "Company") was incorporated on March 14, 1986
as a New Jersey corporation and was originally formed solely to raise funds
through the issuance and sale of its debt securities for the benefit of the
Partnership. Trump Plaza Holding Associates ("Holding") was formed in
February 1993 as a New Jersey general partnership for the purpose of raising
funds through the issuance and sale of its Units (as defined).
The partners in the Partnership are Holding, which has a 99%
interest in the Partnership, and the Company, which has a 1% interest in the
Partnership. Donald J. Trump ("Trump"), by virtue of his ownership of the
Company, Holding and Trump Plaza Holding Inc. ("Holding Inc."), which owns a
1% partnership interest in Holding, is the beneficial owner of 100% of the
equity interest in the Partnership. The two partners in Holding are Trump and
Holding Inc. Holding Inc. acts as the managing general partner of Holding.
Holding has no assets other than its equity interest in the Partnership. The
Company is the managing general partner of the Partnership.
On June 24, 1993, the Partnership, the Company and certain
affiliated entities completed a refinancing (the "Refinancing") of their debt
and equity interests. The purpose of the Refinancing was (i) to repay, in
full, the mortgage indebtedness and certain other indebtedness issued as part
of the restructuring (the "Restructuring") of the indebtedness of the
Partnership and the Company pursuant to a prepackaged plan of reorganization
(the "Plan") under chapter 11 of the Bankruptcy Code of 1978, as amended,
effective as of May 29, 1992, (ii) to repurchase the preferred stock interest
in Trump Plaza not owned by Trump and (iii) to repay certain personal
indebtedness of Trump. The Refinancing included (i) the offering (the
"Mortgage Note Offering") by the Company of $330 million in aggregate
principal amount of its 10-7/8% Mortgage Notes due 2001 (the "Mortgage Notes")
and (ii) the offering (the "Units Offering" and, together with the Mortgage
Note Offering, the "Offerings") by Holding of 12,000 Units (the "Units")
consisting of an aggregate of $60 million in principal amount of 12-1/2% Pay-
in-Kind Notes due 2003 (the "PIK Notes") and 12,000 warrants (the "Warrants")
to acquire an aggregate of $12 million in principal amount of PIK Notes. Each
of the Warrants entitles the holder to
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acquire $1,000 principal amount of PIK Notes for no additional consideration.
The partnership agreement of the Partnership was amended and restated to alter
certain procedures and to effectuate the consummation of the Offerings. See
"-- Narrative Description of Business -- The Refinancing and Restructuring."
The Mortgage Notes are senior indebtedness of the Company. The
Company and the Partnership are subject to restrictions on the incurrence of
additional indebtedness. The Mortgage Notes are unconditionally guaranteed by
the Partnership. The Guarantee ranks pari passu in right of payment with all
existing and future senior indebtedness of the Partnership. The PIK Notes are
secured by Holding's equity interest in the Partnership. Holders of the PIK
Notes and the Warrants are not creditors of the Partnership and, consequently,
have no recourse to the assets of the Partnership if an event of default
should occur thereunder. Accordingly, the PIK Notes are structurally
subordinated to the indebtedness of the Partnership, including the Mortgage
Notes.
As of December 31, 1994, the Company's debt consisted of
approximately $326,234,000 (net of discount) outstanding of its Mortgage
Notes. As of December 31, 1994, Holding's debt consisted of approximately
$71,756,000 of PIK Notes and $12 million of deferred warrant obligations. As
of December 31, 1994, the Partnership's debt consisted of a non-recourse
promissory note to the Company in the amount of $326,234,000 (net of discount)
and approximately $6 million of other indebtedness. The Partnership has
unconditionally guaranteed the Mortgage Notes.
(B) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
---------------------------------------------
The Partnership operates in only one industry segment. See the
Financial Statements of the Company and the Partnership included elsewhere
herein.
(C) NARRATIVE DESCRIPTION OF BUSINESS
---------------------------------
GENERAL
The Partnership owns and operates Trump Plaza, a luxury casino hotel
located in Atlantic City, New Jersey. Trump Plaza, with its 73,000 square
foot casino, first class guest rooms and other luxury amenities, has both a
"Four Star" Mobil Travel Guide rating and a "Four Diamond" American Automobile
Association ("AAA") rating. Management believes that these ratings reflect the
high quality amenities and services that Trump Plaza provides to its casino
patrons and hotel guests. Trump Plaza is conveniently located on The
Boardwalk, at the end of the main highway into Atlantic City and is one of the
first
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casino hotels visible from that approach. Management believes that the
central location of Trump Plaza, with its accessibility to "drive in" and
"walk in" patrons, is highly advantageous to Trump Plaza. In addition, the
Casino Reinvestment Development Authority ("CRDA") is currently overseeing the
development of a "tourist corridor" which will link The Boardwalk with
downtown Atlantic City and, when completed, will feature an entertainment and
retail complex of up to 800,000 square feet. Trump Plaza will be located at
the end of the tourist corridor by The Boardwalk.
Trump Plaza seeks to attract casino patrons who tend to wager more
frequently and in larger denominations than the typical Atlantic City gaming
patron (a "high-end" patron). This strategy is accomplished, in part, through
the attractiveness of the facility, which is enhanced by routinely attending
to the aesthetics of the casino and other public areas in Trump Plaza. In
addition, Trump Plaza provides a consistency in the conduct of play of its
table games that serious gaming patrons seek. Finally, Trump Plaza offers a
broad selection of dining choices (including four gourmet restaurants),
headline entertainment, deluxe accommodations and other amenities and
services.
FACILITIES AND AMENITIES
The casino in Trump Plaza currently offers 89 table games and 2,076
slot machines. In addition to the casino, Trump Plaza consists of a 31-story
tower with 555 guest rooms, including 62 suites. Trump Plaza's hotel capacity
will increase to a total of 904 guest rooms as a result of the renovation of
349 rooms at the Boardwalk Expansion Site. The facility also offers 10
restaurants, a 750-seat cabaret theater, four cocktail lounges, 28,000 square
feet of convention, ballroom and meeting room space, a swimming pool, tennis
courts and a health spa.
The entry level of Trump Plaza includes a cocktail lounge, two gift
shops, a deli, a coffee shop, an ice cream parlor and a buffet. The casino
level houses the casino, a fast food restaurant, an exclusive slot lounge for
high-end patrons and a new ocean front baccarat gaming area. There is also an
enclosed skywalk which connects Trump Plaza at the casino level with the
Atlantic City Convention Center.
Trump Plaza's guest rooms are located in a tower which affords most
guest rooms a view of the ocean. While rooms are of varying size, a typical
guest room consists of approximately 400 square feet. Trump Plaza also
features 23 one-bedroom suites, 21 two-bedroom suites and 18 "Super Suites."
The Super Suites are located on the top two floors of the tower and offer
luxurious accommodations and 24-hour butler and maid service. The Super
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Suites and certain other suites are located on the "Club Level" which requires
guests to use a special elevator key for access, and contains a lounge area
(the "Club Level Lounge") that offers food and bar facilities.
Trump Plaza is connected by an enclosed pedestrian walkway to a 10-
story parking garage, which can accommodate approximately 2,650 cars, and
contains 13 bus bays, a comfortable lounge, a gift shop and waiting area (the
"Transportation Facility"). The Transportation Facility provides patrons with
immediate access to the casino, and is located directly off of the main
highway into Atlantic City.
BUSINESS STRATEGY
GENERAL. After a period of turnover in management in 1994, the
Partnership has hired a new president and chief operating officer for Trump
Plaza, as well as several other senior managers. The new management team at
Trump Plaza is dedicated to continuing Trump Plaza's longstanding commitment
to maintaining high quality amenities, while at the same time pursuing an
aggressive new strategy focusing on strategic expansion and customer service.
A primary element of the Trump Plaza business strategy is to seek to
attract patrons who tend to wager more frequently and in larger denominations
than the typical Atlantic City gaming customer. Such high-end players
typically wager $5 or more per play in slots and $25 or more per play in table
games. In order to attract more high-end gaming patrons to Trump Plaza in a
cost-effective manner, the Partnership has refocused its marketing efforts.
Commencing in 1991, the Partnership substantially curtailed costly "junket"
marketing operations which involved attracting groups of patrons to the
facility on an entirely complimentary basis (e.g., by providing free air fare,
gifts and room accommodations). In the fall of 1992, the Partnership decided
to de-emphasize marketing efforts directed at "high roller" patrons from the
Far East, who tend to wager $50,000 or more per play in table games. In each
case the Partnership determined that the potential benefit derived from these
patrons did not outweigh the high costs associated with attracting such
players and the resultant volatility in the results of operations of Trump
Plaza. This shift in marketing strategy has allowed the Partnership to focus
its efforts on attracting the high-end players.
In addition, Trump Plaza's new management team has launched a
variety of new initiatives designed to increase the level of casino gaming
activity. These initiatives include targeted marketing and advertising
campaigns directed to select
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groups of customers in the corridor that extends from Washington, D.C. to
Boston and includes New York City and Philadelphia, the introduction of new
slot machines and table games and the addition of bill acceptors on slot
machines.
GAMING ENVIRONMENT. Trump Plaza also pursues a continuous
preventative maintenance program that emphasizes the casino, hotel rooms and
public areas in Trump Plaza. These programs are designed to maintain the
attractiveness of Trump Plaza to its gaming patrons. Trump Plaza continuously
monitors the configuration of the casino floor and the games it offers to
patrons with a view towards making changes and improvements. Trump Plaza's
casino floor has clear, large signs for the convenience of patrons. As new
games have been approved by the Casino Control Commission ("CCC"), the
Partnership has integrated such games into its casino operations to the extent
it deems appropriate.
In recent years, there has been an industry trend towards fewer
table games and more slot machines. For the Atlantic City casino industry,
revenue from slot machines increased from 54.6% of the industry gaming revenue
in 1988 to 66.9% of the industry gaming revenue in 1994. Trump Plaza
experienced a similar increase, with slot revenue increasing from 51.2% of
gaming revenue in 1988 to 64.7% of the industry gaming revenue in 1994. In
response to this trend, Trump Plaza has devoted more of its casino floor space
to slot machines. In April 1993, Trump Plaza removed 12 table games from the
casino floor and replaced them with 75 slot machines. Moreover, as part of
its program to attract high-end slot players, the Partnership created "Fifth
Avenue Slots," a partitioned portion of the casino floor that includes
approximately 70 slot machines (most of which provide for $5 or more per
play), an exclusive lounge for high-end patrons and other amenities.
"COMPING" STRATEGY. In order to compete effectively with other
Atlantic City casino hotels, the Partnership offers complimentary drinks,
meals, room accommodations and/or travel arrangements to its patrons
("complimentaries" or "comps"). Trump Plaza's policy on complimentaries is to
provide comps primarily to patrons with a demonstrated propensity to wager at
Trump Plaza.
ENTERTAINMENT. Trump Plaza offers headline entertainment, as well
as other entertainment and revue shows as part of its strategy to attract
high-end and other patrons. Trump Plaza offers headline entertainment weekly
during the summer and monthly during the off-season, and also features other
entertainment and revue shows.
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PLAYER DEVELOPMENT/CASINO HOSTS. The Partnership currently employs
gaming representatives in New Jersey, New York and other states, as well as
several international representatives, to promote Trump Plaza to prospective
gaming patrons. Player development personnel host special events, offer
incentives and contact patrons directly in an effort to attract high-end table
game patrons from the United States, Canada and South America. Trump Plaza's
casino hosts assist patrons on the casino floor, make room and dinner
reservations and provide general assistance. They also solicit Trump Card (the
frequent player slot card) sign-ups in order to increase the Partnership's
marketing base.
PROMOTIONAL ACTIVITIES. The Trump Card, a player identification
card, constitutes a key element in Trump Plaza's direct marketing program.
Slot machine players are encouraged to register for and utilize their
personalized Trump Card to earn various complimentaries based upon their level
of play. The Trump Card is inserted during play into a card reader attached
to the slot machine for use in computerized rating systems. The Company's
computer systems record data about the cardholder, including playing
preferences, frequency and denomination of play and the amount of gaming
revenues produced.
Trump Plaza 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 Trump Card and on table game wagering by the casino game supervisors.
Promotional activities include the mailing of vouchers for complimentary slot
play. Trump Plaza also utilizes a special events calendar (e.g., birthday
parties, sweepstakes and special competitions) to promote its gaming
operations.
The Partnership 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 Plaza.
BUS PROGRAM. Trump Plaza has a bus program, which transports
approximately 2,400 gaming patrons per day during the week and 3,500 per day
on the weekends. The Partnership's bus program offers incentives and
discounts to certain scheduled and chartered bus customers. Trump Plaza's
Transportation Facility contains 13 bus bays and is connected by an enclosed
pedestrian walkway to Trump Plaza. The Transportation Facility provides
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patrons with immediate access to the casino, and contains a comfortable lounge
area for patrons waiting for return buses.
CREDIT POLICY. Historically, Trump Plaza has extended credit to
certain qualified patrons. For the years ended December 31, 1994, 1993 and
1992, credit play as a percentage of total dollars wagered was approximately
17%, 18% and 28%, respectively. As part of the Partnership's new business
strategy and in response to the general economic downturn in the Northeast,
Trump Plaza has imposed stricter standards on applications for new or
additional credit and has reduced credit to international patrons. Such
stricter standards in the extension of credit have contributed to the
reduction of credit play as a percentage of total dollars wagered and has led
to improved quality of the credit extended.
ATLANTIC CITY MARKET
Gaming in Atlantic City started in May 1978 when the first casino
hotel opened for business. Since 1978, gaming in Atlantic City has grown from
one casino to 12 casinos as of December 31, 1994, with approximately $3.4
billion of casino industry revenue generated in 1994, a 4% increase over 1993
revenues of $3.3 billion, despite the effects of unfavorable winter weather in
the first quarter of 1994. From 1989 to 1994, total casino revenues in
Atlantic City have increased 22%. See "-- Competition."
Atlantic City is near many densely populated metropolitan areas.
The primary area served by Atlantic City casino hotels is the corridor that
extends from Washington, D.C. to Boston and includes New York City and
Philadelphia. Within this primary area, Atlantic City may be reached by
automobile or bus. Principal arteries lead into Atlantic City from the
metropolitan New York area and from the Baltimore/Washington, D.C. area, both
of which are approximately three hours away by automobile. Atlantic City can
also be reached by air and rail transportation, although most patrons arrive
by automobile or bus.
Historically, Atlantic City has suffered from inadequate rail and
air transportation. As a result, a majority of Atlantic City gaming patrons
travel from the mid-Atlantic and northeast regions of the United States by
automobile or bus. The State of New Jersey is in the process of implementing
a $124 million capital plan to upgrade the Atlantic City International Airport
and Atlantic City Expressway. Despite the expansion of the Atlantic City
International Airport, however, access to Atlantic City by air is still
limited by a lack of regularly scheduled flights and by inadequate terminal
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facilities. The lack of adequate transportation infrastructure has limited
the expansion of the Atlantic City gaming industry's geographic patron base
and the attractiveness of Atlantic City to major conventions.
In February 1993, the State of New Jersey broke ground for a new
$250,000,000 Convention Center on a 30.5-acre site adjacent to the Atlantic
City Expressway. Targeted to open in January 1997, the new Convention Center
will house approximately 500,000 square feet of exhibit space along with 45
meeting rooms totalling nearly 110,000 square feet. The building will include
a 1,600-car underground garage and an indoor street linking the Convention
Center to the existing Rail Terminal. The new Convention Center has been
designed to serve as the centerpiece of Atlantic City's renaissance as a
favorable meeting destination.
EXPANSION SITES
Management has determined to expand the Partnership's facilities.
The purpose of such an expansion is to increase the casino floor space and to
add additional gaming units. Any such expansion will require various
regulatory approvals, including the approval of the CCC. Furthermore, the
Casino Control Act requires that additional guest rooms be put in service
within a specified time period after any such casino expansion. As discussed
below, the Partnership has begun the planned expansion of its hotel facilities
at the Boardwalk Expansion Site (as defined). If the Partnership completed
any casino expansion and subsequently did not complete the requisite number of
additional guest rooms within the specified time period, the Partnership might
have to close all or a portion of the expanded casino in order to comply with
regulatory requirements, which could have a material adverse effect on the
results of operations and financial condition of the Partnership.
BOARDWALK EXPANSION SITE. In 1993, the Partnership received the
approval of CCC, subject to certain conditions, for the expansion of the Trump
Plaza hotel facilities on a 2.0-acre parcel of land located adjacent to Trump
Plaza on The Boardwalk upon which there is located an approximately 349-room
hotel, which was, at the time, closed to the public and in need of substantial
renovation and repair (the "Boardwalk Expansion Site"). In June 1993, Trump
and the lender holding mortgage liens on the Boardwalk Expansion Site
negotiated the terms of a restructuring of loans of approximately $52.0
million of principal and accrued interest secured by the liens on the
Boardwalk Expansion Site. On June 24, 1993, the date the Offerings were
consummated, Trump transferred title to the Boardwalk Expansion Site to the
lender in exchange for a
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reduction in Trump's indebtedness to such lender, with a further reduction of
Trump's indebtedness if the Partnership assumed the Boardwalk Expansion Site
Lease (as defined). On such date, the lender leased the Boardwalk Expansion
Site to Trump (the "Boardwalk Expansion Site Lease") for a term of five years,
which expires on June 30, 1998, during which time Trump is obligated to pay
the lender $260,000 per month in lease payments.
On June 24, 1993, the Partnership also acquired a five-year option
to purchase the Boardwalk Expansion Site (the "Boardwalk Expansion Site
Purchase Option"). In October 1993, the Partnership assumed the leases
associated with the Boardwalk Expansion Site. In addition, the Partnership
has a right of first offer (the "Right of First Offer") upon any proposed sale
of all or any portion of the Boardwalk Expansion Site during the term of the
Boardwalk Expansion Site Purchase Option. Until such time as the Boardwalk
Expansion Site Purchase Option is exercised or expires, the Partnership is
obligated to pay the net expenses associated with the Boardwalk Expansion
Site. During the year ended December 31, 1994, the Partnership incurred $4.9
million of such expenses. Under the Boardwalk Expansion Site Purchase Option,
the Partnership has the right to acquire the Boardwalk Expansion Site for a
purchase price of $27.0 million through 1995, increasing by $1.0 million
annually thereafter until expiration on June 30, 1998. Under the terms of the
Boardwalk Expansion Site Purchase Option, if the Partnership defaults in
making payments due under the Boardwalk Expansion Site Purchase Option, the
Partnership would be liable to the grantor of the Boardwalk Expansion Site
Purchase Option for the sum of (a) the present value of all remaining payments
to be made by the Partnership pursuant to the Boardwalk Expansion Site
Purchase Option during the term thereof and (b) the cost of demolition of all
improvements then located at the Boardwalk Expansion Site.
As of December 31, 1994, the Partnership had capitalized
approximately $11.7 million in construction costs related to the Boardwalk
Expansion Site including a $1 million consulting fee paid to Trump. Management
does not currently anticipate that it will be in a position to exercise the
Boardwalk Expansion Site Purchase Option prior to 1996 due, in part, to
limitations on its ability to incur additional indebtedness. If the
Partnership is unable to finance the purchase price of the Boardwalk Expansion
Site pursuant to the Boardwalk Expansion Site Purchase Option, any amounts
expended with respect to the Boardwalk Expansion Site, including payments
under the Boardwalk Expansion Site Purchase Option and the Boardwalk Expansion
Site Lease, if assumed, and any improvements thereon would inure to the
benefit of the owner of the Boardwalk Expansion Site and not to the
Partnership. In such event, the Partnership might have to close all or a
portion of the expanded casino in order to comply with regulatory
requirements, which could have a material adverse effect on the results of
operations and financial condition of the Partnership.
The Partnership's ability to acquire the Boardwalk Expansion Site
pursuant to the Boardwalk Expansion Site Purchase Option is dependent upon its
ability to obtain financing to acquire the property and is subject to the
approval of the CCC. See "-- Gaming and Other Laws and Regulations." The
ability to incur such indebtedness is also restricted by the Mortgage Note
Indenture and the PIK Note Indenture and would require the consent of certain
of Trump's personal creditors. The Partnership's ability to complete
development of the Boardwalk Expansion Site is dependent upon its ability to
use existing cash on hand and
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generate cash flow from operations sufficient to fund development costs. No
assurance can be given that such cash on hand will be available to the
Partnership for such purposes or that it will be able to generate sufficient
cash flow from operations. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources." Pursuant to the Right of First Offer, the Partnership has ten
days after receiving written notice from the grantor of the proposed sale to
commit to exercise the Right of First Offer. If the Partnership commits to
exercise the Right of First Offer, it has ten days from the date of the
commitment to deposit $3,000,000 with the grantor, to be credited towards the
purchase price or to be retained by the grantor if the closing, through no
fault of the grantor, does not occur within ninety days (or, subject to
certain conditions, 120 days) of the date of the commitment. There can be no
assurance that the Partnership would have the liquidity necessary to exercise
its Right of First Offer on a timely basis should it be required. In
addition, exercise of the Boardwalk Expansion Site Purchase Option or the
Right of First Offer requires the consent of certain of Trump's personal
creditors, and there can be no assurance that such consent will be obtained at
the time the Partnership desires to exercise the Boardwalk Expansion Site
Purchase Option or such right of first offer. The CCC has required that the
Partnership exercise the Boardwalk Expansion Site Purchase Option or the Right
of First Offer therein no later than July 1, 1995. The Partnership intends to
request a waiver of this requirement; however, no assurance can be given that
such waiver will be granted or that any condition imposed by the CCC would be
acceptable to the Partnership. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources."
Management is in the process of renovating the hotel at the
Boardwalk Expansion Site. When completed, the hotel will have approximately
349 rooms, including a retail space fronting The Boardwalk, and 15,000 square
feet of proposed gaming space on the second floor. As a result of this
expansion, upon approval by the CCC, the Partnership will be permitted to
increase Trump Plaza's casino floor space to 90,000 square feet. The
Partnership added approximately 9,000 square feet in April 1994, 1,000 square
feet in July 1994 and 3,000 square feet in December 1994. At December 31,
1994, the total casino floor space was 73,000 square feet. The Partnership has
begun construction at the Boardwalk Expansion Site (pursuant to rights granted
to the Partnership by the lender and the lessee under the Boardwalk Expansion
Site Lease) prior to acquiring title thereto pursuant to the Boardwalk
Expansion Site Purchase Option. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources."
Acquisition of the Boardwalk Expansion Site by the Partnership would
under certain circumstances (provided there are no events of default under the
Boardwalk Expansion Site Lease or the Boardwalk Expansion Site Purchase Option
and provided that
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certain other events had not theretofore or do not thereafter occur) discharge
Trump's obligation to such lender in full. Management believes that the
Boardwalk Expansion Site will be useful to the operation of Trump Plaza as the
site of the future expansion of the Partnership's hotel operations. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."
In September 1993, Trump entered into a sublease agreement (the
"Time Warner Sublease") with Time Warner Entertainment Company, L.P. ("Time
Warner") for a period of ten years with the sublessee's option to renew the
sublease for a ten-year period. Under this agreement, Time Warner agreed to
sublease the entire first floor of the retail space (approximately 17,000
square feet) located at the Boardwalk Expansion Site for a new Warner Brothers
Studio Store. In October 1993, the Partnership assumed Trump's duties and
obligations under the Time Warner Sublease. In July 1994, Time Warner opened
its second largest Warner Brothers Studio Store at the Boardwalk Expansion
Site pursuant to the Time Warner Sublease. Management believes that the store
will be a major attraction on The Boardwalk and will increase the flow of
patrons through the casino. The remaining portion of the Boardwalk Expansion
Site will be used for a new entranceway to Trump Plaza, directly off the
Atlantic City Expressway, as well as a public park and parking facilities for
Trump Plaza patrons.
The Partnership is obligated to either pay a tax to the CRDA of 2.5%
of its gross casino revenues or to obtain investment tax credits in an amount
equal to 1.25% of its gross casino revenues. The Partnership obtained approval
from the CRDA for up to $14.1 million of investment tax credits with respect
to the acquisition and construction of improvements to the Boardwalk Expansion
Site described herein and the related demolition of certain structures on the
Boardwalk Expansion Site. Due to the fact that the Partnership has begun
construction at the Boardwalk Expansion Site, pursuant to rights granted to
the Partnership by its lessor, the Partnership has received approximately
$1,519,000 in such CRDA credit as of December 31, 1994. There can be no
assurance, however, that such credits would be sufficient to defray a
significant portion of the total project costs.
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TRUMP REGENCY. In June 1989, Trump Crystal Tower Associates Limited
Partnership, a New Jersey limited partnership wholly-owned by Trump, acquired
from Elsinore Shore Associates all of the assets constituting the former
Atlantis Casino Hotel ("Atlantis"), which is located on The Boardwalk adjacent
to the Atlantic City Convention Center on the opposite side from Trump Plaza
and is otherwise referred to herein as the Trump Regency. Prior to such
acquisition, all of the Atlantis' gaming operations were discontinued. The
facility was renamed the Trump Regency Hotel and leased to the Partnership,
which operated it solely as a non-casino hotel. As part of the Restructuring,
the lease was terminated and the Partnership issued to Chemical Bank
("Chemical"), the assignee of rents payable under such lease, a promissory
note in the original principal amount of $17.5 million (the "Regency Note").
At such time, title to the Trump Regency was transferred by Trump to ACFH Inc.
("ACFH"), a wholly owned subsidiary of Chemical. Since that time, the Trump
Regency has been operated by ACFH as a non-casino hotel. The Partnership
repaid the Regency Note with a portion of the proceeds of the Refinancing.
In December 1993, Trump entered into an option agreement (the
"Original Chemical Option Agreement") with Chemical and ACFH. The Original
Chemical Option Agreement granted to Trump an option to purchase (i) the Trump
Regency (including the land, improvements and personal property used in the
operation of the hotel) and (ii) certain promissory notes made by Trump and/or
certain of his affiliates and payable to Chemical (the "Chemical Notes") which
are secured by certain real estate assets located in New York, unrelated to
the Partnership, including one note dated July 20, 1987, as amended by First
Allonge to the note dated as of November 16, 1988 and as further amended by
Second Allonge to the note dated as of August 8, 1988 in the original
principal amount of $80,000,000 made by Trump to a predecessor of Chemical
(the "Trump Note"). As of December 31, 1994, the aggregate amount owed by
Trump and his affiliates under the Chemical Notes (none of which constitutes
an obligation of the Partnership) was approximately $65.8 million, of which
the aggregate amount owing under the Trump Note was $35.9 million.
The aggregate purchase price payable for the assets subject to the
Original Chemical Option Agreement was $80 million. Under the terms of the
Original Chemical Option Agreement, $1 million was required to be paid for the
option by January 5, 1994. In addition, the Original Chemical Option
Agreement provided for an expiration of the option on May 8, 1994, subject to
an extension until June 30, 1994 upon payment of an additional $250,000 on or
before May 8, 1994. The Original Chemical Option Agreement did not allocate
the purchase price
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among the assets subject to the option or permit the option to be exercised
for some, but not all, of such assets.
In connection with the execution of the Original Chemical Option
Agreement, the Partnership was to make the initial $1,000,000 payment, and, in
consideration of such payment to be made by the Partnership, Trump agreed with
the Partnership that, if Trump is able to acquire the Trump Regency pursuant
to the exercise of the option, he would make the Trump Regency available for
the sole benefit of the Partnership on a basis consistent with the
Partnership's contractual obligations and requirements. Trump further agreed
that the Partnership would not be required to pay any additional consideration
to Trump in connection with any assignment to the Partnership of the option to
purchase the Trump Regency. On January 5, 1994, the Partnership obtained the
approval of the CCC to make the $1 million payment, and the payment was made
on that date.
On June 16, 1994, Trump, Chemical and ACFH amended and restated the
Original Chemical Option Agreement (the "First Amended Chemical Option
Agreement"). The First Amended Chemical Option Agreement provided for an
extension of the expiration of the option through September 30, 1994, upon
payment of $250,000. Such payment was made on June 27, 1994. The First
Amended Chemical Option Agreement also provided for a $60 million option price
for the Trump Regency and the Trump Note, and a separate $20 million option
price for the other Chemical Notes. On August 30, 1994, Trump, Chemical and
ACFH entered into an amendment to the First Amended Chemical Option Agreement
(the "Second Amended Chemical Option Agreement"). The Second Amended Chemical
Option Agreement provided for an extension of the expiration of the option
through March 31, 1995 upon the payment of $50,000 per month for the period
October through December 1994, and $150,000 per month for the period January
through March 1995. The Partnership received the approval of the CCC and has
made such payments. On March 6, 1995, Trump, Chemical and ACFH entered into
an amendment to the Second Amended Chemical Option Agreement (the "Third
Amended Chemical Option Agreement"). The Third Amended Chemical Option
Agreement provides for an extension of the expiration of the option through
August 31, 1995 upon the payment of $100,000 per month for the period April
through August 1995. The Partnership received the approval of the CCC on
March 22, 1995 to make such payment. As a condition to the Third Amended
Chemical Option Agreement, Trump must (i) obtain the approval of the CCC by
July 1, 1995 for the transactions contemplated by the exercise of the options
set forth in the Third Amended Chemical Option Agreement and for the financing
to be used in connection with the acquisition of Trump Regency and other
assets in connection with the exercise of the options set forth in the Third
Amended Chemical Option Agreement; and (ii) file with the Securities and
Exchange Commission (the "SEC") by April 1, 1995 a registration statement
relating to
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the financing necessary to complete the transactions contemplated by the
exercise of the options set forth in the Third Amended Chemical Option
Agreement.
As of December 31, 1994, $1,550,000, representing option payments,
is included in other assets in the accompanying Consolidated Financial
Statements. If the option is exercised pursuant to the Third Amended Chemical
Option Agreement, option payments through March 31, 1995 are available to
offset the $60 million option price.
COMPETITION
Trump Plaza competes primarily with other casinos located in
Atlantic City, New Jersey, and 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 may in the future
be, authorized. To a lesser extent, Trump Plaza faces competition from gaming
facilities nationwide, including land based, cruise line, riverboat and
dockside casinos located in Mississippi, Nevada, Louisiana, Iowa, Puerto Rico,
the Bahamas 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.
Competition in the Atlantic City casino hotel market is intense. At
present, there are 12 casino hotels located in Atlantic City, including Trump
Plaza, all of which compete for patrons. In addition, there are several sites
on The Boardwalk and in the Atlantic City Marina area on which casino hotels
could be built in the future, although the Partnership is not aware of any
current development of such sites by third parties.
Casinos in Atlantic City must be located in approved hotel
facilities which offer dining, entertainment and other guest facilities. In
addition, the approved hotel facilities must have a prescribed number of
qualified sleeping units depending on the size of the casino space.
Competition among casino hotels is based primarily upon promotional
allowances, advertising, the attractiveness of the casino area, service,
quality and price of rooms, food and beverages, restaurant, convention and
parking facilities and entertainment. In order to compete effectively with
all other Atlantic City casino hotels, the Partnership offers complimentary
beverages, meals, room accommodations and/or travel arrangements to its
preferred customers, as well as cash bonuses and other incentives pursuant to
approved coupon programs.
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In addition, Trump Plaza faces competition from casino facilities
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 the Partnership.
In 1991, the Mashantucket Pequot Nation opened a casino facility in
Ledyard, Connecticut, located in the far eastern portion of such state, an
approximately three-hour drive from New York City. In February 1992, the
Mashantucket Pequot Nation initiated 24 hour gaming, and in January 1993, slot
machines were added at such facility, and the facility currently contains over
3,100 slot machines. The Mashantucket Pequot Nation has announced various
expansion plans, including its intention to build another casino in Ledyard
together with hotels, restaurants and a theme park. There can be no assurance
that any continued expansion of gaming operations by the Mashantucket Pequot
Nation would not have a materially adverse impact on the Partnership's
operations.
A group in New Jersey calling itself the "Ramapough Indians" has
applied to the U.S. Department of the Interior to be recognized formally as a
Native American tribe, which recognition would permit it to require the State
of New Jersey to negotiate a gaming compact under IGRA. In 1993, the Bureau
of Indian Affairs denied the Ramapough Indians Federal recognition.
Similarly, a group in Cumberland County, New Jersey calling itself the
"Nanticoke Lenni Lenape" tribe has filed a notice of intent with the Federal
Bureau of Indian Affairs seeking Federal recognition as a Native American
tribe. Also, it has been reported that a Sussex County, New Jersey
businessman has offered to donate land he owns there to the Oklahoma-based
Lenape/Delaware Indian Nation which originated in New Jersey and already has
Federal tribal status but does not have a reservation in the state. In
addition, in July 1993, the Oneida Nation opened a casino featuring 24-hour
table gaming and electronic gambling systems, but without slot machines, near
Syracuse, New York and have announced a desire to open gaming facilities
elsewhere in New York. 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 Mohawk casino could be operational as early as
August, 1995. The Mohegan Nation, a tribe in Connecticut, received Federal
recognition in March of 1994 and, in May of that year, executed a gaming
compact
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with the State of Connecticut that was approved by the Secretary of the
Interior in December 1994. The Mohegan Nation is scheduled to open a casino
in southeastern Connecticut in the next few years. Other Native American
Nations are seeking Federal recognition, land and negotiation of gaming
compacts in New York, Pennsylvania, Connecticut and other nearby states.
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 Pennsylvania. Several states are
considering or have approved large scale land-based casinos. Harrah's Jazz
Company is scheduled to open and operate a casino in New Orleans, Louisiana in
May of 1995. Additionally, Las Vegas experienced significant expansion in
1993 and 1994 with additional capacity planned and currently under
construction. The Partnership's operations could be adversely affected by
such competition, particularly if casino gaming were permitted in
jurisdictions near or elsewhere in New Jersey or 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. To the extent that legalized gaming becomes more prevalent in
New Jersey or other jurisdictions, competition would intensify. In
particular, a proposal has been introduced to legalize gaming in Philadelphia
and other locations in Pennsylvania.
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
has been enacted. The Partnership is unable to predict whether any such
legislation, if enacted, would have a material adverse impact on the results
of operations or financial condition of the Partnership.
THE REFINANCING AND RESTRUCTURING
THE REFINANCING. In connection with the Refinancing, the proceeds
of the Units Offering were distributed to Trump. Trump used $35 million of
such proceeds to purchase stock of the Company, which used such funds,
together with a portion of the proceeds of the Mortgage Note Offering, to
redeem the Company's outstanding stock units (the "Stock Units"), each
consisting of (i) one share of the Company's 9.34% Participating Cumulative
Redeemable Preferred Stock (the "Preferred Stock"), liquidation preference $25
per share, par value $1 per share, and (ii) one
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share of the Company's common stock (the "Common Stock"), par value $.00001
per share. The remaining $25 million of the proceeds of the Units Offering
were distributed to Trump as part of a special distribution (the "Special
Distribution"). Trump used the Special Distribution primarily to reduce his
personal indebtedness and to satisfy certain property tax obligations with
respect to real estate owned by him. Out of the proceeds of the Mortgage Note
Offering, $225 million was used to redeem all of the Bonds (as defined).
In connection with the Offerings, the Company formed Holding, a New
Jersey general partnership, for the purpose of offering the Units. Trump
contributed to Holding his equity ownership interest in the Partnership and
became the sole beneficial owner of Holding.
Also in connection with the Offerings, the Company became the
managing general partner of the Partnership as of June 18, 1993 upon its
merger with TP/GP Corp., a New Jersey corporation ("TP/GP"), which had been
the managing general partner of the Partnership until such date. Holding and
the Company, both of which became wholly-owned by Trump upon such merger,
became the sole partners of the Partnership.
THE RESTRUCTURING. In 1991, the Partnership began to experience a
liquidity problem. Management believes that the Partnership's liquidity
problem was attributable, in part, to an overall deterioration in the Atlantic
City gaming market, as indicated by reduced rates of casino revenue growth for
the industry for the two prior years, aggravated by an economic recession in
the Northeast and the Persian Gulf War. Comparatively excessive casino gaming
capacity in Atlantic City, due in part to the opening of the Trump Taj Mahal
Casino Resort (the "Taj Mahal") in April 1990, may also have contributed to
the Partnership's liquidity problem.
In order to alleviate its liquidity problem, on May 29, 1992 (the
"Effective Date"), the Partnership and the Company restructured their
indebtedness pursuant to the Plan. The purpose of the Restructuring was to
improve the amortization schedule and extend the maturity of the Partnership's
indebtedness by (i) eliminating the sinking fund requirement on the Company's
12-7/8% First Mortgage Bonds, due 1998 (the "Original Bonds"), (ii) extending
the maturity and lowering the interest rate on the Original Bonds, (iii)
reducing the aggregate principal amount of such indebtedness from $250 million
to $225 million, and (iv) eliminating certain other indebtedness by
reconstituting such debt in part as Bonds (as defined) and in part as Stock
Units. The Restructuring was necessitated by the Partnership's inability to
either generate cash flow or obtain
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additional financing sufficient to make the scheduled sinking fund payment on
the Original Bonds.
On the Effective Date, the Company, which theretofore had no
interest in the Partnership, received a 50% beneficial interest in TP/GP, and
the Company and TP/GP were admitted as partners of the Partnership. The
Company issued $225 million principal amount of the Company's 12% Mortgage
Bonds due 2002 (the "Bonds") and approximately three million Stock Units to
certain creditors. Pursuant to the terms of the partnership agreement of the
Partnership, the Company was issued the Preferred Stock. TP/GP became the
managing general partner of the Partnership, and through its Board of
Directors, managed the affairs of the Partnership until its merger into the
Company on June 24, 1993.
Upon consummation of the Plan, each holder of $1,000 principal
amount of Original Bonds and such other indebtedness received (i) $900
principal amount of Bonds, (ii) 12 Stock Units and (iii) certain cash
payments.
As a result of the Refinancing, the Company redeemed the Stock
Units, consisting of the Company's Common Stock and Preferred Stock and Trump
became the sole beneficial owner of the Company's Common Stock. The Company
also retired the outstanding principal amount and interest on the Bonds. In
addition, TP/GP was merged into the Company and the Company became the
managing general partner of the Partnership.
CONFLICTS OF INTEREST
Trump is a 100% beneficial owner of Trump's Castle Casino Resort
("Trump's Castle") subject to certain litigation warrants and a 50% beneficial
owner of the Taj Mahal (collectively, the "Other Trump Casinos"), and is the
sole beneficial owner of TC/GP, Inc., an entity that as of December 31, 1994
has provided certain services to Trump's Castle; prior thereto, Trump's Castle
Management Corp., an entity solely owned by Trump, provided management
services to Trump's Castle. Under certain circumstances, Trump could increase
his beneficial interest in Taj Mahal to 100%. In addition, Trump has a
personal services agreement with the partnership that owns the Taj Mahal
pursuant to which he receives substantial compensation based, in part, on the
financial results of the Taj Mahal. The Other Trump Casinos compete directly
with each other and with other Atlantic City casino hotels, including Trump
Plaza. Trump could under certain circumstances have an incentive to operate
the Other Trump Casinos to the competitive detriment of the Partnership.
Nicholas L. Ribis, the Chief Executive Officer of the Partnership, is also the
chief executive officer of the
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partnerships that own the Other Trump Casinos, and Mr. Robert M. Pickus and
Mr. John P. Burke, officers of the Partnership, are also executive officers of
each of the partnerships that own the Other Trump Casinos. In addition,
Messrs. Trump, Ribis and Burke serve on the governing bodies of the
partnerships that own the Other Trump Casinos. As a result of Trump's
interests in three competing Atlantic City casinos, the common chief executive
officer and other common officers, a conflict of interest may be deemed to
exist by reason of such persons' access to information and business
opportunities possibly useful to any or all of such casinos. Although no
specific procedures have been devised for resolving conflicts of interest
confronting, or which may confront, Trump, such persons and the Other Trump
Casinos, Messrs. Trump, Ribis, Pickus and Burke have informed the Company that
they will not engage in any activity which they reasonably expect will harm
Trump Plaza or is otherwise inconsistent with their fiduciary obligations to
the Partnership. See "Certain Relationships and Related Transactions."
EMPLOYEES AND LABOR RELATIONS
The Partnership has approximately 3,800 employees of whom
approximately 1,100 are covered by collective bargaining agreements.
Management believes that its relationships with its employees are
satisfactory. Certain of the Partnership's employees must be licensed or
registered under the Casino Control Act. See "-- Gaming and Other Laws and
Regulations --Employees." The Company has no employees.
In April 1993, the National Labor Relations board found that the
Partnership had violated the National Labor Relations Act (the "NLRA") in the
context of a union organizing campaign by table game dealers of the
Partnership in association with the Sports Arena and Casino Employees Union
Local 137, a/w Laborers' International Union of North America, AFL-CIO ("Local
137"). In connection with such finding, the Partnership was ordered to
refrain from interfering with, restraining, or coercing employees in the
exercise of the rights guaranteed them by Section 7 of the NLRA, to notify its
employees of such rights and to hold an election by secret ballot among its
employees regarding whether they desire to be represented for collective
bargaining by Local 137. The election was held on May 20 and 21, 1994 and the
vote, which has been certified by the NLRB, was in favor of management and
against representation by Local 137.
SEASONALITY
The gaming industry in Atlantic City traditionally has been
seasonal, with its strongest performance occurring from May through September,
and with December and January showing
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substantial decreases in activity. Revenues have been significantly higher on
Fridays, Saturdays, Sundays and holidays than on other days.
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.
In general, the Casino Control Act contains detailed provisions
concerning, among other things: the granting 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; 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; security standards; the
manufacture and distribution of gaming equipment; equal employment opportunity
for employees of casino operators, contractors of casino facilities and
others; and advertising, entertainment and alcoholic beverages.
CASINO CONTROL COMMISSION. The ownership and operation 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.
OPERATING LICENSES. The Partnership was issued its initial casino
license on May 14, 1984. On April 19, 1993, the CCC renewed the Partnership's
casino license through June 30, 1995, and on March 15, 1993 approved Trump as
a natural person qualifier through May 1995. In March 1995, the Partnership's
license renewal proceedings were consolidated with the Other Trump Casinos.
The Partnership, as consolidated with the Other Trump Casinos for license
renewal purposes, intends to apply during March 1995 for a renewal of its
casino license for the period through June 30, 1999 and renewal of the
approval of Trump as a natural person qualifier for the license term. It is
anticipated that the CCC will conduct a plenary hearing for renewal of the
Partnership's casino license in June 1995. No assurance can be given that the
CCC will renew the casino license
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or, if it does so, as to the conditions it may impose, if any, with respect
thereto.
CASINO LICENSEE. 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 include 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. The CCC may reopen licensing
hearings at any time, and must reopen a licensing hearing at the request of
the New Jersey Division of Gaming Enforcement (the "Division").
To be considered financially stable, a licensee must demonstrate the
following ability: to pay winning wagers when due, to achieve a 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 "--
Gaming and Other Laws and Regulations -- Conservatorship."
The Partnership 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
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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. See " --Gaming and Other Laws and
Regulations -- Employees." Pursuant to a condition of its casino license,
payments by the Partnership to or for the benefit of any related entity or
partner are subject to prior CCC approval; and, if the Partnership's cash
position falls below $5.0 million for three consecutive business days, the
Partnership must present to the CCC and the Division evidence as to why it
should not obtain a working capital facility in an appropriate amount.
CONTROL PERSONS. An entity qualifier or intermediary or holding
company, such as Holding, Holding Inc. and the Company, 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 bears any relation to the
casino project, 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
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requirement for holders of less than 15% of a series of publicly traded
mortgage bonds 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 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; investment company registered under the Investment
Company Act of 1940, as amended; collective investment trust organized by
banks under Part Nine of the Rules of the Comptroller of the Currency; closed
end investment trust; chartered or licensed life insurance company or property
and casualty insurance company; banking and other chartered or licensed
lending institution; 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 Division upon request, any document or
information which bears any relation to such debt or equity securities.
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Generally, the CCC requires each institutional holder seeking waiver
of qualification to execute a certification to the effect that (i) the holder
has received 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 (see "Interim Casino Authorization" below)
and has executed a trust agreement pursuant to such an application.
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. Each of the
Company, Holding, Holding Inc. and the Partnership are 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 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 such securities or any
remuneration, in any form, from its affiliated casino licensee for services
rendered or otherwise.
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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 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.
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
authorization, the property relating to the casino operation or the securities
are 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, the closing or settlement date in the contract
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 the 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
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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 casino experience; and (iv) interim operation will best
serve the interests 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, 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 qualification 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 a 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.
Agreements to lease an approved hotel building or the land under the
building must be for a durational term exceeding
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30 years, 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. The CCC may
waive any of the foregoing requirements for good cause. The Partnership
intends to apply for a ruling that good cause exists to waive the 30-year
requirement. There can be no assurances that the CCC will grant such a
waiver.
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 two-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, 1994, 1993 and 1992, the Partnership's gross revenue tax was approximately
$21.0 million, $21.3 million and $21.0 million, respectively, and its license,
investigation, and other fees and assessments totalled approximately $4.2
million, $4.0 million and $4.7 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 25 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 may have terms as long as fifty 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 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 bonds issued to the licensee by
the CRDA. Thereafter, the licensee is (i) entitled to an investment tax
credit in an amount equal to twice the purchase price of such bonds or twice
the amount of its investments authorized in lieu of such bond
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investments or made in projects designated 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 moneys made available to the CRDA, the CRDA is required to
set aside $100,000,000 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 by December 31, 1996. These monies
shall be used to fund up to 35% of the cost to casino licensees of expanding
their hotel facilities to provide additional hotel rooms which are required to
be available upon the opening of the Atlantic City Convention Center and
a portion of which will be required to be dedicated to convention events. The
CRDA has determined at this time that eligible casino licensees will receive
27% of the cost of additional hotel rooms out of these monies set aside and
may, in the future, determine to increase the percentage to an amount no
greater than 35%.
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, garaging or storing
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 payment to the New Jersey State
Treasurer and cover related expenses. Amounts in the special fund will be
expended by the CRDA for economic development projects of a revenue producing
nature that foster the redevelopment of Atlantic City.
CONSERVATORSHIP. If, at any time, it is determined that the
Partnership, the Company, Holding Inc. or Holding 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
revoked or if the CCC fails or refuses to renew such casino license, the CCC
could appoint a conservator to operate and 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
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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.
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 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 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 Plaza is conducted by trained
and supervised personnel. The Partnership employs extensive security and
internal controls. Security checks are made 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 camera to monitor the casino floor and money
counting areas. The count of moneys from gaming also is observed daily by
representatives of the CCC.
OTHER LAWS AND REGULATIONS. The United States Department of 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 involve 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 Commissioner of 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
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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 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.
As the result of an audit conducted by the U.S. Department of
Treasury, Office of Financial Enforcement, the Partnership was alleged to have
failed to timely file the "Currency Transaction Report by Casino" in
connection with 65 individual currency transactions in excess of $10,000
during the period from October 31, 1986 to December 10, 1988. The Partnership
paid a fine of $292,500 in connection with these violations. The Partnership
has revised its internal control procedures to ensure continued compliance
with these regulations.
On April 5, 1994, the Occupational Safety and Health Administration
("OSHA") proposed a regulation that would require, inter alia, that employers
who permit smoking in workplaces establish designated smoking areas, permit
smoking only in such areas, and assure that designated smoking areas be
enclosed, exhausted directly to the outside, and maintained under negative
pressure sufficient to contain tobacco smoke within the designated area. The
Partnership has estimated construction costs to build enclosed, exhausted,
negative-pressure smoking rooms in Trump Plaza to be $1.5 million for its
casino and $2.5 million for its restaurants. The Partnership has also
estimated construction costs to provide negative-pressure exhaust systems for
Trump Plaza hotel rooms to be $1,500 per room; however, management believes
that it is highly unlikely that the regulation, if promulgated, would require
hotel rooms to be equipped with exhaust systems if smoking is prohibited in
the rooms during housekeeping and maintenance activities. If the regulation
is promulgated and is applicable to Trump Plaza hotel rooms, the number of
rooms that would be affected is not known at this time.
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 business of the Partnership
have been obtained for operations in the State of New Jersey.
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(D) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC
OPERATIONS AND EXPORT SALES
------------------------------------------------
Not applicable.
ITEM 2. PROPERTIES.
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The Partnership owns and leases several parcels of land in and around
Atlantic City, New Jersey, each of which is used in connection with the
operation of Trump Plaza and each of which is subject to the liens of the Note
Mortgage and Guarantee Mortgage (collectively, the "Mortgages") and certain
other liens. The "Note Mortgage" and related assignments of assets encumber
the real property owned and leased by the Partnership and substantially all of
the Partnership's other assets, all of which constitute Trump Plaza and its
related properties, which secures the non-recourse promissory note (the
"Partnership Note") of the Partnership issued to the Company in exchange for
the Company's lending to the Partnership the proceeds of the Mortgage Note
Offering. In exchange for the use of such proceeds, the Company has assigned
the Note Mortgage and the Partnership Note to the Trustee. The "Guarantee
Mortgage" is the mortgage on and related assignments of the assets of the
Partnership described above, senior to the lien of the Note Mortgage, which
secures the Partnership's non-recourse guarantee (the "Guarantee") of the
Mortgage Notes. The Mortgage Note Indenture, the Note Mortgage and the
Guarantee Mortgage are herein collectively referred to as the "Mortgage Note
Agreements."
CASINO PARCEL
Trump Plaza is located on The Boardwalk in Atlantic City, New Jersey,
next to the Atlantic City Convention Center. It occupies the entire city
block (approximately 2.38 acres) bounded by The Boardwalk, Mississippi Avenue,
Pacific Avenue and Columbia Place (the "Casino Parcel").
The Casino Parcel consists of four tracts of land, one of which is
owned by the Partnership and three of which are leased to the Partnership
pursuant to three non-renewable Ground Leases, each of which expires on
December 31, 2078 (each, a "Ground Lease"). Trump Seashore Associates,
Seashore Four Associates and Plaza Hotel Management Company (each, a "Ground
Lessor") are the owners/lessors under such respective Ground Leases
(respectively, the "TSA Lease," "SFA Lease" and "PHMC Lease"; the land which
is subject to the Ground Leases (which includes Additional Parcel 1, as
hereinafter defined) is referred to collectively as the "Leasehold Tracts" and
individually as a "Leasehold Tract"). Trump Seashore Associates and Seashore
Four Associates are
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beneficially owned by Trump and are, therefore, affiliates of the Company and
the Partnership.
On August 1, 1991, as security for indebtedness owed to a third party,
Trump Seashore Associates transferred its interest in the TSA Lease to United
States Trust Company of New York ("UST"), as trustee for the benefit of such
third party creditor. The trust agreement among UST, Trump Seashore
Associates and such creditor provides that the trust shall terminate on the
earlier of (i) August 1, 2012 or (ii) the date on which such third party
creditor certifies to UST that all principal, interest and other sums due and
owing from Trump Seashore Associates to such third party creditor have been
paid.
Trump Seashore Associates is currently negotiating with its third party
lender for the extension or refinancing of the indebtedness described above,
which debt matured on October 29, 1993. The lender has agreed to forebear
from pursuing remedies under such loan through April 1995, while such
refinancing negotiations are taking place. The Mortgage Note Agreements
provide that, upon such refinancing, the refinancing lender shall consent to
the execution of an agreement between TSA and the Partnership providing, among
other matters, for certain protections for holders of Mortgage Notes in the
event of a default arising under the TSA Lease.
While the transfer to UST of Trump Seashore Associates' interest in the
TSA Lease was primarily a financing transaction to provide the third-party
creditor with a potentially enhanced security interest, because of the
transfer of such interest to UST, it is not certain that the TSA Lease would
be deemed to be held by an affiliate of the Partnership and, therefore, even
if the agreement described above is executed by TSA, the holders of the
Mortgage Notes and the PIK Notes may not have the benefit of any such
agreement regarding the TSA Lease.
The SFA Lease and the PHMC Lease each contain options pursuant to which
the Partnership may purchase the Leasehold Tract covered by such Ground Lease
at certain times during the term of such Ground Lease under certain
circumstances. Upon any refinancing of the mortgage indebtedness which
currently encumbers the fee interest in the TSA Lease Leasehold Tract,
including any refinancing resulting from the on-going negotiations described
above, the TSA Lease will be amended to confirm the existence thereunder of
the purchase options, or provide for an additional option grant, in each case
substantially similar to those currently set forth in the other Ground Leases.
The purchase price pursuant to each option is specified in the applicable
Ground Lease.
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The Ground Leases are "net leases" pursuant to which the Partnership,
in addition to the payment of fixed rent, is responsible for all costs and
expenses with respect to the use, operation and ownership of the Leasehold
Tracts and the improvements now, or which may in the future be, located
thereon, including, but not limited to, all maintenance and repair costs,
insurance premiums, real estate taxes, assessments and utility charges.
The improvements located on the Leasehold Tracts are owned by the
Partnership during the terms of the respective Ground Leases and upon the
expiration of the term of each Ground Lease (for whatever reason), ownership
of such improvements will vest in the Ground Lessor. Subject to the
provisions of the Mortgage Note Agreements, the Partnership has the right to
improve the Leasehold Tracts, alter, demolish and/or rebuild the improvements
constructed thereon, and remove any personal property and movable trade
fixtures therefrom.
The Ground Leases provide that each Ground Lessor may encumber its fee
estate with mortgage liens, but any such fee mortgage will not increase the
rent under the applicable Ground Lease and must be subordinate to such Ground
Lease. Accordingly, any default by a Ground Lessor under any such fee mortgage
(including that mortgage encumbering the TSA Lease parcel, for which
refinancing negotiations are on-going) will not result in a termination of the
applicable Ground Lease but would permit the fee mortgagee to bring a
foreclosure action and succeed to the interests of the Ground Lessor in the
fee estate, subject to the Partnership's leasehold estate under such Ground
Lease. Each Ground Lease also specifically provides that the Ground Lessor
may sell its interest in the applicable Leasehold Tract, but any such sale
would be made subject to the Partnership's interest in the applicable Ground
Lease.
