UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to __________________
Commission file number: 1-13794
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TRUMP HOTELS & CASINO RESORTS, INC.
-----------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-3818402
- ------------------------------------ --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Mississippi Avenue and The Boardwalk
Atlantic City, New Jersey 08401
- ------------------------------------ --------------------
(Address of principal executive (Zip Code)
offices)
(609) 441-6060
----------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
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 [ ]
The number of outstanding shares of Trump Hotels & Casino Resorts Inc. Common
Stock, par value $.01 per share, as of April 30, 1996, was 24,140,090.
The number of outstanding shares of Trump Hotels & Casino Resorts, Inc. Class B
Common Stock, par value $.01 per share, as of April 30, 1996, was 1,000.
<PAGE>
TRUMP HOTELS & CASINO RESORTS, INC.
INDEX TO FORM 10-Q
Page
PART I -- FINANCIAL INFORMATION
ITEM 1 -- Financial Statements
Condensed Consolidated Balance Sheets of Trump Hotels & Casino
Resorts Inc. as of March 31, 1996 (unaudited) and December 31, 1995. 1
Condensed Consolidated Statement of Operations of Trump Hotels &
Casino Resorts, Inc. for the Three Months Ended March 31, 1996
(unaudited). 2
Condensed Consolidated Statement of Capital (Deficit) of Trump
Hotels & Casino Resorts Inc. for the Three Months Ended March 31,
1996 (unaudited). 3
Condensed Consolidated Statement of Cash Flows of Trump Hotels &
Casino Resorts, Inc. for the Three Months Ended March 31, 1996
(unaudited). 4
Notes to Condensed Financial Statements of Trump Hotels & Casino
Resorts, Inc. (unaudited). 5-12
ITEM 2 -- Management's Discussion and Analysis of Financial
Condition and Results of Operations 13-17
PART II -- OTHER INFORMATION
ITEM 1 -- Legal Proceedings 18
ITEM 2 -- Changes in Securities 19
ITEM 3 -- Defaults Upon Senior Securities 19
ITEM 4 -- Submission of Matters to a Vote of
Security Holders 19
ITEM 5 -- Other Information 19
ITEM 6 -- Exhibits and Reports on Form 8-K 19
Signature - Trump Hotels & Casino Resorts, Inc. 22
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1- Financial Statements
TRUMP HOTELS & CASINO RESORTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, December 31,
1996 1995
------------ ------------
(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 21,612 $ 19,208
Restricted cash 12,013 12,013
Receivables, net 14,879 14,460
Inventories 2,640 2,609
Other current assets 5,037 5,171
-------- --------
Total current assets 56,181 53,461
INVESTMENT IN BUFFINGTON HARBOR 22,328 21,823
PROPERTY AND EQUIPMENT, net 450,823 408,231
LAND RIGHTS 29,227 29,320
CASH RESTRICTED FOR FUTURE CONSTRUCTION 17,550 40,030
NOTE RECEIVABLE -- 3,000
DEFERRED LOAN COSTS, NET 19,472 20,026
OTHER ASSETS 9,967 8,654
-------- --------
Total Assets $605,548 $584,545
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 4,595 $ 2,901
Accounts payable and accrued expenses 37,312 29,625
Accrued interest payable 17,474 2,498
Due to affiliates, net 434 278
--------- ---------
Total Current Liabilities 59,815 35,302
LONG-TERM DEBT, net of discount and
current maturities 497,643 494,471
DEFERRED INCOME TAXES PAYABLE 4,167 4,181
OTHER LONG TERM LIABILITIES 6,246 --
--------- ---------
Total Liabilities 567,871 533,954
--------- ---------
STOCKHOLDERS' EQUITY:
Common Stock $.01 par value,
50,000,000 shares authorized,
10,066,667 issued and outstanding 101 101
Class B Common Stock $.01 par value,
1,000 shares authorized, issued and
outstanding
Additional Paid in Capital 49,361 52,411
Accumulated Deficit (11,785) (1,921)
--------- ---------
Total Stockholders' Equity 37,677 50,591
--------- ---------
Total Liabilities and Stockholders' Equity $ 605,548 $ 584,545
========= =========
The accompanying notes are an integral part of
these condensed consolidated balance sheets.
1
<PAGE>
TRUMP HOTELS & CASINO RESORTS INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(unaudited)
(in thousands, except share data)
REVENUES:
Gaming $ 74,270
Rooms 5,798
Food and Beverage 11,383
Other 2,100
------------
Gross Revenues 93,551
Less - Promotional allowances 10,683
------------
Net Revenues 82,868
COSTS AND EXPENSES:
Gaming 44,126
Rooms 777
Food and Beverage 4,094
General and Administrative 19,668
Depreciation and Amortization 4,527
Pre-Opening 2,110
Other 800
------------
76,102
------------
Income from operations 6,766
------------
NON-OPERATING INCOME AND
(EXPENSES):
Interest income 771
Interest expense (16,026)
Other non-operating expense (1,375)
------------
(16,630)
------------
NET LOSS $ (9,864)
============
Loss Per share (.97)
------------
Weighted average shares 10,133,333
============
The accompanying notes are an integral part of this
condensed consolidated financial statement.
2
<PAGE>
TRUMP HOTELS & CASINO RESORTS, INC.
CONDENSED CONSOLIDATED STATEMENT OF CAPITAL (DEFICIT)
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(unaudited)
(in thousands except share data)
<TABLE>
<CAPTION>
Number of Shares
---------------------------
Common Additional
Class B Stock Paid in Accumulated
Common Common Amount Capital Deficit Total
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance,
December 31, 1995 10,066,667 1,000 $ 101 $ 52,411 $ (1,921) $ 50,591
Cancellation of
Trump Note (3,167) (3,167)
Accretion of
Phantom Stock Units 117 117
Net Loss (9,864) (9,864)
------------------------------------------------------------------------------------------------
Balance,
March 31, 1996 10,066,667 1,000 $ 101 $ 49,361 $ (11,785) $ 37,677
========== ========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of this
condensed consolidated financial statement.
3
<PAGE>
TRUMP HOTELS & CASINO RESORTS, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(unaudited)
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (9,864)
Adjustments to reconcile net income to net
cash flows from operating activities-
Noncash charges-
Depreciation and amortization 4,527
Accretion of phantom stock units 117
Accretion of discounts on mortgage Notes 112
Amortization of deferred loan costs 718
Provisions for losses on receivables 317
Valuation allowance of CRDA investments 86
--------
(3,987)
Increase in receivables (903)
Increase in inventories (31)
Increase in advances to affiliates 157
Decrease in other current assets 135
Increase in other assets (725)
Increase in accounts payable and accrued expenses 4,031
Increase in accrued interest payable 14,976
--------
Net cash flows provided by operating activities 13,653
--------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (35,689)
Investment in Buffington Harbor (505)
CRDA Investments (926)
Cash restricted for future construction 22,480
--------
Net cash flows used in investing activities (14,640)
--------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Long Term Debt 4,168
Payment of current maturities of long-term debt (777)
--------
Net cash flows provided by financing activities 3,391
--------
Net increase in cash and cash equivalents 2,404
--------
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR $ 19,208
========
CASH AND CASH EQUIVALENTS AT MARCH 31, 1996 $ 21,612
========
CASH INTEREST PAID $ 203
========
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
Purchase of property and equipment $ 9,987
========
The accompanying notes are an integral part of this
condensed consolidated financial statement.
4
<PAGE>
TRUMP HOTELS & CASINO RESORTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)
(1) Organization and Operations:
Trump Hotels & Casino Resorts, Inc., a Delaware corporation ("THCR"), which
commenced operations on June 12, 1995, owns and operates the Trump Plaza Hotel
and Casino ("Trump Plaza"), a luxury casino hotel located on The Boardwalk in
Atlantic City, New Jersey. In addition, THCR, through Trump Indiana, Inc., a
Delaware corporation ("Trump Indiana"), a wholly owned subsidiary of Trump
Hotels & Casino Resorts Holdings, L.P., a Delaware limited partnership ("THCR
Holdings"), an entity which is owned approximately 60.2% (as of March 31, 1996)
by THCR, is developing a riverboat gaming facility at Buffington Harbor, Indiana
(the "Indiana Riverboat"). THCR, through THCR Holdings and its subsidiaries, is
the exclusive vehicle through which Donald J. Trump ("Trump") will engage in new
gaming activities in emerging or established gaming jurisdictions.
The accompanying condensed consolidated financial statements include those
of (i) THCR and (ii) THCR Holdings and its subsidiaries: Trump Atlantic City
Associates, a New Jersey general partnership formerly known as Trump Plaza
Holding Associates ("Trump AC"), Trump Indiana, Trump Plaza Funding, Inc., a New
Jersey corporation ("Plaza Funding") and Trump Atlantic City Holding, Inc., a
New Jersey general partnership formerly known as Trump Plaza Holding, Inc. ("AC
Holding Inc."). Trump Plaza Associates, a New Jersey general partnership ("Plaza
Associates") which owns and operates Trump Plaza, is a wholly owned subsidiary
of Trump AC.
On June 12, 1995, THCR completed a public offering of 10,000,000 shares of
its common stock, par value $.01 per share (the "THCR Common Stock"), at $14.00
per share (the "1995 Stock Offering") for gross proceeds of $140,000,000.
Concurrently with the 1995 Stock Offering, THCR Holdings, together with Trump
Hotels & Casino Resorts Funding, Inc., a Delaware corporation and a wholly owned
subsidiary of THCR Holdings ("THCR Funding"), issued their 15-1/2% Senior
Secured Notes due 2005 (the "Senior Notes") for gross proceeds of $155,000,000
(the "1995 Note Offering" and, together with the 1995 Stock Offering, the "1995
Offerings"). THCR contributed the gross proceeds of the 1995 Stock Offering to
THCR Holdings.
Prior to the 1995 Offerings, Trump was the sole stockholder of THCR and
sole beneficial owner of THCR Holdings. Concurrent with the 1995 Offerings,
Trump contributed to THCR Holdings all of his beneficial interest in Plaza
Associates, which consisted of all of the outstanding capital stock of Plaza
Funding, a 99%
5
<PAGE>
equity interest in Trump AC and all of the outstanding capital stock of AC
Holding, Inc., which owns the remaining 1% equity interest in Trump AC. Trump
also contributed all of his existing interests and rights to new gaming
activities in both emerging and established gaming jurisdictions, including
Trump Indiana but excluding his interests in the Trump Taj Mahal Casino Resort
(the "Taj Mahal") and Trump's Castle Casino Resort, to THCR Holdings. In
exchange for Trump's contributions to THCR Holdings, Trump received an
approximately 39.8% limited partnership interest in THCR Holdings. Trump's
limited partnership interest in THCR Holdings represents his economic interest
in the assets and operations of THCR Holdings. Accordingly (as of March 31,
1996) such limited partnership interest is convertible at Trump's option into
6,666,667 shares of THCR Common Stock (subject to certain adjustments)
representing approximately 39.8% of the outstanding shares of THCR Common Stock.
In addition, in connection with the 1995 Offerings, Trump received shares
of Class B Common Stock, par value $.01 per share, of THCR (the "THCR Class B
Common Stock"). The THCR Class B Common Stock votes together with the THCR
Common Stock as a single class on all matters submitted to stockholders of THCR
for a vote or in respect of which consents are solicited (other than in
connection with certain amendments to THCR's Amended and Restated Certificate of
Incorporation). The THCR Class B Common Stock has voting power equivalent to the
voting power of the THCR Common Stock into which a THCR Holdings limited
partnership interest is convertible. Upon conversion of all or any portion of a
THCR Holdings limited partnership interest into shares of THCR Common Stock, the
corresponding voting power of the THCR Class B Common Stock will be
proportionately diminished. The THCR Class B Common Stock provides a THCR
Holdings limited partner with a voting interest in THCR which is proportionate
to such holder's equity interest in THCR Holdings' assets represented by such
limited partnership interest. Except for the right to receive par value upon
liquidation, the THCR Class B Common Stock has no right to receive any dividend
or other distribution in respect of the equity of THCR. In addition, Trump has
agreed to waive (except as set forth under the Amended and Restated Certificate
of Incorporation of THCR) state law rights to vote the THCR Class B Common Stock
as a separate class in the event of merger or sale of substantial assets.
The proceeds of the 1995 Stock Offering were contributed by THCR to THCR
Holdings in exchange for an approximate 60.2% general partnership interest in
THCR Holdings.
(2) Summary of Significant Accounting Policies
Organization and Basis of Presentation
THCR, through THCR Holdings and its subsidiaries, operates Trump Plaza, a
luxury casino hotel, located on The Boardwalk in Atlantic City which provides
high quality amenities and services
6
<PAGE>
to its casino patrons and hotel guests. A substantial portion of Trump Plaza's
revenues are derived from its gaming operations.
All significant intercompany balances and transactions have been eliminated
in the accompanying condensed consolidated financial statements.
The accompanying condensed consolidated financial statements have been
prepared without audit. In the opinion of management, all adjustments,
consisting of only normal recurring adjustments, necessary to present fairly the
financial position, the results of operations and cash flows for the periods
presented, have been made.
The accompanying condensed consolidated financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission. Accordingly, certain information and note disclosures normally
included in financial statements prepared in conformity with generally accepted
accounting principles have been condensed or omitted. These condensed
consolidated financial statements should be read in conjunction with the
financial statements and notes thereto included in Plaza Funding's and Plaza
Associates' Annual Report on Form 10-K for the year ended December 31, 1995,
filed with the Securities and Exchange Commission.
The casino industry in Atlantic City is seasonal in nature, therefore,
results of operations for the period ended March 31, 1996, are not necessarily
indicative of the operating results for a full year.
(3) Long-Term Debt:
Long-term debt consists of the following:
March 31, 1996 December 31, 1995
-------------- -----------------
10 7/8% Mortgage Notes due 2001 net of
unamortized discount of $3,236,000 and
$3,348,000 respectively (A) ................ $326,764,000 $326,652,000
15-1/2% Senior Secured Notes due 2005 (B) .. 155,000,000 155,000,000
Mortgage notes payable (C) ................. 2,738,000 2,953,000
Other (D) .................................. 17,736,000 12,767,000
------------ ------------
502,238,000 497,372,000
Less - Current maturities .................. 4,595,000 2,901,000
------------ ------------
$497,643,000 $494,471,000
============ ============
7
<PAGE>
(A) On June 25, 1993, Plaza Funding issued $330,000,000 principal amount of
10 7/8% Mortgage Notes, due 2001 (the "Plaza Notes"), net of discount of
$4,313,000 and loaned the proceeds to Plaza Associates. (See Note 8).
(B) On June 12, 1995, THCR Holdings and THCR Funding issued $155,000,000
principal amount of Senior Notes. The Senior Notes are redeemable in cash
at the option of THCR Holdings and THCR Funding, in whole or in part, at
any time on or after June 15, 2000 at redemption prices, as defined.
Interest on these notes is payable semi-annually in arrears on June 15 and
December 15 of each year, commencing December 15, 1995, and are secured by
substantially all of the assets of THCR Holdings. Costs associated with the
issuance of these notes totaling approximately $10,742,000 have been
deferred and are being amortized over the life of the Senior Notes.
(C) Interest on these notes is payable with interest rates ranging from 10.0%
to 11.0%. The notes are due at various dates between 1996 and 1998 and are
secured by real property.
(D) Interest on these notes and leases is payable with interest rates ranging
from 7.9% to 13.5%. The notes and leases are due at various dates between
1996 and 2000 and are secured by equipment.
(4) Commitments and Contingencies
Casino License Renewal
The operation of an Atlantic City casino hotel is subject to significant
regulatory controls which affect virtually all of its operations. Under the New
Jersey Casino Control Act (the "Casino Control Act"), Plaza Associates is
required to maintain certain licenses.
In June 1995, the CCC renewed Plaza Associates' license to operate Trump
Plaza. This license must be renewed in June 1999, is not transferable and such
renewal will include a review of the financial stability of Plaza Associates.
Upon revocation, suspension for more than 120 days, or failure to renew the
casino license, the Casino Control Act provides for the appointment of a
conservator to take possession of the hotel and casino's business and property,
subject to all valid liens, claims and encumbrances.
Restricted Cash
As a condition to the 1995 Note Offering, THCR Holdings and THCR Funding
entered into a Cash Collateral and Disbursement Agreement (the "Cash Collateral
Agreement"), with First Bank National Association, in its respective capacities
as Trustee and Disbursement
8
<PAGE>
Agent (each as defined in the Cash Collateral Agreement). The Cash Collateral
Agreement called for initial deposits to custodial accounts which are restricted
in use for (a) Trump Indiana for the ship and land projects, (b) Trump Plaza
construction projects, including the exercise of the option (the "Trump World's
Fair Purchase Option") to purchase the former Trump Regency Hotel ("Trump
World's Fair") and construction projects at a hotel located adjacent to Trump
Plaza's main tower which is being integrated into Trump Plaza (the "Trump Plaza
East Tower") and Trump World's Fair, and (c) the first two interest payments on
the Senior Notes. As of March 31, 1996, $12,013,000 is restricted for the 1996
interest payment on the Senior Notes and is reflected as Restricted Cash in the
accompanying condensed consolidated balance sheet. The balance of funds
restricted for Trump Indiana and Trump World's Fair is an aggregate of
approximately $17,550,000, at March 31, 1996, and is reflected as Cash
Restricted for Future Construction in the accompanying condensed consolidated
balance sheet.
Trump World's Fair
Under an Option Agreement with Chemical Bank ("Chemical"), Trump had an
option to purchase (i) Trump World's Fair (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 Plaza Associates. In connection with such
Option Agreement, Trump assigned his rights to Plaza Associates. On June 12,
1995, the Trump World's Fair Purchase Option was exercised. The option price of
$60,000,000 was funded with $58,150,000 from the capital contributed by THCR
Holdings, (see Note 1), and $1,850,000 of option payments made by Plaza
Associates.
(5) Note Receivable from Trump
Prior to consummation of the 1995 Offerings, Trump incurred $3,000,000
relating to expenditures for the development of Trump Indiana and other gaming
ventures. Concurrently with the 1995 Offerings, THCR Holdings loaned Trump
$3,000,000 and Trump issued to THCR Holdings a five-year promissory note (the
"Trump Note") bearing interest at a fixed rate of 10% per annum, payable
annually. Under its terms, the Trump Note would be automatically canceled in the
event that at any time during the periods defined in the Trump Note, the THCR
Common Stock traded at a price per share equal to or greater than the prices set
forth in the Trump Note (subject to adjustment in certain circumstances). The
Trump Note was canceled on March 27, 1996 in accordance with its terms.
9
<PAGE>
(6) Investment in Buffington Harbor
Trump Indiana and The Majestic Star Casino, LLC ("Barden") entered into an
agreement (the "BHR Agreement"), relating to the joint ownership, development
and operation of all common land-based and waterside operations in support of
each of their separate riverboat casinos at Buffington Harbor. Each will be
equally responsible for the development and operating expenses at Buffington
Harbor, and THCR Holdings is dependent on the ability of Barden to pay for its
share of all future expenses. There can be no assurances that THCR Holdings or
Trump Indiana will be able to obtain financing on satisfactory terms or to fund
from operations, any such required expenditures, or, if available, whether such
other indebtedness would be permitted under existing debt instruments of THCR
Holdings. Furthermore, there can be no assurances that Barden will be able to
fund its portion of such expenses.
(7) Note Receivable from Officer
Included in other assets is a loan amounting to approximately $344,000 due
from the Chief Executive Officer of THCR in accordance with the terms of his
employment agreement, which provides for up to an aggregate of $2,000,000 in
loans to be used by him to pay his income tax liability in connection with the
stock bonus award, which loan, including interest, will be forgiven in the event
of a change in control, as defined in such employment agreement.
(8) Subsequent Event
On April 17, 1996, pursuant to the Agreement and Plan of Merger, as amended
(the "Merger Agreement"), among THCR, Taj Mahal Holding Corp. ("Taj Holding")
and THCR Merger Corp., a wholly owned subsidiary of THCR ("Merger Sub"), Merger
Sub was merged with and into Taj Holding (the "Merger"), and each outstanding
share of Class A Common Stock of Taj Holding (the "Taj Holding Class A Common
Stock") (which in the aggregate represented 50% of the economic interest in
Trump Taj Mahal Associates ("Taj Associates"), the owner and operator of the
Trump Taj Mahal Casino Resort (the "Taj Mahal")) was converted into the right to
receive, at each holder's election, either (a) $30 in cash or (b) that number of
shares of THCR Common Stock having a market value equal to $30. Trump held the
remaining 50% interest in Taj Associates and contributed such interest in Taj
Associates to Trump AC in exchange for limited partnership interests in THCR
Holdings. In addition, the outstanding shares of Taj Holding Class C Common
Stock, all of which were held by Trump, were canceled in connection with the
Merger. The following transactions occurred in connection with the Merger
(collectively referred to as the "Merger Transaction"):
(a) the payment of an aggregate of $31,181,242.73 in cash and the
issuance of 323,423 shares of THCR's Common Stock to the
10
<PAGE>
holders of Taj Holding Class A Common Stock pursuant to the Merger
Agreement;
(b) the contribution by Trump to Trump AC of all of his direct and
indirect ownership interests in Taj Associates, and the contribution by
THCR to Trump AC of all of its indirect ownership interests in Taj
Associates acquired in the Merger;
(c) the public offerings by (i) THCR of 12,500,000 shares of Common
Stock (plus 750,000 shares of Common Stock issued in connection with the
partial exercise of the underwriters' over-allotment option) (the "1996
Stock Offering") and (ii) Trump AC and its wholly owned finance subsidiary
of $1,200,000,000 aggregate principal amount of 11 1/4% First Mortgage
Notes due 2006 (the "Mortgage Notes") (the "1996 Note Offering" and,
together with the 1996 Stock Offering, the "1996 Offerings");
(d) the redemption of the outstanding shares of Taj Holding Class B
Common Stock, immediately prior to the Merger, for $.50 per share in
accordance with its terms;
(e) the redemption of the outstanding 11.35% Mortgage Bonds, Series A,
due 1999 of Trump Taj Mahal Funding, Inc.;
(f) the retirement of the outstanding 10 7/8% Mortgage Notes due 2001
of Plaza Funding;
(g) the satisfaction of the indebtedness of Taj Associates under its
loan agreement with National Westminster Bank USA;
(h) the purchase of certain real property used in the operation of the
Taj Mahal that was leased from a corporation wholly owned by Trump;
(i) the purchase of certain real property used in the operation of
Trump Plaza that was leased from an unaffiliated third party;
(j) the payment to Bankers Trust Company ("Bankers Trust") to obtain
releases of liens and guarantees that Bankers Trust had in connection with
indebtedness owed by Trump to Bankers Trust; and
(k) the issuance to Trump of warrants to purchase an aggregate of 1.8
million shares of Common Stock, (i) 600,000 shares of which may be
purchased on or prior to April 17, 1999, at $30.00 per share, (ii) 600,000
shares of which may be purchased on or prior to April 17, 2000, at $35.00
per share, and (iii) 600,000 shares of which may be purchased on or prior
to April 17, 2001, at $40.00 per share.
As a result of the contribution by Trump to Trump AC (on behalf, and at the
direction, of THCR Holdings) of his direct and indirect ownership interests in
Taj Associates and the
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<PAGE>
contribution by THCR to Trump AC (on behalf, and at the direction, of THCR
Holdings) of its indirect ownership interests in Taj Associates acquired in the
Merger, together with THCR's contribution to THCR Holdings of the proceeds from
the Stock Offering, Trump's aggregate beneficial equity interest in THCR
Holdings decreased from approximately 40% to approximately 25%, and THCR's
aggregate beneficial equity interest in THCR Holdings increased from
approximately 60% to approximately 75%.
12
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Capital Resources and Liquidity
On June 12, 1995, THCR consummated the 1995 Stock Offering resulting in
aggregate gross proceeds of $140,000,000. Concurrently with the 1995 Stock
Offering, THCR Holdings and THCR Funding completed the 1995 Note Offering
resulting in aggregate gross proceeds of $155,000,000. The proceeds to THCR from
the 1995 Stock Offerings were contributed by THCR to THCR Holdings for an
approximately 60% general partnership interest in THCR Holdings. THCR Holdings,
in turn, has used the net proceeds from the 1995 Offerings, through March 31,
1996, for the following purposes: (a) repurchase and redemption of the 12 1/2
Pay-In-Kind Notes due 2003 of Trump AC (the "PIK Notes") (including accrued
interest payable) for $86,209,000, (b) exercise of the Trump World's Fair
Purchase Option for $58,150,000, (c) construction costs for Trump World's Fair
of $29,346,000, (d) construction costs for the Trump Plaza East Tower of
$15,150,000 and (e) construction and land acquisition costs of $36,475,000 for
the Indiana Riverboat. The balance of the proceeds have been and will be used
for the completion of the construction at Trump Plaza, the Trump Plaza East
Tower, Trump World's Fair and the Indiana Riverboat, as well as for general
corporate purposes.
Each of (i) the indenture pursuant to which the 10 7/8% Mortgage Notes due
2001 of Plaza Funding were issued (the "Plaza Note Indenture") and (ii) the
indenture pursuant to which the 15 1/2 Senior Secured Notes due 2005 of THCR
Holdings and THCR Funding were issued (the "Senior Note Indenture") restricts
the ability of Plaza Funding and Plaza Associates, and THCR Holdings and their
subsidiaries, as the case may be, to make distributions to partners or pay
dividends, as the case may be, unless certain financial ratios are achieved.
Further, given the rapidly changing competitive environment and the risks
associated with THCR's proposed expansion plans, THCR's future operating results
are highly conditional and could fluctuate significantly. Moreover, as a
condition to the 1995 Note Offering, THCR Holdings and THCR Funding entered into
the Cash Collateral Agreement, which called for initial deposits to custodial
accounts which are restricted in use for (a) Trump Indiana for the ship and land
projects, (b) Trump Plaza construction projects, including the exercise of the
Trump World's Fair Purchase Option and construction projects at the Trump Plaza
East Tower and the Trump World's Fair and (c) the first two interest payments on
the Senior Notes. As of March 31, 1996, $12,013,000 was restricted for the
second interest payment on the Senior Notes and is reflected as Restricted Cash
in the accompanying condensed consolidated balance sheets. The balance of funds
restricted for Trump Indiana and Trump World's Fair is an aggregate of
approximately $17,550,000, at March 31, 1996, and is reflected as Cash
Restricted for Future Construction as a non-
13
<PAGE>
current asset in the accompanying condensed consolidated balance sheets.
With these restricted funds, as well as cash flow from operating
activities, riverboat and gaming equipment financing (some of which still
remains to be obtained), management believes that sufficient funds are available
to complete the projects that are currently in development. The Trump World's
Fair renovations are scheduled for completion during May 1996. When the
renovations are completed, Trump Plaza will have 139,553 square feet of gaming
space, 1,404 hotel rooms and additional restaurants and meeting space. Trump
Indiana is scheduled to commence operations during the second quarter of 1996.
In addition, the ability of Plaza Associates to make payments of dividends
or distributions (except for payment of interest) through Trump AC to THCR
Holdings may be restricted by the Casino Control Commission of the State of New
Jersey (the "CCC"). Similarly, the ability of Trump Indiana to make payments of
dividends or distributions to THCR Holdings may be restricted by the Indiana
Gaming Commission (the "IGC").
Cash flow from operating activities is Plaza Associates' principal source
of liquidity. Cash flow from operating activities was $16.9 million, for the
three months ended March 31, 1996, compared to $12.9 million for the comparable
period in 1995. This increase primarily reflects increased income from
operations and additional trade payables in connection with construction at the
Trump World's Fair. Plaza Associates' capital expenditures of approximately
$28,053,000 for the three months ended March 31, 1996 were primarily
attributable to the renovation of the Trump World's Fair for approximately
$22,428,000 and renovation costs of approximately $4,611,000 for the Trump Plaza
East Tower. Trump Indiana's capital expenditures of $7,616,000 for the three
months ended March 31, 1996 were primarily attributable to the completion of the
Indiana Riverboat. Additionally, approximately $9,987,000 has been committed to
the purchase of gaming equipment for use therein. At March 31, 1996, THCR had a
combined working capital deficit of $3,634,000, which included a receivable from
the New Jersey Casino Reinvestment Development Authority for approximately
$6,700,000 for reimbursable improvements made to the Trump Plaza East Tower,
which is currently the subject of litigation.
In addition to the approximately $84 million anticipated to be spent prior
to commencing the operations of the Indiana Riverboat in the second quarter of
1996, during its initial five-year license term, an additional $69 million of
funds (consisting of approximately $48 million for the construction of a hotel
and other amenities and $21 million for infrastructure improvements and other
municipal uses) will be required to be spent by Trump Indiana in connection with
the Indiana Riverboat facility and related commitments, including commitments
required in connection with the licensure process.
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<PAGE>
The sources of the initial $84 million include, and are anticipated to include:
$34 million from the proceeds of the 1995 Offerings, $17.5 million from vessel
financing, $10 million from slot machine financing, $12.5 million from a
mortgage on Trump Indiana's interest in the Buffington Harbor site and/or from a
working capital facility and $10 million from operating leases. Trump Indiana
has received commitments for $17.5 million in vessel financing and nearly $2
million in equipment financing and has signed a letter of intent for an
additional $14.2 million in equipment financing (including approximately $8
million for slot machines). Trump Indiana is seeking commitments for the
additional financing required to commence the operations of the Indiana
Riverboat. The remaining $69 million required to be spent over the initial
five-year license term is expected to be funded with cash from operations or
additional borrowings.
Trump Indiana is a party to a loan and security agreement, as amended, with
debis Financial Services, Inc. ("dFS") pursuant to which dFS will provide,
subject to the terms and conditions thereof, $17.5 million in financing for the
gaming vessel. As of March 31, 1996, dFS had provided Trump Indiana with
approximately $9.8 million pursuant to such agreement.
Operating Revenues and Expenses
THCR Holdings' partnership agreement provides that all business activities
of THCR must be conducted by THCR Holdings or subsidiary partnerships or
corporations. As a result of the 1995 Offerings, and the acquisition of Plaza
Associates by THCR Holdings in connection therewith, THCR's results of
operations are primarily those of Plaza Associates, and the results of
operations included in the Statement of Operations reflect Plaza Associates'
results of operations for the three-month period ended March 31, 1996.
As previously discussed, THCR and THCR Holdings commenced operations on
June 12, 1995, and, therefore, there are no comparable results. Neither THCR nor
any of its subsidiaries had any significant operating history, other than Plaza
Associates, although THCR Holdings has incurred certain expenses including
interest on the Senior Notes, and Trump Indiana has incurred significant
expenses relating to the development of the Indiana Riverboat. The accompanying
discussion of results of operations described below includes the results of
operations of THCR Holdings for the three months ended March 31, 1996 and of
Plaza Associates for the three months ended March 31, 1995. Management believes
that this information is important for comparative purposes.
THCR had a loss per share of $.97 for the three months ended March 31,
1996, based on 10,133,333 average shares outstanding. Assuming the conversion of
Trump's interest in THCR Holdings, which was convertible into 6,666,667 shares
of THCR Common Stock during such period, loss per share would have been $.59 for
the three months ended March 31, 1996, based on 16,800,000 shares outstanding.
15
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Comparison of Three-Month Periods Ended March 31, 1996 and 1995
Gaming revenues were $74,270,000 for three months ended March 31, 1996, an
increase of $8,548,000 or 13.0% from gaming revenues of $65,722,000 for the
comparable period in 1995. The increase in gaming revenues consisted of an
increase in both table games and slot revenues. Management believes this
increase in gaming revenues in 1996 is due to an increased level of demand
evident in the Atlantic City market, management's marketing initiatives, and the
availability of additional hotel rooms at the Trump Plaza East Tower as well as
the February 1996 opening of the casino at the Trump Plaza East Tower.
Slot revenues were $49,832,000 for the three months ended March 31, 1996,
an increase of $6,528,000 or 15.1% from slot revenues of $43,304,000 for the
comparable period in 1995. This increase is primarily attributable to the
addition of 405 slot machines in the Trump Plaza East Tower, as well as
management's marketing programs.
Table games revenues were $24,438,000 for the three months ended March 31,
1996, an increase of $2,020,000 or 9.0% from $22,418,000 for the comparable
period in 1995. This increase is primarily due to an increase in table game drop
(i.e., the dollar value of chips purchased) by 8.0% as well as the addition of
12 tables games in the Trump Plaza East Tower.
Other revenues were $19,281,000 for the three months ended March 31, 1996,
an increase of $3,343,000 or 21.0% from other revenues of $15,938,000 for the
comparable period in 1995. Other revenues include revenues from rooms, food and
beverage and miscellaneous items. This increase is primarily attributable to the
additional rooms at the Trump Plaza East Tower as well as increases in rooms and
food and beverage revenues attendant to increased levels of gaming activity due
in part to increased promotional activities.
Promotional allowances were $10,683,000 for the three months ended March
31, 1996, an increase of $3,126,000 or 41.4% from promotional allowances of
$7,557,000 for the comparable period in 1995. This increase is primarily
attributable to the additional rooms at the Trump Plaza East Tower, as well as
increases in marketing initiatives during the three months ended March 31, 1996.
Gaming costs and expenses were $44,126,000 for the three months ended March
31, 1996, an increase of $7,341,000 or 20.0% from $36,785,000 for the comparable
period in 1995. This increase was primarily due to increased promotional and
operating expenses and taxes associated with increased levels of gaming during
the three months ended March 31, 1996.
General and administrative expenses were $19,668,000 for the three months
ended March 31, 1996. Plaza Associates' expenses were $18,392,000, an increase
of $1,642,000 or 9.8% from $16,750,000 for
16
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the comparable period in 1995. This increase is primarily the result of
increased expenses associated with the Trump Plaza East Tower. THCR and THCR
Holdings incurred $1,276,000 in additional costs and Trump Indiana incurred
$1,631,000 of pre-opening costs.
Income from operations was $6,883,000 for the three months ended March 31,
1996. Plaza Associates' income from operations was $9,677,000, a decrease of
$837,000 or 8% from income from operations of $10,514,000 for the comparable
period in 1995. This decrease is primarily attributable to increased gaming
expenses for the reasons discussed above.
Interest expense was $16,026,000 for the three months ended March 31, 1996.
Plaza Associates' interest expense decreased $2,776,000 from interest expense of
$12,527,000 during the comparable period in 1995. This decrease is the result of
the redemption of the PIK Notes in June 1995. THCR Holdings incurred $6,275,000
of interest expense due to the issuance of the Senior Notes.
Other non-operating expense was $1,375,000 for the three months ended March
31, 1996, an increase of $466,000 from non-operating expense of $909,000 for the
comparable period in 1995. This increase is directly attributable to costs
associated with the Trump World's Fair.
17
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PART II - OTHER INFORMATION
ITEM 1 -- LEGAL PROCEEDINGS
THCR and certain of its employees have been involved in various legal
proceedings. In general, THCR Holdings 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, judgments, fines and penalties)
incurred by them in said legal proceedings.
Various legal proceedings are now pending against THCR. THCR considers all
such proceedings to be ordinary litigation incident to the character of its
business. THCR 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.
Commencing in early 1994, Trump Indiana (which was then wholly owned by
Trump), through its Indiana counsel, had discussions with eight Indiana
residents regarding the potential purchase by such residents of non-voting stock
of Trump Indiana, representing a total of 7.5% of the equity in Trump Indiana.
The purchase price of the stock was to have been paid with a promissory note
secured by the stock purchased, although the purchase price and other material
terms of the proposed purchase were never agreed upon. Such discussions did not
result in an agreement for, or the purchase of, any stock by the residents. It
was subsequently determined to include Trump Indiana as a wholly owned
subsidiary of THCR Holdings in connection with the 1995 Offerings. The residents
then asserted a right to purchase stock in Trump Indiana. Trump Indiana and THCR
did not agree that these individuals have any rights with respect to the stock
of Trump Indiana or otherwise, and so advised the residents. Although
discussions had been ongoing with respect to the resolution of this matter, on
March 29, 1996, in the matter entitled Keshav D. Aggarwal, et al v. Donald J.
Trump, Trump Hotels & Casino Resorts, Inc., Trump Hotels & Casino Resorts
Holdings, L.P. and Trump Indiana, Inc., such residents filed a complaint with
respect to this matter in the United States District Court, Southern District of
Indiana, seeking, among other things, compensatory and punitive damages in an
unspecified amount, and that the court order the defendants to transfer
ownership of 7.5% of Trump Indiana to the plaintiffs. THCR and the other
defendants intend to vigorously contest the allegations against them. Further,
THCR believes that the resolution of these claims will not have a material
adverse effect on THCR.
18
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ITEM 2 -- CHANGES IN SECURITIES
None.
ITEM 3 -- DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5 -- OTHER INFORMATION
None.
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits:
Exhibit No. Description of Exhibit
4.17.1 Supplemental Indenture By Trump Hotels & Casino
Resorts Holdings, L.P. and Trump Hotels & Casino
Resorts Funding, Inc. With Respect To Their 15
1/2% Senior Secured Notes due 2005
4.17.2 Second Supplemental Indenture By Trump Hotels &
Casino Resorts Holdings, L.P. and Trump Hotels &
Casino Resorts Funding, Inc. With Respect To Their
15 1/2% Senior Secured Notes due 2005
4.19.5 Pledge Agreement, dated April 17, 1996, from Trump
Hotels & Casino Resorts Holdings, L.P. as pledgor
to First Bank National Association as Senior Note
Trustee.
4.19.6 Pledge Agreement, dated April 17, 1996, from Trump
Atlantic City Associates as pledgor to First Bank
National Association as Senior Note Trustee.
4.19.7 Pledge Agreement, dated April 17, 1996, from Trump
Atlantic City Holding, Inc. as pledgor to First
Bank National Association as Senior Note Trustee.
4.19.8 Pledge Agreement, dated April 17, 1996, from Trump
Atlantic City Corporation as pledgor to First Bank
National Association as Senior Note Trustee.
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4.26.1 Indenture among Trump Atlantic City Associates and
Trump Atlantic City Funding, Inc., as issuers,
Trump Plaza Associates, Trump Taj Mahal Associates
and The Trump Taj Mahal Corporation, as
guarantors, Trump Taj Mahal Funding, Inc., and
First Bank National Association as trustee.
4.27.1 First Mortgage Note Certificate (included in
Exhibit 4.26.1).
4.28.1 Indenture of Mortgage and Security Agreement among
Trump Taj Mahal Associates, as mortgagor and First
Bank National Association, as collateral agent, as
mortgagee.
4.28.2 Indenture of Mortgage and Security Agreement among
Trump Plaza Associates, as mortgagor and First
Bank National Association, as collateral agent, as
mortgagee.
4.29.1 Assignment of Leases and Rents among Trump Taj
Mahal Associates, as assignor and First Bank
National Association, as collateral agent, as
mortgagee.
4.29.2 Assignment of Leases and Rents among Trump Plaza
Associates, as assignor and First Bank National
Association, as collateral agent, as mortgagee.
4.30.1 Collateral Agency Agreement among and First Bank
National Association, as collateral agent; and
First Bank National Association, as trustee; Trump
Atlantic City Associates; Trump Atlantic City
Funding, Inc., the other secured parties signatory
thereto; and the guarantors under the First
Mortgage Note Indenture.
4.31 Warrants of Trump Hotels & Casino Resorts, Inc.
issued to Donald J. Trump.
10.51.1 Second Amended and Restated Agreement of Limited
Partnership of Trump Hotels & Casino Resorts
Holdings, L.P.
10.52.2 Amended and Restated Exchange and Registration
Rights Agreement among Trump Hotels & Casino
Resorts, Inc., Donald J. Trump and Trump Casinos,
Inc.
10.53.2 1996 Contribution Agreement among Trump Hotels &
Casino Resorts Holdings, L.P., Donald J. Trump,
THCR/LP Corporation
20
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(formerly known as TM/GP Corporation) and Trump
Casinos, Inc. (formerly known as Trump Taj Mahal,
Inc.).
10.54.1 Amendment to Trademark License Agreement between
Donald J. Trump and Trump Hotels & Casino Resorts,
Inc.
10.55.1 Amendment to Trademark Security Agreement between
Donald J. Trump and Trump Hotels & Casino Resorts,
Inc.
10.63 Third Amended and Restated Partnership Agreement
of Trump Plaza Associates.
10.64 Amended and Restated Partnership Agreement of
Trump Atlantic City Associates.
27 Financial Data Schedule for Trump Hotels & Casino
Resorts, Inc.
21
<PAGE>
b. Current Reports on Form 8-K:
The Registrant filed a Report on Form 8-K dated January 8, 1996,
reporting, under Item 5 thereto, the Agreement and Plan of Merger
entered into by THCR, the general partner of THCR Holdings,
Merger Sub, a wholly owned subsidiary of THCR, and Taj Holding,
pursuant to which Merger Sub was to be (and on April 17, 1996, was)
merged with and into Taj Holding. No financial statements were filed
in connection with the Form 8-K.
The Registrant filed a Report on Form 8-K dated January 31, 1996,
reporting, under Item 5 thereto, the Amendment to Agreement and Plan
of Merger which it had entered into on January 8, 1996. No financial
statements were filed in connection with the Form 8-K.
22
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRUMP HOTELS & CASINO RESORTS, INC.
(Registrant)
Date: May 15, 1996 By: /s/ Nicholas L. Ribis
-----------------------
Nicholas L. Ribis
President, Chief Executive Officer,
Chief Financial Officer
and Director
(Duly Authorized Officer and
Principal Financial Officer)
23
- --------------------------------------------------------------------------------
FIRST SUPPLEMENTAL INDENTURE
TRUMP HOTELS & CASINO
RESORTS HOLDING, L.P.
TRUMP HOTELS & CASINO
RESORTS FUNDING, INC.
Issuers
and
FIRST BANK NATIONAL ASSOCIATION
Trustee
--------------------
Dated as of April 2, 1996
--------------------
$155,000,000 aggregate principal amount of 15 1/2% Senior Secured Notes due 2005
- --------------------------------------------------------------------------------
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of April 2, 1996, between Trump
Hotels & Casino Resorts Holdings, L.P., a Delaware limited partnership (the
"Company") and Trump Hotels & Casino Resorts Funding, Inc., a Delaware
corporation and a wholly owned subsidiary of the Company ("Funding" and together
with the Company, the "Issuers"), and First Bank National Association, a
national banking association, as Trustee, under the Indenture, dated as of June
12, 1995 (the "Indenture"), between the Issuers and the Trustee relating to the
Issuers' $155 million aggregate principal amount of 15 1/2% Senior Secured Notes
due 2005 (the "Securities"). Capitalized terms not defined herein shall have the
respective meanings assigned to them in the Indenture.
RECITALS OF THE ISSUERS
The Company has proposed a comprehensive plan relating to its acquisition
of all of the direct and indirect interests in Trump Taj Mahal Associates, a New
Jersey general partnership ("Taj Mahal Associates"), and the refinancing of the
debt of certain of the Company's existing Subsidiaries and Taj Mahal Associates
and its subsidiary. Such plan, as described in the Preliminary Prospectus dated
March 8, 1996 of Trump Hotels & Casino Resorts, Inc., relating to an offering of
its common stock, par value $.01 per share ("THCR Common Stock"), is referred to
herein as the "Merger Transaction." As part of the Merger Transaction, the
Issuers have completed a consent solicitation (the "Consent Solicitation") with
the holders of the Securities to waive compliance with certain provisions of the
Indenture (the "Waiver") and to amend certain provisions of the Indenture (the
"Amendments"), both as described in the Consent Solicitation, dated March 15,
1996, as supplemented and amended through the date hereof.
In accordance with Section 10.2 of the Indenture the Holders of not less
than a majority in aggregate principal amount of the Securities Outstanding have
consented to such Waiver and Amendments.
The general partner of the Company and the Board of Directors of Funding
each have duly authorized the execution and delivery of this Supplemental
Indenture. The Issuers have delivered to the Trustee an Officers' Certificate
pursuant to Section 10.4 of the Indenture and an Opinion of Counsel pursuant to
Section 10.6 of the Indenture.
WHEREFORE, each party agrees as follows for the benefit of the other
parties and for the equal or ratable benefit of the Holders of the Securities:
1
<PAGE>
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 Definitions.
For all purposes of this Supplemental Indenture, except as otherwise
expressly provided or unless the context otherwise requires, the words "herein,"
"hereof" and "hereunder" and other words of similar import refer to the
Indenture and this Supplemental Indenture as a whole and not to any particular
Article, Section or subdivision. In addition, the words "this Indenture," as
used in the Indenture, shall refer to the Indenture as supplemented by this
Supplemental Indenture.
SECTION 1.2 Effect of Headings.
The Article and Section headings are for convenience only and shall not
affect the construction hereof. Except as expressly provided herein, all
references to Sections in the Indenture shall remain unchanged.
SECTION 1.3 Successors and Assigns.
All covenants and agreements in this Supplemental Indenture by the Issuers
shall bind their successors and assigns, or any other obligor on the Securities,
whether expressed or not.
SECTION 1.4 Separability Clause.
In case any provision in this Supplemental Indenture shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.5 Benefits of Supplemental Indenture.
Nothing in this Supplemental Indenture, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder, any
Paying Agent and the Holders, any benefit or any legal or equitable right,
remedy or claim under this Supplemental Indenture.
2
<PAGE>
SECTION 1.6 Governing Law.
THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF).
SECTION 1.7 Effectiveness.
This Supplemental Indenture shall take effect on the date hereof; provided,
however, that the Waiver set forth in Article II and the Amendments set forth in
Article III hereof shall become operative only upon and simultaneously with, and
shall have no force and effect prior to, the date of delivery by the Issuers of
an Officers' Certificate to the effect that the Merger Transaction has been
consummated.
ARTICLE II
WAIVER
SECTION 2.1 Waiver.
The Holders of a Majority in aggregate principal amount of Securities
Outstanding on the Record Date (as defined in the Consent Solicitation)
(disregarding the Securities, if any, owned by the Issuers, any other obligor on
the Securities and Affiliates of such Persons) waive compliance by the Issuers
with any provisions of the Indenture which would prohibit or, with the passage
time or otherwise, be violated by, any component of the Merger Transaction as of
the date of consummation thereof, including, without limiting the generality of
the foregoing, any application of proceeds of the offering of the First Mortgage
Notes or THCR Common Stock as part of with the Merger Transaction. To the extent
that any such components constitute Restricted Payments, such Holders waive
inclusion from and after the date hereof of such Restricted Payments in the
calculation of the aggregate amount permitted to be expended for all Restricted
Payments under Section 5.3(a)(3) of the Indenture.
3
<PAGE>
ARTICLE III
AMENDMENTS
SECTION 3.1 Clause (g) of the definition of "Adjusted Consolidated Net
Income (Loss)" in Section 1.1 of the Indenture is hereby amended to read in its
entirety as follows:
(g) net gains and losses in respect of the redemption, defeasance or
repurchase of the PIK Notes, the Mortgage Notes and the 11.35% Mortgage
Bonds, Series A, due 1999 of Trump Taj Mahal Funding, Inc., a New Jersey
corporation.
SECTION 3.2 Clause (a) of the definition of "Affiliate" in section 1.1 of
the Indenture is hereby amended to read in its entirety as follows:
(a) any other Person (including, without limitation, in the case of the
Company or any Subsidiary, the Other Trump Casino) directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified Person or
SECTION 3.3 Clause (ii) of the definition of "Change of Control" in Section
1.1 of the Indenture is hereby amended to read in its entirety as follows:
(ii) any "person" or "group" (as such terms are used for the purposes of
Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable),
other than the Permitted Holder, is or becomes the "beneficial owner" (as
defined in Rules 13d- 3 and 13d-5 under the Exchange Act), directly or
indirectly, of more than 35% of the total voting power of the Voting Stock
of Trump Hotels & Casinos, or any successor thereto by merger,
consolidation or otherwise, unless the Permitted Holder "beneficially owns"
(as so defined), directly or indirectly, in the aggregate a greater
percentage of the total voting power of the Voting Stock of Trump Hotels &
Casinos than such other person or group and has the right or ability by
voting power, contract or otherwise to elect or designate for election a
majority of the Board of Directors of Trump Hotels & Casinos (for purposes
of this definition, such other person shall be deemed to beneficially own
any Voting Stock of a specified corporation held by a parent corporation,
if such other person "beneficially owns" (as so defined), directly or
indirectly, more than 35% of the voting power of the Voting Stock of a such
parent corporation and the Permitted Holder "beneficially owns" (as so
defined), directly or indirectly, in the aggregate a lesser percentage of
the voting power of the Voting Stock of such parent corporation and does
not have the right or ability by voting power, contract or
4
<PAGE>
otherwise to elect or designate for election a majority of the Board of
Directors of such parent corporation);
SECTION 3.4 The definition of "F,F&E Financing Agreement" in Section 1.1 of
the Indenture is hereby amended to read in its entirety as follows:
"F, F&E Financing Agreement" means an agreement which creates a
Lien upon any after-acquired tangible personal property and/or other
items constituting operating assets, which are financed, purchased or
leased by (w) Plaza Associates, (x) Trump Indiana, Inc. (y) Taj Mahal
Associates or (z) any New Venture Subsidiary for the purpose of
engaging in or developing gaming activities other than those
contemplated in the Prospectus to be operated by Plaza Associates and
Trump Indiana, Inc.
SECTION 3.5 Section 1.1 of the Indenture is hereby amended to add the
definition of "First Mortgage Notes" to read in its entirety as follows:
"First Mortgage Notes" means the $1,100,000,000 aggregate principal
amount of Mortgage Notes due 2006 to be issued by Trump Atlantic City
Associates and Trump Atlantic City Funding, Inc. pursuant to the First
Mortgage Note Indenture.
SECTION 3.6 Section 1.1 of the Indenture is hereby amended to add the
definition of "First Mortgage Note Documents" to read in its entirety as
follows:
"First Mortgage Note Documents" means the Mortgage Documents as
defined in the First Mortgage Note Indenture.
SECTION 3.7 Section 1.1 of the Indenture is hereby amended to add the
definition of "First Mortgage Note Indenture" to read in its entirety as
follows:
"First Mortgage Note Indenture" means the Indenture, to be dated
on or about April 17, 1996, among Trump Atlantic City Associates and
Trump Atlantic City Funding, Inc., as issuers, First Bank National
Association, as Trustee, and Trump Plaza Associates, The Trump Taj
Mahal Corporation and Taj Mahal Associates, as guarantors, as the same
may be amended from time to time in accordance with the terms thereof.
SECTION 3.8 Section 1.1 of the Indenture is hereby amended to add the
definition of "First Mortgage Note Trustee" to read in its entirety as follows:
"First Mortgage Note Trustee" means First Bank National Association,
as trustee under the First Mortgage Note Indenture, until a successor
replaces it as trustee pursuant
5
<PAGE>
to the provisions of the First Mortgage Note Indenture, and thereafter
means such successor.
SECTION 3.9 The definition of "Other Trump Casinos" in Section 1.1 of the
Indenture is hereby amended to read in its entirety as follows:
"Other Trump Casino" shall mean Trump's Castle Casino Resort located
in Atlantic City, New Jersey.
SECTION 3.10 The definition of "Related Business" in Section 1.1 of the
Indenture is hereby amended to read in its entirety as follows:
"Related Business" means any gaming business (whether land based,
dockside, aboard a vessel or otherwise) as generally conducted by companies
engaged in the gaming business and any and all related businesses in
support of and ancillary to any such business.
SECTION 3.11 Section 1.1 of the Indenture is hereby amended by adding the
definition of "Taj Mahal Casino Resort" to read in its entirety as follows:
"Taj Mahal Casino Resort" means the casino and hotel complex currently
known as the "Trump Taj Mahal Casino Resort" in Atlantic City, New Jersey
and ancillary structures and facilities and all furniture, fixtures and
equipment at any time contained therein, in each case owned by or leased to
Trump Atlantic City Associates or a Subsidiary thereof.
SECTION 3.12 Section 1.1 of the Indenture is hereby amended to add the
definition of "Taj Mahal Associates" to read in its entirety as follows:
"Taj Mahal Associates" means Trump Taj Mahal Associates, a New Jersey
general partnership and any successor entity thereto.
SECTION 3.13 Section 1.1 of the Indenture is hereby amended to add the
definition of "Taj Mahal Holding Corp." to read in its entirety as follows:
"Taj Mahal Holding Corp." means Taj Mahal Holding Corp., a Delaware
corporation and any successor entity thereto.
SECTION 3.14 Section 1.1 of the Indenture is hereby amended to add the
definition of "Trump Atlantic City Associates" to read in its entirety as
follows:
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<PAGE>
"Trump Atlantic City Associates" means Trump Atlantic City Associates,
a New Jersey general partnership (formerly known as Trump Plaza Holding
Associates) and any successor entity thereto.
SECTION 3.15 The definition of "Permitted Indebtedness" in Section 1.1 of
the Indenture is hereby amended by replacing clause (e) in its entirety with the
following:
(e) Indebtedness of Trump Atlantic City Associates and its
Subsidiaries represented by F, F&E Financing Agreements and/or Capital
Lease Obligations relating to after-acquired gaming or related
equipment of (or, in the case of Capital Lease Obligations, leased by)
Trump Atlantic City Associates and/or its Subsidiaries not to exceed
$50.0 million in aggregate principal amount outstanding at any time
pursuant to this clause (e);
SECTION 3.16 The definition of "Permitted Indebtedness" in Section 1.1 of
the Indenture is hereby amended by replacing clause (g) in its entirety with the
following:
(g) Indebtedness of Trump Atlantic City Associates and its
Subsidiaries in an amount not to exceed $75.0 million in aggregate
principal amount outstanding at any one time, the proceeds of which
are used for further acquisitions, demolitions or constructions of
Improvements with respect to, or related to, the Casino Hotel or the
Taj Mahal Casino Resort or the financing of equipment to be used
therein, provided, that no Indebtedness shall be incurred pursuant to
this clause (g) unless such indebtedness is permitted to be incurred
under Section 5.11(c) of the First Mortgage Note Indenture;
SECTION 3.17 The definition of "Permitted Indebtedness" in Section 1.1 of
the Indenture is hereby amended by replacing clause (n) in its entirety with the
following:
(n) Indebtedness of the Company and/or of Trump Atlantic City
Associates and its Subsidiaries in an aggregate principal amount
outstanding at any time (including any Indebtedness issued to
refinance, replace or refund such Indebtedness) of up to $30.0
million;
SECTION 3.18 The definition of "Permitted Indebtedness" in Section 1.1 of
the Indenture is hereby amended by (i) replacing the period after clause (o)
with a semicolon, and (ii) inserting the following:
(p) Indebtedness of Trump Atlantic City Associates and its
Subsidiaries pursuant to the First Mortgage Notes, the guarantees
thereof, the First Mortgage
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<PAGE>
Note Indenture and the First Mortgage Note Documents (collectively,
the "First Mortgage Indebtedness"), and any renewals, extensions,
substitutions, refundings, refinancings or replacements of the First
Mortgage Indebtedness, including any successive renewals, extensions,
substitutions, refundings, refinancings or replacements so long as
(x) the aggregate principal amount of Indebtedness represented
thereby does not exceed the principal amount of the First Mortgage
Indebtedness (or, if the First Mortgage Indebtedness provides for an
amount less than the principal amount thereof to be due and payable
upon a declaration of acceleration thereof, such lesser amount as of
the date of determination) plus accrued interest thereon, plus, in
the case of refinancings, the amount of any premium or other payment
required to be paid under the terms of the instruments governing the
First Mortgage Indebtedness or the amount of any premium reasonably
determined by the Company as necessary to accomplish such refinancing
by means of a tender offer or privately negotiated purchase and, in
each case, actually paid, plus the amount of expenses incurred in
connection with such refinancing, (y) such renewal, extension,
substitution, refinancing or replacement does not reduce the Average
Life to Stated Maturity or the final Stated Maturity of the First
Mortgage Indebtedness and (z) in connection with any renewal,
extension, substitution, refunding, refinancing or replacement
permitted pursuant to this clause (p), the obligor (or obligors, and
any guarantors) shall be the same (or no more extensive than) the
obligors and/or guarantors with respect to the First Mortgage
Indebtedness;
(q) Indebtedness of Trump Atlantic City Associates and its
Subsidiaries under one or more working capital facilities (including
letter of credit) or similar obligations in a combined amount for all
such facilities and obligations not to exceed $25.0 million in
aggregate principal amount outstanding at any time (including any
renewals, extensions, substitutions, refundings, refinancings or
replacements thereof); and
(r) Indebtedness of Taj Mahal Holding Corp. and its Subsidiaries
existing immediately prior to the issuance of the First Mortgage Note
Indenture which is not repaid or otherwise satisfied in the Merger
Transaction.
SECTION 3.19 The definition of "Permitted Leases" in Section 1.1 of the
Indenture is hereby amended by replacing clause (v) in its entirety with the
following:
(v) any operating leases of the Company or any Subsidiary of the
Company, other than the leases set forth in clauses (ii), (iii) and
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<PAGE>
(iv) above and clauses (vi) and (vii) below, provided that the
aggregate average annual rent and other payments required thereunder
over the terms of such leases shall not exceed $10,000,000;
SECTION 3.20 The definition of "Permitted Leases" in Section 1.1 of the
Indenture is hereby amended by (a) replacing the period after clause (vi) with a
semicolon followed by the word "and", and (b) inserting the following:
(vii) any lease of Taj Mahal Associates, as tenant or subtenant,
existing on the date of the First Mortgage Note Indenture after giving
effect to the Merger Transaction, including any modifications,
amendments, renewals or supplements thereof, provided that the
aggregate annual rent and other costs thereunder are not increased
thereby, except as such rent or costs may be increased during any
renewed lease term pursuant to the terms of such leases as they exist
on the date of the First Mortgage Note Indenture.
SECTION 3.21 The definition of "Permitted Liens" in Section 1.1 of the
Indenture is hereby amended by replacing clause (b) in its entirety with the
following:
(b) the Lien of the First Mortgage Note Trustee as provided for in the
First Mortgage Note Indenture and exhibits thereto;
SECTION 3.22 The definition of "Permitted Liens" in Section 1.1 of the
Indenture is hereby amended by replacing clause (c) in its entirety with the
following:
(c) Permitted Indebtedness incurred in accordance with clause (e), (h)
or (o) of the definition thereof may be secured by the assets acquired
pursuant to the respective capital lease (in the case of Capital Lease
Obligations) or with the proceeds of the respective F,F&E Financing
Agreements, so long as such Liens do not extend to any other assets
and Permitted Indebtedness incurred pursuant to clauses (g), (p) and
(q) of the definition of Permitted Indebtedness (and refinancings
pursuant to clause (k) of Indebtedness incurred pursuant to clause (g)
of the definition of Permitted Indebtedness) may be secured by the
assets of Trump Atlantic City Associates and its Subsidiaries, other
than the Equity Interests in Trump Atlantic City Associates and such
Subsidiaries which are required to be pledged for the benefit of
Holders under this Indenture.
SECTION 3.23 The definition of "Permitted Liens" in Section 1.1 of the
Indenture is hereby amended by (i) deleting the "and" at the end of clause (o)
and (ii) by replacing the period at the end of clause (p) with a semicolon
followed by the word "and" and (iii) inserting the following:
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<PAGE>
(q) Liens securing Indebtedness of Taj Mahal Associates outstanding on
the date of the First Mortgage Note Indenture after giving effect to
the Merger Transaction (and any renewals, extensions, substitutions,
refundings, refinancings or replacements of such Indebtedness), other
than Equity Interests required to be pledged for the benefit of
Holders under this Indenture.
SECTION 3.24 Clause (x) of the definition of Unrestricted Subsidiary in
Section 1.1 of the Indenture is hereby amended to read in its entirety as
follows:
(x) net assets of such Subsidiary at the time of the designation,
unless in the case of this clause (x) the designation is made pursuant
to clause (b)(y) of the first sentence of this definition, in which
case the amount of consideration paid by the Company and its
Subsidiaries to effect such Acquisition (excluding Qualified Equity
Interests of the Company issued in connection therewith, although such
Qualified Equity Interests shall not be included for purposes of
clause 3(B) under paragraph (a) under Section 5.3) shall be included
in lieu of the net assets of such Subsidiary at the time of the
designation and
SECTION 3.25 Section 5.11 of the Indenture is hereby amended to read in its
entirety as follows:
SECTION 5.11 Limitation on Incurrence of Additional Indebtedness
Except as set forth below in this Section 5.11, the Company will not,
nor will any of the Subsidiaries be permitted to, directly or indirectly,
create, incur, assume, or guarantee or in any other manner become directly
or indirectly liable for the payment of (each of the foregoing, an
"incurrence"), any Indebtedness (including any Acquired Indebtedness).
Notwithstanding the foregoing, the Company and the Subsidiaries may incur
Permitted Indebtedness. In addition, the Company and/or Trump Atlantic City
Associates and its Subsidiaries may incur Indebtedness (including Acquired
Indebtedness) if, and the Subsidiaries may incur Acquired Indebtedness if,
(a) no Default or Event of Default exists at the time of any such
incurrence or would occur after giving effect thereto, (b) the Company's
Pro Forma Consolidated Fixed Charge Coverage Ratio for the four full fiscal
quarters immediately preceding such event, taken as one period, would have
been at least equal to the applicable ratios set forth below for the
applicable period during which such determination is being made:
Period Ratio
------ -----
First 24 months from and including the Issuance Date 2.00 to 1
Thereafter 2.25 to 1
10
<PAGE>
and (c) except in the case of Permitted Indebtedness and Acquired
Indebtedness, such Indebtedness created, incurred, assumed or guaranteed
pursuant to this paragraph: (i) has an Average Life to Stated Maturity
that exceeds the remaining Average Life to Stated Maturity of the
Securities and (ii) has a Stated Maturity for its final scheduled
principal payment later than the stated Maturity for the final scheduled
principal payment of the Securities, provided, that Indebtedness, other
than Permitted Indebtedness, to be incurred in accordance with this
paragraph by Trump Atlantic City Associates and its Subsidiaries may only
be incurred to the extent such incurrence is permitted under Section 5.11
of the First Mortgage Note Indenture.
SECTION 3.26 Clause (iii) of Section 5.13 of the Indenture is hereby
amended to read in its entirety as follows:
(iii) restrictions with respect to Trump Atlantic City Associates and
its Subsidiaries contained in the First Mortgage Note Indenture and
the First Mortgage Note Documents and in any other agreement pursuant
to which Trump Atlantic City Associates and its Subsidiaries incur
Indebtedness in compliance with the terms of the First Mortgage Note
Indenture and the First Mortgage Note Documents.
SECTION 3.27 Section 5.13 of the Indenture is hereby amended by adding the
following immediately preceding the period at the end of the Section.
and (vii) restrictions imposed by Gaming Authorities on the payment of
dividends by entities holding Gaming Licenses.
SECTION 3.28 Section 5.19 of the Indenture is hereby amended to read in its
entirety as follows:
Other than employment agreements in the ordinary course of business
consistent with industry practice (including for the purposes of this
Indenture, the Trump Executive Agreement) and approved by the compensation
committee of Trump Hotels & Casinos, the Company will not, and will not
permit any of the Subsidiaries to, enter into any management, services or
consulting agreement with Trump or any Affiliate of Trump, other than the
Services and License Agreement; provided that no Services Fee thereunder
shall be paid (i) to any person other than the Company or a Subsidiary if
the Services and License Agreement is assigned or transferred by Trump
Plaza Management Corp. or (ii) to Trump Plaza Management Corp. or to Trump
or any other Affiliate of Trump other than the Company or a Subsidiary of
the Company after expiration (including all renewal periods currently
contained therein) or termination of the Super Puma Helicopter Lease.
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The Company will not, and will not permit the Subsidiaries to, pay any
Services Fee under the Services and License Agreement to Trump Plaza
Management Corp. or pay or reimburse any expenses relating thereto if a
Default or Event of Default has occurred and is continuing. The terms of
the Services Agreement shall not be amended to increase the amounts to be
paid thereunder in the aggregate or on any particular date, or in any
other manner which would be adverse to the Company or its Subsidiaries.
SECTION 3.29 Section 7.1 of the Indenture is hereby amended by replacing
clause (h) thereof in its entirety with the following:
(h) the revocation, suspension or involuntary loss of any Permit which
results in the cessation of a substantial portion of the operations of the
Casino Hotel or the Taj Mahal Casino & Resort or, after same has opened for
business, the Indiana Riverboat Casino for a period of more than 90 days.
SECTION 3.30 Section 10.4 of the Indenture is hereby amended by replacing
the third paragraph thereof in its entirety with the following:
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in clause (a)
of Section 10.2, in which case, the amendment, supplement or waiver shall
bind only each Holder of a Security who has consented to it and every
subsequent Holder of a Security or a portion of a Security that evidences
the same (or a portion of the same) debt as the consenting Holder's
Security with respect to which a consent was given, provided, that any such
waiver shall not impair or affect the right of any Holder to receive
payment of principal and premium of and interest on a Security, on or after
the respective dates set for such amounts to become due and payable
expressed in such Security, or to bring suit for the enforcement of any
such payment on or after such respective dates.
SECTION 3.31 Section 12.15 of the Indenture is hereby amended to read in
its entirety as follows:
SECTION 12.15 Gaming Laws.
This Indenture, the Collateral Documents, the Securities and the security
interests thereunder are subject to the Casino Control Act of the State of New
Jersey, the Riverboat Gambling Act of the State of Indiana and the Gaming
Control Act of the State of Mississippi and the rules and regulations thereunder
(the "Gaming Regulations") (and each Issuer represents and warrants that all
12
<PAGE>
requisite approvals thereunder have been obtained), and the exercise of remedies
under the Collateral Documents with respect to the Collateral will be subject to
the Gaming Regulations.
------------
This Supplemental Indenture is executed by the Issuers and the Trustee
pursuant to the provisions of Article X of the Indenture, and the terms and
conditions hereof shall be, and shall from and after the date hereof be deemed
to be, part of the terms and conditions of the Indenture for any and all
purposes, subject to Section 1.7 hereof. The Indenture as amended by this
Supplemental Indenture is in all respects confirmed and preserved.
This Supplemental Indenture may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one in the same instrument.
13
<PAGE>
SIGNATURE
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first written above.
TRUMP HOTELS & CASINO RESORTS
HOLDINGS, L.P.
By: TRUMP HOTELS & CASINO
RESORTS, INC., its general partner
By:
--------------------------------
Name: Robert M. Pickus
Title: Executive Vice President
Attest:
-------------------------
TRUMP HOTELS & CASINO RESORTS
FUNDING, INC.
By:
---------------------------------
Name: Robert M. Pickus
Title: Executive Vice President
Attest:
-------------------------
FIRST BANK NATIONAL ASSOCIATION,
Trustee
By:
----------------------------
Name: Richard H. Prokosch
Title: Trust Officer
Attest:
-------------------------
14
- --------------------------------------------------------------------------------
SECOND SUPPLEMENTAL INDENTURE
TRUMP HOTELS & CASINO
RESORTS HOLDING, L.P.
TRUMP HOTELS & CASINO
RESORTS FUNDING, INC.
Issuers
and
FIRST BANK NATIONAL ASSOCIATION
Trustee
--------------------
Dated as of April 16, 1996
--------------------
$155,000,000 aggregate principal amount of 15 1/2% Senior Secured Notes due 2005
- --------------------------------------------------------------------------------
<PAGE>
SECOND SUPPLEMENTAL INDENTURE, dated as of April 16, 1996, between Trump
Hotels & Casino Resorts Holdings, L.P., a Delaware limited partnership (the
"Company") and Trump Hotels & Casino Resorts Funding, Inc., a Delaware
corporation and a wholly owned subsidiary of the Company ("Funding" and together
with the Company, the "Issuers"), and First Bank National Association, a
national banking association, as Trustee, under the Indenture, dated as of June
12, 1995, as supplemented by the First Supplemental Indenture thereto dated
April 2, 1996 (as so supplemented, the "Indenture"), between the Issuers and the
Trustee relating to the Issuers' $155 million aggregate principal amount of 15
1/2% Senior Secured Notes due 2005 (the "Securities"). Capitalized terms not
defined herein shall have the respective meanings assigned to them in the
Indenture.
RECITALS OF THE ISSUERS
The Company has proposed a comprehensive plan relating to its acquisition
of all of the direct and indirect interests in Trump Taj Mahal Associates, a New
Jersey general partnership ("Taj Mahal Associates"), and the refinancing of the
debt of certain of the Company's existing Subsidiaries and Taj Mahal Associates
and its subsidiary. Such plan, as described in the Preliminary Prospectus dated
March 8, 1996 of Trump Hotels & Casino Resorts, Inc., relating to an offering of
its common stock, par value $.01 per share ("THCR Common Stock") Such
comprehensive plan has been amended by the Company to include a $1.2 billion
debt offering in lieu of the $1.1 billion debt offering by subsidiaries of the
Company previously contemplated as part of such comprehensive plan. Such
comprehensive plan, as so amended, shall constitute the Merger Transaction for
the purposes of this Second Supplemental Indenture. In connection with the
Merger Transaction, the Issuers have completed a consent solicitation (the
"Consent Solicitation") with the holders of the Securities to waive compliance
with certain provisions of the Indenture (the "Waiver"), and to amend certain
provisions of the Indenture (the "Amendments"), each as described in the Second
Consent Solicitation, dated April 11, 1996, as supplemented and amended through
the date hereof.
In accordance with Section 10.2 of the Indenture the Holders of not less
than a majority in aggregate principal amount of the Securities Outstanding have
consented to such Waiver and Amendments.
The general partner of the Company and the Board of Directors of Funding
each have duly authorized the execution and delivery of this Supplemental
Indenture. The Issuers have delivered to the Trustee an Officers' Certificate
pursuant to Section 10.4 of the Indenture and an Opinion of Counsel pursuant to
Section 10.6 of the Indenture.
WHEREFORE, each party agrees as follows for the benefit of the other
parties and for the equal or ratable benefit of the Holders of the Securities:
1
<PAGE>
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 Definitions.
For all purposes of this Supplemental Indenture, except as otherwise
expressly provided or unless the context otherwise requires, the words "herein,"
"hereof" and "hereunder" and other words of similar import refer to the
Indenture and this Supplemental Indenture as a whole and not to any particular
Article, Section or subdivision. In addition, the words "this Indenture," as
used in the Indenture, shall refer to the Indenture as supplemented by this
Supplemental Indenture.
SECTION 1.2 Effect of Headings.
The Article and Section headings are for convenience only and shall not
affect the construction hereof. Except as expressly provided herein, all
references to Sections in the Indenture shall remain unchanged.
SECTION 1.3 Successors and Assigns.
All covenants and agreements in this Supplemental Indenture by the Issuers
shall bind their successors and assigns, or any other obligor on the Securities,
whether expressed or not.
SECTION 1.4 Separability Clause.
In case any provision in this Supplemental Indenture shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.5 Benefits of Supplemental Indenture.
Nothing in this Supplemental Indenture, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder, any
Paying Agent and the Holders, any benefit or any legal or equitable right,
remedy or claim under this Supplemental Indenture.
2
<PAGE>
SECTION 1.6 Governing Law.
THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF).
SECTION 1.7 Effectiveness.
This Supplemental Indenture shall take effect on the date hereof; provided,
however, that the Waiver set forth in Article II and the Amendments set forth in
Article III hereof shall become operative only upon and simultaneously with, and
shall have no force and effect prior to, the date of delivery by the Issuers of
an Officers' Certificate to the effect that the Merger Transaction has been
consummated.
ARTICLE II
WAIVER
SECTION 2.1 Waiver.
The Holders of a Majority in aggregate principal amount of Securities
Outstanding on the Record Date (as defined in the Consent Solicitation)
(disregarding the Securities, if any, owned by the Issuers, any other obligor on
the Securities and Affiliates of such Persons) waive compliance by the Issuers
with any provisions of the Indenture which would prohibit or, with the passage
time or otherwise, be violated by, any component of the Merger Transaction, as
of the date of consummation thereof, including, without limiting the generality
of the foregoing, any application of proceeds of the offering of the First
Mortgage Notes or THCR Common Stock as part of with the Merger Transaction. To
the extent that any such components constitute Restricted Payments, such Holders
waive inclusion from and after the date hereof of such Restricted Payments in
the calculation of the aggregate amount permitted to be expended for all
Restricted Payments under Section 5.3(a)(3) of the Indenture.
3
<PAGE>
ARTICLE III
AMENDMENTS
SECTION 3.5 The definition of "First Mortgage Notes" Section 1.1 of the
Indenture is hereby amended to add the definition of "First Mortgage Notes" to
read in its entirety as follows:
"First Mortgage Notes" means the $1,200,000,000 aggregate principal
amount of 11.25% Mortgage Notes due 2006 to be issued by Trump Atlantic
City Associates and Trump Atlantic City Funding, Inc. pursuant to the First
Mortgage Note Indenture.
------------
This Supplemental Indenture is executed by the Issuers and the Trustee
pursuant to the provisions of Article X of the Indenture, and the terms and
conditions hereof shall be, and shall from and after the date hereof be deemed
to be, part of the terms and conditions of the Indenture for any and all
purposes, subject to Section 1.7 hereof. The Indenture as amended by this
Supplemental Indenture is in all respects confirmed and preserved.
This Supplemental Indenture may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one in the same instrument.
4
<PAGE>
SIGNATURE
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first written above.
TRUMP HOTELS & CASINO RESORTS
HOLDINGS, L.P.
By: TRUMP HOTELS & CASINO
RESORTS, INC., its general partner
By:____________________________
Name: Robert M. Pickus
Title: Executive Vice President
Attest: ________________________
TRUMP HOTELS & CASINO RESORTS
FUNDING, INC.
By:____________________________
Name: Robert M. Pickus
Title: Executive Vice President
Attest: ________________________
5
<PAGE>
FIRST BANK NATIONAL ASSOCIATION,
Trustee
By:____________________________
Name: Richard H. Prokosch
Title: Trust Officer
Attest: ________________________
6
PLEDGE AGREEMENT
from
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
as Pledgor
to
FIRST BANK NATIONAL ASSOCIATION,
as Trustee
<PAGE>
PLEDGE AGREEMENT
PLEDGE AGREEMENT, together with any amendments, replacements and
supplements hereafter entered into (the "Pledge Agreement"), dated as of April
17, 1996, between Trump Hotels & Casino Resorts Holdings, L.P. (together with
its successors and assigns, the "Pledgor") and First Bank National Association,
as trustee (the "Senior Note Trustee") under the indenture (as supplemented and
amended, the "Senior Note Indenture") relating to the 15 1/2% Senior Secured
Notes due 2005 (the "Senior Notes") of Pledgor and Trump Hotels & Casino Resorts
Funding, Inc. ("THCR Funding"), as joint obligors, is made for the equal and
ratable benefit of the holders of the Senior Notes (the "Holders"). As used
herein, all capitalized terms not otherwise defined herein shall have the
meanings set forth in the Senior Note Indenture.
W I T N E S S E T H:
WHEREAS, Pledgor and THCR Funding have issued $155,000,000 aggregate
principal amount of Senior Notes pursuant to the Senior Note Indenture; and
WHEREAS, in order to secure on an equal and ratable basis the payment and
performance in full of the obligations to the Holders and the Senior Note
Trustee under the terms of the Senior Note Indenture (the "Indenture
Obligations"), the parties hereto desire to set forth their mutual understanding
and certain agreements regarding the terms and conditions of the pledge of the
Pledged Collateral (as defined below) made by the Pledgor to the Senior Note
Trustee for the benefit of the Holders.
NOW, THEREFORE, in consideration of the premises and other benefits to the
Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1
<PAGE>
Section 1. Pledge. As collateral security for the due and prompt payment in
full and complete performance of the Indenture Obligations and all indebtedness
and other liabilities and obligations, whether now existing or hereafter
arising, under, or arising out of, the Senior Note Indenture, the Pledgor hereby
pledges, assigns, transfers, sets over and delivers unto the Senior Note Trustee
and hereby grants unto the Senior Note Trustee for the benefit of the Holders
and unto their respective successors and assigns, a first priority security
interest in all of the right, title and interest of the Pledgor in, to and under
any and all of the following described property, rights and interests
(collectively, the "Pledged Collateral"):
(a) all of the issued and outstanding Equity Interests of the
Subsidiaries of the Pledgor identified on Schedule A attached hereto,
subject to obtaining the Approvals set forth in Section 2;
(b) all other Equity Interests, now or hereafter owned or acquired by
the Pledgor and wherever located, of the Subsidiaries directly owned by the
Pledgor (the "Pledged Subsidiaries") and the certificates representing such
securities, and any present or future options, warrants or other rights to
subscribe for or purchase any of the foregoing described in subsections
1(a) or 1(b) hereof or any notes, bonds, debentures or other evidences of
indebtedness that (i) are at any time convertible, exchangeable or
exercisable into Equity Interests of the Pledged Subsidiaries or (ii) have
or at any time could by their terms have voting rights with respect to any
matter affecting the Pledged Subsidiaries and all securities, certificates
and instruments representing or evidencing ownership of any of the
foregoing (the property described in subsections 1(a) and 1(b) hereof,
being referred to herein collectively as the "Pledged Securities");
(c) to the extent not included in the foregoing, all of Pledgor's
rights, claims or other general intangibles constituting, or arising out of
or relating to, its rights as a general partner, limited partner or
managing general partner of any Pledged Subsidiary, including without
limitation its share in the profits and losses of any such Pledged
Subsidiary and its right as such partner to receive distributions of the
Pledged Subsidiary's assets or income, in each case whether arising under a
partnership agreement or applicable law, created by operation of law, or
otherwise;
(d) to the extent not included in the foregoing, all rights, claims
and other general intangibles of such Pledged Subsidiary against any third
party, to the extent the same may be asserted or realized upon by Pledgor;
and
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<PAGE>
(e) all dividends, distributions, cash, instruments and other property
or securities (including without limitation any security as such term is
defined in Article 8 of the Uniform Commercial Code as in effect in the
applicable jurisdiction at such time (the "UCC")), now or hereafter at any
time or from time to time received or receivable or otherwise distributed
or distributable in respect of or in exchange for any or all of the Pledged
Collateral and all proceeds of the Pledged Collateral.
TO HAVE AND TO HOLD the Pledged Collateral, together with all rights, titles,
interests, powers, privileges and preferences pertaining or incidental thereto,
unto the Senior Note Trustee for the benefit of the Holders and unto its
respective successors and assigns.
Section 2. Gaming Approvals.
(a) No Pledged Securities shall be sold, assigned, transferred, pledged or
otherwise disposed of, whether pursuant to the Pledge Agreement or the exercise
of any right, power or remedy provided for herein or otherwise, unless the grant
of the security interest or such other disposition as the case may be, has
received in advance any necessary approvals (the "Approvals") by the gaming
authorities with jurisdiction over the issuer of such Pledged Securities (the
"Gaming Authorities"), and unless the transferee of such Pledged Securities
shall have first obtained any and all licenses, findings of suitability or
Approvals required by such Gaming Authorities, or shall have been found to be
individually qualified to be licensed, as appropriate. Without limiting the
generality of the foregoing, the Approval by such Gaming Authorities shall not
constitute permission to foreclose on the same or make any other disposition of
the Pledged Securities.
(b) The Senior Note Trustee agrees to comply with any order or directive of
applicable Gaming Authorities requiring such person or persons to submit an
application for any license, finding of suitability or other approval.
(c) The provisions of Section 2 of this Pledge Agreement shall not modify
or restrict the rights and remedies of the Senior Note Trustee under the Pledge
Agreement in any other Pledged Collateral except as provided in Section 2(a) or
(b); provided, the Senior Note Trustee acknowledges, understands and agrees that
certain Gaming Laws and the regulations thereunder may impose certain licensing
or transaction approval requirements prior to the exercise of such rights and
remedies under the Pledge Agreement with respect to the Pledged Securities and
other pledged collateral subject to such Gaming Laws and the regulations
thereunder.
(d) Notwithstanding any provision contained in this Pledge Agreement to the
contrary, if the granting of a security interest in the capital stock of any
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<PAGE>
Subsidiary shall conflict with any Gaming Laws, the Senior Note Trustee agrees
to (i) release such capital stock from the pledge of this Pledge Agreement to
the extent necessary to avoid such conflict or violation, or (ii) take any other
action, including filing for applicable Approvals, sufficient to avoid such
conflict or violation. The Senior Note Trustee further acknowledges and agrees
that, prior to exercising any remedies set forth in the Pledge Agreement with
respect to the Equity Interests of any of the Subsidiaries subject to or
affected by any Gaming Laws, the Senior Note Trustee shall obtain any and all
Approvals as may be required by applicable Gaming Laws.
(e) If the consent of any Gaming Authority is required in connection with
any of the actions which may be taken by the Senior Note Trustee in the exercise
of its rights hereunder, then the Pledgor agrees to use its reasonable efforts
to secure such consent and to cooperate with the Senior Note Trustee in
obtaining any such consent. Upon the occurrence and during the continuation of
any Event of Default, Pledgor shall promptly execute and/or cause the execution
of all applications, certificates, instruments, and other documents and papers
that the Senior Note Trustee may be required to file in order to obtain any
necessary Gaming Authority approvals, and if Pledgor fails or refuses to execute
such documents, the clerk of the court with jurisdiction may execute such
documents on behalf of Pledgor.
Section 3. Representations, Warranties and Covenants of the Pledgor. The
Pledgor hereby represents and warrants, covenants and agrees that:
(a) The Pledgor is, and as to Pledged Collateral acquired by it from
time to time after the date hereof, will be, the sole legal and beneficial
owner of the Pledged Collateral, and holds, or will hold, the Pledged
Collateral free and clear of all Liens (except for the security interest
granted hereunder to the Senior Note Trustee for the benefit of Holders),
and has not made and will not make any other pledge, assignment, mortgage,
hypothecation or transfer of the Pledged Collateral. The Pledged Securities
are not subject to any put, call, option or other right in favor of any
other person whatsoever.
(b) The Pledged Securities which are shares of stock have been duly
authorized and validly issued and are fully paid and nonassessable.
(c) Except as set forth below, upon delivery of the certificates
evidencing the Pledged Securities to the Senior Note Trustee and so long as
the Senior Note Trustee maintains possession of such certificates pursuant
to this Pledge Agreement, the Senior Note Trustee will have a valid and
perfected first priority security interest in the Pledged Securities. In
the case of a Pledged Security which represents an interest in a
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partnership, upon filing of a UCC-1 financing statement in the appropriate
jurisdiction in connection with such interest, upon delivery of the
certificate evidencing such interest and so long as the Senior Note Trustee
maintains possession of such certificate, the Senior Note Trustee will have
a valid and perfected first priority security interest in such Pledged
Security, which together with the security interest in the other Pledged
Securities will secure the payment and performance in full of the Indenture
Obligations.
(d) The Pledgor has the valid right and legal authority to pledge the
Pledged Collateral in the manner hereby done or contemplated and will
defend its title thereto against the claims of all persons whomsoever and
shall maintain and preserve the security interest granted hereunder with
respect to the Pledged Collateral as long as this Pledge Agreement shall
remain in full force and effect.
(e) Neither the execution and delivery of this Pledge Agreement by the
Pledgor nor the consummation of the transactions herein contemplated nor
the fulfillment of the terms hereof (i) violate the Pledgor's, or any of
its Subsidiary's, charter or by-laws, (ii) violate the terms of any
agreement, indenture, mortgage, deed of trust, equipment lease, instrument
or other document to which the Pledgor, or any of its Subsidiaries, is a
party, or by which any of them may be bound or to which any of their
properties or assets may be subject, which violation or conflict would have
a material adverse effect on the financial condition, business, assets or
liabilities of the Pledgor and its Subsidiaries taken as a whole, or on the
value of the Pledged Collateral or a material adverse effect on the
security interests hereunder, or (iii) conflict with any law, order, rule
or regulation applicable to the Pledgor, or any of its Subsidiaries, of any
court or any government, regulatory body or administrative agency or other
governmental body having jurisdiction over the Pledgor, or any of its
Subsidiaries, or their Properties, or (iv) result in or require the
creation or imposition of any Lien (other than the Lien contemplated
hereby), upon or with respect to any of the property now owned or hereafter
acquired by the Pledgor, or any of its Subsidiaries, which violation or
conflict would have a material adverse effect on the financial condition,
business, assets or liabilities of the Pledgor and its Subsidiaries taken
as a whole, or on the value of the Pledged Collateral or a material adverse
effect on the security interests hereunder.
(f) The Pledged Securities as described in Schedule A attached hereto,
include all of the issued and outstanding Equity Interests of the Pledged
Subsidiaries as of the date hereof, and all outstanding options, warrants,
calls, commitments of any character whatsoever or other rights to subscribe
for or purchase any property described in subsection 1(a) or any notes,
bonds, debentures or other evidences of indebtedness that (i) are at any
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time convertible into Equity Interests of such Pledged Subsidiary or (ii)
have or at any time could by its terms have voting rights with respect to
any matters affecting the Pledged Subsidiary.
(g) Except for the Approvals referred to in Section 2, no consent or
approval which has not been obtained prior to the date hereof of any other
person or entity and no authorization, approval or other action by, and no
notice to or filing with any governmental body, regulatory authority or
securities exchange, was or is necessary as a condition to the validity of
the pledge hereunder of the Pledged Collateral, and subject to receipt of
all applicable Approvals with respect to the exercise of remedies by the
Senior Note Trustee hereunder, such pledge is effective to vest in the
Senior Note Trustee the rights of the Senior Note Trustee in the Pledged
Collateral as set forth herein.
(h) The Pledgor shall deliver to the Senior Note Trustee concurrently
with the execution of this Pledge Agreement: (i) all certificates and
instruments representing the Pledged Securities described in Schedule A,
and (ii) each other item of Pledged Collateral (including all certificates,
instruments, notes and writings representing or evidencing any such Pledged
Collateral) immediately upon the Pledgor's acquisition thereof, and in
addition, with respect to Pledged Securities, immediately upon receipt of
applicable Approvals. Any and all Pledged Securities delivered to the
Senior Note Trustee shall be accompanied by undated duly executed stock
powers in blank and by such other instruments of transfer or documents as
the Senior Note Trustee may reasonably request. Subject to the provisions
of Section 2, the Senior Note Trustee shall have the right (in its
discretion) to hold the certificates representing the Pledged Securities in
its own name or in the name of its nominee, all in form and substance
sufficient to make effective the pledge hereunder and otherwise
satisfactory to the Senior Note Trustee.
(i) Upon reasonable request to the Pledgor, the Senior Note Trustee
shall have full and free access during normal business hours to all of the
books, correspondence and records of the Pledgor relating to the Pledged
Collateral, and the Senior Note Trustee and its representatives may examine
the same, take extracts therefrom and make photocopies thereof, and the
Pledgor agrees to render to the Senior Note Trustee, at the Pledgor's cost
and expense, such clerical and other assistance as may be reasonably
requested by the Senior Note Trustee with regard thereto.
(j) The Pledgor will comply in all material respects with all
requirements of law applicable to the Pledged Collateral or any part
thereof and use its best efforts to obtain all Approvals as may be required
to effect any of the granting clauses of this Pledge Agreement.
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(k) The Pledgor shall not permit any of the Pledged Subsidiaries to
issue any securities of the type required to be pledged hereunder unless
such securities are promptly pledged and delivered hereunder to the Senior
Note Trustee in accordance with Section 1(b).
(l) If, while this Pledge Agreement is in effect, any stock dividend,
stock split, reclassification, readjustment, reorganization, merger,
consolidation, exchange offer, tender offer or other change in the capital
structure, including the creation of any subscription or other rights or
other Pledged Securities, is declared or made, or proposed to be declared
or made, by any of the Pledged Subsidiaries or any other issuer of Pledged
Collateral, all substituted and additional securities or interest issued
with respect to the Pledged Collateral and evidenced by certificates shall,
subject to receipt of all applicable Approvals, be endorsed in blank by the
Pledgor promptly upon receipt thereof or otherwise appropriately
transferred to the Senior Note Trustee in negotiable form, and all
certificates or instruments evidencing such securities shall be delivered
to the Senior Note Trustee to be held under the terms of this Pledge
Agreement in the same manner as, and as a part of, the Pledged Collateral.
All Pledged Securities shall be evidenced by one or more certificates. Any
securities that may be issued upon exercise of any subscription or other
rights relating to the Pledged Securities shall, subject to receipt of all
applicable Approvals, be endorsed in blank and delivered to the Senior Note
Trustee with any necessary powers.
(m) The Pledgor shall pay and discharge all taxes, assessments and
governmental charges or levies against any Pledged Collateral prior to
delinquency thereof and shall keep all Pledged Collateral free of all
unpaid charges whatsoever, unless contested in good faith and appropriate
reserves have been set aside in accordance with GAAP.
(n) The Pledgor has, independently and without reliance on the Senior
Note Trustee and/or any Holder and based on such documents and information
as it deemed appropriate, made its own credit analysis and decision to
enter into this Pledge Agreement.
(o) In the event that the Senior Note Trustee desires to exercise any
remedies, voting or consensual rights or attorney-in-fact powers set forth
in this Pledge Agreement and determines it necessary to obtain any
Approvals therefor, then, upon the reasonable request of the Senior Note
Trustee, the Pledgor agrees to use its best efforts to assist and aid the
Senior Note Trustee to obtain as soon as practicable any necessary
Approvals for the exercise of any such remedies, rights and powers.
(p) The Pledgor has delivered to the Senior Note Trustee a duly
executed acknowledgment from the respective issuers of the Pledged
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Securities acknowledging the registration on its books and records of the
pledge of the Pledged Securities pursuant to this Agreement.
(q) There are no voting trusts or other agreements or understandings
to which Pledgor is a party or by which it may be bound with respect to
voting, managerial consent, election or other rights of Pledgor relating to
the Pledged Securities.
(r) The principal place of business and chief executive office of
Pledgor and the office where Pledgor keeps its records concerning the
Pledged Collateral is Mississippi Avenue and The Boardwalk, Atlantic City,
New Jersey 08401.
Section 4. Administration of the Pledged Collateral. Subject to the terms
of any applicable Approvals, the Senior Note Trustee shall administer the
Pledged Collateral in accordance with the provisions hereof and of the Senior
Note Indenture.
Section 5. Release and Substitution of Pledged Collateral. The Pledged
Collateral shall not be released from the security interest created hereunder
and no property shall be substituted for any of the Pledged Collateral, except
(i) in accordance with the provisions of Article IV of the Senior Note
Indenture, (ii) in the case of the release of Pledged Securities of Unrestricted
Subsidiaries designated as such in accordance with the provisions of the Senior
Note Indenture, all of which provisions are hereby incorporated herein by
reference, (iii) in accordance with the provisions of Sections 5 and 19 hereof,
and (iv) pursuant to any requirements of any order, decree, rule or judgment of
any Gaming Authority applicable to Pledgor or any of the Pledged Subsidiaries.
Section 6. Voting Rights, Dividends, Etc.
(a) So long as no Event of Default (as defined below) shall have occurred
and be continuing and notwithstanding any other section hereof:
(i) the Pledgor shall be entitled to exercise any and all voting or
consensual rights and powers, including subscription rights, accruing to an
owner of the Pledged Collateral or any part thereof for any purpose not
inconsistent with the terms of this Pledge Agreement or any agreement
giving rise to any of the Indenture Obligations;
(ii) the Pledgor shall be entitled to receive, retain and use any and
all dividends, distributions or other payments which are permitted by the
Senior Note Indenture and paid on the Pledged Collateral in cash or
property (other than securities which are subject to this Agreement);
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(iii) the Senior Note Trustee shall execute and deliver to the Pledgor
or cause to be executed and delivered to the Pledgor, all such proxies,
powers of attorney, dividend orders and other instruments as the Pledgor
may reasonably request for the purpose of enabling it to exercise the
voting or consensual rights and powers which the Pledgor is entitled to
exercise pursuant to the foregoing subparagraph (i) or to receive the
dividends, distributions or other payments which the Pledgor is authorized
to retain pursuant to the foregoing subparagraph (ii).
(b) Upon the occurrence of an Event of Default, but prior to the receipt of
all applicable Approvals by the Senior Note Trustee or the Holders, the Pledgor
shall be entitled to exercise the rights provided in Section 6(a)(i) hereof.
(c) Upon the occurrence and during the continuance of an Event of Default
and in the case of voting and consensual rights, upon receipt of all applicable
Approvals, all rights of the Pledgor to exercise the voting or consensual rights
and powers which the Pledgor would otherwise be entitled to exercise pursuant to
subparagraph (i) of Section 6(a) and Section 6(b) hereof and to receive the
dividends, distributions and other payments which the Pledgor would otherwise be
authorized to receive and retain pursuant to subsection (ii) of Section 6(a)
shall automatically cease, and all such rights shall thereupon become vested in
the Senior Note Trustee, which shall then have the sole and exclusive right and
authority to exercise all such voting and consensual rights and powers and to
receive and retain as Pledged Collateral all such dividends, distributions and
other payments. Any and all money and other property paid over to or received by
the Senior Note Trustee pursuant to the provisions of this Section 6(c) shall be
retained by the Senior Note Trustee as Pledged Collateral hereunder and shall be
administered and applied in accordance with the provisions of this Pledge
Agreement and the Senior Note Indenture. All dividends and interest payments
which are received by the Pledgor contrary to the provisions of this subsection
(c) shall be received in trust for the benefit of the Senior Note Trustee, shall
be segregated from other funds of the Pledgor and shall be forthwith paid over
to the Senior Note Trustee as Pledged Collateral in the same form as so received
(with any necessary endorsement).
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Section 7. Default; Remedies.
(a) Defined. For purposes of this Pledge Agreement, the term "Event of
Default" shall have the meaning provided in the Senior Note Indenture.
(b) Exercise of Remedies Under the Pledge Agreement. If an Event of Default
shall have occurred and be continuing, the Senior Note Trustee shall, subject to
obtaining all applicable Approvals, commence the taking of such actions (or
refrain from taking actions) toward collection or enforcement of this Pledge
Agreement and the Pledged Collateral (or any portion thereof), including without
limitation action toward foreclosure upon any Pledged Collateral, as it deems
appropriate in its sole discretion.
(c) Remedies Generally. If an Event of Default shall have occurred and be
continuing, the Senior Note Trustee itself or by its agents or attorneys may,
subject to obtaining all applicable Approvals, (i) exercise any or all of its
rights and remedies hereunder, under the Senior Note Indenture or any other
instrument or agreement securing, evidencing or relating to the Indenture
Obligations or under applicable laws (including all of the rights and remedies
of a secured creditor under the Uniform Commercial Code then in effect in the
State of New York; the "NUCC"), (ii) retain the Pledged Collateral or (iii)
sell, assign, transfer, or dispose of, endorse and deliver the whole or, from
time to time, any part of the Pledged Collateral at public or private sale or
sales, at any exchanges, brokers board or at any of the Senior Note Trustee's
offices or elsewhere, for cash, upon credit or for other property, for immediate
or future delivery, and for such price or prices and on such other terms that
the Senior Note Trustee may deem commercially reasonable (in its liability for
loss or damage). Upon consummation of any such sale, the Senior Note Trustee
shall have the right to assign, transfer, endorse and deliver to the purchaser
or purchasers thereof the Pledged Collateral so sold. Each such purchaser at any
such sale shall hold the property sold absolutely free from any claim or right
on the part of the Pledgor, and the Pledgor hereby waives (to the full extent
permitted by law) all rights of redemption, stay or appraisal which the Pledgor
now has or may at any time in the future have under any rule of law or statute
now existing or hereafter enacted. The Senior Note Trustee shall give the
Pledgor at least 10 Business Days' written notice (which the Pledgor agrees
shall be deemed to be reasonable notification within the meaning of Section
9-504(3) of the NUCC) of the Senior Note Trustee's intention to make any such
public or private sale. Any such sale shall be held at such time or times and at
such place or places as the Senior Note Trustee may deem commercially
reasonable. At any such sale, the Pledged Collateral, or portion thereof to be
sold, may be sold as an entirety or in separate portions, as the Senior Note
Trustee may deem commercially reasonable. The Senior Note Trustee shall not be
obligated to make any sale of the Pledged Collateral if it shall determine not
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to do so, regardless of the fact that notice of sale of the Pledged Collateral
may have been given. The Senior Note Trustee may adjourn any public or private
sale or cause the same to be adjourned from time to time by announcement at the
time and place fixed for sale, and such sale may, without further notice, be
made at the time and place to which the same was so adjourned. In case sale of
all or any part of the Pledged Collateral is made on credit for future delivery,
the Pledged Collateral so sold may be retained by the Senior Note Trustee until
the sale price is paid by the purchaser or purchasers thereof, but the Senior
Note Trustee shall not incur any liability in case any such purchaser or
purchasers shall fail to take up and pay for the Pledged Collateral so sold and,
in case of any such failure, such Pledged Collateral may be sold again upon like
notice and upon receipt of all applicable Approvals. As an alternative to
exercising the power of sale herein conferred upon it, the Senior Note Trustee
may proceed by suit or suits at law or in equity to exercise its remedies
regarding the Pledged Collateral and sell the Pledged Collateral or any portion
thereof pursuant to judgment or decree of a court or courts having competent
jurisdiction. If under mandatory requirements of applicable law, the Senior Note
Trustee shall be required to make disposition of the Pledged Collateral within a
period of time that does not permit the giving of notice to the Pledgor as
herein before provided, the Senior Note Trustee need give the Pledgor only such
notice of disposition as shall be reasonably practicable in view of such
mandatory requirements of law.
(d) Preventing Impairment of the Pledged Collateral. Regardless of whether
or not there shall have occurred any Event of Default, the Senior Note Trustee
may institute and maintain or cause in its name of the Pledgor or in the name to
be instituted and maintained, such suits and proceedings as the Senior Note
Trustee may be advised by counsel shall be necessary or expedient to prevent any
impairment of the security interest in or perfection of the Pledged Collateral
in contravention of the terms of the Senior Note Indenture. The Pledgor agrees
not to knowingly take or permit to be taken any action which would impair the
Pledged Collateral or the Senior Note Trustee's rights in the Pledged
Collateral.
Section 8. Senior Note Trustee Appointed Attorney-in-Fact. The Pledgor
hereby constitutes and appoints the Senior Note Trustee its attorney-in-fact,
during the occurrence and continuance of an Event of Default, for the purpose of
carrying out the provisions, but subject to the terms and conditions, of this
Pledge Agreement and taking any action and executing any instrument, including,
without limitation, any financing statement or continuation statement, and
taking any other action to maintain the validity, perfection, priority and
enforcement of the security interest intended to be created hereunder, that the
Senior Note Trustee may deem necessary or advisable to accomplish the purposes
hereof, which appointment is irrevocable and coupled with an interest; provided,
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however, that nothing herein contained shall be construed as requiring or
obligating the Senior Note Trustee to make any commitment or to make any inquiry
as to the nature or sufficiency of any payment received by it, or to present or
file any claim or notice, or to take any action with respect to the Pledged
Collateral or any part thereof or the monies due or to become due in respect
thereof or any property covered thereby, and no action taken or omitted or any
part thereof shall give rise to any defense, counterclaim or right of action
against the Senior Note Trustee, unless the Senior Note Trustee's actions are
taken or omitted to be taken with gross negligence or bad faith or constitute
willful misconduct.
Section 9. Purchase of Pledged Collateral by Senior Note Trustee or
Holders. At any sale of the Pledged Collateral, whether pursuant to power of
sale or otherwise hereunder, Senior Note Trustee or any Holder may, to the
extent permitted by applicable law and subject to obtaining all applicable
Approvals, bid for and purchase, free from any right of redemption (all such
rights being hereby waived and released by the Pledgor to the extent permitted
by law), the Pledged Collateral or any part thereof or an interest therein and
upon compliance with the terms of such sale may hold, retain, exploit, resell or
otherwise dispose of such property without further accountability to the Pledgor
for the proceeds of such sale. The Pledgor will execute and deliver or cause to
be executed and delivered, such instruments, endorsements, assignments, waivers,
certificates and other documents and take such further action as the Senior Note
Trustee shall request in connection with any such sale.
Section 10. Payments and Proceeds.
In the event that the Senior Note Trustee ever receives any amounts
pursuant to this Pledge Agreement, or otherwise receives any amounts with
respect to the Pledged Collateral following the occurrence of an Event of
Default, such amounts shall first be applied to the reasonable costs and
expenses, including attorneys' fees, incurred by the Senior Note Trustee in
taking such action and thereafter shall be applied by the Senior Note Trustee as
provided in the Senior Note Indenture. After payment in full of all Indenture
Obligations, the remaining proceeds from any foreclosure hereunder shall be paid
to the Pledgor, or its successors or assigns, or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may direct,
any surplus then remaining from such Proceeds.
Section 11. Waiver of Claims. Except as otherwise provided in this Pledge
Agreement, THE PLEDGOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
NOTICE OF JUDICIAL HEARING IN CONNECTION WITH THE SENIOR NOTE TRUSTEE'S TAKING
POSSESSION OR THE SENIOR NOTE TRUSTEE'S DISPOSITION OF ANY OF THE PLEDGED
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICES AND
HEARINGS FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT THE
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PLEDGOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED
STATES OR OF ANY STATE, and, to the full extent permitted by applicable law, the
Pledgor hereby further waives:
(a) all damages occasioned by such taking of possession except any
damages which are the direct result of the Senior Note Trustee's gross
negligence, bad faith or willful misconduct;
(b) all other requirements as to the time, place and terms of sale or
other requirements, with respect to the enforcement of the Senior Note
Trustee's rights and powers hereunder; and
(c) except as provided in Section 7(c) hereof, all rights of
redemption, appraisement, valuation, stay, marshaling of assets, extension
or moratorium, existing at law or in equity, by statute or otherwise, now
or hereafter in force, in order to prevent or delay the enforcement of this
Pledge Agreement or the sale or other disposition of the Pledged Collateral
or any portion thereof, and the Pledgor, for itself and all who may claim
under it, insofar as it now or hereafter lawfully may, hereby waives all
such rights.
Any sale of, or the exercise of any options to purchase, or any other
realization upon, any Pledged Collateral shall operate to divest all right,
title, interest, claim and demand, at law or in equity, of the Pledgor therein
and thereto, and shall be a perpetual bar both at law and in equity against the
Pledgor and against any and all persons claiming or attempting to claim the
Pledged Collateral so sold, optioned or realized upon, or any part thereof,
through and under the Pledgor.
Section 12. Remedies Cumulative; No Waiver. Each right, power and remedy of
the Senior Note Trustee provided for herein or in another agreement pursuant to
which a Lien is created in favor of the Senior Note Trustee for the benefit of
any Holder, or now or hereafter existing at law or in equity, by statute or
otherwise, shall be cumulative and concurrent and shall be in addition to every
other right, power or remedy of the Senior Note Trustee or any Holder provided
for herein or in another agreement pursuant to which a Lien is created in favor
of the Senior Note Trustee for the benefit of any Holder or now or hereafter
existing at law or in equity, by statute or otherwise. No failure on the part of
the Senior Note Trustee or any Holder to exercise, and no delay in exercising,
any right, power or remedy hereunder, or in another agreement pursuant to which
a Lien is created in favor of the Senior Note Trustee for the benefit or any
Holder or now or hereafter existing at law or in equity, by statute or
otherwise, shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. No notice
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to or demand on the Pledgor hereunder shall, of itself, entitle the Pledgor to
any other or further notice or demand in the same, similar or other
circumstances.
Section 13. Additional Collateral. Without notice or consent of any Pledgor
and without impairment of the security interests and rights created by this
Pledge Agreement, the Senior Note Trustee may accept from any person or persons
additional collateral or other security for the Indenture Obligations. Neither
the creation of the security interests created hereunder nor the acceptance of
any such additional collateral or security shall prevent the Senior Note Trustee
from resorting to such additional collateral or security or to the Pledged
Collateral, in any order without affecting the Senior Note Trustee's rights
hereunder.
Section 14. Further Assurances. The Pledgor agrees (i) that it shall, at
its own expense, promptly file or record such notices, financing statements,
continuation statements or other documents and take all further action as may be
necessary to perfect, maintain and protect the validity, perfection and priority
of the security interests of the Senior Note Trustee hereunder or to enable the
Senior Note Trustee to exercise and enforce its rights and remedies hereunder
with respect to the Pledged Collateral, and as the Senior Note Trustee may
reasonably request, such instruments to be in form and substance satisfactory to
the Senior Note Trustee, and (ii) that it shall, at its own expense, do such
further acts and things and execute and deliver to the Senior Note Trustee such
additional conveyances, assignments, agreements and instruments as the Senior
Note Trustee may at any time reasonably request in connection with the
administration and enforcement of this Pledge Agreement or relative to the
Pledged Collateral or any part thereof or in order to assure and confirm unto
the Senior Note Trustee its rights, powers and remedies hereunder.
The Pledgor agrees that it will notify the Senior Note Trustee in writing
not less than 30 days prior to any change in location and the creation of a new
location of (a) the principal place of business or chief executive office and
(b) the offices where the Pledgor's books and records and related information
concerning the Pledged Collateral are kept; provided, however, that no such
change may be effected before all filings required to be made and all other
necessary action to preserve the perfection of the first priority security
interest of the Senior Note Trustee in the Pledged Collateral shall have been
made or taken.
The Pledgor will not change its name, identity or structure in any manner
which might make any financing statement filed hereunder incorrect or misleading
unless Pledgor shall have given the Senior Note Trustee at least 30 days' prior
written notice thereof and shall have properly amended all financing statements
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and properly filed all additional financing statements necessary to maintain the
perfection of the security interest granted hereunder at all times and shall
have provided the Senior Note Trustee with an Officers' Certificate certifying
that the above steps have been taken.
Section 15. Indemnification. The Senior Note Trustee shall have such
indemnity as is provided under Section 8.7 of the Senior Note Indenture.
Section 16. Registration Rights, etc.
(a) If the Senior Note Trustee determines that the registration of any of
the securities included in the Pledged Collateral under, or other compliance
with, the Securities Act or any similar federal or state law is desirable, upon
or at any time after an Event of Default and acceleration of either issue of the
Notes, subject to any applicable Approvals, the Pledgor will use its best
efforts to cause such registration or compliance to be effectively made, at no
expense to the Senior Note Trustee or to the Holders, and to continue any such
registration effective for such time as may be reasonably necessary in the
opinion of the Senior Note Trustee. The Pledgor will reimburse the Senior Note
Trustee upon demand for any expenses incurred by the Senior Note
Trustee(including reasonable attorneys' fees) incurred in connection therewith,
which obligation to pay such expenses shall be secured hereunder.
(b) If the Pledgor is unable to effect a public sale of any or all of the
Pledged Collateral or if the Senior Note Trustee determines that it is desirable
to sell the Pledged Collateral in one or more private sales, subject to any
applicable Approvals, the Senior Note Trustee may limit such sales to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire such securities for its own account for investment and not with a
view to distribution or resale. The Pledgor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable to the
seller than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Senior Note Trustee shall be under
no obligation to delay a sale of any of the Pledged Collateral for the period of
time necessary to permit the issuer of such securities to register such
securities for public sale under the Securities Act or under applicable state
securities laws even if such issuer would agree to do so.
(c) The Pledgor further agrees to do or cause to be done all such other
acts and things as may be necessary to make such sale or sales of all or any
part of the Pledged Collateral valid and binding and in compliance with any and
all applicable law, rules, regulations, orders or decrees, all at the Pledgor's
expense. The Pledgor further agrees that a breach of any of the covenants
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contained in this Pledge Agreement will cause irreparable injury to the Senior
Note Trustee, as secured party, for which the Senior Note Trustee would have no
adequate remedy at law in respect of such breach and, as a consequence, agrees
that each and every covenant contained in this Section 16 shall be specifically
enforceable against the Pledgor and the Pledgor waives and agrees not to assert
any defenses against an action for specific performance of such covenants.
Section 17. Pledgor's Indenture Obligations Absolute. The liability of the
Pledgor under this Pledge Agreement shall remain in full force and effect
without regard to, and shall not be released, suspended, discharged, terminated
or otherwise affected by (a) any change in the time, place or manner of payment
of all or any of the Indenture Obligations, or in any other term of the Senior
Note Indenture, the Senior Notes, any waiver, indulgence, renewal, extension,
amendment or modification of or addition, consent or supplement to or deletion
from or any other action or inaction under or in respect of the Senior Note
Indenture, the Senior Notes or any assignment or transfer thereof; (b) any lack
of validity or enforceability, in whole or in part, of the Senior Note Indenture
or the Senior Notes; (c) any furnishing of any additional security for the
Indenture Obligations or any acceptance thereof or any release or non-perfection
of any security interest in the Pledged Collateral; (d) any limitation on any
party's liability or obligations under the Senior Note Indenture or the Senior
Notes; (e) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to a Pledgor, or any
action taken with respect to this Pledge Agreement by any trustee or receiver,
or by any court, in any such proceeding, whether or not the Pledgor shall have
notice or knowledge of any of the foregoing; (f) any exchange, release or
amendment or waiver of or consent to departure from any agreement pursuant to
which a Lien is created in favor of the Senior Note Trustee for the benefit of
the Holders, pursuant to which a person other than the Pledgor has granted a
security interest; or (g) any other circumstance that might otherwise constitute
a defense available to, or a discharge of the Pledgor.
Section 18. Waiver. To the extent permitted by applicable law, the Pledgor
hereby waives promptness, diligence, notice of acceptance and any other notice
with respect to any of the Indenture Obligations and this Pledge Agreement and
any requirement that the Senior Note Trustee protect, secure, perfect or insure
any security interest or any property subject thereto or exhaust any right or
take any action against the Pledgor or any other person or entity; provided,
however, that the Senior Note Trustee shall in any event take such care in the
handling of any Pledged Securities in its possession as it takes with respect to
Property of a similar nature in its possession.
Section 19. Termination. Upon payment and performance in full and
satisfaction of all of the obligations of the Pledgor, THCR Funding or their
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<PAGE>
successors or assigns under the Senior Note Indenture and all other amounts
payable under this Pledge Agreement, this Pledge Agreement shall terminate and
the Senior Note Trustee shall assign and redeliver to the Pledgor all of the
Pledged Collateral hereunder that has not been sold, disposed of, retained or
applied by the Senior Note Trustee in accordance with the terms hereof. Such
reassignment and redelivery shall be without warranty by or recourse to the
Senior Note Trustee, and shall be at the expense of the Pledgor. At such time,
this Pledge Agreement shall no longer constitute a Lien upon or grant any
security interest in any of the Pledged Collateral, and the Senior Note Trustee
shall, at the Pledgor's expense deliver to the Pledgor written acknowledgment
thereof and of cancellation of this Pledge Agreement in a form reasonably
requested by the Pledgor; provided, however, that this Pledge Agreement shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Indenture Obligations is rescinded or must otherwise
be returned upon the insolvency, bankruptcy or reorganization of the Pledgor or
any of its Subsidiaries all as though such payment had not been made.
Section 20. Notices. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given if made
by hand delivery, by telex, by facsimile or registered or certified mail,
postage prepaid, return receipt requested, addressed as provided in Section 12.2
of the Senior Note Indenture.
Any party hereto may by notice to the other party designate such additional
or different addresses as shall be furnished in writing by such party. Any
notice or communication to any party shall be deemed to have been given or made
as of the date so delivered, if personally delivered; when answered back, if
telexed; when receipt is acknowledged, if faxed; and five calendar days after
mailing, if sent by registered or certified mail (except that a notice of change
of address shall not be deemed to have been given until actually received by the
addressee). The Pledgor may give notice to the Holders at the addresses set
forth for them in the register kept by the Registrar under the Senior Note
Indenture or may request that the Senior Note Trustee notify the Holders at such
addresses.
Section 21. Binding Agreement; Assignment. This Pledge Agreement shall be
binding upon and inure to the benefit the Senior Note Trustee, the Pledgor and
its respective successors and permitted assigns. Neither this Pledge Agreement
nor any interest herein or in the Pledged Collateral, or any part thereof, may
be assigned by the Pledgor without the prior written consent of the Senior Note
Trustee (which consent shall not be unreasonably withheld). This Pledge
Agreement shall be deemed to be automatically assigned by the Senior Note
Trustee to any person who succeeds such Senior Note Trustee in accordance with
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Article VIII of the Senior Note Indenture, and its assignee shall have all
rights and powers of, and act as, such Senior Note Trustee hereunder.
Section 22. Governing Law. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.
Section 23. Amendments. This Pledge Agreement may not be amended or
modified, except with the consent of the Pledgor and the Senior Note Trustee in
accordance with Article X of the Senior Note Indenture.
Section 24. Severability. In the event that any provision contained in this
Pledge Agreement shall for any reason be held to be illegal or invalid under the
laws of any jurisdiction, such illegality or invalidity shall in no way impair
the effectiveness of any other provision hereof, or of such provision under the
laws of any other jurisdiction; provided, that in the construction and
enforcement of such provision under the laws of the jurisdiction in which such
holding of illegality or invalidity exists, and to the extent only of such
illegality or invalidity, this Pledge Agreement shall be construed and enforced
as though such illegal or invalid provision had not been contained herein.
Section 25. Headings. Section headings used herein are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Pledge Agreement.
Section 26. Counterparts. This Pledge Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original, and all of which shall together constitute but one and the same
instrument. A complete set of counterparts shall be lodged with the Senior Note
Trustee.
Section 27. Expenses. The Pledgor will upon demand pay to the Senior Note
Trustee the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, which the Senior
Note Trustee may incur in connection with (i) the administration of this Pledge
Agreement, (ii) the custody or presentation of, or the sale of, collection from,
or other realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Senior Note Trustee hereunder or (iv)
the failure by the Pledgor to perform or observe any of the provisions hereof.
Section 28. Gaming Laws. This Agreement is subject to any applicable Gaming
Law.
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Section 29. No Recourse Against Others. A direct or indirect partner,
director, officer, employee or stockholder, as such, past, present or future of
the Pledgor or any successor entity shall not have any personal liability in
respect of the obligations of the Pledgor under this Agreement by reason of its
status as such partner, stockholder, employee, officer or director, to the
extent such liabilities may be waived under applicable law.
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to
be duly executed and delivered as of the day and year first written above.
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
By: TRUMP HOTELS & CASINO RESORTS, INC.
its general partner
By:
---------------------------------------
Name: Robert M. Pickus
Title: Executive Vice President
and Secretary
FIRST BANK NATIONAL ASSOCIATION,
as Senior Note Trustee
By:
---------------------------------------
Name:
----------------------------------
Title:
--------------------------------
<PAGE>
SCHEDULE A
Pledged Securities
================================================================================
Percentage
Class of Stock/ Number of
Stock Equity Certificate Par of Outstanding
Issuer Interest No.(s) Value Shares Equity
------ -------- ------ ----- ------ ------
Trump Atlantic City general 105 None N/A 99%
Associates partnership
interest
Trump Atlantic City common 3 $.01 100 100%
Holding, Inc. stock
================================================================================
PLEDGE AGREEMENT
from
TRUMP ATLANTIC CITY ASSOCIATES
as Pledgor
to
FIRST BANK NATIONAL ASSOCIATION,
as Trustee
<PAGE>
PLEDGE AGREEMENT
PLEDGE AGREEMENT, together with any amendments, replacements and
supplements hereafter entered into (the "Pledge Agreement"), dated as of April
17, 1996, between Trump Atlantic City Associates (together with its successors
and assigns, the "Pledgor") and First Bank National Association, as trustee (the
"Senior Note Trustee") under the indenture (as amended and supplemented, the
"Senior Note Indenture") relating to the 15 1/2% Senior Secured Notes due 2005
(the "Senior Notes") of Trump Hotels & Casino Resorts Holdings, L.P. ("THCR
Holdings") and Trump Hotels & Casino Resorts Funding, Inc. ("THCR Funding"), as
joint obligors, is made for the equal and ratable benefit of the holders of the
Senior Notes (the "Holders"). As used herein, all capitalized terms not
otherwise defined herein shall have the meanings set forth in the Senior Note
Indenture.
W I T N E S S E T H:
WHEREAS, THCR Holdings and THCR Funding have issued $155,000,000 aggregate
principal amount of Senior Notes pursuant to the Senior Note Indenture; and
WHEREAS, in order to secure on an equal and ratable basis the payment and
performance in full of the obligations to the Holders and the Senior Note
Trustee under the terms of the Senior Note Indenture (the "Indenture
Obligations"), the parties hereto desire to set forth their mutual understanding
and certain agreements regarding the terms and conditions of the pledge of the
Pledged Collateral (as defined below) made by the Pledgor to the Senior Note
Trustee for the benefit of the Holders.
NOW, THEREFORE, in consideration of the premises and other benefits to the
Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
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<PAGE>
Section 1. Pledge. As collateral security for the due and prompt payment in
full and complete performance of the Indenture Obligations and all indebtedness
and other liabilities and obligations, whether now existing or hereafter
arising, under, or arising out of, the Senior Note Indenture, the Pledgor hereby
pledges, assigns, transfers, sets over and delivers unto the Senior Note Trustee
and hereby grants unto the Senior Note Trustee for the benefit of the Holders
and unto their respective successors and assigns, a first priority security
interest in all of the right, title and interest of the Pledgor in, to and under
any and all of the following described property, rights and interests
(collectively, the "Pledged Collateral"):
(a) all of the issued and outstanding Equity Interests of the
Subsidiaries of the Pledgor identified on Schedule A attached hereto,
subject to obtaining the Approvals set forth in Section 2;
(b) all other Equity Interests, now or hereafter owned or acquired by
the Pledgor and wherever located, of the Subsidiaries directly owned by the
Pledgor (the "Pledged Subsidiaries") and the certificates representing such
securities, and any present or future options, warrants or other rights to
subscribe for or purchase any of the foregoing described in subsections
1(a) or 1(b) hereof or any notes, bonds, debentures or other evidences of
indebtedness that (i) are at any time convertible, exchangeable or
exercisable into Equity Interests of the Pledged Subsidiaries or (ii) have
or at any time could by their terms have voting rights with respect to any
matter affecting the Pledged Subsidiaries and all securities, certificates
and instruments representing or evidencing ownership of any of the
foregoing (the property described in subsections 1(a) and 1(b) hereof,
being referred to herein collectively as the "Pledged Securities");
(c) to the extent not included in the foregoing, all of Pledgor's
rights, claims or other general intangibles constituting, or arising out of
or relating to, its rights as a general partner, limited partner or
managing general partner of any Pledged Subsidiary, including without
limitation its share in the profits and losses of any such Pledged
Subsidiary and its right as such partner to receive distributions of the
Pledged Subsidiary's assets or income, in each case whether arising under a
partnership agreement or applicable law, created by operation of law, or
otherwise;
(d) to the extent not included in the foregoing, all rights, claims
and other general intangibles of such Pledged Subsidiary against any third
party, to the extent the same may be asserted or realized upon by Pledgor;
and
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<PAGE>
(e) all dividends, distributions, cash, instruments and other property
or securities (including without limitation any security as such term is
defined in Article 8 of the Uniform Commercial Code as in effect in the
applicable jurisdiction at such time (the "UCC")), now or hereafter at any
time or from time to time received or receivable or otherwise distributed
or distributable in respect of or in exchange for any or all of the Pledged
Collateral and all proceeds of the Pledged Collateral.
TO HAVE AND TO HOLD the Pledged Collateral, together with all rights, titles,
interests, powers, privileges and preferences pertaining or incidental thereto,
unto the Senior Note Trustee for the benefit of the Holders and unto their
respective successors and assigns.
Section 2. Gaming Approvals.
(a) No Pledged Securities shall be sold, assigned, transferred, pledged or
otherwise disposed of, whether pursuant to the Pledge Agreement or the exercise
of any right, power or remedy provided for herein or otherwise, unless the grant
of the security interest or such other disposition as the case may be, has
received in advance any necessary approvals (the "Approvals") by the gaming
authorities with jurisdiction over the issuer of such Pledged Securities (the
"Gaming Authorities"), and unless the transferee of such Pledged Securities
shall have first obtained any and all licenses, findings of suitability or
Approvals required by such Gaming Authorities, or shall have been found to be
individually qualified to be licensed, as appropriate. Without limiting the
generality of the foregoing, the Approval by such Gaming Authorities shall not
constitute permission to foreclose on the same or make any other disposition of
the Pledged Securities.
(b) The Senior Note Trustee agrees to comply with any order or directive of
applicable Gaming Authorities requiring such person or persons to submit an
application for any license, finding of suitability or other approval.
(c) The provisions of Section 2 of this Pledge Agreement shall not modify
or restrict the rights and remedies of the Senior Note Trustee under the Pledge
Agreement in any other Pledged Collateral except as provided in Section 2(a) or
(b); provided, the Senior Note Trustee acknowledges, understands and agrees that
certain Gaming Laws and the regulations thereunder may impose certain licensing
or transaction approval requirements prior to the exercise of such rights and
remedies under the Pledge Agreement with respect to the Pledged Securities and
other pledged collateral subject to such Gaming Laws and the regulations
thereunder.
(d) Notwithstanding any provision contained in this Pledge Agreement to the
contrary, if the granting of a
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<PAGE>
security interest in the capital stock of any Subsidiary shall conflict with any
Gaming Laws, the Senior Note Trustee agrees to (i) release such capital stock
from the pledge of this Pledge Agreement to the extent necessary to avoid such
conflict or violation, or (ii) take any other action, including filing for
applicable Approvals, sufficient to avoid such conflict or violation. The Senior
Note Trustee further acknowledges and agrees that, prior to exercising any
remedies set forth in the Pledge Agreement with respect to the Equity Interests
of any of the Subsidiaries subject to or affected by any Gaming Laws, the Senior
Note Trustee shall obtain any and all Approvals as may be required by applicable
Gaming Laws.
(e) If the consent of any Gaming Authority is required in connection with
any of the actions which may be taken by the Senior Note Trustee in the exercise
of its rights hereunder, then the Pledgor agrees to use its reasonable efforts
to secure such consent and to cooperate with the Senior Note Trustee in
obtaining any such consent. Upon the occurrence and during the continuation of
any Event of Default, Pledgor shall promptly execute and/or cause the execution
of all applications, certificates, instruments, and other documents and papers
that the Senior Note Trustee may be required to file in order to obtain any
necessary Gaming Authority approvals, and if Pledgor fails or refuses to execute
such documents, the clerk of the court with jurisdiction may execute such
documents on behalf of Pledgor.
Section 3. Representations, Warranties and Covenants of the Pledgor. The
Pledgor hereby represents and warrants, covenants and agrees that:
(a) The Pledgor is, and as to Pledged Collateral acquired by it from
time to time after the date hereof, will be, the sole legal and beneficial
owner of the Pledged Collateral, and holds, or will hold, the Pledged
Collateral free and clear of all Liens (except for the security interest
granted hereunder to the Senior Note Trustee for the benefit of Holders),
and has not made and will not make any other pledge, assignment, mortgage,
hypothecation or transfer of the Pledged Collateral. The Pledged Securities
are not subject to any put, call, option or other right in favor of any
other person whatsoever.
(b) The Pledged Securities which are shares of stock have been duly
authorized and validly issued and are fully paid and nonassessable.
(c) Except as set forth below, upon delivery of the certificates
evidencing the Pledged Securities to the Senior Note Trustee and so long as
the Senior Note Trustee maintains possession of such certificates pursuant
to this Pledge Agreement, the Senior Note Trustee will have a valid and
perfected first priority security interest in the Pledged Securities. In
the case of a Pledged Security which represents
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<PAGE>
an interest in a partnership, upon filing of a UCC-1 financing statement in
the appropriate jurisdiction in connection with such interest, upon
delivery of the certificate evidencing such interest and so long as the
Senior Note Trustee maintains possession of such certificate, the Senior
Note Trustee will have a valid and perfected first priority security
interest in such Pledged Security, which together with the security
interest in the other Pledged Securities will secure the payment and
performance in full of the Indenture Obligations.
(d) The Pledgor has the valid right and legal authority to pledge the
Pledged Collateral in the manner hereby done or contemplated and will
defend its title thereto against the claims of all persons whomsoever and
shall maintain and preserve the security interest granted hereunder with
respect to the Pledged Collateral as long as this Pledge Agreement shall
remain in full force and effect.
(e) Neither the execution and delivery of this Pledge Agreement by the
Pledgor nor the consummation of the transactions herein contemplated nor
the fulfillment of the terms hereof (i) violate the Pledgor's, or any of
its Subsidiary's, charter or by-laws, (ii) violate the terms of any
agreement, indenture, mortgage, deed of trust, equipment lease, instrument
or other document to which the Pledgor, or any of its Subsidiaries, is a
party, or by which any of them may be bound or to which any of their
properties or assets may be subject, which violation or conflict would have
a material adverse effect on the financial condition, business, assets or
liabilities of the Pledgor and its Subsidiaries taken as a whole, or on the
value of the Pledged Collateral or a material adverse effect on the
security interests hereunder, or (iii) conflict with any law, order, rule
or regulation applicable to the Pledgor, or any of its Subsidiaries, of any
court or any government, regulatory body or administrative agency or other
governmental body having jurisdiction over the Pledgor, or any of its
Subsidiaries, or their Properties, or (iv) result in or require the
creation or imposition of any Lien (other than the Lien contemplated
hereby), upon or with respect to any of the property now owned or hereafter
acquired by the Pledgor, or any of its Subsidiaries, which violation or
conflict would have a material adverse effect on the financial condition,
business, assets or liabilities of the Pledgor and its Subsidiaries taken
as a whole, or on the value of the Pledged Collateral or a material adverse
effect on the security interests hereunder.
(f) The Pledged Securities, as described in Schedule A attached
hereto, include all of the issued and outstanding Equity Interests of the
Pledged Subsidiaries as of the date hereof, and all outstanding options,
warrants, calls, commitments of any character whatsoever or other rights to
subscribe for or purchase any property described in subsection 1(a) or any
notes, bonds, debentures or other evidences of indebtedness that (i) are at
any time convertible into Equity
5
<PAGE>
Interests of such Pledged Subsidiary or (ii) have or at any time could by
its terms have voting rights with respect to any matters affecting the
Pledged Subsidiary.
(g) Except for the Approvals referred to in Section 2, no consent or
approval which has not been obtained prior to the date hereof of any other
person or entity and no authorization, approval or other action by, and no
notice to or filing with any governmental body, regulatory authority or
securities exchange, was or is necessary as a condition to the validity of
the pledge hereunder of the Pledged Collateral, and subject to receipt of
all applicable Approvals with respect to the exercise of remedies by the
Senior Note Trustee hereunder, such pledge is effective to vest in the
Senior Note Trustee the rights of the Senior Note Trustee in the Pledged
Collateral as set forth herein.
(h) The Pledgor shall deliver to the Senior Note Trustee concurrently
with the execution of this Pledge Agreement: (i) all certificates and
instruments representing the Pledged Securities described in Schedule A,
and (ii) each other item of Pledged Collateral (including all certificates,
instruments, notes and writings representing or evidencing any such Pledged
Collateral) immediately upon the Pledgor's acquisition thereof, and in
addition, with respect to Pledged Securities, immediately upon receipt of
applicable Approvals. Any and all Pledged Securities delivered to the
Senior Note Trustee shall be accompanied by undated duly executed stock
powers in blank and by such other instruments of transfer or documents as
the Senior Note Trustee may reasonably request. Subject to the provisions
of Section 2, the Senior Note Trustee shall have the right (in its
discretion) to hold the certificates representing the Pledged Securities in
its own name or in the name of its nominee, all in form and substance
sufficient to make effective the pledge hereunder and otherwise
satisfactory to the Senior Note Trustee.
(i) Upon reasonable request to the Pledgor, the Senior Note Trustee
shall have full and free access during normal business hours to all of the
books, correspondence and records of the Pledgor relating to the Pledged
Collateral, and the Senior Note Trustee and its representatives may examine
the same, take extracts therefrom and make photocopies thereof, and the
Pledgor agrees to render to the Senior Note Trustee, at the Pledgor's cost
and expense, such clerical and other assistance as may be reasonably
requested by the Senior Note Trustee with regard thereto.
(j) The Pledgor will comply in all material respects with all
requirements of law applicable to the Pledged Collateral or any part
thereof and use its best efforts to obtain all Approvals as may be required
to effect any of the granting clauses of this Pledge Agreement.
6
<PAGE>
(k) The Pledgor shall not permit any of the Pledged Subsidiaries to
issue any securities of the type required to be pledged hereunder unless
such securities are promptly pledged and delivered hereunder to the Senior
Note Trustee in accordance with Section 1(b).
(l) If, while this Pledge Agreement is in effect, any stock dividend,
stock split, reclassification, readjustment, reorganization, merger,
consolidation, exchange offer, tender offer or other change in the capital
structure, including the creation of any subscription or other rights or
other Pledged Securities, is declared or made, or proposed to be declared
or made, by the Pledged Subsidiary or any other issuer of Pledged
Collateral, all substituted and additional securities or interest issued
with respect to the Pledged Collateral and evidenced by certificates shall,
subject to receipt of all applicable Approvals, be endorsed in blank by the
Pledgor promptly upon receipt thereof or otherwise appropriately
transferred to the Senior Note Trustee in negotiable form, and all
certificates or instruments evidencing such securities shall be delivered
to the Senior Note Trustee to be held under the terms of this Pledge
Agreement in the same manner as, and as a part of, the Pledged Collateral.
All Pledged Securities shall be evidenced by one or more certificates. Any
securities that may be issued upon exercise of any subscription or other
rights relating to the Pledged Securities shall, subject to receipt of all
applicable Approvals, be endorsed in blank and delivered to the Senior Note
Trustee with any necessary powers.
(m) The Pledgor shall pay and discharge all taxes, assessments and
governmental charges or levies against any Pledged Collateral prior to
delinquency thereof and shall keep all Pledged Collateral free of all
unpaid charges whatsoever, unless contested in good faith and appropriate
reserves have been set aside in accordance with GAAP.
(n) The Pledgor has, independently and without reliance on the Senior
Note Trustee and/or any Holder and based on such documents and information
as it deemed appropriate, made its own credit analysis and decision to
enter into this Pledge Agreement.
(o) In the event that the Senior Note Trustee desires to exercise any
remedies, voting or consensual rights or attorney-in-fact powers set forth
in this Pledge Agreement and determines it necessary to obtain any
Approvals therefor, then, upon the reasonable request of the Senior Note
Trustee, the Pledgor agrees to use its best efforts to assist and aid the
Senior Note Trustee to obtain as soon as practicable any necessary
Approvals for the exercise of any such remedies, rights and powers.
(p) The Pledgor has delivered to the Senior Note Trustee a duly
executed acknowledgment from the respective
7
<PAGE>
issuers of the Pledged Securities acknowledging the registration on its
books and records of the pledge of the Pledged Securities pursuant to this
Agreement.
(q) There are no voting trusts or other agreements or understandings
to which Pledgor is a party or by which it may be bound with respect to
voting, managerial consent, election or other rights of Pledgor relating to
the Pledged Securities.
(r) The principal place of business and chief executive office of
Pledgor and the office where Pledgor keeps its records concerning the
Pledged Collateral is Mississippi Avenue and The Boardwalk, Atlantic City,
New Jersey 08401.
Section 4. Administration of the Pledged Collateral. Subject to the terms
of any applicable Approvals, the Senior Note Trustee shall administer the
Pledged Collateral in accordance with the provisions hereof and of the Senior
Note Indenture.
Section 5. Release and Substitution of Pledged Collateral. The Pledged
Collateral shall not be released from the security interest created hereunder
and no property shall be substituted for any of the Pledged Collateral, except
(i) in accordance with the provisions of Article IV of the Senior Note
Indenture, (ii) in the case of the release of Pledged Securities of Unrestricted
Subsidiaries designated as such in accordance with the provisions of the Senior
Note Indenture, all of which provisions are hereby incorporated herein by
reference, (iii) in accordance with the provisions of Sections 5 and 19 hereof,
and (iv) pursuant to any requirements of any order, decree, rule or judgment of
any Gaming Authority applicable to Pledgor or any of the Pledged Subsidiaries.
Section 6. Voting Rights, Dividends, Etc.
(a) So long as no Event of Default (as defined below) shall have occurred
and be continuing and notwithstanding any other section hereof:
(i) the Pledgor shall be entitled to exercise any and all voting or
consensual rights and powers, including subscription rights, accruing to an
owner of the Pledged Collateral or any part thereof for any purpose not
inconsistent with the terms of this Pledge Agreement or any agreement
giving rise to any of the Indenture Obligations;
(ii) the Pledgor shall be entitled to receive, retain and use any and
all dividends, distributions or other payments which are permitted by the
Indentures and paid on the Pledged Collateral in cash or property (other
than securities which are subject to this Agreement);
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<PAGE>
(iii) the Senior Note Trustee shall execute and deliver to the Pledgor
or cause to be executed and delivered to the Pledgor, all such proxies,
powers of attorney, dividend orders and other instruments as the Pledgor
may reasonably request for the purpose of enabling it to exercise the
voting or consensual rights and powers which the Pledgor is entitled to
exercise pursuant to the foregoing subparagraph (i) or to receive the
dividends, distributions or other payments which the Pledgor is authorized
to retain pursuant to the foregoing subparagraph (ii).
(b) Upon the occurrence of an Event of Default, but prior to the receipt of
all applicable Approvals by the Senior Note Trustee or the Holders, the Pledgor
shall be entitled to exercise the rights provided in Section 6(a)(i) hereof.
(c) Upon the occurrence and during the continuance of an Event of Default
and in the case of voting and consensual rights, upon receipt of all applicable
Approvals, all rights of the Pledgor to exercise the voting or consensual rights
and powers which the Pledgor would otherwise be entitled to exercise pursuant to
subparagraph (i) of Section 6(a) and Section 6(b) hereof and to receive the
dividends, distributions and other payments which the Pledgor would otherwise be
authorized to receive and retain pursuant to subsection (ii) of Section 6(a)
shall automatically cease, and all such rights shall thereupon become vested in
the Senior Note Trustee, which shall then have the sole and exclusive right and
authority to exercise all such voting and consensual rights and powers and to
receive and retain as Pledged Collateral all such dividends, distributions and
other payments. Any and all money and other property paid over to or received by
the Senior Note Trustee pursuant to the provisions of this Section 6(c) shall be
retained by the Senior Note Trustee as Pledged Collateral hereunder and shall be
administered and applied in accordance with the provisions of this Pledge
Agreement and the Senior Note Indenture. All dividends and interest payments
which are received by the Pledgor contrary to the provisions of this subsection
(c) shall be received in trust for the benefit of the Senior Note Trustee, shall
be segregated from other funds of the Pledgor and shall be forthwith paid over
to the Senior Note Trustee as Pledged Collateral in the same form as so received
(with any necessary endorsement).
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<PAGE>
Section 7. Default; Remedies.
(a) Defined. For purposes of this Pledge Agreement, the term "Event of
Default" shall have the meaning provided in the Senior Note Indenture.
(b) Exercise of Remedies Under the Pledge Agreement. If an Event of Default
shall have occurred and be continuing, the Senior Note Trustee shall, subject to
obtaining all applicable Approvals, commence the taking of such actions (or
refrain from taking actions) toward collection or enforcement of this Pledge
Agreement and the Pledged Collateral (or any portion thereof), including without
limitation action toward foreclosure upon any Pledged Collateral, as it deems
appropriate in its sole discretion.