The Mortgages are subject and subordinate to each of the Ground Leases.
Accordingly, if a Ground Lease were to be terminated while such Mortgages were
outstanding, the lien of the Mortgages would be extinguished as to the
applicable Leasehold Tract. The Ground Leases, however, contain certain
provisions to protect the Mortgage Note Trustee and the holders of the
Mortgage Notes from such an occurrence, including the following: (i) no
cancellation, surrender, acceptance of surrender or modification of a Ground
Lease is binding on the Mortgage Note Trustee or affects the lien of the
Mortgages without the Mortgage Note Trustee's prior written consent, (ii) the
Mortgage Note Trustee is entitled to a copy of any notices (including notices
of default) sent by a Ground Lessor to the Partnership, has the right to
perform any term or condition of the Ground Lease to be performed by the
Partnership and can cure any defaults, (iii) if
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any default is not remedied within the applicable grace period specified in
the Ground Lease, then before the Ground Lessor exercises its rights under the
Ground Lease or any statute, the Mortgage Note Trustee has an additional
period of time within which to cure, or commence the curing of, the default
and (iv) upon any termination of a Ground Lease, the Ground Lessor must enter
into a new lease, on substantially the same terms as the applicable Ground
Lease, with the Mortgage Note Trustee if requested within a specified period
of time. In the event of a default by the Partnership under a Ground Lease,
however, notwithstanding any additional cure period granted to the Mortgage
Note Trustee, there can be no assurance that the Mortgage Note Trustee will
take action to cure the default, will have sufficient time to cure the default
or will otherwise be able to take advantage of such provisions. If the Ground
Lease were then terminated and a new lease entered into, the Mortgage Note
Trustee would nevertheless remain obligated to cure all pre-existing defaults
as a condition to obtaining such new lease.
If a bankruptcy case is filed by or commenced against a Ground Lessor
under applicable bankruptcy law, the trustee in bankruptcy in a liquidation or
reorganization case under the applicable bankruptcy law, or a debtor-in-
possession in a reorganization case under the applicable bankruptcy law, has
the right, at its option, to assume or reject the Ground Lease of the debtor-
lessor (subject, in each case, to court approval). If the Ground Lease is
assumed, the rights and obligations of the Partnership thereunder, and the
rights of the Mortgage Note Trustee as leasehold mortgagee under the Mortgage
Note Agreements, would continue in full force and effect. If the Ground Lease
is rejected, the Partnership would have the right, at its election, either (i)
to treat the Ground Lease as terminated, in which event the lien of the
Mortgages on the leasehold estate created thereby would be extinguished, or
(ii) to continue in possession of the land and improvements under the Ground
Lease for the balance of the term thereof and at the rental set forth therein
(with a right to offset against such rent any damages caused by the Ground
Lessor's failure to thereafter perform its obligations under such Ground
Lease). The Mortgage Note Agreements provide that if a Ground Lease is
rejected, the Partnership assigns to the Trustee its rights to elect whether
to treat the Ground Lease as terminated or to remain in possession of the
leased premises.
In the case of the Ground Leases, the rejection of a Ground Lease by a
trustee in bankruptcy or debtor-lessor (as debtor-in-possession) may result in
termination of any options to purchase the fee estate of the debtor-lessor and
the Mortgage Note Trustee's option (as leasehold mortgagee as described
above), if the Ground Lease is terminated to enter into a new
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lease directly with the lessor. In addition, under an interpretation of New
Jersey law, it is possible that a court would regard such options as separate
contracts and, therefore, severable from the Ground Lease. In such event, the
trustee in bankruptcy or debtor-lessor (as debtor-in-possession) could assume
the Ground Lease, while rejecting some or all of such options under the Ground
Lease.
PARKING PARCELS
The Partnership owns a parcel of land (the "Garage Parcel") located
across the street from the Casino Parcel and along Pacific Avenue in a portion
of the block bounded by Pacific Avenue, Mississippi Avenue, Atlantic Avenue
and Missouri Avenue. The Partnership has constructed on the Garage Parcel a
10-story parking garage capable of accommodating approximately 2,650 cars and
which includes offices and a bus transportation center with bays accommodating
up to 13 buses at one time. An enclosed pedestrian walkway from the parking
garage accesses Trump Plaza at the casino level. Parking at the parking
garage is available to Trump Plaza's guests, as well as to the general public.
Two of the tracts comprising a portion of the Garage Parcel are subject to a
first mortgage on the Partnership's fee interest in such tract. As of
December 31, 1994, such mortgage had an approximate outstanding principal
balance of $3.8 million.
The Partnership leases, pursuant to the PHMC Lease, a parcel of land
located on the northwest corner of the intersection of Mississippi and Pacific
Avenues consisting of approximately 11,800 square feet ("Additional Parcel 1")
and owns another parcel on Mississippi Avenue adjacent to Additional Parcel 1
consisting of approximately 5,750 square feet (the "Bordonaro Parcel"). The
Bordonaro Parcel is encumbered by a first mortgage having an outstanding
principal balance, as of December 31, 1994, of approximately $130,000.
Additional Parcel 1 and the Bordonaro Parcel are presently paved and used for
surface parking.
The Partnership also owns five unimproved parcels of land, aggregating
approximately 43,300 square feet, and sub-leases one parcel consisting of
approximately 3,125 square feet. All of such parcels are contiguous and are
located along Atlantic Avenue, in the same block as the Garage Parcel. They
are used for signage and surface parking for employees of Trump Plaza and are
not encumbered by any mortgage liens other than those of the Mortgages.
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WAREHOUSE PARCEL
The Partnership owns a warehouse and office facility located in Egg
Harbor Township, New Jersey containing approximately 64,000 square feet of
space (the "Egg Harbor Parcel"). The Egg Harbor Parcel is encumbered by a
first mortgage having an outstanding principal balance, as of December 31,
1994, of approximately $1.6 million.
BOARDWALK EXPANSION SITE
See "Business -- Narrative Description of Business
-- Expansion Sites -- Boardwalk Expansion Site."
SUPERIOR MORTGAGES
The liens securing the indebtedness on the Garage Parcel, the Bordonaro
Parcel and the Egg Harbor Parcel (all of such liens are collectively called
the "Existing Senior Mortgages") are all senior to the liens of the Mortgages.
The principal amount currently secured by such Existing Senior Mortgages as of
December 31, 1994 is in the aggregate, approximately $5.5 million.
If the Partnership were to default in the payment of the indebtedness
secured by any of the Existing Senior Mortgages or default in the performance
of any of the other obligations thereunder, and the holder of an Existing
Senior Mortgage were to commence a foreclosure action, the debt owed to the
holder of such Existing Senior Mortgage, together with the debt owed to the
holder of any other Existing Senior Mortgage which is also then being
foreclosed, would have to be satisfied before the holders of the Mortgage
Notes would realize any proceeds from the sale of the portion of the property
encumbered thereby. If the Company and the Partnership default in the payment
of the Mortgage Notes or any other obligation under the Mortgages, and the
Mortgage Note Trustee elects to foreclose under the Mortgages, the Mortgage
Note Trustee will receive the proceeds of the sale of the collateral under the
Mortgage Note Indenture (the "Collateral") subject to the rights of the
holders of any Existing Senior Mortgages. The purchaser of the Collateral at
any such foreclosure sale would take title to the Collateral subject to, to
the extent not foreclosed upon, the Existing Senior Mortgages.
In addition to the Existing Senior Mortgages, the Partnership may,
under certain circumstances, borrow up to $25 million to pay for certain
expansion site costs which may be secured by a lien on the expansion site
superior to the lien of the Mortgages thereon.
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The Partnership has financed or leased and from time to time will
finance or lease its acquisition of furniture, fixtures and equipment. The
lien in favor of any such lender or lessor may be superior to the liens of the
Mortgages.
ITEM 3. LEGAL PROCEEDINGS.
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The Partnership, its partners, certain members of its former Executive
Committee, and certain of its employees, have been involved in various legal
proceedings. In general, the Partnership has agreed to indemnify such persons
and entities 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. Such persons and
entities are vigorously defending the allegations against them and intend to
vigorously contest any future proceedings.
PENTHOUSE LITIGATION
On April 3, 1989, BPHC Acquisition, Inc. and BPHC Parking Corp.
(collectively, "BPHC") filed a third-party complaint (the "Complaint") against
the Partnership and Trump. The Complaint arose in connection with the action
entitled Boardwalk Properties, Inc. and Penthouse International Ltd. v. BPHC
Acquisition, Inc. and BPHC Parking Corp., which was instituted on March 20,
1989 in the New Jersey Superior Court, Chancery Division, Atlantic County.
The suit arose in connection with the conditional sale by Boardwalk
Properties, Inc. ("BPI") (or, with respect to certain of the property, BPI's
agreement to sell) to Trump of BPI's fee and leasehold interests in (i) the
Boardwalk Expansion Site, (ii) an approximately 4.2-acre parcel of land
located on Atlantic Avenue, diagonally across from Trump Plaza's parking
garage (the "Columbus Plaza Site") which was then owned by an entity in which
50% of the interests were each owned by BPHC and BPI and (iii) an additional
1,462-square foot parcel of land located within the area of the Boardwalk
Expansion Site (the "Bongiovanni Site"). Prior to BPI entering into its
agreement with Trump, BPI had entered into agreements with BPHC which
provided, among other things, for the sale to BPHC of the Boardwalk Expansion
Site, as well as BPI's interest in the Columbus Plaza Site, assuming that
certain contingencies were satisfied by a certain date. Additionally, by
agreement between BPHC and BPI, in the event BPHC failed to close on the
Boardwalk Expansion Site, BPHC would convey to BPI the Bongiovanni Site. Upon
BPHC's failure to close on the Boardwalk Expansion Site, BPI entered into its
agreement
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with Trump pursuant to which it sold the Boardwalk Expansion Site to Trump and
instituted a lawsuit against BPHC for specific performance to compel BPHC to
transfer to BPI, BPHC's interest in the Columbus Plaza and Bongiovanni Sites,
as provided for in the various agreements between BPHC and BPI and in the
agreement between BPI and Trump.
The Complaint alleges that the Partnership and/or Trump engaged in the
following activities: civil conspiracy, violations of the New Jersey
Antitrust Act, violations of the New Jersey RICO statute, malicious
interference with contractual relations, malicious interference with
prospective economic advantage, inducement to breach a fiduciary duty and
malicious abuse of process. The relief sought in the Complaint included,
among other things, compensatory damages, punitive damages, treble damages,
injunctive relief, the revocation of all of the Partnership's and Trump's
casino licenses, the revocation of the Partnership's current Certificate of
Partnership, the revocation of any other licenses or permits issued to the
Partnership and Trump by the State of New Jersey, and a declaration voiding
the conveyance by BPI to Trump of BPI's interest in the Boardwalk Expansion
Site as well as BPI's and/or Trump's rights to obtain title to the Columbus
Plaza Site.
The Partnership and Trump filed an answer denying all liability and
alleging that all of BPHC's claims are without merit. On November 9, 1990,
BPHC filed an application to amend its counterclaims against BPI and the
Complaint, which amendment sought to withdraw all of BPHC's affirmative claims
for equitable relief and thereby limit such claims to monetary damages. On
December 20, 1990, the Superior Court entered an Order permitting BPHC to
withdraw its affirmative demands for equitable relief.
Trial of the Penthouse litigation was bifurcated into issues of
liability and damages, with liability issues to be tried first. On March 25,
1993, after trial on issues of liability, the Superior Court rendered a
decision rejecting all of BPHC's claims in the Complaint. On October 13,
1993, the court entered a judgment dismissing with prejudice all claims
against Trump and the Partnership. On November 19, 1993, the Court entered an
Order confirming that the October 13, 1993 judgment in favor of Trump and the
Partnership was a final judgment. That Order was further confirmed by Order
of the Appellate Division entered March 3, 1994. A final judgment disposing
of all claims between BPI and BPHC was entered on May 10, 1994.
BPHC and BPI have settled all claims between them. BPHC is pursuing
its appeal as to Trump and the Partnership but only as to its claims of
interference with contract and prospective
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economic advantage and of inducing BPI to breach its fiduciary duty to BPHC.
All other claims raised in BPHC's complaint as to Trump and the Partnership
and dismissed by the October 13, 1993 judgment have been finally determined in
favor of Trump and the Partnership. BPHC has filed its appeal brief, and
according to the briefing schedule currently in effect, the answering brief of
Trump and the Partnership is due to be filed April 20, 1995 and BPHC's reply
brief is due May 9, 1995.
On January 9, 1991, BPHC instituted suit against Trump, the
Partnership, BPI, Penthouse International Ltd. and Robert C. Guccione in the
United States District Court for the District of New Jersey. This action is
virtually identical to the state court action described above. The
Partnership and Trump filed an answer denying all liability and alleging that
all of BPHC's claims are without merit. In April 1993, the Partnership filed
a motion to dismiss certain claims based on the favorable decision in the
state court action. In May 1993, the court issued an order to show cause,
scheduling a hearing for June 1993 to determine whether certain claims of the
plaintiff's amended complaint should be dismissed with prejudice. On July 15,
1993, the court acted favorably on the Partnership's motion and dismissed the
action in its entirety. The order of dismissal was appealed to the United
States Court of Appeals for the Third Circuit. On April 20, 1994, that Court
affirmed the order of dismissal and, because the time within which to take any
further appeals has elapsed, the order of dismissal is final and unappealable.
OTHER LITIGATION
Various 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 and not material to its business or financial
condition. The majority of such claims are covered by liability insurance
(subject to applicable deductibles), and the Partnership believes that the
resolution of these claims, to the extent not covered by insurance, will not,
individually or in the aggregate, have a material adverse effect on the
financial condition or results of operations of the Partnership.
The Partnership is also a party to various administrative proceedings
involving allegations that it has violated certain provisions of the Casino
Control Act. 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 the ability of the Partnership to
otherwise retain or renew any casino or other licenses required under the
Casino Control Act for the operation of Trump Plaza.
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ITEM 4. SUBMISSION OF MATTERS
------ TO A VOTE OF SECURITY HOLDERS.
-----------------------------
No matters were submitted by the Registrants to their security holders
for a vote during the fourth quarter of 1994.
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PART II
-------
ITEM 5. MARKET FOR REGISTRANT'S COMMON
------ EQUITY AND RELATED STOCKHOLDER MATTERS.
--------------------------------------
(a) There is no established public trading market for the Company's
outstanding Common Stock.
(b) As of December 31, 1994, Trump was the sole holder of record of
the Company's Common Stock.
(c) The Company has not paid any cash dividends on its Common Stock.
The Mortgage Note Indenture restricts the ability of the Company and the
Partnership, and the PIK Note Indenture restricts the ability of the
Partnership, to declare or pay dividends and make other distributions. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."
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ITEM 6. SELECTED FINANCIAL DATA.
------ -----------------------
SELECTED FINANCIAL INFORMATION
The following table sets forth historical financial information of the
Partnership for each of the five years ended December 31, 1994. This
information should be read in conjunction with the financial statements of the
Partnership and related notes included elsewhere in this Report and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------
1994 1993 1992 1991 1990
---------- --------- --------- --------- ---------
STATEMENTS OF OPERATIONS DATA: (dollars in thousands)
<S> <C> <C> <C> <C> <C>
Revenues:
Gaming............................... $261,451 $264,081 $265,448 $233,265 $276,932
Other................................ 66,869 69,203 73,270 66,411 87,286
Trump Regency........................ -- -- 9,465 11,547 --
-------- -------- -------- -------- --------
Gross revenues..................... 328,320 333,284 348,183 311,223 364,218
Promotional allowances............... 33,257 32,793 34,865 31,539 44,281
-------- -------- -------- -------- --------
Net revenues......................... 295,063 300,491 313,318 279,684 319,937
Costs and expenses:
Gaming............................... 139,540 136,895 146,328 133,547 178,356
Other................................ 23,380 24,778 23,670 23,404 26,331
General and administrative........... 73,075 71,624 75,459 69,631 76,057
Depreciation and amortization........ 15,653 17,554 15,842 16,193 16,725
Restructuring costs.................. -- -- 5,177 943 --
Trump Regency........................ -- -- 11,839 19,879 3,359
-------- -------- -------- -------- --------
251,648 250,851 278,315 263,597 300,828
-------- -------- -------- -------- --------
Income from operations............... 43,415 49,640 35,003 16,087 19,109
-------- -------- -------- -------- --------
Net interest expense................... 48,219 39,889 31,356 33,363 33,128
Extraordinary (loss) gain.............. - 4,120 (38,205) -- --
Net income (loss) (1).................. $ (8,870) 9,338 (35,787) (29,230) (10,591)
BALANCE SHEET DATA:
Cash and cash equivalents.............. $ 11,144 $ 14,393 $ 18,802 $ 10,474 $ 10,005
Property and equipment - net........... 298,354 293,141 300,266 306,834 316,595
Total assets........................... 375,643 374,498 370,349 378,398 395,775
Total long-term debt - net of current
maturities (2)......................... 403,214 395,948 249,723 33,326 247,048
Preferred Partnership Interest......... -- -- 58,092 -- --
Total capital (deficit)................ (63,580) (54,710) 11,362 54,043 83,273
----------------------------
</TABLE>
(1) Net loss for the year ended December 31, 1990 includes income of $2.4
million resulting from the settlement of a lawsuit relating to a boxing
match. Net loss for the year ended December 31, 1991 includes a $10.9
million charge associated with rejection of the Regency Lease and $4.0
million of costs associated with certain litigation. Net loss for 1992
includes $1.5 million of costs associated with certain litigation. Net
income (loss) for 1994 and 1993 includes $4.9 and $3.9 million,
respectively, of costs associated with the Boardwalk Expansion Site.
(2) Long-term debt of $225 million at December 31, 1991 had been classified as
a current liability.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
------ FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
---------------------------------------------
GENERAL
The Company was incorporated on March 14, 1986 as a New Jersey
Corporation, and was originally formed solely to raise funds through the
issuance and sale of its debt securities for the benefit of the Partnership.
The Partnership experienced liquidity problems that culminated in the
Restructuring in May 1992, where, as part of a prepackaged plan of
reorganization under chapter 11 of the U.S. Bankruptcy Code consummated on May
29, 1992, the Company became a partner of the Partnership and issued
approximately three million Stock Units, each comprised of one share of
Preferred Stock and one share of Common Stock. On June 25, 1993 the Company
issued and the Partnership guaranteed $330,000,000 of Mortgage Notes (for net
proceeds of $325,687,000) and Holding, issued 12,000 Units consisting of an
aggregate of $60,000,000 of PIK Notes, together with Warrants to acquire an
additional $12,000,000 of PIK Notes at no additional cost. Holding has no
other assets or business other than its 99% equity interest in the
Partnership. The Company owns the remaining 1% interest in the Partnership.
The combined proceeds of the Offerings, together with cash on hand, were used
substantially as follows: (i) $225.0 million of such proceeds were used to
repay the Partnership's Promissory Note to the Company in the principal amount
of $225.0 million, which proceeds were then used by the Company to redeem the
Bonds; (ii) $12.0 million was used to repay the Regency Note (see "Item 13.
Certain Relationships and Related Transactions -- Trump Regency"); (iii) $40.0
million was distributed to the Company (which used such funds, together with
$35.0 million from the Units Offering distributed to Trump and paid to the
Company, to redeem its Stock Units); (iv) approximately $17.3 million was used
to pay the expenses incurred in connection with the Offerings; and (v)
approximately $52.5 million was used to make the Special Distribution to
Trump, which was used by Trump primarily to pay certain personal indebtedness.
No portion of the net proceeds was retained by Holding, the Company or the
Partnership for working capital purposes.
Results of operations of the Partnership through December 31, 1992 were
affected by the Restructuring, which resulted in an extraordinary loss of
$38.2 million for the year ended December 31, 1992. The Partnership's
business is highly competitive, and any future expansions by the Mashantucket
Pequot Nation or new gaming ventures by other Native American tribes or other
persons in the northeastern or mid-Atlantic region of the United States could
have a material adverse effect on the Trump Plaza's future financial condition
and results of operations. In addition, casino gaming is already permitted in
a number of other
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jurisdictions. Increased competition in the casino gaming industry generally
could have a materially adverse impact on the Partnership as it seeks to
expand into new jurisdictions.
In August 1990, the Partnership entered into a triple net lease with an
affiliate pursuant to which the Partnership began operating the Trump Regency
as a non-casino hotel. From August 1990 to September 1992, losses attributable
to the Trump Regency aggregating approximately $14.1 million adversely
affected the results of operations of the Partnership. Pursuant to the
Restructuring, the Partnership ceased operating the Trump Regency as of
September 30, 1992. Subsequent to September 30, 1992, revenues and expenses of
Trump Regency are not included in the Partnership's results of operations.
The financial information presented below reflects the results of
operations of the Partnership. Since the Company and Holding have no business
operations other than their interest in the Partnership, their results of
operations are not discussed below.
RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
Gaming revenues were $261.5 million for the year ended December 31,
1994, a decrease of $2.6 million or 1.0% from gaming revenues of $264.1
million for 1993, although revenues increased for the industry generally in
Atlantic City for the year ended 1994 compared to the year ended 1993. This
decrease in gaming revenues consisted of a reduction in both table games and
slot revenues. These results were impacted by a number of major ice and snow
storms throughout the northeastern United States, during the three months
ended March 31, 1994, which severely restricted travel in the region. Bad
weather also impacted the Atlantic City markets' results for the three months
ended March 31, 1993; however, the weather during the comparable period in
1994 was much more severe. The decrease in gaming revenues was also due in
part to disruptions caused by an expansion of the casino floor which created
inefficiencies in the operation of the casino floor by temporarily disrupting
the normal flow of patrons upon entrance to the casino, as well as detracting
from the overall appearance of the casino floor. Also, in 1994 Trump Plaza
experienced turnover of certain key management positions which had a negative
impact on operations. This negative impact was mitigated toward the end of
1994 as new management was hired and began implementing new policies and
marketing programs.
Slot revenues were $168.7 million for the year ended December 31, 1994,
a decrease of $1.8 million or 1.1%, from slot revenues of $170.5 million in
1993. This decrease was due in part to the sensitivity of slot revenues to
certain of the factors specified in the foregoing paragraph. The Partnership
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elected to discontinue certain progressive slot programs, thereby reversing
certain accruals into revenue which had the effect of improving slot revenue
by $0.6 million for the year ended December 31, 1994.
Table games revenues were $92.8 million for the year ended December 31,
1994, a decrease of $0.8 million or 0.9% from table games revenues of $93.6
million in 1993. This decrease was primarily due to a reduction in table
games drop (i.e., the dollar value of chips purchased) by $26.7 million or
4.3% for the year ended December 31, 1994 from 1993, offset by an increase in
the table game hold percentage to 15.5% (the percentage of table drop retained
by the Partnership) for the year ended December 31, 1994 from 14.9% in 1993.
During the year ended December 31, 1994, gaming credit extended to
customers was approximately 17% of overall table play. At December 31, 1994,
gaming receivables amounted to approximately $13.7 million, with allowances
for doubtful gaming receivables of approximately $8.5 million.
Other revenues were $66.9 million for the year ended December 31, 1994,
a decrease of $2.3 million or 3.3%, from other revenues of $69.2 million in
1993. Other revenues include revenues from rooms, food and beverage and
miscellaneous items. This decrease in other revenues primarily reflects
decreases in food and beverage revenue resulting from changes in bus
couponing.
Promotional allowances were $33.3 million for the year ended December
31, 1994, an increase of $0.5 million or 1.5%, from $32.8 million in 1993.
This increase is attributable to increased marketing and promotional
activities.
Gaming costs and expenses were $139.5 million for the year ended
December 31, 1994, an increase of $2.6 million, or 1.9%, from gaming costs and
expenses of $136.9 million in 1993. This increase was primarily due to
increased marketing costs attributable to an expanded marketing program that
was instituted toward the end of 1994. The marketing programs consisted of
increased bus programs and direct marketing activities. The increase in
marketing costs was offset by decreased gaming taxes associated with the
decreased levels of gaming activity.
General and administrative expenses of $73.1 for the year ended
December 31, 1994 increased $1.5 million or 2.1% from $71.6 million in 1993.
This increase resulted primarily from $1.1 million in cash associated with
donations to the CRDA for the year ended December 31, 1994.
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Income from operations was $43.4 million for the year ended December
31, 1994, a decrease of $6.2 million or 12.5% from income from operations of
$49.6 million for 1993.
Net interest expense was $48.2 million for the year ended December 31,
1994, an increase of $8.3 million, or 20.8% from net interest expense of $39.9
million in 1993. This increase is primarily attributable to increased
interest expenses associated with the Mortgage Notes and PIK Notes which were
outstanding for all of 1994.
Other non-operating expense was $4.9 million (including $3.1 million of
leasing costs) for the year ended December 31, 1994, an increase of $1.0
million or 25.6% from other non-operating expense of $3.9 million (including
$0.8 million of leasing costs) in 1993. This increase is directly attributable
to twelve months of costs associated with the Boardwalk Expansion Site. See
"Note 6 to the Financial Statements --Commitments and Contingencies -- The
Boardwalk Expansion Site."
RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1993 AND 1992
Gaming revenues were $264.1 million for the year ended December 31,
1993, a decrease of $1.4 million or 0.5% from gaming revenues of $265.4
million in 1992. This decrease in gaming revenues consisted of a reduction in
table games revenues, which was partially offset by an increase in slot
revenues. These results were impacted by major snow storms during February
and March, which severely restricted travel in the region. The decrease in
revenues was also attributable, in part, to the revenues derived from "high
roller" patrons from the Far East during 1992, which did not recur in 1993,
due in part to the decision to de-emphasize marketing efforts directed at
"high roller" patrons from the Far East and also to the effects of the adverse
economic conditions in that region.
Slot revenues were $170.5 million for the year ended December 31, 1993,
an increase of $1.0 million or 0.6%, from slot revenues of $169.5 million in
1992. The Partnership elected to discontinue certain progressive slot jackpot
programs thereby reversing certain accruals into revenues which had the effect
of improving slot revenue by $4.1 million for the year ended December 31,
1992. Excluding the aforementioned adjustment, slot revenues would have
resulted in a $5.0 million or 3.0% improvement over 1992. The Partnership
believes that its improvement in slot revenues reflects its intensified slot
marketing efforts directed towards patrons who tend to wager more
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per slot play and general growth in the industry. See "Business -- Narrative
Description of Business -- Business Strategy."
Table games revenues were $93.6 million for the year ended December 31,
1993, a decrease of $2.3 million or 2.4% from table games revenues of $95.9
million in 1992. This decrease was primarily due to a reduction in table
games drop (i.e., the dollar value of chips purchased) by 9.2% for the year
ended December 31, 1993 from 1992, offset by an increase in the table games
hold percentage to 14.9% (the percentage of table drop retained by the
Partnership) for the year ended December 31, 1993 from 13.9% in 1992. The
reduction in table game drop was due to the large dollar amounts wagered
during 1992 by certain foreign customers.
During the year ended December 31, 1993, gaming credit extended to
customers was approximately 18.0% of overall table play. At December 31,
1993, gaming receivables amounted to approximately $16.0 million, with
allowances for doubtful gaming receivables of approximately $10.4 million.
Other revenues were $69.2 million for the year ended December 31,
1993, a decrease of $4.1 million or 5.6%, from other revenues (excluding
revenues from Trump Regency) of $73.3 million in 1992. Other revenues include
revenues from rooms, food and beverage and miscellaneous items. The decrease
in other revenues primarily reflects a $2.1 million adjustment to the
outstanding gaming chip liability in 1992, (this amount had been offset in
gaming cost and expenses with a specific reserve provision for casino
uncollectible accounts receivable) as well as decreases in food and beverage
revenues attendant to reduced levels of gaming activity, and reduced
promotional allowances.
Promotional allowances were $32.8 million for the year ended December
31, 1993, a decrease of $2.1 million or 5.9%, from promotional allowances of
$34.9 million in 1992. This decrease is primarily attributable to a reduction
in table gaming activity as well as the Partnership's focusing its marketing
efforts during the period towards patrons who tend to wager more frequently
and in larger denominations.
Gaming costs and expenses were $136.9 million for the year ended
December 31, 1993, a decrease of $9.4 million, or 6.4%, from gaming costs and
expenses of $146.3 million in 1992. This decrease was primarily due to a $4.8
million decrease in gaming bad debt expense as well as decreased promotional
and operating expenses and taxes associated with decreased levels of gaming
activity and revenues from 1992.
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Other costs and expenses were $24.8 million for the year ended December
31, 1993 an increase of $1.1 million or 4.7%, from other costs and expenses of
$23.7 million in 1992.
General and administrative expenses were $71.6 million for the year
ended December 31, 1993, a decrease of $3.8 million, or 5.1%, from general and
administrative expenses of $75.5 million in 1992. This decrease resulted
primarily from a $2.4 million real estate tax charge resulting from a
reassessment by local authorities of prior years' property values incurred
during 1992 and overall cost reductions related to cost containment efforts.
Income from operations was $49.6 million for the year ended December
31, 1993, an increase of $7.0 million or 16.4% from income from operations
(excluding the operations of Trump Regency and before restructuring costs) of
$42.6 million for 1992. In addition to the items described above, 1993 costs
and expenses were lower as a result of the absence of the Restructuring costs
and the expenses associated with the Trump Regency which were incurred in
1992.
Net interest expense was $39.9 million for the year ended December 31,
1993, an increase of $8.5 million, or 27.2% from net interest expense of $31.4
million in 1992. This is attributable to the interest expense associated with
the Offerings.
Other non-operating expenses were $3.9 million for the year ended
December 31, 1993, an increase of $2.4 million or 164.9% from non-operating
expense of $1.5 million in 1992. This increase is directly attributable to
costs associated with the Boardwalk Expansion Site. See "Note 6 to the
Financial Statements -- Commitments and Contingencies -- The Boardwalk
Expansion Site."
The Offerings resulted in an extraordinary gain of $4.1 million for the
year ended December 31, 1993, which reflects the excess of carrying value of
the Regency Hotel obligation over the amount of the settlement payment, net of
related prepaid expenses. The Restructuring resulted in an extraordinary loss
of $38.2 million for the year ended December 31, 1992 consisting of the
effects of stating the Bonds and Preferred Stock issued at fair value and the
write off of certain deferred financing charges and costs.
LIQUIDITY AND CAPITAL RESOURCES
THE PARTNERSHIP. Cash flow from operating activities is the
Partnership's principal source of liquidity. For the year ended December 31,
1994, net cash from operating activities was $20.0 million. The decrease of
$2.0 million in net cash provided
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by operating activities as compared to the comparable period in 1993 reflects
reduced income from operations and interest on the Mortgage Notes, which were
outstanding for all of 1994.
Capital expenditures of $20.5 million for the year ended December 31,
1994 increased approximately $10.4 million from 1993 and was primarily
attributable to the casino expansion, purchase of additional slot machines,
construction of the new baccarat pit for Trump Plaza and refurbishing costs
associated with the Boardwalk Expansion Site. These expenditures were
financed from funds generated from operations. Management believes that funds
from operations will be sufficient to complete the development of the
Boardwalk Expansion Site. Additional borrowings will be necessary to exercise
the Boardwalk Expansion Site Purchase Option. Capital expenditures for 1993
and 1992 were $10.1 million and $8.6 million, respectively. Previously, the
Partnership made significant capital expenditures which concentrated on the
renovation of the casino floor and certain restaurants, hotel rooms and the
hotel lobby. See "Business --Narrative Description of Business -- Facilities
and Amenities."
Current maturities of long-term debt were $3.0 million and $1.6
million, as of December 1994 and December 1993, respectively. Management
believes that this debt will be paid by cash from operating activities.
At December 31, 1994, the Partnership had a combined working capital
deficit totalling $6.0 million, compared to a working capital deficit of $1.5
million at December 31, 1993.
In 1993, the Partnership received the approval of the CCC, subject to
certain conditions, for the expansion of its hotel facilities at the Boardwalk
Expansion Site. As part of an expansion, management has determined to
renovate rooms at the Boardwalk Expansion Site. As a result of such
expansion, the Partnership will be permitted to increase Trump Plaza's casino
floor space to 90,000 square feet. The Partnership added approximately 9,000
square feet in April 1994, 1,000 square feet in July 1994 and 3,000 square
feet in December 1994. At December 31, 1994, the total casino floor space
was 73,000 square feet. See "Business -- Narrative Description of Business --
Expansion Sites -- Boardwalk Expansion Site."
The Partnership currently leases one parcel and subleases the other
parcel which together comprise the Boardwalk Expansion Site. Pursuant to the
Boardwalk Expansion Site Purchase Option, which expires on June 30, 1998, the
Partnership may purchase both the fee and leasehold interests in the Boardwalk
Expansion Site. Until such time as the Boardwalk Expansion Site Purchase
Option is exercised or expires, the Partnership will be obligated to pay the
net expenses associated with the Boardwalk Expansion Site, including, without
limitation, current real estate taxes (approximately $1.2 million per year
based upon current assessed valuation) and annual lease payments of $3.1
million per year. See "Business -- Narrative Description of Business --
Expansion Sites -- Boardwalk Expansion Site."
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As of December 31, 1994, the Partnership had capitalized approximately
$11.7 million in construction costs related to the Boardwalk Expansion Site
including a $1 million consulting fee paid to Trump. The Partnership's ability
to acquire the Boardwalk Expansion Site pursuant to the Boardwalk Expansion
Site Purchase Option is dependent upon its ability to obtain financing to
acquire the property and is subject to the approval of the CCC. See "Business
--Narrative Description of Business--Expansion Sites--Boardwalk Expansion
Site" and "Business--Narrative Description of Business--Gaming and Other Laws
and Regulations."
Pursuant to the terms of a Services Agreement (as defined) with TPM (as
defined), in consideration for services provided, the Partnership pays TPM
each year an annual fee of $1.0 million in equal monthly installments, and
reimburses TPM on a monthly basis for all reasonable out-of-pocket expenses
incurred by TPM in performing its obligations under the Services Agreement, up
to certain amounts. Under the Services Agreement, approximately $1.3 million
and $1.2 million were charged to expense for the years ended December 31, 1994
and 1993, respectively.
The Mortgage Note Indenture restricts the ability of the Company and
the Partnership, and the PIK Note Indenture restricts the ability of the
Partnership to declare or pay dividends and make distributions to its
partners, including restrictions relating to the achievement of certain
financial ratios. Subject to the satisfaction of these restrictions, the
Partnership may make distributions to its partners with respect to their
Partnership interests. Neither the Company nor Holding has an available bank
line of credit as of the date hereof.
THE COMPANY. The Company's sole source of liquidity is, and will be,
payments made by the Partnership in respect of the Partnership Note securing
the Company's indebtedness, and distributions from the Partnership, if any, in
respect of its Partnership interest.
HOLDING. Holding has no business operations other than that associated
with holding its partnership interest in the Partnership and as issuer of the
PIK Notes and Warrants. Holding's sole source of liquidity is from
distributions in respect of its interest in the Partnership. Prior to the
Units Offering, Holding did not have any long-term or short-term indebtedness;
upon consummation of the Units Offering on June 25, 1993, Holding issued $72.0
million of indebtedness comprised of $60.0 million of PIK Notes and $12.0
million of deferred warrant obligations. Holding's indebtedness will increase
upon exercise of the Warrants and upon the issuance of additional PIK Notes in
lieu of cash interest paid on the PIK Notes. As of December 31, 1994, the
Partnership issued, in lieu of cash, a total of
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$11,756,000 in PIK Notes to satisfy its semi-annual PIK Note interest
obligations.
SEASONALITY
The gaming industry in Atlantic city is seasonal, with the heaviest
activity at Trump Plaza 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 during 1994, 1993 and 1992.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
------ -------------------------------------------
An index to the financial statements and required financial statement
schedules is set forth at Item 14.
ITEM 9. DISAGREEMENTS ON ACCOUNTING
------ AND FINANCIAL DISCLOSURE.
------------------------
None.
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PART III
--------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS.
------- --------------------------------
MANAGEMENT
Prior to the merger of TP/GP into the Company, management of the
affairs of the Partnership was vested in TP/GP. As of June 18, 1993, the date
of such merger, the Company became the managing partner of the Partnership.
As of such date, the Company was granted full authority to do all things
deemed necessary or desirable of the operations, business and affairs of the
Partnership.
As currently constituted, the Board of Directors of each of the Company
and Holding consists of Messrs. Trump, Nicholas L. Ribis, Wallace B. Askins
and Don M. Thomas. In addition, Holding Inc. acts as the managing partner of
Holding. Trump is currently the sole beneficial owner of the Partnership, the
Company, Holding and Holding Inc.
Pursuant to the PIK Note Indenture and the Mortgage Note Indenture, the
Company and Holding Inc. are each required to have at least two Independent
Directors (as such term is defined by the American Stock Exchange, Inc.). The
prior approval of the majority of the Company's Independent Directors will be
required before the Partnership can engage in certain affiliate transactions.
Set forth below, are the names, ages, positions and offices held with
the Company, Holding and the Partnership and a brief account of the business
experience during the past five years of each member of the Board of Directors
and the executive officers of the Company, Holding and the Partnership.
Donald J. Trump - Mr. Trump, 48 years old, is Chairman of the Board of
Directors, President and Treasurer of the Company, the managing general
partner of the Partnership. Trump was a 50% shareholder, Chairman of the
Board of Directors, President and Treasurer of TP/GP, the managing general
partner of the Partnership prior to its merger into the Company in June 1993.
Trump was Chairman of the Executive Committee and President of the Partnership
from May 1986 to May 1992 and was a general partner of the Partnership until
June 1993. Trump has been a director and President of Holding Inc. and a
partner in Holding since February 1993. Trump has been Chairman of the Board
of Partner Representatives of Trump's Castle Associates, the partnership that
owns Trump's Castle ("TCA"), since May 1992; and was Chairman of the Executive
Committee of TCA from June 1985 to May 1992. In addition, Trump is the
managing general partner of TCA. Trump was Chairman of the Executive Committee
of Trump
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Taj Mahal Associates, the Partnership that owns the Taj Mahal ("TTMA") from
June 1988 to October 1991; and has been Chairman of the Board of Directors of
the managing general partner of TTMA since October 1991; President and sole
director of Trump Boardwalk Realty Corp. since May 1986; and 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, 50 years old, has been the Chief
Executive Officer of the Partnership since February 1991 and a member of the
Executive Committee of the Partnership from April 1991 to May 29, 1992 and was
a director and Vice President of TP/GP from May 1992 until its merger into the
Company in June 1993. Mr. Ribis has been Vice President of the Company since
February 1995 and Vice President of Holding Inc. since February 1995. Mr.
Ribis serves as the Chairman of the Atlantic City Casino Association. He has
also been Chief Executive Officer of TCA and TTMA since March 1991; member of
the executive committee of TCA from April 1991 to May 1992; member of the
Board of Partner Representatives of TCA since May 1992; member of the
executive committee of TTMA from April 1991 to October 1991; and member of the
board of directors of the managing general partner of TTMA since October 1991.
From January 1980 to January 1991, Mr. Ribis was Senior Partner in, and since
February 1991, is Counsel to, the law firm of Ribis, Graham & Curtin, which
serves as New Jersey legal counsel to all of the above-named companies, and
certain of their affiliated entities, including the Company.
Barry J. Cregan - Mr. Cregan, 41 years old, has been Chief Operating
Officer of the Partnership since September 19, 1994. Since February 21, 1995,
Mr. Cregan has been Vice President of the Company and Holding Inc. Prior to
accepting these positions, from April 1992 to September 1994, Mr. Cregan was
President of The Plaza Hotel in New York. From March 1991 to April 1992, he
was Vice President of Hotel Operations at Trump's Castle in Atlantic City.
From June 1989 until March 1991, Mr. Cregan was an executive with Hyatt.
Wallace B. Askins - Mr. Askins, 64 years old, has been a director of
the Company and Holding Inc. since April 11, 1994, and has been a partner
representative of the Board of Partner Representatives of Trump's Castle
Associates since May 1992. Mr. Askins served as a director of TC/GP from May
1992 to December 1993. From 1987 to November 1992, Mr. Askins served as
Executive Vice President, Chief Financial Officer and as a director of Armco
Inc. Mr. Askins also serves as a director of EnviroSource, Inc.
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<PAGE>
Don M. Thomas - Mr. Thomas, 63 years old, has been the Senior Vice
President of Corporate Affairs of the Pepsi-Cola Bottling Co. of New York
since January 1985. Mr. Thomas was the Acting Chairman, and a Commissioner,
of the CRDA from 1985 through 1987, and a Commissioner of the CCC from 1980
through 1984. From 1974 through 1980, Mr. Thomas served as Vice President,
General Counsel of the National Urban League. From 1966 through 1974, Mr.
Thomas served in various capacities with Chrysler Corporation rising to the
level of President-Auto Dealerships. Mr. Thomas was an attorney with American
Airlines from 1957 through 1966. Mr. Thomas was a director of TP/GP until its
merger into the Company in June 1993 and has been a director of the Company
since June 1993. Mr. Thomas is an attorney licensed to practice law in the
State of New York.
Francis X. McCarthy, Jr. - Mr. McCarthy, 42 years old, was Vice
President of Finance and Accounting of TP/GP from October 1992 until June
1993, the date of TP/GP's merger into the Company, has been Executive Vice
President, Finance Administration since June 1994 and was Senior Vice
President of Finance and Administration of the Partnership from August 1990 to
June 1994; Chief Accounting Officer of the Company since May 1992; Vice
President and Chief Financial Officer of the Company since July 1992 and
Assistant Treasurer of the Company since March 1991. Mr. McCarthy previously
served in a variety of financial positions for Greater-Bay Hotel and Casino,
Inc. from June 1980 through August 1990.
John P. Burke - Mr. Burke, 47 years old, has been corporate treasurer
of the Partnership since October 1991; corporate treasurer of TCA since
October 1991; Vice President of The Trump Organization since September 1990;
and member of the board of directors of TTMA since October 1991. Mr. Burke
was an Executive Vice President and Chief Administrative Officer of Imperial
Corporation of America from April 1989 through September 1990. From May 1980
through April 1989, Mr. Burke was Executive Vice President and Chief Financial
Officer of Tamco Enterprises, Inc.
Robert M. Pickus - Mr. Pickus, 40 years old, has been the Executive
Vice President of Corporate and Legal Affairs of the Partnership since
February 16, 1995. From December 1993 to February 1995, Mr. Pickus was the
Senior Vice President and General Counsel of the Partnership and, since April
1994, he has been the Vice President and Assistant Secretary of the Company
and Assistant Secretary of Holding Inc. He was the Senior Vice President and
Secretary of Trump's Castle Funding, Inc. from June 1988 until December 1993
and General Counsel of TCA from June 1985 to June 1988. Mr. Pickus was also
Secretary of Trump's
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<PAGE>
Castle Hotel & Casino, Inc., an entity beneficially owned by Trump, from
October 1991 until December 1993.
Fred A. Buro - Mr. Buro, 38 years old, has been the Senior Vice
President of Marketing of the Partnership since May 1994. Mr. Buro previously
served as the President of Casino Resources, Inc., a casino marketing,
management and development organization from 1991 through 1994. Prior to
that, Mr. Buro served from 1984 through 1991 as the President of a
professional services consulting firm.
James A. Rigot - Mr. Rigot, 43 years old, has been Executive Vice
President of Casino Operations of the Partnership since November 1994. Mr.
Rigot served as Vice President of Casino Operations of TropWorld Casino and
Entertainment Resort from July 1989 through November 1994. From January 1989
through July 1989, Mr. Rigot was Assistant Casino Manager of Resorts Casino
Hotel. Mr. Rigot also served as Executive Host of the Partnership from
September 1983 through January 1989 and as a Pit Boss at Harrah's Hotel Casino
(in Atlantic City) from October 1980 through September 1983.
Kevin S. Smith - Mr. Smith, 38 years old, has been the Vice President,
General Counsel of the Partnership since February 1995. From February 1992 to
February 1995 Mr. Smith was associated with Cooper Perskie April Niedelman
Wagenheim & Levenson, an Atlantic City law firm specializing in trial
litigation as a certified criminal trial attorney by the New Jersey Supreme
Court. From 1989 until February 1992, Mr. Smith handled criminal trial
litigation for the State of New Jersey, Department of Public Defender,
assigned to the Cape May and Atlantic County Conflict Unit.
Shinji Tanaka - Mr. Tanaka, 47 years old, has been Executive Vice
President of Hotel Operations of the Partnership since January 1995 and was
Vice President of Hotel Operations and Food & Beverage of the Partnership from
June 1994 to January 1995. Mr. Tanaka was Director of Hotel and Food and
Beverage Operations at TropWorld Casino and Entertainment Resort from August
1986 through February 1994. Mr. Tanaka also held various management positions
with Hilton Hotels, including the Waldorf-Astoria and Capitol Hilton, from
1973 through October 1985.
All of the persons listed above have been qualified or licensed by the
CCC.
The employees of the Partnership serve at the pleasure of the Company,
the managing general partner of the Partnership, subject to any contractual
rights contained in any employment agreement. The officers of the Company
serve at the pleasure of the Board of Directors of the Company. The officers
of Holding Inc. serve at the pleasure of the board of directors of that
company.
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<PAGE>
Donald J. Trump and Nicholas L. Ribis served as either executive
officers and/or directors of TTMA and its affiliated entities when such
parties filed their petition for reorganization under chapter 11 of the
Bankruptcy Code on July 17, 1991. The Second Amended Joint Plan of
Reorganization of such parties was confirmed on August 28, 1991, and was
declared effective on October 4, 1991. Donald J. Trump, Nicholas L. Ribis,
Robert M. Pickus and John P. Burke also served as Executive Committee members,
officers, and/or directors of TCA and its affiliated entities, at the time
such parties filed a petition for reorganization under chapter 11 of the
Bankruptcy Code on March 9, 1992. The First Amended Joint Plan of
Reorganization of such parties was confirmed on May 5, 1992, and declared
effective on May 29, 1992. Donald J. Trump, Nicholas L. Ribis and John P.
Burke served as either executive officers and/or directors of the Partnership
and its affiliated entities when such parties filed their petition for
reorganization under chapter 11 of the Bankruptcy Code in March 1992. The
First Amended Joint Plan of Reorganization of such parties was confirmed on
April 30, 1992, and was declared effective on May 29, 1992. Trump was a
partner of Plaza Operating Partners Ltd. when it filed a petition for
reorganization under chapter 11 of the Bankruptcy Code on November 2, 1992.
The plan of reorganization for Plaza Operating Partners Ltd. was confirmed on
December 11, 1992 and declared effective in January 1993. John P. Burke was
Executive Vice President and Chief Administrative Officer of Imperial
Corporation of America ("Imperial"), a thrift holding company whose major
subsidiary, Imperial Savings, was seized by the Resolution Trust Corporation
in February 1990. Subsequently, in February 1990, Imperial filed a petition
for reorganization under chapter 11 of the Bankruptcy Code.
ITEM 11. EXECUTIVE COMPENSATION.
------- ----------------------
COMPENSATION
Holding, the Company 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.
The following table sets forth compensation paid or accrued during the
years ended December 31, 1994, 1993 and 1992 to the Chief Executive Officer,
each of the four most highly compensated executive officers of the Partnership
whose cash compensation, including bonuses and deferred compensation, exceeded
$100,000 for the year ended December 31, 1994 and two additional individuals
whose employment with the Company terminated in 1994.
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Executive Officers of the Company do not receive any additional compensation
for serving in such capacity. 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.
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<PAGE>
Summary Compensation Table
<TABLE>
<CAPTION>
Other
Annual
Name and Compen- All Other
Principal Position Year Salary Bonus sation(1) Compensation(2)
---------------------------- ---- ----------- ----------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Nicholas L. Ribis (3)....... 1994 $572,917 $250,000 $280,407 $ --
Chief Executive Officer 1993 225,000 250,000 380,500 --
1992 300,000 300,000 256,000 --
Francis X. McCarthy, Jr..... 1994 $201,894 $ 42,500 -- $ 3,139
Executive Vice President 1993 189,069 90,000 -- 3,781
Finance and 1992 170,618 50,000 -- 1,651
Administration
Barry J. Cregan (4)......... 1994 $153,945 -- -- --
Chief Operating
Officer
Robert M. Pickus (5)........ 1994 $163,759 $ 32,500 -- $ 3,291
Executive Vice 1993 5,808 $ -- -- --
President of
Corporate and
Legal Affairs
James A. Rigot (6).......... 1994 $ 13,461 $100,000 -- --
Executive Vice
President of
Casino Operations
Kevin DeSanctis (7)......... 1994 $200,769 $128,720 $ 4,000 $ 3,073
1993 559,753 178,000 118,000 4,497
1992 410,890 160,000 72,372 4,364
William Velardo (8)......... 1994 $84,807 $ -- -- $ 88,893
1993 187,607 75,000 -- 3,598
1992 170,216 50,000 -- 3,405
----------------
</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 fees. Following SEC rules, perquisites and other personal
benefits are not included in this table if the aggregate amount of that
compensation is the lesser of either $50,000 or 10% of the total of salary and
bonus for that officer.
(2) Represents vested and unvested contributions made by the Partnership under
the Trump Plaza Hotel and Casino Retirement Savings Plan. Funds accumulated
for an employee, which consist of a certain percentage of the employee's
compensation plus Partnership contributions equalling 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. Ribis devotes approximately one-third of his professional time to the
affairs of the Partnership. Mr. Ribis is also employed as the chief executive
officer of the Other Trump Casinos; his compensation from the Other Trump
Casinos is not included in the table.
(4) Mr. Cregan commenced employment with the Partnership in September 1994.
(5) Mr. Pickus commenced employment with the Partnership in December 1993.
(6) Mr. Rigot commenced employment with the Partnership in November 1994.
(7) Mr. DeSanctis, former President and Chief Operating Officer of Trump Plaza
resigned in March 1994.
(8) Mr. Velardo, former Vice President of Casino Operations of the
Partnership until March 1994 and Chief Operating Officer from March 1994 to
April 1994.
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<PAGE>
EMPLOYMENT AGREEMENTS
The Partnership has an employment agreement with Nicholas L. Ribis
pursuant to which Mr. Ribis acts as Chief Executive Officer of the
Partnership. The agreement, which expires in September 1996, provides for an
annual salary of $550,000. The salary increases by ten percent for each of
the second and third years of the agreement. Upon execution of the employment
agreement, Mr. Ribis received a $250,000 signing bonus. 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 have agreed to
negotiate new compensation arrangements which shall include equity
participation for Mr. Ribis. Mr. Ribis is also chief executive officer of
TTMA and TCA, the partnerships that own the Other Trump Casinos, and receives
compensation from such entities for such services. Mr. Ribis devotes
approximately one-third of his professional time to the affairs of the
Partnership. All other executive officers of the Partnership, except Mr.
Burke, devote substantially all of their time to the business of the
Partnership.
The Partnership and the Company have an employment agreement with Barry
J. Cregan (the "Cregan Agreement") pursuant to which Mr. Cregan acts as Chief
Operating Officer of the Partnership. The Cregan Agreement, which expires on
September 18, 1996, provides for an annual base salary of $600,000 during the
first year and an annual base salary of $700,000 during the second year. In
addition, Mr. Cregan has an option to extend the Cregan Agreement for one
additional year at an annual base salary of $750,000 during such third year of
employment. In addition to base salary, Mr. Cregan shall also receive certain
other benefits as provided for in the Cregan Agreement. Pursuant to the
Cregan Agreement, Mr. Cregan devotes all of his professional time to the
Partnership. In the event that the Partnership or the Company terminates Mr.
Cregan's employment for Cause (as defined in the Cregan Agreement), the
Partnership shall pay Mr. Cregan all compensation earned to the date of such
termination. In the event Mr. Cregan terminates the Cregan Agreement for Good
Cause (as defined therein), the Partnership shall pay Mr. Cregan all
compensation, reimbursements and benefits provided for therein (i) due as of
the date of such termination and (ii) payable under the Cregan Agreement from
such date of termination through the date of expiration.
The Partnership has an employment agreement with James A. Rigot (the
"Rigot Agreement") pursuant to which Mr. Rigot acts as Executive Vice
President of Casino Operations of the Partnership. The Rigot Agreement, which
expires on November 30, 1997, provides for a bonus of $100,000 upon
commencement of employment, an annual base salary of $250,000, with any bonus
and increases in
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salary provided in the Partnership's sole and absolute discretion, however, at
no time shall such salary be less than $250,000. In addition to salary, Mr.
Rigot shall also receive certain other benefits as provided for in the Rigot
Agreement. Pursuant to the Rigot Agreement, Mr. Rigot devotes all of his
professional time to the Partnership. In the event that the Partnership
terminates the Rigot Agreement (i) because Mr. Rigot's CCC license is
terminated or (ii) because Mr. Rigot has committed an act constituting Cause
(as defined therein), the Partnership shall pay to Mr. Rigot all compensation
earned to the date of such termination. In the event that the Partnership
terminates the Rigot Agreement for any other reason, the Partnership shall
offer to pay Mr. Rigot an amount equal to twelve months of Mr. Rigot's then
current salary, which offer, if accepted, will constitute complete
satisfaction of all obligations and liabilities arising out of the Rigot
Agreement.
The Partnership has an employment agreement with Kevin S. Smith, Esq.