(c) Remedies Generally. If an Event of Default shall have occurred and be
continuing, the Senior Note Trustee itself or by its agents or attorneys may,
subject to obtaining all applicable Approvals, (i) exercise any or all of its
rights and remedies hereunder, under the Senior Note Indenture or any other
instrument or agreement securing, evidencing or relating to the Indenture
Obligations or under applicable laws (including all of the rights and remedies
of a secured creditor under the Uniform Commercial Code then in effect in the
State of New York; the "NUCC"), (ii) retain the Pledged Collateral or (iii)
sell, assign, transfer, or dispose of, endorse and deliver the whole or, from
time to time, any part of the Pledged Collateral at public or private sale or
sales, at any exchanges, brokers board or at any of the Senior Note Trustee's
offices or elsewhere, for cash, upon credit or for other property, for immediate
or future delivery, and for such price or prices and on such other terms that
the Senior Note Trustee may deem commercially reasonable (in its liability for
loss or damage). Upon consummation of any such sale, the Senior Note Trustee
shall have the right to assign, transfer, endorse and deliver to the purchaser
or purchasers thereof the Pledged Collateral so sold. Each such purchaser at any
such sale shall hold the property sold absolutely free from any claim or right
on the part of the Pledgor, and the Pledgor hereby waives (to the full extent
permitted by law) all rights of redemption, stay or appraisal which the Pledgor
now has or may at any time in the future have under any rule of law or statute
now existing or hereafter enacted. The Senior Note Trustee shall give the
Pledgor at least 10 Business Days' written notice (which the Pledgor agrees
shall be deemed to be reasonable notification within the meaning of Section
9-504(3) of the NUCC) of the Senior Note Trustee's intention to make any such
public or private sale. Any such sale shall be held at such time or times and at
such place or places as the Senior Note Trustee may deem commercially
reasonable. At any such sale, the Pledged Collateral, or portion thereof to be
sold, may be sold as an entirety or in separate portions, as the Senior Note
Trustee may deem commercially reasonable. The Senior Note Trustee shall not be
obligated to
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<PAGE>
make any sale of the Pledged Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of the Pledged Collateral may have
been given. The Senior Note Trustee may adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice, be made at the
time and place to which the same was so adjourned. In case sale of all or any
part of the Pledged Collateral is made on credit for future delivery, the
Pledged Collateral so sold may be retained by the Senior Note Trustee until the
sale price is paid by the purchaser or purchasers thereof, but the Senior Note
Trustee shall not incur any liability in case any such purchaser or purchasers
shall fail to take up and pay for the Pledged Collateral so sold and, in case of
any such failure, such Pledged Collateral may be sold again upon like notice and
upon receipt of all applicable Approvals. As an alternative to exercising the
power of sale herein conferred upon it, the Senior Note Trustee may proceed by
suit or suits at law or in equity to exercise its remedies regarding the Pledged
Collateral and sell the Pledged Collateral or any portion thereof pursuant to
judgment or decree of a court or courts having competent jurisdiction. If under
mandatory requirements of applicable law, the Senior Note Trustee shall be
required to make disposition of the Pledged Collateral within a period of time
that does not permit the giving of notice to the Pledgor as herein before
provided, the Senior Note Trustee need give the Pledgor only such notice of
disposition as shall be reasonably practicable in view of such mandatory
requirements of law.
(d) Preventing Impairment of the Pledged Collateral. Regardless of whether
or not there shall have occurred any Event of Default, the Senior Note Trustee
may institute and maintain or cause in its name of the Pledgor or in the name to
be instituted and maintained, such suits and proceedings as the Senior Note
Trustee may be advised by counsel shall be necessary or expedient to prevent any
impairment of the security interest in or perfection of the Pledged Collateral
in contravention of the terms of the Senior Note Indenture. The Pledgor agrees
not to knowingly take or permit to be taken any action which would impair the
Pledged Collateral or the Senior Note Trustee's rights in the Pledged
Collateral.
Section 8. Senior Note Trustee Appointed Attorney-in-Fact. The Pledgor
hereby constitutes and appoints the Senior Note Trustee its attorney-in-fact,
during the occurrence and continuance of an Event of Default, for the purpose of
carrying out the provisions, but subject to the terms and conditions, of this
Pledge Agreement and taking any action and executing any instrument, including,
without limitation, any financing statement or continuation statement, and
taking any other action to maintain the validity, perfection, priority and
enforcement of the security interest intended to be created hereunder, that the
Senior Note Trustee may deem necessary or advisable to accomplish the purposes
hereof, which appointment is irrevocable and coupled
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<PAGE>
with an interest; provided, however, that nothing herein contained shall be
construed as requiring or obligating the Senior Note Trustee to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment
received by it, or to present or file any claim or notice, or to take any action
with respect to the Pledged Collateral or any part thereof or the monies due or
to become due in respect thereof or any property covered thereby, and no action
taken or omitted or any part thereof shall give rise to any defense,
counterclaim or right of action against the Senior Note Trustee, unless the
Senior Note Trustee's actions are taken or omitted to be taken with gross
negligence or bad faith or constitute willful misconduct.
Section 9. Purchase of Pledged Collateral by Senior Note Trustee or
Holders. At any sale of the Pledged Collateral, whether pursuant to power of
sale or otherwise hereunder, Senior Note Trustee or any Holder may, to the
extent permitted by applicable law and subject to obtaining all applicable
Approvals, bid for and purchase, free from any right of redemption (all such
rights being hereby waived and released by the Pledgor to the extent permitted
by law), the Pledged Collateral or any part thereof or an interest therein and
upon compliance with the terms of such sale may hold, retain, exploit, resell or
otherwise dispose of such property without further accountability to the Pledgor
for the proceeds of such sale. The Pledgor will execute and deliver or cause to
be executed and delivered, such instruments, endorsements, assignments, waivers,
certificates and other documents and take such further action as the Senior Note
Trustee shall request in connection with any such sale.
Section 10. Payments and Proceeds.
In the event that the Senior Note Trustee ever receives any amounts
pursuant to this Pledge Agreement, or otherwise receives any amounts with
respect to the Pledged Collateral following the occurrence of an Event of
Default, such amounts shall first be applied to the reasonable costs and
expenses, including attorneys' fees, incurred by the Senior Note Trustee in
taking such action and thereafter shall be applied by the Senior Note Trustee as
provided in the Senior Note Indenture. After payment in full of all Indenture
Obligations, the remaining proceeds from any foreclosure hereunder shall be paid
to the Pledgor, or its successors or assigns, or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may direct,
any surplus then remaining from such Proceeds.
Section 11. Waiver of Claims. Except as otherwise provided in this Pledge
Agreement, THE PLEDGOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
NOTICE OF JUDICIAL HEARING IN CONNECTION WITH THE SENIOR NOTE TRUSTEE'S TAKING
POSSESSION OR THE SENIOR NOTE TRUSTEE'S DISPOSITION OF ANY OF THE PLEDGED
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICES AND
HEARINGS FOR ANY PREJUDGMENT REMEDY OR REMEDIES
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<PAGE>
AND ANY SUCH RIGHT THAT THE PLEDGOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION
OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and, to the full extent
permitted by applicable law, the Pledgor hereby further waives:
(a) all damages occasioned by such taking of possession except any
damages which are the direct result of the Senior Note Trustee's gross
negligence, bad faith or willful misconduct;
(b) all other requirements as to the time, place and terms of sale or
other requirements, with respect to the enforcement of the Senior Note
Trustee's rights and powers hereunder; and
(c) except as provided in Section 7(c) hereof, all rights of
redemption, appraisement, valuation, stay, marshaling of assets, extension
or moratorium, existing at law or in equity, by statute or otherwise, now
or hereafter in force, in order to prevent or delay the enforcement of this
Pledge Agreement or the sale or other disposition of the Pledged Collateral
or any portion thereof, and the Pledgor, for itself and all who may claim
under it, insofar as it now or hereafter lawfully may, hereby waives all
such rights.
Any sale of, or the exercise of any options to purchase, or any other
realization upon, any Pledged Collateral shall operate to divest all right,
title, interest, claim and demand, at law or in equity, of the Pledgor therein
and thereto, and shall be a perpetual bar both at law and in equity against the
Pledgor and against any and all persons claiming or attempting to claim the
Pledged Collateral so sold, optioned or realized upon, or any part thereof,
through and under the Pledgor.
Section 12. Remedies Cumulative; No Waiver. Each right, power and remedy of
the Senior Note Trustee provided for herein or in another agreement pursuant to
which a Lien is created in favor of the Senior Note Trustee for the benefit of
any Holder, or now or hereafter existing at law or in equity, by statute or
otherwise, shall be cumulative and concurrent and shall be in addition to every
other right, power or remedy of the Senior Note Trustee or any Holder provided
for herein or in another agreement pursuant to which a Lien is created in favor
of the Senior Note Trustee for the benefit of any Holder or now or hereafter
existing at law or in equity, by statute or otherwise. No failure on the part of
the Senior Note Trustee or any Holder to exercise, and no delay in exercising,
any right, power or remedy hereunder, or in another agreement pursuant to which
a Lien is created in favor of the Senior Note Trustee for the benefit or any
Holder or now or hereafter existing at law or in equity, by statute or
otherwise, shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise
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<PAGE>
thereof or the exercise of any other right, power or remedy. No notice to or
demand on the Pledgor hereunder shall, of itself, entitle the Pledgor to any
other or further notice or demand in the same, similar or other circumstances.
Section 13. Additional Collateral. Without notice or consent of any Pledgor
and without impairment of the security interests and rights created by this
Pledge Agreement, the Senior Note Trustee may accept from any person or persons
additional collateral or other security for the Indenture Obligations. Neither
the creation of the security interests created hereunder nor the acceptance of
any such additional collateral or security shall prevent the Senior Note Trustee
from resorting to such additional collateral or security or to the Pledged
Collateral, in any order without affecting the Senior Note Trustee's rights
hereunder.
Section 14. Further Assurances. The Pledgor agrees (i) that it shall, at
its own expense, promptly file or record such notices, financing statements,
continuation statements or other documents and take all further action as may be
necessary to perfect, maintain and protect the validity, perfection and priority
of the security interests of the Senior Note Trustee hereunder or to enable the
Senior Note Trustee to exercise and enforce its rights and remedies hereunder
with respect to the Pledged Collateral, and as the Senior Note Trustee may
reasonably request, such instruments to be in form and substance satisfactory to
the Senior Note Trustee, and (ii) that it shall, at its own expense, do such
further acts and things and execute and deliver to the Senior Note Trustee such
additional conveyances, assignments, agreements and instruments as the Senior
Note Trustee may at any time reasonably request in connection with the
administration and enforcement of this Pledge Agreement or relative to the
Pledged Collateral or any part thereof or in order to assure and confirm unto
the Senior Note Trustee its rights, powers and remedies hereunder.
The Pledgor agrees that it will notify the Senior Note Trustee in writing
not less than 30 days prior to any change in location and the creation of a new
location of (a) the principal place of business or chief executive office and
(b) the offices where the Pledgor's books and records and related information
concerning the Pledged Collateral are kept; provided, however, that no such
change may be effected before all filings required to be made and all other
necessary action to preserve the perfection of the first priority security
interest of the Senior Note Trustee in the Pledged Collateral shall have been
made or taken.
The Pledgor will not change its name, identity or structure in any manner
which might make any financing statement filed hereunder incorrect or misleading
unless Pledgor shall have given the Senior Note Trustee at least 30 days' prior
written notice thereof and shall have properly amended all financing
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<PAGE>
statements and properly filed all additional financing statements necessary to
maintain the perfection of the security interest granted hereunder at all times
and shall have provided the Senior Note Trustee with an Officers' Certificate
certifying that the above steps have been taken.
Section 15. Indemnification. The Senior Note Trustee shall
have such indemnity as is provided under Section 8.7 of the
Senior Note Indenture.
Section 16. Registration Rights, etc.
(a) If the Senior Note Trustee determines that the registration of any of
the securities included in the Pledged Collateral under, or other compliance
with, the Securities Act or any similar federal or state law is desirable, upon
or at any time after an Event of Default and acceleration of either issue of the
Notes, subject to any applicable Approvals, the Pledgor will use its best
efforts to cause such registration or compliance to be effectively made, at no
expense to the Senior Note Trustee or to the Holders, and to continue any such
registration effective for such time as may be reasonably necessary in the
opinion of the Senior Note Trustee. The Pledgor will reimburse the Senior Note
Trustee upon demand for any expenses incurred by the Senior Note
Trustee(including reasonable attorneys' fees) incurred in connection therewith,
which obligation to pay such expenses shall be secured hereunder.
(b) If the Pledgor is unable to effect a public sale of any or all of the
Pledged Collateral or if the Senior Note Trustee determines that it is desirable
to sell the Pledged Collateral in one or more private sales, subject to any
applicable Approvals, the Senior Note Trustee may limit such sales to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire such securities for its own account for investment and not with a
view to distribution or resale. The Pledgor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable to the
seller than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Senior Note Trustee shall be under
no obligation to delay a sale of any of the Pledged Collateral for the period of
time necessary to permit the issuer of such securities to register such
securities for public sale under the Securities Act or under applicable state
securities laws even if such issuer would agree to do so.
(c) The Pledgor further agrees to do or cause to be done all such other
acts and things as may be necessary to make such sale or sales of all or any
part of the Pledged Collateral valid and binding and in compliance with any and
all applicable law, rules, regulations, orders or decrees, all at the Pledgor's
expense. The Pledgor further agrees that a breach of
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<PAGE>
any of the covenants contained in this Pledge Agreement will cause irreparable
injury to the Senior Note Trustee, as secured party, for which the Senior Note
Trustee would have no adequate remedy at law in respect of such breach and, as a
consequence, agrees that each and every covenant contained in this Section 16
shall be specifically enforceable against the Pledgor and the Pledgor waives and
agrees not to assert any defenses against an action for specific performance of
such covenants.
Section 17. Pledgor's Indenture Obligations Absolute. The liability of the
Pledgor under this Pledge Agreement shall remain in full force and effect
without regard to, and shall not be released, suspended, discharged, terminated
or otherwise affected by (a) any change in the time, place or manner of payment
of all or any of the Indenture Obligations, or in any other term of the Senior
Note Indenture, the Senior Notes, any waiver, indulgence, renewal, extension,
amendment or modification of or addition, consent or supplement to or deletion
from or any other action or inaction under or in respect of the Senior Note
Indenture, the Senior Notes or any assignment or transfer thereof; (b) any lack
of validity or enforceability, in whole or in part, of the Senior Note Indenture
or the Senior Notes; (c) any furnishing of any additional security for the
Indenture Obligations or any acceptance thereof or any release or non-perfection
of any security interest in the Pledged Collateral; (d) any limitation on any
party's liability or obligations under the Senior Note Indenture or the Senior
Notes; (e) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to a Pledgor, or any
action taken with respect to this Pledge Agreement by any trustee or receiver,
or by any court, in any such proceeding, whether or not the Pledgor shall have
notice or knowledge of any of the foregoing; (f) any exchange, release or
amendment or waiver of or consent to departure from any agreement pursuant to
which a Lien is created in favor of the Senior Note Trustee for the benefit of
the Holders, pursuant to which a person other than the Pledgor has granted a
security interest; or (g) any other circumstance that might otherwise constitute
a defense available to, or a discharge of the Pledgor.
Section 18. Waiver. To the extent permitted by applicable law, the Pledgor
hereby waives promptness, diligence, notice of acceptance and any other notice
with respect to any of the Indenture Obligations and this Pledge Agreement and
any requirement that the Senior Note Trustee protect, secure, perfect or insure
any security interest or any property subject thereto or exhaust any right or
take any action against the Pledgor or any other person or entity; provided,
however, that the Senior Note Trustee shall in any event take such care in the
handling of any Pledged Securities in its possession as it takes with respect to
Property of a similar nature in its possession.
Section 19. Termination. Upon payment and performance in full and
satisfaction of all of the obligations of THCR
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Holdings, THCR Funding or their successors or assigns under the Senior Note
Indenture and all other amounts payable under this Pledge Agreement, this Pledge
Agreement shall terminate and the Senior Note Trustee shall assign and redeliver
to the Pledgor all of the Pledged Collateral hereunder that has not been sold,
disposed of, retained or applied by the Senior Note Trustee in accordance with
the terms hereof. Such reassignment and redelivery shall be without warranty by
or recourse to the Senior Note Trustee, and shall be at the expense of the
Pledgor. At such time, this Pledge Agreement shall no longer constitute a Lien
upon or grant any security interest in any of the Pledged Collateral, and the
Senior Note Trustee shall, at the Pledgor's expense deliver to the Pledgor
written acknowledgment thereof and of cancellation of this Pledge Agreement in a
form reasonably requested by the Pledgor; provided, however, that this Pledge
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Indenture Obligations is rescinded or
must otherwise be returned upon the insolvency, bankruptcy or reorganization of
the Pledgor or any of its Subsidiaries all as though such payment had not been
made.
Section 20. Notices. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given if made
by hand delivery, by telex, by facsimile or registered or certified mail,
postage prepaid, return receipt requested, addressed as provided in Section 12.2
of the Senior Note Indenture.
Any party hereto may by notice to the other party designate such additional
or different addresses as shall be furnished in writing by such party. Any
notice or communication to any party shall be deemed to have been given or made
as of the date so delivered, if personally delivered; when answered back, if
telexed; when receipt is acknowledged, if faxed; and five calendar days after
mailing, if sent by registered or certified mail (except that a notice of change
of address shall not be deemed to have been given until actually received by the
addressee). The Pledgor may give notice to the Holders at the addresses set
forth for them in the register kept by the Registrar under the Senior Note
Indenture or may request that the Senior Note Trustee notify the Holders at such
addresses.
Section 21. Binding Agreement; Assignment. This Pledge Agreement shall be
binding upon and inure to the benefit the Senior Note Trustee, the Pledgor and
its respective successors and permitted assigns. Neither this Pledge Agreement
nor any interest herein or in the Pledged Collateral, or any part thereof, may
be assigned by the Pledgor without the prior written consent of the Senior Note
Trustee (which consent shall not be unreasonably withheld). This Pledge
Agreement shall be deemed to be automatically assigned by the Senior Note
Trustee to any person who succeeds such Senior Note Trustee in accordance with
Article VIII of the Senior Note Indenture, and its assignee shall
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have all rights and powers of, and act as, such Senior Note Trustee hereunder.
Section 22. Governing Law. THIS PLEDGE AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO CONFLICT OF LAWS
PRINCIPLES THEREOF.
Section 23. Amendments. This Pledge Agreement may not be amended or
modified, except with the consent of the Pledgor and the Senior Note Trustee in
accordance with Article X of the Senior Note Indenture.
Section 24. Severability. In the event that any provision contained in this
Pledge Agreement shall for any reason be held to be illegal or invalid under the
laws of any jurisdiction, such illegality or invalidity shall in no way impair
the effectiveness of any other provision hereof, or of such provision under the
laws of any other jurisdiction; provided, that in the construction and
enforcement of such provision under the laws of the jurisdiction in which such
holding of illegality or invalidity exists, and to the extent only of such
illegality or invalidity, this Pledge Agreement shall be construed and enforced
as though such illegal or invalid provision had not been contained herein.
Section 25. Headings. Section headings used herein are
inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Pledge Agreement.
Section 26. Counterparts. This Pledge Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original, and all of which shall together constitute but one and the same
instrument. A complete set of counterparts shall be lodged with the Senior Note
Trustee.
Section 27. Expenses. The Pledgor will upon demand pay to the Senior Note
Trustee the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, which the Senior
Note Trustee may incur in connection with (i) the administration of this Pledge
Agreement, (ii) the custody or presentation of, or the sale of, collection from,
or other realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Senior Note Trustee hereunder or (iv)
the failure by the Pledgor to perform or observe any of the provisions hereof.
Section 28. Gaming Laws. This Agreement is subject to any
applicable Gaming Law.
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Section 29. No Recourse Against Others. A direct or indirect partner,
director, officer, employee or stockholder, as such, past, present or future of
the Pledgor or any successor entity shall not have any personal liability in
respect of the obligations of the Pledgor under this Agreement by reason of its
status as such partner, stockholder, employee, officer or director, to the
extent such liabilities may be waived under applicable law.
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to
be duly executed and delivered as of the day and year first written above.
TRUMP ATLANTIC CITY ASSOCIATES
By: TRUMP ATLANTIC CITY HOLDING, INC.
a general partner
By: _________________________________
Name: Robert M. Pickus
Title: Assistant Secretary
FIRST BANK NATIONAL ASSOCIATION,
as Senior Note Trustee
By: ________________________________
Name:___________________________
Title:__________________________
20
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SCHEDULE A
Pledged Securities
================================================================================
Class of Percentage
Stock/ Number of
Stock Equity Certificate Par of Outstanding
Issuer Interest No.(s) Value Shares Equity
- --------------------------------------------------------------------------------
Trump Atlantic common 8 $.01 40 100%
City Corporation stock
- --------------------------------------------------------------------------------
Trump Taj Mahal general 8 None N/A 99%
Associates partnership
interest
- --------------------------------------------------------------------------------
Trump Atlantic common 2 $.01 100 100%
City Funding, Inc stock
- --------------------------------------------------------------------------------
Trump Plaza general 11 None N/A 99%
Associates partnership
interest
================================================================================
PLEDGE AGREEMENT
from
TRUMP ATLANTIC CITY HOLDING, INC.
as Pledgor
to
FIRST BANK NATIONAL ASSOCIATION,
as Trustee
<PAGE>
PLEDGE AGREEMENT
PLEDGE AGREEMENT, together with any amendments, replacements and
supplements hereafter entered into (the "Pledge Agreement"), dated as of April
17, 1996, between Trump Atlantic City Holding, Inc. (together with its
successors and assigns, the "Pledgor") and First Bank National Association, as
trustee (the "Senior Note Trustee") under the indenture (as supplemented and
amended, the "Senior Note Indenture") relating to the 15 1/2% Senior Secured
Notes due 2005 (the "Senior Notes") of Trump Hotels & Casino Resorts Holdings,
L.P. ("THCR Holdings") and Trump Hotels & Casino Resorts Funding, Inc. ("THCR
Funding"), as joint obligors, is made for the equal and ratable benefit of the
holders of the Senior Notes (the "Holders"). As used herein, all capitalized
terms not otherwise defined herein shall have the meanings set forth in the
Senior Note Indenture.
W I T N E S S E T H:
WHEREAS, THCR Holdings and THCR Funding have issued $155,000,000 aggregate
principal amount of Senior Notes pursuant to the Senior Note Indenture; and
WHEREAS, in order to secure on an equal and ratable basis the payment and
performance in full of the obligations to the Holders and the Senior Note
Trustee under the terms of the Senior Note Indenture (the "Indenture
Obligations"), the parties hereto desire to set forth their mutual understanding
and certain agreements regarding the terms and conditions of the pledge of the
Pledged Collateral (as defined below) made by the Pledgor to the Senior Note
Trustee for the benefit of the Holders.
NOW, THEREFORE, in consideration of the premises and other benefits to the
Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
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<PAGE>
Section 1. Pledge. As collateral security for the due and prompt payment in
full and complete performance of the Indenture Obligations and all indebtedness
and other liabilities and obligations, whether now existing or hereafter
arising, under, or arising out of, the Senior Note Indenture, the Pledgor hereby
pledges, assigns, transfers, sets over and delivers unto the Senior Note Trustee
and hereby grants to the Senior Note Trustee for the benfit of the Holders and
unto their respective successors and assigns, a first priority security interest
in all of the right, title and interest of the Pledgor in, to and under any and
all of the following described property, rights and interests (collectively, the
"Pledged Collateral"):
(a) all of the issued and outstanding Equity Interests (the "Pledged
Securities") of the Subsidiary (the "Pledged Subsidiary") of the Pledgor
identified on Schedule A attached hereto, subject to obtaining the
Approvals set forth in Section 2;
(b) all other Equity Interests, now or hereafter owned or acquired by
the Pledgor and wherever located, of the Subsidiary directly owned by the
Pledgor (the "Pledged Subsidiary") and the certificates representing such
securities, and any present or future options, warrants or other rights to
subscribe for or purchase any of the foregoing described in subsections
1(a) or 1(b) hereof or any notes, bonds, debentures or other evidences of
indebtedness that (i) are at any time convertible, exchangeable or
exercisable into Equity Interests of the Pledged Subsidiary or (ii) have or
at any time could by their terms have voting rights with respect to any
matter affecting the Pledged Subsidiary and all securities, certificates
and instruments representing or evidencing ownership of any of the
foregoing (the property described in subsections 1(a) and 1(b) hereof,
being referred to herein collectively as the "Pledged Securities");
(c) to the extent not included in the foregoing, all of Pledgor's
rights, claims or other general intangibles constituting, or arising out of
or relating to, its rights as a general partner, limited partner or
managing general partner of any Pledged Subsidiary, including without
limitation its share in the profits and losses of any such Pledged
Subsidiary and its right as such partner to receive distributions of the
Pledged Subsidiary's assets or income, in each case whether arising under a
partnership agreement or applicable law, created by operation of law, or
otherwise;
(d) to the extent not included in the foregoing, all rights, claims
and other general intangibles of such Pledged Subsidiary against any third
party, to the extent the same may be asserted or realized upon by Pledgor;
and
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(e) all dividends, distributions, cash, instruments and other property
or securities (including without limitation any security as such term is
defined in Article 8 of the Uniform Commercial Code as in effect in the
applicable jurisdiction at such time (the "UCC")), now or hereafter at any
time or from time to time received or receivable or otherwise distributed
or distributable in respect of or in exchange for any or all of the Pledged
Collateral and all proceeds of the Pledged Collateral.
TO HAVE AND TO HOLD the Pledged Collateral, together with all rights, titles,
interests, powers, privileges and preferences pertaining or incidental thereto,
unto the Senior Note Trustee for the benefit of the Holders and unto their
respective successors and assigns.
Section 2. Gaming Approvals.
(a) No Pledged Securities shall be sold, assigned, transferred, pledged or
otherwise disposed of, whether pursuant to the Pledge Agreement or the exercise
of any right, power or remedy provided for herein or otherwise, unless the grant
of the security interest or such other disposition as the case may be, has
received in advance any necessary approvals (the "Approvals") by the gaming
authorities with jurisdiction over the issuer of such Pledged Securities (the
"Gaming Authorities"), and unless the transferee of such Pledged Securities
shall have first obtained any and all licenses, findings of suitability or
Approvals required by such Gaming Authorities, or shall have been found to be
individually qualified to be licensed, as appropriate. Without limiting the
generality of the foregoing, the Approval by such Gaming Authorities shall not
constitute permission to foreclose on the same or make any other disposition of
the Pledged Securities.
(b) The Senior Note Trustee agrees to comply with any order or directive of
applicable Gaming Authorities requiring such person or persons to submit an
application for any license, finding of suitability or other approval.
(c) The provisions of Section 2 of this Pledge Agreement shall not modify
or restrict the rights and remedies of the Senior Note Trustee under the Pledge
Agreement in any other Pledged Collateral except as provided in Section 2(a) or
(b); provided, the Senior Note Trustee acknowledges, understands and agrees that
certain Gaming Laws and the regulations thereunder may impose certain licensing
or transaction approval requirements prior to the exercise of such rights and
remedies under the Pledge Agreement with respect to the Pledged Securities and
other pledged collateral subject to such Gaming Laws and the regulations
thereunder.
(d) Notwithstanding any provision contained in this Pledge Agreement to the
contrary, if the granting of a
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security interest in the capital stock of any Subsidiary shall conflict with any
Gaming Laws, the Senior Note Trustee agrees to (i) release such capital stock
from the pledge of this Pledge Agreement to the extent necessary to avoid such
conflict or violation, or (ii) take any other action, including filing for
applicable Approvals, sufficient to avoid such conflict or violation. The Senior
Note Trustee further acknowledges and agrees that, prior to exercising any
remedies set forth in the Pledge Agreement with respect to the Equity Interests
of the Subsidiary subject to or affected by any Gaming Laws, the Senior Note
Trustee shall obtain any and all Approvals as may be required by applicable
Gaming Laws.
(e) If the consent of any Gaming Authority is required in connection with
any of the actions which may be taken by the Senior Note Trustee in the exercise
of its rights hereunder, then the Pledgor agrees to use its reasonable efforts
to secure such consent and to cooperate with the Senior Note Trustee in
obtaining any such consent. Upon the occurrence and during the continuation of
any Event of Default, Pledgor shall promptly execute and/or cause the execution
of all applications, certificates, instruments, and other documents and papers
that the Senior Note Trustee may be required to file in order to obtain any
necessary Gaming Authority approvals, and if Pledgor fails or refuses to execute
such documents, the clerk of the court with jurisdiction may execute such
documents on behalf of Pledgor.
Section 3. Representations, Warranties and Covenants of the Pledgor. The
Pledgor hereby represents and warrants, covenants and agrees that:
(a) The Pledgor is, and as to Pledged Collateral acquired by it from
time to time after the date hereof, will be, the sole legal and beneficial
owner of the Pledged Collateral, and holds, or will hold, the Pledged
Collateral free and clear of all Liens (except for the security interest
granted hereunder to the Senior Note Trustee for the benefit of Holders),
and has not made and will not make any other pledge, assignment, mortgage,
hypothecation or transfer of the Pledged Collateral. The Pledged Securities
are not subject to any put, call, option or other right in favor of any
other person whatsoever.
(b) The Pledged Securities which are shares of stock have been duly
authorized and validly issued and are fully paid and nonassessable.
(c) Except as set forth below, upon delivery of the certificates
evidencing the Pledged Securities to the Senior Note Trustee and so long as
the Senior Note Trustee maintains possession of such certificates pursuant
to this Pledge Agreement, the Senior Note Trustee will have a valid and
perfected first priority security interest in the Pledged Securities. In
the case of a Pledged Security which represents
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an interest in a partnership, upon filing of a UCC-1 financing statement in
the appropriate jurisdiction in connection with such interest, upon
delivery of the certificate evidencing such interest and so long as the
Senior Note Trustee maintains possession of such certificate, the Senior
Note Trustee will have a valid and perfected first priority security
interest in such Pledged Security, which together with the security
interest in the other Pledged Securities will secure the payment and
performance in full of the Indenture Obligations.
(d) The Pledgor has the valid right and legal authority to pledge the
Pledged Collateral in the manner hereby done or contemplated and will
defend its title thereto against the claims of all persons whomsoever and
shall maintain and preserve the security interest granted hereunder with
respect to the Pledged Collateral as long as this Pledge Agreement shall
remain in full force and effect.
(e) Neither the execution and delivery of this Pledge Agreement by the
Pledgor nor the consummation of the transactions herein contemplated nor
the fulfillment of the terms hereof (i) violate the Pledgor's, or any of
its Subsidiary's, charter or by-laws, (ii) violate the terms of any
agreement, indenture, mortgage, deed of trust, equipment lease, instrument
or other document to which the Pledgor, or its Subsidiary, is a party, or
by which any of them may be bound or to which any of their properties or
assets may be subject, which violation or conflict would have a material
adverse effect on the financial condition, business, assets or liabilities
of the Pledgor and its Subsidiary taken as a whole, or on the value of the
Pledged Collateral or a material adverse effect on the security interests
hereunder, or (iii) conflict with any law, order, rule or regulation
applicable to the Pledgor, or its Subsidiary, of any court or any
government, regulatory body or administrative agency or other governmental
body having jurisdiction over the Pledgor, or its Subsidiary, or their
Properties, or (iv) result in or require the creation or imposition of any
Lien (other than the Lien contemplated hereby), upon or with respect to any
of the property now owned or hereafter acquired by the Pledgor, or its
Subsidiary, which violation or conflict would have a material adverse
effect on the financial condition, business, assets or liabilities of the
Pledgor and its Subsidiary taken as a whole, or on the value of the Pledged
Collateral or a material adverse effect on the security interests
hereunder.
(f) The Pledged Securities, as described in Schedule A attached
hereto, include all of the issued and outstanding Equity Interests of the
Pledged Subsidiary as of the date hereof, and all outstanding options,
warrants, calls, commitments of any character whatsoever or other rights to
subscribe for or purchase any property described in subsection 1(a) or any
notes, bonds, debentures or other evidences of indebtedness that (i) are at
any time convertible into Equity Interests of the Pledged Subsidiary or
(ii) have or at any time
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could by its terms have voting rights with respect to any matters affecting
the Pledged Subsidiary.
(g) Except for the Approvals referred to in Section 2, no consent or
approval which has not been obtained prior to the date hereof of any other
person or entity and no authorization, approval or other action by, and no
notice to or filing with any governmental body, regulatory authority or
securities exchange, was or is necessary as a condition to the validity of
the pledge hereunder of the Pledged Collateral, and subject to receipt of
all applicable Approvals with respect to the exercise of remedies by the
Senior Note Trustee hereunder, such pledge is effective to vest in the
Senior Note Trustee the rights of the Senior Note Trustee in the Pledged
Collateral as set forth herein.
(h) The Pledgor shall deliver to the Senior Note Trustee concurrently
with the execution of this Pledge Agreement: (i) all certificates and
instruments representing the Pledged Securities described in Schedule A,
and (ii) each other item of Pledged Collateral (including all certificates,
instruments, notes and writings representing or evidencing any such Pledged
Collateral) immediately upon the Pledgor's acquisition thereof, and in
addition, with respect to Pledged Securities, immediately upon receipt of
applicable Approvals. Any and all Pledged Securities delivered to the
Senior Note Trustee shall be accompanied by undated duly executed stock
powers in blank and by such other instruments of transfer or documents as
the Senior Note Trustee may reasonably request. Subject to the provisions
of Section 2, the Senior Note Trustee shall have the right (in its
discretion) to hold the certificates representing the Pledged Securities in
its own name or in the name of its nominee, all in form and substance
sufficient to make effective the pledge hereunder and otherwise
satisfactory to the Senior Note Trustee.
(i) Upon reasonable request to the Pledgor, the Senior Note Trustee
shall have full and free access during normal business hours to all of the
books, correspondence and records of the Pledgor relating to the Pledged
Collateral, and the Senior Note Trustee and its representatives may examine
the same, take extracts therefrom and make photocopies thereof, and the
Pledgor agrees to render to the Senior Note Trustee, at the Pledgor's cost
and expense, such clerical and other assistance as may be reasonably
requested by the Senior Note Trustee with regard thereto.
(j) The Pledgor will comply in all material respects with all
requirements of law applicable to the Pledged Collateral or any part
thereof and use its best efforts to obtain all Approvals as may be required
to effect any of the granting clauses of this Pledge Agreement.
(k) The Pledgor shall not permit the Pledged Subsidiary to issue any
securities of the type required to be
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pledged hereunder unless such securities are promptly pledged and delivered
hereunder to the Senior Note Trustee in accordance with Section 1(b).
(l) If, while this Pledge Agreement is in effect, any stock dividend,
stock split, reclassification, readjustment, reorganization, merger,
consolidation, exchange offer, tender offer or other change in the capital
structure, including the creation of any subscription or other rights or
other Pledged Securities, is declared or made, or proposed to be declared
or made, by the Pledged Subsidiary or any other issuer of Pledged
Collateral, all substituted and additional securities or interest issued
with respect to the Pledged Collateral and evidenced by certificates shall,
subject to receipt of all applicable Approvals, be endorsed in blank by the
Pledgor promptly upon receipt thereof or otherwise appropriately
transferred to the Senior Note Trustee in negotiable form, and all
certificates or instruments evidencing such securities shall be delivered
to the Senior Note Trustee to be held under the terms of this Pledge
Agreement in the same manner as, and as a part of, the Pledged Collateral.
All Pledged Securities shall be evidenced by one or more certificates. Any
securities that may be issued upon exercise of any subscription or other
rights relating to the Pledged Securities shall, subject to receipt of all
applicable Approvals, be endorsed in blank and delivered to the Senior Note
Trustee with any necessary powers.
(m) The Pledgor shall pay and discharge all taxes, assessments and
governmental charges or levies against any Pledged Collateral prior to
delinquency thereof and shall keep all Pledged Collateral free of all
unpaid charges whatsoever, unless contested in good faith and appropriate
reserves have been set aside in accordance with GAAP.
(n) The Pledgor has, independently and without reliance on the Senior
Note Trustee and/or any Holder and based on such documents and information
as it deemed appropriate, made its own credit analysis and decision to
enter into this Pledge Agreement.
(o) In the event that the Senior Note Trustee desires to exercise any
remedies, voting or consensual rights or attorney-in-fact powers set forth
in this Pledge Agreement and determines it necessary to obtain any
Approvals therefor, then, upon the reasonable request of the Senior Note
Trustee, the Pledgor agrees to use its best efforts to assist and aid the
Senior Note Trustee to obtain as soon as practicable any necessary
Approvals for the exercise of any such remedies, rights and powers.
(p) The Pledgor has delivered to the Senior Note Trustee a duly
executed acknowledgment from the respective issuers of the Pledged
Securities acknowledging the registration
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on its books and records of the pledge of the Pledged Securities pursuant
to this Agreement.
(q) There are no voting trusts or other agreements or understandings
to which Pledgor is a party or by which it may be bound with respect to
voting, managerial consent, election or other rights of Pledgor relating to
the Pledged Securities.
(r) The principal place of business and chief executive office of
Pledgor and the office where Pledgor keeps its records concerning the
Pledged Collateral is Mississippi Avenue and The Boardwalk, Atlantic City,
New Jersey 08401.
Section 4. Administration of the Pledged Collateral. Subject to the terms
of any applicable Approvals, the Senior Note Trustee shall administer the
Pledged Collateral in accordance with the provisions hereof and of the Senior
Note Indenture.
Section 5. Release and Substitution of Pledged Collateral. The Pledged
Collateral shall not be released from the security interest created hereunder
and no property shall be substituted for any of the Pledged Collateral, except
(i) in accordance with the provisions of Article IV of the Senior Note
Indenture, (ii) in the case of the release of Pledged Securities of Unrestricted
Subsidiary designated as such in accordance with the provisions of the Senior
Note Indenture, all of which provisions are hereby incorporated herein by
reference, (iii) in accordance with the provisions of Sections 5 and 19 hereof,
and (iv) pursuant to any requirements of any order, decree, rule or judgment of
any Gaming Authority applicable to Pledgor or the Pledged Subsidiary.
Section 6. Voting Rights, Dividends, Etc.
(a) So long as no Event of Default (as defined below) shall have occurred
and be continuing and notwithstanding any other section hereof:
(i) the Pledgor shall be entitled to exercise any and all voting or
consensual rights and powers, including subscription rights, accruing to an
owner of the Pledged Collateral or any part thereof for any purpose not
inconsistent with the terms of this Pledge Agreement or any agreement
giving rise to any of the Indenture Obligations;
(ii) the Pledgor shall be entitled to receive, retain and use any and
all dividends, distributions or other payments which are permitted by the
Senior Note Indenture and paid on the Pledged Collateral in cash or
property (other than securities which are subject to this Agreement);
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(iii) the Senior Note Trustee shall execute and deliver to the Pledgor
or cause to be executed and delivered to the Pledgor, all such proxies,
powers of attorney, dividend orders and other instruments as the Pledgor
may reasonably request for the purpose of enabling it to exercise the
voting or consensual rights and powers which the Pledgor is entitled to
exercise pursuant to the foregoing subparagraph (i) or to receive the
dividends, distributions or other payments which the Pledgor is authorized
to retain pursuant to the foregoing subparagraph (ii).
(b) Upon the occurrence of an Event of Default, but prior to the receipt of
all applicable Approvals by the Senior Note Trustee or the Holders, the Pledgor
shall be entitled to exercise the rights provided in Section 6(a)(i) hereof.
(c) Upon the occurrence and during the continuance of an Event of Default
and in the case of voting and consensual rights, upon receipt of all applicable
Approvals, all rights of the Pledgor to exercise the voting or consensual rights
and powers which the Pledgor would otherwise be entitled to exercise pursuant to
subparagraph (i) of Section 6(a) and Section 6(b) hereof and to receive the
dividends, distributions and other payments which the Pledgor would otherwise be
authorized to receive and retain pursuant to subsection (ii) of Section 6(a)
shall automatically cease, and all such rights shall thereupon become vested in
the Senior Note Trustee, which shall then have the sole and exclusive right and
authority to exercise all such voting and consensual rights and powers and to
receive and retain as Pledged Collateral all such dividends, distributions and
other payments. Any and all money and other property paid over to or received by
the Senior Note Trustee pursuant to the provisions of this Section 6(c) shall be
retained by the Senior Note Trustee as Pledged Collateral hereunder and shall be
administered and applied in accordance with the provisions of this Pledge
Agreement and the Senior Note Indenture. All dividends and interest payments
which are received by the Pledgor contrary to the provisions of this subsection
(c) shall be received in trust for the benefit of the Senior Note Trustee, shall
be segregated from other funds of the Pledgor and shall be forthwith paid over
to the Senior Note Trustee as Pledged Collateral in the same form as so received
(with any necessary endorsement).
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Section 7. Default; Remedies.
(a) Defined. For purposes of this Pledge Agreement, the term "Event of
Default" shall have the meaning provided in the Senior Note Indenture.
(b) Exercise of Remedies Under the Pledge Agreement. If an Event of Default
shall have occurred and be continuing, the Senior Note Trustee shall, subject to
obtaining all applicable Approvals, commence the taking of such actions (or
refrain from taking actions) toward collection or enforcement of this Pledge
Agreement and the Pledged Collateral (or any portion thereof), including without
limitation action toward foreclosure upon any Pledged Collateral, as it deems
appropriate in its sole discretion.
(c) Remedies Generally. If an Event of Default shall have occurred and be
continuing, the Senior Note Trustee itself or by its agents or attorneys may,
subject to obtaining all applicable Approvals, (i) exercise any or all of its
rights and remedies hereunder, under the Senior Note Indenture or any other
instrument or agreement securing, evidencing or relating to the Indenture
Obligations or under applicable laws (including all of the rights and remedies
of a secured creditor under the Uniform Commercial Code then in effect in the
State of New York; the "NUCC"), (ii) retain the Pledged Collateral or (iii)
sell, assign, transfer, or dispose of, endorse and deliver the whole or, from
time to time, any part of the Pledged Collateral at public or private sale or
sales, at any exchanges, brokers board or at any of the Senior Note Trustee's
offices or elsewhere, for cash, upon credit or for other property, for immediate
or future delivery, and for such price or prices and on such other terms that
the Senior Note Trustee may deem commercially reasonable (in its liability for
loss or damage). Upon consummation of any such sale, the Senior Note Trustee
shall have the right to assign, transfer, endorse and deliver to the purchaser
or purchasers thereof the Pledged Collateral so sold. Each such purchaser at any
such sale shall hold the property sold absolutely free from any claim or right
on the part of the Pledgor, and the Pledgor hereby waives (to the full extent
permitted by law) all rights of redemption, stay or appraisal which the Pledgor
now has or may at any time in the future have under any rule of law or statute
now existing or hereafter enacted. The Senior Note Trustee shall give the
Pledgor at least 10 Business Days' written notice (which the Pledgor agrees
shall be deemed to be reasonable notification within the meaning of Section
9-504(3) of the NUCC) of the Senior Note Trustee's intention to make any such
public or private sale. Any such sale shall be held at such time or times and at
such place or places as the Senior Note Trustee may deem commercially
reasonable. At any such sale, the Pledged Collateral, or portion thereof to be
sold, may be sold as an entirety or in separate portions, as the Senior Note
Trustee may deem commercially reasonable. The Senior Note Trustee shall not be
obligated to
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make any sale of the Pledged Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of the Pledged Collateral may have
been given. The Senior Note Trustee may adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice, be made at the
time and place to which the same was so adjourned. In case sale of all or any
part of the Pledged Collateral is made on credit for future delivery, the
Pledged Collateral so sold may be retained by the Senior Note Trustee until the
sale price is paid by the purchaser or purchasers thereof, but the Senior Note
Trustee shall not incur any liability in case any such purchaser or purchasers
shall fail to take up and pay for the Pledged Collateral so sold and, in case of
any such failure, such Pledged Collateral may be sold again upon like notice and
upon receipt of all applicable Approvals. As an alternative to exercising the
power of sale herein conferred upon it, the Senior Note Trustee may proceed by
suit or suits at law or in equity to exercise its remedies regarding the Pledged
Collateral and sell the Pledged Collateral or any portion thereof pursuant to
judgment or decree of a court or courts having competent jurisdiction. If under
mandatory requirements of applicable law, the Senior Note Trustee shall be
required to make disposition of the Pledged Collateral within a period of time
that does not permit the giving of notice to the Pledgor as herein before
provided, the Senior Note Trustee need give the Pledgor only such notice of
disposition as shall be reasonably practicable in view of such mandatory
requirements of law.
(d) Preventing Impairment of the Pledged Collateral. Regardless of whether
or not there shall have occurred any Event of Default, the Senior Note Trustee
may institute and maintain or cause in its name of the Pledgor or in the name to
be instituted and maintained, such suits and proceedings as the Senior Note
Trustee may be advised by counsel shall be necessary or expedient to prevent any
impairment of the security interest in or perfection of the Pledged Collateral
in contravention of the terms of the Senior Note Indenture. The Pledgor agrees
not to knowingly take or permit to be taken any action which would impair the
Pledged Collateral or the Senior Note Trustee's rights in the Pledged
Collateral.
Section 8. Senior Note Trustee Appointed Attorney-in-Fact. The Pledgor
hereby constitutes and appoints the Senior Note Trustee its attorney-in-fact,
during the occurrence and continuance of an Event of Default, for the purpose of
carrying out the provisions, but subject to the terms and conditions, of this
Pledge Agreement and taking any action and executing any instrument, including,
without limitation, any financing statement or continuation statement, and
taking any other action to maintain the validity, perfection, priority and
enforcement of the security interest intended to be created hereunder, that the
Senior Note Trustee may deem necessary or advisable to accomplish the purposes
hereof, which appointment is irrevocable and coupled
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with an interest; provided, however, that nothing herein contained shall be
construed as requiring or obligating the Senior Note Trustee to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment
received by it, or to present or file any claim or notice, or to take any action
with respect to the Pledged Collateral or any part thereof or the monies due or
to become due in respect thereof or any property covered thereby, and no action
taken or omitted or any part thereof shall give rise to any defense,
counterclaim or right of action against the Senior Note Trustee, unless the
Senior Note Trustee's actions are taken or omitted to be taken with gross
negligence or bad faith or constitute willful misconduct.
Section 9. Purchase of Pledged Collateral by Senior Note Trustee or
Holders. At any sale of the Pledged Collateral, whether pursuant to power of
sale or otherwise hereunder, Senior Note Trustee or any Holder may, to the
extent permitted by applicable law and subject to obtaining all applicable
Approvals, bid for and purchase, free from any right of redemption (all such
rights being hereby waived and released by the Pledgor to the extent permitted
by law), the Pledged Collateral or any part thereof or an interest therein and
upon compliance with the terms of such sale may hold, retain, exploit, resell or
otherwise dispose of such property without further accountability to the Pledgor
for the proceeds of such sale. The Pledgor will execute and deliver or cause to
be executed and delivered, such instruments, endorsements, assignments, waivers,
certificates and other documents and take such further action as the Senior Note
Trustee shall request in connection with any such sale.
Section 10. Payments and Proceeds.
In the event that the Senior Note Trustee ever receives any amounts
pursuant to this Pledge Agreement, or otherwise receives any amounts with
respect to the Pledged Collateral following the occurrence of an Event of
Default, such amounts shall first be applied to the reasonable costs and
expenses, including attorneys' fees, incurred by the Senior Note Trustee in
taking such action and thereafter shall be applied by the Senior Note Trustee as
provided in the Senior Note Indenture. After payment in full of all Indenture
Obligations, the remaining proceeds from any foreclosure hereunder shall be paid
to the Pledgor, or its successors or assigns, or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may direct,
any surplus then remaining from such Proceeds.
Section 11. Waiver of Claims. Except as otherwise provided in this Pledge
Agreement, THE PLEDGOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
NOTICE OF JUDICIAL HEARING IN CONNECTION WITH THE SENIOR NOTE TRUSTEE'S TAKING
POSSESSION OR THE SENIOR NOTE TRUSTEE'S DISPOSITION OF ANY OF THE PLEDGED
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICES AND
HEARINGS FOR ANY PREJUDGMENT REMEDY OR REMEDIES
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AND ANY SUCH RIGHT THAT THE PLEDGOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION
OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and, to the full extent
permitted by applicable law, the Pledgor hereby further waives:
(a) all damages occasioned by such taking of possession except any
damages which are the direct result of the Senior Note Trustee's gross
negligence, bad faith or willful misconduct;
(b) all other requirements as to the time, place and terms of sale or
other requirements, with respect to the enforcement of the Senior Note
Trustee's rights and powers hereunder; and
(c) except as provided in Section 7(c) hereof, all rights of
redemption, appraisement, valuation, stay, marshaling of assets, extension
or moratorium, existing at law or in equity, by statute or otherwise, now
or hereafter in force, in order to prevent or delay the enforcement of this
Pledge Agreement or the sale or other disposition of the Pledged Collateral
or any portion thereof, and the Pledgor, for itself and all who may claim
under it, insofar as it now or hereafter lawfully may, hereby waives all
such rights.
Any sale of, or the exercise of any options to purchase, or any other
realization upon, any Pledged Collateral shall operate to divest all right,
title, interest, claim and demand, at law or in equity, of the Pledgor therein
and thereto, and shall be a perpetual bar both at law and in equity against the
Pledgor and against any and all persons claiming or attempting to claim the
Pledged Collateral so sold, optioned or realized upon, or any part thereof,
through and under the Pledgor.
Section 12. Remedies Cumulative; No Waiver. Each right, power and remedy of
the Senior Note Trustee provided for herein or in another agreement pursuant to
which a Lien is created in favor of the Senior Note Trustee for the benefit of
any Holder, or now or hereafter existing at law or in equity, by statute or
otherwise, shall be cumulative and concurrent and shall be in addition to every
other right, power or remedy of the Senior Note Trustee or any Holder provided
for herein or in another agreement pursuant to which a Lien is created in favor
of the Senior Note Trustee for the benefit of any Holder or now or hereafter
existing at law or in equity, by statute or otherwise. No failure on the part of
the Senior Note Trustee or any Holder to exercise, and no delay in exercising,
any right, power or remedy hereunder, or in another agreement pursuant to which
a Lien is created in favor of the Senior Note Trustee for the benefit or any
Holder or now or hereafter existing at law or in equity, by statute or
otherwise, shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise
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thereof or the exercise of any other right, power or remedy. No notice to or
demand on the Pledgor hereunder shall, of itself, entitle the Pledgor to any
other or further notice or demand in the same, similar or other circumstances.
Section 13. Additional Collateral. Without notice or consent of any Pledgor
and without impairment of the security interests and rights created by this
Pledge Agreement, the Senior Note Trustee may accept from any person or persons
additional collateral or other security for the Indenture Obligations. Neither
the creation of the security interests created hereunder nor the acceptance of
any such additional collateral or security shall prevent the Senior Note Trustee
from resorting to such additional collateral or security or to the Pledged
Collateral, in any order without affecting the Senior Note Trustee's rights
hereunder.
Section 14. Further Assurances. The Pledgor agrees (i) that it shall, at
its own expense, promptly file or record such notices, financing statements,
continuation statements or other documents and take all further action as may be
necessary to perfect, maintain and protect the validity, perfection and priority
of the security interests of the Senior Note Trustee hereunder or to enable the
Senior Note Trustee to exercise and enforce its rights and remedies hereunder
with respect to the Pledged Collateral, and as the Senior Note Trustee may
reasonably request, such instruments to be in form and substance satisfactory to
the Senior Note Trustee, and (ii) that it shall, at its own expense, do such
further acts and things and execute and deliver to the Senior Note Trustee such
additional conveyances, assignments, agreements and instruments as the Senior
Note Trustee may at any time reasonably request in connection with the
administration and enforcement of this Pledge Agreement or relative to the
Pledged Collateral or any part thereof or in order to assure and confirm unto
the Senior Note Trustee its rights, powers and remedies hereunder.
The Pledgor agrees that it will notify the Senior Note Trustee in writing
not less than 30 days prior to any change in location and the creation of a new
location of (a) the principal place of business or chief executive office and
(b) the offices where the Pledgor's books and records and related information
concerning the Pledged Collateral are kept; provided, however, that no such
change may be effected before all filings required to be made and all other
necessary action to preserve the perfection of the first priority security
interest of the Senior Note Trustee in the Pledged Collateral shall have been
made or taken.
The Pledgor will not change its name, identity or structure in any manner
which might make any financing statement filed hereunder incorrect or misleading
unless Pledgor shall have given the Senior Note Trustee at least 30 days' prior
written notice thereof and shall have properly amended all financing
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statements and properly filed all additional financing statements necessary to
maintain the perfection of the security interest granted hereunder at all times
and shall have provided the Senior Note Trustee with an Officers' Certificate
certifying that the above steps have been taken.
Section 15. Indemnification. The Senior Note Trustee shall have such
indemnity as is provided under Section 8.7 of the Senior Note Indenture.
Section 16. Registration Rights, etc.
(a) If the Senior Note Trustee determines that the registration of any of
the securities included in the Pledged Collateral under, or other compliance
with, the Securities Act or any similar federal or state law is desirable, upon
or at any time after an Event of Default and acceleration of either issue of the
Notes, subject to any applicable Approvals, the Pledgor will use its best
efforts to cause such registration or compliance to be effectively made, at no
expense to the Senior Note Trustee or to the Holders, and to continue any such
registration effective for such time as may be reasonably necessary in the
opinion of the Senior Note Trustee. The Pledgor will reimburse the Senior Note
Trustee upon demand for any expenses incurred by the Senior Note
Trustee(including reasonable attorneys' fees) incurred in connection therewith,
which obligation to pay such expenses shall be secured hereunder.
(b) If the Pledgor is unable to effect a public sale of any or all of the
Pledged Collateral or if the Senior Note Trustee determines that it is desirable
to sell the Pledged Collateral in one or more private sales, subject to any
applicable Approvals, the Senior Note Trustee may limit such sales to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire such securities for its own account for investment and not with a
view to distribution or resale. The Pledgor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable to the
seller than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Senior Note Trustee shall be under
no obligation to delay a sale of any of the Pledged Collateral for the period of
time necessary to permit the issuer of such securities to register such
securities for public sale under the Securities Act or under applicable state
securities laws even if such issuer would agree to do so.
(c) The Pledgor further agrees to do or cause to be done all such other
acts and things as may be necessary to make such sale or sales of all or any
part of the Pledged Collateral valid and binding and in compliance with any and
all applicable law, rules, regulations, orders or decrees, all at the Pledgor's
expense. The Pledgor further agrees that a breach of
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<PAGE>
any of the covenants contained in this Pledge Agreement will cause irreparable
injury to the Senior Note Trustee, as secured party, for which the Senior Note
Trustee would have no adequate remedy at law in respect of such breach and, as a
consequence, agrees that each and every covenant contained in this Section 16
shall be specifically enforceable against the Pledgor and the Pledgor waives and
agrees not to assert any defenses against an action for specific performance of
such covenants.
Section 17. Pledgor's Indenture Obligations Absolute. The liability of the
Pledgor under this Pledge Agreement shall remain in full force and effect
without regard to, and shall not be released, suspended, discharged, terminated
or otherwise affected by (a) any change in the time, place or manner of payment
of all or any of the Indenture Obligations, or in any other term of the Senior
Note Indenture, the Senior Notes, any waiver, indulgence, renewal, extension,
amendment or modification of or addition, consent or supplement to or deletion
from or any other action or inaction under or in respect of the Senior Note
Indenture, the Senior Notes or any assignment or transfer thereof; (b) any lack
of validity or enforceability, in whole or in part, of the Senior Note Indenture
or the Senior Notes; (c) any furnishing of any additional security for the
Indenture Obligations or any acceptance thereof or any release or non-perfection
of any security interest in the Pledged Collateral; (d) any limitation on any
party's liability or obligations under the Senior Note Indenture or the Senior
Notes; (e) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to a Pledgor, or any
action taken with respect to this Pledge Agreement by any trustee or receiver,
or by any court, in any such proceeding, whether or not the Pledgor shall have
notice or knowledge of any of the foregoing; (f) any exchange, release or
amendment or waiver of or consent to departure from any agreement pursuant to
which a Lien is created in favor of the Senior Note Trustee for the benefit of
the Holders, pursuant to which a person other than the Pledgor has granted a
security interest; or (g) any other circumstance that might otherwise constitute
a defense available to, or a discharge of the Pledgor.
Section 18. Waiver. To the extent permitted by applicable law, the Pledgor
hereby waives promptness, diligence, notice of acceptance and any other notice
with respect to any of the Indenture Obligations and this Pledge Agreement and
any requirement that the Senior Note Trustee protect, secure, perfect or insure
any security interest or any property subject thereto or exhaust any right or
take any action against the Pledgor or any other person or entity; provided,
however, that the Senior Note Trustee shall in any event take such care in the
handling of any Pledged Securities in its possession as it takes with respect to
Property of a similar nature in its possession.
Section 19. Termination. Upon payment and performance in full and
satisfaction of all of the obligations of THCR
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<PAGE>
Holdings, THCR Funding or their successors or assigns under the Senior Note
Indenture and all other amounts payable under this Pledge Agreement, this Pledge
Agreement shall terminate and the Senior Note Trustee shall assign and redeliver
to the Pledgor all of the Pledged Collateral hereunder that has not been sold,
disposed of, retained or applied by the Senior Note Trustee in accordance with
the terms hereof. Such reassignment and redelivery shall be without warranty by
or recourse to the Senior Note Trustee, and shall be at the expense of the
Pledgor. At such time, this Pledge Agreement shall no longer constitute a Lien
upon or grant any security interest in any of the Pledged Collateral, and the
Senior Note Trustee shall, at the Pledgor's expense deliver to the Pledgor
written acknowledgment thereof and of cancellation of this Pledge Agreement in a
form reasonably requested by the Pledgor; provided, however, that this Pledge
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Indenture Obligations is rescinded or
must otherwise be returned upon the insolvency, bankruptcy or reorganization of
the Pledgor or its Subsidiary all as though such payment had not been made.
Section 20. Notices. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given if made
by hand delivery, by telex, by facsimile or registered or certified mail,
postage prepaid, return receipt requested, addressed as provided in Section 12.2
of the Senior Note Indenture.
Any party hereto may by notice to the other party designate such additional
or different addresses as shall be furnished in writing by such party. Any
notice or communication to any party shall be deemed to have been given or made
as of the date so delivered, if personally delivered; when answered back, if
telexed; when receipt is acknowledged, if faxed; and five calendar days after
mailing, if sent by registered or certified mail (except that a notice of change
of address shall not be deemed to have been given until actually received by the
addressee). The Pledgor may give notice to the Holders at the addresses set
forth for them in the register kept by the Registrar under the Senior Note
Indenture or may request that the Senior Note Trustee notify the Holders at such
addresses.
Section 21. Binding Agreement; Assignment. This Pledge Agreement shall be
binding upon and inure to the benefit the Senior Note Trustee, the Pledgor and
its respective successors and permitted assigns. Neither this Pledge Agreement
nor any interest herein or in the Pledged Collateral, or any part thereof, may
be assigned by the Pledgor without the prior written consent of the Senior Note
Trustee (which consent shall not be unreasonably withheld). This Pledge
Agreement shall be deemed to be automatically assigned by the Senior Note
Trustee to any person who succeeds such Senior Note Trustee in accordance with
Article VIII of the Senior Note Indenture, and its assignee shall
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<PAGE>
have all rights and powers of, and act as, such Senior Note Trustee hereunder.
Section 22. Governing Law. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.
Section 23. Amendments. This Pledge Agreement may not be amended or
modified, except with the consent of the Pledgor and the Senior Note Trustee in
accordance with Article X of the Senior Note Indenture.
Section 24. Severability. In the event that any provision contained in this
Pledge Agreement shall for any reason be held to be illegal or invalid under the
laws of any jurisdiction, such illegality or invalidity shall in no way impair
the effectiveness of any other provision hereof, or of such provision under the
laws of any other jurisdiction; provided, that in the construction and
enforcement of such provision under the laws of the jurisdiction in which such
holding of illegality or invalidity exists, and to the extent only of such
illegality or invalidity, this Pledge Agreement shall be construed and enforced
as though such illegal or invalid provision had not been contained herein.
Section 25. Headings. Section headings used herein are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Pledge Agreement.
Section 26. Counterparts. This Pledge Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original, and all of which shall together constitute but one and the same
instrument. A complete set of counterparts shall be lodged with the Senior Note
Trustee.
Section 27. Expenses. The Pledgor will upon demand pay to the Senior Note
Trustee the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, which the Senior
Note Trustee may incur in connection with (i) the administration of this Pledge
Agreement, (ii) the custody or presentation of, or the sale of, collection from,
or other realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Senior Note Trustee hereunder or (iv)
the failure by the Pledgor to perform or observe any of the provisions hereof.
Section 28. Gaming Laws. This Agreement is subject to any applicable Gaming
Law.
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Section 29. No Recourse Against Others. A direct or indirect partner,
director, officer, employee or stockholder, as such, past, present or future of
the Pledgor or any successor entity shall not have any personal liability in
respect of the obligations of the Pledgor under this Agreement by reason of its
status as such partner, stockholder, employee, officer or director, to the
extent such liabilities may be waived under applicable law.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to
be duly executed and delivered as of the day and year first written above.
TRUMP ATLANTIC CITY HOLDING, INC.
By: _________________________________
Name: Robert M. Pickus
Title: Assistant Secretary
FIRST BANK NATIONAL ASSOCIATION,
as Senior Note Trustee
By: ________________________________
Name:___________________________
Title:__________________________
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<PAGE>
SCHEDULE A
Pledged Securities
================================================================================
Class of Percentage
Stock/ Number of
Stock Equity Certificate Par of Outstanding
Issuer Interest No.(s) Value Shares Equity
- --------------------------------------------------------------------------------
Trump Atlantic general 106 None N/A 1%
City Associates partnership
interest
================================================================================
PLEDGE AGREEMENT
from
TRUMP ATLANTIC CITY CORPORATION
as Pledgor
to
FIRST BANK NATIONAL ASSOCIATION,
as Trustee
<PAGE>
PLEDGE AGREEMENT
PLEDGE AGREEMENT, together with any amendments, replacements and
supplements hereafter entered into (the "Pledge Agreement"), dated as of April
17, 1996, between Trump Atlantic City Corporation (together with its successors
and assigns, the "Pledgor") and First Bank National Association, as trustee (the
"Senior Note Trustee") under the indenture (as amended and supplemented, the
"Senior Note Indenture") relating to the 15 1/2% Senior Secured Notes due 2005
(the "Senior Notes") of Trump Hotels & Casino Resorts Holdings, L.P. ("THCR
Holdings") and Trump Hotels & Casino Resorts Funding, Inc. ("THCR Funding"), as
joint obligors, is made for the equal and ratable benefit of the holders of the
Senior Notes (the "Holders"). As used herein, all capitalized terms not
otherwise defined herein shall have the meanings set forth in the Senior Note
Indenture.
W I T N E S S E T H:
WHEREAS, THCR Holdings and THCR Funding have issued $155,000,000 aggregate
principal amount of Senior Notes pursuant to the Senior Note Indenture; and
WHEREAS, in order to secure on an equal and ratable basis the payment and
performance in full of the obligations to the Holders and the Senior Note
Trustee under the terms of the Senior Note Indenture (the "Indenture
Obligations"), the parties hereto desire to set forth their mutual understanding
and certain agreements regarding the terms and conditions of the pledge of the
Pledged Collateral (as defined below) made by the Pledgor to the Senior Note
Trustee for the benefit of the Holders.
NOW, THEREFORE, in consideration of the premises and other benefits to the
Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
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<PAGE>
Section 1. Pledge. As collateral security for the due and prompt payment in
full and complete performance of the Indenture Obligations and all indebtedness
and other liabilities and obligations, whether now existing or hereafter
arising, under, or arising out of, the Senior Note Indenture, the Pledgor hereby
pledges, assigns, transfers, sets over and delivers unto the Senior Note Trustee
and hereby grants unto the Senior Note Trustee for the benefit of the Holders
and unto their respective successors and assigns, a first priority security
interest in all of the right, title and interest of the Pledgor in, to and under
any and all of the following described property, rights and interests
(collectively, the "Pledged Collateral"):
(a) all of the issued and outstanding Equity Interests of the
Subsidiaries of the Pledgor identified on Schedule A attached hereto,
subject to obtaining the Approvals set forth in Section 2;
(b) all other Equity Interests, now or hereafter owned or acquired by
the Pledgor and wherever located, of the Subsidiaries directly owned by the
Pledgor (the "Pledged Subsidiaries") and the certificates representing such
securities, and any present or future options, warrants or other rights to
subscribe for or purchase any of the foregoing described in subsections
1(a) or 1(b) hereof or any notes, bonds, debentures or other evidences of
indebtedness that (i) are at any time convertible, exchangeable or
exercisable into Equity Interests of the Pledged Subsidiaries or (ii) have
or at any time could by their terms have voting rights with respect to any
matter affecting the Pledged Subsidiaries and all securities, certificates
and instruments representing or evidencing ownership of any of the
foregoing (the property described in subsections 1(a) and 1(b) hereof,
being referred to herein collectively as the "Pledged Securities");
(c) to the extent not included in the foregoing, all of Pledgor's
rights, claims or other general intangibles constituting, or arising out of
or relating to, its rights as a general partner, limited partner or
managing general partner of any Pledged Subsidiary, including without
limitation its share in the profits and losses of any such Pledged
Subsidiary and its right as such partner to receive distributions of the
Pledged Subsidiary's assets or income, in each case whether arising under a
partnership agreement or applicable law, created by operation of law, or
otherwise;
(d) to the extent not included in the foregoing, all rights, claims
and other general intangibles of such Pledged Subsidiary against any third
party, to the extent the same may be asserted or realized upon by Pledgor;
and
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<PAGE>
(e) all dividends, distributions, cash, instruments and other property
or securities (including without limitation any security as such term is
defined in Article 8 of the Uniform Commercial Code as in effect in the
applicable jurisdiction at such time (the "UCC")), now or hereafter at any
time or from time to time received or receivable or otherwise distributed
or distributable in respect of or in exchange for any or all of the Pledged
Collateral and all proceeds of the Pledged Collateral.
TO HAVE AND TO HOLD the Pledged Collateral, together with all rights, titles,
interests, powers, privileges and preferences pertaining or incidental thereto,
unto the Senior Note Trustee for the benefit of the Holders and unto their
respective successors and assigns.
Section 2. Gaming Approvals.
(a) No Pledged Securities shall be sold, assigned, transferred, pledged or
otherwise disposed of, whether pursuant to the Pledge Agreement or the exercise
of any right, power or remedy provided for herein or otherwise, unless the grant
of the security interest or such other disposition as the case may be, has
received in advance any necessary approvals (the "Approvals") by the gaming
authorities with jurisdiction over the issuer of such Pledged Securities (the
"Gaming Authorities"), and unless the transferee of such Pledged Securities
shall have first obtained any and all licenses, findings of suitability or
Approvals required by such Gaming Authorities, or shall have been found to be
individually qualified to be licensed, as appropriate. Without limiting the
generality of the foregoing, the Approval by such Gaming Authorities shall not
constitute permission to foreclose on the same or make any other disposition of
the Pledged Securities.
(b) The Senior Note Trustee agrees to comply with any order or directive of
applicable Gaming Authorities requiring such person or persons to submit an
application for any license, finding of suitability or other approval.
(c) The provisions of Section 2 of this Pledge Agreement shall not modify
or restrict the rights and remedies of the Senior Note Trustee under the Pledge
Agreement in any other Pledged Collateral except as provided in Section 2(a) or
(b); provided, the Senior Note Trustee acknowledges, understands and agrees that
certain Gaming Laws and the regulations thereunder may impose certain licensing
or transaction approval requirements prior to the exercise of such rights and
remedies under the Pledge Agreement with respect to the Pledged Securities and
other pledged collateral subject to such Gaming Laws and the regulations
thereunder.
(d) Notwithstanding any provision contained in this Pledge Agreement to the
contrary, if the granting of a
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<PAGE>
security interest in the capital stock of any Subsidiary shall conflict with any
Gaming Laws, the Senior Note Trustee agrees to (i) release such capital stock
from the pledge of this Pledge Agreement to the extent necessary to avoid such
conflict or violation, or (ii) take any other action, including filing for
applicable Approvals, sufficient to avoid such conflict or violation. The Senior
Note Trustee further acknowledges and agrees that, prior to exercising any
remedies set forth in the Pledge Agreement with respect to the Equity Interests
of any of the Subsidiaries subject to or affected by any Gaming Laws, the Senior
Note Trustee shall obtain any and all Approvals as may be required by applicable
Gaming Laws.
(e) If the consent of any Gaming Authority is required in connection with
any of the actions which may be taken by the Senior Note Trustee in the exercise
of its rights hereunder, then the Pledgor agrees to use its reasonable efforts
to secure such consent and to cooperate with the Senior Note Trustee in
obtaining any such consent. Upon the occurrence and during the continuation of
any Event of Default, Pledgor shall promptly execute and/or cause the execution
of all applications, certificates, instruments, and other documents and papers
that the Senior Note Trustee may be required to file in order to obtain any
necessary Gaming Authority approvals, and if Pledgor fails or refuses to execute
such documents, the clerk of the court with jurisdiction may execute such
documents on behalf of Pledgor.
Section 3. Representations, Warranties and Covenants of the Pledgor. The
Pledgor hereby represents and warrants, covenants and agrees that:
(a) The Pledgor is, and as to Pledged Collateral acquired by it from
time to time after the date hereof, will be, the sole legal and beneficial
owner of the Pledged Collateral, and holds, or will hold, the Pledged
Collateral free and clear of all Liens (except for the security interest
granted hereunder to the Senior Note Trustee for the benefit of Holders),
and has not made and will not make any other pledge, assignment, mortgage,
hypothecation or transfer of the Pledged Collateral. The Pledged Securities
are not subject to any put, call, option or other right in favor of any
other person whatsoever.
(b) The Pledged Securities which are shares of stock have been duly
authorized and validly issued and are fully paid and nonassessable.
(c) Except as set forth below, upon delivery of the certificates
evidencing the Pledged Securities to the Senior Note Trustee and so long as
the Senior Note Trustee maintains possession of such certificates pursuant
to this Pledge Agreement, the Senior Note Trustee will have a valid and
perfected first priority security interest in the Pledged Securities. In
the case of a Pledged Security which represents
4
<PAGE>
an interest in a partnership, upon filing of a UCC-1 financing statement in
the appropriate jurisdiction in connection with such interest, upon
delivery of the certificate evidencing such interest and so long as the
Senior Note Trustee maintains possession of such certificate, the Senior
Note Trustee will have a valid and perfected first priority security
interest in such Pledged Security, which together with the security
interest in the other Pledged Securities will secure the payment and
performance in full of the Indenture Obligations.
(d) The Pledgor has the valid right and legal authority to pledge the
Pledged Collateral in the manner hereby done or contemplated and will
defend its title thereto against the claims of all persons whomsoever and
shall maintain and preserve the security interest granted hereunder with
respect to the Pledged Collateral as long as this Pledge Agreement shall
remain in full force and effect.
(e) Neither the execution and delivery of this Pledge Agreement by the
Pledgor nor the consummation of the transactions herein contemplated nor
the fulfillment of the terms hereof (i) violate the Pledgor's, or any of
its Subsidiary's, charter or by-laws, (ii) violate the terms of any
agreement, indenture, mortgage, deed of trust, equipment lease, instrument
or other document to which the Pledgor, or any of its Subsidiaries, is a
party, or by which any of them may be bound or to which any of their
properties or assets may be subject, which violation or conflict would have
a material adverse effect on the financial condition, business, assets or
liabilities of the Pledgor and its Subsidiaries taken as a whole, or on the
value of the Pledged Collateral or a material adverse effect on the
security interests hereunder, or (iii) conflict with any law, order, rule
or regulation applicable to the Pledgor, or any of its Subsidiaries, of any
court or any government, regulatory body or administrative agency or other
governmental body having jurisdiction over the Pledgor, or any of its
Subsidiaries, or their Properties, or (iv) result in or require the
creation or imposition of any Lien (other than the Lien contemplated
hereby), upon or with respect to any of the property now owned or hereafter
acquired by the Pledgor, or any of its Subsidiaries, which violation or
conflict would have a material adverse effect on the financial condition,
business, assets or liabilities of the Pledgor and its Subsidiaries taken
as a whole, or on the value of the Pledged Collateral or a material adverse
effect on the security interests hereunder.
(f) The Pledged Securities, as described in Schedule A attached
hereto, include all of the issued and outstanding Equity Interests of the
Pledged Subsidiaries as of the date hereof, and all outstanding options,
warrants, calls, commitments of any character whatsoever or other rights to
subscribe for or purchase any property described in subsection 1(a) or any
notes, bonds, debentures or other evidences of indebtedness that (i) are at
any time convertible into Equity
5
<PAGE>
Interests of such Pledged Subsidiary or (ii) have or at any time could by
its terms have voting rights with respect to any matters affecting the
Pledged Subsidiary.
(g) Except for the Approvals referred to in Section 2, no consent or
approval which has not been obtained prior to the date hereof of any other
person or entity and no authorization, approval or other action by, and no
notice to or filing with any governmental body, regulatory authority or
securities exchange, was or is necessary as a condition to the validity of
the pledge hereunder of the Pledged Collateral, and subject to receipt of
all applicable Approvals with respect to the exercise of remedies by the
Senior Note Trustee hereunder, such pledge is effective to vest in the
Senior Note Trustee the rights of the Senior Note Trustee in the Pledged
Collateral as set forth herein.
(h) The Pledgor shall deliver to the Senior Note Trustee concurrently
with the execution of this Pledge Agreement: (i) all certificates and
instruments representing the Pledged Securities described in Schedule A,
and (ii) each other item of Pledged Collateral (including all certificates,
instruments, notes and writings representing or evidencing any such Pledged
Collateral) immediately upon the Pledgor's acquisition thereof, and in
addition, with respect to Pledged Securities, immediately upon receipt of
applicable Approvals. Any and all Pledged Securities delivered to the
Senior Note Trustee shall be accompanied by undated duly executed stock
powers in blank and by such other instruments of transfer or documents as
the Senior Note Trustee may reasonably request. Subject to the provisions
of Section 2, the Senior Note Trustee shall have the right (in its
discretion) to hold the certificates representing the Pledged Securities in
its own name or in the name of its nominee, all in form and substance
sufficient to make effective the pledge hereunder and otherwise
satisfactory to the Senior Note Trustee.
(i) Upon reasonable request to the Pledgor, the Senior Note Trustee
shall have full and free access during normal business hours to all of the
books, correspondence and records of the Pledgor relating to the Pledged
Collateral, and the Senior Note Trustee and its representatives may examine
the same, take extracts therefrom and make photocopies thereof, and the
Pledgor agrees to render to the Senior Note Trustee, at the Pledgor's cost
and expense, such clerical and other assistance as may be reasonably
requested by the Senior Note Trustee with regard thereto.
(j) The Pledgor will comply in all material respects with all
requirements of law applicable to the Pledged Collateral or any part
thereof and use its best efforts to obtain all Approvals as may be required
to effect any of the granting clauses of this Pledge Agreement.
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<PAGE>
(k) The Pledgor shall not permit any of the Pledged Subsidiaries to
issue any securities of the type required to be pledged hereunder unless
such securities are promptly pledged and delivered hereunder to the Senior
Note Trustee in accordance with Section 1(b).
(l) If, while this Pledge Agreement is in effect, any stock dividend,
stock split, reclassification, readjustment, reorganization, merger,
consolidation, exchange offer, tender offer or other change in the capital
structure, including the creation of any subscription or other rights or
other Pledged Securities, is declared or made, or proposed to be declared
or made, by any of the Pledged Subsidiaries or any other issuer of Pledged
Collateral, all substituted and additional securities or interest issued
with respect to the Pledged Collateral and evidenced by certificates shall,
subject to receipt of all applicable Approvals, be endorsed in blank by the
Pledgor promptly upon receipt thereof or otherwise appropriately
transferred to the Senior Note Trustee in negotiable form, and all
certificates or instruments evidencing such securities shall be delivered
to the Senior Note Trustee to be held under the terms of this Pledge
Agreement in the same manner as, and as a part of, the Pledged Collateral.
All Pledged Securities shall be evidenced by one or more certificates. Any
securities that may be issued upon exercise of any subscription or other
rights relating to the Pledged Securities shall, subject to receipt of all
applicable Approvals, be endorsed in blank and delivered to the Senior Note
Trustee with any necessary powers.
(m) The Pledgor shall pay and discharge all taxes, assessments and
governmental charges or levies against any Pledged Collateral prior to
delinquency thereof and shall keep all Pledged Collateral free of all
unpaid charges whatsoever, unless contested in good faith and appropriate
reserves have been set aside in accordance with GAAP.
(n) The Pledgor has, independently and without reliance on the Senior
Note Trustee and/or any Holder and based on such documents and information
as it deemed appropriate, made its own credit analysis and decision to
enter into this Pledge Agreement.
(o) In the event that the Senior Note Trustee desires to exercise any
remedies, voting or consensual rights or attorney-in-fact powers set forth
in this Pledge Agreement and determines it necessary to obtain any
Approvals therefor, then, upon the reasonable request of the Senior Note
Trustee, the Pledgor agrees to use its best efforts to assist and aid the
Senior Note Trustee to obtain as soon as practicable any necessary
Approvals for the exercise of any such remedies, rights and powers.
(p) The Pledgor has delivered to the Senior Note Trustee a duly
executed acknowledgment from the respective
7
<PAGE>
issuers of the Pledged Securities acknowledging the registration on its
books and records of the pledge of the Pledged Securities pursuant to this
Agreement.
(q) There are no voting trusts or other agreements or understandings
to which Pledgor is a party or by which it may be bound with respect to
voting, managerial consent, election or other rights of Pledgor relating to
the Pledged Securities.
(r) The principal place of business and chief executive office of
Pledgor and the office where Pledgor keeps its records concerning the
Pledged Collateral is 1000 The Boardwalk, Atlantic City, New Jersey 08401.
Section 4. Administration of the Pledged Collateral. Subject to the terms
of any applicable Approvals, the Senior Note Trustee shall administer the
Pledged Collateral in accordance with the provisions hereof and of the Senior
Note Indenture.
Section 5. Release and Substitution of Pledged Collateral. The Pledged
Collateral shall not be released from the security interest created hereunder
and no property shall be substituted for any of the Pledged Collateral, except
(i) in accordance with the provisions of Article IV of the Senior Note
Indenture, (ii) in the case of the release of Pledged Securities of Unrestricted
Subsidiaries designated as such in accordance with the provisions of the Senior
Note Indenture, all of which provisions are hereby incorporated herein by
reference, (iii) in accordance with the provisions of Sections 5 and 19 hereof,
and (iv) pursuant to any requirements of any order, decree, rule or judgment of
any Gaming Authority applicable to Pledgor or any of the Pledged Subsidiaries.
Section 6. Voting Rights, Dividends, Etc.
(a) So long as no Event of Default (as defined below) shall have occurred
and be continuing and notwithstanding any other section hereof:
(i) the Pledgor shall be entitled to exercise any and all voting or
consensual rights and powers, including subscription rights, accruing to an
owner of the Pledged Collateral or any part thereof for any purpose not
inconsistent with the terms of this Pledge Agreement or any agreement
giving rise to any of the Indenture Obligations;
(ii) the Pledgor shall be entitled to receive, retain and use any and
all dividends, distributions or other payments which are permitted by the
Senior Note Indenture and paid on the Pledged Collateral in cash or
property (other than securities which are subject to this Agreement);
8
<PAGE>
(iii) the Senior Note Trustee shall execute and deliver to the Pledgor
or cause to be executed and delivered to the Pledgor, all such proxies,
powers of attorney, dividend orders and other instruments as the Pledgor
may reasonably request for the purpose of enabling it to exercise the
voting or consensual rights and powers which the Pledgor is entitled to
exercise pursuant to the foregoing subparagraph (i) or to receive the
dividends, distributions or other payments which the Pledgor is authorized
to retain pursuant to the foregoing subparagraph (ii).
(b) Upon the occurrence of an Event of Default, but prior to the receipt of
all applicable Approvals by the Senior Note Trustee or the Holders, the Pledgor
shall be entitled to exercise the rights provided in Section 6(a)(i) hereof.
(c) Upon the occurrence and during the continuance of an Event of Default
and in the case of voting and consensual rights, upon receipt of all applicable
Approvals, all rights of the Pledgor to exercise the voting or consensual rights
and powers which the Pledgor would otherwise be entitled to exercise pursuant to
subparagraph (i) of Section 6(a) and Section 6(b) hereof and to receive the
dividends, distributions and other payments which the Pledgor would otherwise be
authorized to receive and retain pursuant to subsection (ii) of Section 6(a)
shall automatically cease, and all such rights shall thereupon become vested in
the Senior Note Trustee, which shall then have the sole and exclusive right and
authority to exercise all such voting and consensual rights and powers and to
receive and retain as Pledged Collateral all such dividends, distributions and
other payments. Any and all money and other property paid over to or received by
the Senior Note Trustee pursuant to the provisions of this Section 6(c) shall be
retained by the Senior Note Trustee as Pledged Collateral hereunder and shall be
administered and applied in accordance with the provisions of this Pledge
Agreement and the Senior Note Indenture. All dividends and interest payments
which are received by the Pledgor contrary to the provisions of this subsection
(c) shall be received in trust for the benefit of the Senior Note Trustee, shall
be segregated from other funds of the Pledgor and shall be forthwith paid over
to the Senior Note Trustee as Pledged Collateral in the same form as so received
(with any necessary endorsement).
9
<PAGE>
Section 7. Default; Remedies.
(a) Defined. For purposes of this Pledge Agreement, the term "Event of
Default" shall have the meaning provided in the Senior Note Indenture.
(b) Exercise of Remedies Under the Pledge Agreement. If an Event of Default
shall have occurred and be continuing, the Senior Note Trustee shall, subject to
obtaining all applicable Approvals, commence the taking of such actions (or
refrain from taking actions) toward collection or enforcement of this Pledge
Agreement and the Pledged Collateral (or any portion thereof), including without
limitation action toward foreclosure upon any Pledged Collateral, as it deems
appropriate in its sole discretion.
(c) Remedies Generally. If an Event of Default shall have occurred and be
continuing, the Senior Note Trustee itself or by its agents or attorneys may,
subject to obtaining all applicable Approvals, (i) exercise any or all of its
rights and remedies hereunder, under the Senior Note Indenture or any other
instrument or agreement securing, evidencing or relating to the Indenture
Obligations or under applicable laws (including all of the rights and remedies
of a secured creditor under the Uniform Commercial Code then in effect in the
State of New York; the "NUCC"), (ii) retain the Pledged Collateral or (iii)
sell, assign, transfer, or dispose of, endorse and deliver the whole or, from
time to time, any part of the Pledged Collateral at public or private sale or
sales, at any exchanges, brokers board or at any of the Senior Note Trustee's
offices or elsewhere, for cash, upon credit or for other property, for immediate
or future delivery, and for such price or prices and on such other terms that
the Senior Note Trustee may deem commercially reasonable (in its liability for
loss or damage). Upon consummation of any such sale, the Senior Note Trustee
shall have the right to assign, transfer, endorse and deliver to the purchaser
or purchasers thereof the Pledged Collateral so sold. Each such purchaser at any
such sale shall hold the property sold absolutely free from any claim or right
on the part of the Pledgor, and the Pledgor hereby waives (to the full extent
permitted by law) all rights of redemption, stay or appraisal which the Pledgor
now has or may at any time in the future have under any rule of law or statute
now existing or hereafter enacted. The Senior Note Trustee shall give the
Pledgor at least 10 Business Days' written notice (which the Pledgor agrees
shall be deemed to be reasonable notification within the meaning of Section
9-504(3) of the NUCC) of the Senior Note Trustee's intention to make any such
public or private sale. Any such sale shall be held at such time or times and at
such place or places as the Senior Note Trustee may deem commercially
reasonable. At any such sale, the Pledged Collateral, or portion thereof to be
sold, may be sold as an entirety or in separate portions, as the Senior Note
Trustee may deem commercially reasonable. The Senior Note Trustee shall not be
obligated to
10
<PAGE>
make any sale of the Pledged Collateral if it shall determine not to do so,
regardless of the fact that notice of sale of the Pledged Collateral may have
been given. The Senior Note Trustee may adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice, be made at the
time and place to which the same was so adjourned. In case sale of all or any
part of the Pledged Collateral is made on credit for future delivery, the
Pledged Collateral so sold may be retained by the Senior Note Trustee until the
sale price is paid by the purchaser or purchasers thereof, but the Senior Note
Trustee shall not incur any liability in case any such purchaser or purchasers
shall fail to take up and pay for the Pledged Collateral so sold and, in case of
any such failure, such Pledged Collateral may be sold again upon like notice and
upon receipt of all applicable Approvals. As an alternative to exercising the
power of sale herein conferred upon it, the Senior Note Trustee may proceed by
suit or suits at law or in equity to exercise its remedies regarding the Pledged
Collateral and sell the Pledged Collateral or any portion thereof pursuant to
judgment or decree of a court or courts having competent jurisdiction. If under
mandatory requirements of applicable law, the Senior Note Trustee shall be
required to make disposition of the Pledged Collateral within a period of time
that does not permit the giving of notice to the Pledgor as herein before
provided, the Senior Note Trustee need give the Pledgor only such notice of
disposition as shall be reasonably practicable in view of such mandatory
requirements of law.
(d) Preventing Impairment of the Pledged Collateral. Regardless of whether
or not there shall have occurred any Event of Default, the Senior Note Trustee
may institute and maintain or cause in its name of the Pledgor or in the name to
be instituted and maintained, such suits and proceedings as the Senior Note
Trustee may be advised by counsel shall be necessary or expedient to prevent any
impairment of the security interest in or perfection of the Pledged Collateral
in contravention of the terms of the Senior Note Indenture. The Pledgor agrees
not to knowingly take or permit to be taken any action which would impair the
Pledged Collateral or the Senior Note Trustee's rights in the Pledged
Collateral.
Section 8. Senior Note Trustee Appointed Attorney-in-Fact. The Pledgor
hereby constitutes and appoints the Senior Note Trustee its attorney-in-fact,
during the occurrence and continuance of an Event of Default, for the purpose of
carrying out the provisions, but subject to the terms and conditions, of this
Pledge Agreement and taking any action and executing any instrument, including,
without limitation, any financing statement or continuation statement, and
taking any other action to maintain the validity, perfection, priority and
enforcement of the security interest intended to be created hereunder, that the
Senior Note Trustee may deem necessary or advisable to accomplish the purposes
hereof, which appointment is irrevocable and coupled
11
<PAGE>
with an interest; provided, however, that nothing herein contained shall be
construed as requiring or obligating the Senior Note Trustee to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment
received by it, or to present or file any claim or notice, or to take any action
with respect to the Pledged Collateral or any part thereof or the monies due or
to become due in respect thereof or any property covered thereby, and no action
taken or omitted or any part thereof shall give rise to any defense,
counterclaim or right of action against the Senior Note Trustee, unless the
Senior Note Trustee's actions are taken or omitted to be taken with gross
negligence or bad faith or constitute willful misconduct.
Section 9. Purchase of Pledged Collateral by Senior Note Trustee or
Holders. At any sale of the Pledged Collateral, whether pursuant to power of
sale or otherwise hereunder, Senior Note Trustee or any Holder may, to the
extent permitted by applicable law and subject to obtaining all applicable
Approvals, bid for and purchase, free from any right of redemption (all such
rights being hereby waived and released by the Pledgor to the extent permitted
by law), the Pledged Collateral or any part thereof or an interest therein and
upon compliance with the terms of such sale may hold, retain, exploit, resell or
otherwise dispose of such property without further accountability to the Pledgor
for the proceeds of such sale. The Pledgor will execute and deliver or cause to
be executed and delivered, such instruments, endorsements, assignments, waivers,
certificates and other documents and take such further action as the Senior Note
Trustee shall request in connection with any such sale.
Section 10. Payments and Proceeds.
In the event that the Senior Note Trustee ever receives any amounts
pursuant to this Pledge Agreement, or otherwise receives any amounts with
respect to the Pledged Collateral following the occurrence of an Event of
Default, such amounts shall first be applied to the reasonable costs and
expenses, including attorneys' fees, incurred by the Senior Note Trustee in
taking such action and thereafter shall be applied by the Senior Note Trustee as
provided in the Senior Note Indenture. After payment in full of all Indenture
Obligations, the remaining proceeds from any foreclosure hereunder shall be paid
to the Pledgor, or its successors or assigns, or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may direct,
any surplus then remaining from such Proceeds.
Section 11. Waiver of Claims. Except as otherwise provided in this Pledge
Agreement, THE PLEDGOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
NOTICE OF JUDICIAL HEARING IN CONNECTION WITH THE SENIOR NOTE TRUSTEE'S TAKING
POSSESSION OR THE SENIOR NOTE TRUSTEE'S DISPOSITION OF ANY OF THE PLEDGED
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICES AND
HEARINGS FOR ANY PREJUDGMENT REMEDY OR REMEDIES
12
<PAGE>
AND ANY SUCH RIGHT THAT THE PLEDGOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION
OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and, to the full extent
permitted by applicable law, the Pledgor hereby further waives:
(a) all damages occasioned by such taking of possession except any
damages which are the direct result of the Senior Note Trustee's gross
negligence, bad faith or willful misconduct;
(b) all other requirements as to the time, place and terms of sale or
other requirements, with respect to the enforcement of the Senior Note
Trustee's rights and powers hereunder; and
(c) except as provided in Section 7(c) hereof, all rights of
redemption, appraisement, valuation, stay, marshaling of assets, extension
or moratorium, existing at law or in equity, by statute or otherwise, now
or hereafter in force, in order to prevent or delay the enforcement of this
Pledge Agreement or the sale or other disposition of the Pledged Collateral
or any portion thereof, and the Pledgor, for itself and all who may claim
under it, insofar as it now or hereafter lawfully may, hereby waives all
such rights.
Any sale of, or the exercise of any options to purchase, or any other
realization upon, any Pledged Collateral shall operate to divest all right,
title, interest, claim and demand, at law or in equity, of the Pledgor therein
and thereto, and shall be a perpetual bar both at law and in equity against the
Pledgor and against any and all persons claiming or attempting to claim the
Pledged Collateral so sold, optioned or realized upon, or any part thereof,
through and under the Pledgor.
Section 12. Remedies Cumulative; No Waiver. Each right, power and remedy of
the Senior Note Trustee provided for herein or in another agreement pursuant to
which a Lien is created in favor of the Senior Note Trustee for the benefit of
any Holder, or now or hereafter existing at law or in equity, by statute or
otherwise, shall be cumulative and concurrent and shall be in addition to every
other right, power or remedy of the Senior Note Trustee or any Holder provided
for herein or in another agreement pursuant to which a Lien is created in favor
of the Senior Note Trustee for the benefit of any Holder or now or hereafter
existing at law or in equity, by statute or otherwise. No failure on the part of
the Senior Note Trustee or any Holder to exercise, and no delay in exercising,
any right, power or remedy hereunder, or in another agreement pursuant to which
a Lien is created in favor of the Senior Note Trustee for the benefit or any
Holder or now or hereafter existing at law or in equity, by statute or
otherwise, shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise
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<PAGE>
thereof or the exercise of any other right, power or remedy. No notice to or
demand on the Pledgor hereunder shall, of itself, entitle the Pledgor to any
other or further notice or demand in the same, similar or other circumstances.
Section 13. Additional Collateral. Without notice or consent of any Pledgor
and without impairment of the security interests and rights created by this
Pledge Agreement, the Senior Note Trustee may accept from any person or persons
additional collateral or other security for the Indenture Obligations. Neither
the creation of the security interests created hereunder nor the acceptance of
any such additional collateral or security shall prevent the Senior Note Trustee
from resorting to such additional collateral or security or to the Pledged
Collateral, in any order without affecting the Senior Note Trustee's rights
hereunder.
Section 14. Further Assurances. The Pledgor agrees (i) that it shall, at
its own expense, promptly file or record such notices, financing statements,
continuation statements or other documents and take all further action as may be
necessary to perfect, maintain and protect the validity, perfection and priority
of the security interests of the Senior Note Trustee hereunder or to enable the
Senior Note Trustee to exercise and enforce its rights and remedies hereunder
with respect to the Pledged Collateral, and as the Senior Note Trustee may
reasonably request, such instruments to be in form and substance satisfactory to
the Senior Note Trustee, and (ii) that it shall, at its own expense, do such
further acts and things and execute and deliver to the Senior Note Trustee such
additional conveyances, assignments, agreements and instruments as the Senior
Note Trustee may at any time reasonably request in connection with the
administration and enforcement of this Pledge Agreement or relative to the
Pledged Collateral or any part thereof or in order to assure and confirm unto
the Senior Note Trustee its rights, powers and remedies hereunder.
The Pledgor agrees that it will notify the Senior Note Trustee in writing
not less than 30 days prior to any change in location and the creation of a new
location of (a) the principal place of business or chief executive office and
(b) the offices where the Pledgor's books and records and related information
concerning the Pledged Collateral are kept; provided, however, that no such
change may be effected before all filings required to be made and all other
necessary action to preserve the perfection of the first priority security
interest of the Senior Note Trustee in the Pledged Collateral shall have been
made or taken.
The Pledgor will not change its name, identity or structure in any manner
which might make any financing statement filed hereunder incorrect or misleading
unless Pledgor shall have given the Senior Note Trustee at least 30 days' prior
written notice thereof and shall have properly amended all financing
14
<PAGE>
statements and properly filed all additional financing statements necessary to
maintain the perfection of the security interest granted hereunder at all times
and shall have provided the Senior Note Trustee with an Officers' Certificate
certifying that the above steps have been taken.
Section 15. Indemnification. The Senior Note Trustee shall have such
indemnity as is provided under Section 8.7 of the Senior Note Indenture.
Section 16. Registration Rights, etc.
(a) If the Senior Note Trustee determines that the registration of any of
the securities included in the Pledged Collateral under, or other compliance
with, the Securities Act or any similar federal or state law is desirable, upon
or at any time after an Event of Default and acceleration of either issue of the
Notes, subject to any applicable Approvals, the Pledgor will use its best
efforts to cause such registration or compliance to be effectively made, at no
expense to the Senior Note Trustee or to the Holders, and to continue any such
registration effective for such time as may be reasonably necessary in the
opinion of the Senior Note Trustee. The Pledgor will reimburse the Senior Note
Trustee upon demand for any expenses incurred by the Senior Note
Trustee(including reasonable attorneys' fees) incurred in connection therewith,
which obligation to pay such expenses shall be secured hereunder.
(b) If the Pledgor is unable to effect a public sale of any or all of the
Pledged Collateral or if the Senior Note Trustee determines that it is desirable
to sell the Pledged Collateral in one or more private sales, subject to any
applicable Approvals, the Senior Note Trustee may limit such sales to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire such securities for its own account for investment and not with a
view to distribution or resale. The Pledgor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable to the
seller than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Senior Note Trustee shall be under
no obligation to delay a sale of any of the Pledged Collateral for the period of
time necessary to permit the issuer of such securities to register such
securities for public sale under the Securities Act or under applicable state
securities laws even if such issuer would agree to do so.
(c) The Pledgor further agrees to do or cause to be done all such other
acts and things as may be necessary to make such sale or sales of all or any
part of the Pledged Collateral valid and binding and in compliance with any and
all applicable law, rules, regulations, orders or decrees, all at the Pledgor's
expense. The Pledgor further agrees that a breach of
15
<PAGE>
any of the covenants contained in this Pledge Agreement will cause irreparable
injury to the Senior Note Trustee, as secured party, for which the Senior Note
Trustee would have no adequate remedy at law in respect of such breach and, as a
consequence, agrees that each and every covenant contained in this Section 16
shall be specifically enforceable against the Pledgor and the Pledgor waives and
agrees not to assert any defenses against an action for specific performance of
such covenants.
Section 17. Pledgor's Indenture Obligations Absolute. The liability of the
Pledgor under this Pledge Agreement shall remain in full force and effect
without regard to, and shall not be released, suspended, discharged, terminated
or otherwise affected by (a) any change in the time, place or manner of payment
of all or any of the Indenture Obligations, or in any other term of the Senior
Note Indenture, the Senior Notes, any waiver, indulgence, renewal, extension,
amendment or modification of or addition, consent or supplement to or deletion
from or any other action or inaction under or in respect of the Senior Note
Indenture, the Senior Notes or any assignment or transfer thereof; (b) any lack
of validity or enforceability, in whole or in part, of the Senior Note Indenture
or the Senior Notes; (c) any furnishing of any additional security for the
Indenture Obligations or any acceptance thereof or any release or non-perfection
of any security interest in the Pledged Collateral; (d) any limitation on any
party's liability or obligations under the Senior Note Indenture or the Senior
Notes; (e) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to a Pledgor, or any
action taken with respect to this Pledge Agreement by any trustee or receiver,
or by any court, in any such proceeding, whether or not the Pledgor shall have
notice or knowledge of any of the foregoing; (f) any exchange, release or
amendment or waiver of or consent to departure from any agreement pursuant to
which a Lien is created in favor of the Senior Note Trustee for the benefit of
the Holders, pursuant to which a person other than the Pledgor has granted a
security interest; or (g) any other circumstance that might otherwise constitute
a defense available to, or a discharge of the Pledgor.
Section 18. Waiver. To the extent permitted by applicable law, the Pledgor
hereby waives promptness, diligence, notice of acceptance and any other notice
with respect to any of the Indenture Obligations and this Pledge Agreement and
any requirement that the Senior Note Trustee protect, secure, perfect or insure
any security interest or any property subject thereto or exhaust any right or
take any action against the Pledgor or any other person or entity; provided,
however, that the Senior Note Trustee shall in any event take such care in the
handling of any Pledged Securities in its possession as it takes with respect to
Property of a similar nature in its possession.
Section 19. Termination. Upon payment and performance in full and
satisfaction of all of the obligations of THCR
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<PAGE>
Holdings, THCR Funding or their successors or assigns under the Senior Note
Indenture and all other amounts payable under this Pledge Agreement, this Pledge
Agreement shall terminate and the Senior Note Trustee shall assign and redeliver
to the Pledgor all of the Pledged Collateral hereunder that has not been sold,
disposed of, retained or applied by the Senior Note Trustee in accordance with
the terms hereof. Such reassignment and redelivery shall be without warranty by
or recourse to the Senior Note Trustee, and shall be at the expense of the
Pledgor. At such time, this Pledge Agreement shall no longer constitute a Lien
upon or grant any security interest in any of the Pledged Collateral, and the
Senior Note Trustee shall, at the Pledgor's expense deliver to the Pledgor
written acknowledgment thereof and of cancellation of this Pledge Agreement in a
form reasonably requested by the Pledgor; provided, however, that this Pledge
Agreement shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Indenture Obligations is rescinded or
must otherwise be returned upon the insolvency, bankruptcy or reorganization of
the Pledgor or any of its Subsidiaries all as though such payment had not been
made.
Section 20. Notices. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given if made
by hand delivery, by telex, by facsimile or registered or certified mail,
postage prepaid, return receipt requested, addressed as provided in Section 12.2
of the Senior Note Indenture.
Any party hereto may by notice to the other party designate such additional
or different addresses as shall be furnished in writing by such party. Any
notice or communication to any party shall be deemed to have been given or made
as of the date so delivered, if personally delivered; when answered back, if
telexed; when receipt is acknowledged, if faxed; and five calendar days after
mailing, if sent by registered or certified mail (except that a notice of change
of address shall not be deemed to have been given until actually received by the
addressee). The Pledgor may give notice to the Holders at the addresses set
forth for them in the register kept by the Registrar under the Senior Note
Indenture or may request that the Senior Note Trustee notify the Holders at such
addresses.
Section 21. Binding Agreement; Assignment. This Pledge Agreement shall be
binding upon and inure to the benefit the Senior Note Trustee, the Pledgor and
its respective successors and permitted assigns. Neither this Pledge Agreement
nor any interest herein or in the Pledged Collateral, or any part thereof, may
be assigned by the Pledgor without the prior written consent of the Senior Note
Trustee (which consent shall not be unreasonably withheld). This Pledge
Agreement shall be deemed to be automatically assigned by the Senior Note
Trustee to any person who succeeds such Senior Note Trustee in accordance with
Article VIII of the Senior Note Indenture, and its assignee shall
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have all rights and powers of, and act as, such Senior Note Trustee hereunder.
Section 22. Governing Law. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.
Section 23. Amendments. This Pledge Agreement may not be amended or
modified, except with the consent of the Pledgor and the Senior Note Trustee in
accordance with Article X of the Senior Note Indenture.
Section 24. Severability. In the event that any provision contained in this
Pledge Agreement shall for any reason be held to be illegal or invalid under the
laws of any jurisdiction, such illegality or invalidity shall in no way impair
the effectiveness of any other provision hereof, or of such provision under the
laws of any other jurisdiction; provided, that in the construction and
enforcement of such provision under the laws of the jurisdiction in which such
holding of illegality or invalidity exists, and to the extent only of such
illegality or invalidity, this Pledge Agreement shall be construed and enforced
as though such illegal or invalid provision had not been contained herein.
Section 25. Headings. Section headings used herein are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Pledge Agreement.
Section 26. Counterparts. This Pledge Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original, and all of which shall together constitute but one and the same
instrument. A complete set of counterparts shall be lodged with the Senior Note
Trustee.
Section 27. Expenses. The Pledgor will upon demand pay to the Senior Note
Trustee the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, which the Senior
Note Trustee may incur in connection with (i) the administration of this Pledge
Agreement, (ii) the custody or presentation of, or the sale of, collection from,
or other realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Senior Note Trustee hereunder or (iv)
the failure by the Pledgor to perform or observe any of the provisions hereof.
Section 28. Gaming Laws. This Agreement is subject to any applicable Gaming
Law.
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<PAGE>
Section 29. No Recourse Against Others. A direct or indirect partner,
director, officer, employee or stockholder, as such, past, present or future of
the Pledgor or any successor entity shall not have any personal liability in
respect of the obligations of the Pledgor under this Agreement by reason of its
status as such partner, stockholder, employee, officer or director, to the
extent such liabilities may be waived under applicable law.
19
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to
be duly executed and delivered as of the day and year first written above.
TRUMP ATLANTIC CITY CORPORATION
By: _________________________________
Name: Nicholas F. Moles
Title: Senior Vice President
FIRST BANK NATIONAL ASSOCIATION,
as Senior Note Trustee
By: ________________________________
Name:___________________________
Title:__________________________
20
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SCHEDULE A
Pledged Securities
================================================================================
Class of Percentage
Stock/ Number of
Stock Equity Certificate Par of Outstanding
Issuer Interest No.(s) Value Shares Equity
- --------------------------------------------------------------------------------
Trump Plaza general 11 None N/A 1%
Associates partnership
interest
- --------------------------------------------------------------------------------
Trump Taj general 7 None N/A 1%
Mahal partnership
Associates interest
================================================================================
TRUMP ATLANTIC CITY ASSOCIATES
TRUMP ATLANTIC CITY FUNDING, INC.
Issuers
TRUMP PLAZA ASSOCIATES
TRUMP TAJ MAHAL ASSOCIATES
TRUMP ATLANTIC CITY CORPORATION
Guarantors
and
FIRST BANK NATIONAL ASSOCIATION
Trustee
----------------
INDENTURE
Dated as of April 17, 1996
----------------
$1,200,000,000 11 1/4% First Mortgage Notes due 2006
<PAGE>
CROSS-REFERENCE TABLE
TIA
Indenture
Section Section
- ------- -------
310(a)(1).......................................................... 8.10
(a)(2).......................................................... 8.10
(a)(3).......................................................... N.A.
(a)(4).......................................................... N.A.
(a)(5).......................................................... 8.10
(b) .......................................................... 8.8;
8.10;
12.2
(c) .......................................................... N.A.
311(a) .......................................................... 8.11
(b) .......................................................... 8.11
(c) .......................................................... N.A.
312(a) .......................................................... 2.5
(b) .......................................................... 12.3
(c) .......................................................... 12.3
313(a) .......................................................... 8.6
(b) .......................................................... 8.6.
(c) .......................................................... 8.6;
12.2
(d) .......................................................... 8.6
314(a) .......................................................... 5.7;
5.8;
12.2
(b) .......................................................... 4.2
(c)(1).......................................................... 2.2;
8.2;
12.4;
12.5
(c)(2).......................................................... 8.2;
12.4;
12.5
(c)(3).......................................................... 4.1(c)
4.2
(d) .......................................................... 4.1(c)
4.4
(e) .......................................................... 12.5
(f) .......................................................... N.A.
<PAGE>
315(a) .......................................................... 8.1(b)
(b) .......................................................... 8.5
(c) .......................................................... 8.1(a)
(d) .......................................................... 2.9;
7.11;
8.1(c)
(e) .......................................................... 7.13
316(a)(last sentence).............................................. 2.9
(a)(1)(A) ...................................................... 7.11
(a)(1)(B) ...................................................... 7.12
(a)(2).......................................................... N.A.
(b) .......................................................... 7.7;
7.12;
10.2
317(a)(1).......................................................... 7.3
(a)(2).......................................................... 7.4
(b) .......................................................... 2.4
318(a) .......................................................... 12.1
- ----------
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
- --------------------------------------------------------------------------------
DEFINITIONS AND INCORPORATION BY REFERENCE............................... 9
Definitions
SECTION 1.2 Incorporation by Reference of TIA
SECTION 1.3 Rules of Construction
THE SECURITIES........................................................... 41
Form and Dating.
Execution and Authentication.
Registrar and Paying Agent.
Paying Agent to Hold Assets in Trust.
Securityholder Lists.
Transfer and Exchange.
Replacement Securities.
Outstanding Securities.
Treasury Securities.
Temporary Securities.
Cancellation.
Defaulted Interest.
REDEMPTION................................................................ 47
Right of Redemption.
Redemption Pursuant to Applicable Laws
Notices to Trustee.
Selection of Securities to Be Redeemed
Notice of Redemption
Effect of Notice of Redemption
Deposit of Redemption Price
Securities Redeemed in Part
SECURITY 50
Security Interest
Recording; Opinions of Counsel
Disposition of Certain Collateral
Certain Releases of Collateral
Payment of Expenses
Suits to Protect the Collateral
Trustee's Duties
Restricted Funds Account
COVENANTS................................................................. 58
Payment of Securities
Maintenance of Office or Agency
Limitation on Restricted Payments
Corporate and Partnership Existence
Payment of Taxes and Other Claims
Maintenance of Insurance
Compliance Certificate; Notice of Default
Provision of Financial Statements
Waiver of Stay, Extension or Usury Laws
Limitation on Transactions with Affiliates
Limitation on Incurrence of Additional Indebtedness
Restriction on Sale and Issuance of Subsidiary Stock
Limitation on Dividends and Other Payment Restrictions Affecting Subsidiaries
Limitation on Liens
<PAGE>
Limitation on Sales of Assets and Subsidiary Stock; Event of Loss
Future Subsidiary Guarantors
Limitation on Activities of Funding
Limitation on Lines of Business
Restriction on Certain Agreements
Limitation on Leases
Limitation on Status as Investment Company.
Future Collateral Agreements.
SUCCESSORS................................................................. 76
Limitation on Merger, Sale or Consolidation
Successor Substituted
EVENTS OF DEFAULT AND REMEDIES............................................ 77
Events of Default
Acceleration of Maturity Date; Rescission and Annulment
Collection of Indebtedness and Suits for Enforcement by Trustee
Trustee May File Proofs of Claim
Trustee May Enforce Claims Without Possession of Securities
Priorities
Limitation on Suits
Unconditional Right of Holders to Receive Principal, Premium and Interest
Rights and Remedies Cumulative
Delay or Omission Not Waiver
Control by Holders
Waiver of Past Default
Undertaking for Costs
Restoration of Rights and Remedies
TRUSTEE................................................................... 88
Duties of Trustee
Rights of Trustee
Individual Rights of Trustee
Trustee's Disclaimer
Notice of Default
Reports by Trustee to Holders
Compensation and Indemnity
Replacement of Trustee
Successor Trustee by Merger, Etc.
Eligibility; Disqualification
Preferential Collection of Claims against Issuers
LEGAL DEFEASANCE AND COVENANT DEFEASANCE;................................. 95
Option to Effect Legal Defeasance or Covenant Defeasance.
Legal Defeasance and Discharge.
Covenant Defeasance.
Conditions to Legal or Covenant Defeasance.
Deposited U.S. Legal Tender and U.S. Government Obligations to
Be Held in Trust; Other Miscellaneous Provisions.
Repayment to Issuers.
Reinstatement.
Satisfaction and Discharge of Indenture
AMENDMENTS, SUPPLEMENTS AND WAIVERS....................................... 100
Supplemental Indentures Without Consent of Holders
<PAGE>
Amendments, Supplemental Indentures and Waivers with Consent of Holders
Compliance with TIA
Revocation and Effect of Consents
Notation on or Exchange of Securities
Trustee to Sign Amendments, Etc.
RIGHT TO REQUIRE REPURCHASE............................................... 104
Repurchase of Securities at Option of the Holder Upon Change of Control
MISCELLANEOUS............................................................. 107
TIA Controls
Notices
Communications by Holders with Other Holders
Certificate and Opinion as to Conditions Precedent
Statements Required in Certificate or Opinion
Rules by Trustee, Paying Agent, Registrar
Legal Holidays
Governing Law
No Interpretation of Other Agreements
No Recourse against Others
Successors
Duplicate Originals
Severability
Table of Contents, Headings, Etc.
Gaming Laws
GUARANTY.................................................................. 112
Guaranty
Execution and Delivery of Guaranty
Certain Bankruptcy Events
Rights Under the Guaranty
Severability
Merger or Consolidation of Guarantors
<PAGE>
EXHIBITS
Exhibit A Form of First Mortgage Note due 2006................. A-1
Exhibit B Form of Guaranty..................................... B-1
Exhibit C Form of Assignments of Leases and Rents.............. C-1
Exhibit D Forms of Mortgage and Security Agreement............. D-1
Exhibit E Form of Security Agreement........................... E-1
Exhibit F Form of Trademark Security Agreement................. F-1
Exhibit G Form of Collateral Agency Agreement.................. G-1
<PAGE>
INDENTURE, dated as of April 17, 1996, between Trump Atlantic City
Associates, a New Jersey partnership (the "Company"), Trump Atlantic City
Funding, Inc., a Delaware corporation and a wholly owned subsidiary of the
Company ("Funding" and, together with the Company, the "Issuers"), as joint and
several obligors; Trump Plaza Associates, a New Jersey partnership ("Plaza
Associates"), and Trump Taj Mahal Associates, a New Jersey partnership ("Taj
Associates"), Trump Atlantic City Corporation (formerly "The Trump Taj Mahal
Corporation") , a Delaware corporation ("TACC" and, together with Taj Associates
and Plaza Associates and such other persons as may be required from time to time
to execute a Guaranty hereunder, the "Guarantors"); and First Bank National
Association, a national banking association, as Trustee.
Each party hereto agrees as follows for the benefit of each other party and
for the equal and ratable benefit of the Holders of the 11 1/4% First Mortgage
Notes due 2006 being issued by the Issuers and guaranteed by the Guarantors.
<PAGE>
DEFINITIONS AND INCORPORATION BY REFERENCE
Definitions.
"Acceleration Notice" shall have the meaning specified in Section 7.2.
"Acceptance Amount" shall have the meaning specified in Section 5.15.
"Acquired Indebtedness" means Indebtedness or Disqualified Capital Stock of
any Person (a) existing at the time such Person becomes a Subsidiary of the
Company, including by designation, or is merged or consolidated into or with the
Company or one of its Subsidiaries or (b) assumed in connection with the
Acquisition of assets from such Person, in each case, other than Indebtedness
incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary or such acquisition, consolidation or merger. Indebtedness shall be
deemed to be incurred on the date of the related acquisition of assets from any
Person or the date the acquired Person becomes a Subsidiary, including by
designation, or the date of such merger or consolidation, as applicable.
"Acquisition" means the purchase or other acquisition of any Person or
substantially all the assets of any Person by any other Person, whether by
purchase, merger, consolidation, or other transfer, and whether or not for
consideration.
"Affiliate" means, with respect to any specified Person, (a) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (b) any other Person that
owns, directly or indirectly, 5% or more of such Person's Equity Interests or
any officer or director of any such Person or other person or with respect to
any natural Person, any person having a relationship with such Person by blood,
marriage or adoption not more remote than first cousin. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person directly or
indirectly, whether through ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Affiliated Ground Leases" means the TSA Lease and SFA Lease.
"After Acquired Property" shall have the meaning specified in Section 5.22.
<PAGE>
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Approvals" means all approvals, licenses (including Gaming Licenses),
permits, authorizations, findings and other filings necessary under applicable
gaming laws.
"Asset Sale" shall have the meaning specified in Section 5.15.
"Asset Sale Offer" shall have the meaning specified in Section 5.15.
"Asset Sale Offer Amount" shall have the meaning specified in Section 5.15.
"Asset Sale Offer Period" shall have the meaning specified in Section 5.15.
"Asset Sale Offer Price" shall have the meaning specified in Section 5.15.
"Asset Sale Purchase Date" shall have the meaning specified in Section
5.15.
"Asset Sale Put Date" shall have the meaning specified in Section 5.15.
"Assignments of Leases and Rents" means collectively, those assignments of
Leases and Rents dated the date hereof between each of Plaza Associates and Taj
Associates, respectively, and the Collateral Agent, as the same may be amended
from time to time in accordance with their terms and, to the extent applicable,
the terms of this Indenture.
"Authorized Representative" of any person shall mean (i) in the case of the
Company, (x) any person or persons that has or have been designated by the Board
of Directors of Trump Atlantic City Holding, Inc. ("Trump AC Holding"), as
general partner of the Company, to be an "Authorized Representative" under this
Indenture or (y) any member of the Board of Directors of Trump AC Holding; (ii)
in the case of Funding, any Authorized Representative of the Company (with
Funding, by its execution and delivery of this Indenture, irrevocably appointing
the Authorized Representatives from time to time of the Company as its
Authorized Representatives hereunder); and (iii) in the case of any Guarantor or
other obligor, any Officer of such party or, if such person has no Officers, any
person or persons that have been designated by the Board of Directors of Trump
AC Holding to be an "Authorized Representative" of such person under this
Indenture.
"Average Life" means, as of the date of determination, with respect to any
security or instrument, the quotient obtained by dividing (i) the sum of (a) the
product of the number of years
<PAGE>
from the date of determination to the date or dates of each successive scheduled
principal (or redemption) payment of such security or instrument and (b) the
amount of each such respective principal (or redemption) payment by (ii) the sum
of all such principal (or redemption) payments.
"Bankruptcy Law" means Title 11, United States Code, as amended, or any
similar United States federal or state law relating to bankruptcy, insolvency,
receivership, winding-up, liquidation, reorganization or relief of debtors or
any amendment to, succession to or change in any such law.
"Beneficial Owner" or "beneficial owner" for purposes of the definition of
Change of Control has the meaning attributed to it in Rules 13d-3 and 13d-5
under the Exchange Act (as in effect on the Issue Date), whether or not
applicable, except that a "person" shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such person or any committee of the Board of Directors of such
Person authorized, with respect to any particular matter, to exercise the power
of the Board of Directors of such Person.
"Board Resolution" means, with respect to any Person, a duly adopted
resolution of the Board of Directors of such Person.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
"Capital Contribution" shall mean, with respect to any Person, that amount
of money or the Fair Market Value of any Property (net of liabilities to which
such Property is subject) irrevocably and unconditionally contributed to such
Person in exchange for Qualified Equity Interests of such Person; provided,
however, that such term shall not include any such contribution of funds
obtained from the proceeds of the equity offering by THCR prior to or
substantially concurrent with the issuance of the Securities (including proceeds
from any exercise of the underwriters' overallotment option) except for such
contributions of proceeds therefrom in excess of the sum of $270 million, less
amounts received therefrom by Trump AC from the sale of its Qualified Equity
Interests to THCR Holdings.
"Capitalized Lease Obligation" of any Person means any obligation of such
Person or its Subsidiaries on a Consolidated basis under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP, and the amount of Indebtedness represented by such obligation shall be
<PAGE>
the capitalized amount of such obligations, as determined in accordance with
GAAP.
"Capital Stock" means, with respect to any corporation, any and all shares,
interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
"Cash Collateral" means Collateral in the form of U.S. Legal Tender to be
deposited in the Restricted Funds Account.
"Cash Equivalent" means (a) any evidence of Indebtedness, maturing not more
than one year after the date of acquisition, issued by the United States of
America, or an instrumentality or agency thereof and guaranteed fully as to
principal, premium, if any, and interest by the United States of America, (b)
any certificate of deposit, maturing not more than one year after the date of
acquisition, issued by, or time deposit of, a commercial banking institution
that is a member of the Federal Reserve System and that has combined capital and
surplus and undivided profits of not less than $300.0 million and whose debt has
a rating, at the time as of which any investment therein is made, of "P-1" (or
higher) according to Moody's Investors Service, Inc. or any successor rating
agency, or "A-1" (or higher) according to Standard & Poor's Ratings Service, a
division of McGraw-Hill, Inc., or any successor rating agency, (c) commercial
paper, maturing not more than one year after the date of acquisition, issued by
a corporation (other than an Affiliate or Subsidiary of the Company) organized
and existing under the laws of the United States of America with a rating, at
the time as of which any investment therein is made, of "P-1" (or higher)
according to Moody's Investors Service, Inc. or any successor rating agency, or
"A-1" (or higher) according to Standard & Poor's Ratings Service, a division of
McGraw-Hill, Inc., or any successor rating agency and (d) any money market
deposit accounts issued or offered by a domestic commercial bank having capital
and surplus in excess of $300.0 million.
"Casino Control Act" shall mean the New Jersey Casino Control Act.
"Casino Hotels" means collectively (i) the casino and hotel complex
currently known as the "Trump Plaza Hotel and Casino" in Atlantic City, New
Jersey and ancillary structures and facilities located on the premises and all
furniture, fixtures and equipment at any time contained therein in each case
owned by or leased to
<PAGE>
Plaza Associates which are covered by the Lien of the Mortgage Documents and
(ii) the casino and hotel complex currently known as the "Trump Taj Mahal Casino
Resort" in Atlantic City, New Jersey and ancillary structures and facilities
located on the premises and all furniture, fixtures and equipment at any time
contained therein in each case owned by or leased to Taj Associates which are
covered by the Lien of the Mortgage Documents.
"Casino Sale" shall have the meaning specified in Section 5.15 hereof.
"Change of Control" means any of the following events:
(i) THCR Holdings ceases to be the "beneficial owner," directly or
indirectly, of 100% of the Equity Interests of the Company;
(ii) any sale, transfer or other conveyance, whether direct or
indirect, of all or substantially all of the assets of THCR Holdings or
THCR, on a Consolidated basis, in one transaction or a series of related
transactions, if, immediately after giving effect to such transaction, any
"person" or "group" (as such terms are used for purposes of Sections 13(d)
and 14(d) of the Exchange Act, whether or not applicable), other than the
Permitted Holder, or if applicable in the case of THCR Holdings, THCR,
becomes the "beneficial owner" (as defined), directly or indirectly, of
more than 35% of the total voting power of the Voting Stock of the
transferee unless the Permitted Holder "beneficially owns" (as so defined),
directly or indirectly, in the aggregate a greater percentage of the total
voting power of the Voting Stock of the transferee than such other person
or group and has the right or ability by voting power, contract or
otherwise to elect or designate a majority of the Board of Directors of
THCR;
(iii) any "person" or "group" (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable),
other than the Permitted Holder, is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of more than 35% of the total voting power of the Voting Stock
of THCR, or any successor thereto by merger, consolidation or otherwise,
unless the Permitted Holder "beneficially owns" (as so defined), directly
or indirectly, in the aggregate a greater percentage of the total voting
power of the Voting Stock of THCR than such other person or group and has
the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board of Directors of THCR (for
purposes of this definition, such other person shall be deemed to
beneficially own any Voting Stock of a specified corporation held by a
parent corporation, if such other person "beneficially owns" (as so
defined), directly or indirectly, more than 35% of the voting power of the
Voting Stock of such parent corporation and the Permitted Holder
"beneficially owns" (as so defined), directly or indirectly, in the
aggregate, a lesser percentage of the voting power of the Voting Stock of
such parent corporation and does not
<PAGE>
have the right or ability by voting power, contract or otherwise to elect
or designate for election a majority of the Board of Directors of such
parent corporation); or
(iv) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of THCR or
Funding (together with any new directors whose election by such Board of
Directors or whose nomination for election by the stockholders of THCR or
Funding, as applicable, is approved by the Permitted Holder or by a vote of
the 66_% of the directors of THCR or Funding, as applicable, then still in
office who are either directors at the beginning of such period or whose
election or nomination for election was previously so approved) have ceased
for any reason to constitute a majority of the Board of Directors of THCR
or Funding, as applicable, then in office.
"Change of Control Date" shall have the meaning specified in Section 11.1.
"Change of Control Offer" shall have the meaning specified in Section 11.1.
"Change of Control Offer Period" shall have the meaning specified in
Section 11.1.
"Change of Control Purchase Date" shall have the meaning specified in
Section 11.1.
"Change of Control Purchase Price" shall have the meaning specified in
Section 11.1.
"Change of Control Put Date" shall have the meaning specified in Section
11.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means the Property and assets of the Issuers or the Guarantors
which, at the time in question, is subject to the Liens created by the Mortgage
Documents or this Indenture.
"Collateral Agent" shall mean First Bank National Association, as
collateral agent under the Collateral Agency Agreement.
"Collateral Agency Agreement" means that agreement dated the date hereof by
and among the Collateral Agent, the Issuers, the Guarantors and the Trustee, as
well as such other persons as may be permitted to become parties thereunder as a
result of their status as lenders of Refinancing Indebtedness in respect of the
Securities permitted to be incurred pursuant to
<PAGE>
Section 5.11(f) hereof or of Indebtedness permitted to be incurred pursuant to
Sections 5.11(c) (including Refinancing Indebtedness in respect thereof) or (e)
hereof, in substantially the form set forth as Exhibit G hereto for the benefit
of the Holders and the other lenders secured thereby pursuant to the Collateral
Agency Agreement, as it may be amended from time to time in accordance with its
terms and, to the extent applicable, the terms of this Indenture.
"Company" means the party named as such in this Indenture until a successor
replaces it pursuant to this Indenture and thereafter means such successor.
"Company Request" means a written request of the Issuers in the form of an
Officers' Certificate.
"Consolidated Coverage Ratio" of any person on any date of determination
(the "Transaction Date") means the ratio, on a pro forma basis, of (a) the
aggregate amount of Consolidated EBITDA of such person attributable to
continuing operations and businesses (exclusive of amounts attributable to
operations and businesses permanently discontinued or disposed of) for the
Reference Period to (b) the aggregate Consolidated Fixed Charges of such person
(exclusive of amounts attributable to operations and businesses permanently
discontinued or disposed of, but only to the extent that the obligations giving
rise to such Consolidated Fixed Charges would no longer be obligations
contributing to such person's Consolidated Fixed Charges subsequent to the
Transaction Date) during the Reference Period; provided, that for purposes of
such calculation, (i) Acquisitions which occurred during the Reference Period or
subsequent to the Reference Period and on or prior to the Transaction Date shall
be assumed to have occurred on the first day of the Reference Period, (ii)
transactions giving rise to the need to calculate the Consolidated Coverage
Ratio shall be assumed to have occurred on the first day of the Reference
Period, (iii) the incurrence of any Indebtedness or issuance of any Disqualified
Capital Stock during the Reference Period or subsequent to the Reference Period
and on or prior to the Transaction Date (and the application of the proceeds
therefrom to the extent used to refinance or retire other Indebtedness) shall be
assumed to have occurred on the first day of such Reference Period, and (iv) the
Consolidated Fixed Charges of such person attributable to interest on any
Indebtedness or dividends on any Disqualified Capital Stock bearing a floating
interest (or dividend) rate shall be computed on a pro forma basis as if the
average rate in effect from the beginning of the Reference Period to the
Transaction Date had been the applicable rate for the entire period, unless such
Person or any of its Subsidiaries is a party to an Interest Swap and Hedging
Obligation (which shall remain in effect for the 12-month period immediately
following the Transaction Date) that has the effect of fixing the interest rate
on the date of computation, in which case such rate (whether higher or lower)
shall be used.
<PAGE>
"Consolidated EBITDA" means, with respect to any person, for any period,
the Consolidated Net Income of such person for such period (determined, for
purposes of this definition only, without taking into effect clause (x) of the
last sentence of the definition thereof) adjusted to add thereto (to the extent
deducted from net revenues in determining Consolidated Net Income), without
duplication, the sum of (i) Consolidated income tax expense, (ii) Consolidated
depreciation and amortization expense, provided, that consolidated depreciation
and amortization of a Subsidiary that is a less than Wholly-owned Subsidiary
shall only be added to the extent of the equity interest of such person in such
Subsidiary and (iii) Consolidated Fixed Charges, less the amount of all cash
payments made by such person or any of its Subsidiaries during such period to
the extent such payments relate to non-cash charges that were added back in
determining Consolidated EBITDA for such period or any prior period.
"Consolidated Fixed Charges" of any person means, for any period, the
aggregate amount (without duplication and determined in each case in accordance
with GAAP) of (a) interest expensed or capitalized, paid, accrued, or scheduled
to be paid or accrued (including, in accordance with the following sentence,
interest attributable to Capitalized Lease Obligations) of such person and its
Consolidated Subsidiaries during such period, including (i) original issue
discount and non-cash interest payments or accruals on any Indebtedness, (ii)
the interest portion of all deferred payment obligations and (iii) all
commissions, discounts and other fees and charges owed with respect to bankers'
acceptances and letters of credit financings and currency and Interest Swap and
Hedging Obligations, in each case to the extent attributable to such period, (b)
one-third of Consolidated Rental Payments for such period attributable to
operating leases of such person and its Consolidated Subsidiaries, and (c) the
amount of dividends accrued or payable by such person or any of its Consolidated
Subsidiaries in respect of Preferred Stock (other than by Subsidiaries of such
person to such person or such person's Wholly-owned Subsidiaries). For purposes
of this definition, (x) interest on a Capitalized Lease Obligation shall be
deemed to accrue at an interest rate reasonably determined by the Issuers to be
the rate of interest implicit in such Capitalized Lease Obligation in accordance
with GAAP and (y) interest expense attributable to any Indebtedness represented
by the guarantee by such person or a Subsidiary of such person of an obligation
of another person shall be deemed to be the interest expense attributable to the
Indebtedness guaranteed.
"Consolidated Net Income" means, with respect to any person for any period,
the net income (or loss) of such person and its Consolidated Subsidiaries
(determined on a consolidated basis in accordance with GAAP) for such period,
adjusted to exclude (only to the extent included in computing such net income
<PAGE>
(or loss) and without duplication): (a) all gains (but not losses) which are
either extraordinary (as determined in accordance with GAAP) or are either
unusual or nonrecurring (including any gain from the sale or other disposition
of assets outside the ordinary course of business or from the issuance or sale
of any capital stock), less all fees and expenses relating thereto, (b) the net
income, if positive, of any person, other than a Consolidated Wholly-owned
Subsidiary, in which such person or any of its Consolidated Subsidiaries has an
interest, except to the extent of the amount of any dividends or distributions
actually paid in cash to such person or a Consolidated Wholly-owned Subsidiary
of such person during such period, but in any case not in excess of such
person's pro rata share of such person's net income for such period, (c) the net
income or loss of any person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition, (d) the net income, if
positive, of any of such person's Consolidated Subsidiaries to the extent that
the declaration or payment of dividends or similar distributions is not at the
time permitted by operation of the terms of its charter or bylaws or any other
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to such Consolidated Subsidiary and (e) net gains or
losses in respect of the redemption or repurchase of (i) the 11.35% Mortgage
Bonds Series A, due 1999 of Trump Taj Mahal Funding, Inc., (ii) the 10_% First
Mortgage Notes due 2001 of Trump Plaza Funding, Inc. pursuant to the retirement
thereof as described in the Prospectus (and, in respect of the defeased portion
thereof, net losses relating to unamortized loan costs) or (iii) the 12 1/2%
Pay-in-Kind Notes due 2003 of the Company. To the extent not already reduced
thereby, Consolidated Net Income of the Company for any period shall be reduced
by the aggregate amount of (x) all Permitted Tax Distributions made during, or
distributable in respect of, such period and (y) all payments made during such
period pursuant to the TPM Services Agreement.
"Consolidated Net Worth" of any person at any date means, in the case of a
partnership, such person's partners' capital and, in the case of a corporation,
the aggregate Consolidated stockholders' equity of such person (plus amounts
attributable to preferred stock) and its Consolidated Subsidiaries, as would be
shown on the consolidated balance sheet of such person prepared in accordance
with GAAP, adjusted to exclude (to the extent included in calculating such
equity), (a) the amount of any such stockholders' equity attributable to
Disqualified Capital Stock or treasury stock of such person and its Consolidated
Subsidiaries, (b) all upward revaluations and other write-ups in the book value
of any asset of such person or a Consolidated Subsidiary of such person
subsequent to the Issue Date, and (c) all investments in Subsidiaries that are
not Consolidated Subsidiaries and in persons that are not Subsidiaries.
<PAGE>
"Consolidated Rental Payments" of any Person means the aggregate rental
obligations of such Person and its Consolidated Subsidiaries (not including
taxes, insurance, maintenance and similar expenses that the lessee is obligated
to pay under the terms of the relevant leases), determined on a Consolidated
basis in conformity with GAAP, payable in respect of such period under leases of
real or personal property (net of income from subleases thereof, not including
taxes, insurance, maintenance and similar expenses that the sublessee is
obligated to pay under the terms of such sublease), whether or not such
obligations are reflected as liabilities or commitments on a Consolidated
balance sheet of such Person and its Subsidiaries or in the notes thereto,
excluding, however, in any event, that portion of Consolidated Fixed Charges of
such Person representing payments by such Person or any of its Consolidated
Subsidiaries in respect of Capitalized Lease Obligations.
"Consolidated Subsidiary" means, for any person, each Subsidiary of such
person (whether now existing or hereafter created or acquired), the financial
statements of which are consolidated for financial statement reporting purposes
with the financial statements of such person in accordance with GAAP.
"Consolidation" means, with respect to any Person, the consolidation of the
accounts of such Person and each of its Subsidiaries if and to the extent the
accounts of such Person and each of its Subsidiaries would normally be
consolidated with those of such Person, all in accordance with GAAP consistently
applied. The term "Consolidated" shall have a similar meaning.
"CRDA" means the New Jersey Casino Reinvestment Development Authority or
any successor entity thereto.
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator
or similar official under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Defaulted Interest" shall have the meaning specified in Section 2.12.
"Disqualified Capital Stock" means, with respect to any person, an Equity
Interest of such person that, by its terms or by the terms of any security into
which it is convertible, exercisable or exchangeable, is, or upon the happening
of an event (other than the disqualification of the holder thereof by a Gaming
Authority) or the passage of time would be, required to be redeemed or
repurchased (including at the option of the holder thereof) in whole or in part,
on or prior to the final Stated Maturity of the Securities.
<PAGE>
"Egg Harbor Mortgage" shall have the meaning given to it in the Plaza
Mortgages.
"Egg Harbor Parcel" means that warehouse and office facility owned by Plaza
Associates and located on the premises known as Block 404 Lots 13 and 14 of the
official tax map of Egg Harbor Township, New Jersey, containing approximately
64,000 square feet of space.
"Equity Interest" of any Person means any shares, interests, participations
or other equivalents (however designated) in such Person's equity, and shall in
any event include any Capital Stock issued by, or partnership interests in, such
Person.
"Event of Default" shall have the meaning specified in Section 7.1.
"Event of Loss" means, with respect to any property or asset, any (i) loss,
destruction or damage of such property or asset, or (ii) any condemnation,
seizure or taking, by exercise of the power of eminent domain or otherwise, of
such property or asset, or confiscation or requisition of the use of such
property or asset.
"Excepted Property" shall have the meaning given to it in each of the
Mortgages.
"Excess Proceeds" shall have the meaning specified in Section 5.15.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"F, F&E Financing Agreement" means an agreement which creates a Lien upon
any after-acquired tangible personal property and/or other items constituting
operating assets, which are financed, purchased or leased for the purpose of
engaging in or developing a Related Business.
"Facility Lease" shall have the meaning given to it in each of the
Mortgages.
"Fair Market Value" means, with respect to any asset or property, the sale
value that would be obtained in an arm's-length transaction between an informed
and willing seller under no compulsion to sell and an informed and willing buyer
under no compulsion to buy and, with respect to any redemption of Securities
pursuant to the Gaming Laws means (a) the last sales price regular way on the
last trading day prior to the date of determination of such value on the largest
national securities exchange (or, if said security is not listed on a national
securities exchange, on the National Market System of the National Association
of Securities Dealers, Inc. Automated
<PAGE>
Quotation System ("NASDAQ")) on which such Securities shall have traded on such
trading day, or (b) if no such sales of such Securities occurred on such trading
day, the mean between the "bid" and "asked" prices on such national securities
exchange or as quoted on the National Market System of NASDAQ, as the case may
be, on such last trading day, or (c) if the Securities are not listed or quoted
on any national securities exchange or the Nasdaq National Market, the average
of the closing bid and asked prices on such day in the over-the-counter market
as reported by NASDAQ or, if bid and asked prices for the Securities have not
been reported through NASDAQ, the average of the bid and asked prices on such
day as furnished by any New York Stock Exchange member firm regularly making a
market in the Securities, selected for such purpose by Funding, or (d) if none
of clauses (a) through (c) are applicable, the fair market value of such
Securities as of the date of determination as determined in such manner as shall
be satisfactory to Funding, which shall be entitled to rely for such purpose on
the advice of any firm of investment bankers or securities dealers having
familiarity with the Securities.
"First Mortgage Notes" means the 11 1/4% First Mortgage Notes due 2006
issued by the Issuers, which, together with the Guaranty, form the Securities.
"First Mortgage Note Register" means the list of names and addresses of
Holders held by the Registrar of the Securities.
"Funding" means Trump Atlantic City Funding, Inc. until a successor
replaces it as an Issuer pursuant to this Indenture, and thereafter means such
successor.
"Future Collateral Agreements" means collectively those collateral
agreements in favor of the Collateral Agent for the benefit of the Holders and
the other lenders secured thereby pursuant to the Collateral Agency Agreement,
by the Company or any of its Subsidiaries, as the case may be, including,
without limitation, those which are required to be executed and delivered under
Section 5.22.
"Gaming Authority" means the New Jersey Casino Control Commission, the New
Jersey Division of Gaming Enforcement or any other governmental agency which
regulates gaming in a jurisdiction in which the Company or any of the
Subsidiaries conducts gaming activities.
"Gaming Law" means any law, rule, regulation or ordinance governing gaming
activities and any administrative rules or regulations promulgated thereunder,
and any other corresponding statutes, rules and regulations.
"Gaming Licenses" means every material license, material franchise, or
other material authorization required to own, lease, operate or otherwise
conduct or manage gaming in any
<PAGE>
state or jurisdiction where the Company or its Subsidiaries conduct business,
and any applicable liquor licenses.
"Generally Accepted Accounting Principles" or "GAAP" means United States
generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
approved by a significant segment of the accounting profession as in effect on
the Issue Date.
"Governmental Authority" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
the United States or foreign government, any state, province or any city or
other political subdivision and whether now or hereafter in existence, or any
officer or official thereof, and any maritime authority.
"Ground Leases" means the ground leases, as amended or supplemented in
accordance with the Mortgage Documents, each of which expires on December 31,
2078, pursuant to which Plaza Associates is the current lessee, and each of
Trump Seashore Associates (the "TSA Lease"), Seashore Four Associates (the "SFA
Lease") and Plaza Hotel Management Company (the "PHMC Lease") are the current
respective lessors.
"Guaranteed Debt" of any Person means, without duplication, all
indebtedness of any other Person referred to in the definition of Indebtedness
contained in this section guaranteed directly or indirectly in any manner by
such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (a) to pay or purchase such Indebtedness or to advance or
supply funds for the payment or purchase of such Indebtedness, (b) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such
Indebtedness or to assure the holder of such Indebtedness against loss, (c) to
supply funds to, or in any other manner invest in, the debtor (including any
agreement to pay for property or services without requiring that such property
be received or such services be rendered), (d) to maintain working capital or
equity capital of the debtor, or otherwise to maintain the net worth, solvency
or other financial condition of the debtor or (e) otherwise to assure a creditor
against loss; provided, that the term "guarantee" shall not include endorsements
for collection or deposit, in either case in the ordinary course of business;
and provided, further, that the obligations of Plaza Associates pursuant to the
TPM Services Agreement or the Ground Leases, in each case in effect on the Issue
Date or as amended pursuant to terms substantially similar to the terms in
effect on the Issue Date, shall not be deemed to be Guaranteed Debt of Plaza
Associates.
<PAGE>
"Guarantors" means Plaza Associates, Taj Associates, TACC and each existing
or future Subsidiary of the Company (other than Funding).
"Guaranty" shall have the meaning provided in Section 13.1.
"Holder" or "Securityholder" means the person in whose name a Security is
registered on the Registrar's books.
"Improvements" shall mean, with respect to either or both of the Casino
Hotels, all improvements thereto, including any alteration thereof and the
acquisition, construction of any additions related thereto (including adjacent
property) or renovations thereof, including without limitation the construction
or renovation of additional gaming space or facilities, hotel and restaurant
facilities and parking facilities, with all landscaping and other off- and
on-site work related thereto.
"incurrence" shall have the meaning specified in Section 5.11.
"Incurrence Date" shall have the meaning specified in Section 5.11.
"Indebtedness" means, with respect to any Person, without duplication, (a)
all liabilities and obligations, contingent and otherwise, of such Person for
borrowed money or representing the balance deferred and unpaid of the purchase
price of property or services, excluding any trade payables and other accrued
current liabilities arising in the ordinary course of business, but including,
without limitation, all obligations, contingent or otherwise, of such Person in
connection with any letters of credit issued under letter of credit facilities,
acceptance facilities or other similar facilities or in connection with any
agreement to purchase, redeem, exchange, convert or otherwise acquire for value
any Equity Interest of such Person, or any warrants, rights or options to
acquire such Equity Interest, now or hereafter outstanding, (b) all obligations
of such Person evidenced by bonds, notes, debentures or other similar
instruments, (c) every obligation of such Person issued as payment in
consideration of the purchase by such Person or an Affiliate of such Person of
the Equity Interest or all or substantially all of the assets of another Person
or in consideration for the merger or consolidation with respect to which such
Person or an Affiliate of such Person was a party, (d) all indebtedness created
or arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even if the rights and remedies of
the seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), but excluding trade payables and other
accrued current liabilities arising in the ordinary course of business, (e) all
obligations under Interest Swap and Hedging Obligations of such Person, (f) all
Capitalized
<PAGE>
Lease Obligations of such Person, (g) all Indebtedness referred to in clauses
(a) through (f) above of other Persons and all dividends of other Persons, the
payment of which are secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien, upon
or in property (including, without limitation, accounts and contract rights)
owned by such Person, even though such Person has not assumed or become liable
for the payment of such Indebtedness, (h) all Guaranteed Debt of such Person and
(i) all Disqualified Capital Stock of such Person (valued at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid
dividends). For purposes hereof, the "maximum fixed repurchase price" of any
Disqualified Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock as if
such Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the Fair Market Value of such Disqualified
Capital Stock, such Fair Market Value to be determined in good faith by the
Board of Directors of the issuer (or managing general partner of the issuer) of
such Disqualified Capital Stock.
"Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.
"Indenture Obligations" means the obligations of the Issuers and the
Guarantors pursuant to this Indenture and the Securities (and any other obligor
hereunder or under the Securities) now or hereafter existing, to pay principal
of and interest on the Securities when due and payable, whether on Maturity or
an Interest Payment Date, by acceleration, call for redemption, acceptance of
any Asset Sale Offer, Change of Control Offer, or otherwise, and interest on the
overdue principal of, and (to the extent lawful) interest, if any, on, the
Securities and all other amounts due or to become due in connection with this
Indenture, the Securities and the Mortgage Documents, including any and all
extensions, renewals or other modifications thereof, in whole or in part, and
the performance of all other obligations of the Issuers and the Guarantors (and
any other obligor hereunder or under the Securities), including all costs and
expenses incurred by the Trustee or the Holders in the collection or enforcement
of any such obligations or realization upon the Mortgage or the security of any
Mortgage Documents.
"Independent Directors" shall mean directors who are not officers or
employees of THCR or any of its Subsidiaries and who are not Affiliates of Trump
or any of his Affiliates.
"Interest Payment Date" means the stated due date of an installment of
interest on the Securities.
<PAGE>
"Interest Swap and Hedging Obligation" means any obligation of any person
pursuant to any interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement, interest rate exchange agreement, currency
exchange agreement or any other agreement or arrangement designed to protect
against fluctuations in interest rates or currency values, including, without
limitation, any arrangement whereby, directly or indirectly, such person is
entitled to receive from time to time periodic payments calculated by applying
either a fixed or floating rate of interest on a stated notional amount in
exchange for periodic payments made by such person calculated by applying a
fixed or floating rate of interest on the same notional amount.
"Investment" means, with respect to any Person, directly or indirectly, (a)
any advance, loan or other extension of credit or capital contribution to any
other Person (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), (b) any
purchase or other acquisition by such Person of any Equity Interest, bonds,
notes, debentures or other securities issued or owned by, any other Person or
(c) other than guarantees of Indebtedness of the Issuers or any Subsidiary to
the extent permitted by Section 5.11, the entering into by such Person of any
guarantee of, or other credit support or contingent obligation with respect to,
Indebtedness or other liability of such other Person.
"Issue Date" means the date of first issuance of the Securities under this
Indenture.
"Issuers" shall mean, collectively, the Company and Funding.
"Legal Requirements" means all applicable laws, statutes, codes, acts,
ordinances, orders, judgments, decrees, injunctions, rules, regulations,
permits, licenses, authorizations, directions and requirements of all
governments, departments, commissions, boards, courts, authorities, agencies,
officials and officers, of governments, federal, state and municipal.
"Legal Holiday" shall have the meaning provided in Section 12.7.
"Lien" means any mortgage, charge, pledge, lien (statutory or otherwise),
privilege, security interest, hypothecation or other encumbrance upon or with
respect to any property of any kind, real or personal, movable or immovable, now
owned or hereafter acquired by an Issuer or Guarantor.
"Maturity" when used with respect to any Security means the date on which
the principal of such Security becomes due and payable as therein provided or as
provided in this Indenture,
<PAGE>
whether at final Stated Maturity, Change of Control Purchase Date, Asset Sale
Offer Purchase Date or the redemption date and whether by declaration of
acceleration, call for redemption or otherwise.
"Mortgages" means collectively, the Taj Mortgage and the Plaza Mortgage.
"Mortgage Documents" means the Mortgages, the Assignments of Leases and
Rents, the Security Agreement, the Trademark Security Agreements, any Future
Collateral Agreements and any UCC-1 financing statements which may be filed in
connection therewith.
"Net Cash Proceeds" (x) of an issuance of Indebtedness or Equity Interests
means the cash proceeds of such issuance, net of attorneys' fees, accountants'
fees, brokerage, consultant, underwriting and other fees and expenses actually
incurred in connection with such issuance, sale, conversion or exchange and net
of any taxes paid or payable as a result thereof by the entity making such sale
and (y) of an Asset Sale (including for this purpose an Event of Loss) means the
aggregate amount of cash and Cash Equivalents received by the Company and its
Subsidiaries in respect of such Asset Sale less the sum of all fees, commissions
and other expenses incurred in connection with such Asset Sale less, in the case
of an Asset Sale only, the amount (estimated reasonably and in good faith by the
Company) of income, franchise, sales and other applicable taxes required to be
paid by the Company or any of its Subsidiaries or distributable by the Company
as a Permitted Tax Distribution, in each case, within 12 months of consummating
the Asset Sale, in connection with such Asset Sale.
"Net Proceeds" means the aggregate Net Cash Proceeds and fair market value
of property and assets (valued at the fair market value thereof at the time of
receipt in good faith by the Company).
"Obligation" means any principal, premium or interest payment, or monetary
penalty, or damages, due by the Issuers or the Guarantors under the terms of the
Securities or this Indenture.
"Offer to Purchase" means any Change of Control Offer or Asset Sale Offer.
"Offer to Purchase Price" means any Change of Control Offer Price or Asset
Sale Offer Price.
"Officer" means, with respect to any Person, the Chairman of the Board, the
President, any Vice President, the Chief Financial Officer, the Treasurer or
Assistant Treasurer, the Controller, or the Secretary or Assistant Secretary of
such Person.
<PAGE>
"Officers' Certificate" means, with respect to the Issuers or any
Guarantor, a certificate signed by two Authorized Representatives of the Issuers
or such Guarantor and otherwise complying with the requirements of Sections
12.4(1) and 12.5.
"Operating Assets" shall have the meaning given to it in each of the
Mortgages.
"Opinion of Counsel" means a written opinion from legal counsel to the
Issuers or the Guarantors reasonably acceptable to the Trustee and which
complies with the requirements of Sections 12.4 and 12.5. Unless otherwise
required by this Indenture, the counsel may be in-house counsel to the Issuers
or the Guarantors.
"Original Policy" shall have the meaning given to it in each of the
Mortgages.
"Parking Parcel Mortgage" shall have the meaning given to it in the Plaza
Mortgage.
"Partners" means each of THCR Holdings and Trump AC Holding or any
additional or substitute partners admitted under the Partnership Agreement so
long as (i) each is a partner under the Partnership Agreement, unless removed as
a partner in accordance with the Partnership Agreement and (ii) no Default or
Event of Default occurs as a result thereof.
"Partnership Agreement" means the Amended and Restated Partnership
Agreement of the Company, dated as of the Issue Date, as amended from time to
time in accordance with its terms.
"Paying Agent" shall have the meaning specified in Section 2.3.
"Permit" means any license (including, without limitation, all Gaming
Licenses), franchise, authorization, statement of compliance, certificate of
operation, certificate of occupancy and permit required for the lawful
ownership, occupancy, operation and use of all or a material portion of either
of the Casino Hotels, whether held by Plaza Associates, Taj Associates or any
other Person (which may be temporary or permanent) (including, without
limitation, those required for the use of either of the Casino Hotels as a
licensed casino facility), in accordance with all applicable Legal Requirements.
"Permitted Holder" means Trump and the spouse and descendants of Trump
(including any related grantor trusts controlled by, and established and
maintained for the sole benefit of, Trump or such spouse or descendants), and
the estate of any of the foregoing, but no other Person.
<PAGE>
"Permitted Indebtedness" means the following:
(a) the Company may incur Indebtedness to any Wholly-owned Subsidiary
Guarantor, and any Wholly-owned Subsidiary Guarantor may incur Indebtedness
to any other Wholly-owned Subsidiary Guarantor or to the Company, provided,
that, in the case of Indebtedness of the Company such obligations shall be
unsecured and expressly subordinated in right of payment to the Company's
Obligations pursuant to the Securities, and that the date of any event that
causes such Subsidiary Guarantor to no longer be a Wholly-owned Subsidiary
Guarantor shall be an Incurrence Date;
(b) the Super Puma Helicopter Lease, but only to the extent no
Services Fees are thereafter paid under the TPM Services Agreement; and
(c) Indebtedness existing on the Issue Date, after giving effect to
the "Merger Transaction" as such term is defined in the Prospectus.
"Permitted Investment" means (a) Investments in any of the Securities; (b)
Cash Equivalents; (c) intercompany notes to the extent permitted under clause
(a) of the definition of "Permitted Indebtedness"; (d) loans, advances or
investments existing on the Issue Date; (e) any Investment in any Wholly-owned
Subsidiary of the Company; and (f) any Investment consisting of the extension of
gaming credit to customers consistent with industry practice in the ordinary
course of business.
"Permitted Leases" means the following:
(a) any Capitalized Lease Obligation of the Company or any of its
Subsidiaries incurred in accordance with Section 5.11;
(b) any lease of Plaza Associates or Taj Associates, as tenant or
subtenant, existing on the date of this Indenture and listed on a schedule
hereto or referred to in the Mortgages (including schedules thereto),
including any modifications, amendments, renewals or supplements thereof,
provided, that the aggregate annual rent and other costs thereunder are not
increased thereby, except as such rent or costs may be increased during any
renewed lease term pursuant to the terms of such leases as they exist on
the date of this Indenture; and
(c) any operating leases of the Company or any of its Subsidiaries
other than the leases set forth above, provided that the aggregate average
annual rent and other payments required thereunder over the terms of such
leases shall not exceed $10.0 million.
"Permitted Liens" means:
<PAGE>
(a) Liens existing on the Issue Date after giving effect to the
"Merger Transaction" as such term is defined in the Prospectus, and Liens
securing Refinancing Indebtedness in respect of secured Indebtedness
(including the Securities, provided, that the Securities are secured by the
assets securing such Refinancing Indebtedness in respect of the Securities
on a senior or an equal and ratable basis pursuant to the terms of the
Collateral Agency Agreement) existing on the Issue Date;
(b) the Lien of the Trustee and the Collateral Agent as provided for
in this Indenture and in the Mortgage Documents;
(c) Indebtedness incurred in accordance with clause (d) of Section
5.11 may be secured by the assets acquired pursuant to the respective
capital lease (in the case of Capitalized Lease Obligations) or with the
proceeds of the respective F, F&E Financing Agreements, so long as such
Liens do not extend to any other assets;
(d) Indebtedness of the Company and the Guarantors incurred pursuant
to clause (e) of Section 5.11 (and refinancings thereof pursuant to clause
(e) of Section 5.11) may be secured by the assets of the Company and the
Guarantors, as applicable, provided, that the Securities are secured by the
assets securing such Indebtedness on a senior or an equal and ratable basis
pursuant to the terms of the Collateral Agency Agreement;
(e) Indebtedness of the Company, Plaza Associates and Taj Associates
incurred pursuant to clause (c) of Section 5.11 (and refinancings thereof
pursuant to clause (f) of Section 5.11) may be secured by the assets of the
Company, Plaza Associates or Taj Associates, as applicable, provided, that
the Securities are secured by the assets securing such Indebtedness on a
senior or an equal and ratable basis pursuant to the terms of the
Collateral Agency Agreement;
(f) any Lien arising by reason of (i) any judgment, decree or order of
any court, so long as such Lien is adequately bonded and any appropriate
legal proceedings which may have been duly initiated for the review of such
judgment, decree or order shall not have been finally terminated or the
period within which such proceedings may be initiated shall not have
expired; (ii) security for payment of workmen's compensation or other
insurance; (iii) good faith deposits in connection with tenders, leases and
contracts (other than contracts for the payment of money); and (iv)
deposits to secure public or statutory obligations, or in lieu of surety or
appeal bonds;
(g) Liens for taxes, assessments or other governmental charges not yet
due or which are being contested in good faith and by appropriate
proceedings by the Company or any
<PAGE>
of its Subsidiaries if adequate reserves with respect thereto are
maintained on the books of the Company or any of its Subsidiaries, as the
case may be, in accordance with GAAP;
(h) statutory Liens of carriers, warehousemen, mechanics, landlords,
laborers, materialmen, repairmen or other like Liens arising by operation
of law in the ordinary course of business and consistent with industry
practices and Liens on deposits made to obtain the release of such Liens if
(i) the underlying obligations are not overdue for a period of more than 60
days or (ii) such Liens are being contested in good faith and by
appropriate proceedings by the Company or any of its Subsidiaries and
adequate reserves with respect thereto are maintained on the books of the
Company or any of its Subsidiaries, as the case may be, in accordance with
GAAP;
(i) easements, rights-of-way, zoning and similar restrictions and
other similar encumbrances or title defects, which, if they are incurred by
the Company or any of its Subsidiaries after it acquires the property
subject thereto, are incurred in the ordinary course of business and
consistent with industry practices which, individually or in the in the
aggregate, do not materially detract from the value of the property subject
thereto (as such property is used or proposed to be used by the Company or
any of its Subsidiaries) or interfere with the ordinary conduct of the
business of the Company or any of its Subsidiaries, provided, that any such
Liens are not incurred in connection with any borrowing of money or any
commitment to loan any money or to extend any credit;
(j) Liens that secure Acquired Indebtedness (and refinancings thereof
pursuant to clause (f) of Section 5.11), provided, in each case, that such
Liens do not secure any property or assets other than the property or asset
so acquired and were not put in place in connection with or in anticipation
of such acquisition, merger or consolidation;
(k) leases or subleases granted to other persons in the ordinary
course of business not materially interfering with the conduct of the
business of the Company or any of its Subsidiaries or materially detracting
from the value of the relative assets of the Company or such Subsidiary;
(l) Liens arising from precautionary Uniform Commercial Code financing
statement filings regarding operating leases entered into by the Company or
any of its Subsidiaries in the ordinary course of business;
(m) Liens on the Equity Interests of the Company or any of its
Subsidiaries in favor of or to the extent required to be pledged for the
benefit of holders of the Senior Notes or of any Refinancing Indebtedness
in respect thereof; and
<PAGE>
(n) a notice of intention filed by a mechanic, materialman or laborer
under the New Jersey mechanic's lien law, or a building contract filed by a
contractor or subcontractor thereunder.
"Permitted Tax Distributions" means for each tax year that the Company
qualifies as a partnership or substantially similar pass-through entity under
the Code or any similar provision of state or local law, distributions of Tax
Amounts in respect of the jurisdictions in which the Company so qualifies as a
partnership or substantially similar pass-through entity; provided, that (A)
prior to any Permitted Tax Distribution a knowledgeable and duly authorized
officer of Funding shall certify, and counsel reasonably acceptable to the
Trustee shall opine, that the Company qualifies as a partnership or
substantially similar pass-through entity for federal income tax purposes and
under similar laws of the states in respect of which such distributions are
being made and (B) at the time of such distributions, the most recent audited
financial statements of the Company provide that the Company was treated as a
partnership for federal income tax purposes for the period of such financial
statements. Distributions of Tax Amounts may be made between the tenth and
twentieth day of each January (provided that payments in respect of estimated
state or local taxes due in January may instead, at the option of the Company,
be paid during the last five days of the immediately preceding December), April,
June and September, based upon the minimum estimated tax payments in respect of
Tax Amounts which would then be due and payable, and during the tenth through
twentieth day of April or within ten days of the reconciliation described in the
immediately succeeding sentence, with respect to any additional tax payments
owing in respect of the prior fiscal year. Within sixty days of the Company's
filing of the Internal Revenue Service Form 1065 for the applicable tax year, a
reconciliation shall be made of the Permitted Tax Distributions actually paid
versus the amount permitted to be paid as Permitted Tax Distributions based upon
the final results of the applicable tax year. In addition, prior to any
Permitted Tax Distributions, each Partner shall have entered into a binding
agreement promptly to reimburse the Company for any positive difference between
the distributed amount and the Tax Amount as finally determined; provided,
however, that, if the Partners of the Company do not promptly reimburse the
Company for any positive difference between the distributed amount and the Tax
Amount, then the Permitted Tax Distributions during the year in which such
reimbursement should have been made shall be reduced by the unreimbursed amount
until the Permitted Tax Distributions for such year are zero and, thereafter,
Permitted Tax Distributions shall be reduced in the succeeding years until the
unreimbursed amount not used to reduce Permitted Tax Distributions is zero.
"Person" or "person" means any individual, corporation, limited or general
partnership, joint venture, association, joint stock company, limited liability
company, trust, unincorporated
<PAGE>
organization or government or any agency or political subdivision thereof.
"Plaza Associates" means Trump Plaza Associates, a Wholly-owned Subsidiary
of the Company.
"Plaza Mortgage" means that certain Indenture of Mortgage and Security
Agreement by Plaza Associates and the Collateral Agent dated the date hereof in
favor of the Holders and the other lenders secured thereby pursuant to the
Collateral Agency Agreement as the same may be amended from time to time in
accordance with its terms and, to the extent applicable, the terms of this
Indenture.
"Pleasantville Warehouse" means that warehouse and office facility owned by
Taj Associates and located on the premises known as Lot 15 Block 190 on the
official tax maps of Pleasantville, New Jersey and Lot 9 Block 801 of the
official tax maps of the Township of Egg Harbor, New Jersey, containing
approximately 23,000 square feet of space.
"Principal" or "principal" of any Indebtedness (including the Securities)
means the principal of such Indebtedness plus any applicable premium, if any, on
such Indebtedness.
"Property" or "property" means any right or interest in or to property or
assets of any kind whatsoever, whether real, personal or mixed and whether
tangible, intangible, contingent, indirect or direct.
"Prospectus" shall refer to the prospectus, dated April 11, 1996, in
connection with the offering of the Securities, as the same may be amended or
supplemented prior to the Issue Date.
"Purchase Price" means any Change of Control Purchase Price or Asset Sale
Offer Price.
"Qualified Capital Stock" means any Equity Interest of the Company that is
not Disqualified Capital Stock.
"Qualified Exchange" means (a) any repurchase, redemption or other
acquisition or retirement of any shares of any class of Equity Interests of the
Company on or after the Issue Date in exchange for (including any such exchange
pursuant to the exercise of a conversion right or privilege in connection with
which cash is paid in lieu of the issuance of fractional shares, interests or
scrip), or out of the Net Cash Proceeds of a substantially concurrent issuance
and sale (other than to a Subsidiary of the Company) of, Qualified Capital Stock
of the Company; or (b) the redemption, repayment, defeasance, repurchase or
other acquisition or retirement for value of any Indebtedness of, or guaranteed
by, the Company on or after the Issue Date in exchange for, or out of the Net
Cash Proceeds of a substantially
<PAGE>
concurrent issuance and sale of, Qualified Equity Interests of the Company.
"Realty Warehouse" means that warehouse facility owned by Taj Associates
located on the premises known as Lots 6, 22, 39, 58, 68, 85 in Block 119 and
Lots 23, 33, 44, 58, 65 and 66 in Block 120, on the official tax maps of
Atlantic City, New Jersey, containing approximately 34,500 square feet of space.
"Record Date" means a Record Date specified in the Securities whether or
not such Record Date is a Business Day.
"Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption pursuant to Article III of this
Indenture and Paragraph 5 in the applicable form of Security.
"Redemption Price," when used with respect to any Security to be redeemed,
means the redemption price for such redemption set forth in Paragraph 5 in the
applicable form of Security.
"Reference Period" with regard to any person means the four full fiscal
quarters (or such lesser period during which such person has been in existence)
ended immediately preceding any date upon which any determination is to be made
pursuant to the terms of the Securities or this Indenture.
"Refinancing Indebtedness" means the Indebtedness or Disqualified Capital
Stock issued in exchange for, or the proceeds from the issuance and sale of
which are used substantially concurrently to repay, redeem, defease, refund,
refinance, discharge or otherwise retire for value, in whole or in part, or
constituting an amendment, modification or supplement to, or a deferral or
renewal of (collectively, a "Refinancing"), any Indebtedness or Disqualified
Capital Stock in a principal amount or, in the case of Disqualified Capital
Stock, liquidation preference, not to exceed (after deduction of reasonable and
customary fees and expenses incurred in connection with the Refinancing) the
lesser of (i) the principal amount or, in the case of Disqualified Capital
Stock, liquidation preference, of the Indebtedness or Disqualified Capital Stock
so Refinanced and (ii) if such Indebtedness being Refinanced was issued with an
original issue discount, the accreted value thereof (as determined in accordance
with GAAP) at the time of such Refinancing; provided, that (A) such Refinancing
Indebtedness of any Subsidiary shall only be used to Refinance outstanding
Indebtedness or Disqualified Capital Stock of such Subsidiary, (B) Refinancing
Indebtedness shall (x) not have an Average Life shorter than the Indebtedness or
Disqualified Capital Stock to be so refinanced at the time of such Refinancing
and (y) in all respects, be no less subordinated or junior, if applicable, to
the rights of Holders than was the Indebtedness or Disqualified Capital Stock to
be so refinanced, (C) such Refinancing Indebtedness shall be secured only by the
assets (if any)
<PAGE>
securing the Indebtedness to be so refinanced and (D) such Refinancing
Indebtedness shall have no installment of principal (or redemption payment)
scheduled to come due earlier than the scheduled maturity of the corresponding
installment of principal of the Indebtedness or Disqualified Capital Stock to be
so refinanced which was scheduled to come due prior to the Stated Maturity.
"Registrar" shall have the meaning specified in Section 2.3.
"Related Business" means the business conducted (or proposed to be
conducted) by Plaza Associates or Taj Associates as of the Issue Date and any
and all businesses that in good faith judgment of the Board of Directors of
Funding are related businesses in Atlantic County, New Jersey or are related to
the Casino Hotels.
"Required Regulatory Redemption" means a redemption by the Issuers of any
Holder's Securities pursuant to, and in accordance with, any order of any
Governmental Authority with appropriate jurisdiction and authority relating to a
Gaming License, or to the extent necessary in the reasonable, good faith
judgment of the Issuers to prevent the loss, failure to obtain or material
impairment or to secure the reinstatement of, any material Gaming License, where
such redemption or acquisition is required because the Holder or beneficial
owner of such Security is required to be found suitable or to otherwise qualify
under any gaming laws and is not found suitable or so qualified within a
reasonable period of time.
"Restricted Funds Account" means a segregated bank account of the Company
or any of its Subsidiaries subject to the Lien of the Collateral Agent pursuant
to the Security Agreement, the proceeds of which are invested in cash or Cash
Equivalents pending any use permitted by Section 5.15.
"Restricted Investment" means, in one or a series of related transactions,
any Investment, other than investments in Cash Equivalents.
"Restricted Payment" means, with respect to any person, (a) the declaration
or payment of any dividend or other distribution in respect of Equity Interests
of such person or any Subsidiary or parent of such person, (b) any payment on
account of the purchase, redemption or other acquisition or retirement for value
of Equity Interests of such person or any Subsidiary or parent of such person,
(c) any purchase, redemption, or other acquisition or retirement for value of,
any payment in respect of any amendment of the terms of or any defeasance of,
any Indebtedness of, or guaranteed by, such Person, any parent of such Person or
any Subsidiary prior to the scheduled maturity, any scheduled repayment of
principal, or scheduled sinking fund payment, as the case may be, of such
Indebtedness (including any
<PAGE>
payment in respect of any amendment of the terms of any such Indebtedness, which
amendment is sought in connection with any such acquisition of such Indebtedness
or seeks to shorten any such due date), (d) in connection with the designation
of a Person as an Unrestricted Subsidiary, a Restricted Payment shall be deemed
to exist in the amount provided in the definition of Unrestricted Subsidiary
contained herein and (e) any Restricted Investment by such person; provided,
that the term "Restricted Payment" does not include (i) any dividend,
distribution or other payment on or with respect to Equity Interests of an
issuer to the extent payable solely in shares of Qualified Capital Stock of such
issuer, or (ii) any dividend, distribution or other payment to the Company or to
any of its Wholly-owned Subsidiaries or any Subsidiary Guarantor.
"SEC" means the Securities and Exchange Commission, as from time to time
constituted, created under the Exchange Act, or if at any time after the
execution of this Indenture such SEC is not existing and performing the duties
now assigned to it under the Trust Indenture Act, then the body performing such
duties at such time.
"Securities" means the First Mortgage Notes due 2006, together with the
Guaranties thereof, as amended or modified from time to time in accordance with
the terms hereof, issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means the security agreement dated the date hereof
between the Collateral Agent, the Issuers and the Guarantors, for the benefit of
the Holders and the other lenders secured thereby pursuant to the terms of the
Collateral Agency Agreement, substantially in the form of Exhibit E hereto, as
it may be amended or supplemented from time to time in accordance with its terms
and, to the extent applicable, the terms of this Indenture.
"Securityholder." See "Holder."
"Senior Notes" means the 15 1/2% Senior Secured Notes due 2005 of THCR
Holdings and Trump Hotels & Casino Resorts Funding, Inc.
"Services Fee" means, for any period, the amount of the fee payable by
Plaza Associates under the TPM Services Agreement for such period.
"Significant Subsidiary" shall have the meaning provided under Regulation
S-X of the Securities Act, as in effect on the Issue Date.
<PAGE>
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 2.12.
"Stated Maturity" when used with respect to any Security means May 1, 2006
and when used with respect to any other Indebtedness means the dates specified
in such other Indebtedness as the fixed date on which the principal of such
Indebtedness is due and payable.
"Subsidiary" of any Person means (i) a corporation a majority of whose
Voting Stock is at the time, directly or indirectly, owned by such Person, by
such Person and one or more Subsidiaries of such Person or by one or more
Subsidiaries of such Person, (ii) any other Person (other than a corporation) in
which such Person, one or more Subsidiaries of such Person, or such Person and
one or more Subsidiaries of such Person, directly or indirectly, at the date of
determination thereof has a majority ownership interest, or (iii) a partnership
in which such Person or a Subsidiary of such Person is, at the time, a general
partner and has a majority ownership interest. Notwithstanding the foregoing, no
Unrestricted Subsidiary shall be considered a Subsidiary of the Company or any
of its other Subsidiaries for purposes of the Securities and this Indenture.
Unless the context otherwise requires, all references herein to "Subsidiaries"
shall be to the direct and indirect to Subsidiaries of the Company for purposes
of the Securities and this Indenture.
"Super Puma Helicopter Lease" means that certain Aircraft Lease Agreement,
dated as of March 9, 1992, between The CIT/Group Equipment Financing, Inc., as
Lessor, and Trump Plaza Management Corp., as Lessee, as it may be amended to
modify the expiration date to the end of the last renewal period currently
contained therein, together with all the obligations of the parties thereunder
and related thereto.
"Superior Mortgages" shall have the meaning given to it in the Plaza
Mortgage.
"TACC" means Trump Atlantic City Corporation (formerly "The Trump Taj Mahal
Corporation"), a Wholly-owned Subsidiary of the Company.
"Taj Associates" means Trump Taj Mahal Associates, a Wholly-owned
Subsidiary of the Company.
"Taj Mortgage" means that certain Indenture of Mortgage and Security
Agreement dated the date hereof between Taj Associates and the Collateral Agent,
for the benefit of the Holders and the other lenders secured thereby pursuant to
the terms of the Collateral Agency Agreement as it may be amended from time to
time in accordance with its terms and, to the extent applicable, the terms of
this Indenture.
<PAGE>
"Tangible Personal Property" shall have the meaning given to it in the
Mortgages.
"Tax Amounts" with respect to any year means an amount no greater than (a)
the higher of (i) the product of (A) the taxable income of the Company (treating
the Company as if it were an individual) for such year as determined in good
faith by the Board of Directors of Funding and (B) the Tax Percentage and (ii)
the product of (A) the alternative minimum taxable income attributable to the
Company (treating the Company as if it were an individual) for such year as
determined in good faith by the Board of Directors of Funding and (B) the Tax
Percentage, reduced by (b) to the extent not previously taken into account, any
income tax benefit attributable to the Company which could be realized (without
regard to the actual realization) by its Partners in the current or any prior
taxable year, or portion thereof, commencing on or after the Issue Date
(including any tax losses or tax credits), computed at the applicable Tax
Percentage for the year that such benefit is taken into account for purposes of
this computation. Any part of the Tax Amount not distributed in respect of a tax
period for which it is calculated shall be available for distribution in
subsequent tax periods.
"Tax Percentage" means the highest, aggregate effective marginal rate of
federal, state and local income tax or, when applicable, alternative minimum
tax, to which any Partner of the Company would be subject in the relevant year
of determination (as certified to the Trustee by a nationally recognized tax
accounting firm); provided, that in no event shall the Tax Percentage be greater
than the sum of (x) the highest, aggregate effective marginal rate of federal,
state, and local income tax or, when applicable, alternative minimum tax, to
which the Company would have been subject if it were a C corporation, for
federal income tax purposes, and (y) 5 percentage points. If any Partner or
Upper Tier Owner of the Company is an S corporation, partnership or similar
pass-through entity for federal income tax purposes, the Tax Percentage shall be
computed based upon the tax rates applicable to the shareholder or partner of
such Partner or Upper Tier Owner, as the case may be.
"THCR" means Trump Hotels & Casino Resorts, Inc., a Delaware corporation.
"THCR Holdings" means Trump Hotels & Casino Resorts Holdings, L.P., a
Delaware limited partnership.
"TPM Services Agreement" means the Amended and Restated Services Agreement,
dated June 24, 1993, between Plaza Associates and Trump Plaza Management Corp.
"Trademark Security Agreements" means the trademark security agreements
dated the date hereof between Plaza Associates and Taj Associates, respectively,
and the Collateral Agent for the benefit of the Holders and the other lenders
<PAGE>
secured thereby pursuant to the terms of the Collateral Agency Agreement,
substantially in the Form of Exhibit F hereto, as they may be amended or
supplemented from time to time in accordance with the terms thereof and, to the
extent applicable, the terms of the Indenture.
"Trump" means Donald J. Trump.
"Trump AC Holding" shall mean Trump Atlantic City Holding, Inc., a Delaware
corporation.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended.
"Trustee" means the party named as such in this Indenture until a successor
replaces it in accordance with the provisions of this Indenture and thereafter
means such successor.
"Trust Officer" means any officer within the corporate trust department (or
any successor group) of the Trustee including any vice president, assistant vice
president, secretary, assistant secretary or any other officer or assistant
officer of the Trustee customarily performing functions similar to those
performed by the persons who at that time shall be such officers, and also
means, with respect to a particular corporate trust matter, any other officer of
the corporate trust department (or any successor group) of the Trustee to whom
such trust matter is referred because of his knowledge of and familiarity with
the particular subject.
"Unrestricted Subsidiary" means any Subsidiary of the Company that, at the
time of determination, shall be an Unrestricted Subsidiary (as designated by the
Company, as provided below) provided that such Subsidiary does not and shall not
engage, to any substantial extent, in any line or lines of business activity
other than a Related Business. The Company may designate any Person (other than
Plaza Associates, Taj Associates, TACC, Funding and any direct or indirect
holder of Equity Interest therein) to be an Unrestricted Subsidiary if (a) no
Default or Event of Default is existing or will occur as a consequence thereof,
(b) either (x) such Subsidiary, at the time of designation thereof, has no
assets, (y) such Subsidiary is designated an "Unrestricted Subsidiary" at the
time of Acquisition by the Company, in the case of Subsidiaries acquired after
the Issue Date or (z) immediately after giving effect to such designation, on a
pro forma basis, the Company could incur at least $1.00 of additional
Indebtedness pursuant to the Debt Incurrence Ratio in paragraph (a) of Section
5.11, and (c) such Subsidiary does not own any Equity Interests in, or own or
hold any Lien on any property of, the Company or any other Subsidiary (excluding
other Unrestricted Subsidiaries). Any such designation also constitutes a
Restricted Payment (to the extent such amount is in excess of $0.00) in an
amount equal to the sum of (x) net assets of such Subsidiary at the time of the
<PAGE>
designation, unless in the case of this clause (x) the designation is made
pursuant to clause (b)(y) of the first sentence of this definition, in which
case the amount of consideration paid by the Company and its Subsidiaries to
effect such Acquisition (excluding Qualified Equity Interests of THCR issued in
connection therewith) shall be the amount for purpose of this clause (x), and
(y) the maximum amount of Guaranteed Debt of the Company and its Subsidiaries in
respect of the designated Subsidiary which is to be outstanding immediately
after such designation, in each case for purposes of Section 5.3. Subject to the
foregoing, the Company may designate any Unrestricted Subsidiary to be a
Subsidiary, provided, that (i) no Default or Event of Default is existing or
will occur as a consequence thereof and (ii) immediately after giving effect to
such designation, on a pro forma basis, the Company could incur at least $1.00
of Indebtedness pursuant to the Debt Incurrence Ratio test in paragraph (a) of
Section 5.11. Each such designation shall be evidenced by filing with the
Trustee a certified copy of the resolution giving effect to such designation and
an officers' certificate certifying that such designation complied with the
foregoing conditions.
"Upper Tier Owner" means (i) if a Partner is an S corporation, partnership
or similar pass-through entity for federal income tax purposes, any shareholder
or partner of such Partner and (ii) if any such shareholder or partner referred
to in (i) above is an S corporation, partnership or similar pass-though entity
for federal income tax purposes, any shareholder or partner of such person.
"U.S. Government Obligations" means direct non-callable obligations of, or
noncallable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the United
States of America is pledged.
"U.S. Legal Tender" means such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debts.
"Voting Stock" with respect to any Person means all classes of Equity
Interests of such Person then outstanding and normally entitled to vote in
elections of directors of such Person.
"Wholly-owned Subsidiary" means a Subsidiary all the Equity Interests of
which are owned by the Company or another Wholly-owned Subsidiary of the
Company.
"Working Capital Facility" means any credit facility available to the
Company or any of its Subsidiaries the proceeds of which are used for working
capital or other general corporate purposes.
<PAGE>
SECTION 1.2 Incorporation by Reference of TIA
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture securityholder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the\ Trustee.
"obligor" on the indenture securities means the Issuers, each
Guarantor and any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein, have the meanings assigned to them thereby.
SECTION 1.3 Rules of Construction
Unless the context otherwise requires:
<PAGE>
a term has the meaning assigned to it;
an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
"or" is not exclusive;
words in the singular include the plural, and words in the plural
include the singular;
provisions apply to successive events and transactions;
"herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision; and
references to Sections or Articles means reference to such Section or
Article in this Indenture, unless stated otherwise.
<PAGE>
THE SECURITIES
Form and Dating.
The Securities and the Trustee's certificate of authentication, in respect
thereof, shall be substantially in the form of Exhibit A hereto, and each First
Mortgage Note shall be endorsed with the Guaranty substantially in the form of
Exhibit B hereto, each of which Exhibits is incorporated into and made a part of
this Indenture. The Securities may have notations, legends or endorsements
required by law, stock exchange rule or usage. The Issuers shall approve the
form of the Securities and any notation, legend or endorsement on them. Any such
notations, legends or endorsements not contained in the form of First Mortgage
Note attached as Exhibit A hereto or the form of Guaranty attached as Exhibit B
hereto shall be delivered in writing to the Trustee. Each Security shall be
dated the date of its authentication.
The terms and provisions contained in the form of Securities shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Issuers, the Guarantors and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Execution and Authentication.
Two Authorized Representatives shall sign, or one Authorized Representative
shall sign and one Authorized Representative shall attest to, the Securities for
the Issuers by manual or facsimile signature. The Issuers' seals shall be
impressed, affixed, imprinted, or reproduced on the Securities and may be in
facsimile form.
If an Authorized Representative whose signature is on a Security was an
Authorized Representative at the time of such execution but no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless and the Issuers shall nevertheless be bound by the terms of
the Securities and this Indenture.
A Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security, but such
signature shall be conclusive evidence that the Security has been authenticated
pursuant to the terms of this Indenture.
The Trustee shall authenticate Securities for original issue in the
aggregate principal amount of up to $1,200,000,000
<PAGE>
upon a written order of the Issuers in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of Securities to be authenticated
and the date on which the Securities are to be authenticated. The aggregate
principal amount of Securities outstanding at any time may not exceed
$1,200,000,000, except as provided in Section 2.7. Upon the written order of the
Issuers in the form of an Officers' Certificate, the Trustee shall authenticate
Securities in substitution of Securities originally issued to reflect any name
change of the Issuers.
The Trustee may appoint an authenticating agent acceptable to the Issuers
to authenticate Securities. Unless otherwise provided in the appointment, an
authenticating agent may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Issuers, any Affiliate of the Issuers or any of their
respective Subsidiaries.
Securities shall be issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof.
Registrar and Paying Agent.
The Issuers shall maintain an office or agency in the Borough of Manhattan,
The City of New York, where Securities may be presented for registration of
transfer or for exchange ("Registrar") and an office or agency in the Borough of
Manhattan, The City of New York where Securities may be presented for payment
("Paying Agent") and an office or agency where notices and demands to or upon
the Issuers in respect of the Securities may be served. Unless a Default or
Event of Default has occurred and is continuing, the Issuers or any of their
Subsidiaries may act as Registrar or Paying Agent, except that, for the purposes
of Articles III, IX, XI and Section 5.15 and as otherwise specified in this
Indenture, neither the Issuers, any Guarantor nor any other obligor on the
Securities nor any Affiliate of the Issuers, any Guarantor or such other obligor
shall act as Paying Agent. The Registrar shall keep a register of the Securities
and of their transfer and exchange. The Issuers may have one or more
co-Registrars and one or more additional Paying Agents. The term "Paying Agent"
includes any additional Paying Agent. The Issuers hereby initially appoint the
Trustee as Registrar and Paying Agent, and the Trustee hereby initially agrees
so to act until such time as the Trustee has resigned or a successor has been
appointed. The Company may change any Registrar, Paying Agent or co-Registrar
without notice to any Holder.
The Issuers shall enter into an appropriate written agency agreement with
any Agent not a party to this Indenture, which agreement shall implement the
provisions of this Indenture that relate to such Agent. The Issuers shall
promptly notify the
<PAGE>
Trustee in writing of the name and address of any such Agent. If the Issuers
fail to maintain a Registrar or Paying Agent, the Trustee shall act as such.
Paying Agent to Hold Assets in Trust.
The Issuers shall require each Paying Agent other than the Trustee to agree
in writing that each Paying Agent shall hold in trust for the benefit of Holders
or the Trustee all assets held by the Paying Agent for the payment of principal
of, premium, if any, or interest on, the Securities (whether such assets have
been distributed to it by the Issuers, a Guarantor or any other obligor on the
Securities), and shall notify the Trustee in writing of any Default by the
Issuers, a Guarantor or any other obligor on the Securities in making any such
payment. If the Issuers, a Guarantor, any other obligor on the Securities or a
Subsidiary of the Issuers acts as Paying Agent, it shall segregate such assets
and hold them as a separate trust fund for the benefit of the Holders or the
Trustee. The Issuers at any time may require a Paying Agent to distribute all
assets held by it to the Trustee and account for any assets disbursed and the
Trustee may at any time during the continuance of any payment Default, upon
written request to a Paying Agent, require such Paying Agent to distribute all
assets held by it to the Trustee and to account for any assets distributed. Upon
distribution to the Trustee of all assets that shall have been delivered by the
Issuers or any Guarantor to the Paying Agent, the Paying Agent (if other than
the Issuers, a Guarantor or any other obligor on the Securities) shall have no
further liability for such assets.
Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Issuers shall furnish to the
Trustee on or before the third Business Day preceding each Interest Payment Date
and at such other times as the Trustee may request in writing a list in such
form and as of such date as the Trustee reasonably may require of the names and
addresses of Holders. The Trustee, the Registrar and the Issuers shall provide a
current securityholder list to any Gaming Authority upon demand.
Transfer and Exchange.
<PAGE>
When Securities are presented to the Registrar or a co-Registrar with a
request to register the transfer of such Securities or to exchange such
Securities for an equal principal amount of Securities of other authorized
denominations, the Registrar or co-Registrar shall register the transfer or make
the exchange as requested if its reasonable requirements for such transaction
are met; provided, however, that the Securities surrendered for transfer or
exchange shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Issuers and the Registrar or
co-Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing. To permit registrations of transfers and exchanges, the
Issuers and the Guarantors shall execute and the Trustee shall authenticate
Securities at the Registrar's or co-Registrar's request. No service charge shall
be made for any registration of transfer or exchange, but the Issuers may
require payment of a sum sufficient to cover any transfer tax, assessments, or
similar governmental charge payable in connection therewith (other than any such
transfer taxes, assessments, or similar governmental charge payable upon
exchanges or transfers pursuant to Section 2.2, 2.10, 3.5, 5.15, 10.5, or 11.1).
Except for a Required Regulatory Redemption pursuant to Section 3.2 or an order
of any Gaming Authority, the Registrar or co-Registrar shall not be required to
register the transfer of or exchange of (a) any Security selected for redemption
in whole or in part pursuant to Article Three, except the unredeemed portion of
any Security being redeemed in part, or (b) any Security for a period beginning
15 Business Days before the mailing of a notice of an offer to repurchase
pursuant to Sections 5.15 or of a notice to redeem Securities pursuant to
Article III and ending at the close of business on the day of such mailing.
Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the Holder of a
Security claims and submits an affidavit or other evidence, satisfactory to the
Trustee, to the Trustee to the effect that the Security has been lost, destroyed
or wrongfully taken, the Issuers shall issue, the Guarantors shall endorse, and
the Trustee shall authenticate a replacement Security if the Trustee's
requirements are met. If required by the Trustee or the Issuers, such Holder
must provide an indemnity bond or other indemnity, sufficient in the judgment of
both the Issuers and the Trustee, to protect the Issuers, the Guarantors, the
Trustee or any Agent from any loss which any of them may suffer if a Security is
replaced. The Issuers may charge such Holder for its reasonable, out-of-pocket
expenses in replacing a Security.
Every replacement Security is an additional obligation of the Issuers, and,
to the extent of the Guaranty, the Guarantors.
<PAGE>
Outstanding Securities.
Securities outstanding at any time are all the Securities that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section 2.8 as not outstanding. A
Security does not cease to be outstanding because an obligor or an Affiliate of
the Issuers holds the Security, except as provided in Section 2.9.
If a Security is replaced pursuant to Section 2.7 (other than a mutilated
Security surrendered for replacement), it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Security is held by
a bona fide purchaser. A mutilated Security ceases to be outstanding upon
surrender of such Security and replacement thereof pursuant to Section 2.7.
If on a Redemption Date or the Maturity Date the Paying Agent (other than
the Issuers, the Guarantors (or any other obligor on the Securities) or an
Affiliate of the Issuers or any Guarantor (or such other obligor)) holds U.S.
Legal Tender or U.S. Government Obligations sufficient to pay all of the
principal and interest due on the Securities payable on that date and payment of
the Securities called for redemption is not otherwise prohibited, then on and
after that date such Securities cease to be outstanding and interest on them
ceases to accrue unless any such obligor defaults in its obligations with
respect thereto.
Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, amendment, supplement, waiver or
consent, Securities owned by the Issuers, any Guarantor or any other obligor on
the Securities and Affiliates of the Issuers, shall be disregarded, except that,
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, amendment, supplement, waiver or consent, only
Securities that the Trustee knows or has reason to know are so owned shall be
disregarded.
Temporary Securities.
Until definitive Securities are ready for delivery, the Issuers may
prepare, the Guarantors shall endorse and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Issuers reasonably and in
good faith consider appropriate for temporary Securities. Without unreasonable
delay, the Issuers shall prepare, the Guarantors shall endorse and the Trustee
shall authenticate definitive Securities in exchange for temporary Securities.
Until so exchanged, the temporary Securities shall in all respects be entitled
to the
<PAGE>
same benefits under this Indenture as permanent Securities authenticated and
delivered hereunder.
Cancellation.
The Issuers at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent
(other than the Issuers or any Guarantor (or any other obligor on the
Securities) or an Affiliate of the Issuers or any Guarantor (or such other
obligor)), and no one else, shall cancel and, at the written direction of the
Issuers, shall dispose of all Securities surrendered for transfer, exchange,
payment or cancellation. Subject to Section 2.7, the Issuers may not issue new
Securities to replace Securities they have paid or delivered to the Trustee for
cancellation. No Securities shall be authenticated in lieu of or in exchange for
any Securities cancelled as provided in this Section 2.11, except as expressly
permitted in the form of Securities and as permitted by this Indenture.
Defaulted Interest.
If the Issuers default in a payment of interest on the Securities, they
shall pay the defaulted interest, plus (to the extent lawful) interest on the
defaulted interest, to the persons who are Holders on a Record Date (or at the
Issuers' option a subsequent special record date) which date shall be the
fifteenth day next preceding the date fixed by the Issuers for the payment of
defaulted interest, whether or not such day is a Business Day, unless the
Trustee fixes another record date. At least 15 days before the subsequent
special record date, the Issuers shall mail to each Holder with a copy to the
Trustee a notice that states the subsequent special record date, the payment
date and the amount of defaulted interest, and interest payable on such
defaulted interest, if any, to be paid.
<PAGE>
REDEMPTION
Right of Redemption.
Redemption of Securities shall be made only in accordance with this Article
III. At their election, the Issuers may redeem the Securities in whole or in
part, at any time on or after May 1, 2001, at the Redemption Prices specified
under the caption "Redemption" in the Form of Security attached as Exhibit A
hereto, plus accrued and unpaid interest to the applicable Redemption Date.
Except as provided in this paragraph, Section 3.2 and paragraph 5 of the
Securities, the Securities may not otherwise be redeemed at the option of the
Issuers.
Redemption Pursuant to Applicable Laws.
Notwithstanding the provisions of this Indenture, if the CCC does not waive
the qualification requirements as to any Securityholder (whether the record
owner or beneficial owner) and requires that such Securityholder be qualified
under the Casino Control Act, then, in such event, such Securityholder must
qualify under the Casino Control Act. If a Securityholder does not so qualify,
the Securityholder must dispose of its interest in the Securities, within 30
days after the Issuers' receipt of notice of such finding (or within such
earlier date as the CCC may require), or the Issuers may redeem the Securities
of such Holder, in whole or in part, pursuant to, and in accordance with, a
Required Regulatory Redemption. Notwithstanding any other provision of this
Indenture, the Securities of such Holder shall also be redeemable at any time
pursuant to, and in accordance with, a Required Regulatory Redemption. If the
Issuers require the redemption of any Security pursuant to this Section 3.2,
then the Redemption Price shall be the principal amount thereof, plus accrued
and unpaid interest to the Redemption Date (or such lesser amount as may be
required by applicable law or by order of any Gaming Authority). The Issuers
shall tender the Redemption Price, plus accrued and unpaid interest to the
Redemption Date, to the Trustee no less than 30 and no more than 60 days after
the Issuers give the Securityholder or owner of a beneficial or voting interest
written notice of redemption or such earlier date as may be required by
applicable law. The Issuers shall notify the Trustee of any disposition or
redemption required under this Section 3.2, and upon receipt of such notice, the
Trustee shall not accord any rights or privileges under this Indenture or any
Security to any Securityholder or owner of a beneficial or voting interest who
is required to dispose of any Security or tender it for redemption, except to
pay the Redemption Price, plus accrued and unpaid interest to the Redemption
Date, upon tender of such Security.
Notices to Trustee.
<PAGE>
If the Issuers elect to redeem Securities pursuant to Article III
(including, without limitation, Section 3.2), they shall notify the Trustee in
writing of the date on which the applicable Securities are to be redeemed
("Redemption Date") and the principal amount thereof to be redeemed and whether
they want the Trustee to give notice of redemption to the Holders.
The Company shall give each notice to the Trustee provided for in this
Section 3.3 at least 30 days before the Redemption Date (unless a shorter notice
shall be required by applicable law or by order of any Gaming Authority). Any
such notice may be cancelled at any time prior to notice of such redemption
being mailed to any Securityholder and shall thereby be void and of no effect.
Selection of Securities to Be Redeemed.
If less than all of the Securities are to be redeemed pursuant to the first
paragraph of Paragraph 5 thereof, the Trustee shall, if applicable, select from
among such Securities to be redeemed pro rata or by lot or by such other method
as the Trustee shall determine to be fair and appropriate and in such manner as
complies with any applicable legal and stock exchange requirements.
The Trustee shall make the selection from the Securities outstanding and
not previously called for redemption and shall promptly notify the Issuers in
writing of the Securities selected for redemption and, in the case of any
Security selected for partial redemption, the principal amount thereof to be
redeemed. Securities in denominations of $1,000 may be redeemed only in whole.
The Trustee may select for redemption portions (equal to $1,000 or any integral
multiple thereof) of the principal of Securities that have denominations larger
than $1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.
Notice of Redemption.
At least 30 days but not more than 60 days before each Redemption Date
(unless another notice period shall be required by applicable law or by order of
any Gaming Authority), the Issuers shall mail a notice of redemption by first
class mail, postage prepaid, to each Holder whose Securities are to be redeemed
(unless a shorter notice period shall be required by applicable law) to such
Holder's last address as then shown upon the First Mortgage Note Register. At
the Issuers' request, the Trustee shall give the notice of redemption in the
Issuers' name and at the Issuers' expense. Each notice for redemption shall
identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
<PAGE>
(2) the Redemption Price, plus the amount of accrued and unpaid
interest to be paid upon such redemption;
(3) the name, address and telephone number of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent at the address specified in such notice to collect the
Redemption Price;
(5) that, unless (a) the Issuers default in their obligation to
deposit U.S. Legal Tender with the Paying Agent in accordance with Section
3.7 or (b) such redemption payment is prevented for any reason, interest on
Securities called for redemption ceases to accrue on and after the
Redemption Date and the only remaining right of the Holders of such
Securities is to receive payment of the Redemption Price, plus accrued and
unpaid interest to the Redemption Date, upon surrender to the Paying Agent
of the Securities called for redemption and to be redeemed;
(6) if any Security is being redeemed in part, the portion of the
principal amount, equal to $1,000 or any integral multiple thereof, of such
Security to be redeemed and that, after the Redemption Date, and upon
surrender of such Security, a new Security or Securities in aggregate
principal amount equal to the unredeemed portion thereof will be issued;
(7) if less than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of such Securities to
be redeemed;
(8) the CUSIP number of the Securities to be redeemed;
(9) in the case of a Required Regulatory Redemption, the circumstances
pursuant to which such Required Regulatory Redemption is being effected;
and
(10) that the notice is being sent pursuant to this Section 3.5 and
pursuant to the redemption provisions of Paragraph 5 of the Securities.
Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.5,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price, plus accrued and unpaid interest to the Redemption
Date. Upon surrender to the Trustee or Paying Agent, such Securities called for
redemption shall be paid at the Redemption Price, plus accrued and unpaid
interest to the Redemption Date; provided that if the Redemption Date is after a
regular Record Date and on or prior to the corresponding Interest Payment Date,
the accrued
<PAGE>
interest constituting part of the Redemption Price shall be payable to the
Holder of the redeemed Securities registered on the relevant Record Date; and
provided, further, that if a Redemption Date is a Legal Holiday, payment shall
be made on the next succeeding Business Day and no interest shall accrue for the
period from such Redemption Date to such succeeding Business Day.
Deposit of Redemption Price.
On or before the Redemption Date, the Issuers shall deposit with the Paying
Agent (other than the Issuers, any of the Guarantors (or any other obligor on
the Securities) or an Affiliate of the Issuers or any of the Guarantors or any
other obligor on the Securities), U.S. Legal Tender sufficient to pay the
Redemption Price, plus accrued and unpaid interest to the Redemption Date, of
all Securities to be redeemed on such Redemption Date (other than Securities or
portions thereof called for redemption on that date that have been delivered by
the Company to the Trustee for cancellation). The Paying Agent shall promptly
return to the Issuers any U.S. Legal Tender so deposited which is not required
for that purpose upon the written request of the Issuers.
If the Issuers comply with the preceding paragraph and the other provisions
of this Article III and payment of the Securities called for redemption is not
prevented for any reason, interest on the Securities to be redeemed will cease
to accrue on the applicable Redemption Date, whether or not such Securities are
presented for payment. Notwithstanding anything herein to the contrary, if any
Security surrendered for redemption in the manner provided in the Securities
shall not be so paid upon surrender for redemption because of the failure of the
Issuers to comply with the preceding paragraph and the other provisions of this
Article III, interest shall continue to accrue and be paid from and including
the Redemption Date until such payment is made on the unpaid principal, and, to
the extent lawful, on any interest not paid on such unpaid principal, in each
case at the rate and in the manner provided in Section 5.1 hereof and the
Securities.
Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part, the Issuers
shall execute and the Trustee shall authenticate and deliver to the Holder,
without service charge, a new Security or Securities equal in principal amount
to the unredeemed portion of the Security surrendered.
<PAGE>
SECURITY
Security Interest.
(a) In order to secure the prompt and complete payment and performance in
full of the Indenture Obligations, the Issuers, the Guarantors, the Trustee and
the Collateral Agent have entered into this Indenture and the Mortgage
Documents, as applicable, required to be entered into on the Issue Date. Each
Holder, by accepting a Security, agrees to all of the terms and provisions of
this Indenture, the Mortgage Documents and the Collateral Agency Agreement, and
the Trustee and the Collateral Agent agree to all of the terms and provisions of
this Indenture, the Mortgage Documents and the Collateral Agency Agreement, as
applicable, as this Indenture, the Mortgage Documents and the Collateral Agency
Agreement may be amended from time to time pursuant to the provisions thereof
and hereof.
(b) Subject to the terms of the Collateral Agency Agreement, the Collateral
as now or hereafter constituted shall be held for the equal and ratable benefit
of the Holders without preference, priority or distinction of any thereof over
any other by reason of difference in time of issuance, sale or otherwise, as the
only security for the Indenture Obligations and other lenders secured thereby
pursuant to the Collateral Agency Agreement. The Collateral is to be held by the
Collateral Agent for the benefit of the Trustee acting for the equal and ratable
benefit of the Holders and for the benefit of any other Designated
Representative, subject to the terms of the Collateral Agency Agreement.
(c) The provisions of TIA ss. 314(d), and the provisions of TIA ss.
314(c)(3) to the extent applicable by specific reference in this Article IV, are
hereby incorporated by reference herein as if set forth in their entirety,
except that, as set forth in Section 4.4, TIA ss. 314(d) need not be complied
with in certain respects.
Recording; Opinions of Counsel.
(a) Each of the Issuers and the Guarantors warrants and represents that it
has caused to be executed and delivered and covenants that it will promptly
cause to be executed and delivered, filed and recorded, all instruments and
documents, and has done and will do or will cause to be done all such acts and
other things, at the Issuers' expense, as are necessary to effect and maintain
valid and perfected security interests in the Collateral as required under the
Mortgage Documents. Each of the Issuers and the Guarantors shall, as promptly as
practicable, cause to be executed and delivered, filed and recorded all
instruments and do all acts and other things as may be required by law to
perfect, maintain and protect
<PAGE>
the Liens under the Mortgage Documents, the Collateral Agency Agreement and
herein. Each of the Guarantors warrants and represents that it has caused to be
executed and delivered, and covenants that it will promptly cause to be executed
and delivered, filed and recorded all instruments and documents, and has done
and will do or will cause to be done all such acts and other things, at such
Guarantor's expense, as are necessary to effect and maintain valid and perfected
Liens in the Collateral as required under the Mortgage Documents. Each of the
Guarantors shall, as promptly as practicable, cause to be executed and
delivered, filed and recorded, all instruments and do all acts and other things
as may be required by law to perfect, maintain and protect the security
interests under the Mortgage Documents and herein.
(b) The Issuers shall furnish to the Trustee and the Collateral Agent,
concurrently with or promptly after the execution and delivery of this Indenture
and the Mortgage Documents and promptly after the execution and delivery of any
amendment thereto or any other instrument of further assurance, an Opinion(s) of
Counsel stating that, in the opinion of such counsel, subject to customary
exclusions and exceptions reasonably acceptable to the Trustee and the
Collateral Agent, either (i) this Indenture, the Mortgage Documents, any such
amendment and all other instruments of further assurance have been properly
recorded, registered and filed and all such other action has been taken to the
extent necessary to make effective such valid Liens and to perfect such Liens
intended to be created by this Indenture, the Mortgage Documents and the
Collateral Agency Agreement, and reciting the details of such action, or (ii) no
such action is necessary to effect and maintain in full force and effect the
validity and perfection of the Liens under the Mortgage Documents, the
Collateral Agency Agreement and hereunder.
(c) The Issuers shall furnish to the Trustee, on or prior to May 1, of each
year commencing in 1997, an Opinion(s) of Counsel, dated as of such date,
stating that, in the opinion of such counsel, subject to customary exclusions
and exceptions reasonably acceptable to the Trustee, either (A) all such action
has been taken with respect to the recording, registering, filing, rerecording
and refiling of the Mortgage Documents, financing statements, continuation
statements and all other instruments of further assurance as is necessary to
maintain the validity and perfection of Liens under the Mortgage Documents, the
Collateral Agency Agreement and hereunder in full force and effect and reciting
the details of such action, and stating that all financing statements and
continuation statements have been executed and filed and such other actions
taken that are necessary fully to preserve and protect the rights of the Holders
and the Trustee hereunder and under the Mortgage Documents and the Collateral
Agency Agreement, or (B) no such action is necessary to maintain in full force
and effect the validity and perfection of the Liens under the Mortgage Documents
and hereunder.
<PAGE>
Disposition of Certain Collateral.
) The Company and its Subsidiaries may, without requesting the release or
consent of the Trustee and the Collateral Agent, but otherwise subject to the
requirements of this Indenture and the Mortgage Documents:
(i) in the ordinary course of business for the casino industry,
convey, sell, lease, transfer, assign, or otherwise dispose of, free from
the Liens under the Mortgage Documents and hereunder, assets acquired and
held for resale in the ordinary course of business;
(ii) other than a Casino Sale, convey, sell, lease, transfer or
otherwise dispose of, free from the Liens under the Mortgage Documents and
hereunder, assets pursuant to and in accordance with Section 6.1 of this
Indenture;
(iii) convey, sell, lease, transfer, assign or otherwise dispose of,
free from the Liens under the Mortgage Documents and hereunder, three
warehouses and related facilities (the Egg Harbor Parcel, the Pleasantville
Warehouse and the Realty Warehouse) in exchange for any type of
consideration so long as the Company determines in good faith that the
Company or such Subsidiary, as applicable, receives fair market value;
(iv) convey, sell, transfer, assign or otherwise dispose of assets to
the Company or any Wholly-owned Subsidiaries of the Company so long as they
continue to be subject to a Lien under the Mortgage Documents; and
(v) subject to the provisions of the Mortgage Documents pertaining to
disposal of real property, sell, assign, transfer, license or otherwise
dispose of, free from the Liens under the Mortgage Documents and hereunder,
any assets or property in accordance with Section 5.15 (including, without
limitation, pursuant to Section 5.15(a)); provided that the proceeds of
such sale, assignment, transfer, license or other disposition are applied
in the manner set forth in Section 5.15.
(vi) sell or dispose of, free from the Liens under the Mortgage
Documents, any Tangible Personal Property which, in the Company's
reasonable opinion, may have become obsolete or unfit for use or which is
no longer necessary in the conduct of its businesses, and no purchaser of
any such property shall be bound to inquire into any question affecting the
Company's or any of its Subsidiaries' rights to sell or otherwise dispose
of the same free from the Liens under the Mortgage Documents;
(vii) alter, repair, replace, change shall the location or position of
and add to any Property; provided, however, that no change shall be made in
the location of any such property subject to the Liens under the Mortgage
Documents which
<PAGE>
would in any respect impair the security of the Liens under the Mortgage
Documents upon such property; or
(viii) renew, extend, surrender, terminate, modify or amend any leases
of Tangible Personal Property, when, in the Company's or any of its
Subsidiaries' reasonable opinion, it is prudent to do so.
Notwithstanding the provisions of subsection (a) above, the Net Cash
Proceeds from any disposition described in clauses (ii) through (viii) above
shall be held in a Restricted Funds Account, pending application (which shall be
restricted only as provided in Section 5.15).
(b) Notwithstanding the provisions of subsection (a) above, the Issuers
shall not dispose of or transfer (by lease, assignment, license, sale or
otherwise) or pledge, mortgage or otherwise encumber Collateral pursuant to the
provisions of Section 4.3(a) with a fair value of 10% or more of the aggregate
fair value of all Collateral then existing in any calendar year.
<PAGE>
(c) In the event that the Issuers or any Guarantor have sold, exchanged, or
otherwise disposed of or propose to sell, exchange or otherwise dispose of any
portion of the Collateral which under the provisions of this Section 4.3 may be
sold, exchanged or otherwise disposed of by the Issuers or any Guarantor without
consent of the Trustee, and the Issuers request the Trustee to furnish a written
disclaimer, release or quitclaim of any interest in such property under the
Mortgage Documents, the Trustee shall execute (or if appropriate, request the
Collateral Agent to execute) such an instrument prepared by the Issuers or a
Guarantor, upon delivery to the Trustee of an Officers' Certificate by the
Issuers reciting the sale, exchange or other disposition made or proposed to be
made and describing in reasonable detail the property affected thereby, and
certifying that such property is property which by the provisions of this
Section 4.3 may be sold, exchanged or otherwise disposed of or dealt with by the
Issuers or the Guarantors without any release or consent of the Trustee or the
Holders; provided, that the Trustee shall have no liability thereunder (except
for its gross negligence or willful misconduct) and all costs and expenses
(including, without limitation, reasonable attorneys' fees and disbursements)
shall be paid by the Company. The Trustee and the Collateral Agent shall be
authorized to conclusively rely on such certification.
(d) Any disposition of Collateral made in compliance with the provisions of
this Section 4.3 shall be deemed not to impair the Liens under the Mortgage
Documents and hereunder in contravention of the provisions of this Indenture.
Certain Releases of Collateral.
Subject to applicable law, the release of any Collateral from Liens created
by the Mortgage Documents or the release of, in whole or in part, the Liens
created by the Mortgage Documents, will not be deemed to impair the Mortgage
Documents in contravention of the provisions of this Indenture if and to the
extent the Collateral or Liens are released pursuant to, and in accordance with,
the applicable Mortgage Documents and pursuant to, and in accordance with, the
terms hereof. To the extent applicable, without limitation, the Issuers, each
Guarantor and each other obligor, if any, on the Securities shall cause TIA ss.
314(d), relating to the release of property or securities from the Liens of the
Mortgage Documents, to be complied with. Any certificate or opinion required by
TIA ss. 314(d) may be made by two Authorized Representatives, except in cases in
which TIA ss. 314(d) requires that such certificate or opinion be made by an
independent person. The Issuers shall not be required under this Indenture to
deliver to the Trustee any certificates or opinions required to be delivered
pursuant to ss. 314(d) of the TIA in connection with releases of Collateral in
accordance with Section 4.3(a) (ii) hereunder, unless TIA ss. 314(d) would
require such certificate or opinion to be made by an independent person.
<PAGE>
Payment of Expenses.
On demand of the Trustee, the Issuers forthwith shall pay or satisfactorily
provide for all reasonable expenditures incurred by the Trustee under this
Article IV, including the reasonable fees and expenses of counsel and all such
sums shall be a Lien upon the Collateral and shall be secured thereby.
<PAGE>
Suits to Protect the Collateral.
Subject to Section 4.1 of this Indenture and to the provisions of the
Mortgage Documents, the Trustee (to the extent not granted to the Collateral
Agent pursuant to the Collateral Agency Agreement) shall have power to institute
and to maintain such suits and proceedings as it may deem expedient to prevent
any impairment of the Collateral by any acts which may be unlawful or in
violation of the Mortgage Documents or this Indenture, including the power to
institute and maintain suits or proceedings to restrain the enforcement of or
compliance with any legislative or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid or if the enforcement of, or
compliance with, such enactment, rule or order would impair the security
interests in contravention of this Indenture or be prejudicial to the interests
of the Holders or the Trustee. The Trustee shall give notice to the Issuers
promptly following the institution of any such suit or proceeding.
Trustee's Duties.
The powers and duties conferred upon the Trustee by this Article IV are
solely to protect the Liens and shall not impose any duty upon the Trustee to
exercise any such powers and duties, except as expressly provided in this
Indenture, the Mortgage Documents or the TIA. The Trustee shall not be under any
duty to the Issuers or any Guarantor whatsoever to make or give any presentment,
demand for performance, notice of nonperformance, protest, notice of protest,
notice of dishonor, or other notice or demand in connection with any Collateral,
or to take any steps necessary to preserve any rights against prior parties
except as expressly provided in this Indenture or the Mortgage Documents. The
Trustee shall not be liable to the Issuers or any Guarantor for failure to
collect or realize upon any or all of the Collateral, or for any delay in so
doing, nor shall the Trustee be under any duty to the Issuers or any Guarantor
to take any action whatsoever with regard thereto. The Trustee shall have no
duty to the Issuers or any Guarantor to comply with any recording, filing, or
other legal requirements necessary to establish or maintain the validity,
priority or enforceability of the security interests in, or the Trustee's rights
in or to, any of the Collateral.
Restricted Funds Account.
<PAGE>
The Company or any of its Subsidiaries shall maintain and establish a
Restricted Funds Account as provided in the Security Agreement, which, subject
to the terms of the Collateral Agency Agreement, shall hold Cash Collateral for
the equal and ratable benefit of the Holders (without preference, priority or
distinction of any thereof over any other by reason of difference in time of
issuance, sale or otherwise, as security for the Indenture Obligations) and the
other lenders secured thereby pursuant to the Collateral Agency Agreement. Upon
delivery of an Officers' Certificate from the Company or any of its Subsidiaries
notifying the Trustee and the Collateral Agent of the release of funds from the
Restricted Funds Account and certifying that such funds will be used in
compliance with Section 5.15 within the time provided by Section 5.15, but not
later than 30 days after the transfer of such funds, the Company or its
Subsidiary, as the case may be, may transfer such funds from the Restricted
Funds Account.
The Issuers or any Guarantor may invest Cash Collateral in the Restricted
Funds Account only in Cash Equivalents. Interest and other amounts earned on
such Cash Collateral shall be held by the Collateral Agent in the Restricted
Funds Account as additional Collateral.
COVENANTS
Payment of Securities.
The Issuers shall pay the principal of and interest on the Securities on
the dates and in the manner provided in the Securities and this Indenture. An
installment of principal of or interest on the Securities shall be considered
paid on the date it is due if the Trustee or Paying Agent (other than the
Issuers, any of the Guarantors (or any other obligor on the Securities) or an
Affiliate of either of the Issuers or any of the Guarantors (or such other
obligor)) holds for the benefit of the Holders, on or before 10:00 a.m. New York
City time on that date, U.S. Legal Tender deposited and designated for and
sufficient to pay the installment.
The Issuers shall pay interest on overdue principal and on overdue
installments of interest at the rate specified in the Securities compounded
semi-annually, to the extent lawful.
Maintenance of Office or Agency.
<PAGE>
The Issuers shall maintain in the Borough of Manhattan, The City of New
York, an office or agency where Securities may be presented or surrendered for
payment, where Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Issuers in respect of the
Securities and this Indenture may be served. No service charge will be made for
any registration of transfer, exchange or redemption of Securities, but the
Issuers may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. The Issuers shall give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Issuers shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 12.2.
The Issuers may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or recession shall in any manner relieve the
Issuers of their obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York, for such purposes. The Issuers shall give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency. The Issuers
hereby initially designate the Corporate Trust Office of the Trustee as such
office.
Limitation on Restricted Payments.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, make any Restricted Payment if, after giving effect to
such Restricted Payment on a pro forma basis, (1) a Default or an Event of
Default shall have occurred and be continuing, (2) the Company is not permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Debt
Incurrence Ratio in paragraph (a) of Section 5.11, or (3) the aggregate amount
of all Restricted Payments made by the Company and its Subsidiaries, including
after giving effect to such proposed Restricted Payment, from and after the
Issue Date, would exceed the sum of (a) 50% of the aggregate Consolidated Net
Income of the Company and its Consolidated Subsidiaries for the period (taken as
one accounting period) commencing on the first day of the first fiscal quarter
commencing prior to the Issue Date, to and including the last day of the fiscal
quarter ended immediately prior to the date of each such calculation (or, in the
event Consolidated Net Income for such period is a deficit, then minus 100% of
such deficit), plus (b) the aggregate Net Cash Proceeds received by the Company
after the Issue Date and on or prior to the date of such proposed Restricted
Payment from (i)
<PAGE>
the sale of its Qualified Equity Interests (other than (x) to a Subsidiary of
the Company, (y) to the extent applied in connection with a Qualified Exchange
and (z) in connection with the equity offering by THCR prior to or substantially
concurrent with the issuance of the Securities, including any exercise of the
underwriters' overallotment option, except for amounts Trump AC receives
therefrom (including by Capital Contribution) in excess of $270 million or (ii)
other Capital Contributions not covered by clause (i) of this sentence .
The foregoing clauses (2) and (3) of the immediately preceding paragraph,
however, will not prohibit (v) (I) distributions by the Company pursuant to the
terms of the Partnership Agreement as in effect on the Issue Date to THCR
Holdings to the extent promptly distributed to and/or applied by THCR Holdings
or THCR (A) to pay reasonable general and administrative expenses of such
persons, including directors' fees and premiums for directors' and officers'
liability insurance, which distributions shall not exceed $10.0 million in any
consecutive four-quarter period, (B) to make indemnification payments as
required by the Certificate of Incorporation of THCR as in effect on the Issue
Date or (C) to effect redemption of any Equity Interest of THCR if (x) counsel
to THCR delivers an opinion that failure to so redeem would subject THCR to an
adverse action by a Gaming Authority (or, if applicable, a failure to act by a
Gaming Authority that is adverse to THCR) and (y) THCR determines (as evidenced
by a resolution of its Board of Directors delivered to the Trustee) that such
adverse action (or, if applicable, such failure to act) would be likely to have
a material adverse effect on THCR, and (II) distributions by the Company to THCR
Holdings to the extent promptly distributed to and applied by THCR to pay any
tax liability resulting from the distributions provided for in (I) above, as
required by the Partnership Agreement, (w) distributions by the Company to THCR
Holdings in an amount not to exceed $50.0 million in the aggregate to the extent
applied by THCR Holdings, within 20 Business Days of receiving such
distribution, to the next scheduled interest payment on the Senior Notes or any
Refinancing Indebtedness with respect thereto (provided, that solely in the case
of this clause (w), clause (1) of the immediately preceding paragraph will not
prohibit a distribution hereunder except in the case of an Event of Default
under clause (a) or (b) of Section 7.1 hereof), (x) a Qualified Exchange, (y)
for so long as the Company is a partnership or substantially similar
pass-through entity for Federal income tax purposes, cash distributions made by
the Company to its Partners from time to time in amounts not to exceed the
Permitted Tax Distributions, so long as the payments are made at the time
permitted by the second sentence of the definition of Permitted Tax
Distributions contained herein, or (z) the payment of any dividend within 60
days after the date of its declaration if such dividend could have been made on
the date of such declaration in compliance with the foregoing provisions. In
addition, the immediately preceding paragraph will not prohibit the purchase by
the Company of
<PAGE>
Indebtedness incurred pursuant to clause (c) of Section 5.11 substantially
concurrently with a purchase by the Company of Securities pursuant to a Change
of Control Offer or an Asset Sale Offer, provided, that (i) in the case of a
purchase pursuant to an Asset Sale Offer, such purchase of Securities represents
a pro rata application of the Asset Sale Offer Amount to the Securities and such
other Indebtedness, based upon the aggregate principal amount then outstanding,
and (ii) the terms of such other Indebtedness do not restrict such purchase of
the Securities pursuant to a Change of Control Offer or an Asset Sale Offer. The
full amount of any Restricted Payment made pursuant to the foregoing clauses
(v), (w), (y) and (z) of the second preceding sentence (but not pursuant to the
immediately preceding sentence or to clause (x) of the second preceding
sentence), however, will be deducted in the calculation of the aggregate amount
of Restricted Payments available to be made referred to in clause (3) of the
immediately preceding paragraph.
Corporate and Partnership Existence.
Subject to Article VI, each of the Issuers shall do or cause to be done all
things necessary to preserve and keep in full force and effect their corporate
or partnership existence, as the case may be, and the corporate or other
existence of each of their Subsidiaries in accordance with the respective
organizational documents of each of them and the rights (charter and statutory)
and corporate or partnership franchises of the Issuers and each of their
Subsidiaries; provided, however, that neither of the Issuers shall be required
to preserve, with respect to itself or any of its Subsidiaries, any right or
franchise if (a) the Board of Directors of Funding shall determine reasonably
and in good faith that the preservation thereof is no longer desirable in the
conduct of the business of the Issuers and (b) the loss thereof is not
disadvantageous in any material respect to the Holders; and provided further,
that the Company may change from a partnership to a corporation, in which case
it must thereafter maintain its corporate existence in accordance with this
Section 5.4.
Payment of Taxes and Other Claims.
<PAGE>
Each of the Issuers shall, and shall cause each of their Subsidiaries to,
pay or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges (including
withholding taxes and any penalties, interest and additions to taxes) levied or
imposed upon either of the Issuers or any of their Subsidiaries or properties
and assets of the Issuers or any of their Subsidiaries and (ii) all lawful
claims, whether for labor, materials, supplies, services or anything else, which
have become due and payable and which by law have or may become a Lien upon the
property and assets of either of the Issuers or any of their Subsidiaries;
provided, however, that neither the Issuers nor their Subsidiaries shall be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings and for which disputed
amounts adequate reserves have been established in accordance with GAAP.
Maintenance of Insurance.
<PAGE>
The Company will, and will cause its Subsidiaries to, (a) obtain, prior to
the Issue Date, mortgagee title insurance policies insuring a first mortgage
lien on the land, leaseholds and the other portions of the Collateral deemed
real estate under applicable law, as constituted on the Issue Date, subject to
certain exceptions, in an amount not less than the principal amount of the
Securities (for the benefit of all holders of Indebtedness secured pursuant to
the Collateral Agency Agreement) and (b) from and at all times after the Issue
Date until the Securities have been paid in full, have and maintain in effect
insurance with responsible carriers against such risks and in such amounts as is
customarily carried by similar businesses with such deductibles, retentions,
self insured amounts and coinsurance provisions as are customarily carried by
similar businesses of similar size, including, without limitation, property and
casualty, and, with respect to insurance on the Collateral, shall have provided
insurance certificates evidencing such insurance to the Collateral Agent prior
to the Issue Date and shall thereafter provide such certificates prior to the
anniversary or renewal date of each such policy referred to in this clause (b),
which certificate shall expressly state the expiration date for each policy
listed. All insurance with respect to the Collateral required under the
Indenture (except worker's compensation) shall name the Issuers, Taj Associates,
Plaza Associates, and the Collateral Agent and such other parties to the extent
required by the Material Instrument Requirement (as defined in the Plaza
Mortgage) as additional insureds or loss payees, as the case may be, with losses
in excess of $10.0 million payable jointly to the Issuers, Taj Associates, Plaza
Associates and the Collateral Agent (unless a Default or Event of Default has
occurred and is then continuing, in which case all losses are payable solely to
the Collateral Agent subject to the Material Instrument Requirement), with no
recourse against the Collateral Agent for the payment of premiums, deductibles,
commissions or club calls, and for at least 30 days notice of cancellation. All
such insurance policies will be issued by carriers having an A.M. Best &
Company, Inc. rating of A- or higher and a financial size category of not less
than X, or if such carrier is not rated by A.M. Best & Company, Inc., having the
financial stability and size deemed appropriate by an opinion from a reputable
insurance broker. The Company may effect the insurance required under this
Section 5.6 under blanket and/or umbrella policies covering properties owned or
leased by Affiliates of the Company; provided, that such policies otherwise
comply with this Indenture and the Mortgages.
Compliance Certificate; Notice of Default.
<PAGE>
(a) The Issuers shall deliver to the Trustee, within 120 days after the end
of each of their fiscal years, an Officers' Certificate complying (whether or
not required) with Section 314(a)(4) of the TIA and stating that a review of
their activities and the activities of their Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Authorized
Representatives with a view to determining whether each of the Issuers has or
has caused to be, kept, observed, performed and fulfilled its obligations under
this Indenture and the and further stating, as to each such Authorized
Representative signing such certificate, whether or not the signer knows of any
failure by either of the Issuers or any Subsidiary of either of the Issuers to
comply with any conditions or covenants in this Indenture and, if such signer
does know of such a failure to comply, the certificate shall describe such
failure with particularity. The Officers' Certificate shall also notify the
Trustee should the relevant fiscal year end on any date other than the current
fiscal year end date.
(b) So long as not contrary to the then current recommendation of the
American Institute of Certified Public Accountants, the Issuers shall deliver to
the Trustee within 120 days after the end of each of their fiscal years a
written report of a firm of independent certified public accountants with an
established national reputation stating that in conducting their audit for such
fiscal year, nothing has come to their attention that caused them to believe
that either of the Issuers or any Subsidiary of either of the Issuers was not in
compliance with the provisions set forth in Section 5.3, 5.11, 5.15, 5.19, or
5.20 of this Indenture or any of the provisions of the Mortgage Documents.
(c) Each of the Issuers shall, so long as any of the Securities are
outstanding, deliver to the Trustee, immediately upon becoming aware of any
Default or Event of Default under this Indenture, an Officers' Certificate
specifying such Default or Event of Default and what action the Issuers are
taking or propose to take with respect thereto. The Trustee shall not be deemed
to have knowledge of a Default or an Event of Default unless one of its trust
officers receives notice of the Default or Event of Default giving rise thereto
from either of the Issuers or any of the Holders.
<PAGE>
Provision of Financial Statements.
Whether or not either of the Issuers is subject to Section 13(a) or 15(d)
of the Exchange Act, each such Person will file with the SEC the annual reports,
quarterly reports and other documents which each such Person would have been
required to file with the SEC (to the extent permitted by applicable law)
pursuant to such Section 13(a) or 15(d) if such Person were so subject, such
documents to be filed with the SEC on or prior to the respective dates (the
"Required Filing Dates") by which such Person would have been required so to
file such documents if such Person were so subject. Each such Person will also
in any event within 15 days of each Required Filing Date (i) transmit by mail to
all Holders, as their names and addresses appear in the First Mortgage Note
Register, without cost to such Holders and (ii) file with the Trustee copies of
the annual reports, quarterly reports and other documents which each such Person
would have been required to file with the SEC pursuant to Section 13(a) or 15(d)
of the Exchange Act if such Person were subject to such Sections, together with
supplemental information in respect of summary financial data for each of the
Casino Hotels at the Issuers' cost. Notwithstanding anything contrary herein the
Trustee shall have no duty to review such documents for purposes of determining
compliance with any provisions of this Indenture.
Waiver of Stay, Extension or Usury Laws.
Each of the Issuers and each of the Guarantors covenant (to the extent that
it may lawfully do so) that it will not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law wherever enacted which would
prohibit or forgive either of the Issuers or any Guarantor from paying all or
any portion of the principal of or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that they may lawfully do so) each of the Issuers or any Guarantor hereby
expressly waives all benefit or advantage of any such law insofar as such law
applies to the Securities, and covenants that it shall not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
<PAGE>
Limitation on Transactions with Affiliates.
The Company will not, nor will any of the Subsidiaries be permitted to,
directly or indirectly, enter into or suffer to exist any contract, arrangement,
understanding or transaction or series of related transactions (including,
without limitation, the sale, purchase, exchange or lease of assets, property or
services) with any Affiliate of the Company (other than a Wholly-owned
Subsidiary) unless (a) such transaction or series of related transactions is on
terms that are no less favorable to the Company or such Subsidiary, as the case
may be, than would be available at the time of such transaction or transactions
in a comparable transaction in arm's-length dealings with an unaffiliated third
party and, with respect to a transaction or series of related transactions
involving aggregate payments equal to or greater than (x) $2.0 million, such
transaction or series of related transactions is approved by a majority of the
Independent Directors of the Board of Directors of Funding, or (y) $10.0
million, prior to the consummation of such transaction or series of related
transactions, the Company also obtains a written favorable opinion as to the
fairness thereof to the Company from a financial point of view from an
independent investment banking firm of national reputation, and (b) the Company
delivers an Officers' Certificate to the Trustee certifying that such
transaction or transactions comply with clause (a) above. The foregoing
restriction will not apply to (1) pro rata dividends or distributions paid in
cash of any class of Equity Interests and not prohibited under Section 5.3, (2)
the Partnership Agreement as in effect on the Issue Date, (3) the Affiliated
Ground Leases as in effect on the Issue Date, or (4) the arrangements, as in
effect on the Issue Date, which are described in the Prospectus under the
caption "Certain Transactions" (including any subsections of the Prospectus
specifically referred to under such caption).
Funding will maintain at least two Independent Directors on its Board of
Directors.
Limitation on Incurrence of Additional Indebtedness.
Except as set forth below in this Section 5.11, the Company will not, nor
will any of its Subsidiaries be permitted to, directly or indirectly, create,
issue, assume, guaranty, incur, become directly or indirectly liable with
respect to (including as a result of an Acquisition), or otherwise become
responsible for, contingently or otherwise (individually and collectively, to
"incur" or, as appropriate, an "incurrence"), any Indebtedness or any
Disqualified Capital Stock (including Acquired Indebtedness). Notwithstanding
the foregoing:
(a) if (i) no Default or Event of Default shall have occurred and be
continuing at the time of, or would occur after giving effect on a pro
forma basis to, such incurrence of Indebtedness or Disqualified Capital
Stock and (ii) on the date
<PAGE>
of such incurrence (the "Incurrence Date"), the Consolidated Coverage Ratio
of the Company for the Reference Period immediately preceding the
Incurrence Date, after giving effect on a pro forma basis to such
incurrence of such Indebtedness or Disqualified Capital Stock and, to the
extent set forth in the definition of Consolidated Coverage Ratio, the use
of proceeds thereof, would be at least 2.0 to 1 for incurrences on or prior
to November 1, 1998 and at least 2.25 to 1 for incurrences thereafter (the
"Debt Incurrence Ratio"), then the Company may incur such Indebtedness or
Disqualified Capital Stock, provided, that except in the case of Acquired
Indebtedness, such Indebtedness incurred pursuant to this clause (a) has an
Average Life to Stated Maturity that exceeds the remaining Average Life to
Stated Maturity of the Securities and has a Stated Maturity for its final
scheduled principal or (in the case of Disqualified Capital Stock)
redemption payment, as applicable, later than the Stated Maturity for the
final scheduled principal payment of the Securities;
(b) the Company and the Guarantors may incur Indebtedness evidenced by
the Securities and represented by this Indenture;
(c) the Company may incur Indebtedness not to exceed $75.0 million in
aggregate principal amount outstanding at any time pursuant to this clause
(c) the proceeds of which are used for further acquisitions, renovations or
constructions of Improvements with respect to, or related to (including
related demolitions), the Casino Hotels or the financing of equipment to be
used therein, provided, that no Indebtedness shall be incurred pursuant to
this clause (c) in an aggregate principal amount which exceeds 75% of the
cost of the assets or Improvements, as the case may be, financed thereby,
and provided further, that except in the case of Acquired Indebtedness,
such Indebtedness incurred pursuant to this clause (c) has an Average Life
to Stated Maturity that equals or exceeds the remaining Average Life to
Stated Maturity of the Securities and has a Stated Maturity for its final
scheduled principal or (in the case of Disqualified Capital Stock)
redemption payment, as applicable, on or later than the Stated Maturity for
the final scheduled principal payment of the Securities;
(d) Plaza Associates and Taj Associates may incur Indebtedness
represented by F, F&E Financing Agreements and/or Capitalized Lease
Obligations relating to after-acquired gaming or related equipment (or
other after-acquired equipment necessary to conduct a Related Business and
consistent in amount and nature with industry practices) of (or, in the
case of Capitalized Lease Obligations, leased by) Plaza Associates or Taj
Associates, as applicable, not to exceed (for Plaza Associates and Taj
Associates, collectively) $50.0 million in aggregate principal amount
outstanding at any time pursuant to this clause (d) (including any
Indebtedness issued to refinance, refund or replace such Indebtedness);
<PAGE>
(e) the Company may incur Indebtedness pursuant to the Working Capital
Facility up to an aggregate amount outstanding (including any Indebtedness
issued to refinance, refund or replace such Indebtedness) at any time of
$25.0 million;
(f) the Company, Plaza Associates and Taj Associates, as applicable,
may incur Refinancing Indebtedness with respect to any Indebtedness or
Disqualified Capital Stock, as applicable, described in clauses (a), (b)
and (c) of this Section or which is outstanding on the Issue Date so long a
such Refinancing Indebtedness is secured only by the assets (if any) that
secured the Indebtedness so refinanced;
(g) the Company, Plaza Associates, Taj Associates and their
Subsidiaries may incur Permitted Indebtedness; and
(h) the Company may incur Indebtedness in an aggregate amount
outstanding at any time pursuant to this clause (h) (including any
Indebtedness issued to refinance, replace, or refund such Indebtedness) of
up to $30.0 million.
Indebtedness of any Person which is outstanding at the time such Person
becomes a Subsidiary of the Company, including by designation, or is merged with
or into or consolidated with the Company or a Subsidiary of the Company shall be
deemed to have been incurred at the time such Person becomes such a Subsidiary
of the Company or is merged with or into or consolidated with the Company or a
Subsidiary of the Company, as applicable. Except to the extent provided
otherwise in the definition of Permitted Indebtedness, any Guarantor may
guarantee Indebtedness of the Company or another Guarantor to the extent and at
the time the Company or such other Guarantor incurs such Indebtedness in
compliance with this Section 5.11.
Restriction on Sale and Issuance of Subsidiary Stock.
The Company will not sell, and will not permit any of its Subsidiaries to
issue or sell, any shares of Equity Interests of any Subsidiary of the Company
to any Person other than the Company or a Wholly-owned Subsidiary of the
Company, except that all of the Equity Interests of a Subsidiary may be sold if
such Asset Sale complies with the other provisions of this Indenture, including
Sections 5.15 and 6.1.
Limitation on Dividends and Other Payment Restrictions Affecting
Subsidiaries.
The Company will not, nor will any of its Subsidiaries be permitted to,
directly or indirectly, create, assume or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any Subsidiary of the Company to pay dividends or make any
<PAGE>
other distributions to or on behalf of, or to pay any obligation to or on behalf
of, or otherwise to transfer assets or property to or on behalf of, or make or
pay loans or advances to or on behalf of, the Company or any Subsidiary of the
Company, except (a) any restrictions, with respect to a Subsidiary that is not a
Subsidiary on the date of this Indenture, in existence at the time such Person
becomes a Subsidiary of the Company (but not created in connection with or
contemplation of such Person becoming a Subsidiary and not applicable to any
Person, or property, asset or business, than the Person, or property, asset or
business so acquired), (b) any restrictions with respect to a Subsidiary imposed
pursuant to an agreement which has been entered into for the sale or disposition
of all or substantially all of the Equity Interests or assets of such Subsidiary
(which restrictions shall be for the benefit of the purchaser thereof and no
other Person and apply only to the assets of the Subsidiary to be sold), (c)
restrictions imposed by a Permitted Lien on the transfer of the respective
assets subject thereto, (d) restrictions contained in this Indenture and the
Mortgage Documents, as the same may be amended from time to time in accordance
with the terms thereof, (e) restrictions imposed by Gaming Authorities on the
payment of dividends by entities holding Gaming Licenses, and (f) any
restrictions existing under any agreement which refinances or replaces the
agreements containing the restrictions in clause (a), provided that the terms
and conditions of any such agreement are not more restrictive than those under
or pursuant to the agreement evidencing the Indebtedness refinanced.
Limitation on Liens.
The Company will not, nor will any of its Subsidiaries be permitted to,
directly or indirectly, create, incur, assume or suffer to exist any Lien of any
kind, other than Permitted Liens, upon any of their respective assets now owned
or acquired after the date of this Indenture or upon any income or profits
therefrom.
Limitation on Sales of Assets and Subsidiary Stock; Event of Loss.
Neither the Company nor any of its Subsidiaries will, in one or a series of
related transactions, convey, sell, transfer, assign or otherwise dispose of,
directly or indirectly, any of its property, business or assets, including,
without limitation, upon any sale or other transfer or issuance of any Equity
Interests of any Subsidiary or any sale and leaseback transaction, whether by
the Company or a Subsidiary of the Company or through the issuance, sale or
transfer of Equity Interests by a Subsidiary of the Company (an "Asset Sale"),
unless:
(1) (a) within 210 days after the date of such Asset Sale, the Net
Cash Proceeds therefrom (the "Asset Sale
<PAGE>
Offer Amount") are applied to the optional redemption of the Securities in
accordance with the terms of this Indenture or to the repurchase of the
Securities pursuant to an irrevocable, unconditional cash offer by the
Company (the "Asset Sale Offer") to repurchase the Securities at a purchase
price (the "Asset Sale Offer Price") of 100% of principal amount, plus
accrued interest to the date of payment, made within 180 days of such Asset
Sale and/or (b) within 180 days following such Asset Sale, the Asset Sale
Offer Amount (less that portion of the Asset Sale Offer Amount applied as
provided in clause (a) above) is reinvested by the Company or its
Subsidiaries to make replacements, improvements or additions to existing
properties or new properties directly related to a Related Business and
such reinvestment is made or committed to be made (such commitment to be
established by (A) the purchase of a new property, the ground-breaking or
the commencement of construction, in each case within 180 days of such
Asset Sale or (B) promptly placing the Net Cash Proceeds in a Restricted
Funds Account, provided, that such Net Cash Proceeds are invested as
aforesaid in existing properties or new properties within 365 days of being
placed in such Restricted Funds Account) and provided further, that in the
case of any Asset Sale involving all or substantially all of (x) the
Capital Stock of a Subsidiary, the assets of which constitute all or
substantially all of either Casino Hotel (or both) or (y) the assets of
either Casino Hotel (or both) (a "Casino Sale"), such Net Cash Proceeds
must be used to make an Asset Sale Offer in accordance with clause 1(a),
and not reinvested under clause 1(b),
(2) with respect to any Asset Sale or related series of Asset Sales
involving securities, property or assets with an aggregate fair market
value in excess of $5.0 million, at least 75% (or 90%, in the case of a
Casino Sale) of the consideration for such Asset Sale or series of related
Asset Sales consists of cash or Cash Equivalents (treating for this purpose
as cash or Cash Equivalents (A) property that promptly after such Asset
Sale is converted into cash or Cash Equivalents and (B) except in the case
of a Casino Sale, any senior Indebtedness that secured the subject assets
that are assumed by the transferee in such Asset Sale,
(3) no Default or Event of Default shall have occurred and be
continuing at the time of, or would occur after giving effect, on a pro
forma basis, to, such Asset Sale, and
(4) the Company determines in good faith that the Company or such
Subsidiary, as applicable, receives fair market value for such Asset Sale.
For purposes of this Section 5.15 with respect to the application of the
Net Cash Proceeds thereof, the receipt by the Company or any of its Subsidiaries
of proceeds due to an Event of Loss shall constitute an Asset Sale, which Asset
Sale shall be deemed to occur upon receipt of such proceeds. All Net Cash
<PAGE>
Proceeds from an Event of Loss shall be reinvested or used to repurchase the
Securities, all within the applicable periods and as otherwise provided above in
clause (1) of the first paragraph of this Section 5.15.
An Asset Sale Offer need not be made until the accumulated Net Cash
Proceeds from Asset Sales not applied in accordance with (1) above (the "Excess
Proceeds") exceeds $15.0 million. Each Asset Sale Offer shall remain open for 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Asset Sale Offer
Period"). Upon expiration of the Asset Sale Offer Period, the Company shall
apply the Excess Proceeds, plus an amount equal to accrued interest, to the
purchase of all Securities tendered (on a pro rata basis if the Excess Proceeds
is insufficient to purchase all such Securities so tendered) at the Asset Sale
Offer Price (together with accrued interest).
Notwithstanding the foregoing, if an Asset Sale Offer is commenced and
securities of the Company ranking pari passu in right of payment with the
Securities and incurred pursuant to clause (c) of Section 5.11 are outstanding
at the date of commencement thereof, the terms of which provide that a
substantially similar offer must be made with respect thereto, then the Asset
Sale Offer shall be made concurrently with such other offer, and securities of
each issue which the Holders of securities of such issue elect to have purchased
will be accepted pro rata in proportion to the aggregate principal amount
thereof; provided, that in so repurchasing such other securities the Company is
in compliance with the provisions of Section 5.3.
Subject to Article IV hereof, notwithstanding the foregoing provisions of
the prior paragraphs:
the Company and its Subsidiaries may, without complying with the foregoing, in
the ordinary course of business for the casino industry, convey, sell, lease,
transfer, assign, or otherwise dispose of assets acquired and held for resale in
the ordinary course of business;
other than a Casino Sale, the Company and its Subsidiaries may, without
complying with the foregoing, convey, sell, lease, transfer or otherwise dispose
of assets pursuant to and in accordance with Section 6.1 of this Indenture;
the Company and its Subsidiaries may, without complying with the foregoing,
convey, sell, lease, transfer, assign or otherwise dispose of three warehouses
and related facilities (the Egg Harbor Parcel, the Pleasantville Warehouse and
the Realty Warehouse) in exchange for any type of consideration so long as the
Company determines in good faith that the Company or such Subsidiary, as
applicable, receives fair market value;
<PAGE>
the Company and its Subsidiaries may, without complying with the foregoing,
convey, sell, transfer, assign or otherwise dispose of assets to the Company or
any Wholly-owned Subsidiaries of the Company; and
sell or dispose of, free from the Liens under the Mortgage Documents, any
Tangible Personal Property which, in the Company's reasonable opinion, may have
become obsolete or unfit for use or which is no longer necessary in the conduct
of its businesses.
Notwithstanding the foregoing, the Company will not, and will not permit any of
its Subsidiaries to, directly or indirectly make any Asset Sale of any of the
Equity Interests of such Subsidiary except pursuant to an Asset Sale of all the
Equity Interests of such Subsidiary.
In addition, if the amount required to acquire all Securities tendered by
Holders pursuant to the Asset Sale Offer (the "Acceptance Amount") is less than
the Asset Sale Offer Amount, the excess of the Asset Sale Offer Amount over the
Acceptance Amount may be used by the Company and its Subsidiaries for general
corporate or partnership purposes without restriction, other than dividends,
repurchases or other distributions in respect of Equity Interests, and unless
otherwise restricted by the other provisions of the Indenture. Upon consummation
of any Asset Sale Offer, the Asset Sale Offer Amount will be reduced to zero.
Notice of an Asset Sale Offer shall be sent, not later than 20 Business
Days prior to the close of business on the Asset Sale Put Date (as defined
below), by first-class mail, by the Issuers to each Holder at its registered
address, with a copy to the Trustee. The notice to the Holders shall contain all
information, instructions and materials required by applicable law or otherwise
material to such Holders' decision to tender Securities pursuant to the Asset
Sale Offer. The notice, which (to the extent consistent with this Indenture)
shall govern the terms of the Asset Sale Offer, shall state:
(l) that the Asset Sale Offer is being made pursuant to such notice
and this Section 5.15;
(2) the Asset Sale Offer Amount, the Accumulated Amount, the Asset
Sale Offer Price (including the amount of accrued and unpaid interest), the
Asset Sale Put Date, and the "Asset Sale Purchase Date," which Asset Sale
Purchase Date shall be on or prior to 30 Business Days (or later, if
required by law) following the date the Accumulated Amount was greater than
$5.0 million;
(3) that any Security or portion thereof not tendered or accepted for
payment will continue to accrue interest if interest is then accruing;
<PAGE>
(4) that, unless the Issuers default in depositing U.S. Legal Tender
with the Paying Agent (which may not for purposes of this Section 5.15,
notwithstanding anything in this Indenture to the contrary, be the Issuers
or any Affiliate of the Issuers) in accordance with the last paragraph of
this clause (b), any Security, or portion thereof, accepted for payment
pursuant to the Asset Sale Offer shall cease to accrue interest after the
Asset Sale Purchase Date;
(5) that Holders electing to have a Security, or portion thereof,
purchased pursuant to an Asset Sale Offer will be required to surrender
their Security, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Security completed, to the Paying Agent (which may
not for purposes of this Section 5.15, notwithstanding any other provision
of this Indenture, be the Issuers or any Affiliate of the Issuers) at the
address specified in the notice prior to the close of business on the third
Business Day prior to the Asset Sale Purchase Date (the "Asset Sale Put
Date");
(6) that Holders will be entitled to withdraw their elections, in
whole or in part, if the Paying Agent (which may not for purposes of this
Section 5.15, notwithstanding any other provision of this Indenture, be the
Issuers or any Affiliate of the Issuers) receives, up to the close of
business on the Asset Sale Put Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Securities the Holder is withdrawing and a statement that
such Holder is withdrawing his election to have such principal amount of
Securities purchased;
(7) that if Securities in a principal amount in excess of the
principal amount of Securities to be acquired pursuant to the Asset Sale
Offer are tendered and not withdrawn, the Issuers shall purchase Securities
on a pro rata basis (with such adjustments as may be deemed appropriate by
the Issuers so that only Securities in denominations of $1,000 or integral
multiples of $1,000 shall be acquired);
(8) that Holders whose Securities were purchased only in part will be
issued new Securities equal in principal amount to the unpurchased portion
of the Securities surrendered; and
(9) the circumstances and relevant facts regarding such Asset Sales.
No later than 12:00 noon New York City time on an Asset Sale Purchase Date,
the Issuers shall (i) accept for payment Securities or portions thereof properly
tendered pursuant to the Asset Sale Offer (on a pro rata basis if required
pursuant to paragraph (7) above), (ii) deposit with the Paying Agent U.S. Legal
Tender sufficient to pay the Asset Sale Offer Price (plus accrued interest) for
all Securities or portions thereof so
<PAGE>
accepted and (iii) deliver to the Trustee Securities so accepted together with
an Officers' Certificate setting forth the Securities or portions thereof being
purchased by the Issuers. The Paying Agent shall promptly mail or deliver to
Holders of Securities so accepted payment in an amount equal to the Asset Sale
Offer Price for such Securities, and the Trustee shall promptly authenticate and
mail or deliver to such Holders a new Security equal in principal amount to any
unpurchased portion of the Security surrendered. Any Securities not so accepted
shall be promptly mailed or delivered by the Issuers to the Holder thereof.
Future Subsidiary Guarantors.
The Company and the Guarantors covenant and agree that they shall cause
each person that is or becomes a Subsidiary of the Company (other than Funding)
to execute a Guaranty in the form of Exhibit B hereto and will cause such
Subsidiary to enter into a supplemental indenture for the purpose of jointly and
severally guaranteeing, on a senior secured basis, the Indenture Obligations.
Limitation on Activities of Funding.
Funding will not conduct any business (including having any Subsidiary)
whatsoever, other than to comply with its obligations under this Indenture and
the Securities. Funding will not incur or otherwise become liable for any
Indebtedness (other than the Securities and any renewal, extension,
substitution, refunding, refinancing or replacement thereof in accordance with
this Indenture) or make any Restricted Payments.
Limitation on Lines of Business.
Neither the Company nor any of the Subsidiaries will directly or indirectly
engage to any substantial extent in any line or lines of business activity other
than which, in the reasonable good faith judgment of the Independent Directors
of Funding is a Related Business.
Restriction on Certain Agreements.
<PAGE>
Other than employment agreements in the ordinary course of business
consistent with industry practice and approved by the compensation committee of
Funding, the Company will not, and will not permit any of its Subsidiaries to,
enter into any management, services or consulting agreement with Trump or any
Affiliate of Trump, other than the TPM Services Agreement; provided, that no
Services Fee thereunder shall be paid (i) to any person other than the Company
or a Subsidiary of the Company if the TPM Services Agreement is assigned or
transferred by Trump Plaza Management Corp. and (ii) to Trump Plaza Management
Corp. after expiration of the Super Puma Helicopter Lease. The Company will not,
and will not permit the Subsidiaries to, pay any Services Fee under the TPM
Services Agreement to Trump Plaza Management Corp. or pay or reimburse any
expenses relating thereto if a Default or Event of Default has occurred and is
continuing. The terms of the TPM Services Agreement shall not be amended to
increase the amounts to be paid thereunder in the aggregate or on any particular
date, or in any other manner which would be adverse to the Company or its
Subsidiaries.
Limitation on Leases.
The Company will not, nor will any of its Subsidiaries, be permitted to,
lease as tenant or subtenant real or personal property (except Permitted
Leases), unless the Company's Consolidated Coverage Ratio for the four full
fiscal quarters immediately preceding such event, taken as one period (and after
also giving pro forma effect to any such lease as if such lease was entered into
at the beginning of such four-quarter period), would have been at least equal to
the ratios set forth below for the applicable period during which such
determination is being made:
Period Ratio
------ -----
First 24 months from and including the Issue Date......... 2.00 to 1
Thereafter................................................ 2.25 to 1
In giving effect to the lease as of such four full fiscal quarters, it will be
assumed that the rent for such prior four fiscal quarters was the greater of the
(i) average annualized rent over the term of such lease and (ii) rent payable
for the first four fiscal quarters of such lease.
Limitation on Status as Investment Company.
None of the Company, Funding, any Unrestricted Subsidiary or any of their
respective Subsidiaries shall become required to register as an "investment
company" (as that term is defined in the Investment Company Act of 1940, as
amended), or otherwise become subject to regulation under the Investment Company
Act.
Future Collateral Agreements.
<PAGE>
The Company and the Guarantors hereby agree and consent that all property,
real, personal or mixed or any interest therein (other than Excepted Property),
of every kind and description and wheresoever situate, which may be hereafter
acquired by the Company, any of its Subsidiaries or any Guarantor (including,
without limitation, fee title to any Leased Land) shall immediately upon the
acquisition thereof by the Company, any of its Subsidiaries or any Guarantor,
and without any further mortgage, conveyance or assignment, become subject to
the Liens under the Mortgage Documents as fully as though now owned by the
Company, any of its Subsidiaries or any Guarantor. Nevertheless, the Company,
any of its Subsidiaries or any Guarantor shall do, execute, acknowledge and
deliver all and every such further acts, conveyances, mortgages, financing
statements and assurances necessary, including as the Collateral Agent shall
reasonably require, for accomplishing the express purposes of the Indenture and
the Mortgage Documents (including the preceding sentence).
SUCCESSORS
Limitation on Merger, Sale or Consolidation.
Neither of the Issuers may consolidate with, merge with or into any other
Person or sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets (as an entirety or substantially
as an entirety in one transaction or series of related transactions) to any
Person or group of affiliated Persons or permit any of the Company's
Subsidiaries to enter into any such transaction or transactions if such
transaction or transactions, in the aggregate, would result in a transfer of all
or substantially all of the assets of the Company and the Subsidiaries on a
Consolidated basis or Funding, as applicable, to any other Person, unless:
) such Issuer shall be the continuing Person, or the Person (if other than
such Issuer) formed by such consolidation or into which such Issuer is merged or
to which the properties and assets of such Issuer are transferred (the
"Surviving Entity") shall be a partnership or corporation, in the case of the
Company, and a corporation, in the case of Funding, duly organized and validly
existing under the laws of the United States or any state thereof or the
District of Columbia and shall expressly assume, by a supplemental indenture,
all of the obligations of such Issuer under the Securities and this Indenture,
and this Indenture shall remain in full force and effect;
) immediately before and immediately after giving effect to such
transaction on a pro forma basis, no Event of Default or Default shall have
occurred and be continuing;
<PAGE>
) immediately after giving effect to such transaction on a pro forma basis,
the Consolidated Net Worth of the Company or the Surviving Entity, as
applicable, is at least equal to the Consolidated Net Worth of the Company
immediately prior to such transaction or series of transactions;
) immediately before and after giving effect to such transaction on a pro
forma basis, the Company or the Surviving Entity, as applicable, could incur at
least $1.00 of additional Indebtedness pursuant to the Debt Incurrence Ratio set
forth in paragraph (a) of Section 5.11; and
) immediately after such transaction, such Issuer or the Surviving Entity,
as applicable, holds all Permits required for operation of the business of, and
such entity is controlled by a Person or entity (or has retained a Person or
entity which is) experienced in, operating casino hotels or otherwise holds all
Permits (including those required from Gaming Authorities) to operate its
business.
The Company shall also deliver to the Trustee an officers' certificate and
an opinion of counsel, each stating that (a) such consolidation, merger, sale,
assignment, conveyance, transfer, lease or disposition and such supplemental
indenture comply with this Indenture and (b) this transaction shall not impair
the rights and powers of the Trustee and Holders of the Securities thereunder.
For purposes of the first sentence of this Section 6.1, the sale, lease,
conveyance or transfer of all or substantially all of the properties and assets
of one or more Subsidiaries of the Issuers, which properties and assets, if held
by the Issuers instead of such Subsidiaries, would constitute all or
substantially all of the properties and assets of the Issuers on a consolidated
basis, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Issuers.
Successor Substituted.
In the event of any transaction (other than a lease) described in and
complying with the conditions listed in Section 6.1 in which the Company or
Funding, as applicable, is not the continuing Person, the successor Person
formed or remaining shall succeed to, and be substituted for, and may exercise
every right and power of, provisions of the Company or Funding, as applicable,
and the Company or Funding shall in such case be discharged from all obligations
and covenants under this Indenture, the Securities and the Mortgage Documents.
EVENTS OF DEFAULT AND REMEDIES
<PAGE>
Events of Default.
"Event of Default," wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
caused voluntarily or involuntarily or effected, without limitation, by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
) the failure by the Issuers to pay any installment of interest
(including any defaulted interest) on the Securities as and when the same
becomes due and payable and the continuance of any such failure for 30
days;
) the failure by the Issuers to pay all or any part of the principal,
or premium, if any, on the Securities when and as the same becomes due and
payable at maturity, at redemption, by acceleration or otherwise,
including, without limitation, payment of the Change of Control Purchase
Price or the Asset Sale Offer Price, or otherwise;
(c)(i) the failure by the Company or any of its Subsidiaries to
observe or perform any other covenant or agreement contained in the
Securities or this Indenture and (other than a default in the performance,
or breach of a covenant that is specifically dealt with elsewhere in this
section) the continuance of such failure for a period of 30 days after
written notice is given to the Issuers by the Trustee or to the Issuers and
the Trustee by the Holders of at least 25% in aggregate principal amount of
the Securities outstanding, specifying such default and requiring that it
be remedied; (ii) default in the performance or breach of the provisions of
Article VI; (iii) Funding or the Company shall have failed to make or
consummate a Change of Control Offer in accordance with provisions of
Section 11.1; and (iv) Funding or the Company shall have failed to make or
consummate an Asset Sale Offer in accordance with the provisions of Section
5.15;
(d) a default in Indebtedness of either of the Issuers or any of the
Subsidiaries with an aggregate outstanding principal amount in excess of
$20.0 million;
(e) one or more judgments, orders or decrees for the payment of money
in excess of $20.0 million, either individually or in the aggregate, shall
be rendered against either of the Issuers or any of the Subsidiaries or any
of their respective properties and shall not be discharged and either (i)
an enforcement proceeding shall have been commenced by any creditor upon
such judgment, order or decree or (ii) there shall be any period of 60 days
during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect;
<PAGE>
(f) there shall have been the entry by a court having jurisdiction in
the premises of (i) a decree or order for relief in respect of either of
the Issuers or any of the Significant Subsidiaries in an involuntary case
or proceeding under any applicable Bankruptcy Law or (ii) a decree or order
adjudging either of the Issuers or any of the Significant Subsidiaries
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment
or composition of or in respect of either of the Issuers or any of the
Significant Subsidiaries under any applicable federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of either of the Issuers or any of
the Significant Subsidiaries or of any substantial part of their property,
or ordering the winding-up or liquidation of their affairs, and the
continuance of any such decree or order for relief or any such other decree
or order unstayed and in effect for a period of 60 consecutive days;
(g)(i) either of the Issuers or any of the Significant Subsidiaries
commences a voluntary case or proceeding under any applicable Bankruptcy
Law or any other case or proceeding to be adjudicated bankrupt or
insolvent, or (ii) either of the Issuers or any of the Significant
Subsidiaries consents to the entry of a decree or order for relief in
respect of either of the Issuers or such Significant Subsidiary in an
involuntary case or proceeding under any applicable Bankruptcy Law or to
the commencement of any bankruptcy or insolvency case or proceeding against
it, or (iii) either of the Issuers or any of the Significant Subsidiaries
files a petition or answer or consent seeking reorganization or relief
under any applicable federal or state law, or either of the Issuers or any
of the Significant Subsidiaries consents to (1) the filing of such petition
or the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of either
of the Issuers or such Significant Subsidiary or of any substantial part of
its property, (2) the making by it of an assignment for the benefit of
creditors or (3) the admission by it in writing of its inability to pay its
debts generally as they become due, or (iv) the taking of corporate or
partnership action by either of the Issuers or any of the Significant
Subsidiaries in furtherance of any such action in this paragraph (g);
(h) the revocation, suspension or involuntary loss of any Permit which
results in the cessation of all or a substantial portion of the operations
of either Casino Hotel for a period of more than 90 consecutive days;
(i) except as permitted by this Indenture and the Securities, the
cessation of effectiveness of any Guaranty of the Obligations in any
material respect or the finding by any judicial proceeding that any such
Guaranty is unenforceable or invalid in any material respect or the denial
or disaffirmation
<PAGE>
by any Guarantor in writing of its obligations under its Guaranty; or
(j) default in the payment of any sum due under the Taj Mortgage or
the Plaza Mortgage, and the continuance of such default for a period of 30
days after there has been given to the Issuers and respective Mortgagor a
notice specifying such default and requiring it to be remedied and stating
that such notice is a "Notice of Default" under the respective Mortgage; or
(k) default in the performance, or breach, of any covenant of Taj
Associates or Plaza Associates in the Taj Mortgage or the Plaza Mortgage,
as applicable (other than a covenant, a default in the performance or
breach of which is elsewhere in the applicable Mortgage specifically dealt
with) in any material respect, and continuance of such default or breach
for a period of 30 days after there has been given to Taj Associates or
Plaza Associates, as applicable, a notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a "Notice
of Default" under the Taj Mortgage or the Plaza Mortgage, as applicable,
unless (i) the default or breach is of such a nature that is curable but
not susceptible of being cured with due diligence within such 30-day period
(for reasons other than the lack of funds), (ii) Taj Associates or Plaza
Associates, as applicable, delivers an Officers' Certificate to the
Collateral Agent within such 30-day period stating (A) the applicability of
the provisions of clause (i) to such default or breach, (B) Taj Associates'
or Plaza Associates', as applicable, intention to remedy such default or
breach with reasonable diligence and (C) the steps which Taj Associates or
Plaza Associates, as applicable, has undertaken or intends to undertake to
remedy such default or breach and (iii) Taj Associates or Plaza Associates,
as applicable, delivers to the Collateral Agent additional Officers'
Certificates every 30 days thereafter updating the information contained in
the certificate described in clause (ii), in which case such 30-day period
shall be extended for such further period of time (but in no event more
than 60 days after the last day of such 30-day period) as may reasonably be
required to cure the same, provided that Taj Associates or Plaza
Associates, as applicable, is then proceeding and thereafter continues to
proceed to cure the same with reasonable diligence; or
(l) default by Taj Associates or Plaza Associates under any of the
terms of any Facility Lease forming a portion of the Collateral other than
the Rothenberg Lease (as defined therein) which shall not be fully cured or
waived prior to the expiration of any grace period (as such grace period
may be extended) contained in such Facility Lease; or
(m) default by Taj Associates or Plaza Associates under any of the
terms of the Egg Harbor Mortgage or the Parking Parcel Mortgage (i) at the
Stated Maturity of the Indebtedness secured by such mortgage or (ii) which
default results in the
<PAGE>
acceleration of the Stated Maturity of the Indebtedness secured by such
mortgage and, in the case of (i) or (ii), which default shall not be fully
cured, waived or rescinded, as the case may be, prior to the expiration of
any grace period (as such grace period may be extended) contained in such
mortgage; or
(n) if any representation or warranty of Taj Associates or Plaza
Associates, as applicable, set forth in the respective Mortgage or in any
notice, certificate, demand or request delivered to the Collateral Agent
pursuant to the respective Mortgage shall prove to be incorrect as of the
time when made and which has or could reasonably be expected to have a
material adverse effect on the business, financial condition or operations
of the Company or its Subsidiaries, taken as a whole; or
(o) the declaration or payment of any dividend or other distribution
in respect of Equity Interests of any Guarantor in the event that there
shall exist a "default" or "event of default" (as defined therein) under
the Indenture governing the Senior Notes or any Refinancing Indebtedness in
respect thereof; or
(p) an event of default under any of the Mortgage Documents (without
duplication of those items otherwise recited in this Section 7).
An Event of Default shall not be deemed to exist by reason of any event
under paragraph (j) or (l) through (n) above which Taj Associates or Plaza
Associates, as applicable, is contesting in compliance with the provisions of
Section 5.09 of the respective Mortgage.
Notwithstanding the 30-day period and notice requirement contained in
Section 7.1(c) above, (i) with respect to a default under Article XI, the 30-day
period referred to in Section 7.1(c) shall be deemed to have begun as of the
date the Change of Control notice is required to be sent in the event that the
Company has not complied with the provisions of Section 11.1, and the Trustee or
Holders of at least 25% in principal amount of the outstanding Securities
thereafter give the notice of default referred to in Section 7.1(c) to the
Company and, if applicable, the Trustee; provided, however, that if the breach
or default is a result of a default in the payment when due of the Change of
Control Purchase Price, such default shall be deemed, for purposes of this
Section 7.1, to arise no later than on such due date; and (ii) with respect to a
default under Section 5.15, the 30-day period referred to in Section 7.1(c)
shall be deemed to have begun as of the date the notice of an Offer to Purchase
is required to be sent in the event that the Company has not complied with the
provisions of Section 5.15 requiring the giving of such notice, and the Trustee
or Holders of at least 25% in principal amount of the outstanding Securities
thereafter give the notice of default referred to in Section 7.1(c) to the
<PAGE>
Company and, if applicable, the Trustee; provided, however, that if the breach
or default is a result of a default in the payment when due of the Offer to
Purchase Price, such default shall be deemed, for purposes of this Section 7.1,
to arise no later than on such due date.
Acceleration of Maturity Date; Rescission and Annulment.
If an Event of Default (other than as specified in clauses (f) and (g) of
Section 7.1) occurs and is continuing, then in every such case, unless the
principal of all the Securities shall have already become due and payable,
either the Trustee or the Holders of at least 25% of the principal amount of the
Securities then outstanding, by written notice to the Issuers (and to the
Trustee if such notice is given by such Holders) (an "Acceleration Notice"),
may, and the Trustee at the request of such Holders shall, declare all unpaid
principal of, premium, if any, and accrued interest on all Securities to be due
and payable and thereupon the Trustee may, at its discretion, proceed to protect
and enforce the rights of the Holders of the Securities by appropriate judicial
proceeding. If an Event of Default specified in clause (f) or (g) occurs and is
continuing, then the principal of all Securities shall ipso facto become and be
immediately due and payable without any declaration or other act of the Trustee
or any Holder.
After a declaration of acceleration, but before a judgment or decree for
payment of the money due has been obtained by the Trustee, the Holders of a
majority in aggregate principal amount of Securities outstanding, by written
notice to the Issuers and the Trustee, may annul such declaration if:
(a) the Issuers have paid or deposited with the Trustee a sum
sufficient to pay:
(i) all sums paid or advanced by the Trustee under this Indenture
and the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel,
(ii) all overdue interest on all Securities,
(iii) the principal of and premium, if any, on any Securities
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Securities,
and
(iv) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities;
and
(b) all Events of Default, other than the non-payment of principal of
the Securities which have become due
<PAGE>
solely by such declaration of acceleration, have been cured or waived.
Notwithstanding the previous sentence of this Section 7.2, no annulment of
a declaration of acceleration shall be effective for any Event of Default with
respect to any covenant or provision which cannot be modified or amended without
the consent of the Holder of greater than a simple majority of the outstanding
principal amount of the Securities, unless such specified percentage of affected
Holders agree, in writing, to annul such declaration of acceleration. No such
annulment shall cure or waive any subsequent default or impair any right
consequent thereon.
Collection of Indebtedness and Suits for Enforcement by Trustee.
The Issuers covenant that if an Event of Default in payment of principal,
premium, or interest specified in Section 7.1(a) and (b) occurs and is
continuing, the Issuers shall, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal, premium (if any) and interest, and, to the
extent that payment of such interest shall be legally enforceable, interest on
any overdue principal (premium, if any) and on any overdue interest, at the rate
borne by the Securities, and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, including
compensation to, and expenses, disbursements and advances of the Trustee, its
agents and counsel.
If the Issuers fail to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Issuers or any other obligor upon the
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Issuers or any other obligor
upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Trustee May File Proofs of Claim.
<PAGE>
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Issuers or any other obligor upon the
Securities or the property of the Issuers or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Issuers for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise to take any and
all actions under the TIA, including
(i) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest owing and unpaid in respect of the
Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel) and
of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 8.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment, or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Trustee May Enforce Claims Without Possession of Securities.
<PAGE>
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust in favor of the Holders, and any recovery of
judgment shall, after provision for the payment of compensation to, and
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
Priorities.
Any money collected by the Trustee pursuant to this Article VII shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal, premium (if
any) or interest, upon presentation of the Securities and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to
Section 8.7;
SECOND: To the Holders in payment of the amounts then due and unpaid
for principal of, premium (if any) and interest on, the Securities in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal, premium (if any)
and interest, respectively; and
THIRD: To whomsoever may be lawfully entitled thereto, the remainder,
if any.
The Trustee may, but shall not be obligated to, fix a record date and
payment date for any payment to the Holders under this Section 7.6.
Limitation on Suits.
No Holder of any Security shall have any right to order or direct the
Trustee to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(A) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(B) the Holders of not less than 25% in principal amount of then
outstanding Securities shall
<PAGE>
have made written request to the Trustee to institute proceedings in
respect of such Event of Default in its own name as Trustee hereunder;
(C) such Holder or Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities to be
incurred or reasonably probable to be incurred in compliance with such
request;
(D) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(E) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
Unconditional Right of Holders to Receive Principal, Premium and Interest.
Notwithstanding any other provision of this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of, and interest on, such Security on the Maturity
dates of such payments as expressed in such Security (in the case of redemption,
the Redemption Price on the applicable Redemption Date, in the case of a Change
of Control, the Change of Control Purchase Price on the applicable Change of
Control Purchase Date, and, in the case of an Asset Sale, the Asset Sale Offer
Price on the Asset Sale Purchase Date) and to institute suit for the enforcement
of any such payment, and such rights shall not be impaired without the consent
of such Holder.
Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in Section 2.7, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The
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assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
Delay or Omission Not Waiver.
No delay or omission by the Trustee or by any Holder of any Security to
exercise any right or remedy arising upon any Event of Default shall impair the
exercise of any such right or remedy or constitute a waiver of any such Event of
Default. Every right and remedy given by this Article VII or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as the case may be.
Control by Holders.
The Holder or Holders of a majority in aggregate principal amount of then
outstanding Securities shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred upon the Trustee, provided, that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee shall not determine that the action so directed would
be unjustly prejudicial to the Holders not taking part in such direction,
and
(3) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Waiver of Past Default.
Subject to Section 7.8, the Holder or Holders of not less than a majority
in aggregate principal amount of the outstanding Securities may, by written
notice to the Trustee on behalf of all Holders, prior to the declaration of
acceleration of the maturity of the Securities, waive any past default hereunder
and its consequences, except a default
(A) in the payment of the principal of, premium, if any, or interest
on, any Security as specified in clauses (a) and (b) of Section 7.1, or
(B) in respect of a covenant or provision hereof which, under Article
X, cannot be modified or amended without the consent of the Holder of each
outstanding Security affected or Holders of more than a simple majority in
principal amount of the Securities, as applicable; provided, however, that
such
<PAGE>
a default may be waived upon the affirmative vote of the requisite
principal amount of the Securities.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair the exercise of any right arising therefrom.
Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by its
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted to be taken by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 7.13 shall not apply to any suit instituted
by the Issuers, to any suit instituted by the Trustee, to any suit instituted by
any Holder, or group of Holders, holding in the aggregate more than 10% in
aggregate principal amount of the outstanding Securities, or to any suit
instituted by any Holder for enforcement of the payment of principal of, or
premium (if any) or interest on, any Security on or after the Maturity of such
Security.
Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every case, subject to any determination in such
proceeding, the Issuers, the Trustee and the Holders shall be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture and
covenants and agrees to perform the same, as herein expressed.
Duties of Trustee.
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) If a Default or an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
) Except during the continuance of a Default or an Event of Default:
(1) The Trustee need perform only those duties as are specifically set
forth in this Indenture and no others, and no covenants or obligations
shall be implied in or read into this Indenture which are adverse to the
Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 8.1.
(2) The Trustee shall comply with any order or directive of a Gaming
Authority that the Trustee submit an application for any license, finding
of suitability or other approval pursuant to any Gaming Law and will
cooperate fully and completely in any proceeding related to such
application.
(3) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(4) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 7.11.
) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or to take or omit to take any action under this
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Indenture or at the request, order or direction of the Holders or in the
exercise of any of its rights or powers if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
) Every provision of this Indenture that in any way relates to the Trustee
is subject to paragraphs (a), (b), (c), (d) and (f) of this Section 8.1.
) The Trustee shall not be liable for interest on any assets received by it
except as the Trustee may agree in writing with the Issuers. Assets held in
trust by the Trustee need not be segregated from other assets except to the
extent required by law.
Rights of Trustee
Subject to Section 8.1:
) The Trustee may rely on any document believed by it to be genuine and to
have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
) Before the Trustee acts or refrains from acting, it may consult with
counsel and may require an Officers' Certificate or an Opinion of Counsel, which
shall conform to Sections 12.4 and 12.5. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such certificate
or opinion.
) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
) The Trustee shall not be liable for any action it takes or omits to take
in good faith which it believes to be authorized or within its rights or powers
conferred upon it by this Indenture or the TIA.
) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, notice, request, direction, consent, order, bond, debenture, or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
) The Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture at the request, order or direction of any
of the Holders, pursuant to the provisions of this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
<PAGE>
against the costs, expenses and liabilities which may be incurred therein or
thereby.
) Except with respect to Section 5.1, the Trustee shall have no duty to
inquire as to the performance of the Issuers' covenants in Article V. In
addition, the Trustee shall not be deemed to have knowledge of any Default or
Event of Default except (i) any Event of Default occurring pursuant to Sections
7.1(a), 7.1(b) and 5.1, or (ii) any Default or Event of Default of which the
Trustee shall have received written notification or obtained actual knowledge.
Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of any of the Securities, may make loans to, accept deposits from, and
perform services for the Issuers or their Affiliates, and may otherwise deal
with the Issuers, any of their respective Subsidiaries, or their respective
Affiliates with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee must comply with Sections
8.10 and 8.11.
Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities and it shall not be responsible for any statement in
the Securities, other than the Trustee's certificate of authentication, or the
use or application of any funds received by a Paying Agent other than the
Trustee.
Notice of Default.
If a Default or an Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each Securityholder notice of
the uncured Default or Event of Default within 90 days after such Default or
Event of Default occurs. Except in the case of a Default or an Event of Default
in payment of principal (or premium, if any) of, or interest on, any Security
(including the payment of the Change of Control Purchase Price on the Change of
Control Purchase Date, the Redemption Price on the Redemption Date and the Asset
Sale Offer Amount on the Asset Sale Purchase Date, as the case may be), the
Trustee may withhold the notice if and so long as a Trust Officer in good faith
determines that withholding the notice is in the interest of the
Securityholders.
Reports by Trustee to Holders.
) Securities Law Requirements. If required by law, within 60 days after
each May 15, beginning with the May 15 following the date of this Indenture, the
Trustee shall mail to each Securityholder a brief report dated as of such May 15
that
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complies with TIA ss. 313(a). If required by law, the Trustee also shall comply
with TIA ss.ss. 313(b) and 313(c).
The Issuers shall promptly notify the Trustee in writing if the Securities
become listed on any stock exchange or automatic quotation system.
A copy of each report at the time of its mailing to Securityholders shall
be mailed to the Issuers and filed with the SEC and each stock exchange, if any,
on which the Securities are listed.
) Gaming License Requirements. The Trustee will provide any applicable
Gaming Authority with:
(1) copies of all notices, reports and other written communications
which the Trustee gives to Holders;
(2) a list of Holders promptly after the original issuance of the
Securities and a list of Holders eight months and two months prior to the
expiration date of each then-current Gaming License held by the Company or
its Subsidiaries;
(3) notice of any Event of Default under this Indenture or of any
Default, any acceleration of the Indebtedness evidenced or secured hereby,
the institution of any legal actions or proceedings before any court or
governmental authority in respect of this Indenture or the Collateral
Documents, the entering into or taking possession of any property
constituting the Collateral and any rescission, annulment or waiver in
respect of an Event of Default;
(4) notice of the removal or resignation of the Trustee within five
Business Days thereof;
(5) notice of any transfer or assignment of rights under this
Indenture (but no transfers or assignments of the Securities) or the
Collateral Documents within five Business Days thereof; and
(6) a copy of any amendment to the Securities, this Indenture or the
Collateral Documents within five Business Days of the effectiveness
thereof.
The notice specified in clause (3) above shall be in writing and, except as set
forth below, shall be given within five Business Days after the Trustee has
transmitted the notice required by Section 8.5. In the case of any notice in
respect of any Event of Default, such notice shall be accompanied by a copy of
any notice from the Holders, or a representative thereof or the Trustee, to the
defaulting Person and, if accompanied by any such notice to the defaulting
Person, shall be given simultaneously with the giving of any such notice to the
defaulting Person. In the case of any legal actions or proceedings, such notice
shall
<PAGE>
be accompanied by a copy of the complaint or other initial pleading or document.
The Trustee shall in accordance with the limitations set forth herein
cooperate with any applicable Gaming Authority in order to provide such Gaming
Authority with information and documentation relevant to compliance with clause
(3) above and as otherwise required by any applicable gaming law.
The Issuers will advise the Trustee of the expiration date of any
then-current Gaming License held by the Partnership at least nine months prior
to the expiration thereof and the Trustee until so advised may assume that such
Gaming License has not expired.
Compensation and Indemnity.
Each of the Issuers shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. Each of the Issuers
shall reimburse the Trustee upon request for all reasonable disbursements,
expenses and advances incurred or made by it. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents,
accountants, experts and counsel.
Each of the Issuers shall indemnify the Trustee (in its capacity as
Trustee) and each of its officers, directors, attorneys-in-fact and agents for,
and hold it harmless against, any claim, demand, expense (including but not
limited to reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel), loss or liability incurred by them without negligence, bad
faith or willful misconduct on its part, arising out of or in connection with
the administration of this trust and their rights or duties hereunder including
the reasonable costs and expenses of defending themselves against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. The Trustee shall notify the Issuers promptly of any claim
asserted against the Trustee for which it may seek indemnity. The Issuers shall
defend the claim and the Trustee shall provide reasonable cooperation at the
Issuers's expense in the defense. The Trustee may have separate counsel and the
Issuers shall pay the reasonable fees and expenses of such counsel; provided,
that the Issuers will not be required to pay such fees and expenses if it
assumes the Trustee's defense and there is no conflict of interest between the
Issuers and the Trustee in connection with such defense. The Issuers need not
pay for any settlement made without its written consent. The Issuers need not
reimburse any expense or indemnify against any loss or liability to the extent
incurred by the Trustee through its negligence, bad faith or willful misconduct.
<PAGE>
To secure the Issuers' payment obligations in this Section 8.7, the Trustee
shall have a lien prior to the Securities on all assets held or collected by the
Trustee, in its capacity as Trustee, except assets held in trust to pay
principal of or interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 7.1 (f) or (g) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Issuers' obligations under this Section 8.7 and any lien arising
hereunder shall survive the resignation or removal of the Trustee, the discharge
of the Issuers' obligations pursuant to Article IX and any rejection or
termination of this Indenture under any Bankruptcy Law.
Replacement of Trustee.
The Trustee may resign by so notifying the Issuers in writing. The Holder
or Holders of a majority in principal amount of the outstanding Securities may
remove the Trustee by so notifying the Issuers and the Trustee in writing and
may appoint a successor trustee with the Issuers' consent. The Issuers may
remove the Trustee if:
(1) the Trustee fails to comply with Section 8.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver, Custodian, or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Issuers shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holder or
Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Issuers.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Issuers. Immediately after that and provided
that all sums owing to the Trustee provided for in Section 8.7 have been paid,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 8.7, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights,
<PAGE>
powers and duties of the Trustee under this Indenture. A successor Trustee shall
mail notice of its succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuers or the
Holder or Holders of at least 10% in principal amount of the outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 8.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section 8.8,
the Issuers' obligations under Section 8.7 shall continue for the benefit of the
retiring Trustee.
Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the resulting, surviving or transferee corporation without any further act
shall, if such resulting, surviving or transferee corporation is otherwise
eligible hereunder, be the successor Trustee.
Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of TIA ss.
310(a)(1) and TIA ss. 310(a)(5). The Trustee shall have a combined capital and
surplus of at least $25,000,000 as set forth in its most recent published annual
report of condition. The Trustee shall comply with TIA ss. 310(b).
Preferential Collection of Claims against Issuers.
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE; SATISFACTION AND DISCHARGE
Option to Effect Legal Defeasance or Covenant Defeasance.
<PAGE>
The Issuers may elect to have either Section 9.2 or 9.3 be applied to all
outstanding Securities upon compliance with the conditions set forth below in
this Article IX.
Legal Defeasance and Discharge.
The Issuers may at their option, within one year of the final Stated
Maturity of the Securities and upon the Issuers' exercise under Section 9.1 of
the option applicable to this Section 9.2, elect to have their obligations and
the obligations of the Guarantors discharged with respect to all outstanding
Securities on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance means
that the Issuers shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Securities, which shall thereafter
be deemed to be "outstanding" only for the purposes of Section 9.5 and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all their, and the Guarantors', other obligations under such
Securities and this Indenture and the Mortgage Documents (insofar as they relate
to the Securities or the Guaranties) and the Liens of the Collateral Agent
thereunder shall be deemed to have been paid and discharged, except for the
following which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of outstanding Securities to receive solely
from the trust fund described in Section 9.4, and as more fully set forth in
such section, payments in respect of the principal of, premium, if any, and
interest on such Securities when such payments are due, (b) the Issuers'
obligations with respect to such Securities under Sections 2.4, 2.6, 2.7, 2.10
and 5.2, (c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Issuers' obligations in connection therewith and (d) this
Article IX. Subject to compliance with this Article IX, the Issuers may exercise
their option under this Section 9.2 notwithstanding the prior exercise of its
option under Section 9.3 with respect to the Securities.