(the "Smith Agreement") pursuant to which Mr. Smith acts as the Vice
President/General Counsel of the Partnership. The Smith Agreement, which
expires on February 9, 1998, provides for an annual base salary of $110,000,
with any bonus and increases in salary provided in the Partnership's sole and
absolute discretion. In addition to salary, Mr. Smith shall also receive
certain other benefits as provided for in the Smith Agreement. Pursuant to
the Smith Agreement, Mr. Smith devotes all of his professional time to the
Partnership. In the event that the Partnership or Mr. Smith terminates the
Smith Agreement, the Smith Agreement provides for various types of severance
compensation based on the circumstances surrounding the termination. The
severance compensation provided for in the Smith Agreement shall, in no case,
exceed one year's salary, including benefits.
The Partnership has a severance agreement with Robert M. Pickus, Esq.,
who is the Executive Vice President of Corporate and Legal Affairs of the
Partnership. The agreement provides that upon Mr. Pickus' termination other
than for cause (as defined in the severance agreement) or loss of his casino
key employee license from CCC, the Partnership will pay Mr. Pickus a severance
payment equal to the amount of his salary at its then current rate for a
period of one year, which is anticipated to be in excess of $150,000.
The Partnership had an employment agreement with Kevin DeSanctis,
former President and Chief Operating Officer of Trump Plaza. The agreement
was terminated upon the resignation of Mr. DeSanctis. Mr. DeSanctis received
$200,769 of salary and $128,720 in bonus in 1994.
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The Partnership had an employment agreement with Ernest E. East, Esq.,
former Senior Vice President of Administration and Corporate Affairs of the
Partnership. The agreement was terminated upon Mr. East's resignation in
August 1994. Mr. East received $101,407 of salary, and $156,000 in board fees
in 1994.
The Partnership had an employment agreement with William Velardo that
expired in March 1994. Mr. Velardo served as the Vice President of Casino
Operations of the Partnership until March 1994 and as the Chief Operating
Officer of the Partnership from March 1994 to April 1994. Mr. Velardo received
$173,700 of salary and severance payments in 1994.
All of the above agreements provide for discretionary bonuses and/or
signing bonuses.
COMPENSATION OF DIRECTORS
Each director of the Company, receives an annual fee of $50,000 and
$2,000 per meeting attended, plus reasonable out-of-pocket expenses incurred
in attending any meeting of the Board of Directors of the Company.
Each director of TP/GP, other than Trump, received an annual fee of
$50,000 and $2,000 per meeting attended, plus reasonable out-of-pocket
expenses incurred in attending any meeting of the board of directors of TP/GP.
In addition, each member of the TP/GP Audit Committee received a fee of $1,500
for each meeting attended. TP/GP, the former managing general partner of the
Partnership, was merged with and into the Company in June 1993.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Holding does not have a compensation committee and its officers serve
without separate compensation.
In general, the compensation of executive officers of the Partnership
is determined by the Board of Directors of the Company, composed of Donald J.
Trump, Nicholas L. Ribis, Wallace B. Askins and Don M. Thomas. The
compensation of Nicholas L. Ribis is set forth in his employment agreement
with the Partnership, pursuant to which the Partnership has delegated the
responsibility over certain matters, such as bonuses, to Trump. See "--
Employment Agreements." No officer or employee of Trump Plaza, other than Mr.
Ribis, who serves on the Board of Directors of the Company, participated in
the deliberations of the Board of Directors of the Company concerning
executive compensation. Executive officers of the Company do not receive any
additional compensation for serving in such capacity.
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The SEC 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 and Burke,
executive officers of the Partnership, have served on the board of directors
of other entities in which members of the Board of Directors of the Company
(namely, Messrs. Trump and Ribis) served and continue to serve as
executive officers. Management believes that such relationships have not
affected the compensation decisions made by the Board of Directors of the
Company in the last fiscal year.
Messrs. Ribis and Burke serve on the board of directors of Taj Mahal
Holding Corp., which holds an indirect equity interest in TTMA, the
partnership that owns the Taj Mahal, of which Messrs. Trump and Ribis are
executive officers. Such persons also serve on the board of directors of
TM/GP Corporation (a subsidiary of Taj Mahal Holding Corp.), the managing
general partner of TTMA, of which Messrs. Trump and Ribis are executive
officers. Mr. Ribis is compensated by TTMA for his services as its chief
executive officer.
Mr. Ribis also serves on the board of directors of Trump Taj Mahal
Realty Corp. ("Taj Realty Corp."), which leases certain real property to TTMA,
of which Trump is an executive officer. Trump, however, does not receive any
compensation for serving as an executive officer of Taj Realty Corp. Mr.
Ribis receives compensation from TCA for acting as its chief executive
officer.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN
------- BENEFICIAL OWNERS AND MANAGEMENT.
--------------------------------
Trump has owned 100% of the Common Stock since June 25, 1993. Trump
has sole voting and investment power regarding the Common Stock owned by him.
In connection with the PIK Note Offering which was consummated on June
25, 1993, TP/GP was merged with and into the Company, and the Company became
the managing general partner of the Partnership. Trump contributed his
interest in the Partnership to Holding, which is beneficially-owned by Trump.
Since such date, the Company and Holding have been the sole partners in the
Partnership.
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ITEM 13. CERTAIN RELATIONSHIPS
------- AND RELATED TRANSACTIONS.
------------------------
Although the Partnership has not fully considered all of the areas in
which it intends to engage in transactions with affiliates of the partners, it
is free to do so, subject to certain restrictions. Payments to affiliates in
connection with any such transactions are governed by the provisions of the
Mortgage Note Indenture and the PIK Note Indenture which generally require
that such transactions be on terms as favorable to the Partnership as would be
obtainable from an unaffiliated party, and requires the approval of a majority
of the Independent Directors of the Company for certain affiliated
transactions.
The Partnership has joint property insurance coverage with TCA, TTMA
and other entities affiliated with Trump for which the annual premium paid by
the Partnership was $247,000 for the twelve months ended May 1994.
The Partnership leased from TTMA certain office facilities located in
Pleasantville, New Jersey. In 1993 and 1992, lease payments by the
Partnership to TTMA totalled approximately $30,000 and $138,000, respectively.
Such lease terminated on March 19, 1993, and the Partnership vacated the
premises. Through February 1, 1993, the Partnership also leased from Trump
approximately 120 parking spaces at the Boardwalk Expansion Site for
approximately $5.50 per parking space per day, with payments under such
arrangement for the year ended December 31, 1993 and December 31, 1992
totalling $21,000 and $227,000, respectively.
The Partnership also leased portions of its warehouse facility located
in Egg Harbor Township, New Jersey to TCA until January 31, 1994; lease
payments by TCA to the Partnership totalled $6,000, $15,000 and $14,000 in
1994, 1993 and 1992, respectively.
Trump and Trump Boardwalk collectively own 100% of the interests in
Seashore Four. Seashore Four is the fee owner of a parcel of land
constituting a portion of the Casino Parcel, which it leases to the
Partnership pursuant to the SFA Lease, a long-term, triple-net lease.
Seashore Four was assigned the lessor's interest in the existing SFA Lease in
connection with its acquisition of fee title to such parcel from a non-
affiliated third party in November 1983. The SFA Lease was entered into by
the Partnership with such third party on an arm's-length basis. The
Partnership recorded rental expenses of approximately $900,000, $900,000 and
$900,000 in 1994, 1993 and 1992, respectively, concerning rent owed to
Seashore Four.
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Trump and Trump Seashore Associates, Inc. collectively own 100% of the
interests in Trump Seashore Associates ("Trump Seashore"). Trump Seashore is
the fee owner of a parcel of land constituting a portion of the Casino Parcel,
which it leases to the Partnership pursuant to the Trump Seashore Lease, a
long-term, triple-net lease. In July 1988, Trump Seashore exercised a $10
million option to purchase the fee title to such parcel from a non-affiliated
third party. In connection therewith, Trump Seashore was assigned the
lessors' interest in the Trump Seashore Lease, which interest has, however,
been transferred to UST. See "Properties." The Partnership paid rental
payments to Trump Seashore of approximately $1.0 million, $1.0 million and
$1.0 million in 1994, 1993 and 1992, respectively.
The Partnership has separately agreed to reimburse Trump for any
payments which he may make under (i) a note (the "Harrah's Note") for which
Trump and the Partnership are co-makers and which constitutes part of the
redemption price for Harrah's Atlantic City, Inc.'s ("HAC") prior interests in
the Partnership and Seashore Four, which were redeemed in 1986, pursuant to a
redemption agreement dated as of March 11, 1986 (the "Redemption Agreement");
and (ii) his or Trump Boardwalk's indemnity of HAC under the Redemption
Agreement, insofar as it relates to the Partnership. Trump and Trump
Boardwalk have agreed to assign to the Partnership any payment either receives
pursuant to HAC's and The Promus Companies Incorporated's (HAC's parent
corporation) indemnity, insofar as it relates to the Partnership. The
Harrah's Note was repaid by the Partnership on May 16, 1993.
The financial statements of the Company included herein include a
provision for Federal income taxes, based on distributions from the
Partnership relating to the Company's Preferred Stock which was redeemed on
June 25, 1993. The Company will be reimbursed for such income taxes by the
Partnership in the amount of $3.8 million when due.
BOARDWALK EXPANSION SITE
See "Business -- Narrative Description of Business --Expansion Sites --
Boardwalk Expansion Site" and "Management's Discussion and Analysis of
Financial Condition and Results of Operation -- Liquidity and Capital
Resources."
TRUMP REGENCY
See "Business -- Narrative Description of Business --Expansion Sites --
Trump Regency."
-64-
<PAGE>
SERVICES AGREEMENT
On June 24, 1993, the Partnership and Trump Plaza Management Corp.
("TPM") entered into an Amended and Restated Services Agreement (the "Services
Agreement") pursuant to which TPM is required 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
similar and related services (the "Services") with respect to the business and
operations of the Partnership. In addition, the Services Agreement contains a
non-exclusive "license" of the "Trump" name. TPM is not required to devote
any prescribed amount of time to the performance of its duties. In
consideration for the Services, the Partnership pays TPM an annual fee of $1.0
million in equal monthly installments. In addition to such annual fee, the
Partnership reimburses TPM on a monthly basis for all reasonable out-of-pocket
expenses incurred by TPM in performing its obligations under the Services
Agreement. The Partnership paid TPM $1,288,000, $1,247,000 and $708,000 in
1994, 1993 and 1992, respectively, for the Services. Pursuant to the Services
Agreement, the Partnership will agree to hold TPM, its officers, directors and
employees harmless from and against any loss arising out of or in connection
with the performance of the Services and to hold Trump harmless from and
against any loss arising out of the license of the "Trump" name.
INDEMNIFICATION AGREEMENTS
The directors of the Company have entered into separate indemnification
agreements (collectively, the "Indemnification Agreements") with the
Partnership pursuant to which such persons are afforded the full benefits of
the indemnification provisions of the partnership agreement of the
Partnership. The Partnership has also entered into an Indemnification Trust
Agreement with an Indemnification Trustee (the "Trust Agreement") pursuant to
which the sum $100,000 has been deposited by the Partnership with the
Indemnification Trustee for the benefit of the directors of the Company and
the Class B Directors of TP/GP serving prior to the Offerings to provide a
source for indemnification for such persons if the Partnership or the Company,
as the case may be, fails to immediately honor a demand for indemnification by
such persons. In connection with the Offerings, the Indemnification
Agreements with the directors of the Company and the Class B Directors of
TP/GP were amended to provide, among other things, the Partnership would
maintain directors' and officers' insurance covering such persons during the
term of the Indemnification Agreements; provided, however, that if such
insurance would not be available on a commercially practicable basis, the
Partnership could, in lieu of obtaining such insurance, annually deposit an
amount in the Indemnification Trust Fund equal to $500,000 for
-65-
<PAGE>
the benefit of such directors; provided, further, that deposits relating to
the failure to obtain such insurance shall not exceed $2.5 million.
-66-
<PAGE>
PART IV
-------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT
------- SCHEDULES, AND REPORTS ON FORM 8-K.
----------------------------------
(a) FINANCIAL STATEMENTS. See the Index to Financial Statements
immediately following the signature pages.
(b) REPORTS ON FORM 8-K. The Registrants did not file any reports on
Form 8-K during the last quarter of the year ended December 31,
1994.
(c) EXHIBITS.
Exhibit No. Description of Exhibit
----------- ----------------------
3.1(1) Amended and Restated Certificate of Incorporation of the
Company.
3.1.1(8) Form of Second Amended and Restated Certificate of
Incorporation of the Company.
3.2(1) Amended and Restated By-Laws of the Company.
3.3(1) Amended and Restated Certificate of Incorporation of TP/GP.
3.4(1) Amended and Restated By-Laws of TP/GP.
3.5(8) Certificate of Incorporation of Holding Inc.
3.6(8) By-Laws of Holding Inc.
3.7(9) Second Amended and Restated Partnership Agreement of the
Partnership.
3.8(8) Partnership Agreement of Holding.
3.8.1(8) Amendment No. 1 to the Partnership Agreement of Holding.
3.9(8) Agreement and Plan of Merger between TP/GP and the Company.
-67-
<PAGE>
4.1(9) Mortgage Note Indenture, among the Company, as issuer, the
Partnership, as guarantor, and the Mortgage Note Trustee, as
trustee.
4.2(9) Indenture of Mortgage, between the Partnership, as Mortgagor,
and the Company, as Mortgagee (the Note Mortgage.
4.3(9) Assignment Agreement between the Company and the Mortgage Note
Trustee.
4.4(9) Assignment of Operating Assets from the Partnership to the
Company.
4.5(9) Assignment of Leases and Rents from the Partnership to the
Company.
4.6(9) Indenture of Mortgage between the Partnership and the Mortgage
Note Trustee (the Guarantee Mortgage).
4.7(9) Assignment of Leases and Rents from the Partnership to the
Mortgage Note Trustee.
4.8(9) Assignment of Operating Assets from the Partnership to the
Mortgage Note Trustee.
4.9(9) The Partnership Note.
4.10(9) Mortgage Note (included in Exhibit 4.1).
4.11(9) Pledge Agreement of the Company in favor and for the benefit
of the Mortgage Note Trustee.
4.12(9) PIK Note Indenture between Holding, as Issuer, and the PIK
Note Trustee, as trustee.
4.13(9) PIK Note (included in Exhibit 4.12).
4.14(8) Warrant Agreement.
4.15(8) Warrant (included in Exhibit 4.14).
4.16(8) Pledge Agreement of Holding in favor and for the benefit of
the PIK Note Trustee.
10.1-10.6 Intentionally omitted.
10.7(12) Employment Agreement between the Partnership and Barry Cregan.
-68-
<PAGE>
10.8-10.9 Intentionally omitted.
10.10(4) Agreement of Lease, dated as of July 1, 1980, by and between
SSG Enterprises, as lessor and Atlantic City Seashore 2, Inc.,
as lessee, as SSG Enterprises' interest has been assigned to
Seashore Four, and as Atlantic City Seashore 2, Inc.'s
interest has been, through various assignments, assigned to
the Partnership (with schedules).
10.11(4) Agreement of Lease, dated July 11, 1980, by and between Plaza
Hotel Management Company, as lessor, and Atlantic City
Seashore 3, Inc., as lessee, as Atlantic City Seashore 3,
Inc.'s interest has been, through various assignments,
assigned to the Partnership (with schedules).
10.12(4) Agreement of Lease, dated as of July 1, 1980, by and between
Magnum Associates and Magnum Associates II, as lessor and
Atlantic City Seashore 1, Inc., as lessee, as Atlantic City
Seashore 1, Inc.'s interest has been, through various
assignments, assigned to the Partnership (with schedules).
10.13-10.15 Intentionally omitted.
10.16(2) Trump Plaza Hotel and Casino Retirement Savings Plan effective
as of November 1, 1986.
10.17-10.20 Intentionally omitted.
10.21(5) Assignment of Lease, dated as of July 28, 1988, by and between
Magnum Associates and Magnum Associates II, as assignor, Trump
Seashore Associates, as assignee, and the Partnership, as
lessee.
10.22-10.23 Intentionally omitted.
10.24(5) Employment Agreement, dated January 28, 1991, between the
Partnership and Kevin DeSanctis.
10.24.1(7) Amendment to Employment Agreement, dated August 6, 1992,
between the Partnership and Kevin DeSanctis.
10.25 Intentionally omitted.
-69-
<PAGE>
10.26(1) Employment Agreement, dated as of June 1, 1992 between the
Partnership and Ernest E. East.
10.27(3) Employment Agreement, dated as of March 13, 1991 between the
Partnership and William Velardo.
10.28(3) Option Agreement, dated as of February 2, 1993 between Trump
and the Partnership.
10.29(8) Appraisal of Trump Plaza by Appraisal Group International,
dated March 5, 1993.
10.30(6) Amended and Restated Services Agreement between the
Partnership and Trump.
10.31(1) Working Capital Facility between the Partnership and Belmont
Fund, L.P.
10.31.1(8) Mortgage and Security Agreement of the Partnership in favor of
Belmont Fund, L.P.
10.31.2(8) Assignment of Rents and Leases: by the Partnership to Belmont
Fund L.P., dated May 29, 1992.
10.31.3(8) Assignment of Operating Assets: by the Partnership to Belmont
Fund L.P., dated May 29, 1992.
10.32.1(8) Mortgage: from Trump, Nominee to Emil F. Aysseh, Trustee dated
January 12, 1983.
10.32.2(8) Mortgage: from Trump, Nominee to Emil F. Aysseh, Trustee dated
June 23, 1983.
10.32.3(8) Mortgage Consolidation, Modification, and Extension Agreement:
dated June 23, 1983.
10.32.4(8) Partial Assignment of Mortgage: (1/3 interest) by Alfred
Aysseh to New Canaan Bank Trust Company.
10.32.5(8) Partial Assignment of Mortgage: (1/3 interest) by New Canaan
Bank and Trust Company to Alfred Aysseh.
10.32.6(8) Assignment of Mortgage: Emil F. Aysseh, Trustee to Community
National Bank and Trust Company of New York.
-70-
<PAGE>
10.32.7(8) Mortgage Note and Mortgage Modification Agreement: by and
between Emil F. Aysseh, Trustee and Donald J. Trump, Nominee
dated January 10, 1992.
10.33(8) Mortgage: from Donald J. Trump, Nominee to Albert Rothenberg
and Robert Rothenberg, dated October 3, 1983.
10.34(8) Mortgage: made by Harrah's Associates to Adeline Bordonaro,
dated January 28, 1986.
10.35(8) Mortgage: made by the Partnership to The Mutual Benefit Life
Insurance Company, dated October 5, 1990.
10.35.1(8) Collateral Assignment of Leases: made by the Partnership to
The Mutual Benefit Life Insurance Company, dated October 5,
1990.
10.36-10.37 Intentionally omitted.
10.38(11) Employment Agreement between the Partnership and Nicholas L.
Ribis.
10.39(11) Severance Agreement between the Partnership and Robert M.
Pickus.
10.40 Employment Agreement, dated February 7, 1995, between
the Partnership and Kevin S. Smith.
10.41 Employment Agreement, dated November 21, 1994, between the
Partnership and James A. Rigot.
10.42 Option and Right of First Offer Agreement between the
Partnership and Missouri Boardwalk Inc., dated as of June 24,
1993.
10.43 Lease between Trump and Missouri Boardwalk Inc., dated as of
June 24, 1993.
10.44 Sublease between Trump and Missouri Boardwalk Inc., dated June
24, 1993.
10.45 Option Agreement among Trump, ACFH and Chemical, dated
December 17, 1993.
10.45.1 Amended and Restated Option Agreement among Trump, ACFH and
Chemical, dated June 16, 1994.
-71-
<PAGE>
10.45.2 First Amendment to Amended and Restated Option Agreement among
Trump, ACFH and Chemical, dated August 30, 1994.
10.45.3 Second Amendment to Amended and Restated Option Agreement
among Trump, ACFH and Chemical, dated March 6, 1995.
24 Power of Attorney of directors and certain officers of the
Company, Holding and the Partnership (included in the
signature pages).
27.1 Financial Data Schedule for Trump Plaza Funding, Inc.
27.2 Financial Data Schedule for Trump Plaza Holding Associates.
27.3 Financial Data Schedule for Trump Plaza Associates.
-------------
(1) Incorporated herein by reference to the Exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1992.
(2) Incorporated herein by reference to the identically numbered
Exhibit in the Company's Annual Report on Form 10-K for the year
ended December 31, 1986.
(3) Incorporated herein by reference to the identically numbered
Exhibit in the Company's Annual Report on Form 10-K for the year
ended December 31, 1992.
(4) Incorporated herein by reference to the identically numbered
Exhibit in the Company's Registration Statement on Form S-1,
Registration No. 33-4604.
(5) Incorporated herein by reference to the identically numbered
Exhibit in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1990.
(6) Previously filed in Holding's Registration Statement on Form S-
1, Registration No. 33-58608.
(7) Incorporated herein by reference to the Exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended September
30, 1992.
(8) Incorporated herein by reference to the identically numbered
Exhibit in the Registration Statement of the Company and the
Partnership on Form S-1, Registration No. 33-58602.
-72-
<PAGE>
(9) Incorporated herein by reference to the identically numbered
Exhibit in Holding's Registration Statement on Form S-1,
Registration No. 33-58608.
(10) Previously filed in the Registration Statement of the Company
and the Partnership on Form S-1, Registration No. 33-58602.
(11) Incorporated herein by reference to the identically numbered
Exhibit in the Annual Report of the Company and Holding on Form
10-K for the year ended December 31, 1993.
(12) Incorporated herein by reference to the identically numbered
Exhibit in the Quarterly Report of the Company and Holding on
Form 10-Q for the quarter ended September 30, 1994.
(d) FINANCIAL STATEMENT SCHEDULES. See the Index to Financial
Statements immediately following the signature pages.
-73-
<PAGE>
PARTNERSHIP SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Partnership has duly caused this Annual Report to be
signed on its behalf by the undersigned, thereunto duly authorized this 29th day
of March, 1995.
TRUMP PLAZA ASSOCIATES
By: Trump Plaza Funding, Inc.
Its: Managing General Partner
/s/ Donald J. Trump
-----------------------------
By: Donald J. Trump
Title: President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Annual Report has been signed on the subsequent pages by the persons listed
therein in the capacities and on the dates indicated for Trump Plaza Funding,
Inc. and Trump Plaza Holding Associates, the general partners of the
Partnership.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, each Registrant has duly caused this Annual Report to be
signed on its behalf by the undersigned, thereunto duly authorized this 29th day
of March, 1995.
TRUMP PLAZA FUNDING, INC.
/s/ Donald J. Trump
-------------------------------
By: Donald J. Trump
Title: President and Treasurer
TRUMP PLAZA HOLDING ASSOCIATES
By: Trump Plaza Holding, Inc.
Its Managing General Partner
/s/ Donald J. Trump
-------------------------------
By: Donald J. Trump
Title: President
POWER OF ATTORNEY
EACH PERSON WHOSE SIGNATURE APPEARS BELOW CONSTITUTES AND APPOINTS DONALD
J. TRUMP AND NICHOLAS L. RIBIS, AND EACH OF THEM, WITH FULL POWER TO ACT
WITHOUT THE OTHER, HIS TRUE AND LAWFUL ATTORNEY-IN-FACT AND AGENT, WITH FULL
POWER OF SUBSTITUTION AND RESUBSTITUTION, FOR HIM AND IN HIS NAME, PLACE AND
STEAD, IN ANY AND ALL CAPACITIES, TO SIGN ANY AND ALL AMENDMENTS TO THIS
ANNUAL REPORT, AND TO FILE THE SAME, WITH ALL EXHIBITS THERETO, AND OTHER
DOCUMENTS IN CONNECTION THEREWITH, WITH THE SECURITIES AND EXCHANGE
COMMISSION, GRANTING UNTO SAID ATTORNEYS-IN-FACT AND AGENTS, AND EACH OF THEM,
FULL POWER AND AUTHORITY TO DO AND PERFORM EACH AND EVERY ACT AND THING
REQUISITE AND NECESSARY TO BE DONE, AS FULLY TO ALL INTENTS AND PURPOSES AS HE
MIGHT OR COULD DO IN PERSON HEREBY RATIFYING AND CONFIRMING ALL THAT SAID
ATTORNEYS-IN-FACT AND AGENTS OR ANY OF THEM, OR HIS OR THEIR SUBSTITUTE OR
SUBSTITUTES, MAY LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF.
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Annual Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
TRUMP PLAZA FUNDING, INC.
By: /s/ Donald J. Trump March 29, 1995
----------------------------
Donald J. Trump Principal
Executive
Officer and
Director
By: /s/ Francis X. McCarthy, Jr. March 29, 1995
----------------------------
Francis X. McCarthy, Jr. Principal
Financial and
Accounting
Officer
By: /s/ Nicholas L. Ribis March 29, 1995
----------------------------
Nicholas L. Ribis Director
By: /s/ Wallace B. Askins March 29, 1995
-------------------------------
Wallace B. Askins Director
By: /s/ Don M. Thomas March 29, 1995
----------------------------
Don M. Thomas Director
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Annual Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
TRUMP PLAZA HOLDING ASSOCIATES
By: Trump Plaza Holding, Inc.
Its Managing General Partner
By: /s/ Donald J. Trump March 29, 1995
----------------------------
Donald J. Trump Principal
Executive
Officer and
Director
By: /s/ Francis X. McCarthy, Jr. March 29, 1995
----------------------------
Francis X. McCarthy, Jr. Principal
Financial and
Accounting
Officer
By: /s/ Nicholas L. Ribis March 29, 1995
----------------------------
Nicholas L. Ribis Director
By: /s/ Wallace B. Askins March 29, 1995
-------------------------------
Wallace B. Askins Director
By: /s/ Don M. Thomas March 29, 1995
----------------------------
Don M. Thomas Director
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Public Accountants..................... F-2
Balance Sheets of Trump Plaza Funding, Inc. as of
December 31, 1994 and 1993............................... F-3
Statements of Income of Trump Plaza Funding, Inc. for
the years ended December 31, 1994, 1993 and 1992......... F-4
Statements of Capital of Trump Plaza Funding, Inc. for
the years ended December 31, 1994, 1993 and 1992......... F-5
Statements of Cash Flows of Trump Plaza Funding, Inc. for
the years ended December 31, 1994, 1993 and 1992......... F-6
Report of Independent Public Accountants..................... F-7
Consolidated Balance Sheets of Trump Plaza Holding
Associates and Trump Plaza Associates as of
December 31, 1994 and 1993............................... F-8
Consolidated Statements of Operations of Trump Plaza
Holding Associates and Trump Plaza Associates
for the years ended December 31, 1994, 1993 and 1992..... F-9
Consolidated Statements of Capital (Deficit) of Trump
Plaza Holding Associates and Trump Plaza Associates for
the years ended December 31, 1994, 1993 and 1992......... F-10
Consolidated Statements of Cash Flows of Trump Plaza
Holding Associates and Trump Plaza Associates
for the years ended December 31, 1994, 1993 and 1992..... F-11
Notes to Financial Statements of Trump Plaza Funding,
Inc., Trump Plaza Holding Associates and Trump
Plaza Associates......................................... F-13
Schedules
---------
II Valuation and Qualifying Accounts of Trump Plaza Holding
Associates and Trump Plaza Associates for the years
ended December 31, 1994, 1993 and 1992................... F-27
</TABLE>
Other Schedules are omitted for the reason that they are not required or
are not applicable, or the required information is shown in the consolidated
financial statements or notes thereto.
F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Trump Plaza Funding, Inc.:
We have audited the accompanying balance sheets of Trump Plaza Funding, Inc.
(a New Jersey Corporation) as of December 31, 1994 and 1993, and the related
statements of income, capital and cash flows for each of the three years in
the period ended December 31, 1994. These financial statements are the
responsibility of the management of Trump Plaza Funding, Inc. Our
responsibility is to express an opinion on these financial statements 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 Plaza Funding, Inc. as
of December 31, 1994 and 1993, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1994, in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
February 18, 1995
F-2
<PAGE>
TRUMP PLAZA FUNDING, INC.
BALANCE SHEETS
DECEMBER 31, 1994 AND 1993
ASSETS
------
<TABLE>
<CAPTION>
1994 1993
------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 2,000 $ 2,000
Mortgage Interest Receivable 1,495,000 1,495,000
Receivable From Partnership - 974,000
------------ ------------
Total current assets 1,497,000 2,471,000
Mortgage Note Receivable 326,234,000 325,859,000
Receivable From Partnership 3,822,000 2,949,000
------------ ------------
Total assets $331,553,000 $331,279,000
============ ============
</TABLE>
LIABILITIES AND CAPITAL
-----------------------
<TABLE>
<CAPTION>
CURRENT LIABILITIES:
<S> <C> <C>
Accrued Interest Payable $ 1,495,000 $ 1,495,000
Income Taxes Payable - 974,000
------------ ------------
Total current liabilities 1,495,000 2,469,000
10 7/8% Mortgage Bonds,
net of discount
due 2001 (Notes 1, 2, and 3) 326,234,000 325,859,000
Deferred Income Taxes Payable 3,822,000 2,949,000
------------ ------------
Total liabilities 331,551,000 331,277,000
------------ ------------
Commitments and
Contingencies (Note 6) - -
Common Stock, $.01 par value,
1,000 shares authorized,
100 shares issued
and outstanding - -
Additional Paid in Capital 2,000 2,000
Retained Earnings - -
------------ ------------
Total liabilities
and capital $331,553,000 $331,279,000
============ ============
</TABLE>
The accompanying notes to financial statements are an
integral part of these balance sheets.
F-3
<PAGE>
TRUMP PLAZA FUNDING, INC.
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
1994 1993 1992
------------- ------------ -------------
<S> <C> <C> <C>
Interest Income
From Partnership $36,262,000 $32,642,000 $27,720,000
Preferred Partnership
Investment Income - 3,993,000 4,468,000
Reimbursement
for Income Taxes 101,000 1,802,000 2,202,000
Interest Expense (36,262,000) (32,642,000) (27,720,000)
Directors' Fees
and Other Expenses (101,000) (497,000) (224,000)
------------ ----------- -----------
Income Before
Provision for Taxes - 5,298,000 6,446,000
Provision for
Income Taxes - 1,802,000 2,202,000
------------ ----------- -----------
Net Income $ - $ 3,496,000 $ 4,244,000
============ =========== ===========
</TABLE>
The accompanying notes to financial statements are an
integral part of these statements.
F-4
<PAGE>
TRUMP PLAZA FUNDING, INC.
STATEMENTS OF CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
Common Stock
---------------------
Number of Additional Paid Retained
Shares Amount in Capital Earnings Total
---------- -------- --------------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Balance
December 31, 1991 200 $ 2,000 $ - $ - $ 2,000
Net Income - - - 4,244,000 4,244,000
Accrued dividends on
preferred stock - - - (4,126,000) (4,126,000)
Preferred Stock Accretion - - - (342,000) (342,000)
Capital contribution from
partnership - - - 224,000 224,000
Redemption of stock units upon
consummation of offering,
effective May 29, 1992 (200) (2,000) - - (2,000)
Issuance of stock upon
consummation of offering,
effective May 29, 1992 2,999,580 - 2,000 - 2,000
---------- ------- ------------ ----------- ------------
Balance,
December 31, 1992 2,999,580 - 2,000 - 2,000
Net Income - - - 3,496,000 3,496,000
Accrued dividends on
preferred stock - - - (3,678,000) (3,678,000)
Preferred stock accretion - - - (315,000) (315,000)
Capital contribution from
partnership - - 40,000,000 497,000 40,497,000
Capital contribution from
Donald J. Trump - - 35,000,000 - 35,000,000
Redemption of Preferred
Stock - - (75,000,000) - (75,000,000)
Redemption of Stock Units upon
consummation of offering,
effective, June 25, 1993 (2,999,580) - - - -
Issuance of stock upon
consummation of offering,
effective June 25, 1993 100 - - - -
---------- ------- ------------ ----------- ------------
Balance,
December 31, 1993 100 - 2,000 - 2,000
Net Income - - - - -
---------- ------- ------------ ----------- ------------
Balance,
December 31, 1994 100 $ $ 2,000 $ $ 2,000
========== ======= ============ =========== ============
</TABLE>
The accompanying notes to financial statements are an integral part of these
statements.
F-5
<PAGE>
TRUMP PLAZA FUNDING, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
1994 1993 1992
---------- -------------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ - $ 3,496,000 $4,244,000
Adjustments to Reconcile Net Income
To Net Cash Flows Provided by
Operating Activities:
Accretion of Discount on Indebtedness 375,000 172,000 -
Preferred Stock Accretion - (315,000) (342,000)
Deferred Income Taxes Payable - 747,000 116,000
--------- ------------ ----------
375,000 4,100,000 4,018,000
Decrease (increase) in receivable
from Partnership 101,000 305,000 (4,228,000)
Decrease (increase) in interest receivable - 6,455,000 (6,573,000)
(Decrease) increase in income taxes payable (101,000) 974,000 2,086,000
(Decrease) increase in accrued
interest payable - (6,455,000) 6,573,000
--------- ------------ ----------
Net Cash Flows Provided by
Operating Activities 375,000 5,379,000 1,876,000
--------- ------------ ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Preferred Stock Dividends - (5,704,000) (2,100,000)
--------- ------------ ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital Contribution - 35,000,000 224,000
Distribution from Partnership - 40,497,000 -
Increase in Mortgage Note receivable (375,000) (100,859,000) -
Additional borrowings - 325,687,000 -
Payment of long term debt - (225,000,000) -
Redemption of Preferred Stock - (75,000,000) -
--------- ------------ ----------
Net Cash Flows (used in) provided by
Financing Activities (375,000) 325,000 224,000
--------- ------------ ----------
Net Change in Cash - - -
Cash at Beginning of Year 2,000 2,000 2,000
--------- ------------ ----------
Cash at End of Year $ 2,000 $ 2,000 $ 2,000
========= ============ ==========
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
F-6
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Trump Plaza Holding Associates and
Trump Plaza Associates:
We have audited the accompanying consolidated balance sheets of Trump Plaza
Holding Associates (a New Jersey general partnership) and Trump Plaza
Associates (a New Jersey general partnership) as of December 31, 1994 and
1993, and the related consolidated statements of operations, capital (deficit)
and cash flows for each of the three years in the period ended December 31,
1994. These consolidated financial statements, and the schedule referred to
below, are the responsibility of the management of Trump Plaza Holding
Associates and Trump Plaza Associates. Our responsibility is to express an
opinion on these financial statements 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 Plaza Holding
Associates and Trump Plaza Associates as of December 31, 1994 and 1993, and
the results of their operations and their cash flows for each of the three
years in the period ended December 31, 1994, 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 and schedules is presented for purposes 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 state in all material respects the financial data required to
be set forth therein in relation to the basis financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
February 18, 1995
F-7
<PAGE>
TRUMP PLAZA HOLDING ASSOCIATES AND
TRUMP PLAZA ASSOCIATES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1994 AND 1993
<TABLE>
<CAPTION>
ASSETS
--------------
1994 1993
-------------- --------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 11,144,000 $ 14,393,000
Trade receivables, net of allowances for doubtful
accounts of $8,493,000 and $10,616,000, respectively 6,685,000 6,759,000
Accounts receivable, other 112,000 198,000
Inventories 3,657,000 3,566,000
Prepaid expenses and other current assets 4,280,000 2,701,000
------------- ------------
Total current assets 25,878,000 27,617,000
------------- ------------
Property and Equipment (Notes 4, 6 and 8):
Land and land improvements 36,463,000 35,613,000
Buildings and building improvements 297,573,000 295,617,000
Furniture, fixtures and equipment 84,709,000 78,173,000
Leasehold improvements 2,404,000 2,404,000
Construction in progress 14,864,000 3,784,000
------------- ------------
436,013,000 415,591,000
Less-Accumulated depreciation and amortization (137,659,000) (122,450,000)
------------- ------------
Net property and equipment 298,354,000 293,141,000
------------- ------------
Land Rights, net of accumulated amortization of
$3,780,000 and $3,410,000, respectively 29,688,000 30,058,000
------------- ------------
Other Assets:
Deferred bond issuance costs, net of accumulated
amortization of $3,270,000 and $1,088,000, respectively 14,125,000 16,254,000
(Note 3) 7,598,000 7,428,000
------------- ------------
Total other assets 21,723,000 23,682,000
------------- ------------
Total assets $ 375,643,000 $374,498,000
============= ============
LIABILITIES AND CAPITAL
-----------------------
Current Liabilities:
Current maturities of long-term debt (Note 3) $ 2,969,000 $ 1,633,000
Accounts payable 9,156,000 6,309,000
Accrued payroll 4,026,000 5,806,000
Accrued interest payable (Note 3) 1,871,000 1,829,000
Due to affiliates, net (Note 8) 206,000 97,000
Other accrued expenses 8,998,000 7,109,000
Other current liabilities 4,602,000 5,330,000
Distribution payable to Trump Plaza Funding, Inc. - 974,000
------------- ------------
Total current liabilities 31,828,000 29,087,000
------------- ------------
Non-Current Liabilities:
Long-term debt, net of current maturities (Note 3) 403,214,000 395,948,000
Distribution payable to Trump Plaza Funding, Inc. 3,822,000 2,949,000
Deferred state income taxes 359,000 1,224,000
------------- ------------
Total non-current liabilities 407,395,000 400,121,000
------------- ------------
Total liabilities 439,223,000 429,208,000
------------- ------------
Commitments and Contingencies (Notes 4 and 6) - -
Capital (Deficit):
Partner's Deficit (78,772,000) (78,772,000)
Retained Earnings 15,192,000 24,062,000
------------- ------------
Total Capital (Deficit) (63,580,000) (54,710,000)
------------- ------------
Total liabilities and capital $ 375,643,000 $374,498,000
============= ============
</TABLE>
The accompanying notes to financial statements are an integral part of these
consolidated statements.
F-8
<PAGE>
TRUMP PLAZA HOLDING ASSOCIATES AND
TRUMP PLAZA ASSOCIATES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
1994 1993 1992
------------ ------------ ------------
<S> <C> <C> <C>
REVENUES:
Gaming $261,451,000 $264,081,000 $265,448,000
Rooms 18,312,000 18,324,000 18,369,000
Food and Beverage 40,149,000 41,941,000 43,889,000
Other 8,408,000 8,938,000 11,012,000
Trump Regency - - 9,465,000
------------ ------------ ------------
Gross Revenues 328,320,000 333,284,000 348,183,000
Less-Promotional
allowances 33,257,000 32,793,000 34,865,000
------------ ------------ ------------
Net Revenues 295,063,000 300,491,000 313,318,000
------------ ------------ ------------
COSTS AND EXPENSES:
Gaming 139,540,000 136,895,000 146,328,000
Rooms 2,715,000 2,831,000 2,614,000
Food and Beverage 17,050,000 18,093,000 18,103,000
General and Administrative 73,075,000 71,624,000 75,459,000
Depreciation and Amortization 15,653,000 17,554,000 15,842,000
Restructuring costs - - 5,177,000
Trump Regency - - 11,839,000
Other 3,615,000 3,854,000 2,953,000
------------ ------------ ------------
251,648,000 250,851,000 278,315,000
------------ ------------ ------------
Income from operations 43,415,000 49,640,000 35,003,000
------------ ------------ ------------
NON-OPERATING INCOME
(EXPENSE):
Interest income 842,000 546,000 487,000
Interest expense (Note 3) (49,061,000) (40,435,000) (31,843,000)
Other non-operating expense ( 4,931,000) ( 3,873,000) ( 1,462,000)
(Note 5) ------------ ------------ ------------
Non-operating expense, net (53,150,000) (43,762,000) (32,818,000)
------------ ------------ ------------
Income (loss) before state
income taxes and
extraordinary items (9,735,000) 5,878,000 2,185,000
PROVISION (BENEFIT) FOR
STATE INCOME TAXES (865,000) 660,000 (233,000)
------------ ------------ ------------
INCOME (LOSS) BEFORE (8,870,000) 5,218,000 2,418,000
EXTRAORDINARY ITEMS
EXTRAORDINARY GAIN (LOSS) - 4,120,000 (38,205,000)
(Note 5) ------------ ------------ ------------
NET INCOME (LOSS) $ (8,870,000) $ 9,338,000 $(35,787,000)
============ ============ ============
</TABLE>
The accompanying notes to financial statements are
an integral part of these consolidated statements.
F-9
<PAGE>
TRUMP PLAZA HOLDING ASSOCIATES AND
TRUMP PLAZA ASSOCIATES
CONSOLIDATED STATEMENTS OF CAPITAL (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
Partners' Retained
Capital Earnings Total
------------ ------------ ------------
<S> <C> <C> <C>
Balance
December 31, 1991 $ 40,502,000 $ 13,541,000 $ 54,043,000
Net Loss - (35,787,000) (35,787,000)
Preferred Partnership
Interest Distribution, Net (43,864,000) 36,970,000 (6,894,000)
------------ ------------ ------------
Balance
December 31, 1992 (3,362,000) 14,724,000 11,362,000
Net Income - 9,338,000 9,338,000
Preferred Partnership
Interest Distribution (6,317,000) - (6,317,000)
Distribution to Donald J.
Trump to repay certain
personal indebtedness (52,500,000) - (52,500,000)
Distribution to Donald J.
Trump to redeem Trump
Plaza Funding, Inc.
Preferred Stock Units (35,000,000) - (35,000,000)
Conversion of Preferred
Partnership Interest into
General Partnership
Interest 18,407,000 - 18,407,000
------------ ------------ ------------
Balance
December 31, 1993 (78,772,000) 24,062,000 (54,710,000)
Net Loss - (8,870,000) (8,870,000)
------------ ------------ ------------
Balance
December 31, 1994 $(78,772,000) $ 15,192,000 $(63,580,000)
============ ============ ============
</TABLE>
The accompanying notes to financial statements are an
integral part of these consolidated statements.
F-10
<PAGE>
TRUMP PLAZA HOLDING ASSOCIATES AND
TRUMP PLAZA ASSOCIATES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
1994 1993 1992
----------- ----------- -------------
<S> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income (loss) $(8,870,000) $ 9,338,000 $(35,787,000)
Adjustments to reconcile net income
(loss) to net cash flows provided by operating
activities-
Noncash charges-
Extraordinary (gain) loss - (4,120,000) 38,205,000
Depreciation and amortization of
property and equipment 15,276,000 17,177,000 15,211,000
Accretion of discount on
indebtedness 1,916,000 862,000 -
Amortization of other assets 377,000 377,000 631,000
Provision for losses on
receivables 396,000 90,000 4,675,000
Deferred state income taxes (865,000) 729,000 (233,000)
Utilization of CRDA credits and
donations 1,062,000 - 1,358,000
Valuation allowance of CRDA
investments 394,000 1,047,000 645,000
----------- ----------- ------------
9,686,000 25,500,000 24,705,000
(Increase) decrease in
receivables (236,000) 823,000 99,000
Increase in inventories (91,000) (498,000) (167,000)
Increase in prepaid expenses and
other current assets (1,385,000) (199,000) (580,000)
Decrease (increase) in other
assets 1,504,000 2,530,000 (828,000)
Increase in amounts due to
affiliates 109,000 188,000 374,000
Increase (decrease) in accounts
payable, accrued expenses and other
current liabilities 10,464,000 (6,524,000) 2,588,000
Decrease in distribution payable
to Trump Plaza Funding, Inc. (101,000) - -
----------- ----------- ------------
Net cash flows provided by
operating activities $19,950,000 $21,820,000 $ 26,191,000
----------- ----------- ------------
</TABLE>
The accompanying notes to financial statements
are an integral part of these consolidated statements.
F-11
<PAGE>
TRUMP PLAZA HOLDING ASSOCIATES AND
TRUMP PLAZA ASSOCIATES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
1994 1993 1992
------------ -------------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment $(20,489,000) $ (10,052,000) $ (8,643,000)
Purchases of CRDA investments ( 2,525,000) (2,823,000) (1,853,000)
Cash refund of CRDA deposits 1,323,000 196,000 -
------------ ------------- -------------
Net cash flows used in investing
activities (21,691,000) (12,679,000) (10,496,000)
------------ ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred Financing costs - (17,342,000) -
Distributions to Donald J. Trump - (87,500,000) -
Distributions to the Company - (40,000,000) -
Preferred Partnership Interest
Distribution - (6,282,000) (2,324,000)
Borrowings 375,000 386,147,000 251,575,000
Payments and current maturities of
long-term debt (1,883,000) (248,573,000) (256,618,000)
------------ ------------- -------------
Net cash flows used in financing
activities (1,508,000) (13,550,000) (7,367,000)
------------ ------------- -------------
Net (decrease) increase in
cash and cash equivalents (3,249,000) (4,409,000) 8,328,000
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 14,393,000 18,802,000 10,474,000
------------ ------------- -------------
CASH AND CASH EQUIVALENTS AT
END OF YEAR $ 11,144,000 $ 14,393,000 $ 18,802,000
============ ============= =============
</TABLE>
The accompanying notes to financial statements
are an integral part of these consolidated statements.
F-12
<PAGE>
TRUMP PLAZA FUNDING, INC.
TRUMP PLAZA HOLDING ASSOCIATES
AND TRUMP PLAZA ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION
The accompanying financial statements include those of Trump Plaza Funding,
Inc. (the "Company"), a New Jersey General Corporation as well as those of
Trump Plaza Holding Associates ("Holding"), a New Jersey General Partnership,
and its 99% owned subsidiary, Trump Plaza Associates (the "Partnership"), a
New Jersey General Partnership, which owns and operates Trump Plaza Hotel and
Casino ("Trump Plaza") located in Atlantic City, New Jersey. The Company owns
the remaining 1% interest in the Partnership. Holding's sole source of
liquidity is distributions in respect of its interest in the Partnership.
All significant intercompany balances and transactions have been eliminated in
the accompanying consolidated financial statements. The minority interest in
the Partnership has not been separately reflected in the consolidated
financial statements of Holding since it is not material.
The Company was incorporated on March 14, 1986 and was originally formed
solely to raise funds through the issuance and sale of its debt securities for
the benefit of the Partnership. As part of a Prepackaged Plan of
Reorganization under Chapter 11 of the U.S. Bankruptcy code consummated on May
29, 1992, the Company became a partner of the Partnership and issued
approximately three million Stock Units, each comprised of one share of
Preferred Stock and one share of Common Stock of the Company. On June 25,
1993, the Stock Units were redeemed with a portion of the proceeds of the
Company's 10 7/8% Mortgage Notes due 2001 (the "Mortgage Notes") as well as
Holding's Units.
Holding was formed in February 1993 for the purpose of raising funds for the
Partnership. On June 25, 1993, Holding completed the sale of 12,000 Units
(the "Units"), each Unit consisting of $5,000 principal amount of 12 1/2%
Pay-In-Kind Notes, due 2003 (the "PIK Notes"), and one Warrant to acquire
$1,000 principal amount of PIK Notes (collectively with the Mortgage Note
Offering, the "Offerings"). The PIK Notes and the Warrants are separately
transferable. Holding has no other assets or business other than its 99%
equity interest in the Partnership.
The Partnership was organized in June 1982. Prior to the date of the
consummation of the Offerings, the Partnership's three partners were TP/GP,
the managing general partner of the Partnership, the Company and Donald J.
Trump ("Trump"). On June 25, 1993, Trump
F-13
<PAGE>
contributed his interest in TP/GP to the Company and TP/GP merged with and
into the Company. The Company then became the managing general partner of the
Partnership. In addition, Trump contributed his interest in the Partnership
to Holding, and the Company and Holding, each of which are wholly owned by
Trump, became the sole partners of the Partnership.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Gaming Revenues and Promotional Allowances
Gaming revenues represent the net win from gaming activities which is the
difference between amounts wagered and amounts won by patrons. The retail
value of accommodations, food, beverage and other services provided to
customers without charge is included in gross revenue and deducted as
promotional allowances. The estimated departmental costs of providing such
promotional allowance are included in gaming costs and expenses as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------
(in thousands)
1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Rooms $ 4,311 $ 4,190 $ 4,804
Food and
Beverage 15,373 14,726 14,982
Other 4,169 3,688 3,884
------- ------- -------
$23,853 $22,604 $23,670
======= ======= =======
</TABLE>
During 1994 and 1992, certain Progressive Slot Jackpot Programs were
discontinued which resulted in $585,000 and $4,100,000, respectively, of
related accruals being taken into income.
Inventories
Inventories of provisions and supplies are carried at the lower of cost
(weighted average) or market.
Property and Equipment
Property and equipment is carried at cost and is depreciated on the straight-
line method using rates based on the following estimated useful lives:
F-14
<PAGE>
Buildings and building improvements 40 years
Furniture, fixtures and equipment 3-10 years
Leasehold improvements 10-40 years
Interest associated with borrowings used to finance construction projects has
been capitalized and is being amortized over the estimated useful lives of the
assets.
Land Rights
Land rights represent the fair value of such rights, at the time of
contribution to the Partnership by the Trump Plaza Corporation, an affiliate
of the Partnership. These rights are being amortized over the period of the
underlying operating leases which extend through 2078.
Income Taxes
The Company, Holding and the Partnership adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109"),
effective January 1, 1993. Adoption of this new standard did not have a
significant impact on the respective statements of financial condition or
results of operations. SFAS No. 109 requires recognition of deferred tax
liabilities and assets for the expected future tax consequences of events that
have been included in the financial statements or tax returns. Under this
method deferred tax liabilities and assets are determined based on the
difference between the financial statement and the tax basis of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse.
The accompanying financial statements of the Company include a provision for
Federal income taxes, based on distributions from the Partnership relating to
the Company's Preferred Stock which was redeemed on June 25, 1993. The
Company will be reimbursed for such income taxes by the Partnership. The
accompanying consolidated financial statements of Holding and the Partnership
do not include a provision for Federal income taxes since any income or losses
allocated to its partners are reportable for Federal income tax purposes by
the partners.
Under the New Jersey Casino Control Commission regulations, the Partnership is
required to file a New Jersey corporation business tax return. Accordingly, a
provision (benefit) for state income taxes has been reflected in the
accompanying consolidated financial statements of Holding and the Partnership.
F-15
<PAGE>
The Partnership's deferred state income taxes result primarily from
differences in the timing of reporting depreciation for tax and financial
statement purposes.
Statements of Cash Flows
For purposes of the statements of cash flows, the Company, Holding and the
Partnership consider all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents. The following
supplemental disclosures are made to the statements of cash flows.
<TABLE>
<CAPTION>
1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
Cash paid during the
year for interest $36,538,000 $41,118,000 $25,310,000
=========== =========== ===========
Cash paid for state
and Federal income taxes $ - $ 81,000 $ -
=========== =========== ===========
Issuance of debt
in exchange for accrued interest $ 8,194,000 $ 3,562,000 $ -
=========== =========== ===========
</TABLE>
(3) LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
December 31, December 31,
1994 1993
------------ ------------
<S> <C> <C>
THE COMPANY:
10 7/8% Mortgage Notes, due 2001 net of
unamortized discount of $3,766,000 and
$4,141,000, respectively (A). $326,234,000 $325,859,000
------------ ------------
HOLDING AND THE PARTNERSHIP:
PARTNERSHIP
Partnership Note (10 7/8% Mortgage Notes,
due 2001 net of unamortized discount
of $3,766,000 and $4,141,000, respectively)(A) $326,234,000 $325,859,000
Mortgage notes payable (C) 5,494,000 6,410,000
Other notes payable 468,000 1,060,000
------------ ------------
332,196,000 333,329,000
Less - Current maturities 2,969,000 1,633,000
------------ ------------
329,227,000 331,696,000
HOLDING
PIK Notes (12 1/2% Notes due 2003 net of
discount of $9,769,000 and $11,310,000,
respectively) (B) 73,987,000 64,252,000
------------ ------------
$403,214,000 $395,948,000
============ ============
</TABLE>
F-16
<PAGE>
(A) On June 25, 1993 the Company issued $330,000,000 principal amount of 10
7/8% Mortgage Notes, due 2001, net of discount of $4,313,000. Net
proceeds of the offering were used to redeem all of the Company's
outstanding $225,000,000 principal amount 12% Mortgage Bonds, due 2002 and
together with other funds (see (B) Pay-In-Kind Notes) all of the Company's
Stock Units, comprised of $75,000,000 liquidation preference participating
cumulative redeemable Preferred Stock with associated shares of Common
Stock, to repay $17,500,000 principal amount 9.14% Regency Note due 2003,
to make a portion of a distribution to Trump to pay certain personal
indebtedness, and to pay transaction expenses.
The Mortgage Notes mature on June 15, 2001 and are redeemable at any time
on or after June 15, 1998, at the option of the Company or the
Partnership, in whole or in part, at the principal amount plus a premium
which declines ratably each year to zero in the year of maturity. The
Mortgage Notes bear interest at the stated rate of 10 7/8% per annum from
the date of issuance, payable semi-annually on each June 15 and December
15, commencing December 15, 1993 and are secured by substantially all of
the Partnership's assets. The accompanying consolidated financial
statements reflect interest expense at the effective interest rate of
11.12% per annum.
The Mortgage Note Indenture contains certain covenants limiting the
ability of the Partnership to incur indebtedness, including indebtedness
secured by liens on Trump Plaza. In addition, the Partnership may, under
certain circumstances, incur up to $25.0 million of indebtedness to
finance the expansion of its facilities, which indebtedness may be secured
by a lien on the Boardwalk Expansion Site (see Note 6 Commitments And
Contingencies) senior to the liens of the Note Mortgage and Guarantee
Mortgage thereon. The Mortgage Notes represent the senior indebtedness of
the Company. The Partnership Note and the Guarantee rank pari passu in
right of payment with all existing and future senior indebtedness of the
Partnership.
The Mortgage Notes, the Partnership Note, the Note Mortgage, the Guarantee
and the Guarantee Mortgage are non-recourse to the partners of the
Partnership, to the shareholders of the Company and to all other persons
and entities (other than the Company and the Partnership), including
Trump. Upon an event of default, holders of the Mortgage Notes would have
recourse only to the assets of the Company and the Partnership.
(B) On June 25, 1993 Holding issued $60,000,000 principal amount of 12 1/2%
PIK Notes, due 2003, together with Warrants to acquire an additional
$12,000,000 of PIK Notes at no additional cost.
F-17
<PAGE>
The Warrants are exercisable following the earlier of certain triggering
events or June 15, 1996.
The PIK Notes mature on June 15, 2003 and bear interest at the rate of 12
1/2% per annum from the date of issuance, payable semi-annually on each
June 15 and December 15, commencing December 15, 1993. At the option of
Holding, interest is payable in whole or in part, in cash or, in lieu of
cash, through the issuance of additional PIK Notes valued at 100% of their
principal amount. The ability of Holding to pay interest in cash on the
PIK Notes is entirely dependent on the ability of the Partnership to
distribute available cash, as defined, to Holding for such purpose.
As of December 31, 1994 the Partnership has elected to issue in lieu of
cash a total of $11,756,000 in PIK Notes to satisfy its semi-annual PIK
Note interest obligation.
The PIK Notes are structurally subordinate to the Company's Mortgage Notes
and any other indebtedness of the Partnership and are secured by a pledge
of Holding's 99% equity interest in the Partnership. The indenture to
which the PIK Notes were issued (the "PIK Note Indenture") contains
covenants prohibiting Holding from incurring additional indebtedness and
engaging in other activities, and other covenants restricting the
activities of the Partnership substantially similar to those set forth in
the Mortgage Note Indenture. The PIK Notes and the Warrants are non-
recourse to the Partners of Holding, including Trump, and to all other
persons and entities (other than Holding). Upon an event of default,
holders of PIK Notes or Warrants will have recourse only to the assets of
Holding which consist solely of its equity interest in the Partnership.
(C) Interest on these notes are payable with interest rates ranging from 10.0%
to 11.0%. The notes are due at various dates between 1995 and 1998 and
are secured by real property.
The aggregate maturities of long-term debt in each of the years subsequent
to 1994 are:
<TABLE>
<CAPTION>
<S> <C>
1995 $ 2,969,000
1996 548,000
1997 2,012,000
1998 433,000
1999 -
Thereafter 400,221,000
------------
$406,183,000
============
</TABLE>
F-18
<PAGE>
(4) LEASES
The Partnership leases property (primarily land), certain parking space, and
various equipment under operating leases. Rent expense for the years ended
December 31, 1994, 1993 and 1992 was $3,613,000, $4,338,000 and $4,361,000,
respectively, of which $1,900,000, $2,513,000 and $2,127,000, respectively,
relates to affiliates of the Partnership.
Future minimum lease payments under the noncancelable operating leases are as
follows:
<TABLE>
<CAPTION>
Amounts
Relating to
Total Affiliates
------------- -------------
<S> <C> <C>
1995 $ 6,445,000 $ 2,125,000
1996 6,670,000 2,350,000
1997 6,670,000 2,350,000
1998 5,110,000 2,350,000
1999 3,550,000 2,350,000
Thereafter 270,633,000 191,250,000
------------ ------------
$299,078,000 $202,775,000
============ ============
</TABLE>
Certain of these leases contain options to purchase the leased properties at
various prices throughout the leased terms. At December 31, 1994, the
aggregate option price for these leases was approximately $58,000,000.
In October 1993, the Partnership assumed the Boardwalk Expansion Site Lease
and related expenses which are included in the above lease commitment amounts.
In connection with the Offerings, the Partnership acquired a five-year option
to purchase the Boardwalk Expansion Site. See "Note 6 to the Financial
Statements --Commitments and Contingencies -- The Boardwalk Expansion Site."
(5) EXTRAORDINARY GAIN (LOSS) AND NON-OPERATING EXPENSE
The excess of the carrying value of a note obligation over the amount of
the settlement payment net of related prepaid expenses in the amount of
$4,120,000 has been reported as an extraordinary gain for the year ended
December 31, 1993.
The extraordinary loss for the year ended December 31, 1992 consists of the
effect of stating the Bonds and Preferred Stock issued at fair value as
compared to the carrying value of these securities and the write off of
certain deferred financing charges and costs.
F-19
<PAGE>
Non-operating expense in 1992 included $1,462,000 of legal expenses relating
to litigation associated with the Boardwalk Expansion Site. In 1994 and 1993
these costs included $4,931,000 and $3,873,000, respectively, in costs
associated with the Boardwalk Expansion Site (see Note 6-Commitments and
Contingencies Future Expansion), net of miscellaneous non-operating credits.
(6) COMMITMENTS AND CONTINGENCIES
Casino License Renewal
The operation of an Atlantic City hotel and casino is subject to significant
regulatory controls which affect virtually all of its operations. Under the
New Jersey Casino Control Act (the "Act"), the Partnership is required to
maintain certain licenses.
In April 1993, the New Jersey Casino Control Commission ("CCC") renewed the
Partnership's license to operate Trump Plaza. This license must be renewed in
June 1995, is not transferable and will include a review of the financial
stability of the Partnership. Upon revocation, suspension for more than 120
days, or failure to renew the casino license, the Act provides for the
mandatory appointment of a conservator to take possession of the hotel and
casino's business and property, subject to all valid liens, claims and
encumbrances.
Legal Proceedings
The Partnership, its Partners, certain members of its former Executive
Committee, and certain of its employees, have been involved in various legal
proceedings. In general, the Partnership has 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, judgements, fines and penalties )
incurred by them in said legal proceedings. Such persons and entities are
vigorously defending the allegations against them and intend to vigorously
contest any future proceedings.
Various 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. The Partnership believes that the
resolution of these claims will not, individually or in the aggregate, have a
material adverse effect on its financial condition or results of operations.
The Partnership is also a party to various administrative proceedings
involving allegations that it has violated certain provisions of the Act. The
Partnership believes that the final
F-20
<PAGE>
outcome of these proceedings will not, either individually or in the
aggregate, have a material adverse effect on its financial condition,
results of operations or on the ability of the Partnership to otherwise retain
or renew any casino or other licenses required under the Act for the operation
of Trump Plaza.
Casino Reinvestment Development Authority Obligations
Pursuant to the provisions of the Act, the Partnership, commencing twelve
months after the date of opening of Trump Plaza in May 1984, and continuing
for a period of twenty-five years thereafter, must either obtain investment
tax credits (as defined in the Casino Control Act), in an amount equivalent
to 1.25% of its gross casino revenues, or pay an alternative tax of 2.5% of
its gross casino revenues, (as defined in the Casino Control Act). Investment
tax credits may be obtained by making qualified investments or by the purchase
of bonds at below market interest rates from the Casino Reinvestment
Development Authority ("CRDA"). The Partnership is required to make quarterly
deposits with the CRDA based on 1.25% of its gross revenue. For the years
ended December 31, 1994, 1993 and 1992, the Partnership charged to operations
$838,000, $1,047,000 and $645,000, respectively, to give effect to the below
market interest rates associated with CRDA bonds that have either been issued
or are expected to be issued from funds deposited.
In connection with the Boardwalk Expansion Site (see below), the CRDA has
approved the use of up to $1,519,000 in deposits made by the Partnership for
site improvements. Such deposits are being capitalized as part of property and
equipment as funds are appropriated by the CRDA.
Concentrations of Credit Risks
In accordance with casino industry practice, the Partnership extends credit to
a limited number of casino patrons, after extensive background checks and
investigations of credit worthiness. At December 31, 1994 approximately 28%
of the Partnership's casino receivables (before allowances) were from
customers whose primary residence is outside the United States, with no
significant concentration in any one foreign country.
The Boardwalk Expansion Site
In 1993, the Partnership received the approval of the CCC, subject to certain
conditions, for the expansion of its hotel facilities (the "Boardwalk
Expansion Site"). On June 25, 1993, Trump transferred title of the Boardwalk
Expansion Site to a lender in exchange for a reduction in indebtedness to such
lender in an amount equal to the sum of the fair market value of the Boardwalk
Expansion Site and all rent payments made to such lender by Trump
F-21
<PAGE>
under the Boardwalk Expansion Site Lease. At that time, the lender leased the
Boardwalk Expansion Site to Trump (the "Boardwalk Expansion Site Lease") for a
term of five years, which expires on June 30, 1998, during which time Trump is
obligated to pay the lender $260,000 per month in lease payments. In October
1993, the Partnership assumed the Boardwalk Expansion Site Lease and related
expenses.
On June 25, 1993, the Partnership acquired a five-year option to purchase the
Boardwalk Expansion Site (the "Boardwalk Expansion Site Purchase Option"). In
addition, the Partnership has a right of first refusal upon any proposed sale
of all or any portion of the Boardwalk Expansion Site during the term of the
Boardwalk Expansion Site Purchase Option. Until such time as the Boardwalk
Expansion Site Purchase Option is exercised or expires, the Partnership will
be obligated, from and after the date it entered into the Boardwalk Expansion
Site Purchase Option, to pay the net expenses associated with the Boardwalk
Expansion Site. During 1994, the Partnership incurred $4.9 million of such
expenses. Under the Boardwalk Expansion Site Purchase Option, the Partnership
has the right to acquire the Boardwalk Expansion Site for a purchase price of
$27.0 million through 1995, increasing by $1.0 million annually thereafter
until expiration on June 30, 1998. The CCC has required that the Partnership
exercise the Boardwalk Expansion Site Purchase Option or its right of first
refusal no later than July 1, 1995. The Partnership intends to request a
waiver of this requirement; however, no assurance can be given that such
waiver will be granted or that any condition imposed by the CCC would be
acceptable to the Partnership. If the Partnership defaults in making payments
due under the Boardwalk Expansion Site Purchase Option, the Partnership would
be liable to the lender for the sum of (a) the present value of all remaining
payments to be made by the Partnership pursuant to the Boardwalk Expansion
Site Purchase Option during the term thereof and (b) the cost of demolition of
all improvements then located on the Boardwalk Expansion Site.
As of December 31, 1994, the Partnership had capitalized approximately $11.7
million in construction costs related to the Boardwalk Expansion Site
including a $1 million consulting fee paid to Trump (Note 8). The
Partnership's ability to acquire the Boardwalk Expansion Site pursuant to the
Boardwalk Expansion Site Purchase Option is dependent upon its ability to
obtain financing to acquire the property. The ability to incur such
indebtedness is restricted by the Mortgage Note Indenture and the PIK Note
Indenture and requires the consent of certain of Trump's personal creditors.
The Partnership's ability to develop the Boardwalk Expansion Site is dependent
upon its ability to use existing cash on hand and generate cash flow from
operations sufficient to fund development costs. No assurance can be given
that such cash on
F-22
<PAGE>
hand will be available to the Partnership for such purposes or that it will be
able to generate sufficient cash flow from operations. In addition, exercise
of the Boardwalk Expansion Site Purchase Option or the right of first refusal
requires the consent of certain of Trump's personal creditors, and there can
be no assurance that such consent will be obtained at the time the Partnership
desires to exercise the Boardwalk Expansion Site Purchase Option or such
right.
The accompanying consolidated financial statements do not include any
adjustments that may be necessary should the Partnership be unable to exercise
the Boardwalk Expansion Site Purchase Option.
(7) EMPLOYEE BENEFIT PLANS
The Partnership has a retirement savings plan (the "Plan") for its nonunion
employees under Section 401(K) of the Internal Revenue Code. Employees are
eligible to contribute up to 15% of their earnings to the Plan and the
Partnership will match 50% of an eligible employee's contributions up to a
maximum of 4% of the employee's earnings. The Partnership recorded charges of
$848,000, $765,000 and $699,000 for matching contributions for the years ended
December 31, 1994, 1993 and 1992, respectively.
The Partnership provides no other material, post-retirement or post-employment
benefits.
(8) TRANSACTIONS WITH AFFILIATES
Due to/from Affiliates
Amounts due to affiliates was $206,000 and $97,000 as of December 31, 1994 and
1993, respectively. The Partnership leases warehouse facility space to Trump
Castle Associates. Lease payments of $6,000, $15,000 and $14,000 were
received from Trump Castle Associates in 1994, 1993 and 1992, respectively.
The Partnership leased office space from Trump Taj Mahal Associates, which
terminated on March 19, 1993. Lease payments of $30,000 and $138,000 were
paid to Trump Taj Mahal Associates in 1993 and 1992, respectively.
The Partnership leases two parcels of land under long-term ground leases from
Seashore Four Associates and Trump Seashore Associates. In 1994, 1993 and
1992, the Partnership paid $900,000, $900,000 and $900,000, respectively, to
Seashore Four Associates, and paid $1,000,000, $1,000,000 and $1,000,000 in
1994, 1993 and 1992, respectively, to Trump Seashore Associates.
F-23
<PAGE>
Services Agreement
Pursuant to the terms of a Services Agreement with Trump Plaza Management
Corp. ("TPM"), a corporation beneficially owned by Donald J. Trump, in
consideration for services provided, the Partnership pays TPM each year an
annual fee of $1.0 million in equal monthly installments, and reimburses TPM
on a monthly basis for all reasonable out-of-pocket expenses incurred by TPM
in performing its obligations under the Services Agreement, up to certain
amounts. Under this Agreement, approximately $1.3 million, $1.2 million and
$708,000 was charged to expense for the years ended December 31, 1994, 1993
and 1992, respectively.
Trump Regency Option
In December 1993, Trump entered into an option agreement (the "Original
Chemical Option Agreement") with Chemical Bank ("Chemical") and ACFH Inc.
("ACFH") a wholly owned subsidiary of Chemical. The Original Chemical Option
Agreement granted to Trump an option to purchase (i) the Trump Regency Hotel
(including the land, improvements and personal property used in the operation
of the hotel) ("Trump Regency") and (ii) certain promissory notes made by
Trump and/or certain of his affiliates and payable to Chemical (the "Chemical
Notes") which are secured by certain real estate assets located in New York,
unrelated to the Partnership.
The aggregate purchase price payable for the assets subject to the Original
Chemical Option Agreement was $60 million. Under the terms of the Original
Chemical Option Agreement, $1 million was required to be paid for the option
by January 5, 1994. In addition, the Original Chemical Option Agreement
provided for an expiration of the option on May 6, 1994, subject to an
extension until June 30, 1994 upon payment of an additional $250,000 on or
prior to May 6, 1994. The Original Chemical Option Agreement did not allocate
the purchase price among the assets subject to the option or permit the option
to be exercised for some, but not all of such assets.
In connection with the execution of the Original Chemical Option Agreement,
Trump agreed with the Partnership that, if Trump is able to acquire Trump
Regency pursuant to the exercise of the option, he would make Trump Regency
available for the sole benefit of the Partnership on a basis consistent with
the Partnership's contractual obligations and requirements. Trump further
agreed that the Partnership would not be required to pay any additional
consideration to Trump in connection with any assignment of the option to
purchase Trump Regency. On January 5, 1994, the Partnership obtained the
approval of the CCC to make the $1 million payment, which was made on that
date.
F-24
<PAGE>
On June 16, 1994, Trump, Chemical and ACFH entered into, amended and restated
the Original Chemical Option Agreement, (the "First Amended Chemical Option
Agreement"). The First Amended Chemical Option Agreement provided for an
extension of the expiration of the Option through September 30, 1994, upon
payment of $250,000. Such payment was made on June 27, 1994. The First
Amended Chemical Option Agreement also provided for a $60 million option price
for Trump Regency and one of the Chemical Notes. On August 30, 1994, Trump,
Chemical and ACFH entered into an amendment to the First Amended Chemical
Option Agreement (the "Second Amended Chemical Option Agreement"). The Second
Amended Chemical Option Agreement provides for an extension of the expiration
of the Option through March 31, 1995 upon the payment of $50,000 a month for
the period October through December 1994, and $150,000 a month for the period
January through March 1995. The Partnership received the approval of the CCC
and has made such payments.
As of December 31, 1994, $1,550,000, representing option payments, is included
in other assets in the accompanying consolidated balance sheet. If the option
is exercised, these amounts are available to offset the $60 million option
price.
Other Payments to Donald J. Trump
During 1994, the Partnership paid to Trump $1,000,000 under a Construction
Management Service Agreement. The payment was made for construction
management services rendered by Trump with respect to the Boardwalk Expansion
Site. This payment was approved prior to disbursement by the CCC and has been
classified in construction in process in the accompanying consolidated balance
sheet as of December 31, 1994.
During 1994, the Partnership also paid Trump a commission of approximately
$572,000 for securing a retail lease at Trump Plaza.
F-25
<PAGE>
The commission has been capitalized and is being amortized to expense over the
10-year term of the lease.
(9) FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount of the following financial instruments of the Company,
Holding and the Partnership approximates fair value, as follows: (a) cash and
cash equivalents, accrued interest receivables and payables are based on the
short term nature of these financial instruments. (b) CRDA bonds and deposits
are based on the allowances to give effect to the below market interest rates.
The estimated fair values of other financial instruments are as follows:
<TABLE>
<CAPTION>
December 31, 1994
-----------------
Carrying Amount Fair Value
--------------- --------------
<S> <C> <C>
12 1/2% PIK $ 73,987,000 $ 51,791,000
10 7/8% Mortgage Notes $ 326,234,000 $ 247,122,000
</TABLE>
The fair values of the PIK and Mortgage Notes are based on quoted market
prices obtained by the Partnership from its investment advisor.
There are no quoted market prices for other notes payable and a reasonable
estimate could not be made without incurring excessive costs.
F-26
<PAGE>
SCHEDULE II
TRUMP PLAZA HOLDING ASSOCIATES AND
TRUMP PLAZA ASSOCIATES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
<TABLE>
<CAPTION>
Balance at Charged to Other Balance at
Beginning Costs and Changes End of
of Period Expenses (Deductions) Period
------------ ---------- ------------ ----------
<S> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1994
Allowances for doubtful
accounts $10,616,000 $ 323,000 $(2,446,000)(A) $ 8,493,000
=========== ========= =========== ===========
Valuation allowance for
interest differential on
CRDA bonds $ 2,981,000 $ 838,000 $(1,645,000)(B) $ 2,174,000
=========== ========= =========== ===========
YEAR ENDED DECEMBER 31, 1993:
Allowance for doubtful
accounts $14,402,000 $ 90,000 $ (3,876,000)(A) $10,616,000
=========== ========= ============ ===========
Valuation allowance for
interest differential on
CRDA bonds $ 1,934,000 $1,047,000 $ - $ 2,981,000
=========== ========== =========== ===========
YEAR ENDED DECEMBER 31, 1992:
Allowance for doubtful
accounts $20,231,000 $4,675,000 $(10,504,000)(A) $14,402,000
========== ========= ============ ===========
Valuation allowance for
interest differential on
CRDA bonds $ 1,385,000 $ 645,000 $ (96,000)(B) $1,934,000
=========== ========== =========== ==========
</TABLE>
(A) Write-off of uncollectible accounts.
(B) Write-off of allowance applicable to
contribution of CRDA deposits.
F-27
<PAGE>
Ex. 10.40
EMPLOYMENT AGREEMENT, DATED FEBRUARY 7, 1995 BETWEEN THE
PARTNERSHIP AND KEVIN S. SMITH
February 7, 1995
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (the "Agreement") made this 7th day of
February, 1995, between TRUMP PLAZA ASSOCIATES, a New Jersey General
Partnership, with offices in Atlantic City, New Jersey 08401 (hereinafter
referred to as "TPA") and KEVIN S. SMITH, ESQUIRE, with an address of 1556
Washington Court, Mays Landing, New Jersey 08330 (hereinafter referred to as
"Executive").
W I T N E S S E T H:
WHEREAS, the Executive is desirous of gaining employment with TPA as
its Vice President/General Counsel and TPA is desirous of employing the
Executive as its Vice President/General Counsel; and
WHEREAS, the parties desire to consummate their employment
relationship and to define more specifically the terms and conditions thereof by
entering into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants, promises and
agreements herein contained, the parties hereto, intending to be legally bound
hereby, do covenant and agree as follows:
ARTICLE 1
---------
EMPLOYMENT
----------
TPA hereby employs the Executive and the Executive hereby accepts such
employment in the capacity of Vice President/General Counsel of TPA.
ARTICLE 2
---------
TERM
----
The term of this agreement shall be for a period of three (3) years
and shall commence on February 9, 1995 and shall
1
<PAGE>
continue until 12 Midnight on February 9, 1998 (the "Employment Term"). Written
notice of intent not to renegotiate and extend the Employment Term beyond
February 9, 1998 ("Notice of Intent") is to be received by the Executive no
later than February 9, 1997. In the event TPA does not provide the Notice of
Intent as provided herein, the payments required under Paragraph 9.3 below shall
begin no sooner than the date the Notice of Intent is received by the Executive.
In the event the Notice of Intent is received by the Executive as provided
herein, TPA shall have no obligation to make the payments provided in Paragraph
9.3 below beyond February 9, 1998.
ARTICLE 3
---------
DUTIES
------
3.1 During the Employment Term, the Executive shall devote his full
business time, attention, and energies exclusively and solely in discharging and
performing his duties and responsibilities as the Vice President/General Counsel
of TPA ("Executive Duties"), which include, without limitation, those duties and
responsibilities for such position as are currently set forth by TPA, or as may
be amended from time to time in the discretion of the Chief Operating Officer
TPA which must be reasonably exercised.
3.2 The Executive shall at all times, diligently and in good faith,
discharge the Executive Duties in consultation with and under the supervision of
the Chief Operating Officer and shall make his principal office at TPA.
ARTICLE 4
---------
COMPENSATION
------------
4.1 In consideration of the services to be rendered by the Executive
to TPA, TPA shall pay to the Executive a salary of ONE HUNDRED TEN THOUSAND
($110,000.00) DOLLARS per annum ("Executive Salary"). The Executive Salary
shall, during the Employment Term, be payable periodically in accordance with
TPA's regular payroll practices.
4.2 On the first anniversary of the Executive's employment with TPA
and on all subsequent anniversary dates, the Executive Salary will be reviewed
in accordance with TPA's regular policies therefor. Any increase in the
Executive Salary shall be in TPA's sole and absolute discretion.
4.3 The Executive shall be entitled to participate in TPA's executive
bonus programs in such form and at such levels as TPA,
2
<PAGE>
in its sole and absolute discretion, may hereafter elect to provide similarly
situated executives.
4.4 The per annum Executive Salary as increased under Paragraph 4.2
above plus any Bonus accrued under Paragraph 4.3 above shall be hereinafter
referred to as the "Executive Annual Amount".
ARTICLE 5
---------
BENEFITS
--------
In further consideration of the services to be rendered by the
Executive to TPA, and in addition to the compensation set forth in Article 4
above, TPA shall provide the Executive with the following benefits:
5.1 TPA shall provide the Executive, at the sole cost and expense of
TPA, with health insurance in such amounts and with such coverages as provided
to other Executives of TPA under its group plan.
5.2 TPA shall reimburse the Executive for the actual cost of the
Executive's COBRA coverage until the Executive is eligible to participate in
TPA's insurance program.
5.3 TPA shall procure for the benefit of the Executive a life
insurance policy or policies which shall provide coverage in an amount equal to
that provided similarly situated executives and shall be payable to those
beneficiaries named by the Executive or, in the event no beneficiaries are so
named, shall be payable to the Executive's estate.
5.4 The Executive shall be entitled to participate in any qualified
pension, profit sharing or other retirement plan now or hereinafter established
by Executive.
5.5 TPA shall provide the Executive with the use of a TPA automobile
("Executive Automobile") at TPA's sole cost and expense pursuant to the terms of
this Agreement. Said automobile shall be substantially in the same class and
price range as a Volvo 940. TPA shall be responsible for all repairs,
maintenance, insurance and registration fees incurred with respect to said
automobile.
5.6 TPA shall pay all dues and membership fees for the Executive's
membership in the American Bar Association, New Jersey Bar Association, New York
Bar Association, Atlantic County Bar Association and the International
Association of Gaming Attorneys and such other professional societies or
organizations
3
<PAGE>
which the Executive and the Board collectively deem appropriate in connection
with the performance of the Executive Duties.
5.7 The Executive
shall be entitled to ten (10) days of paid vacation for each year during the
term of employment.
Said ten (10) days does not include official TPA holidays. Vacations shall be
taken upon reasonable prior notice to the Chief Operating Officer and at a time
and manner that shall not substantially interfere with the proper operation of
TPA and the performance of the Executive Duties.
ARTICLE 6
---------
EXPENSES
--------
TPA recognizes that the Executive may incur certain out-of-pocket
expenses related to the Executive Duties. Upon submission to TPA of a detailed
accounting of reasonable expenses and paid receipts or other documentation
incurred for such purposes including travel and entertainment expenses, TPA
shall reimburse the Executive for such amounts so expended.
ARTICLE 7
---------
CONFIDENTIALITY
---------------
The Executive acknowledges that he will have access to information
which is proprietary and confidential to TPA. 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.
It is hereby acknowledged and understood that this information must be
maintained in strict confidence in order for TPA to protect its business and its
competitive position in the marketplace. Accordingly, both during and after
termination of the Executive's employment, it is agreed that the Executive will
not disclose any of this information for any purpose or remove materials
containing this information from TPA's premises.
Upon termination of the Executive's employment, the Executive will
immediately return to TPA all correspondence files, business card files,
customer and prospect lists, technical data, notes and other materials which
contain any of this information, and the Executive will not retain copies of
those materials.
4
<PAGE>
ARTICLE 8
---------
TERMINATION
-----------
Notwithstanding the provisions of Article 2 hereof, and subject to the
terms of Article 9 hereof, the employment of the Executive may be terminated by
TPA or by the Executive in the following manner:
8.1 By TPA:
(i) For "just cause" which, for the purposes of this Agreement, shall
be defined as forfeiture of your Casino Control Commission license;
(ii) If the Executive should become mentally or physically
incapacitated and thereby unable to perform the Executive Duties for a period of
time in excess of one hundred eighty (180) days, which termination shall be
effective upon delivery to Executive of written notice of termination from TPA;
or
(iii) For any reason in the sole and absolute discretion of TPA upon
sixty (60) days prior written notice to the Executive.
8.2 By the Executive:
(i) In the event that the TPA/Chief Operating Officer, in its
discretion and without the consent of the Executive, substantially changes the
Executive Duties in such a way that it can reasonably be determined that the
Executive is no longer functioning as Vice President/General Counsel; the
Executive shall submit written notice objecting to the change of duties; if such
is not corrected within thirty (30) days after receipt of such notice, the
Executive may terminate this agreement;
(ii) Upon written notice from the Executive, if TPA has materially
breached any of the terms or conditions of this Agreement and such breach is not
cured within seven (7) days after receipt of such notice by TPA;
(iii) For any reason in the sole and absolute discretion of the
Executive upon sixty (60) days prior written notice to TPA.
8.3 Upon the termination of this Agreement under this Article 8, the
duties, responsibilities and obligations of the parties shall cease and this
Agreement shall thereafter be of no further force and effect, except as
otherwise set forth in
5
<PAGE>
Article 9 below. In such event, the Executive shall immediately tender his
resignation from all directorships and offices held with TPA or any other
entities with whom TPA is affiliated or related.
ARTICLE 9
---------
GUARANTEED AGREEMENT
--------------------
9.1 In the event this Agreement is terminated by TPA pursuant to Paragraph
8.1(i) above, the Executive shall not be entitled to any further Executive
Annual Amount. Termination shall be effective at the end of the business day
that Executive is delivered a written notice of termination from the Chief
Operating Officer.
9.2 In the event this Agreement is terminated by TPA pursuant to Paragraph
8.1(ii) above, TPA shall be required to make all payments as set forth in
Paragraph 9.3 below.
9.3 In the event this Agreement is terminated by TPA for any other reason,
the following shall apply:
(i) TPA shall pay to the Executive his salary for the full month in
which his duties were terminated and in addition thereto as follows:
(a) The Executive Annual Amount over twelve (12) additional
consecutive months thereafter ("First Year Severance Period") whether employee
obtains other employment or not.
(ii) During the First Year Severance Period the Executive shall not
be permitted to perform any duties for TPA.
(iii) TPA further agrees that during the period it continues to pay
the Executive pursuant to paragraph 9.3(i) above, it shall keep the Executive's
life, health and major medical insurance coverage in full force and effect.
However, the Executive shall notify TPA forthwith if he acquires other
employment during said one (1) year period and TPA may terminate the insurance
referred to in this paragraph if and when provided by the new employer. TPA
shall provide at its expense during the First Year Severance Period the car
currently operated by the Executive. Said car shall be furnished for said one
(1) year period or until the Executive obtains other employment, whichever event
occurs first.
(iv) TPA shall be required to provide reasonable out placement
services at its sole cost and expense.
6
<PAGE>
(v) The termination provisions are provided to enable the Executive to
fulfill all responsibilities and duties with reasonable job and income security.
(vi) After the First Year Severance Period, TPA shall have no further
obligations to the Executive under this Article 9 and this Agreement which, for
all purposes, shall then be of no further force or effect.
9.4 In the event this Agreement is terminated by the Executive pursuant to
Paragraph 8.2(i), (ii) and (iii) above, TPA shall be required to make all
payments as set forth in Paragraph 9.3 above.
9.5 Any and all payments made by TPA to the Executive pursuant to this
Article 8 shall be subject to regular Federal and State deductions and
withholding.
ARTICLE 10
----------
INDEMNIFICATION
---------------
TPA shall indemnify, defend and hold the Executive harmless, including the
payment of reasonable attorney fees, if TPA does not directly provide for the
Executive's 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 the Executive Duties hereunder unless such claim is based upon
the Executive's gross negligence or any willful and/or wanton illegal acts.
ARTICLE 11
----------
WAIVER
------
The waiver of a breach of any term or condition of this Agreement shall not
be deemed to constitute the waiver of any other breach of the same or any other
term or condition of this Agreement.
ARTICLE 12
----------
NOTICES
-------
All notices, requests, demands, or other communications to be given
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered or mailed by certified mail, return receipt requested:
7
<PAGE>
A. If to the Executive, addressed to him at:
----------------------------------------
1556 Washington Court
Mays Landing, New Jersey 08330
B. If to TPA, addressed to:
-----------------------
Barry Cregan
Chief Operating Officer
Trump Plaza Associates
Atlantic City, New Jersey
or to such other place or places as the parties hereto may designate to each
other in writing.
ARTICLE 13
----------
CONSTRUCTION OF AGREEMENT
-------------------------
This Agreement was executed by the parties in accordance with and shall be
governed and interpreted in accordance with the laws of the State of New Jersey.
ARTICLE 14
----------
JURISDICTION
------------
The parties agree that all disputes arising or related to this Agreement
shall be settled by arbitration in accordance with the rules of the American
Arbitration Association, and judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof.
ARTICLE 15
----------
BENEFITS AND BURDENS
--------------------
This Agreement shall inure to the benefit of and be binding upon TPA, its
successors and assigns, and any corporation or other entity with which TPA may
merge or consolidate or to which TPA will sell its assets, and the Executive and
his executors, administrators, heirs, and legal representatives. Since the
Executive's duties and services hereunder are acknowledged by the parties hereto
to be special, personal, and unique in nature, the Executive shall not transfer,
sell or otherwise assign his rights, obligations, or benefits under this
Agreement nor delegate any of his duties hereunder without the prior written
consent of TPA, which may be withheld in its sole and absolute discretion and
shall not be subject to a standard of reasonableness.
8
<PAGE>
ARTICLE 16
----------
ENTIRE AGREEMENT
----------------
This Agreement contains the entire agreement between the parties hereto
relating to the subject matter hereof and supersedes all previous and
contemporaneous agreements and understandings between the parties hereto whether
written or oral with respect to the subject matter hereof. This Agreement
cannot be modified, altered, or amended except by a writing executed by the
parties hereto.
ARTICLE 17
----------
SEVERABILITY
------------
If any provision of this Agreement shall be held to be invalid or
unenforceable, such validity or unenforceability shall not affect or impair the
validity or enforceability of the remaining provisions of this Agreement which
shall remain in full force and effect and the parties hereto shall continue to
be bound thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the year and date first above written.
ATTEST: TRUMP PLAZA ASSOCIATES
__________________________ BY: /s/
--------------------------
Barry Cregan,
Chief Operating Officer
Dated:____________________
WITNESS:
-------------------------- /s/
------------------------------
Kevin S. Smith, Esquire
Dated: 2/7/94
9
<PAGE>
Ex. 10.41
EMPLOYMENT AGREEMENT, DATED NOVEMBER 21, 1994 BETWEEN THE
PARTNERSHIP AND JAMES A. RIGOT
November 17, 1994
Mr. James A. Rigot
1106 Del Mar Court
Absecon, NJ 08201
Dear Mr. Rigot:
This letter will serve to confirm our understanding and agreement pursuant to
which Trump Plaza Associates ("TPA") has agreed to employ you, and you have
agreed to be employed by TPA for the Term defined and set forth in Paragraph 2,
unless terminated earlier by TPA pursuant to Paragraphs 13 or 14 hereof:
1. You shall be employed by TPA in the capacity of Executive Vice President
of Casino Operations to perform such duties as are commonly attendant
upon such office.
2. Your employment with TPA, subject to your successful completion of a pre-
employment drug test, shall commence on November 30, 1994 and continue
for a period of three (3) years thereafter.
3. a. During the term of this Agreement, you shall be paid an annual base
salary at the rate of Two Hundred Fifty Thousand ($250,000) Dollars,
payable periodically in accordance with TPA's regular payroll practices.
b. Upon the commencement of your employment with TPA, you shall receive
a bonus in the amount of One Hundred Thousand ($100,000) Dollars.
c. Upon the commencement of your employment, you shall be entitled to
three (3) weeks vacation. Thereafter, you will earn vacation in
accordance with TPA's regular policies therefor.
4. On the first anniversary of your employment with TPA and on all
subsequent anniversary dates, your annual salary
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will be reviewed in accordance with TPA's regular policies therefor. Any
increase of your annual salary shall be in TPA's sole and absolute
discretion. At no time during the term hereof shall your annual salary
be less than Two Hundred Fifty Thousand ($250,000) Dollars.
5. a. You shall be afforded coverage under TPA's employee insurance
programs in such form and at such levels as TPA, in its sole and absolute
discretion, may hereafter elect to provide for similarly situated
executives.
b. TPA shall reimburse you for the actual costs of your COBRA health
insurance coverage until you are eligible to participate in TPA's
insurance program.
6. From the commencement of this Agreement, you shall be entitled to
participate in TPA's executive benefit programs, including a bonus
program, in such form and at such levels as TPA, in its sole and absolute
discretion, may hereafter elect to provide similarly situated executives.
7. You agree that so long as TPA 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 TPA, imposes no undue hardship on you and is not
injurious to the public.
8. You hereby agree that throughout the term of this Agreement you shall
devote your full time, attention and efforts to TPA'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 TPA's prior written consent. You will promptly
communicate to TPA, in writing when requested, all marketing strategies,
technical designs and concepts, and other ideas pertaining to TPA'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
TPA. You acknowledge that all of those ideas will be TPA's exclusive
property. You agree to sign any documents which TPA deems necessary to
confirm its ownership of those ideas, and you agree to otherwise
cooperate with TPA in order to allow TPA to take full advantage of those
ideas.
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9. You acknowledge that you have access to information which is proprietary
and confidential to TPA. 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 TPA 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 TPA's premises. Upon termination of your
employment, you will immediately return to TPA 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.
10. You represent to TPA 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 TPA 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. You hereby understand and acknowledge that TPA may terminate this
Agreement in the event your Casino Control Commission license is
terminated and/or suspended or revoked by the Commission or if you shall
commit an act constituting "Cause", which is defined to mean the
following: a breach by you of any of the provisions of this Agreement or
any employee conduct rules; an act of dishonesty; the deliberate and
intentional refusal by you to perform your duties hereunder; alcohol or
drug addiction; your disability, which is defined to be any condition
prohibiting you from performing your duties
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hereunder for a period in excess of ninety (90) days; or your death. In
the event of a termination pursuant to this paragraph, TPA shall pay to
you your salary earned to the date of termination and shall have no
further liability or obligation to you under this Agreement.
14. You hereby also understand and acknowledge that, notwithstanding any
other provision hereof, TPA may terminate this Agreement for no cause in
its sole discretion immediately upon notice to you. In such event, TPA
shall offer you in satisfaction of all obligations and liabilities
arising out of your employment relationship with TPA, an amount equal to
twelve (12) months at your then current salary. You shall, in such
event, execute any and all release documents requested by TPA as a
condition precedent to receiving such payment.
15. TPA shall indemnify, defend and hold you harmless, including the payment
of reasonable attorney fees, if TPA does not directly provide your
defense, from and against any and all claims made by anyone, including,
but not limited to, a corporate entity, or governmental entity, including
but not limited to the Casino Control Commission (to the extent such is
indemnity is permitted by law), 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 and
such claim is sustained by a court of competent jurisdiction.
16. 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.
17. 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 7, 8 and 9 of this Agreement and that a breach may cause
irreparable injury to TPA which could not be compensated by money
damages. Accordingly, TPA will be entitled to enforce this Agreement by
obtaining a court order prohibiting you 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.
18. 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
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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.
19. It is understood that until you receive Casino Control Commission
approval to serve in position of Executive Vice President of Casino
Operations, you shall serve in the position of Casino Manager.
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 PLAZA ASSOCIATES
Agreed & Consented to:
By: /s/ /s/
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Barry J. Cregan James A. Rigot
Chief Operating Officer
11/21/94
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Date
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Ex. 10.42
OPTION AND RIGHT OF FIRST OFFER AGREEMENT
This OPTION AND RIGHT OF FIRST OFFER AGREEMENT (the "Agreement") is
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executed on and effective as of June 24, 1993, by and between MISSOURI
BOARDWALK, INC., a New Jersey corporation ("Owner"), whose address is c/o
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Midlantic National Bank, 499 Thornall Street, Metro Park Plaza, Edison, New
Jersey 08837 and TRUMP PLAZA ASSOCIATES, a New Jersey general partnership
("Optionee"), whose address is Mississippi Avenue and The Boardwalk, Atlantic
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City, New Jersey 08401.
R E C I T A L S:
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A. Owner is the owner and/or lessee of a certain parcel of land
located in Atlantic City, New Jersey and described on Exhibit A attached hereto
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and made a part hereof (the "Land").
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B. Optionee desires to receive from Owner an option to purchase the
Land in order to potentially expand certain of Optionee's operations and
facilities currently located on adjacent land.
C. Owner desires to grant Optionee such purchase option in return for
Optionee's agreement to satisfy certain real estate taxes and other property
expenses of the Land through and including the Termination Date (as hereinafter
defined).
D. Owner and Optionee acknowledge that contemporaneously with the
execution of this Agreement, Owner, as landlord, is entering into a certain
lease of the Land (the "Lease") with Donald J. Trump ("Trump"), pursuant to
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which Trump, as tenant, shall also have certain rights and interests in and to
the Land.
A G R E E M E N T:
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NOW, THEREFORE, in consideration of Ten Dollars ($10.00), Optionee's
agreement to pay certain property-related expenses, as set forth in Section 2
below, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Owner and Optionee agree as follows:
1. Option Grant. In consideration of the sums payable by Optionee
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pursuant to Section 2 and the other consideration described herein, Owner hereby
grants and conveys to Optionee, for the duration of the Term (as hereinafter
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defined), the exclusive right and option (the "Option"), revocable only upon the
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termination of this Agreement, to purchase the Land, together with all
easements, rights and appurtenances attached or related thereto and all
improvements located thereon (the "Property") for the Option Purchase Price set
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forth in Section 5 below.
2. Payment of Certain Property Expenses. This Option is granted, in
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part, in consideration of Optionee's agreement to pay throughout the Term and
until the Termination Date those Property costs and expenses as described in
Schedule 1, attached hereto and made a part hereof. Owner and Optionee
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acknowledge and agree to be bound by those covenants and obligations regarding
the payment of such costs and expenses set forth in Schedule 1.
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3. Term. The term of this Agreement and the term of the Option and
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Right of First Offer (as hereinafter defined) granted hereunder (the "Term")
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commences on the date of execution of this Agreement by Owner and terminates,
unless earlier terminated pursuant to Section 12, at 6:00 p.m. on June 30, 1998
(the "Termination Date").
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4. Exercise of Option. The Option shall be exercised by notice in
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writing, signed and delivered by Optionee to Owner (the "Option Notice") at any
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time during the Term. If the Option is not exercised prior to the end of the
Term, it shall automatically terminate without further notice. The Option
Notice shall set forth Optionee's irrevocable commitment to exercise the Option,
the Option Purchase Price (as hereinafter defined), and the proposed date of the
Closing (as hereinafter defined). The Closing shall occur within ninety (90)
days from the date of the Option Notice and may occur after the expiration of
the Term if the Option is exercised within ninety (90) days of the Termination
Date.
5. Option Purchase Price. At the Closing, Optionee shall pay to
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Owner in immediately available funds a purchase price (the "Option Purchase
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Price") equal to (a) the following price determined in accordance with the
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calendar year when the Option Notice is sent:
Year of Exercise Option Price
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(millions)
1993 - 1994 $ 26.0
1995 $ 27.0
1996 $ 28.0
1997 $ 29.0
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1998 $ 30.0;
less (b) any ROFO Price (as hereinafter defined) previously paid by Optionee to
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Owner less (c) any Proceeds (as hereinafter defined) previously received by
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Owner. As used herein, "Proceeds" means (i) any insurance proceeds, following a
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casualty loss to any portion of the Property, which Owner receives and retains
pursuant to the Lease or this Agreement (but only to the extent that such
proceeds are not used to restore or reconstruct any portion of the Property),
and (ii) any awards, following a taking of all or a portion of the Property by
condemnation or eminent domain, which Owner receives and retains pursuant to the
Lease. Except as set forth above, the Option Purchase Price shall not be
reduced by any sums paid by Optionee pursuant to Section 2 hereof or any other
amounts whatsoever.
6. Right of First Offer. In addition to the Option, in consideration
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of the sums payable by Optionee pursuant to Section 2 and the other
consideration described herein, Owner hereby grants and conveys to Optionee an
exclusive (except for a subordinate right of first offer granted to Trump
pursuant to a certain Modification Agreement dated as of substantially even date
herewith, between Trump and Midlantic National Bank (the "Midlantic
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Modification")) right of first offer (the "Right of First Offer"), revocable
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only upon the termination of this Agreement, to purchase the Property or any
portion thereof as hereinafter provided. If Owner receives during the Term a
bona fide written third-party offer which is acceptable to Owner in its sole
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discretion, Owner shall notify Optionee in writing and shall disclose to
Optionee the proposed purchase price (the "ROFO Price") and all other material
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terms and conditions of such offer, except that Owner shall not be required to
disclose the identity or address of the proposed purchaser. Optionee agrees to
keep all such information strictly confidential, except as it may become
necessary to disclose the ROFO Price and other information to Optionee's
potential sources of financing as well as to the Credit and Override Lenders (as
defined in the Midlantic Modification), who or which in each case shall have
been advised in writing by Optionee of the confidentiality thereof. Optionee
shall have ten (10) days after receipt of such written notice and disclosure to
irrevocably and unconditionally commit, through written notice to Owner (the
"ROFO Notice"), to exercise its Right of First Offer. Within ten (10) days
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after sending Owner a ROFO Notice indicating such commitment to exercise its
Right of First Offer, Optionee shall deposit with Owner $3,000,000 (the
"Deposit") in immediately available funds, to be credited by Owner toward the
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ROFO Price payable at the Closing, or if the Closing does not timely occur
through no fault of Owner, to be retained by Owner as liquidated damages. The
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Closing shall occur within ninety (90) days of the date the ROFO Notice is sent
by Optionee to Owner; provided, however, the Closing may be extended for up to
an additional thirty (30) days if Owner has received, within ninety (90) days of
the ROFO Notice date, written evidence reasonably satisfactory to Owner
(including, but not limited to, a fully-executed commitment letter) of the
availability to Optionee and Optionee's acceptance of any financing being used
to pay the balance owing on the ROFO Price. If no ROFO Notice is sent within
the time period specified above or if Optionee does not deliver to Owner in
immediately available funds at Closing the ROFO Price (less the credit thereto
in the amount of the Deposit) or otherwise fails or refuses to close title to
the Property, Owner may proceed to consummate the transaction with the third-
party purchaser at the same ROFO Price (subject to customary closing
adjustments) and upon substantially the same other terms and conditions
previously disclosed by Owner to Optionee. Notwithstanding the foregoing, if
the ROFO Price is higher than the then-applicable Option Price, Optionee shall
have the right to obtain title to the Property through exercise of its Option
hereunder, including payment of the applicable Option Price. If, for any
reason, the proposed sale to the third-party purchaser does not close and title
to the Property does not pass to such party, Optionee's Right of First Offer
shall be and is hereby automatically reinstated under the same terms and
conditions set forth above. If such third-party sale of all or a portion of the
Property closes and provided that this Agreement has not been terminated for any
reason prior to (and not as a result of) such transfer, (a) such transfer shall
be subject to this Agreement and the continuing rights of Optionee under this
Agreement and, if the Lease is then in effect, such transfer shall also be
subject to the Lease and the continuing rights of the Lessee under the Lease,
and (b) as a condition to and prior to the closing of such third-party purchase
or the recording of any instruments of conveyance in the appropriate real
property records of Atlantic County, New Jersey, Owner agrees to record, in all
such public real property records, this Agreement (or such memorandum or other
evidence of this Agreement as is reasonably acceptable to Optionee and as may be
reasonably required by a title insurance company in order to insure Optionee's
rights hereunder) and, if applicable, a memorandum or short-form version of the
Lease. Once (x) this Agreement or such other evidence of this Agreement, and
(y) if applicable, a memorandum or short-form version of the Lease, is in each
case properly filed in the appropriate public records and so long as each
remains of record therein, Owner shall have no further obligation to record,
respectively, this Agreement or any memorandum or other evidence hereof, and a
memorandum or short-form version of the Lease.
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7. Closing. At the consummation (the "Closing") of the conveyance
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and transfer of the Property from Owner to Optionee or to such affiliate or
designee as Optionee may designate, whether pursuant to exercise of the Option
or the Right of First Offer, the following shall occur:
a. Optionee shall pay to Owner in immediately available funds the
Option Purchase Price, where the Option has been exercised, or the ROFO
Price (less the credit thereto in the amount of the Deposit), where the
Right of First Offer has been exercised;
b. Owner shall convey and transfer the subject portion of the
Property to Optionee or to its designated affiliate or designee through
appropriate instruments, including a leasehold assignment as to that
portion of the Land leased to Owner, and as to the remainder of the Land a
deed of bargain and sale with covenant against grantor's acts, subject only
to current taxes, title exceptions created solely through an act or
omission of Optionee and those title exceptions listed on Exhibit B,
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attached hereto and made a part hereof (other than those mortgage liens,
security interests and assignments held by Midlantic National Bank, all of
which shall be released of record with respect to the subject portion of
the Property in connection with the Closing); and provided, however,
notwithstanding anything in this Agreement to the contrary, Owner shall
have no responsibility or liability (other than agreeing to reasonably
cooperate with Optionee at Optionee's expense) for obtaining any consent
from the landlord under the Rothenberg lease described in Section 1.1(f) of
Schedule 1 to this Agreement, and if Optionee fails to obtain such consent,
the subject portion of the Property shall be conveyed without including a
conveyance of the Rothenberg leasehold and without any diminution or
reduction in the applicable Option Purchase Price or ROFO Price, but
otherwise in conformity with the Closing requirements set forth in this
Section 7;
c. Optionee shall pay all documentary and transfer taxes imposed as a
result of such conveyance;
d. Owner shall deliver to Optionee actual, physical possession of the
Property (subject, in the case of any transfer pursuant to the Right of
First Offer, to the continuing rights, if any, of Trump under the Lease),
without any representation or warranty by or recourse to Owner of any kind
or nature (except as to the status of title to the Property described in
Section 7(b) above),
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together with copies of any governmental permits or licenses or any
material notices or communications received by Owner during its ownership
of the Property relating to the Property or to Optionee's intended
development and use of the Property; and
e. Each party shall reasonably cooperate with the other to execute
such other instruments as may be necessary or appropriate to comply with
the terms of this Agreement, including such instruments as affidavits of
title, evidence of corporate authority, affidavits of consideration and
other documents and instruments required under applicable law or otherwise
necessary or appropriate to consummate any of the transactions contemplated
hereby.
8. Access to Property. At any reasonable time and as often as
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necessary during the Term or until the Closing if an Option Notice or ROFO
Notice has been timely given, Optionee and its employees, agents, contractors
and subcontractors may enter upon and shall have access to the Property to do
and perform all demolition, surveying, engineering, environmental studies, soil
borings and other tests and acts deemed necessary by Optionee to satisfy
Optionee that the Land is suitable for the uses intended by Optionee. Any such
tests and acts shall be at Optionee's sole cost and expense, and Optionee shall
indemnify and hold Owner and the Property free and harmless from and against any
liens and claims arising out of such tests and acts. Optionee acknowledges that
Trump also has certain access rights and other rights in and to the Property
pursuant to his status and rights as current tenant under the Lease. During the
term of this Agreement and prior to Closing, Owner shall promptly provide to
Optionee all material notices, complaints and other communications which it
receives relating in any manner to the Property or Optionee's intended
development and use thereof. Owner agrees to reasonably cooperate, at no
expense to Owner, with Optionee in any efforts by Optionee at any time during
the term hereof to obtain any governmental approvals, permits or licenses sought
by Optionee in connection with its intended development and use of the Property.
In addition to the foregoing, Optionee and its employees, agents,
contractors and subcontractors shall have all necessary rights of access, during
the Term of this Agreement, to initiate the development of the Property and the
construction of certain improvements thereon so long as Optionee continues to
comply with this Agreement, including, without limitation, the payment of all
sums set forth in Section 2 hereof, as said sums may be increased as a result of
such development and/or construction, and so long as Optionee satisfies those
covenants and obligations regarding construction and insurance set forth in
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Schedule 2, attached hereto and made a part hereof, including, without
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limitation, that requirement to obtain Owner's prior consent to certain plans
and specifications for such construction. Upon Optionee's compliance with such
covenants set forth in Schedule 2 hereto (including, without limitation, the
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procurement of all necessary insurance coverages, building and other permits and
the approval, to the extent required by applicable law, of the Casino Control
Commission), Optionee and its employees, agents, contractors and subcontractors
shall have the right to enter upon the Property to perform and complete such
development and construction and for such other limited purposes as are directly
related thereto, including, without limitation, the right, acknowledged herein
by Owner, to afford certain pedestrian access to members of the general public
for purposes of pedestrian ingress to and egress from and across the Atlantic
City Boardwalk, through that portion of the Property commonly known as the
"Holiday Inn Hotel" site, and then to and from the adjoining casino/hotel
complex currently operated by Optionee; provided, however, (a) such pedestrian
access right is not intended and shall not constitute a public dedication or
easement from Owner, and shall terminate automatically upon the expiration or
termination of this Agreement, and (b) such limited rights of access and
development do not, under any circumstances, permit Optionee to occupy any
portion of the Property for the purpose of opening hotel rooms or other
overnight accommodations thereon, or for any other purpose not set forth above,
at any time prior to Optionee's assumption of the tenant's interests under the
Lease or prior to passage of title to the Property to Optionee or its designee
pursuant to the exercise of its rights under this Agreement.
9. Title Issues. Optionee shall have the right to assign its rights
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hereunder only in connection with a sale, transfer or lease of all or
substantially all of its assets in such manner as is permitted in a certain
indenture agreement of substantially even date herewith, among Trump Plaza
Funding, Inc., as issuer, Optionee, as guarantor, and First Bank National
Association, as trustee (the "Trustee"). Optionee shall also have the right,
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without notice to or consent of Owner, to grant to the Trustee those security
interests in and collateral assignments of its rights hereunder as are dated as
of substantially even date herewith, and shall have the right to grant future
security interests and assignments to Trustee or Trustee's successor following
prior notice to, but without the necessity of obtaining the consent of, Owner.
Owner agrees that, following any foreclosure of the Trustee's security interest
herein and provided that the Trustee promptly cures any Optionee default then
existing hereunder and that this Agreement has not previously expired or been
terminated pursuant to Section 12
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hereof, the Trustee shall succeed to the rights and obligations of Optionee
hereunder and may transfer the same to any successor or assign who succeeds to
all or substantially all of the assets of Optionee and assumes in writing
Optionee's obligations hereunder. Owner shall have the right to sell and
transfer all or any portion of the Property, provided that Optionee continues to
hold its rights hereunder, including, without limitation, its Option and Right
of First Offer, each of which shall continue to be effective and exercisable by
Optionee against subsequent owners of the Property throughout the Term. As a
condition precedent to any such sale or transfer by Owner, Owner shall cause
this Agreement (or such memorandum or other evidence of this Agreement as is
reasonably acceptable to Optionee and as may be reasonably required by a title
insurance company in order to insure Optionee's rights hereunder) to be recorded
in the appropriate real property records of Atlantic County, New Jersey prior to
the recording of any documents or instruments relating to such sale or transfer.
Once this Agreement or such other evidence of this Agreement is properly filed
in the appropriate public records and so long as it remains of record therein,
Owner shall have no further obligation to record this Agreement or any
memorandum or other evidence hereof. Promptly following any such sale or
transfer, Owner shall notify Optionee in writing of the name and address of the
new owner of the Property and "Owner" hereunder. If there is a sale to a third
party of some but not all of the Property and Optionee does not exercise its
Right of First Offer with respect thereto, Optionee shall be instructed in
writing (and may rely thereon) which entity then owning a portion of the
Property shall be deemed "Owner" under this Agreement solely for the purposes of
receiving and allocating (a) those Property expenses paid by Optionee pursuant
to Section 2 hereof and (b) any Option Purchase Price paid by Optionee pursuant
to Section 5 hereof.