Covenant Defeasance.
<PAGE>
Upon the Issuers' exercise under Section 9.1 of the option applicable to
this Section 9.3, the Issuers and the Guarantors shall be released from their
respective obligations under the covenants contained in Sections 5.3, 5.6, 5.7,
5.8, 5.10, 5.11, 5.12, 5.13, 5.14, 5.15, 5.18, 5.19, 5.20, 5.22 and Article VI
with respect to the outstanding Securities on and after the date the conditions
set forth below are satisfied (hereinafter, "Covenant Defeasance"), and the
Securities shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder. For this
purpose, such Covenant Defeasance means that, with respect to the outstanding
Securities, the Issuers and the Guarantors need not comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and the Liens of
the Collateral Agent under the Mortgage Documents (insofar as they relate to the
Securities or the Guaranties) shall be deemed to have been paid and discharged,
but, except as specified above, the remainder of this Indenture and such
Securities shall be unaffected thereby. In addition, upon the Issuers' exercise
under Section 9.1 of the option applicable to this Section 9.3, Sections 7.1(c),
7.1(d), 7.1(e), 7.1(h), 7.1(i) and 7.1(j) shall not constitute Events of
Default.
Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of either Section
9.2 or Section 9.3 to the outstanding Securities, unless otherwise specified
herein:
) the Issuers must irrevocably deposit with the Trustee, in trust, for the
benefit of the Holders of the Securities, U.S. Legal Tender, U.S. Government
Obligations or a combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent public accountants,
to pay the principal of, premium, if any, and interest on such Securities on the
stated date for payment thereof or on the redemption date of such principal or
installment of principal of, premium, if any, or interest on such Securities,
and the Holders of Securities must have a valid, perfected, exclusive security
interest in such trust;
) in the case of the Legal Defeasance, the Issuers shall have delivered to
the Trustee an opinion of counsel in the United States reasonably acceptable to
Trustee confirming that (A) the Issuers have received from, or there has been
published by the Internal Revenue Service, a ruling or (B) since the date of
this Indenture, there has been a change in the
<PAGE>
applicable Federal income tax law, in either case to the effect that, and based
thereon, such opinion of counsel shall confirm that, the Holders of such
Securities will not recognize income, gain or loss for Federal income tax
purposes as a result of such Legal Defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
) in the case of the Covenant Defeasance, the Issuers shall have delivered
to the Trustee an opinion of counsel in the United States reasonably acceptable
to such Trustee confirming that the Holders of such Securities will not
recognize income, gain or loss for Federal income tax purposes as a result of
such Covenant Defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred;
) no Default or Event of Default shall have occurred and be continuing on
the date of such deposit or insofar as Events of Default from bankruptcy or
insolvency events are concerned, at any time in the period ending on the 91st
day after the date of deposit;
) such Legal Defeasance or Covenant Defeasance shall not result in a breach
or violation of, or constitute a default under, this Indenture or any other
material agreement or instrument to which the Company or any of its Subsidiaries
is a party or by which the Company or any of its Subsidiaries is bound;
) the Issuers shall have delivered to the Trustee an Officers' Certificate
stating that the deposit was not made by the Issuers with the intent of
preferring the Holders of such Securities over any other creditors of the
Company or any of its Subsidiaries or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company, its Subsidiaries or
others; and
) the Issuers shall have delivered to the Trustee an Officers' Certificate
and an opinion of counsel, each stating that the conditions precedent provided
for in, in the case of the Officers' Certificate, (a) through (f) and, in the
case of the opinion of counsel, clauses (a) (with respect to the validity and
perfection of the security interest), (b), (c) and (e) of this Section have been
complied with.
Deposited U.S. Legal Tender and U.S. Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions.
Subject to Section 9.6, all money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 9.5, the "Trustee") pursuant
to Section 9.4 in
<PAGE>
respect of the outstanding Securities shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying Agent as the
Trustee may determine, to the Holders of such Securities of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Issuers jointly and severally agree to pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the U.S.
Legal Tender or U.S. Government Obligations deposited pursuant to Section 9.4 or
the principal and interest received in respect thereof other than any such tax,
fee or other charge which by law is for the account of the Holders of the
outstanding Securities.
Anything in this Article IX to the contrary notwithstanding, the Trustee
shall deliver or pay to the Issuers from time to time upon the request of the
Issuers any U.S. Legal Tender or U.S. Government Obligations held by it as
provided in Section 9.4 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
9.4(a)), are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Repayment to Issuers.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Issuers, in trust for the payment of the principal of or interest on any
Security and remaining unclaimed for two years after such principal or interest
has become due and payable shall be paid to the Issuers on their request; and
the Holder of such Security shall thereafter look only to the Issuers for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Issuers cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Issuers.
Reinstatement.
<PAGE>
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender or
U.S. Government Obligations in accordance with Section 9.2 or 9.3, as the case
may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Issuers' obligations under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to Section 9.2
or 9.3 until such time as the Trustee or Paying Agent is permitted to apply such
money in accordance with Section 9.2 and 9.3, as the case may be; provided,
however, that, if the Issuers make any payment of principal of or interest on
any Security following the reinstatement of its obligations, the Issuers shall
be subrogated to the rights of the Holders of such Securities to receive such
payment from the money held by the Trustee or Paying Agent.
Satisfaction and Discharge of Indenture.
This Indenture shall, upon Company Request, cease to be of further effect
(except as to surviving rights of registration of transfer or exchange of
Securities herein expressly provided for) and the Trustee, on demand of and at
the expense of the Company and the Guarantors, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture when all Securities
theretofore authenticated and delivered (other than (i) Securities which have
been destroyed, lost or stolen and which have been replaced or paid as provided
in Section 2.7 and (ii) Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in Section 9.6)
have been delivered to the Trustee for cancellation; the Issuers and the
Guarantors have paid or caused to be paid all other sums payable hereunder by
the Issuers and the Guarantors; and the Issuers and the Guarantors have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel each
stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuers and the Guarantors to the Trustee under Section 7.6
shall survive.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Supplemental Indentures Without Consent of Holders.
<PAGE>
Without the consent of any Holder, the Issuers, when authorized by Board
Resolutions, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, or may amend, modify or supplement
the Securities, this Indenture, or any of the Mortgage Documents, in form
satisfactory to the Trustee and the Issuers, for any of the following purposes:
(1) to cure any ambiguity, defect, or inconsistency, or to make any
other provisions with respect to matters or questions arising under this
Indenture which shall not be inconsistent with the provisions of this
Indenture, provided such action pursuant to this clause (1) shall not
adversely affect the interests of any Holder in any respect;
(2) to add to the covenants of the Issuers for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Issuers or to make any other change that does not adversely affect the
rights of any Holder; provided, that the Issuers have delivered to the
Trustee an Opinion of Counsel stating that such change does not adversely
affect the rights of any Holder;
(3) to provide for additional collateral for or for guarantors of the
Securities;
(4) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(5) to evidence the succession of another person to the Issuers, and
the assumption by any such successor of the obligations of the Issuers,
herein and in the Securities in accordance with Article VI; or
(6) to comply with the TIA.
The terms of any document entered into pursuant to this Section shall be
subject to prior approval, if required, of any applicable Gaming Authority.
Amendments, Supplemental Indentures and Waivers with Consent of Holders.
Subject to Section 7.8 and the last sentence of this paragraph, with the
consent of the Holders of not less than a majority in aggregate principal amount
of then outstanding Securities, by written act of said Holders delivered to the
Issuers and the Trustee, the Issuers, when authorized by Board Resolutions, and
the Trustee may amend or supplement any of the
<PAGE>
Mortgage Documents, this Indenture or the Securities or enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Mortgage
Documents, this Indenture or the Securities or of modifying in any manner the
rights of the Holders under any of the Mortgage Documents, this Indenture or the
Securities. Subject to Section 7.8 and the last sentence of this paragraph, the
Holder or Holders of a majority in aggregate principal amount of then
outstanding Securities may waive compliance by the Issuers with any provision of
the Mortgage Documents, this Indenture or the Securities. Notwithstanding the
foregoing provisions of this Section 10.2, no such amendment, supplemental
indenture or waiver shall,
) without the consent of the Holder of each outstanding Security affected
thereby:
change the Stated Maturity on any Security, or reduce the principal amount
thereof or the rate (or extend the time for payment) of interest thereon, or
change the place of payment where, or the coin or currency in which, any
Security or any premium or the interest thereon is payable, or impair the right
to institute suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date), or reduce the Change of Control Purchase Price or the Asset Sale Offer
Price or alter the provisions of Article III in a manner adverse to the Holders;
reduce the percentage in principal amount of outstanding Securities, the
consent of whose Holders is required for any such amendment, supplemental
indenture or waiver provided for in this Indenture; or
release any Collateral from the Liens created by the Mortgage Documents,
except in accordance with this Indenture and such documents, or modify any of
the waiver provisions (except to increase any required percentage or to provide
that certain other provisions of this Indenture cannot be modified or waived).
) without the consent of the Holders of not less than two-thirds in
aggregate principal amount of the then outstanding Securities affected thereby
(except as set forth in clause (a) of this sentence), modify the obligations of
the Issuers to make and consummate a Change of Control Offer or modify any of
the provisions or definitions with respect thereto.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed amendment, supplement or waiver,
but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Issuers shall mail to the Holders affected thereby a notice
briefly describing the amendment,
<PAGE>
supplement or waiver. Any failure of the Issuers to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture or waiver.
After an amendment, supplement or waiver under this Section 10.2 or 10.4
becomes effective, it shall bind each Holder, subject to the limitations set
forth above.
In connection with any amendment, supplement or waiver under this Article
X, the Issuers may, but shall not be obligated to, offer to any Holder who
consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
The terms of any document entered into pursuant to this Section shall be
subject to prior approval, if required, of any applicable Gaming Authority.
Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a consent to it
by a Holder is a continuing consent by the Holder and every subsequent Holder of
a Security or portion of a Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security. However, any such Holder or subsequent Holder may revoke the consent
as to his Security or portion of his Security by written notice to the Issuers
or the person designated by the Issuers as the person to whom consents should be
sent if such revocation is received by the Issuers or such person before the
date on which the Trustee receives an Officers' Certificate certifying that the
Holders of the requisite principal amount of Securities have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver.
The Issuers may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Issuers notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those persons who were Holders at such record date, and only those persons (or
their duly designated proxies), shall be entitled to revoke any consent
previously given, whether or not such persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date.
<PAGE>
After an amendment, supplement or waiver becomes effective, it shall bind
every Securityholder; provided, that any such waiver shall not impair or affect
the right of any Holder to receive payment of principal and premium of and
interest on a Security, on or after the respective dates set for such amounts to
become due and payable expressed in such Security, or to bring suit for the
enforcement of any such payment on or after such respective dates.
Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security, the
Trustee may require the Holder of the Security to deliver it to the Trustee or
require the Holder to put an appropriate notation on the Security. The Trustee
may place an appropriate notation on the Security about the changed terms and
return it to the Holder. Alternatively, if the Issuers or the Trustee so
determine, the Issuers in exchange for the Security shall issue, the Guarantors
shall endorse and the Trustee shall authenticate a new Security that reflects
the changed terms. Any failure to make the appropriate notation or to issue a
new Security shall not affect the validity of such amendment, supplement or
waiver.
Trustee to Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver authorized
pursuant to this Article X, provided, that the Trustee may, but shall not be
obligated to, execute any such amendment, supplement or waiver which affects the
Trustee's own rights, duties or immunities under this Indenture. The Trustee
shall be entitled to receive, and shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of any amendment, supplement or
waiver authorized pursuant to this Article X is authorized or permitted by this
Indenture.
RIGHT TO REQUIRE REPURCHASE
Repurchase of Securities at Option of the Holder Upon Change of Control.
) In the event that a Change of Control (the date on which such event
occurs being referred to as the "Change of Control Date") occurs, each Holder of
Securities shall have the right, at such Holder's option, subject to the terms
and conditions hereof, to require the Issuers to repurchase all or any part of
such Holder's Securities (provided, that the principal amount of such Securities
at maturity must be $1,000 or an integral multiple thereof) on a date (the
"Change of Control Purchase Date") that is no later than 75 days after the
occurrence of such Change of Control, at a cash price (the
<PAGE>
"Change of Control Purchase Price") equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the Change of Control
Purchase Date.
) In the event that, pursuant to this Section 11.1, the Company shall be
required to commence an offer to purchase Securities (a "Change of Control
Offer"), the Company shall follow the procedures set forth in this Section 11.1
as follows:
(1) within 30 days following any Change of Control, the Company or the
Trustee (upon the request and at the expense of the Company) shall send, by
first-class mail, a notice to each of the Securityholders, at his address
appearing in the First Mortgage Note Register, which (to the extent consistent
with this Indenture) shall govern the terms of the Change of Control Offer and
shall state:
that the Change of Control Offer is being made pursuant to this Section 11.1;
the Change of Control Purchase Price together with accrued and unpaid
interest;
the purchase date for such validly tendered Securities, which date shall be a
business day no earlier than 45 days nor later than 60 days from the date such
notice is mailed;
the Change of Control Put Date (as defined below);
that any Security or portion thereof not tendered or accepted for payment will
continue to accrue interest;
that, unless (a) the Company default in depositing U.S. Legal Tender with the
Paying Agent (which may not for purposes of this Section 11.1, notwithstanding
anything in this Indenture to the contrary, be the Issuers or any of the
Guarantors or any Affiliate of any of the Guarantors (or any other obligor on
the Securities) or any Affiliate of the Issuers (or such other obligor)) in
accordance with the last paragraph of this clause (b) or (b) such Change of
Control payment is prevented for any reason, any Security or portion thereof
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Purchase Date;
that Holders electing to have a Security, or portion thereof, purchased
pursuant to a Change of Control Offer will be required to surrender the
Security, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Security completed, to the Paying Agent (which may not for
purposes of this Section 11.1, notwithstanding anything in this Indenture to the
contrary, be the Issuers or any of the Guarantors or any Affiliate of any of the
Guarantors (or any other obligor on the
<PAGE>
Securities) or any Affiliate of the Issuers (or such other obligor)) at the
address specified in the notice prior to the close of business on the fifth
Business Day prior to the Change of Control Purchase Date (the "Change of
Control Put Date");
that Holders will be entitled to withdraw their elections, in whole or in
part, if the Paying Agent (which, for purposes of this Section 11.1,
notwithstanding any other provision of this Indenture, may not be the Issuers or
an Affiliate of the Issuers or any of the Guarantors or any Affiliate of any of
the Guarantors) receives, up to the close of business on the Change of Control
Put Date, a telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Securities the Holder is
withdrawing and a statement that such Holder is withdrawing his election to have
such principal amount of Securities purchased; and
a brief description of the events resulting in such Change of Control.
(2) the Change of Control Offer shall commence within 30 days following the
Change of Control Date;
(3) the Change of Control Offer shall remain open for 20 Business Days and
no longer, except to the extent that a longer period is required by applicable
law (the "Change of Control Offer Period");
(4) within 5 Business Days following the expiration of a Change of Control
Offer (and in any event not earlier than 45 days nor later than 60 days
following the mailing of the notice described above), the Company shall purchase
all of the tendered Securities at the Change of Control Purchase Price together
with accrued interest to the Change of Control Purchase Date;
(5) if the Change of Control Purchase Date is on or after an interest
payment record date and on or before the related interest payment date, any
accrued interest will be paid to the Person in whose name a Security is
registered at the close of business on such record date, and no additional
interest will be payable to Securityholders who tender Securities pursuant to
the Change of Control Offer and who are paid on the Change of Control Purchase
Date; and
(6) the Company shall provide the Trustee with notice of the Change of
Control Offer at least 5 Business Days before the commencement of any Change of
Control Offer.
<PAGE>
On or before the Change of Control Purchase Date, the Company shall (i)
accept for payment Securities or portions thereof properly tendered pursuant to
the Change of Control Offer, (ii) deposit with the Paying Agent U.S. Legal
Tender sufficient to pay the Change of Control Purchase Price (including accrued
and unpaid interest) of all Securities so tendered and (iii) deliver to the
Trustee Securities so accepted together with an Officers' Certificate listing
the Securities or portions thereof being purchased. The Paying Agent will
promptly mail to the Holders of Securities so accepted payment in an amount
equal to the Change of Control Purchase Price (together with accrued and unpaid
interest), and the Trustee shall promptly authenticate and mail or deliver to
such Holders a new Security equal in principal amount to any unpurchased portion
of the Security surrendered. Any Securities not so accepted shall be promptly
mailed or delivered to the Holder thereof. The Company will publicly announce
the results of the Change of Control Offer on or as soon as practicable after
the Change of Control Purchase Date.
MISCELLANEOUS
TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts with the
duties imposed by operation of the TIA, the imposed duties, upon qualification
of this Indenture under the TIA, shall control.
Notices.
Any notices or other communications to the Issuers or the Trustee required
or permitted hereunder shall be in writing, and shall be sufficiently given if
made by hand delivery, by telex, by telecopier or registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
if to Trump Atlantic City Associates:
Trump Atlantic City Associates
Mississippi Avenue and The Boardwalk
Atlantic City, New Jersey 08401
Attention: Corporate Secretary
Telephone: (609) 441-6000
<PAGE>
if to Trump Atlantic City Funding, Inc.:
Trump Atlantic City Funding, Inc.
Mississippi Avenue and The Boardwalk
Atlantic City, New Jersey 08401
Attention: Corporate Secretary
Telephone: (609) 441-6000
if to Trump Plaza Associates:
Trump Plaza Associates
Mississippi Avenue and The Boardwalk
Atlantic City, New Jersey 08401
Attention: Corporate Secretary
Telephone: (609) 441-6000
if to Trump Taj Mahal Associates:
Trump Taj Mahal Associates
1000 Boardwalk
Atlantic City, New Jersey 08401
Attention: Corporate Secretary
Telephone: (609) 449-1000
if to Trump Atlantic City Corporation:
Trump Atlantic City Corporation
1000 Boardwalk
Atlantic City, New Jersey 08401
Attention: Corporate Secretary
Telephone: (609) 449-1000
if to the Trustee:
First Bank National Association
180 E. 5th Street
St. Paul, Minnesota 55101
Attention: Richard Prokosch
Telephone: (612) 244-0721
The Issuers, the Guarantors or the Trustee by notice to each other party
may designate additional or different addresses as shall be furnished in writing
by such party. Any notice or communication to the Issuers, the Guarantors or the
Trustee shall be deemed to have been given or made as of the date so delivered,
if personally delivered; when answered back, if telexed; when receipt is
acknowledged, if telecopied; and 5 Business Days after mailing if sent by
registered or certified mail, postage prepaid (except that a notice of change of
address shall not be deemed to have been given until actually received by the
addressee).
Any notice or communication mailed to a Securityholder shall be mailed to
him by first class mail or other equivalent means at his address as it appears
on the registration books of the Registrar and shall be deemed to have been
given upon the date so mailed.
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders. If
a notice or
<PAGE>
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Issuers, the Trustee, the Registrar and any other person shall
have the protection of TIA ss. 312(c).
Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuers to the Trustee to take any
action under this Indenture, the Issuers shall furnish to the Trustee:
(1) an Officers' Certificate (in form and substance reasonably satisfactory
to the Trustee) stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel (in form and substance reasonably satisfactory to
the Trustee) stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion has read
such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of each such person,
such condition or covenant has been complied with; provided, however, that with
respect to matters of fact an Opinion of
<PAGE>
Counsel may rely on an Officers' Certificate or certificates of public
officials.
Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Paying Agent or Registrar may make reasonable rules for its
functions.
Legal Holidays.
A "Legal Holiday" used with respect to a particular place of payment is a
Saturday, a Sunday or a day on which banking institutions in New York, New York
are not required to be open. If a payment date is a Legal Holiday in New York,
New York, payment may be made at such place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.
Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE ISSUERS AND THE GUARANTORS HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH
OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH
OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE AND THE SECURITIES, AND
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE ISSUERS AND THE
GUARANTORS IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO
UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY SECURITYHOLDER TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST ANY OF THE ISSUERS OR THE GUARANTORS IN ANY OTHER
JURISDICTION.
No Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of any of the Issuers or any of their Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
No Recourse against Others.
<PAGE>
A direct or indirect partner, director, officer, employee or stockholder,
as such, past, present or future of either of the Issuers, the Guarantors or any
successor entity shall not have any personal liability in respect of the
obligations of the Issuers or the Guarantors under the Securities or this
Indenture by reason of his or its status as such partner, director, officer,
employee or stockholder, except to the extent such is an Issuer or a Guarantor.
Each Securityholder by accepting a Security waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Securities.
Successors.
All agreements of the Issuers or the Guarantors in this Indenture and the
Securities shall bind their successors. All agreements of the Trustee in this
Indenture shall bind its successor.
Duplicate Originals.
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all of them
together shall represent the same agreement.
Severability.
In case any one or more of the provisions in this Indenture or in the
Securities shall be held invalid, illegal or unenforceable, in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and headings of the Articles
and the Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
Gaming Laws.
<PAGE>
This Indenture, the Mortgage Documents, the Securities and the security
interests thereunder are subject to the Casino Control Act of the State of New
Jersey and the rules and regulations thereunder (the "Gaming Regulations") (and
each Issuer represents and warrants that all requisite approvals thereunder have
been obtained), and the exercise of remedies under the Mortgage Documents and
the Collateral Agency Agreement with respect to the Collateral will be subject
to the Gaming Regulations.
GUARANTY
Guaranty.
) In consideration of good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each of the Guarantors, jointly and
severally, hereby irrevocably and unconditionally guarantees on a senior basis,
which guarantee shall be secured by a perfected security interest in all of the
Collateral owned by such Guarantors pursuant to the Mortgage Documents
(collectively, the "Guaranty"), to each Holder of a Security authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the
Securities or the obligations of the Issuers under this Indenture or the
Securities, that: (w) the principal and premium (if any) of and interest on the
Securities will be paid in full when due, whether at the maturity or interest
payment date, by acceleration, call for redemption, upon an Offer to Purchase,
or otherwise, and interest on the overdue principal and interest, if any, of the
Securities, if lawful, and all other obligations of the Company to the Holders
or the Trustee under this Indenture or the Securities will be promptly paid in
full or performed, all in accordance with the terms of this Indenture and the
Securities; (x) all other obligations of the Company to the Holders or the
Trustee under this Indenture or the Securities will be promptly paid in full or
performed, all in accordance with the terms of this Indenture and the
Securities; and (y) in case of any extension of time of payment or renewal of
any Securities or any of such other obligations, they will be paid in full when
due or performed in accordance with the terms of the extension or renewal,
whether at maturity, by acceleration, call for redemption, upon an Offer to
Purchase or otherwise. Failing payment when due of any amount so guaranteed for
whatever reason, each Guarantor shall be obligated to pay the same before
failure so to pay becomes an Event of Default. This Guaranty is a guarantee of
payment and not of collection. Failing payment when due of any amount so
guaranteed for whatever reason, the Guarantors shall be jointly and severally
obligated to pay the same before failure to so pay becomes an Event of Default.
<PAGE>
) Each Guarantor hereby agrees that its obligations with regard to this
Guaranty shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action to
enforce the same, any delays in obtaining or realizing upon or failures to
obtain or realize upon collateral, the recovery of any judgment against the
Issuers, any action to enforce the same or any other circumstances that might
otherwise constitute a legal or equitable discharge or defense of a Guarantor.
Each Guarantor hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of either of the
Issuers, any right to require a proceeding first against either of the Issuers
or right to require the prior disposition of the assets of either of the Issuers
to meet its obligations, protest, notice and all demands whatsoever and
covenants that this Guaranty will not be discharged except by complete
performance of the obligations contained in the Securities and this Indenture.
) If any Holder or the Trustee is required by any court or otherwise to
return to either of the Issuers or any Guarantor, or any Custodian, Trustee, or
similar official acting in relation to either of the Issuers or such Guarantor,
any amount paid by either of the Issuers or such Guarantor to the Trustee or
such Holder, this Guaranty, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor agrees that it will not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Guarantor further agrees that, as between such
Guarantor, on the one hand, and the Holders and the Trustee, on the other hand,
(i) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Section 7.2 for the purposes of this Guaranty, notwithstanding any
stay, injunction or other prohibition preventing such acceleration as to the
Issuers of the obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of those obligations as provided in Section 7.2,
those obligations (whether or not due and payable) will forthwith become due and
payable by each of the Guarantors for the purpose of this Guaranty.
) It is the intention of each Guarantor and the Issuers that the
obligations of each Guarantor hereunder shall be in, but not in excess of, the
maximum amount permitted by applicable law. Accordingly, if the obligations in
respect of the Guaranty would be annulled, avoided or subordinated to the
creditors of any Guarantor by a court of competent jurisdiction in a proceeding
actually pending before such court as a result of a determination both that such
Guaranty was made without fair consideration and, immediately after giving
effect thereto, such Guarantor was insolvent or unable to pay its debts as they
mature or left with an unreasonably small capital, then the obligations
<PAGE>
of such Guarantor under such Guaranty shall be reduced by such court if and to
the extent such reduction would result in the avoidance of such annulment,
avoidance or subordination; provided, however, that any reduction pursuant to
this paragraph shall be made in the smallest amount as is strictly necessary to
reach such result. For purposes of this paragraph, "fair consideration",
"insolvency", "unable to pay its debts as they mature", "unreasonably small
capital" and the effective times of reductions, if any, required by this
paragraph shall be determined in accordance with applicable law. The provisions
of this Section 13.1(d) shall survive until the Securities are no longer
outstanding.
Execution and Delivery of Guaranty.
To evidence its Guaranty set forth in Section 13.1, each Guarantor agrees
to execute a Guaranty substantially in the form annexed hereto as Exhibit B and
that this Indenture shall be executed on behalf of such Guarantor by two
Officers or an Officer and an Assistant Secretary by manual or facsimile
signature.
Each Guarantor agrees that its Guaranty set forth in Section 13.1 shall
remain in full force and effect and apply to all the Securities notwithstanding
any failure to endorse on each Security a notation of such Guaranty.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security to which a Guaranty relates,
the Guaranty shall be valid nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guaranty set forth in
this Indenture on behalf of each Guarantor.
Certain Bankruptcy Events.
Each Guarantor hereby covenants and agrees that in the event of the
insolvency, bankruptcy, dissolution, liquidation or reorganization of either of
the Issuers, such Guarantor shall not file (or join in any filing of), or
otherwise seek to participate in the filing of, any motion or request seeking to
stay or to prohibit (even temporarily) execution on the Guaranty and hereby
waives and agrees not to take the benefit of any such stay of execution, whether
under Section 362 or 105 of the United States Bankruptcy Code or otherwise.
Rights Under the Guaranty.
No payment by any Guarantor pursuant to the provisions hereof to the
Trustee shall entitle such Guarantor to any payment
<PAGE>
out of any Collateral held by the Trustee under this Indenture or any Mortgage
Documents.
) Each of the Guarantors waives notice of the issuance, sale and purchase
of the Securities and notice from the Trustee or the holders from time to time
of any of the Securities of their acceptance and reliance on this Guaranty.
) Notwithstanding any payment or payments made by the Guarantors by reason
of this Guaranty, the Guarantors shall not be subrogated to any rights of the
Trustee or any Holder of the Securities against the Issuers until all the
Securities shall have been paid or deemed to have been paid within the meaning
of this Indenture. Any payment made by the Guarantors by reason of this Guaranty
shall be in all respects subordinated to the full and complete payment or
discharge under this Indenture of all obligations guaranteed hereby, and no
payment by the Guarantors by reason of this Guaranty shall give rise to any
claim of the Guarantors against the Trustee or any Holder of the Securities.
Unless and until the Securities shall have been paid or deemed to have been paid
within the meaning of this Indenture, none of the Guarantors will assign or
otherwise transfer any such claim against the Issuers to any other person.
) No set-off, counterclaim, reduction or diminution of any obligation or
any defense of any kind or nature (other than performance by the Guarantor of
its obligation hereunder) which the Guarantor may have or assert against the
Trustee or any holder of any Securities shall be available hereunder to the
Guarantor against the Trustee.
) Each Guarantor agrees to pay all costs, expense and fees, including all
reasonable attorneys' fees, which may be incurred by the Trustee in enforcing or
attempting to enforce the Guaranty or protecting the rights of the Trustee or
the Holders of Securities, if any, in accordance with this Indenture.
Severability.
In case any provision of this Guaranty shall be invalid, illegal or
unenforceable, that portion of such provision that is not invalid, illegal or
unenforceable shall remain in effect, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Merger or Consolidation of Guarantors.
No Guarantor shall consolidate or merge with or into (whether or not such
Guarantor is the surviving Person) another Person unless (i) subject to the
provisions of the following paragraph, the Person formed by or surviving any
such consolidation or merger (if other than such Guarantor) assumes all the
obligations of such Guarantor pursuant to a supplemental
<PAGE>
indenture and supplemental Mortgage Documents in form reasonably satisfactory to
the Trustee, pursuant to which such Person shall unconditionally guarantee, on a
senior secured basis, all of such Guarantor's obligations under such Guarantor's
guarantee, this Indenture and the Mortgage Documents on the terms set forth in
this Indenture; (ii) immediately before and immediately after giving effect to
such transaction on a pro forma basis, no Default or Event of Default shall have
occurred or be continuing; and (iii) immediately after such transaction, the
surviving Person holds all Permits required for operation of the business of,
and such entity is controlled by a Person or entity (or has retained a Person or
entity which is) experienced in, operating casino hotels or otherwise holds all
Permits (including those required from Gaming Authorities) to operate its
business.
In the event of a sale or other disposition of all of the Equity Interests
of any Guarantor (including pursuant to a merger or consolidation) to any person
other than a Subsidiary Guarantor, then such Guarantor may be released and
relieved of any obligation under its Guaranty; provided, that (x) immediately
after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing and (y) such Asset Sale and the application of
the Net Cash Proceeds therefrom are in accordance with the applicable provisions
of this Indenture, including without limitation Section 5.15 and Article VI.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first written above.
TRUMP ATLANTIC CITY ASSOCIATES
By: TRUMP ATLANTIC CITY HOLDING, INC.,
its general partner
By:_______________________________
Name:
Title:
Attest:_________________________________________
TRUMP ATLANTIC CITY FUNDING, INC.
By:_________________________________
Name:
Title:
Attest:_________________________________________
<PAGE>
FIRST BANK NATIONAL
ASSOCIATION, as Trustee
By:_________________________________
Name:
Title:
Attest:_________________________________________
<PAGE>
GUARANTORS
TRUMP PLAZA ASSOCIATES
By: TRUMP ATLANTIC CITY CORPORATION,
its general partner
By:_______________________________
Name:
Title:
Attest:_________________________________________
TRUMP TAJ MAHAL ASSOCIATES
By: TRUMP ATLANTIC CITY CORPORATION,
its general partner
By:_______________________________
Name:
Title:
TRUMP ATLANTIC CITY CORPORATION
By:_________________________________
Name:
Title:
Attest:_________________________________________
<PAGE>
EXHIBIT A
[FORM OF SECURITY]
TRUMP ATLANTIC CITY ASSOCIATES
TRUMP ATLANTIC CITY FUNDING, INC.
11 1/4% FIRST MORTGAGE NOTES
DUE 2006
No. $
CUSIP 897907 AA 9
Trump Atlantic City Associates, a New Jersey partnership, and Trump
Atlantic City Funding, Inc., a Delaware corporation (hereinafter collectively
called the "Issuers," which term includes any successor entity under the
Indenture hereinafter referred to), for value received, hereby promise to pay to
______________, or registered assigns, the principal sum of
___________________________________________ Dollars, on May 1, 2006.
Interest Payment Dates: May 1 and November 1.
Record Dates: April 15 and October 15.
Reference is made to the further provisions of this Security on the reverse
side, which will, for all purposes, have the same effect as if set forth at this
place.
A-1
<PAGE>
IN WITNESS WHEREOF, the Issuers have caused this Instrument to be duly
executed under their respective corporate seals.
Dated:
Attest: TRUMP ATLANTIC CITY ASSOCIATES
By: TRUMP HOTELS & CASINO RESORTS
HOLDINGS, L.P., its general partner
By: TRUMP HOTELS & CASINO RESORTS,
INC., its managing general partner
_______________________________ By:________________________________________
Secretary
Attest: TRUMP ATLANTIC CITY FUNDING, INC.
_______________________________ By:________________________________________
Secretary
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned Indenture.
FIRST BANK NATIONAL ASSOCIATION,
as trustee
By: _____________________________
Authorized Signatory
Dated:
A-2
<PAGE>
TRUMP ATLANTIC CITY ASSOCIATES
TRUMP ATLANTIC CITY FUNDING, INC.
11 1/4% First Mortgage Notes
due 2006
A-3
<PAGE>
Interest.
Trump Atlantic City Associates, a New Jersey partnership, and Trump
Atlantic City Funding, Inc., a Delaware corporation (collectively, the
"Issuers"), jointly and severally promise to pay interest on the principal
amount of this Security at the rate of 11 1/4% per annum from the date of
issuance or from the most recent Interest Payment Date to which interest has
been paid or provided for. Interest on this Security will be payable
semiannually on May 1 and November 1, commencing November 1, 1996, to the person
in whose name this Security is registered at the close of business on April 15
or October 15, preceding such Interest Payment Date (each, a "Record Date").
Interest on this Security will be computed on the basis of a 360-day year,
consisting of twelve 30-day months.
Method of Payment.
The Issuers shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date. Holders must
surrender Securities to a Paying Agent to collect principal payments. Except as
provided below, the Issuers shall pay principal and interest in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for payment of public and private debts ("U.S. Legal Tender"). The
Issuers may deliver any such interest payment to the Paying Agent or the Issuers
may mail any such interest payment to a Holder at the Holder's registered
address. Notwithstanding the preceding two sentences, in the case of Securities
of which The Depository Trust Company or its nominee is the Holder, such
payments must be made by wire transfer of Federal funds.
Paying Agent and Registrar.
Initially, First Bank National Association, a national banking association
(the "Trustee"), will act as Paying Agent and Registrar. The Issuers may change
any Paying Agent, Registrar or Co-registrar without notice to the Holders. The
Issuers or any of their Subsidiaries may, subject to certain exceptions, act as
Paying Agent, Registrar or Co-registrar.
Indenture.
A-4
<PAGE>
The Issuers issued the Securities under an Indenture, dated as of April 17,
1996 (the "Indenture"), between the Issuers, the Guarantors named therein and
the Trustee. Capitalized terms herein are used as defined in the Indenture
unless otherwise defined herein. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act, as in effect on the date of the Indenture. The Securities
are subject to all such terms, and Holders of Securities are referred to the
Indenture and said Act for a statement of them. The Securities are senior,
secured obligations of each of the Issuers limited in aggregate principal amount
to $1,200,000,000.
Redemption.
The Securities are redeemable in whole or from time to time in part at any
time on and after May 1, 2001, at the option of the Issuers, at the Redemption
Price (expressed as a percentage of principal amount) set forth below, if
redeemed during the 12-month period commencing May 1 of each of the years
indicated below, in each case, together with any accrued but unpaid interest to
the Redemption Date. Except as provided in the next paragraph, the Securities
may not otherwise be redeemed at the option of the Issuers.
12-Month
Period Beginning Redemption Price
---------------- ----------------
May 1, 2001 ............................. 105.625%
May 1, 2002 ............................. 103.750%
May 1, 2003 ............................. 101.875%
May 1, 2004 and thereafter............... 100.000%
Any Governmental Authority with appropriate jurisdiction and authority
relating to a Gaming License held by an Issuer or an Affiliate or wholly owned
Subsidiary of an Issuer may require a Holder to be qualified under any
applicable law administered by such Governmental Authority. If a Holder does not
qualify under the Casino Control Act, the Holder must dispose of its interest in
the Securities, within 30 days after an Issuer's notice of such finding (or
within such earlier date as the CCC may require), or the Issuers may redeem such
Securities to the extent necessary in the reasonable, good faith
A-5
<PAGE>
judgment of a general partner of the Company, to prevent the loss, failure to
obtain or material impairment or to secure the reinstatement of any material
Gaming License. If a Holder does not qualify under any applicable law
administered by a Governmental Authority other than the Casino Control Act, the
Issuers may redeem such Securities to the extent necessary in the reasonable,
good faith judgment of a general partner of the Company, to prevent the loss,
failure to obtain or material impairment or to secure the reinstatement of any
material Gaming License. In such event, the Redemption Price shall be the
principal amount thereof, plus accrued and unpaid interest to the date of
redemption (or such lesser amount as may be required by applicable law or by
order of any Gaming Authority).
Any redemption of the Securities shall comply with Article III of the
Indenture.
Notice of Redemption.
Notice of redemption will be mailed by first class mail at least 30 days
but not more than 60 days before the Redemption Date (unless another notice
period shall be required by applicable law or by order of any Gaming Authority)
to each Holder of Securities to be redeemed at his registered address.
Securities in denominations larger than $1,000 may be redeemed in part, but only
in $1,000 integrals.
Except as set forth in the Indenture, from and after any Redemption Date,
if monies for the redemption of the Securities called for redemption shall have
been deposited with the Paying Agent (other than either of the Issuers or an
Affiliate of either of the Issuers) on such Redemption Date, the Securities
called for redemption will cease to bear interest and the only right of the
Holders of such Securities will be to receive payment of the Redemption Price,
including any accrued and unpaid interest to the Redemption Date, unless the
Issuers default on such payment.
Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in denominations of
$1,000 and integral multiples of $1,000. A Holder may register the transfer of,
or exchange Securities in accordance with, the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption.
Persons Deemed Owners.
The registered Holder of a Security may be treated as the owner of it for
all purposes.
Unclaimed Money.
A-6
<PAGE>
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee and the Paying Agent(s) will pay the money back to the
Issuers at their written request. After that, all liability of the Trustee and
such Paying Agent(s) with respect to such money shall cease.
Legal Defeasance or Covenant Defeasance Prior to Redemption or Maturity.
If the Issuers, within one year of the final Stated Maturity of the
Securities in the case of Legal Defeasance, or at any time in the case of
Covenant Defeasance, deposit with the Trustee, in trust, for the benefit of the
Holders, U.S. Legal Tender, non-callable government securities or a combination
thereof, in such amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants selected by the Trustee, to
pay the principal of, premium, if any and interest on the Securities to
redemption or maturity and comply with the other provisions of the Indenture
relating thereto, the Issuers may elect to have their obligations discharged, in
the case of a Legal Defeasance (in which case the Indenture would cease to be of
further effect, except as to certain limited obligations and to the rights of
Holders to receive payments when due from the trust funds therefor), or, in the
case of a Covenant Defeasance, to be discharged from certain provisions of the
Indenture and the Securities (including the financial covenants, but excluding
their obligation to pay the principal of and interest on the Securities).
Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the written consent of the Holders of a simple
majority, 66_% or 100% in aggregate principal amount of the Securities then
outstanding, as applicable, and any existing Default or Event of Default or
compliance with any provision may be waived with the consent of the Holders of
the same specified percentage of aggregate principal amount of the Securities
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture, the Mortgage Documents or the
Securities to, among other things, cure any ambiguity, defect or inconsistency,
provide for uncertificated Securities in addition to or in place of certificated
Securities, or make any other change that does not adversely affect the rights
of any Holder of a Security.
Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the Issuers and
their Subsidiaries to, among other things,
A-7
<PAGE>
incur additionalIndebtedness and Disqualified Capital Stock, make payments in
respect of its Equity Interests, enter into transactions with Affiliates, incur
Liens, sell assets, merge or consolidate with any other person and sell, lease,
transfer or otherwise dispose of substantially all of its properties or assets.
The limitations are subject to a number of important qualifications and
exceptions. The Issuers must annually report to the Trustee on compliance with
such limitations.
Change of Control.
In the event there shall occur any Change of Control, each Holder of
Securities shall have the right, at such Holder's option but subject to the
limitations and conditions set forth in the Indenture, to require the Issuers to
purchase on the Change of Control Purchase Date in the manner specified in the
Indenture, all or any part (in integral multiples of $1,000) of such Holder's
Securities at a Change of Control Purchase Price equal to 101% of the principal
amount thereof, together with accrued and unpaid interest, if any, to the Change
of Control Purchase Date.
Security.
In order to secure the obligations under the Indenture, the Issuers, the
Guarantors and the Trustee have entered into the Mortgage Documents and the
Collateral Agency Agreement in order to create and govern security interests in
certain assets of the Issuers, the Guarantors and their Subsidiaries.
Sale of Assets.
The Indenture imposes certain limitations on the ability of the Issuers or
any of their Subsidiaries to sell assets. In the event the proceeds from a
permitted Asset Sale exceed certain amounts, as specified in the Indenture, the
Issuers and the Guarantors will be required either to reinvest the proceeds of
such Asset Sale in their business or to repay certain indebtedness and to make
an offer to purchase each Holder's Securities at 100% of the principal amount
thereof, together with accrued and unpaid interest, if any, to the Asset Sale
Purchase Date.
Gaming Laws.
The rights of the Holder of this Security and any owner of any beneficial
interest in this Security are subject to the gaming laws, regulations and the
jurisdiction and requirements of the Gaming Authorities and the further
limitations and requirements set forth in the Indenture.
Successors.
A-8
<PAGE>
When a successor assumes all the obligations of its predecessor under the
Securities and the Indenture, the predecessor will be released from those
obligations.
Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the Holders
of at least 25% in aggregate principal amount of Securities then outstanding may
declare all the Securities to be due and payable immediately in the manner and
with the effect provided in the Indenture. Holders of Securities may not enforce
the Indenture or the Securities except as provided in the Indenture. The Trustee
may require reasonable security or indemnity satisfactory to it before it
enforces the Indenture or the Securities. Subject to certain limitations,
Holders of a majority in aggregate principal amount of the Securities then
outstanding may direct the Trustee in its exercise of any trust or power.
Trustee Dealings with Issuers.
The Trustee under the Indenture, in its individual or any other capacity,
may become the owner or pledgee of any of the Securities, make loans to, accept
deposits from, and perform services for the Issuers or their Affiliates, and may
otherwise deal with the Issuers or their respective Affiliates with the same
rights it would have if it were not the Trustee.
No Recourse Against Others.
No direct or indirect partner, director, officer, employee or stockholder,
as such, past, present or future of either of the Company or Funding, any
Guarantor or any successor entity shall have any personal liability in respect
of the obligations of the Issuers or any Guarantor under the Indenture or the
Securities or the guarantees thereof by reason of his or its status as such
partner, director, officer, employee or stockholder, except to the extent such
is an Issuer or a Guarantor. Each Holder of a Security by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
Authentication.
This Security shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Security.
Abbreviations and Defined Terms.
A-9
<PAGE>
Customary abbreviations may be used in the name of a Holder of a Security
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuers will cause CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
A-10
<PAGE>
[FORM OF ASSIGNMENT]
I or we assign this Security to
-------------------------------------------------------------------
---
-------------------------------------------------------------------
---
-------------------------------------------------------------------
---
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of assignee
_________________ and irrevocably appoint ___________ agent to transfer this
Security on the books of the Issuers. The agent may substitute another to act
for him.
Dated: __________ Signed:_____________________________________________________
(Sign exactly as your name appears on the
other side of this Security)
Signature guarantee should be made by a guarantor institution participating in
the Securities Transfer Agents Medallion Program or in such other guarantee
program acceptable to the Trustee.
A-11
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Issuers
pursuant to any of the following provisions of the Indenture, check the
appropriate box:
[ ] Section 5.15; [ ] Article XI.
If you want to elect to have only part of this Security purchased by the
Issuers pursuant to the Indenture, state the principal amount you want to be
purchased: $________
Dated: __________ Signed:_____________________________________________________
(Sign exactly as your name appears on the
other side of this Security)
A-12
<PAGE>
EXHIBIT B
FORM OF GUARANTY
For value received, __________________, a __________________
[corporation/partnership], hereby irrevocably, unconditionally guarantees, on a
senior secured basis, to the Holder of any 11 1/4% First Mortgage Note due 2006
(the "Security") of Trump Atlantic City Associates and Trump Atlantic City
Funding, Inc. (collectively, the "Issuers") upon which this Guaranty is
endorsed, the due and punctual payment, as set forth in the Indenture (the
"Indenture") among the Issuers, the guarantors named therein and First Bank
National Association, as trustee (the "Trustee") pursuant to which such Security
and this Guaranty were issued, of the principal of, premium (if any) and
interest on such Security when and as the same shall become due and payable for
any reason according to the terms of such Security and Article XIII of the
Indenture. The guaranty of the Security upon which this Guaranty is endorsed
will not become effective until the Trustee signs the certificate of
authentication on such Security.
By:____________________________________
Attest:________________________________
B-1
INDENTURE OF MORTGAGE AND SECURITY AGREEMENT
TRUMP TAJ MAHAL ASSOCIATES
Mortgagor
and
FIRST BANK NATIONAL ASSOCIATION,
AS COLLATERAL AGENT
Mortgagee
Dated as of April 17, 1996
----------------------------------------------------
Record and return to:
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Attention: Wallace L. Schwartz, Esq.
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
Section 1.01. Definitions............................................... 10
Section 1.02. Notices................................................... 18
Section 1.03. Form and Contents of Documents
Delivered to Mortgagee................................ 19
Section 1.04. Compliance Certificates and Opinions...................... 19
Section 1.05. Effect of Headings and Table of
Contents.............................................. 20
Section 1.06. Successors and Assigns; Amendments........................ 20
Section 1.07. Separability Clause....................................... 20
Section 1.08. Benefits of Mortgage...................................... 20
Section 1.09. Governing Law............................................. 20
Section 1.10. Limitation on Liability................................... 20
Section 1.11. Provisions Required by Trust
Indenture............................................. 21
Section 1.12. Rights of Mortgagee....................................... 21
Section 1.13. Mortgage Subject to Casino Control
Act................................................... 22
Section 1.14. Discharge of Lien......................................... 22
Section 1.15. General Application....................................... 23
Section 1.16. Mortgage Deemed to be Security
Agreement............................................. 23
ARTICLE TWO
RELEASE; SUBORDINATION
Section 2.01. Possession by Mortgagor................................... 24
Section 2.02. Obsolete Property......................................... 24
Section 2.03. F,F&E Financing Agreements................................ 25
Section 2.04. [Intentionally Omitted]................................... 25
ARTICLE THREE
REMEDIES
Section 3.01. Events of Default......................................... 25
Section 3.02. Application of Moneys Received by
Mortgagee.............................................. 25
Section 3.03. Restoration of Rights and Remedies........................ 26
Section 3.04. Rights and Remedies Cumulative............................ 26
Section 3.05. Delay or Omission Not Waiver.............................. 26
Section 3.06. Undertaking for Costs..................................... 26
Section 3.07. Waiver of Appraisement and Other Laws..................... 27
Section 3.08. Entry..................................................... 27
Section 3.09. Power of Sale; Suits for Enforcement...................... 28
i
<PAGE>
Section 3.10. Incidents of Sale......................................... 28
Section 3.11. Receiver.................................................. 30
Section 3.12. Suits to Protect the Trust Estate......................... 30
Section 3.13. Management of the Premises................................ 30
ARTICLE FOUR
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
Section 4.01. Consolidation, Merger, Conveyance or
Transfer only on Certain Terms........................ 31
ARTICLE FIVE
COVENANTS AND REPRESENTATIONS OF MORTGAGOR
Section 5.01. Performance of Obligations................................ 31
Section 5.02. F,F&E Financing Agreements................................ 31
Section 5.03. Limitations on Liens and Transfers........................ 31
Section 5.04. Environmental............................................. 32
Section 5.05. Pari Passu Liens.......................................... 37
Section 5.06. Warranty of Leasehold Estate and Title.................... 37
Section 5.07. After-Acquired Property; Further Assurances; Recording.... 38
Section 5.08. Payment of Taxes and Certain Claims;
Maintenance of Properties;
Compliance with Legal Require-
ments and Insurance Requirements....................... 41
Section 5.09. Permitted Contests........................................ 43
Section 5.10. Mechanics' and Other Liens................................ 44
Section 5.11. To Insure................................................. 44
Section 5.12. Limitations on Building Demolition,
Alterations, Improvements and New
Construction........................................... 47
Section 5.13. Leases.................................................... 49
Section 5.14. Compliance Certificates................................... 51
Section 5.15. [Intentionally Omitted]................................... 51
Section 5.16. To Keep Books; Inspection by
Mortgagee.............................................. 51
Section 5.17. Advances by Mortgagee..................................... 51
Section 5.18. Waiver of Stay, Extension or Usury
Laws................................................... 52
Section 5.19. [Intentionally Omitted]................................... 52
Section 5.20. Facility Leases........................................... 52
Section 5.21. [Intentionally Omitted]................................... 58
Section 5.22. Indemnification........................................... 58
Section 5.23. Acceptance................................................ 59
ii
<PAGE>
SCHEDULES AND EXHIBITS
Schedule 1 - Owned Land
Schedule 2 - Ground Leases and Ground Lease Land
Schedule 3 - Parking Leases and Parking Lease Land
Schedule 4 - Intentionally Omitted
Schedule 5 - Form of Non-Disturbance and Attornment
Agreement
Exhibit A - Form of Trust Indenture
iii
<PAGE>
INDENTURE OF MORTGAGE AND SECURITY AGREEMENT
INDENTURE OF MORTGAGE AND SECURITY AGREEMENT ("Mortgage"), dated as of
April 17, 1996, between TRUMP TAJ MAHAL ASSOCIATES, a New Jersey partnership
("Mortgagor"), having an office at Mississippi Avenue and The Boardwalk,
Atlantic City, New Jersey 08401, and FIRST BANK NATIONAL ASSOCIATION, a national
banking association having an office at 180 East Fifth Street, St. Paul,
Minnesota 55101, as Collateral Agent ("Mortgagee"), on behalf of the Designated
Representatives (as hereinafter defined) for the benefit of the Secured
Beneficiaries (as hereinafter defined) under the Collateral Agency Agreement (as
hereinafter defined).
W I T N E S S E T H:
In consideration of $10.00 in hand paid by Mortgagee to Mortgagor and for
other good and valuable consideration, the receipt and sufficiency whereof is
hereby acknowledged, and in order to secure (i) the punctual payment and
performance when due of all of Guarantors' obligations under the Guarantee; (ii)
the punctual payment and performance when due of all of the Company's, the
Issuers', the Guarantors' and the Mortgagor's obligations under the Mortgage
Notes, the Trust Indenture, the Secured Loans, the Debt Documents and, to the
extent not otherwise included, any other Obligations in the initial principal
sum of $1,200,000,000 but which principal sum may be increased up to
$1,300,000,000 pursuant to the terms of the Trust Indenture and the Collateral
Agency Agreement; (iii) payment by Mortgagor to Mortgagee of all sums expended
or advanced by Mortgagee pursuant to any term or provision of this Mortgage;
(iv) performance of each covenant, term, condition and agreement of Mortgagor
herein contained; (v) all costs and expenses, including, without limitation,
reasonable counsel fees and expenses as provided in Section 3.07, which may
arise in respect of this Mortgage or of the obligations secured hereby; and (vi)
performance and observance of all of the provisions herein contained, Mortgagor
has executed and delivered this Mortgage and has bargained, sold, alienated,
mortgaged, pledged, released, conveyed and confirmed unto Mortgagee and its
successors hereunder and assigns forever, all of its right, title and interest
in, to and under all of the following described property:
<PAGE>
GRANTING CLAUSES
Granting Clause First
All of the property, rights, title, interest, privileges and franchises
particularly described in annexed Schedule 1 (the "Owned Land") which Schedule
is hereby made a part of, and deemed to be described in, this Granting Clause as
fully as if set forth in this Granting Clause at length.
Granting Clause Second
All of the property, rights, title, interest, privileges and franchises of
Mortgagor as lessee under (a) all Facility Leases and (b) all Parking Leases,
together with (i) all credits, deposits, privileges and rights of Mortgagor as
lessee under the Facility Leases and the Parking Leases, now or at any time
existing, (ii) the leaseholds and the leasehold estates created by the Facility
Leases and the Parking Leases and (iii) all of the estates, rights, titles,
claims or demands whatsoever of Mortgagor, either in law or in equity, in
possession or in expectancy, of, in and to the Facility Leases, the Leased
Facilities, the Parking Leases and the Parking Lease Land, together with (x) any
and all other, further or additional title, estates, interests or rights which
may at any time be acquired by Mortgagor in or to the Leased Facilities or the
Parking Lease Land or any part thereof, and Mortgagor expressly agrees that if
Mortgagor shall, at any time prior to payment in full of all indebtedness
secured hereby, acquire fee simple title or any other greater estate to the
Leased Facilities (including, without limitation, to the Ground Lease Land
pursuant to the terms of the Ground Leases) or the Parking Lease Land, the Lien
of this Mortgage shall attach, extend to, cover and be a Lien upon such fee
simple title or other greater estate and (y) any right to possession or
statutory term of years derived from, or incident to, the Facility Leases or the
Parking Leases pursuant to Section 365(h) of the Code or any Comparable
Provision.
Except as otherwise set forth herein and in the other Mortgage Documents,
the assignment made by this Granting Clause Second shall not impair or diminish
any right, privilege or obligation of Mortgagor with respect to the Facility
Leases or the Parking Leases, nor shall any such obligation be imposed on
Mortgagee.
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Granting Clause Third
All of the rents, issues, profits, revenues accounts, accounts receivable
and other income and proceeds (including, without limitation, all rents, fees,
charges, accounts, issues, profits, revenues and payments for or from (a) the
use or occupancy of the rooms and other public facilities in the Hotel and (b)
the operation of the Casino) of the property subjected or required to be
subjected to the Lien of this Mortgage, including, without limitation, the
property described in Granting Clauses First, Second and Sixth (said property
described in Granting Clauses First, Second and Sixth and similar other property
subjected or required to be subjected to the Lien of this Mortgage, together
with all such rents, issues, profits, revenues, accounts, accounts receivable
and other income and proceeds therefrom is hereinafter collectively referred to
as the "Premises") and all of the estate, right, title and interest of every
nature whatsoever of Mortgagor in and to the same and every part thereof.
Granting Clause Fourth
All of the rights of Mortgagor as lessor under the Leases in effect on the
date of execution of this Mortgage or hereafter entered into by Mortgagor,
including modifications, extensions and renewals of all of the same, and the
immediate and continuing right as security in accordance with the Assignment of
Leases and Rents, and, after the occurrence, and during the continuance, of an
Event of Default, to (a) make claim for, collect, receive and receipt for (and
to apply the same as provided herein) any and all rents, fees, charges, income,
revenues, issues, profits, security and other sums of money payable or
receivable thereunder or pursuant thereto, and all proceeds thereof, whether
payable as rent, insurance proceeds, condemnation awards, security or otherwise
and whether payable prior to or subsequent to the Stated Maturity of any of the
Debt Documents, (b) receive and give notices and consents thereunder, (c) bring
actions and proceedings thereunder or for the enforcement thereof, (d) make
waivers and agreements thereunder or with respect thereto, (e) take such action
upon the happening of a default under any Lease, including the commencement,
conduct and consummation of any proceedings at law or in equity as shall be
permitted by any provision of any Lease, and (f) do any and all things which
Mortgagor or any lessor is or may become entitled to do under the Leases;
provided, that, except as may be set forth to the contrary in the Assignment of
Leases and Rents, the assignment made by this Granting Clause Fourth shall not
impair or diminish any right, privilege or
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obligation of Mortgagor under the Leases nor shall any such obligation be
imposed upon Mortgagee.
Granting Clause Fifth
Without limiting the generality of the provisions of Granting Clause Third,
all of Mortgagor's rights, title, interest, privileges and franchises in and to
the following, now owned or hereafter acquired by Mortgagor, to the extent of
Mortgagor's interest therein and thereto and to the extent assignable
(collectively, "Operating Assets"):
(a) bookings for the use of guest rooms, banquet facilities, meeting
rooms at the Casino Hotel or at any other improvements now or hereafter
located on any of the Land;
(b) all contracts respecting utility services for, and the
maintenance, operations, or equipping of, the Premises, including
guaranties and warranties relating thereto;
(c) the Permits;
(d) all contract rights, leases (whether with respect to real
property, personal property or both real and personal property, excluding
the Facility Leases and the Parking Leases), concessions, trademarks, trade
names, service marks, logos, copyrights, warranties and other items of
intangible personal property, and any and all good will associated with the
same relating to the ownership or operation of the Casino Hotel or of any
other improvements now or hereafter located on any of the Land, including,
without limitation, (1) telephone and other communication numbers, (2) all
software licensing agreements as are required to operate computer software
systems at the Casino Hotel or at any other improvements now or hereafter
located on any of the Land and books and records relating to the software
programs and (3) lessee's interest under leases of Tangible Personal
Property;
(e) all contracts, purchase orders, requisitions and agreements
entered into by or on behalf of Mortgagor or which have been assigned to
Mortgagor, for the design, construction, and furnishing of the Casino Hotel
or of any other improvements now or hereafter located on any of the Land,
including, without limitation, architect's agreements, engineering
agreements, construction contracts, consulting agreements and agreements or
purchase orders for all items of Tangible Personal
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Property and payment and performance bonds in favor of Mortgagor in
connection with the Trust Estate (and all warranties and guarantees
thereunder and warranties and guarantees of any subcontractor and bond
issued in connection with the work to be performed by any subcontractor);
(f) the following personal property (the "Tangible Personal Property")
now or hereafter acquired by Mortgagor (directly or by way of lease) which
are located on, or to be located on, or which are in use or held in reserve
storage for future use in connection with the gaming or other operations
of, the Casino Hotel or of any other improvements now or hereafter located
on any of the Land, which are on hand or on order whether stored on-site or
off-site:
(i) all furniture, furnishings, equipment, machinery, apparatus,
appliances, fixtures and fittings and other articles of tangible
personal property;
(ii) all slot machines, electronic gaming devices, crap tables,
blackjack tables, roulette tables, baccarat tables, big six wheels and
other gaming tables, and all furnishings and equipment to be used in
connection with the operation thereof;
(iii) all cards, dice, gaming chips and placques, tokens, chip
racks, dealing shoes, dice cups, dice sticks, layouts, paddles,
roulette balls and other consumable supplies and items;
(iv) all china, glassware, linens, kitchen utensils, silverware
and uniforms;
(v) all consumables and operating supplies of every kind and
nature, including, without limitation, accounting supplies, guest
supplies, forms, printing, stationery, food and beverage stock, bar
supplies, laundry supplies and brochures to existing purchase orders;
(vi) all upholstery material, carpets and rugs, beds, bureaus,
chiffonniers, chairs, chests, desks, bookcases, tables, curtains,
hangings, pictures, divans, couches, ornaments, bars, bar fixtures,
safes, stoves, ranges, refrigerators, radios, televisions, clocks,
electrical equipment, lamps, mirrors, heating and lighting fixtures
and equipment, ice machines, air conditioning machines, fire
prevention and extinguishing apparatus, laundry machines, and all
similar and related articles used
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in bedrooms, sitting rooms, bathrooms, boudoirs, halls, closets,
kitchens, dining rooms, offices, lobbies, basements and cellars in the
Casino Hotel and in any other improvements now or hereafter located on
any of the Land;
(vii) all sets and scenery, costumes, props and other items of
tangible personal property on hand or on order for use in the
production of shows in any showroom, convention space, exhibition
hall, or sports and entertainment arena of the Casino Hotel or in any
other improvements now or hereafter located on any of the Land; and
(viii) all cars, limousines, vans, buses, trucks and other
vehicles owned or leased by Mortgagor for use in connection with the
operation of the Premises, together with all equipment, parts and
supplies used to service, repair, maintain and equip the foregoing;
(g) all drawings, designs, plans and specifications prepared by
architects, engineers, interior designers, landscape designers and any
other professionals or consultants for the design, development,
construction and/or improvement of the Casino Hotel, or for any other
development of the Premises, as amended from time to time;
(h) any administrative and judicial proceedings initiated by
Mortgagor, or in which Mortgagor has intervened, concerning the Premises,
and agreements, if any, which are the subject matter of such proceedings;
(i) any customer lists utilized by Mortgagor including lists of
transient guests and restaurant and bar patrons and "high roller" lists;
and
(j) all of the good will in connection with the assets listed in this
Granting Clause Fifth and in connection with the operation of the Premises.
Except as otherwise set forth herein and in the other Mortgage Documents,
the assignment made by this Granting Clause Fifth shall not impair or diminish
any right, privilege or obligation of Mortgagor with respect to the Operating
Assets, nor shall any such obligation be imposed on Mortgagee.
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Granting Clause Sixth
(a) All of Mortgagor's rights, title, interest, privileges and franchises
in and to all buildings, structures (surface and subsurface), and other
improvements of every kind and description, including, without limitation, all
pedestrian bridges, entrance-ways, parking lots, plazas, curb-cuts, walkways,
driveways and landscaping and such fixtures as constitute real property, now or
hereafter erected or placed on the Land or on any other land or any interest
therein hereafter acquired by Mortgagor and all of Mortgagor's rights, title,
interest, privileges and franchises in and to all fixtures and articles of
personal property now or hereafter attached to or contained in and used in
connection with such buildings and improvements, including, without limitation,
all apparatus, furniture, furnishings, machinery, motors, elevators, fittings,
radiators, cooking ranges, ice boxes, ice machines, printing presses, mirrors,
bars, mechanical refrigerators, furnaces, coal and oil burning apparatus, wall
cabinets, machinery, generators, partitions, steam and hot water boilers,
lighting and power plants, pipes, plumbing, radiators, sinks, bath tubs, water
closets, gas and electrical fixtures, awnings, shades, screens, blinds,
dishwashers, freezers, vacuum cleaning systems, office equipment and other
furnishings, and all plumbing, heating, lighting, cooking, laundry, ventilating,
incinerating, air-conditioning and sprinkler equipment or other fire prevention
or extinguishing apparatus and material, and fixtures and appurtenances thereto;
and all renewals or replacements thereof or articles in substitution therefor,
whether or not the same are or shall be attached to the Land, any other land or
any interest therein hereafter acquired by Mortgagor or to any such buildings
and improvements thereon, in any manner.
(b) All of Mortgagor's rights, title, interest, privileges and franchises
in and to all other property, real, personal or mixed (other than Excepted
Property), of every kind and description and wheresoever situate, now owned or
which may be hereafter acquired by Mortgagor (including, without limitation, (i)
the Ground Lease Land, if Mortgagor acquires the fee simple title to the Ground
Lease Land or any part thereof whether by exercise of any or all of the options
contained in the Ground Leases or otherwise, and/or the Parking Lease Land or
any part thereof and/or any other Leased Facilities, if Mortgagor acquires fee
simple title to such Leased Facilities or any part thereof, (ii) all air rights
and rights to maintain supporting columns, all rights to construct and maintain
tunnels and bridges and other elevated structures, all rights to create private
rights of way over streets now or hereafter owned or enjoyed by Mortgagor
appurtenant to real property, including, without
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limitation, those rights, if any, granted by (x) any Ordinance granted by the
City of Atlantic City, New Jersey (the "City"), (y) deeds from the City and (z)
easements from the City, and (iii) to the extent assignable, all easements,
licenses, rights of way, gores of land, streets, ways, alleys, passages, sewer
rights, waters, water courses, water rights and powers, and all estates, rights,
titles, interests, privileges, franchises, liberties, tenements, hereditaments
and appurtenances of any nature whatsoever, in any way for the benefit of, or
belonging, relating or pertaining to, the Trust Estate), it being the intention
hereof that all property, interests, rights, privileges and franchises now owned
by Mortgagor or acquired by Mortgagor after the date hereof (other than Excepted
Property) shall be as fully embraced within and subjected to the Lien hereof as
if such property were specifically described herein.
* * *
TOGETHER with all of Mortgagor's right, title and interest in and to any
and all mineral and water rights and any title or reversion, in and to the beds
of the ways, streets, avenues and alleys adjoining the Premises to the center
line thereof and in and to all strips, gaps and gores adjoining the Premises on
all sides thereof; and
TOGETHER with any and all of Mortgagor's right, title and interest in and
to the tenements, hereditaments, easements, appurtenances, passages, waters,
water courses, riparian rights, other rights, liberties and privileges thereof
or in any way now or hereafter appertaining to the Premises, including, without
limitation, any other claim at law or in equity as well as any after-acquired
title, franchise or license and the reversion and reversions and remainder and
remainders thereof; and
TOGETHER with any and all awards and other compensation heretofore or
hereafter to be made to the present and all subsequent owners of the Trust
Estate for any taking by eminent domain, either permanent or temporary, of all
or any part of the Trust Estate or any easement or appurtenances thereof,
including severance and consequential damage and change in grade of streets, all
in accordance with and subject to the provisions of the Superior Instrument
Requirements and Section 5.19; and
TOGETHER with any and all proceeds of any unearned premiums on any
insurance policies described in Sections 5.11 and 5.12, and the right to receive
and
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apply the proceeds of any insurance, judgments, or settlements made in lieu
thereof, for damage to the Trust Estate or otherwise, all in accordance with and
subject to the provisions of Section 5.11, Article IV of the Trust Indenture,
and the Superior Instrument Requirements.
EXCLUDING, with respect to all of the hereinabove granted property, rights,
title, interest, privileges and franchises described in Granting Clauses First
through Sixth and/or in the four immediately preceding paragraphs, all Excepted
Property now or hereafter existing.
TO HAVE AND TO HOLD all of said Premises, Leases, Facility Leases,
Operating Assets, properties, options, credits, deposits, rights, privileges and
franchises of every kind and description, real, personal or mixed, hereby and
hereafter granted, bargained, sold, alienated, assigned, transferred,
hypothecated, pledged, released, conveyed, mortgaged, or confirmed as aforesaid,
or intended, agreed or covenanted so to be, together with all the appurtenances
thereto appertaining (said Premises, Leases, Facility Leases, Operating Assets,
properties, options, credits, deposits, rights, privileges and franchises, other
than Excepted Property now or hereafter existing, being herein collectively
called the "Trust Estate") unto Mortgagee and its successors and assigns
forever.
SUBJECT, HOWEVER, to Permitted Liens (other than Restricted Encumbrances)
and Section 1.14.
BUT IN TRUST, NEVERTHELESS, for the benefit and security of the Secured
Creditors.
UPON CONDITION that, until the happening of an Event of Default, Mortgagor
shall be permitted to possess and use the Trust Estate, and to receive and use
the rents, issues, profits, revenues and other income of the Trust Estate.
AND IT IS HEREBY COVENANTED AND DECLARED that the Trust Estate is to be
held and applied by Mortgagee, subject to the further covenants, conditions and
trusts hereinafter set forth, and Mortgagor does hereby covenant and agree to
and with Mortgagee, for the benefit of the Secured Creditors, as follows:
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ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
Section 1.01. Definitions.
For all purposes of this Mortgage, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article One have the meanings assigned
to them in this Article One and include the plural as well as the singular;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them, and all computations herein provided for shall
be made, in accordance with generally accepted accounting principles in
effect on the date hereof consistently applied; and
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Mortgage as a whole and not to any particular
Article, Section or other subdivision.
"Affiliate" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Alterations" has the meaning set forth in Section 5.12.
"Architect" means an Independent Person selected by Mortgagor and licensed
as an architect or engineer in the State of New Jersey.
"Assignment of Leases and Rents" means the Assignment of Leases and Rents
of even date herewith made by Mortgagor, as assignor, in favor of Mortgagee, as
assignee.
"Bankruptcy Law" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Casino" means that portion of the Casino Hotel used for gaming and related
activities.
"Casino Hotel" means the casino and hotel complex currently known as the
"Trump Taj Mahal Casino Resort" in Atlantic City, New Jersey and ancillary
structures and facilities located on the Premises and all furniture, fixtures
and equipment at any time contained therein in each case owned by or leased to
Mortgagor and covered by the Lien of the Mortgage Documents.
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"Casualty" means any act or occurrence of any kind or nature which results
in damage, loss or destruction to any buildings or improvements on the Premises
and/or Tangible Personal Property.
"Code" means the Federal Bankruptcy Code, Title 11 of the United States
Code, as amended.
"Collateral Agency Agreement" means the Collateral Agency Agreement, dated
as of the date hereof, by and among Mortgagee, Trustee, the Issuers, the
Guarantors and such other persons as may be permitted to become parties
thereunder in accordance with its terms and the terms of the Trust Indenture, as
the same may be amended from time to time in accordance with its terms.
"Company" means Trump Atlantic City Associates, a New Jersey partnership.
"Comparable Provision" has the meaning set forth in Section 5.20(b)(viii).
"Debt Documents" has the meaning set forth in Section 1 of the Collateral
Agency Agreement.
"Default" means any event which is, or after notice or lapse of time or
both would be, an Event of Default. Without limiting the generality of the
previous provisions of this definition, the term "Default" shall include the
occurrence of an event as to which a notice of default has been given to
Mortgagor under any Facility Lease by a Lessor, which has not yet been cured.
"Designated Representatives" has the meaning set forth in Section 1 of the
Collateral Agency Agreement.
"Event of Default" has the meaning set forth in Section 3.01.
"Excepted Property" means:
(1) the personal property owned by lessees under Leases and the
personal property of any Hotel guests;
(2) counterchecks and any other property to the extent that the
granting of a security interest therein is prohibited by the New Jersey
Casino Control Act, N.J.S.A. 5:12-1 et seq., and the regulations
promulgated thereunder;
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(3) tradenames, intellectual property rights and interests in and to
the use of the terms "Trump Taj Mahal Casino Resort", "Trump", "Donald J.
Trump",", "Donald Trump" or related variations thereof;
(4) all cash and Cash Equivalents (as defined in the Trust Indenture)
to the extent such cash and Cash Equivalents are not required to be pledged
to the Collateral Agent as security for the Obligations pursuant to the
terms of the Trust Indenture; and
(5) any property deemed to be Excepted Property pursuant to the
provisions of Section 2.03.
"Existing Encumbrances" means the Liens existing as of April 17, 1996 after
giving effect to the "Merger Transaction" (as such term is defined in the
Prospectus).
"Facility Leases" means, collectively:
(1) the Ground Leases;
(2) any other lease now existing or hereafter entered into or assumed
by Mortgagor as lessee with respect to any real property, whether it be
land, land and buildings and improvements thereon or only buildings and
improvements (excluding the Parking Leases), which is material to the
operation of the Mortgagor or which is necessary for the normal operation
of the Casino Hotel in accordance with all Legal Requirements and all
Permits; and
(3) any and all modifications, extensions and renewals of the leases
described in clauses (1) and (2) above, to the extent the same are
permitted under Section 5.20.
"F,F&E Financing Agreement" has the meaning set forth in Section 1.1 of the
Trust Indenture.
"Full Insurable Value" means the actual replacement cost (excluding the
costs of foundation, footing, excavation, paving, landscaping and other similar,
noninsurable improvements) of the insurable properties in question.
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"Ground Lease Land" means the real property described in Schedule 2.
"Ground Leases" means the leases described in Schedule 2 as amended or
supplemented to the extent permitted by Section 5.20.
"Guarantee" means collectively, each guarantee made from time to time by
the Guarantors of the Issuers' Indenture Obligations (as defined in the Trust
Indenture) pursuant to Article Thirteen of the Trust Indenture.
"Guarantors" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Holder" has the meaning set forth in Section 1.1 of the Trust Indenture.
"Hotel" means that portion of the Casino Hotel not included within the
Casino.
"Impositions" has the meaning set forth in Section 5.08.
"Indebtedness" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Independent" when used with respect to any specified Person means such a
Person who (i) is in fact independent, (ii) does not have any direct financial
interest or any material indirect financial interest in Mortgagor or in any
Affiliate of Mortgagor and (iii) is not connected with Mortgagor or any
Affiliate of Mortgagor as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions. Whenever it is herein
provided that any Independent Person's opinion or certificate shall be furnished
to Mortgagee, such opinion or certificate shall state that the signer has read
this definition and that the signer is Independent within the meaning thereof. A
Person who is performing or who has performed services as an independent
contractor to any specified Person shall not be considered not Independent
merely by reason of the fact that such Person is performing or has performed
such services.
"Insurance Amount" has the meaning set forth in Section 5.11(a)(i).
"Insurance Requirements" means all terms of any insurance policy covering
or applicable to the Trust Estate or any part thereof, all requirements of the
issuer of any such policy, and all orders, rules, regulations
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and other requirements of the National Board of Fire Underwriters (or any other
body exercising similar functions) applicable to or affecting the Trust Estate
or any part thereof or any use or condition of the Trust Estate or any part
thereof.
"Insurer" means (i) an insurance company or companies selected by Mortgagor
authorized to issue insurance in the State of New Jersey with an A.M. Best &
Company, Inc. rating level of A minus or better and an A.M. Best & Company, Inc.
financial size category of X or better or, if such carrier is not rated by A.M.
Best & Company, Inc., having the financial stability and size deemed appropriate
by an opinion from a reputable insurance broker.
"Issuers" has the meaning set forth in Section 1.1 of the Trust Indenture.
"Land" means, collectively, the Owned Land and the Leased Land.
"Lease" means each lease or sublease (made by Mortgagor as lessor or
sublessor, as the case may be) of any space in any building or buildings, an
interest in which building or buildings constitutes a part of the Trust Estate,
including every agreement relating thereto or entered into in connection
therewith and every guarantee of the performance and observance of the
covenants, conditions and agreements to be performed by the lessee or sublessee
under any such lease or sublease. For purposes hereof, the term "Lease" shall
include any license agreement, concession agreement or other occupancy
agreement. Notwithstanding the foregoing, the term "Lease" shall not include any
transient room rentals.
"Leased Facilities" means, collectively, the Leased Land and any buildings
and improvements now or hereafter located thereon.
"Leased Land" means, collectively, the Ground Lease Land and any other land
that is now or hereafter subject to a Facility Lease.
"Legal Requirements" means all laws, statutes, codes, acts, ordinances,
orders, judgments, decrees, injunctions, rules, regulations, permits, licenses,
authorizations, directions and requirements (including, without limitation, the
New Jersey Casino Control Act, the New Jersey Industrial Site Recovery Act and
the New Jersey Spill Compensation and Control Act of 1976) of all governments,
departments, commissions, boards, courts, authorities, agencies, officials and
officers, of governments,
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federal, state and municipal (including, without limitation, the New Jersey
Department of Environmental Protection, the Atlantic City Bureau of
Investigations, the Division of Gaming Enforcement of the State of New Jersey,
and the Casino Control Commission of the State of New Jersey, foreseen or
unforeseen, ordinary or extraordinary, which now are or at any time hereafter
become applicable to the Trust Estate or any part thereof, or any of the
adjoining sidewalks, or any use or condition of the Trust Estate or any part
thereof, including, without limitation, the use of the Casino Hotel as a gaming
or gambling facility.
"Lessors" means the lessors under the Facility Leases.
"Lien" has the meaning set forth in Section 1.1 of the Trust Indenture.
"Material Instrument Requirements" means the applicable terms, conditions
and provisions of (i) the Ground Leases with respect to the Ground Lease Land,
(ii) the Parking Leases with respect to the Parking Lease Land and (iii) any
other Facility Lease with respect to the portion of the Premises covered
thereby.
"Maturity" when used with respect to any Indebtedness means the date on
which the principal (or any portion thereof) of such Indebtedness becomes due
and payable as therein or herein provided, whether at the Stated Maturity, upon
acceleration, optional redemption, required repurchase, scheduled principal
payment or otherwise.
"Mortgage" means this Indenture of Mortgage and Security Agreement, as
amended or supplemented from time to time in accordance with the terms hereof.
"Mortgage Documents" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Mortgage Notes" means the Issuers' First Mortgage Notes due 2006 in an
aggregate principal amount of $1,200,000,000, issued pursuant to the Trust
Indenture, including the guarantees thereof by the Guarantors.
"Mortgagee" means the Persons named as "Mortgagee" in the first paragraph
of this instrument including any successor entity which shall have become such
pursuant to the applicable provisions of the Collateral Agency Agreement and
this Mortgage.
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"Mortgagor" means the Person named as "Mortgagor" in the first paragraph of
this instrument including any successor entity which shall have become such
pursuant to the applicable provisions of this Mortgage.
"Mortgagor Request" means a written request of the Mortgagor in the form of
an Officers' Certificate.
"Notices" has the meaning set forth in Section 1.02.
"Obligations" has the meaning set forth in Section 1 of the Collateral
Agency Agreement.
"Officer" has the meaning set forth in Section 1.1 of the Trust Indenture.
"Officers' Certificate" has the meaning set forth in Section 1.1 of the
Trust Indenture.
"Operating Assets" has the meaning set forth in Granting Clause Fifth.
"Opinion of Counsel" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Original Policy" means the ALTA Loan Policies of Title Insurance issued by
Commonwealth Land Title Insurance Company, First American Title Insurance Co.
and Chicago Title Insurance Company, pursuant to Commonwealth Land Title
Insurance Company Title Commitment No. F238427L and Commonwealth Land Title
Insurance Company Title Commitment No. F239636L, redated the date hereof,
insuring Mortgagee as to the Liens of this Mortgage and the Plaza Mortgage in an
aggregate amount of not less than $1,200,000,000.
"Outstanding Amount" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Owned Land" has the meaning set forth in Granting Clause First.
"Parking Lease Land" means the real property described in Schedule 3.
"Parking Leases" means the leases and licenses described in Schedule 3.
"Permits" has the meaning set forth in Section 1.1 of the Trust Indenture.
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"Permitted Liens" has the meaning set forth in Section 1.1 of the Trust
Indenture. All references to the subsections of the definition of Permitted
Liens shall mean the subsections of the definition of Permitted Liens as set
forth in the Trust Indenture.
"Person" means any individual, corporation, limited or general partnership,
joint venture, association, joint stock company, trust, unincorporated
organization or any other entity or government or any agency or political
subdivision thereof.
"Plaza Mortgage" means the Indenture of Mortgage and Security Agreement,
dated as of the date hereof, made by Trump Plaza Associates for the benefit of
Mortgagee, as amended or supplemented from time to time in accordance with the
terms thereof.
"Premises" has the meaning set forth in Granting Clause Third.
"Prospectus" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Refinancing Indebtedness" has the meaning set forth in Section 1.1 of the
Trust Indenture.
"Restricted Encumbrances" means (i) Leases which are subordinate to or
shall be subordinate to the Lien of this Mortgage pursuant to Section 5.13, (ii)
the Mortgage Documents, and any other instrument now or hereafter executed, as
additional security for the obligations secured by this Mortgage, (iii) any Lien
which pursuant to the terms of the Trust Indenture, the Collateral Agency
Agreement and the terms hereof is to be subordinate to, or pari passu with, the
Lien of this Mortgage and (iv) the leases and licenses which as of April 17,
1996 are subordinate to the Lien of this Mortgage pursuant to their terms or the
terms of any non-disturbance agreement executed in connection therewith; it
being intended that Restricted Encumbrances constitute those Permitted Liens
which are subordinate to, or pari passu with, the Lien of this Mortgage.
"Securities Act" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Secured Beneficiaries" has the meaning set forth in Section 1 of the
Collateral Agency Agreement.
"Secured Loans" has the meaning set forth in Section 1 of the Collateral
Agency Agreement.
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"Security Agreement" means the Security Agreement, dated as of the date
hereof, among the Issuers, Guarantors and Mortgagee.
"Stated Maturity" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Subsidiaries" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Tangible Personal Property" has the meaning set forth in Granting Clause
Fifth.
"Trust Estate" has the meaning stated in the habendum to the Granting
Clauses.
"Trust Indenture" means that certain Indenture of even date herewith among
Mortgagor, the Issuers, Guarantors and First National Bank Association, as
Trustee, as it may from time to time be supplemented, modified or amended in
accordance with its terms by one or more trust indentures or other instruments
supplemental thereto entered into pursuant to the applicable provisions thereof,
a form of which (without exhibits) is attached hereto as Exhibit A.
"Trust Indenture Act" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
the Trust Indenture and any successor thereto.
"Uniform Commercial Code" means the New Jersey Uniform Commercial Code
N.J.S.A. 12A:1-101 et seq.
Section 1.02. Notices.
(a) Any request, demand, authorization, direction, notice (including,
without limitation, a notice of default), consent, waiver or other document
provided or permitted by this Mortgage to be made upon, given or furnished to,
or filed with, Mortgagor or Mortgagee (collectively, "Notices") shall be in
writing and shall be sufficiently given if made by hand delivery, by telex, by
telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
To Mortgagor:
Trump Taj Mahal Associates
Mississippi Avenue and The Boardwalk
Atlantic City, New Jersey 08401
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Attn: Chief Financial Officer
with a copy to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Attn: Jack H. Nusbaum, Esq.
To Mortgagee:
First Bank National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Attn: Corporate Trust Department
(b) Mortgagee or Mortgagor by notice in accordance with the terms hereof to
the other party may designate additional or different addresses as shall be
furnished in writing by such party. Any notice or communication to the Mortgagee
or Mortgagor shall be deemed to have been given or made as of the date so
delivered, if personally delivered; when answered back, if telexed; when receipt
is acknowledged, if telecopied; and 5 Business Days after mailing if sent by
registered or certified mail, postage prepaid (except that a notice of change of
address shall not be deemed to have been given until actually received by the
addressee).
Section 1.03. Form and Contents of Documents
Delivered to Mortgagee.
Any Officers' Certificate or Opinion of Counsel delivered to Mortgagee in
connection with this Mortgage shall be in compliance with the provisions of
Section 12.5 of the Trust Indenture.
Every application, certificate, report, affidavit, opinion, consent,
statement or other instrument required to be delivered to Mortgagee under this
Mortgage or under any other Mortgage Document shall be in writing and shall be
prepared and delivered without cost or expense to Mortgagee.
Section 1.04. Compliance Certificates and Opinions.
Upon any application or request by Mortgagor to Mortgagee to take any
action under any provision of this Mortgage, Mortgagor shall furnish to
Mortgagee an Officers' Certificate and an Opinion of Counsel in compliance with
the provisions of Section 12.4 of the Trust Indenture.
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Section 1.05. Effect of Headings and Table of Contents.
The Article and Section headings herein and in the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 1.06. Successors and Assigns; Amendments.
(a) Subject to the provisions of Section 1.10 hereof and Section 6.2 of the
Trust Indenture, and without limiting the generality of Section 1.12 hereof,
this Mortgage shall be binding upon and inure to the benefit of the parties
hereto and of the respective successors and assigns of the parties hereto to the
same effect as if each such successor or assign were in each case named as a
party to this Mortgage.
(b) This Mortgage may not be modified, amended, discharged, released nor
any of its provisions waived except by agreement in writing executed by
Mortgagor and Mortgagee and in accordance with the provisions of this Mortgage
and the Trust Indenture.
Section 1.07. Separability Clause.
In case any provision in this Mortgage shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 1.08. Benefits of Mortgage.
Without limiting the generality of Section 1.12, nothing in this Mortgage,
express or implied, shall give to any Person, other than the parties hereto and
their successors and assigns, any benefit or any legal or equitable right,
remedy or claim under this Mortgage.
Section 1.09. Governing Law.
This Mortgage shall be deemed to be a contract under the laws of the State
of New Jersey and shall be construed in accordance with and governed by the laws
of the State of New Jersey.
Section 1.10. Limitation on LiabilityLimitation on Liability.
A direct or indirect partner, director, officer, employee or stockholder,
as such, past, present or future of the Mortgagor or any successor entity shall
not have any personal liability in respect of the obligations under this
Mortgage by reason of his or its status as such partner, director, officer,
employee or stockholder
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except to the extent such is an Issuer or a Guarantor. Each Holder by accepting
a Security (as defined in the Trust Indenture) waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Securities.
Section 1.11. Provisions Required by Trust Indenture.
Whenever the provisions of this Mortgage and the provisions of the Trust
Indenture shall be inconsistent, the provisions of the Trust Indenture shall
govern.
Section 1.12. Rights of Mortgagee.
(a) Except as otherwise provided in Section 5 of the Collateral Agency
Agreement:
(i) Mortgagee may rely, and shall be protected in acting or refraining
from acting, upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(ii) any request or direction of Mortgagor mentioned herein shall be
sufficiently evidenced by a Mortgagor Request;
(iii) whenever in the administration of this Mortgage, Mortgagee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, Mortgagee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(iv) Mortgagee may consult with counsel and any written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by
Mortgagee hereunder in good faith and in reliance thereon;
(v) Mortgagee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
approval, appraisal, bond, debenture, note, coupon, security or other paper
or document but Mortgagee, in its discretion, may make such further inquiry
or investigation into such
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facts or matters as it may see fit, and, if Mortgagee shall determine to
make such further inquiry or investigation, it shall be entitled (subject
to the express limitations with respect thereto contained in this Mortgage)
to examine the books, records and premises of Mortgagor, personally or by
agent or attorney;
(vi) Mortgagee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys, and Mortgagee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(vii) Mortgagee shall not be personally liable, in case of entry by it
upon the Trust Estate, for debts contracted or liabilities or damages
incurred in the management or operation of the Trust Estate; and
(viii) no provision of this Mortgage shall require Mortgagee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of its obligations hereunder, or in the exercise of any of its
rights or powers.
(b) The provisions of this Section 1.12 shall apply to all Mortgage
Documents.
Section 1.13. Mortgage Subject to Casino Control Act.
Each provision of this Mortgage is subject to and shall be enforced in
compliance with the provisions of the New Jersey Casino Control Act.
Section 1.14. Discharge of Lien.
If Mortgagor shall pay or cause to be paid, or there shall otherwise be
paid, to Mortgagee all amounts required to be paid by Mortgagor pursuant to the
this Mortgage and all Obligations pursuant to the Debt Documents, including,
without limitation, the Mortgage Notes and the Guarantee, shall have been
satisfied and (a) the conditions precedent for the Trust Indenture to cease,
determine and become null and void (except for any surviving rights of transfer
or exchange of the Mortgage Notes provided in the Trust Indenture and for the
obligation to pay the Trustee's fees and expenses provided in Section 8.7 of the
Trust Indenture) in accordance with Article Nine of the Trust Indenture shall
have occurred, or (b) there shall have occurred a Legal Defeasance (as
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defined in Section 9.2 of the Trust Indenture) of the Mortgage Notes, or (c)
there shall have occurred a Covenant Defeasance (as defined in Section 9.3 of
the Trust Indenture), then in any such case Mortgagee shall promptly cancel and
discharge the Mortgage Documents, including, without limitation, this Mortgage,
and any financing statements filed in connection herewith and execute and
deliver to Mortgagor all such instruments as may be necessary, required or
appropriate to evidence such discharge and satisfaction of said Lien or Liens.
In connection with the disposition of all or any portion of the Trust Estate
free and clear of the Lien of this Mortgage in accordance with the terms of
Section 4.3 of the Trust Indenture, Mortgagee shall promptly execute and deliver
to Mortgagor all such instruments as may be necessary, required or appropriate
to evidence the release of such portion of the Trust Estate from the Lien of
this Mortgage. Upon such release, the terms, conditions and obligations
hereunder shall no longer apply to the portion of the Trust Estate so released
and all defined terms hereunder shall be deemed appropriately modified.
Section 1.15. General Application.
(a) The remedies of Mortgagee upon any default by Mortgagor in the
fulfillment of any of its obligations hereunder shall be limited in each
instance by the provisions of Section 1.10, whether or not the provisions
providing for such remedies explicitly refer to such Section.
(b) The assertion of any rights upon any Default shall be subject in each
instance to, if required, the giving of any notice and the expiration of any
grace period provided for in Section 3.01 as a condition to such Default
becoming an Event of Default, unless the Trust Indenture Act requires otherwise,
in which case the Trust Indenture Act shall control.
(c) For the purposes of this Mortgage, it is understood that an event which
does not materially diminish the value of Mortgagee's interest in the Trust
Estate shall not be deemed an "impairment of security," as that phrase is used
in this Mortgage.
Section 1.16. Mortgage Deemed to be Security Agreement.
To the extent that the grant of a security interest in any portion of the
Trust Estate is governed by the Uniform Commercial Code, this Mortgage is hereby
deemed to be as well a security agreement under the Uniform Commercial Code for
the purpose of creating hereby a
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security interest in all of Mortgagor's right, title and interest in and to said
property, securing the obligations secured hereby, for the benefit of Mortgagee.
ARTICLE TWO
RELEASE; SUBORDINATION
Section 2.01. Possession by Mortgagor.
So long as there shall have been no acceleration of maturity of any
Indebtedness secured hereby, including, without limitation, the Mortgage Notes,
Mortgagor shall be suffered and permitted, with power freely and without let or
hindrance on the part of Mortgagee, subject to the provisions of this Mortgage
and the Trust Indenture, to possess, use, manage, operate and enjoy the Trust
Estate and every part thereof and to collect, receive, use, invest and dispose
of the rents, issues, tolls, profits, revenues and other income from the Trust
Estate or any part thereof, to use, consume and dispose of any consumables,
goods, wares and merchandise in the ordinary course of business of operating the
Casino Hotel and to adjust and settle all matters relating to choses in action,
leases and contracts.
Section 2.02. Obsolete Property.
Mortgagor shall have the rights granted to it with respect to the
disposition of certain Tangible Personal Property secured hereby pursuant to
Section 4.3 of the Trust Indenture (but subject to all restrictions pertaining
thereto), the terms of which are incorporated herein by reference.
Mortgagee shall, from time to time, promptly execute any written instrument
in form satisfactory to Mortgagee to confirm the propriety of any action taken
by Mortgagor under this Section 2.02, upon receipt by Mortgagee of a Mortgagor
Request requesting the same, together with an Officers' Certificate stating that
the action so to be confirmed was duly taken in conformity with this Section
2.02, and that the execution of such written instrument is appropriate to
confirm the propriety of such action under this Section 2.02; provided, that
Mortgagee shall have no liability thereunder and all costs and expenses
(including, without limitation, reasonable attorneys' fees and disbursements)
shall be paid by Mortgagor.
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Section 2.03. F,F&E Financing Agreements.
Notwithstanding any provision contained in this Mortgage or the Trust
Indenture to the contrary, if Mortgagor has acquired or hereafter acquires
Tangible Personal Property and/or other items constituting operating assets
subject to any F,F&E Financing Agreement, or becomes the lessee under a lease
for any of the same and if the document evidencing such F,F&E Financing
Agreement prohibits subordinate Liens or the provisions of any such lease
prohibits any assignment thereof by the lessee, and if any such prohibition is
customary with respect to similar transactions of the lender or lessor (as
evidenced by an Officers' Certificate delivered to Mortgagee, together with such
other evidence as Mortgagee may reasonably request), as the case may be, then
the property so purchased or the lessee's interest in the lease, as the case may
be, shall be deemed to be Excepted Property. If any such F,F&E Financing
Agreement permits subordinate Liens then Mortgagee shall execute and deliver to
Mortgagor, at Mortgagor's expense, such documents as the holder of such F,F&E
Financing Agreement may reasonably request to evidence the subordination of the
Lien of this Mortgage and the Mortgage Documents to the Lien of such F,F&E
Financing Agreement.
Section 2.04. Intentionally Omitted.
ARTICLE THREE
REMEDIES
Section 3.01. Events of Default.
"Event of Default," whenever used herein, means an "Event of Default," as
defined in Section 7.1 of the Trust Indenture, shall occur and be continuing
(whatever the reason for such event and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body).
Section 3.02. Application of Moneys Received by
Mortgagee.
Any moneys received by Mortgagee pursuant to the provisions of this Article
Three (including moneys received after any action or act by Mortgagee under
Section 3.10) shall be applied by Mortgagee in accordance with the provisions of
Section 7.6 of the Trust Indenture.
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Section 3.03. Restoration of Rights and Remedies.
If Mortgagee has instituted any proceeding to enforce any right or remedy
under this Mortgage and such proceeding has been discontinued or abandoned for
any reason or has been determined adversely to Mortgagee, then and in every such
case Mortgagor and Mortgagee shall, subject to any determination in such
proceeding, be restored to their respective former positions hereunder, and
thereafter all rights and remedies of Mortgagee shall continue as though no such
proceeding had been instituted.
Section 3.04. Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to Mortgagee is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 3.05. Delay or Omission Not Waiver.
No delay or omission of Mortgagee to exercise any right or remedy accruing
upon an Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and
remedy given by this Article Three or by applicable law to Mortgagee may be
exercised, from time to time, and as often as may be deemed expedient, by
Mortgagee.
Section 3.06 Undertaking for Costs.
If any action or proceeding shall be commenced (including, without
limitation, an action to foreclose this Mortgage or to collect the Indebtedness
or under the Guarantee secured hereby) to which action or proceeding Mortgagee
is made or becomes a party, or in which it becomes necessary in the opinion of
Mortgagee to defend or uphold the Lien of this Mortgage, then Mortgagor shall
pay to Mortgagee all expenses, including, without limitation, reasonable
attorneys, fees, disbursements and court costs incurred by Mortgagee in
connection therewith, together with interest at the rate then payable on such
Indebtedness, from the date of payment less the net amount received by
Mortgagee, as its interest may appear under any title insurance policy, and,
until paid, all
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such expenses, together with interest as aforesaid, shall be secured by the Lien
of this Mortgage.
Section 3.07. Waiver of Appraisement and Other Laws.
To the full extent that it may lawfully so agree, Mortgagor will not at any
time insist upon, plead, claim or take the benefit or advantage of, any
appraisement, valuation, stay, extension or redemption law now or hereafter in
force, in order to prevent or hinder the enforcement of this Mortgage or the
absolute sale of the Trust Estate, or any part thereof, or the possession
thereof by any purchaser at any sale under this Article Three; and Mortgagor,
for itself and all who may claim under Mortgagor, so far as Mortgagor or they
now or hereafter may lawfully do so, hereby waives the benefit of all such laws.
Mortgagor, for itself and all who may claim under Mortgagor, waives, to the
extent that Mortgagor may lawfully do so, all right to have the property in the
Trust Estate marshalled upon any foreclosure hereof, and agrees that any court
having jurisdiction to foreclose this Mortgage may order the sale of the Trust
Estate as an entirety.
If any law in this Section 3.07 referred to and now in force, of which
Mortgagor or its successor or successors might take advantage despite this
Section 3.08, shall hereafter be repealed or cease to be in force, such law
shall not thereafter be deemed to constitute any part of the contract herein
contained or to preclude the application of this Section 3.07.
Section 3.08. Entry.
Mortgagor agrees that upon the occurrence, and during the continuance, of
an Event of Default, Mortgagor, upon demand of Mortgagee, shall forthwith
surrender to Mortgagee the actual possession of, and it shall be lawful for
Mortgagee by such officers or agents as it may appoint to enter and take
possession of, the Trust Estate (and the books and papers of Mortgagor), and to
hold, operate and manage the Trust Estate (including the making of all needful
repairs, and such alterations, additions and improvements as Mortgagee shall
deem wise) and to receive the rents, issues, tolls, profits, revenues and other
income thereof, and, after deducting the costs and expenses of entering, taking
possession, holding, operating and managing the Trust Estate, as well as
payments for taxes, insurance and other proper charges upon the Trust Estate and
reasonable compensation to itself, its agents and counsel, to apply the same as
provided in Section 3.02; provided, however, that Mortgagee's rights under this
Section 3.08 shall be subject to the provisions
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of the New Jersey Casino Control Act and Section 3.13. Whenever all that is then
due upon the Debt Documents, including without limitation, the Mortgage Notes
and under any of the terms of this Mortgage shall have been paid and all
defaults hereunder shall have been cured, Mortgagee shall surrender possession
to Mortgagor.
Section 3.09. Power of Sale; Suits for Enforcement.
If an Event of Default shall occur and be continuing, Mortgagee, with or
without entry, in its discretion, may:
(a) sell, subject to any mandatory requirements of applicable law, the
Trust Estate as an entirety, or in such parcels, as Mortgagee may
determine, to the highest bidder at public auction at such place and at
such time (which sale may be adjourned by Mortgagee from time to time in
its discretion by announcement at the time and place fixed for such sale,
without further notice) and upon such terms as Mortgagee may fix and
briefly specify in a notice of sale to be published as required by law; or
(b) proceed to protect and enforce its rights under this Mortgage by
sale pursuant to judicial proceedings or by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in this Mortgage or in aid of the execution
of any power granted in this Mortgage or for the foreclosure of this
Mortgage or for the enforcement of any other legal, equitable or other
remedy, as Mortgagee shall deem most effectual to protect and enforce any
of the rights of Mortgagee; the failure to join tenants shall not be
asserted as a defense to any foreclosure or proceeding to enforce the
rights of Mortgagee.
Section 3.10 Incidents of Sale.
Upon any sale of any of the Trust Estate, whether made under the power of
sale hereby given or pursuant to judicial proceedings, to the extent permitted
by law:
(a) subject to the provisions of Section 3.13 and the receipt of any
required prior approvals of the New Jersey Casino Control Commission,
Mortgagee may bid for and purchase the property offered for sale, and upon
compliance with the terms of sale may hold, retain, possess and dispose of
such property, without further accountability, and may, in paying the
purchase money therefor, deliver the Mortgage Notes or any other Debt
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Document or claims for interest thereon in lieu of cash to the amount which
shall, upon distribution of the net proceeds of such sale, be payable
thereon, and the Mortgage Notes or any other Debt Document, in case the
amounts so payable thereon shall be less than the amount due thereon, shall
be returned to Mortgagee after being appropriately stamped to show partial
payment;
(b) Mortgagee may make and deliver to the purchaser or purchasers a
good and sufficient deed, bill of sale and instrument of assignment and
transfer of the property sold;
(c) Mortgagee is hereby irrevocably appointed the true and lawful
attorney of Mortgagor, in its name and stead, to make all necessary deeds,
bills of sale and instruments of assignment and transfer of the property
thus sold; and for that purpose it may execute all necessary deeds, bills
of sale and instruments of assignment and transfer, and may substitute one
or more persons, firms or corporations with like power, Mortgagor hereby
ratifying and confirming all that its said attorney or such substitute or
substitutes shall lawfully do by virtue hereof; but if so requested by
Mortgagee or by any purchaser, Mortgagor shall ratify and confirm any such
sale or transfer by executing and delivering to Mortgagee or to such
purchaser or purchasers all proper deeds, bills of sale, instruments of
assignment and transfer and releases as may be designated in any such
request;
(d) all right, title, interest, claim and demand whatsoever, either at
law or in equity or otherwise, of Mortgagor of, in and to the property so
sold shall be divested and such sale shall be a perpetual bar both at law
and in equity against Mortgagor, its successors and assigns, and against
any and all persons claiming or who may claim the property sold or any part
thereof from, through or under Mortgagor, its successors and assigns; and
(e) the receipt of Mortgagee or of the officer making such sale shall
be a sufficient discharge to the purchaser or purchasers at such sale for
his or their purchase money and such purchaser or purchasers and his or
their assigns or personal representatives shall not, after paying such
purchase money and receiving such receipt, be obliged to see to the
application of such purchase money, or be in anywise answerable for any
loss, misapplication or non-application thereof.
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Section 3.11. Receiver.
Upon the occurrence of an Event of Default and commencement of judicial
proceedings by Mortgagee to enforce any right under this Mortgage, Mortgagee
shall be entitled, as against Mortgagor, without notice or demand and without
regard to the adequacy of the security for the Mortgage Notes, the Guarantee or
any other Debt Document or the solvency of Mortgagor, to the appointment of a
receiver of the Trust Estate, and of the rents, issues, profits, revenues and
other income thereof; provided, however, that Mortgagee's rights under this
Section 3.11 shall be subject to the provisions of the New Jersey Casino Control
Act and Section 3.13 hereof.
Section 3.12. Suits to Protect the Trust Estate.
Mortgagor hereby acknowledges the right of Mortgagee, in the name and on
behalf of Mortgagor, (a) to appear in and defend any action or proceeding
brought with respect to the Trust Estate or any part thereof and (b) upon 5
days' prior notice to Mortgagor (or such shorter period or without notice if
deemed necessary and appropriate by Mortgagee), Mortgagee shall have power to
institute and to maintain such proceedings as Mortgagee may deem necessary and
appropriate, but in the case of (a) and (b) to prevent any impairment of
security or any impairment of the Trust Estate in all cases by any acts which
may be unlawful or in violation of this Mortgage and to protect Mortgagee's
interests in the Trust Estate and in the rents, issues, profits, revenues and
other income arising therefrom, including the right to institute and maintain
proceedings to restrain the enforcement of or compliance with any governmental
enactment, rule or order that may be unconstitutional or otherwise invalid, if
the enforcement of or compliance with such enactment, rule or order would impair
the security hereunder or be materially prejudicial to the interests of
Mortgagee.
Section 3.13. Management of the Premises.
Without limiting the generality of any other provision of this Article
Three, following an Event of Default and the taking of possession of the Trust
Estate or any part thereof by Mortgagee and/or the appointment of a receiver of
the Trust Estate or any part thereof, Mortgagee or any such receiver shall be
authorized, in addition to the rights and powers of Mortgagee and such receiver
set forth elsewhere in this Mortgage, to take any action permitted under Article
Seven of the Trust Indenture.
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ARTICLE FOUR
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
Section 4.01. Consolidation, Merger, Conveyance
or Transfer only on Certain Terms.
Mortgagor shall be bound by all provisions applicable to Mortgagor in
Section 13.6 of the Trust Indenture, the terms of which are incorporated herein
by reference.
ARTICLE FIVE
COVENANTS AND REPRESENTATIONS OF MORTGAGOR
Section 5.01. Performance of Obligations.
Mortgagor shall duly and punctually pay and perform the Obligations in
accordance with the terms of the Debt Documents to which it is a party
(including, without limitation, Article Thirteen of the Trust Indenture).
Section 5.02. F,F&E Financing Agreements.
Mortgagor shall comply with all of the terms and conditions set forth in
any F,F&E Financing Agreements before the expiration of any applicable notice
and cure periods contained in any such F,F&E Financing Agreements.
Section 5.03. Limitations on Liens and Transfers.
(a) Except as otherwise expressly permitted under this Mortgage and the
Trust Indenture (including, without limitation, Article Five of the Trust
Indenture), Mortgagor shall not create, incur, suffer or permit to be created or
incurred or to exist any Lien on all or any portion of the Trust Estate, other
than Permitted Liens.
(b) The Lien of this Mortgage shall be subject and subordinate to the Lien
of any Existing Encumbrances and the Permitted Liens described in subsections
(a) (other than with respect to Refinancing Indebtedness of the Securities (as
defined in the Trust Indenture)), (c)(but only to the extent that such F,F&E
Financing Agreement requires the Lien of this Mortgage to be subordinate
thereto), (i) and (j) (but only to the extent that such Acquired Indebtedness
(as defined in the Trust Indenture) requires the Lien of this Mortgage to be
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subordinate thereto) of the definition of Permitted Lien, to the extent that
each thereof encumbers Mortgagor's interest in the Trust Estate or any part
thereof. The foregoing provisions of this Section 5.03(b) shall be
self-operative and no further instrument shall be required to give effect to
such subordination.
(c) Mortgagor shall not sell, assign, lease or otherwise transfer all or
any portion of the Trust Estate or any interest therein (including, without
limitation, any interest in the Ground Leases) in violation of the terms of this
Mortgage or the terms of the Trust Indenture (including, without limitation,
Sections 4.3 and 13.6 of the Trust Indenture). Without limiting the generality
of the foregoing, Mortgagor shall not separate, or attempt to separate, its
ownership of its interest in the Ground Leases from the ownership of the
buildings constituting the Casino Hotel or any part thereof. Notwithstanding the
foregoing, Mortgagor shall have the right, at any time and from time to time,
unless an Event of Default shall have occurred and be continuing, without any
release from or consent by Mortgagee, to grant Permitted Liens; provided, (i)
that none of the same will reduce or impair, in any material respect, (A) the
value or usefulness of the Trust Estate or (B) the normal operation of the
Casino Hotel in accordance with all Legal Requirements and all Permits, (ii) no
Event of Default has occurred and is continuing and (iii) Mortgagor shall
promptly deliver to Mortgagee a duplicate original of the instrument, if any,
pursuant to which such grant is to be made, and such other instruments,
certificates and opinions as Mortgagee may reasonably request. The foregoing
provisions of this Section 5.03(c) shall be self-operative and no further
instrument shall be required to evidence the consent of Mortgagee to the grant
or other conveyance of such rights-of-way or easements. Mortgagee shall,
however, from time to time, after receipt of a Mortgagor Request therefor
(accompanied by an Officers' Certificate stating that said conditions have been
satisfied) execute instruments in form and substance reasonably satisfactory to
Mortgagee confirming the permissibility of such grant or other conveyance but
only with respect to the Permitted Liens incurred after the date hereof
described in subsections (a) (but only with respect to Refinancing
Indebtedness), (d), (e), (i), (j) and (k) of the definition of Permitted Liens.
Section 5.04. Environmental.
Without limiting the generality of any other provision of this Mortgage,
Mortgagor covenants, represents and warrants to Mortgagee as follows:
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(a) Mortgagor shall comply with any and all federal, state and local
environmental legislation, rules, and regulations in effect as of the date
of this Mortgage and subsequent thereto, including, without limitation, the
Spill Compensation and Control Act (N.J.S.A. 58:10-23.11 et seq.) (the
"Spill Act"); the Industrial Site Recovery Act (N.J.S.A. 13:lK-6 et seq.)
("ISRA"); the Solid Waste Management Act (N.J.S.A. 13:E-1 et seq.); the
Resource, Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.)
("RCRA"); the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.) ("CERCLA"), each as amended,
and such other environmental legislation, rules and regulations, as are in
or may come into effect and apply to (i) Mortgagor and/or Mortgagee with
respect to the Premises or (ii) the transactions contemplated hereby, and
as to any occupants or users of the collateral, whether as lessees,
tenants, licensees or otherwise, Mortgagor shall use its best efforts to
cause same to comply with said legislation, rules and regulations.
Mortgagor agrees to pay all costs required in connection with compliance
with the foregoing legislation, rules and regulations.
(b) Mortgagor has not used in the past, nor shall Mortgagor use in the
future, the Premises for the purpose of refining, producing, storing,
handling, transferring, processing or transporting "Hazardous Substances",
as such term is defined in ISRA, the Spill Act, CERCLA or the regulations
relating thereto, except that Mortgagor and its subsidiaries have used, and
Mortgagor may continue in the future to use, substances in the operation
and maintenance of the Premises, including, without limitation, heating
oil, gasoline and cleaning chemicals which could be considered as
"Hazardous Substances" under the preceding definition.
(c) To the best of Mortgagor's knowledge, after due inquiry and
investigation, none of the real property owned, leased and/or occupied by
Mortgagor and located in the State of New Jersey, including, without
limitation, the Premises, has been or is now being used as a "Major
Facility" as such term is defined in N.J.S.A. 58:10-23.llb(l). Mortgagor
will not use the Premises in the future as a "Major Facility".
(d) To the best of Mortgagor's knowledge, after due inquiry and
investigation, no Lien has been attached to any revenues or any real or
personal property owned by Mortgagor or the Premises, as a result of the
Chief Executive of the New Jersey Spill Compensation Fund expending monies
from said fund to pay for "Cleanup Costs", as such term is defined in
N.J.S.A. 58:10-23.llb(d),
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arising from an intentional or unintentional action or omission of
Mortgagor or any previous owner and/or operator of such real property.
(e) There is no asbestos or asbestos containing material on the
Premises currently owned, operated or leased by Mortgagor, other than
asbestos-containing materials located at the Virginia Avenue warehouse
owned by Mortgagor and the Terrace Building located on Pennsylvania Avenue,
which are in good condition and in compliance with applicable law. To the
best of Mortgagor's knowledge, after due inquiry and investigation, there
are no underground storage tanks located at or on the Premises, with the
exception of two (2) underground storage tanks located at the Casino Hotel
and three (3) underground storage tanks located at the Pleasantville
Warehouse (as defined in the Trust Indenture), all of which are in
compliance with applicable law. In addition, there is another underground
storage tank located at Parking Lot C on Virginia Avenue which will be
excavated by the Company at a cost which is not material to the Company and
its Subsidiaries. Mortgagor has not installed or placed, or permitted to be
installed or placed, any underground storage tanks at or on the Premises.
Underground storage tanks shall have the definition as set forth in
N.J.S.A. 58:10A-22(p).
(f) Except as previously provided to Mortgagee, Mortgagor has not
received a summons, citation, directive, letter, other written
communication, or, to the best of its knowledge, any oral communication
("Communication"), and in any event, no such Communication remains
outstanding, from the New Jersey Department of Environmental Protection or
from any other person, firm or corporation concerning any intentional or
unintentional action or omission on Mortgagor's part resulting in the
releasing, spilling, leaking, pumping, pouring, emitting, emptying or
dumping of "Hazardous Substances", as such term is defined in N.J.S.A.
58:10-23.llb(k), into the waters or onto the lands of the State of New
Jersey, or into the waters outside the jurisdiction of the State of New
Jersey, in either case resulting in damage to the lands, waters, fish,
shellfish, wildlife, biota, air and other resources owned, managed, held in
trust or otherwise controlled by the State of New Jersey.
(g) In connection with any purchase of the Premises or any business or
assets located thereon or any closing, terminating or transferring of
ownership or operations of any "industrial establishment", as that term is
defined in ISRA or in the predecessor statute to ISRA, occurring on or
after December 31, 1983, Mortgagor required that the owner and or operator
of the industrial
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establishment comply with the provisions of ISRA or in the predecessor
statute and the owner and or operator did comply therewith.
(h) Upon the occurrence of an Event (as hereinafter defined),
Mortgagee shall have the right to have its consultants perform a
comprehensive environmental audit of the Premises. Such audit shall be
conducted by an environmental consultant chosen by Mortgagee and may
include a visual survey, a record review, an area reconnaissance assessing
the presence of hazardous or toxic waste or substances, PCBs or storage
tanks at the Premises, an asbestos survey of the Premises, which may
include random sampling of the improvements and air quality testing, and
such further site assessments as Mortgagee may reasonably require due to
the results obtained from the foregoing. Mortgagor grants Mortgagee, its
agents, consultants and contractors the right to enter the Premises as
reasonable or appropriate for the circumstances for the purposes of
performing such studies and the reasonable cost of such studies shall be
due and payable by Mortgagor to Mortgagee upon demand and shall be secured
by the Lien of this Mortgage. Mortgagee shall direct the environmental
consultant to use its best efforts not to hinder Mortgagor's or any
tenant's operations when conducting such audit, sampling or inspections.
For purposes of this paragraph, the term "Event" shall mean (i) the
occurrence of any Event of Default, (ii) the issuance of any summons,
citation, directive or similar written notice from the New Jersey
Department of Environmental Protection or from any other local, state or
federal entity or from any other person, firm or corporation concerning any
alleged material violation of any and all federal, state and local
environmental legislation, rules and regulations in effect as of the date
of this Mortgage and subsequent thereto or (iii) the initiation of any
legal action, suits or other legal or administrative proceedings relating
to or in connection with any alleged violation of any and all federal,
state and local environmental legislation, rules and regulations in effect
as of the date of this Mortgage and subsequent thereto. By undertaking any
of the measures identified in and pursuant to this subsection (h),
Mortgagee shall not be deemed to be exercising any control over the
operations of Mortgagor or the handling of any environmental matter or
hazardous wastes or substances of Mortgagor for purposes of incurring or
being subject to liability therefor.
(i) If a Lien shall be filed against the Premises by the New Jersey
Department of Environmental Protection, pursuant to and in accordance with
the provisions of N.J.S.A. 58:10-23.llf(f), as a result of the
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Chief Executive of the New Jersey Spill Compensation Fund having expended
monies from said fund to pay for "Damages", as such term is defined in
N.J.S.A. 58:10-23.llg, and/or "Cleanup and Removal Costs", as such term is
defined in N.J.S.A. 58:10-23(b), arising from an intentional or
unintentional action or omission of Mortgagor resulting in the releasing,
spilling, pumping, pouring, emitting, emptying or dumping of "Hazardous
Substances", as such term is defined in N.J.S.A. 58:10-23.11(b)k into
waters of the State of New Jersey or onto lands from which it might flow or
drain into said waters, then, unless there is a good faith basis for
contesting such Lien and Mortgagor is so contesting such Lien in accordance
with Section 5.09, Mortgagor shall, within 30 days from the date that
Mortgagor is given notice that the Lien has been placed against the
Premises or within such shorter period of time if the State of New Jersey
has commenced steps to cause the Premises to be sold pursuant to the Lien,
either (i) pay the claim and remove the Lien from the Premises, or (ii)
furnish (A) a bond satisfactory to a title company selected by Mortgagee
(the "Title Insurer") in the amount of the claim out of which the Lien
arises, (B) to the Trustee, a cash deposit (which may be disbursed by the
Trustee in its sole discretion) in the amount of the claim out of which the
Lien arises, or (C) other security reasonably satisfactory to Mortgagee in
an amount sufficient to discharge the claim out of which the Lien arises.
(j) Mortgagor shall use its best efforts to cause compliance by all
lessees with all applicable Legal Requirements relating to environmental
protection.
(k) Mortgagor shall promptly provide Mortgagee with copies of all
notices which allege or identify any actual or potential violation or
noncompliance received by or prepared by or for Mortgagor in connection
with ISRA, CERCLA, the Spill Act, RCRA or any other environmental law, rule
or regulation relating to the Premises. For purposes of this paragraph, the
term "notice" shall mean any summons, citation, directive, order, claim,
pleading, letter, application, filing, report, findings, declarations or
other materials pertinent to compliance of the Trust Estate and Mortgagor
with such environmental laws, rules or regulations.
(l) If this Mortgage is foreclosed, Mortgagor shall deliver the
Premises in compliance with all applicable federal, state and local
environmental laws, ordinances, rules and regulations, including, without
limitation, ISRA.
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(m) Without limiting the generality of Section 5.22, Mortgagor agrees
to defend, indemnify and save Mortgagee harmless from and against any loss
or liability, cost or expense (including, without limitation, reasonable
attorneys' fees, consultants' fees, disbursements and court costs) arising
out of, or incurred in connection with, Mortgagor's misrepresentation, or
failure promptly (but in no event to exceed the time period permitted by
law) to comply with and perform its obligations, under this Section 5.04.
The provisions of this subsection (m) shall survive any transfer of the
Premises, including a transfer after a foreclosure of this Mortgage.
Section 5.05. Pari Passu Liens.
Any Liens permitted by the terms of the Trust Indenture and the Collateral
Agency Agreement to be on a parity with the Lien of this Mortgage may be on a
parity with the Lien of this Mortgage only if such Lien and the Indebtedness, if
any, secured thereby shall in all respects be in accordance with the provisions
of the Collateral Agency Agreement and the Trust Indenture.
Section 5.06. Warranty of Leasehold Estate and Title.
Mortgagor represents and warrants that as of the date hereof:
(a) Mortgagor is duly authorized under the laws of the State of New
Jersey and all other applicable laws to execute and deliver the Mortgage
Documents, and all corporate and partnership action on Mortgagor's part
necessary for the valid execution and delivery of the Mortgage Documents
has been duly and effectively taken;
(b) Mortgagor is the lawful owner and is lawfully seized and possessed
of the Owned Land and all buildings and improvements thereon, free and
clear of all Liens, charges or encumbrances, other than the Mortgage
Documents and the Existing Encumbrances;
(c) Mortgagor is the holder of and has good and marketable title to
the leasehold interests and leasehold estates under all existing Facility
Leases, subject to no Lien, encumbrance or charge other than the Mortgage
Documents and the Existing Encumbrances;
(d) (i) each existing Facility Lease is a valid and subsisting demise
of the respective Leased Land for the term therein set forth, and without
limiting the generality of the foregoing, all conditions to the
effectiveness of the Ground Leases have been either waived or
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satisfied, (ii) there are no defaults under any Facility Lease by any
lessor or the lessee as to which written notice has been given to or by the
lessee, (iii) Mortgagor has delivered to Mortgagee a true and correct copy
of each existing Facility Lease, and all modifications, amendments and
supplements thereto, and (iv) each existing Facility Lease is in full force
and effect and has not been modified, amended or supplemented, except as
described on Schedule 2;
(e) Mortgagor has good title to the Operating Assets, subject to no
Lien, encumbrance or charge, other than the Mortgage Documents and the
Existing Encumbrances;
(f) Mortgagor has good and lawful right and authority to execute this
Mortgage and to grant, bargain, sell, alien, convey, assign, transfer,
hypothecate, pledge, mortgage and confirm the Trust Estate as provided
herein (including, without limitation, with respect to the Operating Assets
and Facility Leases), without the consent of any third party, other than
governmental authorities and other secured Persons but any applicable or
necessary consent or approval of any such governmental authority and other
such Persons has been given or waived in accordance with applicable law at
or prior to the execution and delivery of this Mortgage, and upon the
proper recording and indexing hereof, this Mortgage constitutes a valid
first mortgage Lien and first priority security interest in the Trust
Estate, subject only to Existing Encumbrances.
Mortgagor hereby does and shall forever warrant and defend (a) the title to
the Trust Estate (including, without limitation, Mortgagor's leasehold estate
under, and the lessee's interests in, each existing Facility Lease) (subject to
Permitted Liens) and (b) the priority of the Lien of the Mortgage Documents
thereon (subject to Permitted Liens other than Restricted Encumbrances), against
the claims and demands of all persons whomsoever, at Mortgagor's sole cost and
expense. No title company may rely on any of the foregoing representations or
warranties or make any claim in connection therewith by way of subrogation or
otherwise.
Section 5.07. After-Acquired Property; Further
Assurances; Recording.
All property, real, personal or mixed or any interest therein (other than
Excepted Property), of every kind and description and wheresoever situate, which
may be hereafter acquired by Mortgagor, the Company or any of its Subsidiaries
(including, without limitation, fee
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title to any Leased Land) which shall be used or materially useful in connection
with the Trust Estate or any part thereof or shall otherwise materially relate
to the operation of the Casino Hotel or which shall be acquired by Mortgagor or
the Company or any of its Subsidiaries from proceeds due to an Event of Loss
with respect to the Premises in accordance with the provisions of Section 5.15
of the Trust Indenture, shall immediately upon the acquisition thereof by
Mortgagor, the Company or any of its Subsidiaries, and without any further
mortgage, conveyance or assignment, become subject to the Lien of this Mortgage
as fully as though now owned by Mortgagor and covered by the Granting Clauses.
Nevertheless, Mortgagor, the Company or any of its Subsidiaries, as applicable,
shall do, execute, acknowledge and deliver all and every such further acts,
conveyances, mortgages, financing statements and assurances as Mortgagee shall
require for accomplishing the express purposes of this Mortgage and the Trust
Indenture.
Mortgagor shall, as provided in Section 5.13, from time to time subject to
the Lien of this Mortgage its right, title and interest under all Leases.
Mortgagor shall use reasonable efforts to insure that all Operating Assets
or any interest therein hereafter acquired by Mortgagor, the Company or any of
its Subsidiaries shall be assignable to Mortgagee, and to the extent such
assignment to Mortgagee requires the consent of any governmental authority or
any other Person, Mortgagor shall use all reasonable efforts to obtain such
consent or a waiver thereof.
Mortgagor, the Company or any of its Subsidiaries, as applicable, shall
cause this instrument (or other appropriate instruments) and all other
instruments of further assurance, including all financing statements and
continuation statements covering security interests in personal property, to be
promptly recorded, registered and filed, and at all times to be kept recorded,
registered and filed, and shall execute and file such financing statements and
cause to be issued and filed such continuation statements, all in such manner
and in such places as may be required by law or as requested by Mortgagee to
fully preserve and protect the rights of Mortgagee as a secured party under the
Uniform Commercial Code to all property comprising the Trust Estate (to the
extent a grant of a security interest therein is governed by the Uniform
Commercial Code) and to perfect, preserve and protect the Lien of this Mortgage
as a valid first, (other than with respect to Acquired Indebtedness permitted by
the terms of Section 5.11 of the Trust Indenture) mortgage Lien of record and a
valid first (other than
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with respect to Acquired Indebtedness permitted by the terms of Section 5.11 of
the Trust Indenture) priority security interest on the Trust Estate subject to
Permitted Liens, other than Restricted Encumbrances.
Mortgagor shall pay all filing or recording fees, and all expenses incident
to the execution and delivery of this Mortgage, any financing statement or
continuation statement with respect to the personal property constituting part
of the Trust Estate, and any instrument of further assurance, and all federal,
state, county and municipal stamp taxes and other taxes, duties, imposts,
assessments and charges arising out of or in connection with the execution and
delivery of this Mortgage, any financing statement or continuation statement
with respect to the personal property constituting part of the Trust Estate or
any instrument of further assurance.
Mortgagor shall furnish to Mortgagee promptly after the acquisition
hereafter by Mortgagor, the Company or any of its Subsidiaries of any fee
interest or leasehold interest in real property (i) material to the operation of
Mortgagor, (ii) which is necessary for the normal operation of the Casino Hotel
in accordance with all Legal Requirements and all Permits or (iii) which shall
be acquired by Mortgagor or the Company or any of its Subsidiaries from proceeds
due to an Event of Loss with respect to the Premises in accordance with the
provisions of Section 5.15 of the Trust Indenture, (a) a mortgagee policy of
title insurance on the most recent form of American Land Title Association
standard loan policy, extended coverage, which policy shall (i) contain all such
endorsements and affirmative insurance, to the extent reasonably applicable and
available at the then standard published rates for the State of New Jersey (or
if there shall be no such published rates, at commercially reasonable premiums),
as is contained in the Original Policy and (ii) evidence that title to such real
property is subject to no Liens or encumbrances, other than Permitted Liens,
which would (A) render title unmarketable or (B) violate any other provision of
this Mortgage or the Trust Indenture, (b) an as-built survey meeting the
"Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys",
certified within 60 days prior to the acquisition date by a surveyor licensed in
the State of New Jersey using the same form of certification as that contained
in the surveys of the Premises delivered to Mortgagee on the date of this
Mortgage and (c) an Officers' Certificate certifying that the mortgagee policy
of title insurance and survey delivered pursuant to clauses (a) and (b) comply,
respectively, with the provisions of such clauses (a) and (b).
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Notwithstanding anything contained herein or in the Trust Indenture to the
contrary, neither Mortgagor, the Company nor any of its Subsidiaries may acquire
any property, real, personal or mixed or any interest therein (other than
Excepted Property), of every kind and description and wheresoever situate
(including, without limitation, fee title to any Leased Land), which shall be
used or materially useful in connection with the Trust Estate or any part
thereof or shall otherwise materially relate to the operation of the Casino
Hotel or which shall be acquired by Mortgagor or the Company or any of its
Subsidiaries from proceeds due to an Event of Loss with respect to the Premises
in accordance with the provisions of Section 5.15 of the Trust Indenture, unless
Mortgagor, the Company or any of its Subsidiaries, as applicable, shall comply
with the provisions of this Section 5.07.
Section 5.08. Payment of Taxes and Certain Claims;
Maintenance of Properties; Compliance
with Legal Requirements and Insurance
Requirements.
Mortgagor shall:
(a) subject to the provisions of Section 5.09, pay or cause to be paid
before the date on which any fine, penalty, interest or cost may be added
for nonpayment (but no later than when the same are payable by Mortgagor
pursuant to any Superior Instrument Requirement), all taxes (including,
without limitation, real estate taxes, personal or other property taxes and
all sales, value added, use and similar taxes), assessments (including,
without limitation, all assessments for public improvements or benefits,
whether or not commenced or completed prior to the date hereof and whether
or not to be completed prior to the satisfaction of this Mortgage), water,
sewer or other rents, rates and charges, excises, levies, license fees,
permit fees, inspection fees and other authorization fees and other
charges, in each case whether general or special, ordinary or
extraordinary, foreseen or unforeseen, of every character (including,
without limitation, all interest, additions to tax and penalties thereon),
that may be assessed, levied, confirmed or imposed on or in respect of or
be a Lien upon (i) the Trust Estate (including, without limitation, the
Leased Land) or any part thereof or any rent therefrom or any estate, right
or interest therein, or (ii) any acquisition, occupancy, use, leasing, or
possession of or activity conducted on the real property or any part
thereof included in the Trust Estate or any gross receipts thereof or of
the rent therefrom (all of the foregoing being referred to collectively as
"Impositions").
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Notwithstanding the foregoing or any other provision of this Mortgage or
the Trust Indenture, Mortgagor shall not be required to pay any income,
profits or revenue tax upon the income of Mortgagee or the Holders nor any
franchise, excise, corporate, estate, inheritance, succession, capital levy
or transfer tax of Mortgagee or the Holders nor any interest, additions to
tax or penalties in respect thereof, unless such tax is imposed, levied or
assessed in substitution for any Imposition that Mortgagor is required to
pay pursuant to this Section 5.08. Mortgagor shall deliver to Mortgagee, at
Mortgagee's request, official receipts or other proof evidencing payments
of any Impositions in accordance with the requirements of this Section
5.08. Mortgagor shall not be entitled to any credit for taxes or
assessments paid against the Mortgage Notes;
(b) except for such property which Mortgagor may dispose of or replace
pursuant to Section 2.02 and the terms of the Trust Indenture, maintain and
keep all of Mortgagor's properties used or useful in the conduct of
Mortgagor's business, including, without limitation, the Casino Hotel and
all Tangible Personal Property, in such good repair, working order and
condition, except for reasonable wear and use, and shall make or cause to
be made all such needful and proper repairs, renewals and replacements
thereto consistent with the standards of first-class casino and hotel
complexes in Atlantic City, New Jersey;
(c) occupy and continuously operate the Casino Hotel and keep the
Casino Hotel supplied with Tangible Personal Property, all in a manner
consistent with the standards of first-class casino and hotel complexes in
Atlantic City, New Jersey;
(d) subject to the provisions of Section 5.09, (i) comply with all
Legal Requirements and Insurance Requirements, whether or not compliance
therewith shall require structural changes in the buildings and
improvements included in the Trust Estate or interfere with the use and
enjoyment of the Trust Estate or any part thereof, (ii) procure, maintain
and comply with all Permits required for (1) the use of the Casino as a
gaming and gambling facility, (2) the on-premises consumption of alcoholic
beverages at the Casino Hotel and (3) any other use of the Trust Estate or
any part thereof then being made, and for the proper erection,
installation, operation and maintenance of the improvements or any part
thereof, (iii) comply with all obligations of Mortgagor under, and keep in
full force and effect, all easements which in any respect inure to the
benefit of, or otherwise affect, the Trust Estate or any part thereof, if
the
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failure to comply with the same would impair Mortgagee's security
hereunder, and (iv) without limiting the generality of clause (iii), comply
with any instruments of record at the time in force affecting the Trust
Estate or any part thereof, if the failure to comply with the same would
impair Mortgagee's security hereunder. Without limiting the generality of
the foregoing, Mortgagor represents and warrants that at the time of the
execution of this Mortgage, Mortgagor is in compliance with the
requirements of clauses (i), (ii), (iii) and (iv) above; and
(e) in the event of the passage after the date of this Mortgage of any
law of the State of New Jersey, or any other governmental entity, changing
in any way the laws now in force for the taxation of mortgages, or debts
secured thereby, for federal, state or local purposes, or the manner of the
operation of any such taxes, so as to affect the interest of Mortgagee, pay
the full amount of such new or additional taxes.
Section 5.09. Permitted Contests.
Notwithstanding anything in this Mortgage to the contrary, Mortgagor, at
Mortgagor's expense, may contest by appropriate legal proceedings conducted in
good faith and with due diligence, the amount or validity or application, in
whole or in part, of any Imposition or Lien therefor or any Legal Requirement or
Insurance Requirement or the application of any instrument of record (including,
without limitation, any Superior Instrument Requirement) affecting the Trust
Estate or any part thereof or any claims of holders of F,F&E Financing
Agreements, mechanics, materialmen, suppliers, or vendors or Lien therefor, and
may withhold payment of the same pending such proceedings if permitted by law,
or make payment under protest, or defer compliance with any such Legal
Requirement, any such Insurance Requirement or the terms of any such instrument,
and the same shall not be a Default hereunder; provided, that (a) in the case of
any Impositions or Lien therefor or any claims of mechanics, materialmen,
suppliers or vendors or Lien therefor, such proceedings shall suspend the
collection thereof from each of Mortgagor, Mortgagee, the Holders, the Secured
Beneficiaries and the Trust Estate, (b) neither the Trust Estate nor any
interest therein would be in any significant danger of being sold, forfeited, or
lost, (c) such action will not result in the termination of any Facility Lease,
(d) in the case of a Legal Requirement, neither the Secured Beneficiaries,
including, without limitation, the Holders, nor the Mortgagee shall be in any
significant danger of any civil liability or any danger of any criminal
liability, and the failure of Mortgagor to
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comply with such Legal Requirement shall not affect the continuance in good
standing of any Permit or result in the suspension, termination, non-renewal or
material adverse modification of any Permit, and (e) in the case of an Insurance
Requirement, the failure of Mortgagor to comply therewith shall not affect the
validity of any insurance required to be maintained by Mortgagor hereunder.
Section 5.10. Mechanics' and Other Liens.
Mortgagor shall cause to be removed, all statutory Liens of carriers,
warehousemen, mechanics, landlords, laborers, materialmen, repairmen or other
like Liens arising by operation of law in the ordinary course of business and
consistent with industry practices and Liens on deposits made to obtain the
release of such Liens if (i) the underlying obligations are overdue for a period
of more than 60 days or (ii) such Liens are not being contested in good faith
and by appropriate proceedings by the Company or any of its Subsidiaries and
adequate reserves with respect thereto are maintained on the books of the
Company or any of its Subsidiaries, as the case may be, in accordance with GAAP
and the provisions of Section 5.09 and in general shall do or cause to be done
everything necessary so that the Lien hereof shall be fully preserved, at the
cost of Mortgagor, without expense to Mortgagee.
Section 5.11. To Insure.
(a) Mortgagor, at Mortgagor's expense, shall maintain with Insurers:
(i) insurance with respect to Mortgagor's insurable properties
constituting a part of the Trust Estate against loss or damage by fire,
lightning, and other risks from time to time included under "all-risk"
policies and against loss or damage by sprinkler leakage, water damage,
collapse, malicious mischief and explosion in respect of any steam and
pressure boilers and similar apparatus located on such insurable
properties, in amounts at all times sufficient to prevent Mortgagor from
becoming a coinsurer within the terms of the applicable policies, but in
any event such insurance shall be maintained in not less than the greatest
of the following (the "Insurance Amount"): (A) 100% of the then Full
Insurable Value of such insurable properties, determined from time to time
(but not less frequently than once in any 36 calendar months), by an
Independent appraiser or Insurer, (B) the then outstanding principal amount
of Indebtedness under
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the Debt Documents or (C) the amount required to be maintained pursuant to
the Material Instrument Requirements;
(ii) war risk insurance as and when such insurance is obtainable from
the United States of America or any agency thereof as promptly as
reasonably practicable after the same becomes so obtainable, in an amount
not less than the Insurance Amount, or, if such insurance cannot be
obtained in an amount not less than the Insurance Amount, in such lesser
amount as may then be so obtainable;
(iii) comprehensive general liability insurance, including, without
limitation, blanket contractual liability coverage, broad form property
damage, independent contractor's coverage and personal injury coverage
against any and all claims arising out of or connected with the possession,
use,, leasing, operation or condition of such insurable properties, in an
amount not less than $100,000,000 combined single limit coverage for
personal injury and property damage with respect to any one occurrence,
which may be under an umbrella policy. Anything contained in this clause
(iii) to the contrary notwithstanding, the Material Instrument Requirements
with respect to the kinds and amount of insurance described in this clause
(iii) shall be satisfied by Mortgagor;
(iv) workers' compensation insurance to the extent required by law;
(v) business interruption insurance covering not less than 6 months of
loss;
(vi) to the extent available for a commercially reasonable premium,
flood insurance in an amount not less than the Insurance Amount, or, if
such insurance cannot be obtained in an amount not less than the Insurance
Amount, such lesser amount as may then be so obtainable but in no event
less than $100,000,000; and
(vii) such other insurance with respect to such insurable properties
against loss or damage of the kinds (A) from time to time customarily
insured against by persons owning or using first-class casino and hotel
complexes in Atlantic City, New Jersey and (B) required to be maintained
pursuant to any Material Instrument Requirements.
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Notwithstanding the foregoing, to the extent not violative of any Material
Instrument Requirements, Mortgagor may maintain deductibles with respect to the
insurance policies described in clauses (i), (ii), (iii), (v), (vi) and (vii)
above in accordance with standard industry practice with respect to the
operation of a first-class casino hotel.
(b) (i) Each policy of insurance maintained by Mortgagor pursuant to
Section 5.11(a) shall, (A) except in the case of workers' compensation
insurance, name Mortgagor as an insured and shall name as additional insureds
(1) Mortgagee and (2) to the extent required by the Material Instrument
Requirements, the lessors under any Facility Leases, (B) provide that all
insurance proceeds for losses, except in the case of comprehensive general
liability insurance and workers' compensation insurance, be payable solely to
Mortgagee, subject to any Material Instrument Requirements, include effective
waivers (whether under the terms of any such policy or otherwise) by the insurer
of all claims for insurance premiums against all loss payees and named insureds
(other than Mortgagor) and all rights of subrogation against any named insured,
(D) except in the case of comprehensive general liability and workers'
compensation insurance, provide that any losses shall be payable notwithstanding
(1) any act, failure to act, negligence of, or violation or breach of
warranties, declarations or conditions contained in such policy by Mortgagor or
Mortgagee or any other named insured or loss payee, (2) the occupation or use of
the insurable properties for purposes more hazardous than permitted by the terms
of the policy, (3) any foreclosure or other proceeding or notice of sale
relating to the insurable properties or (4) any change in the title to or owners
hip or possession of the insurable properties, (E) contain a non-contributory
mortgagee clause in favor of Mortgagee, and (F) provide that if all or any part
of such policy is cancelled, terminated or expires, the insurer will forthwith
give notice thereof to each named insured and loss payee and that no
cancellation, non-renewal, reduction in amount or material change in coverage
thereof shall be effective until at least 30 days after receipt by each named
insured and loss payee of written notice thereof. Mortgagor may effect the
insurance required under this Section 5.11 under blanket and/or umbrella
policies covering properties owned or leased by Affiliates of Mortgagor;
provided, that such policies otherwise comply with this Mortgage and provide
that the amount of coverage afforded thereunder with respect to the Trust Estate
shall not be reduced by claims thereunder against such other properties.
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(ii) Mortgagor may effect the insurance required under this Section 5.11
under blanket and/or umbrella policies covering properties owned or leased by
Affiliates of Mortgagor; provided, that (A) such policies otherwise comply with
this Mortgage, (B) except with respect to flood insurance and earthquake
insurance, provide that the amount of coverage afforded thereunder with respect
to the Trust Estate shall not be reduced by claims thereunder against such other
properties' and (C) in the case of flood insurance provide that the amount of
coverage afforded thereunder with respect to the Trust Estate shall not be
reduced below $100,000,000 by reason of claims thereunder against such other
properties.
(c) Mortgagee shall not be responsible for effecting or renewing any
insurance or for the responsibility or solvency of the insurers.
(d) Mortgagor shall not take out separate insurance, concurrent in form or
contributing in the event of loss with that required to be maintained pursuant
to this Section 5.11, unless the same is permitted by Material Instrument
Requirements.
Section 5.12. Limitations on Building Demolition,
Alterations, Improvements and New
Construction.