10. No Termination For Lease Default; New Lease. A tenant default
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under or breach of the Lease shall not affect in any manner this Agreement, and
shall not terminate, impair or affect the Option and Right of First Offer
granted to Optionee hereunder. If, following a Lease default, Owner terminates
the Lease or retakes possession of the Leased Premises without terminating the
Lease, Owner agrees that either Optionee or Trustee may, each in its sole
discretion exercisable within ninety (90) days of written notice of such
termination from Owner, and Owner does hereby grant to Optionee and Trustee an
option to, enter into, as tenant, a new lease of the Property on terms and
conditions identical to those set forth in the Lease, provided that the
exercising party first cures all defaults then existing under the Lease. If
Owner terminates this Agreement pursuant to Section 12, Owner agrees that
Trustee may, in its
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sole discretion exercisable within sixty (60) days of written notice of such
termination from Owner, and Owner does hereby grant to Trustee an option to,
reinstate this Agreement in favor of Trustee, as Optionee, as though this
Agreement had never been terminated, provided that Trustee first cures all
defaults then existing under this Agreement.
11. Representations and Covenants. In addition to those
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representations and covenants elsewhere contained in this Agreement, Optionee
and Owner, respectively, represent, warrant and covenant to, respectively, Owner
and Optionee as follows:
(1) Optionee's representations, warranties and covenants:
a. Optionee (i) is a general partnership duly organized, validly
existing and in good standing under the laws of the jurisdiction of
its organization; (ii) has the requisite partnership power and
authority and the legal right to enter into this Agreement and the
agreements contained herein; (iii) has all necessary licenses,
permits, consents or approvals from or by, and has made all necessary
filings with, and has given all necessary notices to, all governmental
authorities having jurisdiction and all other persons, to the extent
required for entering into this Agreement; and (iv) is in compliance
with its partnership agreement and other organizational documents;
b. The execution, delivery and performance by Optionee of this
Agreement and all instruments and documents to be delivered by
Optionee at any time hereafter pursuant to this Agreement: (i) are
within Optionee's partnership power; (ii) have been duly authorized by
all necessary or proper partnership action, including, without
limitation, the consent of partners where required; (iii) are not in
contravention of any provision of Optionee's partnership agreement;
(iv) are not in contravention of any provision of Optionee's managing
partner's certificate of incorporation or by-laws; (v) will not
violate any law or regulation, including, without limitation, the
Casino Control Act and any rules or regulations of the Casino Control
Commission, or any order or decree of any court or governmental
authority or arbitrator; (vi) will not conflict with or result in the
breach or termination of, constitute a default under or accelerate any
performance required by, any indenture, mortgage, deed of trust,
lease, agreement or other
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instrument to which Optionee is a party or by which Optionee or any of
its property is bound; (vii) will not result in the creation or
imposition of any lien upon any of the property of Optionee; and
(viii) do not require the consent or approval of any governmental
authority or any other person other than those which have been
obtained prior to the date hereof. This Agreement constitutes a
legal, valid and binding obligation of Optionee enforceable against it
in accordance with its terms (except as may be limited by applicable
bankruptcy, reorganization, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles); and
c. Optionee does not know of any pending or threatened
condemnation proceedings involving the Property, or any material
pending or threatened lawsuits involving the Property, and the Notices
to Repair or Demolish dated April 21, 1993, issued by the Demolition
Unit of the City of Atlantic City have been withdrawn, stayed pending
appeal or otherwise satisfied as previously disclosed in writing to
Owner (with written confirmation of such withdrawal or satisfaction
from the Demolition Program Coordinator of the City of Atlantic City
having previously been delivered to Owner).
(2) Owner's representations, warranties and covenants:
a. Owner (i) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
organization; (ii) has the requisite corporate power and authority and
the legal right to enter into this Agreement and the agreements
contained herein; (iii) has all necessary licenses, permits, consents
or approvals from or by, and has made all necessary filings with, and
has given all necessary notices to, all governmental authorities
having jurisdiction and all other persons, to the extent required for
entering into this Agreement; and (iv) is in compliance with its
articles of incorporation, by-laws and other organizational documents;
b. The execution, delivery and performance by Owner of this
Agreement and all instruments and documents to be delivered by Owner
at any time hereafter pursuant to this Agreement: (i) are within
Owner's corporate power; (ii) have been duly authorized
-10-
<PAGE>
by all necessary or proper corporate action, including, without
limitation, the vote of the board of directors where required; (iii)
are not in contravention of any provision of Owner's articles of
incorporation, by-laws and other organizational documents; (iv) will
not violate any law or regulation, including, without limitation, the
Casino Control Act and any rules or regulations of the Casino Control
Commission, or any order or decree of any court or governmental
authority or arbitrator; (v) will not conflict with or result in the
breach or termination of, constitute a default under or accelerate any
performance required by, any indenture, mortgage, deed of trust,
lease, agreement or other instrument to which Owner is a party or by
which Owner or any of its property is bound; (vi) will not result in
the creation or imposition of any lien upon any of the property of
Owner; and (vii) do not require the consent or approval of any
governmental authority or any other person other than those which have
been obtained prior to the date hereof. This Agreement constitutes a
legal, valid and binding obligation of Owner enforceable against it in
accordance with its terms (except as may be limited by applicable
bankruptcy, reorganization, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles);
c. The Owner identified by name in the introductory paragraph of
this Agreement is now and throughout the term of this Agreement shall
always remain a wholly-owned subsidiary of Midlantic National Bank
having as its sole permitted purpose the ownership of the Property and
the fulfillment of the rights and obligations afforded the "Owner"
hereunder and the "Lessor" under the Lease, and Owner shall not engage
in any other functions or purposes whatsoever; and
d. The Owner identified by name in the introductory paragraph of
this Agreement is not now and at Closing (if then the transferor of
the Property) shall not be a "foreign person" as defined in Section
1445 of the Internal Revenue Code.
(3) Notwithstanding anything herein or any implication herein to the
contrary, Owner makes no representations or warranties of any kind or
character, express or implied, regarding the suitability of the Land for
Optionee's intended purposes.
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<PAGE>
12. Remedies. If Optionee properly exercises the Option or Right of
--------
First Offer and Owner fails to perform its obligations hereunder, or if Owner
breaches its obligation under Section 10 to, under the circumstances provided
therein, enter into a new lease with Optionee, Optionee shall be entitled to
enforce the same by specific performance and/or to obtain damages resulting
therefrom. If Optionee exercises its Option or Right of First Offer but fails
to pay at Closing the applicable purchase price, Owner shall be entitled to
retain all moneys previously paid to Owner or on behalf of the Property as
liquidated damages for breach of Optionee's obligation to consummate such
transaction and/or to terminate this Agreement and to obtain damages as set
forth below. If Optionee fails to pay (subject to the contest rights described
in Item 1.4 of Schedule 1 attached hereto) those sums required under Section 2
or any other covenant or agreement hereunder within thirty (30) days of written
notice of default by Owner to Optionee and to the Trustee, or if any
representation or warranty made by Optionee herein shall be false or misleading
in any material respect, Owner shall have the right to terminate this Agreement
and the Option and Right of First Offer granted hereunder and to obtain damages
as set forth below. Owner also shall have the right to terminate this Agreement
and obtain damages as set forth below in the event that title to the Property as
conveyed by Trump to Owner is rescinded, revoked or is otherwise ineffective or
unenforceable (whether as a consequence of any bankruptcy or insolvency of Trump
or otherwise), and under such circumstances Owner shall have no further
obligation or liability to Optionee. Except as set forth in the three (3)
preceding sentences, neither Owner nor any other subsequent owner of the
Property shall have any right to terminate this Agreement or the Option and
Right of First Offer granted hereunder at any time prior to the Termination
Date. Optionee agrees to pay, upon any such termination of this Agreement,
damages to Owner in an amount equal to (a) the then present value of all
Property expenses payable under Section 2 hereof calculated as if paid through
the Termination Date, assuming a constant rate of inflation for each such item
of cost and an interest-rate factor equal to Midlantic's then existing prime
rate of interest plus one percent (1%) per annum plus (b) the costs of
----
demolition of all improvements then located on the Land and restoration thereof
to vacant land suitable as a building site, unless such improvements have been
accepted in writing by Owner. Under no circumstances shall Optionee be entitled
to any credit or damages for any improvements to or refurbishments of the
Property, regardless of whether the same may have been approved or accepted by
Owner. Breach of any representation or covenant contained herein which is not
expressly addressed in the preceding sentences of this section shall entitle the
non-breaching party, following thirty
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<PAGE>
(30) days' written notice and cure period afforded to the breaching party (and
to the Trustee if Optionee is the breaching party), to pursue all available
remedies at law or in equity. Any termination of this Agreement by Owner shall
be subject to, and conditional upon, Trustee's reinstatement right under Section
10. In the event of a termination of this Agreement pursuant to this Section 12
and the failure of Trustee to exercise its reinstatement right under Section 10,
Owner may partition and separate all or any part of the Property from any
adjoining or contiguous property integrated with the Property with respect to
any improvement, any portion of which is located on the Land. The right to
partition shall include, without limitation, the right to demolish, sever or
otherwise separate the Building (as defined in Schedule 2) from any building,
structure or improvement located on adjoining premises. Owner shall have no
liability to Optionee on account of the exercise of any such rights of partition
except for any liability resulting from the gross negligence or wanton or wilful
misconduct of Owner and its agents, employees, invitees and licensees or anyone
claiming through Owner.
13. Nonrecourse. Notwithstanding anything herein or in any other
-----------
agreement to the contrary, optionee is liable hereunder only to the extent of
the assets (present and future) of Optionee and no partner, officer, committee
or committee member of Optionee or any partner therein or of any partnership
affiliate of Optionee, or any incorporator, officer, director or shareholder of
any corporate partner of Optionee or of any corporate affiliate of Optionee, or
any affiliate or controlling person or entity of any of the foregoing, or any
agent or employee of any of the foregoing, or any successor, personal
representative, heir or assign of any of the foregoing, in each case past,
present or as they may exist in the future, shall be liable in any respect
(including, without limitation, the breach of any representation, warranty,
covenant, agreement, condition or indemnification or contribution undertaking
contained herein or therein) under, in connection with, arising out of or
relating to this Agreement or any other agreement, document, certificate,
instrument or statement (oral or written) related to, executed or to be
executed, delivered or to be delivered, or made or to be made, or any omission
made or to be made, in connection with any of the foregoing or any of the
transactions contemplated in any such agreement, document, certificate,
instrument, or statement; provided, however, the foregoing shall not affect or
modify any of the obligations of the parties to the Lease or the Midlantic
Modification or with respect to the transactions contemplated thereby (other
than this Agreement and any other instruments required to be executed by
Optionee in connection with or pursuant to this Agreement).
-13-
<PAGE>
14. Notices. Any notice, demand or other communication
-------
(collectively, "notices") which, under the terms of this Agreement or under any
-------
statute, must or may be given by the parties hereto shall be in writing (and, if
sent by mail, certified or registered, return receipt requested) or by telegraph
or telex and shall be deemed to have been duly given or made (a) when delivered
by hand, or (b) when received by the addressee thereof, if mailed by certified
or registered mail, postage prepaid, return receipt requested, or sent by
Federal Express, Express Mail or other similar overnight courier service, or (c)
in the case of telegraphic notice, when delivered to the telegraph company, or
(d) in the case of telex notice, when sent, answerback received, addressed (i)
in the case of notices to Owner, to Owner at the address first above written,
and (ii) in the case of notices to Optionee, to Optionee at the address first
above written, with a copy to First Bank National Association, as Trustee, c/o
First Trust National Association, 180 East Fifth Street, St. Paul, Minnesota
55010, Attn: Corporate Trust Department. By notice to Owner, Optionee and the
Trustee, any party may designate by notice in writing a new or other address to
which notices shall thereafter be given.
15. Guarantee of Owner's Obligations. For value received, Midlantic
--------------------------------
National Bank, a national banking association "Midlantic"), hereby absolutely,
---------
unconditionally and irrevocably guarantees to Optionee the punctual performance
when due of all obligations of Owner hereunder. This guarantee is a continuing
guarantee of Midlantic, remaining in full force and effect until the transfer of
title to all of the Property at a Closing pursuant to the terms and conditions
set forth in Section 7 hereof. Midlantic is liable to Optionee as a primary
obligor for all Owner obligations and liabilities hereunder. Midlantic's
obligations under this guarantee are independent of the obligations of the Owner
hereunder, and enforcement of the obligations of Owner hereunder may be sought
against Midlantic whether or not demand has first been upon Owner and whether or
not owner is joined in any such enforcement action. Notwithstanding the
generality of the foregoing, Owner and Midlantic acknowledge and agree that if,
after optionee's proper exercise of the Option or Right of First Offer set forth
herein, Owner fails or is unable, for any reason, to properly transfer title to
the Property, Midlantic shall be liable to Optionee for all damages suffered as
a result thereof. Midlantic and Owner acknowledge and agree that during the
Term neither a foreclosure of or other enforcement of or realization under any
liens currently or hereafter held by Midlantic or its subsidiaries or affiliates
and encumbering the Property or portions thereof, nor any sale or transfer of
all or any portion of the Property pursuant thereto, shall operate to terminate
or affect this
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<PAGE>
Agreement or Optionee's rights hereunder, including, without limitation,
Optionee's right to enter into a new lease of the Property under the
circumstances described in Section 10 hereof. Prior to the recording of this
Agreement, as a condition precedent to (a) Midlantic's ability to sell or
transfer any liens currently or hereafter held by it and encumbering the
Property and (b) Owner's right to encumber its interest in the Property,
Midlantic and Owner, respectively, shall obtain from any such future holder of a
mortgage, deed of trust, or similar instrument which is a lien on Owner's
interest in the Property, an instrument, in recordable form, executed by such
holder, setting forth such holder's agreement with the provisions of the
preceding sentence. Once this Agreement or such other evidence of this
Agreement is properly filed in the appropriate public records and so long as it
remains of record therein, Owner and Midlantic shall have no further obligation
to record any such instrument.
16. Entire Agreement: Amendment. This document contains the entire
---------------------------
agreement between the parties relating to the Option and Right of First Offer.
Any oral representations or modifications concerning the Option or Right of
First Offer made by either party before or after the execution of this Agreement
shall be of no force and effect. However, this Agreement may be altered in the
future by written agreement of the parties.
17. Governing Law. This Agreement shall be construed under, and in
-------------
accordance with, the laws of the State of New Jersey.
18. Construction. In case any one or more of the provisions
------------
contained in this Agreement is held to be invalid, illegal or unenforceable in
any respect for any reason, such invalidity, illegality or unenforceability
shall not affect any other provision of the Agreement, and this Agreement shall
be construed as if the invalid, illegal or unenforceable provision had never
been included. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same instrument. Notwithstanding anything herein to the contrary, if
the end of any notice, cure or activity period falls on a Saturday, Sunday or
legal holiday, then said period shall be deemed to end at the end of the next
business day; if the Closing falls on a Saturday, Sunday or legal holiday, then
said Closing shall be set for the next business day. All headings of sections
of this Agreement are inserted for convenience only, and do not form part of
this Agreement or limit, expand, or otherwise alter the meaning of any
provisions hereof. The rule of ejusdem generis shall not be applicable herein
------- -------
to limit a general
-15-
<PAGE>
statement, which is followed by an enumeration of specific matters, to matters
similar to the matters specifically mentioned. This Agreement shall be
construed without regard to any presumption or rule requiring construction
against the party causing that instrument to be drafted.
IN WITNESS WHEREOF, the parties hereto have respectively executed this
Option and Right of First Offer Agreement as of the date and year first above
written.
OWNER:
MISSOURI BOARDWALK, INC.,
a New Jersey corporation
Witness:
/s/ By: /s/
------------------------- -------------------------
Name: William R. Kendall Name: Ben Berzin, Jr.
Asst. Secretary Vice President
OPTIONEE:
TRUMP PLAZA ASSOCIATES
By: Trump Plaza Funding, Inc.,
a New Jersey corporation,
Managing Partner
Witness:
/s/ By: /s/
----------------------- ----------------------------
Name: Fx McCarthy, Jr. Name: Kevin DeSanctis
By signature below, Midlantic National
Bank acknowledges its obligations set
forth in Section 15 of this Agreement.
MIDLANTIC NATIONAL BANK
Witness:
By: /s/ /s/
---------------------------- -------------------------
Print Name: Ben Berzin, Jr. Name: William R. Kendall
Title: Senior Vice President Vice President
-16-
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
I CERTIFY that on June 23, 1993, William R. Kendall personally came
before me, and this person acknowledged under oath, to my satisfaction, that:
(a) this person is the Assistant Secretary of MISSOURI BOARDWALK,
INC., the New Jersey corporation named in this document;
(b) this person is the attesting witness to the signing of this
document by the proper corporate officer, who is Ben Berzin, Jr.,
the Vice President of the corporation;
(c) this document was signed and delivered by the corporation as its
voluntary act duly authorized by a proper resolution of its Board
of Directors;
(d) this person signed this proof to attest to the truth of these
facts.
_________________________________________________
(Print name of attesting witness below signature)
Signed and sworn to before me
on June 23, 1993:
/s/
-----------------------------
Notary Public of the
State of New York
Evan K. Gordon
Notary Public
(State of New York)
No. 41-4971159
Qualified in Bronx Court,
Cert filed in New York County
Commission Expires August 27, 1994
-17-
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
I CERTIFY that on June 23, 1993, Ernest E. East personally came before
me, and this person acknowledged under oath, to my satisfaction, that:
(a) this person is the secretary of Trump Plaza Funding, Inc., the
managing general partner of TRUMP PLAZA ASSOCIATES, a New Jersey
partnership, respectively, the corporation and the partnership
named in this document;
(b) this person is the attesting witness to the signing of this
document by the proper corporate officer, who is Kevin DeSanctis,
the President of the corporation which is the managing general
partner of the partnership;
(c) this document was signed and delivered by the corporation as its
voluntary act duly authorized by a proper resolution of its Board
of Directors, on behalf of the partnership of which it is the
managing general partner as the voluntary act of said
partnership;
(d) this person signed this proof to attest to the truth of these
facts.
_________________________________________________
(Print name of attesting witness below signature)
Signed and sworn to before me
on June 23, 1993:
/s/
-----------------------------
Notary Public of the
State of New York
Rosemary Vassallo
Notary Public, State of New York
No. 41-5001626
Qualified in Queens County
Commission Expires 9/14/94
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<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
I CERTIFY that on June 23, 1993, William R. Kendall personally came
before me, and this person acknowledged under oath, to my satisfaction, that:
(a) this person is the Vice President of MIDLANTIC NATIONAL BANK, the
national banking association named in this document;
(b) this person is the attesting witness to the signing of this
document by the proper corporate officer who is Ben Berzin, Jr.,
Senior Vice President of the national banking association;
(c) this document was signed and delivered by the national banking
association as its voluntary act duly authorized by a proper
resolution of its Board of Directors;
(d) this person signed this proof to attest to the truth of these
facts.
_________________________________________________
(Print name of attesting witness below signature)
Signed and sworn to before me
on June 23, 1993:
/s/
-----------------------------
Notary Public of the
State of New York
Evan V. Gordon
Notary Public, State of New York
No. 41-4971159
Qualified in Bronx County,
Cert filed in New York County
Commission Expires August 27, 1994
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<PAGE>
SCHEDULE 1
----------
1.1 Optionee shall pay and discharge:
(a) all real estate taxes, assessments, water, water meter (including
any expenses incident to the installation, repair or replacement of any water
meter) and sewer rents and charges and all other duties, charges, taxes, rents,
levies, impositions and sums of every kind or nature whatsoever, extraordinary
as well as ordinary, and whether or not now within the contemplation of the
parties, as shall, from the date hereof through and including the Termination
Date, or any period or periods prior thereto, be imposed by any governmental or
public authority on, or become a lien in respect of, the Land or any part
thereof, or upon any building or appurtenance thereto or any part thereof, now
on or hereafter erected or placed on or in the Land, or upon any sidewalk, or
street in front of or adjacent to the Land, or upon the rents payable under the
Lease, or which may become due and payable with respect thereto, or by reason
thereof, and any and all taxes, assessments, rents (other than Fixed Net Rent
under the Lease, which is payable by Trump unless and until the assumption of
the Lease by Optionee, and which thereafter shall be the obligation of Optionee)
and charges of any kind whatsoever levied, assessed or imposed upon the Land,
upon any building or appurtenance thereto now or hereafter erected or placed on
or in the Land, or the rents under the Lease in lieu of or in addition to the
foregoing, under or by virtue of any present or future laws, rules,
requirements, orders, directives, ordinances or regulations of the United States
of America, or of the State, County or City government, or any municipal bureau,
district, department or lawful authority whatsoever;
(b) all charges for fire alarm service, water, gas, electricity, steam
and all other public utility or similar services or services furnished to the
Land or to any improvements located thereon from the date hereof through and
including the Termination Date, or any period or periods prior thereto, and all
fees and charges of the Federal, State, County or City government or any
municipal bureau, district, department or lawful authority whatsoever, for the
construction, maintenance or use, from the date hereof through and including the
Termination Date, or any period or periods prior thereto, of any vault,
passageway or space in or over or under any street or sidewalk adjacent to the
Land, or for the construction, maintenance, use or occupancy from the date
hereof through and including the Termination Date, or any period or periods
prior thereto, of any part of any building now or hereafter erected on the Land;
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<PAGE>
(c) all taxes and assessments which shall or may from the date hereof
through and including the Termination Date be charged, levied, assessed or
imposed upon, or become a lien upon, any personal property located on the Land
of Owner, the tenant under the Lease or the Optionee;
(d) all unpaid real estate taxes, assessments, water charges and sewer
rents attributable to any period or periods prior to the Term, including all
delinquent taxes, assessments, water charges and sewer rents and the interest
and other penalties thereon, Optionee hereby covenanting and agreeing to redeem
all tax sale certificates currently held by Nassau Viking Associates by not
later than May 1, 1994 and to pay all installment payments required under the
tax redemption installment agreement between Trump and the City of Atlantic
City, New Jersey, pertaining to delinquent taxes on the Land and the
improvements thereon, as such installments shall become due pursuant to such
agreement, but in any event prior to the expiration or termination for any
reason (whether upon default or otherwise) of the Term. Upon written request of
Owner, Optionee shall provide Owner with evidence confirming that the foregoing
payments have been made in a timely manner;
(e) all insurance premiums required as to the tenant's leasehold
interest under the Lease and Optionee's permitted activities with respect to the
Property, as set forth in this Agreement, all such coverages being substantially
similar to those coverages currently held by Optionee in connection with its
casino and hotel properties located in Atlantic City, New Jersey;
(f) all rent, additional rents and other costs and expenses of every
kind and character payable by the tenant and arising under that certain Amended
Lease of a portion of the Land, dated March 9, 1979, among Albert Rothenberg and
Robert Rothenberg, as lessors, and Boardwalk Properties, Inc. ("BPI"), as
---
lessee, which Amended Lease was assigned by BPI to Trump pursuant to a certain
Assignment and Assumption of Tenant's Interest in Lease dated March 18, 1989 and
a certain Assignment and Assumption of Tenant's Interest in Lease dated May 18,
1989, as the same has been assigned by Trump to Owner by assignment dated as of
or prior to the date hereof, and as said lease may be amended, supplemented or
otherwise modified from time to time, and Optionee covenants and agrees to send
to Owner copies of the checks paying said rent and other expenses concurrently
with the payment thereof;
(g) all costs and expenses incurred by Optionee in its demolition and
removal of all improvements currently located on the Land; provided, however,
(i) Optionee covenants and agrees to
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<PAGE>
demolish and remove all such improvements prior to the first anniversary of the
date hereof, except for those improvements known as the "Holiday Inn Hotel" and
located on a portion of Lot 86 in Block 38 on the Official Tax Maps of the City
of Atlantic City, New Jersey; (ii) upon the expiration or termination for any
reason (whether upon default or otherwise) of the Term, unless the "Holiday Inn
Hotel" as it then exists is accepted, as is, by Owner, Optionee shall, at its
option, either cause, at its expense, the demolition of the "Holiday Inn Hotel"
as it then exists, or shall pay Owner in immediately available funds an amount
equal to such demolition costs, as such costs are mutually agreed to by the
parties or, if the parties are unable to agree, as may be determined by a court
of competent jurisdiction; and (iii) Optionee shall obtain all permits,
approvals, licenses and consents required by law for such demolition and shall
procure and maintain all appropriate insurance coverages during the course
thereof;
(h) all costs and expenses incurred by Optionee in its development of
the Property and construction of improvements thereon, to the extent such
development and construction is permitted under Section 8 of this Agreement; and
(i) all other costs and expenses of whatever kind or character now or
hereafter assessed against or imposed upon the Property or Owner as the owner
thereof by a governmental or public authority or otherwise required by
applicable law (including, without limitation, any hazardous materials or
environmental cleanup or remediation) or otherwise attributable to the Optionee
hereunder or to the tenant or lessee under the Lease, other than the payment of
Fixed Net Rent thereunder (unless and until the assumption of the Lease by
Optionee, and thereafter the payment of Fixed Net Rent shall be the obligation
of optionee); provided, however, nothing contained in this Schedule 1 or
elsewhere in this Agreement shall be construed so as to require Optionee to pay
or be liable for (1) any gift, inheritance, estate, franchise, income, profits,
capital or similar tax, or any tax in lieu of any of the foregoing, imposed upon
Owner, or (2) any internal or administrative expenses of Owner in monitoring its
rights hereunder or any costs or expenses (other than reasonable out-of-pocket
expenses of Owner (including, without limitation, reasonable attorneys' fees),
which shall be reimbursed to Owner by optionee) incurred if Owner is required to
obtain or maintain any permits or licenses pursuant to the New Jersey Casino
Control Act.
1.2 Optionee shall be deemed to have complied with the foregoing
covenant of Section 1.1 of this Schedule 1 with respect to payments to be made
to any governmental or public authority if
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<PAGE>
payment of all such taxes (except as hereinafter provided in Section 1.4 of this
Schedule 1), assessments, water, water meter and sewer rents and charges, or of
any other governmental impositions, duties and charges, and all other such costs
and expenses described therein is made by Optionee prior to the expiration of
the period within which payment is permitted without penalty or interest, and if
Optionee shall promptly procure official receipts from the appropriate taxing
authority, if available, evidencing such payment and shall within twenty (20)
days after the receipt of said official receipts and at the request of Owner
exhibit the same to Owner or such other evidence of payment as Owner shall
reasonably request. Notwithstanding anything to the contrary, if any assessment
payable pursuant to this Agreement by Optionee is permitted to be paid in
installments, Optionee shall have the right, at its option, to pay same in
installments. Owner shall promptly provide Optionee with all tax bills and
other Property assessments which come into Owner's possession.
1.3 In any action or proceeding involving any question arising under
the provisions of this Schedule 1, a search, certificate or receipt, made or
given by any officer, person or corporation legally authorized to make or give
the same, showing or purporting to certify or show that any such tax,
assessment,, water, water meter or sewer rent or charge or other item against or
affecting the Land or the improvements located thereon is due and payable on the
date of said search or certificate, or has been paid, shall be prima facie
-----------
evidence that such tax, assessment, water, water meter or sewer rent or charge
or other item was due and payable or a lien upon or charge against the Land or
such improvements, or was paid. Owner shall be protected in any action which it
may take in reliance upon any such certificate, search or receipt.
1.4 Optionee may contest in good faith, by appropriate proceedings at
its own expense, any such tax, assessment, water, water meter or sewer rent or
charge or similar item payable to any governmental or public authority or to any
other party except Owner, provided that if such tax or assessment is then due
and payable, Optionee either (i) shall have deposited with Owner the amount of
the item so contested, together with such additional sums as may reasonably be
required to cover interest or penalties accrued or to accrue on any such item or
items, (ii) where permitted by law, paid the same under protest, or (iii) shall
certify to Owner that Optionee has maintained adequate reserves therefor or
accrued the estimated liability on Optionee's balance sheets for payment
thereof. If such contest involves real estate taxes, any additional taxes,
interest, court costs and penalties or other charges directed to be paid as a
result of such contest
-23-
<PAGE>
shall be forthwith deposited by Optionee with Owner or adequately reserved for
in order to enable Owner to comply with the adjudication of said contest.
Nothing herein contained, however, shall relieve Optionee of the obligation and
duty to pay and discharge such contested items, as finally adjudicated, with
interest and penalties, and all other charges direct to be paid in or by any
such adjudication less such sums as have been deposited with Owner. Any such
contest or legal proceeding shall be commenced by Optionee as soon as reasonably
possible after the imposition of any contested item and shall be prosecuted to
final adjudication with all promptness and dispatch, except, however, Optionee
may in its discretion consolidate any proceeding to obtain a reduction in the
assessed valuation of the Land and the improvements located thereon for tax
purposes relating to any tax year with any similar proceeding or proceedings
relating to one or more other tax years. Anything to the contrary
notwithstanding, (a) in the case of a permitted contest involving a claim
asserted by a mechanic, materialman, supplier or vendor, such contest proceeding
must suspend the collection thereof from Optionee and the Property, and (b)
Optionee shall pay all such contested items before the time when the Land or any
part thereof would be subject to any significant risk of forfeiture as a result
of non-payment or if Owner shall be subject to any civil or criminal penalty or
liability arising out of the non-payment thereof. Owner shall not, without
Optionee's prior approval, which shall not be unreasonably withheld or delayed,
make or finally agree to any settlement, compromise or other disposition of any
such proceedings or discontinue or withdraw any such proceedings, or accept any
refund or other adjustment of or credit for any tax, assessment, water rent,
rate or charge, sewer rent or other governmental imposition or charge
aforementioned as the result of any such proceedings. Any refunds resulting
from any contest by Optionee shall belong to Optionee, even if the action was
brought by Optionee in Owner's name.
1.5 All taxes, assessments, water, water meter or sewer rents or
charges, duties, impositions, license and permit fees, charges for public
utility or similar services, payments and other charges of every kind and nature
provided to be paid by Optionee under this Schedule 1 whether accrued or
prepaid, as the case may be, shall be apportioned between Owner and Optionee as
of the Termination Date in accordance with the usual practice and custom then in
effect in the City of Atlantic City, New Jersey; provided, however, Owner shall
be entitled to deduct from the sums due to Optionee hereunder any such sums as
may then be due from Optionee if Optionee shall then be in default in the
performance of any of the terms, covenants and conditions of this Agreement on
Optionee's part to be performed.
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<PAGE>
1.6 If by law any assessment for a public improvement with respect to
the Land or any improvements thereon is payable, at the option of the taxpayer,
in installments, Optionee may, whether or not interest shall accrue on the
unpaid balance thereof, pay the same, and any accrued interest or any unpaid
balance thereof, in installments, as each installment becomes due and payable,
but in any event before any fine, penalty, interest or cost may be added thereto
for non-payment of any installment or interest, or if Owner shall be subject to
any civil or criminal penalty or liability arising out of the non-payment
thereof.
1.7 Owner and Optionee covenant and agree that, during the Term, each
will cooperate with the other in obtaining and retaining any tax exemptions for
which the Land or the improvements now or hereafter located thereon may be
eligible pursuant to any statute, law, ordinance, rule or regulation now or
hereafter enacted, and each will execute and file any and all documents and
instruments reasonably necessary to obtain and retain any such exemption,
provided that such action on the part of Owner shall be at the sole cost and
expense of Optionee. Optionee shall deliver to Owner copies of all preliminary
and final certificates or other instruments evidencing any such tax exemption
obtained for the Land as and when Optionee receives such certificates or other
instruments from the appropriate governmental agency.
1.8 Nothing in this Schedule 1 or elsewhere in this Agreement shall
require Optionee to pay debt service under, or any other costs and expenses in
connection with, any fee mortgages on Owner's interest in the Property, all of
which shall be the sole obligation of Owner.
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<PAGE>
SCHEDULE 2
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SECTION 1 -- OPTIONEE'S RIGHT TO CONSTRUCT
2.1-1 Optionee shall have the right, but shall not be obligated, to
refurbish and/or construct on the Property at Optionee's own cost and expense,
any hotel, parking deck structures, skyway connections and related improvements
(said hotel and related improvements are sometimes hereinafter collectively
referred to as the "Building").
--------
2.1-2 In the event Optionee elects to construct the Building:
(a) All plans and specifications for the Building will be prepared
and completed by a licensed architect;
(b) Optionee will furnish Owner with copies of all plans and
specifications for the Building as and when such plans are received by Optionee;
(c) Owner's approval of any of the said plans and specifications for
the Building shall be required, which approval shall not be unreasonably
withheld or delayed (Owner acknowledging hereby that it would be unreasonable
for it to withhold approval from Building plans and specifications calling for a
hotel facility to be constructed in a good and workmanlike manner and having a
quality of construction and caliber of materials as is generally applicable to
other reputable non-casino Boardwalk hotels located in Atlantic City);
(d) Within ninety (90) days after completion of the Building,
Optionee shall furnish Owner with one complete set of "as built" plans, drawings
and specifications of the Building; and
(e) Either (i) Owner's written approval of the contractor(s) hired by
Optionee to perform said work shall be required, which contractor(s) shall be
bondable and of sound financial standing and business reputation, or (ii) Owner
shall be named as obligee under a surety bond or bonds covering performance and
labor and material payments with respect to such work, issued by a reputable
surety company, and in form and content as is customary for such work, or (iii)
if such surety bond or bonds shall be unobtainable, Optionee shall deliver to
Owner security by cash, letter of credit or other guarantee, affording
substantially the same protection as would such bond or bonds.
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<PAGE>
2.1-3 Optionee shall procure, at its own cost and expense, all
permits requisite to the construction of the Building and shall, during the
construction thereof, comply with all applicable laws. The Building shall, when
completed, comply with all applicable laws, and with all requirements of the
Fire Insurance Rating Organization or similar body and of any liability
insurance company insuring Owner against liability for accidents in or connected
with the Property or the Improvements.
2.1-4 (a) Owner will, within a reasonable time after receipt of
written request therefor by Optionee, execute any documents necessary to be
signed on its part to obtain Certificates of Occupancy for the Building. If
Owner shall incur any expense thereby, Optionee shall assume such payment or, if
Owner shall be subjected to any liability thereby, optionee shall agree to hold
Owner harmless therefrom, in form and substance satisfactory to Owner.
(b) Title to the Building shall be in Owner, subject to the tenant's
interest thereto under the Lease, if then in effect, and subject to those access
rights afforded under Section 8 of this Agreement.
2.1-5 Prior to the actual commencement of demolition work on any
improvements on the Property, Optionee shall deliver to Owner certificates of
insurance reasonably satisfactory to Owner and naming Owner as an additional
insured, which insurance shall be maintained and kept in force by Optionee as
may be necessary or appropriate to protect Owner from all liabilities and to
protect Owner's interests in the Property.
SECTION 2 -- INSURANCE
2.2-1 From the date hereof through and including the Termination
Date, Optionee shall:
(a) Keep the improvements and equipment on in or appurtenant to the
Land at the commencement of the Term and thereafter erected thereon or therein
(the "Improvements") insured for the benefit of Owner against loss or damage by
fire with all standard extended coverage, in an amount which will comply with
the co-insurance clause applicable to the location and character of the
Improvements, but not less than 80% of the full replacement value thereof.
Supplementing the foregoing, said fire insurance shall:
(1) be written on a replacement cost basis;
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<PAGE>
(2) be issued by such insurance companies licensed to do
business in the State of New Jersey under insurance policies in form
and content reasonably satisfactory to Owner;
(3) comply with any changes in requirements applicable to the
Land or the Improvements by the applicable Fire Insurance Rating
Organization, or any similar body, or by law;
(4) be carried in favor of Owner, and any fee mortgagee(s), as
additional insureds and as their interests may appear, and shall also
name Optionee, and any leasehold mortgagee, as their interests may
appear;
(5) effectively provide that the respective interests of Owner,
any fee mortgagee(s) and any leasehold mortgagee, shall not be subject
to cancellation by reason of any act or omission of optionee; and
(6) provide that, subject to the rights of any leasehold
mortgagee whose interest may be covered by such policies, the loss, if
any, under any such policies shall be adjusted by Optionee, with the
participation and approval of Owner, and paid by the insurance company
or companies as provided in Section 2.8 of this Schedule 2; and
(b) provide Owner with public liability insurance, elevator
insurance, boiler and machinery insurance, garage keeper's legal liability
insurance as may from time to time be reasonably required by Owner as insurance
against insurable hazards which are customarily and generally required to be
insured with respect to similar Improvements, with due regard for the height and
depth and type of building, its construction and use and occupancy. Such public
liability insurance shall be in limits not less than $100,000,000 combined
single limit coverage for personal injury and property damage with respect to
any one occurrence. Such personal injury and property damage liability policies
shall cover the Improvements, the appurtenances as well as the sidewalks
adjacent to the Improvements or the Land. All the insurance described in this
subparagraph (b) shall be carried in favor of and insure Owner (and any fee
mortgagee(s)) and Optionee and any leasehold mortgagee, as additional insureds
and as their interests may appear. In the event of any dispute between Owner
and Optionee with respect to such other insurance as Owner may reasonably
require from time to time, as above
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<PAGE>
provided, such dispute shall be arbitrated pursuant to the provisions of Article
Twenty of the Lease.
2.2-2 Optionee shall procure policies for all said insurance for
periods of from one (1) to five (5) years, as Optionee shall elect, and shall
deliver to Owner the originals or certified copies of such policies, if
obtainable, or if not obtainable, certificates thereof with evidence, by
stamping or otherwise, of the payment of the premiums thereon.
2.2-3 Thirty (30) days prior to the expiration of each such policy,
Optionee shall pay the premiums for renewal insurance and prior to said period
shall deliver to Owner the original policy or a duplicate thereof and duplicate
receipt evidencing the payment thereof.
2.2-4 All premiums and charges for all of said policies shall be
paid by Optionee, and if Optionee shall fail to make any such payment when due,
or to carry or renew any such policy, Owner may, but shall not be obligated to,
make such payment or carry such policy, and the amount paid by Owner, with
interest thereon at the Default Rate set forth in the Lease, shall be repaid to
Owner by Optionee on demand and Optionee shall have as to all such amounts so
repayable, together with such interest, all of the remedies herein or by law
provided for the collection of such amounts. Payment by Owner of any such
premium or the carrying by Owner of any such policy shall not be deemed to waive
or release the default of Optionee with respect thereto.
2.2-5 Optionee shall not violate or permit to be violated any of the
conditions or provisions of any such insurance policy, and Optionee shall
perform and satisfy the reasonable requirements of the companies writing such
insurance policies.
2.2-6 Subject to Section 2.2 of this Schedule 2, all of the insurance
policies to be obtained and maintained by Optionee under this Schedule 2 of the
Agreement shall be held by Owner or any fee mortgagee(s).
2.2-7 Optionee shall not carry separate insurance, concurrent in
coverage and contributing in the event of loss with any insurance required to be
furnished by Optionee under the provisions of this Schedule 2 if the effect of
such separate insurance would be to reduce the protection or the payment to be
made under said insurance required to be furnished by Optionee, unless Owner
(and the fee mortgagee(s), where said insurance required to be carried requires
the inclusion of the fee mortgagee(s)) are included as additional insureds with
loss
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<PAGE>
payable as hereinabove provided. Optionee shall promptly notify Owner of the
issuance of any such separate insurance and shall cause such policies to be
delivered to Owner and the fee mortgagee(s) as provided in this Schedule 2.
2.2-8 The loss proceeds of any fire or casualty insurance:
(a) if less than $500,000 shall be paid to Optionee as a trust fund,
deposited in a separate bank account maintained by Optionee and applied to the
repair and restoration of the damage of the Improvements; or
(b) if in excess of $500,000 shall be paid to and deposited with an
institution to act as insurance trustee which is mutually satisfactory to Owner,
Optionee and any fee and leasehold mortgagees (in such capacity, the
"Depositary") , which shall make available the proceeds of such insurance to
----------
repair the damage or replace or rebuild the Improvements as more particularly
hereafter provided in Article 13 of the Lease.
2.2-9 All insurance policies carried by either party covering the
Land and the Improvements shall expressly waive any right on the part of the
insurer against the other party. The parties hereto agree that their policies
will include such waiver clauses or endorsement so long as the same shall be
obtainable without extra cost or, if extra cost shall be charged therefor, so
long as the other party pays such extra cost, and the other party, at its or his
election, may pay the same, but shall not be obligated to do so. Both Owner and
Optionee waive any and all rights of recovery, claim, action or cause of action
against the other, their agents, officers, directors and employees for any loss
or damage that may occur to the Land, the contents thereof or the Improvements,
by reason of fire, the elements or any other cause which could be insured
against under the terms of a standard fire and extended coverage insurance
policy or policies, regardless of cause or origin.
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<PAGE>
EXHIBIT A
---------
PROPERTY DESCRIPTION
--------------------
PARCEL A - OWNED LAND
-------- ----------
ALL THAT CERTAIN lot, tract, or parcel of land and premises situate, lying and
being in the City of Atlantic City, County of Atlantic, and State of New Jersey,
bounded and described as follows:
BEGINNING at a point in the westerly line of Missouri Avenue (50 feet wide),
said point being distant 227.10 feet south of the southerly line of Pacific
Avenue (60 feet wide), and extending thence
1. South 27 degrees 28 minutes 00 seconds East, in and along the westerly line
of Missouri Avenue, 496.46 feet to the Inland or Interior Line of Public
Park; thence
2. South 27 degrees 28 minutes 00 seconds East, continuing in and along the
westerly line of Missouri Avenue if same were extended, 1276.44 feet to the
Riparian Commissioners Exterior Line, said line being located 2000.00 feet
south of and parallel with Pacific Avenue; thence
3. South 62 degrees 32 minutes 00 seconds West, in and along said Riparian
Commissioners Exterior Line, 150.00 feet to the easterly line of Columbia
Place (50 feet wide), if same were extended southwardly; thence
4. North 27 degrees 28 minutes 00 seconds West, in and along said extended
easterly line of Columbia Place, 1293.86 feet to the Inland or Interior
Line of Public Park; thence
5. North 27 degrees 28 minutes 00 seconds West, in and along the easterly line
of Columbia Place, 306.14 feet; thence
6. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
63.00 feet; thence
7. North 27 degrees 28 minutes 00 seconds West, parallel with Columbia Place,
77.90 feet; thence
8. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
12.00 feet; thence
9. North 27 degrees 28 Minutes 00 seconds West, parallel with Missouri Avenue,
95.00 feet; thence
<PAGE>
10. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
75.00 feet to the point and place of BEGINNING.
IN compliance with Chapter 157, Laws of 1977 premises are herein known as Lots
3, 4, 75, 23 and 86 in Block 38 on the official tax map of Atlantic City, New
Jersey.
PARCEL B - LEASED LAND
-------- -----------
ALL THAT CERTAIN lot, tract, or parcel of land and premises situate, lying and
being in the City of Atlantic City, County of Atlantic, and State of New Jersey,
bounded and described as follows:
BEGINNING at the southwesterly corner of Pacific Avenue (60 feet wide) and
Missouri Avenue (50 feet wide), and extending thence
1. South 27 degrees 28 minutes 00 seconds East, in and along the westerly line
of Missouri Avenue, 182.10 feet; thence
2. South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
75.00 feet; thence
3. North 27 degrees 28 minutes 00 seconds West, parallel with Missouri Avenue,
82.10 feet; thence
4. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
15.00 feet; thence
5. North 27 degrees 28 minutes 00 seconds West, parallel with Missouri Avenue,
100.00 feet to the southerly line of Pacific Avenue; thence
6. North 62 degrees 32 minutes 00 seconds East, in and along the southerly
line of Pacific Avenue, 60.00 feet to the point and place of BEGINNING.
IN compliance with Chapter 157, Laws of 1977 premises are herein known as Lot 1
in Block 38 on the official tax map of Atlantic City, New Jersey.
PARCEL C - OWNED LAND
-------- ----------
ALL THAT CERTAIN lot, tract, or parcel of land and premises situate, lying, and
being in the City of Atlantic City, County of Atlantic, and State of New Jersey,
bounded and described as follows:
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<PAGE>
BEGINNING at a point in the Southerly line of Pacific Avenue (60 feet wide),
said point being distant 60.00 feet west of the westerly line of Missouri Avenue
(50 feet wide), and extending thence
1. South 27 degrees 28 minutes 00 seconds East, parallel with Missouri Avenue,
100.00 feet; thence
2. South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
15.00 feet; thence
3. South 27 degrees 28 minutes 00 seconds East, parallel with Missouri Avenue,
82.10 feet; thence
4. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
75.00 feet to the westerly line of Missouri Avenue; thence
5. South 27 degrees 28 minutes 00 seconds East, in and along the westerly line
of Missouri Avenue, 45.00 feet; thence
6. South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
75.00 feet; thence
7. North 27 degrees 28 minutes 00 seconds West, parallel with Missouri Avenue,
1.00 feet; thence
8. South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
75.00 feet; to the easterly line of Columbia Place (50 feet wide); thence
9. North 27 degrees 28 minutes 00 seconds West, in and along the easterly line
of Columbia Place, 133.00 feet; thence
10. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
43.00 feet; thence
11. North 27 degrees 28 minutes 00 seconds West, parallel with Missouri Avenue,
3.50 feet; thence
12. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
17.00 feet; thence
13. North 27 degrees 28 minutes 00 seconds West, parallel with Missouri Avenue,
19.50 feet; thence
14. South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
60.00 feet to the easterly line of Columbia Place (50 feet wide); thence
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<PAGE>
15. North 27 degrees 28 minutes 00 seconds West, in and along the easterly
line of Columbia Place, 16.00 feet; thence
16. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
60.00 feet; thence
17. North 27 degrees 28 minutes 00 seconds West, parallel with Missouri Avenue,
54.10 feet to the southerly line of Pacific Avenue; thence
18. North 62 degrees 32 minutes 00 seconds East, in and along the southerly
line of Pacific Avenue, 30.00 feet to the point and place of BEGINNING.
IN compliance with Chapter 157, Laws of 1977 premises are herein known as Lots
2, 43, 44, 58, 60, 61, 62, 52, 63, 84, 85 and a certain 7 foot by 58 foot alley
located between lots 52 and 63 in Block 38 on the official tax map of Atlantic
City, New Jersey.
PARCEL D - OWNED-LAND
-------- ----------
ALL THAT CERTAIN lot, tract or parcel of land and premises situate, lying and
being in the City of Atlantic City, County of Atlantic, and State of New Jersey,
bounded and described as follows:
BEGINNING at a point in the easterly line of Columbia Place (50 feet wide), said
point being distant 249.10 feet south of the southerly line of Pacific Avenue
(60 feet wide), and extending thence
1. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
58.00 feet; thence
2. North 27 degrees 28 minutes 00 seconds West, parallel with Columbia Place,
3.50 feet; thence
3. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
17.00 feet; thence
4. South 27 degrees 28 minutes 00 seconds East, parallel with Columbia Place,
76.50 feet; thence
5. South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
75.00 feet to the easterly line of Columbia Place; thence
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<PAGE>
6. North 27 degrees 28 minutes 00 seconds West, in and along the easterly line
of Columbia Place, 73.00 feet to the point and place of BEGINNING.
IN compliance with Chapter 157, Laws of 1977 premises are herein known as Lots
66, 67 and 93 in Block 38 on the official tax map of Atlantic City, New Jersey.
PARCEL E - OWNED LAND
-------- ----------
ALL THAT CERTAIN lot, tract, or parcel of land and premises situate, lying, and
being in the City of Atlantic City, County of Atlantic, and State of New Jersey,
bounded and described as follows:
BEGINNING at a point in the easterly line of Columbia Place (50 feet wide), said
point being distant 352.10 feet south of the southerly line of Pacific Avenue
(60 feet wide), and extending thence
1. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
63.00 feet; thence
2. South 27 degrees 28 minutes 00 seconds East, parallel with Columbia Place,
47.90 feet; thence
3. South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
63.00 feet to the easterly line of Columbia Place; thence
4. North 27 degrees 28 minutes 00 seconds West, in and along the easterly line
of Columbia Place, 47.90 feet to the point and place of BEGINNING.
IN compliance with Chapter 157, laws of 1977 premises are herein known as Lots
88, 89 and 90 in Block 38 on the official tax map of Atlantic City, New Jersey.
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<PAGE>
EXHIBIT B
---------
TITLE EXCEPTIONS
----------------
1. FEE/LEASEHOLD MORTGAGE: by and between Donald J. Trump and Midlantic
National Bank, dated November 29, 1989 recorded December 4, 1989 in
Mortgage Book 4288 page 121; to secure $37,000,000.00.
2. COLLATERAL ASSIGNMENT OF LEASE OR LEASES: by and between Donald J. Trump
to Midlantic National Bank, dated November 29, 1989 recorded December 4,
1989 in Deed Book 5007 page
224.
3. FINANCING STATEMENT: Donald J. Trump (Debtor) to Midlantic National Bank
(Secured Party) filed December 4, 1989 #5587. (NOTE: Above Financing
Statement was filed with the Secretary of State of New Jersey December 11,
1989, as #1309052)
4. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $19,306.44 for Block 38 and Lot 66 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 16.
5. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $16,203.37 for Block 38 and Lot 90 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 18.
6. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $22,444.46 for Block 38 and Lot 85 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 20.
7. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $22,444.46 for Block 38 and Lot 84 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 22.
8. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $22,444.46 for Block 38 and Lot 62 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 24.
9. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $22,444.46 for Block 38 and Lot 61
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<PAGE>
dated August 6, 1992 recorded September 16, 1992 in Mortgage Book 4853 page
26.
10. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $17,718.49 for Block 38 and Lot 60 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 28.
11. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $14,691.18 for Block 38 and Lot 58 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 30.
12. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $19,305.44 for Block 38 and Lot 52 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 32.
13. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $51,983.33 for Block 38 and Lot 4 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 34.
14. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $45,497.49 for Block 38 and Lot 43 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 36.
15. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $51,983.33 for Block 38 and Lot 2 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 38.
16. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $57,775.72 for Block 38 and Lot 3 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 40.
17. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to City of Atlantic
City for $104,519.84 for Block 38 and Lot 75 dated August 6, 1992 recorded
December 7, 1992 in Mortgage Book 4912 page 270.
18. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to City of Atlantic
City for $687,048.38 for Block 38 and Lot 86 dated August 6, 1992 recorded
December 7, 1992 in Mortgage Book 4912 page 272.
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<PAGE>
19. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to City of Atlantic
City for $11,706.28 for Block 38 and Lot 89 dated August 6, 1992 recorded
December 15, 1992 in Mortgage Book 4919 page 114.
20. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to City of Atlantic
City for $16,497.65 for Block 38 and Lot 88 dated August 6, 1992 recorded
December 15, 1992 in Mortgage Book 4919 page 116.
21. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to City of Atlantic
City for $21,870.48 for Block 38 and Lot 67 dated August 6, 1992 recorded
December 15, 1992 in Mortgage Book 4919 page 118.
22. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to City of Atlantic
City for $19,306.44 for Block 38 and Lot 63 dated August 6, 1992 recorded
December 15, 1992 in Mortgage Book 4919 page 120.
23. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to City of Atlantic
City for $43,877.49 for Block 38 and Lot 93 dated August 6, 1992 recorded
December 15, 1992 in Mortgage Book 4919 page 122.
24. Taxes, charges and assessments subsequent to December 31, 1990 except as
paid in the sum of $286,246.08.
25. As to Parcel A: Rights granted to the Atlantic City Electric Company in
Deed Book 1025 page 455, and Deed Book 1025 page 461. (Affects Lots 3, 4,
Block 38)
26. Rights of City of Atlantic City and the General Public as set forth in
Boardwalk and Park Grants in Deed Book 205 page 1, and Deed Book 423 page
136. (Affects Lot 86, Block 38)
(Affects lands waterward of the Interior Line of the Park-Boardwalk only)
27. Rights granted to the Atlantic City Electric Company in Deed Book 1027 page
125.
28. The estate to be guaranteed in that portion of the insured premises flowed
by tide water of Atlantic Ocean, shall be limited to such estate as the
State of New Jersey, through its Riparian Commissioners, grants to Riparian
Owners, said estate in this instance having been granted to The Seaview
Hotel Company, grant dated October 27, 1883 and recorded on November 10,
1883 in Deed Book 97 page 26. It is hereby
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<PAGE>
certified that the grantee in said grant was the upland owner at the time
the grant was issued.
29. Rights of general public in and to the beach. (Affects Lot 23) (Affects
lands waterward of the Interior Line of the Park-Boardwalk only).
30. Paramount Rights of the United States Government to establish harbor,
bulkhead or pierhead lines or to change or alter any such existing lines
and to remove or compel the removal of fill and improvements thereon
(including buildings or other structures) from land now or formerly lying
the high water mark of the Atlantic Ocean without compensation. (Affects
Parcel A).
31. As to Parcel B:
GROUND LEASE: Albert Rothenberg, and Robert Rothenberg, to Four Seasons
Motel Inc., dated June 16, 1969 recorded June 18, 1969 in Deed Book 2478
page 276.
a. ASSIGNMENT OF LEASE (Assigns Lease in Deed Book 2478 page 276) Four
Seasons Motel Inc. to Isadore Mokrin and Dorothy Mokrin, dated January
31, 1978 recorded February 9, 1978 in Deed Book 3205 page 48.
b. ASSIGNMENT OF LEASE: from Isadore Mokrin and Dorothy Mokrin, to
Isadore Mokrin and Dorothy Mokrin Partnership, dated February 1, 1978
recorded February 9, 1978 in Deed Book 3205 page 52.
c. ASSIGNMENT OF LEASE WITH ASSUMPTION OF LEASE BY ASSIGNEE: from Isadore
Mokrin and Dorothy Mokrin Partnership to Boardwalk Properties Inc., a
New Jersey Corporation dated March 13, 1978 recorded March 21, 1978 in
Deed Book 3215 page 5.
d. AMENDED LEASE: between Albert Rothenberg and Robert Rothenberg, and
Boardwalk Properties Inc., a New Jersey Corporation dated March 9,
1979 in Deed Book 3332 page 33.
e. ASSIGNMENT AND ASSUMPTION OF TENANTS INTEREST: by and between
Boardwalk Properties Inc., a New Jersey Corporation and Donald J.
Trump dated March 18, 1989 recorded March 20, 1989 in Deed Book 4865
page 223.
f. ASSIGNMENT AND ASSUMPTION OF TENANTS INTEREST IN LEASE: by and between
Boardwalk Properties Inc., a New Jersey
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<PAGE>
Corporation and Donald J. Trump dated May 18, 1989 recorded June 19,
1989 in Deed Book 4921 page 183.
g. ASSIGNMENT AND ASSUMPTION OF TENANT'S INTEREST IN LEASE: by and
between Donald J. Trump and Missouri Boardwalk, Inc., dated June 24,
1993 recorded June __, 1993 in Deed Book ____ page _____.
32. Rights granted to the Atlantic City Electric Company in Deed
Book 1027 page 28.
33. Fee title to Parcel B appears of record in Albert Rothenberg and Robert
Rothenberg of virtue of the following Deeds viz:
a. Being the same premises with Max Berman (widow) by a deed dated
January 6, 1964, recorded January 9, 1964 in Atlantic County in Deed
Book 2201 page 76, granted and conveyed unto Albert Rothenberg,
married man, and Robert Rothenberg, married man, in fee.
b. Also being the same premises which Carolyn Rothenberg (wife of Robert
Rothenberg) by a deed dated January 28, 1966 and recorded February 8,
1966 in Atlantic County in Deed Book 2315 page 363 granted and
conveyed unto Robert Rothenberg, in fee to release dower interest.
c. Also being the same premises which Edna Rothenberg (wife of Albert
Rothenberg) by a deed dated January 28, 1966 recorded February 8, 1966
in Atlantic County, in Deed Book 2315 page 367 granted and conveyed
unto Albert Rothenberg in fee to release dower interest.
34. Estate and Interest insured (Parcel B) is limited to the right of
possession acquired under a lease dated June 16, 1969 and recorded in Deed
Book 2478 page 276.
As to Parcels C, D and E:
35. Rights of adjoining owners, and appurtenant rights in and to all alleyways
that now exist on the subject lands.
36. Rights granted to the Atlantic City Electric as follows:
a. Deed Book 1028 page 8, Affects Lot 84
b. Deed Book 1025 page 458, Affects Lot 85
c. Deed Book 1027 page 39, Affects Lot 63
d. Deed Book 1025 page 456, Affects Lot 43
e. Deed Book 1481 page 188, Affects Lot 83
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<PAGE>
f. Deed Book 1481 page 190, Affects Lot 84
g. Deed Book 1027 page 33, Affects Lot 52
h. Deed Book 1026 page 104, Affects Lot 58
i. Deed Book 1025 page 464, Affects Lot 60
j. Deed Book 1027 page 40, Affects Lot 61
k. Deed Book 1475 page 253, Affects Lot 61
l. Deed Book 1475 page 255, Affects Lot 62
m. Deed Book 1028 page 7, Affects Lot 66
n. Deed Book 1028 page 9, Affects Lot 67
o. Deed Book 1025 page 332, Affects Lots 88, 89 & 90
p. Deed Book 1027 page 38, Affects Lot 93
37. Rights of adjoining owner (Lot 74) Northwest of Parcel E in and to an
alleyway, 3 feet wide, that now exists along the Northwest line of Parcel E
(Lot 88) as granted in Deed Book 674 page 83.
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<PAGE>
Ex. 10.43
AGREEMENT OF LEASE
------------------
MISSOURI BOARDWALK, INC.
[MIDLANTIC DESIGNEE],
LESSOR
-and-
DONALD J. TRUMP,
LESSEE
Dated: As of June 24, 1993
<PAGE>
THIS AGREEMENT OF LEASE dated as of the 24th day of June, 1993, made
by and between Missouri Boardwalk, Inc. [Midlantic Designee], having an office
at 499 Thornall Street, Edison, New Jersey 08837 ("Lessor"), and DONALD J.
------
TRUMP, having an office at 725 Fifth Avenue, New York, New York 10022
("Lessee").
------
ARTICLE ONE
DEMISED PREMISES
Lessor, in consideration of the rents and the covenants, agreements,
terms and conditions to be paid, observed and fulfilled by Lessee in accordance
herewith, does hereby demise and lease to Lessee, and Lessee hereby leases and
rents from Lessor, the premises described in Schedule A annexed hereto and made
----------
a part hereof, together with all buildings and other improvements now or
hereafter located thereon, and all appurtenances related thereto (collectively,
the "Leased Premises").
---------------
Subject, however, to the following:
1. All present and future Laws affecting the Leased Premises;
2. The condition and state of repair of the Leased Premises as of the
date of this Lease; and
3. The matters referred to in Schedule B annexed hereto and made a
----------
part hereof, including, without limitation, that certain Option and Right of
First Offer Agreement (the "Option") of substantially even date herewith between
------
Lessor and Trump Plaza Associates ("TPA") (the "Permitted Encumbrances").
--- ----------------------
TO HAVE AND TO HOLD the Leased Premises unto Lessee, his successors
and permitted assigns, for and during the term commencing on the date hereof and
ending on the earlier to occur of (i) June 30, 1998 or (ii) the sale of the
entire Leased Premises by Lessor to TPA, whether pursuant to the Option or
otherwise (the "Term"). The Term and this Lease shall expire upon the sale of
----
the entire Leased Premises to TPA pursuant to the exercise of the purchase
option (but shall not terminate upon the exercise of the right of first offer)
contained in the Option.
IT IS HEREBY MUTUALLY COVENANTED AND AGREED between Lessor and Lessee
as set forth in the following Articles of this Lease:
<PAGE>
ARTICLE TWO
FIXED NET RENT
2.1 Lessee covenants and agrees to pay to Lessor the sum of Three
Million One Hundred Twenty Thousand ($3,120,000) Dollars per year throughout the
Term, payable in equal monthly installments of Two Hundred Sixty Thousand
($260,000) Dollars, commencing on the date hereof as the fixed net rental for
the Leased Premises (the "Fixed Net Rent"). Notwithstanding anything in this
--------------
Lease to the contrary, Lessee's sole obligation and liability under this Lease
shall be the payment of Fixed Net Rent together with any interest thereon as
provided in Section 2.4, which obligation of Donald J. Trump, as the original
Lessee, shall be released as provided in Section 22.1 hereof.
2.2 The monthly installments of Fixed Net Rent shall be paid in
advance, by Lessee to Lessor, without setoff, abatement or deduction of any kind
whatsoever, on the 1st day of each and every calendar month at the address
herein set forth for delivery of notices, in cash or by good check drawn on a
bank which is a member of the New York Clearing House.
2.3 Fixed Net Rent shall be net to Lessor. All costs and expenses of
every kind and nature whatsoever relating to the Leased Premises (other than the
payment of Fixed Net Rent prior to TPA's assumption of the Lessee's interest
hereunder and the payment of debt service on any Fee Mortgages now existing or
hereafter entered into) shall be paid by TPA pursuant to the Option and none of
same shall be the obligation or liability of Lessee, whether as primary obligor,
equity owner of a partner of TPA, guarantor or otherwise, nor shall Lessee be
entitled to any setoff, abatement or deduction against Fixed Net Rent as a
result of TPA's failure to pay such costs and expenses. Lessee hereby consents
to the Option, the rights granted to TPA and others as set forth therein and the
exercise by TPA and such others of their respective rights and obligations
thereunder and agrees that a default under the Option shall constitute a default
under this Lease.
2.4 In the event any payment of Fixed Net Rent is not paid to Lessor
on or prior to the expiration of the grace period available to Lessee (if any)
under Section 11.1(a), Lessee shall pay to Lessor interest on the amount of said
late installment of Fixed Net Rent computed at the Default Rate for the period
commencing upon the date such late installment became due.
-2-
<PAGE>
ARTICLE THREE
FEE MORTGAGES
3.1 Subject to the restrictions, if any, set forth in the Option,
Lessor shall have the right to mortgage or otherwise create a security interest
in the Lessor's fee simple interest in the Leased Premises and/or Improvements,
including, without limitation, an assignment of Lessor's rights under and
interests in this Lease and Lessor's right to collect Fixed Net Rent hereunder
(each, a "Fee Mortgage"); provided, however, any such Fee Mortgage shall be
------------
satisfied in whole or in part by Lessor and Lessee shall have no liability
therefor.
3.2 In the event that any future fee mortgagee(s) comes into
possession or ownership of the title to the Leased Premises, such future fee
mortgagee(s) will take title subject to this Lease and the Option, and in return
for the standard non-disturbance protections customarily given by such fee
mortgagee(s) under similar circumstances, Lessee agrees to attorn to the
holder(s) of the Fee Mortgage(s) as its new lessor. In no event, however, shall
Lessee be entitled to any credit against such fee mortgagee(s) for any Fixed Net
Rent paid by Lessee for more than one (1) month in advance to its lessor
hereunder prior to such possession or ownership by the fee mortgagee(s). The
provisions for attornment hereinbefore set forth in this Article Three shall not
require the execution of any further instrument, except that an agreement
containing the non-disturbance protections provided for above, and in form
reasonably acceptable to Lessee, shall be offered to Lessee by such fee
mortgagee(s) prior to or promptly after the execution of such Fee Mortgage; and
if the fee mortgagee does not offer such non-disturbance agreement to Lessee,
such Fee Mortgage shall be subject and subordinate to this Lease. However, if
either Lessee or the holder(s) of any Fee Mortgage(s) to whom Lessee agrees to
attorn as aforesaid reasonably requests a further instrument expressing such
non-disturbance and attornment, the other party agrees to execute the same
within fifteen (15) days after notice to do so in accordance with the provisions
of this Lease. Simultaneously with the execution of this Lease, Lessor shall
deliver to Lessee a non-disturbance agreement from the existing fee mortgagee,
in form and substance similar to other standard non-disturbance protections
customarily given by such fee mortgagee under similar circumstances and
otherwise reasonably acceptable to Lessee, which agreement shall not be recorded
unless such fee mortgagee transfers the existing Fee Mortgages. In the case of
such a transfer, if this Lease and the Option are then in effect, as a condition
to and prior to the transfer of such Fee Mortgages or the recording of any
instruments of assignment or transfer in the appropriate real estate records of
Atlantic City, New Jersey,
-3-
<PAGE>
Lessor agrees to record or cause the recording of such non-disturbance agreement
in all such public real property records. Once such non-disturbance agreement
is properly filed in the appropriate public records and so long as it remains of
record therein, Lessor shall have no further obligation to record such an
agreement in connection with the existing Fee Mortgages.
ARTICLE FOUR
USE OF THE PREMISES
4.1 Lessee covenants and agrees that it will not use or permit the
Leased Premises or the Improvements to be used for other than legal purposes,
including, without limitation, the Casino Control Act, N.J.S.A. 5:12-1 et seq.,
-------- -- ----
if applicable, or, except as required or permitted under the Option, for a
purpose or in a manner likely to cause structural or other injury to any
Improvement on the Leased Premises, OR IN A MANNER WHICH SHALL VIOLATE ANY
CERTIFICATE OF OCCUPANCY IN force relating to any Improvements thereon situated.
All rights of Lessee to use the Leased Premises or make alterations or
improvements thereto shall be subject to the paramount rights of TPA under the
Option and Lessee shall take no action which is inconsistent therewith without
having first obtained TPA's prior written consent.
ARTICLE FIVE
NO REPRESENTATIONS BY LESSOR
5.1 Lessee accepts the Leased Premises in their present condition and
without any representation or warranty by Lessor of any kind or nature. Lessor
and Lessee acknowledge and agree that, pursuant to the Option, TPA has assumed
the sole responsibility for the condition, operation, maintenance and management
of the Leased Premises. Lessor shall not be required to furnish any facilities
or services or make any repairs or alterations to the Leased Premises.
ARTICLE SIX
LESSOR NOT LIABLE FOR FAILURE
OF WATER SUPPLY, ETC.
6.1 Lessor shall not be liable for any failure of water supply, gas
or electric current, sanitary or storm sewer, not for any injury or damage to
person or property for any reason whatsoever.
-4-
<PAGE>
ARTICLE SEVEN
LESSEE NOT TO VIOLATE LAWS
7.1 Lessee shall not violate any Laws affecting the Leased Premises,
the Improvements or the appurtenances thereto in any material respect.
ARTICLE EIGHT
NON-TERMINABILITY
8.1 The Fixed Net Rent shall be paid without notice or demand and
without setoff, counterclaim, abatement, suspension, deduction or defense.
8.2 Except as otherwise expressly provided herein, this Lease shall
not terminate nor shall Lessee have any right to terminate this Lease or abate
any rent, any Law to the contrary notwithstanding, it being the intention of the
parties hereto that the Fixed Net Rent reserved hereunder shall continue to be
payable in all events.
8.3 Lessee waives all rights now or hereafter conferred by Law (a) to
terminate this Lease, or (b) to any abatement of the Fixed Net Rent payable
under this Lease.
ARTICLE NINE
INTENTIONALLY DELETED
ARTICLE TEN
FIRE OR CASUALTY
10.1 If the Improvements now or hereafter erected upon the Leased
Premises during the Term of this Lease shall be destroyed or damaged in whole or
in part by reason of any causes whatsoever, Lessee covenants that Lessee shall
give prompt notice thereof to Lessor. As to Improvements now existing upon the
Leased Premises, Lessee shall not be obligated to rebuild the same, but TPA,
under the Option, shall be required to complete the demolition of such
Improvements, raze the same, clear all debris, secure the Leased Premises and
otherwise take such action as shall be required by Law or otherwise to eliminate
any unsightly or unsafe conditions at the Leased Premises resulting from such
casualty. This Lease shall not terminate as a result of any fire or casualty,
notwithstanding the total destruction of the Leased Premises, nor shall Lessee
be entitled to any abatement of the Fixed Net Rent as a result thereof.
-5-
<PAGE>
ARTICLE ELEVEN
DEFAULT CLAUSES AND LESSOR'S REMEDIES
11.1 The following events shall constitute and be deemed defaults
under this Lease ("Events of Default"):
-----------------
(a) if Lessee shall fail to pay any installment of Fixed Net Rent
within 5 business days after the same becomes due and payable but Lessee shall
not be allowed more than three (3) such 5-day grace periods in any 12 month
period; or
(b) if TPA shall fail to pay any amounts required to be paid by TPA
under the Option or shall violate or fail to comply with or perform any other
covenant, term, condition or agreement of this Lease or the Option, and such
default shall continue for a period of thirty (30) days after notice to Lessee
and TPA.
With respect to subparagraph (b) above, if any of the defaults therein referred
to cannot be cured within the applicable notice period, then Lessee shall not be
deemed to be in default with respect thereto if Lessee or TPA shall have
initiated the action required to remedy such defaults as soon as reasonably
possible under the circumstances and thereafter prosecutes such action to
completion within a period of time which, under all the prevailing
circumstances, shall be reasonable, but in any event not later than ninety (90)
days.
11.2 (a) In the case of any Event of Default as hereinabove
provided (not cured within the applicable cure period, if any, set forth in this
Lease), Lessor shall have the immediate right to reenter the Leased Premises and
to dispossess Lessee and all other occupants therefrom (subject to any right of
access granted under the Option, as then in effect) and remove and dispose of
all property therein, without Lessor being deemed guilty of trespass or becoming
liable for any loss or damage which may be occasioned thereby. Upon the
occurrence of any such Event of Default, Lessor shall also have the right, at
its option, in addition to and not in limitation of any other right or remedy,
to terminate this Lease by giving Lessee, TPA and Trustee three (3) days' notice
of termination and upon the expiration of said three (3) days, this Lease and
the Term shall cease and terminate as fully and completely as if the date of
expiration of such three (3) day period were the expiration date and thereupon,
unless Lessor shall have theretofore demanded possession of the Leased Premises,
Lessor shall have the immediate right of possession, in the manner aforesaid,
and Lessee and all other occupants shall quit and surrender the Leased Premises
to Lessor (subject to any right of access granted
-6-
<PAGE>
in the Option, as then in effect), but Lessee shall remain liable as hereinafter
mentioned. So long as no default by TPA under the Option has occurred and is
continuing following the running of applicable notice and grace periods, no
termination of this Lease shall affect the rights of TPA and First Bank National
Association, as trustee ("Trustee") under the Option, including the right of TPA
-------
and Trustee under Section 10 of the Option to enter into a new lease of the
Leased Premises with Lessor as provided therein.
(b) If by reason of the occurrence of any such Event of Default, the
Term shall end before the expiration date, or Lessor shall take possession of
the Leased Premises, or Lessee shall be ejected, dispossessed or removed
therefrom by summary proceedings or in any other manner, or if the Leased
Premises become vacant, deserted or abandoned, Lessor, at any time after the
failure by TPA and Trustee to exercise their rights under Section 10 of the
Option to receive a new lease as provided therein, may relet the Leased
Premises, or any part or parts thereof, either in the name of Lessor or as agent
for Lessee, for a term or terms which may, at Lessor's option be less than or
exceed the balance of the Term, and at such rent and upon such other conditions,
which may include concessions and free rent periods, as Lessor, in its sole
discretion, shall determine. Lessor shall receive the rents from such reletting
for the balance of the Term and shall apply the same first, to the payment of
such expenses as Lessor may have incurred in connection with reentering,
ejecting, removing, dispossessing or reletting, including brokerage and
attorneys' fees and expenses; and second, to the payment of the Fixed Net Rent,
with interest thereon as provided for herein, and the fulfillment of the terms,
covenants and conditions of Lessee hereunder; and Lessee hereby waives all
claims to the surplus, if any. Lessee shall be and hereby agrees to be liable
for and to pay Lessor any deficiency between the Fixed Net Rent and the net
rentals, as aforesaid, of reletting, if any, for each month or portion thereof
of the period which otherwise would have constituted the balance of the Term.
Lessor shall in no event be liable in any way whatsoever for the failure to
relet the Leased Premises or, in the event of such reletting, for failure to
collect the rents reserved thereunder.
(c) No such reentry or taking possession of the Leased Premises by
Lessor shall be construed as an election on its part to terminate this Lease,
unless Lessor gives written notice to Lessee, TPA and Trustee of such intention
or the termination thereof shall result as a matter of Law. Notwithstanding any
such reletting without termination, Lessor may at any time
-7-
<PAGE>
thereafter elect to terminate this Lease for such previous default.
(d) In the event this Lease is terminated pursuant to the foregoing
provisions, Lessor may recover from Lessee, in lieu of the damages that may be
recoverable under subparagraph (b) above, as liquidated damages, and not as a
penalty, an amount equal to the Fixed Net Rent for the period which otherwise
would have constituted the balance of the Term, discounted at the rate of
interest equal to the Prime Rate as of the date hereof, to its then present
worth, which shall immediately become due and payable by Lessee. Lessee
acknowledges that the Leased Premises is currently in a state of disrepair, that
Lessee's willingness and need to lease the same results primarily from its
location adjacent to other properties in which Lessee and TPA have an ownership
interest, and that no tenant other than Lessee is likely to be willing to lease
the Leased Premises for any rental amount whatsoever. Accordingly, Lessee
acknowledges that there is no "fair market rental value" for the Leased Premises
to which Lessee is entitled as a credit against the liquidated damages payable
to Lessor as provided above, and that Lessor shall not be obligated to attempt
to lease the Leased Premises in the event of any default hereunder.
(e) THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM BROUGHT BY EITHER PARTY AGAINST THE OTHER UNDER THIS LEASE.
(f) Lessee hereby expressly waives any and all rights of redemption
granted by or under any Law in the event Lessee shall be evicted or dispossessed
from the Leased Premises for any cause, or Lessor reenters the Leased Premises
following the occurrence of any Event of Default hereunder or this Lease is
terminated before the Expiration Date.
(g) In the event of any breach by Lessee of any of the terms and
provisions of this Lease, Lessor shall have the right to injunctive relief and
declaratory relief as if no other remedies were provided herein for such breach.
(h) The rights and remedies herein reserved by or granted to Lessor
and Lessee are distinct, separate and cumulative, and the exercise of any one of
them shall not be deemed to preclude, waive or prejudice Lessor's or Lessee's
right to exercise any or all others. Lessor hereby reserves all rights and
remedies at Law and in equity, and nothing contained in this Lease shall be
construed as a limitation of any such rights or remedies.
-8-
<PAGE>
(i) Lessor and Lessee hereby expressly waive any right to assert a
defense based on merger and agree that neither the commencement of any action or
proceeding, nor the settlement thereof nor the entry of judgment therein, shall
bar Lessor or Lessee from bringing any subsequent actions or proceeding from
time to time.
(j) The words "reenter", "reentry" and "reentered" as used in this
Lease shall not be deemed to be restricted to their technical legal meanings.
(k) In the event Lessor commences any summary proceeding or action for
nonpayment of rent, Lessee covenants and agrees that it will not interpose, by
consolidation of actions or otherwise, any counterclaim or other claim seeking
any affirmative relief whatsoever in any such proceeding.
ARTICLE TWELVE
LESSEE TO INDEMNIFY LESSOR
12.1 Lessee shall not do or permit any act upon the Leased Premises
or Improvements which may subject Lessor to any liability by reason of any
illegal business or conduct upon the Leased Premises or the Improvements, or by
reason of any violation of Law. Lessee shall indemnify and hold Lessor harmless
from and against any and all liability, fines, suits, claims, demands and
actions, and costs and expenses of any kind or nature (including reasonable
attorneys' fees) due to or arising out of (a) any breach, violation or non-
performance of any covenant, condition or agreement in this Lease set forth and
contained on the part of Lessee to be fulfilled, kept, observed and performed,
and/or (b) any damage to person or property occasioned by Lessee's use or
occupancy of the Leased Premises and Improvements and/or (c) any injury to
person or persons, including death resulting at any time therefrom, occurring in
or about the Leased Premises, the Improvements and/or on the sidewalks in front
of the same, but nothing herein shall be deemed to relieve Lessor from any
liability (i) resulting from the wanton or willful misconduct of Lessor and its
agents, employees, invitees and licensees or anyone claiming through Lessor with
respect to a claim by any third party, or (ii) resulting from the gross
negligence or wanton or willful misconduct of Lessor and its agents, employees,
invitees and licensees or anyone claiming through Lessor with respect to a claim
by Lessee. If Lessee be required to defend any action or proceeding pursuant to
this Article to which action or proceeding Lessor is made a party, Lessor shall
be entitled to appear, defend or otherwise take part in the matter involved, at
its election, by counsel of its own choosing, providing such action
-9-
<PAGE>
by Lessor does not limit or make void any liability of any insurer of Lessor or
Lessee hereunder in respect to the claim or matter in question. Lessee's
liability under this Article shall be reduced by the net proceeds of any
insurance carried by Lessee actually collected by Lessor with respect to the
risks in question for Lessor's benefit.
ARTICLE THIRTEEN
MECHANICS' LIENS
13.1 Notice is hereby given that Lessor shall not be liable for any
labor or materials furnished or to be furnished to Lessee or TPA upon credit,
and that no mechanic's or other lien, charge or order for the payment of money
for any such labor or materials (collectively, "Mechanic's Liens") shall attach
----------------
to or affect the reversion or other estate or interest of Lessor in and to the
Leased Premises or the Improvements.
13.2 Lessee covenants that whenever and as often as any Mechanic's
Lien shall have been filed against any part or all of the Leased Premises or any
part or all of the Improvements, based upon any act or interest of Lessee or of
anyone claiming through Lessee, Lessee shall cause TPA to forthwith take such
action by bonding, deposit or payment as will remove or satisfy the lien and in
default thereof for thirty (30) days after notice to Lessee from Lessor, but
subject to such rights of contest as are set forth in the Option, if and to the
extent then in effect, Lessor may discharge the Mechanic's Lien by bonding or
deposit, and the amount so expended, with interest thereon at the Default Rate,
shall be payable forthwith with interest at the Default Rate from the date of
such advance and with the same remedies to Lessor as in case of default in the
payment of rent as herein provided.
ARTICLE FOURTEEN
CONDEMNATION
14.1 This Lease shall not terminate as a result of any taking of all
or any portion of the Leased Premises or the Improvements in or by condemnation
proceedings in pursuance of any Law, or by agreement between Lessor, Lessee and
those authorized to exercise such rights, nor shall Lessee be entitled to any
abatement of the Fixed Net Rent as a result thereof.
14.2 Lessor shall be entitled to receive all awards for any taking of
all or portions of the Leased Premises and/or the Improvements thereon, except
that, so long as Lessee is not in default under this Lease beyond any applicable
notice or grace periods, Lessee shall be entitled to receive that portion of any
-10-
<PAGE>
such award specifically attributable to the value of the leasehold estate for
such periods after the taking as to which Lessee has paid Fixed Net Rent under
this Lease. In the event Lessee is in default under this Lease beyond any
applicable notice or grace periods, any award otherwise payable to Lessee shall
be retained by Lessor. Under no circumstances shall Lessee be entitled to any
award in excess of the amount which represents the actual value, as established
in the condemnation proceeding, of the leasehold estate for that period after
the taking as to which Fixed Net Rent has been paid.
14.3 If the temporary use of the whole or any part of the Leased
Premises or Improvements shall be taken at any time during the Term for any
public or quasi-public purpose by any lawful power or authority by the exercise
of the right of condemnation or eminent domain or by agreement between Lessee
and those authorized to exercise such right, the Term shall not be reduced or
affected in any way, Lessee shall continue to pay in full the Fixed Net Rent
required to be paid by Lessee, and Lessee shall be entitled to make claim for,
recover and retain any award or awards, whether in the form of rental or
otherwise, recovered in respect of such possession or occupancy as provided in
Section 14.1 hereof.
14.4 Lessee shall not settle or compromise the amount of any award in
such condemnation proceeding without Lessor's consent, which consent Lessor
agrees shall not be unreasonably withheld. Lessee shall be entitled to appear
in such condemnation proceedings and make claim for such share of the award as
it is entitled to receive under the provisions of this Article, and to offer
testimony thereat.
14.5 Any mortgagees shall be entitled to appear in such condemnation
proceedings and make a claim for such share of any award to which its borrower
is entitled by the terms of this Article. Such mortgagees shall be entitled to
that portion of the condemnation award which by the terms of this Article might
otherwise be paid to its borrower.
ARTICLE FIFTEEN
COVENANT OF QUIET ENJOYMENT
15.1 If and so long as Lessee shall pay the Fixed Net Rent, Lessee
shall quietly enjoy the Leased Premises, subject, however, to the terms of this
Lease, the Option, the Permitted Encumbrances and any other matters not created
by or through Lessor.
-11-
<PAGE>
ARTICLE SIXTEEN
ASSIGNMENT, SUBLETTING AND MORTGAGING
16.1 Lessee shall not have the right, without the prior consent of
Lessor, which Lessor may deny or grant upon such conditions as Lessor may in its
sole and absolute discretion determine, to assign or transfer this Lease in
whole or in part or to underlease or sublet the whole or any part of the Leased
Premises except that Lessee may (i) sublease a portion of the Leased Premises to
Warner Brothers or its designee and (ii) assign and transfer this Lease to TPA.
Following an assignment to TPA and the assumption by TPA of this Lease and all
of Lessee's obligations hereunder, TPA shall have the right to mortgage its
interest under this Lease and its rights hereunder to Trustee as leasehold
mortgagee and to sublease portions of the Leased Premises. Lessor shall not be
required to grant non-disturbance protections to any sublessee even if such
sublease is permitted under this Lease. As a condition to the effectiveness of
such sublease, Lessor shall receive a copy of such sublease and same shall
provide that it is subject and subordinate to this Lease. Trustee shall have
the right to perform any term, covenant, condition or agreement of this Lease to
be performed by lessee or TPA and to remedy any default by Lessee or TPA
hereunder or under the Option within the same period of time provided to Lessee
or TPA under this Lease or the Option, and Lessor shall accept such performance
by Trustee with the same force and effect as if performed by Lessee or TPA;
provided, however, that Lessee or TPA shall not thereby or hereby be subrogated
to the rights of Lessor. Lessor agrees that, so long as no default exists
hereunder or under the Option which has not been cured within the applicable
cure period, Trustee, upon a foreclosure of its mortgage, shall succeed to the
rights and obligations of TPA as Lessee hereunder and may transfer the same to
any successor or assign who succeeds to all or substantially all of the assets
of TPA and assumes in writing TPA's obligations as Lessee hereunder.
ARTICLE SEVENTEEN
SURRENDER OF PROPERTY
17.1 At the end of the Term, Lessee shall peaceably and quietly
surrender the Leased Premises and the Improvements, free of subtenancies,
together with all alterations, additions and improvements which may have been
made upon the Leased Premises, subject, however, to the demolition of such
Improvements as required under the Option.
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<PAGE>
ARTICLE EIGHTEEN
SALE OR CONVEYANCE OF LEASED PREMISES
AND LIMITS OF LIABILITY OF LESSOR AND LESSEE
18.1 The term "Lessor," as used in this Lease, means only the owner
for the time being of the Leased Premises, so that in the event of any sale of
the Leased Premises, which is expressly permitted so long as such sale is
subject to the continuing rights of Lessee and TPA under this Lease and the
Option, if and to the extent then in effect, the seller is entirely relieved of
all covenants and obligations of Lessor hereunder thereafter arising. If Lessor
or any successor in interest of Lessor shall be an individual or individuals who
are joint venturers, tenants in common, members of a firm, a general or limited
partnership or corporation, it is specifically understood and agreed that the
monetary liability of such individual or of the members of that firm,
corporation, partnership or joint venture, in relation to this Lease, shall be
limited to the equity of Lessor in the Leased Premises.
18.2 TPA is and, after any assignment to TPA of the Lessee's interest
hereunder, shall be liable hereunder only to the extent of the assets (present
and future) of TPA and no partner, officer, committee or committee member of TPA
or any partner therein or of any partnership affiliate of TPA, or any
incorporator, officer, director or shareholder of any corporate partner of TPA
or of any corporate affiliate of TPA, or any affiliate or controlling person or
entity of any of the foregoing, or any agent or employee of any of the
foregoing, or any successor, personal representative, heir or assign of any of
the foregoing, in each case past, present or as they may exist in the future,
shall be liable in any respect (including, without limitation, the breach of any
representation, warranty, covenant, agreement, condition or indemnification or
contribution undertaking contained herein or therein) under, in connection with,
arising out of or relating to this Lease or any other agreement, document,
certificate, instrument or statement (oral or written) related to, executed or
to be executed, delivered or to be delivered, or made or to be made, or any
omission made or to be made, in connection with any of the foregoing or any of
the transactions contemplated in any such agreement, document, certificate,
instrument, or statement; provided, however, the foregoing shall not affect or
modify any of the obligations of Donald J. Trump as Lessee pursuant to this
Lease or as a party to the Modification Agreement of substantially even date
herewith or with respect to the transactions contemplated hereby or thereby.
18.3 Notwithstanding anything herein to the contrary, the rights of
Lessor against Donald J. Trump as Lessee shall be
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subject to the terms of that certain Override Agreement dated as of August 8,
1990, among Donald J. Trump, certain entities affiliated with Trump and certain
lenders, as amended from time to time, including, without limitation, Section
2.2(g) thereof, if and to the extent then in effect.
ARTICLE NINETEEN
ALTERATIONS
19.1 Lessee shall not have the right to make alterations to the
Improvements and the Building except with the prior written consent of TPA,
which written consent shall be delivered to Lessor prior to the commencement of
such alterations.
19.2 Any alterations made to the Leased Premises or Improvements by
Lessee, as well as fixtures attached to and used in connection with the Leased
Premises or Improvements, shall become the property of Lessor.
ARTICLE TWENTY
LESSOR AND LESSEE TO FURNISH STATEMENT
20.1 Lessor within twenty (20) days, upon written request of Lessee,
TPA, Trustee or any prospective leasehold mortgagee, will furnish a written
statement, duly acknowledged, of the following items, i.e., as to: (a) the
----
amount of Fixed Net Rent due, if any; (b) whether or not the Lease is unmodified
and in full force and effect (or, if there have been modifications, that the
same are in full force and effect as modified and stating the modification); (c)
whether or not, to the knowledge of Lessor, Lessee is in default; (d) whether
there are any offsets or defenses; and (e) whether Lessor has given Lessee any
notice of default under the Lease, and if given, whether the default set forth
therein remains uncured. Any such statement shall be for the sole benefit of
the recipient or its assigns and shall have no effect, as an estoppel or
otherwise, with respect to any other third party.
20.2 Lessee, within twenty (20) days, will, upon written request of
Lessor or of any holder(s) or prospective holder(s) of any Fee Mortgage(s),
furnish a written statement, duly acknowledged, as to (a) whether the Lease is
unmodified and in full force and effect; (b) whether the Lease has been modified
or amended in any respect and submitting copies of such modifications, if any;
(c) whether there are any defaults thereunder, to the knowledge of Lessee, and
specifying the nature of such defaults, if any; (d) the amount of Fixed Net Rent
due, if any; and (e) whether there are any offsets or defenses.
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ARTICLE TWENTY-ONE
INSPECTION BY LESSOR
21.1 Lessee shall permit, from time to time during customary business
hours, inspections of the Leased Premises and Improvements by Lessor, or
Lessor's agent or representatives, all at Lessor's sole cost and expense.
ARTICLE TWENTY-ONE
COVENANTS BINDING ON SUCCESSORS AND ASSIGNS
22.1 The covenants, agreements, terms, provisions and conditions
contained in this Lease shall benefit and be binding upon Lessor and Lessee, and
their respective successors and assigns. Upon Lessee's assignment to TPA of
Lessee's leasehold interest under this Lease and TPA's unconditional and
irrevocable assumption of such interest and the duties and obligations attendant
thereto, Donald J. Trump shall be automatically and completely released from all
obligations hereunder. From and after such assignment to and assumption by TPA,
which may occur at any time upon notice to but without the necessity of
obtaining the consent of Lessor, TPA shall be, for all purposes, the "Lessee"
hereunder, and shall have sole liability for satisfying all of Lessee's
obligations hereunder, including without limitation, the payment of Fixed Net
Rent. No such assignment shall relieve TPA of its obligations under the Option,
which shall remain in full force and effect. Notwithstanding that TPA and
Trustee are not parties to this Lease, TPA and Trustee shall be entitled to the
benefits and rights expressly granted to them in this Lease and shall be
entitled to directly enforce such rights and benefits; and the rights and
benefits granted to TPA and Trustee under this Lease may not be abrogated or
amended without the prior written consent of TPA and Trustee.
ARTICLE TWENTY-THREE
ENTIRE AGREEMENT
23.1 This Lease contains the entire agreement between the parties and
shall not be modified in any manner except by an instrument in writing executed
by the parties or their respective successors in interest.
ARTICLE TWENTY-FOUR
DESIGNATIONS HEREIN
24.1 (a) As used herein, the expression "the Term of this Lease,"
----------------------
"Term" or the like, shall be deemed to be the period commencing on (and
-----
including) the date hereof and ending on June
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30, 1998, as the same may be terminated earlier by Lessor as provided herein.
(b) The term "Lessee" as used herein shall be Lessee named herein on
------
page 1 hereof or the then holder of this Lease and the Term thereof as though in
each instance so specifically expressed.
24.2 (a) The term "Leased Premises," unless the context shall
---------------
clearly indicate a different meaning, shall be construed to mean the land
described on Schedule A annexed hereto and made a part hereof.
----------
(b) The term "building equipment" shall be construed to mean
------------------
equipment and other personal property (except where such items of personal
property are owned by occupancy tenants) used or procured for use in connection
with the operation and maintenance of the Improvements.
(c) The term "Improvements" shall be construed to mean the structures
------------
(not necessarily enclosed) or buildings, and replacements thereof, now on the
Leased Premises or hereafter erected on the Leased Premises, including all
building equipment, apparatus, machinery and fixtures of every kind and nature
forming part of such structures or buildings, or of any structures or buildings
hereafter standing on the Leased Premises or on any part thereof and articles of
personal property owned by Lessee now or at any time hereafter affixed to,
attached to, placed upon or used in any way in connection with the complete and
comfortable use, enjoyment, occupancy or operation of, any such structures or
buildings.
(d) The term "Alterations" shall be deemed to mean any and all
-----------
alterations, charges, replacements, improvements and additions in and to the
Leased Premises and the Improvements.
(e) The term "Default Rate" shall be deemed to mean an annual rate of
------------
interest applicable from time to time during the period in question, equal (a)
to the Prime Rate as then in effect, plus (b) five (5%) percent.
----
(f) The term "Affiliate" shall be deemed to mean any corporation,
---------
association, partnership, trust, entity, organization, or other person with
respect to any other corporation, association, partnership, trust, entity,
organization or other person if (i) it is directly or indirectly subject to the
control of, or a power or right of control of, said corporation, association,
partnership, trust, entity, organization or other person, or (ii) under Section
318 of the
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Internal Revenue Code of 1986, as amended, it would be considered an affiliate.
(g) The term "Prime Rate" shall mean the rate of interest announced
----------
by Midlantic National Bank as its prime or base lending rate of interest which
rate of interest is determined as a means of pricing some loans to customers and
is neither tied to any external rate of interest nor does it necessarily reflect
the lowest rate of interest actually charged to any particular class or category
of customers.
(h) The term "Law" shall mean any statute, rule or regulation,
---
ordinance or code, decree, writ or directive of any Governmental Authority as in
effect from time to time.
(i) The term "Governmental Authority" shall mean any government or
----------------------
any governmental authority, agency or instrumentality.
24.3 The captions of this Lease and the index preceding this Lease
are for convenience and reference only and in no way define, limit or describe
the scope or intent of this Lease, nor in any way affect this Lease.
24.4 All the provisions of this Lease shall be deemed and construed
to be "conditions" as well as "covenants," as though the words specifically
expressing or importing covenants and conditions were used in each separate
provision hereof.
24.5 Words of any gender in this Lease shall be held to include any
other gender and words in the singular number shall be held to include the
plural when the context so requires.
24.6 If and to the extent that a provision of this Lease shall be
unlawful or contrary to public policy, the same shall not be deemed to
invalidate the other provisions of this Lease.
ARTICLE TWENTY-FIVE
NOTICES
25.1 Any notice, demand or other communication (collectively,
"notices") which, under the terms of this Lease or under any Law, must or may be
--------
given by the parties hereto shall be in writing (and, if sent by mail, certified
or registered, return receipt requested) or by telegraph or telex and shall be
deemed to have been duly given or made (a) when delivered by hand, or (b) when
received by the addressee thereof, if mailed by certified or registered mail,
postage prepaid, return receipt
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requested, or sent by Federal Express, Express Mail or other similar overnight
courier service, or (c) in the case of telegraphic notice, when delivered to the
telegraph company, or (d) in the case of telex notice, when sent, answerback
received, addressed (i) in the case of notices to Lessor, to Lessor at the
address first above written, and (ii) in the case of notices to Lessee, to
Lessee at the address first above written, with a copy to TPA at Mississippi
Avenue and the Boardwalk, Atlantic City, New Jersey 08401 and an additional copy
to First Bank National Association, as Trustee, c/o First Trust National
Association, 180 East Fifth Street, St. Paul, Minnesota 55010, Attn: Corporate
Trust Department. By notice to Lessor, TPA and the Trustee, any party may
designate by notice in writing a new or other address to which notices shall
thereafter by given.
ARTICLE TWENTY-SIX
NON-MERGER
26.1 There shall not be a merger of (a) Lessee's interest in this
Lease or the leasehold estate created hereby, or (b) Lessee's interest in the
Improvements, or (c) the fee estate in the Leased Premises or any part thereof
by reason of the fact that the same person may acquire, own or hold, directly or
indirectly, all or part of (a), (b) or (c) above, and no such merger shall occur
unless and until all persons, including, without limitation, Lessor and Lessee,
having an interest in the foregoing (a), (b) and/or (c) above shall join in a
written instrument effecting such merger and shall duly record the same.
ARTICLE TWENTY-SEVEN
BROKER
27.1 Lessor and Lessee covenant, warrant and represent that there was
no broker or finder instrumental in consummating this Lease and that no
conversations or negotiations were had with any broker or finder concerning the
leasing of the Leased Premises.
ARTICLE TWENTY-EIGHT
NO RECORDATION
28.2 Neither this Lease nor a memorandum of same shall be recorded
without the consent of both Lessor and Lessee, except that if any sale or
transfer of the Leased Premises or any portion thereof occurs as described in
Section 6 of the Option or otherwise, if and to the extent this Lease and the
Option are then in effect, as a condition to and prior to the closing of such
sale or transfer or the recording of any instruments of conveyance in the
appropriate real estate records of Atlantic
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City, New Jersey, Lessor agrees to record a short form of this Lease in all such
public real property records in accordance with the Option. Once a short form
of this Lease is properly filed in the appropriate public records and so long as
it remains of record therein, Lessor shall have no further obligation to record
such a document in connection with future sales or transfers of the Leased
Premises or any portions thereof.
ARTICLE TWENTY-NINE
EXISTING TENANCIES AND OCCUPANCIES
29.1 Lessor represents that, to its knowledge, there are no tenants,
occupants or other parties presently occupying or having any right to occupy the
Leased Premises, the Improvements or any portion thereof, other than as set
forth in Schedule B.
----------
ARTICLE THIRTY
CONDITIONS TO LEASE
30.1 The parties acknowledge and agree that TPA is granted certain
rights of access and development under Section 8 of the Option, and neither
Lessor nor Lessee shall restrict or interfere with such rights so long as the
Option remains in effect.
30.1 The effectiveness of this Lease is conditioned on a copy hereof
being filed, by Lessee, with the Casino Control Commission of the State of New
Jersey (the "Commission") and/or the Commission, to the extent necessary,
----------
approving the form of this Lease. Said filing and approval of the Lease, to the
extent required, shall be at the sole cost and expense of TPA. Lessor agrees to
use good faith efforts to assist Lessee in obtaining said approval. Further,
Lessor agrees to provide to Lessee and the Commission any and all information
requested by or on behalf of the Commission necessary to obtain said approval.
If the Commission should require any change(s), addition(s) or deletion(s) in
the terms and conditions of this Lease (a "Modification"), each party agrees to
------------
effect such requested Modification(s), provided same do not materially diminish
the benefits to or increase the burdens imposed upon such party. All
discussions with the Commission concerning said approval and any such
Modification(s) shall be jointly participated in by Lessor and Lessee.
ARTICLE THIRTY-ONE
CASINO CONTROL ACT LICENSING
31.1 In the event TPA incorporates any Improvements on the Leased
Premises into its approved hotel building (as defined
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in N.J.S.A. 5:12-27), located on adjoining premises, Lessor and every person who
-------
has control over the Leased Premises within the meaning of N.J.S.A. 5:12-
-------
82b.(4)(a "Controlling Person") shall obtain and hold throughout the Term such
------------------
license(s) or qualification(s) as may be required by the Commission to the
extent same is necessary for Lessee to receive and hold a casino license for the
operation of a hotel/casino erected on the Leased Premises. Applications for
such license(s) or qualification(s) shall initially be filed within a reasonable
time after a notice is served by TPA on Lessor to do so and shall, with respect
to renewals, be filed at least ninety (90) days prior to the scheduled
expiration of the then current casino license. Lessor and each Controlling
Person shall cooperate in the filing and prosecuting of all such initial
applications and renewals, and whether or not such licensure or qualification of
Lessor is required, shall cooperate in furnishing any and all information
lawfully required by the Commission or the Division of Gaming Enforcement (the
"Division") so that Lessee may receive a casino license or renewal thereof. Any
---------
reasonable out-of-pocket costs or expenses incurred by Lessor (including
Lessor's reasonable counsel fees), in connection with the issuance, renewal
and/or continued maintenance of such license(s) or qualification(s) or any
application for the waiver thereof) shall be borne by TPA as provided in the
Option.
31.2 If the Commission denies licensure or qualification or should
attempt to revoke or suspend any license or qualification theretofore issued
with respect to Lessor or if the Division objects to such licensure or
qualification (any of such events hereinafter referred to as a
"Disqualification" and the entity or person disqualified or found unsuitable as
----------------
a "Disqualified Person"), Lessor shall use its reasonable efforts, at the
------------ ------
expense of TPA, to obtain a reversal of each such Disqualification.
ARTICLE THIRTY-TWO
ENVIRONMENTAL
32.1 (a) In the event that Lessee receives any notice, whether
written or oral, concerning the occurrence of any spill, discharge or cleanup of
any "hazardous substances" or "hazardous wastes" as such terms are defined in
the New Jersey Environmental Cleanup Responsibility Act, N.J.S.A. 13:1K-6 et
------- --
seq., or the regulations promulgated pursuant thereto ("ECRA"), on or about the
---- ----
Leased Premises or into any sewer, septic system or waste treatment system
servicing the Leased Premises (hereinafter collectively referred to as a
"Hazardous Discharge"), or of any complaint, order, citation or notice with
--------------------
regard to air emissions, water discharges, noise emissions or any
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other environmental, health or safety matter affecting Lessee or any subtenant
or the operation of Lessee or any subtenant at the Leased Premises (hereinafter
collectively referred to as "Environmental Complaint"), from any person, entity
-----------------------
or Governmental Authority, then Lessee shall give immediate oral and written
notice of same to Lessor, which notice shall set forth specifically and in
detail all relevant facts and circumstances with respect thereto.
(b) Lessor shall have the right, but not the obligation, to exercise
any and all rights provided to it pursuant to the terms of this Lease or to
enter onto the Leased Premises or take any actions as it shall deem necessary or
advisable to remove, clean up, minimize the impact of, or otherwise deal with
any Hazardous Discharge or any Environmental Complaint pertaining to the Leased
Premises upon its receipt of any notice from any person, entity or Governmental
Authority. All costs and expenses incurred by Lessor in the exercise of any
such rights shall be immediately payable by TPA to Lessor pursuant to the
Option.
(c) Notwithstanding any of the foregoing, the occurrence of any of the
following shall constitute an Event of Default under this Lease:
(1) If any Governmental Authority asserts a lien upon the Leased
Premises or any other part of the property of which the Leased Premises
forms a part by reason of the occurrence of a Hazardous Discharge, by the
filing of an Environmental Complaint or for any other reason whatsoever; or
(2) If any Governmental Authority asserts a claim against Lessor,
Lessee or the Leased Premises, for fines, damages or cleanup costs related
to the occurrence of any Hazardous Discharge or any Environmental Complaint
with respect to the Leased Premises; provided, however, that such claim
shall not constitute an Event of Default hereunder if, within thirty (30)
days after the occurrence giving rise to said claim: (i) Lessee proves to
Lessor's satisfaction that TPA has commenced and is diligently pursuing
either: (x) cure or correction of the event which constitutes the basis
for the claim, and that TPA continues diligently to pursue such cure or
correction to completion, or (y) proceedings for an injunction, a
restraining order or other appropriate emergent relief preventing such
entity or Governmental Authority from asserting such claim have been
instituted and relief pursuant thereto is granted within sixty (60) days of
the occurrence giving rise to said claim and such relief is
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not thereafter dissolved or reversed on appeal; and (ii) TPA has posted a
bond, letter of credit or other security satisfactory in form, substance
and amount to Lessor and the entity asserting the claim to secure the
proper and complete cure or correction of the event which constitutes the
basis of the claim.
(d) Notwithstanding any of the foregoing, the termination of this
Lease based upon any Event of Default set forth in this Lease shall in no way
serve to relieve TPA from the performance of all of its obligations under this
Article pursuant to the Option.
(e) In the event that Lessee's, TPA's or any subtenant's operations at
the Leased Premises now or hereafter constitute an "industrial establishment"
within the meaning of ECRA, then upon the expiration or termination of this
Lease, and upon any and every event which shall constitute a closing,
terminating or transferring of operations within the meaning of ECRA (including
but not limited to Lessor's sale of the Leased Premises or any part thereof,
exercise by TPA of the Option or upon subletting by TPA hereunder), TPA shall
comply with all requirements of ECRA with respect to such closing, terminating
or transferring of operations, at TPA's sole cost and expense, to the
satisfaction of the New Jersey Department of Environmental Protection and Energy
and Lessor. TPA shall immediately provide to Lessor copies of all
correspondence, reports, notices, orders, findings, declarations and other
materials pertinent to TPA's compliance with the provisions of ECRA, as any of
same are issued or received by Lessee from time to time.
(f) The terms of this Article shall survive the expiration or
termination for any reason of this Lease.
ARTICLE THIRTY-THREE
FURTHER ASSURANCES
33.1 The parties agree to cooperate with each other and to execute
and deliver, without expense to the other, such further documents and assurance
as may be necessary to carry out the purposes of this Lease.
ARTICLE THIRTY-FOUR
GOVERNING LAW
34.1 This Lease and the performance thereof shall be governed,
interpreted, construed and regulated by the substantive laws of the State of New
Jersey.
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ARTICLE THIRTY-FIVE
SECURITY DEPOSIT
35.1 Lessee hereby deposits the sum of ONE MILLION FIVE HUNDRED
SIXTY-THOUSAND ($1,560,000) Dollars (the "Deposit") with Lessor, the receipt of
-------
which is hereby acknowledged, as security for the full and faithful performance
by Lessee of each and every term, covenant and condition of this Lease. In the
event that this Lease shall be terminated pursuant to Article Eleven, Lessor may
use, apply or retain the whole or any part of the Deposit against the damages
payable by Lessee under Section 11.2(d) hereof. Notwithstanding anything
contained in this Section to the contrary, Lessor shall have the right to
commingle the Deposit with other funds of Lessor and Lessor's use thereof shall
be unrestricted. No interest shall be paid on the Deposit.
35.2 Unless this Lease shall have been terminated pursuant to Article
Eleven prior thereto, upon the irrevocable and unconditional assumption by TPA
of all of the obligations of Lessee under this Lease, the Deposit shall be
repaid to Donald J. Trump, the original Lessee, without interest, within three
(3) business days after the date of such assumption, subject to Donald J. Trump
obtaining any necessary prior approval by the Commission, and upon such
repayment of the Deposit, the provisions of this Article Thirty-five shall be
null and void.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement of Lease as of the date and year first above written.
MISSOURI BOARDWALK, INC.
LESSOR:
Attest: [MIDLANTIC DESIGNEE]
By: /s/ /s/
-------------------- --------------------------
BEN BERZIN, JR., VP
LESSEE:
Witness:
/s/ /s/
------------------------ --------------------------
DONALD J. TRUMP
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SCHEDULE A
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Leased Premises
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<PAGE>
SCHEDULE B
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Permitted Encumbrances
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<PAGE>
SCHEDULE A
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PROPERTY DESCRIPTION
--------------------
PARCEL A - OWNED LAND
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ALL THAT CERTAIN lot, tract, or parcel of land and premises situate, lying and
being in the City of Atlantic City, County of Atlantic, and State of New Jersey,
bounded and described as follows:
BEGINNING at a point in the westerly line of Missouri Avenue (50 feet wide),
said point being distant 227.10 feet south of the southerly line of Pacific
Avenue (60 feet wide), and extending thence
1. South 27 degrees 28 minutes 00 seconds East, in and along the westerly line
of Missouri Avenue, 496.46 feet to the Inland or Interior Line of Public
Park; thence
2. South 27 degrees 28 minutes 00 seconds East, continuing in and along the
westerly line of Missouri Avenue if same were extended, 1276.44 feet to the
Riparian Commissioners Exterior Line, said line being located 2000.00 feet
south of and parallel with Pacific Avenue; thence
3. South 62 degrees 32 minutes 00 seconds West, in and along said Riparian
Commissioners Exterior Line, 150.00 feet to the easterly line of Columbia
Place (50 feet wide), if same were extended southwardly; thence
4. North 27 degrees 28 minutes 00 seconds West, in and along said extended
easterly line of Columbia Place, 1293.86 feet to the Inland or Interior
Line of Public Park; thence
5. North 27 degrees 28 minutes 00 seconds West, in and along the easterly line
of Columbia Place, 306.14 feet; thence
6. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
63.00 feet; thence
7. North 27 degrees 28 minutes 00 seconds West, parallel with Columbia Place,
77.90 feet; thence
8. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
12.00 feet; thence
9. North 27 degrees 28 minutes 00 seconds West, parallel with Missouri Avenue,
95.00 feet; thence
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10. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific
Avenue, 75.00 feet to the point and place of BEGINNING.
IN compliance with Chapter 157, Laws of 1977 premises are herein known as Lots
3, 4, 75, 23 and 86 in Block 38 on the official tax map of Atlantic City, New
Jersey.
PARCEL B - LEASED LAND
-------- -----------
ALL THAT CERTAIN lot, tract, or parcel of land and premises situate, lying and
being in the City of Atlantic City, County of Atlantic, and State of New Jersey,
bounded and described as follows:
BEGINNING at the southwesterly corner of Pacific Avenue (60 feet wide) and
Missouri Avenue (50 feet wide), and extending thence
1. South 27 degrees 28 minutes 00 seconds East, in and along the westerly line
of Missouri Avenue, 182,10 feet; thence
2. South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
75.00 feet; thence
3. North 27 degrees, 28 minutes 00 seconds West, parallel with Pacific Avenue,
82.10 feet; thence
4. North 62 degrees, 32 minutes 00 seconds East, parallel with Pacific Avenue,
15.00 feet; thence
5. North 27 degrees 28 minutes 00 seconds West, parallel with Missouri Avenue,
100.00 feet to the southerly line of Pacific Avenue; thence
6. North 62 degrees 32 minutes 00 seconds East, in and along the southerly
line of Pacific Avenue, 60.00 feet to the point and place of BEGINNING.