Unless an Event of Default shall have occurred and be continuing, Mortgagor
shall have the right at all times to make or permit such demolition,
alterations, improvements or new construction, structural or otherwise (herein
sometimes called collectively "Alterations" and each, individually, an
"Alteration"), of or on the Trust Estate, to be made in all cases subject to
each of the following conditions:
(a) No Alteration shall be undertaken or carried out except in
conformity with all Material Instrument Requirements, Legal Requirements
and Insurance Requirements.
(b) If any Alteration, together with other Alterations that constitute
a single construction plan or project (whether or not accomplished in
several stages or procedures) is material to the Premises taken as a whole
(a "Material Alteration"), the building or buildings, structures or other
improvements as so improved or altered, upon the completion of the work,
shall be of a value not less than the value of such building or buildings,
structures or other improvements immediately prior to the making of such
Material Alteration.
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(c) Any Material Alteration shall be conducted under the supervision
of an Architect, and upon Mortgagee's request therefor, detailed plans and
specifications and cost estimates therefor, prepared and approved in
writing by such Architect and accompanied by a certificate of such
Architect stating that such plans and specifications are in compliance with
all Legal Requirements and Insurance Requirements shall be delivered to
Mortgagee.
(d) No Alteration which is material to the operation of the Company
and its Subsidiaries taken as a whole shall be undertaken until Mortgagor
has furnished to Mortgagee, at Mortgagor's sole cost and expense, a surety
bond or bonds, covering performance, and labor and material payments with
respect to the work to be so performed, naming Mortgagee as obligee, issued
by a responsible surety company, authorized to do business in the State of
New Jersey, in a form generally and customarily used by such surety in an
amount equal to the estimated cost of construction of the work covered by
the plans and specifications therefor, guaranteeing the performance and
completion of such construction, substantially in conformity with the said
plans and specifications and within a reasonable time, subject to delays by
fire, strikes, lock-out, acts of God, inability to obtain labor or
materials, governmental restrictions, enemy action, civil commotion or
unavoidable Casualty or other similar causes beyond the control of
Mortgagor, free and clear of all Liens, claims and liabilities for the cost
of such Alterations. If such surety bond or bonds shall be unobtainable
Mortgagor shall deliver to Mortgagee security by cash, letter of credit or
other guarantee, affording substantially the same protection as would such
bond or bonds. If Mortgagor shall require any contractor performing a
Material Alteration to deliver any surety bonds or bonds, covering
performance, and labor and material payments with respect to the work to be
so performed, naming Mortgagor as obligee, such bond or bonds shall name
Mortgagee as co-obligee.
(e) All work done in connection with any Alterations shall be done
promptly and in good and workmanlike manner. The work in connection with
any Alteration shall be prosecuted with reasonable dispatch, delays due to
fire, strikes, lock-outs, acts of God, inability to obtain labor or
materials, governmental restrictions, enemy action, civil commotion or
unavoidable Casualty or similar causes beyond the control of Mortgagor
excepted.
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(f) No Alterations of any kind shall be made which shall change the
use of the Casino Hotel from its use as a gaming and hotel facility.
(g) Mortgagor shall maintain, or shall require its contractors to
maintain, at all times during the performance of Material Alterations, in
addition to any insurance required to be maintained under Section 5.11
hereof, appropriate workers' compensation insurance covering all persons
employed for such Material Alterations to the extent required by applicable
law, and comprehensive general liability insurance expressly covering the
additional hazards due to such Material Alterations. Each such policy of
insurance shall comply with the provisions of Section 5.11(b), and
Mortgagor shall comply with Subsections (c), (d) and (e) of Section 5.11 in
connection with all such insurance.
Section 13. Leases.
Mortgagor shall not (except in accordance with the provisions of the
Trust Indenture):
(a) lease the Trust Estate substantially as an entirety to any Person,
nor shall Mortgagor lease either the Casino Hotel or the Casino or the
Hotel or any parking facilities located on the Parking Parcel or the
Parking Parcel substantially as an entirety to any Person;
(b) enter into any Lease, or renew, modify, extend, terminate, or
amend any Lease, except in the ordinary course of business of operating the
Casino Hotel;
(c) receive or collect, or permit the receipt or collection of, any
rental payments under any Lease more than one month in advance of the
respective periods in respect of which they are to accrue, except that, in
connection with the execution and delivery of any Lease or of any amendment
to any Lease, rental payments thereunder may be collected and received in
advance in an amount not in excess of three months' rent and/or a security
deposit may be required thereunder;
(d) collaterally assign, transfer or hypothecate (other than to
Mortgagee hereunder and except as permitted by the Trust Indenture) (i) any
rental payment under any Lease whether then due or to accrue in the future,
(ii) the interest of Mortgagor as landlord under any Lease or (iii) the
rents, issues or profits of the Trust Estate;
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(e) after the date hereof, enter into any Lease, or renew any Lease,
unless such Lease contains terms to the effect as follows:
(i) the Lease and the rights of the tenants thereunder shall be
subject and subordinate to the rights of Mortgagee under this
Mortgage,
(ii) the Lease may be assigned by the landlord thereunder to
Mortgagee,
(iii) the rights and remedies of the tenant in respect of any
obligations of the landlord thereunder shall be nonrecourse as to any
assets of the landlord other than its equity in the building in which
the leased premises are located or the proceeds thereof, and
(iv) the rights of the tenant shall be subject and subordinate to
the rights of the lessee under any new Lease permitted by the terms of
the Ground Leases); or
(f) modify any Lease with respect to the matters described in clauses
(i) through (iv) of paragraph (e).
If Mortgagor enters into a Lease (other than with Affiliate of Mortgagor)
for a term of not less than 3 years, Mortgagee shall deliver a non-disturbance
and attornment agreement substantially in the form of Schedule 5 hereto,
following receipt of a Mortgagor's Request. Mortgagor shall, upon demand,
reimburse Mortgagee for any costs and expenses (including reasonable attorneys'
fees and disbursements) incurred by Mortgagee in connection with the
preparation, review and delivery of such non-disturbance and attornment
agreements. Mortgagee shall, from time to time, after receipt of a Mortgagor
Request therefor (accompanied by an Officers' Certificate stating that said
conditions have been satisfied) execute instruments in form and substance
reasonably satisfactory to Mortgagee confirming the permissibility of a
modification, termination or surrender of any Lease, other than a modification
described in paragraph (f) of this Section 5.13.
Promptly after the execution and delivery hereof, Mortgagor shall cause the
lessee under each Lease now in effect, and promptly after each Lease is executed
or becomes effective after the date of the execution and delivery hereof,
Mortgagor shall cause the lessee under each such Lease, to be duly notified in
writing (unless the substance and effect of such notice shall be contained
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in such Lease) of the subjection of the owner's interest, as lessor, in and to
such Lease to the Lien of this Mortgage and of the name and address of
Mortgagee. Each such notice shall state that the lease of such lessee is a Lease
as herein defined. If a new Mortgagee is at any time appointed hereunder or the
address of Mortgagee shall at any time be changed, Mortgagor shall cause each
lessee under each Lease to be promptly notified in writing of the name and
address of such new Mortgagee or the new address of Mortgagee. Mortgagor shall
use reasonable efforts (but shall not be obligated to incur any expenditure
other than de minimis amounts) to obtain from each lessee under each Lease to
whom any notice is sent pursuant to this paragraph an acknowledgment of receipt
of such notice, and Mortgagor shall promptly deliver to Mortgagee, upon request,
a copy of each such acknowledgment of receipt which it is able to obtain.
Mortgagee shall not be responsible for securing or causing Mortgagor to secure
any such acknowledgment.
Section 5.14. Compliance Certificates.
Mortgagor shall comply with the provisions of Section 5.7 of the Trust
Indenture, the terms of which are incorporated herein by reference.
Section 5.15. Intentionally Omitted.
Section 5.16. To Keep Books; Inspection by Mortgagee.
Mortgagor will keep proper books of record and account, in which full and
correct entries shall be made of all dealings or transactions of or in relation
to the properties, business and affairs of Mortgagor in accordance with
generally accepted accounting principles consistently applied. Said books shall
be maintained in an office located either in Atlantic City, New Jersey or in the
Borough of Manhattan, City of New York, State of New York. Mortgagor shall at
any and all times, upon request of Mortgagee and at the expense of Mortgagor,
permit Mortgagee and its representatives to inspect the Casino Hotel and any
other buildings, structures and improvements now or hereafter located on the
Land and the books of account, records, reports and other papers of Mortgagor,
and to make copies and extracts therefrom, and will afford and procure a
reasonable opportunity to make any such inspection (provided, that any such
inspection shall not unreasonably interfere with the business operations of
Mortgagor), and Mortgagor will furnish to Mortgagee any and all information as
Mortgagee may reasonably request, with respect to the performance by Mortgagor
of its covenants in this Mortgage.
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Section 5.17. Advances by Mortgagee.
If Mortgagor shall fail to perform any of the covenants, terms, provisions
or conditions contained in this Mortgage and such failure shall continue for 10
days following notice thereof given by Mortgagee (or at any time, without
notice, in case of emergency), Mortgagee may (but is not obligated to), at any
time and from time to time, take any action or make advances, to effect
performance of any such covenant, term, provision or condition on behalf of
Mortgagor; and all moneys so used, paid or advanced by Mortgagee and all
reasonable costs and expenses incurred by Mortgagee in connection therewith,
together with interest on all of the same at the rate of interest set forth in
the applicable Debt Documents, shall be immediately due and payable by Mortgagor
to Mortgagee and all such moneys, costs and expenses shall be secured by the
Lien of this Mortgage prior to any Indebtedness secured hereby. No such advance
or payment by Mortgagee shall relieve Mortgagor from any default hereunder or
impair any right or remedy of Mortgagee.
Section 5.18. Waiver of Stay, Extension or Usury Laws.
Mortgagor covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any usury, stay or extension law or any other law
wherever enacted which would prohibit or forgive Mortgagor from paying all or
any portion of the Obligations secured by this Mortgage, wherever enacted, now
or at any time hereafter in force, or which may otherwise affect the covenants
or the performance of this Mortgage; and Mortgagor (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not hinder, delay or impede the execution of
any power herein granted to Mortgagee, but shall suffer and permit the execution
of every such power as though no such law had been enacted.
Section 5.19. Intentionally Omitted.
Section 5.20. Facility Leases.
(a) Subject to the provisions of Sections 4.3 and 5.15 of the Trust
Indenture, Mortgagor shall do or cause to be done all things necessary to
preserve and keep unimpaired the rights of Mortgagor, as lessee under all
Facility Leases, and to prevent any termination, surrender, cancellation,
forfeiture or impairment of any thereof, except to the extent that the
underlying fee
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estate thereof has been mortgaged to Mortgagee as of the date hereof. Mortgagor
shall at all times fully perform and comply with all agreements, covenants,
terms and conditions imposed upon or assumed by it as lessee under each of the
Facility Leases (including, without limitation, the covenant to pay rent and all
taxes, assessments and other charges mentioned therein) prior to the expiration
of any notice and/or cure period provided in each such Facility Lease. Upon
receipt by Mortgagee from a Lessor of any written notice of default by the
lessee thereunder, Mortgagee may rely thereon and take any action Mortgagee
deems necessary in its sole discretion to prevent or to cure any default by
Mortgagor in the performance of or compliance with any of the agreements,
covenants, terms or conditions imposed upon or assumed by Mortgagor as lessee
under such Facility Lease, even though the existence of such default or the
nature thereof be questioned or denied by Mortgagor or by any party on behalf of
Mortgagor. Without limiting the generality of Section 3.09, Mortgagor hereby
expressly grants to Mortgagee, and agrees that Mortgagee shall have, the
absolute and immediate right to enter in and upon the Premises or any part
thereof to such extent and as often as Mortgagee, in its sole discretion, deems
necessary or desirable for the purpose permitted by the immediately preceding
sentence, subject only to applicable Legal Requirements. Without limiting
Mortgagor's obligations or Mortgagee's rights set forth above or limiting
Mortgagee's other remedies under this Mortgage, Mortgagee may pay and expend
such sums of money as Mortgagee in its sole discretion deems necessary for any
such purpose, and Mortgagor hereby agrees to pay to Mortgagee immediately and
without demand, all such sums, so paid and expended by Mortgagee, together with
interest thereon from the date of each such payment at the highest rate of
interest set forth in the Mortgage Notes. All sums so paid and expended by
Mortgagee, and the interest thereon, shall be added to and be secured by the
Lien of this Mortgage.
(b) Subject to the provisions of Sections 4.3 and 5.15 of the Trust
Indenture, Mortgagor further covenants and agrees as follows:
(i) Mortgagor shall not without the consent of Mortgagee, surrender,
terminate or cancel modify, change, supplement, alter or amend any Facility
Lease, either orally or in writing, if an impairment of the security
granted under this Mortgage would result therefrom. As further security for
the repayment of the indebtedness secured hereby and for the performance of
the covenants herein and in each Facility Lease contained, Mortgagor hereby
assigns to Mortgagee all of Mortgagor's rights,
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privileges and prerogatives as lessee under each Facility Lease to
terminate, cancel, modify, change, supplement, alter or amend such Facility
Lease, and any such termination, cancellation, modification, change,
supplement, alteration or amendment of a Facility Lease in violation of the
terms hereof, without the prior consent thereto by Mortgagee, shall be void
and of no force and effect. Unless (1) an Event of Default has occurred and
is continuing and (2) either (A) there has been an acceleration of maturity
of any Indebtedness secured hereby or (B) Mortgagee exercises its rights
under Section 3.09, Mortgagee shall have no right to terminate, cancel,
modify, change, supplement, alter or amend any Facility Lease. Mortgagee
shall, from time to time, after receipt of a Mortgagor Request therefor
(accompanied by an Officers' Certificate stating that said conditions have
been satisfied) execute instruments in form and substance reasonably
satisfactory to Mortgagee confirming the permissibility of the modification
of any Facility Lease described in this clause (i).
(ii) Solely for the benefit of Mortgagee, the Holders and no other
person, no release or forbearance of any of Mortgagor's obligations under
any Facility Lease, pursuant to such Facility Lease or otherwise, shall
release Mortgagor from any of Mortgagor's other obligations under this
Mortgage.
(iii) Unless Mortgagee shall otherwise expressly consent in writing,
the fee title to the Leased Facilities and Mortgagor's leasehold estates
therein shall not merge and shall always remain separate and distinct,
notwithstanding the union of said estates either in the Lessor or in the
lessee, or in a third party by purchase or otherwise.
(iv) Mortgagor shall not appoint or consent to the appointment of an
arbitrator pursuant to the terms of the Ground Leases without the prior
consent of Mortgagee. Mortgagor shall promptly notify Mortgagee in writing
of any request made by Mortgagor, as lessee under any Facility Lease, or
any of the Lessors, for arbitration proceedings under any Facility Lease
and of the institution of any arbitration proceedings, as well as all
proceedings thereunder. Mortgagor shall promptly deliver to Mortgagee a
copy of the determination of the arbitrators in each such arbitration
proceeding. Mortgagee shall have the right to participate in such
arbitration proceedings in association with
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Mortgagor or on its own behalf as an interested party.
(v) Mortgagor shall not consent to the subordination of any Facility
Lease to any mortgage, deed of trust or other Lien on the fee interest of
the Lessor.
(vi) If (A) Mortgagor exercises its option(s) under the terms of any
Ground Lease to purchase any portion of the Ground Lease Land, Mortgagor
shall deliver a copy of its election to exercise such option within 5 days
after Mortgagor has delivered notice of such election to the Lessor or (B)
Mortgagor acquires fee simple title or any other estate, title or interest
in any Leased Facility (pursuant to the options described in clause (A) or
otherwise), Mortgagor shall promptly notify Mortgagee of such acquisition
and, on request by Mortgagee, shall cause to be executed and recorded all
such other and further assurances or other instruments in writing as may in
the opinion of Mortgagee be required or desirable to carry out the intent
and meaning of clause (x) of Granting Clause Second.
(vii) Within 5 days after Mortgagor's receipt of any notice of any
motion, application or effort to reject any Facility Lease by any Lessor or
any trustee arising from or in connection with any case, proceeding or
other action commenced or pending by or against any Lessor under the Code
or any comparable provision contained in any present or future federal,
state, local, foreign or other statute, law, rule or regulation
("Comparable Provision"), Mortgagor shall give notice thereof to Mortgagee.
Mortgagor hereby (A) assigns to Mortgagee any and all of Mortgagor's rights
as lessee under Section 365(h) of the Code or any Comparable Provision and
(B) covenants that it shall not elect to treat any Facility Lease as
terminated pursuant to Section 365(h) of the Code or any Comparable
Provision without the prior consent of Mortgagee and (C) agrees that any
such election by Mortgagor without such consent shall be null and void.
(viii) Without limiting the generality of the foregoing, to the extent
permitted by applicable law, Mortgagor hereby unconditionally assigns,
transfers and sets over to Mortgagee all of Mortgagor's claims and rights
to the payment of damages arising from any rejection by Lessor of any
Facility Lease under the Code or any Comparable Provision. Mortgagee shall
have the right to proceed
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in its own name or in the name of Mortgagor in respect of any claim, suit,
action or proceeding relating to the rejection of any Facility Lease,
including, without limitation, the right to file and prosecute, in
cooperation with Mortgagor, any proofs of claim, complaints, motions,
applications, notices and other documents, in any case in respect of Lessor
under the Code or any Comparable Provision. This assignment constitutes a
present, irrevocable and unconditional assignment of the foregoing claims,
rights and remedies, and shall continue in effect until all of the
indebtedness and obligations secured by this Mortgage shall have been
satisfied and discharged in full. Any amounts received by Mortgagee in
damages arising out of the rejection of any Facility Lease as aforesaid
shall be applied first to all reasonable costs and expenses of Mortgagee
(including, without limitation, reasonable attorneys' fees, disbursements
and court costs) incurred in connection with the exercise of any of its
rights or remedies under this Section 5.20, and thereafter as provided in
Section 3.03.
(ix) If there shall be filed by or against Mortgagor a petition under
the Code or any Comparable Provision and Mortgagor, as lessee under any
Facility Lease, shall determine to reject such Facility Lease, Mortgagor
shall give Mortgagee not less than 10 days' prior notice of the date on
which Mortgagor shall apply to the Bankruptcy Court or other judicial body
with appropriate jurisdiction for authority to reject such Facility Lease.
Mortgagee shall have the right, but not the obligation, to serve upon
Mortgagor within such 10-day period a notice stating that (a) Mortgagee
demands that Mortgagor assume and assign such Facility Lease to Mortgagee
pursuant to Section 365 of the Code or any Comparable Provision and (b)
Mortgagee covenants to cure or provide adequate assurance of prompt cure of
all defaults and provide adequate assurance of future performance under
such Facility Lease. If Mortgagee serves upon Mortgagor the notice
described in the preceding sentence, Mortgagor shall not seek to reject
such Facility Lease and shall comply with the demand provided for in clause
(a) of the preceding sentence within 30 days after the notice shall have
been given subject to the performance by Mortgagee of the covenant provided
for in clause (b) of the preceding sentence. The foregoing provisions of
this Section 5.20(x) shall not apply to the extent not permitted by
applicable law. Effective upon the entry of an order for relief in respect
of Mortgagor under Chapter 7 of the Code or any Comparable Provision,
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Mortgagor hereby assigns and transfers to Mortgagee a non-exclusive right
to apply to the Bankruptcy Court or other judicial body with appropriate
jurisdiction for an order extending the period during which such Facility
Lease may be rejected or assumed.
(x) Mortgagor shall promptly give to Mortgagee copies of (A) all
notices of default and (B) any other communications or notices with respect
to events that relate to the possible impairment of the security of this
Mortgage, which Mortgagor shall give or receive under any Facility Lease
and shall promptly notify Mortgagee of any default under any Facility Lease
on the part of the Lessor or Mortgagor.
(xi) Mortgagor shall enforce with due diligence all of the obligations
of the Lessor under each Facility Lease, to the end that Mortgagor may
enjoy all of the rights and privileges granted to it under the Facility
Leases.
(xii) Mortgagor shall notify Mortgagee within 5 days after the
transfer of a fee interest in any Leased Facility or any portion thereof to
or from an Affiliate.
(xiii) The Company or any of its Subsidiaries shall not at any time
hereafter acquire fee title to the Leased Land or any portion thereof
unless simultaneously with such acquisition the Company or such Subsidiary
and Mortgagor execute and exchange (and deliver to Mortgagee an executed
counterpart of) an instrument in form and substance satisfactory to
Mortgagee providing that so long as the Company or such Subsidiary owns
such fee title (A) the Company or such Subsidiary shall not terminate the
applicable Facility Lease for any reason whatsoever (including, without
limitation, due to the default of Mortgagor under such Facility Lease) and
(B) the Company or such Subsidiary shall not accept, and, if tendered by
Mortgagor shall promptly return to Mortgagor, any payment of rent or other
charges payable under such Facility Lease in excess of the amount required
to pay the debt service and other sums payable under any mortgage affecting
the Company's or such Subsidiary's fee interest in the applicable Leased
Facility (and the Company or such Subsidiary shall use such funds only to
pay its debt service obligations and other sums payable under such
mortgage) at any time that an Event of Default
57
<PAGE>
shall have occurred and be continuing under this Mortgage or the Trust
Indenture.
(c) Mortgagor hereby represents and warrants that all fixed rent (as
defined in the Ground Leases), taxes and assessments, payable under the Ground
Leases have been paid to the extent they were due and payable to the date hereof
and that Mortgagor has not received notice of its failure to pay any other
amounts payable under the Ground Leases which has not been cured.
(d) Subject to the provisions of Section 5.20(b)(iii), if both the lessor's
and lessee's estates under any Facility Lease or any portion thereof shall at
any time become vested in one owner, this Mortgage and the Lien created hereby
shall nevertheless not be destroyed or terminated by application of the doctrine
of merger and, in such event, Mortgagee shall continue to have all of the rights
and privileges of a first leasehold mortgagee.
(e) Mortgagor hereby acknowledges that if any Facility Lease shall be
terminated prior to the natural expiration of its term due to default by the
lessee thereunder, and if pursuant to such Facility Lease, Mortgagee or its
designee shall acquire from the Lessor a new lease of the Leased Facility or any
portion thereof, Mortgagor shall have no right, title or interest in or to such
lease or the leasehold estate created thereby, or the options therein contained.
(f) Each Facility Lease hereafter entered into or assumed by Mortgagor as
lessee or sublessee shall contain provisions (i) permitting the assignment of
the same to Mortgagee and permitting assignment without the lessor's consent if
this Mortgage is foreclosed; and (ii) providing protection to Mortgagee, as
leasehold mortgagee, not less favorable than the provisions contained in the
Ground Leases.
Section 5.21. Intentionally Omitted.
Section 5.22. Indemnification.
Mortgagor shall reimburse Mortgagee upon request for all reasonable
disbursements, expenses and advances incurred or made by it in accordance with
the terms hereof. Such expenses shall include the reasonable compensation,
disbursements and expenses of Mortgagee's agents, accountants, experts and
counsel.
Mortgagor shall indemnify Mortgagee (in its capacity as Mortgagee) and each
of its officers, directors,
58
<PAGE>
attorneys-in-fact and agents for, and hold it harmless against, any claim,
demand, expense (including but not limited to reasonable compensation,
disbursements and expenses of Mortgagee's agents and counsel), loss or liability
incurred by them without negligence, bad faith or willful misconduct on its
part, arising out of or in connection with the administration of this Mortgage
and their rights or duties hereunder including the reasonable costs and expenses
of defending themselves against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. Mortgagee
shall notify Mortgagor promptly of any claim asserted against the Mortgagee for
which it may seek indemnity. Mortgagor shall defend the claim and Mortgagee
shall provide reasonable cooperation at Mortgagor's expense in the defense.
Mortgagee may have separate counsel and Mortgagor shall pay the reasonable fees
and expenses of such counsel; provided, that Mortgagor will not be required to
pay such fees and expenses if it assumes Mortgagee's defense and there is no
conflict of interest between Mortgagor and Mortgagee in connection with such
defense. Mortgagor need not pay for any settlement made without its written
consent. Mortgagor need not reimburse any expense or indemnify against any loss
or liability to the extent incurred by Mortgagee through its negligence, bad
faith or willful misconduct.
When Mortgagee incurs expenses or renders services after an "Event of
Default" specified in Section 7.1 (f) or (g) of the Trust Indenture occurs, the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
Mortgagor's obligations under this Section 5.22 shall survive the
resignation or removal of Mortgagee, the discharge of the Obligations and any
rejection or termination of this Mortgage under any Bankruptcy Law.
Section 5.23. Acceptance. By Mortgagee's acceptance of this Mortgage,
Mortgagee agrees to be bound by the terms hereof.
59
<PAGE>
IN WITNESS WHEREOF, Mortgagor has caused this Mortgage to be duly executed
and attested, all as of the day and year first above written.
TRUMP TAJ MAHAL ASSOCIATES
By: Trump Atlantic City
Corporation,
a general partner
Witness: /s/ [ILLEGIBLE] By: /s/ Nicholas L. Ribis
-------------------- -------------------------
Name: Nicholas L. Ribis
Title: Vice President
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
BE IT REMEMBERED, that on April 17, 1996, before me, the subscriber, a
Notary Public of the State of New York, personally appeared Nicholas L. Ribis,
to me known, who, being by me duly sworn did depose and say that he resides at
One [ILLEGIBLE] way, Morristown, NJ 07960; that he is Vice President of Trump
Atlantic City Corporation, which is a general partner of TRUMP TAJ MAHAL
ASSOCIATES, the partnership described in and which executed the above
instrument, and he acknowledged that he signed and delivered the same on behalf
of such managing general partner as his voluntary act and deed and as the
voluntary act and deed of said corporation on behalf of said general
partnership, pursuant to authority of the board of directors of said
corporation.
/s/ CHRIS OWEN
--------------------------------
Notary Public
CHRIS OWEN
Notary Public, State of New York
No. 01OW5057119
Qualified in New York County
Commission Expires ________
<PAGE>
SCHEDULE 5
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
THIS AGREEMENT is made as of the_____day of ___________, 199___ by and
between FIRST BANK NATIONAL ASSOCIATION, as Collateral Agent, having an office
at 180 E. 5th Street, St. Paul, MN 55101 (hereinafter called "Mortgagee") and
_________________, a ____________________, having an office at
______________________________(hereinafter called "Tenant").
WITNESSETH:
WHEREAS, Tenant entered into a certain agreement of lease dated
_____________________ , 199___ with Trump Taj Mahal Associates ("TTMA"), as
lessor (and as it may be hereafter amended from time to time the "Lease")
covering certain premises more particularly described therein (the "Demised
Premises"); and
WHEREAS, Mortgagee is the mortgagee under that certain Indenture of
Mortgage and Security Agreement dated as of April 17, 1996, executed and
delivered by TTMA, as mortgagor and intended to be recorded in the office of the
Clerk of Atlantic County (the "Clerk's Office") (said mortgage, as amended,
increased, renewed, modified, consolidated, replaced, combined, substituted,
severed, split, spread or extended, being hereinafter referred to as the
"Mortgage"), which encumbers, inter alia, the Trump Taj Mahal Casino Resort
located in Atlantic City, New Jersey, as more particularly described in said
Mortgage (the "Property"); and
WHEREAS, the Demised Premises are included within the Property.
NOW, THEREFORE, in consideration of the mutual agreements herein contained
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
1. Tenant covenants and agrees that the Lease and the rights of Tenant in,
to and under the Lease and the Property now is and shall at all times continue
to be subject and subordinate in each and every respect to the Mortgage and to
any and all renewals, modifications and extensions of the Mortgage and any and
all other instruments held by Mortgagee as security in connection with the
Mortgage. Tenant, upon request, shall execute and deliver any certificate or
other instrument which Mortgagee may reasonably request to confirm said
subordination by Tenant.
2. Tenant certifies that the Lease is presently in full force and effect
and unmodified and no base rent payable thereunder has been paid more than one
(1) month in advance of its due date, and that no default exists under the Lease
which has continued beyond the expiration of any applicable grace period or
which with the giving of notice of passage of time or both will constitute a
default under the Lease. Tenant has no defenses, claims or offsets to its
obligations under the Lease.
<PAGE>
3. Provided Tenant is in compliance with the terms of this Agreement and no
default exists under the Lease which has continued beyond the expiration of any
applicable grace period, Mortgagee shall not name Tenant as a party defendant to
any action for foreclosure or other enforcement thereof (unless required by
law), nor shall the Lease be terminated by Mortgagee in connection with, or by
reason of, foreclosure or other proceedings for the enforcement of the Mortgage,
or by reason of a transfer of the landlord's interest under the Lease pursuant
to the taking of a deed in lieu of foreclosure (or similar device), nor shall
Tenant's use or possession of the Demised Premises be interfered with by
Mortgagee, unless the holder of the landlord's interest under the Lease (the
"Landlord") would have had such right if the Mortgage had not been made, except
that the person acquiring, or succeeding to, the interests of the Landlord as a
result of any such action or proceeding, and such person's successors and
assigns (any of the foregoing being hereinafter referred to as the "Successor"),
shall not be:
(a) subject to any credits, offsets, defenses or claims which Tenant
might have against any prior landlord; nor
(b) bound by any prepayment of rent which Tenant might have paid more
than 30 days before the due date of such installment to any prior landlord,
including TTMA, unless such prepayment shall have been made with Mortgagee's
prior written consent; nor
(c) liable for any act or omission of any prior landlord; nor
(d) bound by any covenant to undertake or complete any improvement to
the Demised Premises or the building forming a part of the Property; nor
(e) be required to account for any security deposit other than any
security deposit actually delivered to the Successor; nor
(f) bound by any amendment or change in any material term of the Lease
or by any waiver of any material term of the Lease made by Landlord in violation
of the express terms of the Mortgage unless such amendment, change or waiver is
consented to by Mortgagee; nor
(g) liable for any payment to Tenant of any sums, or the granting to
Tenant of any credit, in the nature of a contribution towards the cost of
preparing, furnishing or moving into the Demised Premises or any portion
thereof.
4. If the interest of the Landlord under the Lease shall be transferred by
reason of foreclosure or other proceedings for enforcement of the Mortgage or
pursuant to a taking of a deed in lieu of foreclosure (or similar device),
Tenant shall be bound to the Successor, and, except as provided in this
Agreement, the Successor shall be bound to Tenant, under all of the terms,
covenants and conditions of the Lease for the balance of the term thereof
remaining, with the same force and effect as if the Successor were the landlord,
and Tenant does hereby (i) agree to attorn to the Successor, including Mortgagee
2
<PAGE>
if it be the Successor as its landlord, (ii) affirm its obligations under the
Lease, and (iii) agree to make payments of all sums due under the Lease
to the Successor, said attornment, affirmation and agreement to be effective and
self-operative without the execution of any further instruments, upon written
demand by Mortgagee or upon the Successor succeeding to the interest of the
landlord under the Lease. Tenant waives the provisions of any statue or rule of
law now or hereafter in effect that may give or purport to give it any right or
election to terminate or otherwise adversely affect the Lease or the obligations
of Tenant thereunder by reason of any foreclosure or similar proceeding.
5. Tenant understands that Landlord's interest in the Lease has been
assigned to Mortgagee as security under the Mortgage. Until Mortgagee becomes
owner of the Property, however, Mortgagee assumes no duty, liability or
obligation to Tenant under the Lease.
6. This Agreement may not be modified except by an agreement in writing
signed by the parties or their respective successors in interest. This Agreement
shall inure to the benefit of and be binding upon the parties hereto, their
respective heirs, representatives, successors and assigns.
7. Nothing contained in this Agreement shall in any way impair or affect
the lien created by the Mortgage except as specifically set forth herein.
8. The Tenant agrees that this Agreement satisfies any condition or
requirement in the Lease relating to the granting of a non-disturbance agreement
by Mortgagee. Tenant further agrees that in the event there is any inconsistency
between the terms and provisions hereof and the terms and provisions of the
Lease dealing with the non-disturbance by Mortgagee, the terms and provisions
hereof shall be controlling.
9. All notices, demands or requests made pursuant to, under, or by virtue
of this Agreement must be in writing and mailed to the party whom the notice,
demand or request is being made by certified or registered mail, return receipt
requested, at its address set forth above. Any party may change the place that
notices and demands are to be sent by written notice delivered in accordance
with this Agreement.
10. This Agreement shall be governed by the laws of the State of New
Jersey. If any term of this Agreement or the application thereof to any person
or circumstances shall to any extent be invalid or unenforceable, the remainder
of this Agreement or the application of such term to any person or circumstances
other than those as to which it is invalid or unenforceable shall not be
affected thereby, and each term of this Agreement shall be valid and enforceable
to the fullest extent permitted by law.
11. This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same agreement, and either of
the parties hereto may execute this Agreement by signing any such counterpart.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have hereunto caused this Agreement
to be duly executed as of the day and year first above written.
MORTGAGEE
ATTEST: FIRST BANK NATIONAL ASSOCIATION,
as COLLATERAL AGENT
____________________ By:___________________________
Typed Name:___________________
Title:________________________
TENANT
ATTEST:
____________________ By:___________________________
Typed Name:___________________
Title:________________________
TTMC joins in this Agreement and agrees to be bound by the terms hereof.
TTMC
ATTEST:
____________________ By:___________________________
Typed Name: Typed Name:___________________
Title: Title:________________________
4
<PAGE>
STATE OF NEW YORK
ss
COUNTY OF NEW YORK
BE IT REMEMBERED, that on this _______day of ____________________, 199__,
before me, the subscrober, a Notary Public of ____________________, personally
appeared ___________________, the _____________________ of First Bank National
Association, who, I am satisfied, is the person who signed, sealed with the
corporate seal and delivered the same as such officer aforesaid, and that the
within instrument is the voluntary act and deed of such corporation.
__________________________
STATE OF
SS
COUNTY OF
BE IT REMEMBERED, that on this _____day of _________________, 199__, before
me, the subscriber, a Notary Public of ____________, personally appeared
________________, the ____________________ President of
___________________________, who, I am satisfied, is the person who signed,
sealed with the corporate seal and delivered the same as such officer aforesaid,
and that the within instrument is the voluntary act and deed of such corporation
pursuant to a proper resolution of its Board of Directors.
__________________________
STATE OF
SS
COUNTY OF
BE IT REMEMBERED, that on this _____day of _________________, 199__, before
me, the subscriber, a Notary Public of ____________, personally appeared
________________, the ____________________ President of
___________________________, who, I am satisfied, is the person who signed,
sealed with the corporate seal and delivered the same as such officer aforesaid,
and that the within instrument is the voluntary act and deed of such corporation
pursuant to a proper resolution of its Board of Directors.
--------------------------
5
INDENTURE OF MORTGAGE AND SECURITY AGREEMENT
TRUMP PLAZA ASSOCIATES
Mortgagor
and
FIRST BANK NATIONAL ASSOCIATION,
AS COLLATERAL AGENT
Mortgagee
Dated as of April 17, 1996
----------------------------------------------------
Record and return to:
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Attention: Wallace L. Schwartz, Esq.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
Section 1.01. Definitions ................................................. 10
Section 1.02. Notices ..................................................... 21
Section 1.03. Form and Contents of Documents
Delivered to Mortgagee .................................... 22
Section 1.04. Compliance Certificates and Opinions ........................ 22
Section 1.05. Effect of Headings and Table of
Contents .................................................. 22
Section 1.06. Successors and Assigns; Amendments .......................... 22
Section 1.07. Separability Clause ......................................... 23
Section 1.08. Benefits of Mortgage ........................................ 23
Section 1.09. Governing Law ............................................... 23
Section 1.10. Limitation on Liability ..................................... 23
Section 1.11. Provisions Required by Trust
Indenture ................................................. 23
Section 1.12. Rights of Mortgagee ......................................... 24
Section 1.13. Mortgage Subject to Casino Control Act ...................... 25
Section 1.14. Discharge of Lien ........................................... 25
Section 1.15. General Application ......................................... 26
Section 1.16. Mortgage Deemed to be Security Agreement .................... 26
ARTICLE TWO
RELEASE; SUBORDINATION
Section 2.01. Possession by Mortgagor ..................................... 27
Section 2.02. Obsolete Property ........................................... 27
Section 2.03. F,F&E Financing Agreements .................................. 27
Section 2.04. Intentionally Omitted ....................................... 28
ARTICLE THREE
REMEDIES
Section 3.01. Events of Default ........................................... 28
Section 3.02. Application of Moneys Received by Mortgagee ................. 28
Section 3.03. Restoration of Rights and Remedies .......................... 29
Section 3.04. Rights and Remedies Cumulative .............................. 29
Section 3.05. Delay or Omission Not Waiver ................................ 29
Section 3.06. Undertaking for Costs ....................................... 29
Section 3.07. Waiver of Appraisement and Other Laws ....................... 30
Section 3.08. Entry ....................................................... 30
Section 3.09. Power of Sale; Suits for Enforcement ........................ 31
Section 3.10. Incidents of Sale ........................................... 31
Section 3.11. Receiver .................................................... 33
Section 3.12. Suits to Protect the Trust Estate ........................... 33
Section 3.13. Management of the Premises .................................. 33
<PAGE>
ARTICLE FOUR
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
Section 4.01. Consolidation, Merger, Conveyance or
Transfer only on Certain Terms ............................. 34
ARTICLE FIVE
COVENANTS AND REPRESENTATIONS OF MORTGAGOR
Section 5.01. Performance of Obligations .................................. 34
Section 5.02. F,F&E Financing Agreements .................................. 34
Section 5.03. Limitations on Liens and Transfers .......................... 34
Section 5.04. Environmental ............................................... 36
Section 5.05. Pari Passu Liens ............................................ 40
Section 5.06. Warranty of Leasehold Estate and Title ...................... 40
Section 5.07. After-Acquired Property; Further Assurances:
Recording ................................................. 42
Section 5.08. Payment of Taxes and Certain Claims;
Maintenance of Properties;
Compliance with Legal Requirements and
Insurance Requirements .................................... 45
Section 5.09. Permitted Contests .......................................... 47
Section 5.10. Mechanics' and Other Liens .................................. 48
Section 5.11. To Insure ................................................... 48
Section 5.12. Limitations on Building Demolition,
Alterations, Improvements and New Construction ............ 51
Section 5.13. Leases ...................................................... 53
Section 5.14. Compliance Certificates ..................................... 55
Section 5.15. Intentionally Omitted ....................................... 55
Section 5.16. To Keep Books; Inspection by Mortgagee ...................... 55
Section 5.17. Advances by Mortgagee ....................................... 56
Section 5.18. Waiver of Stay, Extension or Usury Laws ..................... 56
Section 5.19. Intentionally Omitted ....................................... 57
Section 5.20. Facility Leases ............................................. 57
Section 5.21. Superior Mortgages .......................................... 63
Section 5.22. Indemnification ............................................. 65
Section 5.23. Acceptance .................................................. 66
<PAGE>
SCHEDULES AND EXHIBITS
Schedule 1 - Owned Land
Schedule 2 - Ground Leases and Ground Lease Land
Schedule 3 - Parking Leases and Parking Lease Land
Schedule 4 - Convention Hall Easements
Schedule 5 - Form of Non-Disturbance and Attornment
Agreement
Exhibit A - Form of Trust Indenture
<PAGE>
INDENTURE OF MORTGAGE AND SECURITY AGREEMENT
INDENTURE OF MORTGAGE AND SECURITY AGREEMENT ("Mortgage"), dated as of
April 17, 1996, between TRUMP PLAZA ASSOCIATES, a New Jersey partnership
("Mortgagor"), having an office at Mississippi Avenue and The Boardwalk,
Atlantic City, New Jersey 08401, and FIRST BANK NATIONAL ASSOCIATION, a national
banking association having an office at 180 East Fifth Street, St. Paul,
Minnesota 55101, as Collateral Agent ("Mortgagee"), on behalf of the Designated
Representatives (as hereinafter defined) for the benefit of the Secured
Beneficiaries (as hereinafter defined) under the Collateral Agency Agreement (as
hereinafter defined).
W I T N E S S E T H:
In consideration of $10.00 in hand paid by Mortgagee to Mortgagor and for
other good and valuable consideration, the receipt and sufficiency whereof is
hereby acknowledged, and in order to secure (i) the punctual payment and
performance when due of all of Guarantors' obligations under the Guarantee; (ii)
the punctual payment and performance when due of all of the Company's, the
Issuers', the Guarantors' and the Mortgagor's obligations under the Mortgage
Notes, the Trust Indenture, the Secured Loans, the Debt Documents and, to the
extent not otherwise included, any other Obligations in the initial principal
sum of $1,200,000,000 but which principal sum may be increased up to
$1,300,000,000 pursuant to the terms of the Trust Indenture and the Collateral
Agency Agreement; (iii) payment by Mortgagor to Mortgagee of all sums expended
or advanced by Mortgagee pursuant to any term or provision of this Mortgage;
(iv) performance of each covenant, term, condition and agreement of Mortgagor
herein contained; (v) all costs and expenses, including, without limitation,
reasonable counsel fees and expenses as provided in Section 3.07, which may
arise in respect of this Mortgage or of the obligations secured hereby; and (vi)
performance and observance of all of the provisions herein contained, Mortgagor
has executed and delivered this Mortgage and has bargained, sold, alienated,
mortgaged, pledged, released, conveyed and confirmed unto Mortgagee and its
successors hereunder and assigns forever, all of its right, title and interest
in, to and under all of the following described property:
<PAGE>
GRANTING CLAUSES
Granting Clause First
All of the property, rights, title, interest, privileges and franchises
particularly described in annexed Schedule 1 (the "Owned Land") which Schedule
is hereby made a part of, and deemed to be described in, this Granting Clause as
fully as if set forth in this Granting Clause at length.
Granting Clause Second
All of the property, rights, title, interest, privileges and franchises of
Mortgagor as lessee under (a) all Facility Leases and (b) all Parking Leases,
together with (i) all credits, deposits, privileges and rights of Mortgagor as
lessee under the Facility Leases and the Parking Leases, now or at any time
existing, (ii) the leaseholds and the leasehold estates created by the Facility
Leases and the Parking Leases and (iii) all of the estates, rights, titles,
claims or demands whatsoever of Mortgagor, either in law or in equity, in
possession or in expectancy, of, in and to the Facility Leases, the Leased
Facilities, the Parking Leases and the Parking Lease Land, together with (x) any
and all other, further or additional title, estates, interests or rights which
may at any time be acquired by Mortgagor in or to the Leased Facilities or the
Parking Lease Land or any part thereof, and Mortgagor expressly agrees that if
Mortgagor shall, at any time prior to payment in full of all indebtedness
secured hereby, acquire fee simple title or any other greater estate to the
Leased Facilities (including, without limitation, to the Ground Lease Land
pursuant to Article Forty-Fourth or Fifty-Second of the Ground Leases) or the
Parking Lease Land, the Lien of this Mortgage shall attach, extend to, cover and
be a Lien upon such fee simple title or other greater estate and (y) any right
to possession or statutory term of years derived from, or incident to, the
Facility Leases or the Parking Leases pursuant to Section 365(h) of the Code or
any Comparable Provision.
Except as otherwise set forth herein and in the other Mortgage Documents,
the assignment made by this Granting Clause Second shall not impair or diminish
any right, privilege or obligation of Mortgagor with respect to the Facility
Leases or the Parking Leases, nor shall any such obligation be imposed on
Mortgagee.
Granting Clause Third
All of the rents, issues, profits, revenues accounts, accounts receivable
and other income and proceeds (including, without limitation, all rents, fees,
charges, accounts, issues, profits, revenues and payments for or from (a) the
use or
<PAGE>
occupancy of the rooms and other public facilities in the Hotel and (b)
the operation of the Casino) of the property subjected or required to be
subjected to the Lien of this Mortgage, including, without limitation, the
property described in Granting Clauses First, Second and Sixth (said property
described in Granting Clauses First, Second and Sixth and similar other property
subjected or required to be subjected to the Lien of this Mortgage, together
with all such rents, issues, profits, revenues, accounts, accounts receivable
and other income and proceeds therefrom is hereinafter collectively referred to
as the "Premises") and all of the estate, right, title and interest of every
nature whatsoever of Mortgagor in and to the same and every part thereof.
Granting Clause Fourth
All of the rights of Mortgagor as lessor under the Leases in effect on the
date of execution of this Mortgage or hereafter entered into by Mortgagor,
including modifications, extensions and renewals of all of the same, and the
immediate and continuing right as security in accordance with the Assignment of
Leases and Rents, and, after the occurrence, and during the continuance, of an
Event of Default, to (a) make claim for, collect, receive and receipt for (and
to apply the same as provided herein) any and all rents, fees, charges, income,
revenues, issues, profits, security and other sums of money payable or
receivable thereunder or pursuant thereto, and all proceeds thereof, whether
payable as rent, insurance proceeds, condemnation awards, security or otherwise
and whether payable prior to or subsequent to the Stated Maturity of any of the
Debt Documents, (b) receive and give notices and consents thereunder, (c) bring
actions and proceedings thereunder or for the enforcement thereof, (d) make
waivers and agreements thereunder or with respect thereto, (e) take such action
upon the happening of a default under any Lease, including the commencement,
conduct and consummation of any proceedings at law or in equity as shall be
permitted by any provision of any Lease, and (f) do any and all things which
Mortgagor or any lessor is or may become entitled to do under the Leases;
provided, that, except as may be set forth to the contrary in the Assignment of
Leases and Rents, the assignment made by this Granting Clause Fourth shall not
impair or diminish any right, privilege or obligation of Mortgagor under the
Leases nor shall any such obligation be imposed upon Mortgagee.
<PAGE>
Granting Clause Fifth
Without limiting the generality of the provisions of Granting Clause Third,
all of Mortgagor's rights, title, interest, privileges and franchises in and to
the following, now owned or hereafter acquired by Mortgagor, to the extent of
Mortgagor's interest therein and thereto and to the extent assignable
(collectively, "Operating Assets"):
<PAGE>
bookings for the use of guest rooms, banquet facilities, meeting rooms
at the Casino Hotel or at any other improvements now or hereafter located
on any of the Land;
all contracts respecting utility services for, and the maintenance,
operations, or equipping of, the Premises, including guaranties and
warranties relating thereto;
the Permits;
all contract rights, leases (whether with respect to real property,
personal property or both real and personal property, excluding the
Facility Leases and the Parking Leases), concessions, trademarks, trade
names, service marks, logos, copyrights, warranties and other items of
intangible personal property, and any and all good will associated with the
same relating to the ownership or operation of the Casino Hotel or of any
other improvements now or hereafter located on any of the Land, including,
without limitation, (1) telephone and other communication numbers, (2) all
software licensing agreements as are required to operate computer software
systems at the Casino Hotel or at any other improvements now or hereafter
located on any of the Land and books and records relating to the software
programs and (3) lessee's interest under leases of Tangible Personal
Property;
all contracts, purchase orders, requisitions and agreements entered
into by or on behalf of Mortgagor or which have been assigned to Mortgagor,
for the design, construction, and furnishing of the Casino Hotel or of any
other improvements now or hereafter located on any of the Land, including,
without limitation, architect's agreements, engineering agreements,
construction contracts, consulting agreements and agreements or purchase
orders for all items of Tangible Personal Property and payment and
performance bonds in favor of Mortgagor in connection with the Trust Estate
(and all warranties and guarantees thereunder and warranties and guarantees
of any subcontractor and bond issued in connection with the work to be
performed by any subcontractor);
the following personal property (the "Tangible Personal Property") now
or hereafter acquired by Mortgagor (directly or by way of lease) which are
located on, or to be located on, or which are in use or held in reserve
storage for future use in connection with the gaming or other operations
of, the Casino Hotel or of any other improvements now or hereafter located
on any of the Land, which are on hand or on order whether stored on-site or
off-site:
all furniture, furnishings, equipment, machinery, apparatus,
appliances, fixtures and fittings and other articles of tangible personal
property;
<PAGE>
all slot machines, electronic gaming devices, crap tables, blackjack
tables, roulette tables, baccarat tables, big six wheels and other gaming
tables, and all furnishings and equipment to be used in connection with the
operation thereof;
all cards, dice, gaming chips and placques, tokens, chip racks,
dealing shoes, dice cups, dice sticks, layouts, paddles, roulette balls and
other consumable supplies and items;
all china, glassware, linens, kitchen utensils, silverware and
uniforms;
all consumables and operating supplies of every kind and nature,
including, without limitation, accounting supplies, guest supplies, forms,
printing, stationery, food and beverage stock, bar supplies, laundry
supplies and brochures to existing purchase orders;
all upholstery material, carpets and rugs, beds, bureaus,
chiffonniers, chairs, chests, desks, bookcases, tables, curtains, hangings,
pictures, divans, couches, ornaments, bars, bar fixtures, safes, stoves,
ranges, refrigerators, radios, televisions, clocks, electrical equipment,
lamps, mirrors, heating and lighting fixtures and equipment, ice machines,
air conditioning machines, fire prevention and extinguishing apparatus,
laundry machines, and all similar and related articles used in bedrooms,
sitting rooms, bathrooms, boudoirs, halls, closets, kitchens, dining rooms,
offices, lobbies, basements and cellars in the Casino Hotel and in any
other improvements now or hereafter located on any of the Land;
all sets and scenery, costumes, props and other items of tangible
personal property on hand or on order for use in the production of shows in
any showroom, convention space, exhibition hall, or sports and
entertainment arena of the Casino Hotel or in any other improvements now or
hereafter located on any of the Land; and
all cars, limousines, vans, buses, trucks and other vehicles owned or
leased by Mortgagor for use in connection with the operation of the
Premises, together with all equipment, parts and supplies used to service,
repair, maintain and equip the foregoing;
all drawings, designs, plans and specifications prepared by
architects, engineers, interior designers, landscape designers and any
other professionals or consultants for the design, development,
construction and/or improvement of the Casino Hotel, or for any other
development of the Premises, as amended from time to time;
any administrative and judicial proceedings initiated by Mortgagor, or
in which Mortgagor has intervened, concerning
<PAGE>
the Premises, and agreements, if any, which are the subject matter of such
proceedings;
any customer lists utilized by Mortgagor including lists of transient
guests and restaurant and bar patrons and "high roller" lists; and
all of the good will in connection with the assets listed in this
Granting Clause Fifth and in connection with the operation of the Premises.
Except as otherwise set forth herein and in the other Mortgage Documents,
the assignment made by this Granting Clause Fifth shall not impair or diminish
any right, privilege or obligation of Mortgagor with respect to the Operating
Assets, nor shall any such obligation be imposed on Mortgagee.
Granting Clause Sixth
All of Mortgagor's rights, title, interest, privileges and franchises in
and to all buildings, structures (surface and subsurface), and other
improvements of every kind and description, including, without limitation, all
pedestrian bridges, entrance-ways, parking lots, plazas, curb-cuts, walkways,
driveways and landscaping and such fixtures as constitute real property, now or
hereafter erected or placed on the Land or on any other land or any interest
therein hereafter acquired by Mortgagor and all of Mortgagor's rights, title,
interest, privileges and franchises in and to all fixtures and articles of
personal property now or hereafter attached to or contained in and used in
connection with such buildings and improvements, including, without limitation,
all apparatus, furniture, furnishings, machinery, motors, elevators, fittings,
radiators, cooking ranges, ice boxes, ice machines, printing presses, mirrors,
bars, mechanical refrigerators, furnaces, coal and oil burning apparatus, wall
cabinets, machinery, generators, partitions, steam and hot water boilers,
lighting and power plants, pipes, plumbing, radiators, sinks, bath tubs, water
closets, gas and electrical fixtures, awnings, shades, screens, blinds,
dishwashers, freezers, vacuum cleaning systems, office equipment and other
furnishings, and all plumbing, heating, lighting, cooking, laundry, ventilating,
incinerating, air-conditioning and sprinkler equipment or other fire prevention
or extinguishing apparatus and material, and fixtures and appurtenances thereto;
and all renewals or replacements thereof or articles in substitution therefor,
whether or not the same are or shall be attached to the Land, any other land or
any interest therein hereafter acquired by Mortgagor or to any such buildings
and improvements thereon, in any manner.
<PAGE>
All of Mortgagor's rights, title, interest, privileges and franchises in
and to all other property, real, personal or mixed (other than Excepted
Property), of every kind and description and wheresoever situate, now owned or
which may be hereafter acquired by Mortgagor (including, without limitation, (i)
the Ground Lease Land, if Mortgagor acquires the fee simple title to the Ground
Lease Land or any part thereof whether by exercise of any or all of the options
contained in Articles Forty-Fourth and Fifty-Second of the Ground Leases or
otherwise, and/or the Parking Lease Land or any part thereof and/or any other
Leased Facilities, if Mortgagor acquires fee simple title to such Leased
Facilities or any part thereof, (ii) all air rights and rights to maintain
supporting columns, all rights to construct and maintain tunnels and bridges and
other elevated structures, all rights to create private rights of way over
streets now or hereafter owned or enjoyed by Mortgagor appurtenant to real
property, including, without limitation, those rights, if any, granted by (t)
Ordinance #68 of 1983 adopted December 20, 1983 by the City of Atlantic City,
New Jersey (the "City") (u) Ordinance #35 of 1981 adopted May 21, 1981 by the
City and recorded July 13, 1982 in Deed Book 3700 page 337, (v) Vacation
Ordinance #17 of 1982, adopted March 11, 1982 by The Board of Commissioners of
the City and recorded July 13, 1982 in Deed Book 3700 page 341, (w) Ordinance
#36 of 1982 adopted February 10, 1983 by the City, (x) deeds from the City dated
May 3, 1982 and recorded on May 7, 1982 in (A) Deed Book 3685 page 120, (B) Deed
Book 3685 page 105, (C) Deed Book 3685 page 110, (D) Deed Book 3685 page 124,
(E) Deed Book 3685 page 115 and (F) Deed Book 3685 page 128, (y) corrective
deeds from the City (A) dated June 28, 1982 and recorded July 13, 1982 in Deed
Book 3701 page 1, (B) dated June 29, 1982 and recorded July 13, 1982 in Deed
Book 3701 page 13, (C) dated June 28, 1982 and recorded July 13, 1982, in Deed
Book 3701 page 9, (D) dated June 29, 1982 and recorded July 13, 1982 in Deed
Book 3701 page 21, (E) dated June 28, 1982 and recorded July 13, 1982 in Deed
Book 3701 page 5, and (F) dated June 29, 1982 and recorded July 13, 1982 in Deed
Book 3701 page 17 and (z) easements from the City dated June 1, 1982 and
recorded June 8, 1982 in (A) Deed Book 3693 page 56, (B) Deed Book 3693 page 60
and (C) Deed Book 3693 page 64, as corrected by corrective easements dated June
29, 1982 and recorded July 13, 1982 in (A) Deed Book 3701 page 25, (B) Deed Book
3701 page 33, and (C) Deed Book 3701 page 29, and (iii) to the extent
assignable, all easements (including, without limitation, the Convention Hall
Easements), licenses, rights of way, gores of land, streets, ways, alleys,
passages, sewer rights, waters, water courses, water rights and powers, and all
estates, rights, titles, interests, privileges, franchises, liberties,
tenements, hereditaments and appurtenances of any nature whatsoever, in any way
for the benefit of, or belonging, relating or pertaining to, the Trust Estate),
it being the intention hereof that all property, interests, rights, privileges
and franchises now owned by Mortgagor or acquired by Mortgagor after the date
hereof (other than Excepted Property) shall be as fully embraced within
<PAGE>
and subjected to the Lien hereof as if such property were specifically described
herein.
* * *
TOGETHER with all of Mortgagor's right, title and interest in and to any
and all mineral and water rights and any title or reversion, in and to the beds
of the ways, streets, avenues and alleys adjoining the Premises to the center
line thereof and in and to all strips, gaps and gores adjoining the Premises on
all sides thereof; and
TOGETHER with any and all of Mortgagor's right, title and interest in and
to the tenements, hereditaments, easements, appurtenances, passages, waters,
water courses, riparian rights, other rights, liberties and privileges thereof
or in any way now or hereafter appertaining to the Premises, including, without
limitation, any other claim at law or in equity as well as any after-acquired
title, franchise or license and the reversion and reversions and remainder and
remainders thereof; and
TOGETHER with any and all awards and other compensation heretofore or
hereafter to be made to the present and all subsequent owners of the Trust
Estate for any taking by eminent domain, either permanent or temporary, of all
or any part of the Trust Estate or any easement or appurtenances thereof,
including severance and consequential damage and change in grade of streets, all
in accordance with and subject to the provisions of the Superior Instrument
Requirements and Section 5.19; and
TOGETHER with any and all proceeds of any unearned premiums on any
insurance policies described in Sections 5.11 and 5.12, and the right to receive
and apply the proceeds of any insurance, judgments, or settlements made in lieu
thereof, for damage to the Trust Estate or otherwise, all in accordance with and
subject to the provisions of Section 5.11, Article IV of the Trust Indenture,
and the Superior Instrument Requirements.
EXCLUDING, with respect to all of the hereinabove granted property, rights,
title, interest, privileges and franchises described in Granting Clauses First
through Sixth and/or in the four immediately preceding paragraphs, all Excepted
Property now or hereafter existing.
TO HAVE AND TO HOLD all of said Premises, Leases, Facility Leases,
Operating Assets, properties, options, credits, deposits, rights, privileges and
franchises of every kind and description, real, personal or mixed, hereby and
hereafter granted, bargained, sold, alienated, assigned, transferred,
hypothecated, pledged, released, conveyed, mortgaged, or confirmed as aforesaid,
or intended, agreed or covenanted so to be, together with all the appurtenances
thereto appertaining (said Premises, Leases, Facility Leases, Operating Assets,
properties, options, credits, deposits, rights, privileges and
<PAGE>
franchises, other than Excepted Property now or hereafter existing, being herein
collectively called the "Trust Estate") unto Mortgagee and its successors and
assigns forever.
SUBJECT, HOWEVER, to Permitted Liens (other than Restricted Encumbrances)
and Section 1.14.
BUT IN TRUST, NEVERTHELESS, for the benefit and security of the Secured
Creditors.
UPON CONDITION that, until the happening of an Event of Default, Mortgagor
shall be permitted to possess and use the Trust Estate, and to receive and use
the rents, issues, profits, revenues and other income of the Trust Estate.
AND IT IS HEREBY COVENANTED AND DECLARED that the Trust Estate is to be
held and applied by Mortgagee, subject to the further covenants, conditions and
trusts hereinafter set forth, and Mortgagor does hereby covenant and agree to
and with Mortgagee, for the benefit of the Secured Creditors, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
<PAGE>
Definitions.
For all purposes of this Mortgage, except as otherwise expressly provided
or unless the context otherwise requires:
the terms defined in this Article One have the meanings assigned to
them in this Article One and include the plural as well as the singular;
all accounting terms not otherwise defined herein have the meanings
assigned to them, and all computations herein provided for shall be made,
in accordance with generally accepted accounting principles in effect on
the date hereof consistently applied; and
the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Mortgage as a whole and not to any particular
Article, Section or other subdivision.
"Affiliate" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Alterations" has the meaning set forth in Section 5.12.
"Architect" means an Independent Person selected by Mortgagor and licensed
as an architect or engineer in the State of New Jersey.
"Assignment of Leases and Rents" means the Assignment of Leases and Rents
of even date herewith made by Mortgagor, as assignor, in favor of Mortgagee, as
assignee.
"Bankruptcy Law" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Casino" means that portion of the Casino Hotel used for gaming and related
activities.
"Casino Hotel" means the casino and hotel complex currently known as the
"Trump Plaza Hotel and Casino" in Atlantic City, New Jersey and ancillary
structures and facilities located on the Premises and all furniture, fixtures
and equipment at any time contained therein in each case owned by or leased to
Mortgagor and covered by the Lien of the Mortgage Documents.
"Casualty" means any act or occurrence of any kind or nature which results
in damage, loss or destruction to any buildings or improvements on the Premises
and/or Tangible Personal Property.
"Code" means the Federal Bankruptcy Code, Title 11 of the United States
Code, as amended.
<PAGE>
"Collateral Agency Agreement" means the Collateral Agency Agreement, dated
as of the date hereof, by and among Mortgagee, Trustee, the Issuers, the
Guarantors and such other persons as may be permitted to become parties
thereunder in accordance with its terms and the terms of the Trust Indenture, as
the same may be amended from time to time in accordance with its terms.
"Company" means Trump Atlantic City Associates, a New Jersey partnership.
"Comparable Provision" has the meaning set forth in Section 5.20(b)(viii).
"Convention Hall Easements" means the easements and agreements described on
Schedule 4 attached hereto.
"Debt Documents" has the meaning set forth in Section 1 of the Collateral
Agency Agreement.
"Default" means any event which is, or after notice or lapse of time or
both would be, an Event of Default. Without limiting the generality of the
previous provisions of this definition, the term "Default" shall include the
occurrence of an event as to which a notice of default has been given to
Mortgagor under any Facility Lease by a Lessor or under any Superior Mortgage by
the holder thereof, which has not yet been cured.
"Designated Representatives" has the meaning set forth in Section 1 of the
Collateral Agency Agreement.
"Egg Harbor Mortgage" means that certain mortgage, dated October 5, 1990,
encumbering the Egg Harbor Parcel made by Mortgagor in favor of The Mutual
Benefit Life Insurance Company securing a note in the original principal amount
of $1,550,000 and recorded October 11, 1990 in Mortgage Book 4453, Page 1, and
that certain collateral assignment of leases, dated October 5, 1990, made by
Mortgagor in favor of The Mutual Benefit Life Insurance Company and recorded
October 11, 1990 in Deed Book 5142, Page 75, as assigned to MBL Life Assurance
Corporation, by assignment of mortgage, dated April 30,1994, recorded May 9,
1994 in Assignment Book 669 page 1, and any Refinancing Indebtedness thereof, to
the extent the same is permitted under the terms of the Trust Indenture and
Section 5.21(b)(i).
"Egg Harbor Parcel" means the portion of the Owned Land designated as the
"Egg Harbor Parcel" on Schedule 1.
"Event of Default" has the meaning set forth in Section 3.01.
"Excepted Property" means:
<PAGE>
(1) the personal property owned by lessees under Leases and the
personal property of any Hotel guests;
(2) counterchecks and any other property to the extent that the
granting of a security interest therein is prohibited by the New Jersey
Casino Control Act, N.J.S.A. 5:12-1 et seq., and the regulations
promulgated thereunder;
(3) tradenames, intellectual property rights and interests in and to
the use of the terms "Trump Plaza Hotel and Casino", "Trump", "Donald J.
Trump",", "Donald Trump" or related variations thereof;
(4) all cash and Cash Equivalents (as defined in the Trust Indenture)
to the extent such cash and Cash Equivalents are not required to be pledged
to the Collateral Agent as security for the Obligations pursuant to the
terms of the Trust Indenture; and
(5) any property deemed to be Excepted Property pursuant to the
provisions of Section 2.03.
"Existing Encumbrances" means the Liens existing as of April 17, 1996 after
giving effect to the "Merger Transaction" (as such term is defined in the
Prospectus), including the Superior Mortgages.
"Facility Leases" means, collectively:
(1) the Ground Leases;
(2) the Rothenberg Lease;
(3) any other lease now existing or hereafter entered into or assumed
by Mortgagor as lessee with respect to any real property, whether it be
land, land and buildings and improvements thereon or only buildings and
improvements (excluding the Parking Leases), which is material to the
operation of the Mortgagor or which is necessary for the normal operation
of the Casino Hotel in accordance with all Legal Requirements and all
Permits; and
(4) any and all modifications, extensions and renewals of the leases
described in clauses (1) through (3) above, to the extent the same are
permitted under Section 5.20.
"F,F&E Financing Agreement" has the meaning set forth in Section 1.1 of the
Trust Indenture.
<PAGE>
"Full Insurable Value" means the actual replacement cost (excluding the
costs of foundation, footing, excavation, paving, landscaping and other similar,
noninsurable improvements) of the insurable properties in question.
"Ground Lease Land" means the real property described in Schedule 2.
"Ground Leases" means the leases described in Schedule 2 as amended or
supplemented to the extent permitted by Section 5.20.
"Guarantee" means collectively, each guarantee made from time to time by
the Guarantors of the Issuers' Indenture Obligations (as defined in the Trust
Indenture) pursuant to Article Thirteen of the Trust Indenture.
"Guarantors" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Holder" has the meaning set forth in Section 1.1 of the Trust Indenture.
"Hotel" means that portion of the Casino Hotel not included within the
Casino.
"Impositions" has the meaning set forth in Section 5.08.
"Indebtedness" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Independent" when used with respect to any specified Person means such a
Person who (i) is in fact independent, (ii) does not have any direct financial
interest or any material indirect financial interest in Mortgagor or in any
Affiliate of Mortgagor and (iii) is not connected with Mortgagor or any
Affiliate of Mortgagor as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions. Whenever it is herein
provided that any Independent Person's opinion or certificate shall be furnished
to Mortgagee, such opinion or certificate shall state that the signer has read
this definition and that the signer is Independent within the meaning thereof. A
Person who is performing or who has performed services as an independent
contractor to any specified Person shall not be considered not Independent
merely by reason of the fact that such Person is performing or has performed
such services.
"Insurance Amount" has the meaning set forth in Section 5.11(a)(i).
"Insurance Requirements" means all terms of any insurance policy covering
or applicable to the Trust Estate or
<PAGE>
any part thereof, all requirements of the issuer of any such policy, and all
orders, rules, regulations and other requirements of the National Board of Fire
Underwriters (or any other body exercising similar functions) applicable to or
affecting the Trust Estate or any part thereof or any use or condition of the
Trust Estate or any part thereof.
"Insurer" means (i) an insurance company or companies selected by Mortgagor
authorized to issue insurance in the State of New Jersey with an A.M. Best &
Company, Inc. rating level of A minus or better and an A.M. Best & Company, Inc.
financial size category of X or better or, if such carrier is not rated by A.M.
Best & Company, Inc., having the financial stability and size deemed appropriate
by an opinion from a reputable insurance broker.
"Issuers" has the meaning set forth in Section 1.1 of the Trust Indenture.
"Land" means, collectively, the Owned Land and the Leased Land.
"Lease" means each lease or sublease (made by Mortgagor as lessor or
sublessor, as the case may be) of any space in any building or buildings, an
interest in which building or buildings constitutes a part of the Trust Estate,
including every agreement relating thereto or entered into in connection
therewith and every guarantee of the performance and observance of the
covenants, conditions and agreements to be performed by the lessee or sublessee
under any such lease or sublease. For purposes hereof, the term "Lease" shall
include any license agreement, concession agreement or other occupancy
agreement. Notwithstanding the foregoing, the term "Lease" shall not include any
transient room rentals.
"Leased Facilities" means, collectively, the Leased Land and any buildings
and improvements now or hereafter located thereon.
"Leased Land" means, collectively, the Ground Lease Land and any other land
that is now or hereafter subject to a Facility Lease.
"Legal Requirements" means all laws, statutes, codes, acts, ordinances,
orders, judgments, decrees, injunctions, rules, regulations, permits, licenses,
authorizations, directions and requirements (including, without limitation, the
New Jersey Casino Control Act, the New Jersey Industrial Site Recovery Act and
the New Jersey Spill Compensation and Control Act of 1976) of all governments,
departments, commissions, boards, courts, authorities, agencies, officials and
officers, of governments, federal, state and municipal (including, without
limitation, the New Jersey Department of Environmental Protection, the Atlantic
City Bureau of Investigations, the Division of Gaming Enforcement
<PAGE>
of the State of New Jersey, and the Casino Control Commission of the State of
New Jersey, foreseen or unforeseen, ordinary or extraordinary, which now are or
at any time hereafter become applicable to the Trust Estate or any part thereof,
or any of the adjoining sidewalks, or any use or condition of the Trust Estate
or any part thereof, including, without limitation, the use of the Casino Hotel
as a gaming or gambling facility.
"Lessors" means the lessors under the Facility Leases.
"Lien" has the meaning set forth in Section 1.1 of the Trust Indenture.
"Material Instrument Requirements" means the applicable terms, conditions
and provisions of (i) the Ground Leases with respect to the Ground Lease Land,
(ii) the Parking Parcel Mortgage with respect to the Parking Parcel, (iii) the
Parking Leases with respect to the Parking Lease Land, (iv) the Egg Harbor
Mortgage with respect to the Egg Harbor Parcel and (v) any other Facility Lease
with respect to the portion of the Premises covered thereby.
"Maturity" when used with respect to any Indebtedness means the date on
which the principal (or any portion thereof) of such Indebtedness becomes due
and payable as therein or herein provided, whether at the Stated Maturity, upon
acceleration, optional redemption, required repurchase, scheduled principal
payment or otherwise.
"Mortgage" means this Indenture of Mortgage and Security Agreement, as
amended or supplemented from time to time in accordance with the terms hereof.
"Mortgage Documents" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Mortgage Notes" means the Issuers' First Mortgage Notes due 2006 in an
aggregate principal amount of $1,200,000,000, issued pursuant to the Trust
Indenture, including the guarantees thereof by the Guarantors.
"Mortgagee" means the Persons named as "Mortgagee" in the first paragraph
of this instrument including any successor entity which shall have become such
pursuant to the applicable provisions of the Collateral Agency Agreement and
this Mortgage.
"Mortgagor" means the Person named as "Mortgagor" in the first paragraph of
this instrument including any successor entity which shall have become such
pursuant to the applicable provisions of this Mortgage.
"Mortgagor Request" means a written request of the Mortgagor in the form of
an Officers' Certificate.
<PAGE>
"Notices" has the meaning set forth in Section 1.02.
"Obligations" has the meaning set forth in Section 1 of the Collateral
Agency Agreement.
"Officer" has the meaning set forth in Section 1.1 of the Trust Indenture.
"Officers' Certificate" has the meaning set forth in Section 1.1 of the
Trust Indenture.
"Operating Assets" has the meaning set forth in Granting Clause Fifth.
"Opinion of Counsel" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Original Policy" means the ALTA Loan Policies of Title Insurance issued by
Commonwealth Land Title Insurance Company, First American Title Insurance Co.
and Chicago Title Insurance Company, pursuant to Commonwealth Land Title
Insurance Company Title Commitment No. F238427L and Commonwealth Land Title
Insurance Company Title Commitment No. F239636L, redated the date hereof,
insuring Mortgagee as to the Liens of this Mortgage and the Taj Mortgage in an
aggregate amount of not less than $1,200,000,000.
"Outstanding Amount" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Owned Land" has the meaning set forth in Granting Clause First.
"Parking Lease Land" means the real property described in Schedule 3.
"Parking Leases" means the leases and licenses described in Schedule 3.
"Parking Parcel" means the portion of the Owned Land designated as the
"Parking Parcel" on Schedule 1.
"Parking Parcel Mortgage" means the Mortgage made by Donald J. Trump,
nominee, to Albert Rothenberg and Robert Rothenberg, dated October 3, 1983,
securing a note in the original principal amount of $4,100,000 and recorded
October 6, 1983 in Mortgage Book 2900, page 233, encumbering portions of the
Parking Parcel, and any Refinancing Indebtedness thereof, to the extent the same
are permitted under the Trust Indenture and Section 5.21(b)(i).
"Permits" has the meaning set forth in Section 1.1 of the Trust Indenture.
<PAGE>
"Permitted Liens" has the meaning set forth in Section 1.1 of the Trust
Indenture. All references to the subsections of the definition of Permitted
Liens shall mean the subsections of the definition of Permitted Liens as set
forth in the Trust Indenture.
"Person" means any individual, corporation, limited or general partnership,
joint venture, association, joint stock company, trust, unincorporated
organization or any other entity or government or any agency or political
subdivision thereof.
"Premises" has the meaning set forth in Granting Clause Third.
"Prospectus" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Refinancing Indebtedness" has the meaning set forth in Section 1.1 of the
Trust Indenture.
"Restricted Encumbrances" means (i) Leases which are subordinate to or
shall be subordinate to the Lien of this Mortgage pursuant to Section 5.13, (ii)
the Mortgage Documents, and any other instrument now or hereafter executed, as
additional security for the obligations secured by this Mortgage, (iii) any Lien
which pursuant to the terms of the Trust Indenture, the Collateral Agency
Agreement and the terms hereof is to be subordinate to, or pari passu with, the
Lien of this Mortgage and (iv) the leases and licenses which as of April 17,
1996 are subordinate to the Lien of this Mortgage pursuant to their terms or the
terms of any non-disturbance agreement executed in connection therewith; it
being intended that Restricted Encumbrances constitute those Permitted Liens
which are subordinate to, or pari passu with, the Lien of this Mortgage.
"Rothenberg Lease" means that certain Ground Lease, dated June 16, 1969,
recorded June 18, 1969 in Deed Book 2478 page 276, among Albert Rothenberg and
Robert Rothenberg, as lessors, and Four Seasons Motel Inc., as amended by (i)
Assignment of Lease, dated January 31, 1978, recorded February 9, 1978 in Deed
Book 3205 page 48, by Four Seasons Motel Inc. to Isadore Mokrin and Dorothy
Mokrin, (ii) Assignment of Lease, dated February 1, 1978, recorded February 9,
1978 in Deed Book 3205 page 52, by Isadore Mokrin and Dorothy Mokrin to Isadore
Mokrin and Dorothy Mokrin Partnership, (iii) Assignment of Lease, dated March
13, 1978 recorded March 21, 1978 in Deed Book 3215 page 5, by Isadore Mokrin and
Dorothy Mokrin Partnership to Boardwalk Properties Inc., (iv) Amended Lease,
dated March 9, 1979, recorded April 9, 1979 in Deed Book 3332 page 33, among
Albert Rothenberg and Robert Rothenberg, as lessors, and Boardwalk Properties
Inc., as lessee, (v) Assignment and Assumption of Tenant's Interest in Lease,
dated March 18, 1989 recorded March 20, 1989 in Deed Book 4865 page 223, by and
between Boardwalk Properties Inc. and Donald J. Trump, (vi) Assignment and
<PAGE>
Assumption of Tenant's Interest in Lease, dated May 18, 1989 recorded June 19,
1989 in Deed Book 4921 page 183, by and between Boardwalk Properties Inc. and
Donald J. Trump, (vii) Assignment of Lease, dated June 24, 1993 recorded June
25, 1993 in Deed Book 5517 page 110, by and between Donald J. Trump to Missouri
Boardwalk, Inc. and (viii) Assignment of Lease, dated April 17, 1996, by and
between Missouri Boardwalk Inc. and Trump Plaza Associates.
"Securities Act" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Secured Beneficiaries" has the meaning set forth in Section 1 of the
Collateral Agency Agreement.
"Secured Loans" has the meaning set forth in Section 1 of the Collateral
Agency Agreement.
"Security Agreement" means the Security Agreement, dated as of the date
hereof, among the Issuers, Guarantors and Mortgagee.
"Stated Maturity" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Subsidiaries" has the meaning set forth in Section 1.1 of the Trust
Indenture.
"Superior Mortgages" means, collectively, the Parking Parcel Mortgage and
the Egg Harbor Mortgage.
"Taj Mortgage" means the Indenture of Mortgage and Security Agreement,
dated as of the date hereof, made by Trump Taj Mahal Associates for the benefit
of Mortgagee, as amended or supplemented from time to time in accordance with
the terms thereof.
"Tangible Personal Property" has the meaning set forth in Granting Clause
Fifth.
"Trust Estate" has the meaning stated in the habendum to the Granting
Clauses.
"Trust Indenture" means that certain Indenture of even date herewith among
Mortgagor, the Issuers, Guarantors and First National Bank Association, as
Trustee, as it may from time to time be supplemented, modified or amended in
accordance with its terms by one or more trust indentures or other instruments
supplemental thereto entered into pursuant to the applicable provisions thereof,
a form of which (without exhibits) is attached hereto as Exhibit A.
"Trust Indenture Act" has the meaning set forth in Section 1.1 of the Trust
Indenture.
<PAGE>
"Trustee" means the Person named as the "Trustee" in the first paragraph of
the Trust Indenture and any successor thereto.
"TSA" means Trump Seashore Associates, a New Jersey general partnership.
"TSA Parcel" means the portion of the Ground Lease Land designated as the
"TSA Parcel" on Schedule 2.
"Uniform Commercial Code" means the New Jersey Uniform Commercial Code
N.J.S.A. 12A:1-101 et seq.
Notices.
Any request, demand, authorization, direction, notice (including, without
limitation, a notice of default), consent, waiver or other document provided or
permitted by this Mortgage to be made upon, given or furnished to, or filed
with, Mortgagor or Mortgagee (collectively, "Notices") shall be in writing and
shall be sufficiently given if made by hand delivery, by telex, by telecopier or
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
To Mortgagor:
Trump Plaza Associates
Mississippi Avenue and The Boardwalk
Atlantic City, New Jersey 08401
Attn: Chief Financial Officer
with a copy to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Attn: Jack H. Nusbaum, Esq.
To Mortgagee:
First Bank National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Attn: Corporate Trust Department
Mortgagee or Mortgagor by notice in accordance with the terms hereof to the
other party may designate additional or different addresses as shall be
furnished in writing by such party. Any notice or communication to the Mortgagee
or Mortgagor shall be deemed to have been given or made as of the date so
delivered, if personally delivered; when answered back, if telexed; when receipt
is acknowledged, if telecopied; and 5 Business
<PAGE>
Days after mailing if sent by registered or certified mail, postage prepaid
(except that a notice of change of address shall not be deemed to have been
given until actually received by the addressee).
Form and Contents of Documents Delivered to Mortgagee.
Any Officers' Certificate or Opinion of Counsel delivered to Mortgagee in
connection with this Mortgage shall be in compliance with the provisions of
Section 12.5 of the Trust Indenture.
Every application, certificate, report, affidavit, opinion, consent,
statement or other instrument required to be delivered to Mortgagee under this
Mortgage or under any other Mortgage Document shall be in writing and shall be
prepared and delivered without cost or expense to Mortgagee.
Compliance Certificates and Opinions.
Upon any application or request by Mortgagor to Mortgagee to take any
action under any provision of this Mortgage, Mortgagor shall furnish to
Mortgagee an Officers' Certificate and an Opinion of Counsel in compliance with
the provisions of Section 12.4 of the Trust Indenture.
Effect of Headings and Table of Contents.
The Article and Section headings herein and in the Table of Contents are
for convenience only and shall not affect the construction hereof.
Successors and Assigns; Amendments.
Subject to the provisions of Section 1.10 hereof and Section 6.2 of the
Trust Indenture, and without limiting the generality of Section 1.12 hereof,
this Mortgage shall be binding upon and inure to the benefit of the parties
hereto and of the respective successors and assigns of the parties hereto to the
same effect as if each such successor or assign were in each case named as a
party to this Mortgage.
This Mortgage may not be modified, amended, discharged, released nor any of
its provisions waived except by agreement in writing executed by Mortgagor and
Mortgagee and in accordance with the provisions of this Mortgage and the Trust
Indenture.
Separability Clause.
In case any provision in this Mortgage shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
<PAGE>
Benefits of Mortgage.
Without limiting the generality of Section 1.12, nothing in this Mortgage,
express or implied, shall give to any Person, other than the parties hereto and
their successors and assigns, any benefit or any legal or equitable right,
remedy or claim under this Mortgage.
Governing Law.
This Mortgage shall be deemed to be a contract under the laws of the State
of New Jersey and shall be construed in accordance with and governed by the laws
of the State of New Jersey.
<PAGE>
0.
1.
2.
3.
4.
5.
6.
7.
8.
Limitation on Liability.
A direct or indirect partner, director, officer, employee or stockholder,
as such, past, present or future of the Mortgagor or any successor entity shall
not have any personal liability in respect of the obligations under this
Mortgage by reason of his or its status as such partner, director, officer,
employee or stockholder except to the extent such is an Issuer or a Guarantor.
Each Holder by accepting a Security (as defined in the Trust Indenture) waives
and releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Securities.
<PAGE>
Provisions Required by Trust Indenture.
Whenever the provisions of this Mortgage and the provisions of the Trust
Indenture shall be inconsistent, the provisions of the Trust Indenture shall
govern.
Rights of Mortgagee.
Except as otherwise provided in Section 5 of the Collateral Agency
Agreement:
Mortgagee may rely, and shall be protected in acting or refraining from
acting, upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
any request or direction of Mortgagor mentioned herein shall be sufficiently
evidenced by a Mortgagor Request;
whenever in the administration of this Mortgage, Mortgagee shall deem it
desirable that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, Mortgagee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officers' Certificate;
Mortgagee may consult with counsel and any written advice of such counsel or
any Opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by Mortgagee hereunder in
good faith and in reliance thereon;
Mortgagee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, approval, appraisal, bond,
debenture, note, coupon, security or other paper or document but Mortgagee, in
its discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if Mortgagee shall determine to make such
further inquiry or investigation, it shall be entitled (subject to the express
limitations with respect thereto contained in this Mortgage) to examine the
books, records and premises of Mortgagor, personally or by agent or attorney;
Mortgagee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys, and
Mortgagee shall not be responsible for any misconduct or negligence on the part
of any agent or attorney appointed with due care by it hereunder;
<PAGE>
Mortgagee shall not be personally liable, in case of entry by it upon the
Trust Estate, for debts contracted or liabilities or damages incurred in the
management or operation of the Trust Estate; and
no provision of this Mortgage shall require Mortgagee to expend or risk its
own funds or otherwise incur any financial liability in the performance of its
obligations hereunder, or in the exercise of any of its rights or powers.
The provisions of this Section 1.12 shall apply to all Mortgage Documents.
Mortgage Subject to Casino Control Act.
Each provision of this Mortgage is subject to and shall be enforced in
compliance with the provisions of the New Jersey Casino Control Act.
Discharge of Lien.
If Mortgagor shall pay or cause to be paid, or there shall otherwise be
paid, to Mortgagee all amounts required to be paid by Mortgagor pursuant to the
this Mortgage and all Obligations pursuant to the Debt Documents, including,
without limitation, the Mortgage Notes and the Guarantee, shall have been
satisfied and (a) the conditions precedent for the Trust Indenture to cease,
determine and become null and void (except for any surviving rights of transfer
or exchange of the Mortgage Notes provided in the Trust Indenture and for the
obligation to pay the Trustee's fees and expenses provided in Section 8.7 of the
Trust Indenture) in accordance with Article Nine of the Trust Indenture shall
have occurred, or (b) there shall have occurred a Legal Defeasance (as defined
in Section 9.2 of the Trust Indenture) of the Mortgage Notes, or (c) there shall
have occurred a Covenant Defeasance (as defined in Section 9.3 of the Trust
Indenture), then in any such case Mortgagee shall promptly cancel and discharge
the Mortgage Documents, including, without limitation, this Mortgage, and any
financing statements filed in connection herewith and execute and deliver to
Mortgagor all such instruments as may be necessary, required or appropriate to
evidence such discharge and satisfaction of said Lien or Liens. In connection
with the disposition of all or any portion of the Trust Estate free and clear of
the Lien of this Mortgage in accordance with the terms of Section 4.3 of the
Trust Indenture, Mortgagee shall promptly execute and deliver to Mortgagor all
such instruments as may be necessary, required or appropriate to evidence the
release of such portion of the Trust Estate from the Lien of this Mortgage. Upon
such release, the terms, conditions and obligations hereunder shall no longer
apply to the portion of the Trust Estate so released and all defined terms
hereunder shall be deemed appropriately modified.
General Application.
<PAGE>
The remedies of Mortgagee upon any default by Mortgagor in the fulfillment
of any of its obligations hereunder shall be limited in each instance by the
provisions of Section 1.10, whether or not the provisions providing for such
remedies explicitly refer to such Section.
The assertion of any rights upon any Default shall be subject in each
instance to, if required, the giving of any notice and the expiration of any
grace period provided for in Section 3.01 as a condition to such Default
becoming an Event of Default, unless the Trust Indenture Act requires otherwise,
in which case the Trust Indenture Act shall control.
For the purposes of this Mortgage, it is understood that an event which
does not materially diminish the value of Mortgagee's interest in the Trust
Estate shall not be deemed an "impairment of security," as that phrase is used
in this Mortgage.
Mortgage Deemed to be Security Agreement.
To the extent that the grant of a security interest in any portion of the
Trust Estate is governed by the Uniform Commercial Code, this Mortgage is hereby
deemed to be as well a security agreement under the Uniform Commercial Code for
the purpose of creating hereby a security interest in all of Mortgagor's right,
title and interest in and to said property, securing the obligations secured
hereby, for the benefit of Mortgagee.
ARTICLE TWO
RELEASE; SUBORDINATION
<PAGE>
Possession by Mortgagor.
So long as there shall have been no acceleration of maturity of any
Indebtedness secured hereby, including, without limitation, the Mortgage Notes,
Mortgagor shall be suffered and permitted, with power freely and without let or
hindrance on the part of Mortgagee, subject to the provisions of this Mortgage
and the Trust Indenture, to possess, use, manage, operate and enjoy the Trust
Estate and every part thereof and to collect, receive, use, invest and dispose
of the rents, issues, tolls, profits, revenues and other income from the Trust
Estate or any part thereof, to use, consume and dispose of any consumables,
goods, wares and merchandise in the ordinary course of business of operating the
Casino Hotel and to adjust and settle all matters relating to choses in action,
leases and contracts.
Obsolete Property.
Mortgagor shall have the rights granted to it with respect to the
disposition of certain Tangible Personal Property secured hereby pursuant to
Section 4.3 of the Trust Indenture (but subject to all restrictions pertaining
thereto), the terms of which are incorporated herein by reference.
Mortgagee shall, from time to time, promptly execute any written instrument
in form satisfactory to Mortgagee to confirm the propriety of any action taken
by Mortgagor under this Section 2.02, upon receipt by Mortgagee of a Mortgagor
Request requesting the same, together with an Officers' Certificate stating that
the action so to be confirmed was duly taken in conformity with this Section
2.02, and that the execution of such written instrument is appropriate to
confirm the propriety of such action under this Section 2.02; provided, that
Mortgagee shall have no liability thereunder and all costs and expenses
(including, without limitation, reasonable attorneys' fees and disbursements)
shall be paid by Mortgagor.
F,F&E Financing Agreements.
<PAGE>
Notwithstanding any provision contained in this Mortgage or the Trust
Indenture to the contrary, if Mortgagor has acquired or hereafter acquires
Tangible Personal Property and/or other items constituting operating assets
subject to any F,F&E Financing Agreement, or becomes the lessee under a lease
for any of the same and if the document evidencing such F,F&E Financing
Agreement prohibits subordinate Liens or the provisions of any such lease
prohibits any assignment thereof by the lessee, and if any such prohibition is
customary with respect to similar transactions of the lender or lessor (as
evidenced by an Officers' Certificate delivered to Mortgagee, together with such
other evidence as Mortgagee may reasonably request), as the case may be, then
the property so purchased or the lessee's interest in the lease, as the case may
be, shall be deemed to be Excepted Property. If any such F,F&E Financing
Agreement permits subordinate Liens then Mortgagee shall execute and deliver to
Mortgagor, at Mortgagor's expense, such documents as the holder of such F,F&E
Financing Agreement may reasonably request to evidence the subordination of the
Lien of this Mortgage and the Mortgage Documents to the Lien of such F,F&E
Financing Agreement.
Intentionally Omitted.
ARTICLE THREE
REMEDIES
<PAGE>
Events of Default.
"Event of Default," whenever used herein, means an "Event of Default," as
defined in Section 7.1 of the Trust Indenture, shall occur and be continuing
(whatever the reason for such event and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body).
Application of Moneys Received by Mortgagee.
Any moneys received by Mortgagee pursuant to the provisions of this Article
Three (including moneys received after any action or act by Mortgagee under
Section 3.10) shall be applied by Mortgagee in accordance with the provisions of
Section 7.6 of the Trust Indenture.
Restoration of Rights and Remedies.
If Mortgagee has instituted any proceeding to enforce any right or remedy
under this Mortgage and such proceeding has been discontinued or abandoned for
any reason or has been determined adversely to Mortgagee, then and in every such
case Mortgagor and Mortgagee shall, subject to any determination in such
proceeding, be restored to their respective former positions hereunder, and
thereafter all rights and remedies of Mortgagee shall continue as though no such
proceeding had been instituted.
Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to Mortgagee is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Delay or Omission Not Waiver.
No delay or omission of Mortgagee to exercise any right or remedy accruing
upon an Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and
remedy given by this Article Three or by applicable law to Mortgagee may be
exercised, from time to time, and as often as may be deemed expedient, by
Mortgagee.
Undertaking for Costs.
<PAGE>
If any action or proceeding shall be commenced (including, without
limitation, an action to foreclose this Mortgage or to collect the Indebtedness
or under the Guarantee secured hereby) to which action or proceeding Mortgagee
is made or becomes a party, or in which it becomes necessary in the opinion of
Mortgagee to defend or uphold the Lien of this Mortgage, then Mortgagor shall
pay to Mortgagee all expenses, including, without limitation, reasonable
attorneys, fees, disbursements and court costs incurred by Mortgagee in
connection therewith, together with interest at the rate then payable on such
Indebtedness, from the date of payment less the net amount received by
Mortgagee, as its interest may appear under any title insurance policy, and,
until paid, all such expenses, together with interest as aforesaid, shall be
secured by the Lien of this Mortgage.
Waiver of Appraisement and Other Laws.
To the full extent that it may lawfully so agree, Mortgagor will not at any
time insist upon, plead, claim or take the benefit or advantage of, any
appraisement, valuation, stay, extension or redemption law now or hereafter in
force, in order to prevent or hinder the enforcement of this Mortgage or the
absolute sale of the Trust Estate, or any part thereof, or the possession
thereof by any purchaser at any sale under this Article Three; and Mortgagor,
for itself and all who may claim under Mortgagor, so far as Mortgagor or they
now or hereafter may lawfully do so, hereby waives the benefit of all such laws.
Mortgagor, for itself and all who may claim under Mortgagor, waives, to the
extent that Mortgagor may lawfully do so, all right to have the property in the
Trust Estate marshalled upon any foreclosure hereof, and agrees that any court
having jurisdiction to foreclose this Mortgage may order the sale of the Trust
Estate as an entirety.
If any law in this Section 3.07 referred to and now in force, of which
Mortgagor or its successor or successors might take advantage despite this
Section 3.08, shall hereafter be repealed or cease to be in force, such law
shall not thereafter be deemed to constitute any part of the contract herein
contained or to preclude the application of this Section 3.07.
Entry.
<PAGE>
Mortgagor agrees that upon the occurrence, and during the continuance, of
an Event of Default, Mortgagor, upon demand of Mortgagee, shall forthwith
surrender to Mortgagee the actual possession of, and it shall be lawful for
Mortgagee by such officers or agents as it may appoint to enter and take
possession of, the Trust Estate (and the books and papers of Mortgagor), and to
hold, operate and manage the Trust Estate (including the making of all needful
repairs, and such alterations, additions and improvements as Mortgagee shall
deem wise) and to receive the rents, issues, tolls, profits, revenues and other
income thereof, and, after deducting the costs and expenses of entering, taking
possession, holding, operating and managing the Trust Estate, as well as
payments for taxes, insurance and other proper charges upon the Trust Estate and
reasonable compensation to itself, its agents and counsel, to apply the same as
provided in Section 3.02; provided, however, that Mortgagee's rights under this
Section 3.08 shall be subject to the provisions of the New Jersey Casino Control
Act and Section 3.13. Whenever all that is then due upon the Debt Documents,
including without limitation, the Mortgage Notes and under any of the terms of
this Mortgage shall have been paid and all defaults hereunder shall have been
cured, Mortgagee shall surrender possession to Mortgagor.
Power of Sale; Suits for Enforcement.
If an Event of Default shall occur and be continuing, Mortgagee, with or
without entry, in its discretion, may:
sell, subject to any mandatory requirements of applicable law, the Trust
Estate as an entirety, or in such parcels, as Mortgagee may determine, to the
highest bidder at public auction at such place and at such time (which sale may
be adjourned by Mortgagee from time to time in its discretion by announcement at
the time and place fixed for such sale, without further notice) and upon such
terms as Mortgagee may fix and briefly specify in a notice of sale to be
published as required by law; or
proceed to protect and enforce its rights under this Mortgage by sale
pursuant to judicial proceedings or by a suit, action or proceeding in equity or
at law or otherwise, whether for the specific performance of any covenant or
agreement contained in this Mortgage or in aid of the execution of any power
granted in this Mortgage or for the foreclosure of this Mortgage or for the
enforcement of any other legal, equitable or other remedy, as Mortgagee shall
deem most effectual to protect and enforce any of the rights of Mortgagee; the
failure to join tenants shall not be asserted as a defense to any foreclosure or
proceeding to enforce the rights of Mortgagee.
Section 3.10 Incidents of Sale.
<PAGE>
Upon any sale of any of the Trust Estate, whether made under the power of
sale hereby given or pursuant to judicial proceedings, to the extent permitted
by law:
(a) subject to the provisions of Section 3.13 and the receipt of any
required prior approvals of the New Jersey Casino Control Commission,
Mortgagee may bid for and purchase the property offered for sale, and upon
compliance with the terms of sale may hold, retain, possess and dispose of
such property, without further accountability, and may, in paying the
purchase money therefor, deliver the Mortgage Notes or any other Debt
Document or claims for interest thereon in lieu of cash to the amount which
shall, upon distribution of the net proceeds of such sale, be payable
thereon, and the Mortgage Notes or any other Debt Document, in case the
amounts so payable thereon shall be less than the amount due thereon, shall
be returned to Mortgagee after being appropriately stamped to show partial
payment;
(b) Mortgagee may make and deliver to the purchaser or purchasers a
good and sufficient deed, bill of sale and instrument of assignment and
transfer of the property sold;
(c) Mortgagee is hereby irrevocably appointed the true and lawful
attorney of Mortgagor, in its name and stead, to make all necessary deeds,
bills of sale and instruments of assignment and transfer of the property
thus sold; and for that purpose it may execute all necessary deeds, bills
of sale and instruments of assignment and transfer, and may substitute one
or more persons, firms or corporations with like power, Mortgagor hereby
ratifying and confirming all that its said attorney or such substitute or
substitutes shall lawfully do by virtue hereof; but if so requested by
Mortgagee or by any purchaser, Mortgagor shall ratify and confirm any such
sale or transfer by executing and delivering to Mortgagee or to such
purchaser or purchasers all proper deeds, bills of sale, instruments of
assignment and transfer and releases as may be designated in any such
request;
(d) all right, title, interest, claim and demand whatsoever, either at
law or in equity or otherwise, of Mortgagor of, in and to the property so
sold shall be divested and such sale shall be a perpetual bar both at law
and in equity against Mortgagor, its successors and assigns, and against
any and all persons claiming or who may claim the property sold or any part
thereof from, through or under Mortgagor, its successors and assigns; and
(e) the receipt of Mortgagee or of the officer making such sale shall
be a sufficient discharge to the purchaser or purchasers at such sale for
his or their purchase money and such purchaser or purchasers and his or
their assigns or personal representatives shall not, after paying such
purchase money and receiving such receipt, be obliged to see to the
application of such purchase money, or be in anywise answerable for any
loss, misapplication or non-application thereof.
<PAGE>
Section 3.11. Receiver.
Upon the occurrence of an Event of Default and commencement of judicial
proceedings by Mortgagee to enforce any right under this Mortgage, Mortgagee
shall be entitled, as against Mortgagor, without notice or demand and without
regard to the adequacy of the security for the Mortgage Notes, the Guarantee or
any other Debt Document or the solvency of Mortgagor, to the appointment of a
receiver of the Trust Estate, and of the rents, issues, profits, revenues and
other income thereof; provided, however, that Mortgagee's rights under this
Section 3.11 shall be subject to the provisions of the New Jersey Casino Control
Act and Section 3.13 hereof.
Section 3.12. Suits to Protect the Trust Estate.
Mortgagor hereby acknowledges the right of Mortgagee, in the name and on
behalf of Mortgagor, (a) to appear in and defend any action or proceeding
brought with respect to the Trust Estate or any part thereof and (b) upon 5
days' prior notice to Mortgagor (or such shorter period or without notice if
deemed necessary and appropriate by Mortgagee), Mortgagee shall have power to
institute and to maintain such proceedings as Mortgagee may deem necessary and
appropriate, but in the case of (a) and (b) to prevent any impairment of
security or any impairment of the Trust Estate in all cases by any acts which
may be unlawful or in violation of this Mortgage and to protect Mortgagee's
interests in the Trust Estate and in the rents, issues, profits, revenues and
other income arising therefrom, including the right to institute and maintain
proceedings to restrain the enforcement of or compliance with any governmental
enactment, rule or order that may be unconstitutional or otherwise invalid, if
the enforcement of or compliance with such enactment, rule or order would impair
the security hereunder or be materially prejudicial to the interests of
Mortgagee.
Section 3.13. Management of the Premises.
Without limiting the generality of any other provision of this Article
Three, following an Event of Default and the taking of possession of the Trust
Estate or any part thereof by Mortgagee and/or the appointment of a receiver of
the Trust Estate or any part thereof, Mortgagee or any such receiver shall be
authorized, in addition to the rights and powers of Mortgagee and such receiver
set forth elsewhere in this Mortgage, to take any action permitted under Article
Seven of the Trust Indenture.
ARTICLE FOUR
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
<PAGE>
01. Consolidation, Merger, Conveyance or Transfer only on Certain Terms.
Mortgagor shall be bound by all provisions applicable to Mortgagor in
Section 13.6 of the Trust Indenture, the terms of which are incorporated herein
by reference.
ARTICLE FIVE
COVENANTS AND REPRESENTATIONS OF MORTGAGOR
<PAGE>
01. Performance of Obligations.
Mortgagor shall duly and punctually pay and perform the Obligations in
accordance with the terms of the Debt Documents to which it is a party
(including, without limitation, Article Thirteen of the Trust Indenture).
02. F,F&E Financing Agreements.
Mortgagor shall comply with all of the terms and conditions set forth in
any F,F&E Financing Agreements before the expiration of any applicable notice
and cure periods contained in any such F,F&E Financing Agreements.
03. Limitations on Liens and Transfers.
(a) Except as otherwise expressly permitted under this Mortgage and the
Trust Indenture (including, without limitation, Article Five of the Trust
Indenture), Mortgagor shall not create, incur, suffer or permit to be created or
incurred or to exist any Lien on all or any portion of the Trust Estate, other
than Permitted Liens.
(b) The Lien of this Mortgage shall be subject and subordinate to the Lien
of any Existing Encumbrances and the Permitted Liens described in subsections
(a) (other than with respect to Refinancing Indebtedness of the Securities (as
defined in the Trust Indenture)), (c) (but only to the extent that such F,F&E
Financing Agreement requires the Lien of this Mortgage to be subordinate
thereto), (i) and (j) (but only to the extent that such Acquired Indebtedness
(as defined in the Trust Indenture) requires the Lien of this Mortgage to be
subordinate thereto) of the definition of Permitted Lien, to the extent that
each thereof encumbers Mortgagor's interest in the Trust Estate or any part
thereof. The foregoing provisions of this Section 5.03(b) shall be
self-operative and no further instrument shall be required to give effect to
such subordination. Mortgagee shall, however, from time to time, after receipt
of a Mortgagor Request therefor (accompanied by an Officers' Certificate stating
that said conditions have been satisfied) execute instruments in form and
substance reasonably satisfactory to the holder of a particular Superior
Mortgage confirming such subordination.
(c) Mortgagor shall not sell, assign, lease or otherwise transfer all or
any portion of the Trust Estate or any interest therein (including, without
limitation, any interest in the Ground Leases) in violation of the terms of this
Mortgage or the terms of the Trust Indenture (including, without limitation,
Sections 4.3 and 13.6 of the Trust Indenture). Without limiting the generality
of the foregoing, Mortgagor shall not separate, or attempt to separate, its
ownership of its interest in the Ground Leases from the ownership of the
buildings constituting the Casino Hotel or any part thereof. Notwithstanding the
foregoing,
<PAGE>
Mortgagor shall have the right, at any time and from time to time, unless an
Event of Default shall have occurred and be continuing, without any release from
or consent by Mortgagee, to grant Permitted Liens; provided, (i) that none of
the same will reduce or impair, in any material respect, (A) the value or
usefulness of the Trust Estate or (B) the normal operation of the Casino Hotel
in accordance with all Legal Requirements and all Permits, (ii) no Event of
Default has occurred and is continuing and (iii) Mortgagor shall promptly
deliver to Mortgagee a duplicate original of the instrument, if any, pursuant to
which such grant is to be made, and such other instruments, certificates and
opinions as Mortgagee may reasonably request. The foregoing provisions of this
Section 5.03(c) shall be self-operative and no further instrument shall be
required to evidence the consent of Mortgagee to the grant or other conveyance
of such rights-of-way or easements. Mortgagee shall, however, from time to time,
after receipt of a Mortgagor Request therefor (accompanied by an Officers'
Certificate stating that said conditions have been satisfied) execute
instruments in form and substance reasonably satisfactory to Mortgagee
confirming the permissibility of such grant or other conveyance but only with
respect to the Permitted Liens incurred after the date hereof described in
subsections (a) (but only with respect to Refinancing Indebtedness), (d), (e),
(i), (j) and (k) of the definition of Permitted Liens.
04. Environmental.
Without limiting the generality of any other provision of this Mortgage,
Mortgagor covenants, represents and warrants to Mortgagee as follows:
(a) Mortgagor shall comply with any and all federal, state and local
environmental legislation, rules, and regulations in effect as of the date of
this Mortgage and subsequent thereto, including, without limitation, the Spill
Compensation and Control Act (N.J.S.A. 58:10-23.11 et seq.) (the "Spill Act");
the Industrial Site Recovery Act (N.J.S.A. 13:lK-6 et seq.) ("ISRA"); the Solid
Waste Management Act (N.J.S.A. 13:E-1 et seq.); the Resource, Conservation and
Recovery Act (42 U.S.C. Section 6901 et seq.) ("RCRA"); the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601
et seq.) ("CERCLA"), each as amended, and such other environmental legislation,
rules and regulations, as are in or may come into effect and apply to (i)
Mortgagor and/or Mortgagee with respect to the Premises or (ii) the transactions
contemplated hereby, and as to any occupants or users of the collateral, whether
as lessees, tenants, licensees or otherwise, Mortgagor shall use its best
efforts to cause same to comply with said legislation, rules and regulations.
Mortgagor agrees to pay all costs required in connection with compliance with
the foregoing legislation, rules and regulations.
<PAGE>
(b) Mortgagor has not used in the past, nor shall Mortgagor use in the
future, the Premises for the purpose of refining, producing, storing, handling,
transferring, processing or transporting "Hazardous Substances", as such term is
defined in ISRA, the Spill Act, CERCLA or the regulations relating thereto,
except that Mortgagor and its subsidiaries have used, and Mortgagor may continue
in the future to use, substances in the operation and maintenance of the
Premises, including, without limitation, heating oil, gasoline and cleaning
chemicals which could be considered as "Hazardous Substances" under the
preceding definition.
(c) To the best of Mortgagor's knowledge, after due inquiry and
investigation, none of the real property owned, leased and/or occupied by
Mortgagor and located in the State of New Jersey, including, without limitation,
the Premises, has been or is now being used as a "Major Facility" as such term
is defined in N.J.S.A. 58:10-23.llb(l). Mortgagor will not use the Premises in
the future as a "Major Facility".
(d) To the best of Mortgagor's knowledge, after due inquiry and
investigation, no Lien has been attached to any revenues or any real or personal
property owned by Mortgagor or the Premises, as a result of the Chief Executive
of the New Jersey Spill Compensation Fund expending monies from said fund to pay
for "Cleanup Costs", as such term is defined in N.J.S.A. 58:10-23.llb(d),
arising from an intentional or unintentional action or omission of Mortgagor or
any previous owner and/or operator of such real property.
(e) There is no asbestos or asbestos containing material on the Premises
currently owned, operated or leased by Mortgagor. To the best of Mortgagor's
knowledge, after due inquiry and investigation, there are no underground storage
tanks located at or on the Premises. Mortgagor has not installed or placed, or
permitted to be installed or placed, any underground storage tanks at or on the
Premises. Underground storage tanks shall have the definition as set forth in
N.J.S.A. 58:10A-22(p).
(f) Except as previously provided to Mortgagee, Mortgagor has not received
a summons, citation, directive, letter, other written communication, or, to the
best of its knowledge, any oral communication ("Communication"), and in any
event, no such Communication remains outstanding, from the New Jersey Department
of Environmental Protection or from any other person, firm or corporation
concerning any intentional or unintentional action or omission on Mortgagor's
part resulting in the releasing, spilling, leaking, pumping, pouring, emitting,
emptying or dumping of "Hazardous Substances", as such term is defined in
N.J.S.A. 58:10-23.llb(k), into the waters or onto the lands of the State of New
Jersey, or into the waters outside the jurisdiction of the State of New Jersey,
in either case resulting in damage to the lands, waters, fish, shellfish,
wildlife, biota,
<PAGE>
air and other resources owned, managed, held in trust or otherwise controlled by
the State of New Jersey.
(g) In connection with any purchase of the Premises or any business or
assets located thereon or any closing, terminating or transferring of ownership
or operations of any "industrial establishment", as that term is defined in ISRA
or in the predecessor statute to ISRA, occurring on or after December 31, 1983,
Mortgagor required that the owner and or operator of the industrial
establishment comply with the provisions of ISRA or in the predecessor statute
and the owner and or operator did comply therewith.
(h) Upon the occurrence of an Event (as hereinafter defined), Mortgagee
shall have the right to have its consultants perform a comprehensive
environmental audit of the Premises. Such audit shall be conducted by an
environmental consultant chosen by Mortgagee and may include a visual survey, a
record review, an area reconnaissance assessing the presence of hazardous or
toxic waste or substances, PCBs or storage tanks at the Premises, an asbestos
survey of the Premises, which may include random sampling of the improvements
and air quality testing, and such further site assessments as Mortgagee may
reasonably require due to the results obtained from the foregoing. Mortgagor
grants Mortgagee, its agents, consultants and contractors the right to enter the
Premises as reasonable or appropriate for the circumstances for the purposes of
performing such studies and the reasonable cost of such studies shall be due and
payable by Mortgagor to Mortgagee upon demand and shall be secured by the Lien
of this Mortgage. Mortgagee shall direct the environmental consultant to use its
best efforts not to hinder Mortgagor's or any tenant's operations when
conducting such audit, sampling or inspections. For purposes of this paragraph,
the term "Event" shall mean (i) the occurrence of any Event of Default, (ii) the
issuance of any summons, citation, directive or similar written notice from the
New Jersey Department of Environmental Protection or from any other local, state
or federal entity or from any other person, firm or corporation concerning any
alleged material violation of any and all federal, state and local environmental
legislation, rules and regulations in effect as of the date of this Mortgage and
subsequent thereto or (iii) the initiation of any legal action, suits or other
legal or administrative proceedings relating to or in connection with any
alleged violation of any and all federal, state and local environmental
legislation, rules and regulations in effect as of the date of this Mortgage and
subsequent thereto. By undertaking any of the measures identified in and
pursuant to this subsection (h), Mortgagee shall not be deemed to be exercising
any control over the operations of Mortgagor or the handling of any
environmental matter or hazardous wastes or substances of Mortgagor for purposes
of incurring or being subject to liability therefor.
(i) If a Lien shall be filed against the Premises by the New Jersey
Department of Environmental Protection, pursuant to and in
<PAGE>
accordance with the provisions of N.J.S.A. 58:10-23.llf(f), as a result of the
Chief Executive of the New Jersey Spill Compensation Fund having expended monies
from said fund to pay for "Damages", as such term is defined in N.J.S.A.
58:10-23.llg, and/or "Cleanup and Removal Costs", as such term is defined in
N.J.S.A. 58:10-23(b), arising from an intentional or unintentional action or
omission of Mortgagor resulting in the releasing, spilling, pumping, pouring,
emitting, emptying or dumping of "Hazardous Substances", as such term is defined
in N.J.S.A. 58:10-23.11(b)k into waters of the State of New Jersey or onto lands
from which it might flow or drain into said waters, then, unless there is a good
faith basis for contesting such Lien and Mortgagor is so contesting such Lien in
accordance with Section 5.09, Mortgagor shall, within 30 days from the date that
Mortgagor is given notice that the Lien has been placed against the Premises or
within such shorter period of time if the State of New Jersey has commenced
steps to cause the Premises to be sold pursuant to the Lien, either (i) pay the
claim and remove the Lien from the Premises, or (ii) furnish (A) a bond
satisfactory to a title company selected by Mortgagee (the "Title Insurer") in
the amount of the claim out of which the Lien arises, (B) to the Trustee, a cash
deposit (which may be disbursed by the Trustee in its sole discretion) in the
amount of the claim out of which the Lien arises, or (C) other security
reasonably satisfactory to Mortgagee in an amount sufficient to discharge the
claim out of which the Lien arises.
(j) Mortgagor shall use its best efforts to cause compliance by all lessees
with all applicable Legal Requirements relating to environmental protection.
(k) Mortgagor shall promptly provide Mortgagee with copies of all notices
which allege or identify any actual or potential violation or noncompliance
received by or prepared by or for Mortgagor in connection with ISRA, CERCLA, the
Spill Act, RCRA or any other environmental law, rule or regulation relating to
the Premises. For purposes of this paragraph, the term "notice" shall mean any
summons, citation, directive, order, claim, pleading, letter, application,
filing, report, findings, declarations or other materials pertinent to
compliance of the Trust Estate and Mortgagor with such environmental laws, rules
or regulations.
(l) If this Mortgage is foreclosed, Mortgagor shall deliver the Premises in
compliance with all applicable federal, state and local environmental laws,
ordinances, rules and regulations, including, without limitation, ISRA.
(m) Without limiting the generality of Section 5.22, Mortgagor agrees to
defend, indemnify and save Mortgagee harmless from and against any loss or
liability, cost or expense (including, without limitation, reasonable attorneys'
fees, consultants' fees, disbursements and court costs) arising out of, or
incurred in connection with, Mortgagor's misrepresentation, or
<PAGE>
failure promptly (but in no event to exceed the time period permitted by law) to
comply with and perform its obligations, under this Section 5.04. The provisions
of this subsection (m) shall survive any transfer of the Premises, including a
transfer after a foreclosure of this Mortgage.
05. Pari Passu Liens.
Any Liens permitted by the terms of the Trust Indenture and the Collateral
Agency Agreement to be on a parity with the Lien of this Mortgage may be on a
parity with the Lien of this Mortgage only if such Lien and the Indebtedness, if
any, secured thereby shall in all respects be in accordance with the provisions
of the Collateral Agency Agreement and the Trust Indenture.
06. Warranty of Leasehold Estate and Title.
Mortgagor represents and warrants that as of the date hereof:
(a) Mortgagor is duly authorized under the laws of the State of New
Jersey and all other applicable laws to execute and deliver the Mortgage
Documents, and all corporate and partnership action on Mortgagor's part
necessary for the valid execution and delivery of the Mortgage Documents
has been duly and effectively taken;
(b) Mortgagor is the lawful owner and is lawfully seized and possessed
of the Owned Land and all buildings and improvements thereon, free and
clear of all Liens, charges or encumbrances, other than the Mortgage
Documents and the Existing Encumbrances;
(c) Mortgagor is the holder of and has good and marketable title to
the leasehold interests and leasehold estates under all existing Facility
Leases and the easement interests and easement estates under the Convention
Hall Easements, subject to no Lien, encumbrance or charge other than the
Mortgage Documents and the Existing Encumbrances;
(d) (i) each existing Facility Lease is a valid and subsisting demise
of the respective Leased Land for the term therein set forth, and without
limiting the generality of the foregoing, all conditions to the
effectiveness of the Ground Leases contained in Article Fifty-First of the
Ground Leases have been either waived or satisfied, (ii) there are no
defaults under any Facility Lease by any lessor or the lessee as to which
written notice has been given to or by the lessee, (iii) Mortgagor has
delivered to Mortgagee a true and correct copy of each existing Facility
Lease, and all modifications, amendments and supplements thereto, and (iv)
each existing Facility Lease is in full force and effect and has not been
modified, amended or supplemented, except as described on Schedule 2;
<PAGE>
(e) Mortgagor has good title to the Operating Assets, subject to no
Lien, encumbrance or charge, other than the Mortgage Documents and the
Existing Encumbrances;
(f) Mortgagor has good and lawful right and authority to execute this
Mortgage and to grant, bargain, sell, alien, convey, assign, transfer,
hypothecate, pledge, mortgage and confirm the Trust Estate as provided
herein (including, without limitation, with respect to the Operating Assets
and Facility Leases), without the consent of any third party, other than
governmental authorities and certain Superior Mortgage holders and other
secured Persons but any applicable or necessary consent or approval of any
such governmental authority, Superior Mortgage holders and other such
Persons has been given or waived in accordance with applicable law at or
prior to the execution and delivery of this Mortgage, and upon the proper
recording and indexing hereof, this Mortgage constitutes a valid first
mortgage Lien and first priority security interest in the Trust Estate,
subject only to Existing Encumbrances (including, without limitation, the
Superior Mortgages); and
(g) (i) all amounts due under the Superior Mortgages and the
instruments secured thereby have been paid to the extent they were due and
payable to the date hereof, and (ii) there is no existing default under
said Superior Mortgages or instruments, or in the performance of any of the
terms, covenants, conditions or warranties therein on the part of Mortgagor
to be performed and observed thereunder as to which written notice has been
given to Mortgagor.
Mortgagor hereby does and shall forever warrant and defend (a) the title to
the Trust Estate (including, without limitation, Mortgagor's leasehold estate
under, and the lessee's interests in, each existing Facility Lease) (subject to
Permitted Liens) and (b) the priority of the Lien of the Mortgage Documents
thereon (subject to Permitted Liens other than Restricted Encumbrances), against
the claims and demands of all persons whomsoever, at Mortgagor's sole cost and
expense. No title company may rely on any of the foregoing representations or
warranties or make any claim in connection therewith by way of subrogation or
otherwise.
<PAGE>
07. After-Acquired Property; Further Assurances; Recording.
All property, real, personal or mixed or any interest therein (other than
Excepted Property), of every kind and description and wheresoever situate, which
may be hereafter acquired by Mortgagor, the Company or any of its Subsidiaries
(including, without limitation, fee title to any Leased Land) which shall be
used or materially useful in connection with the Trust Estate or any part
thereof or shall otherwise materially relate to the operation of the Casino
Hotel or which shall be acquired by Mortgagor or the Company or any of its
Subsidiaries from proceeds due to an Event of Loss with respect to the Premises
in accordance with the provisions of Section 5.15 of the Trust Indenture, shall
immediately upon the acquisition thereof by Mortgagor, the Company or any of its
Subsidiaries, and without any further mortgage, conveyance or assignment, become
subject to the Lien of this Mortgage as fully as though now owned by Mortgagor
and covered by the Granting Clauses. Nevertheless, Mortgagor, the Company or any
of its Subsidiaries, as applicable, shall do, execute, acknowledge and deliver
all and every such further acts, conveyances, mortgages, financing statements
and assurances as Mortgagee shall require for accomplishing the express purposes
of this Mortgage and the Trust Indenture.
Mortgagor shall, as provided in Section 5.13, from time to time subject to
the Lien of this Mortgage its right, title and interest under all Leases.
Mortgagor shall use reasonable efforts to insure that all Operating Assets
or any interest therein hereafter acquired by Mortgagor, the Company or any of
its Subsidiaries shall be assignable to Mortgagee, and to the extent such
assignment to Mortgagee requires the consent of any governmental authority or
any other Person, Mortgagor shall use all reasonable efforts to obtain such
consent or a waiver thereof.
Mortgagor, the Company or any of its Subsidiaries, as applicable, shall
cause this instrument (or other appropriate instruments) and all other
instruments of further assurance, including all financing statements and
continuation statements covering security interests in personal property, to be
promptly recorded, registered and filed, and at all times to be kept recorded,
registered and filed, and shall execute and file such financing statements and
cause to be issued and filed such continuation statements, all in such manner
and in such places as may be required by law or as requested by Mortgagee to
fully preserve and protect the rights of Mortgagee as a secured party under the
Uniform Commercial Code to all property comprising the Trust Estate (to the
extent a grant of a security interest therein is governed by the Uniform
Commercial Code) and to perfect, preserve and protect the Lien of this Mortgage
as a valid first, (other than with respect to Acquired Indebtedness
<PAGE>
permitted by the terms of Section 5.11 of the Trust Indenture) mortgage Lien of
record and a valid first (other than with respect to Acquired Indebtedness
permitted by the terms of Section 5.11 of the Trust Indenture) priority security
interest on the Trust Estate subject to Permitted Liens (including, without
limitation, the Superior Mortgages), other than Restricted Encumbrances.
Mortgagor shall pay all filing or recording fees, and all expenses incident
to the execution and delivery of this Mortgage, any financing statement or
continuation statement with respect to the personal property constituting part
of the Trust Estate, and any instrument of further assurance, and all federal,
state, county and municipal stamp taxes and other taxes, duties, imposts,
assessments and charges arising out of or in connection with the execution and
delivery of this Mortgage, any financing statement or continuation statement
with respect to the personal property constituting part of the Trust Estate or
any instrument of further assurance.
Mortgagor shall furnish to Mortgagee promptly after the acquisition
hereafter by Mortgagor, the Company or any of its Subsidiaries of any fee
interest or leasehold interest in real property (i) material to the operation of
Mortgagor, (ii) which is necessary for the normal operation of the Casino Hotel
in accordance with all Legal Requirements and all Permits or (iii) which shall
be acquired by Mortgagor or the Company or any of its Subsidiaries from proceeds
due to an Event of Loss with respect to the Premises in accordance with the
provisions of Section 5.15 of the Trust Indenture, (a) a mortgagee policy of
title insurance on the most recent form of American Land Title Association
standard loan policy, extended coverage, which policy shall (i) contain all such
endorsements and affirmative insurance, to the extent reasonably applicable and
available at the then standard published rates for the State of New Jersey (or
if there shall be no such published rates, at commercially reasonable premiums),
as is contained in the Original Policy and (ii) evidence that title to such real
property is subject to no Liens or encumbrances, other than Permitted Liens,
which would (A) render title unmarketable or (B) violate any other provision of
this Mortgage or the Trust Indenture, (b) an as-built survey meeting the
"Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys",
certified within 60 days prior to the acquisition date by a surveyor licensed in
the State of New Jersey using the same form of certification as that contained
in the surveys of the Premises delivered to Mortgagee on the date of this
Mortgage and (c) an Officers' Certificate certifying that the mortgagee policy
of title insurance and survey delivered pursuant to clauses (a) and (b) comply,
respectively, with the provisions of such clauses (a) and (b).
Notwithstanding anything contained herein or in the Trust Indenture to the
contrary, neither Mortgagor, the Company nor any of its Subsidiaries may acquire
any property, real,
<PAGE>
personal or mixed or any interest therein (other than Excepted Property), of
every kind and description and wheresoever situate (including, without
limitation, fee title to any Leased Land), which shall be used or materially
useful in connection with the Trust Estate or any part thereof or shall
otherwise materially relate to the operation of the Casino Hotel or which shall
be acquired by Mortgagor or the Company or any of its Subsidiaries from proceeds
due to an Event of Loss with respect to the Premises in accordance with the
provisions of Section 5.15 of the Trust Indenture, unless Mortgagor, the Company
or any of its Subsidiaries, as applicable, shall comply with the provisions of
this Section 5.07.
<PAGE>
08. Payment of Taxes and Certain Claims; Maintenance of Properties; Compliance
with Legal Requirements. ts
Mortgagor shall:
(a) subject to the provisions of Section 5.09, pay or cause to be paid
before the date on which any fine, penalty, interest or cost may be added
for nonpayment (but no later than when the same are payable by Mortgagor
pursuant to any Superior Instrument Requirement), all taxes (including,
without limitation, real estate taxes, personal or other property taxes and
all sales, value added, use and similar taxes), assessments (including,
without limitation, all assessments for public improvements or benefits,
whether or not commenced or completed prior to the date hereof and whether
or not to be completed prior to the satisfaction of this Mortgage), water,
sewer or other rents, rates and charges, excises, levies, license fees,
permit fees, inspection fees and other authorization fees and other
charges, in each case whether general or special, ordinary or
extraordinary, foreseen or unforeseen, of every character (including,
without limitation, all interest, additions to tax and penalties thereon),
that may be assessed, levied, confirmed or imposed on or in respect of or
be a Lien upon (i) the Trust Estate (including, without limitation, the
Leased Land) or any part thereof or any rent therefrom or any estate, right
or interest therein, or (ii) any acquisition, occupancy, use, leasing, or
possession of or activity conducted on the real property or any part
thereof included in the Trust Estate or any gross receipts thereof or of
the rent therefrom (all of the foregoing being referred to collectively as
"Impositions"). Notwithstanding the foregoing or any other provision of
this Mortgage or the Trust Indenture, Mortgagor shall not be required to
pay any income, profits or revenue tax upon the income of Mortgagee or the
Holders nor any franchise, excise, corporate, estate, inheritance,
succession, capital levy or transfer tax of Mortgagee or the Holders nor
any interest, additions to tax or penalties in respect thereof, unless such
tax is imposed, levied or assessed in substitution for any Imposition that
Mortgagor is required to pay pursuant to this Section 5.08. Mortgagor shall
deliver to Mortgagee, at Mortgagee's request, official receipts or other
proof evidencing payments of any Impositions in accordance with the
requirements of this Section 5.08. Mortgagor shall not be entitled to any
credit for taxes or assessments paid against the Mortgage Notes;
(b) except for such property which Mortgagor may dispose of or replace
pursuant to Section 2.02 and the terms of the Trust Indenture, maintain and
keep all of Mortgagor's properties used or useful in the conduct of
Mortgagor's business, including, without limitation, the Casino Hotel and
all Tangible Personal Property, in such good repair, working order and
condition, except for reasonable wear and use, and shall make or cause to
be
<PAGE>
made all such needful and proper repairs, renewals and replacements thereto
consistent with the standards of first-class casino and hotel complexes in
Atlantic City, New Jersey;
(c) occupy and continuously operate the Casino Hotel and keep the
Casino Hotel supplied with Tangible Personal Property, all in a manner
consistent with the standards of first-class casino and hotel complexes in
Atlantic City, New Jersey;
(d) subject to the provisions of Section 5.09, (i) comply with all
Legal Requirements and Insurance Requirements, whether or not compliance
therewith shall require structural changes in the buildings and
improvements included in the Trust Estate or interfere with the use and
enjoyment of the Trust Estate or any part thereof, (ii) procure, maintain
and comply with all Permits required for (1) the use of the Casino as a
gaming and gambling facility, (2) the on-premises consumption of alcoholic
beverages at the Casino Hotel and (3) any other use of the Trust Estate or
any part thereof then being made, and for the proper erection,
installation, operation and maintenance of the improvements or any part
thereof, (iii) comply with all obligations of Mortgagor under, and keep in
full force and effect, all easements which in any respect inure to the
benefit of, or otherwise affect, the Trust Estate or any part thereof, if
the failure to comply with the same would impair Mortgagee's security
hereunder, and (iv) without limiting the generality of clause (iii), comply
with any instruments of record at the time in force affecting the Trust
Estate or any part thereof, if the failure to comply with the same would
impair Mortgagee's security hereunder. Without limiting the generality of
the foregoing, Mortgagor represents and warrants that at the time of the
execution of this Mortgage, Mortgagor is in compliance with the
requirements of clauses (i), (ii), (iii) and (iv) above; and
(e) in the event of the passage after the date of this Mortgage of any
law of the State of New Jersey, or any other governmental entity, changing
in any way the laws now in force for the taxation of mortgages, or debts
secured thereby, for federal, state or local purposes, or the manner of the
operation of any such taxes, so as to affect the interest of Mortgagee, pay
the full amount of such new or additional taxes.
<PAGE>
09. Permitted Contests.
Notwithstanding anything in this Mortgage to the contrary, Mortgagor, at
Mortgagor's expense, may contest by appropriate legal proceedings conducted in
good faith and with due diligence, the amount or validity or application, in
whole or in part, of any Imposition or Lien therefor or any Legal Requirement or
Insurance Requirement or the application of any instrument of record (including,
without limitation, any Superior Instrument Requirement) affecting the Trust
Estate or any part thereof or any claims of holders of F,F&E Financing
Agreements, mechanics, materialmen, suppliers, or vendors or Lien therefor, and
may withhold payment of the same pending such proceedings if permitted by law,
or make payment under protest, or defer compliance with any such Legal
Requirement, any such Insurance Requirement or the terms of any such instrument,
and the same shall not be a Default hereunder; provided, that (a) in the case of
any Impositions or Lien therefor or any claims of mechanics, materialmen,
suppliers or vendors or Lien therefor, such proceedings shall suspend the
collection thereof from each of Mortgagor, Mortgagee, the Holders, the Secured
Beneficiaries and the Trust Estate, (b) neither the Trust Estate nor any
interest therein would be in any significant danger of being sold, forfeited, or
lost, (c) such action will not result in (i) the termination of any Facility
Lease or (ii) the holder of any Superior Mortgage having a right to exercise any
rights or remedies thereunder, (d) in the case of a Legal Requirement, neither
the Secured Beneficiaries, including, without limitation, the Holders, nor the
Mortgagee shall be in any significant danger of any civil liability or any
danger of any criminal liability, and the failure of Mortgagor to comply with
such Legal Requirement shall not affect the continuance in good standing of any
Permit or result in the suspension, termination, non-renewal or material adverse
modification of any Permit, and (e) in the case of an Insurance Requirement, the
failure of Mortgagor to comply therewith shall not affect the validity of any
insurance required to be maintained by Mortgagor hereunder.
<PAGE>
10. Mechanics' and Other Liens.
Mortgagor shall cause to be removed, all statutory Liens of carriers,
warehousemen, mechanics, landlords, laborers, materialmen, repairmen or other
like Liens arising by operation of law in the ordinary course of business and
consistent with industry practices and Liens on deposits made to obtain the
release of such Liens if (i) the underlying obligations are overdue for a period
of more than 60 days or (ii) such Liens are not being contested in good faith
and by appropriate proceedings by the Company or any of its Subsidiaries and
adequate reserves with respect thereto are maintained on the books of the
Company or any of its Subsidiaries, as the case may be, in accordance with GAAP
and the provisions of Section 5.09 and in general shall do or cause to be done
everything necessary so that the Lien hereof shall be fully preserved, at the
cost of Mortgagor, without expense to Mortgagee.
11. To Insure.
(a) Mortgagor, at Mortgagor's expense, shall maintain with Insurers:
(i) insurance with respect to Mortgagor's insurable properties
constituting a part of the Trust Estate against loss or damage by fire,
lightning, and other risks from time to time included under "all-risk"
policies and against loss or damage by sprinkler leakage, water damage,
collapse, malicious mischief and explosion in respect of any steam and
pressure boilers and similar apparatus located on such insurable
properties, in amounts at all times sufficient to prevent Mortgagor from
becoming a coinsurer within the terms of the applicable policies, but in
any event such insurance shall be maintained in not less than the greatest
of the following (the "Insurance Amount"): (A) 100% of the then Full
Insurable Value of such insurable properties, determined from time to time
(but not less frequently than once in any 36 calendar months), by an
Independent appraiser or Insurer, (B) the then outstanding principal amount
of Indebtedness under the Debt Documents or (C) the amount required to be
maintained pursuant to the Material Instrument Requirements;
(ii) war risk insurance as and when such insurance is obtainable from
the United States of America or any agency thereof as promptly as
reasonably practicable after the same becomes so obtainable, in an amount
not less than the Insurance Amount, or, if such insurance cannot be
obtained in an amount not less than the Insurance Amount, in such lesser
amount as may then be so obtainable;
(iii) comprehensive general liability insurance, including, without
limitation, blanket contractual liability
<PAGE>
coverage, broad form property damage, independent contractor's coverage and
personal injury coverage against any and all claims arising out of or
connected with the possession, use,, leasing, operation or condition of
such insurable properties, in an amount not less than $100,000,000 combined
single limit coverage for personal injury and property damage with respect
to any one occurrence, which may be under an umbrella policy. Anything
contained in this clause (iii) to the contrary notwithstanding, the
Material Instrument Requirements with respect to the kinds and amount of
insurance described in this clause (iii) shall be satisfied by Mortgagor;
(iv) workers' compensation insurance to the extent required by law;
(v) business interruption insurance covering not less than 6 months of
loss;
(vi) to the extent available for a commercially reasonable premium,
flood insurance in an amount not less than the Insurance Amount, or, if
such insurance cannot be obtained in an amount not less than the Insurance
Amount, such lesser amount as may then be so obtainable but in no event
less than $100,000,000; and
(vii) such other insurance with respect to such insurable properties
against loss or damage of the kinds (A) from time to time customarily
insured against by persons owning or using first-class casino and hotel
complexes in Atlantic City, New Jersey and (B) required to be maintained
pursuant to any Material Instrument Requirements.
Notwithstanding the foregoing, to the extent not violative of any Material
Instrument Requirements, Mortgagor may maintain deductibles with respect to the
insurance policies described in clauses (i), (ii), (iii), (v), (vi) and (vii)
above in accordance with standard industry practice with respect to the
operation of a first-class casino hotel.
(b) (i) Each policy of insurance maintained by Mortgagor pursuant to
Section 5.11(a) shall, (A) except in the case of workers' compensation
insurance, name Mortgagor as an insured and shall name as additional insureds
(1) Mortgagee and (2) to the extent required by the Material Instrument
Requirements, the lessors under any Facility Leases and the holders of the
Superior Mortgages, (B) provide that all insurance proceeds for losses, except
in the case of comprehensive general liability insurance and workers'
compensation insurance, be payable solely to Mortgagee, subject to any Material
Instrument Requirements, include effective waivers (whether under the terms of
any such policy or otherwise) by the insurer of all claims for insurance
premiums against all loss payees and named insureds (other than Mortgagor) and
all rights of subrogation against any named
<PAGE>
insured, (D) except in the case of comprehensive general liability and workers'
compensation insurance, provide that any losses shall be payable notwithstanding
(1) any act, failure to act, negligence of, or violation or breach of
warranties, declarations or conditions contained in such policy by Mortgagor or
Mortgagee or any other named insured or loss payee, (2) the occupation or use of
the insurable properties for purposes more hazardous than permitted by the terms
of the policy, (3) any foreclosure or other proceeding or notice of sale
relating to the insurable properties or (4) any change in the title to or owners
hip or possession of the insurable properties, (E) contain a non-contributory
mortgagee clause in favor of Mortgagee, and (F) provide that if all or any part
of such policy is cancelled, terminated or expires, the insurer will forthwith
give notice thereof to each named insured and loss payee and that no
cancellation, non-renewal, reduction in amount or material change in coverage
thereof shall be effective until at least 30 days after receipt by each named
insured and loss payee of written notice thereof. Mortgagor may effect the
insurance required under this Section 5.11 under blanket and/or umbrella
policies covering properties owned or leased by Affiliates of Mortgagor;
provided, that such policies otherwise comply with this Mortgage and provide
that the amount of coverage afforded thereunder with respect to the Trust Estate
shall not be reduced by claims thereunder against such other properties.
(i) Mortgagor may effect the insurance required under this Section 5.11
under blanket and/or umbrella policies covering properties owned or leased by
Affiliates of Mortgagor; provided, that (A) such policies otherwise comply with
this Mortgage, (B) except with respect to flood insurance and earthquake
insurance, provide that the amount of coverage afforded thereunder with respect
to the Trust Estate shall not be reduced by claims thereunder against such other
properties' and (C) in the case of flood insurance provide that the amount of
coverage afforded thereunder with respect to the Trust Estate shall not be
reduced below $100,000,000 by reason of claims thereunder against such other
properties.
(c) Mortgagee shall not be responsible for effecting or renewing any
insurance or for the responsibility or solvency of the insurers.
(d) Mortgagor shall not take out separate insurance, concurrent in form or
contributing in the event of loss with that required to be maintained pursuant
to this Section 5.11, unless the same is permitted by Material Instrument
Requirements.
<PAGE>
12. Limitations on Building Demolition, Alterations, Improvements and New
Construction.
Unless an Event of Default shall have occurred and be continuing, Mortgagor
shall have the right at all times to make or permit such demolition,
alterations, improvements or new construction, structural or otherwise (herein
sometimes called collectively "Alterations" and each, individually, an
"Alteration"), of or on the Trust Estate, to be made in all cases subject to
each of the following conditions:
(a) No Alteration shall be undertaken or carried out except in
conformity with all Material Instrument Requirements, Legal Requirements
and Insurance Requirements.
(b) If any Alteration, together with other Alterations that constitute
a single construction plan or project (whether or not accomplished in
several stages or procedures) is material to the Premises taken as a whole
(a "Material Alteration"), the building or buildings, structures or other
improvements as so improved or altered, upon the completion of the work,
shall be of a value not less than the value of such building or buildings,
structures or other improvements immediately prior to the making of such
Material Alteration.
(c) Any Material Alteration shall be conducted under the supervision
of an Architect, and upon Mortgagee's request therefor, detailed plans and
specifications and cost estimates therefor, prepared and approved in
writing by such Architect and accompanied by a certificate of such
Architect stating that such plans and specifications are in compliance with
all Legal Requirements and Insurance Requirements shall be delivered to
Mortgagee.
(d) No Alteration which is material to the operation of the Company
and its Subsidiaries taken as a whole shall be undertaken until Mortgagor
has furnished to Mortgagee, at Mortgagor's sole cost and expense, a surety
bond or bonds, covering performance, and labor and material payments with
respect to the work to be so performed, naming Mortgagee as obligee, issued
by a responsible surety company, authorized to do business in the State of
New Jersey, in a form generally and customarily used by such surety in an
amount equal to the estimated cost of construction of the work covered by
the plans and specifications therefor, guaranteeing the performance and
completion of such construction, substantially in conformity with the said
plans and specifications and within a reasonable time, subject to delays by
fire, strikes, lock-out, acts of God, inability to obtain labor or
materials, governmental restrictions, enemy action, civil commotion or
unavoidable Casualty or other similar causes beyond the control of
Mortgagor, free and clear of all Liens, claims and
<PAGE>
liabilities for the cost of such Alterations. If such surety bond or bonds
shall be unobtainable Mortgagor shall deliver to Mortgagee security by
cash, letter of credit or other guarantee, affording substantially the same
protection as would such bond or bonds. If Mortgagor shall require any
contractor performing a Material Alteration to deliver any surety bonds or
bonds, covering performance, and labor and material payments with respect
to the work to be so performed, naming Mortgagor as obligee, such bond or
bonds shall name Mortgagee as co-obligee.
(e) All work done in connection with any Alterations shall be done
promptly and in good and workmanlike manner. The work in connection with
any Alteration shall be prosecuted with reasonable dispatch, delays due to
fire, strikes, lock-outs, acts of God, inability to obtain labor or
materials, governmental restrictions, enemy action, civil commotion or
unavoidable Casualty or similar causes beyond the control of Mortgagor
excepted.
(f) No Alterations of any kind shall be made which shall change the
use of the Casino Hotel from its use as a gaming and hotel facility.