IN compliance with Chapter 157, Laws of 1977 premises are herein known as Lot 1
in Block 38 on the official tax map of Atlantic City, New Jersey.
PARCEL C - OWNED LAND
-------- ----------
ALL THAT CERTAIN lot, tract, or parcel of land and premises situate, lying, and
being in the City of Atlantic City, County of Atlantic, and State of New Jersey,
bounded and described as follows:
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BEGINNING at a point in the Southerly line of Pacific Avenue (60 feet wide),
said point being distant 60.00 feet west of the westerly line of Missouri Avenue
(50 feet wide), and extending thence
1. South 27 degrees 28 minutes 00 seconds East, parallel with Missouri Avenue,
100.00 feet; thence
2. South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
15.00 feet; thence
3. South 27 degrees 28 minutes 00 seconds East, parallel with Missouri Avenue,
82.10 feet; thence
4. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
75.00 feet to the westerly line of Missouri Avenue; thence
5. South 27 degrees 28 minutes 00 seconds East, in and along the westerly line
of Missouri Avenue, 45.00 feet; thence
6. South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
75.00 feet; thence
7. North 27 degrees 28 minutes 00 seconds West, parallel with Missouri Avenue,
1.00 feet; thence
8. South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
75.00 feet; to the easterly line of Columbia Place (50 feet wide); thence
9. North 27 degrees 28 minutes 00 seconds West, in and along the easterly line
of Columbia Place, 133.00 feet; thence
10. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
43.00 feet; thence
11. North 27 degrees 28 minutes 00 seconds West, parallel with Missouri Avenue,
3.50 feet; thence
12. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
17.00 feet; thence
13. North 27 degrees 28 minutes 00 seconds West, parallel with Missouri Avenue,
19.50 feet; thence
14. South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
60.00 feet to the easterly line of Columbia Place (50 feet wide); thence
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15. North 27 degrees 28 minutes 00 seconds West, in and along the easterly
line of Columbia Place, 16.00 feet; thence
16. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
60.00 feet; thence
17. North 27 degrees 28 minutes 00 seconds West, parallel with Missouri Avenue,
54.10 feet to the southerly line of Pacific Avenue; thence
18. North 62 degrees 32 minutes 00 seconds East, in and along the southerly
line of Pacific Avenue, 30.00 feet to the point and place of BEGINNING.
IN compliance with Chapter 157, Laws of 1977 premises are herein known as Lots
2, 43, 44, 58, 60, 61, 62, 52, 63, 84, 85 and a certain 7 foot by 58 foot alley
located between lots 52 and 63 in Block 38 on the official tax map of Atlantic
City, New Jersey.
PARCEL D - OWNED LAND
--------- ----------
ALL THAT CERTAIN lot, tract or parcel of land and premises situate, lying and
being in the City of Atlantic City, County of Atlantic, and State of New Jersey,
bounded and described as follows:
BEGINNING at a point in the easterly line of Columbia Place (50 feet wide), said
point being distant 249.10 feet south of the southerly line of Pacific Avenue
(60 feet wide), and extending thence
1. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
58.00 feet; thence
2. North 27 degrees 28 minutes 00 seconds West, parallel with Columbia Place,
3.50 feet; thence
3. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
17.00 feet; thence
4. South 27 degrees 28 minutes 00 seconds East, parallel with Columbia Place,
76.50 feet; thence
5. South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
75.00 feet to the easterly line of Columbia Place; thence
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<PAGE>
6. North 27 degrees 28 minutes 00 seconds West, in and along the easterly line
of Columbia Place, 73.00 feet to the point and place of BEGINNING.
IN compliance with Chapter 157, Laws of 1977 premises are herein known as Lots
66, 67 and 93 in Block 38 on the official tax map of Atlantic City, New Jersey.
PARCEL E - OWNED LAND
-------- ----------
ALL THAT CERTAIN lot, tract, or parcel of land and premises situate, lying, and
being in the City of Atlantic City, County of Atlantic, and State of New Jersey,
bounded and described as follows:
BEGINNING at a point in the easterly line of Columbia Place (50 feet wide), said
point being distant 352.10 feet south of the southerly line of Pacific Avenue
(60 feet wide), and extending thence
1. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
63.00 feet; thence
2. South 27 degrees 28 minutes 00 seconds East, parallel with Columbia Place,
47.90 feet; thence
3. South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
63.00 feet to the easterly line of Columbia Place; thence
4. North 27 degrees 28 minutes 00 seconds West, in and along the easterly line
of Columbia Place, 47.90 feet to the point and place of BEGINNING.
IN compliance with Chapter 157, laws of 1977 premises are herein known as Lots
88, 89 and 90 in Block 38 on the official tax map of Atlantic City, New Jersey.
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<PAGE>
SCHEDULE B
----------
PERMITTED ENCUMBRANCES
----------------------
1. FEE/LEASEHOLD MORTGAGE: by and between Donald J. Trump and Midlantic
National Bank, dated November 29, 1989 recorded December 4, 1989 in
Mortgage Book 4288 page 121; to secure $37,000,000.00.
2. COLLATERAL ASSIGNMENT OF LEASE OR LEASES: by and between Donald J. Trump
to Midlantic National Bank, dated November 29, 1989 recorded December 4,
1989 in Deed Book 5007 page 224.
3. FINANCING STATEMENT: Donald J. Trump (Debtor) to Midlantic National Bank
(Secured Party) filed December 4, 1989 #5587. (NOTE: Above Financing
Statement was filed with the Secretary of State of New Jersey December 11,
1989, as #1309052)
FINANCING STATEMENT: Donald J. Trump (Debtor) to Midlantic National Bank
(Secured Party) filed August 21, 1990 #06809.
4. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $19,306.44 for Block 38 and Lot 66 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 16.
5. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $16,203.37 for Block 38 and Lot 90 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 18.
6. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $22,444.46 for Block 38 and Lot 85 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 20.
7. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $22,444.46 for Block 38 and Lot 84 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 22.
8. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $22,444.46 for Block 38 and Lot 62 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 24.
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<PAGE>
9. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $22,444.46 for Block 38 and Lot 61 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 26.
10. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $17,718.49 for Block 38 and Lot 60 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 28.
11. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $14,691.18 for Block 38 and Lot 58 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 30.
12. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $19,305.44 for Block 38 and Lot 52 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 32.
13. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $51,983.33 for Block 38 and Lot 4 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 34.
14. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $45,497.49 for Block 38 and Lot 43 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 36.
15. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $51,983.33 for Block 38 and Lot 2 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 38.
16. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to Nassau Viking
Assoc. for $57,775.72 for Block 38 and Lot 3 dated August 6, 1992 recorded
September 16, 1992 in Mortgage Book 4853 page 40.
17. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to City of Atlantic
City for $104,519.84 for Block 38 and Lot 75 dated August 6, 1992 recorded
December 7, 1992 in Mortgage Book 4912 page 270.
18. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to City of Atlantic
City for $687,048.38 for Block 38 and Lot 86 dated August 6, 1992 recorded
December 7, 1992 in Mortgage Book 4912 page 272.
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<PAGE>
19. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to City of
Atlantic City for $11,706.28 for Block 38 and Lot 89 dated August 6, 1992
recorded December 15, 1992 in Mortgage Book 4919 page 114.
20 TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to City of Atlantic
City for $16,497.65 for Block 38 and Lot 88 dated August 6, 1992 recorded
December 15, 1992 in Mortgage Book 4919 page 116.
21. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to City of Atlantic
City for $21,870.48 for Block 38 and Lot 67 dated August 6, 1992 recorded
December 15, 1992 in Mortgage Book 4919 page 118.
22. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to City of Atlantic
City for $19,306.44 for Block 38 and Lot 63 dated August 6, 1992 recorded
December 15, 1992 in Mortgage Book 4919 page 120.
23. TAX SALE CERTIFICATE: Atlantic City Tax Collector sold to City of Atlantic
City for $43,877.49 for Block 38 and Lot 93 dated August 6, 1992 recorded
December 15, 1992 in Mortgage Book 4919 page 122.
24. Taxes, charges and assessments subsequent to December 31, 1990 except as
paid in the sum of $286,246.08.
25. As to Parcel A: Rights granted to the Atlantic City Electric Company in
Deed Book 1025 page 455, and Deed Book 1025 page 461. (Affects Lots 3, 4,
Block 38)
26. Rights of City of Atlantic City and the General Public as set forth in
Boardwalk and Park Grants in Deed Book 205 page 1, and Deed Book 423 page
136. (Affects Lot 86, Block 38)
(Affects lands waterward of the Interior Line of the Park-Boardwalk only)
27. Rights granted to the Atlantic City Electric Company in Deed Book 1027 page
125.
28. The estate to be guaranteed in that portion of the insured premises flowed
by tide water of Atlantic Ocean, shall be limited to such estate as the
State of New Jersey, through its Riparian Commissioners, grants to Riparian
Owners, said estate in this instance having been granted to The Seaview
Hotel Company, grant dated October 27, 1883 and recorded on November 10,
1883 in Deed Book 97 page 26. It is hereby
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<PAGE>
certified that the grantee in said grant was the upland owner at the time
the grant was issued.
29. Rights of general public in and to the beach. (Affects Lot 23) (Affects
lands waterward of the Interior Line of the Park-Boardwalk only).
30. Paramount Rights of the United States Government to establish harbor,
bulkhead or pierhead lines or to change or alter any such existing lines
and to remove or compel the removal of fill and improvements thereon
(including buildings or other structures) from land now or formerly lying
the high water mark of the Atlantic Ocean without compensation. (Affects
Parcel A).
31. As to parcel B:
GROUND LEASE: Albert Rothenberg, and Robert Rothenberg, to Four Season
Motel Inc., dated June 16, 1969 recorded June 18, 1969 in Deed Book 2478
page 276.
a. ASSIGNMENT OF LEASE (Assigns Lease in Deed Book 2478 page 276) Four
Seasons Motel Inc. to Isadore Mokrin and Dorothy Mokrin, dated January
31, 1978 recorded February 9, 1978 in Deed Book 3205 page 48.
b. ASSIGNMENT OF LEASE: from Isadore Mokrin and Dorothy Mokrin, to
Isadore Mokrin and Dorothy Mokrin Partnership, dated February 1, 1978
recorded February 9, 1978 in Deed Book 3205 page 52.
c. ASSIGNMENT OF LEASE WITH ASSUMPTION OF LEASE BY ASSIGNEE: from
Isadore Mokrin and Dorothy Mokrin Partnership to Boardwalk Properties
Inc., a New Jersey Corporation dated March 13, 1978 recorded March 21,
1978 in Deed Book 3215 page 5.
d. AMENDED LEASE: between Albert Rothenberg and Robert Rothenberg, and
Boardwalk Properties Inc., a New Jersey Corporation dated March 9,
1979 in Deed Book 3332 page 33.
e. ASSIGNMENT AND ASSUMPTION OF TENANTS INTEREST: by and between
Boardwalk Properties Inc., a New Jersey Corporation and Donald J.
Trump dated March 18, 1989 recorded March 20, 1989 in Deed Book 4865
page 223.
f. ASSIGNMENT AND ASSUMPTION OF TENANTS INTEREST IN LEASE: by and
between Boardwalk Properties Inc., a New Jersey
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<PAGE>
Corporation and Donald J. Trump, dated May 18, 1989 recorded June 19,
1989 in Deed Book 4921 page 183.
g. ASSIGNMENT AND ASSUMPTION OF TENANT'S INTEREST IN LEASE: by and
between Donald J. Trump and Missouri Boardwalk, Inc., dated June 24,
1993 recorded June __, 1993 in Deed Book ___ page ___.
32. Rights granted to the Atlantic City Electric Company in Deed Book 1027 page
28.
33. Fee title to Parcel B appears of record in Albert Rothenberg and Robert
Rothenberg of virtue of the following Deeds viz:
a. Being the same premises with Max Berman (widow) by a deed dated
January 6, 1964, recorded January 9, 1964 in Atlantic County in Deed
Book 2201 page 76, granted and conveyed unto Albert Rothenberg,
married man, and Robert Rothenberg, married man, in fee.
b. Also being the same premises which Carolyn Rothenberg (wife of Robert
Rothenberg) by a deed dated January 28, 1966 and recorded February 8,
1966 in Atlantic County in Deed Book 2315 page 363 granted and
conveyed unto Robert Rothenberg, in fee to release dower interest.
c. Also being the same premises which Edna Rothenberg (wife of Albert
Rothenberg) by a deed dated January 28, 1966 recorded February 8, 1966
in Atlantic County, in Deed Book 2315 page 367 granted and conveyed
unto Albert Rothenberg in fee to release dower interest.
34. Estate and Interest insured (Parcel B) is limited to the right of
possession acquired under a lease dated June 16, 1969 and recorded in Deed
Book 2478 page 276.
As to Parcels C, D and E:
35. Rights of adjoining owners, and appurtenant rights in and to all alleyways
that now exist on the subject lands.
36. Rights granted to the Atlantic City Electric as follows:
a. Deed Book 1028 page 8, Affects Lot 84
b. Deed Book 1025 page 458, Affects Lot 85
c. Deed Book 1027 page 39, Affects Lot 63
b. Deed Book 1025 page 456, Affects Lot 43
e. Deed Book 1481 page 188, Affects Lot 83
f. Deed Book 1481 page 190, Affects Lot 84
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<PAGE>
g. Deed Book 1027 page 33, Affects Lot 52
h. Deed Book 1026 page 104, Affects Lot 58
i. Deed Book 1025 page 464, Affects Lot 60
j. Deed Book 1027 page 40, Affects Lot 61
k. Deed Book 1475 page 253, Affects Lot 61
l. Deed Book 1475 page 255, Affects Lot 62
m. Deed Book 1028 page 7, Affects Lot 66
n. Deed Book 1028 page 9, Affects Lot 67
o. Deed Book 1025 page 332, Affects Lots 88, 89 & 90
p. Deed Book 1027 page 38, Affects Lot 93
37. Rights of adjoining owner (Lot 74) Northwest of Parcel E in and to an
alleyway, 3 feet wide, that now exists along the Northwest line of Parcel E
(Lot 88) as granted in Deed Book 674 page 83.
38. Notwithstanding the foregoing, (i) the Liens described in paragraphs 4
through 16 of this Schedule and (ii) the delinquent taxes described in that
certain letter agreement dated June 24, 1993 among Donald J. Trump, Trump
Plaza Associates and Missouri Boardwalk, Inc., shall be "Permitted Liens"
until May 1, 1994, at which time all taxes, interests and penalties which
are the subject thereof shall be paid in full and such Liens shall be
discharged of record.
39. Notwithstanding the foregoing, the Liens described in paragraphs 17 through
23 of this Schedule shall be "Permitted Liens", but only if and to extent
that all taxes, interest and penalties which are the subject thereof are
paid in full in accordance with the Tax Redemption Installment Agreement
between Donald J. Trump and the City of Atlantic City, New Jersey.
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<PAGE>
Ex. 10.44
SUBLEASE
THIS SUBLEASE is made as of this 24 day of June, 1993 by and between
Missouri Boardwalk, Inc., a New Jersey corporation, having its principal office
located c/o Midlantic National Bank, 499 Thornall Street, Metro Park Plaza,
Edison, New Jersey 08837 (hereinafter referred to as "Sublandlord"), and DONALD
J. TRUMP, having an office at 725 Fifth Avenue, New York, New York 10022
(hereinafter called "Subtenant").
WITNESSETH:
1. Property. The Subtenant agrees to rent from the Sublandlord and
--------
the Sublandlord agrees to Sublease to the Subtenant the property known as Block
38, Lot 1 on the Official Tax Map of the City of Atlantic City and more
particularly described as Exhibit A attached hereto and made a part
---------
hereof (hereinafter referred to as the "Property").
2. Use of the Property. The Subtenant may use the Property for any
-------------------
lawful purpose and as permitted under the Master Lease as hereinafter defined.
3. Master Lease.
------------
3.1 The terms and conditions of that certain Amended Lease dated
March 9, 1979 and April 9, 1979 in Deed Book 3332, Page 33 et seq. in the
-------
Atlantic County Clerk's Office (hereinafter referred to as the "Amended
Lease") between Albert Rothenberg and Robert Rothenberg, as Lessors
("Lessors") and Boardwalk Properties, Inc. ("Boardwalk"), as assigned by
Boardwalk to Subtenant by Assignments dated March 18, 1984 and May 18,
1989, which assignments were recorded on March 20, 1989 and June 19, 1984
in the office of the Clerk of Atlantic County in Book 4865 of Deeds at Page
223 et seq., and Book 4921 of Deeds at Page 183 et seq., respectively
------- -------
(collectively, the "Assignments"), and subsequently assigned by Subtenant
to Sublandlord by that certain Assignment of Lease dated of even date
herewith (the "Lease Assignment") are incorporated herein by reference.
The Amended Lease, Assignments and Lease Assignment are hereinafter
collectively referred to as the "Master Lease".
3.2 Subtenant shall have all the rights of the lessee under the
Master Lease.
<PAGE>
3.3 Sublandlord shall have all the rights and obligations of the
lessor under the Master Lease.
4. Term. The term of this Sublease shall commence on the date hereof and
----
shall be coterminous with the term of that certain Agreement of Lease dated of
substantially even date herewith, between Sublandlord, as landlord, and
Subtenant, as tenant, demising certain property adjoining the Property (the
"Adjoining Lease"). If, for any reason, the Adjoining Lease is terminated, this
Sublease shall also be automatically terminated at the same time and without any
obligation or liability of Sublandlord to Subtenant as a result thereof, subject
to the rights, set forth in that certain Option and Right of First Refusal
Agreement of substantially even date herewith between Sublandlord and Trump
Plaza Associates ("TPA"), of TPA or First Bank National Association, as Trustee,
to receive a new sublease of the Property from Sublandlord substantially similar
in form to this Sublease.
5. Rent. Rent, additional rent and all taxes, assessments and other
----
charges set forth in Section 1 and elsewhere in the Master Lease shall be paid
in amounts specified in the Master Lease and shall constitute all rents and
additional rents due under this Sublease. Subtenant shall make all payments
owed under the Master Lease, including rent and additional rent, directly to
Lessors under the Master Lease.
6. Default by Subtenant. The default by Subtenant of any of the terms,
--------------------
provisions, covenants or conditions of either the Master Lease or the Adjoining
Lease shall constitute a default hereunder. In the event of such a default, or
of any violation of this Sublease, Sublandlord shall have and may exercise
against Subtenant all of the rights and remedies available to Lessor under the
Master Lease or available to Sublandlord under the Adjoining Lease. In
addition, in such event, Sublandlord may, but shall not be obligated to, without
further notice to Subtenant, perform the same for the account of Subtenant, and
if Sublandlord makes any expenditures or incurs any obligations for the payment
of money in connection therewith including, but not limited to reasonable
attorneys' fees, such sums paid or obligations incurred shall be deemed to be
additional rent hereunder payable directly to Sublandlord.
7. Validity of Lease. If a clause or provision of this Sublease is
-----------------
legally invalid, the rest of this Sublease remains in effect.
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<PAGE>
8. Parties. The Sublandlord and Subtenant are bound by this Sublease.
-------
All parties who lawfully succeed to their rights and responsibilities are also
bound.
9. Entire Lease. This Sublease constitutes the entire Agreement between
------------
the parties. This Sublease can only be changed by an agreement in writing
signed by both the Subtenant and the Sublandlord.
IN WITNESS WHEREOF, the Subtenant and Sublandlord have each executed this
Sublease on the day and year first hereinabove written.
Witness or Attest: SUBTENANT:
/s/ /s/
----------------------- -----------------------------
Name:__________________ DONALD J. TRUMP
Witness or Attest: SUBLANDLORD:
/s/
----------------------- MISSOURI BOARDWALK, INC.
Name: William R. Kendall _______________________
------------------------
By: /s/
------------------------
Name: Ben Berzin, Jr.
Title: Vice President
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<PAGE>
STATE OF NEW YORK :
: SS.
COUNTY OF NEW YORK :
I certify that on June 23, 1993, DONALD J. TRUMP personally came before me
and acknowledged under oath, to my satisfaction, that he:
(a) Is the person named in and who signed this Sublease; and
(b) Signed and delivered this Sublease as his voluntary act and deed.
My Commission Expires:
Rosemary Vasallo /s/
Notary Public, ------------------------
State of New York A Notary Public
No. 41-5001626 Of The State of New York
Qualified in Queens County
Commission Expires 9/14/94
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<PAGE>
STATE OF NEW YORK :
: SS.
COUNTY OF NEW YORK :
I CERTIFY that on June 23, 1993, BEN BERZIN, JR. personally came before me
and this person acknowledged under oath, to my satisfaction, that:
(a) This person signed, sealed and delivered the attached document as
the Vice President of Missouri Boardwalk, Inc. a corporation of
the State of New Jersey;
(b) This document was signed and made by the Corporation as its
voluntary act and deed by virtue of authority from its Board of
Directors.
My Commission Expires:
Evan K. Gordon /s/
Notary Public, ---------------------------
State of New York A Notary Public Of The
Qualified in Bronx County State of New York
Certificate filed in New York County
Commission Expires August 27, 1994
-5-
<PAGE>
EXHIBIT A
ALL THAT CERTAIN LOT, tract or parcel of land and premises situate, lying and
being in the City of Atlantic City, County of Atlantic and State of New Jersey,
bounded and described as follows:
PARCEL B: BEGINNING at the Southwesterly corner of Pacific Avenue (60 feet
wide) and Missouri Avenue (50 feet wide); and extending thence
(1) South 27 degrees 28 minutes 00 seconds East, in and along the Westerly line
of Missouri Avenue, 182.10 feet; thence
(2) South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue,
75.00 feet; thence
(3) North 27 degrees 28 minutes 00 seconds West, parallel with Missouri Avenue,
82.10 feet; thence
(4) North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue,
15.00 feet; thence
(5) North 27 degrees 28 minutes 00 seconds West, parallel with Missouri Avenue,
100.00 feet to the Southerly line of Pacific Avenue; thence
(6) North 62 degrees 32 minutes 00 seconds East, in and along the Southerly line
of Pacific Avenue, 60.00 feet to the point and place of BEGINNING.
BEING KNOWN AS Lot 1 in Block 38 as shown on the tax map of the City of Atlantic
City.
TOGETHER WITH all of the right, title and interest in and to the lands lying in
the bed of any street, alley or highway in front of, adjoining or abutting the
above-described premises.
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<PAGE>
Ex. 10.45
Option Agreement
This Option Agreement is made as of the 17th day of December, 1993
among ACFH Inc., a Delaware Corporation ("ACFH"), CHEMICAL BANK, a New York
banking corporation ("Chemical"), and DONALD J. TRUMP (the "Buyer").
Preliminary Statement
---------------------
A. ACFH is the owner of certain property located in Atlantic City,
New Jersey which is described in the Agreement of Purchase and Sale attached as
Exhibit A to this Option Agreement (the "Purchase Agreement"), and which
includes the property known as the Trump Regency Hotel.
B. Chemical, as successor by merger to Manufacturers Hanover Trust
Company ("MHT"), is the holder of the following promissory notes:
(i) Revolving Credit Note dated as of July 20, 1987 made by the
Buyer to the order of MHT, as amended by First Allonge to Note dated
January 30, 1989, and as further amended by Second Allonge to Note dated as
of August 8, 1990 (as amended, the "NYP Note");
(ii) Interest Equalization Note dated as of August 8, 1990 made by
the Buyer to the order of MHT (the "Interest Equalization Note");
(iii) Term Note dated as of August 8, 1990 made by the Buyer to
the order of MHT (the "Term Note");
(iv) Noted dated as of July 20, 1987, in the original principal
amount of $80,000,000 made by the Buyer to the order of MHT, as amended by
First Allonge to Noted dated as of November 16, 1988 and as further amended
by Second Allonge to Note dated as of August 8, 1990 (as amended, the
"Hyatt Note").
(v) Mortgage Note dated as of January 31, 1973, made by LBREC
Realty Inc. to Morris Green, as trustee under the will of Dora Green,
deceased, and Joyce Cheney, as such note was assigned to MHT by that
certain Assignment dated April 13, 1983, made by Morris Green, as trustee
under the will of Dora Green, deceased, Joyce Cheney, as trustee under the
will of Dora Green, deceased, and Joyce Cheney to MHT which Assignment was
recorded in the Office of the City Register, New York County (the "City
Register's Office") on April 27, 1983 in Reel 682, Page 585, as such note
was amended by that
<PAGE>
certain Agreement dated April 22, 1983 recorded on April 27, 1983 in the
City Register's Office in Reel 682, Page 587 between MHT and the Buyer, and
as further amended by those certain letter agreements dated May 7, 1986,
March 11, 1988 and April 17, 1989 and by Note Modification Agreement dated
as of August 8, 1990 each between MHT and the Buyer (as amended, the "CPS
Note").
The NYP Note, the Interest Equalization Note, the Term Note, the Hyatt
Note and the CPS Note are collectively referred to in this Option Agreement as
the "Notes". The Notes are intended to include all debt owing by the Buyer and
any entity owned by the Buyer to Chemical relating to the Premises referred to
in the Settlement Agreement (as defined below).
C. The Notes are secured by the mortgages, pledge and security
agreements and other collateral documents described on Exhibit B to this Option
Agreement (collectively, the "Collateral Documents").
D. ACFH is willing to grant to the Buyer an option to purchase the
Property (as defined in the Purchase Agreement), and Chemical is willing to
grant to the Buyer an option to purchase the Notes, all in accordance with the
terms of this Option Agreement and the Purchase Agreement.
E. The Buyer acknowledges that he is the maker of the Notes, that he
or his wholly owned affiliates own the collateral which is encumbered by the
Collateral Documents, and that his wholly owned affiliate previously owned the
Property, and that therefore the Buyer is completely familiar with all matters
concerning the Notes, the Collateral Documents and, up to the date of transfer
to ACFH, the Property. ACFH and Chemical are unwilling to make any
representations regarding the Notes, the Collateral Documents and the Property
except for the limited representations contained in this Option Agreement and
the Purchase Agreement, and the Buyer is willing to enter into this Option
Agreement based on such limited representations.
F. The Buyer and Chemical desire to settle all outstanding matters
relating to the Notes and the Collateral Documents, and in furtherance of such
settlement, Chemical and ACFH are granting the options in accordance with the
terms of this Option Agreement, and the Buyer is executing and delivering to
Chemical the release by the Buyer and certain of his wholly owned affiliates of
any and all claims they may have against Chemical.
-2-
<PAGE>
Agreement
---------
In consideration of the foregoing recitals and other good and valuable
consideration, Chemical, ACFH and the Buyer agree as follows:
1. Grant of Options. ACFH hereby grants to the Buyer an option to
purchase the Property, and Chemical hereby grants to the Buyer an option to
purchase the Notes, all strictly in accordance with the terms of this Option
Agreement. The options granted by this Section 1 are referred to as the
"Options".
2. Term of the Options; Performance Obligations. (a) The term of
the Options shall commence upon the execution of this Option Agreement and
continue until 5:00 P.M. on May 8, 1994 (the "Initial Option Period"). Provided
the Buyer has paid the $1,000,000 option consideration as provided in Section 5
below and the Options have not previously been terminated as provided in this
Agreement, the Buyer may elect to extend the term of the Options to June 30,
1994 (the "Extended Option Period") subject to the satisfaction of the following
conditions: (i) the Buyer shall give written notice of such election to ACFH
and Chemical prior to the expiration of the Initial Option Period, and
simultaneously with the giving of such notice, shall pay to ACFH and Chemical,
in immediately available funds, the aggregate sum of $250,000 as consideration
for the extension of the Initial Option Period (time being of the essence with
respect to such notice and payment) and (ii) no event specified in clause (v) or
(vi) of paragraph (b) below shall have occurred. As used below in this
Agreement, "Option Period" shall mean the Initial Option Period and if the term
of the Options is extended as set forth above, the Initial Option Period and the
Extended Option Period.
(b) Notwithstanding the term of the Options set forth in paragraph (a)
above, Chemical and ACFH shall have the right to terminate the Options upon the
occurrence of any of the following:
(i) the Buyer shall fail to deliver to ACFH on or prior to February
15, 1994 (time being of the essence) (A) an agreement between the New
Jersey Sports and Exposition Authority ("NJSEA") and the Buyer whereby
NJSEA grants to the Buyer an option for a term of no less than eighteen
months to purchase the premises demised by the West Hall Lease (as defined
in the Purchase Agreement) (the "West Hall Option") and (B) an assignment,
in form reasonably satisfactory to ACFH, by the Buyer to ACFH of all his
rights under West Hall Option, together with the consent of NJSEA and all
other required parties to such assignment; such
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<PAGE>
assignment shall provide that so long as (1) the Options have not
terminated and remain in full force and effect and (2) the Buyer is not in
default under the terms of the Purchase Agreement, then the Buyer shall
retain the right to exercise the West Hall Option for his own account; and
shall further provide that it shall terminate upon Buyer's acquisition of
the Property pursuant to the Purchase Agreement;
(ii) the Buyer shall fail to deliver to Chemical and ACFH on or
prior to February 1, 1994 (time being of the essence) a letter from a
reputable investment banking firm stating that such firm is confident that
the Buyer has the ability to obtain the financing described in clause (iii)
below;
(iii) the Buyer shall fail to file with the Securities and
Exchange Commission on or prior to March 15, 1994 (time being of the
essence) a registration statement relating to the offering of securities in
an aggregate principal amount sufficient to pay the purchase price as
provided in Section 6 below;
(iv) the Buyer shall fail to file the notification and report
required pursuant to Section 12 of this Agreement on or prior to February
28, 1994 (time being of the essence);
(v) the Buyer, Park South Associates, The Trump Corporation, The
East 61st. Company, Plaza Consulting Corp. or B. Plaza Realty Corp. shall
breach any covenant or other obligation set forth in Sections 5.1, 5.2, 5.3
or 5.4 of the Settlement Agreement dated as of the same date as this
Agreement among the Buyer, the foregoing entities and Chemical (the
"Settlement Agreement"), provided that in the case of a breach of the
covenant set forth in Section 5.3, such breach must be material; or any
representation or warranty made by the Buyer or any of the foregoing
entities in the Settlement Agreement or which is contained in any
certificate, document or financial or other statement furnished at any time
under or in connection with the Settlement Agreement shall provide to have
been inaccurate in any material respect on or as of the date made and the
Buyer or such entity had actual knowledge of such inaccuracy and made such
representation notwithstanding such knowledge; or The Trump Corporation,
The East 61st. Company or Park South Associates shall fail to deposit the
Rents (as defined in the Settlement Agreement) in the accounts designated
pursuant to subsection 8.2 of the Settlement Agreement or to apply funds
released from such accounts to the payment of
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Qualified Business Expenses (as defined in the Settlement Agreement),
except to the extent that there is a bona fide dispute regarding
expenditures made by The Trump Corporation, the East 61st. Company or Park
South Associates, as applicable, provided that the Trump Corporation, The
East 61st. Company or Park South Associates, as applicable, acted in good
faith in believing that such disputed expenditure was a Qualified Business
Expense;
(vi) the Buyer shall be in default under the terms of this Option
Agreement or the Purchase Agreement; or
(vii) Chemical and the other parties to the Settlement Agreement
shall fail, on or before January 5, 1993, to enter into escrow arrangements
satisfactory to both Chemical and the Buyer under which all of the
documents required as closing deliveries under the Settlement Agreement are
executed and placed into escrow, to be delivered out of such escrow on the
Closing Date as designated by Lender under the Settlement Agreement.
The Buyer acknowledges that time shall be of the essence with respect to the
Buyer's obligations to deliver each of the agreements and the letter referred to
in clauses (i) and (ii) above and to make the filings referred to in clauses
(iii) and (iv) above by the respective dates set forth in each such clause (each
such date, a "Performance Date"). If Chemical and ACFH shall elect to terminate
the Options pursuant to this paragraph (b), then Chemical and ACFH shall have no
further obligations or liability to the Buyer under this Option Agreement. In
the event that the Buyer exercises the Options pursuant to Section 3 of this
Agreement, the Buyer shall have no further obligation to perform under clauses
(i) through (iv) above to the extent that the applicable Performance Date will
occur after the date on which the Options are so exercised; provided, however,
-------- -------
that upon the occurrence of an event specified in clause (v) or (vi) above,
Chemical and ACFH shall have the right to terminate this Option Agreement and
the Purchase Agreement and upon such termination shall have no further
obligations or liabilities to the Buyer under this Option Agreement and the
Purchase Agreement.
(c) Buyer covenants that he will not exercise the West Hall Option
until such time as the Closing (as defined below) shall have occurred.
3. Exercise of the Options. The Options may be exercised by the
Buyer only by written notice of such exercise in the form set forth in Exhibit C
(the "Option Notice") given by
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the Buyer to ACFH and Chemical prior to the termination of the Option Period in
accordance with the provisions of Section 14 below. Time shall be of the
essence with respect to the giving of the Option Notice. The Buyer must
exercise the Options together, and shall not have the right to exercise either
of the Options granted under Section 1 above independently of the other. Any
attempt by the Buyer to exercise one of the Options without the other shall be
void and of no effect. If the Buyer fails to exercise the Options during the
Option Period as provided above, the Options shall terminate and ACFH and
Chemical shall have no further obligations or liability to the Buyer under this
Option Agreement.
4. The Purchase Agreement. Upon the valid exercise of the Options
by the Buyer in accordance with Section 3 above, the Purchase Agreement shall
conclusively be deemed to have been executed and delivered by the Buyer and ACFH
and to be in full force and effect without the need for any further action by
either of such parties.
5. Option Payment. (a) The total consideration to be paid by Buyer
for the granting of the Options shall be $1,000,000. The Buyer shall pay to
ACFH and Chemical on or prior to January 5, 1994 the entire $1,000,000
consideration, in immediately available funds. In the event that Chemical and
ACFH shall not have received such payment on or prior to January 6, 1994 (time
being of the essence), this Option Agreement shall automatically terminate
without notice or any other action on the part of Chemical and/or ACFH, and upon
such termination, Chemical and ACFH shall have no further obligations or
liabilities to the Buyer under this Option Agreement or the Purchase Agreement.
If this Option Agreement is terminated as a result of Buyer's failure to make
the payment due January 5, 1994, then Buyer shall not be liable for the payment
of any portion of the $1,000,000 option consideration. Except as provided in
paragraph (b) below, such payments and, if applicable, the $250,000 paid as
consideration for the granting of an extension to the Initial Option Period,
shall be non-refundable.
(b) The Buyer shall have the right to terminate this Option Agreement,
and if entered into, the Purchase Agreement, and to receive a refund of payments
made as consideration for the granting of the Options and, if paid, for the
extension of the Initial Option Period upon the occurrence of any of the
following: (i) ACFH shall fail to file the notification and report required
pursuant to Section 12 of this Agreement on or prior to February 28, 1994 or
shall cancel this Agreement pursuant to such Section 12, (ii) Chemical and ACFH
do not have the requisite power and authority to assign the Notes and convey
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the Property as contemplated by this Option Agreement and the Purchase
Agreement, or (iii) ACFH shall be unable to convey title to the Property as
required by this Option Agreement and the Purchase Agreement as a result of a
breach by ACFH of the covenant set forth in Section 13(b) of this Option
Agreement.
6. Purchase Price. The aggregate purchase price to be paid by the
Buyer for the Notes and the Property shall be $80,000,000, to be wired at the
Closing (as defined below) in immediately available funds in accordance with
instructions given at the Closing by ACFH and Chemical. The Buyer shall receive
a credit against the purchase price of the $1,000,000 paid as consideration for
the granting of the Options and, if applicable, the $250,000 paid as
consideration for the granting of an extension to the Initial Option Period.
Apportionments or adjustments to the purchase price with respect to the Notes
shall be as provided in Section 7(c) below, and apportionments and adjustments
to the purchase price with respect to the Property shall be as provided in
Section 8 of the Purchase Agreement.
7. Closing. (a) The Notes and the Property shall be transferred to
the Buyer, and the purchase price shall be paid, at a closing (the "Closing") on
a date to be specified by the Buyer in the Option Notice, which closing date
shall be not less than 5 or more than 14 days after the date that the Option
Notice is given. Any Option Notice given by the Buyer which does not specify a
closing date as provided in the preceding sentence shall be void and of no
effect as if such Option Notice had never been given. Time shall be of the
essence with respect to Chemical's and the Buyer's obligations to close on the
date specified in the Option Notice for the Closing, and any failure by the
Buyer to comply with such obligations on that date shall, at ACFH's and
Chemical's option, result in a termination of the Options, after which the Buyer
shall have no further rights under this Option Agreement or under the Purchase
Agreement. The transfer of the Notes and the transfer of the Property must
occur simultaneously and each such closing is conditioned upon the other closing
being completed at the same time. The Buyer expressly agrees that he will not
have the right to complete the purchase of the Notes without simultaneously
completing the purchase of the property.
(b) At the Closing, in addition to the delivery of any documents
required by the Purchase Agreement: (i) Chemical shall deliver to the Buyer (A)
a duly executed and acknowledged assignment of all of Chemical's right, title
and interest in the Notes, the Collateral Documents (including appropriate UCC
assignments), all deficiency claims, if any, relating to the Notes, and all
claims under the Override Agreement dated as of
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August 8, 1990 among the Buyer and various other parties, all of the above
without recourse, representation, or warranty of any kind except as expressly
provided in this Option Agreement or in such assignment, which assignment shall
be in the form set forth in Exhibit B and (B) a termination of the assignment of
the West Hall Option given by the Buyer to ACFH pursuant to Section 2(b)(i) of
this Option Agreement; and (ii) each party shall also deliver at the Closing a
reaffirmation of its representations and warranties as of the Closing, as
provided in Section 8 below.
(c) Pursuant to the Settlement Agreement, all Rents from the
properties which are the subject of the Settlement Agreement have been assigned
to, and are being deposited into accounts owned by, Chemical and are being
disbursed to the extent required to pay Qualified Building Expenses. Chemical
is entitled to all Rents in excess of Qualified Building Expenses through the
Closing. Accordingly, the following shall be apportioned and adjusted between
Chemical and the Buyer as of midnight of the day preceding the Closing
("Adjustment Date"):
(i) rents and additional rents under or in respect of the Leases
(as defined in the Settlement Agreement), as, when and to the extent
actually collected; the first rents so collected shall be applied to rents
up to 60 days delinquent as of the Closing, then to bring rents current,
and then to other past due rents (except that Meyer rents collected which
are attributable to the period before June 24, 1993 shall belong to Buyer);
(ii) real estate and other taxes, assessments and charges, and
other municipal and state charges, license and permit fees, if any, on the
basis of the fiscal period for which assessed or charged, provided,
--------
however, that any rebates of taxes, assessments or charges received after
-------
the Adjustment Date (i) which are attributable to taxes, assessments or
charges incurred or paid prior to the Adjustment Date shall be delivered to
Chemical and (ii) which are attributable to taxes, assessments or charges
in part incurred or paid prior to the Adjustment Date shall be apportioned
between Chemical and the Buyer as of the Adjustment Date.
(iii) water and sewer rents and charges on the basis of the fiscal
period for which assessed or charged;
(iv) water, electric, gas, steam and other utility charges except
that no apportionment shall be made for any of such items as are furnished
and charged by the utility
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<PAGE>
company furnishing such service directly to any tenants under the Leases;
(v) fuel, if any, and all taxes thereon, on the basis of a reading
taken as late as possible prior to the Adjustment Date, at the price then
charged by the supplier thereof, including any taxes;
(vi) charges under service contracts on the basis of the annual or
monthly charges or fees payable thereunder; and
(vii) such additional adjustments as are normally made in
connection with the sale of residential and commercial property in New York
City. Except as otherwise specifically provided, the "Customs in Respect
to Title Closing" adopted by the Real Estate Board of New York, Inc. shall
apply to the apportionments.
8. Representations. (a) Chemical represents and warrants to the
Buyer that: (i) it has all necessary authority to enter into this Option
Agreement and to complete the transactions contemplated by this Option
Agreement; (ii) neither Chemical nor MHT has at any time assigned, transferred,
conveyed, pledged or otherwise encumbered its interest in the Notes or the
Collateral Documents. Chemical represents and warrants to the Buyer (but not to
any other person or entity) that it is the owner of the Notes. The Buyer
specifically acknowledges that Chemical is making no representation or warranty
whatsoever regarding the validity or enforceability of the Notes or the
Collateral Documents, and all of Buyer's obligations under this Option Agreement
and the Purchase Agreement shall remain in full force and effect regardless of
the validity or enforceability (or lack thereof) of the Notes or the Collateral
Documents.
(b) ACFH represents and warrants to the Buyer that it is a corporation
which is duly organized, validly existing and in good standing under the laws of
the State of Delaware and is qualified to do business in, and in good standing
under, the laws of the State of New Jersey, that it has all necessary power and
authority to enter into this Option Agreement and to complete the transactions
contemplated by this Option Agreement, and, to the best of its knowledge, it has
not received written notice of any pending condemnation of the Property.
(c) Except as specifically provided in this Option Agreement or in the
Purchase Agreement, neither ACFH nor Chemical is making, or shall be deemed to
have made, any covenant, representation or warranty of any nature whatsoever,
express or
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<PAGE>
implied, regarding the Notes, the Collateral Documents, the Property, or any
other matter relating in any way to this Option Agreement or any of the
obligations of ACFH or Chemical under this Option Agreement, including, without
limitation, the condition or status of the Property. The Buyer agrees that he
is entering into this Option Agreement, and, if he should exercise the Options,
will be exercising those Options with the express and specific understanding
that no such covenants, representations or warranties are being made by ACFH or
Chemical.
(d) The Buyer represents and warrants that the Notes are valid and
binding obligations of the makers thereof and are in full force and effect, that
he has all the necessary power and authority to enter into this Option Agreement
and to complete all of the transactions contemplated by this Option Agreement,
and that the execution and delivery of this Option Agreement, and the purchase
of the Notes and the Property as contemplated by this Option Agreement, will not
require the consent or approval of any governmental authority or other party,
and will not result in a default under or otherwise violate, any contract or
agreement to which the Buyer, or any entity in which the Buyer has any direct or
indirect interest, is a party or any order, law or regulation to which the Buyer
or any such affiliate may be subject, except in each case such approvals and
consents as shall be obtained by Buyer before Closing.
(e) All of the representations and warranties of ACFH, Chemical and
the Buyer set forth in this Section 8 shall be true and correct as of the
Closing, and each party shall expressly reaffirm such representations and
warranties at the Closing.
9. Operation of the Property. During the Option Period and, if the
Options are exercised, during the period until the earlier of (i) the Closing
and (ii) a termination by the Buyer under this Option Agreement or the Purchase
Agreement, ACFH agrees that (a) it will not make any material structural
alterations to the Property, (b) it will maintain substantially the same
insurance coverage as is presently in effect for the Property, (c) it will not
operate the Property for any purpose other than as a hotel and entertainment,
theater, dining and other incidental uses and (d) it will not sell, dispose of
or otherwise remove from the Property furniture, fixtures, equipment or other
personal property used in the operation of the Property having an aggregate
value of more than $100,000. Notwithstanding the foregoing, ACFH may, in its
discretion, at any time cease operating the Property as a hotel. ACFH may, in
the ordinary course of business, enter into, or cause to be entered into, any
contract or agreement relating to the operation of the Property, including,
without limitation, any lease or supply or services
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<PAGE>
contract, or may amend or terminate, or cause to be amended or terminated, any
existing contract or agreement, provided that (A) any contract or agreement
entered into after the date of this Option Agreement shall be terminable on not
more than thirty days notice without penalty or premium, unless a longer period
(up to 90 days) is necessary and (B) no amendment which extends the term of an
agreement shall extend the term to a date more than 30 days after the date of
Closing, unless a longer period (up to 90 days) is required.
10. Right of Inspection of the Property. Upon reasonable notice of
ACFH, and provided that neither the Options nor the Purchase Agreement have been
terminated, the Buyer or his authorized representatives shall have the right to
enter upon and inspect the Property subject to the following conditions:
(a) the Buyer shall not interfere with the conduct of business on
the Property;
(b) the Buyer shall make such inspections in good faith, and all
inspection fees and other costs and expenses of any kind incurred by the Buyer
relating to such inspections will be the sole expense of the Buyer;
(c) the Buyer shall not conduct any Phase II environmental assessment,
test or audit of the Property or any portion thereof, including, but not limited
to, any inspection that involves any testing of an underground storage tank, if
any, or any drilling, coring or boring on the Property (whether or not such
activity is referred to as a Phase II environmental assessment, test or audit),
without the prior written consent of ACFH, which consent may be refused,
withheld or delayed by ACFH for any or no reason in its sole and absolute
discretion, which shall be final and conclusive;
(d) the Buyer shall have no right whatsoever to alter the condition of
the Property or any portion thereof without the prior written consent of ACFH,
which consent may be refused, withheld or delayed by ACFH for any or no reason
in its sole and absolute discretion, which shall be final and conclusive, and
without in any way constituting ACFH's consent to an alteration of the condition
of the Property, ACFH and the Buyer agree that in the event of any alteration of
the Property or portion thereof by the Buyer, the Buyer shall immediately
restore the Property to its condition prior to the Buyer's entry thereon;
(e) the Buyer or his authorized representatives shall be
accompanied at all times by a representative of ACFH; and
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<PAGE>
(f) the Buyer agrees to indemnify and hold ACFH and its agents,
contractors, lessees and representatives harmless from and against any and all
liens, claims, liabilities or damages (including, but not limited to, reasonable
attorneys' fees) sustained by any of them which result from or arise out of any
inspections of the Property made or conducted by the Buyer or its inspectors,
appraisers, engineers, employees or contractors. Such Indemnity and Hold
Harmless Agreement shall survive the Closing of any termination of this Option
Agreement or, if entered into, the Purchase Agreement and shall not be merged
therein.
11. No Brokers. (a) Chemical and ACFH will pay any broker's fee,
finder's fee, commission or similar payments which may be due to any broker,
finder or other person or entity employed by Chemical or ACFH in connection with
the negotiation of this Option Agreement or the conveyance of the Property.
Chemical and ACFH agree to indemnify and hold the Buyer harmless from and
against any loss, claim, damage, cost and expense, including reasonable
attorneys' fees and expenses, resulting from any broker's, finder's or other
person's or entity's claiming to be owed a broker's fee, commission, finder's
fee or any similar payment as a result of any dealing with or for Chemical or
ACFH. The terms of this paragraph shall survive the Closing or earlier
termination of this Option Agreement or, if entered into, the Purchase Agreement
(b) The Buyer represents and warrants to Chemical and ACFH that it has
not and at the time of the Closing will not have dealt with any person or entity
to whom a broker's fee, finder's fee, commission or any similar payment may be
due in connection with the negotiation of this Option Agreement or the
conveyance of the Property. The Buyer agrees to indemnify and hold Chemical and
ACFH harmless from and against any loss, claim, damage, cost and expense,
including reasonable attorneys' fees and expenses, resulting from any broker's,
finder's or other person's or entity's claiming to be owed a broker's fee,
commission, finder's fee or any similar payment as a result of any dealings with
or for the Buyer. The terms of this paragraph shall survive the Closing or
earlier termination of this Option Agreement or, if entered into, the Purchase
Agreement.
12. Antitrust Notification. As promptly as practicable and in any
event not later than February 28, 1994, the Buyer and ACFH each shall cause to
be filed with the Federal Trade Commission ("FTC") and the Department of Justice
("DOJ") pursuant to the Hart-Scott Rodino Antitrust Improvements Act of 1976, as
amended, and applicable rules and regulations thereunder ("HSR") the
notification and report form required for the
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<PAGE>
transactions contemplated by this Option Agreement and shall, as promptly as
practicable, furnish any supplemental information which may be requested by the
FTC or the DOJ pursuant to HSR. The Buyer and ACFH shall cooperate in making
such filings, and shall use their respective best efforts to cause the
applicable HSR waiting period to be terminated at the earliest possible time.
Buyer shall pay any filing or similar fees required to be paid in connection
with HSR notification and report form. Anything in this agreement to the
contrary notwithstanding, the expiration of the HSR waiting period and any
extensions thereof shall be a condition precedent to the Closing. If the
Closing fails to occur by the closing date due to a failure of this contingency,
the date for Closing shall be automatically extended for a period not to exceed
thirty (30) days unless all of the parties to this Option Agreement agree to the
contrary; provided, however, that if the Closing fails to occur during such 30-
-------- -------
day extension, ACFH and Chemical shall have the right by notice to the Buyer, to
terminate this Option Agreement and the Purchase Agreement, and thereafter this
Option Agreement and the Purchase Agreement shall be void without recourse by
either party in law or in equity.
13. Title to Property. (a) The Buyer shall satisfy himself as to
the quality of ACFH's title to the Property prior to the Buyer's exercise of the
Options. Upon exercise of the Options, the Buyer shall thereby waive its right
to object to any aspect of ACFH's title to the Property existing at the time of
such exercise. The provisions of this paragraph (a) shall not relieve ACFH of
its covenant set forth in paragraph (b) below.
(b) ACFH covenants that at the Closing the Property will not be
subject to any monetary lien or material encumbrance created, or which came into
existence after June 3, 1992, except for the lien of real estate taxes and
assessments not yet due and payable.
14. Notices. Any notice shall be given in writing to the party for
whom it is intended, either (i) by personal delivery, (ii) by registered or
certified mail (return receipt requested and postage prepaid), or (iii) by a
nationally recognized overnight courier providing for signed receipt of
delivery, in each case at the following address, or such other address as may be
designated in writing by notice given in accordance with this Section:
(i) if to Chemical, at
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277 Park Avenue, 12th Floor
New York, New York 10172
Attn: Rick Peiser, Managing Director
with a copy to
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attn: Gary F. Mottola
(ii) if to ACFH, at
277 Park Avenue, 12th Floor
New York, New York 10172
Attn: Edward C. Collins, Vice President
with a copy to
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attn: Gary F. Mottola
(iii) If to the Buyer, at
The Trump Organization
725 Fifth Avenue
New York, New York 10022
Attn: Donald J. Trump
with a copy to
Willkie Farr & Gallagher
One Citicorp Center
New York, New York 10022
Attn: Thomas M. Cerabino, Esq.
Any notice given by any party shall be deemed to have been given only when
received by the party to whom it is addressed. Notices which are required to be
given to Chemical and ACFH shall not be deemed to have been given until received
by both Chemical and ACFH.
15. Assignment. (a) This Option Agreement shall be binding upon and
inure to the benefit of the heirs, successors, administrators, executors, and
assigns of the respective parties; provided, however, that, except as provided
in paragraph (b) below, neither this Option Agreement nor, if entered into, the
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Purchase Agreement may be assigned by the Buyer, in whole or in part, to any
other individual or entity without the express written permission of ACFH and
Chemical, which permission may be withheld in the ACFH's and Chemical's sole
discretion and without regard to any commercial standard. Any attempted
assignment of this Option Agreement shall, at the ACFH's and Chemical's option,
be deemed a breach of the terms of this Option Agreement which results in the
termination of the Options and all of the Buyer's rights hereunder.
(b) Notwithstanding the provisions of paragraph (a) above, the Buyer
may (i) assign all or a portion of its interest in this Agreement or the
Purchase Agreement to an entity of which the Buyer has control and owns,
directly or indirectly, more than 50% of the equity interest or to a publicly-
registered and traded entity that directly or indirectly owns the Trump Plaza
Casino Hotel and (ii) direct Chemical to assign the Notes or any individual Note
or portions thereof to one or more of the Buyer's institutional lenders or to an
entity financing the properties securing such Notes or an entity controlled by
Buyer, and in which Buyer has at least 50%, of the equity interest, which owns
such properties.
16. Confidentiality. Buyer understands, agrees and acknowledges that
the consideration being paid for the Options, and the price to be paid for the
Notes and the Property if the Options are exercised, is fair and reasonable and
reflects the fair value of the Options, the Notes and the Property. Buyer
further understands and acknowledges that Chemical and ACFH intend that the
granting of the Options, the sale of the Notes and the Property as contemplated
by this Agreement, and the other matters contained in this Agreement and in the
Purchase Agreement be kept as confidential as possible, and Buyer agrees that
any statements, whether oral or written, made by the Buyer relating to these
matters will be made in a manner consistent with the foregoing and that the
content of any such statements will also be consistent with the foregoing.
Chemical and ACFH understand that, to complete the transactions contemplated by
this Agreement, including a publicly-registered financing to raise the proceeds
to pay for the Notes and the Property, Buyer will have to disclose this
Agreement to the New Jersey Casino Control Commission, the federal Securities
and Exchange Commission, his institutional lenders, and to other entities and
governmental agencies. Nevertheless, Buyer agrees that any such disclosure, and
any statements made by Buyer relating to this transaction, will be completed in
a professionally responsible manner consistent with good legal and business
practice. Buyer further agrees that, while Chemical and ACFH recognize the need
for disclosure considering Buyer's contemplated financing and use of
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the Property, Buyer will make all such disclosures, and any other statements
relating to this Agreement and the transactions contemplated by this Agreement,
only to the extent reasonably and in good faith deemed by the Borrower and his
advisors to be necessary or desirable to complete such contemplated
transactions. The provisions of this Section shall survive the Closing and the
termination of the Option Agreement.
17. Costs and Expenses. Each party shall bear its own legal and other
professional costs and expenses in connection with the preparation, negotiation
and performance of this Option Agreement and, if entered into, the Purchase
Agreement.
18. Miscellaneous. (a) Except for filings with the Casino Control
Commission and the Securities and Exchange Commission, the Buyer shall not
otherwise record or file this Option Agreement or the Purchase Agreement or any
copy or memorandum of either with any public agency or land records, and any
such recording or filing shall, at ACFH's and Chemical's option, render this
Option Agreement and, if entered into, the Purchase Agreement null and void and
shall constitute a default of the Buyer's obligations under this Option
Agreement resulting in a termination of the Options and all of the Buyer's
rights under this Option Agreement and the Purchase Agreement. Except as
provided in the Hyatt Option referred to below, the Buyer expressly acknowledges
that the only rights the Buyer has to purchase the Notes, the Collateral
Documents and the Property are as set forth in this Option Agreement and, if
entered into, the Purchase Agreement and that if this Option Agreement and the
Purchase Agreement shall be terminated, then the Buyer agrees that he has no
further rights to purchase the Notes, the Collateral Documents and the Property
and shall have no claims against Chemical or ACFH arising out of the Options
granted by this Option Agreement. If, notwithstanding the foregoing agreement,
the Buyer shall assert any claims against Chemical or ACFH, the Buyer will be
fully liable for all costs and expenses (including, without limitation,
attorneys' fees and expenses) incurred by Chemical or ACFH in defending any such
claims or otherwise. Nothing contained in this Option Agreement shall affect the
Buyer's rights under the Option Agreement dated June 24, 1993 between the Buyer
and Chemical relating to the Buyer's option to purchase the Hyatt Note (the
"Hyatt Option").
(b) The acceptance by the Buyer of the Deed (as defined in the
Purchase Agreement) and the assignment of the Notes shall be deemed to
constitute a full performance and discharge of every condition, covenant and
obligation contained or expressed in this Option Agreement and in the Purchase
Agreement, except such as are, by the express terms of this
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Option Agreement or the Purchase Agreement, to survive the Closing.
(c) This Option Agreement constitutes the entire agreement between the
parties and fully supersedes and cancels all prior agreements, arrangements or
understandings, whether oral or written, between them relating to the subject
matter hereof and no party shall be bound by any terms, conditions, statements,
or representations, oral or written, not herein contained. No modification of
this Option Agreement and, if entered into, the Purchase Agreement shall be
valid or binding unless such modification is in writing, duly dated and signed
by the party or parties against whom enforcement of such modification is sought.
(d) In the event that any one or more of the provisions of this Option
Agreement or, if entered into, the Purchase Agreement shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or uneforceability shall not affect any other provision of this
Option Agreement or, if entered into, the Purchase Agreement, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included.
(e) This Option Agreement may not be executed in counterparts.
(f) This Option Agreement and, if entered into, the Purchase Agreement
shall be governed, construed, interpreted and enforced in accordance with the
laws of the State of New York, except to the extent that the terms and
provisions relate to the conveyance of real property in which event such terms
and provisions shall be governed by the laws of the State of New Jersey.
(g) Nothing expressed or implied in this Option Agreement or the
Purchase Agreement is intended or will be construed to confer upon or give any
person or entity other than the parties hereto any rights or remedies under or
by reason of this Option Agreement, the Purchase Agreement or any transactions
contemplated by this Option Agreement or the Purchase Agreement.
(h) The headings in this Option Agreement and in the Purchase
Agreement are for purposes of reference only and shall have no meaning in
construing this Option Agreement or the Purchase Agreement.
-17-
<PAGE>
(i) This instrument as executed by the Buyer constitutes only an offer
by the Buyer to ACFH and Chemical which shall expire 5:00 p.m. on December __,
1993, unless and until its acceptance is signified by ACFH's and Chemical's
execution of this instrument and delivery of a fully executed copy to the Buyer
on or before such time. This Option Agreement shall become a binding agreement
only at such time as it shall have been duly executed and delivered by each of
ACFH, Chemical and the Buyer.
(j) The Buyer shall not be entitled to any consequential, speculative,
punitive damages or any similar claim in any action relating to this Agreement.
If the Buyer shall have exercised the Options in accordance with this Agreement,
then upon any failure by the Buyer to pay the purchase price and purchase the
Notes, as provided in this Agreement, Chemical shall have as its sole remedy
under this Agreement the right to retain all sums paid under this Agreement;
provided, however, that the foregoing limitation shall not modify, affect or
qualify in any manner any rights and remedies Chemical may have under the
Settlement Agreement or otherwise.
The parties have duly executed this Option agreement.
ACFH INC.
By: /s/ Steven Palmer
-----------------------
Name: Steven Palmer
Title: Vice President
CHEMICAL BANK
By: /s/ Richard Peiser
-----------------------
Name: Richard Peiser
Title: Managing Director
By: /s/ Donald J. Trump
-----------------------
DONALD J. TRUMP
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<PAGE>
Ex. 10.45.1
Amended and Restated Option Agreement
This Option Agreement is made as of the 16th day of June, 1994 among
ACFH Inc., a Delaware corporation ("ACFH"), CHEMICAL BANK, a New York banking
corporation ("Chemical"), and DONALD J. TRUMP (the "Buyer").
ACFH, Chemical and the Buyer have previously entered into an Option
Agreement dated as of December 17, 1993 (the "Original Option Agreement").
These parties now desire to amend and restate the Original Option Agreement in
its entirety, and agree that the Original Option Agreement shall be deemed to be
replaced by, and fully amended and restated to, the following:
Preliminary Statement
---------------------
A. ACFH is the owner of certain property located in Atlantic City,
New Jersey which is described in the Agreement of Purchase and Sale attached as
Exhibit A to this Agreement (the "Purchase Agreement"), and which includes the
property known as the Trump Regency Hotel.
B. Chemical, as successor by merger to Manufacturers Hanover Trust
Company ("MHT"), is the holder of the following promissory notes:
(i) Revolving Credit Note dated as of July 20, 1987 made by the
Buyer to the order of MHT, as amended by First Allonge to Note dated
January 30, 1989, and as further amended by Second Allonge to Note dated as
of August 8, 1990 (as amended, the "NYP Note");
(ii) Interest Equalization Note dated as of August 8, 1990 made by
the Buyer to the order of MHT (the "Interest Equalization Note");
(iii) Term Note dated as of August 8, 1990 made by the Buyer to the
order of MHT (the "Term Note");
(iv) Note dated as of July 20, 1987, in the original principal
amount of $80,000,000, made by the Buyer to the order of MHT, as amended by
First Allonge to Note dated as of November 16, 1988 and as further amended
by Second Allonge to Note dated as of August 8, 1990 (as amended, the
"Hyatt Note").
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(v) Mortgage Note dated as of January 31, 1973, made by LBREC Realty
Inc. to Morris Green, as trustee under the will of Dora Green, deceased and
Joyce Cheney, as such note was assigned to MHT by that certain Assignment
dated April 13, 1983, made by Morris Green, as trustee under the will of
Dora Green, deceased, Joyce Cheney, as trustee under the will of Dora
Green, deceased, and Joyce Cheney to MHT which Assignment was recorded in
the Office of the City Register, New York County (the "City Register's
Office") on April 27, 1983 in Reel 682, Page 585, as such note was amended
by that certain Agreement dated April 22, 1983 recorded on April 27, 1983
in the City Register's Office in Reel 682, Page 587 between MHT and the
Buyer, and as further amended by those certain letter agreements dated May
7, 1986, March 11, 1988 and April 17, 1989 and by Note Modification
Agreement dated as of August 8, 1990 each between MHT and the Buyer (as
amended, the "CPS Note").
The NYP Note, the Interest Equalization Note, the Term Note, and the
CPS Note are collectively referred to in this Agreement as the "Property Notes".
The Property Notes are intended to include the debt owing by the Buyer and any
entity owned by the Buyer to Chemical relating to the Premises referred to in
the Settlement Agreement (as defined below). The Property Notes and the Hyatt
Note are collectively referred to in this Agreement as the "Notes".
C. The Notes are secured by the mortgages, pledge and security
agreements and other collateral documents described on Exhibit B to this
Agreement (collectively, the "Collateral Documents").
D. ACFH is willing to grant to the Buyer an option to purchase the
Property (as defined in the Purchase Agreement), and Chemical is willing to
grant to the Buyer options to purchase the Notes, all in accordance with the
terms of this Agreement and the Purchase Agreement.
E. The Buyer acknowledges that he is the maker of the Notes, that he
or his wholly owned affiliates own the collateral which is encumbered by the
Collateral Documents, and that his wholly owned affiliate previously owned the
Property, and that therefore the Buyer is completely familiar with all matters
concerning the Notes, the Collateral Documents and, up to the date of transfer
to ACFH, the Property. ACFH and Chemical are unwilling to make any
representations regarding the Notes, the Collateral Documents and the Property
except for the limited representations contained in this Agreement and the
Purchase Agreement, and the Buyer is willing to enter into this Agreement based
on such limited representations.
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F. The Buyer and Chemical desire to settle all outstanding matters
relating to the Notes and the Collateral Documents, and in furtherance of such
settlement, Chemical and ACFH are granting the options in accordance with the
terms of this Agreement, and the Buyer has executed and delivered to Chemical
the release by the Buyer and certain of his wholly owned affiliates of any and
all claims they may have against Chemical.
Agreement
---------
In consideration of the foregoing recitals and other good and valuable
consideration, Chemical, ACFH and the Buyer agree as follows:
1. Grant of Options. (a) ACFH hereby grants to the Buyer an option
to purchase the Property, and Chemical hereby grants to the Buyer an option to
purchase the Hyatt Note, all strictly in accordance with the terms of this
Agreement. The options granted by this paragraph (a) are referred to
collectively as the "First Option".
(b) Chemical hereby grants to the Buyer an option to purchase the
Property Notes, strictly in accordance with the terms of this Agreement. The
option granted by this paragraph (b) is referred to in this Agreement as the
"Second Option". (The "First Option" and the Second Option are referred to
collectively as the "Options").
2. Term of the Options; Performance Obligations. (a) The term
of the First Option shall commence upon the date of this Agreement and continue
until 5:00 P.M. on September 30, 1994 (the "First Option Period"). The term of
the Second Option (the "Second Option Period") shall commence on the date of
this Agreement and continue until September 30, 1994, provided that, if the
Buyer has exercised the First Option during the First Option Period in
accordance with the terms of this Agreement, and is not in default under the
terms of this Agreement or the Purchase Agreement, then the term of the Second
Option shall be extended to May 31, 1995.
(b) Notwithstanding the term of the Options set forth in paragraph (a)
above, Chemical and ACFH shall have the right to terminate the Options upon the
occurrence of any of the following:
(i) the Buyer shall fail to obtain, by August 1, 1994 (time being
of the essence), all necessary approvals from the Casino Control Commission
of the State of New Jersey for the lease of a portion of the East Hall of
the Atlantic City Convention Center as contemplated by the letter agreement
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<PAGE>
dated April 18, 1994 between Trump Oceanview, Inc. and the New Jersey
Sports and Exposition Authority.
(ii) the Buyer shall fail to file with the Securities and Exchange
Commission on or prior to August 1, 1994 time being of the essence) a
registration statement relating to the offering of securities in an
aggregate principal amount sufficient to pay the purchase price as provided
in Section 6 below and to pay the costs and expenses listed on Exhibit C.
(iii) the Buyer shall fail to file the notification and report
required pursuant to Section 12 of this Agreement on or prior to August 1,
1994 (time being of the essence);
(iv) the Buyer, Park South Associates, The Trump Corporation, The
East 61st. Company, Plaza Consulting Corp. or B. Plaza Realty Corp. shall
breach any covenant or other obligation set forth in Sections 5.1, 5.2, 5.3
or 5.4 of the Settlement Agreement dated December 17, 1993, as amended,
among the Buyer, the foregoing entities and Chemical (the "Settlement
Agreement"), provided that in the case of a breach of the covenant set
forth in Section 5.3, such breach must be material; or any representation
or warranty made by the Buyer or any of the foregoing entities in the
Settlement Agreement or which is contained in any certificate, document or
financial or other statement furnished at any time under or in connection
with the Settlement Agreement shall prove to have been inaccurate in any
material respect on or as of the date made and the Buyer or such entity had
actual knowledge of such inaccuracy and made such representation
notwithstanding such knowledge; or The Trump Corporation, The East 61st.
Company or Park South Associates shall fail to deposit the Rents (as
defined in the Settlement Agreement) in the accounts designated pursuant to
subsection 8.2 of the Settlement Agreement or to apply funds released from
such accounts to the payment of Qualified Business Expenses (as defined in
the Settlement Agreement), except to the extent that there is a bona fide
dispute regarding expenditures made by The Trump Corporation, the East
61st. Company or Park South Associates, as applicable, provided that the
Trump Corporation, the East 61st Company or Park South Associates, as
applicable, acted in good faith in believing that such disputed expenditure
was a Qualified Building Expense; or
(v) the Buyer shall be in default under the terms of this Agreement
or the Purchase Agreement.
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<PAGE>
The Buyer acknowledges that time shall be of the essence with respect to the
Buyer's obligations to obtain the approvals described in clause (i) above and to
make the filings referred to in clauses (ii) and (iii) above by the respective
dates set forth in each such clause (each such date, a "Performance Date"). If
Chemical and ACFH shall elect to terminate the Options pursuant to this
paragraph (b), then Chemical and ACFH shall have no further obligations or
liability to the Buyer under this Agreement. In the event that the Buyer
exercises all of the Options pursuant to Section 3 of this Agreement, the Buyer
shall have no further obligation to perform under clauses (i) through (iii)
above to the extent that the applicable Performance Date will occur after the
date on which the Options are so exercised; provided, however, that upon the
-------- -------
occurrence of an event specified in clause (iv) or (v) above, Chemical and ACFH
shall have the right to terminate this Agreement and the Purchase Agreement and
upon such termination shall have no further obligations or liabilities to the
Buyer under this Agreement or the Purchase Agreement.
3. Exercise of the Options. The First Option may be exercised by
the Buyer only by written notice of such exercise in the form set forth in
Exhibit D (the "First Option Notice") given by the Buyer to ACFH and Chemical
prior to the termination of the First Option Period in accordance with the
provisions of Section 14 below. The Second Option may be exercised by the Buyer
only by written notice of such exercise in the form set forth in Exhibit E (the
"Second Option Notice") given by the Buyer to Chemical prior to the termination
of the Second Option Period in accordance with the provisions of Section 14
below. Time shall be of the essence with respect to the giving of the First
Option Notice and the Second Option Notice. The Buyer must exercise the options
granted under paragraph (a) of Section 1 above together, and shall not have the
right to exercise either of the options granted under such paragraph (a)
independently of the other. Any attempt by the Buyer to exercise one of such
options without the other shall be void and of no effect. If the Buyer fails to
exercise either of the Options during the relevant Option Period as provided
above, such Option shall terminate and ACFH and Chemical shall have no further
obligations or liability to the Buyer under this Agreement relating to such
Option. Notwithstanding any other provision of this Agreement, the Buyer shall
not have the right to exercise the Second Option unless the Buyer has previously
exercised the First Option or exercises both Options simultaneously.
4. The Purchase Agreement. Upon the valid exercise of the First
Option by the Buyer in accordance with Section 3 above, the Purchase Agreement
shall conclusively be deemed to have been executed and delivered by the Buyer
and ACFH and to be
5
<PAGE>
in full force and effect without the need for any further action by either of
such parties.
5. Option Payment. (a) The total consideration to be paid by the
Buyer for the granting of the Options shall be $1,250,000, which has been paid
in full.
(b) The Buyer shall have the right to terminate this Agreement, and
if entered into, the Purchase Agreement, and to receive a refund of payments
made as consideration for the granting of the Options, only upon the occurrence
of either of the following: (i) Chemical and ACFH do not have the requisite
power and authority to assign the Notes and convey the Property as contemplated
by this Agreement and the Purchase Agreement, or (ii) ACFH shall be unable to
convey title to the Property as required by this Agreement and the Purchase
Agreement as a result of a breach by ACFH of the covenant set forth in Section
13(b) of this Agreement.
6. Purchase Price. (a) Upon the exercise of the First Option, the
aggregate purchase price to be paid by the Buyer for the Hyatt Note and the
Property shall be $60,000,000, to be wired at the First Closing (as defined
below) in immediately available funds in accordance with instructions given at
such Closing by ACFH and Chemical. The Buyer shall receive a credit against
this purchase price of the $1,250,000 paid as consideration for the granting of
the Options. Apportionments or adjustments to the purchase price with respect
to the Property shall be as provided in Section 8 of the Purchase Agreement.
There shall be no apportionments or adjustments to the purchase price with
respect to the Hyatt Note.
(b) Upon exercise of the Second Option, the purchase price for the
Property Notes shall be $20,000,000, to be wired at the Second Closing (as
defined below) in immediately available funds in accordance with instructions
given at such Closing by Chemical. Apportionments or adjustments to the
purchase price with respect to the Property Notes shall be as provided in
Section 7(c) below.
7. Closing. (a)(i) Upon exercise of the First Option, the Hyatt
Note and the Property shall be transferred to the Buyer, and the relevant
purchase price shall be paid, at a closing (the "First Closing") on a date to be
specified by the Buyer in the First Option Notice, which closing date shall be
not less than 5 or more than 14 days after the date that the First Option Notice
is given. If the First Option Notice given by the Buyer does not specify a
closing date as provided in the preceding sentence, it shall be void and of no
effect as if such First Option Notice had never been given. Time shall be of
the
6
<PAGE>
essence with respect to Chemical's and the Buyer's obligations to close on the
date specified in the First Option Notice for such Closing, and any failure by
the Buyer to comply with such obligations on that date shall, at ACFH's and
Chemical's option, result in a termination of the Options, after which the Buyer
shall have no further rights under this Agreement or under the Purchase
Agreement. The transfer of the Hyatt Note and the transfer of the Property
must occur simultaneously and each such closing is conditioned upon the other
closing being completed at the same time. The Buyer expressly agrees that he
will not have the right to complete the purchase of the Hyatt Note without
simultaneously completing the purchase of the Property.
(ii) Upon the exercise of the Second Option, the Property Notes shall
be transferred to the Buyer, and the relevant purchase price paid, at a closing
(the "Second Closing") on a date to be specified by the Buyer in the Second
Option Notice, which closing date shall be not less than 5 nor more than 14 days
after the date that the Second Option Notice is given. If the Second Option
Notice given by the Buyer does not specify a closing date as provided in the
preceding sentence, it shall be void and of no effect as if such Second Option
Notice had never been given. Time shall be of the essence with respect to the
Buyer's obligations to close on the date specified in the Second Option Notice
for such Closing, and any failure by the Buyer to comply with such obligations
on such date shall, at Chemical's option, result in a termination of the
Options, after which the Buyer shall have no further rights under this Agreement
or the Purchase Agreement. Notwithstanding any other provision of this
Agreement, Chemical shall not be obligated to complete the Second Closing and
assign the Property Notes unless the First Closing has been, or is
simultaneously being, completed.
(b)(i) At the First Closing, in addition to the delivery of any
documents required by the Purchase Agreement: i) Chemical shall deliver to the
Buyer (A) a duly executed and acknowledged assignment of all of Chemical's
right, title and interest in the Hyatt Note, the Collateral Documents relating
to the Hyatt Note (including appropriate UCC assignments), and all claims under
the Override Agreement dated as of August 8, 1990 among the Buyer and various
other parties, all of the above without recourse, representation, or warranty of
any kind except as expressly provided in this Agreement or in such assignment,
which assignment shall be in the form set forth in Exhibit F; and ii) each party
shall also deliver at the Closing a reaffirmation of its representations and
warranties as of such Closing, as provided in Section 8 below. Notwithstanding
the forgoing, to the extent the Hyatt Note is secured by a mortgage or any
property or other interests relating to 100 Central Park South, New York, New
York or the property known as Trump Plaza located
7
<PAGE>
at 61st Street and Third Avenue, New York, New York or any other property
covered by the Settlement Agreement, such collateral shall not be assigned to
Buyer, in connection with the First Option, and the collateral documents shall,
prior to assignment, be amended as appropriate to exclude any such collateral.
(ii) At the Second Closing, (i) Chemical shall deliver to the Buyer a
duly executed and acknowledged assignment of all of Chemical's right, title and
interest in the Property Notes and the Collateral Documents relating to the
Property Notes, all without recourse, representation or warranty of any kind
except as expressly provided in this Agreement or in such assignment, which
assignment shall be in the form set forth in Exhibit F; and (ii) each party
shall also deliver at the Closing a reaffirmation of its representations and
warranties as of such Closing, as provided in Section 8 below.
(c) Pursuant to the Settlement Agreement, all Rents from the
properties which are the subject of the Settlement Agreement have been assigned
to, and are being deposited into accounts owned by, Chemical and are being
disbursed to the extent required to pay Qualified Building Expenses. Chemical
is entitled to all Rents in excess of Qualified Building Expenses through the
Closing pursuant to the Second Option. Accordingly the following shall be
apportioned and adjusted between Chemical and the Buyer as of midnight of the
day preceding the Second Closing pursuant to the exercise of the Second Option
("Adjustment Date"):
(i) rents and additional rents under or in respect of the Leases
(as defined in the Settlement Agreement), as, when and to the extent
actually collected; the first rents so collected shall be applied to rents
up to 60 days delinquent as of such Closing, then to bring rents current,
and then to other past due rents (except that Meyer rents collected which
are attributable to the period before June 24, 1993 shall belong to Buyer);
(ii) real estate and other taxes, assessments and charges, and
other municipal and state charges, license and permit fees, if any, on the
basis of the fiscal period for which assessed or charged, provided,
--------
however, that any rebates of taxes, assessments or charges received after
-------
the Adjustment Date (i) which are attributable to taxes, assessments or
charges incurred or paid prior to the Adjustment Date shall be delivered to
Chemical and (ii) which are attributable to taxes, assessments or charges
in part incurred or paid prior to the Adjustment Date shall be apportioned
between Chemical and the Buyer as of the Adjustment Date.
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<PAGE>
(iii) water and sewer rents and charges on the basis of the fiscal
period for which assessed or charged;
(iv) water, electric, gas, steam and other utility charges except
that no apportionment shall be made for any of such items as are furnished
and charged by the utility company furnishing such service directly to any
tenants under the Leases;
(v) fuel, if any, and all taxes thereon, on the basis of a reading
taken as late as possible prior to the Adjustment Date, at the price then
charged by the supplier thereof, including any taxes;
(vi) charges under service contracts on the basis of the annual or
monthly charges or fees payable thereunder; and
(vii) such additional adjustments as are normally made in
connection with the sale of residential and commercial property in New York
City. Except as otherwise specifically provided, the "Customs in Respect
to Title Closing" adopted by the Real Estate Board of New York, Inc. shall
apply to the apportionments.
8. Representations. (a) Chemical represents and warrants to the
Buyer that: (i) it has all necessary authority to enter into this Agreement and
to complete the transactions contemplated by this Agreement; (ii) neither
Chemical nor MHT has at any time assigned, transferred, conveyed, pledged or
otherwise encumbered its interest in the Notes or the Collateral Documents.
Chemical represents and warrants to the Buyer (but not to any other person or
entity) that it is the owner of the Notes. The Buyer specifically acknowledges
that Chemical is making no representation or warranty whatsoever regarding the
validity or enforceability of the Notes or the Collateral Documents, and all of
Buyer's obligations under this Agreement and the Purchase Agreement shall remain
in full force and effect regardless of the validity or enforceability (or lack
thereof) of the Notes or the Collateral Documents.
(b) ACFH represents and warrants to the Buyer that it is a corporation
which is duly organized, validly existing and in good standing under the laws of
the State of Delaware and is qualified to do business in, and in good standing
under, the laws of the State of New Jersey, that it has all necessary power and
authority to enter into this Agreement and to complete the transactions
contemplated by this Agreement, and, to the best of its knowledge, it has not
received written notice of any pending condemnation of the Property.
9
<PAGE>
(c) Except as specifically provided in this Agreement or in the
Purchase Agreement, neither ACFH nor Chemical is making, or shall be deemed to
have made, any covenant, representation or warranty of any nature whatsoever,
express or implied, regarding the Notes, the Collateral Documents, the Property,
or any other matter relating in any way to this Agreement or any of the
obligations of ACFH or Chemical under this Agreement, including, without
limitation, the condition or status of the Property. The Buyer agrees that he
is entering into this Agreement, and, if he should exercise either of the
Options, will be exercising those Options with the express and specific
understanding that no such covenants, representations or warranties are being
made by ACFH or Chemical.
(d) The Buyer represents and warrants that the Notes are valid and
binding obligations of the makers thereof and are in full force and effect, that
he has all the necessary power and authority to enter into this Agreement and to
complete all of the transactions contemplated by this Agreement, and that the
execution and delivery of this Agreement, and the purchase of the Notes and the
Property as contemplated by this Agreement, will not require the consent or
approval of any governmental authority or other party, and will not result in a
default under or otherwise violate, any contract or agreement to which the
Buyer, or any entity in which the Buyer has any direct or indirect interest, is
a party or any order, law or regulation to which the Buyer or any such affiliate
may be subject except in each case such approvals and consents as shall be
obtained by Buyer before the relevant Closing.
(e) All of the representations and warranties of ACFH, Chemical and
the Buyer set forth in this Section 8 shall be true and correct as of each
Closing, and each party shall expressly reaffirm such representations and
warranties at each Closing.
9. Operation of the Property. During the First Option Period and,
if the First Option is exercised, during the period until the earlier of (i) the
First Closing and (ii) a termination by the Buyer under this Agreement or the
Purchase Agreement, ACFH agrees that (a) it will not make any material
structural alterations to the Property, (b) it will maintain substantially the
same insurance coverage as is presently in effect for the Property, (c) it will
not operate the Property for any purpose other than as a hotel and
entertainment, theater, dining and other incidental uses and (d) it will not
sell, dispose of or otherwise remove from the Property furniture, fixtures,
equipment or other personal property used in the operations of the Property
having an aggregate value of more than $100,000. Notwithstanding the foregoing,
ACFH may, in its discretion, at any time cease operating the Property as a
hotel.
10
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ACFH may, in the ordinary course of business, enter into, or cause to be entered
into, any contract or agreement relating to the operation of the Property,
including, without limitation, any lease or supply or services contract, or may
amend or terminate, or cause to be amended or terminated, any existing contract
or agreement, provided that (A) any contract or agreement entered into after the
date of this Agreement shall be terminable on not more than thirty days notice
without penalty or premium, unless a longer period (up to 90 days) is necessary
and (B) no amendment which extends the term of an agreement shall extend the
term to a date more than 30 days after the date of the First Closing, unless a
longer period (up to 90 days) is required.
10. Right of Inspection of the Property. Upon reasonable notice to
ACFH, and provided that neither the Options nor the Purchase Agreement have been
terminated, the Buyer or his authorized representatives shall have the right to
enter upon and inspect the Property subject to the following conditions:
(a) the Buyer shall not interfere with the conduct of business on the
Property;
(b) the Buyer shall make such inspections in good faith, and all
inspection fees and other costs and expenses of any kind incurred by the
Buyer relating to such inspections will be the sole expense of the Buyer;
(c) the Buyer shall not conduct any Phase II environmental assessment,
test or audit of the Property or any portion thereof, including, but not
limited to, any inspection that involves any testing or an underground
storage tank, if any, or any drilling, coring or boring on the Property
(whether or not such activity is referred to as a Phase II environmental
assessment, test or audit), without the prior written consent of ACFH,
which consent may be refused, withheld or delayed by ACFH for any or no
reason in its sole and absolute discretion, which shall be final and
conclusive;
(d) the Buyer shall have no right whatsoever to alter the condition of
the Property or any portion thereof without the prior written consent of
ACFH, which consent may be refused, withheld or delayed by ACFH for any or
no reason in its sole and absolute discretion, which shall be final and
conclusive, and without in any way constituting ACFH's consent to an
alteration of the condition of the Property, ACFH and the Buyer agree that
in the event of any alteration of the Property or portion thereof by the
Buyer, the Buyer shall immediately restore the Property to its condition
prior to the Buyer's entry thereon;
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(e) the Buyer or his authorized representative shall be accompanied at all
times by a representative of ACFH; and
(f) the Buyer agrees to indemnify and hold ACFH and its agents,
contractors, lessees and representatives harmless from and against any and
all liens, claims, liabilities or damages (including, but not limited to,
reasonable attorneys' fees) sustained by any of them which result from or
arise out of any inspections of the Property made or conducted by the Buyer
or its inspectors, appraisers, engineers, employees or contractors. Such
Indemnity and Hold Harmless Agreement shall survive the First Closing or
any termination of this Agreement or, if entered into, the Purchase
Agreement and shall not be merged therein.
11. No Brokers. (a) Chemical and ACFH will pay any broker's fee,
finder's fee, commission or similar payments which may be due to any broker,
finder or other person or entity employed by Chemical or ACFH in connection with
the negotiation of this Agreement or the conveyance of the Property. Chemical
and ACFH agree to indemnify and hold the Buyer harmless from and against any
loss, claim, damage, cost and expense, including reasonable attorneys' fees and
expenses, resulting from any broker's, finder's or other person's or entity's
claiming to be owed a broker's fee, commission, finder's fee or any similar
payment as a result of any dealing with or for Chemical or ACFH. The terms of
this paragraph shall survive the Closing or earlier termination of this
Agreement or, if entered into, the Purchase Agreement.
(b) The Buyer represents and warrants to Chemical and ACFH that it has
not and at the time of the Closing will not have dealt with any person or entity
to whom a broker's fee, finder's fee, commission or any similar payment may be
due in connection with the negotiation of this Agreement or the conveyance of
the Property. The Buyer agrees to indemnify and hold Chemical and ACFH harmless
from and against any loss, claim, damage, cost and expense, including reasonable
attorneys' fees and expenses, resulting from any broker's, finder's or other
person's or entity's claiming to be owed a broker's fee, commission, finder's
fee or any similar payment as a result of any dealings with or for the Buyer.
The terms of this paragraph shall survive the Closings or earlier termination of
this Agreement or, if entered into, the Purchase Agreement.
12. Antitrust Notification. As promptly as practicable and in any
event not later than August 1, 1994, the Buyer shall cause to be filed with the
Federal Trade Commission ("FTC") and the Department of Justice ("DOJ") pursuant
to the
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Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended, and applicable
rules and regulations thereunder ("HSR") the notification and report form
required for the transactions contemplated by this Agreement and shall, as
promptly as practicable, furnish any supplemental information which may be
requested by the FTC or the DOJ pursuant to HSR. The Buyer and ACFH shall use
their respective best efforts to cause the applicable HSR waiting period to be
terminated at the earliest possible time. Buyer shall pay any filing or similar
fees required to be paid in connection with HSR notification and report form.
Anything in this agreement to the contrary notwithstanding, the expiration of
the HSR waiting period and any extensions thereof shall be a condition precedent
to the Closing pursuant to the exercise of the First Option. If such Closing
fails to occur by the closing date due to a failure of this contingency, the
date for such Closing shall be automatically extended for a period not to exceed
thirty (30) days unless all of the parties to this Agreement agree to the
contrary; provided, however, that if such Closing fails to occur during such 30-
-------- -------
day extension, ACFH and Chemical shall have the right, by notice to the Buyer,
to terminate this Agreement and the Purchase Agreement, and thereafter this
Agreement and the Purchase Agreement shall be void without recourse by either
party in law or in equity.
13. Title to Property. (a) The Buyer shall satisfy himself as to
the quality of ACFH's title to the Property prior to the Buyer's exercise of the
First Option. Upon exercise of the First Option, the Buyer shall thereby waive
its right to object to any aspect of ACFH's title to the Property existing at
the time of such exercise. The provisions of this paragraph (a) shall not
relieve ACFH of its covenant set forth in paragraph (b) below.
(b) ACFH covenants that at the First Closing the Property will not be
subject to any monetary lien (except as provided below in this paragraph (b)) or
material encumbrance created, or which came into existence after June 3, 1992,
except for the lien of real estate taxes and assessments not yet due and
payable. Monetary liens shall not violate this covenant to the extent that such
liens (i) result from labor or materials which were provided in connection with
construction or other work on the Property, or (ii) in addition to liens
contemplated by clause (i) above, do not exceed $2,250,000 in the aggregate;
provided that all such liens must, at the expense of ACFH, be appropriately
bonded, and the title policy obtained by Buyer in connection with the
acquisition of the Property must either (i) omit such liens as title exceptions
or (ii) provide affirmative insurance over such liens.
13
<PAGE>
14. Notices. Any notice shall be given in writing to the party for
whom it is intended, either (i) by personal delivery, (ii) by registered or
certified mail (return receipt requested and postage prepaid), or (iii) by a
nationally recognized overnight courier providing for signed receipt of
delivery, in each case at the following address, or such other address as may be
designated in writing by notice given in accordance with this Section:
(i) if to Chemical, at
380 Madison Avenue, 12th Floor
New York, New York 10017
Attn: Rick Peiser, Managing Director
with a copy to
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attn: Gary F. Mottola
(ii) if to ACFH, at
380 Madison Avenue, 12th Floor
New York, New York 10017
Attn: Edward C. Collins, Vice President
with a copy to
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attn: Gary F. Mottola
(iii) If to the Buyer, at
The Trump Organization
725 Fifth Avenue
New York, New York 10022
Attn: Donald J. Trump
with a copy to
Willkie Farr & Gallagher
One Citicorp Center
New York, New York 10022
Attn: Thomas M. Cerabino, Esq.
14
<PAGE>
Any notice given by any party shall be deemed to have been given only when
received by the party to whom it is addressed. Notices which are required to be
given to Chemical and ACFH shall not be deemed to have been given until received
by both Chemical and ACFH.
15. Assignment. (a) This Agreement shall be binding upon and insure
to the benefit of the heirs, successors, administrators, executors, and assigns
of the respective parties; provided, however, that, except as provided in
paragraph (b) below, neither this Agreement nor, if entered into, the Purchase
Agreement may be assigned by the Buyer, in whole or in part, to any other
individual or entity without the express written permission of ACFH and
Chemical, which permission may be withheld in the ACFH's and Chemical's sole
discretion and without regard to any commercial standard. Any attempted
assignment of this Agreement shall, at the ACFH's and Chemical's option, be
deemed a breach of the terms of this Agreement which results in the termination
of the Options and all of the Buyer's rights hereunder.
(b) Notwithstanding the provisions of paragraph (a) above, the Buyer
may (i) assign all or a portion of its interest in this Agreement or the
Purchase Agreement to an entity of which the Buyer has control and owns,
directly or indirectly, more than 50% of the equity interest or to a publicly-
registered and traded entity that directly or indirectly owns the Trump Plaza
Casino Hotel and (ii) direct Chemical to assign the Notes or any individual Note
or portions thereof to one or more of the Buyer's institutional lenders or to an
entity financing the properties securing such Notes or an entity controlled by
Buyer, and in which Buyer has at least 50% of the equity interest, which owns
such properties.
16. Confidentiality. Buyer understands, agrees and acknowledges that
the consideration being paid for the Options, and the price to be paid for the
Notes and the Property if the Options are exercised, is fair and reasonable and
reflects the fair value of the Options, the Notes and the Property. Buyer
further understands and acknowledges that Chemical and ACFH intend that the
granting of the Options, the sale of the Notes and the Property as contemplated
by this Agreement, and the other matters contained in this Agreement and in the
Purchase Agreement be kept as confidential as possible, and Buyer agrees that
any statements, whether oral or written, made by the Buyer relating to these
matters will be made in a manner consistent with the foregoing and that the
content of any such statements will also be consistent with the foregoing.
Chemical and ACFH understand that, to complete the transactions contemplated by
this Agreement, including a publicly-registered financing to raise the
15
<PAGE>
proceeds to pay for the Notes and the Property, Buyer will have to disclose this
Agreement to the New Jersey Casino Control Commission, the federal Securities
and Exchange Commission, his institutional lenders, and to other entities and
governmental agencies. Nevertheless, Buyer agrees that any such disclosure, and
any statements made by Buyer relating to this transaction, will be completed in
a professionally responsible manner consistent with good legal and business
practice. Buyer further agrees that, while Chemical and ACFH recognize the need
for disclosure considering Buyer's contemplated financing and use of the
Property, Buyer will make all such disclosures, and any other statements
relating to this Agreement and the transactions contemplated by this Agreement,
only to the extent reasonably and in good faith deemed by the Borrower and his
advisors to be necessary or desirable to complete such contemplated
transactions. The provisions of this Section shall survive the Closing and the
termination of this Agreement.
17. Costs and Expenses. Each party shall bear its own legal and
other professional costs and expenses in connection with the preparation,
negotiation and performance of this Agreement and, if entered into, the Purchase
Agreement.
18. Miscellaneous. (a) Except for filings with the Casino Control
Commission and the Securities and Exchange Commission, the Buyer shall not
otherwise record or file this Agreement or the Purchase Agreement or any copy or
memorandum of either with any public agency or land records, and any such
recording or filing shall, at ACFH's and Chemical's option, render this
Agreement and, if entered into, the Purchase Agreement null and void and shall
constitute a default of the Buyer's obligations under this Agreement resulting
in a termination of the Options and all of the Buyer's rights under this
Agreement and the Purchase Agreement. Except as provided in the Previous Hyatt
Option referred to below, the Buyer expressly acknowledges that the only rights
the Buyer has to purchase the Notes, the Collateral Documents and the Property
are as set forth in this Agreement and, if entered into, the Purchase Agreement
and that if this Agreement and the Purchase Agreement shall be terminated, then
the Buyer agrees that he has no further rights to purchase the Notes, the
Collateral Documents and the Property and shall have no claims against Chemical
or ACFH arising out of the Options granted by this Agreement. If,
notwithstanding the foregoing agreement, the Buyer shall assert any claims
against Chemical or ACFH, the Buyer will be fully liable for all costs and
expenses (including, without limitation, attorneys' fees and expenses) incurred
by Chemical or ACFH in defending any such claims or otherwise. Nothing
contained in this Agreement shall affect the Buyer's rights under the Agreement
dated June 24, 1993
16
<PAGE>
between the Buyer and Chemical relating to the Buyer's option to purchase the
Hyatt Note (the "Previous Hyatt Option").
(b) The acceptance by the Buyer of the Deed (as defined in the
Purchase Agreement) and the assignment of the Notes shall be deemed to
constitute a full performance and discharge of every condition, covenant and
obligation contained or expressed in this Agreement and in the Purchase
Agreement, except such as are, by the express terms of this Agreement or the
Purchase Agreement, to survive the Closing.
(c) This Agreement constitutes the entire agreement between the
parties and fully supersedes and cancels all prior agreements, arrangements or
understandings, whether oral or written, between them relating to the subject
matter hereof and no party shall be bound by any terms, conditions, statements,
or representations, oral or written, not herein contained. No modification of
this Agreement and, if entered into, the Purchase Agreement shall be valid or
binding unless such modification is in writing, duly dated and signed by the
party or parties against whom enforcement of such modification is sought.
(d) In the event that any one or more of the provisions of this
Agreement or, if entered into, the Purchase Agreement shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or, if entered into, the Purchase Agreement, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included.
(e) This Agreement may not be executed in counterparts.
(f) This Agreement and, if entered into, the Purchase Agreement shall
be governed, construed, interpreted and enforced in accordance with the laws of
the State of New York, except to the extent that the terms and provisions relate
to the conveyance of real property in which event such terms and provisions
shall be governed by the laws of the State of New Jersey.
(g) Nothing expressed or implied in this Agreement or the Purchase
Agreement is intended or will be construed to confer upon or give any person or
entity other than the parties hereto any rights or remedies under or by reason
of this Agreement, the Purchase Agreement or any transactions contemplated by
this Agreement or the Purchase Agreement.
17
<PAGE>
(h) The headings in this Agreement and in the Purchase Agreement are
for purposes of reference only and shall have no meaning in construing this
Agreement or the Purchase Agreement.
(i) The Buyer shall not be entitled to any consequential, speculative,
punitive damages or any similar claim in any action relating to this Agreement.
If the Buyer shall have exercised either of the Options in accordance with this
Agreement, then upon any failure by the Buyer to pay the purchase price as
provided in this Agreement, Chemical shall have as its sole remedy under this
Agreement the right to retain all sums paid under this Agreement; provided,
however, that the foregoing limitation shall not modify, affect or qualify in
any manner any rights and remedies Chemical may have under the Settlement
Agreement or otherwise.
The parties have duly executed this Agreement.
ACFH INC.
By: /s/
-------------------------
Name: Gordon Tsou
Title: President
CHEMICAL BANK
By: /s/
-------------------------
Name: Richard Peiser
Title: Managing Director
/s/
----------------------------
DONALD J. TRUMP
18
<PAGE>
Ex. 10.45.2
First Amendment
to
Amended and Restated Option Agreement
This First Amendment to Amended and Restated Option Agreement dated as
of August 30, 1994 is made among ACFH Inc. ("ACFH"), Chemical Bank ("Chemical")
and Donald J. Trump (the "Buyer").
Preliminary Statement
---------------------
ACFH, Chemical and the Buyer have previously entered into an Amended
and Restated Option Agreement dated as of June 16, 1994 (the "Existing Option").
The parties now desire to amend the Existing Option as set forth in this
Amendment.
Agreement
---------
The parties agree as follows:
1. The Existing Option is amended as follows:
A. Paragraph 2(a) is deleted and the following substituted in its
place:
"(a) The term of the First Option shall commence upon the date of this
Agreement and continue until 5:00 P.M. on September 30, 1994 (the
"First Option Period"). The term of the Second Option shall commence
upon the date of this Agreement and continue until 5:00 P.M. on
September 30, 1994 (the "Second Option Period"). The First Option
Period and the Second Option period may be extended on a month by
month basis after September 30, 1994 until March 31, 1995 upon the
following terms and conditions: (i) prior to the then current
expiration date (time being of the essence), the Buyer shall give
notice to ACFH and Chemical of its election to extend the Options,
which notice shall state the month through which the Options shall be
extended (which shall not be beyond March 31, 1995), (ii)
simultaneously with the delivery of the notice described in clause (i)
(time being of the essence), the Buyer shall pay to ACFH and Chemical,
in immediately available funds, the applicable Option Extension Fee as
described below, and (iii) at the time of the Buyer's election to
extend, the Options shall not have previously terminated and no event
specified in clause (v) or (vi) of paragraph (b) below shall have
occurred. The Option Extension Fee
1
<PAGE>
shall be $50,000 per month for October, November and December of 1994,
and $150,000 per month for January, February and March of 1995. Under
no circumstances shall the Buyer have any right to extend the First
Option Period or the Second Option Period beyond March 31, 1995, time
being of the essence with respect to such final expiration date."
B. Clauses (i) and (ii) of Paragraph 2(b) are deleted.
C. In clause (iii) of Paragraph 2(b), the date "August 1, 1994" is
changed to "the date required by the terms of Section 12;".
D. The paragraph beginning at the bottom of page 4 and continuing
onto the top of page 5 is deleted, and the following is substituted in its
place:
"The Buyer acknowledges that time shall be of the essence with respect
to the Buyer's obligations to make the filing referred to in clause
(iii) above by the date set forth in such clause (the "Performance
Date"). If Chemical and ACFH elect to terminate the Options pursuant
to this paragraph (b), then Chemical and ACFH shall have no further
obligations or liability to the Buyer under this Agreement."
E. At the end of Paragraph 5(a), the following shall be added:
"In addition to the consideration in the previous sentence, the
applicable Option Extension Fee shall be paid in connection with any
extension of the term of the Options. Except as provided in paragraph
(b) below, the initial option payment of $1,250,000 and any Option
Extension Fees which are paid shall be non-refundable.
F. In Paragraph 6(a), in addition to the credit of $1,250,000 on
account of the initial option payment, the Buyer shall be given a credit
against the purchase price equal to the amount of any Option Extension Fees
actually paid by the Buyer.
G. The following shall be added at the end of Paragraph 9:
"Prior to September 30, 1994, the Buyer, at his expense, shall obtain
an extension of the right to use
2
<PAGE>
the name "Regency" in connection with the operation of the Property
for the period through December 31, 1995, which extension shall be in
substantially the same form as the current license. if the Buyer
fails to obtain the extension of the license required by the preceding
sentence, then the Buyer shall be liable to ACFH for all costs and
expenses incurred by ACFH in removing the "Regency" name from the
Property."
H. The existing Section 12 is deleted and the following substituted
in its place:
"12. Antitrust Notification. The Buyer shall cause to be filed with
the Federal Trade Commission ("FTC") and the Department of Justice
("DOJ") pursuant to the Hart-Scott-Rodino Antitrust Improvements Acts
of 1976, as amended, and applicable rules and regulations thereunder
("HSR"), the notification and report form required for the
transactions contemplated by this Agreement and shall, as promptly as
practicable, furnish any supplemental information which may be
requested by the FTC or the DOJ pursuant to HSR. The HSR filing shall
be made by the Buyer on or before such date as is necessary to insure
that the HSR waiting period will expire at least one day prior to the
date specified for the Closing in the First Option Notice delivered
pursuant to Section 3 above. The Buyer and ACFH shall use their
respective best efforts to cause the applicable HSR waiting period to
be terminated at the earliest possible time. Buyer shall pay any
filing or similar fees required to be paid in connection with the HSR
notification and report form. Anything in this Agreement to the
contrary notwithstanding, the expiration of the HSR waiting period and
any extensions thereof shall be a condition precedent to the Closing
pursuant to the exercise of the First Option. If such Closing fails
to occur by the Closing date specified in the First Option Notice due
to a failure to have the HSR waiting period terminated by that date,
then the date for such Closing shall be automatically extended for
thirty (30) days, time being of the essence, unless all parties to
this Agreement agree in writing to the contrary; provided, however,
that if such Closing fails to occur during such 30-day extension, time
being of the essence, ACFH and Chemical shall have the right, by
notice to the Buyer, to terminate this Agreement and the Purchase
Agreement, and thereafter this Agreement shall be void without
recourse by either party in law or in equity, the Buyer specifically
agreeing in such event that he shall have no right to purchase the
3
<PAGE>
Property whatsoever and claim of any kind whatsoever regarding the
Property, and further agreeing that in such event the Buyer shall not
be entitled to the return of any monies paid hereunder. The Buyer
specifically agrees that he shall have no further right to extend the
Closing date beyond the one 30-day extension provided for in the
previous sentence, and that a failure to have the HSR waiting period
terminated during such 30-day extension shall not in any way entitle
the Buyer to any further extension. The Buyer shall promptly upon
request furnish to ACFH information reasonably requested by ACFH in
connection with any amendment of ACFH's HSR filing."
2. The Buyer certifies that (i) the Existing Option, as modified by
this Amendment, remains in full force and effect and has not been modified or
amended except by this amendment, and (ii) neither Chemical nor ACFH are in
default under the terms of the Existing Option, as amended.
The undersigned have duly executed this Amendment.
Chemical Bank
By: /s/
------------------------
Name: RICHARD J. PEISER
Title: Managing Director
ACFH Inc.
By: /s/
------------------------
Name: GORDON TSOU
Title: President
/s/
-----------------------------
DONALD J. TRUMP
4
<PAGE>
Ex. 10.45.3
Second Amendment
to
Amended and Restated Option Agreement
This Second Amendment to Amended and Restated Option Agreement dated
as of March 6, 1995 is made among ACFH Inc. ("ACFH"), Chemical Bank
("Chemical") and Donald J. Trump (the "Buyer").
Preliminary Statement
---------------------
ACHF, Chemical and the Buyer have previously entered into an Amended
and Restated Option Agreement dated as of June 16, 1994, as amended by First
Amendment to Amended and Restated Option Agreement (as amended, the "Existing
Option"). The parties now desire to amend the Existing Option as set forth in
this Amendment.
Agreement
---------
The parties agree as follows:
1. The Existing Option is amended as follows:
A. Paragraph 2(a) is deleted and the following substituted in its
place:
"(a) The term of the First Option shall commence upon the date of
this Agreement and continue until 5:00 P.M. on September 30, 1994 (the
"First Option Period"). The term of the Second Option shall commence
upon the date of this Agreement and continue until 5:00 P.M. on
September 30, 1994 (the "Second Option Period"). The First Option
Period and the Second Option Period may be extended on a month by
month basis after September 30, 1994 until August 31, 1995 upon the
following terms and conditions: (i) prior to the then current
expiration date (time being of the essence), the Buyer shall give
notice to ACFH and Chemical of its election to extend the Options,
which notice shall state the month through which the Options shall be
extended (which shall not be beyond August 31, 1995), (ii)
simultaneously with the delivery of the notice described in clause (i)
(time being of the essence), the Buyer shall pay to ACFH and Chemical,
in immediately available funds, the applicable Option Extension Fee as
described below, and (iii) at the time of the Buyer's election to
extend, the Options shall not have previously terminated and no
<PAGE>
event specified in clause (iv), (v), (vi) or (vii) of paragraph (b)
below shall have occurred. The Option Extension Fee shall be $50,000
per month for October, November and December of 1994, $150,000 per
month for January, February and March of 1995, and $100,000 per month
for April, May, June, July and August of 1995. Under no circumstances
shall the Buyer have any right to extend the First Option Period or
the Second Option Period beyond August 31, 1995, time being of the
essence with respect to such final expiration date. Chemical and ACFH
acknowledge that the Option Extension Fees have been paid through
March 31, 1995 and the Options have been extended to that date."
B. The following are added as clauses (vi) and (vii) of Paragraph
2(b):
(vi) the Buyer shall fail to obtain, by July 1, 1995 (time being
of the essence), all necessary approvals from the Casino Control
Commission of the State of New Jersey for the transactions
contemplated by the exercise of the Options and for the financing to
be used in connection with the acquisition of the Property and other
assets in connection with the exercise of the Options; and
(vii) the Buyer shall fail to file with the Securities and
Exchange Commission by April 1, 1995 (time being of the essence), a
registration statement relating to the financing necessary to complete
the transactions contemplated by the exercise of the Options.
C. In Paragraph 6(a), in addition to the credit of $1,250,000 on
account of the initial option payment, the Buyer shall be given a credit
against the purchase price equal to the amount of any Option Extension Fees
actually paid by the Buyer for the period through March 31, 1995. However,
the Option Extension Fees, if any, paid for April, May, June, July and
August of 1995, shall not be credited against the purchase price.
---
2. The Buyer certifies that (i) the Existing Option, as modified by
this Amendment, remains in full force and effect and has not been modified or
amended except by this amendment, and (ii) neither Chemical nor ACFH are in
default under the terms of the Existing Option, as amended.
2
<PAGE>
The undersigned have duly executed this Amendment.
Chemical Bank
By: /s/
------------------------
Name: John C. Collins
Title: Managing Director
ACFH, Inc.
By: /s/
-----------------------
Name: Edward C. Collins
Title: Vice President
/s/
----------------------------
Donald J. Trump
3
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet, income statement, cashflow, and capital statement of Trump Plaza Holding
Associates, Trump Plaza Associates and Trump Plaza Funding Inc. and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000791445
<NAME> TRUMP PLAZA FUNDING, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 2
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,497
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 331,553
<CURRENT-LIABILITIES> 1,495
<BONDS> 326,234
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 331,553
<SALES> 0
<TOTAL-REVENUES> 36,262
<CGS> 0
<TOTAL-COSTS> 0<F1>
<OTHER-EXPENSES> 0<F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 36,262
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Includes gaming, lodging, food & beverage and other
<F2>Includes general & administration and depreciation & amortization
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet, income statement, cashflow, and capital statement of Trump Plaza Holding
Associates, Trump Plaza Associates and Trump Plaza Funding Inc. and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000897729
<NAME> TRUMP PLAZA HOLDING ASSOCIATES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 11,144
<SECURITIES> 0
<RECEIVABLES> 15,290
<ALLOWANCES> 8,493
<INVENTORY> 3,657
<CURRENT-ASSETS> 25,878
<PP&E> 436,013
<DEPRECIATION> 137,659
<TOTAL-ASSETS> 375,643
<CURRENT-LIABILITIES> 31,828
<BONDS> 403,214
<COMMON> 0
0
0
<OTHER-SE> (63,580)
<TOTAL-LIABILITY-AND-EQUITY> 375,643
<SALES> 295,063
<TOTAL-REVENUES> 328,320
<CGS> 0
<TOTAL-COSTS> 162,920<F1>
<OTHER-EXPENSES> 88,728<F2>
<LOSS-PROVISION> 396
<INTEREST-EXPENSE> 49,061
<INCOME-PRETAX> (9,735)
<INCOME-TAX> (865)
<INCOME-CONTINUING> (8,870)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,870)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Includes gaming, lodging, food & beverage and other
<F2>Includes general & administration and depreciation & amortization
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the balance
sheet, income statement, cashflow, and capital statement of Trump Plaza Holding
Associates, Trump Plaza Associates and Trump Plaza Funding Inc. and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000791446
<NAME> TRUMP PLAZA ASSOCIATES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 11,142
<SECURITIES> 0
<RECEIVABLES> 15,291
<ALLOWANCES> 8,494
<INVENTORY> 3,657
<CURRENT-ASSETS> 28,729
<PP&E> 436,187
<DEPRECIATION> 137,659
<TOTAL-ASSETS> 376,208
<CURRENT-LIABILITIES> 31,248
<BONDS> 326,234
<COMMON> 0
0
0
<OTHER-SE> 10,146
<TOTAL-LIABILITY-AND-EQUITY> 376,208
<SALES> 295,063
<TOTAL-REVENUES> 328,320
<CGS> 0
<TOTAL-COSTS> 162,920<F1>
<OTHER-EXPENSES> 87,670<F2>
<LOSS-PROVISION> 397
<INTEREST-EXPENSE> 38,876
<INCOME-PRETAX> 448
<INCOME-TAX> 92
<INCOME-CONTINUING> 356
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 356
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Includes gaming, lodging, food & beverage, and other
<F2>Includes general & administration and depreciation & amortization
</FN>
</TABLE>