(g) Mortgagor shall maintain, or shall require its contractors to
maintain, at all times during the performance of Material Alterations, in
addition to any insurance required to be maintained under Section 5.11
hereof, appropriate workers' compensation insurance covering all persons
employed for such Material Alterations to the extent required by applicable
law, and comprehensive general liability insurance expressly covering the
additional hazards due to such Material Alterations. Each such policy of
insurance shall comply with the provisions of Section 5.11(b), and
Mortgagor shall comply with Subsections (c), (d) and (e) of Section 5.11 in
connection with all such insurance.
13. Leases.
Mortgagor shall not (except in accordance with the provisions of the Trust
Indenture):
(a) lease the Trust Estate substantially as an entirety to any Person,
nor shall Mortgagor lease either the Casino Hotel or the Casino or the
Hotel or any parking facilities located on the Parking Parcel or the
Parking Parcel substantially as an entirety to any Person;
(b) enter into any Lease, or renew, modify, extend, terminate, or
amend any Lease, except in the ordinary course of business of operating the
Casino Hotel;
(c) receive or collect, or permit the receipt or collection of, any
rental payments under any Lease more than one month in advance of the
respective periods in respect of which they are to
<PAGE>
accrue, except that, in connection with the execution and delivery of any
Lease or of any amendment to any Lease, rental payments thereunder may be
collected and received in advance in an amount not in excess of three
months' rent and/or a security deposit may be required thereunder;
(d) collaterally assign, transfer or hypothecate (other than to
Mortgagee hereunder or to the holder of any Superior Mortgage, but in each
case only with respect to the property secured by such mortgage, and except
as permitted by the Trust Indenture) (i) any rental payment under any Lease
whether then due or to accrue in the future, (ii) the interest of Mortgagor
as landlord under any Lease or (iii) the rents, issues or profits of the
Trust Estate;
(e) after the date hereof, enter into any Lease, or renew any Lease,
unless such Lease contains terms to the effect as follows:
(i) the Lease and the rights of the tenants thereunder shall be
subject and subordinate to the rights of Mortgagee under this Mortgage
and the holders of any Superior Mortgage,
(ii) the Lease may be assigned by the landlord thereunder to
Mortgagee,
(iii) the rights and remedies of the tenant in respect of any
obligations of the landlord thereunder shall be nonrecourse as to any
assets of the landlord other than its equity in the building in which
the leased premises are located or the proceeds thereof, and
(iv) the rights of the tenant shall be subject and subordinate to
the rights of the lessee under any New Lease (as defined in Section
29.3 of the Ground Leases); or
(f) modify any Lease with respect to the matters described in clauses
(i) through (iv) of paragraph (e).
If Mortgagor enters into a Lease (other than with Affiliate of Mortgagor)
for a term of not less than 3 years, Mortgagee shall deliver a non-disturbance
and attornment agreement substantially in the form of Schedule 5 hereto,
following receipt of a Mortgagor's Request. Mortgagor shall, upon demand,
reimburse Mortgagee for any costs and expenses (including reasonable attorneys'
fees and disbursements) incurred by Mortgagee in connection with the
preparation, review and delivery of such non-disturbance and attornment
agreements. Mortgagee shall, from time to time, after receipt of a Mortgagor
Request therefor (accompanied by an Officers' Certificate stating that said
conditions have been satisfied) execute instruments in form and substance
reasonably satisfactory to Mortgagee confirming the permissability of a
modification, termination or
<PAGE>
surrender of any Lease, other than a modification described in paragraph (f) of
this Section 5.13.
Promptly after the execution and delivery hereof, Mortgagor shall cause the
lessee under each Lease now in effect, and promptly after each Lease is executed
or becomes effective after the date of the execution and delivery hereof,
Mortgagor shall cause the lessee under each such Lease, to be duly notified in
writing (unless the substance and effect of such notice shall be contained in
such Lease) of the subjection of the owner's interest, as lessor, in and to such
Lease to the Lien of this Mortgage and of the name and address of Mortgagee.
Each such notice shall state that the lease of such lessee is a Lease as herein
defined. If a new Mortgagee is at any time appointed hereunder or the address of
Mortgagee shall at any time be changed, Mortgagor shall cause each lessee under
each Lease to be promptly notified in writing of the name and address of such
new Mortgagee or the new address of Mortgagee. Mortgagor shall use reasonable
efforts (but shall not be obligated to incur any expenditure other than de
minimis amounts) to obtain from each lessee under each Lease to whom any notice
is sent pursuant to this paragraph an acknowledgment of receipt of such notice,
and Mortgagor shall promptly deliver to Mortgagee, upon request, a copy of each
such acknowledgment of receipt which it is able to obtain. Mortgagee shall not
be responsible for securing or causing Mortgagor to secure any such
acknowledgment.
14. Compliance Certificates.
Mortgagor shall comply with the provisions of Section 5.7 of the Trust
Indenture, the terms of which are incorporated herein by reference.
<PAGE>
15. Intentionally Omitted.
16. To Keep Books; Inspection by Mortgagee.
Mortgagor will keep proper books of record and account, in which full and
correct entries shall be made of all dealings or transactions of or in relation
to the properties, business and affairs of Mortgagor in accordance with
generally accepted accounting principles consistently applied. Said books shall
be maintained in an office located either in Atlantic City, New Jersey or in the
Borough of Manhattan, City of New York, State of New York. Mortgagor shall at
any and all times, upon request of Mortgagee and at the expense of Mortgagor,
permit Mortgagee and its representatives to inspect the Casino Hotel and any
other buildings, structures and improvements now or hereafter located on the
Land and the books of account, records, reports and other papers of Mortgagor,
and to make copies and extracts therefrom, and will afford and procure a
reasonable opportunity to make any such inspection (provided, that any such
inspection shall not unreasonably interfere with the business operations of
Mortgagor), and Mortgagor will furnish to Mortgagee any and all information as
Mortgagee may reasonably request, with respect to the performance by Mortgagor
of its covenants in this Mortgage.
17. Advances by Mortgagee.
If Mortgagor shall fail to perform any of the covenants, terms, provisions
or conditions contained in this Mortgage and such failure shall continue for 10
days following notice thereof given by Mortgagee (or at any time, without
notice, in case of emergency), Mortgagee may (but is not obligated to), at any
time and from time to time, take any action or make advances, to effect
performance of any such covenant, term, provision or condition on behalf of
Mortgagor; and all moneys so used, paid or advanced by Mortgagee and all
reasonable costs and expenses incurred by Mortgagee in connection therewith,
together with interest on all of the same at the rate of interest set forth in
the applicable Debt Documents, shall be immediately due and payable by Mortgagor
to Mortgagee and all such moneys, costs and expenses shall be secured by the
Lien of this Mortgage prior to any Indebtedness secured hereby. No such advance
or payment by Mortgagee shall relieve Mortgagor from any default hereunder or
impair any right or remedy of Mortgagee.
<PAGE>
18. Waiver of Stay, Extension or Usury Laws.
Mortgagor covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any usury, stay or extension law or any other law
wherever enacted which would prohibit or forgive Mortgagor from paying all or
any portion of the Obligations secured by this Mortgage, wherever enacted, now
or at any time hereafter in force, or which may otherwise affect the covenants
or the performance of this Mortgage; and Mortgagor (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not hinder, delay or impede the execution of
any power herein granted to Mortgagee, but shall suffer and permit the execution
of every such power as though no such law had been enacted.
<PAGE>
19. Intentionally Omitted.
20. Facility Leases.
(a) Subject to the provisions of Sections 4.3 and 5.15 of the Trust
Indenture, Mortgagor shall do or cause to be done all things necessary to
preserve and keep unimpaired the rights of Mortgagor, as lessee under all
Facility Leases, and to prevent any termination, surrender, cancellation,
forfeiture or impairment of any thereof. Mortgagor shall at all times fully
perform and comply with all agreements, covenants, terms and conditions imposed
upon or assumed by it as lessee under each of the Facility Leases (including,
without limitation, the covenant to pay rent and all taxes, assessments and
other charges mentioned therein) prior to the expiration of any notice and/or
cure period provided in each such Facility Lease. Upon receipt by Mortgagee from
a Lessor of any written notice of default by the lessee thereunder, Mortgagee
may rely thereon and take any action Mortgagee deems necessary in its sole
discretion to prevent or to cure any default by Mortgagor in the performance of
or compliance with any of the agreements, covenants, terms or conditions imposed
upon or assumed by Mortgagor as lessee under such Facility Lease, even though
the existence of such default or the nature thereof be questioned or denied by
Mortgagor or by any party on behalf of Mortgagor. Without limiting the
generality of Section 3.09, Mortgagor hereby expressly grants to Mortgagee, and
agrees that Mortgagee shall have, the absolute and immediate right to enter in
and upon the Premises or any part thereof to such extent and as often as
Mortgagee, in its sole discretion, deems necessary or desirable for the purpose
permitted by the immediately preceding sentence, subject only to applicable
Legal Requirements. Without limiting Mortgagor's obligations or Mortgagee's
rights set forth above or limiting Mortgagee's other remedies under this
Mortgage, Mortgagee may (i) pay and expend such sums of money as Mortgagee in
its sole discretion deems necessary for any such purpose, and (ii) without
limiting the provisions of (i) above, in the event of a Disqualification (as
defined in Section 52.2 of the Ground Leases), and Mortgagor's failure to
exercise the option contained in Section 52.3 of the appropriate Ground Lease
within the period of time described in Section 5.20(b)(vii), exercise said
option on behalf of Mortgagor and expend any amounts Mortgagee, in its sole
discretion, deems necessary in connection therewith, and Mortgagor hereby agrees
to pay to Mortgagee immediately and without demand, all such sums referred to in
(i) and (ii) above, so paid and expended by Mortgagee, together with interest
thereon from the date of each such payment at the highest rate of interest set
forth in the Mortgage Notes. All sums so paid and expended by Mortgagee, and the
interest thereon, shall be added to and be secured by the Lien of this Mortgage.
(b) Subject to the provisions of Sections 4.3 and 5.15 of the Trust
Indenture, Mortgagor further covenants and agrees as follows:
<PAGE>
(i) Mortgagor shall not surrender, terminate or cancel any Ground
Lease, and shall not without the consent of Mortgagee, surrender, terminate
or cancel modify, change, supplement, alter or amend any Facility Lease,
either orally or in writing, if (x) an impairment of the security granted
under this Mortgage would result therefrom or (y) with respect to any
Ground Lease, the term of such Ground Lease would be reduced thereby or the
leasehold mortgagee protections contained therein would be reduced or
impaired thereby. Without limiting the generality of the foregoing
sentence, Mortgagor shall be permitted to amend Article Fifty-Second of the
Ground Lease of the TSA Parcel to increase the purchase price under the
option to purchase described therein from $5,000,000 to $10,000,000. As
further security for the repayment of the indebtedness secured hereby and
for the performance of the covenants herein and in each Facility Lease
contained, Mortgagor hereby assigns to Mortgagee all of Mortgagor's rights,
privileges and prerogatives as lessee under each Facility Lease to
terminate, cancel, modify, change, supplement, alter or amend such Facility
Lease (including, without limitation, under Section 20.2 of any Ground
Lease), and any such termination, cancellation, modification, change,
supplement, alteration or amendment of a Facility Lease in violation of the
terms hereof, without the prior consent thereto by Mortgagee, shall be void
and of no force and effect. Unless (1) an Event of Default has occurred and
is continuing and (2) either (A) there has been an acceleration of maturity
of any Indebtedness secured hereby or (B) Mortgagee exercises its rights
under Section 3.09, Mortgagee shall have no right to terminate, cancel,
modify, change, supplement, alter or amend any Facility Lease. Mortgagee
shall, from time to time, after receipt of a Mortgagor Request therefor
(accompanied by an Officers' Certificate stating that said conditions have
been satisfied) execute instruments in form and substance reasonably
satisfactory to Mortgagee confirming the permissabilty of the modification
of any Facility Lease described in this clause (i).
(ii) Solely for the benefit of Mortgagee, the Holders and no other
person, no release or forbearance of any of Mortgagor's obligations under
any Facility Lease, pursuant to such Facility Lease or otherwise, shall
release Mortgagor from any of Mortgagor's other obligations under this
Mortgage.
(iii) Unless Mortgagee shall otherwise expressly consent in writing,
the fee title to the Leased Facilities and Mortgagor's leasehold estates
therein shall not merge and shall always remain separate and distinct,
notwithstanding the union of said estates either in the Lessor or in the
lessee, or in a third party by purchase or otherwise.
<PAGE>
(iv) Mortgagor shall not appoint or consent to the appointment of an
arbitrator pursuant to Article Twenty-First of the Ground Leases without
the prior consent of Mortgagee. Mortgagor shall promptly notify Mortgagee
in writing of any request made by Mortgagor, as lessee under any Facility
Lease, or any of the Lessors, for arbitration proceedings under any
Facility Lease and of the institution of any arbitration proceedings, as
well as all proceedings thereunder. Mortgagor shall promptly deliver to
Mortgagee a copy of the determination of the arbitrators in each such
arbitration proceeding. Mortgagee shall have the right to participate in
such arbitration proceedings in association with Mortgagor or on its own
behalf as an interested party.
(v) Mortgagor shall not consent to the subordination of any Facility
Lease to any mortgage, deed of trust or other Lien on the fee interest of
the Lessor.
(vi) If (A) Mortgagor exercises its option(s) under Article
Forty-Fourth or Fifty-Second of any Ground Lease to purchase any portion of
the Ground Lease Land, Mortgagor shall deliver a copy of its election to
exercise such option within 5 days after Mortgagor has delivered notice of
such election to the Lessor or (B) Mortgagor acquires fee simple title or
any other estate, title or interest in any Leased Facility (pursuant to the
options described in clause (A) or otherwise), Mortgagor shall promptly
notify Mortgagee of such acquisition and, on request by Mortgagee, shall
cause to be executed and recorded all such other and further assurances or
other instruments in writing as may in the opinion of Mortgagee be required
or desirable to carry out the intent and meaning of clause (x) of Granting
Clause Second.
(vii) In the event of any Disqualification, Mortgagor shall exercise
the option granted by Section 52.3 of the appropriate Ground Lease within
60 days after the first day on which Mortgagor may exercise said option.
(viii) Within 5 days after Mortgagor's receipt of any notice of any
motion, application or effort to reject any Facility Lease by any Lessor or
any trustee arising from or in connection with any case, proceeding or
other action commenced or pending by or against any Lessor under the Code
or any comparable provision contained in any present or future federal,
state, local, foreign or other statute, law, rule or regulation
("Comparable Provision"), Mortgagor shall give notice thereof to Mortgagee.
Mortgagor hereby (A) assigns to Mortgagee any and all of Mortgagor's rights
as lessee under Section 365(h) of the Code or any Comparable Provision and
(B) covenants that it shall not elect to treat any Facility Lease as
terminated pursuant to Section 365(h) of the Code or any Comparable
Provision without the prior
<PAGE>
consent of Mortgagee and (C) agrees that any such election by Mortgagor
without such consent shall be null and void.
(ix) Without limiting the generality of the foregoing, to the extent
permitted by applicable law, Mortgagor hereby unconditionally assigns,
transfers and sets over to Mortgagee all of Mortgagor's claims and rights
to the payment of damages arising from any rejection by Lessor of any
Facility Lease under the Code or any Comparable Provision. Mortgagee shall
have the right to proceed in its own name or in the name of Mortgagor in
respect of any claim, suit, action or proceeding relating to the rejection
of any Facility Lease, including, without limitation, the right to file and
prosecute, in cooperation with Mortgagor, any proofs of claim, complaints,
motions, applications, notices and other documents, in any case in respect
of Lessor under the Code or any Comparable Provision. This assignment
constitutes a present, irrevocable and unconditional assignment of the
foregoing claims, rights and remedies, and shall continue in effect until
all of the indebtedness and obligations secured by this Mortgage shall have
been satisfied and discharged in full. Any amounts received by Mortgagee in
damages arising out of the rejection of any Facility Lease as aforesaid
shall be applied first to all reasonable costs and expenses of Mortgagee
(including, without limitation, reasonable attorneys' fees, disbursements
and court costs) incurred in connection with the exercise of any of its
rights or remedies under this Section 5.20, and thereafter as provided in
Section 3.03.
(x) If there shall be filed by or against Mortgagor a petition under
the Code or any Comparable Provision and Mortgagor, as lessee under any
Facility Lease, shall determine to reject such Facility Lease, Mortgagor
shall give Mortgagee not less than 10 days' prior notice of the date on
which Mortgagor shall apply to the Bankruptcy Court or other judicial body
with appropriate jurisdiction for authority to reject such Facility Lease.
Mortgagee shall have the right, but not the obligation, to serve upon
Mortgagor within such 10-day period a notice stating that (a) Mortgagee
demands that Mortgagor assume and assign such Facility Lease to Mortgagee
pursuant to Section 365 of the Code or any Comparable Provision and (b)
Mortgagee covenants to cure or provide adequate assurance of prompt cure of
all defaults and provide adequate assurance of future performance under
such Facility Lease. If Mortgagee serves upon Mortgagor the notice
described in the preceding sentence, Mortgagor shall not seek to reject
such Facility Lease and shall comply with the demand provided for in clause
(a) of the preceding sentence within 30 days after the notice shall have
been given subject to the performance by Mortgagee of the covenant provided
for in clause (b) of the preceding sentence. The foregoing provisions of
this
<PAGE>
Section 5.20(x) shall not apply to the extent not permitted by applicable
law. Effective upon the entry of an order for relief in respect of
Mortgagor under Chapter 7 of the Code or any Comparable Provision,
Mortgagor hereby assigns and transfers to Mortgagee a non-exclusive right
to apply to the Bankruptcy Court or other judicial body with appropriate
jurisdiction for an order extending the period during which such Facility
Lease may be rejected or assumed.
(xi) Mortgagor shall promptly give to Mortgagee copies of (A) all
notices of default and (B) any other communications or notices with respect
to events that relate to the possible impairment of the security of this
Mortgage, which Mortgagor shall give or receive under any Facility Lease
and shall promptly notify Mortgagee of any default under any Facility Lease
on the part of the Lessor or Mortgagor.
(xii) Mortgagor shall enforce with due diligence all of the
obligations of the Lessor under each Facility Lease, to the end that
Mortgagor may enjoy all of the rights and privileges granted to it under
the Facility Leases.
(xiii) Mortgagor shall notify Mortgagee within 5 days after the
transfer of a fee interest in any Leased Facility or any portion thereof to
or from an Affiliate.
(xiv) The Company or any of its Subsidiaries shall not at any time
hereafter acquire fee title to the Leased Land or any portion thereof
unless simultaneously with such acquisition the Company or such Subsidiary
and Mortgagor execute and exchange (and deliver to Mortgagee an executed
counterpart of) an instrument in form and substance satisfactory to
Mortgagee providing that so long as the Company or such Subsidiary owns
such fee title (A) the Company or such Subsidiary shall not terminate the
applicable Facility Lease for any reason whatsoever (including, without
limitation, due to the default of Mortgagor under such Facility Lease) and
(B) the Company or such Subsidiary shall not accept, and, if tendered by
Mortgagor shall promptly return to Mortgagor, any payment of rent or other
charges payable under such Facility Lease in excess of the amount required
to pay the debt service and other sums payable under any mortgage affecting
the Company's or such Subsidiary's fee interest in the applicable Leased
Facility (and the Company or such Subsidiary shall use such funds only to
pay its debt service obligations and other sums payable under such
mortgage) at any time that an Event of Default shall have occurred and be
continuing under this Mortgage or the Trust Indenture.
(c) Mortgagor hereby represents and warrants that all Fixed Net Rent (as
defined in the Ground Leases), taxes and assessments, payable under the Ground
Leases have been paid to
<PAGE>
the extent they were due and payable to the date hereof and that Mortgagor has
not received notice of its failure to pay any other amounts payable under the
Ground Leases which has not been cured.
(d) Subject to the provisions of Section 5.20(b)(iii), if both the lessor's
and lessee's estates under any Facility Lease or any portion thereof shall at
any time become vested in one owner, this Mortgage and the Lien created hereby
shall nevertheless not be destroyed or terminated by application of the doctrine
of merger and, in such event, Mortgagee shall continue to have all of the rights
and privileges of a first leasehold mortgagee.
(e) Mortgagor hereby acknowledges that if any Facility Lease shall be
terminated prior to the natural expiration of its term due to default by the
lessee thereunder, and if pursuant to such Facility Lease, Mortgagee or its
designee shall acquire from the Lessor a new lease of the Leased Facility or any
portion thereof, Mortgagor shall have no right, title or interest in or to such
lease or the leasehold estate created thereby, or the options therein contained.
(f) Each Facility Lease hereafter entered into or assumed by Mortgagor as
lessee or sublessee shall contain provisions (i) permitting the assignment of
the same to Mortgagee and permitting assignment without the lessor's consent if
this Mortgage is foreclosed; and (ii) providing protection to Mortgagee, as
leasehold mortgagee, not less favorable than the provisions contained in Article
Twenty-Ninth of the Ground Leases.
<PAGE>
21. Superior Mortgages.
(a) Mortgagor shall at all times fully perform and comply with all
agreements, covenants, terms and conditions imposed upon or assumed by it as
mortgagor under the Superior Mortgages prior to the expiration of any notice
and/or cure period provided in each such Superior Mortgage. If a notice of
default has been given by the holder of any Superior Mortgage, Mortgagee may
rely thereon and take any action Mortgagee deems necessary in its sole
discretion to prevent or to cure any default by Mortgagor in the performance of
or compliance with any of the agreements, covenants, terms or conditions imposed
upon or assumed by Mortgagor as mortgagor under each of the Superior Mortgages
even though the existence of such default or the nature thereof be questioned or
denied by Mortgagor or by any party on behalf of Mortgagor. Without limiting the
generality of Section 3.09, Mortgagor hereby expressly grants to Mortgagee, and
agrees that Mortgagee shall have, the absolute and immediate right to enter in
and upon the Premises or any part thereof to such extent and as often as
Mortgagee, in its sole discretion, deems necessary or desirable for the purpose
permitted by the immediately preceding sentence, subject only to applicable
Legal Requirements. Without limiting Mortgagor's obligations or Mortgagee's
rights set forth above or limiting Mortgagee's other remedies under this
Mortgage, Mortgagee may (i) pay and expend such sums of money as Mortgagee in
its sole discretion deems necessary or desirable for any such purpose and (ii)
in its sole discretion prepay any Superior Mortgage, and Mortgagor hereby agrees
to pay to Mortgagee immediately and without demand, all such sums referred to in
(i) and (ii) above so paid and expended by Mortgagee, together with interest
thereon from the date of each such payment at the highest rate of interest set
forth in any outstanding Mortgage Notes. All sums so paid and expended by
Mortgagee and the interest thereon, shall be added to and be secured by the Lien
of this Mortgage.
(b) Mortgagor further covenants and agrees:
(i) Mortgagor shall not, without first obtaining the consent of
Mortgagee in each instance: (A) modify, replace or refinance any Superior
Mortgage if (x) the collateral securing the Lien thereof would be increased
thereby or (y) such modification, replacement or refinancing violates any
other provision of this Mortgage or the Trust Indenture or (B) acquire or
permit or suffer the Company or any of its Subsidiaries to acquire any
Superior Mortgage or any interest therein unless permitted by the terms of
the Trust Indenture;
(ii) Mortgagor shall timely pay and perform all of the obligations to
be paid or performed by the mortgagor under each Superior Mortgage, the
note secured thereby
<PAGE>
and any other instrument evidencing or securing the indebtedness owing to
any holder of any Superior Mortgage;
(iii) at any time, and from time to time, Mortgagor shall upon request
of Mortgagee promptly use its reasonable efforts to obtain an estoppel
certificate or letter addressed to Mortgagee from holders of the Superior
Mortgages, such certificate or letter to be in such form as Mortgagee shall
reasonably request;
(iv) Mortgagor shall promptly give to Mortgagee copies of (A) all
notices of default or (B) any other notice or communication with respect to
events which relate to the possible impairment of the security of this
Mortgage, which Mortgagor shall give or receive under the Superior
Mortgages and shall promptly notify Mortgagee of any default under any
Superior Mortgages on the part of Mortgagor.
22. Indemnification.
Mortgagor shall reimburse Mortgagee upon request for all reasonable
disbursements, expenses and advances incurred or made by it in accordance with
the terms hereof. Such expenses shall include the reasonable compensation,
disbursements and expenses of Mortgagee's agents, accountants, experts and
counsel.
Mortgagor shall indemnify Mortgagee (in its capacity as Mortgagee) and each
of its officers, directors, attorneys-in-fact and agents for, and hold it
harmless against, any claim, demand, expense (including but not limited to
reasonable compensation, disbursements and expenses of Mortgagee's agents and
counsel), loss or liability incurred by them without negligence, bad faith or
willful misconduct on its part, arising out of or in connection with the
administration of this Mortgage and their rights or duties hereunder including
the reasonable costs and expenses of defending themselves against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. Mortgagee shall notify Mortgagor promptly of any claim
asserted against the Mortgagee for which it may seek indemnity. Mortgagor shall
defend the claim and Mortgagee shall provide reasonable cooperation at
Mortgagor's expense in the defense. Mortgagee may have separate counsel and
Mortgagor shall pay the reasonable fees and expenses of such counsel; provided,
that Mortgagor will not be required to pay such fees and expenses if it assumes
Mortgagee's defense and there is no conflict of interest between Mortgagor and
Mortgagee in connection with such defense. Mortgagor need not pay for any
settlement made without its written consent. Mortgagor need not reimburse any
expense or indemnify against any loss or liability to the extent incurred by
Mortgagee through its negligence, bad faith or willful misconduct.
When Mortgagee incurs expenses or renders services after an "Event of
Default" specified in Section 7.1 (f) or (g)
<PAGE>
of the Trust Indenture occurs, the expenses and the compensation for the
services are intended to constitute expenses of administration under any
Bankruptcy Law.
Mortgagor's obligations under this Section 5.22 shall survive the
resignation or removal of Mortgagee, the discharge of the Obligations and any
rejection or termination of this Mortgage under any Bankruptcy Law.
Section 5.23. Acceptance. By Mortgagee's acceptance of this Mortgage,
Mortgagee agrees to be bound by the terms hereof.
<PAGE>
IN WITNESS WHEREOF, Mortgagor has caused this Mortgage to be duly executed
and attested, all as of the day and year first above written.
TRUMP PLAZA ASSOCIATES
By: Trump Atlantic City Corporation,
a general partner
Witness:________________ By: ___________________
Name:
Title:
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
BE IT REMEMBERED, that on April __, 1996, before me, the subscriber, a
Notary Public of the State of New York, personally appeared
_______________________, to me known, who, being by me duly sworn did depose and
say that he resides at _____________________________ ; that he is _____________
of Trump Atlantic City Corporation, which is a general partner of TRUMP PLAZA
ASSOCIATES, the partnership described in and which executed the above
instrument, and he acknowledged that he signed and delivered the same on behalf
of such managing general partner as his voluntary act and deed and as the
voluntary act and deed of said corporation on behalf of said general
partnership, pursuant to authority of the board of directors of said
corporation.
--------------------------------
Notary Public
ASSIGNMENT
OF
LEASES AND RENTS
TRUMP TAJ MAHAL ASSOCIATES,
as Assignor
to
FIRST BANK NATIONAL ASSOCIATION,
AS COLLATERAL AGENT,
as Assignee
Dated as of April 17, 1996
Record and Return to:
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue, New York, New York 10022
Attention: Wallace L. Schwartz, Esq.
<PAGE>
ASSIGNMENT OF LEASES AND RENTS
THIS ASSIGNMENT OF LEASES AND RENTS (the "Assignment") made as of the 17th
day of April, 1996, by TRUMP TAJ MAHAL ASSOCIATES, a New Jersey general
partnership "Assignor"), and FIRST BANK NATIONAL ASSOCIATION, a national banking
association having an office at 180 East Fifth Street, St. Paul, Minnesota
55101, as Collateral Agent ("Assignee"), on behalf of the Designated
Representatives (as defined in the Collateral Agency Agreement) for the benefit
of the Secured Beneficiaries (as defined in the Collateral Agency Agreement)
under the Collateral Agency Agreement (as hereinafter defined).
W I T N E S S E T H:
WHEREAS, the Issuers simultaneously herewith have issued $1,200,000,000
principal amount of First Mortgage Notes due 2006 (the "Mortgage Notes"), which
Mortgage Notes were issued pursuant to that certain Indenture, dated as of even
date herewith (the "Indenture"), among Assignor, the Issuers, Guarantors and
First Bank National Association, as Trustee (the "Trustee"), as the same may be
amended from time to time in accordance with its terms;
WHEREAS, Assignor is the owner of a certain casino hotel facility (the
"Facility") known as Trump Taj Mahal Casino Resort located in Atlantic City,
Atlantic County, New Jersey, including the improvements now or hereafter erected
thereon, and the easements, rights and appurtenances thereunto belonging (the
real property on which the Facility is located which is more particularly
described on Schedule 1 attached hereto and all other real property owned or
leased by Assignor, and Assignor's interests in such real property together with
all buildings and improvements erected thereon are collectively referred to as
the "Property"); and
WHEREAS, the parties hereto desire that additional secured indebtedness of
the Assignor be permitted to be secured equally and ratably with the Indenture
Obligations in accordance with the terms of the Collateral Agency Agreement,
dated as of the date hereof (the "Collateral Agency Agreement"), by and among
Assignee, Trustee, the Issuers, the Guarantors and the other Designated
Representatives (as defined in the Collateral Agency Agreement) who become a
party thereto, as the same may be amended from time to time in accordance with
its terms; and
WHEREAS, Assignor simultaneously herewith has executed and delivered in
favor of Assignee an Indenture of Mortgage and Security Agreement, dated as of
even date herewith (the "Mortgage"), between Assignor, as mortgagor and
<PAGE>
Assignee, as mortgagee, pursuant to which Assignor has encumbered, mortgaged and
conveyed to Assignee all of Assignor's right, title and interest in and to the
Trust Estate (as defined in the Mortgage), including, without limitation, all of
Assignor's right, title and interest in and to the Property, as further security
for the performance and observance of (i) the Guarantors' obligations under the
Guarantee and (ii) the punctual payment and performance when due of all of the
Company's, the Issuers', the Guarantors' and Assignor's obligations under the
Mortgage Notes, the Indenture and the Debt Documents; and
WHEREAS, Assignor is the owner, in fee simple absolute, of the Owned Land
(as defined in the Mortgage) and the holder of certain leasehold or license
estates with respect to the Leased Land (as defined in the Mortgage); and
Assignor has and may hereafter enter into leases, subleases or occupancy
agreements, as lessor or sublessor, as the case may be, concerning or affecting
the use or occupancy of Assignor's interests or estates in and to the Property
or any part thereof; and
WHEREAS, Assignee has required this Assignment to be made by Assignor as a
condition to the purchase by the Holders of the Mortgage Notes.
<PAGE>
NOW, THEREFORE, Assignor, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, does hereby bargain, sell,
transfer, assign, convey, set over and deliver unto Assignee as additional
security for the punctual payment and performance when due of all of the
Guarantors' obligations under the Guarantee and the payment and performance when
due of all of the Company's, the Issuers', the Guarantors' and the Assignor's
obligations under the Mortgage Notes, the Indenture and the Debt Documents and
any and all amendments, extensions and renewals thereof (subject, however, to
the rights of the holders of Superior Mortgages and other Permitted Liens (as
such terms are defined in the Mortgage)), all of the following (collectively,
the "Assigned Assets"):
(i) all leases or occupancy agreements wherein Assignor is lessor
concerning or affecting the use or occupancy of the Property or any part
thereof, now existing or which may be executed at any time in the future, and
all amendments, extensions and renewals of said leases or occupancy agreements,
and any of them, all of which are collectively called the "Leases",
all rents, fees, charges, income, revenues, issues, profits, security and
other payments which may now or hereafter be or become due or owing under the
Leases, and any of them, and any and all payments derived from or relating to
the Leases to which Assignor is entitled, including, without limitation, (x)
claims for the recovery of damages done to the Property, (y) claims for damages
resulting from acts of insolvency or acts of bankruptcy or otherwise, and (z)
lump sum payments for the cancellation of Leases or the waiver of any obligation
or term thereof prior to the expiration date (collectively, the "Rents"); and
all of the rents, profits, revenues, accounts, accounts receivable and
other income and proceeds (including, without limitation, all rents, fees,
charges, accounts, issues, profits, revenues and payments for or from (i) the
use or occupancy of the rooms and other public facilities in the Hotel (as
defined in the Mortgage) and (ii) the operation of the Casino (as defined in the
Mortgage)) of the Trust Estate (as defined in the Mortgage) and all of the
estate, right, title and interest of every nature whatsoever of Assignor in and
to the same and every part thereof (collectively, the "Profits").
Provided, however, that no Excepted Property (as defined in the Mortgage) is
conveyed hereby; it being intended hereby to establish a present and complete
transfer unto Assignee of all of Assignor's right, title, interest and estate in
and to the Assigned Assets, provided, however, that Assignor is hereby granted a
license by Assignee to (i) collect all of the Rents and Profits which may become
due during the life of this Assignment and (ii) enter into, renew, modify,
extend, terminate, amend, collectively assign, transfer or hypothecate any or
all of the Leases, in accordance with the provisions of Section 5.13 of the
<PAGE>
Mortgage, each until an Event of Default under the Mortgage (an "Event of
Default") shall have occurred and Assignee shall have notified Assignor (in the
manner set forth in the Mortgage for the giving of notices) of Assignee's
election to revoke such license (a "Revocation Event"). Upon the occurrence of
an Event of Default, Assignor agrees to deposit with Assignee upon demand such
of the Leases as may from time to time be designated by Assignee.
All capitalized terms not otherwise defined herein shall have the meaning
set forth in the Mortgage.
Assignor hereby appoints Assignee the true and lawful attorney of Assignor
with full power of substitution, and with power for Assignor and in the name of
Assignor and/or in Assignor's name, place and stead, to demand, collect, receipt
and give complete acquittance for any and all Rents and Profits, and at
Assignee's discretion to file any claim or take any other action or proceeding
and make any settlement of any claims, either in Assignee's own name or in the
name of Assignor or otherwise, which Assignee may deem necessary or desirable in
order to collect and enforce the payment of any and all Rents and Profits. No
right shall be exercised by Assignee under this paragraph until a Revocation
Event has occurred. All lessees under the Leases are hereby expressly authorized
and directed, after the occurrence of a Revocation Event, to pay all rents and
other sums herein assigned to Assignee or such nominee as Assignee may designate
in writing delivered to and received by such lessees, who thereafter are
expressly relieved of any and all duty, liability or obligation to Assignor in
respect of all payments so made.
Assignee is hereby vested with full power to use all measures, legal and
equitable, deemed by Assignee to be necessary or proper to enforce this
Assignment and to collect the Rents and Profits. Assignee shall be under no
obligation to press any of the rights or claims assigned to Assignee hereunder,
or, prior to entering into possession and control of the Property, to perform or
carry out any of the obligations of Assignor under any of the Leases and does
not assume any of the liabilities in connection with or arising or growing out
of the covenants and agreements of Assignor in the Leases. It is further
understood that this Assignment shall not operate to place responsibility for
the control, care, management or repair of Assignor's estates or interests in
and to the Property, or parts thereof, upon Assignee, prior to entering into
possession and control of the Property, nor shall it operate to make Assignee
liable, prior to entering into possession and control of the Property, for the
carrying out of any of the terms and conditions of any of the Leases, or, prior
to entering into possession and control of the Property, for any waste to
Assignor's estates or interests in and to the Property by any lessee or
sublessee of Assignor under any leases, or by any occupant of the Property, or
by any party whatsoever or, prior to entering into possession and control of the
<PAGE>
Property, for any dangerous or defective condition of the Property or for any
negligence in the management, upkeep, repair or control of Assignor's estates or
interests in and to the Property resulting in loss or injury or death to any
lessee, licensee, employee or any other person. No right shall be exercised by
Assignee under this paragraph until a Revocation Event has occurred.
Assignee hereby agrees to promptly remit to Assignor any amounts collected
hereunder by Assignee which are in excess of those applied to pay in full the
aforesaid liabilities and indebtedness at the time due.
Nothing herein contained is intended to limit or reduce the rights of
Assignee or the obligations of Assignor set forth in the Mortgage, but rather
all of the terms, provisions and conditions of this Assignment are in addition
to and in supplement of such rights and obligations. If any provision contained
in this Assignment is in conflict with, or inconsistent with, any provision in
the Mortgage, the provision contained in the Mortgage shall govern and control.
Upon the termination of the Debt Documents and the payment in full of the
principal sum, interest and other indebtedness secured thereby or the defeasance
of the indebtedness secured thereby in accordance with the provisions of Article
Nine of the Indenture, this Assignment shall be and become null and void, and
all estate, right, title and interest of Assignee in and to the Leases shall
revert to Assignor and Assignee shall promptly cancel and discharge of record
this Assignment and any financing statement filed in connection herewith and
execute and deliver to Assignor all such instruments as may be appropriate to
evidence such discharge and satisfaction of said Assignment (provided that
Assignee shall have no liability thereunder and all costs and expenses shall be
paid by Assignor); otherwise, this Assignment shall remain in full force and
effect as herein provided, shall inure to the benefit of Assignee and its
successors and assigns and shall be binding upon Assignor, and its successors
and assigns, and any subsequent holder of Assignor's right, title, interest and
estate in and to the Property. In connection with the release of a portion of
the Trust Estate pursuant to Section 1.14 of the Mortgage, Assignee shall
promptly execute and deliver to Assignor all such instruments as may be
necessary, required or appropriate to evidence the release of such portion of
the Trust Estate from this Assignment.
Notwithstanding anything herein or in any other agreement, document,
certificate, instrument, statement or omission referred to below to the
contrary, Section 1.10 of the Mortgage is incorporated herein by reference.
<PAGE>
This Assignment shall be governed by and construed in accordance with the
laws of the State of New Jersey, without giving effect to the principles of
conflicts of laws.
This Assignment is subject to and shall be enforced in compliance with the
provisions of the New Jersey Casino Control Act.
<PAGE>
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to be
duly executed, all as of the date first above set forth.
ASSIGNOR:
TRUMP TAJ MAHAL ASSOCIATES
By: Trump
Atlantic City Corporation,
a general partner
Witness:________________ By: ___________________
Name:
Title
<PAGE>
ASSIGNEE:
FIRST BANK NATIONAL ASSOCIATION,AS
COLLATERAL AGENT
Witness:_____________ By: ______________________
Name:
Title:
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)
BE IT REMEMBERED, that on April __, 1996, before me, the subscriber, a
Notary Public of the State of New York, personally appeared
_______________________, to me known, who, being by me duly sworn did depose and
say that he resides at ; that he is _____________ of Trump Atlantic City
Corporation, which is a general partner of TRUMP TAJ MAHAL ASSOCIATES, the
partnership described in and which executed the above instrument, and he
acknowledged that he signed and delivered the same on behalf of such managing
general partner as his voluntary act and deed and as the voluntary act and deed
of said corporation on behalf of said general partnership, pursuant to authority
of the board of directors of said corporation.
--------------------------------
Notary Public
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
BE IT REMEMBERED, that on April , 1996, before me, the
subscriber, a Notary Public of the State of New York, personally appeared
, to me known, who, being by me duly sworn did depose
and say that he resides at ; that
he is of FIRST BANK NATIONAL ASSOCIATION,
one of the corporations described in and which executed the above instrument,
and he acknowledged that he signed and delivered the same as his voluntary act
and deed and the voluntary act and deed of said corporation pursuant to
authority of its board of directors, and that he received a true copy of the
within instrument on behalf of said corporation.
--------------------------------
Notary Public
ASSIGNMENT
OF
LEASES AND RENTS
TRUMP PLAZA ASSOCIATES,
as Assignor
to
FIRST BANK NATIONAL ASSOCIATION,
AS COLLATERAL AGENT,
as Assignee
Dated as of April 17, 1996
Record and Return to:
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue, New York, New York 10022
Attention: Wallace L. Schwartz, Esq.
<PAGE>
ASSIGNMENT OF LEASES AND RENTS
THIS ASSIGNMENT OF LEASES AND RENTS (the "Assignment") made as of the 17th
day of April, 1996, by TRUMP PLAZA ASSOCIATES, a New Jersey general partnership
"Assignor"), and FIRST BANK NATIONAL ASSOCIATION, a national banking association
having an office at 180 East Fifth Street, St. Paul, Minnesota 55101, as
Collateral Agent ("Assignee"), on behalf of the Designated Representatives (as
defined in the Collateral Agency Agreement) for the benefit of the Secured
Beneficiaries (as defined in the Collateral Agency Agreement) under the
Collateral Agency Agreement (as hereinafter defined).
W I T N E S S E T H:
WHEREAS, the Issuers simultaneously herewith have issued $1,200,000,000
principal amount of First Mortgage Notes due 2006 (the "Mortgage Notes"), which
Mortgage Notes were issued pursuant to that certain Indenture, dated as of even
date herewith (the "Indenture"), among Assignor, the Issuers, Guarantors and
First Bank National Association, as Trustee (the "Trustee"), as the same may be
amended from time to time in accordance with its terms;
WHEREAS, Assignor is the owner of a certain casino hotel facility (the
"Facility") known as Trump Plaza Hotel and Casino located in Atlantic City,
Atlantic County, New Jersey, including the improvements now or hereafter erected
thereon, and the easements, rights and appurtenances thereunto belonging (the
real property on which the Facility is located which is more particularly
described on Schedule 1 attached hereto and all other real property owned or
leased by Assignor, and Assignor's interests in such real property together with
all buildings and improvements erected thereon are collectively referred to as
the "Property"); and
WHEREAS, the parties hereto desire that additional secured indebtedness of
the Assignor be permitted to be secured equally and ratably with the Indenture
Obligations in accordance with the terms of the Collateral Agency Agreement,
dated as of the date hereof (the "Collateral Agency Agreement"), by and among
Assignee, Trustee, the Issuers, the Guarantors and the other Designated
Representatives (as defined in the Collateral Agency Agreement) who become a
party thereto, as the same may be amended from time to time in accordance with
its terms; and
WHEREAS, Assignor simultaneously herewith has executed and
delivered in favor of Assignee an Indenture of Mortgage and Security Agreement,
dated as of even date herewith (the "Mortgage"), between Assignor, as mortgagor
and Assignee, as mortgagee, pursuant to which Assignor has encumbered,
<PAGE>
mortgaged and conveyed to Assignee all of Assignor's right, title and interest
in and to the Trust Estate (as defined in the Mortgage), including, without
limitation, all of Assignor's right, title and interest in and to the Property,
as further security for the performance and observance of (i) the Guarantors'
obligations under the Guarantee and (ii) the punctual payment and performance
when due of all of the Company's, the Issuers', the Guarantors' and Assignor's
obligations under the Mortgage Notes, the Indenture and the Debt Documents; and
WHEREAS, Assignor is the owner, in fee simple absolute, of the Owned Land
(as defined in the Mortgage) and the holder of certain leasehold or license
estates with respect to the Leased Land (as defined in the Mortgage); and
Assignor has and may hereafter enter into leases, subleases or occupancy
agreements, as lessor or sublessor, as the case may be, concerning or affecting
the use or occupancy of Assignor's interests or estates in and to the Property
or any part thereof; and
WHEREAS, Assignee has required this Assignment to be made by Assignor as a
condition to the purchase by the Holders of the Mortgage Notes.
<PAGE>
NOW, THEREFORE, Assignor, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, does hereby bargain, sell,
transfer, assign, convey, set over and deliver unto Assignee as additional
security for the punctual payment and performance when due of all of the
Guarantors' obligations under the Guarantee and the payment and performance when
due of all of the Company's, the Issuers', the Guarantors' and the Assignor's
obligations under the Mortgage Notes, the Indenture and the Debt Documents and
any and all amendments, extensions and renewals thereof (subject, however, to
the rights of the holders of Superior Mortgages and other Permitted Liens (as
such terms are defined in the Mortgage)), all of the following (collectively,
the "Assigned Assets"):
(i) all leases or occupancy agreements wherein Assignor is lessor
concerning or affecting the use or occupancy of the Property or any part
thereof, now existing or which may be executed at any time in the future,
and all amendments, extensions and renewals of said leases or occupancy
agreements, and any of them, all of which are collectively called the
"Leases",
all rents, fees, charges, income, revenues, issues, profits, security
and other payments which may now or hereafter be or become due or owing
under the Leases, and any of them, and any and all payments derived from or
relating to the Leases to which Assignor is entitled, including, without
limitation, (x) claims for the recovery of damages done to the Property,
(y) claims for damages resulting from acts of insolvency or acts of
bankruptcy or otherwise, and (z) lump sum payments for the cancellation of
Leases or the waiver of any obligation or term thereof prior to the
expiration date (collectively, the "Rents"); and
all of the rents, profits, revenues, accounts, accounts receivable and
other income and proceeds (including, without limitation, all rents, fees,
charges, accounts, issues, profits, revenues and payments for or from (i)
the use or occupancy of the rooms and other public facilities in the Hotel
(as defined in the Mortgage) and (ii) the operation of the Casino (as
defined in the Mortgage)) of the Trust Estate (as defined in the Mortgage)
and all of the estate, right, title and interest of every nature whatsoever
of Assignor in and to the same and every part thereof (collectively, the
"Profits").
Provided, however, that no Excepted Property (as defined in the Mortgage) is
conveyed hereby; it being intended hereby to establish a present and complete
transfer unto Assignee of all of Assignor's right, title, interest and estate in
and to the Assigned Assets, provided, however, that Assignor is hereby granted a
license by Assignee to (i) collect all of the Rents and Profits which may become
due during the life of this Assignment and (ii) enter into, renew, modify,
extend, terminate, amend, collectively assign, transfer or hypothecate any or
all of the Leases, in accordance with the provisions of Section 5.13 of the
Mortgage,
<PAGE>
each until an Event of Default under the Mortgage (an "Event of Default")
shall have occurred and Assignee shall have notified Assignor (in the
manner set forth in the Mortgage for the giving of notices) of Assignee's
election to revoke such license (a "Revocation Event"). Upon the occurrence
of an Event of Default, Assignor agrees to deposit with Assignee upon
demand such of the Leases as may from time to time be designated by
Assignee.
All capitalized terms not otherwise defined herein shall have the meaning
set forth in the Mortgage.
Assignor hereby appoints Assignee the true and lawful attorney of Assignor
with full power of substitution, and with power for Assignor and in the name of
Assignor and/or in Assignor's name, place and stead, to demand, collect, receipt
and give complete acquittance for any and all Rents and Profits, and at
Assignee's discretion to file any claim or take any other action or proceeding
and make any settlement of any claims, either in Assignee's own name or in the
name of Assignor or otherwise, which Assignee may deem necessary or desirable in
order to collect and enforce the payment of any and all Rents and Profits. No
right shall be exercised by Assignee under this paragraph until a Revocation
Event has occurred. All lessees under the Leases are hereby expressly authorized
and directed, after the occurrence of a Revocation Event, to pay all rents and
other sums herein assigned to Assignee or such nominee as Assignee may designate
in writing delivered to and received by such lessees, who thereafter are
expressly relieved of any and all duty, liability or obligation to Assignor in
respect of all payments so made.
Assignee is hereby vested with full power to use all measures,
legal and equitable, deemed by Assignee to be necessary or proper to enforce
this Assignment and to collect the Rents and Profits. Assignee shall be under no
obligation to press any of the rights or claims assigned to Assignee hereunder,
or, prior to entering into possession and control of the Property, to perform or
carry out any of the obligations of Assignor under any of the Leases and does
not assume any of the liabilities in connection with or arising or growing out
of the covenants and agreements of Assignor in the Leases. It is further
understood that this Assignment shall not operate to place responsibility for
the control, care, management or repair of Assignor's estates or interests in
and to the Property, or parts thereof, upon Assignee, prior to entering into
possession and control of the Property, nor shall it operate to make Assignee
liable, prior to entering into possession and control of the Property, for the
carrying out of any of the terms and conditions of any of the Leases, or, prior
to entering into possession and control of the Property, for any waste to
Assignor's estates or interests in and to the Property by any lessee or
sublessee of Assignor under any leases, or by any occupant of the Property, or
by any party whatsoever or, prior to entering into possession and control of the
<PAGE>
Property, for any dangerous or defective condition of the Property or for any
negligence in the management, upkeep, repair or control of Assignor's estates or
interests in and to the Property resulting in loss or injury or death to any
lessee, licensee, employee or any other person. No right shall be exercised by
Assignee under this paragraph until a Revocation Event has occurred.
Assignee hereby agrees to promptly remit to Assignor any amounts collected
hereunder by Assignee which are in excess of those applied to pay in full the
aforesaid liabilities and indebtedness at the time due.
Nothing herein contained is intended to limit or reduce the rights of
Assignee or the obligations of Assignor set forth in the Mortgage, but rather
all of the terms, provisions and conditions of this Assignment are in addition
to and in supplement of such rights and obligations. If any provision contained
in this Assignment is in conflict with, or inconsistent with, any provision in
the Mortgage, the provision contained in the Mortgage shall govern and control.
Upon the termination of the Debt Documents and the payment in full of the
principal sum, interest and other indebtedness secured thereby or the defeasance
of the indebtedness secured thereby in accordance with the provisions of Article
Nine of the Indenture, this Assignment shall be and become null and void, and
all estate, right, title and interest of Assignee in and to the Leases shall
revert to Assignor and Assignee shall promptly cancel and discharge of record
this Assignment and any financing statement filed in connection herewith and
execute and deliver to Assignor all such instruments as may be appropriate to
evidence such discharge and satisfaction of said Assignment (provided that
Assignee shall have no liability thereunder and all costs and expenses shall be
paid by Assignor); otherwise, this Assignment shall remain in full force and
effect as herein provided, shall inure to the benefit of Assignee and its
successors and assigns and shall be binding upon Assignor, and its successors
and assigns, and any subsequent holder of Assignor's right, title, interest and
estate in and to the Property. In connection with the release of a portion of
the Trust Estate pursuant to Section 1.14 of the Mortgage, Assignee shall
promptly execute and deliver to Assignor all such instruments as may be
necessary, required or appropriate to evidence the release of such portion of
the Trust Estate from this Assignment.
Notwithstanding anything herein or in any other agreement, document,
certificate, instrument, statement or omission referred to below to the
contrary, Section 1.10 of the Mortgage is incorporated herein by reference.
<PAGE>
This Assignment shall be governed by and construed in accordance with the
laws of the State of New Jersey, without giving effect to the principles of
conflicts of laws.
This Assignment is subject to and shall be enforced in compliance with the
provisions of the New Jersey Casino Control Act.
<PAGE>
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to be
duly executed, all as of the date first above set forth.
ASSIGNOR:
TRUMP PLAZA ASSOCIATES
By:
Trump Atlantic City Corporation,
a general partner
Witness:________________ By: ___________________
Name:
Title:
<PAGE>
ASSIGNEE:
FIRST BANK NATIONAL ASSOCIATION,
AS COLLATERAL AGENT
Witness:_____________ By: ______________________
Name:
Title:
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
BE IT REMEMBERED, that on April __, 1996, before me, the subscriber, a
Notary Public of the State of New York, personally appeared
_______________________, to me known, who, being by me duly sworn did depose and
say that he resides at ; that he is _____________ of Trump Atlantic City
Corporation, which is a general partner of TRUMP PLAZA ASSOCIATES, the
partnership described in and which executed the above instrument, and he
acknowledged that he signed and delivered the same on behalf of such managing
general partner as his voluntary act and deed and as the voluntary act and deed
of said corporation on behalf of said general partnership, pursuant to authority
of the board of directors of said corporation.
--------------------------------
Notary Public
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
BE IT REMEMBERED, that on April , 1996, before me, the subscriber, a Notary
Public of the State of New York, personally appeared ___________________, to me
known, who, being by me duly sworn did depose and say that he resides at
__________________________; that he is _______________________________________
of FIRST BANK NATIONAL ASSOCIATION, one of the corporations described in and
which executed the above instrument, and he acknowledged that he signed and
delivered the same as his voluntary act and deed and the voluntary act and deed
of said corporation pursuant to authority of its board of directors, and that he
received a true copy of the within instrument on behalf of said corporation.
--------------------------------
Notary Public
- --------------------------------------------------------------------------------
COLLATERAL AGENCY AGREEMENT
among
FIRST BANK
NATIONAL ASSOCIATION,
as Collateral Agent,
FIRST BANK
NATIONAL ASSOCIATION,
as Trustee under the Existing Indenture
referred to herein for the holders of the
First Mortgage Notes due 2006
of Trump Atlantic City Associates and
Trump Atlantic City Funding, Inc.
THE OTHER SECURED PARTIES FROM TIME TO TIME SIGNATORY HERETO and
TRUMP ATLANTIC CITY ASSOCIATES
and
TRUMP ATLANTIC CITY FUNDING, INC.,
TOGETHER WITH THE ENTITIES REQUIRED TO GUARANTEE
THE FIRST MORTGAGE NOTES REFERRED TO ABOVE
------------
Dated as of April 17, 1996
- --------------------------------------------------------------------------------
<PAGE>
COLLATERAL AGENCY
AGREEMENT
COLLATERAL AGENCY AGREEMENT (together with any amendments, replacements and
supplements hereafter entered into in accordance with the terms hereof, the
"Collateral Agency Agreement"), dated as of April 17, 1996, by and among First
Bank National Association, in its capacity as collateral agent hereunder
(including any successor collateral agent, the "Collateral Agent"); First Bank
National Association (the "Trustee"), in its capacity as trustee under the
Existing Indenture (as defined herein) for the benefit of the holders of
Existing Notes (as hereinafter defined); the other Designated Representatives
(as hereinafter defined) for the benefit of the other Secured Beneficiaries (as
hereinafter defined), which Designated Representatives by their act become
signatories hereto as set forth herein; Trump Atlantic City Associates, a New
Jersey general partnership (the "Company"); Trump Atlantic City Funding, Inc., a
Delaware corporation ("Funding" and, together with the Company, the "Issuers");
and Trump Plaza Associates, a New Jersey general partnership, Trump Taj Mahal
Associates, a New Jersey general partnership and Trump Atlantic City Corporation
(formerly known as "The Trump Taj Mahal Corporation"), a Delaware corporation
(collectively, together with such entities as may hereafter be required to
become guarantors of the Existing Indenture Obligations, the "Guarantors", and
together with the Issuers, the "Debtors"). As used herein, all capitalized terms
not otherwise defined herein shall have the respective meanings set forth in the
Existing Indenture.
W I T N E S S E T H:
WHEREAS, the Company and Funding are concurrently issuing the Existing
Notes and the Guarantors are issuing guarantees of the Existing Notes pursuant
to the Existing Indenture;
WHEREAS, each of the Debtors is concurrently executing and delivering
certain of the Collateral Documents to which it is a party to the Collateral
Agent;
WHEREAS, the parties hereto desire that certain permitted indebtedness be
secured by equal and ratable liens.
NOW THEREFORE, in consideration of the premises and other benefits, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
<PAGE>
Definitions. As used herein, the following terms shall have the meanings
set forth in this Section 1, and all other capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the Existing
Indenture. All such terms shall include in the singular number the plural and in
the plural number the singular.
"Acceptable Bank" means a bank or trust company in good standing and
incorporated under the laws of the United States or any State thereof or the
District of Columbia, with its principal corporate trust office within the
United States, with capital, surplus and undistributed profits of not less than
$25,000,000.
"Agency Appointment Agreement" means an agreement substantially in the form
of Annex A attached hereto signed on behalf of a class of secured creditors by
its sole Designated Representative and accepted by the Collateral Agent.
"Collateral" means property that is subject to the Liens created by the
Collateral Documents in favor of the Collateral Agent.
"Collateral Agency Agreement" means this Collateral Agency Agreement among
the Collateral Agent, the Existing Trustee, the other Designated Representatives
and the Debtors, as this Collateral Agency Agreement may be amended, modified or
supplement from time to time in accordance with the terms hereof.
"Collateral Documents" means the "Mortgage Documents" (as defined in the
Existing Indenture) and this Collateral Agency Agreement.
"Company Request" means a written request of any of the Debtors in the form
of an Officers' Certificate delivered pursuant to the respective Debt Documents.
"Debt Documents" means the Existing Indenture and any Secured Credit
Agreements.
"Designated Representatives" means the Trustee, with respect to the
Existing Indenture, for the benefit of the Holders, and means each Person who
executes an Agency Appointment Agreement for the benefit of each other class of
Secured Beneficiaries.
"Existing Indenture" means the Indenture, dated as of April 17, 1996, among
the Debtors and the Trustee, relating to the Existing Notes, as such Indenture
may be amended, modified or supplemented from time to time in accordance with
its terms.
"Existing Indenture Obligations" means the "Indenture Obligations" as
defined in the Existing Indenture.
"Existing Notes" means the Company's and Funding's 11 1/4% First Mortgage
Notes due 2006 in an aggregate principal amount originally outstanding of
<PAGE>
$1,200,000,000, issued pursuant to the Existing Indenture, including the
guarantees thereof by the Guarantors and Indenture Refinancings.
"Indenture Refinancings" means any full or partial refinancings,
replacements or modifications of the Existing Indenture Obligations (or an
Indenture Refinancing thereof) which are made pursuant to a Secured Credit
Agreement.
"Majority Secured Creditors" means the holders of more than 50% of the
Outstanding Amount of Existing Notes and Secured Loans at such time, taken as a
whole.
"Obligations" means the Existing Indenture Obligations and the Secured
Obligations together with any obligations of any Debtor under any Collateral
Document.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Collateral Agent.
"Outstanding Amount" of any Indebtedness at any time means the principal
amount outstanding of such Indebtedness at such time, unless such Indebtedness
was issued at a discount, in which case the "Outstanding Amount" of such
Indebtedness means the original issue price of such Indebtedness plus the
accretion to such time determined in accordance with GAAP.
"Satisfied" means (a)(i) payment in full and satisfaction of all of the
relevant Obligations or (ii) a defeasance made in accordance with Article IX of
the Existing Indenture and a comparable covenant defeasance or legal defeasance
of all other Secured Obligation made in accordance the provisions of the
applicable Secured Credit Agreement to the extent the terms thereof provide for
the release of the applicable Designated Representative's Lien in respect of the
Collateral as a result thereof, and (b) receipt by the relevant Designated
Representative of an Officers' Certificate of the Company to the effect that (i)
each of the Debtors is at the time of such payments and satisfaction solvent for
the purposes of the United States Bankruptcy Code and (ii) there exist bona fide
financial projections of each of the Debtors demonstrating that the Company,
Funding and the Guarantors each is expected to remain solvent for such purposes
for a period of at least ninety days after such time.
"Secured Beneficiary" or "Secured Beneficiaries" means each Designated
Representative, each holder of the Existing Notes and each holder of the Secured
Loans.
"Secured Credit Agreement" means collectively, each document providing for
secured Indebtedness of the Debtors which Indebtedness is permitted to be
incurred under (i) Indenture Refinancings or (ii) Section 5.11(c) (including
full or partial refinancings, modifications or replacements thereof to the
extent that such refinancings, modifications or replacements are permitted under
the Existing Indenture) or Section 5.11(e) of the Existing Indenture.
"Secured Loans" means the principal amount borrowed under any Secured
Credit Agreements.
<PAGE>
"Secured Obligations" means the obligations of the Issuers and the
Guarantors pursuant to the Secured Credit Agreement and the Secured Loans now or
hereafter existing, to pay principal of and interest on the Secured Loans when
due and payable, whether on maturity or an interest payment date, by
acceleration, call for redemption or otherwise, and interest on the overdue
principal of, and (to the extent lawful) interest, if any, on, the Secured Loans
and all other amounts due or to become due in connection with the Secured Credit
Agreement, including any and all extensions, renewals or other modifications
thereof, in whole or in part, and the performance of all other obligations of
the Issuers and the Guarantors including all costs and expenses incurred by the
applicable Designated Representative or the holders in the collection or
enforcement of any such obligations or realization upon the security therefor.
"Security Interests" means the Liens on the Collateral created by the
Collateral Documents.
<PAGE>
Appointment. The Trustee, for the benefit of the holders of the Existing
Notes, hereby designates and appoints, and the other Designated Representatives,
for the benefit of their respective holders of Indebtedness, by executing the
Agency Appointment Agreement, designate and appoint the Collateral Agent, and
the Collateral Agent hereby and thereby accepts each such appointment, to serve
as collateral agent and representative of the Trustee, for the benefit of the
holders of the Existing Notes, and to serve as collateral agent and
representative of the other Designated Representatives, for the benefit of the
respective Secured Beneficiaries which thereby become a party to this Collateral
Agency Agreement, in the manner and upon the terms and conditions set forth
herein and in the other Collateral Documents. The Trustee, on behalf of itself
and each Existing Note Holder, hereby irrevocably authorizes, and each Existing
Noteholder by its acceptance of an Existing Note shall irrevocably authorize and
direct, and each Designated Representative, by execution of an Agency
Appointment Agreement on behalf of itself and each holder of a Secured
Obligation, by its respective Designated Representatives' execution of the
Agency Appointment Agreement, irrevocably authorizes and directs, the Collateral
Agent and the Collateral Agent hereby agrees:
to take such action on behalf of the Secured Beneficiaries under the
provisions of this Collateral Agency Agreement and the other Collateral
Documents and to exercise such powers and to perform such duties hereunder and
under any other Collateral Document as are specifically delegated to or required
of the Collateral Agent by the terms hereof and thereof and such other powers as
are reasonably incidental thereto;
to exercise, on behalf of the Secured Beneficiaries, all remedies available
to the Collateral Agent under the Collateral Documents, including without
limitation the right to foreclose or otherwise realize upon any Collateral and
to initiate, prosecute and defend any and all legal proceedings with respect to
the Collateral against the Debtors; and
to execute, deliver and perform on behalf of the Secured Creditors and/or
the Holders of the Obligations such confirmations, subordinations, releases,
terminations, satisfactions, discharges, non-disturbance agreements and all
other agreements, instruments and acts as any of the Debtors shall be entitled
pursuant to the Collateral Documents and the Debt Documents.
Nature of Duties. Neither the Collateral Agent nor any of its officers,
directors, employees or agents shall be liable for any claims, losses, damages,
penalties, actions, judgments, suits, liabilities, obligations, costs or
expenses of any kind or nature whatsoever resulting from any action the
Collateral Agent takes or omits to take under any Collateral Document or in
connection therewith, unless caused by its or their negligence, bad faith or
willful misconduct. The Collateral Agent may perform any of its duties hereunder
by or through its agents or employees. The Collateral Agent shall have no duty
or responsibility, either initially or on a continuing basis, to provide any
Secured Beneficiary with any credit or other information with respect to the
Issuers or any Guarantor whether coming into its possession before the issuance
of the Obligations or at any time or times thereafter, except as otherwise
provided in this Collateral Agency Agreement. The Collateral Agent may accept
deposits from, lend money to, or generally engage in any kind of banking, trust
or other business with the Company or any of its Affiliates, in each case as if
it were not the Collateral Agent hereunder.
<PAGE>
Advices. The Collateral Agent shall forward promptly to each Designated
Representative a copy of each notice, certificate, instruction or other
communication received by the Collateral Agent from the Debtors or the Secured
Creditors under this Collateral Agency Agreement, any other Collateral Document
or any of the Debt Documents (except for any which the Issuers and/or the
Guarantors shall be obligated to furnish directly to such Secured Creditor). The
Collateral Agent shall also promptly furnish to each Designated Representative,
upon its written request, such other information and documents concerning the
Collateral and the Collateral Agent's actions with respect thereto as such
Secured Creditor may reasonably request.
Rights of Collateral Agent.
) Right to Rely. The Collateral Agent may rely on any document reasonably
believed by it to be genuine and to have been signed or presented
by the proper person. Before the Collateral Agent acts or refrains from acting
it may consult with counsel and may require an Officers' Certificate or an
Opinion of Counsel, to the extent required under and in accordance with the
Existing Indenture and Secured Credit Agreements. The Collateral Agent shall not
be liable for any action it takes or omits to take in good faith in reliance on
any such Certificate or Opinion.
) Attorneys/Agents. The Collateral Agent may act through its attorneys and
agents and shall not be responsible for the misconduct or negligence of any
agent appointed with due care.
) Good Faith Belief in Authority, Rights or Powers. The Collateral Agent
shall not be liable for any action it takes or omits to take in the good faith
belief that such act or omission was authorized or within its rights or powers.
) No Investigation. The Collateral Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, notice, request, direction, consent, order,
bond, debenture or other paper or document, but the Collateral Agent, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit.
) Obligation to Act upon Instructions. The Collateral Agent shall be under
no obligation to exercise any of the rights or powers vested in it by any
Collateral Document at the request, order or direction of or any of the
Designated Representatives or the Majority Secured Creditors, pursuant to the
provisions of any Debt Document, unless the Designated Representatives shall
have offered to the Collateral Agent reasonable security or indemnity against
the costs, expenses and liabilities which may be incurred therein or thereby.
Upon receipt of such reasonable security or indemnity, however, the Collateral
Agent shall act upon the instructions of the Majority Secured Creditors.
Notwithstanding the foregoing, the Collateral Agent shall not take or refrain
from taking such action if so taking or refraining from taking such action, as
the case may be, would violate applicable law or the terms of the Collateral
Documents or the Debt Documents.
<PAGE>
) Designated Representative and Secured Beneficiaries. The Collateral Agent
may deem and treat a Designated Representative as the owner of the applicable
Obligation, other than in connection with a determination by the Majority
Secured Creditors. The rights of the individual owners of Existing Notes shall
be governed by the Existing Indenture and the rights of holders of any Secured
Obligation shall be governed by the applicable Secured Credit Agreement. No
individual holder of any Obligation shall have the right to direct the
Collateral Agent to act other than through its Designated Representative, except
in accordance with Section 10.
<PAGE>
Compensation and Indemnification.
) Compensation and Expenses. The Company agrees to pay to the Collateral
Agent from time to time upon demand, all reasonable fees, costs and expenses of
the Collateral Agent (including, without limitation, the reasonable fees and
disbursements of counsel) (A) arising in connection with the preparation,
execution, delivery, modification and termination of each Collateral Document or
the enforcement of any of the provisions hereof or thereof, (B) incurred or
required to be advanced in connection with the sale or other disposition of any
Collateral pursuant to any Collateral Document and the preservation, protection
or defense of the Collateral Agent's rights under the Collateral Documents and
in and to the Collateral or (C) in connection with any action taken pursuant to
Section 13.
) Stamp and Other Taxes. The Company hereby agrees to indemnify the
Collateral Agent, and hold it harmless against, any present or future claim for
liability for any stamp or other similar tax and any penalties or interest with
respect thereto, which may be assessed, levied or collected by any jurisdiction
in connection with any Collateral Document or any Collateral.
) Filing Fees, Excise Taxes, Etc. The Company hereby agrees to pay or to
reimburse the Collateral Agent for any and all amounts in respect of all search,
filing, recording and registration fees, taxes, excise taxes and other similar
imposts which may be payable or determined to be payable in respect of the
execution, delivery, performance and enforcement of each Collateral Document.
) Indemnification of Collateral Agent. The Debtors shall jointly and
severally indemnify the Collateral Agent for, and hold it harmless against, any
and all claims, demands, expenses (including but not limited to reasonable
compensation, disbursements and expenses of the Collateral Agent's agents and
counsel), losses or liabilities incurred by it without negligence, bad faith or
willful misconduct on its part, in any way arising out of or in connection with
the acceptance and administration of this Collateral Agency Agreement and its
rights or duties hereunder or under any other Collateral Document. The
Collateral Agent shall notify the Company promptly of any claim asserted against
the Collateral Agent for which it may seek indemnity. The Company need not pay
for any settlement made without its written consent. The Company need not
reimburse any expense or indemnify against any loss or liability to the extent
incurred by the Collateral Agent through its negligence, bad faith or willful
misconduct. When the Collateral Agent incurs expenses or renders services after
an Event of Default specified in Section 7.1(f) of the Existing Indenture
occurs, such expenses and the compensation for such services are intended to
constitute expenses of administration under any Bankruptcy Law.
) Right to Advance Costs. In the event the Collateral Agent makes demand of
the Company for costs incurred under Section 5(a) to 5(d), inclusive, and the
Company is unable or refuses to pay such disbursement or expense of the
Collateral Agent, each Designated Representative shall have the right, but not
the obligation, to advance to the Collateral Agent amounts to pay such
disbursement or expense of the Collateral Agent.
<PAGE>
) Survival of Obligations. All obligations set forth in this Section 6
shall survive the execution, delivery and termination of this Collateral Agency
Agreement and the other Collateral Documents and the payment of all other
Obligations.
Resignation by or Removal of the Collateral Agent.
) Resignation; Removal. The Collateral Agent may resign from the
performance of all its functions and duties hereunder and under the other
Collateral Documents at any time by giving twenty Business Days' prior written
notice to the Company and each Secured Creditor. The Majority Secured Creditors
may, at any time, and the Company may, if the Collateral Agent ceases to be an
Acceptable Bank, remove the Collateral Agent by giving twenty Business Days'
prior written notice to the Collateral Agent, the Company, the Guarantors and
the Secured Creditors. Such resignation or removal shall take effect upon the
appointment of a successor Collateral Agent pursuant to paragraph (b) or (c)
below or as otherwise provided below.
) Appointment of Successor. Upon any such notice of resignation or removal,
the Majority Secured Creditors may appoint, with the Company's consent, a
successor Collateral Agent hereunder, which shall be an Acceptable Bank. In the
event that the Majority Secured Creditors do not appoint, with the consent of
the Company, a successor Collateral Agent within fifteen days of receipt of such
notice, the Company shall appoint an Acceptable Bank as successor Collateral
Agent. If a successor Collateral Agent shall have been so appointed by the
Company, the Majority Secured Creditors may appoint a successor Collateral Agent
within one year after the Company-appointed successor Collateral Agent takes
office to replace the Collateral Agent.
) Effectiveness of Resignation or Removal. A successor Collateral Agent
shall deliver a written acceptance of its appointment to the retiring Collateral
Agent, the Designated Representatives and the Debtors. Immediately thereafter,
the retiring Collateral Agent shall transfer all property held by it as
Collateral Agent to the successor Collateral Agent, and shall execute and
deliver to the successor Collateral Agent such documents as are necessary to
perfect or maintain the Security Interests, including any documents necessary to
assign or transfer all interests of the retiring Collateral Agent in the
Collateral to the successor Collateral Agent, in the form or forms adequate for
proper filing or recording in such offices and such jurisdictions as are
necessary to put the successor Collateral Agent in the same position as was the
retiring Collateral Agent with respect to the Collateral. Thereafter, the
resignation or removal of the retiring Collateral Agent shall become effective
and the successor Collateral Agent shall have all the rights, powers and duties
of the Collateral Agent under this Collateral Agency Agreement. A successor
Collateral Agent shall give notice of its succession to the Secured Creditors
and the Debtors.
) Consolidation, Merger, Etc. If the Collateral Agent consolidates with,
merges or converts into, or transfers all or substantially all of its corporate
trust business to, another corporation, the resulting, surviving or transferee
corporation without any further act shall, if such resulting, surviving or
transferee corporation is an Acceptable Bank, be the successor Collateral Agent.
The transferring, merging or converting Collateral Agent shall have all
documents necessary to perfect or maintain the Security Interests, including any
<PAGE>
documents necessary to assign or transfer all interests of the transferring,
merging or converting Collateral Agent in the Collateral, executed and delivered
to it in the form or forms adequate for proper filing or recording in such
offices and such jurisdictions as are necessary to put the successor Collateral
Agent in the same position as the transferring, merging or converting Collateral
Agent with respect to the Collateral.
) Compensation Continuing. Any person or entity authorized to act and
acting as Collateral Agent hereunder shall continue to be entitled to receive
fees, costs and expenses as provided in Section 6 hereof so long as such person
or entity acts as Collateral Agent hereunder.
<PAGE>
Collateral Delivery and Release.
) Possession. Notwithstanding anything in the Collateral Documents to the
contrary, any Collateral, the establishment or perfection of a security interest
in which may occur only through possession by the secured party, that comes into
the possession or control of any Secured Beneficiary, Designated Representative
or Debtor shall be delivered by such Secured Beneficiary, Designated
Representative or Debtor to, and shall be held by the Collateral Agent in its
name on behalf of the Designated Representatives.
) Release. In the event any Debtor desires release of any item of
Collateral such Debtor shall deliver a Company Request to the Collateral Agent
(a "Release Request"). The Release Request shall include a representation by the
Debtor that it has complied with (i) the applicable requirements of Section 4.3
of the Existing Indenture and (ii) the applicable Collateral Document. Promptly
after receipt of a Release Request, the Collateral Agent shall deliver to each
Designated Representative (A) a copy of such Release Request and (B) written
notice stating that the Requester has requested a release of the subject item of
Collateral. Unless any Designated Representative demonstrates to the Collateral
Agent within five business days of such notice that such requested release would
violate the requirements of the Section 4.3 of the Existing Indenture or the
applicable Collateral Document with respect thereto, the Collateral Agent shall
release the item of Collateral that is the subject of such Release Request from
the Security Interests by executing whatever documents the Debtor has provided
with the Release Request and delivering the item of Collateral to the Debtor.
) Delivery Upon Termination. Upon termination of this Collateral Agency
Agreement, in accordance with its terms, in the case where the Collateral Agent
has not been required to exercise remedies to foreclose on the Collateral, the
Collateral Agent, at the request and sole expense of the Debtor and upon
confirmation of the Satisfaction of all Obligations by each Designated
Representative, will execute and deliver to the Debtor the proper instruments
(including UCC termination statements) acknowledging the termination of this
Security Agreement, and will duly assign, transfer and deliver to the Debtors,
without recourse, representation or warranty of any kind whatsoever, such of the
Collateral as may be in possession of the Secured Party and has not theretofore
been disposed of, applied or released.
Priority of Rights; Priority of Payments.
) Priority. As long as more than one class of Obligations remains
outstanding, unpaid or not Satisfied, the Trustee, on behalf of itself and each
holder of any Existing Notes, and the other Designated Representatives, on
behalf of the respective lenders comprising each other class of Secured
Beneficiaries, as applicable, agree that the interests of the holders of the
Existing Obligations, and the interests of the holders of the Secured
Obligations, in the Collateral, including their interests in any payments to be
made from the proceeds of any sale or other disposition thereof, shall,
irrespective of the time of perfection or creation of any security interests or
liens in the Collateral on behalf of and for the benefit of each Secured
Beneficiary, be equal and ratable to the extent and in the manner provided in
paragraph (b) below. In addition, the interests of the Collateral Agent, the
Trustee, on behalf of itself and the holders of Existing Notes, and the other
<PAGE>
Designated Representatives, on behalf of the respective lenders comprising each
other class of Secured Beneficiaries, in the Collateral and the proceeds thereof
shall be as set forth in paragraph (b) below.
) Proceeds. Except as set forth in Section 8(e) or 10(c), the proceeds of
any sale or other disposition by the Collateral Agent or its agents or employees
of the whole or any part of the Collateral, together with any other monies held
by the Collateral Agent in the Collateral Account or otherwise held by the
Collateral Agent on behalf of the Designated Representatives for the benefit of
their respective Secured Creditors, shall be applied by the Collateral Agent in
accordance with this Section 11(b):
first, to the payment of any and all amounts advanced by a Secured Creditor
pursuant to Sections 5(f) and/or 6(e) of this Collateral Agency Agreement;
second, to the payment of any and all Obligations of the Company then due and
owing to the Collateral Agent, including without limitation any and all amounts
to compensate and indemnify the Collateral Agent pursuant to Section 6(d) and
any and all expenses and fees (including reasonable attorneys' fees);
third, to the pro rata payment of any and all (A) Existing Indenture
Obligations then due and owing to the Trustee on account of any and all expenses
and fees (including reasonable attorneys' fees) incurred by the Trustee in the
course of the performance of its duties under the Existing Indenture and (B) to
the other Designated Representatives for the payment of any or all amounts owing
to such Designated Representative on account of its fees and expenses for
serving as Designated Representative and/or administrative agent, servicer or
other person in a similar capacity under the applicable Secured Credit
Agreement, provided, however, that the aggregate amount payable under this
clause (B) shall not exceed the amount payable under the immediately preceding
clause (A) unless, at such time, the Outstanding Amount under the Existing
Indenture is less than the Outstanding Amount of Secured Obligations;
fourth, to the payment of the Obligations, pro rata in accordance with the
relative Outstanding Amounts of the applicable Obligations owed to the
respective Secured Beneficiaries;
fifth, if no Obligation is then due and owing, any surplus then remaining
shall be paid to the persons legally entitled thereto, subject, however, to
Section 9-504(1)(c) of the applicable Uniform Commercial Code, and thereafter to
the Debtors, as their respective interests may appear;
if, however, there remains any deficiency between (A) the aggregate amount of
the proceeds of the sale or other disposition of the Collateral and (B) the
aggregate sum of all Obligations referred to in subparagraphs (i) and (ii) of
this Section 19(b), then the Debtors shall remain liable to the persons
specified therein remaining unpaid to the extent of any such deficiency.
Exercise of Remedies Under the Collateral Documents.
<PAGE>
) Secured Creditors' Duties. The Collateral Agent shall exercise remedies with
respect to the Collateral only in accordance with this Section 10. As long as
more than one class of Obligations remains outstanding, unpaid or not Satisfied,
the Designated Representatives and the Secured Beneficiaries shall not
themselves be entitled to exercise any remedies with respect to the Collateral.
) Designated Representatives' Notices. If any Designated Representative has
notice of a "default" or an "event of default", as such terms are defined in the
Existing Indenture or a Secured Credit Agreement, such Designated Representative
shall give notice (a "Default Notice"), to the Collateral Agent and (unless the
Company provided such notice to such Designated Representative under any Debt
Document) to the Company within three Business Days after it receives such
notice of "default" or "event of default". If holders of the Existing Notes by
notice to the Company or the Trustee, pursuant to the Existing Indenture, or if
the other Secured Beneficiaries in accordance with the applicable Secured Credit
Agreement, declare all unpaid principal and accrued interest to the date of
acceleration on the Existing Notes or the Secured Loans then outstanding, to be
due and payable in accordance with the applicable Debt Document, or if such
principal and interest ipso facto becomes due and payable pursuant to the
Existing Indenture or any Secured Credit Agreement, as applicable, the
applicable Designated Representative, on behalf of its respective Secured
Beneficiaries, under such Debt Document shall give notice to the Collateral
Agent and the other Designated Representatives of such acceleration (an
"Acceleration Notice"), within three Business Days after such acceleration.
Within three business days after receipt by the Collateral Agent of an
Acceleration Notice or a Default Notice from any Designated Representative, the
Collateral Agent shall provide each Designated Representative with a notice
stating that it has received an Acceleration Notice or a Default Notice, as
applicable, from a Designated Representative pursuant to Section 10(b) of this
Collateral Agency Agreement (such notice, a "Remedies Notice"). Upon receipt of
a Remedies Notice, each Designated Representative shall poll its holders in
accordance with the applicable Debt Document in order to enable the Collateral
Agent to determine the aggregate Outstanding Amount held by Secured
Beneficiaries who desire the remedies under the applicable Collateral Document
be exercised. If thereafter, the Collateral Agent shall receive notice from the
Designated Representatives indicating that a Majority of Secured Creditors are
instructing the Collateral Agent to exercise remedies under the applicable
Collateral Documents, the Collateral Agent shall, within three Business Days
after receipt of such notice, and provided that the event giving rise to the
applicable Default Notice or Acceleration Notice shall be continuing, as
provided under the applicable Debt Document, commence the taking of such actions
toward collection or enforcement of the Collateral Documents and the Collateral
(or any portion thereof), including without limitation action toward foreclosure
upon any Collateral, as the Collateral Agent deems appropriate (or as to which
it has been directed to take by the Majority Secured Creditors in accordance
with Section 5(c)), unless instructed otherwise by the Majority Secured
Creditors. Notwithstanding the foregoing, except as provided pursuant to Section
10(d), in no circumstance shall the Collateral Agent have any authority
hereunder to collect or enforce the Collateral Documents or the Collateral
without, or counter to, the instruction of the Majority Secured Creditors. If
any default or event of default which was the basis for the giving of such a
notice to the Collateral Agent shall be cured or waived, and, in the case where
there has been an acceleration, rescission of such acceleration has occurred, in
accordance with the terms of the applicable Debt Document, any direction to the
Collateral Agent to take any action in connection with such notice shall be
<PAGE>
deemed rescinded upon notification by the Designated Representative under the
applicable Debt Document to the Collateral Agent of such cure or waiver and
rescission of acceleration, if applicable. The Collateral Agent shall not
exercise any remedies available to it except in accordance with the foregoing
provisions of this Section 10(b).
) Available Remedies. The Collateral Agent shall have the right to exercise
any remedies available pursuant to the Collateral Documents or applicable law.
) Action to Protect Collateral. Upon the occurrence of any "default" or
"event of default", as such terms are defined in the Existing Indenture or any
Secured Credit Agreement, the Collateral Agent may institute and maintain or
cause in the name of any Debtor or of the Collateral Agent or of the Designated
Representatives, or any of them, to be instituted and maintained, such suits and
proceedings as the Collateral Agent may be advised by counsel shall be necessary
or expedient to prevent any impairment of the Security Interests in
contravention of the terms of the Debt Documents. The Debtors jointly and
severally agree not to knowingly take, or permit to be taken, any action which
would impair the Collateral or the Security Interests.
Additional Secured Creditors. The Debtors may incur any or all of the
Secured Loans only upon receipt of an Officers' Certificate stating that the
following conditions are complied with: (i) the Secured Loan complies in all
respects with the definition of such term hereunder; (ii) each Secured
Beneficiary under the applicable Secured Credit Agreement appoints a
representative and such representative becomes the Designated Representative by
irrevocably appointing the Collateral Agent as its agent pursuant to an
agreement in substantially the same form contained in paragraph 1 of Annex A
hereto; (iii) the proposed Designated Representative acknowledges the Lien of
the Existing Trustee and the Collateral Agent pursuant to an agreement in
substantially the same form contained in paragraph 2 of Annex A hereto; (iv) the
proposed Designated Representative agrees to be bound by this Collateral Agency
Agreement pursuant to an agreement in substantially as contemplated by and
pursuant to paragraph 3 of Annex A hereto; (v) the Debtors deliver a Consent
Agreement substantially in the form contained in Annex B hereto; and (vi) the
Company delivers an Opinion of Counsel to the effect that (a) this Collateral
Agency Agreement continues to constitute a valid and binding obligation of each
of the Debtors, and the Consent Agreement constitutes a valid and binding
obligation of the Debtors and each is enforceable in accordance with its terms
against each of the Debtors, except to the extent that enforcement thereof may
be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally and (ii) general
principles of equity (whether considered in a proceeding at law or in equity),
and (b) the Lien of the Collateral Agent for the benefit of the Designated
Representative continues to constitute a perfected security interest in the
Collateral with the same priority as was in effect with respect to the
Collateral immediately prior to such Secured Loan incurrence.
Further Assurances. Each party hereto covenants to execute and deliver such
further instruments and to take such further action as the Collateral Agent may
at any time or times reasonably request in order to carry out the provisions and
intent of this Collateral Agency Agreement.
<PAGE>
Notices. Any notices or other communications required or permitted
hereunder shall be in writing, and shall be sufficiently given if made by hand
delivery, by telex, by telecopier or registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:
To any of the Debtors:
c/o Trump Atlantic City Associates
Mississippi Avenue and The Boardwalk
Atlantic City, New Jersey 08401
Attn: President
Telecopy Number: (609) 441-7926
with a copy to:
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10021
Attn: Jack Nusbaum, Esq.
Telecopy Number: (212) 821-8111
<PAGE>
To the Collateral Agent or the Existing Trustee:
c/o First Bank National Association
180 East Fifth Street
Minneapolis, Minnesota 55101
Attn: Corporate Trust Department
Telecopy Number: (612) 244-0711
To the other Designated Representatives at the address provided as
contemplated in Annex A hereto.
Any party hereto may by notice to each other party designate such
additional or different addresses as shall be furnished in writing by such
party. Any notice or communication to any party hereto shall be deemed to have
been given or made as of the date so delivered, if personally delivered; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and five
calendar days after mailing if sent by registered or certified mail (except that
a notice of change of address shall not be deemed to have been given until
actually received by the addressee). A copy of any notice given under this
Collateral Agency Agreement to any party shall also be given to each other party
hereto.
Binding Agreement; Assignment; Obligations Several. This Collateral Agency
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. This Collateral Agency
Agreement may not be assigned by the Debtors; provided, however, that this
Collateral Agency Agreement shall be deemed to be automatically assigned by any
of the Debtors to any person which is a successor to any of the Debtors in
accordance with the Existing Indenture and the applicable Secured Credit
Agreement. This Collateral Agency Agreement shall be deemed to be automatically
assigned by the Collateral Agent to any person who succeeds to the Collateral
Agent in accordance with Section 7, and such assignee shall have all rights and
powers of, and act as, the Collateral Agent hereunder. This Collateral Agency
Agreement shall be deemed to be automatically assigned by the Trustee to the
person who succeeds to it in accordance with the Existing Indenture. Except as
otherwise expressly provided herein, the obligations of each of the parties
under this Collateral Agency Agreement are several and not joint, it being
expressly agreed that no Designated Representative shall be liable for the
failure of any other Designated Representative to perform its duties or
obligations hereunder. Each Holder, by its acceptance of an Existing Note,
consents to and agrees to be bound by the provisions hereof.
<PAGE>
Governing Law. THE PARTIES HERETO EXPRESSLY ACKNOWLEDGE AND AGREE THAT, IN
ACCORDANCE WITH THE PROVISIONS OF NEW YORK GENERAL OBLIGATIONS LAW SECTION
5-1401 GOVERNING AGREEMENTS RELATING TO ANY OBLIGATION ARISING OUT OF A
TRANSACTION COVERING IN THE AGGREGATE NOT LESS THAN $250,000, THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR THE PERFECTION OF ANY
SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN NEW YORK. ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN
COURTS SITTING IN THE BOROUGH OF MANHATTAN OF THE STATE OF NEW YORK OR OF THE
UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH PARTY HERETO ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS.
Waiver of Jury Trial. THE PARTIES HERETO HEREBY WAIVE, TO THE FULLEST
EXTENT THEY MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY RIGHT TO TRIAL BY
JURY WHICH ANY OF THEM MIGHT OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY
STATUTE OF THE UNITED STATES OR OF ANY STATE IN ANY LEGAL ACTION OR PROCEEDING
BROUGHT WITH RESPECT TO, OR ARISING OUT OF, THIS AGREEMENT.
Effectiveness; Termination. This Collateral Agency Agreement shall become
effective on the date first written above. This Collateral Agency Agreement
shall become binding upon any Designated Representative and its respective
Secured Beneficiaries that become a party hereto subsequent to the effectiveness
of this Collateral Agency Agreement upon execution of an agreement substantially
in the form of Annex A to this Collateral Agency Agreement by such Designated
Representative. This Collateral Agency Agreement shall bind any Person which is
required to become a Guarantor under the Existing Indenture upon execution of
this Collateral Agency Agreement by such Person. This Collateral Agency
Agreement shall remain effective until, and terminate when, all Secured
Obligations are Satisfied; provided, that once the Obligations owed to any
Secured Beneficiary shall have been Satisfied, such Secured Beneficiary and the
applicable Designated Representative shall have no further rights or obligations
hereunder, unless and until such Secured Beneficiary and the applicable
Designated Representative again becomes a Secured Beneficiary or Designated
Representative, as the case may be, by becoming a holder of an Obligation or a
representative thereof, as the case may be. Upon termination of this Collateral
Agency Agreement, the Collateral Agent shall reassign and redeliver the
Collateral held by it, and not sold, transferred or disposed of pursuant to any
other provision of this Collateral Agency Agreement, in accordance herewith.
Such reassignment and redelivery shall be without warranty by or recourse to the
Collateral Agent, and shall be at the expense of the Company. Thereafter, the
Collateral Agent shall, at the Company's expense, deliver to the Company and
each Designated Representative (i) written acknowledgement of cancellation of
this Collateral Agency Agreement and (ii) such other documents as are reasonably
<PAGE>
requested by the Company and adequate for proper filing or recording in such
offices and such jurisdictions as the Company reasonably deems necessary to
evidence such termination.
Amendments, Supplements and Waivers.
) Consent of Holders. With the written consent from or on behalf of the
Majority Secured Creditors, the Collateral Agent and the Debtors may, from time
to time, enter into written supplemental agreements for the purpose of amending,
modifying or waiving any provision of this Collateral Agency Agreement or
changing in any manner the rights of the Collateral Agent, the Designated
Representative, the Debtors, hereunder or thereunder; provided, however, that no
such supplemental agreement shall, without the written consent of each Secured
Beneficiary affected thereby:
change the respective percentages of outstanding aggregate principal amount of
Existing Notes and Secured Loans specified in the definition of Majority Secured
Creditors contained herein or otherwise entitled to take any action hereunder,
without the written consent of each Secured Creditor;
amend, modify or waive any provision of this Section 18 without the written
consent of each Designated Representative;
amend, modify or waive any provision of Section 11 without the written consent
of each Designated Representative; or
amend, modify or waive any provision of this Collateral Agency Agreement such
that either (a) the holders of the Existing Indenture Obligations or the other
Secured Beneficiaries are materially and adversely affected or (b) the holders
of the Existing Indenture Obligations or any other Secured Beneficiaries are
benefited and the Secured Beneficiaries represented by one or more Designated
Representatives are materially and adversely affected (without the written
consent of a majority of the Outstanding Amount of the adversely affected
Obligations).
Any such supplemental agreement shall be binding upon the Debtors, the
Collateral Agent, the Designated Representatives and each Secured Beneficiary
and their respective successors and permitted assigns. The Collateral Agent
shall not enter into any such supplemental agreement unless it shall have
received an Officers' Certificate of the Company reasonably satisfactory to the
Collateral Agent to the effect that the execution, delivery and performance of
such supplemental agreement will not result in a Default or Event of Default.
) Without Consent of Holders. Notwithstanding the provisions of Section
18(a), without having to seek or receive the approval of the Majority Secured
Creditors, the Debtors and the Collateral Agent may at any time and from time to
time, without the consent of the Designated Representatives, enter into
Collateral Documents after the date hereof, in which a Security Interest is
<PAGE>
granted in favor of the Collateral Agent on behalf of all (but no fewer than
all) Secured Beneficiaries, or one or more amendments or agreements supplemental
hereto or to any Collateral Document, in form satisfactory to the Collateral
Agent:
to add to the covenants of the Debtors for the benefit of the Secured
Beneficiaries or to surrender any right or power herein conferred upon the
Debtors;
to mortgage, pledge, hypothecate or grant a security interest in favor of the
Collateral Agent, as additional security for the payment and performance of the
Obligations, in any property, including any which is required to be mortgaged,
pledged or hypothecated, or in which a security interest is required to be
granted, to the Collateral Agent pursuant to any Collateral Document or
otherwise;
to cure any ambiguity, defect or inconsistency or to make any other change
that does not adversely affect the rights of any Secured Beneficiary hereunder
or under any Collateral Document; and
to add to the provisions of this Agreement which may not be modified or
amended without the consent of all of the Designated Representatives.
Any such supplemental agreement shall be binding upon the Debtors, the
Collateral Agent, the Designated Representatives and each Secured Beneficiary
and their respective successors and permitted assigns. The Collateral Agent
shall not enter into any such supplemental agreement unless it shall have
received an Officers' Certificate of the Company reasonably satisfactory to the
Collateral Agent to the effect that the execution, delivery and performance of
such supplemental agreement will not result in a Default or Event of Default.
) Notice of Amendments. Notice of any amendment, modification or waiver to
any Collateral Document or of any additional or supplemental agreements entered
into in accordance with Section 18(a) or (b) shall be given by the Collateral
Agent to each of the Designated Representatives.
Inconsistent Provisions. If any provision of this Collateral Agency
Agreement shall be inconsistent with, or contrary to, any provision in any other
Collateral Document or any Debt Document, such provision of this Collateral
Agency Agreement shall be controlling, and shall supersede such inconsistent
provision to the extent necessary to give full effect to all provisions
contained in this Collateral Agency Agreement.
Severability. In the event that any provision contained in this Collateral
Agency Agreement shall for any reason be held to be illegal or invalid under the
laws of any jurisdiction, such illegality or invalidity shall in no way impair
the effectiveness of any other provision hereof or of such provision under the
laws of any other jurisdiction; provided, that in the construction and
enforcement of such provision under the laws of the jurisdiction in which such
holding of illegality or invalidity exists, and to the extent only of such
illegality or invalidity, this Collateral Agency Agreement shall be construed
and enforced as though such illegal or invalid provision had not been contained
herein.
<PAGE>
Headings. Section headings used herein are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Collateral Agency Agreement.
Counterparts. This Collateral Agency Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original, and all of which shall together constitute one and the same
instrument. A complete set of counterparts shall be lodged with the Collateral
Agent and with each Secured Creditor.
<PAGE>
IN WITNESS WHEREOF, the Collateral Agent and the Existing Trustee, for the
benefit of the holders of the Existing Notes, the Company, Funding and the
Guarantors have caused this Agreement to be executed and delivered by their
respective officers thereunto duly authorized as of the day and year first above
written.
FIRST BANK NATIONAL ASSOCIATION,
as Collateral Agent
By:______________________________________________
Name:
Title:
FIRST BANK NATIONAL ASSOCIATION,
as the Trustee
By:______________________________________________
Name:
Title:
TRUMP ATLANTIC CITY ASSOCIATES, as Company
BY: TRUMP ATLANTIC CITY HOLDING INC.,
its general partner
By:______________________________________________
Name:
Title:
<PAGE>
TRUMP ATLANTIC CITY FUNDING, INC., as Funding
By:_________________________________________
Name:
Title:
TRUMP PLAZA ASSOCIATES, as Guarantor
BY: TRUMP ATLANTIC CITY CORPORATION, its general partner
By:_________________________________________
Name:
Title:
TAJ MAHAL ASSOCIATES, as Guarantor
BY: TRUMP ATLANTIC CITY CORPORATION, its general partner
By:_________________________________________
Name:
Title:
TRUMP ATLANTIC CITY CORPORATION,
as Guarantor
By:_________________________________________
Name:
Title:
<PAGE>
[EACH ADDITIONAL GUARANTOR FROM TIME TO TIME], as Guarantor
By:_________________________________________
Name:
Title:
<PAGE>
ANNEX A
First Bank National Association, as Collateral Agent
180 East Fifth Street
St. Paul, Minnesota 55101
The undersign intends to enter into [credit agreement] with [Trump Atlantic
City Associates] [and/or] [its subsidiar[y][ies]]. Such [credit agreement]
provides that the obligations thereunder are to be secured by the collateral
which is subject to the lien you hold as collateral agent, pursuant to the
Collateral Agency Agreement originally dated April 17, 1996 (the "Collateral
Agency Agreement") by and among yourself, as collateral agent, First Bank
National Association, as trustee under an indenture originally dated April 17,
1996, and the other parties signatory thereto. Capitalized terms not otherwise
defined herein have the respective meanings ascribed to them in the Collateral
Agency Agreement. The undersigned represents and warrants that it is the
designated representative of the lenders under the [credit agreement] and that
such Secured Beneficiaries have consented to be bound by the Collateral Agency
Agreement.
1. The undersigned [, as the sole [Designated Representative] of the
lender[s] under the [credit agreement],] hereby appoint[s] you as Collateral
Agent to act for its benefit and irrevocably authorizes and directs you to take
all actions described in Section 2(a), 2(b) and 2(c) of the Collateral Agency
Agreement.
2. The undersigned [, as such [Designated Representative],] hereby agrees
that its interest as a beneficiary of your security interest in the Collateral,
including its interests in any payments to be made from the proceeds of any sale
or other disposition thereof, shall, irrespective of the time of perfection or
creation of any security interests or liens in the Collateral or the time of
appointment of you as agent for the respective Designated Representative, be
equal and ratable with the other Secured Creditors to the extent and manner
provided in Section 11 of the Collateral Agency Agreement.
3. From and after this date, the undersigned, on behalf of itself and its
successors and assigns, agrees to be bound by the terms and subject to the
conditions contained in the Collateral Agency Agreement and shall by its
signature below be deemed to be a party signatory to the Collateral Agency
Agreement.
The address for notices to the Designated Representative under the
Collateral Agency Agreement is:
Very truly yours,
[DESIGNATED REPRESENTATIVE]
ACKNOWLEDGED AND ACCEPTED BY:
First Bank National Association, as Collateral Agent
By:_________________________________________
Name:
Title:
<PAGE>
ANNEX B
DEBTORS' CONSENT
First Trust National Association, as Collateral Agent
180 East Fifth Street
St. Paul, Minnesota 55101
Each of the Company, Funding and each Guarantor hereby consents to the
addition of __________ as a party to the Collateral Agency Agreement dated as
April 17, 1996 among _______________ and confirms the grant set forth in each of
the Collateral Documents (as defined in the Collateral Agency Agreement) of a
security interest in, or pledge or assignment of, the Collateral (as defined in
the Collateral Agency Agreement) to the Collateral Agent for the benefit of the
Designed Representatives. As used herein, Designated Representatives shall mean
the Trustee (as defined in the Collateral Agency Agreement), any other person
who prior to the date hereof became a party to the Collateral Agency Agreement
by executing an Agency Appointment Agreement (as defined in the Collateral
Agency Agreement) prior to the date hereof.
TRUMP ATLANTIC CITY ASSOCIATES,
for itself and its subsidiaries
BY: TRUMP ATLANTIC CITY HOLDING, INC., its general partner
By:_________________________________________
Name:
Title:
TRUMP ATLANTIC CITY FUNDING, INC., as Funding
By:_________________________________________
Name:
Title:
<PAGE>
TRUMP PLAZA ASSOCIATES, as Guarantor
BY: TRUMP ATLANTIC CITY CORPORATION, its general partner
By:_________________________________________
Name:
Title:
TAJ MAHAL ASSOCIATES, as Guarantor
BY: TRUMP ATLANTIC CITY CORPORATION, its general partner
By:_________________________________________
Name:
Title:
TRUMP ATLANTIC CITY CORPORATION, as Guarantor
By:_________________________________________
Name:
Title:
[EACH ADDITIONAL GUARANTOR FROM TIME TO TIME], as Guarantor
By:_________________________________________
Name:
Title:
Warrant No. W-001
WARRANT
THIS WARRANT AND THE SECURITIES ISSUABLE UPON ITS EXERCISE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER
THE SECURITIES ACT OR IN A TRANSACTION WHICH, IN THE OPINION OF COUNSEL
REASONABLY SATISFACTORY TO TRUMP HOTELS & CASINO RESORTS, INC., QUALIFIES AS AN
EXEMPT TRANSACTION UNDER THE SECURITIES ACT AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER.
TRUMP HOTELS & CASINO RESORTS, INC.
Common Stock Purchase Warrant
TRUMP HOTELS & CASINO RESORTS, INC., a Delaware corporation (the
"Company"), hereby certifies that, for value received, DONALD J. TRUMP
("Trump"), or his assigns, is entitled, subject to the terms set forth below, to
purchase from the Company, at any time and from time to time during the period
beginning on April 17, 1996 and ending on April 17, 1999 in whole or in part, an
aggregate of six hundred thousand (600,000) fully paid and non-assessable shares
of the Common Stock of the Company, par value $ .01 per share, at a purchase
price, subject to the provisions of Section 3 hereof, of $30.00 per share (the
"Purchase Price"). The Purchase Price and the number and character of such
shares are subject to adjustment as provided below, and the term "Common Stock"
shall mean, unless the context otherwise requires, the stock or other securities
or property at the time deliverable upon the exercise of this Warrant. This
Warrant is herein called the "Warrant."
1. EXERCISE OF WARRANT. The purchase rights evidenced by this Warrant shall
be exercised by the holder surrendering this Warrant, with the form of
subscription at the end hereof duly executed by such holder, to the Company at
its office in Atlantic City, New Jersey, accompanied by payment, of an amount
(the "Exercise Amount") equal to the Purchase Price multiplied by the number of
shares being purchased pursuant to such exercise, payable as follows: (i) by
payment to the Company in cash, by certified or official bank check, or by wire
transfer of the Exercise Amount, (ii) by surrender to the Company for
cancellation of securities of the Company having a Market Price (as hereinafter
defined) on the date of exercise equal to the Exercise Amount; or (c) by a
combination of the methods described in clauses (a) and (b) above. In lieu of
exercising the Warrant, the holder may elect to receive a payment equal to the
difference between (i) the Market Price multiplied by the number of shares as to
which the payment is then being elected and (ii) the exercise price with respect
to such shares, payable by the Company to the holder of this Warrant only in
shares of Common Stock valued at the Market Price on the date of exercise. For
purposes hereof, the term "Market Price" shall mean the average high and low
sale price of a share of Common Stock for the 15 consecutive trading days
preceding such day on the principal national securities exchange on which the
shares of Common Stock or securities are listed or admitted to trading or, if
not listed or admitted to trading on any national securities exchange, the
average of the reported bid and asked prices during such 15 trading day period
in the over-the-counter market as furnished by the National Quotation Bureau,
Inc., or, if such firm is not then engaged in the business of reporting such
prices, as furnished by any member of the National Association of Securities
Dealers, Inc. selected by the Company or, if the shares of Common Stock or
securities are not publicly traded, the Market Price for such day shall be the
fair market value thereof determined jointly by the Company and the holder of
this Warrant; provided, however, that if such parties are unable to reach
agreement within a reasonable period of time, the Market Price shall be
determined in good faith by the independent investment banking firm selected
jointly by the Company and the holder of this Warrant or, if that selection
cannot be made within 15 days, by an independent investment banking firm
selected by the American Arbitration Association in accordance with its rules.
<PAGE>
1.1 Partial Exercise. This Warrant may be exercised for less than the full
number of shares of Common Stock, in which case the number of shares receivable
upon the exercise of this Warrant as a whole, and the sum payable upon the
exercise of this Warrant as a whole, shall be proportionately reduced. Upon any
such partial exercise, the Company at its expense will forthwith issue to the
holder hereof a new Warrant or Warrants of like tenor calling for the number of
shares of Common Stock as to which rights have not been exercised, such Warrant
or Warrants to be issued in the name of the holder hereof or his nominee (upon
payment by such holder of any applicable transfer taxes).
2. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as practicable after
the exercise of this Warrant and payment of the Purchase Price, and in any event
within ten (10) days thereafter, the Company, at its expense, will cause to be
issued in the name of and delivered to the holder hereof a certificate or
certificates for the number of fully paid and non-assessable shares or other
securities or property to which such holder shall be entitled upon such
exercise, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash in an amount determined in accordance with Section
3.9 hereof. The Company agrees that the shares so purchased shall be deemed to
be issued to the holder hereof as the record owner of such shares as of the
close of business on the date on which this Warrant shall have been surrendered
and payment made for such shares as aforesaid.
3. ANTI-DILUTION PROVISIONS AND OTHER ADJUSTMENTS. In order to prevent
dilution of the right granted hereunder, the Purchase Price shall be subject to
adjustment from time to time in accordance with this Section 3. Upon each
adjustment of the Purchase Price pursuant to this Section 3, the registered
holder of this Warrant shall thereafter be entitled to acquire upon exercise, at
the Purchase Price resulting from such adjustment, the number of shares of the
Company's Common Stock obtainable by multiplying the Purchase Price in effect
immediately prior to such adjustment by the number of shares of the Company's
Common Stock acquirable immediately prior to such adjustment and dividing the
product thereof by the Purchase Price resulting from such adjustment.
3.1. Adjustment for Issue or Sale of Common Stock at less than Market
Price. (a) Except as provided in Section 3.2 or 3.5 below, if and whenever on or
after the date of issuance hereof the Company shall issue or sell, or shall in
accordance with subsections 3.1(c)(1) to (9), inclusive, be deemed to have
issued or sold, any shares of its Common Stock for a consideration per share
less than the Market Price in effect immediately prior to the time of such issue
or sale, then forthwith upon such issue or sale (the "Triggering Transaction"),
the Purchase Price shall, subject to subsections (1) to (9) of Section 3.1(c),
be reduced to the lower of the prices (calculated to the nearest tenth of a
cent) determined as follows:
(i) by dividing (a) an amount equal to the sum of (x) the product
derived by multiplying the Number of Common Shares Deemed Outstanding
immediately prior to such Triggering Transaction by the Purchase Price then
in effect, plus (y) the consideration, if any, received by the Company upon
consummation of such Triggering Transaction, by (b) an amount equal to the
sum of (x) the Number of Shares Deemed Outstanding immediately prior to
such Triggering Transaction plus (y) the number of shares of Common Stock
issued (or deemed to be issued in accordance with subsections 3.1(1) to
(9)) in connection with the Triggering Transaction; and
(ii) by multiplying the Purchase Price in effect immediately prior to
the time of such issue or sale by a fraction, the numerator of which shall
be the sum of (x) the Number of Shares Deemed Outstanding immediately prior
to such Triggering Transaction multiplied by the Market Price immediately
prior to such Triggering Transaction plus (y) the consideration received by
the Company upon such Triggering Transaction, and the denominator of which
shall be the product of (x) the Number of Shares Deemed Outstanding
immediately after such issue or sale, multiplied by (y) the Market Price
immediately prior to such issue or sale.
(b) For purposes of this Section 3, the term "Number of Common Shares
Deemed Outstanding" at any given time shall mean the sum of (i) the number of
shares of the Company's Common Stock outstanding at such time, and (ii) the
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number of shares of the Company's Common Stock deemed to be outstanding under
the applicable subsections 3.1(c)(1) to (9), inclusive, at such time.
(c) For purposes of determining the adjusted Purchase Price under this
Section 3.1, the following subsections (1) to (9), inclusive, shall be
applicable:
(1) In case the Company at any time shall in any manner grant (whether
directly or by assumption in a merger or otherwise) any rights to subscribe
for or to purchase, or any options for the purchase of, Common Stock or any
stock or other securities convertible into or exchangeable for Common Stock
(such rights or options being herein called "Options" and such convertible
or exchangeable stock or securities being herein called "Convertible
Securities"), whether or not such Options or the right to convert or
exchange any such Convertible Securities are immediately exercisable and
the price per share for which the Common Stock is issuable upon exercise,
conversion or exchange (determined by dividing (x) the total amount, if
any, received or receivable by the Company as consideration for the
granting of such Options, plus the minimum aggregate amount of additional
consideration payable to the Company upon the exercise of all such Options,
plus, in the case of such Options which relate to Convertible Securities,
the minimum aggregate amount of additional consideration, if any, payable
upon the issue or sale of such Convertible Securities and upon the
conversion or exchange thereof, by (y) the total maximum number of shares
of Common Stock issuable upon the exercise of such Options or the
conversion or exchange of such Convertible Securities) shall be less than
the Purchase Price in effect immediately prior to the time of the granting
of such Option," then the total maximum amount of Common Stock issuable
upon the exercise of such Options, or, in the case of Options for
Convertible Securities, upon the conversion or exchange of such Convertible
Securities, shall (as of the date of granting of such Options) be deemed to
be outstanding and to have been issued and sold by the Company for such
price per share. No adjustment of the Purchase Price shall be made upon the
actual issue of such shares of Common Stock or such Convertible Securities
upon the exercise of such Options, except as otherwise provided in
subsection (3) below.
(2) In case the Company at any time shall in any manner issue (whether
directly or by assumption in a merger or otherwise) or sell any Convertible
Securities, whether or not the rights to exchange or convert thereunder are
immediately exercisable, and the price per share for which Common Stock is
issuable upon such conversion or exchange (determined by dividing (x) the
total amount received or receivable by the Company as consideration for the
issue or sale of such Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, payable to the Company upon the
conversion or exchange thereof, by (y) the total maximum number of shares
of Common Stock issuable upon the conversion or exchange of all such
Convertible Securities) shall be less than the Purchase Price in effect
immediately prior to the time of such issue or sale, then the total maximum
number of shares of Common Stock issuable upon conversion or exchange of
all such Convertible Securities shall (as of the date of the issue or sale
of such Convertible Securities) be deemed to be outstanding and to have
been issued and sold by the Company for such price per share. No adjustment
of the Purchase Price shall be made upon the actual issue of such Common
Stock upon exercise of the rights to exchange or convert under such
Convertible Securities, except as otherwise provided in subsection (3)
below.
(3) If the purchase price provided for in any Options referred to in
subsection (1), the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities referred to in
subsections (1) or (2), or the rate at which any Convertible Securities
referred to in subsection (1) or (2) are convertible into or exchangeable
for Common Stock shall change at any time (other than under or by reason of
provisions designed to protect against dilution of the type set forth in
Section 3.1 or 3.3), the Purchase Price in effect at the time of such
change shall forthwith be readjusted to the Purchase Price which would have
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been in effect at such time had such Options or Convertible Securities
still outstanding provided for such changed purchase price, additional
consideration or conversion rate, as the case may be, at the time initially
granted, issued or sold. If the purchase price provided for in any Option
referred to in subsection (1) or the rate at which any Convertible
Securities referred to in subsections (1) or (2) are convertible into or
exchangeable for Common Stock, shall be reduced at any time under or by
reason of provisions with respect thereto designed to protect against
dilution, then in case of the delivery of Common Stock upon the exercise of
any such Option or upon conversion or exchange of any such Convertible
Security, the Purchase Price then in effect hereunder shall forthwith be
adjusted to such respective amount as would have been obtained had such
Option or Convertible Security never been issued as to such Common Stock
and had adjustments been made upon the issuance of the shares of Common
Stock delivered as aforesaid, but only if as a result of such adjustment
the Purchase Price then in effect hereunder is hereby reduced.
(4) On the expiration of any Option or the termination of any right to
convert or exchange any Convertible Securities, the Purchase Price then in
effect hereunder shall forthwith be increased to the Purchase Price which
would have been in effect at the time of such expiration or termination had
such Option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination, never been issued.
(5) In case any Options shall be issued in connection with the issue
or sale of other securities of the Company, together comprising one
integral transaction in which no specific consideration is allocated to
such Options by the parties thereto, such Options shall be deemed (solely
for the purpose of this Warrant) to have been issued without consideration.
(6) In case any shares of Common Stock, Options or Convertible
Securities shall be issued or sold or deemed to have been issued or sold
for cash, the consideration received therefor shall be deemed to be the
amount received by the Company therefor. In case any shares of Common
Stock, Options or Convertible Securities shall be issued or sold for a
consideration other than cash, the amount of the consideration other than
cash received by the Company shall be the fair value of such consideration
as determined in good faith by the Board of Directors of the Company. In
case any shares of Common Stock, Options or Convertible Securities shall be
issued in connection with any merger in which the Company is the surviving
corporation, the amount of consideration therefor shall be deemed to be the
fair value of such portion of the net assets and business of the
non-surviving corporation as shall be attributed by the Board of Directors
of the Company in good faith to such Common Stock, Options or Convertible
Securities, as the case may be.
(7) The number of shares of Common Stock outstanding at any given time
shall not include shares owned or held by or for the account of the
Company, and the disposition of any shares so owned or held shall be
considered an issue or sale of Common Stock for the purpose of this Section
3.1.
(8) In case the Company shall declare a dividend or make any other
distribution upon the stock of the Company payable in Common Stock,
Options, or Convertible Securities, then in such case any Common Stock,
Options or Convertible Securities, as the case may be, issuable in payment
of such dividend or distribution shall be deemed to have been issued or
sold without consideration.
(9) For purposes of this Section 3.1, in case the Company shall take a
record of the holders of its Common Stock for the purpose of entitling them
(x) to receive a dividend or other distribution payable in Common Stock,
Options or in Convertible Securities, or (y) to subscribe for or purchase
Common Stock, Options or Convertible Securities, then such record date
shall be deemed to be the date of the issue or sale of the shares of Common
Stock deemed to have been issued or sold upon the declaration of such
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dividend or the making of such other distribution or the date of the
granting of such right or subscription or purchase, as the case may be.
3.2. Dividends Not Paid Out of Earnings or Earned Surplus. In the event the
Company shall declare a dividend upon the Common Stock (other than a dividend
payable in Common Stock covered by subsection 3.1(8)) payable otherwise than out
of earnings or earned surplus, determined in accordance with generally accepted
accounting principles, including the making of appropriate deductions for
minority interests, if any, in subsidiaries (such amount in excess of earnings
or earned surplus herein referred to as "Liquidating Dividends"), then, as soon
as possible after the exercise of this Warrant, the Company shall pay to the
person exercising such Warrant an amount equal to the aggregate value at the
time of such exercise of all Liquidating Dividends paid from the date of
issuance of this Warrant to the date of exercise (including but not limited to
Liquidating Dividends upon Common Stock which would have been issued at the time
of such earlier exercise and upon all other securities which would have been
issued with respect to such Common Stock by reason of stock splits, stock
dividends, mergers or reorganizations, or for any other reason). For the
purposes of this Section 3.2, a dividend other than in cash shall be considered
payable out of earnings or earned surplus only to the extent that such earnings
or earned surplus are charged an amount equal to the fair value of such dividend
as determined in good faith by the Board of Directors of the Company.
3.3. Subdivisions and Combinations. In case the Company shall at any time
subdivide (other than by means of a dividend payable in Common Stock covered by
subsection 3.1(8)), its outstanding shares of Common Stock into a greater number
of shares, the Purchase Price in effect immediately prior to such subdivision
shall be proportionately reduced, and, conversely, in case the outstanding
shares of Common Stock of the Company shall be combined into a smaller number of
shares, the Purchase Price in effect immediately prior to such combination shall
be proportionately increased.
3.4. Reorganization, Reclassification, Consolidation, Merger or Sale of
Assets. If any capital reorganization or reclassification of the capital stock
of the Company, or consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets to another
corporation shall be effected in such a way that holders of Common Stock shall
be entitled to receive stock, securities, cash or other property with respect to
or in exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provision
shall be made whereby the holder of this Warrant shall have the right to acquire
and receive upon exercise of this Warrant such shares of stock, securities, cash
or other property issuable or payable (as part of the reorganization,
reclassification, consolidation, merger or sale) with respect to or in exchange
for such number of outstanding shares of the Company's Common Stock as would
have been received upon exercise of this Warrant at the Purchase Price then in
effect. The Company will not effect any such consolidation, merger or sale,
unless prior to the consummation thereof the successor corporation (if other
than the Company) resulting from such consolidation or merger or the corporation
purchasing such assets shall assume by written instrument mailed or delivered to
the holder of this Warrant at the last address of such holder appearing on the
books of the Company, the obligation to deliver to such holder such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to purchase. If a purchase, tender or exchange offer
is made to and accepted by the holders of more than 50% of the outstanding
shares of Common Stock of the Company, the Company shall not effect any
consolidation, merger or sale with the person having made such offer or with any
Affiliate of such person, unless prior to the consummation of such
consolidation, merger or sale the holder of this Warrant shall have been given a
reasonable opportunity to then elect to receive upon the exercise of this
Warrant either the stock, securities or assets then issuable with respect to the
Common Stock of the Company or the stock, securities or assets, or the
equivalent, issued to previous holders of the Common Stock in accordance with
such offer. For purposes hereof the term "Affiliate" with respect to any given
person shall mean any person controlling, controlled by or under common control
with the given person.
3.5. No Adjustment for Exercise of Certain Options, Warrants, Etc. The
provisions of this Section 3 shall not apply to any Common Stock issued,
issuable or deemed outstanding under subsections 3.1(1) to (9) inclusive: (i) to
any person pursuant to any stock option, stock purchase or similar plan or
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arrangement for the benefit of employees, consultants or directors of the
Company or its subsidiaries in effect on the date of issuance hereof, (ii)
pursuant to options, warrants and conversion rights in existence on the date of
issuance hereof or (iii) pursuant to the Exchange and Registration Rights
Agreement, dated June 12, 1995, between the Company and Trump, as it may be
amended from time to time (the "Exchange Rights Agreement").
3.6. Notices of Record Date, Etc. In the event that:
(1) the Company shall declare any cash dividend upon its Common Stock,
or
(2) the Company shall declare any dividend upon its Common Stock
payable in stock or make any special dividend or other distribution to the
holders of its Common Stock, or
(3) the Company shall offer for subscription pro rata to the holders
of its Common Stock any additional shares of stock of any class or other
rights, or
(4) there shall be any capital reorganization or reclassification of
the capital stock of the Company, including any subdivision or combination
of its outstanding shares of Common Stock, or consolidation or merger of
the Company with, or sale of all or substantially all of its assets to,
another corporation, or
(5) there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then, in connection with such event, the Company shall give to the
holder of this Warrant:
(i) at least twenty (20) days' prior written notice of the date on
which the books of the Company shall close or a record shall be taken for
such dividend, distribution or subscription rights or for determining
rights to vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up; and
(ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at
least twenty (20) days' prior written notice of the date when the same
shall take place. Such notice in accordance with the foregoing clause (i)
shall also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Common Stock shall be
entitled thereto, and such notice in accordance with the foregoing clause
(ii) shall also specify the date on which the holders of Common Stock shall
be entitled to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification consolidation,
merger, sale, dissolution, liquidation or winding up, as the case may be.
Each such written notice shall be given by first class mail, postage
prepaid, addressed to the holder of this Warrant at the address of such
holder as shown on the books of the Company.
3.7. Grant, Issue or Sale of Options, Convertible Securities, or Rights. If
at any time or from time to time on or after the date of issuance hereof, the
Company shall grant, issue or sell any Options, Convertible Securities or rights
to purchase property (the "Purchase Rights") pro rata to the record holders of
any class of Common Stock of the Company and such grants, issuances or sales do
not result in an adjustment of the Purchase Price under Section 3.1 hereof, then
the holder of this Warrant shall be entitled to acquire (within thirty (30) days
after the later to occur of the initial exercise date of such Purchase Rights or
receipt by such holder of the notice concerning Purchase Rights to which such
holder shall be entitled under Section 3.6) and upon the terms applicable to
such Purchase Rights either:
(i) the aggregate Purchase Rights which such holder could have
acquired if it had held the number of shares of Common Stock acquirable
upon exercise of this Warrant immediately before the grant, issuance or
sale of such Purchase Rights; provided that if any Purchase Rights were
distributed to holders of Common Stock without the payment of additional
consideration by such holders, corresponding Purchase Rights shall be
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distributed to the exercising holder of this Warrant as soon as possible
after such exercise and it shall not be necessary for the exercising holder
of this Warrant specifically to request delivery of such rights; or
(ii) in the event that any such Purchase Rights shall
have expired or shall expire prior to the end of said thirty (30) day
period, the number of shares of Common Stock or the amount of property
which such holder could have acquired upon such exercise at the time or
times at which the Company granted, issued or sold such expired
Purchase Rights.
3.8. Adjustment by Board of Directors. If any event occurs as to which, in
the opinion of the Board of Directors of the Company, the provisions of this
Section 3 are not strictly applicable or if strictly applicable would not fairly
protect the rights of the holder of this Warrant in accordance with the
essential intent and principles of such provisions, then the Board of Directors
shall make an adjustment in the application of such provisions, in accordance
with such essential intent and principles, so as to protect such rights as
aforesaid, but in no event shall any adjustment have the effect of increasing
the Purchase Price as otherwise determined pursuant to any of the provisions of
this Section 3 except in the case of a combination of shares of a type
contemplated in Section 3.3 and then in no event to an amount larger than the
Purchase Price as adjusted pursuant to Section 3.3.
3.9. Fractional Shares. The Company shall not issue fractions of shares of
Common Stock upon exercise of this Warrant or scrip in lieu thereof. If any
fraction of a share of Common Stock would, except for the provisions of this
Section 3.9, be issuable upon exercise of this Warrant, the Company shall in
lieu thereof pay to the person entitled thereto an amount in cash equal to the
current value of such fraction, calculated to the nearest one-hundredth (1/100)
of a share, to be computed (i) if the Common Stock is listed on any national
securities exchange on the basis of the last sales price of the Common Stock on
such exchange (or the quoted closing bid price if there shall have been no
sales) on the date of conversion, or (ii) if the Common Stock shall not be
listed, on the basis of the mean between the closing bid and asked prices for
the Common Stock on the date of conversion as reported by NASDAQ, or its
successor, and if there are not such closing bid and asked prices, on the basis
of the fair market value per share as determined by the Board of Directors of
the Company.
3.10. Officers' Statement as to Adjustments. Whenever the Purchase Price
shall be adjusted as provided in Section 3 hereof, the Company shall forthwith
file at each office designated for the exercise of this Warrant, a statement,
signed by the Chairman of the Board, the President, any Vice President or
Treasurer of the Company, showing in reasonable detail the facts requiring such
adjustment and the Purchase Price that will be effective after such adjustment.
The Company shall also cause a notice setting forth any such adjustments to be
sent by mail, first class, postage prepaid, to the record holder of this Warrant
at his or its address appearing on the stock register. If such notice relates to
an adjustment resulting from an event referred to in Section 3.6, such notice
shall be included as part of the notice required to be mailed and published
under the provisions of Section 3.6 hereof.
4. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its
charter or through reorganization, consolidation, merger, dissolution, sale of
assets or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
holder hereof against dilution or other impairment. Without limiting the
generality of the foregoing, the Company will not increase the par value of any
shares of stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise, and at all times will take all such action
as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and non-assessable stock upon the exercise of this
Warrant.
5. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANTS. The
Company shall at all times reserve and keep available out of its authorized but
unissued stock, solely for the issuance and delivery upon the exercise of this
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Warrant and other similar Warrants, such number of its duly authorized shares of
Common Stock as from time to time shall be issuable upon the exercise of this
Warrant and all other similar Warrants at the time outstanding.
6. REGISTRATION RIGHTS. The holder of this warrant shall have the following
registration rights with respect to the Common Stock:
6.1. Registration on Demand. (a) Upon written notice to the Company from
holders of at least twenty-five percent (25%) of the Registrable Securities (as
hereinafter defined), determined as if the Warrant had been fully exercised, of
their desire to cause a registration of the Registrable Securities, the Company
shall (i) inform the other holders of Registrable Securities (at least 30 days
prior to the proposed filing of any registration statement), such notice to
state the identity of the holders requesting registration and the number of
Registrable Securities proposed to be sold thereby, and take appropriate action,
on a reasonably timely basis, to file with the Securities and Exchange
Commission (the "SEC") a registration statement on the appropriate form covering
all Registrable Securities specified in such demand and by such other holders
(by notice given to the Company within 15 days after the date the Company
notified them of such demand), (ii) use best efforts to cause such registration
statement to become effective under the Securities Act and (iii) use best
efforts to qualify such resale under those state securities laws reasonably
requested by the holders of a majority of Registrable Securities to be included
in such registration; provided, however, that such effort shall not require the
Company to qualify as a foreign corporation or subject itself to taxation in any
jurisdiction where it is not already so qualified or subject. The Company shall
be obligated to effect two (2) registrations pursuant to this Section 6.1. The
Company shall be obligated to effect any registration pursuant to this Section
6.1 as promptly as practicable upon receipt from the requisite number of holders
of Registrable Securities of the notice requesting such registration; provided,
however, that the Company shall have the right to delay any registration
pursuant to this Section 6.1 for one period of up to thirty (30) days if the
Board of Directors of the Company shall have determined (and passed a resolution
to such effect) that to effectuate such registration at such time would
materially and adversely affect the Company and be materially detrimental to the
business and operations thereof (a "Blackout Determination"), which period may
be extended for an additional thirty (30) days upon a second Blackout
Determination upon the expiration of the first thirty (30) day period. For
purposes hereof, the term "Registrable Securities" shall mean, collectively, (i)
the Common Stock issued or issuable upon exercise of the Warrant and (ii) any
securities issued or issuable with respect to such shares of Common Stock by way
of stock dividend, stock split, in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise.
(b) The Company will be obligated to pay all Registration Expenses with
respect to the registrations pursuant to this Section 6.1.
(c) Registrable Securities will cease to be such when (i) a registration
statement covering such Registrable Securities has been declared effective and
they have been disposed of pursuant to such effective registration statement,
(ii) they shall have been otherwise transferred, and the Company shall have
delivered new certificates or other evidences of ownership for them not subject
to any stop transfer order or other restriction on transfer and not bearing a
legend restricting transfer in the absence of an effective registration or an
exemption from the registration requirements of the Securities Act and
subsequent disposition of them shall not require registration or qualification
of them under the Securities Actor any similar state law then in force, or (iii)
they shall have ceased to be outstanding.
(d) A registration requested pursuant to this Section 6.1 will not be
deemed to have been effected unless it has been declared effective by the SEC
and the Company has complied with all of its obligations under this Warrant with
respect thereto (without regard to the use of best efforts or the like);
provided that such registration will be deemed not to have been effected if
after such registration has become effective, the offering of the Registrable
Securities (or any portion thereof) pursuant to such registration is withdrawn
or is or becomes the subject of any Stop Order (as hereinafter defined). If (i)
a registration requested pursuant to this Section 6.1 is deemed not to have been
effected or (ii) the registration requested pursuant to this Section 6.1 does
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not remain effective for a period of at least 360 days, then (x) such requested
registration shall not be deemed to be an effective registration pursuant to
this Section 6.1 and (y) such requested registration shall not reduce the number
of registrations the Company shall be obligated to effect pursuant to this
Section 6.1. For the purposes hereof, the term "Stop Order" shall mean, with
respect to any registration of the Registrable Securities or any portion thereof
effected pursuant to this Warrant, any stop order, injunction or other order or
requirement of the SEC or any other governmental or administrative agency, or
any act by any court preventing or otherwise limiting the sale of any
Registrable Securities pursuant to such registration.
(e) Any offering of Registrable Securities contemplated by this Section 6.1
shall, unless the holders of a majority of the Registrable Securities to be
included in such offering determine otherwise, be a firm commitment underwritten
offering and the managing underwriter for such offering shall be chosen by the
holders of a majority of the Registrable Securities to be included therein,
which managing underwriter shall be reasonably acceptable to the Company.
(f) The Company shall not, without the prior written consent of the holders
of a majority of the Registrable Securities to be included in any registration
requested pursuant to this Section 6.1, include in such registration, any other
securities of the Company; provided, however, that the Company may include in
any such registration any securities to the extent that the inclusion of such
securities does not have the effect referred to in subsection 6.1(g) hereof and
so long as the sale of such securities is included in the underwriting of the
Registrable Securities and the same underwriters are used.
(g) If the underwriter in a public offering to be effected pursuant to the
provisions of this Section 6.1 advises the Company and the holders of the
Registrable Securities in writing that in its opinion inclusion in the
registration of the total amount of securities requested to be registered will
materially and adversely affect the offering price of such securities or will
materially and adversely affect the market for such securities, then, to the
extent necessary, up to the entire amount of any securities proposed to be
included in such registration which are not Registrable Securities shall be
eliminated.
(h) The Company shall not be required to register Registrable Securities
which, registration together with any other securities to be included in such,
have a value, based on the proposed offering price, of less than $2,000,000.
6.2. Incidental Registration. (a) If the Company intends to file a
registration statement on Form S-1, S-2 or S-3 (or other appropriate form) for
the registration of an offering of equity securities with the SEC, the Company
shall notify each of the holders of record of Registrable Securities at least 30
days prior to each such filing of the Company's intention to file such a
registration statement, such notice shall state the number of shares of equity
securities proposed to be registered thereby. If any holder of Registrable
Securities notifies the Company within ten days after receipt of such notice
from the Company of its desire to have included in such registration statement
any of its Registrable Securities, then the Company shall cause the Company to
include such shares in such registration statement. The Company shall pay all
the Registration Expenses (as hereinafter defined) of such registration. For the
purposes hereof, the term "Registration Expenses" shall mean all expenses
required to be disclosed in Item 13 of Part II of the Form S-1 registration
statement, or in a comparable section of any similar form permitting an
underwritten public offering, as well as expenses of underwriters customarily
reimbursed by issuers for selling stockholders and reasonable fees and expenses
of one counsel for all selling stockholders (in respect of a demand
registration) and any underwriter (for both a demand and piggyback
registration), but not including underwriting discounts and commissions and
transfer taxes.
(b) The Company may in its discretion withdraw any registration statement
filed pursuant to this Section 6.2 subsequent to its filing without liability to
the holders of Registrable Securities.
(c) In the event that the managing underwriter for any such offering
described in this Section 6.2 notifies the Company that, in good faith, it is
able to proceed with the proposed offering only with respect to a smaller number
of securities (the "Maximum Number") than the total number of Registrable
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<PAGE>
Securities proposed to be offered by such holders and securities proposed to be
offered by the Company and all others entitled to registration rights under such
registration statement, then the Company shall reduce the number of securities
held by persons (the "Piggyback Holders") other than the Company and persons
exercising demand registration rights to be included in such registration, to
the extent necessary to reduce the number of securities to be included in such
registration to an amount equal to the Maximum Number. Such amount will be
allocated pro rata in accordance with the number of securities proposed to be
offered by each Piggyback Holder (including the holders of Registrable
Securities).
6.3. Indemnity and Contribution. (a) In connection with a registration
statement filed with the SEC pursuant to this Section 6, the Company shall
provide each holder of Registrable Securities included in such registration
statement, and each officer and director of any thereof, and each person who
controls such holder within the meaning of Section 15 of the Securities Act, and
Section 20 of the Securities Exchange Act of 1934 (the "Exchange Act") , with
indemnification against any losses, claims, damages or liabilities, reasonable
attorneys fees, costs or expenses and costs and expenses of investigating and
defending any such claims (collectively "Damages"), joint or several, to which
any of them may become subject under the federal securities laws, or otherwise,
in form and substance as is customarily given to underwriters in an underwritten
offering of securities. Each holder including Registrable Securities in any such
registration statement agrees that it shall indemnify the Company, and each
officer and director thereof, and each person who controls the Company within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act, against any Damages, in form and substance as is customarily given by
selling shareholders to publicly held corporation in an underwritten public
offering of securities, but only to the extent that such Damages (or proceedings
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained, on the effective date
thereof, in any registration statement under which such securities are
registered under the Securities Act, in any preliminary prospectus or final
prospectus contained therein or in any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, which, in each such case, has been made in or omitted
from such registration statement, said preliminary or final prospectus or said
amendment or supplement solely in reliance upon, and in conformity with, written
information furnished to the Company by such holder of Registrable Securities.
(b) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in subsection 6.3(a)
is for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, each of the Company and the holders of
the Registrable Securities shall contribute to the aggregate Damages
contemplated by said indemnity agreement incurred by each of the Company and the
holders of the Registrable Securities, as incurred, in such proportions as is
appropriate to reflect the relative fault of the Company and the holders of the
Registrable Securities in connection with the statements or omissions which
resulted in such Damages. The relative fault of the Company on one hand and the
holders of the Registrable Securities on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statements of a material fact or the omission or alleged omission to state a
material fact was supplied by the Company on one hand and the holders of the
Registrable Securities on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(c) In no event shall a holder of Registrable Securities be liable for
indemnification or contribution pursuant to this Section 6 in excess of the net
proceeds received upon the sale of such Registrable Securities.
6.4. Certain Procedures. The Company shall provide each holder of
Registrable Securities included in any registration with (i) a "cold comfort"
letter from the Company's independent public accountants, in customary form
covering those matters customarily covered by a "cold comfort" letter with
respect to any such registration statement and addressed to such holder; and
(ii) use its best efforts to execute and deliver with underwriters for the
offering covered by any such registration statement, an underwriting agreement
in form and substance customarily executed for public offerings of common stock.
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6.5. Rule 144 Reporting. With a view to making available to the holders of
Registrable Securities the benefits of certain rules and regulations of the SEC
which may permit the sale of the Registrable Securities to the public without
registration, the Company agrees to, at all times:
(1) make and keep available current public information concerning the
Company as those terms are understood and defined in Rule 144 under the
Securities Act("Rule 144");
(2) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act; and
(3) furnish to each holder of Registrable Securities forthwith upon
such holder's request a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so
filed by the Company as such holder may reasonably request in availing
itself of any rule or regulation of the SEC allowing it to sell any such
securities without registration.
6.6. Lock-Ups. After receipt of any notice pursuant to Section 6.1 or 6.2
hereof, each holder of Registrable Securities and the Company shall not demand
or request a registration of securities of the Company or otherwise offer or
sell securities until the later of (i) 90 days after the effective date of the
registration statement in respect of which such notice was given, (ii) 150 days
after the date such notice was given or (iii) the date such registration
statement is withdrawn by the Company. To the extent requested by the managing
underwriter in respect of an offering of securities of the Company described in
this Section 6, each holder of Registrable Securities and the Company shall
agree to refrain from selling or offering to sell any securities of the Company
within 120 days after the effective date of any registration statement described
herein. Nothing in this Section 6.6 shall preclude the Company from issuing
shares of Registrable Securities upon exercise of the Warrant.
6.7. No Inconsistent Provisions. The Company shall not, without the prior
written consent of the holders of a majority of the Registrable Securities
include, or grant to any person or entity the right to request the Company to
include, in such registration, any other securities of the Company that are
inconsistent with the priorities, rights and privileges of the holders of
Registrable Securities contained in this Warrant, except pursuant to the
Exchange Rights Agreement.
7. REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant and
(in the case of loss, theft or destruction) upon delivery of an indemnity
agreement (with surety if reasonably required) in an amount reasonably
satisfactory to it, or (in the case of mutilation) upon surrender and
cancellation thereof, the Company will issue, in lieu thereof, a new Warrant of
like tenor.
8. REMEDIES. The Company stipulates that the remedies at law of the holder
of this Warrant in the event of any default by the Company in the performance of
or compliance with any of the terms of this Warrant are not and will not be
adequate, and that the same may be specifically enforced.
9. NEGOTIABILITY, ETC. This Warrant is issued upon the following terms, to
all of which each taker or owner hereof consents and agrees:
(a) Subject to the legend appearing on the first page hereof, title to
this Warrant may be transferred by endorsement (by the holder hereof
executing the form of assignment at the end hereof including guaranty of
signature) and delivery in the same manner as in the case of a negotiable
instrument transferable by endorsement and delivery.
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(b) Any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is granted
power to transfer absolute title hereto by endorsement and delivery hereof
to a bona fide purchaser hereof for value; each prior taker or owner waives
and renounces all of his equities or rights in this Warrant in favor of
every such bona fide purchaser, and every such bona fide purchaser shall
acquire title hereto and to all rights represented hereby.
(c) Until this Warrant is transferred on the books of the Company, the
Company may treat the registered holder of this Warrant as the absolute
owner hereof for all purposes without being affected by any notice to the
contrary.
(d) Prior to the exercise of this Warrant, the holder hereof shall not
be entitled to any rights of a shareholder of the Company with respect to
shares for which this Warrant shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions
or to exercise any preemptive rights, and shall not be entitled to receive
any notice of any proceedings of the Company, except as provided herein.
(e) The Company shall not be required to pay any Federal or state
transfer tax or charge that may be payable in respect of any transfer
involved in the transfer or delivery of this Warrant or the issuance or
conversion or delivery of certificates for Common Stock in a name other
than that of the registered holder of this Warrant or to issue or deliver
any certificates for Common Stock upon the exercise of this Warrant until
any and all such taxes and charges shall have been paid by the holder of
this Warrant or until it has been established to the Company's satisfaction
that no such tax or charge is due.
10. SUBDIVISION OF RIGHTS. This Warrant (as well as any new warrants issued
pursuant to the provisions of this Section) is exchangeable, upon the surrender
hereof by the holder hereof, at the principal office of the Company for any
number of new warrants of like tenor and date representing in the aggregate the
right to subscribe for and purchase the number of shares of Common Stock of the
Company which may be subscribed for and purchased hereunder.
11. MAILING OF NOTICES, ETC. All notices and other communications from the
Company to the holder of this Warrant shall be mailed by first-class certified
mail, postage prepaid, to the address furnished to the Company in writing by the
last holder of this Warrant who shall have furnished an address to the Company
in writing.
12. HEADINGS, ETC. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect the meaning hereof.
13. CHANGE, WAIVER, ETC. Neither this Warrant nor any term hereof may be
changed, waived, discharged or terminated orally but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
14. GOVERNING LAW. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.
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IN WITNESS WHEREOF, the undersigned has executed and delivered this Warrant
as of this 17th day of April, 1996.
TRUMP HOTELS & CASINO RESORTS, INC.
By:
---------------------------------------------
Name: Nicholas L. Ribis
Title: President and Chief Executive Officer
Attest:
- --------------------------
Name: Robert M. Pickus
Title: Executive Vice President
and Secretary
<PAGE>
Warrant No. W-002
WARRANT
THIS WARRANT AND THE SECURITIES ISSUABLE UPON ITS EXERCISE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER
THE SECURITIES ACT OR IN A TRANSACTION WHICH, IN THE OPINION OF COUNSEL
REASONABLY SATISFACTORY TO TRUMP HOTELS & CASINO RESORTS, INC., QUALIFIES AS AN
EXEMPT TRANSACTION UNDER THE SECURITIES ACT AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER.
TRUMP HOTELS & CASINO RESORTS, INC.
Common Stock Purchase Warrant
TRUMP HOTELS & CASINO RESORTS, INC., a Delaware corporation (the
"Company"), hereby certifies that, for value received, DONALD J. TRUMP
("Trump"), or his assigns, is entitled, subject to the terms set forth below, to
purchase from the Company, at any time and from time to time during the period
beginning on April 17, 1996 and ending on April 17, 2000 in whole or in part, an
aggregate of six hundred thousand (600,000) fully paid and non-assessable shares
of the Common Stock of the Company, par value $ .01 per share, at a purchase
price, subject to the provisions of Section 3 hereof, of $35.00 per share (the
"Purchase Price"). The Purchase Price and the number and character of such
shares are subject to adjustment as provided below, and the term "Common Stock"
shall mean, unless the context otherwise requires, the stock or other securities
or property at the time deliverable upon the exercise of this Warrant. This
Warrant is herein called the "Warrant."
1. EXERCISE OF WARRANT. The purchase rights evidenced by this Warrant shall
be exercised by the holder surrendering this Warrant, with the form of
subscription at the end hereof duly executed by such holder, to the Company at
its office in Atlantic City, New Jersey, accompanied by payment, of an amount
(the "Exercise Amount") equal to the Purchase Price multiplied by the number of
shares being purchased pursuant to such exercise, payable as follows: (i) by
payment to the Company in cash, by certified or official bank check, or by wire
transfer of the Exercise Amount, (ii) by surrender to the Company for
cancellation of securities of the Company having a Market Price (as hereinafter
defined) on the date of exercise equal to the Exercise Amount; or (c) by a
combination of the methods described in clauses (a) and (b) above. In lieu of
exercising the Warrant, the holder may elect to receive a payment equal to the
difference between (i) the Market Price multiplied by the number of shares as to
which the payment is then being elected and (ii) the exercise price with respect
to such shares, payable by the Company to the holder of this Warrant only in
shares of Common Stock valued at the Market Price on the date of exercise. For
purposes hereof, the term "Market Price" shall mean the average high and low
sale price of a share of Common Stock for the 15 consecutive trading days
preceding such day on the principal national securities exchange on which the
shares of Common Stock or securities are listed or admitted to trading or, if
not listed or admitted to trading on any national securities exchange, the
average of the reported bid and asked prices during such 15 trading day period
in the over-the-counter market as furnished by the National Quotation Bureau,
Inc., or, if such firm is not then engaged in the business of reporting such
prices, as furnished by any member of the National Association of Securities
Dealers, Inc. selected by the Company or, if the shares of Common Stock or
securities are not publicly traded, the Market Price for such day shall be the
fair market value thereof determined jointly by the Company and the holder of
this Warrant; provided, however, that if such parties are unable to reach
agreement within a reasonable period of time, the Market Price shall be
determined in good faith by the independent investment banking firm selected
jointly by the Company and the holder of this Warrant or, if that selection
cannot be made within 15 days, by an independent investment banking firm
selected by the American Arbitration Association in accordance with its rules.
<PAGE>
1.1 Partial Exercise. This Warrant may be exercised for less than the full
number of shares of Common Stock, in which case the number of shares receivable
upon the exercise of this Warrant as a whole, and the sum payable upon the
exercise of this Warrant as a whole, shall be proportionately reduced. Upon any
such partial exercise, the Company at its expense will forthwith issue to the
holder hereof a new Warrant or Warrants of like tenor calling for the number of
shares of Common Stock as to which rights have not been exercised, such Warrant
or Warrants to be issued in the name of the holder hereof or his nominee (upon
payment by such holder of any applicable transfer taxes).
2. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as practicable after
the exercise of this Warrant and payment of the Purchase Price, and in any event
within ten (10) days thereafter, the Company, at its expense, will cause to be
issued in the name of and delivered to the holder hereof a certificate or
certificates for the number of fully paid and non-assessable shares or other
securities or property to which such holder shall be entitled upon such
exercise, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash in an amount determined in accordance with Section
3.9 hereof. The Company agrees that the shares so purchased shall be deemed to
be issued to the holder hereof as the record owner of such shares as of the
close of business on the date on which this Warrant shall have been surrendered
and payment made for such shares as aforesaid.
3. ANTI-DILUTION PROVISIONS AND OTHER ADJUSTMENTS. In order to prevent
dilution of the right granted hereunder, the Purchase Price shall be subject to
adjustment from time to time in accordance with this Section 3. Upon each
adjustment of the Purchase Price pursuant to this Section 3, the registered
holder of this Warrant shall thereafter be entitled to acquire upon exercise, at
the Purchase Price resulting from such adjustment, the number of shares of the
Company's Common Stock obtainable by multiplying the Purchase Price in effect
immediately prior to such adjustment by the number of shares of the Company's
Common Stock acquirable immediately prior to such adjustment and dividing the
product thereof by the Purchase Price resulting from such adjustment.
3.1. Adjustment for Issue or Sale of Common Stock at less than Market
Price. (a) Except as provided in Section 3.2 or 3.5 below, if and whenever on or
after the date of issuance hereof the Company shall issue or sell, or shall in
accordance with subsections 3.1(c)(1) to (9), inclusive, be deemed to have
issued or sold, any shares of its Common Stock for a consideration per share
less than the Market Price in effect immediately prior to the time of such issue
or sale, then forthwith upon such issue or sale (the "Triggering Transaction"),
the Purchase Price shall, subject to subsections (1) to (9) of Section 3.1(c),
be reduced to the lower of the prices (calculated to the nearest tenth of a
cent) determined as follows:
(i) by dividing (a) an amount equal to the sum of (x) the product
derived by multiplying the Number of Common Shares Deemed Outstanding
immediately prior to such Triggering Transaction by the Purchase Price then
in effect, plus (y) the consideration, if any, received by the Company upon
consummation of such Triggering Transaction, by (b) an amount equal to the
sum of (x) the Number of Shares Deemed Outstanding immediately prior to
such Triggering Transaction plus (y) the number of shares of Common Stock
issued (or deemed to be issued in accordance with subsections 3.1(1) to
(9)) in connection with the Triggering Transaction; and
(ii) by multiplying the Purchase Price in effect immediately prior to
the time of such issue or sale by a fraction, the numerator of which shall
be the sum of (x) the Number of Shares Deemed Outstanding immediately prior
to such Triggering Transaction multiplied by the Market Price immediately
prior to such Triggering Transaction plus (y) the consideration received by
the Company upon such Triggering Transaction, and the denominator of which
shall be the product of (x) the Number of Shares Deemed Outstanding
immediately after such issue or sale, multiplied by (y) the Market Price
immediately prior to such issue or sale.
(b) For purposes of this Section 3, the term "Number of Common Shares
Deemed Outstanding" at any given time shall mean the sum of (i) the number of
shares of the Company's Common Stock outstanding at such time, and (ii) the
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number of shares of the Company's Common Stock deemed to be outstanding under
the applicable subsections 3.1(c)(1) to (9), inclusive, at such time.
(c) For purposes of determining the adjusted Purchase Price under this
Section 3.1, the following subsections (1) to (9), inclusive, shall be
applicable:
(1) In case the Company at any time shall in any manner grant (whether
directly or by assumption in a merger or otherwise) any rights to subscribe
for or to purchase, or any options for the purchase of, Common Stock or any
stock or other securities convertible into or exchangeable for Common Stock
(such rights or options being herein called "Options" and such convertible
or exchangeable stock or securities being herein called "Convertible
Securities"), whether or not such Options or the right to convert or
exchange any such Convertible Securities are immediately exercisable and
the price per share for which the Common Stock is issuable upon exercise,
conversion or exchange (determined by dividing (x) the total amount, if
any, received or receivable by the Company as consideration for the
granting of such Options, plus the minimum aggregate amount of additional
consideration payable to the Company upon the exercise of all such Options,
plus, in the case of such Options which relate to Convertible Securities,
the minimum aggregate amount of additional consideration, if any, payable
upon the issue or sale of such Convertible Securities and upon the
conversion or exchange thereof, by (y) the total maximum number of shares
of Common Stock issuable upon the exercise of such Options or the
conversion or exchange of such Convertible Securities) shall be less than
the Purchase Price in effect immediately prior to the time of the granting
of such Option," then the total maximum amount of Common Stock issuable
upon the exercise of such Options, or, in the case of Options for
Convertible Securities, upon the conversion or exchange of such Convertible
Securities, shall (as of the date of granting of such Options) be deemed to
be outstanding and to have been issued and sold by the Company for such
price per share. No adjustment of the Purchase Price shall be made upon the
actual issue of such shares of Common Stock or such Convertible Securities
upon the exercise of such Options, except as otherwise provided in
subsection (3) below.
(2) In case the Company at any time shall in any manner issue (whether
directly or by assumption in a merger or otherwise) or sell any Convertible
Securities, whether or not the rights to exchange or convert thereunder are
immediately exercisable, and the price per share for which Common Stock is
issuable upon such conversion or exchange (determined by dividing (x) the
total amount received or receivable by the Company as consideration for the
issue or sale of such Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, payable to the Company upon the
conversion or exchange thereof, by (y) the total maximum number of shares
of Common Stock issuable upon the conversion or exchange of all such
Convertible Securities) shall be less than the Purchase Price in effect
immediately prior to the time of such issue or sale, then the total maximum
number of shares of Common Stock issuable upon conversion or exchange of
all such Convertible Securities shall (as of the date of the issue or sale
of such Convertible Securities) be deemed to be outstanding and to have
been issued and sold by the Company for such price per share. No adjustment
of the Purchase Price shall be made upon the actual issue of such Common
Stock upon exercise of the rights to exchange or convert under such
Convertible Securities, except as otherwise provided in subsection (3)
below.
(3) If the purchase price provided for in any Options referred to in
subsection (1), the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities referred to in
subsections (1) or (2), or the rate at which any Convertible Securities
referred to in subsection (1) or (2) are convertible into or exchangeable
for Common Stock shall change at any time (other than under or by reason of
provisions designed to protect against dilution of the type set forth in
Section 3.1 or 3.3), the Purchase Price in effect at the time of such
change shall forthwith be readjusted to the Purchase Price which would have
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<PAGE>
been in effect at such time had such Options or Convertible Securities
still outstanding provided for such changed purchase price, additional
consideration or conversion rate, as the case may be, at the time initially
granted, issued or sold. If the purchase price provided for in any Option
referred to in subsection (1) or the rate at which any Convertible
Securities referred to in subsections (1) or (2) are convertible into or
exchangeable for Common Stock, shall be reduced at any time under or by
reason of provisions with respect thereto designed to protect against
dilution, then in case of the delivery of Common Stock upon the exercise of
any such Option or upon conversion or exchange of any such Convertible
Security, the Purchase Price then in effect hereunder shall forthwith be
adjusted to such respective amount as would have been obtained had such
Option or Convertible Security never been issued as to such Common Stock
and had adjustments been made upon the issuance of the shares of Common
Stock delivered as aforesaid, but only if as a result of such adjustment
the Purchase Price then in effect hereunder is hereby reduced.
(4) On the expiration of any Option or the termination of any right to
convert or exchange any Convertible Securities, the Purchase Price then in
effect hereunder shall forthwith be increased to the Purchase Price which
would have been in effect at the time of such expiration or termination had
such Option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination, never been issued.
(5) In case any Options shall be issued in connection with the issue
or sale of other securities of the Company, together comprising one
integral transaction in which no specific consideration is allocated to
such Options by the parties thereto, such Options shall be deemed (solely
for the purpose of this Warrant) to have been issued without consideration.
(6) In case any shares of Common Stock, Options or Convertible
Securities shall be issued or sold or deemed to have been issued or sold
for cash, the consideration received therefor shall be deemed to be the
amount received by the Company therefor. In case any shares of Common
Stock, Options or Convertible Securities shall be issued or sold for a
consideration other than cash, the amount of the consideration other than
cash received by the Company shall be the fair value of such consideration
as determined in good faith by the Board of Directors of the Company. In
case any shares of Common Stock, Options or Convertible Securities shall be
issued in connection with any merger in which the Company is the surviving
corporation, the amount of consideration therefor shall be deemed to be the
fair value of such portion of the net assets and business of the
non-surviving corporation as shall be attributed by the Board of Directors
of the Company in good faith to such Common Stock, Options or Convertible
Securities, as the case may be.
(7) The number of shares of Common Stock outstanding at any given time
shall not include shares owned or held by or for the account of the
Company, and the disposition of any shares so owned or held shall be
considered an issue or sale of Common Stock for the purpose of this Section
3.1.
(8) In case the Company shall declare a dividend or make any other
distribution upon the stock of the Company payable in Common Stock,
Options, or Convertible Securities, then in such case any Common Stock,
Options or Convertible Securities, as the case may be, issuable in payment
of such dividend or distribution shall be deemed to have been issued or
sold without consideration.
(9) For purposes of this Section 3.1, in case the Company shall take a
record of the holders of its Common Stock for the purpose of entitling them
(x) to receive a dividend or other distribution payable in Common Stock,
Options or in Convertible Securities, or (y) to subscribe for or purchase
Common Stock, Options or Convertible Securities, then such record date
shall be deemed to be the date of the issue or sale of the shares of Common
Stock deemed to have been issued or sold upon the declaration of such
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<PAGE>
dividend or the making of such other distribution or the date of the
granting of such right or subscription or purchase, as the case may be.
3.2. Dividends Not Paid Out of Earnings or Earned Surplus. In the event the
Company shall declare a dividend upon the Common Stock (other than a dividend
payable in Common Stock covered by subsection 3.1(8)) payable otherwise than out
of earnings or earned surplus, determined in accordance with generally accepted
accounting principles, including the making of appropriate deductions for
minority interests, if any, in subsidiaries (such amount in excess of earnings
or earned surplus herein referred to as "Liquidating Dividends"), then, as soon
as possible after the exercise of this Warrant, the Company shall pay to the
person exercising such Warrant an amount equal to the aggregate value at the
time of such exercise of all Liquidating Dividends paid from the date of
issuance of this Warrant to the date of exercise (including but not limited to
Liquidating Dividends upon Common Stock which would have been issued at the time
of such earlier exercise and upon all other securities which would have been
issued with respect to such Common Stock by reason of stock splits, stock
dividends, mergers or reorganizations, or for any other reason). For the
purposes of this Section 3.2, a dividend other than in cash shall be considered
payable out of earnings or earned surplus only to the extent that such earnings
or earned surplus are charged an amount equal to the fair value of such dividend
as determined in good faith by the Board of Directors of the Company.
3.3. Subdivisions and Combinations. In case the Company shall at any time
subdivide (other than by means of a dividend payable in Common Stock covered by
subsection 3.1(8)), its outstanding shares of Common Stock into a greater number
of shares, the Purchase Price in effect immediately prior to such subdivision
shall be proportionately reduced, and, conversely, in case the outstanding
shares of Common Stock of the Company shall be combined into a smaller number of
shares, the Purchase Price in effect immediately prior to such combination shall
be proportionately increased.
3.4. Reorganization, Reclassification, Consolidation, Merger or Sale of
Assets. If any capital reorganization or reclassification of the capital stock
of the Company, or consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets to another
corporation shall be effected in such a way that holders of Common Stock shall
be entitled to receive stock, securities, cash or other property with respect to
or in exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provision
shall be made whereby the holder of this Warrant shall have the right to acquire
and receive upon exercise of this Warrant such shares of stock, securities, cash
or other property issuable or payable (as part of the reorganization,
reclassification, consolidation, merger or sale) with respect to or in exchange
for such number of outstanding shares of the Company's Common Stock as would
have been received upon exercise of this Warrant at the Purchase Price then in
effect. The Company will not effect any such consolidation, merger or sale,
unless prior to the consummation thereof the successor corporation (if other
than the Company) resulting from such consolidation or merger or the corporation
purchasing such assets shall assume by written instrument mailed or delivered to
the holder of this Warrant at the last address of such holder appearing on the
books of the Company, the obligation to deliver to such holder such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to purchase. If a purchase, tender or exchange offer
is made to and accepted by the holders of more than 50% of the outstanding
shares of Common Stock of the Company, the Company shall not effect any
consolidation, merger or sale with the person having made such offer or with any
Affiliate of such person, unless prior to the consummation of such
consolidation, merger or sale the holder of this Warrant shall have been given a
reasonable opportunity to then elect to receive upon the exercise of this
Warrant either the stock, securities or assets then issuable with respect to the
Common Stock of the Company or the stock, securities or assets, or the
equivalent, issued to previous holders of the Common Stock in accordance with
such offer. For purposes hereof the term "Affiliate" with respect to any given
person shall mean any person controlling, controlled by or under common control
with the given person.
3.5. No Adjustment for Exercise of Certain Options, Warrants, Etc. The
provisions of this Section 3 shall not apply to any Common Stock issued,
issuable or deemed outstanding under subsections 3.1(1) to (9) inclusive: (i) to
any person pursuant to any stock option, stock purchase or similar plan or
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<PAGE>
arrangement for the benefit of employees, consultants or directors of the
Company or its subsidiaries in effect on the date of issuance hereof, (ii)
pursuant to options, warrants and conversion rights in existence on the date of
issuance hereof or (iii) pursuant to the Exchange and Registration Rights
Agreement, dated June 12, 1995, between the Company and Trump, as it may be
amended from time to time (the "Exchange Rights Agreement").
3.6. Notices of Record Date, Etc. In the event that:
(1) the Company shall declare any cash dividend upon its Common Stock,
or
(2) the Company shall declare any dividend upon its Common Stock
payable in stock or make any special dividend or other distribution to the
holders of its Common Stock, or
(3) the Company shall offer for subscription pro rata to the holders
of its Common Stock any additional shares of stock of any class or other
rights, or
(4) there shall be any capital reorganization or reclassification of
the capital stock of the Company, including any subdivision or combination
of its outstanding shares of Common Stock, or consolidation or merger of
the Company with, or sale of all or substantially all of its assets to,
another corporation, or
(5) there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then, in connection with such event, the Company shall give to the holder of
this Warrant:
(i) at least twenty (20) days' prior written notice of the date on
which the books of the Company shall close or a record shall be taken for
such dividend, distribution or subscription rights or for determining
rights to vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up; and
(ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at
least twenty (20) days' prior written notice of the date when the same
shall take place. Such notice in accordance with the foregoing clause (i)
shall also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Common Stock shall be
entitled thereto, and such notice in accordance with the foregoing clause
(ii) shall also specify the date on which the holders of Common Stock shall
be entitled to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification consolidation,
merger, sale, dissolution, liquidation or winding up, as the case may be.
Each such written notice shall be given by first class mail, postage
prepaid, addressed to the holder of this Warrant at the address of such
holder as shown on the books of the Company.
3.7. Grant, Issue or Sale of Options, Convertible Securities, or Rights. If
at any time or from time to time on or after the date of issuance hereof, the
Company shall grant, issue or sell any Options, Convertible Securities or rights
to purchase property (the "Purchase Rights") pro rata to the record holders of
any class of Common Stock of the Company and such grants, issuances or sales do
not result in an adjustment of the Purchase Price under Section 3.1 hereof, then
the holder of this Warrant shall be entitled to acquire (within thirty (30) days
after the later to occur of the initial exercise date of such Purchase Rights or
receipt by such holder of the notice concerning Purchase Rights to which such
holder shall be entitled under Section 3.6) and upon the terms applicable to
such Purchase Rights either:
(i) the aggregate Purchase Rights which such holder could have
acquired if it had held the number of shares of Common Stock acquirable
upon exercise of this Warrant immediately before the grant, issuance or
sale of such Purchase Rights; provided that if any Purchase Rights were
distributed to holders of Common Stock without the payment of additional
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consideration by such holders, corresponding Purchase Rights shall be
distributed to the exercising holder of this Warrant as soon as possible
after such exercise and it shall not be necessary for the exercising holder
of this Warrant specifically to request delivery of such rights; or
(ii) in the event that any such Purchase Rights shall have expired or
shall expire prior to the end of said thirty (30) day period, the number of
shares of Common Stock or the amount of property which such holder could
have acquired upon such exercise at the time or times at which the Company
granted, issued or sold such expired Purchase Rights.
3.8. Adjustment by Board of Directors. If any event occurs as to which, in
the opinion of the Board of Directors of the Company, the provisions of this
Section 3 are not strictly applicable or if strictly applicable would not fairly
protect the rights of the holder of this Warrant in accordance with the
essential intent and principles of such provisions, then the Board of Directors
shall make an adjustment in the application of such provisions, in accordance
with such essential intent and principles, so as to protect such rights as
aforesaid, but in no event shall any adjustment have the effect of increasing
the Purchase Price as otherwise determined pursuant to any of the provisions of
this Section 3 except in the case of a combination of shares of a type
contemplated in Section 3.3 and then in no event to an amount larger than the
Purchase Price as adjusted pursuant to Section 3.3.
3.9. Fractional Shares. The Company shall not issue fractions of shares of
Common Stock upon exercise of this Warrant or scrip in lieu thereof. If any
fraction of a share of Common Stock would, except for the provisions of this
Section 3.9, be issuable upon exercise of this Warrant, the Company shall in
lieu thereof pay to the person entitled thereto an amount in cash equal to the
current value of such fraction, calculated to the nearest one-hundredth (1/100)
of a share, to be computed (i) if the Common Stock is listed on any national
securities exchange on the basis of the last sales price of the Common Stock on
such exchange (or the quoted closing bid price if there shall have been no
sales) on the date of conversion, or (ii) if the Common Stock shall not be
listed, on the basis of the mean between the closing bid and asked prices for
the Common Stock on the date of conversion as reported by NASDAQ, or its
successor, and if there are not such closing bid and asked prices, on the basis
of the fair market value per share as determined by the Board of Directors of
the Company.
3.10. Officers' Statement as to Adjustments. Whenever the Purchase Price
shall be adjusted as provided in Section 3 hereof, the Company shall forthwith
file at each office designated for the exercise of this Warrant, a statement,
signed by the Chairman of the Board, the President, any Vice President or
Treasurer of the Company, showing in reasonable detail the facts requiring such
adjustment and the Purchase Price that will be effective after such adjustment.
The Company shall also cause a notice setting forth any such adjustments to be
sent by mail, first class, postage prepaid, to the record holder of this Warrant
at his or its address appearing on the stock register. If such notice relates to
an adjustment resulting from an event referred to in Section 3.6, such notice
shall be included as part of the notice required to be mailed and published
under the provisions of Section 3.6 hereof.
4. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its
charter or through reorganization, consolidation, merger, dissolution, sale of
assets or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
holder hereof against dilution or other impairment. Without limiting the
generality of the foregoing, the Company will not increase the par value of any
shares of stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise, and at all times will take all such action
as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and non-assessable stock upon the exercise of this
Warrant.
5. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANTS. The
Company shall at all times reserve and keep available out of its authorized but
unissued stock, solely for the issuance and delivery upon the exercise of this
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<PAGE>
Warrant and other similar Warrants, such number of its duly authorized shares of
Common Stock as from time to time shall be issuable upon the exercise of this
Warrant and all other similar Warrants at the time outstanding.
6. REGISTRATION RIGHTS. The holder of this warrant shall have the following
registration rights with respect to the Common Stock:
6.1. Registration on Demand. (a) Upon written notice to the Company from
holders of at least twenty-five percent (25%) of the Registrable Securities (as
hereinafter defined), determined as if the Warrant had been fully exercised, of
their desire to cause a registration of the Registrable Securities, the Company
shall (i) inform the other holders of Registrable Securities (at least 30 days
prior to the proposed filing of any registration statement), such notice to
state the identity of the holders requesting registration and the number of
Registrable Securities proposed to be sold thereby, and take appropriate action,
on a reasonably timely basis, to file with the Securities and Exchange
Commission (the "SEC") a registration statement on the appropriate form covering
all Registrable Securities specified in such demand and by such other holders
(by notice given to the Company within 15 days after the date the Company
notified them of such demand), (ii) use best efforts to cause such registration
statement to become effective under the Securities Act and (iii) use best
efforts to qualify such resale under those state securities laws reasonably
requested by the holders of a majority of Registrable Securities to be included
in such registration; provided, however, that such effort shall not require the
Company to qualify as a foreign corporation or subject itself to taxation in any
jurisdiction where it is not already so qualified or subject. The Company shall
be obligated to effect two (2) registrations pursuant to this Section 6.1. The
Company shall be obligated to effect any registration pursuant to this Section
6.1 as promptly as practicable upon receipt from the requisite number of holders
of Registrable Securities of the notice requesting such registration; provided,
however, that the Company shall have the right to delay any registration
pursuant to this Section 6.1 for one period of up to thirty (30) days if the
Board of Directors of the Company shall have determined (and passed a resolution
to such effect) that to effectuate such registration at such time would
materially and adversely affect the Company and be materially detrimental to the
business and operations thereof (a "Blackout Determination"), which period may
be extended for an additional thirty (30) days upon a second Blackout
Determination upon the expiration of the first thirty (30) day period. For
purposes hereof, the term "Registrable Securities" shall mean, collectively, (i)
the Common Stock issued or issuable upon exercise of the Warrant and (ii) any
securities issued or issuable with respect to such shares of Common Stock by way
of stock dividend, stock split, in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise.
(b) The Company will be obligated to pay all Registration Expenses with
respect to the registrations pursuant to this Section 6.1.
(c) Registrable Securities will cease to be such when (i) a registration
statement covering such Registrable Securities has been declared effective and
they have been disposed of pursuant to such effective registration statement,
(ii) they shall have been otherwise transferred, and the Company shall have
delivered new certificates or other evidences of ownership for them not subject
to any stop transfer order or other restriction on transfer and not bearing a
legend restricting transfer in the absence of an effective registration or an
exemption from the registration requirements of the Securities Act and
subsequent disposition of them shall not require registration or qualification
of them under the Securities Actor any similar state law then in force, or (iii)
they shall have ceased to be outstanding.
(d) A registration requested pursuant to this Section 6.1 will not be
deemed to have been effected unless it has been declared effective by the SEC
and the Company has complied with all of its obligations under this Warrant with
respect thereto (without regard to the use of best efforts or the like);
provided that such registration will be deemed not to have been effected if
after such registration has become effective, the offering of the Registrable
Securities (or any portion thereof) pursuant to such registration is withdrawn
or is or becomes the subject of any Stop Order (as hereinafter defined). If (i)
a registration requested pursuant to this Section 6.1 is deemed not to have been
effected or (ii) the registration requested pursuant to this Section 6.1 does
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<PAGE>
not remain effective for a period of at least 360 days, then (x) such requested
registration shall not be deemed to be an effective registration pursuant to
this Section 6.1 and (y) such requested registration shall not reduce the number
of registrations the Company shall be obligated to effect pursuant to this
Section 6.1. For the purposes hereof, the term "Stop Order" shall mean, with
respect to any registration of the Registrable Securities or any portion thereof
effected pursuant to this Warrant, any stop order, injunction or other order or
requirement of the SEC or any other governmental or administrative agency, or
any act by any court preventing or otherwise limiting the sale of any
Registrable Securities pursuant to such registration.
(e) Any offering of Registrable Securities contemplated by this Section 6.1
shall, unless the holders of a majority of the Registrable Securities to be
included in such offering determine otherwise, be a firm commitment underwritten
offering and the managing underwriter for such offering shall be chosen by the
holders of a majority of the Registrable Securities to be included therein,
which managing underwriter shall be reasonably acceptable to the Company.
(f) The Company shall not, without the prior written consent of the holders
of a majority of the Registrable Securities to be included in any registration
requested pursuant to this Section 6.1, include in such registration, any other
securities of the Company; provided, however, that the Company may include in
any such registration any securities to the extent that the inclusion of such
securities does not have the effect referred to in subsection 6.1(g) hereof and
so long as the sale of such securities is included in the underwriting of the
Registrable Securities and the same underwriters are used.
(g) If the underwriter in a public offering to be effected pursuant to the
provisions of this Section 6.1 advises the Company and the holders of the
Registrable Securities in writing that in its opinion inclusion in the
registration of the total amount of securities requested to be registered will
materially and adversely affect the offering price of such securities or will
materially and adversely affect the market for such securities, then, to the
extent necessary, up to the entire amount of any securities proposed to be
included in such registration which are not Registrable Securities shall be
eliminated.
(h) The Company shall not be required to register Registrable Securities
which, registration together with any other securities to be included in such,
have a value, based on the proposed offering price, of less than $2,000,000.
6.2. Incidental Registration. (a) If the Company intends to file a
registration statement on Form S-1, S-2 or S-3 (or other appropriate form) for
the registration of an offering of equity securities with the SEC, the Company
shall notify each of the holders of record of Registrable Securities at least 30
days prior to each such filing of the Company's intention to file such a
registration statement, such notice shall state the number of shares of equity
securities proposed to be registered thereby. If any holder of Registrable
Securities notifies the Company within ten days after receipt of such notice
from the Company of its desire to have included in such registration statement
any of its Registrable Securities, then the Company shall cause the Company to
include such shares in such registration statement. The Company shall pay all
the Registration Expenses (as hereinafter defined) of such registration. For the
purposes hereof, the term "Registration Expenses" shall mean all expenses
required to be disclosed in Item 13 of Part II of the Form S-1 registration
statement, or in a comparable section of any similar form permitting an
underwritten public offering, as well as expenses of underwriters customarily
reimbursed by issuers for selling stockholders and reasonable fees and expenses
of one counsel for all selling stockholders (in respect of a demand
registration) and any underwriter (for both a demand and piggyback
registration), but not including underwriting discounts and commissions and
transfer taxes.
(b) The Company may in its discretion withdraw any registration statement
filed pursuant to this Section 6.2 subsequent to its filing without liability to
the holders of Registrable Securities.
(c) In the event that the managing underwriter for any such offering
described in this Section 6.2 notifies the Company that, in good faith, it is
able to proceed with the proposed offering only with respect to a smaller number
of securities (the "Maximum Number") than the total number of Registrable
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<PAGE>
Securities proposed to be offered by such holders and securities proposed to be
offered by the Company and all others entitled to registration rights under such
registration statement, then the Company shall reduce the number of securities
held by persons (the "Piggyback Holders") other than the Company and persons
exercising demand registration rights to be included in such registration, to
the extent necessary to reduce the number of securities to be included in such
registration to an amount equal to the Maximum Number. Such amount will be
allocated pro rata in accordance with the number of securities proposed to be
offered by each Piggyback Holder (including the holders of Registrable
Securities).
6.3. Indemnity and Contribution. (a) In connection with a registration
statement filed with the SEC pursuant to this Section 6, the Company shall
provide each holder of Registrable Securities included in such registration
statement, and each officer and director of any thereof, and each person who
controls such holder within the meaning of Section 15 of the Securities Act, and
Section 20 of the Securities Exchange Act of 1934 (the "Exchange Act") , with
indemnification against any losses, claims, damages or liabilities, reasonable
attorneys fees, costs or expenses and costs and expenses of investigating and
defending any such claims (collectively "Damages"), joint or several, to which
any of them may become subject under the federal securities laws, or otherwise,
in form and substance as is customarily given to underwriters in an underwritten
offering of securities. Each holder including Registrable Securities in any such
registration statement agrees that it shall indemnify the Company, and each
officer and director thereof, and each person who controls the Company within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act, against any Damages, in form and substance as is customarily given by
selling shareholders to publicly held corporation in an underwritten public
offering of securities, but only to the extent that such Damages (or proceedings
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained, on the effective date
thereof, in any registration statement under which such securities are
registered under the Securities Act, in any preliminary prospectus or final
prospectus contained therein or in any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, which, in each such case, has been made in or omitted
from such registration statement, said preliminary or final prospectus or said
amendment or supplement solely in reliance upon, and in conformity with, written
information furnished to the Company by such holder of Registrable Securities.
(b) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in subsection 6.3(a)
is for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, each of the Company and the holders of
the Registrable Securities shall contribute to the aggregate Damages
contemplated by said indemnity agreement incurred by each of the Company and the
holders of the Registrable Securities, as incurred, in such proportions as is
appropriate to reflect the relative fault of the Company and the holders of the
Registrable Securities in connection with the statements or omissions which
resulted in such Damages. The relative fault of the Company on one hand and the
holders of the Registrable Securities on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statements of a material fact or the omission or alleged omission to state a
material fact was supplied by the Company on one hand and the holders of the
Registrable Securities on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(c) In no event shall a holder of Registrable Securities be liable for
indemnification or contribution pursuant to this Section 6 in excess of the net
proceeds received upon the sale of such Registrable Securities.
6.4. Certain Procedures. The Company shall provide each holder of
Registrable Securities included in any registration with (i) a "cold comfort"
letter from the Company's independent public accountants, in customary form
covering those matters customarily covered by a "cold comfort" letter with
respect to any such registration statement and addressed to such holder; and
(ii) use its best efforts to execute and deliver with underwriters for the
offering covered by any such registration statement, an underwriting agreement
in form and substance customarily executed for public offerings of common stock.
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6.5. Rule 144 Reporting. With a view to making available to the holders of
Registrable Securities the benefits of certain rules and regulations of the SEC
which may permit the sale of the Registrable Securities to the public without
registration, the Company agrees to, at all times:
(1) make and keep available current public information concerning the
Company as those terms are understood and defined in Rule 144 under the
Securities Act("Rule 144");
(2) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act; and
(3) furnish to each holder of Registrable Securities forthwith upon
such holder's request a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so
filed by the Company as such holder may reasonably request in availing
itself of any rule or regulation of the SEC allowing it to sell any such
securities without registration.
6.6. Lock-Ups. After receipt of any notice pursuant to Section 6.1 or 6.2
hereof, each holder of Registrable Securities and the Company shall not demand
or request a registration of securities of the Company or otherwise offer or
sell securities until the later of (i) 90 days after the effective date of the
registration statement in respect of which such notice was given, (ii) 150 days
after the date such notice was given or (iii) the date such registration
statement is withdrawn by the Company. To the extent requested by the managing
underwriter in respect of an offering of securities of the Company described in
this Section 6, each holder of Registrable Securities and the Company shall
agree to refrain from selling or offering to sell any securities of the Company
within 120 days after the effective date of any registration statement described
herein. Nothing in this Section 6.6 shall preclude the Company from issuing
shares of Registrable Securities upon exercise of the Warrant.
6.7. No Inconsistent Provisions. The Company shall not, without the prior
written consent of the holders of a majority of the Registrable Securities
include, or grant to any person or entity the right to request the Company to
include, in such registration, any other securities of the Company that are
inconsistent with the priorities, rights and privileges of the holders of
Registrable Securities contained in this Warrant, except pursuant to the
Exchange Rights Agreement.
7. REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant and
(in the case of loss, theft or destruction) upon delivery of an indemnity
agreement (with surety if reasonably required) in an amount reasonably
satisfactory to it, or (in the case of mutilation) upon surrender and
cancellation thereof, the Company will issue, in lieu thereof, a new Warrant of
like tenor.
8. REMEDIES. The Company stipulates that the remedies at law of the holder
of this Warrant in the event of any default by the Company in the performance of
or compliance with any of the terms of this Warrant are not and will not be
adequate, and that the same may be specifically enforced.
9. NEGOTIABILITY, ETC. This Warrant is issued upon the following terms, to
all of which each taker or owner hereof consents and agrees:
(a) Subject to the legend appearing on the first page hereof, title to
this Warrant may be transferred by endorsement (by the holder hereof
executing the form of assignment at the end hereof including guaranty of
signature) and delivery in the same manner as in the case of a negotiable
instrument transferable by endorsement and delivery.
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(b) Any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is granted
power to transfer absolute title hereto by endorsement and delivery hereof
to a bona fide purchaser hereof for value; each prior taker or owner waives
and renounces all of his equities or rights in this Warrant in favor of
every such bona fide purchaser, and every such bona fide purchaser shall
acquire title hereto and to all rights represented hereby.
(c) Until this Warrant is transferred on the books of the Company, the
Company may treat the registered holder of this Warrant as the absolute
owner hereof for all purposes without being affected by any notice to the
contrary.
(d) Prior to the exercise of this Warrant, the holder hereof shall not
be entitled to any rights of a shareholder of the Company with respect to
shares for which this Warrant shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions
or to exercise any preemptive rights, and shall not be entitled to receive
any notice of any proceedings of the Company, except as provided herein.
(e) The Company shall not be required to pay any Federal or state
transfer tax or charge that may be payable in respect of any transfer
involved in the transfer or delivery of this Warrant or the issuance or
conversion or delivery of certificates for Common Stock in a name other
than that of the registered holder of this Warrant or to issue or deliver
any certificates for Common Stock upon the exercise of this Warrant until
any and all such taxes and charges shall have been paid by the holder of
this Warrant or until it has been established to the Company's satisfaction
that no such tax or charge is due.
10. SUBDIVISION OF RIGHTS. This Warrant (as well as any new warrants issued
pursuant to the provisions of this Section) is exchangeable, upon the surrender
hereof by the holder hereof, at the principal office of the Company for any
number of new warrants of like tenor and date representing in the aggregate the
right to subscribe for and purchase the number of shares of Common Stock of the
Company which may be subscribed for and purchased hereunder.
11. MAILING OF NOTICES, ETC. All notices and other communications from the
Company to the holder of this Warrant shall be mailed by first-class certified
mail, postage prepaid, to the address furnished to the Company in writing by the
last holder of this Warrant who shall have furnished an address to the Company
in writing.
12. HEADINGS, ETC. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect the meaning hereof.
13. CHANGE, WAIVER, ETC. Neither this Warrant nor any term hereof may be
changed, waived, discharged or terminated orally but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
14. GOVERNING LAW. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.
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IN WITNESS WHEREOF, the undersigned has executed and delivered this Warrant
as of this 17th day of April, 1996.
TRUMP HOTELS & CASINO RESORTS, INC.
By:
---------------------------------------------
Name: Nicholas L. Ribis
Title: President and Chief Executive Officer
Attest:
- --------------------------
Name: Robert M. Pickus
Title: Executive Vice President
and Secretary
<PAGE>
Warrant No. W-003
WARRANT
THIS WARRANT AND THE SECURITIES ISSUABLE UPON ITS EXERCISE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER
THE SECURITIES ACT OR IN A TRANSACTION WHICH, IN THE OPINION OF COUNSEL
REASONABLY SATISFACTORY TO TRUMP HOTELS & CASINO RESORTS, INC., QUALIFIES AS AN
EXEMPT TRANSACTION UNDER THE SECURITIES ACT AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER.
TRUMP HOTELS & CASINO RESORTS, INC.
Common Stock Purchase Warrant
TRUMP HOTELS & CASINO RESORTS, INC., a Delaware corporation (the
"Company"), hereby certifies that, for value received, DONALD J. TRUMP
("Trump"), or his assigns, is entitled, subject to the terms set forth below, to
purchase from the Company, at any time and from time to time during the period
beginning on April 17, 1996 and ending on April 17, 2001 in whole or in part, an
aggregate of six hundred thousand (600,000) fully paid and non-assessable shares
of the Common Stock of the Company, par value $ .01 per share, at a purchase
price, subject to the provisions of Section 3 hereof, of $40.00 per share (the
"Purchase Price"). The Purchase Price and the number and character of such
shares are subject to adjustment as provided below, and the term "Common Stock"
shall mean, unless the context otherwise requires, the stock or other securities
or property at the time deliverable upon the exercise of this Warrant. This
Warrant is herein called the "Warrant."
1. EXERCISE OF WARRANT. The purchase rights evidenced by this Warrant shall
be exercised by the holder surrendering this Warrant, with the form of
subscription at the end hereof duly executed by such holder, to the Company at
its office in Atlantic City, New Jersey, accompanied by payment, of an amount
(the "Exercise Amount") equal to the Purchase Price multiplied by the number of
shares being purchased pursuant to such exercise, payable as follows: (i) by
payment to the Company in cash, by certified or official bank check, or by wire
transfer of the Exercise Amount, (ii) by surrender to the Company for
cancellation of securities of the Company having a Market Price (as hereinafter
defined) on the date of exercise equal to the Exercise Amount; or (c) by a
combination of the methods described in clauses (a) and (b) above. In lieu of
exercising the Warrant, the holder may elect to receive a payment equal to the
difference between (i) the Market Price multiplied by the number of shares as to
which the payment is then being elected and (ii) the exercise price with respect
to such shares, payable by the Company to the holder of this Warrant only in
shares of Common Stock valued at the Market Price on the date of exercise. For
purposes hereof, the term "Market Price" shall mean the average high and low
sale price of a share of Common Stock for the 15 consecutive trading days
preceding such day on the principal national securities exchange on which the
shares of Common Stock or securities are listed or admitted to trading or, if
not listed or admitted to trading on any national securities exchange, the
average of the reported bid and asked prices during such 15 trading day period
in the over-the-counter market as furnished by the National Quotation Bureau,
Inc., or, if such firm is not then engaged in the business of reporting such
prices, as furnished by any member of the National Association of Securities
Dealers, Inc. selected by the Company or, if the shares of Common Stock or
securities are not publicly traded, the Market Price for such day shall be the
fair market value thereof determined jointly by the Company and the holder of
this Warrant; provided, however, that if such parties are unable to reach
agreement within a reasonable period of time, the Market Price shall be
determined in good faith by the independent investment banking firm selected
jointly by the Company and the holder of this Warrant or, if that selection
cannot be made within 15 days, by an independent investment banking firm
selected by the American Arbitration Association in accordance with its rules.
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1.1 Partial Exercise. This Warrant may be exercised for less than the full
number of shares of Common Stock, in which case the number of shares receivable
upon the exercise of this Warrant as a whole, and the sum payable upon the
exercise of this Warrant as a whole, shall be proportionately reduced. Upon any
such partial exercise, the Company at its expense will forthwith issue to the
holder hereof a new Warrant or Warrants of like tenor calling for the number of
shares of Common Stock as to which rights have not been exercised, such Warrant
or Warrants to be issued in the name of the holder hereof or his nominee (upon
payment by such holder of any applicable transfer taxes).
2. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as practicable after
the exercise of this Warrant and payment of the Purchase Price, and in any event
within ten (10) days thereafter, the Company, at its expense, will cause to be
issued in the name of and delivered to the holder hereof a certificate or
certificates for the number of fully paid and non-assessable shares or other
securities or property to which such holder shall be entitled upon such
exercise, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash in an amount determined in accordance with Section
3.9 hereof. The Company agrees that the shares so purchased shall be deemed to
be issued to the holder hereof as the record owner of such shares as of the
close of business on the date on which this Warrant shall have been surrendered
and payment made for such shares as aforesaid.
3. ANTI-DILUTION PROVISIONS AND OTHER ADJUSTMENTS. In order to prevent
dilution of the right granted hereunder, the Purchase Price shall be subject to
adjustment from time to time in accordance with this Section 3. Upon each
adjustment of the Purchase Price pursuant to this Section 3, the registered
holder of this Warrant shall thereafter be entitled to acquire upon exercise, at
the Purchase Price resulting from such adjustment, the number of shares of the
Company's Common Stock obtainable by multiplying the Purchase Price in effect
immediately prior to such adjustment by the number of shares of the Company's
Common Stock acquirable immediately prior to such adjustment and dividing the
product thereof by the Purchase Price resulting from such adjustment.
3.1. Adjustment for Issue or Sale of Common Stock at less than Market
Price. (a) Except as provided in Section 3.2 or 3.5 below, if and whenever on or
after the date of issuance hereof the Company shall issue or sell, or shall in
accordance with subsections 3.1(c)(1) to (9), inclusive, be deemed to have
issued or sold, any shares of its Common Stock for a consideration per share
less than the Market Price in effect immediately prior to the time of such issue
or sale, then forthwith upon such issue or sale (the "Triggering Transaction"),
the Purchase Price shall, subject to subsections (1) to (9) of Section 3.1(c),
be reduced to the lower of the prices (calculated to the nearest tenth of a
cent) determined as follows:
(i) by dividing (a) an amount equal to the sum of (x) the product
derived by multiplying the Number of Common Shares Deemed Outstanding
immediately prior to such Triggering Transaction by the Purchase Price then
in effect, plus (y) the consideration, if any, received by the Company upon
consummation of such Triggering Transaction, by (b) an amount equal to the
sum of (x) the Number of Shares Deemed Outstanding immediately prior to
such Triggering Transaction plus (y) the number of shares of Common Stock
issued (or deemed to be issued in accordance with subsections 3.1(1) to
(9)) in connection with the Triggering Transaction; and
(ii) by multiplying the Purchase Price in effect immediately prior to
the time of such issue or sale by a fraction, the numerator of which shall
be the sum of (x) the Number of Shares Deemed Outstanding immediately prior
to such Triggering Transaction multiplied by the Market Price immediately
prior to such Triggering Transaction plus (y) the consideration received by
the Company upon such Triggering Transaction, and the denominator of which
shall be the product of (x) the Number of Shares Deemed Outstanding
immediately after such issue or sale, multiplied by (y) the Market Price
immediately prior to such issue or sale.
(b) For purposes of this Section 3, the term "Number of Common Shares
Deemed Outstanding" at any given time shall mean the sum of (i) the number of
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shares of the Company's Common Stock outstanding at such time, and (ii) the
number of shares of the Company's Common Stock deemed to be outstanding under
the applicable subsections 3.1(c)(1) to (9), inclusive, at such time.
(c) For purposes of determining the adjusted Purchase Price under this
Section 3.1, the following subsections (1) to (9), inclusive, shall be
applicable:
(1) In case the Company at any time shall in any manner grant (whether
directly or by assumption in a merger or otherwise) any rights to subscribe
for or to purchase, or any options for the purchase of, Common Stock or any
stock or other securities convertible into or exchangeable for Common Stock
(such rights or options being herein called "Options" and such convertible
or exchangeable stock or securities being herein called "Convertible
Securities"), whether or not such Options or the right to convert or
exchange any such Convertible Securities are immediately exercisable and
the price per share for which the Common Stock is issuable upon exercise,
conversion or exchange (determined by dividing (x) the total amount, if
any, received or receivable by the Company as consideration for the
granting of such Options, plus the minimum aggregate amount of additional
consideration payable to the Company upon the exercise of all such Options,
plus, in the case of such Options which relate to Convertible Securities,
the minimum aggregate amount of additional consideration, if any, payable
upon the issue or sale of such Convertible Securities and upon the
conversion or exchange thereof, by (y) the total maximum number of shares
of Common Stock issuable upon the exercise of such Options or the
conversion or exchange of such Convertible Securities) shall be less than
the Purchase Price in effect immediately prior to the time of the granting
of such Option," then the total maximum amount of Common Stock issuable
upon the exercise of such Options, or, in the case of Options for
Convertible Securities, upon the conversion or exchange of such Convertible
Securities, shall (as of the date of granting of such Options) be deemed to
be outstanding and to have been issued and sold by the Company for such
price per share. No adjustment of the Purchase Price shall be made upon the
actual issue of such shares of Common Stock or such Convertible Securities
upon the exercise of such Options, except as otherwise provided in
subsection (3) below.
(2) In case the Company at any time shall in any manner issue (whether
directly or by assumption in a merger or otherwise) or sell any Convertible
Securities, whether or not the rights to exchange or convert thereunder are
immediately exercisable, and the price per share for which Common Stock is
issuable upon such conversion or exchange (determined by dividing (x) the
total amount received or receivable by the Company as consideration for the
issue or sale of such Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, payable to the Company upon the
conversion or exchange thereof, by (y) the total maximum number of shares
of Common Stock issuable upon the conversion or exchange of all such
Convertible Securities) shall be less than the Purchase Price in effect
immediately prior to the time of such issue or sale, then the total maximum
number of shares of Common Stock issuable upon conversion or exchange of
all such Convertible Securities shall (as of the date of the issue or sale
of such Convertible Securities) be deemed to be outstanding and to have
been issued and sold by the Company for such price per share. No adjustment
of the Purchase Price shall be made upon the actual issue of such Common
Stock upon exercise of the rights to exchange or convert under such
Convertible Securities, except as otherwise provided in subsection (3)
below.
(3) If the purchase price provided for in any Options referred to in
subsection (1), the additional consideration, if any, payable upon the
conversion or exchange of any Convertible Securities referred to in
subsections (1) or (2), or the rate at which any Convertible Securities
referred to in subsection (1) or (2) are convertible into or exchangeable
for Common Stock shall change at any time (other than under or by reason of
provisions designed to protect against dilution of the type set forth in
Section 3.1 or 3.3), the Purchase Price in effect at the time of such
change shall forthwith be readjusted to the Purchase Price which would have
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been in effect at such time had such Options or Convertible Securities
still outstanding provided for such changed purchase price, additional
consideration or conversion rate, as the case may be, at the time initially
granted, issued or sold. If the purchase price provided for in any Option
referred to in subsection (1) or the rate at which any Convertible
Securities referred to in subsections (1) or (2) are convertible into or
exchangeable for Common Stock, shall be reduced at any time under or by
reason of provisions with respect thereto designed to protect against
dilution, then in case of the delivery of Common Stock upon the exercise of
any such Option or upon conversion or exchange of any such Convertible
Security, the Purchase Price then in effect hereunder shall forthwith be
adjusted to such respective amount as would have been obtained had such
Option or Convertible Security never been issued as to such Common Stock
and had adjustments been made upon the issuance of the shares of Common
Stock delivered as aforesaid, but only if as a result of such adjustment
the Purchase Price then in effect hereunder is hereby reduced.
(4) On the expiration of any Option or the termination of any right to
convert or exchange any Convertible Securities, the Purchase Price then in
effect hereunder shall forthwith be increased to the Purchase Price which
would have been in effect at the time of such expiration or termination had
such Option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination, never been issued.
(5) In case any Options shall be issued in connection with the issue
or sale of other securities of the Company, together comprising one
integral transaction in which no specific consideration is allocated to
such Options by the parties thereto, such Options shall be deemed (solely
for the purpose of this Warrant) to have been issued without consideration.
(6) In case any shares of Common Stock, Options or Convertible
Securities shall be issued or sold or deemed to have been issued or sold
for cash, the consideration received therefor shall be deemed to be the
amount received by the Company therefor. In case any shares of Common
Stock, Options or Convertible Securities shall be issued or sold for a
consideration other than cash, the amount of the consideration other than
cash received by the Company shall be the fair value of such consideration
as determined in good faith by the Board of Directors of the Company. In
case any shares of Common Stock, Options or Convertible Securities shall be
issued in connection with any merger in which the Company is the surviving
corporation, the amount of consideration therefor shall be deemed to be the
fair value of such portion of the net assets and business of the
non-surviving corporation as shall be attributed by the Board of Directors
of the Company in good faith to such Common Stock, Options or Convertible
Securities, as the case may be.
(7) The number of shares of Common Stock outstanding at any given time
shall not include shares owned or held by or for the account of the
Company, and the disposition of any shares so owned or held shall be
considered an issue or sale of Common Stock for the purpose of this Section
3.1.
(8) In case the Company shall declare a dividend or make any other
distribution upon the stock of the Company payable in Common Stock,
Options, or Convertible Securities, then in such case any Common Stock,
Options or Convertible Securities, as the case may be, issuable in payment
of such dividend or distribution shall be deemed to have been issued or
sold without consideration.
(9) For purposes of this Section 3.1, in case the Company shall take a
record of the holders of its Common Stock for the purpose of entitling them
(x) to receive a dividend or other distribution payable in Common Stock,
Options or in Convertible Securities, or (y) to subscribe for or purchase
Common Stock, Options or Convertible Securities, then such record date
shall be deemed to be the date of the issue or sale of the shares of Common
Stock deemed to have been issued or sold upon the declaration of such
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<PAGE>
dividend or the making of such other distribution or the date of the
granting of such right or subscription or purchase, as the case may be.
3.2. Dividends Not Paid Out of Earnings or Earned Surplus. In the event the
Company shall declare a dividend upon the Common Stock (other than a dividend
payable in Common Stock covered by subsection 3.1(8)) payable otherwise than out
of earnings or earned surplus, determined in accordance with generally accepted
accounting principles, including the making of appropriate deductions for
minority interests, if any, in subsidiaries (such amount in excess of earnings
or earned surplus herein referred to as "Liquidating Dividends"), then, as soon
as possible after the exercise of this Warrant, the Company shall pay to the
person exercising such Warrant an amount equal to the aggregate value at the
time of such exercise of all Liquidating Dividends paid from the date of
issuance of this Warrant to the date of exercise (including but not limited to
Liquidating Dividends upon Common Stock which would have been issued at the time
of such earlier exercise and upon all other securities which would have been
issued with respect to such Common Stock by reason of stock splits, stock
dividends, mergers or reorganizations, or for any other reason). For the
purposes of this Section 3.2, a dividend other than in cash shall be considered
payable out of earnings or earned surplus only to the extent that such earnings
or earned surplus are charged an amount equal to the fair value of such dividend
as determined in good faith by the Board of Directors of the Company.
3.3. Subdivisions and Combinations. In case the Company shall at any time
subdivide (other than by means of a dividend payable in Common Stock covered by
subsection 3.1(8)), its outstanding shares of Common Stock into a greater number
of shares, the Purchase Price in effect immediately prior to such subdivision
shall be proportionately reduced, and, conversely, in case the outstanding
shares of Common Stock of the Company shall be combined into a smaller number of
shares, the Purchase Price in effect immediately prior to such combination shall
be proportionately increased.
3.4. Reorganization, Reclassification, Consolidation, Merger or Sale of
Assets. If any capital reorganization or reclassification of the capital stock
of the Company, or consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets to another
corporation shall be effected in such a way that holders of Common Stock shall
be entitled to receive stock, securities, cash or other property with respect to
or in exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provision
shall be made whereby the holder of this Warrant shall have the right to acquire
and receive upon exercise of this Warrant such shares of stock, securities, cash
or other property issuable or payable (as part of the reorganization,
reclassification, consolidation, merger or sale) with respect to or in exchange
for such number of outstanding shares of the Company's Common Stock as would
have been received upon exercise of this Warrant at the Purchase Price then in
effect. The Company will not effect any such consolidation, merger or sale,
unless prior to the consummation thereof the successor corporation (if other
than the Company) resulting from such consolidation or merger or the corporation
purchasing such assets shall assume by written instrument mailed or delivered to
the holder of this Warrant at the last address of such holder appearing on the
books of the Company, the obligation to deliver to such holder such shares of
stock, securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to purchase. If a purchase, tender or exchange offer
is made to and accepted by the holders of more than 50% of the outstanding
shares of Common Stock of the Company, the Company shall not effect any
consolidation, merger or sale with the person having made such offer or with any
Affiliate of such person, unless prior to the consummation of such
consolidation, merger or sale the holder of this Warrant shall have been given a
reasonable opportunity to then elect to receive upon the exercise of this
Warrant either the stock, securities or assets then issuable with respect to the
Common Stock of the Company or the stock, securities or assets, or the
equivalent, issued to previous holders of the Common Stock in accordance with
such offer. For purposes hereof the term "Affiliate" with respect to any given
person shall mean any person controlling, controlled by or under common control
with the given person.
3.5. No Adjustment for Exercise of Certain Options, Warrants, Etc. The
provisions of this Section 3 shall not apply to any Common Stock issued,
issuable or deemed outstanding under subsections 3.1(1) to (9) inclusive: (i) to
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any person pursuant to any stock option, stock purchase or similar plan or
arrangement for the benefit of employees, consultants or directors of the
Company or its subsidiaries in effect on the date of issuance hereof, (ii)
pursuant to options, warrants and conversion rights in existence on the date of
issuance hereof or (iii) pursuant to the Exchange and Registration Rights
Agreement, dated June 12, 1995, between the Company and Trump, as it may be
amended from time to time (the "Exchange Rights Agreement").
3.6. Notices of Record Date, Etc. In the event that:
(1) the Company shall declare any cash dividend upon its Common Stock,
or
(2) the Company shall declare any dividend upon its Common Stock
payable in stock or make any special dividend or other distribution to the
holders of its Common Stock, or
(3) the Company shall offer for subscription pro rata to the holders
of its Common Stock any additional shares of stock of any class or other
rights, or
(4) there shall be any capital reorganization or reclassification of
the capital stock of the Company, including any subdivision or combination
of its outstanding shares of Common Stock, or consolidation or merger of
the Company with, or sale of all or substantially all of its assets to,
another corporation, or
(5) there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then, in connection with such event, the Company shall give to the holder
of this Warrant:
(i) at least twenty (20) days' prior written notice of the date on
which the books of the Company shall close or a record shall be taken for
such dividend, distribution or subscription rights or for determining
rights to vote in respect of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up; and
(ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at
least twenty (20) days' prior written notice of the date when the same
shall take place. Such notice in accordance with the foregoing clause (i)
shall also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Common Stock shall be
entitled thereto, and such notice in accordance with the foregoing clause
(ii) shall also specify the date on which the holders of Common Stock shall
be entitled to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification consolidation,
merger, sale, dissolution, liquidation or winding up, as the case may be.
Each such written notice shall be given by first class mail, postage
prepaid, addressed to the holder of this Warrant at the address of such
holder as shown on the books of the Company.
3.7. Grant, Issue or Sale of Options, Convertible Securities, or Rights. If
at any time or from time to time on or after the date of issuance hereof, the
Company shall grant, issue or sell any Options, Convertible Securities or rights
to purchase property (the "Purchase Rights") pro rata to the record holders of
any class of Common Stock of the Company and such grants, issuances or sales do
not result in an adjustment of the Purchase Price under Section 3.1 hereof, then
the holder of this Warrant shall be entitled to acquire (within thirty (30) days
after the later to occur of the initial exercise date of such Purchase Rights or
receipt by such holder of the notice concerning Purchase Rights to which such
holder shall be entitled under Section 3.6) and upon the terms applicable to
such Purchase Rights either:
(i) the aggregate Purchase Rights which such holder could have
acquired if it had held the number of shares of Common Stock acquirable
upon exercise of this Warrant immediately before the grant, issuance or
sale of such Purchase Rights; provided that if any Purchase Rights were
distributed to holders of Common Stock without the payment of additional
consideration by such holders, corresponding Purchase Rights shall be
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distributed to the exercising holder of this Warrant as soon as possible
after such exercise and it shall not be necessary for the exercising holder
of this Warrant specifically to request delivery of such rights; or
(ii) in the event that any such Purchase Rights shall have expired or
shall expire prior to the end of said thirty (30) day period, the number of
shares of Common Stock or the amount of property which such holder could
have acquired upon such exercise at the time or times at which the Company
granted, issued or sold such expired Purchase Rights.
3.8. Adjustment by Board of Directors. If any event occurs as to which, in
the opinion of the Board of Directors of the Company, the provisions of this
Section 3 are not strictly applicable or if strictly applicable would not fairly
protect the rights of the holder of this Warrant in accordance with the
essential intent and principles of such provisions, then the Board of Directors
shall make an adjustment in the application of such provisions, in accordance
with such essential intent and principles, so as to protect such rights as
aforesaid, but in no event shall any adjustment have the effect of increasing
the Purchase Price as otherwise determined pursuant to any of the provisions of
this Section 3 except in the case of a combination of shares of a type
contemplated in Section 3.3 and then in no event to an amount larger than the
Purchase Price as adjusted pursuant to Section 3.3.
3.9. Fractional Shares. The Company shall not issue fractions of shares of
Common Stock upon exercise of this Warrant or scrip in lieu thereof. If any
fraction of a share of Common Stock would, except for the provisions of this
Section 3.9, be issuable upon exercise of this Warrant, the Company shall in
lieu thereof pay to the person entitled thereto an amount in cash equal to the
current value of such fraction, calculated to the nearest one-hundredth (1/100)
of a share, to be computed (i) if the Common Stock is listed on any national
securities exchange on the basis of the last sales price of the Common Stock on
such exchange (or the quoted closing bid price if there shall have been no
sales) on the date of conversion, or (ii) if the Common Stock shall not be
listed, on the basis of the mean between the closing bid and asked prices for
the Common Stock on the date of conversion as reported by NASDAQ, or its
successor, and if there are not such closing bid and asked prices, on the basis
of the fair market value per share as determined by the Board of Directors of
the Company.
3.10. Officers' Statement as to Adjustments. Whenever the Purchase Price
shall be adjusted as provided in Section 3 hereof, the Company shall forthwith
file at each office designated for the exercise of this Warrant, a statement,
signed by the Chairman of the Board, the President, any Vice President or
Treasurer of the Company, showing in reasonable detail the facts requiring such
adjustment and the Purchase Price that will be effective after such adjustment.
The Company shall also cause a notice setting forth any such adjustments to be
sent by mail, first class, postage prepaid, to the record holder of this Warrant
at his or its address appearing on the stock register. If such notice relates to
an adjustment resulting from an event referred to in Section 3.6, such notice
shall be included as part of the notice required to be mailed and published
under the provisions of Section 3.6 hereof.
4. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its
charter or through reorganization, consolidation, merger, dissolution, sale of
assets or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
holder hereof against dilution or other impairment. Without limiting the
generality of the foregoing, the Company will not increase the par value of any
shares of stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise, and at all times will take all such action
as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and non-assessable stock upon the exercise of this
Warrant.
5. RESERVATION OF STOCK, ETC., ISSUABLE ON EXERCISE OF WARRANTS. The
Company shall at all times reserve and keep available out of its authorized but
unissued stock, solely for the issuance and delivery upon the exercise of this
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Warrant and other similar Warrants, such number of its duly authorized shares of
Common Stock as from time to time shall be issuable upon the exercise of this
Warrant and all other similar Warrants at the time outstanding.
6. REGISTRATION RIGHTS. The holder of this warrant shall have the following
registration rights with respect to the Common Stock:
6.1. Registration on Demand. (a) Upon written notice to the Company from
holders of at least twenty-five percent (25%) of the Registrable Securities (as
hereinafter defined), determined as if the Warrant had been fully exercised, of
their desire to cause a registration of the Registrable Securities, the Company
shall (i) inform the other holders of Registrable Securities (at least 30 days
prior to the proposed filing of any registration statement), such notice to
state the identity of the holders requesting registration and the number of
Registrable Securities proposed to be sold thereby, and take appropriate action,
on a reasonably timely basis, to file with the Securities and Exchange
Commission (the "SEC") a registration statement on the appropriate form covering
all Registrable Securities specified in such demand and by such other holders
(by notice given to the Company within 15 days after the date the Company
notified them of such demand), (ii) use best efforts to cause such registration
statement to become effective under the Securities Act and (iii) use best
efforts to qualify such resale under those state securities laws reasonably
requested by the holders of a majority of Registrable Securities to be included
in such registration; provided, however, that such effort shall not require the
Company to qualify as a foreign corporation or subject itself to taxation in any
jurisdiction where it is not already so qualified or subject. The Company shall
be obligated to effect two (2) registrations pursuant to this Section 6.1. The
Company shall be obligated to effect any registration pursuant to this Section
6.1 as promptly as practicable upon receipt from the requisite number of holders
of Registrable Securities of the notice requesting such registration; provided,
however, that the Company shall have the right to delay any registration
pursuant to this Section 6.1 for one period of up to thirty (30) days if the
Board of Directors of the Company shall have determined (and passed a resolution
to such effect) that to effectuate such registration at such time would
materially and adversely affect the Company and be materially detrimental to the
business and operations thereof (a "Blackout Determination"), which period may
be extended for an additional thirty (30) days upon a second Blackout
Determination upon the expiration of the first thirty (30) day period. For
purposes hereof, the term "Registrable Securities" shall mean, collectively, (i)
the Common Stock issued or issuable upon exercise of the Warrant and (ii) any
securities issued or issuable with respect to such shares of Common Stock by way
of stock dividend, stock split, in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise.
(b) The Company will be obligated to pay all Registration Expenses with
respect to the registrations pursuant to this Section 6.1.
(c) Registrable Securities will cease to be such when (i) a registration
statement covering such Registrable Securities has been declared effective and
they have been disposed of pursuant to such effective registration statement,
(ii) they shall have been otherwise transferred, and the Company shall have
delivered new certificates or other evidences of ownership for them not subject
to any stop transfer order or other restriction on transfer and not bearing a
legend restricting transfer in the absence of an effective registration or an
exemption from the registration requirements of the Securities Act and
subsequent disposition of them shall not require registration or qualification
of them under the Securities Actor any similar state law then in force, or (iii)
they shall have ceased to be outstanding.
(d) A registration requested pursuant to this Section 6.1 will not be
deemed to have been effected unless it has been declared effective by the SEC
and the Company has complied with all of its obligations under this Warrant with
respect thereto (without regard to the use of best efforts or the like);
provided that such registration will be deemed not to have been effected if
after such registration has become effective, the offering of the Registrable
Securities (or any portion thereof) pursuant to such registration is withdrawn
or is or becomes the subject of any Stop Order (as hereinafter defined). If (i)
a registration requested pursuant to this Section 6.1 is deemed not to have been
effected or (ii) the registration requested pursuant to this Section 6.1 does
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not remain effective for a period of at least 360 days, then (x) such requested
registration shall not be deemed to be an effective registration pursuant to
this Section 6.1 and (y) such requested registration shall not reduce the number
of registrations the Company shall be obligated to effect pursuant to this
Section 6.1. For the purposes hereof, the term "Stop Order" shall mean, with
respect to any registration of the Registrable Securities or any portion thereof
effected pursuant to this Warrant, any stop order, injunction or other order or
requirement of the SEC or any other governmental or administrative agency, or
any act by any court preventing or otherwise limiting the sale of any
Registrable Securities pursuant to such registration.
(e) Any offering of Registrable Securities contemplated by this Section 6.1
shall, unless the holders of a majority of the Registrable Securities to be
included in such offering determine otherwise, be a firm commitment underwritten
offering and the managing underwriter for such offering shall be chosen by the
holders of a majority of the Registrable Securities to be included therein,
which managing underwriter shall be reasonably acceptable to the Company.
(f) The Company shall not, without the prior written consent of the holders
of a majority of the Registrable Securities to be included in any registration
requested pursuant to this Section 6.1, include in such registration, any other
securities of the Company; provided, however, that the Company may include in
any such registration any securities to the extent that the inclusion of such
securities does not have the effect referred to in subsection 6.1(g) hereof and
so long as the sale of such securities is included in the underwriting of the
Registrable Securities and the same underwriters are used.
(g) If the underwriter in a public offering to be effected pursuant to the
provisions of this Section 6.1 advises the Company and the holders of the
Registrable Securities in writing that in its opinion inclusion in the
registration of the total amount of securities requested to be registered will
materially and adversely affect the offering price of such securities or will
materially and adversely affect the market for such securities, then, to the
extent necessary, up to the entire amount of any securities proposed to be
included in such registration which are not Registrable Securities shall be
eliminated.
(h) The Company shall not be required to register Registrable Securities
which, registration together with any other securities to be included in such,
have a value, based on the proposed offering price, of less than $2,000,000.
6.2. Incidental Registration. (a) If the Company intends to file a
registration statement on Form S-1, S-2 or S-3 (or other appropriate form) for
the registration of an offering of equity securities with the SEC, the Company
shall notify each of the holders of record of Registrable Securities at least 30
days prior to each such filing of the Company's intention to file such a
registration statement, such notice shall state the number of shares of equity
securities proposed to be registered thereby. If any holder of Registrable
Securities notifies the Company within ten days after receipt of such notice
from the Company of its desire to have included in such registration statement
any of its Registrable Securities, then the Company shall cause the Company to
include such shares in such registration statement. The Company shall pay all
the Registration Expenses (as hereinafter defined) of such registration. For the
purposes hereof, the term "Registration Expenses" shall mean all expenses
required to be disclosed in Item 13 of Part II of the Form S-1 registration
statement, or in a comparable section of any similar form permitting an
underwritten public offering, as well as expenses of underwriters customarily
reimbursed by issuers for selling stockholders and reasonable fees and expenses
of one counsel for all selling stockholders (in respect of a demand
registration) and any underwriter (for both a demand and piggyback
registration), but not including underwriting discounts and commissions and
transfer taxes.
(b) The Company may in its discretion withdraw any registration statement
filed pursuant to this Section 6.2 subsequent to its filing without liability to
the holders of Registrable Securities.
(c) In the event that the managing underwriter for any such offering
described in this Section 6.2 notifies the Company that, in good faith, it is
able to proceed with the proposed offering only with respect to a smaller number
of securities (the "Maximum Number") than the total number of Registrable
9
<PAGE>
Securities proposed to be offered by such holders and securities proposed to be
offered by the Company and all others entitled to registration rights under such
registration statement, then the Company shall reduce the number of securities
held by persons (the "Piggyback Holders") other than the Company and persons
exercising demand registration rights to be included in such registration, to
the extent necessary to reduce the number of securities to be included in such
registration to an amount equal to the Maximum Number. Such amount will be
allocated pro rata in accordance with the number of securities proposed to be
offered by each Piggyback Holder (including the holders of Registrable
Securities).
6.3. Indemnity and Contribution. (a) In connection with a registration
statement filed with the SEC pursuant to this Section 6, the Company shall
provide each holder of Registrable Securities included in such registration
statement, and each officer and director of any thereof, and each person who
controls such holder within the meaning of Section 15 of the Securities Act, and
Section 20 of the Securities Exchange Act of 1934 (the "Exchange Act") , with
indemnification against any losses, claims, damages or liabilities, reasonable
attorneys fees, costs or expenses and costs and expenses of investigating and
defending any such claims (collectively "Damages"), joint or several, to which
any of them may become subject under the federal securities laws, or otherwise,
in form and substance as is customarily given to underwriters in an underwritten
offering of securities. Each holder including Registrable Securities in any such
registration statement agrees that it shall indemnify the Company, and each
officer and director thereof, and each person who controls the Company within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act, against any Damages, in form and substance as is customarily given by
selling shareholders to publicly held corporation in an underwritten public
offering of securities, but only to the extent that such Damages (or proceedings
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained, on the effective date
thereof, in any registration statement under which such securities are
registered under the Securities Act, in any preliminary prospectus or final
prospectus contained therein or in any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, which, in each such case, has been made in or omitted
from such registration statement, said preliminary or final prospectus or said
amendment or supplement solely in reliance upon, and in conformity with, written
information furnished to the Company by such holder of Registrable Securities.
(b) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in subsection 6.3(a)
is for any reason held to be unenforceable by the indemnified parties although
applicable in accordance with its terms, each of the Company and the holders of
the Registrable Securities shall contribute to the aggregate Damages
contemplated by said indemnity agreement incurred by each of the Company and the
holders of the Registrable Securities, as incurred, in such proportions as is
appropriate to reflect the relative fault of the Company and the holders of the
Registrable Securities in connection with the statements or omissions which
resulted in such Damages. The relative fault of the Company on one hand and the
holders of the Registrable Securities on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statements of a material fact or the omission or alleged omission to state a
material fact was supplied by the Company on one hand and the holders of the
Registrable Securities on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(c) In no event shall a holder of Registrable Securities be liable for
indemnification or contribution pursuant to this Section 6 in excess of the net
proceeds received upon the sale of such Registrable Securities.
6.4. Certain Procedures. The Company shall provide each holder of
Registrable Securities included in any registration with (i) a "cold comfort"
letter from the Company's independent public accountants, in customary form
covering those matters customarily covered by a "cold comfort" letter with
respect to any such registration statement and addressed to such holder; and
(ii) use its best efforts to execute and deliver with underwriters for the
offering covered by any such registration statement, an underwriting agreement
in form and substance customarily executed for public offerings of common stock.
10
<PAGE>
6.5. Rule 144 Reporting. With a view to making available to the holders of
Registrable Securities the benefits of certain rules and regulations of the SEC
which may permit the sale of the Registrable Securities to the public without
registration, the Company agrees to, at all times:
(1) make and keep available current public information concerning the
Company as those terms are understood and defined in Rule 144 under the
Securities Act("Rule 144");
(2) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act; and
(3) furnish to each holder of Registrable Securities forthwith upon
such holder's request a written statement by the Company as to its
compliance with the reporting requirements of Rule 144 and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so
filed by the Company as such holder may reasonably request in availing
itself of any rule or regulation of the SEC allowing it to sell any such
securities without registration.
6.6. Lock-Ups. After receipt of any notice pursuant to Section 6.1 or 6.2
hereof, each holder of Registrable Securities and the Company shall not demand
or request a registration of securities of the Company or otherwise offer or
sell securities until the later of (i) 90 days after the effective date of the
registration statement in respect of which such notice was given, (ii) 150 days
after the date such notice was given or (iii) the date such registration
statement is withdrawn by the Company. To the extent requested by the managing
underwriter in respect of an offering of securities of the Company described in
this Section 6, each holder of Registrable Securities and the Company shall
agree to refrain from selling or offering to sell any securities of the Company
within 120 days after the effective date of any registration statement described
herein. Nothing in this Section 6.6 shall preclude the Company from issuing
shares of Registrable Securities upon exercise of the Warrant.
6.7. No Inconsistent Provisions. The Company shall not, without the prior
written consent of the holders of a majority of the Registrable Securities
include, or grant to any person or entity the right to request the Company to
include, in such registration, any other securities of the Company that are
inconsistent with the priorities, rights and privileges of the holders of
Registrable Securities contained in this Warrant, except pursuant to the
Exchange Rights Agreement.
7. REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant and
(in the case of loss, theft or destruction) upon delivery of an indemnity
agreement (with surety if reasonably required) in an amount reasonably
satisfactory to it, or (in the case of mutilation) upon surrender and
cancellation thereof, the Company will issue, in lieu thereof, a new Warrant of
like tenor.
8. REMEDIES. The Company stipulates that the remedies at law of the holder
of this Warrant in the event of any default by the Company in the performance of
or compliance with any of the terms of this Warrant are not and will not be
adequate, and that the same may be specifically enforced.
9. NEGOTIABILITY, ETC. This Warrant is issued upon the following terms, to
all of which each taker or owner hereof consents and agrees:
(a) Subject to the legend appearing on the first page hereof, title to
this Warrant may be transferred by endorsement (by the holder hereof
executing the form of assignment at the end hereof including guaranty of
signature) and delivery in the same manner as in the case of a negotiable
instrument transferable by endorsement and delivery.
11
<PAGE>
(b) Any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is granted
power to transfer absolute title hereto by endorsement and delivery hereof
to a bona fide purchaser hereof for value; each prior taker or owner waives
and renounces all of his equities or rights in this Warrant in favor of
every such bona fide purchaser, and every such bona fide purchaser shall
acquire title hereto and to all rights represented hereby.
(c) Until this Warrant is transferred on the books of the Company, the
Company may treat the registered holder of this Warrant as the absolute
owner hereof for all purposes without being affected by any notice to the
contrary.
(d) Prior to the exercise of this Warrant, the holder hereof shall not
be entitled to any rights of a shareholder of the Company with respect to
shares for which this Warrant shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions
or to exercise any preemptive rights, and shall not be entitled to receive
any notice of any proceedings of the Company, except as provided herein.
(e) The Company shall not be required to pay any Federal or state
transfer tax or charge that may be payable in respect of any transfer
involved in the transfer or delivery of this Warrant or the issuance or
conversion or delivery of certificates for Common Stock in a name other
than that of the registered holder of this Warrant or to issue or deliver
any certificates for Common Stock upon the exercise of this Warrant until
any and all such taxes and charges shall have been paid by the holder of
this Warrant or until it has been established to the Company's satisfaction
that no such tax or charge is due.
10. SUBDIVISION OF RIGHTS. This Warrant (as well as any new warrants issued
pursuant to the provisions of this Section) is exchangeable, upon the surrender
hereof by the holder hereof, at the principal office of the Company for any
number of new warrants of like tenor and date representing in the aggregate the
right to subscribe for and purchase the number of shares of Common Stock of the
Company which may be subscribed for and purchased hereunder.
11. MAILING OF NOTICES, ETC. All notices and other communications from the
Company to the holder of this Warrant shall be mailed by first-class certified
mail, postage prepaid, to the address furnished to the Company in writing by the
last holder of this Warrant who shall have furnished an address to the Company
in writing.
12. HEADINGS, ETC. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect the meaning hereof.
13. CHANGE, WAIVER, ETC. Neither this Warrant nor any term hereof may be
changed, waived, discharged or terminated orally but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
14. GOVERNING LAW. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.
12
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed and delivered this Warrant
as of this 17th day of April, 1996.
By:
---------------------------------------------
Name: Nicholas L. Ribis
Title: President and Chief Executive Officer
Attest:
- --------------------------
Name: Robert M. Pickus
Title: Executive Vice President
and Secretary
<PAGE>
WARRANT EXERCISE FORM
To: Trump Hotels & Casino Resorts, Inc.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, _____________ shares of Common Stock of Trump Hotels &
Casino Resorts, Inc. and herewith makes payment of $ _____________ therefor, and
requests that the certificates for such shares be issued in the name of, and be
delivered to ______________, whose address is __________________________.
Dated:
- ------------------------
<PAGE>
TRANSFER OF WARRANT FORM
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _____________________ the right represented by the within Warrant to
purchase the ________ shares of the Common Stock of Trump Hotels & Casino
Resorts, Inc. to which the within Warrant relates, and appoints ______________
attorney to transfer said right on the books of Trump Hotels & Casino Resorts,
Inc. with full power of substitution in the premises.
Dated:
- ------------------------
In the presence of
- -------------------------
================================================================================
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
Page
ARTICLE I. DEFINITIONS ..................................................... 2
Section 1.1. Definitions .............................................. 2
Section 1.2. Accounting Terms and Determinations ...................... 16
ARTICLE II. CONTINUATION OF PARTNERSHIP; BUSINESS OF PARTNERSHIP ........... 17
Section 2.1. Continuation ............................................. 17
Section 2.2. Name ..................................................... 17
Section 2.3. Character of the Business ................................ 17
Section 2.4. Location of Principal Place of Business .................. 17
Section 2.5. Registered Agent and Registered Office ................... 17
ARTICLE III. TERM .......................................................... 18
Section 3.1. Commencement ............................................. 18
Section 3.2. Termination .............................................. 18
ARTICLE IV. CAPITAL CONTRIBUTIONS .......................................... 18
Section 4.1. Capital Contributions; Partnership Interests
and Percentage Interests of the Partners ......................... 18
Section 4.2. Issuance of Additional Partnership Interests
and Shares ....................................................... 19
Section 4.3. Adjustment of Partnership Interests ...................... 21
Section 4.4. No Interest on or Return of Capital Contribution ......... 21
ARTICLE V. ALLOCATIONS AND OTHER TAX AND ACCOUNTING MATTERS ................ 22
Section 5.1. Allocations of Net Income and Net Loss ................... 22
Section 5.2. Special Allocations ...................................... 22
Section 5.3. Tax Allocations .......................................... 24
Section 5.4. Books of Account ......................................... 26
Section 5.5. Tax Matters Partner ...................................... 26
Section 5.6. Tax Elections and Returns ................................ 26
Section 5.7. Tax Certifications ....................................... 28
ARTICLE VI. DISTRIBUTIONS .................................................. 28
Section 6.1. General .................................................. 28
Section 6.2. Distributions for Taxes .................................. 28
Section 6.3. Other Distributions ...................................... 29
Section 6.4. Withholding Payments Required By Law ..................... 29
Section 6.5. Non-Recourse ............................................. 31
ARTICLE VII. RIGHTS, DUTIES AND RESTRICTIONS OF THE GENERAL PARTNER ........ 31
Section 7.1. Powers and Duties of General Partner ..................... 31
Section 7.2. Major Decisions .......................................... 34
Section 7.3. Reimbursement of the General Partner ..................... 35
Section 7.4. Outside Activities of the General Partner ................ 35
<PAGE>
Section 7.5. Contracts with Affiliates ................................ 35
Section 7.6. Title to Partnership Assets .............................. 36
Section 7.7. Reliance by Third Parties ................................ 36
Section 7.8. Liability of the General Partner ......................... 37
Section 7.9. Officers of the Partnership .............................. 37
Section 7.10. Covenants of THCR Regarding the Issuance
of New Securities ................................................. 37
Section 7.11. Other Matters Concerning the General Partner ............ 38
ARTICLE VIII. DISSOLUTION, LIQUIDATION AND WINDING-UP ...................... 39
Section 8.1. Accounting ............................................... 39
Section 8.2. Distribution on Dissolution .............................. 39
Section 8.3. Timing Requirements ...................................... 39
Section 8.4. Documentation of Liquidation ............................. 40
Section 8.5. Dissolution .............................................. 40
Section 8.6. Continuation of the Partnership .......................... 41
ARTICLE IX. TRANSFER AND REDEMPTION OF PARTNERSHIP INTERESTS;
CERTAIN CONSENT RIGHTS ......................................... 41
Section 9.1. General Partner Transfer ................................. 41
Section 9.2. Transfers by Limited Partners ............................ 42
Section 9.3. Certain Additional Restrictions on Transfer .............. 45
Section 9.4. Effective Dates of Transfers ............................. 46
Section 9.5. Transfer ................................................. 46
Section 9.6. Redemption of Partnership Interest ....................... 47
Section 9.7. Certain Consent Rights ................................... 47
ARTICLE X. RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS .................. 47
Section 10.1. No Participation in Management .......................... 47
Section 10.2. Bankruptcy of a Limited Partner ......................... 48
Section 10.3. No Withdrawal ........................................... 48
Section 10.4. Conflicts ............................................... 48
Section 10.5. Provision of Information ................................ 49
Section 10.6. Limited Partner Representative .......................... 50
Section 10.7. Power of Attorney ....................................... 51
ARTICLE XI. INDEMNIFICATION; EXCULPATION ................................... 52
Section 11.1. Indemnification ......................................... 52
Section 11.2. Indemnification Procedures .............................. 53
Section 11.3. Exculpation ............................................. 54
Section 11.4. No Liability of Directors and Others .................... 54
ARTICLE XII. RIGHTS UNDER THE EXCHANGE RIGHTS AGREEMENT .................... 55
Section 12.1. Transfer Pursuant to Exchange Rights Agreement .......... 55
Section 12.2. Subject to the Exchange Rights Agreement ................ 55
ARTICLE XIII. AMENDMENT OF PARTNERSHIP AGREEMENT, MEETINGS ................. 55
Section 13.1. Amendments .............................................. 55
Section 13.2. Meetings of the Partners; Notices to Partners ........... 57
(ii)
<PAGE>
ARTICLE XIV. CERTIFICATE OF INTEREST ....................................... 58
Section 14.1. Form of Certificate of Interest ......................... 58
Section 14.2. Transfers of Certificates of Interest ................... 58
Section 14.3. Lost, Stolen, Destroyed or Mutilated
Certificates of Interest .......................................... 59
Section 14.4. Inspection of Certificate Transfer Ledger ............... 59
ARTICLE XV. REGULATORY REQUIREMENTS ........................................ 59
Section 15.1. Applicable Regulatory Authority and CCC Regulation ...... 59
Section 15.2. Additional Applicable Regulatory Authority Regulation ... 60
Section 15.3. Disqualified Holders .................................... 60
ARTICLE XVI. GENERAL PROVISIONS ............................................ 61
Section 16.1. Notices ................................................. 61
Section 16.2. Controlling Law ......................................... 62
Section 16.3. No Third Party Beneficiaries ............................ 62
Section 16.4. Execution in Counterparts ............................... 62
Section 16.5. Provisions Separable .................................... 62
Section 16.6. Entire Agreement ........................................ 62
Section 16.7. Paragraph Headings ...................................... 63
Section 16.8. Gender, Etc. ............................................ 63
Section 16.9. Number of Days .......................................... 63
Section 16.10. Partners Not Agents .................................... 63
Section 16.11. Assurances ............................................. 63
Section 16.12. Successors and Assigns ................................. 63
Section 16.13. Waiver ................................................. 63
Schedules
---------
SCHEDULE I -- Aggregate Capital Contributions
SCHEDULE II -- Capital Contributions Prior to April 17, 1996
SCHEDULE III -- Capital Contributions in connection with the Merger Transaction
Exhibits
--------
EXHIBIT A -- Form of Amended and Restated Exchange and Registration Rights
Agreement
(iii)
<PAGE>
THE LIMITED PARTNERSHIP INTERESTS REFERRED TO IN THIS AGREEMENT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. REFERENCE IS MADE TO ARTICLE IX OF THIS AGREEMENT FOR
PROVISIONS RELATING TO VARIOUS RESTRICTIONS ON THE SALE OR OTHER TRANSFER
OF THESE INTERESTS.
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.
THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP is made
and entered into this 17th day of April 1996, by and among Trump Hotels & Casino
Resorts, Inc., a Delaware corporation ("THCR"), Donald J. Trump ("Trump" or the
"Initial Limited Partner"), THCR/LP Corporation, a New Jersey corporation
(formerly TM/GP Corporation) ("THCR/LP"), Trump Casinos, Inc., a New Jersey
corporation (formerly Trump Taj Mahal, Inc.) ("TCI"), and the Persons who may
become party hereto from time to time pursuant to the terms of this Agreement.
W I T N E S S E T H:
WHEREAS, THCR and Trump formed the Partnership on March 28, 1995 by the
filing of a Certificate of Limited Partnership with the Secretary of State of
the State of Delaware; and
WHEREAS, THCR and Trump entered into an Amended and Restated Agreement of
Limited Partnership on June 12, 1995;
WHEREAS, effective on the date hereof, the General Partner and Trump desire
to cause certain capital contributions to the Partnership, as set forth on
Schedule III hereto, in connection with the "Merger Transaction," as such term
is defined in the final prospectus dated April 11, 1996 included in the General
Partner's Registration Statement on Form S-1 (Registration No. 333-639); and
WHEREAS, in exchange for their capital contributions as set forth in
Schedule III, effective on the date hereof, THCR/LP and TCI are being admitted
to the Partnership as Limited Partners; and
WHEREAS, the parties hereto desire to continue the Partnership as a limited
partnership under the Delaware Revised
<PAGE>
Uniform Limited Partnership Act in accordance with the provisions of this
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions. Except as otherwise herein expressly provided,
the following terms and phrases shall have the meanings as set forth below:
"Accountants" shall mean the national firm or firms of independent
certified public accountants selected by the General Partner on behalf of the
Partnership to audit the books and records of the Partnership and to prepare
statements and reports in connection therewith, which initially shall be Arthur
Andersen LLP.
"Act" shall mean the Delaware Revised Uniform Limited Partnership Act, as
the same may hereafter be amended from time to time.
"Action" shall mean any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative, that give rise to
a claim for indemnification pursuant to Article XI hereof.
"Additional Distributions" shall mean distributions by the Partnership
pursuant to Section 6.3 hereof.
"Additional Partnership Interests" shall have the meaning set forth in
Section 4.2(a).
"Adjusted Capital Account Deficit" shall mean, with respect to any Limited
Partner, the deficit balance, if any, in such Partner's Capital Account as of
the end of any relevant fiscal year and after giving effect to the following
adjustments:
(a) credit to such Capital Account any amounts which such Partner is
obligated or treated as obligated to restore with respect to any deficit
balance in such Capital Account pursuant to Section 1.704-1(b)(2)(ii)(c) of
the Regulations, or is deemed to be obligated to restore with respect to
any deficit balance pursuant to the penultimate sentences of Sections
1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations; and
-2-
<PAGE>
(b) debit to such Capital Account the items described in Sections
1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the requirements of the alternate test for economic effect contained
in Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be interpreted
consistently therewith.
"Adjustment Date" shall have the meaning set forth in Section 4.3 hereof.
"Affiliate" shall mean, with respect to any specified Person, any other
Person directly or indirectly controlling, controlled by, or under common
control with, such specified Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise.
"Agreement" shall mean this Second Amended and Restated Agreement of
Limited Partnership, as originally executed and as amended, modified,
supplemented or restated from time to time, as the context requires.
"Applicable Regulatory Authority" shall mean any governmental or
quasi-governmental authority with applicable jurisdiction over the business,
affairs, securities, or properties of the Partnership or any of its
Subsidiaries, including, without limitation, the CCC, the IGC, and the MGC.
"Audited Financial Statements" shall mean financial statements (balance
sheet, statement of income, statement of partners' equity and statement of cash
flows) prepared in accordance with GAAP and accompanied by an independent
auditor's report containing an opinion thereon.
"Bankruptcy" shall mean, with respect to any Person, (i) the commencement
by such Person of any petition, case or proceeding seeking relief under any
provision or chapter of the federal bankruptcy code or any other federal or
state law relating to insolvency, bankruptcy or reorganization, (ii) an
adjudication that such Person is insolvent or bankrupt, (iii) the entry of an
order for relief under the federal bankruptcy code with respect to such Person,
(iv) the filing of any such petition or the commencement of any such case or
proceeding against such Person, unless such petition and the case or proceeding
initiated thereby are dismissed within ninety (90) days from the date of such
filing or (v) the filing of an answer by such Person admitting the allegations
of any such petition.
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<PAGE>
"Beneficial Owner" shall mean any Person who, singly or together with any
of such Person's Affiliates, directly or indirectly, has "beneficial ownership"
of Partnership Interests (as determined pursuant to Rule 13d-3 of the Securities
Exchange Act of 1934, as amended).
"Business Day" shall mean any day that is not a Saturday, Sunday or a day
on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
"Capital Account" shall mean, with respect to any Partner, the separate
"book" account which the Partnership shall establish and maintain for such
Partner in accordance with Section 704(b) of the Code and the Treasury
Regulations promulgated thereunder. In the event that a Partnership Interest is
transferred in accordance with the terms of this Agreement, the Capital Account,
at the time of the transfer, of the transferor attributable to the transferred
interest shall carry over to the transferee.
"Capital Contribution" shall mean, with respect to any Partner, the amount
of money and the initial Gross Asset Value of any Contributed Property (net of
liabilities to which such property is subject) set forth on Schedule I, as such
exhibit will be amended by the General Partner from time to time to reflect the
amount of money and the Gross Asset Value of any Contributed Property received
by the Partnership pursuant to any additional Capital Contribution or deemed
contributed pursuant to Sections 4.2 or 7.10.
"Casino Control Act" shall mean the New Jersey Casino Control Act, N.J.S.A.
5:12-1 et seq.
"CCC" shall mean the New Jersey Casino Control Commission and any successor
agency.
"Certificate" shall mean the Certificate of Limited Partnership
establishing the Partnership, as filed with the office of the Delaware Secretary
of State on March 28, 1995, as it may be amended from time to time in accordance
with the terms of this Agreement and the Act.
"Class B Stock" shall mean Class B Common Stock, par value $.01 per share,
of THCR, and any class of securities into which the Class B Stock has been
converted, other than Common Stock.
"Code" shall mean the Internal Revenue Code of 1986, as amended and in
effect from time to time, as interpreted by the applicable regulations
thereunder. Any reference herein to a specific section or sections of the Code
shall be deemed to include a reference to any corresponding provision of future
law.
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"Common Stock" shall mean the common stock, par value $.01 per share, of
THCR, other than the Class B Stock.
"Consent of the Limited Partners" shall mean the written consent of a
Majority-In-Interest of the Limited Partners given in accordance with Section
13.2 hereof, which consent shall be obtained prior to the taking of any action
for which it is required by this Agreement and may be given or withheld by a
Majority-In-Interest of the Limited Partners, unless otherwise expressly
provided herein, in their sole and absolute discretion.
"Contributed Property" shall mean any property or asset, in such form as
may be permitted by the Act, but excluding cash, contributed or deemed
contributed to the Partnership with respect to the Partnership Interest held by
each Partner.
"Current Market Price" shall mean, with respect to any security on any
Valuation Date specified herein, the arithmetic mean over a period of twenty
consecutive trading days ending the second trading day prior to such date (a) if
the security is listed or admitted to trading on any national securities
exchange, of the high and low sale price of the security or if no such sale
takes place on such date, the average of the highest closing bid and lowest
closing asked prices thereof on such date, in each case as officially reported
on all national securities exchanges on which the security is then listed or
admitted to trading, (b) if the security is not then listed or admitted to
trading on any national securities exchange, the highest closing price thereof
on such date in the over-the-counter market as shown by the NASDAQ National
Market System, or (c) if the security is not then quoted in such system, as
published by the National Quotation Bureau, Incorporated or any similar
successor organization, and in any case as reported by any member firm of the
New York Stock Exchange selected by the General Partner. If the security is not
then listed or admitted to trading on any national securities exchange and if no
closing bid and ask prices therefor are then quoted or published in the
over-the-counter market, "Current Market Price" shall mean the value of the
security as of a date which is 15 days preceding the date as of which the
determination is to be made, as determined in good faith by an investment
banking firm of national reputation (which firm may have provided other services
to the General Partner or the Partnership) selected by the Board of Directors of
the General Partner, and, in connection with a Capital Contribution by the
Initial Limited Partner or his Permitted Holders, which selection shall be
approved by a majority of the Special Committee. Notwithstanding the foregoing,
if a determination of Current Market Price is being made in connection with an
arms length underwritten public offering, such value shall be the public
offering price of the Common Stock in such offering.
"Damages" shall have the meaning set forth in Section 11.1(a).
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"Deemed Partnership Interest Value" as of any date, shall mean with respect
to a Partner, the Deemed Value of the Partnership (as of the day preceding such
date) multiplied by such Partner's Percentage Interest (expressed as a decimal
carried to four places, e.g., .1234 or 12.34%).
"Deemed Value of the Partnership" shall mean, as of the Valuation Date, (a)
the sum of (i) the product of (A) the Current Market Price per share of Common
Stock, (B) the number of shares of outstanding Common Stock, and (C) a fraction,
the numerator of which is one, and the denominator of which is the Percentage
Interest (expressed as a decimal) of the General Partner, (ii) the aggregate
Fair Market Value of the outstanding capital stock of THCR, other than the
Common Stock or the Class B Stock, and (iii) the Fair Market Value of the
outstanding Indebtedness of THCR appearing on the balance sheet of THCR,
prepared in accordance with GAAP, as of the Valuation Date, which Indebtedness
(the "Included Indebtedness") shall exclude (A) the Indebtedness of the
Partnership and its consolidated and combined Subsidiaries, appearing on the
balance sheet of the Partnership and its consolidated and combined Subsidiaries,
prepared in accordance with GAAP as of the Valuation Date, and (B) any other
Indebtedness appearing on the balance sheet of THCR, prepared in accordance with
GAAP, as of the Valuation Date, the proceeds of which were not used to purchase
additional Partnership Interests, reduced by (b) the amount, if any, by which
the consolidated net worth of the General Partner exceeds its pro rata share of
the consolidated net worth of the Partnership; provided, however, that if the
General Partner shall have material amounts of liabilities (other than Included
Indebtedness) or material assets other than cash and Partnership Interests, the
General Partner may seek the advice of an investment banking firm of national
reputation as to the appropriate modification of the Deemed Value of the
Partnership formula set forth herein to take into account such liabilities or
assets.
"Depreciation" shall mean, with respect to any asset of the Partnership for
any fiscal year or other period, the depreciation or amortization, as the case
may be, allowed or allowable for federal income tax purposes in respect of such
asset for such fiscal year or other period; provided, however, that if there is
a difference between the Gross Asset Value and the adjusted tax basis of such
asset, Depreciation shall mean "book depreciation, depletion or amortization" as
determined under Section 1.704-1(b)(2)(iv)(g)(3) of the Regulations.
"Disabling Event" shall have the meaning set forth in Section 8.6.
"Disqualified Holder" shall mean any Beneficial Owner of Partnership
Interests or Equity Interests of the General Partner, the Partnership or any of
its Subsidiaries (a) who is found to be disqualified by any Applicable
Regulatory Authority, or (b) whose holding of such Partnership Interests or
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Equity Interests may result or, when taken together with the holding of such
Partnership Interests or Equity Interests by any other Beneficial Owner, may
result, in the judgment of the General Partner, in the inability to obtain, loss
or non-reinstatement of any license or franchise from any Applicable Regulatory
Authority sought or held by the Partnership or any Subsidiary to conduct any
portion of the business of the Partnership or any Subsidiary, which license or
franchise is conditioned upon some or all of the holders of Partnership
Interests and such Equity Interests meeting certain criteria.
"Entity" shall mean any general partnership, limited partnership, limited
liability company, corporation, joint venture, trust, business trust, real
estate investment trust, association or other entity.
"Equity Interest" of any Person shall mean any shares, interests,
participations or other equivalents (however designated) of such Person in
equity.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time (or any corresponding provisions of succeeding laws).
"Exchange Rights Agreement" shall mean the Amended and Restated Exchange
and Registration Rights Agreement, substantially in the form of Exhibit A
hereto, to be entered into by and among Trump, TCI and THCR, providing certain
rights to exchange Limited Partnership Interests for Common Stock on the terms
and conditions set forth therein, as the same may be amended from time to time
in accordance with the terms thereof.
"Executive Agreement" shall mean the Trump Executive Agreement, by and
between Trump and the Partnership, as the same may be amended from time to time
in accordance with the terms thereof.
"Fair Market Value" shall mean (i) in the case of any security, its Current
Market Price and (ii) in the case of any property or Indebtedness that is not a
security, the fair market value of such property or Indebtedness as determined
in good faith by a majority of the Board of Directors of the General Partner
and, in connection with a Capital Contribution by the Initial Limited Partner or
his Permitted Holders, by a majority of the Special Committee.
"Foreclosure Sale" shall mean any judicial sale or any sale of collateral
conducted by a pledgee in exercising its rights under the Uniform Commercial
Code.
"Gary Riverboat" shall mean a riverboat or dockside gaming facility and the
ancillary structures and other facilities used in connection with the operation
thereof located in Gary, Indiana.
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"General Partner" shall mean THCR, its duly admitted successors and assigns
and any other Person who is a general partner of the Partnership at the time of
reference thereto.
"General Partner Expenses" shall mean all organization, formation,
administrative and operating costs and expenses of the General Partner,
including, but not limited to, (a) salaries paid to officers of the General
Partner, and insurance, accounting, legal, and other professional fees and
expenses incurred by the General Partner, (b) costs and expenses relating to the
organization, formation and continuity of existence of the Partnership and the
General Partner, including franchise taxes, fees and assessments associated
therewith, any and all costs, expenses or fees payable or reimbursable to, or in
respect of, any director or officer of the General Partner, (c) costs and
expenses relating to any offer or registration of securities by the General
Partner or the Partnership and all statements, reports, fees and expenses
incidental thereto, including Issuance Costs applicable to any such offer of
securities, (d) costs and expenses associated with compliance by the General
Partner with laws, rules and regulations promulgated by any Applicable
Regulatory Authority, including the SEC, and (e) any costs and expenses incurred
in connection with any matter for which the General Partner may seek
indemnification from the Partnership pursuant to the provisions of this
Agreement; provided, however, that "General Partner Expenses" shall not include,
(i) any taxes taken into account in calculating Tax Amounts, and (ii) any
administrative and operating costs and expenses of the General Partner to the
extent arising out of any Outside Business Activities.
"Gross Asset Value" shall mean, with respect to any asset of the
Partnership, such asset's adjusted basis for federal income tax purposes, except
as follows:
(a) the initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be (i) in the case of any asset described
on attached Schedule I, the gross fair market value ascribed thereto on
such Schedule and (ii) in the case of any other asset hereafter contributed
by a Partner, the gross Fair Market Value of such asset at the time of its
contribution, which determination, in the case of the Initial Limited
Partner and his Permitted Holders, shall be made by a majority of the
Special Committee;
(b) the Gross Asset Values of all Partnership assets shall be adjusted
to equal their respective gross Fair Market Values:
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(i) immediately prior to a Capital Contribution (other than a de
minimis Capital Contribution) to the Partnership by a new or existing
Partner as consideration for a Partnership Interest;
(ii) immediately prior to the distribution by the Partnership to
a Partner of more than a de minimis amount of Partnership property as
consideration for the redemption of a Partnership Interest;
(iii) immediately prior to the liquidation of the Partnership
within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations;
and
(iv) upon any other event as to which the General Partner
reasonably determines that an adjustment is necessary or appropriate
to reflect the relative economic interests of the Partners;
(c) the Gross Asset Values of Partnership assets distributed to any
Partner shall be the gross Fair Market Values of such assets as of the date
of distribution; and
(d) the Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such
assets pursuant to Sections 734(b) or 743(b) of the Code, but only to the
extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the Regulations;
provided, however, that Gross Asset Values shall not be adjusted pursuant
to this paragraph to the extent that the General Partner reasonably
determines that an adjustment pursuant to paragraph (b) above is necessary
or appropriate in connection with a transaction that would otherwise result
in an adjustment pursuant to this paragraph (d).
At all times, Gross Asset Values shall be adjusted by any Depreciation taken
into account with respect to the Partnership's assets for purposes of computing
Net Income and Net Loss. Any adjustment to the Gross Asset Values of Partnership
property shall require an adjustment to the Partners' Capital Accounts; as for
the manner in which such adjustments are allocated to the Capital Accounts, see
clause (c) of the definition of Net Income and Net Loss in the case of
adjustment by Depreciation, and clause (d) of said definition in all other
cases.
"IGC" shall mean the Indiana Gaming Commission and any successor agency.
"Indebtedness" shall mean any obligation, whether or not contingent, (i) in
respect of borrowed money or evidenced by bonds, notes, debentures or similar
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instruments, (ii) representing the balance deferred and unpaid of the purchase
price of any property (including pursuant to capital leases), except any such
balance that constitutes an accrued expense or a trade payable, if and to the
extent any of the foregoing indebtedness would appear as a liability upon a
balance sheet prepared on a consolidated basis in accordance with GAAP, (iii) to
the extent not otherwise included, obligations under interest rate exchange,
currency exchange, swaps, futures or similar agreements, and (iv) guaranties
(other than endorsements for collection or deposit in the ordinary course of
business), direct or indirect, in any manner (including, without limitation,
reimbursement agreements in respect of letters of credit), of all or any part of
any Indebtedness of any third party.
"Indemnitee" shall mean any Person made or threatened to be made a party to
a proceeding by reason of its status as a Partner or a trustee, director,
officer, employee, agent, stockholder or Liquidating Trustee of the Partnership,
a Partner or an Affiliate of a Partner.
"Indiana Riverboat Act" shall mean the Indiana Riverboat Gambling Act, Ind.
Code ss. 4-33-1-1 et seq.
"Initial Limited Partner" shall have the meaning set forth in the
Introduction to this Agreement.
"Issuance Costs" shall mean the underwriter's discount, placement fees,
commissions or other expenses relating to the issuance of New Securities by the
General Partner.
"Lien" shall mean any liens, security interests, mortgages, deeds of trust,
pledges, options, escrows, collateral assignments, rights of first offer or
first refusal, preemptive rights and any other similar encumbrances of any
nature whatsoever.
"Limited Partner Representative" shall have the meaning set forth in
Section 10.6 hereof.
"Limited Partners" shall mean the Initial Limited Partner, those Persons
listed under the heading "Limited Partners" on the signature page hereto in
their respective capacities as limited partners of the Partnership, their
permitted successors or assigns as limited partners hereof, and any Person who,
at the time of reference thereto, is a limited partner of the Partnership.
"Liquidating Trustee" shall mean such individual or Entity which is
selected as the Liquidating Trustee hereunder by the General Partner, which
individual or Entity may include the General Partner or an Affiliate of the
General Partner, provided that such Liquidating Trustee agrees in writing to be
bound by the terms of this Agreement. The Liquidating Trustee shall be empowered
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to give and receive notices, reports and payments in connection with the
dissolution, liquidation and/or winding up of the Partnership and shall hold and
exercise such other rights and powers granted to the General Partner herein or
under the Act as are necessary or required to conduct the winding-up and
liquidation of the Partnership's affairs and to authorize all parties to deal
with the Liquidating Trustee in connection with the dissolution, liquidation
and/or winding-up of the Partnership.
"Major Decisions" shall have the meaning set forth in Section 7.2 hereof.
"Majority-In-Interest of the Limited Partners" shall mean Limited
Partner(s) (excluding the General Partner to the extent it Beneficially Owns any
limited Partnership Interest) who hold in the aggregate more than fifty (50)
percent of the Percentage Interests then allocable to and held by the Limited
Partners (excluding the General Partner to the extent it Beneficially Owns any
limited Partnership Interest), as a class.
"Merger Transaction" shall have the meaning set forth in the Recitals to
this Agreement.
"MGC" shall mean the Mississippi Gaming Commission and any successor
agency.
"Minimum Gain Attributable to Partner Nonrecourse Debt" shall mean "partner
nonrecourse debt minimum gain" as determined in accordance with Regulation
Section 1.704-2(i)(3).
"Mississippi Gaming Control Act" shall mean the Gaming Control Act of
Mississippi, Miss. Code ss. 75-76-1 et seq.
"Net Income" or "Net Loss" shall mean, for each fiscal year or other
applicable period, an amount equal to the Partnership's net income or loss for
such year or period as determined for federal income tax purposes by the
Accountants, determined in accordance with Section 703(a) of the Code (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Section 703(a) of the Code shall be included in taxable
income or loss), with the following adjustments: (a) by including as an item of
gross income any tax-exempt income received by the Partnership; (b) by treating
as a deductible expense any expenditure of the Partnership described in Section
705(a)(2)(B) of the Code (including amounts paid or incurred to organize the
Partnership (unless an election is made pursuant to Code Section 709(b)) or to
promote the sale of interests in the Partnership and by treating deductions for
any losses incurred in connection with the sale or exchange of Partnership
property disallowed pursuant to Section 267(a)(1) or Section 707(b) of the Code
as expenditures described in Section 705(a)(2)(B) of the Code); (c) in lieu of
depreciation, depletion, amortization and other cost recovery deductions taken
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into account in computing total income or loss, there shall be taken into
account Depreciation; (d) gain or loss resulting from any disposition of
Partnership property with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Gross Asset
Value of such property rather than its adjusted tax basis; (e) in the event of
an adjustment of the Gross Asset Value of any Partnership asset which requires
that the Capital Accounts of the Partnership be adjusted pursuant to Regulation
Section 1.704-1(b)(2)(iv)(e), (f) and (m), the amount of such adjustment is to
be taken into account as additional Net Income or Net Loss pursuant to Section
5.1; and (f) excluding any items specially allocated pursuant to Section 5.2.
Once an item of income, gain, loss or deduction has been included in the initial
computation of Net Income or Net Loss and is subjected to the special allocation
rules in Section 5.2, Net Income and Net Loss shall be computed without regard
to such item.
"New Securities" means Indebtedness or Equity Interests of the General
Partner and any of its Subsidiaries other than the Partnership and its
Subsidiaries; provided, however, that New Securities shall not include (i) Class
B Stock and Common Stock issued by THCR prior to the date of this Agreement,
(ii) the Common Stock to be issued by THCR pursuant to (x) a Registration
Statement on Form S-1 (Registration No. 333-639) (including the underwriters'
over-allotment option with respect thereto) or (y) a Registration Statement on
Form S-4 (Registration No. 333-153), or (iii) the First Mortgage Notes to be
issued by Trump AC and Trump Atlantic City Funding, Inc. pursuant to
Registration Statements on Form S-1 (Registration Nos. 333-643 and 333-2439).
"Nonrecourse Deductions" shall have the meaning set forth in Sections
1.704-2(b)(1) and (c) of the Regulations.
"Nonrecourse Liabilities" shall have the meaning set forth in Section
1.704-2(b)(3) of the Regulations.
"Outside Business Activity" shall mean any business other than (i) the
ownership, acquisition and disposition of Partnership Interests as a General
Partner or Limited Partner and (ii) the management of the business of the
Partnership, and such activities as are incidental thereto, including, without
limitation, the issuance of New Securities and the application of the proceeds
thereof in compliance with the provisions of Section 7.10 of this Agreement.
"Partner Nonrecourse Debt" shall have the meaning set forth in Section
1.704-2(b)(4) of the Regulations.
"Partner Nonrecourse Deductions" shall have the meaning set forth in
Section 1.704-2(i)(2) of the Regulations.
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"Partners" shall mean the General Partner and the Limited Partners, their
duly admitted successors or assigns or any Person who is a partner of the
Partnership at the time of reference thereto.
"Partnership" shall mean the limited partnership formed under the Act
pursuant to this Agreement, and any successor thereto.
"Partnership Interest" shall mean the ownership interest of a Partner in
the Partnership from time to time, including each Partner's Percentage Interest
and such Partner's Capital Account. Wherever in this Agreement reference is made
to a particular Partner's Partnership Interest it shall be deemed to refer to
such Partner's Percentage Interest and shall include the proportionate amount of
such Partner's other interests in the Partnership which are attributable to or
based upon the Partner's Partnership Interest.
"Partnership Minimum Gain" shall have the meaning set forth in Section
1.704-2(b)(2) of the Regulations.
"Percentage Interest" shall mean, with respect to any Partner, the
percentage ownership interest of such Partner in such items of the Partnership
as to which the term "Percentage Interests" is applied in this Agreement, as
specified in Schedule I hereto, as such Schedule may be amended from time to
time.
"Permitted Holder" with respect to any Partner shall mean (i) such Partner
and (ii) if a natural person, the spouse and descendants of such Partner
(including any related trusts controlled by, and established and maintained for
the sole benefit of, such Partner or such spouse or descendants) and the estate
of any of the foregoing. In addition, TCI and Trump shall be Permitted Holders
in respect of each other.
"Permitted Limited Partnership Interest Lien" shall mean any Lien to which
the limited Partnership Interest of a Limited Partner is subject; provided that
the terms of such Lien (other than a Lien on the proceeds (as defined in Section
9-306 of the Uniform Commercial Code) of, or right to receive distributions or
payments with respect to, a limited Partnership Interest) must expressly
acknowledge that the rights of the holder of such Lien, upon foreclosure, will
be subject to the terms of the Exchange Rights Agreement.
"Permitted Partners" shall have the meaning set forth in Section
5.1(b)(ii).
"Person" shall mean any natural person or Entity.
"Redemption Date" shall mean the date fixed by the General Partner for the
redemption of any Partnership Interests pursuant to Article XV.
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"Redemption Securities" shall mean any debt or equity securities of the
Partnership, any Subsidiary or any other corporation, or any combination
thereof, having such terms and conditions as shall be approved by the General
Partner and which, together with any cash to be paid as part of the redemption
price, in the opinion of any nationally recognized investment banking firm
selected by the General Partner (which may be a firm which provides other
investment banking, brokerage or other services to the Partnership), has a
value, at the time notice of redemption is given pursuant to Section 15.3, at
least equal to the Fair Market Value of the Partnership Interests to be redeemed
pursuant to Article XV (assuming, in the case of Redemption Securities to be
publicly traded, such Redemption Securities were fully distributed and subject
only to normal trading activity).
"Regulations" shall mean the income tax regulations promulgated under the
Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Restricted Partner" shall have the meaning set forth in Section
5.1(b)(ii).
"Rights" shall mean the exchange rights as provided in the Exchange Rights
Agreement.
"SEC" shall mean the United States Securities and Exchange Commission.
"Special Committee" shall mean a committee of at least two (2) of the
members of the board of directors of the General Partner, composed solely of
directors who are not officers or employees of the General Partner and who are
not Affiliates of Trump or any of his Affiliates; provided that a director shall
not be deemed to be an Affiliate of either Trump or his Affiliates solely by
reason of his or her being a member of the board of directors of the General
Partner or its Subsidiaries.
"Stock Incentive Plan" shall mean the General Partner's 1995 Stock Option
Plan and such successor or additional plan as the General Partner may adopt.
"Stock Option" shall mean an option to purchase Shares granted under the
Stock Incentive Plan.
"Subsidiary" with respect to any Person shall mean a "subsidiary" as
defined in Section 1-02 of Regulation S-X promulgated under the Securities Act
of 1933, as amended.
"Taj Associates" shall mean Trump Taj Mahal Associates, a New Jersey
general partnership.
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"Taj Mahal" shall mean the Trump Taj Mahal Casino Resort and the ancillary
structures and other facilities used in connection with the operation thereof
located in Atlantic City, New Jersey.
"Tax Amounts" with respect to any year shall not exceed an amount equal to
(a) the higher of (i) the product of (A) the taxable income of the Partnership
(computed as if the Partnership were an individual) for such year as determined
in good faith by the board of directors of the General Partner and (B) the Tax
Percentage and (ii) the product of (A) the alternative minimum taxable income
attributable to the Partnership (computed as if the Partnership were an
individual) for such year as determined in good faith by the board of directors
of the General Partner and (B) the Tax Percentage, reduced by (b) to the extent
not previously taken into account, any income tax benefit attributable to the
Partnership which could be realized (without regard to the actual realization)
by its Partners in the current or any prior taxable year, or portion thereof,
commencing on the date of this Partnership Agreement (including any tax losses
or tax credits), computed at the applicable Tax Percentage for the year that
such benefit is taken into account for purposes of this computation. Any part of
the Tax Amount not distributed in respect of a tax period for which it is
calculated shall be available for distribution in subsequent tax periods.
"Tax Distribution" shall mean distributions by the Partnership pursuant to
Section 6.2 hereof.
"Tax Items" shall have the meaning set forth in Section 5.3(a).
"Tax Payment Loan" shall have the meaning set forth in Section 6.4(a)
hereof.
"Tax Percentage" shall mean the highest, aggregate effective marginal rate
of Federal, state and local income tax or, when applicable, alternative minimum
tax, to which any Partner would be subject in the relevant year of determination
(as certified to the General Partner by the Accountants); provided, however,
that in no event shall the Tax Percentage be greater than the sum of (x) the
highest, aggregate effective marginal rate of Federal, state, and local income
tax, or when applicable, alternative minimum tax, to which the Partnership would
have been subject if it were a C corporation for Federal income tax purposes,
and (y) 5 percentage points. If any Partner is an S corporation, partnership, or
similar pass-through entity for Federal income tax purposes, the Tax Percentage
shall be computed based upon the tax rates applicable to the shareholder or
partner of such Partner, as the case may be.
"TCI" shall mean Trump Casinos, Inc., a New Jersey corporation.
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"THCR" shall mean Trump Hotels & Casino Resorts, Inc., a Delaware
corporation.
"THCR/LP" shall mean THCR/LP Corporation, a New Jersey corporation.
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open for
the transaction of business or, if the Common Stock is are not listed or
admitted to trading on any national securities exchange, shall mean a Business
Day.
"Transfer" shall have the meaning set forth in Section 9.5.
"Transfer Determination" shall have the meaning set forth in Section
9.2(c).
"Trump" shall have the meaning set forth in the Introduction to this
Agreement.
"Trump AC" shall mean Trump Atlantic City Associates, a New Jersey general
partnership.
"Trump Plaza" shall mean the Trump Plaza Hotel and Casino and the ancillary
structures and other facilities used in connection with the operation thereof
located in Atlantic City, New Jersey.
"Valuation Date" shall mean any date as of which the value of New
Securities, the Partnership, or any other property is to be determined for
purposes of this Agreement.
"Withholding Tax Act" shall have the meaning set forth in Section 6.6(a)
hereof.
Section 1.2. Accounting Terms and Determinations. All references in this
Agreement to "generally accepted accounting principles" or "GAAP" shall mean
generally accepted accounting principles in effect in the United States of
America at the time of application thereof. Unless otherwise specified herein,
all accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made, and all financial
statements and certificates and reports as to financial matters required to be
furnished hereunder shall be prepared, in accordance with generally accepted
accounting principles, applied on a consistent basis.
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ARTICLE II.
CONTINUATION OF PARTNERSHIP; BUSINESS OF PARTNERSHIP
Section 2.1. Continuation. The parties hereto do hereby agree to continue
the Partnership as a limited partnership pursuant to the provisions of the Act,
for the purposes and upon the terms and conditions hereinafter set forth. The
Partners agree that the rights and liabilities of the Partners shall be as
provided in the Act, except as otherwise herein expressly provided.
Section 2.2. Name.
(a) Subject to the provisions of paragraph (b) below, the name of the
Partnership shall be Trump Hotels & Casino Resorts Holdings, L.P. or such other
name as shall be chosen from time to time by the General Partner in its sole and
absolute discretion. The inclusion of Trump's name in the name of the
Partnership shall not be deemed to be evidence that Trump participates in the
control of the business within the meaning of Section 17-303 of the Act or any
comparable provision.
(b) The Partnership shall conduct business and qualify as a foreign limited
partnership under an assumed name, which shall not include the name of any
Limited Partner, in any jurisdiction where the inclusion of a Limited Partner's
name in the name of the Partnership would subject such Limited Partner to
general liability for the Partnership's debts.
Section 2.3. Character of the Business. The purpose and business of the
Partnership is through its Affiliates and Subsidiaries (a) to conduct casino
gaming and to own and/or operate (i) Trump Plaza, (ii) the Taj Mahal, (iii) the
Gary Riverboat, and (iv) such other gaming properties and facilities as the
Partnership may acquire in the future; (b) to do all things necessary,
incidental, desirable or appropriate in connection with the foregoing; and (c)
to otherwise engage in any enterprise or business in which a limited partnership
may engage or conduct under the Act.
Section 2.4. Location of Principal Place of Business. The location of the
principal place of business of the Partnership shall be at Mississippi Avenue
and The Boardwalk, Atlantic City, New Jersey 08401, or such other location as
shall be selected from time to time by the General Partner in its sole and
absolute discretion.
Section 2.5. Registered Agent and Registered Office. The registered agent
of the Partnership shall be The Corporation Trust Company, or such other Person
as the General Partner may select in its sole and absolute discretion. The
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registered office of the Partnership in the State of Delaware shall be 1209
Orange Street, Wilmington, Delaware or such other location as the General
Partner may from time to time select in its sole discretion.
ARTICLE III.
TERM
Section 3.1. Commencement. The Partnership's term commenced upon the filing
of the Certificate with the Secretary of State of Delaware on March 28, 1995.
Section 3.2. Termination. The Partnership shall terminate on the close of
business on the 31st day of December 2035, unless sooner terminated pursuant to
Article VIII hereof.
ARTICLE IV.
CAPITAL CONTRIBUTIONS
Section 4.1. Capital Contributions; Partnership Interests and Percentage
Interests of the Partners.
(a) Prior to the date hereof, the General Partner and the Initial Limited
Partner made or caused to be made the Capital Contributions set forth opposite
their respective names on Schedule II hereto. Effective as of the date hereof,
the General Partner and the Limited Partners (including THCR/LP and TCI) shall
make or cause to be made the Capital Contributions set forth opposite their
respective names on Schedule III hereto, and THCR/LP and TCI shall become
Limited Partners of the Partnership. The General Partner and the Initial Limited
Partner hereby consent to the admission of THCR/LP and TCI as Limited Partners.
As of the date hereof, each Partner shall have made or caused to be made the
Capital Contributions set forth opposite such Partner's name on Schedule I
hereto (which shall reflect the aggregate of such Partner's Capital
Contributions as set forth on Schedules II and III), and each Partner shall have
the Percentage Interests in the Partnership set forth opposite such Partner's
name in Schedule I, which Percentage Interests shall be adjusted as provided in
Schedule I as amended by the General Partner from time to time after the date
hereof to the extent necessary to reflect properly redemptions or conversions of
Partnership Interests, Capital Contributions, the issuance of Additional
Partnership Interests or any other event having an effect on a Partner's
Percentage Interest, in each case to the extent permitted by and in accordance
with this Agreement. Except to the extent specifically set forth in this
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Agreement with respect to the General Partner, the Partners shall have no
obligation to make any additional Capital Contributions or loans to the
Partnership, even if the failure to do so could result in the Bankruptcy or
insolvency of the Partnership or any other adverse consequence to the
Partnership. All surtax, documentary stamp tax or other transfer tax that may be
imposed as a result of the foregoing Capital Contributions shall be paid by the
Partnership.
(b) Except as provided by law, (i) no Limited Partner shall be liable for
any deficit in its Capital Account or (ii) except as provided in Section 6.2(b),
be obligated to return any distributions of any kind received from the
Partnership.
(c) So long as the Initial Limited Partner and his Permitted Holders
collectively beneficially own more than 10% of the issued and outstanding
Partnership Interests, the General Partner shall notify such Partners no less
than 60 days prior to any reduction of nonrecourse indebtedness or other
indebtedness which such Partner may include in the basis of its interest in the
Partnership (other than scheduled repayments of principal) in an amount greater
than $10 million during any fiscal year. Upon receipt of such notice, such
Partners shall be permitted, at their own expense, to undertake any action they
desire to increase the "economic risk of loss," within the meaning of Regulation
section 1.752-2, that the Initial Limited Partner and his Permitted Holders have
with respect to the liabilities of the Partnership; provided, however, that the
Initial Limited Partner and his Permitted Holders may not undertake any action
that would have, in the reasonable judgment of a majority of the Special
Committee, a material adverse tax impact on the Partnership, the General Partner
or other Limited Partners. If the Initial Limited Partner or his Permitted
Holders wish to undertake any action permitted pursuant to this section 4.1(c),
the General Partner shall endeavor to cooperate with such Partners, provided
that such Partners shall promptly reimburse the General Partner for any
reasonable costs incurred in providing such cooperation.
Section 4.2. Issuance of Additional Partnership Interests and Shares.
(a) The General Partner is authorized to cause the Partnership from time to
time to issue to the General Partner, THCR/LP, the Initial Limited Partner and
his Permitted Holders, and TCI, Partnership Interests ("Additional Partnership
Interests") in one or more classes, or one or more series of any of such
classes, with such designations, preferences and participating, optional or
other special rights, powers and duties, including rights, powers and duties
which may be senior to interests in the Partnership theretofore issued, for
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consideration not less than the Fair Market Value thereof, and on such terms and
conditions as shall be determined by the General Partner and, which special
rights, powers and duties, without limitation, may relate to (i) the allocations
of items of Partnership income, gain, loss, deduction and credit to each such
class or series of Partnership Interests; (ii) the right of each such class or
series of Partnership Interests to share in Partnership distributions; and (iii)
the rights of each such class or series of Partnership Interests upon
dissolution and liquidation of the Partnership.
(b) No Additional Partnership Interests shall be issued to the General
Partner or any Subsidiary or nominee of the General Partner, unless either
(i) the Additional Partnership Interests are issued in connection with
an issuance of New Securities, the General Partner complies with all of the
provisions of this Agreement, including, without limitation, Section
7.10(b) and (A) if such New Securities are Common Stock, such Additional
Partnership Interests have terms equivalent to the Partnership Interest
originally issued to the General Partner hereunder; provided, however, in
the case of the issuance of Common Stock as compensation for services
rendered, the General Partner shall be deemed to have contributed to the
Partnership as a Capital Contribution pursuant to Section 4.3 hereof an
amount equal to the product of (x) the Fair Market Value of the Common
Stock (as of the Trading Day immediately preceding the date of issue of the
deferred stock to such recipient), times (y) the number of shares of
deferred Common Stock issued by the General Partner to such recipient; (B)
if such New Securities are Stock Options, no Additional Partnership
Interests shall be issued at the time of the issuance of such Stock
Options; provided, that upon the exercise of such Stock Options, the
General Partner shall contribute to the capital of the Partnership an
amount equal to the exercise price of such Stock Options and shall be
deemed to have contributed to the Partnership as a Capital Contribution
pursuant to Section 4.3 hereof an amount equal to the product of (x) the
Fair Market Value of the Common Stock (as of the Valuation Day immediately
preceding the date on which the Stock Options are exercised), and (y) the
number of shares of Common Stock issued upon the exercise of such Stock
Options, and (C) if such New Securities are other than Common Stock or
Stock Options, such Additional Partnership Interests have conversion,
subscription, purchase and other terms equivalent to the terms of such New
Securities;
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(ii) the Additional Partnership Interests are issued to all Partners
in proportion to their respective Percentage Interests;
(iii) Additional Partnership Interests are issued in connection with
any other contribution of value made by the General Partner to the
Partnership not otherwise described in clauses (i) and (ii) of this Section
4.2(b); or
(iv) the Additional Partnership Interests are issued with the written
consent of all of the Limited Partners given in accordance with Section
13.2 hereof.
(c) No Person shall have any preemptive, preferential or other similar
right with respect to (i) additional Capital Contributions or loans to the
Partnership; or (ii) issuance or sale of any Partnership Interests.
(d) The General Partner is hereby authorized on behalf of each of the
Partners to amend this Agreement solely to reflect any increase in the
Percentage Interests of any Partner and the corresponding reduction of the
Percentage Interests of the other Partners in accordance with the provisions of
this Section 4.2, and the General Partner shall promptly send a copy of such
amendment to each Limited Partner.
Section 4.3. Adjustment of Partnership Interests. Except with respect to a
Capital Contribution described in Section 4.2(b)(i)(C), effective on each date
on which a Partner has made a Capital Contribution to the Partnership (each an
"Adjustment Date"), the Percentage Interest of each Partner shall be adjusted,
which adjustment in the case of a Capital Contribution by the Initial Limited
Partner or his Permitted Holders shall be subject to the approval of a majority
of the Special Committee, such that the Percentage Interest of the Partner shall
be equal to a fraction, (a) the numerator of which is equal to the sum of (i)
the Deemed Partnership Interest Value of such Partner (computed as of the
Trading Day immediately preceding the Adjustment Date) and (ii) the amount of
the Capital Contribution contributed by such Partner on such Adjustment Date,
and (b) the denominator of which is equal to the sum of (i) the Deemed Value of
the Partnership (computed as of the Trading Day immediately preceding the
Adjustment Date) and (ii) the amount of the Capital Contribution contributed by
all Partners on such Adjustment Date. The General Partner shall promptly give
each Limited Partner written notice of its Percentage Interest, as adjusted, and
the Gross Asset Value shall be adjusted.
Section 4.4. No Interest on or Return of Capital Contribution. No Partner
shall be entitled to interest on its Capital Contribution or Capital Account.
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Except as provided herein or by law, no Partner shall have any right to demand
or receive the return of its Capital Contribution.
ARTICLE V.
ALLOCATIONS AND OTHER TAX AND ACCOUNTING MATTERS
The Net Income, Net Loss and/or other Partnership items shall be allocated
as follows:
Section 5.1. Allocations of Net Income and Net Loss.
(a) Net Income. Except as otherwise provided herein, Net Income for
any fiscal year or other applicable period shall be allocated in the
following order and priority:
(i) First, to the Partners, until the cumulative Net Income
allocated pursuant to this subparagraph (a)(i) for the current and all
prior periods equals the cumulative Net Loss allocated pursuant to
subparagraph (b)(ii) hereof for all prior periods, among the Partners
in the reverse order that such Net Loss was allocated to the Permitted
Partners pursuant to subparagraph (b)(ii) hereof.
(ii) Thereafter, the balance of the Net Income, if any, shall be
allocated to the Partners in accordance with their respective
Percentage Interests.
(b) Net Loss. Except as otherwise provided herein, Net Loss of the
Partnership for each fiscal year or other applicable period shall be
allocated as follows:
(i) To the Partners in accordance with their respective
Percentage Interests.
(ii) Notwithstanding subparagraph (b)(i) hereof, to the extent
any Net Loss allocated to a Partner under subparagraph (b)(i) hereof
or this subparagraph (b)(ii) would cause such Partner (a "Restricted
Partner") to have an Adjusted Capital Account Deficit as of the end of
the fiscal year to which such Net Loss relates, such Net Loss shall
not be allocated to such Restricted Partner and instead shall be
allocated to the other Partner(s) (the "Permitted Partners") pro rata
in accordance with their relative Percentage Interests.
Section 5.2. Special Allocations. Notwithstanding any provisions of Section
5.1, the following special allocations shall be made, to the least extent
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necessary to satisfy section 704(b) of the Code and the Regulations promulgated
thereunder, in the following order:
(a) Minimum Gain Chargeback (Nonrecourse Liabilities). If there is a
net decrease in Partnership Minimum Gain for any Partnership fiscal year
(except as a result of conversion or refinancing of Partnership
indebtedness, certain capital contributions or revaluation of the
Partnership property as further outlined in Regulation Sections
1.704-2(d)(4), (f)(2) or (f)(3)), each Partner shall be specially allocated
items of Partnership income and gain for such year (and, if necessary,
subsequent years) in an amount equal to that Partner's share of the net
decrease in Partnership Minimum Gain. The items to be so allocated shall be
determined in accordance with Regulation Section 1.704-2(f)(6). This
paragraph (a) is intended to comply with the minimum gain chargeback
requirement in said section of the Regulations and shall be interpreted
consistently therewith. Allocations pursuant to this paragraph (a) shall be
made in proportion to the respective amounts required to be allocated to
each Partner pursuant hereto.
(b) Minimum Gain Attributable to Partner Nonrecourse Debt. If there is
a net decrease in Minimum Gain Attributable to Partner Nonrecourse Debt
during any fiscal year (other than due to the conversion, refinancing or
other change in the debt instrument causing it to become partially or
wholly nonrecourse, certain capital contributions, or certain revaluations
of Partnership property (as further outlined in Regulation Section
1.704-2(i)(4))), each Partner shall be specially allocated items of
Partnership income and gain for such year (and, if necessary, subsequent
years) in an amount equal to the Partner's share of the net decrease in the
Minimum Gain Attributable to Partner Nonrecourse Debt. The items to be so
allocated shall be determined in accordance with Regulation Section
1.704-2(i)(4) and (j)(2). This paragraph (b) is intended to comply with the
minimum gain chargeback requirement with respect to Partner Nonrecourse
Debt contained in said section of the Regulations and shall be interpreted
consistently therewith. Allocations pursuant to this paragraph (b) shall be
made in proportion to the respective amounts required to be allocated to
each Partner pursuant hereto.
(c) Qualified Income Offset. In the event a Limited Partner
unexpectedly receives any adjustments, allocations or distributions
described in Regulation Section 1.704-1(b)(2)(ii) (d)(4), (5), or (6), and
such Limited Partner has an Adjusted Capital Account Deficit, items of
Partnership income and gain shall be specially allocated to such Partner in
an amount and manner sufficient to eliminate the Adjusted Capital Account
Deficit as quickly as possible. This paragraph (c) is intended to
constitute a "qualified income offset" under Regulation Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
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(d) Nonrecourse Deductions. Nonrecourse Deductions for any fiscal year
or other applicable period shall be allocated to the Partners in accordance
with their respective Percentage Interests.
(e) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for
any fiscal year or other applicable period shall be specially allocated to
the Partner that bears the economic risk of loss for the debt (i.e., the
Partner Nonrecourse Debt) in respect of which such Partner Nonrecourse
Deductions are attributable (as determined under Regulation Section
1.704-2(b) (4) and (i) (1)).
(f) Additional Allocations. Notwithstanding the foregoing, if, upon
final dissolution and termination of the Partnership and after taking into
account all allocations of Net Income and Net Loss (and other Tax Items)
under this Article V, the distributions to be made in accordance with the
positive Capital Account balances would result in a distribution that would
be different from a distribution under Section 6.3 hereof, then gross items
of income and gain (and other Tax Items) for the taxable year of the final
dissolution and termination (and, to the extent permitted under section
761(c) of the Code, gross items of income and gain (and other Tax Items)
for the immediately preceding taxable year) shall be allocated to the
Partners to increase or decrease their Capital Account balances, as the
case may be, so that the final distribution will occur in the same manner
as a distribution under Section 6.3 hereof.
Section 5.3. Tax Allocations.
(a) Generally. Subject to paragraphs (b) and (c) hereof, items of income,
gain, loss, deduction and credit to be allocated for income tax purposes
(collectively, "Tax Items") shall be allocated among the Partners on the same
basis as their respective book items.
(b) Sections 1245/1250 Recapture. If any portion of gain from the sale of
property is treated as gain which is ordinary income by virtue of the
application of Code Sections 1245 or 1250 ("Affected Gain"), except to the
extent that the tax treatment of such sale is governed by section 704(c) of the
Code as provided under Section 5.3(c) hereof, then (i) such Affected Gain, to
the extent attributable to depreciation or amortization allowed or allowable for
any taxable period subsequent to the date hereof, shall be allocated among the
Partners in the same proportion that the depreciation and amortization
deductions giving rise to the Affected Gain were allocated and (ii) other Tax
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Items of gain of the same character that would have been recognized, but for the
application of Code Sections 1245 and/or 1250, shall be allocated away from
those Partners who are allocated Affected Gain pursuant to clause (i) so that,
to the extent possible, the other Partners are allocated the same amount, and
type, of capital gain that would have been allocated to them had Code Sections
1245 and/or 1250 not applied. For purposes hereof, in order to determine the
proportionate allocations of depreciation and amortization deductions for each
fiscal year or other applicable period, such deductions shall be deemed
allocated on the same basis as Net Income or Net Loss for such respective
period.
(c) Allocations Respecting Section 704(c). Property contributed to the
Partnership shall be subject to Section 704(c) of the Code and Regulation
Section 1.704-3 so that notwithstanding Section 5.2 hereof, taxable gain and
loss from disposition of such property contributed to the Partnership that is
subject to section 704(c) of the Code shall be allocated on a property by
property basis in accordance with the Regulations promulgated thereunder.
Notwithstanding the foregoing, tax depreciation and amortization with respect to
Partnership property contributed by the Initial Limited Partner pursuant to the
Contribution Agreement between the Partnership and the Initial Limited Partner,
dated as of June 12, 1995, and Partnership property contributed pursuant to the
1996 Contribution Agreement among Trump, TCI, THCR/LP and the Partnership, dated
as of the date hereof, shall be allocated on an aggregate basis for purposes of
complying with the requirements of Section 704(c) of the Code, taking into
account, for any particular taxable year for which such allocation is made, the
aggregate amount of depreciation and amortization allowable with respect to the
aggregate basis of all such Partnership properties determined as of the
respective date of contribution (and not taking into account (i) any increase in
the basis of such properties resulting from improvements thereon made by the
Partnership subsequent to the respective date of contribution or (ii) any
additional basis resulting from any new property purchased by the Partnership in
a taxable transaction subsequent to the respective date of contribution);
provided, however, that the General Partner shall not specially allocate any Tax
Items other than items of depreciation and amortization referred to in this
Section 5.3 (c) to cure for the effect of the ceiling rule set forth in
Regulation Section 1.704-3(b). The Partnership shall allocate items of income,
gain, loss and deduction allocated to it by a partnership to the Partner or
Partners contributing the interest or interests in such partnership, so that, to
the greatest extent possible and consistent with the foregoing, such
contributing Partner or Partners are allocated the same amount and character of
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items of income, gain, loss and deduction with respect to such partnership that
they would have been allocated had they contributed undivided interests in the
assets owned by such partnership to the Partnership in lieu of contributing the
interest or interests in the partnership to the Partnership.
Section 5.4. Books of Account. At all times during the continuance of the
Partnership, the General Partner shall maintain or cause to be maintained full,
true, complete and correct books of account in accordance with GAAP, using the
calendar year as the fiscal and taxable year of the Partnership. In addition,
the Partnership shall keep all records required to be kept pursuant to the Act.
Section 5.5. Tax Matters Partner. The General Partner is hereby designated
as the Tax Matters Partner within the meaning of Section 6231(a)(7) of the Code
for the Partnership; provided, however, that (i) in exercising its authority as
Tax Matters Partner, the General Partner shall be limited by the provisions of
this Agreement affecting tax aspects of the Partnership; (ii) the General
Partner shall consult in good faith with the Limited Partner Representative
regarding the filing of a Code Section 6227(b) administrative adjustment request
with respect to the Partnership or a Contributed Property before filing such
request, it being understood, however, that the provisions hereof shall not be
construed to limit the ability of any Partner, including the General Partner, to
file an administrative adjustment request on its own behalf pursuant to Section
6227(a) of the Code; (iii) the General Partner shall consult in good faith with
the Limited Partner Representative regarding the filing of a petition for
judicial review of an administrative adjustment request under Section 6228 of
the Code, or a petition for judicial review of a final partnership
administrative judgment under Section 6226 of the Code relating to the
Partnership before filing such petition; (iv) the General Partner shall give
prompt notice to the Limited Partner Representative and any notice partners
under Section 6231 of the Code of the receipt of any written notice that the
Internal Revenue Service or any state or local taxing authority intends to
examine or audit Partnership income tax returns for any year, receipt of written
notice of the beginning of an administrative proceeding at the Partnership level
relating to the Partnership under Section 6223 of the Code, receipt of written
notice of the final Partnership administrative adjustment relating to the
Partnership pursuant to Section 6223 of the Code, and receipt of any request
from the Internal Revenue Service for waiver of any applicable statute of
limitations with respect to the filing of any tax return by the Partnership and
(v) the General Partner shall promptly notify the Limited Partner Representative
if the General Partner does not intend to file for judicial review with respect
to the Partnership.
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Section 5.6. Tax Elections and Returns. All elections required or permitted
to be made by the Partnership under any applicable tax law shall be made by the
General Partner in its sole and absolute discretion, except that the General
Partner shall, if requested by a Limited Partner or a transferee, file an
election on behalf of the Partnership pursuant to Section 754 of the Code to
adjust the basis of the Partnership property in the case of a transfer of a
Partnership Interest or distribution from the Partnership, including transfers
made in connection with the exercise of the Rights, made in accordance with the
provisions of this Agreement. The General Partner shall cause the Accountants to
prepare and submit to the Limited Partner Representative on or before March 31st
of each year for review drafts of all federal and state income tax returns of
the Partnership. If the Limited Partner Representative determines that any
modifications to the tax returns of the Partnership should be considered, the
Limited Partner Representative shall, within fifteen (15) days following receipt
of such tax returns from the Accountants or the General Partner, indicate to the
Accountants or to the General Partner the suggested revisions to the tax
returns, which returns shall be resubmitted to the Limited Partner
Representative for its review and approval. The Limited Partner Representative
shall complete its review of the resubmitted returns within ten (10) days after
receipt thereof from the Accountants or the General Partner. The General Partner
shall consult in good faith with the Limited Partner Representative regarding
any proposed modifications to the tax returns of the Partnership, provided that
(i) a majority of the Special Committee shall make the final decision, in light
of the best interest of all Partners, of whether to accept or reject any such
proposed modifications, which decision shall be binding upon the Partnership and
all of the Partners and (ii) no Partner shall, unless otherwise required by
applicable law, take any position for income tax purposes or otherwise that is
inconsistent with such final decision of the majority of the Special Committee.
A statement of the allocation of Net Income or Net Loss of the Partnership shown
on the annual income tax returns prepared by the Accountants shall be
transmitted and delivered to the Limited Partner Representative within ten (10)
days of the receipt thereof by the Partnership. The General Partner shall be
responsible for preparing and filing all federal and state tax returns for the
Partnership and furnishing copies thereof to the Partners, together with
required Partnership schedules showing allocations of tax items, all within the
period of time prescribed by law. The General Partner shall use reasonable
efforts to make available to the Limited Partners final Forms K-1 not later than
March 31 of each year. Notwithstanding the foregoing, Trump shall have the right
to control the resolution of tax matters affecting or relating to Taj Associates
in respect of periods ending on or prior to the date hereof, including requiring
the Partnership, Trump AC and Taj Associates to adjust the tax basis of assets
held by Taj Associates in connection with the resolution of such tax matters to
the extent such basis adjustments shall not reduce THCR's share of federal
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income tax depreciation and cost recovery deductions in respect of assets held
by Taj Associates as of the date hereof and contributions of the interests in
Taj Associates to Trump AC.
Section 5.7. Tax Certifications.
(a) The Partnership shall deliver to each partner in the manner provided in
Section 16.1, from time to time as necessary to implement timely the provisions
of this Agreement, certificates executed by its chief financial officers and the
Accountants indicating the respective calculations with respect to, and the
amounts of, a Partner's share of Tax Distributions and the amount of any
repayments to the Partnership called for thereunder, together with supporting
schedules in reasonable detail all as of each pertinent date and delivered at
least 15 business days prior to the date payment is due.
(b) The certificates delivered pursuant to paragraph (a) hereof shall be
deemed approved by all parties and the Partnership shall act upon such
certificates as provided in this Agreement unless within five business days of
delivery of such certificate a Partner objects to the contents of any
certificate by written notice in detail sufficient to state the basis for the
objection. The Partners shall negotiate in good faith to resolve such objection.
ARTICLE VI.
DISTRIBUTIONS
Section 6.1. General. Distributions of cash or property may be made in
accordance herewith at such times as the General Partner deems appropriate in
the order provided in this Article VI, subject to the limitations, if any, set
forth in the agreements governing the Partnership's Indebtedness.
Section 6.2. Distributions for Taxes.
(a) The Partnership shall distribute to each Partner in one or more
payments, including payments described in paragraph (b) from time to time during
each year, but in no event later than March 1 of the year immediately following
such year, an aggregate cash sum equal to the product of (i) Tax Amounts in
respect of the taxable year, or portion thereof, for which such distribution is
being made and (ii) the Partner's Percentage Interest. In addition, the
Partnership shall make additional pro rata distributions as are necessary to
reflect adjustments, as determined in good faith by the board of directors of
the General Partner, to any item affecting Tax Amounts, as reflected on the
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Partnership's tax return, as it may be amended from time to time, or as a result
of a concluded tax audit.
(b) In addition to the certificates required by Section 5.7, the
Partnership shall furnish the Partners with such information as they shall
reasonably request from time to time respecting estimates of the Partnership's
taxable income or loss (and items thereof) for any fiscal year or portion
thereof. If, in any year, any Partner shall be required to make federal, state
or local estimated income tax payments under applicable law and regulations,
then, at least thirty (30) days prior to the date (the "Estimated Payment Date")
upon which any such payments are due, the Partnership shall deliver to each
Partner the certificates required by Section 5.7, indicating the amount (the
"Estimated Payment") of the tax in respect of the respective Tax Amounts due on
the Estimated Payment Date, and not later than fifteen (15) days prior to such
Estimated Payment Date, the Partnership shall pay to such Partner an amount
equal to such Estimated Payment. The amount of each Estimated Payment received
by such Partner shall be treated as a non-interest bearing advance against the
amounts distributable in respect of such Partner's pro rata share of Tax Amounts
to such Partner for such year. If the aggregate amount of the Estimated Payments
received by a Partner for any year shall exceed the distribution to which such
Partner actually is entitled under paragraph (a) above, such Partner shall
forthwith repay such excess to the Partnership on or before the date set forth
in paragraph (a) above, unless such excess shall have been paid to taxing
authorities in which event such excess shall be applied to reduce the amount
otherwise distributable pursuant to this Section 6.2 in respect of the
Partnership's next succeeding fiscal year or years. Each Partner shall seek, to
the extent entitled thereto, and contribute to the Partnership any refund of
taxes paid by such Partner out of amounts distributed pursuant to this Section
6.2 promptly after receipt of such refund.
Section 6.3. Other Distributions. After payments and distributions, if any,
of the amounts set forth in Section 6.2 above, the Partnership may distribute,
in the discretion of a majority of the board of directors of the General
Partner, cash or other property, valued at its Fair Market Value, to the
Partners. Any such distributions shall be made pro rata in accordance with their
Percentage Interests.
Section 6.4. Withholding Payments Required By Law.
(a) Unless treated as a Tax Payment Loan (as hereinafter defined), any
amount paid by the Partnership for or with respect to any Partner on account of
any withholding tax or other tax payable with respect to the income, profits or
distributions of the Partnership pursuant to the Code, the Regulations, or any
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state or local statute, regulation or ordinance requiring such payment (a
"Withholding Tax Act") shall be treated as a distribution to such Partner for
all purposes of this Agreement, consistent with the character or source of the
income, profits or cash which gave rise to the payment or withholding
obligation. To the extent that the amount required to be remitted by the
Partnership under the Withholding Tax Act exceeds the amount then otherwise
distributable to such Partner, unless and to the extent that funds shall have
been provided by such Partner pursuant to the last sentence of this Section
6.4(a), the excess shall constitute a loan from the Partnership to such Partner
(a "Tax Payment Loan") which shall be payable upon demand and shall bear
interest, from the date that the Partnership makes the payment to the relevant
taxing authority, at the rate announced from time to time by Citibank, N.A. (or
any successor thereto) as its "prime rate", compounded monthly (but in no event
higher than the highest interest rate permitted by applicable law). So long as
any Tax Payment Loan to any Partner or the interest thereon remains unpaid, the
Partnership shall make future distributions due to such Partner under this
Agreement by applying the amount of any such distributions first to the payment
of any unpaid interest on such Tax Payment Loan and then to the repayment of the
principal thereof, and no such future distributions shall be paid to such
Partner until all of such principal and interest has been paid in full. If the
amount required to be remitted by the Partnership under the Withholding Tax Act
exceeds the amount then otherwise distributable to a Partner, the Partnership
shall notify such Partner at least five (5) Business Days in advance of the date
upon which the Partnership would be required to make a Tax Payment Loan under
this Section 6.4(a) (the "Tax Payment Loan Date") and provide such Partner the
opportunity to pay to the Partnership, on or before the Tax Payment Loan Date,
all or a portion of such deficit.
(b) The General Partner shall have the authority to take all actions
necessary to enable the Partnership to comply with the provisions of any
Withholding Tax Act applicable to the Partnership and to carry out the
provisions of this Section 6.4. Nothing in this Section 6.4 shall create any
obligation on the General Partner to advance funds to the Partnership or to
borrow funds from third parties in order to make any payments on account of any
liability of the Partnership under a Withholding Tax Act.
(c) In the event that a Tax Payment Loan is not paid by a Limited Partner
within thirty (30) days after written demand therefor is made by the General
Partner, the General Partner may cause all distributions that would otherwise be
made to such Limited Partner to be retained by the Partnership, up to the amount
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necessary to repay such Tax Payment Loan, including all accrued and unpaid
interest thereon, and such retained distributions shall be applied against,
first, the accrued interest on and, second, the principal of, such Tax Payment
Loan.
Section 6.5. Non-Recourse. Notwithstanding any other provisions of this
Agreement, the obligations to make distributions contemplated hereby shall be
limited to the assets of the Partnership and shall be non-recourse with respect
to the Partners and any of their assets.
ARTICLE VII.
RIGHTS, DUTIES AND RESTRICTIONS OF THE GENERAL PARTNER
Section 7.1. Powers and Duties of General Partner.
(a) The General Partner shall be responsible for the management of the
Partnership's business and affairs. Except as otherwise expressly provided in
this Agreement, and subject to the limitations contained in Section 7.2 hereof
with respect to Major Decisions, the General Partner shall have, and is hereby
granted, full and complete power, authority and discretion to take such action
for and on behalf of the Partnership and in its name as the General Partner
shall, in its sole and absolute discretion, deem necessary or appropriate to
carry out the Partnership's business and the purposes for which the Partnership
was organized. Except as otherwise expressly provided herein, and subject to
Section 7.2 hereof, the General Partner shall, on behalf of, and at the expense
of, the Partnership, have the right, power and authority:
(i) to manage, control, invest, reinvest, acquire by purchase, lease
or otherwise, sell, contract to purchase or sell, grant, obtain, or
exercise options to purchase, options to sell or conversion rights, assign,
transfer, convey, deliver, endorse, exchange, pledge, mortgage, abandon,
improve, repair, maintain, insure, lease for any term and otherwise deal
with any and all property of whatsoever kind and nature, and wheresoever
situated, in furtherance of the business or purposes of the Partnership;
(ii) to acquire, directly or indirectly, interests in gaming ventures
of any kind and of any type, and any and all kinds of interests therein
(including, without limitation, Entities investing therein), and to
determine the manner in which title thereto is to be held; to manage
(directly or through management agreements), insure against loss, protect
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and subdivide any of such gaming ventures, interests therein or parts
thereof; and to participate in the ownership, management and operation of
any gaming venture;
(iii) to employ, engage, indemnify or contract with or dismiss from
employment or engagement Persons to the extent deemed necessary or
appropriate by the General Partner for the operation and management of the
Partnership's business, including but not limited to contractors,
subcontractors, engineers, architects, surveyors, mechanics, consultants,
accountants, attorneys, insurance brokers and others;
(iv) to enter into contracts on behalf of the Partnership, and to
cause all General Partner Expenses to be paid;
(v) to borrow or loan money, obtain or make loans and advances from
and to any Person for Partnership purposes and to apply for and secure from
or accept and grant to any Person credit or accommodations; to contract
liabilities and obligations (including interest rate swaps, caps and
hedges) of every kind and nature with or without security; and to repay,
collect, discharge, settle, adjust, compromise or liquidate any such loan,
advance, obligation or liability;
(vi) to grant security interests, mortgage, assign, deposit, deliver,
enter into sale and leaseback arrangements or otherwise give as security or
as additional or substitute security or for sale or other disposition any
and all Partnership property, tangible or intangible, including, but not
limited to, personal property and real estate and interests in land trusts,
and to make substitutions thereof, and to receive any proceeds thereof upon
the release or surrender thereof; to sign, execute and deliver any and all
assignments, deeds, bills of sale and contracts and instruments in writing;
to authorize, give, make, procure, accept and receive moneys, payments,
property notices, demands, protests and authorize and execute waivers of
every kind and nature; to enter into, make, execute, deliver and receive
agreements, undertakings and instruments of every kind and nature; and
generally to do any and all other acts and things incidental to any of the
foregoing or with reference to any dealings or transactions which the
General Partner may deem necessary, proper or advisable to effect or
accomplish any of the foregoing or to carry out the business and purposes
of the Partnership;
(vii) to acquire and enter into any contract of insurance (including,
without limitation, general partner liability and partnership reimbursement
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insurance policies) which the General Partner may deem necessary or
appropriate;
(viii) to conduct any and all banking transactions on behalf of the
Partnership; to adjust and settle checking, savings and other accounts with
such institutions as the General Partner shall deem appropriate; to draw,
sign, execute, accept, endorse, guarantee, deliver, receive and pay any
checks, drafts, bills of exchange, acceptances, notes, obligations,
undertakings and other instruments for or relating to the payment of money
in, into or from any account in the Partnership's name; to make deposits
into and withdrawals from the Partnership's bank accounts and to negotiate
or discount commercial paper, acceptances, negotiable instruments, bills of
exchange and dollar drafts;
(ix) to demand, sue for, receive and otherwise take steps to collect
or recover all debts, rents, proceeds, interests, dividends, goods,
chattels, income from property, damages and all other property, to which
the Partnership may be entitled or which are or may become due the
Partnership from any Person; to commence, prosecute or enforce, or to
defend, answer or oppose, contest and abandon all legal proceedings in
which the Partnership is or may hereafter be interested; and to settle,
compromise or submit to arbitration any accounts, debts, claims, disputes
and matters which may arise between the Partnership and any other Person
and to grant an extension of time for the payment or satisfaction thereof
on any terms, with or without security;
(x) to acquire interests in and contribute money or property to any
limited or general partnerships, joint ventures, Subsidiaries or other
Entities as the General Partner deems desirable and to conduct the
Partnership's business through such Entities;
(xi) to maintain or cause to be maintained the Partnership's books and
records;
(xii) to prepare and deliver, or cause to be prepared and delivered,
all financial and other reports with respect to the operations of the
Partnership, and preparation and filing of all tax returns and reports;
(xiii) to do all things which are necessary or advisable for the
protection and preservation of the Partnership's business and assets, and
to execute and deliver such further instruments and undertake such further
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acts as may be necessary or desirable to carry out the intent and purposes
of this Agreement and as are not inconsistent with the terms hereof; and
(xiv) in general, to exercise all of the general rights, privileges
and powers permitted to be had and exercised under the Act.
(b) Except as otherwise provided in this Agreement, to the extent the
duties of the General Partner require expenditures of funds to be paid to third
parties, the General Partner shall not have any obligations hereunder except to
the extent that Partnership funds are reasonably available to it for the
performance of such duties, and nothing herein contained shall be deemed to
require the General Partner, in its capacity as such, to expend its individual
funds for payment to third parties or to undertake any specific liability or
litigation on behalf of the Partnership.
(c) Notwithstanding the provisions of Section 7.1(a), the Partnership shall
not commingle its funds with those of any Affiliate or other Entity; funds and
other assets of the Partnership shall be separately identified and segregated;
all of the Partnership's assets shall at all times be held by or on behalf of
the Partnership, and, if held on behalf of the Partnership by another Entity,
shall at all times be kept identifiable (in accordance with customary usages) as
assets owned by the Partnership; and the Partnership shall maintain its own
separate bank accounts, payroll and books of account.
(d) Notwithstanding the provisions of Section 7.1(a), the Partnership shall
pay from its own assets all obligations of any kind incurred by the Partnership.
Section 7.2. Major Decisions. The General Partner shall not, without the
prior Consent of the Limited Partners undertake, on behalf of the Partnership,
any of the following actions at any time that the Limited Partners (not
including the General Partner) own in the aggregate more than ten percent (10%)
of the issued and outstanding Partnership Interests (the "Major Decisions"):
(a) make a general assignment for the benefit of creditors or appoint
or acquiesce in the appointment of a custodian, receiver or trustee for all
or any part of the assets of the Partnership;
(b) institute any proceedings for Bankruptcy on behalf of the
Partnership; or
(c) dissolve the Partnership.
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Without the consent of all the Limited Partners, the General Partner shall
have no power to do any act in contravention of this Agreement or possess any
Partnership property for other than a Partnership purpose. In addition, the
General Partner shall have no power to do any act in contravention of applicable
law.
Section 7.3. Reimbursement of the General Partner.
(a) Except as provided in this Section 7.3 and elsewhere in this Agreement
(including the provisions of Articles VI and VIII), the General Partner shall
not receive payments from, or be compensated for its services as general partner
of, the Partnership.
(b) The General Partner shall be reimbursed on a monthly basis, or such
other basis as the General Partner may determine in its sole and absolute
discretion, for all General Partner Expenses. The Partners agree that the
General Partner Expenses shall be deemed to be incurred on behalf of the
Partnership. The General Partner represents that, except as permitted by Section
7.4, its sole business is the ownership of direct and indirect interests in and
operation of the Partnership and as such all of the General Partner Expenses
will be incurred for the benefit of the Partnership.
Section 7.4. Outside Activities of the General Partner. Without the Consent
of the Limited Partners, the General Partner shall not directly or indirectly
enter into or conduct any Outside Business Activity.
Section 7.5. Contracts with Affiliates.
(a) The Partnership may engage in transactions and enter into contracts
with Affiliates which are on terms that are no less favorable to the Partnership
than would be available at the time of such transaction or transactions in a
comparable transaction in arm's-length dealings with an unaffiliated third
party; provided, however, that the foregoing shall not limit any of the
transactions relating to the Merger Transaction.
(b) Notwithstanding the foregoing:
(i) No compensation shall be paid directly or indirectly to the
Initial Limited Partner by the Partnership or any of its Subsidiaries,
except (A) as set forth in the Executive Agreement, as in effect on the
date of this Partnership Agreement, (B) the Services Agreement between
Trump Plaza Associates and the Initial Limited Partner as in effect on the
date of this Partnership Agreement, or (C) with the approval of the
Compensation Committee of the board of directors of the General Partner;
and
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(ii) The Partnership and its Subsidiaries shall not enter into any
management, services, consulting or similar agreements with the Initial
Limited Partner or any of his Affiliates, except (A) the Executive
Agreement, as in effect on the date of this Partnership Agreement, (B) the
Services Agreement between Trump Plaza Associates and the Initial Limited
Partner as in effect on the date of this Partnership Agreement, or (C)
employment agreements in the ordinary course of business, consistent with
industry practice, which are approved by the Compensation Committee of the
board of directors of the General Partner.
Section 7.6. Title to Partnership Assets. Title to Partnership assets,
whether real, personal or mixed and whether tangible or intangible, shall be
deemed to be owned by the Partnership as an Entity, and no Partner, individually
or collectively, shall have any ownership interest in such Partnership assets or
any portion thereof. Title to any or all of the Partnership assets may be held
in the name of the Partnership, the General Partner or one or more nominees, as
the General Partner may determine, including Affiliates of the General Partner.
The General Partner hereby acknowledges and confirms that any Partnership assets
for which legal title is held in the name of the General Partner or any nominee
or Affiliate of the General Partner shall be held by the General Partner for the
use and benefit of the Partnership in accordance with the provisions of this
Agreement; provided, however, that the General Partner shall use its best
efforts to cause beneficial and record title to such assets to be vested in the
Partnership as soon as reasonably practicable. All Partnership assets shall be
recorded as the property of the Partnership in its books and records,
irrespective of the name in which legal title to such Partnership assets is
held.
Section 7.7. Reliance by Third Parties. Notwithstanding anything to the
contrary in this Agreement, any Person dealing with the Partnership shall be
entitled to assume that the General Partner has full power and authority to
encumber, sell or otherwise use in any manner any and all assets of the
Partnership and to enter into any contracts on behalf of the Partnership, and
such Person shall be entitled to deal with the General Partner as if it were the
Partnership's sole party in interest, both legally and beneficially. In no event
shall any Person dealing with the General Partner or its representatives be
obligated to ascertain that the terms of this Agreement have been complied with
or to inquire into the necessity or expedience of any act or action of the
General Partner or its representatives. Each and every certificate, document or
other instrument executed on behalf of the Partnership by the General Partner
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shall be conclusive evidence in favor of any and every Person relying thereon or
claiming thereunder that (i) at the time of the execution and delivery of such
certificate, document or instrument, this Agreement was in full force and
effect, (ii) the Person executing and delivering such certificate, document or
instrument was duly authorized and empowered to do so for and on behalf of the
Partnership and (iii) such certificate, document or instrument was duly executed
and delivered in accordance with the terms and provisions of this Agreement and
is binding upon the Partnership.
Section 7.8. Liability of the General Partner.
(a) Notwithstanding anything to the contrary set forth in this Agreement,
the General Partner shall not be liable for monetary or other damages to the
Partnership, any of the Partners or any assignee of any interest of any Partner
for losses sustained or liabilities incurred as a result of errors in judgment
or of any act or omission if the General Partner acted in good faith without
fraud, gross negligence, willful misconduct or a breach of the General Partner's
fiduciary duties to the Limited Partners. The General Partner shall not be
obligated to make any additional payments from its own funds or Capital
Contributions for the purpose of returning any capital of the Limited Partners.
(b) Subject to its obligations and duties as General Partner set forth in
Section 7.1 hereof, the General Partner may exercise any of the powers granted
to it by this Agreement and perform any of the duties imposed upon it hereunder
either directly or by or through its agents. The General Partner shall not be
responsible for any act of any such agent appointed by it in good faith and
without gross negligence including, without limitation, any willful misconduct
or gross negligence on the part of any such agent.
Section 7.9. Officers of the Partnership. The Partnership shall have such
officers, if any, as the General Partner from time to time may in its discretion
elect or appoint. The Partnership may also have such agents, if any, as the
General Partner from time to time may in its discretion choose. Each officer
shall have such duties and powers as are commonly incident to his or her office
and such additional duties and powers as the General Partner may from time to
time designate. Each officer and agent shall retain his or her authority at the
pleasure of the General Partner.
Section 7.10. Covenants of THCR Regarding the Issuance of New Securities.
THCR hereby covenants and agrees that so long as it is a General Partner:
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(a) THCR shall not issue any additional shares of Class B Stock,
except to the Initial Limited Partner and his Permitted Holders.
(b) THCR shall not issue any additional New Securities, other than pro
rata to all holders of Common Stock unless (x) the General Partner shall
cause the Partnership to issue to THCR (or, in the absence of such
issuance, there shall be deemed to have been issued to THCR) Additional
Partnership Interests, as provided in Section 4.2(b)(i) and (y) THCR
contributes the gross proceeds (net of any Issuance Costs not paid by the
Partnership, which Issuance Costs shall be deemed to have been contributed
to the Partnership as a Capital Contribution for purposes of Section 4.3),
if any, from the issuance of such New Securities and from the exercise of
rights contained in such New Securities to the Partnership.
(c) In connection with any issuance of New Securities pursuant to
paragraph (b) of this Section 7.10, THCR shall make a Capital Contribution
to the Partnership of the gross proceeds (net of any Issuance Costs not
paid by the Partnership) raised in connection with such issuance (and any
proceeds paid upon conversion or exchange of the New Securities) and the
Partnership shall, as agent for THCR, simultaneously pay the Issuance Costs
to the extent included in General Partner Expenses, and credit such
contribution to the capital account of THCR.
Section 7.11. Other Matters Concerning the General Partner.
(a) The General Partner may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, or other document reasonably believed by it to be genuine and
to have been signed or presented by the proper party or parties.
(b) The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers and other consultants and
advisers selected by it, and any act taken or omitted to be taken in reliance
upon the advice or opinion of such Persons as to matters which the General
Partner reasonably believes to be within such Person's professional or expert
competence and in accordance with such advice or opinion shall be prima facie
evidence that such actions have been done or omitted in good faith.
(c) The General Partner shall have the right, in respect of any of its
powers or obligations hereunder, to act through any of its duly authorized
officers and any attorney or attorneys-in-fact duly appointed by the General
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Partner. Each such attorney shall, to the extent provided by the General Partner
in the power of attorney, have full power and authority to do and perform all
and every act and duty which is permitted or required to be done by the General
Partner hereunder.
ARTICLE VIII.
DISSOLUTION, LIQUIDATION AND WINDING-UP
Section 8.1. Accounting. In the event of the dissolution, liquidation and
winding-up of the Partnership, a proper accounting shall be made of the Capital
Account of each Partner and of the Net Income or Net Loss of the Partnership
from the date of the last previous accounting to the date of dissolution.
Section 8.2. Distribution on Dissolution. In the event of the dissolution
and liquidation of the Partnership for any reason, the assets of the Partnership
shall be liquidated for distribution in the following rank and order:
(a) Payment of creditors of the Partnership, including creditors who
are Partners or former Partners;
(b) Establishment of reserves as provided by the Liquidating Trustee
to provide for contingent liabilities, if any; and
(c) To the Partners in accordance with the positive balances in their
Capital Accounts after giving effect to all contributions, distributions
and allocations for all periods.
Whenever the Liquidating Trustee reasonably determines that any reserves
established pursuant to paragraph (b) above are in excess of the reasonable
requirements of the Partnership, the amount determined to be excess shall
be distributed to the Partners in accordance with the provisions of this
Section 8.2.
Section 8.3. Timing Requirements.
(a) In the event that the Partnership is "liquidated" within the meaning of
Section 1.704-1(b)(2)(ii)(g) of the Regulations, any and all distributions to
the Partners pursuant to Section 8.2(c) hereof shall be made no later than the
later to occur of (i) the last day of the taxable year of the Partnership in
which such liquidation occurs or (ii) ninety (90) days after the date of such
liquidation.
(b) Notwithstanding the provisions of Section 8.2 hereof which require
liquidation of the assets of the Partnership, but subject to the order of
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priorities set forth therein, if prior to or upon dissolution of the Partnership
the Liquidating Trustee determines that an immediate sale of part or all of the
Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidating Trustee may, in its sole and absolute discretion,
defer for a reasonable time the liquidation of any assets except those necessary
to satisfy liabilities of the Partnership (including to those Partners which are
creditors of the Partnership) and/or, with the Consent of the Limited Partners,
distribute to the Partners, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 8.2 hereof, undivided interests in
such Partnership assets as the Liquidating Trustee deems not suitable for
liquidation. Any such distributions in kind shall be made only if, in the good
faith judgment of the Liquidating Trustee, such distributions in kind are in the
best interest of the Partners, and shall be subject to such conditions relating
to the disposition and management of such properties as the Liquidating Trustee
deems reasonable and equitable and to any agreements governing the operation of
such properties at such time. The Liquidating Trustee shall determine the fair
market value of any property distributed in kind using such reasonable method of
valuation as it may adopt.
Section 8.4. Documentation of Liquidation. Upon the completion of the
dissolution and liquidation of the Partnership, the Partnership shall terminate
and the Liquidating Trustee shall have the authority to execute and record any
and all documents or instruments required to effect the dissolution, liquidation
and termination of the Partnership.
Section 8.5. Dissolution. The Partnership shall be dissolved upon the
occurrence of any of the following events:
(a) the dissolution, liquidation, termination, withdrawal, death,
insanity, retirement or Bankruptcy of the last remaining General Partner or
other event causing dissolution under the Act;
(b) the election to dissolve the Partnership made in writing by the
General Partner with the Consent of the Limited Partners;
(c) the sale or other disposition of all or substantially all of the
assets of the Partnership unless the General Partner elects to continue the
Partnership business for the purpose of the receipt and the collection of
indebtedness or the collection of any other consideration to be received in
exchange for the assets of the Partnership (which activities shall be
deemed to be part of the winding up of the affairs of the Partnership); or
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(d) the entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Act, which decree is final and not
subject to appeal.
Following an event causing a dissolution of the Partnership, the
Partnership shall be wound-up and terminated unless the business of the
Partnership is continued by the Partnership in reconstituted form pursuant to
Section 8.6.
Section 8.6. Continuation of the Partnership. The Partners hereby waive
their right of partition and agree, that except as provided in Section 9.7, they
shall not do anything that would terminate the Partnership prior to the
expiration of its term without the prior Consent of the Limited Partners. Upon
the bankruptcy, dissolution, liquidation, withdrawal, death, retirement or
insanity of any General Partner (a "Disabling Event"), or any other event of
dissolution under the Act, within 90 days thereafter, all of the remaining
Partners (or, to the extent permitted under the Act, such lesser number or
percentage of the Partners, but in no event less than a majority-in-interest of
the remaining Partners) may (a) elect to reconstitute the Partnership and
continue its business, and (b) in the case of an event as a result of which
there is no longer a party serving as general partner of the Partnership, select
a substitute General Partner, which substitute General Partner accepts such
election and agrees to serve as General Partner. Such successor General Partner
shall thereupon succeed to the rights and obligations of the General Partner as
provided in Section 9.1. A General Partner which has suffered a Disabling Event
shall automatically be converted to a Limited Partner having none of the voting
rights or privileges provided hereunder for the election to reconstitute the
Partnership as provided above.
ARTICLE IX.
TRANSFER AND REDEMPTION OF PARTNERSHIP INTERESTS;
CERTAIN CONSENT RIGHTS
Section 9.1. General Partner Transfer.
(a) Except as set forth in Section 9.7, during such time as the Limited
Partners (not including the General Partner) own in the aggregate more than ten
percent (10%) of the issued and outstanding Partnership Interests, the General
Partner shall not withdraw from the Partnership and shall not Transfer all or
any portion of its interest in the Partnership without the Consent of the
Limited Partners.
(b) Upon any Transfer of a Partnership Interest by the General Partner in
accordance with the provisions of this Section 9.1 (other than in connection
with the granting of a Lien), the transferee General Partner shall become vested
with the powers and rights of the transferor General Partner, and shall be
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liable for all obligations and responsible for all duties of the General
Partner, once such transferee has executed such instruments as may be necessary
to effectuate such admission and to confirm the agreement of such transferee to
be bound by all the terms and provisions of this Agreement with respect to the
Partnership Interest so acquired. It shall be a further condition to any
Transfer otherwise permitted hereunder (other than in connection with the
granting of a Lien) that the transferee assumes by express agreement (or
pursuant to a statutory merger or consolidation wherein all obligations and
liabilities of the General Partner are assumed by a successor corporation by
operation of law) all of the obligations of the transferor General Partner under
this Agreement with respect to such transferred Partnership Interest and no such
Transfer (other than pursuant to a statutory merger or consolidation wherein all
obligations and liabilities of the transferor General Partner are assumed by a
successor corporation by operation of law) shall relieve the transferor General
Partner of its obligations under this Agreement without the Consent of the
Limited Partners. In connection with any such permitted Transfer (other than in
connection with the granting of a Lien), the successor General Partner shall be
deemed admitted as such immediately prior to the effective time of the Transfer
from the transferor General Partner and shall continue the business of the
Partnership without dissolution.
(c) If the General Partner withdraws or retires from the Partnership, in
violation of this Agreement, (i) any remaining general partner may continue the
Partnership business or (ii) within 90 days thereafter, all of the remaining
Partners (or, to the extent permitted under the Act, such lesser number or
percentage of the Partners, but in no event less than a majority-in-interest of
the remaining Partners) may elect to continue the Partnership business pursuant
to Section 8.6.
Section 9.2. Transfers by Limited Partners.
(a) No Limited Partner shall have the right, directly or indirectly, to
Transfer all or any part of its Partnership Interest to any Person without the
prior written consent of the General Partner, including a majority of the
Special Committee, which consent shall not be unreasonably withheld or delayed;
provided, however, that no such consent shall be required for (i) a Transfer of
Partnership Interests pursuant to Article XII hereof, (ii) a Transfer of
Partnership Interests to a Permitted Holder, (iii) the subjecting of a Limited
Partnership Interest to a Permitted Limited Partnership Interest Lien or (iv)
the subsequent foreclosure on such a Permitted Limited Partnership Interest
Lien.
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(b) It shall be a further condition to any Transfer (other than the
granting of a Permitted Limited Partnership Interest Lien) otherwise permitted
hereunder (including upon the foreclosure of any Lien) that the transferee
assume by operation of law or express agreement all of the obligations of the
transferor Limited Partner under this Agreement (including, without limitation,
under Article IX) with respect to such transferred Partnership Interest and no
such Transfer (other than pursuant to a statutory merger or consolidation
wherein all obligations and liabilities of the transferor Partner are assumed by
a successor corporation by operation of law) shall relieve the transferor
Partner of its obligations under this Agreement without the approval of the
General Partner, in its reasonable discretion (it being understood that, without
limiting the generality of Section 9.5, a transferor Partner shall be deemed
relieved from such obligations, without the necessity of any such approval, in
respect of Partnership Interests transferred to the General Partner pursuant to
Article XII hereof). Upon such Transfer, the transferee shall, subject to
Section 9.2(d), be admitted as a substituted Limited Partner and shall succeed
to all of the rights, including rights with respect to Article XII hereof, of
the transferor Limited Partner under this Agreement in the place and stead of
such transferor Limited Partner (which succession, in the event of a pledge, may
be entered into and become effective at the time of foreclosure or other
realization of such pledge). Any transferee, whether or not admitted as a
substituted Limited Partner, shall succeed to the obligations of the transferor
hereunder (unless such transfer is a pledge, encumbrance, hypothecation or
mortgage or except as otherwise provided herein). Unless admitted as a Limited
Partner pursuant to, and in accordance with, the terms hereof, no transferee,
whether by a voluntary Transfer, by operation of law or otherwise, shall have
rights hereunder, other than (i) to receive such portion of the distributions
made by the Partnership as are allocable to the Percentage Interest transferred
and (ii) under Article XII hereof.
(c) In addition to any other restrictions on transfer provided herein, no
Partnership Interest of a Limited Partner shall be transferable unless the
General Partner has determined by written notification (a "Transfer
Determination") to the transferring Limited Partner, which Transfer
Determination shall not be unreasonably withheld and shall be deemed given if
not refused within ten Business Days of the notice to the Partnership of a
proposed transfer, provided that the proposed transferor and transferee have
promptly responded in writing to the reasonable requests, if any, of the General
Partner for additional information sufficient for the General Partner to
determine the matters set forth in this Section 9.2(c), that either (i) such
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transfer will not cause (x) any lender to the Partnership to hold in excess of
ten (10) percent of the aggregate Partnership Interests or any other percentage
of the Partnership Interest that would, pursuant to the Regulations under
Section 752 of the Code or any successor provision, cause a loan by such lender
to constitute Partner Nonrecourse Debt, (y) a transfer of a Partnership Interest
the value of which would have been less than $20,000 when issued, or (z) a
prohibited transaction (as defined in section 4975(c) of the Code or Section 406
of ERISA) to occur, or the Partnership to become, with respect to any employee
benefit plan subject to Title 1 of ERISA, a "party in interest" (as defined in
Section 3(14) of ERISA) or a "disqualified person" (as defined in Section
4975(e)(2) of the Code), or the Partnership to be deemed to hold "plan assets"
(as defined in regulations promulgated by the Department of Labor) of any
employee benefit plan subject to Title I of ERISA, or (ii) the General Partner
has determined to waive one or more of such requirements as of the date of this
Agreement, and may, after the date of this Agreement, waive one or more of such
requirements in its reasonable discretion after having determined that the
transfer will not materially adversely affect the Partnership, its assets or any
Partner, or constitute a violation of law.
(d) Any transferee of the interest of a Limited Partner pursuant to this
Section 9.2 shall, upon the written request of such transferee and the
transferring Limited Partner and the consent of the General Partner, including a
majority of the Special Committee, which consent shall not be unreasonably
withheld or delayed, be admitted as a Limited Partner under this Article IX, and
the transferring Limited Partner shall, if all of its Partnership Interests have
been Transferred, withdraw from the Partnership. The Partnership shall not be
required in any way to determine the validity of any written instrument referred
to in the immediately preceding sentence, and shall be authorized to rely upon
any such written instrument signed by the necessary parties.
(e) Any permitted transferee under Section 9.2 who is not admitted as a
substituted Limited Partner in accordance with this Article IX (including,
without limitation, Sections 9.2(b) and 9.2(d)) shall be considered an assignee
for purposes of this Agreement. An assignee shall be deemed to have had assigned
to it, and shall be entitled to receive, distributions from the Partnership and
the share of Net Income, Net Losses, and any other items of income, gain, loss,
deduction and credit of the Partnership and rights attributable to the
Partnership Interests assigned to such transferee, and shall have the rights of
the transferor under Article XII hereof, but shall not be deemed to be a holder
of Partnership Interests for any other purpose under this Agreement, and shall
not be entitled to vote such Partnership Interests in any matter presented to
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the Limited Partners for a vote or consent. In the event any such transferee
desires to make a further assignment of any such Partnership Interests, such
transferee shall be subject to all the provisions of this Article IX to the same
extent and in the same manner as any Limited Partner desiring to make an
assignment of Partnership Interests.
(f) The Limited Partners acknowledge that the Partnership Interests have
not been registered under any federal or state securities laws and, as a result
thereof, they may not be sold or otherwise transferred, except in compliance
with such laws. Notwithstanding anything to the contrary contained in this
Agreement, no Partnership Interest may be sold or otherwise transferred unless
such transfer is exempt from registration under any applicable securities laws
or such transfer is registered under such laws, it being acknowledged that the
Partnership has no obligation to take any action which would cause any such
Partnership Interests to be registered.
(g) Any transferee of ownership of the Partnership Interests originally
held by the Initial Limited Partner shall have the right to purchase from the
transferor of such Partnership Interests a pro rata portion of the Class B Stock
held by such transferor at a purchase price equal to its par value.
Section 9.3. Certain Additional Restrictions on Transfer. In addition to
any other restrictions on Transfer herein contained, in no event may any
Transfer of a Partnership Interest by any Partner be made (i) to any person or
Entity that lacks the legal right, power or capacity to own a Partnership
Interest; (ii) if such Transfer would cause a termination of the Partnership for
federal income tax purposes, except with the Consent of the Limited Partners,
subject to the provisions of Section 9.7; (iii) if such Transfer would, in the
opinion of counsel to the Partnership, cause the Partnership to cease to be
classified as a partnership for Federal income tax purposes; (iv) if such
Transfer is effectuated through an "established securities market" or a
"secondary market (or the substantial equivalent thereof)" within the meaning of
Section 7704(b) of the Code; (v) if such Transfer would cause the Partnership to
become, with respect to any employee benefit plan subject to Title 1 of ERISA, a
"party-in-interest" (as defined in Section 3(14) of ERISA) or a "disqualified
person" (as defined in Section 4975(e)(2) of the Code); (vi) in violation of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976; or (vii) if such transfer
would, in the opinion of counsel to the Partnership, cause any portion of the
assets of the Partnership to constitute assets of any employee benefit plan
pursuant to Department of Labor Regulations Section 2510.3-101.
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Section 9.4. Effective Dates of Transfers.
(a) Transfers pursuant to this Article IX may be made on any day, but for
purposes of this Agreement, the effective date of any such Transfer shall be (i)
the first day of the month in which such Transfer occurred if such Transfer
occurred on or prior to the fifteenth calendar day of a month, or (ii) the first
day of the month immediately following the month in which such transfer
occurred, if such Transfer occurred after the fifteenth calendar day of a month,
or such other date determined by the General Partner pursuant to such convention
as may be administratively feasible and consistent with applicable law.
(b) If any Partnership Interest is Transferred (other than the granting of
a Permitted Limited Partnership Interest Lien) in compliance with the provisions
of this Article IX, on any day other than the first day of a calendar year, then
Net Income, Net Loss, each item thereof and all other items attributable to such
Partnership Interest for such year shall be allocated to the transferor Partner,
or the redeemed or selling Partners, as the case may be, and, in the case of a
Transfer other than a redemption or the granting of a Permitted Limited
Partnership Interest Lien, to the transferee Partner, by taking into account
their varying interests during such year in accordance with Section 706(d) of
the Code, using the interim closing of the books method. Solely for purposes of
making such allocations, each of such items for the calendar month in which the
effective date of a Transfer (other than the granting of a Lien) occurs shall be
allocated to the transferor or transferee Partner as provided in Section 9.4(a),
and for purposes of Section 9.4(a), the transferee shall be the owner of the
Partnership Interest at the close of business on any day on which a Transfer
takes place.
Section 9.5. Transfer.
(a) The term "Transfer," when used in this Article IX with respect to a
Partnership Interest, shall be deemed to refer to a transaction by which a
Partner purports to assign its Partnership Interest or any portion thereof to
another Person, and includes a sale, assignment, gift, pledge, encumbrance,
hypothecation, mortgage, exchange, granting of a Lien or any other disposition
by law or otherwise; provided, however, that the term "Transfer", when used in
this Article IX (except when such term is used in Section 9.4) does not include
any acquisition of Partnership Interests from a Limited Partner by the General
Partner or the Partnership pursuant to Article XII.
(b) The Limited Partner has consented, in Section 4.1, to certain issuances
of Partnership Interests, and the foregoing provisions of this Article IX, to
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the extent that they would, but for such Section or this subsection (b), be
applicable to such Transfers, are hereby deemed satisfied or waived.
(c) The General Partner is hereby authorized on behalf of each of the
Partners to amend this Agreement (including the schedules hereto) to reflect the
admission of any transferee of a Partnership Interest as a substituted Limited
Partner in accordance with the provisions of this Article IX.
(d) No Partnership Interest shall be Transferred, in whole or in part,
except in accordance with the terms and conditions set forth in this Article IX.
Any Transfer or purported Transfer of a Partnership Interest not made in
accordance with this Article IX shall be null and void.
Section 9.6. Redemption of Partnership Interest. The Partnership shall not
redeem, repurchase, or otherwise acquire Partnership Interests from the
Partners, except (i) for redemptions of Partnership Interests pro rata based on
the Partners' Percentage Interests, (ii) for redemptions of Partnership
Interests as provided in Article XV, and (iii) with the Consent of the Limited
Partners.
Section 9.7. Certain Consent Rights. Notwithstanding any other provision of
this Agreement to the contrary, (A) the General Partner shall have the right to
enter into, effect, and/or consummate, and, (B) the Limited Partners, as such,
shall not have the right to approve, consent, or vote with respect to: (x) any
merger, consolidation, combination, sale of all or substantially all of the
assets or stock of the General Partner, the sale of all of the General Partner's
interest in the Partnership, or any similar transaction, which, in the case of
this clause (x), if and only to the extent required by applicable law, has been
approved by the stockholders of the General Partner, or (y) any merger,
consolidation, combination, sale of all or substantially all of the assets of
the Partnership, or any similar transaction, which in the case of this clause
(y) has been approved by the stockholders of the General Partner; provided,
however, that if any transaction is determined to be described in both clauses
(x) and (y) immediately above, the imposition of any requirement that the
stockholders of the General Partnership approve such transaction shall be
governed solely by clause (x) and not by clause (y).
ARTICLE X.
RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS
Section 10.1. No Participation in Management. No Limited Partner, in its
capacity as such, shall take part in the management of the Partnership's
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business, transact any business in the Partnership's name or have the power to
sign documents for or otherwise bind the Partnership. Any rights expressly
granted to the Limited Partners in this Agreement shall not be deemed to be
rights relating to the management of the Partnership's business.
Section 10.2. Bankruptcy of a Limited Partner. The Bankruptcy of any
Limited Partner shall not cause a dissolution of the Partnership, but the rights
of such Limited Partner to share in the Net Profits or Net Losses of the
Partnership and to receive distributions of Partnership funds shall, on the
happening of such event, devolve on its successors or assigns, subject to the
terms and conditions of this Agreement, and the Partnership shall continue as a
limited partnership. In no event, however, shall such assignee(s) become a
substituted Limited Partner except in accordance with Article IX hereof.
Section 10.3. No Withdrawal. No Limited Partner may withdraw from the
Partnership without the prior written consent of the General Partner, other than
as provided in Article IX of this Agreement, and provided that the foregoing
provisions of this Section 10.3 shall not apply to a withdrawal from the
Partnership upon a Transfer pursuant to Article XII hereof, such withdrawal to
be effective immediately without any requirement for consent thereto by the
General Partner.
Section 10.4. Conflicts. The Partners recognize that the Limited Partners
and their Affiliates have or may have other business interests, activities and
investments, some of which may be in conflict or competition with the business
of the Partnership, and that such Persons are entitled to carry on such other
business interests, activities and investments. Without limiting the foregoing
in deciding whether to take any actions in such capacity, such Limited Partners
and their Affiliates shall be under no obligation to consider the separate
interests of the Partnership and shall have no fiduciary obligations to the
Partnership and shall not be liable for monetary damages for losses sustained,
liabilities incurred or benefits not derived by the other Partners in connection
with such actions. The Limited Partners and their Affiliates may engage in or
possess an interest in any other business or venture of any kind, independently
or with others, on their own behalf or on behalf of other entities with which
they are affiliated or associated, and such persons may engage in any
activities, whether or not competitive with the Partnership, without any
obligation to offer any interest in such activities to the Partnership or to any
Partner. Neither the Partnership nor any Partner shall have any right, by virtue
of this Agreement, in or to such activities, or the income or profits derived
therefrom, and the pursuit of such activities, even if competitive with the
business of the Partnership, shall not be deemed wrongful or improper.
Notwithstanding the foregoing, (i) the provisions of this Section 10.4 shall not
negate or impair any other agreement between one or more of the Limited Partners
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and the General Partner, the Partnership, or any of their respective
Subsidiaries, and (ii) in conducting an Outside Business Activity, a Limited
Partner will to the best of its ability and consistent with its fiduciary duty
to such Outside Business Activity, conduct such Outside Business Activity in a
commercially reasonable manner so that on an annual overall basis the
Partnership is not discriminated against.
Section 10.5. Provision of Information.
(a) Annual and Periodic Reports.
(i) Annual Statement. The General Partner shall, as soon as
practicable, but in no event later than 105 days after the close of each
fiscal year, cause to be furnished to each Partner Audited Financial
Statements for the Partnership, or of the General Partner if such
statements are prepared solely on a consolidated basis with the General
Partner, for the immediately preceding fiscal year of the Partnership.
(ii) Quarterly Reports. The General Partner shall, as soon as
available and, in any event, within 45 days after the end of each of the
first three fiscal quarters of the Partnership's fiscal year, furnish to
each Partner the internally prepared unaudited combined balance sheet of
the Partnership and its combined Subsidiaries as of the end of such quarter
and the combined statements of profit and loss, partners' capital and cash
flow for such quarter and for the portion of the fiscal year then ending
(all in reasonable detail), accompanied by a certificate of the General
Partner or of the chief financial officer of the Partnership to the effect
that, except for the lack of required footnotes, such balance sheets and
statements have been properly prepared in accordance with GAAP and fairly
present the financial condition of the Partnership and its combined
Subsidiaries as of the date thereof and the results of their operations for
the period covered thereby, subject only to normal year-end audit
adjustments. In lieu of the foregoing, the General Partner may furnish to
each Partner a copy of the Partnership's quarterly report on Form 10-Q, if
the Partnership is then obligated to file such report with the SEC pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended.
(b) In addition to other rights provided by this Agreement or by the Act,
each Limited Partner shall have the right, for a purpose reasonably related to
such Limited Partner's interest as a limited partner in the Partnership (the
interests of a lender to such Limited Partner having a Permitted Limited
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Partnership Interest Lien on its Partnership Interests being so related), upon
written demand with a statement of the purpose of such demand:
(i) to obtain a copy of the most recent annual and quarterly reports
and current reports on Form 8-K filed with the SEC by the General Partner
pursuant to the Securities Exchange Act of 1934, as amended;
(ii) to obtain a copy of the Partnership's federal, state and local
income tax returns for each fiscal year of the Partnership;
(iii) to obtain a current list of the name and last known business,
residence or mailing address of each Partner;
(iv) to obtain a copy of this Agreement and the Certificate and all
amendments thereto, together with executed copies of all powers of attorney
pursuant to which this Agreement, the Certificate and all amendments
thereto have been executed; and
(v) such other information regarding the business, affairs and
condition, financial or otherwise, of the Partnership and its Subsidiaries
as such Partner may reasonably request.
(c) Notwithstanding any other provision of this Section 10.5, the General
Partner may keep confidential from the Limited Partners, for such period of time
as the General Partner determines in its sole and absolute discretion to be
reasonable, any information that the Partnership is required by law or by
agreements with an unaffiliated third party to keep confidential.
Section 10.6. Limited Partner Representative. The Initial Limited Partner
is hereby appointed as the Limited Partner Representative. A
Majority-in-Interest of the Limited Partners shall have the right, at any time,
within their sole discretion, to replace the Limited Partner Representative, or
to appoint a temporary substitute to act for a Limited Partner Representative
unable to act. Any appointment of a Limited Partner Representative made
hereunder shall remain effective until rescinded in a writing delivered to the
General Partner via certified mail, registered overnight express mail or
telecopy, and the General Partner shall have the right and authority to rely
(and shall be fully protected in so doing) on the actions taken and directions
given by such Limited Partner Representative, without any further evidence of
their authority or further action by the Limited Partners. The General Partner
shall send copies of all notices received by it pursuant to Section 5.6 to each
Limited Partner requesting the same.
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Section 10.7. Power of Attorney.
(a) Each Limited Partner constitutes and appoints the General Partner, any
Liquidating Trustee and authorized officers and attorneys-in-fact of each, and
each of those acting singly, in each case with full power of substitution, as
its true and lawful agent and attorney-in-fact, with full power and authority in
its name, place and stead to: execute, swear to, acknowledge, deliver, file and
record in the appropriate public offices (i) all certificates, documents and
other instruments (including, without limitation, this Agreement and the
Certificate and all amendments or restatements thereof) that the General Partner
or the Liquidating Trustee deems appropriate or necessary to form, qualify or
continue the existence or qualification of the Partnership as a limited
partnership (or a partnership in which the limited partners have limited
liability) in the State of Delaware and in all other jurisdictions in which the
Partnership may conduct business or own property; (ii) all instruments that the
General Partner deems appropriate or necessary to reflect any amendment, change,
modification or restatement of this Agreement in accordance with its terms;
(iii) all conveyances and other instruments or documents that the General
Partner deems appropriate or necessary to reflect the dissolution and
liquidation of the Partnership pursuant to the terms of this Agreement,
including, without limitation, a certificate of cancellation; and (iv) all
instruments relating to the admission, withdrawal, removal or substitution of
any Partner pursuant to the provisions of this Agreement or the Capital
Contribution of any Partner.
(b) The foregoing power of attorney is irrevocable and a power coupled with
an interest, in recognition of the fact that each of the Partners will be
relying upon the power of the General Partner to act as contemplated by this
Agreement in any filing or other action by it on behalf of the Partnership, and
it shall survive the death or incompetency of a Limited Partner to the effect
and extent permitted by law, subsequent incapacity of any Limited Partner and
the transfer of all or any portion of such Limited Partner's Partnership
Interests and shall extend to such Limited Partner's heirs, successors, assigns
and personal representatives.
(c) Nothing contained in this Section 10.7 shall be construed as
authorizing the General Partner to amend this Agreement except in accordance
with Article XIII hereof.
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ARTICLE XI.
INDEMNIFICATION; EXCULPATION
Section 11.1. Indemnification.
(a) To the fullest extent permitted by law, the Partnership shall and does
hereby indemnify an Indemnitee from and against any and all losses, claims,
damages, liabilities, joint or several, expenses (including reasonable legal
fees and expenses), judgments, fines, settlements, and other amounts
(collectively "Damages") arising from any and all claims, demands, actions,
suits or proceedings, civil, criminal, administrative or investigative, that
relate to the operations of the Partnership as set forth in this Agreement in
which any Indemnitee may be involved, or is threatened to be involved, as a
party or otherwise, unless it is established that: (i) the act or omission of
the Indemnitee was material to the matter giving rise to the proceeding and was
committed with fraud, gross negligence, willful misconduct or in breach of the
General Partner's fiduciary duties to the Limited Partners; (ii) the Indemnitee
actually received an improper personal benefit in money, property or services;
or (iii) in the case of any criminal proceeding, the Indemnitee had reasonable
cause to believe that the act or omission was unlawful. The termination of any
proceeding by judgment, order or settlement shall not create a presumption that
the Indemnitee did not meet the requisite standard of conduct set forth in this
Section 11.1(a). Any indemnification pursuant to this Section 11.1 shall be made
only out of the assets of the Partnership and no Partner shall have any personal
liability therefor.
(b) Reasonable expenses incurred by an Indemnitee may be paid or reimbursed
by the Partnership in advance of the final disposition of the proceeding upon
receipt by the Partnership of (i) a written affirmation by the Indemnitee of the
Indemnitee's good faith belief that the standard of conduct necessary for
indemnification by the Partnership, as authorized in this Section 11.1, has been
met, and (ii) a written undertaking by or on behalf of the Indemnitee to repay
the amount paid or reimbursed if it shall ultimately be determined that such
standard of conduct has not been met.
(c) The indemnification provided by this Section 11.1 shall be in addition
to any other rights to which an Indemnitee may be entitled under any agreement,
as a matter of law or otherwise, and shall continue as to an Indemnitee who has
ceased to serve in such capacity.
(d) The Partnership may purchase and maintain insurance, on behalf of the
Indemnitees, against any liability that may be asserted against or expenses that
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may be incurred by such Person in connection with the Partnership's activities,
regardless of whether the Partnership would have the power to indemnify such
Person against such liability under the provisions of this Agreement.
(e) For purposes of this Section 11.1, the Partnership shall be deemed to
have requested an Indemnitee to serve as fiduciary of an employee benefit plan
whenever the performance by it of its duties to the Partnership also imposes
duties on, or otherwise involves services by, it to the plan or participants or
beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute fines
within the meaning of this Section 11.1; and actions taken or omitted by the
Indemnitee with respect to an employee benefit plan in the performance of its
duties for a purpose reasonably believed by it to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose
which is not opposed to the best interests of the Partnership.
(f) An Indemnitee shall not be denied indemnification in whole or in part
under this Section 11.1 solely because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies.
(g) The provisions of this Section 11.1 are for the benefit of the
Indemnitees, their heirs, successors, assigns personal representatives and
administrators, and shall not be deemed to create any rights for the benefit of
any other Persons.
Section 11.2. Indemnification Procedures.
(a) If a claim for indemnification is asserted against the Partnership
under Article XI, the Partnership shall have the right, at its own expense, (i)
subject to the Partnership's obligations to pay all amounts under Section
11.1(a) to participate in the defense of any Action which resulted in the claim
for indemnification or (ii) to assume at any time the defense of any Action
which resulted in the claim for indemnification. Such assumption of the defense
by the Partnership shall be an admission that the Action is a proper subject of
indemnification pursuant to this Article XI. The Indemnitee at any time may
elect to participate in (but not conduct or control) such defense at its
expense, and the Partnership shall not be responsible for the Indemnitee's costs
of participation (including attorneys, accountants, and in-house counsel fees).
In either event, the parties shall cooperate in the defense of such Action. The
Partnership in the defense of any Action shall not, except with the consent of
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the Indemnitee claiming indemnification under Article XI, cause to be entered
any judgment or enter into any settlement which provides for the release of the
Partnership or any other Partner but does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnitee of a release
equivalent to that provided to the Partnership or any other Partner.
(b) The Indemnitee claiming indemnification under Article XI may, at any
time upon written notice to the Partnership, elect to conduct or control its own
defense in such Action (as opposed to merely participating in the defense with
counsel for the Partnership), but in such event, provided that the Partnership
has theretofore undertaken the defense of the Indemnitee pursuant to Section
11.2(a) and subject to Section 11.2(c), such Indemnitee shall cease to have the
indemnification rights under Article XI, and the Partnership shall no longer be
obligated to continue the defense of the Limited Partner, with respect to such
Action.
(c) If the Partnership has assumed the defense of any Action under clause
(ii) of the first sentence of Section 11.2(a), and if at any time there exists a
conflict of interest in defending both the Partnership and the Indemnitee, as
determined in the reasonable judgment of counsel to the Indemnitee, the
Indemnitee shall so notify the Partnership and the Indemnitee may, upon written
notice to the Partnership delivered promptly thereafter, elect to defend itself
in such Action with counsel selected by the Indemnitee, but reasonably
acceptable to the Partnership, at the expense of the Partnership. Following the
assumption of defense by an Indemnitee under this Section 11.2(c), an Indemnitee
may not enter into any settlement without the prior written consent of the
Partnership, which consent shall not be unreasonably withheld.
Section 11.3. Exculpation. No officer, employee or agent shall have any
liability to the Partnership or any Partner for monetary damages for any action
taken, or any failure to take any action, in such capacity, except liability for
(a) any improper financial benefit received by such Person; (b) an intentional
infliction of harm on the Partnership or any Partner; (c) acts or omissions not
in good faith or which involve intentional misconduct; and (d) any knowing
violation of law.
Section 11.4. No Liability of Directors and Others. Notwithstanding
anything to the contrary contained herein, no recourse shall be had by the
Partnership or any Partner against any director, shareholder, officer, employee,
agent or attorney of the General Partner for any act or omission of the General
Partner or any obligation or liability of the General Partner under this
Agreement, and none of the foregoing shall have any personal liability for or
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with respect to any of the foregoing; provided that the foregoing shall not
relieve any officer or director of the General Partner of any liability in his
capacity as such.
ARTICLE XII.
RIGHTS UNDER THE EXCHANGE RIGHTS AGREEMENT
THCR, the Initial Limited Partner and TCI have entered into the Exchange
Rights Agreement, substantially in the form of Exhibit A to this Agreement.
Section 12.1. Transfer Pursuant to Exchange Rights Agreement.
Notwithstanding anything to the contrary contained in this Agreement, the
Partners hereby consent to the Transfer of Partnership Interests pursuant to the
terms of such Exchange Rights Agreement, without compliance with any of the
other provisions of this Agreement.
Section 12.2. Subject to the Exchange Rights Agreement. The Initial Limited
Partner, TCI and all their respective subsequent transferees shall be entitled
to the benefits of, and subject to the burdens of, the Exchange Rights
Agreement, including, but not limited to, the "Conversion Right" of the Company
to require any such transferee (other than the Initial Limited Partner and his
Permitted Holders) to exchange its Partnership Interests for shares of Common
Stock on the terms and subject to the conditions set forth therein.
ARTICLE XIII.
AMENDMENT OF PARTNERSHIP AGREEMENT, MEETINGS
Section 13.1 Amendments.
(a) This Agreement may not be amended unless such amendment is approved by
the General Partner, with the consent of a majority of the Special Committee,
and by the Consent of the Limited Partners, except as provided below in this
Section 13.1.
(b) Notwithstanding Section 13.1(a), the General Partner, with the consent
of a majority of the Special Committee, shall have the power, without the
Consent of the Limited Partners but after five Business Days notice to the
Limited Partners, to amend this Agreement as may be required to facilitate or
implement any of the following purposes:
(i) to add to the obligations of the General Partner or surrender any
right or power granted to the General Partner for the benefit of the
Limited Partners;
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(ii) to reflect the admission, substitution, termination, or
withdrawal of Partners after the date hereof in accordance with Article IX
or XII of this Agreement, provided that the General Partner shall not be
required to give the notice referred to in the first paragraph of this
subsection (b) in respect of a transfer of Partnership Interests pursuant
to Article XII hereof;
(iii) to reflect a change that is of an inconsequential nature and
does not adversely affect the Limited Partners, or to cure any ambiguity,
correct or supplement any provision in this Agreement not inconsistent with
law or with other provisions, or make other changes with respect to matters
arising under this Agreement that will not be inconsistent with law or with
the provisions of this Agreement; and
(iv) to satisfy any requirements, conditions, or guidelines contained
in any order, directive, opinion, ruling or regulation of a federal or
state agency or contained in federal or state law.
The General Partner will provide notice to the Limited Partners promptly
after any action under this Section 13.1(b) is taken.
(c) Notwithstanding Sections 13.1(a) and (b) hereof, this Agreement shall
not be amended without the prior written consent of each Partner adversely
affected if such amendment would (i) convert a Limited Partner's interest in the
Partnership into a general partner's interest, (ii) modify the limited liability
of a Limited Partner, (iii) alter rights of the Partners to receive allocations
and distributions pursuant to Articles V and VI hereof, (iv) alter or modify the
Rights set forth in Article XII except in compliance therewith, (v) amend this
Section 13.1(c), (vi) alter such Partner's rights to transfer its Partnership
Interests, or (vii) amend Section 4.1(c), 7.8, 10.8, Article XI or 13.2(d).
Further, no amendment may alter the restrictions on the General Partner's
authority set forth in Section 7.2 without the Consent specified in that
section.
(d) Notwithstanding Section 13.1(a) hereof, no amendment of Section 7.4
shall be effective unless appropriate corresponding modifications are made to
Article XII and the Registration Rights Agreement to preserve the financial
terms of the Limited Partners' rights thereunder.
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(e) Any amendment, modification or repeal of Section 7.8 or Article XI or
any provision thereof shall be prospective only and shall not in any way affect
the rights to indemnification and limitations on the General Partner's liability
to the Partnership and the Limited Partners as in effect immediately prior to
such amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be asserted.
Section 13.2. Meetings of the Partners; Notices to Partners.
(a) Meetings of the Partners may be called by the General Partner or by any
Limited Partner to act on any matter specified herein or in the Act to be voted
on or consented to by the Partners. The call shall state the nature of the
business to be transacted. Notice of any such meeting shall be given to all
Partners not less than seven (7) Business Days prior to the date of such
meeting. Partners may vote in person or by proxy at such meeting. Whenever the
vote or Consent of the Limited Partners is permitted or required under this
Agreement, such vote or Consent may be given at a meeting of Partners or may be
given in accordance with the procedure prescribed in Section 13.2(b) hereof.
Except as otherwise expressly provided in this Agreement, the consent of holders
of a majority of the Partnership Interests shall control.
(b) Any action required or permitted to be taken at a meeting of the
Partners may be taken without a meeting if a written consent setting forth the
action so taken is (i) signed by Partners holding a majority of the Partnership
Interests of the Partners (or such other percentage as is expressly required by
this Agreement) and (ii) in the case of any matter that would otherwise require
the approval of a majority of the Special Committee, such consent is approved by
a majority of the Special Committee. Such consent may be in one instrument or in
several instruments, and shall have the same force and effect as a vote of a
majority of the Partnership Interests of the Partners (or such other percentage
as is expressly required by this Agreement). Such consent shall be filed with
the General Partner and copies thereof delivered to all Partners. An action so
taken shall be deemed to have been taken at a meeting held on the effective date
so certified.
(c) Each Limited Partner may authorize any Person or Persons to act for him
by proxy on all matters in which a Limited Partner is entitled to participate,
including waiving notice of any meeting, or voting or participating at a
meeting. Every proxy must be signed by the Limited Partner or his
attorney-in-fact. No proxy shall be valid after the expiration of 11 months from
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the date thereof unless otherwise provided in the proxy. Every proxy shall be
revocable at the pleasure of the Limited Partner executing it. No such proxy and
no such revocation shall be effective unless a copy thereof has been delivered
to the General Partner.
(d) Whenever the Consent of the Limited Partners is required hereunder, the
General Partner shall provide a notice to each Partner who is a Limited Partner
on the date the notice is given setting forth the matter(s) as to which it
proposes to seek such Consent at least five (5) Business Days in advance of the
date upon which such Consent is sought.
ARTICLE XIV.
CERTIFICATE OF INTEREST
Section 14.1. Form of Certificate of Interest. The interest of each Partner
in the Partnership shall be evidenced by a Certificate of Interest (each a
"Certificate of Interest"). A certificate transfer ledger (the "Certificate
Transfer Ledger") recording the issue and transfer of Certificates of Interest
in the Partnership shall be maintained at the principal office of the
Partnership. Each such Certificate of Interest shall be serially numbered and
shall be issued by the General Partner to the lawful holder of an interest in
the Partnership, upon payment of the full amount of the Capital Contributions
then due with respect to the Partnership Interest represented by such
Certificate of Interest. All Certificates of Interest shall be executed in the
name of the Partnership by the General Partner. Each Certificate of Interest
shall state on its face the name of the registered holder thereof, and shall
bear, on both sides thereof, a statement of the restrictions imposed by Section
105 of the Casino Control Act. Effective on the date hereof, the General Partner
and the Initial Limited Partner shall tender their respective Certificates of
Interest (which shall be canceled) for new Certificates of Interest evidencing,
as of the date hereof, their respective interests in the Partnership.
Section 14.2. Transfers of Certificates of Interest. Certificates of
Interest in the Partnership may be transferred by the lawful holders thereof
only in connection with the pledge or transfer of all or part of the interest of
such holder in the Partnership, and only in accordance with the provisions of
this Agreement. All such transfers shall be effected by duly executed and
acknowledged instruments of assignment, each of which shall be duly recorded on
the Certificate Transfer Ledger. No effect shall be given to any purported
assignment of a Certificate of Interest, or transfer of the interest in the
Partnership evidenced thereby, unless such assignment and transfer shall be in
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compliance with the terms and provisions of this Agreement, and any attempted
assignment or transfer in contravention hereof shall be ineffectual.
Section 14.3. Lost, Stolen, Destroyed or Mutilated Certificates of
Interest. In the event that a Certificate of Interest shall be lost, stolen,
destroyed or mutilated, the Partnership may cause a replacement Certificate of
Interest to be issued upon such terms and conditions as shall be fixed by the
General Partner, including, without limitation, provision for indemnity and the
posting of a bond or other adequate security as security therefor. No
replacement Certificate of Interest shall be issued to any person unless such
person has surrendered the Certificate of Interest to be replaced, or has
complied with the terms of this Section 14.3.
Section 14.4.Inspection of Certificate Transfer Ledger. The Certificate
Transfer Ledger containing the names and addresses of all Partners and the
interest of each Partner in the Partnership shall be open to the inspection of
the Partners at the principal office of the Partnership during usual business
hours upon request of any Partner. Such Certificate Transfer Ledger shall, in
addition, be available for inspection by the Casino Control Commission and the
Division of Gaming Enforcement of the State of New Jersey and each of their
respective authorized agents at all reasonable times without notice.
ARTICLE
REGULATORY REQUIREMENTS
Section 15.1. Applicable Regulatory Authority and CCC Regulation.
Notwithstanding anything to the contrary in this Agreement:
(a) This Agreement will be deemed to include all provisions required
by the Casino Control Act, the Indiana Riverboat Act, and the Mississippi
Gaming Control Act and to the extent that anything contained in this
Agreement is inconsistent with such acts, the provisions of such acts shall
govern. All provisions of the Casino Control Act, the Indiana Riverboat
Act, and the Mississippi Gaming Control Act to the extent required by law
to be included in this Agreement, are incorporated herein by reference as
if fully restated in this Agreement.
(b) If the continued holding of a Partnership Interest by any Partner
will disqualify the Partnership to continue as the owner and operator of a
casino licensed in the State of New Jersey under the provisions of the
Casino Control Act, such Partner shall enter into such escrow, trust or
similar arrangement as may be required by the Commission under the
circumstances. It is the intent of this Section 15.1 to set forth
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procedures to permit the Partnership to continue, on an uninterrupted
basis, as the owner and operator of a casino licensed under the provisions
of the Casino Control Act.
(c) All transfers (as defined by the Casino Control Act and the
governing laws, statutes rules and regulations of any Applicable Regulatory
Authority) of securities (as defined by the Casino Control Act and the
governing laws, statutes rules and regulations of any Applicable Regulatory
Authority), shares and other interests in the Partnership shall be subject
to the right of prior approval by the Applicable Regulatory Authority; and
(b) the Partnership shall have the absolute right to repurchase in
accordance with Section 15.3, any security, share or other interest in the
Partnership in the event that the Applicable Regulatory Authority
disapproves a transfer in accordance with the provisions of the Casino
Control Act.
(d) Each Partner hereby agrees to cooperate reasonably and promptly
with the others in obtaining any and all licenses, permits or approvals
required by any Applicable Regulatory Authority or deemed expedient by the
Partners.
Section 15.2. Additional Applicable Regulatory Authority Regulation. No
Person may become the Beneficial Owner of five percent (5%) or more of any class
or series of Partnership Interests unless such Person agrees in writing to: (i)
provide to the Applicable Regulatory Authorities information regarding such
Person, including without limitation thereto, information regarding other
gaming-related activities of such Person and financial statements, in such form,
and with such updates, as may be required by the Applicable Regulatory
Authorities; (ii) respond to written or oral questions that may be propounded by
the Applicable Regulatory Authorities and (iii) consent to the performance of
any background investigation that may be required by the IGC, including without
limitation thereto, an investigation of any criminal record of such Person.
Section 15.3. Disqualified Holders. Notwithstanding any other provision of
this Agreement, Partnership Interests held by a Disqualified Holder (or in the
case of a Disqualified Holder of securities of the General Partner, the
corresponding Partnership Interest of the General Partner) shall be subject to
redemption at any time by the Partnership by action of the General Partner,
pursuant to this Section 15.3 as follows:
(a) the redemption price of the Partnership Interest to be redeemed
pursuant to this Section 15.3 shall be equal to the Fair Market Value of
such Partnership Interest or such other redemption price as required by
pertinent state or federal law pursuant to which the redemption is
required;
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(b) the redemption price of such shares may be paid in cash,
Redemption Securities or any combination thereof; provided, however, in the
case of a redemption mandated by the CCC, the redemption price shall be
paid in cash;
(c) if less than all the Partnership Interest held by Disqualified
Holders are to be redeemed, the Partnership Interest to be redeemed shall
be selected in such manner as shall be determined by the General Partner,
which may include selection first of the most recently purchased portion
thereof, selection by lot, or selection in any other manner determined by
the General Partner;
(d) at least thirty (30) days' written notice of the Redemption Date
shall be given to the record holders of the Partnership Interest selected
to be redeemed (unless waived in writing by any such holder); provided,
however, that the Redemption Date shall be deemed to be the date on which
written notice shall be given to record holders if the cash or Redemption
Securities necessary to effect the redemption shall have been deposited in
trust for the benefit of such record holders and subject to immediate
withdrawal by them upon surrender of the Certificates of Interests for
their Partnership Interests to be redeemed;
(e) from and after the Redemption Date or such earlier date as
mandated by pertinent state or federal law, any and all rights of whatever
nature, which may be held by the Beneficial Owners of Partnership Interests
selected for redemption (including without limitation any rights to vote or
participate in distribution) shall cease and terminate and they shall
thenceforth be entitled only to receive the cash or Redemption Securities
payable upon redemption; and
(f) such other terms and conditions as the General Partner shall
determine.
ARTICLE XVI.
GENERAL PROVISIONS
Section 16.1. Notices. All notices, offers or other communications required
or permitted to be given pursuant to this Agreement shall be in writing and may
be personally served or sent by United States mail and shall be deemed to have
been given when delivered in person or three business days after deposit in
United States mail, registered or certified, postage prepaid, and properly
addressed, by or to the appropriate party. For purposes of this Section 16.1,
the addresses of the parties hereto shall be as set forth below their name on
the signature page hereof. The address of any party hereto may be changed by a
notice in writing given in accordance with the provisions hereof.
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Section 16.2. Controlling Law. This Agreement and all questions relating to
its validity, interpretation, performance and enforcement (including, without
limitation, provisions concerning limitations of actions), shall be governed by
and construed in accordance with the laws of the State of Delaware,
notwithstanding any conflict-of-laws doctrines of such state or other
jurisdiction to the contrary.
Section 16.3. No Third Party Beneficiaries. No creditor or other third
party shall have the right to enforce any right or obligation of any Partner to
make Capital Contributions or to pursue any other right or remedy hereunder or
at law or in equity, it being understood and agreed that the provisions of this
Agreement shall be solely for the benefit of, and may be enforced solely by, the
parties hereto and their respective successors and assigns. None of the rights
or obligations of the Partners herein set forth to make Capital Contributions to
the Partnership shall be deemed an asset of the Partnership for any purpose by
any creditor or other third party, nor may such rights or obligations be sold,
transferred or assigned by the Partnership or pledged or encumbered by the
Partnership to secure any debt or other obligation of the Partnership or of any
of the Partners.
Section 16.4. Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.
Section 16.5. Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.
Section 16.6. Entire Agreement. This Agreement (together with the Exhibit
and Schedules hereto) contains the entire understanding among the parties hereto
with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written, except as herein contained. The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof. This Agreement may not be
modified or amended other than by an agreement in writing.
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Section 16.7. Paragraph Headings. The paragraph headings in this Agreement
are for convenience only; they form no part of this Agreement and shall not
affect its interpretation.
Section 16.8. Gender, Etc. Words used herein, regardless of the number and
gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context indicates is appropriate.
Section 16.9. Number of Days. In computing the number of days (other than
Business Days) for purposes of this Agreement, all days shall be counted,
including Saturdays, Sundays and holidays; provided, however, that if the final
day of any time period falls on a date which is not a Business Day, then the
final day shall be deemed to be the next Business Day.
Section 16.10. Partners Not Agents. Nothing contained herein shall be
construed to constitute any Partner the agent of another Partner, except as
specifically provided herein, or in any manner to limit the Limited Partners in
the carrying on of their own respective businesses or activities.
Section 16.11. Assurances. Each of the Partners shall hereafter execute and
deliver such further instruments and do such further acts and things as may be
reasonably required or useful to carry out the intent and purpose of this
Agreement and as are not inconsistent with the terms hereof.
Section 16.12. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their heirs, executors,
administrators, successors, legal representatives and permitted assigns,
including any pledgee upon the foreclosure of any pledge of a Partner's
Partnership Interest in the Partnership.
Section 16.13. Waiver. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused
this Agreement to be executed on their behalf as of the date first above
written.
GENERAL PARTNER:
TRUMP HOTELS & CASINO RESORTS, INC.
By:
---------------------------------
Name: Robert M. Pickus
Title: Executive Vice President
and Secretary
Address: Mississippi Avenue and
The Boardwalk
Atlantic City,
New Jersey 08401
LIMITED PARTNERS: (Addresses
are as set forth on Schedule I):
DONALD J. TRUMP
By:
--------------------------------
Donald J. Trump
TRUMP CASINOS, INC.
By:
--------------------------------
Donald J. Trump
President
THCR/LP CORPORATION
By:
--------------------------------
Name: Nicholas F. Moles
Title: Secretary
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STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
BE IT REMEMBERED, that on April __, 1996, before me, the subscriber,
personally appeared Donald J. Trump, an individual, who, I am satisfied, is the
person who has signed the within instrument on his own behalf, and I having
first made known to him the contents thereof he thereupon acknowledged that he
signed and delivered the said instrument in his personal capacity as an
individual, and that the within instrument is his voluntary act and deed.
--------------------------------
Notary Public
<PAGE>
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
BE IT REMEMBERED, that on April __, 1996, before me, the subscriber,
personally appeared Robert M. Pickus, the Executive Vice President and Secretary
of Trump Hotels & Casino Resorts, Inc., a Delaware corporation, who, I am
satisfied, is the person who has signed the within instrument on behalf of such
corporation, and I having first made known to him the contents thereof he
thereupon acknowledged that he signed and delivered the said instrument in his
capacity as such officer aforesaid, and that the within instrument is the
voluntary act and deed of said corporation, made by virtue of authority from its
Board of Directors.
--------------------------------
Notary Public
<PAGE>
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
BE IT REMEMBERED, that on April __, 1996, before me, the subscriber,
personally appeared Donald J. Trump, the President of Trump Casinos, Inc., a New
Jersey corporation, who, I am satisfied, is the person who has signed the within
instrument on behalf of such corporation, and I having first made known to him
the contents thereof he thereupon acknowledged that he signed and delivered the
said instrument in his capacity as such officer aforesaid, and that the within
instrument is the voluntary act and deed of said corporation, made by virtue of
authority from its Board of Directors.
--------------------------------
Notary Public
<PAGE>
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
BE IT REMEMBERED, that on April __, 1996, before me, the subscriber,
personally appeared Nicholas F. Moles, the Secretary of THCR/LP Corporation, a
New Jersey corporation, who, I am satisfied, is the person who has signed the
within instrument on behalf of such corporation, and I having first made known
to him the contents thereof he thereupon acknowledged that he signed and
delivered the said instrument in his capacity as such officer aforesaid, and
that the within instrument is the voluntary act and deed of said corporation,
made by virtue of authority from its Board of Directors.
--------------------------------
Notary Public
<PAGE>
SCHEDULE I
AGGREGATE CAPITAL CONTRIBUTIONS
Partner Contribution Percentage Interest
- ------- ------------ -------------------
Trump Hotels & Casino $516,002,095.27 70.19992% general
Resorts, Inc. partner
Donald J. Trump $ 93,337,725.62 21.20677%* limited
725 Fifth Avenue partner
New York, N.Y. 10022
Trump Casinos, Inc. $ 43,921,854.66 4.47082% limited partner
1000 The Boardwalk
Atlantic City, NJ 08401
THCR/LP Corporation $ 40,499,861.91 4.12249% limited partner
1000 The Boardwalk
Atlantic City, N.J. 08401
* Certificate No. 4 represents 99.89004% of such percentage interest and
Certificate No. 4-A represents 0.10996% of such percentage interest.
Dated: April 17, 1996
<PAGE>
SCHEDULE II
CAPITAL CONTRIBUTIONS PRIOR TO APRIL 17, 1996
Partner Contribution Percentage Interest
- ------- ------------ -------------------
Trump Hotels & Casino
Resorts, Inc. $140,933,338 60.15936% general
partner
Donald J. Trump $ 93,333,333 39.84064% limited
partner
Dated: April 17, 1996
<PAGE>
SCHEDULE III
CAPITAL CONTRIBUTIONS IN CONNECTION WITH THE
MERGER TRANSACTIONS
(Excluding underwriters' exercise of over-allotment option in
connection with THCR Common Stock Offering)
Partner Contribution
------- ------------
Trump Hotels & Casino Resorts, Inc. $375,068,757.27
Donald J. Trump $ 4,392.62
Trump Casinos, Inc. $ 43,921,854.66
THCR/LP Corporation $ 40,499,861.91
Dated: April 17, 1996
AMENDED AND RESTATED EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
AMENDED AND RESTATED EXCHANGE AND REGISTRATION RIGHTS AGREEMENT, dated as
of April 17, 1996, by and among Trump Hotels & Casino Resorts, Inc., a Delaware
corporation (the "Company"), Donald J. Trump ("Trump") and Trump Casinos, Inc.,
a New Jersey corporation wholly owned by Trump ("TCI").
WHEREAS, the Company and Trump are parties to that certain Exchange and
Registration Rights Agreement (the "Initial Agreement"), dated as of June 12,
1995, relating to the conversion of limited partnership interests in Trump
Hotels & Casino Resorts Holdings, L.P. (the "Partnership") into shares of Common
Stock (as defined below) of the Company and registration rights with respect
thereto;
WHEREAS, in connection with the acquisition by the Partnership of Trump Taj
Mahal Associates ("Taj Associates") and the other transactions related thereto
(the "Merger Transaction"), (i) Trump is contributing to Trump Atlantic City
Associates ("Trump AC") (on behalf, and at the direction, of the Partnership)
shares of capital stock of The Trump Taj Mahal Corporation, ("TTMC"), which
holds a .01% general partnership interest in Taj Associates, and (ii) TCI is
contributing to Trump AC (on behalf, and at the direction, of the Partnership)
its 49.995 general partnership interest in Taj Associates;
WHEREAS, as consideration of such contributions by Trump and TCI, the
Partnership is issuing limited partnership interests to each of Trump and TCI;
WHEREAS, in connection with the issuance of, and with respect to, such
limited partnership interests, the Company has agreed to grant Trump and TCI the
exchange rights and registration rights set forth below, and pursuant to the
Initial Agreement, Trump was issued certain exchange rights and registration
rights; and
WHEREAS, the Company and Trump have agreed to amend and restate the Initial
Agreement in its entirety and to add TCI as a party;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
<PAGE>
ARTICLE I.
Definitions
Section 1.1 Reference to Partnership Agreement. Capitalized terms used
herein and not otherwise defined herein shall have the meaning ascribed to them
in the Second Amended and Restated Agreement of Limited Partnership of the
Partnership (the "Partnership Agreement").
Section 1.2 Certain Definitions. Except as otherwise herein expressly
provided, the following terms and phrases shall have the meanings as set forth
below:
"Aggregate Conversion Number" means the sum of the Conversion Numbers of
each Optionee.
"Agreement" means this Amended and Restated Exchange and Registration
Rights Agreement.
"Common Stock" means the common stock, par value $.01 per share of the
Company, and any securities into which the Common Stock has been converted or
exchanged whether pursuant to a Recapitalization Event, Merger or otherwise.
"Company" has the meaning ascribed thereto in the introduction hereto.
"Conversion Number" means the aggregate number of shares of Common Stock
issuable upon the exercise of an Optionee's entire Exchange Right, which number
shall initially be 6,674,006 with respect to Trump, and 1,407,017 with respect
to TCI, and which numbers shall be adjusted as provided in Article II.
"Conversion Partner" means an Optionee other than (i) Trump, (ii) TCI and
(iii) any Permitted Holder with respect to Trump.
"Conversion Right" has the meaning set forth in Section 2.2 hereof.
"Determination" has the meaning ascribed thereto in Section 2.7 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC thereunder, all as the same shall be in
effect at the relevant time.
"Exchange Right" has the meaning set forth in Section 2.1 hereof.
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"HSR" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
"Letter of Transmittal" means the form of letter attached hereto and made a
part hereof pursuant to which an Optionee may tender his Partnership Interests
in exchange for shares of Common Stock.
"Option" means, collectively, the Conversion Right and the Exchange Right.
"Optionee" means (i) Trump, (ii) TCI and (iii) each assignee of Partnership
Interests of Trump and TCI and any subsequent assignee.
"Partnership" has the meaning ascribed thereto in the recitals hereto.
"Partnership Agreement" has the meaning ascribed thereto in the recitals
hereto.
"Recapitalization Event" has the meaning set forth in Section 2.4(b)
hereof.
"Registrable Securities" shall mean, collectively, (i) the Common Stock
issued or issuable upon exercise of the Options and (ii) any securities issued
or issuable with respect to such shares of Common Stock by way of stock
dividend, stock split, in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise.
"Registration Expenses" means all expenses required to be disclosed in Item
13 of Part II of the Form S-1 registration statement, or in a comparable section
of any similar form permitting an underwritten public offering, as well as
expenses of underwriters customarily reimbursed by issuers for selling
stockholders and reasonable fees and expenses of one counsel for all selling
stockholders (in respect of a demand registration) and any underwriter (for both
a demand and piggyback registration), but not including underwriting discounts
and commissions and transfer taxes.
"Rights" means any rights, options, warrants or convertible securities (or
rights, options or warrants to purchase convertible securities) containing the
right to subscribe for or purchase shares of Common Stock.
"SEC" means the Securities and Exchange Commission and any successor
agency.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC thereunder, all as the same shall be in effect
at the relevant time.
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"Settlement Date" has the meaning ascribed thereto in Section 4.1(a)
hereof.
"Special Dividend Record Date" has the meaning set forth in the Company's
Amended and Restated Certificate of Incorporation.
"Stop Order" means, with respect to any registration of the Registrable
Securities or any portion thereof effected pursuant to this Agreement, any stop
order, injunction or other order or requirement of the SEC or any other
governmental or administrative agency, or any act by any court preventing or
otherwise limiting the sale of any Registrable Securities pursuant to such
registration.
"TCI" has the meaning ascribed thereto in the introduction hereto.
"Trump" has the meaning ascribed thereto in the introduction hereto.
Section 1.3. Rules of Construction. In this Agreement, whenever the context
so indicates, the singular or plural number, and the masculine, feminine or
neuter gender shall each be deemed to include the other, and the terms "he" and
"him" shall refer to an Optionee. Words such as "herein," "hereinafter," and
"hereunder" refer to this Agreement as a whole and not merely to a subdivision
in which such words appear unless the context otherwise requires.
ARTICLE II
The Option
Section 2.1. The Exchange Right. Each Optionee shall have the right (the
"Exchange Right"), exercisable at any time, to require the Company to exchange
shares of Common Stock for all or any portion of the properly tendered
Partnership Interests owned by such Optionee.
Section 2.2. The Conversion Right. The Company (acting through a majority
of the Special Committee) shall have the right (the "Conversion Right"),
exercisable at any time, to require a Conversion Partner to exchange all or any
portion of the Partnership Interests owned by such Conversion Partner for shares
of Common Stock.
Section 2.3. Shares Issuable Upon Exchange. The number of shares of Common
Stock to be issued by the Company to an Optionee upon exercise of an Exchange
Right or Conversion Right shall be equal to the product of (a) a fraction, (i)
the numerator of which is the Percentage Interest of the Partnership Interests
with respect to which the Option is exercised and (ii) the denominator of which
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is the aggregate Percentage Interest of the outstanding Partnership Interests
held by such Optionee immediately prior to such exercise, multiplied by (b) such
Optionee's Conversion Number.
Section 2.4. Adjustment of the Conversion Number. The Conversion Number
shall be adjusted as provided in this Section 2.4 as follows:
(a) An Optionee's Conversion Number shall be reduced by the number of
shares of Common Stock issued upon any exercise its Option. Upon an
assignment of Partnership Interests by an Optionee in accordance with the
terms of the Partnership Agreement, such Optionee's Conversion Number shall
be reduced appropriately, and the Conversion Number of the assignee of such
Partnership Interests shall be equal to the amount of such reduction, or in
the case of an assignee who is also a holder of Partnership Interests, such
assignee's Conversion Number shall increase by the amount of such
reduction.
(b) Except in respect of transactions described in paragraph (c)
below, in case the Company shall (i) pay a dividend on the Common Stock in
additional shares of equity securities of the Company, (ii) subdivide or
reclassify its Common Stock, (iii) combine its outstanding shares of Common
Stock into a smaller number of shares of Common Stock, or (iv) issue by
reclassification of its Common Stock other securities of the Company (each
a "Recapitalization Event"), each Optionee's Conversion Number immediately
prior to the Recapitalization Event shall be adjusted such that the
Conversion Number after the Recapitalization Event shall equal, the kind
and amount of shares and other securities and property which the Optionees
would have owned or have been entitled to receive after the happening of
such Recapitalization Event had all of the Options been exercised
immediately prior to such Recapitalization Event (or any record date with
respect thereto). Any adjustment made pursuant to this paragraph (b) shall
become effective immediately after the effective date of such event and
such adjustment shall be retroactive to the record date, if any, for such
event.
(c) In case the Company shall issue Rights pro rata to all holders of
Common Stock, and the consideration payable upon exercise or conversion of
any such Right to acquire one share of Common Stock is less than the
Current Market Price on the date of and immediately prior to such issuance
of Rights, then upon the expiration of the period during which such Rights
may be exercised or converted (the "Rights Exercise Period") each
Optionee's Conversion Number immediately prior to such expiration shall be
adjusted to be that number of shares of Common Stock equal to the product
of (i) such Optionee's Conversion Number immediately prior to such
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expiration and (ii) a fraction, (A) the numerator of which is equal to the
sum of the (I) number of shares of Common Stock outstanding immediately
prior to such issuance and the (II) number of shares issued upon exercise
or conversion of such Rights and (B) the denominator of which is equal to
the sum of (I) the total number of shares of Common Stock outstanding
immediately prior to such issuance and (II) the number of shares of Common
Stock which the aggregate consideration payable upon exercise or conversion
of such Rights would purchase at the Current Market Price on the date of
issuance of the Rights; provided, however, in no event shall such fraction
be less than one. If an Option is exercised during the period commencing on
the record date for the issuance of the Rights and ending on the expiration
of the Rights Exercise Period, then (r) the Conversion Number upon such
exercise shall be adjusted as provided in Section 2.4(c), as if such
exercise date were the end of the Rights Exercise Period, utilizing for
purposes of clause (ii)(A)(II) the number of shares of Common Stock issued
upon exercise or conversion of Rights as of such date; provided, however,
that in no event shall the fraction in clause (ii) be less than one; and
(s) at the end of the Rights Exercise Period, the Optionee shall be issued
an additional number of shares equal to the excess, if any, of the number
of shares of Common Stock which would have been issued had such Option been
exercised at the end of the Rights Exercise Period over the number of
shares actually issued upon exercise of the Option.
(d) In case the Percentage Interest of the Partnership Interests held
by an Optionee shall increase as the result of the contribution by such
Optionee of additional consideration or otherwise to the Partnership (a
"Contribution"), then the Conversion Number shall be adjusted such that (i)
such Optionee's Conversion Number immediately after the Contribution
divided by the sum of the number of outstanding shares of Common Stock plus
the new Aggregate Conversion Number shall equal (ii) the product of (A) a
fraction, (I) the numerator of which is the aggregate Percentage Interest
of such Optionee immediately after the Contribution, and (II) the
denominator of which is the aggregate Percentage Interest of such Optionee
immediately prior to the Contribution, and (B) a fraction, (I) the
numerator of which is such Optionee's Conversion Number immediately prior
to the Contribution, and (II) the denominator of which is the sum of the
Aggregate Conversion Number immediately prior to the Contribution and the
number of outstanding shares of Common Stock.
(e) In case of any consolidation or merger of the Company with or into
another entity as a result of which the holders of Common Stock become
holders of other shares or securities of the Company or of another entity
or person, or such holders receive cash or other assets, or in case of any
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sale or conveyance to another person of the property, assets or business of
the Company as an entirety or substantially as an entirety, the Company or
such successor or purchasing entity or person, as the case may be, shall
execute with the Optionees an agreement that (i) the Optionees shall have
the right thereafter to receive upon exercise of their Options the kind and
amount of shares and other securities and property which it would have
owned or have been entitled to receive after the happening of such
consolidation, merger, sale or conveyance had its Option been exercised
immediately prior to such action and (ii) that this Agreement including the
registration rights in Article V hereof, shall continue in full force and
effect notwithstanding the consummation of such transaction and that such
person or entity shall assume the obligations of the Company hereunder. The
agreements referred to in this Section 2.4(e) shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the
adjustments provided for in the other provisions in this Section 2.4. The
provisions of this Section 2.4(e) shall similarly apply to successive
consolidations, mergers, sales or conveyances.
Section 2.5. Company's Covenant Regarding Certain Rights Offerings. The
Company covenants and agrees that it shall not issue Rights pro rata to all
holders of Common Stock, unless such Rights are exercisable or convertible for a
period not in excess of sixty (60) days from their date of issuance.
Section 2.6. Reservation. The Company shall at all times reserve and keep
available out of its authorized but unissued Common Stock the full number of
shares of Common Stock deliverable at such time upon the exercise of the Options
and shall take all such action and obtain all such permits or orders as may be
necessary to enable the Company lawfully to issue such Common Stock upon the
exercise of the Option and to cause such Common Stock to be fully paid and
nonassessable.
Section 2.7. Determination of Number of Shares. The Company shall calculate
(each, a "Determination") the number of shares of Common Stock to be issued upon
the exercise of an Option pursuant to this Agreement in connection with such
exercise. After each exercise of an Option, the Company shall promptly provide
the Optionees a report, certified by the Chief Financial Officer of the Company
and its independent public accountants, setting forth the Determination, and
setting forth in reasonable detail the method of calculation and the facts upon
which such calculation is based. Each Determination will be made by the Company
in good faith and in accordance with the provisions hereof. The Company shall,
at any time upon the written request of an Optionee, furnish to such Optionee a
like report setting forth the number of shares of Common Stock issuable upon the
exercise of an Option and showing in reasonable detail the derivation of such
number of shares of Common Stock.
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Section 2.8. Continuous Offer. This Agreement is a continuous offer and may
not be withdrawn, changed or modified by the Company or a Conversion Partner
without the prior written consent of the Company and each Optionee.
ARTICLE III
Procedure for Exercising the Option
Section 3.1. The Exercise of the Exchange Right.
(a) Each Optionee desiring to exercise his Exchange Right with respect
to all or a portion of his Partnership Interests may do so by delivering to
the Company, at The Boardwalk and Mississippi Avenue, Atlantic City, New
Jersey 08401, Attn: Corporate Secretary (or such other address as the
Company shall provide in writing to each Optionee) a completed and duly
executed Letter of Transmittal and any other documents required by the
Letter of Transmittal.
(b) The tender of Partnership Interests pursuant to this Section 3.1
shall constitute a binding agreement between the tendering Optionee and the
Company and will not be subject to withdrawal or change except with the
consent of the Company.
(c) All questions as to the validity and form of any tender of
Partnership Interests upon the exercise of the Option will be determined in
good faith by the Company.
Section 3.2. Representation of Optionee. Any exercise of an Exchange Right
hereunder by an Optionee shall constitute a representation by such Optionee that
it is acquiring the Common Stock to be issued upon the exercise of the Exchange
Right for purposes of investment and not with a view to distribution (without
any limitation of any rights such Person may have under Article V hereof) in
violation of any federal or state securities laws.
Section 3.3. The Exercise of the Conversion Right.
(a) If the Company exercises the Conversion Right with respect to all
or a portion of the Partnership Interests of a Conversion Partner, the
Company may do so by delivering to the Conversion Partner at his address
appearing on the books of the Partnership, a notice setting forth (i) the
Company's election to exercise the Conversion Right, (ii) the portion of
the Partnership Interest with respect to which the Conversion Right is
exercised, and (iii) that delivery of shares of Common Stock as the
consideration for the Partnership Interest subject to the Conversion Right
shall not be made until the Conversion Partner has submitted a duly
completed Letter of Transmittal and any other documents required by the
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Letter of Transmittal, which Letter of Transmittal and other documents
shall be completed and delivered promptly to the Company.
(b) All questions as to the validity and form of any tender of
Partnership Interests upon the exercise of the Conversion Right will be
determined in good faith by the Company.
ARTICLE IV.
Settlement of the Option
Section 4.1. Settlement of the Option.
(a) Upon the terms and subject to the conditions of this Agreement,
the Company will issue shares of Common Stock for Partnership Interests
properly tendered on that date (the "Settlement Date") which is the later
of: (i) the expiration of three (3) Business Days from the date that the
Company receives the tender of the Partnership Interests in proper form and
meeting all of the requirements of this Agreement, which requirements may
be waived by the Company in connection with a Conversion Right, (ii) the
earlier of (A) ten (10) Business Days after the exercise of the Exchange
Right, or (B) one day after the Special Dividend Record Date, and (iii) the
expiration or termination of the waiting period applicable to each tender,
if any, under HSR. The Optionee shall be deemed to be the record holder of
the Common Stock issuable upon exercise of the Option on the Settlement
Date, notwithstanding the fact that certificates with respect to such
shares of Common Stock may not have been issued on such date.
(b) Upon the exercise of an Option, the General Partner shall use its
reasonable best efforts (including, without limitation, forming and
properly capitalizing a subsidiary for the purpose of holding all or a
portion of the Partnership Interests being transferred upon exercise of the
Option) and cooperate with the remaining Optionees to the extent necessary
to preserve the treatment of the Partnership as a pass-through entity for
federal tax purposes.
(c) Each tender and the issuance of Common Stock with respect thereto
will be subject to any change in securities or other applicable law
imposing limits or conditions on such tender or the issuance of Common
Stock with respect thereto.
(d) Payment for the Partnership Interests tendered pursuant to this
Agreement will be made only after timely receipt by the Company of (i)
Certificates of Interest with respect to such Partnership Interests, duly
completed and executed by the Partnership in the name of the Optionee and
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duly endorsed by the Optionee for transfer to, or accompanied by stock
powers duly executed by the Optionee in favor of, the Company, (ii) a
properly completed and duly executed Letter of Transmittal and (iii) any
other documents required by the Letter of Transmittal.
Section 4.2. Tax Withholding. Unless an exception applies under applicable
law and regulations, the Company will be required to withhold, and will
withhold, 31 percent (or such other amount as applicable law may require) of the
gross proceeds (including dollar equivalent of shares of Common Stock) paid to a
tendering Optionee unless the Optionee provides his tax identification number
(employer identification number or Social Security Number) and certifies that
such number is correct.
Section 4.3. Rights as Partner/Stockholder.
(a) No Optionee shall, by virtue of this Agreement, have any rights as
a stockholder of the Company until such time as that person becomes a
holder of record of shares of Common Stock.
(b) The Company, effective as of the Settlement Date with respect to
any tendered Partnership Interest, assumes all obligations related to the
tendered Partnership Interest and will hold the Person tendering that
Partnership Interest harmless from any such obligations other than with
respect to any breach of any representation contained in the Letter of
Transmittal to be delivered in connection with the exercise of rights
pursuant to this Agreement.
(c) Until the Settlement Date, each tendering Optionee shall continue
to own his respective tendered Partnership Interests, and will continue to
be treated as the holder of such tendered Partnership Interests for all
purposes of the Partnership Agreement, including, without limitation, for
purposes of voting, consent, allocations and distributions (subject only to
reasonable accounting conventions adopted by the Partnership for purposes
of determining the partners' varying percentage interests in the
Partnership during the taxable year). Tendered Partnership Interests will
be transferred to the Company only upon receipt by the tendering Optionee
of Common Stock in payment in full therefor.
Section 4.4. HSR. If in connection with the exercise of an Option, such
Optionee is required to file a notification form pursuant to the HSR, then as
promptly as practicable, and in any event within ten (10) Business Days
following the exercise of the Option, such Optionee and the Company shall each
prepare and file, or shall cause its "ultimate parent" (as defined in the HSR)
to prepare and file, any required notification and report form under the HSR, in
connection with the transactions contemplated hereby, the filing fees for which
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shall be borne by the Company. Such Optionee and the Company shall, or shall
cause their ultimate parents to, request early termination of the waiting period
with respect to such filing and to respond with reasonable diligence to any
request for additional information made in response to such filings.
ARTICLE V.
Registration Rights
Section 5.1. Registration on Demand.
(a) Upon written notice to the Company from holders of at least twenty
percent (20%) of the Registrable Securities, determined as if the Exchange
Right had been fully exercised, of their desire to cause a registration of
the Registrable Securities, the Company shall (i) inform the other holders
of Registrable Securities (at least 30 days prior to the proposed filing of
any registration statement), such notice to state the identity of the
holders requesting registration and the number of Registrable Securities
proposed to be sold thereby, and take appropriate action, on a reasonably
timely basis, to file with the SEC a registration statement on the
appropriate form covering all Registrable Securities specified in such
demand and by such other holders (by notice given to the Company within 15
days after the date the Company notified them of such demand), (ii) use
best efforts to cause such registration statement to become effective under
the Securities Act and (iii) use best efforts to qualify such resale under
those state securities laws reasonably requested by the holders of a
majority of Registrable Securities to be included in such registration;
provided, however, that such effort shall not require the Company to
qualify as a foreign corporation or subject itself to taxation in any
jurisdiction where it is not already so qualified or subject. The Company
shall be obligated to effect four (4) registrations pursuant to this
Section 5.1. The Company shall be obligated to effect any registration
pursuant to this Section 5.1 as promptly as practicable upon receipt from
the requisite number of holders of Registrable Securities of the notice
requesting such registration; provided, however, that the Company shall
have the right to delay any registration pursuant to this Section 5.1 for
one period of up to thirty (30) days if the Board of Directors of the
Company shall have determined (and passed a resolution to such effect) that
to effectuate such registration at such time would materially and adversely
affect the Company and be materially detrimental to the business and
operations thereof (a "Blackout Determination"), which period may be
extended for an additional thirty (30) days upon a second Blackout
Determination upon the expiration of the first thirty (30) day period.
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(b) The Company will be obligated to pay all Registration Expenses
with respect to the registrations pursuant to this Section 5.1.
(c) Registrable Securities will cease to be such when (i) a
registration statement covering such Registrable Securities has been
declared effective and they have been disposed of pursuant to such
effective registration statement, (ii) such Registrable Securities shall
have been otherwise transferred, and the Company shall have delivered new
certificates or other evidences of ownership for them not subject to any
stop transfer order or other restriction on transfer and not bearing a
legend restricting transfer in the absence of an effective registration or
an exemption from the registration requirements of the Securities Act and
subsequent disposition of them shall not require registration or
qualification of them under the Securities Act or any similar state law
then in force, or (iii) such Registrable Securities shall have ceased to be
outstanding.
(d) A registration requested pursuant to this Section 5.1 will not be
deemed to have been effected unless it has been declared effective by the
SEC and the Company has complied with all of its obligations under this
Agreement with respect thereto (without regard to the use of best efforts
or the like); provided that such registration will be deemed not to have
been effected if after such registration has become effective, the offering
of the Registrable Securities (or any portion thereof) pursuant to such
registration is withdrawn or is or becomes the subject of any Stop Order.
If (i) a registration requested pursuant to this Section 5.1 is deemed not
to have been effected or (ii) the registration requested pursuant to this
Section 5.1 does not remain effective for a period of at least 360 days,
then (x) such requested registration shall not be deemed to be an effective
registration pursuant to this Section 5.1 and (y) such requested
registration shall not reduce the number of registrations the Company shall
be obligated to effect pursuant to this Section 5.1.
(e) Any offering of Registrable Securities contemplated by this
Section 5.1 shall, unless the holders of a majority of the Registrable
Securities to be included in such offering determine otherwise, be a firm
commitment underwritten offering and the managing underwriter for such
offering shall be chosen by the holders of a majority of the Registrable
Securities to be included therein, which managing underwriter shall be
reasonably acceptable to the Company.
(f) The Company shall not, without the prior written consent of the
holders of a majority of the Registrable Securities to be included in any
registration requested pursuant to this Section 5.1, include in such
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registration, any other securities of the Company; provided, however, that
the Company may include in any such registration any securities to the
extent that the inclusion of such securities does not have the effect
referred to in Section 5.1(g) hereof and so long as the sale of such
securities is included in the underwriting of the Registrable Securities
and the same underwriters are used.
(g) If the managing underwriter in a public offering to be effected
pursuant to the provisions of this Section 5.1 advises the Company and the
holders of the Registrable Securities in writing that in its opinion
inclusion in the registration of the total amount of securities requested
to be registered will materially and adversely affect the offering price of
such securities or will materially and adversely affect the market for such
securities, then, to the extent necessary, up to the entire amount of any
securities proposed to be included in such registration which are not
Registrable Securities shall be eliminated.
(h) The Company shall not be required to register Registrable
Securities which, together with any other securities to be included in such
registration, have a value, based on the proposed offering price, of less
than $2,000,000.
Section 5.2. Incidental Registration.
(a) If the Company intends to file a registration statement on Form
S-1, S-2 or S-3 (or other appropriate form) for the registration of an
offering of equity securities with the SEC, the Company shall notify each
of the holders of record of Registrable Securities at least 30 days prior
to each such filing of the Company's intention to file such a registration
statement, such notice shall state the number of shares of equity
securities proposed to be registered thereby. If any holder of Registrable
Securities notifies the Company within ten days after receipt of such
notice from the Company of its desire to have included in such registration
statement any of its Registrable Securities, then the Company shall cause
the Company to include such shares in such registration statement. The
Company shall pay all the Registration Expenses of such registration.
(b) The Company may in its discretion withdraw any registration
statement filed pursuant to this Section 5.2 subsequent to its filing
without liability to the holders of Registrable Securities.
(c) In the event that the managing underwriter for any such offering
described in this Section 5.2 notifies the Company that, in good faith, it
is able to proceed with the proposed offering only with respect to a
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smaller number of securities (the "Maximum Number") than the total number
of Registrable Securities proposed to be offered by such holders and
securities proposed to be offered by the Company and all others entitled to
registration rights under such registration statement, then the Company
shall reduce the number of securities held by persons (the "Piggyback
Holders") other than the Company and persons exercising demand registration
rights to be included in such registration, to the extent necessary to
reduce the number of securities to be included in such registration to an
amount equal to the Maximum Number. Such amount will be allocated pro rata
in accordance with the number of securities proposed to be offered by each
Piggyback Holder (including the holders of Registrable Securities).
Section 5.3. Indemnity and Contribution.
(a) In connection with a registration statement filed with the
Commission pursuant to this Article V, the Company shall provide each
holder of Registrable Securities included in such registration statement,
and each officer and director of any thereof, and each person who controls
such holder within the meaning of Section 15 of the Securities Act, and
Section 20 of the Exchange Act, with indemnification against any losses,
claims, damages or liabilities, reasonable attorneys fees, costs or
expenses and costs and expenses of investigating and defending any such
claims (collectively "Damages"), joint or several, to which any of them may
become subject under the federal securities laws, or otherwise, in form and
substance as is customarily given to underwriters in an underwritten
offering of securities. Each holder including Registrable Securities in any
such registration statement agrees that it shall indemnify the Company, and
each officer and director thereof, and each person who controls the Company
within the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act, against any Damages, in form and substance as is
customarily given by selling shareholders to publicly held corporation in
an underwritten public offering of securities, but only to the extent that
such Damages (or proceedings in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained, on the effective date thereof, in any registration statement
under which such securities are registered under the Securities Act, in any
preliminary prospectus or final prospectus contained therein or in any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, which, in each such case, has been made in or omitted from such
registration statement, said preliminary or final prospectus or said
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amendment or supplement solely in reliance upon, and in conformity with,
written information furnished to the Company by such holder of Registrable
Securities.
(b) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section
5.3(a) is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, each of the
Company and the holders of the Registrable Securities included in such
registration shall contribute to the aggregate Damages contemplated by said
indemnity agreement incurred by each of the Company and such holders of the
Registrable Securities, as incurred, in such proportions as is appropriate
to reflect the relative fault of the Company and such holders of the
Registrable Securities in connection with the statements or omissions which
resulted in such Damages. The relative fault of the Company and such
holders of Registrable Securities shall be determined by reference to,
among other things, whether the untrue or alleged untrue statements of a
material fact or the omission or alleged omission to state a material fact
was supplied by the Company or one or more of the holders of Registrable
Securities, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
(c) In no event shall a holder of Registrable Securities be liable for
indemnification or contribution pursuant to this Article V in excess of the
net proceeds received upon the sale of such Registrable Securities.
Section 5.4. Certain Procedures. The Company shall provide each holder of
Registrable Securities included in any registration with a "cold comfort" letter
from the Company's independent public accountants, in customary form covering
those matters customarily covered by a "cold comfort" letter with respect to any
such registration statement and addressed to such holder, and the Company shall
use its best efforts to execute and deliver with underwriters for the offering
covered by any such registration statement, an underwriting agreement in form
and substance customarily executed for public offerings of common stock. Any
holder of Registrable Securities that includes shares in the registration shall
also be a party to such underwriting agreement.
Section 5.5. Rule 144 Reporting. With a view to making available to the
holders of Registrable Securities the benefits of certain rules and regulations
of the SEC which may permit the sale of the Registrable Securities to the public
without registration, the Company agrees to, at all times:
(1) make and keep available current public information concerning
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the Company as those terms are understood and defined in Rule 144
under the Securities Act ("Rule 144");
(2) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the
Exchange Act; and
(3) furnish to each holder of Registrable Securities forthwith
upon such holder's request a written statement by the Company as to
its compliance with the reporting requirements of Rule 144 and of the
Securities Act and the Exchange Act, a copy of the most recent annual
or quarterly report of the Company, and such other reports and
documents so filed by the Company as such holder may reasonably
request in availing itself of any rule or regulation of the SEC
allowing it to sell any such securities without registration.
Section 5.6. Lock-Ups. After receipt of any notice pursuant to Section 5.1
or 5.2 hereof, each holder of Registrable Securities and the Company shall not
demand or request a registration of securities of the Company or otherwise offer
or sell securities until the later of (i) 90 days after the effective date of
the registration statement in respect of which such notice was given, (ii) 150
days after the date such notice was given or (iii) the date such registration
statement is withdrawn by the Company. To the extent requested by the managing
underwriter in respect of an offering of securities of the Company described in
this Article V, each holder of Registrable Securities and the Company shall
agree to refrain from selling or offering to sell any securities of the Company
within 120 days after the effective date of any registration statement described
herein; provided, however, that any pledgee of Registrable Securities shall not
be bound by this requirement in connection with a private sale by it of its
collateral. Nothing in this Section 5.6 shall preclude the Company from issuing
shares of Registrable Securities upon exercise of an Option.
Section 5.7. No Inconsistent Provisions. The Company shall not, without the
prior written consent of the holders of a majority of the Registrable Securities
include, or grant to any Person the right to request the Company to include, in
such registration, any other securities of the Company that are inconsistent
with the priorities, rights and privileges of the holders of Registrable
Securities contained in this Agreement.
ARTICLE VI.
Miscellaneous
Section 6.1. Waiver, Amendment. Neither this Agreement nor any provisions
hereof shall be waived, modified, changed, discharged or terminated except by an
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instrument in writing signed by the party against whom any waiver, modification,
change, discharge or termination is sought.
Section 6.2. Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by either an Optionee or the Company, without the prior written
consent of the other parties; provided, however, that the rights granted to an
Optionee hereunder shall automatically be assigned in connection with an
assignment of Partnership Interests or Registrable Securities; and provided
further, however, that the rights granted hereunder may be assigned to and
exercised by a secured creditor to whom an Optionee has pledged Partnership
Interests or Registrable Securities.
Section 6.3. Entire Agreement. This Agreement sets forth the entire
agreement and understanding of the parties hereto with respect to the
transactions contemplated hereby and supersedes any and all prior agreements and
understandings relating to the subject matter hereof. No representation, promise
or statement of intention has been made by any party hereto which is not
embodied in this Agreement or the written statements, certificates, exhibits or
other documents delivered pursuant hereto or in connection with the transactions
contemplated hereby, and no party hereto shall be bound by or liable for any
alleged representation, promise or statement of intention not set forth herein
or therein. The documents referred to in the immediately preceding sentence are
incorporated by reference herein and shall be deemed a part of this Agreement.
By executing and delivering this Agreement, the Company and Trump agree to the
termination of the Initial Agreement and to the amendment and restatement
thereof by this Agreement.
Section 6.4. Severability. If any provision of this Agreement or the
application of any such provision to any person or circumstance shall be held
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, this Agreement shall continue in full force and effect without
said provision; provided that no such severance of provision shall be effective
if it materially changes the economic benefit of this Agreement to any Person.
Section 6.5. Section and Other Headings. The section headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 6.6. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, regardless of
the law that might be applied under principles of conflicts of law.
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Section 6.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which together shall be deemed to be one and the same
agreement.
Section 6.8. Specific Performance. Without limiting or waiving in any
respect any rights or remedies of an Optionee under this Agreement, or now or
hereinafter existing at law or in equity or by statute, the Company agrees that
the Optionees shall be entitled to seek specific performance of the obligations
to be performed by the Company in accordance with the provisions of this
Agreement.
Section 6.9. Notice. Each notice, demand, request, request for approval,
consent, approval, disapproval, designation or other communication (each of the
foregoing being referred to herein as a "notice") required or desired to be
given or made under this Agreement shall be in writing (except as otherwise
provided in this Agreement), and shall be effective and deemed to have been
received (i) when delivered in person, (ii) when sent by facsimile transmission
with receipt acknowledged, (iii) three (3) days after having been mailed by
certified or registered United States mail, postage prepaid, return receipt
requested, or (iv) the next business day after having been sent by a nationally
recognized overnight mail or courier service, receipt requested (a) if to any
Optionee, at such address or to the telefax number as such Optionee shall have
furnished the Company in writing, or (b) if to the Company, at the address of
its principal executive offices and addressed to the attention of the Corporate
Secretary, or at such other address or to the telefax number as the Company
shall have furnished to each Optionee.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and date first set forth above.
TRUMP HOTELS & CASINO RESORTS, INC.
By:
-----------------------------------
Robert M. Pickus
Executive Vice President
TRUMP CASINOS, INC.
By:
-----------------------------------
Donald J. Trump
President
-----------------------------------
Donald J. Trump
<PAGE>
LETTER OF TRANSMITTAL
To Tender Partnership Interests
Pursuant to the Amended and Restated Exchange and Registration
Rights Agreement
Dated as of April __, 1996
of
Trump Hotels & Casino Resorts, Inc.
TO: Trump Hotels & Casino Resorts, Inc.
Mississippi Avenue and The Boardwalk
Atlantic City, New Jersey 08401
Attn: Corporate Secretary
Description of Partnership Interests
- --------------------------------------------------------------------------------
Names(s) and Address(es) Partnership Interest Certificate(s)
of Registered Owners Enclosed (Attach additional list if
necessary)
Partnership Partnership Partnership
Interest Interests Interests
Certificate Represented Being
Number(s) by Tendered
Partnership
Interest
Certificate(s)
-------------------------------------------
Total
Unless otherwise indicated, it will be assumed that all Partnership Interests
evidenced by any Partnership Interest Certificate(s) delivered to the Company
are being tendered. If, for any reason, Partnership Interest Certificates are
not being issued by Trump Hotels & Casino Resorts Holdings, L.P., all provisions
in this Letter of Transmittal referring thereto shall be of no effect. See
instruction 4.
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Gentlemen:
The undersigned hereby tenders to Trump Hotels & Casino Resorts, Inc., a
Delaware corporation (the "Company"), the above-described Partnership Interests
as defined in the Company's Amended and Restated Exchange and Registration
Rights Agreement dated as of April __, 1996 (the "Agreement") in accordance with
the terms and conditions of the Agreement and this Letter of Transmittal (which
together constitutes the "Tender"), receipt of which is hereby acknowledged. All
terms used herein but not defined herein are used as defined in the Agreement.
Subject to, and effective upon, payment (i.e., issuance of shares of Common
Stock) for the Partnership Interests tendered herewith, the undersigned hereby
assigns and transfers to the Company all right, title and interest in and to all
the Partnership Interests that are being tendered hereby and irrevocably
constitutes and appoints the Company (the "Agent"), with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (a) present such Partnership Interests for
transfer on the Partnership's books and (b) receive all rights, privileges and
benefits, and any and all obligations and liabilities appertaining thereto and
otherwise exercise all rights of beneficial ownership of such Partnership
Interests, all in accordance with the terms of the Tender.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the tendered
Partnership Interests and that upon payment, the Company will acquire
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and the same will not be subject to any adverse claim. The
undersigned will, upon request, execute any additional documents deemed by the
Agent or the Company to be reasonably necessary or desirable to complete the
sale, assignment and transfer of the tendered Partnership Interests. If not sold
pursuant to an effective registration statement, the shares of Common Stock
issued will bear an appropriate legend indicating that such shares have not been
registered under the Securities Act and resale of such Common Stock is
restricted under applicable securities laws.
<PAGE>
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall not be affected by, and shall survive, the death or incapacity
of the undersigned, and any obligation of the undersigned hereunder shall be
binding upon the successors, assigns, heirs, executors, administrators and legal
representatives of the undersigned. Except as stated in the Agreement, this
Tender is irrevocable.
The undersigned understands that a tender of Partnership Interests pursuant
to the Agreement constitutes a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Agreement.
Unless otherwise indicated under "Special Delivery Instructions", please
mail the shares of Common Stock for the purchase price and/or return the
Partnership Interest Certificate for Partnership Interests not tendered (and
accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing under "Description of Partnership Interests."
In the event that the Special Delivery Instructions are completed, please
issue the shares of Common Stock for the purchase price and any Certificate for
Partnership Interests not tendered in the name of the registered holder(s) and
transmit the same to the person or persons so indicated.
The Company, effective as of the Settlement Date (as defined in the
Agreement), will assume all obligations related to the tendered Partnership
Interests and will hold the undersigned harmless from such obligations,
including any liabilities, demands, claims, actions or causes of action,
assessments, losses, fines, penalties, costs, damages and expenses as a result
of or arising out of the ownership of such tendered Partnership Interests.
The Company and the undersigned agree that they will cooperate with each
other and will make, execute, acknowledge, deliver, record and file, or cause to
be made, executed, acknowledged, delivered, recorded and filed, at such times
and places as the other may reasonably deem necessary, all other and further
documents and instruments, and will take all other and further actions, as the
other may reasonably request from time to time in order to effectuate the
purposes and provisions of the tender made pursuant to this Letter of
Transmittal.
-2-
<PAGE>
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 5 and 6)
================================================================================
To be completed ONLY if (a) the Certificate of Interests includes Partnership
Interests not tendered and/or (b) shares of Common Stock for the purchase price
of Partnership Interests purchased are to be sent (i) to someone other than the
undersigned or (ii) to the undersigned at an address other than that above.
Mail / / Certificate(s) for shares of Common Stock
/ / Certificate of Interests for Partnership
Interests not tendered
To:
Name
---------------------------------------------------------
(please print)
Address
------------------------------------------------------
- -------------------------------------------------------------
(include Zip Code)
- -------------------------------------------------------------
- -------------------------------------------------------------
(Tax Identification or Social Security Number)
================================================================================
<PAGE>
SIGN HERE
Complete Substitute Form W-9 included
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Signature(s) of holder of Partnership Interests)
(Must be signed by registered holder(s) as name(s) appear(s) on Partnership
Interest Certificate(s). If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, please set forth full title and see
instruction 5.
Dated
---------------------------------------------------------------------------
Name(s)
-------------------------------------------------------------------------
(please print)
Capacity
(Full Title)
--------------------------------------------------------------------
Address
-------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(include Zip Code)
Area Code and Tel. No.
----------------------------------------------------------
Tax Identification or
Social Security No.
-------------------------------------------------------------
(Complete Substitute Form W-9)
Guarantee of Signature(s)
(See Instruction 1)
Authorized
Signature
-----------------------------------------------------------------------
Name of
Firm
----------------------------------------------------------------------------
Dated
---------------------------------------------------------------------------
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the
Amended and Restated Exchange and Registration Rights Agreement
1. Guarantee of Signature. No signature guarantee on this Letter of
Transmittal is required unless the registered holder of the Partnership
Interests has completed the box entitled "Special Delivery Instructions". In
such case all signatures on this Letter of Transmittal must be guaranteed by a
member firm of any registered national securities exchange in the United States
or of the National Association of Securities Dealers, Inc. or by a commercial
bank or trust company (not a savings bank or a savings and loan association)
having an office, branch or agency in the United States.
2. Delivery of Letter of Transmittal and Partnership Interest
Certificate(s). This Letter of Transmittal is to be completed by the holder of
Partnership Interests. Partnership Interest Certificate(s) for all Partnership
Interests as well as a properly completed and duly executed Letter of
Transmittal, and any other documents required by this Letter of Transmittal,
must be received by the Agent.
No alternative, conditional or contingent tenders will be accepted.
3. Inadequate Space. If the space provided herein is inadequate, the
Partnership Interest Certificate numbers and/or other information required
should be listed on a separate schedule attached hereto.
4. Partial Tenders. If fewer than all the Partnership Interests evidenced
by any Certificate submitted are to be tendered, fill in the Percentage Interest
represented by the Partnership Interests which are to be tendered in the box
entitled "Units of Partnership Interests Being Tendered." In such case, a new
Partnership Interest Certificate for the remainder of the Partnership Interests
that was evidenced by old certificate(s) will be sent to the registered holder,
unless otherwise provided in the appropriate box on this Letter of Transmittal,
as soon as practicable. All Partnership Interests represented by Partnership
Interest Certificate(s) delivered to the Agent will be deemed to have been
tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal. The signature must correspond with
the name as written on the face of the Partnership Interest Certificate(s)
without any change whatsoever.
If any of the Partnership Interests tendered hereby are owned of record by
two or more joint owners, all such owners must sign the Letter of Transmittal.
<PAGE>
If any tendered Partnership Interests are registered in different names on
several Partnership Interest Certificates, it will be necessary to complete,
sign and submit as many separate Letters of Transmittal as there are different
registrations of Partnership Interest Certificates.
If this Letter of Transmittal is signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, each person should so indicate
when signing, and proper evidence satisfactory to the Agent of their authority
so to act must be submitted.
6. Special Delivery Instructions. If Partnership Interest Certificate(s)
for unpurchased Partnership Interests are to be returned to a person other than
the signer of this Letter of Transmittal or if a certificate for shares of
Common Stock is to be sent to someone other than the signer of this Letter of
Transmittal or to an address other than that shown above, the appropriate boxes
on this letter of Transmittal should be completed.
7. Waiver of Conditions. The Company reserves the right to waive any of the
specified conditions of the Tender in the case of the Partnership Interests
tendered.
8. Back-up Withholding. Under the Federal income tax law, a person
surrendering Partnership Interests must provide the Agent with his correct
taxpayer identification number ("TIN") on Substitute Form W-9 below unless an
exemption applies. If the correct TIN is not provided, a $50 penalty may be
imposed by the Internal Revenue Service and payments made in exchange for the
surrendered Partnership Interests may be subject to back-up withholding of that
rate provided by the Federal income tax law (such rate being at the date hereof,
31%).
The TIN that must be provided is that of the registered holder of the
Partnership Interests. The TIN for an individual is his social security number.
9. Requests for Assistance or Additional Copies. Questions and requests for
assistance or additional copies of the Agreement and the Letter of Transmittal
may be directed to the Agent at the address set forth above.
-2-
<PAGE>
IMPORTANT TAX INFORMATION
Under Federal income tax laws, a holder whose tendered Partnership
interests are accepted for payment is required by law to provide the Agent (as
payer) with his correct taxpayer identification number on Substitute Form W-9
below. If such holder is an individual, the taxpayer identification number is
his social security number. If the Agent is not provided with the correct
taxpayer identification number, the holder may be subject to a $50 penalty
imposed by the Internal Revenue Service. In addition, payments that are made to
such holder with respect to Partnership Interests purchased pursuant to the
Tender may be subject to back-up withholding.
If back-up withholding applies, the Agent is required to withhold that rate
provided by the Federal income tax law (such rate being at the date hereof, 31%)
of any such payments made to the holder of Partnership Interests. Shares of
Common Stock otherwise deliverable hereunder may, at the expense (and with all
risk of loss for the account) of the undersigned, be sold to pay such amounts.
Back-up withholding is not an additional tax. Rather, the tax liability of
persons subject to back-up withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained.
Purpose of Substitute Form W-9
To prevent back-up withholding on payments that are made to a holder of
Partnership Interests purchased pursuant to the Tender, the holder is required
to notify the Agent of his correct taxpayer identification number by completing
the form below certifying that the taxpayer identification number provided on
Substitute Form W-9 is correct.
What Number to Give the Agent
The holder is required to give the Agent the social security number or
employer identification number of the record owner of the Partnership Interests.
<PAGE>
PAYER'S NAME: Trump Hotels & Casino Resorts, Inc.
================================================================================
Substitute Part 1 - Please provide your TIN in the Social Security
Form W-9 box at right and certify by signing and Number/Employer
dating below Identification
Number
- --------------------------------------------------------------------------------
Department Certification - Under the penalties of
of the Perjury, (i) I certify that the
Treasury/ information provided on this form is
Internal true, correct and complete and (ii) I am
Revenue not subject to backup withholding
Service because: (a) I am exempt from backup
withholding, or (b) I have not been
notified by the Internal Revenue Service
(IRS) that I am subject to backup
withholding as a result of a failure to
report all interest or dividends, or (c)
the IRS has notified me that I am no
longer subject to backup withholding.
- --------------------------------------------------------------------------------
Signature ____________________ Date __________
================================================================================
NOTE:FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACK-UP WITHHOLDING
OF THAT RATE PROVIDED BY THE FEDERAL INCOME TAX LAW (SUCH RATE BEING AT THE
DATE HEREOF, 31%) OF ANY PAYMENTS MADE TO YOU UNDER THE AMENDED AND
RESTATED EXCHANGE AND REGISTRATION RIGHTS AGREEMENT OF TRUMP HOTELS &
CASINO RESORTS, INC.
1996 CONTRIBUTION AGREEMENT
1996 CONTRIBUTION AGREEMENT, dated as of April 17, 1996, between Donald J.
Trump ("Trump"), Trump Casinos, Inc., a New Jersey corporation wholly owned by
Trump (fka Trump Taj Mahal, Inc.) ("TCI"), THCR/LP Corporation, a New Jersey
corporation (fka TM/GP Corporation) ("THCR/LP" and collectively with Trump and
TCI, the "Transferors"), and Trump Hotels & Casino Resorts Holdings, L.P., a
Delaware limited partnership (the "Transferee").
W I T N E S S E T H:
WHEREAS, each of TCI and THCR/LP holds a 49.995% general partnership
interest in Trump Taj Mahal Associates ("Taj Associates, and each of Trump and
THCR Holding Corp. (fka Taj Mahal Holding Corp.)("THCR Holding") owns 50% of the
capital stock of Trump Atlantic City Corporation (fka The Trump Taj Mahal
Corporation) ("TACC"), which holds a .01% general partnership interest in Taj
Associates;
WHEREAS, concurrently with the execution of this Agreement, the Transferors
and Transferee are entering into a Second Amended and Restated Agreement of
Limited Partnership of the Transferee, dated as of the date hereof (the
"Partnership Agreement"), pursuant to which Trump will continue as a Limited
Partner (as defined therein) of the Transferee and each of THCR/LP and TCI will
become Limited Partners of the Transferee on the terms and subject to the
conditions set forth therein; and
WHEREAS, in connection with the acquisition of Taj Associates by the
Transferee and the other transactions related thereto (the "Merger
Transaction"), including the issuance of First Mortgage Notes by Trump Atlantic
City Associates and Trump Atlantic City Funding, Inc. (the "Mortgage Note
Offering"), following the consummation of the Mortgage Note Offering, Trump
Hotels & Casino Resorts, Inc. ("THCR") will cause THCR Holding to contribute the
shares of capital stock of TACC to THCR/LP, and each of Trump, TCI and THCR/LP
will then contribute their respective interests in Taj Associates and TACC to
the Transferee on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and the other agreements being entered in connection with the
Merger Transaction and other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
<PAGE>
ARTICLE I.
The Contribution
Section 1.1. The Capital Contribution. Effective as of the date hereof and
in fulfillment of the obligation of the Transferors to make the capital
contributions pursuant to Section 4.1 of the Partnership Agreement, each of the
Transferors hereby contributes, transfers, assigns and conveys to the Transferee
all right, title and interest in and to those assets of the respective
Transferor set forth opposite its name on Schedule A hereto (the foregoing being
referred to collectively as the "Assets").
Section 1.2. Direction of Transfer. Transferee hereby directs that the
Transferors effect the transfer of the Assets by contributing, transferring,
assigning and conveying such Assets, on behalf of the Transferee, directly to
the Transferee's wholly owned subsidiary, Trump Atlantic City Associates.
ARTICLE II.
The Consideration
Section 2.1. Obligations of the Transferee. In further consideration for
the contribution of the Assets pursuant to Section 1.1, the Transferee, on
behalf of itself and its subsidiaries now existing and hereafter acquired,
hereby:
(i) accepts all right, title and interest in and to the Assets and
does hereby assume and agree to promptly and fully pay, perform and
discharge when due all obligations and liabilities associated with the
Assets (collectively, the "Assumed Liabilities," including, without
limitation, all obligations and liabilities of each of TCI, THCR/LP and
TACC as a general partner of Taj Associates, but excluding any liabilities
arising out of breaches of the representations and warranties of the
Transferors contained in Article III hereof); and
(ii) agrees to indemnify the Transferors against all actions,
proceedings, costs, damages, claims and demands arising in connection with
the Assumed Liabilities subsequent to the date hereof except insofar as
such actions, proceedings, costs, damages, claims and demands arise out of
the gross negligence or willful misconduct of such Transferor.
2
<PAGE>
ARTICLE III.
Representations and Warranties
Each Transferor hereby severally represents and warrants to the Transferee
that, as of the date hereof:
Section 3.1. Due Execution and Delivery; Enforceability. This Agreement has
been duly executed and delivered by such Transferor in accordance with its terms
and is a legal, valid and binding agreement of such Transferor enforceable
against such Transferor in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws affecting creditors' rights and remedies generally and to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
Section 3.2. No Conflicts. The execution, delivery and performance of this
Agreement by such Transferor, and the consummation of the transactions
contemplated hereby, do not and will not conflict with or result in a breach or
violation of (i) any of the respective charters or by-laws of such Transferor or
any of its subsidiaries, as applicable, (ii) any of the terms or provisions of,
or constitute a default or cause an acceleration or any obligation under, or
result in the imposition or creation of (or the obligation to create or impose),
any security interest, mortgage, pledge, claim, lien, encumbrance or adverse
interest of any nature (each, a "Lien") with respect to any obligation, bond
agreement, note, debenture or other evidence of indebtedness or any indenture,
mortgage, deed of trust or other agreement, lease or instrument to which such
Transferor or any of its Affiliates is a party or by which such Transferor or
any of its Affiliates is bound or to which any of the properties or assets of
such Transferor or any of its Affiliates (including, without limitation, the
Assets transferred by such Transferor) may be subject or (iii) any Federal,
state or local law, rule, administrative regulation or ordinance or order of any
court or governmental agency, body or official having jurisdiction over such
Transferor or any of the Assets transferred by such Transferor, except, in the
case of clauses (ii) and (iii), for such conflicts, breaches, violations,
defaults or Liens that would not have a material adverse effect on the Assets
transferred by such Transferor (a "Material Adverse Effect").
Section 3.3. No Consents or Approvals. No authorization, approval, consent
or order of, or filing with, any court or governmental body, agency or official,
including the New Jersey Casino Control Commission, the New Jersey Department of
Environmental Protection and the Indiana Gaming Commission, is necessary in
connection with the transactions contemplated by this Agreement, except those of
which have been obtained or made on or prior to the date hereof.
3
<PAGE>
Section 3.4. Title to Assets. Such Transferor has good title to the Assets
that it is transferring pursuant to this Agreement, free and clear of any Liens.
ARTICLE IV.
Further Documents
Each of the Transferors and the Transferee hereby undertakes that it will,
and will cause its Affiliates to, execute and undertake to perform at the
Transferee's expense all such further agreements, documents and other actions as
may be reasonably necessary for vesting the Assets in the Transferee and Trump
AC and otherwise for giving full effect to this Agreement.
ARTICLE V.
Miscellaneous
Section 5.1. Waiver, Amendment. Neither this Agreement nor any provision
hereof shall be waived, amended, modified, changed, discharged or terminated
except by an instrument in writing executed by the Transferors and the
Transferee.
Section 5.2. Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by the Transferors or the Transferee, without the prior written
consent of each other parties.
Section 5.3. Entire Agreement. This Agreement, together with the schedule
hereto, sets forth the entire agreement and understanding of the parties hereto
with respect to the transactions contemplated hereby and supersedes any and all
prior agreements and understandings relating to the subject matter hereof. No
representation, promise or statement of intention has been made by any party
hereto which is not embodied in this Agreement or the written schedules or other
documents delivered pursuant hereto or in connection with the transactions
contemplated hereby, and no party hereto shall be bound by or liable for any
alleged representation, promise or statement of intention not set forth herein
or therein. All of the documents referred to in the immediately preceding
sentence are hereby incorporated by reference and shall be deemed a part of this
Agreement with the same effect as if set forth in full herein.
4
<PAGE>
Section 5.4. Severability. If any provision of this Agreement or the
application of any such provision to any person or circumstance shall be held
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, this Agreement shall continue in full force and effect without
said provision.
Section 5.5. Section and Other Headings. The section headings contained in
this Agreement and the schedules thereto are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
Section 5.6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW JERSEY, WITHOUT
GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF. THE TRANSFERORS AND
THE TRANSFEREE HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW JERSEY
STATE COURT SITTING IN ATLANTIC CITY, NEW JERSEY OR ANY FEDERAL COURT SITTING IN
ATLANTIC CITY, NEW JERSEY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPT FOR THEMSELVES AND
IN RESPECT OF THEIR PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE
AFORESAID COURTS. THE TRANSFERORS AND THE TRANSFEREE IRREVOCABLY WAIVE, TO THE
FULLEST EXTENT THEY MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION
WHICH THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN ANY
INCONVENIENT FORUM.
Section 5.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which together shall be deemed to be one and the same
agreement.
Section 5.8. Notice. Each notice, demand, request, request for approval,
consent, approval, disapproval, designation or other communication (each of the
foregoing being referred to herein as a "notice") required or desired to be
given or made under this Agreement shall be in writing (except as otherwise
provided in this Agreement), and shall be effective and deemed to have been
received (i) when delivered in person, (ii) when sent by facsimile transmission
with receipt acknowledged, (iii) three (3) days after having been mailed by
certified or registered United States mail, postage prepaid, return receipt
requested, or (iv) the next business day after having been sent by a nationally
recognized overnight mail or courier service, receipt requested (a) if to Trump
or TCI, at 725 Fifth Avenue, 26th Floor, New York, NY 10022 or (b) if to THCR/LP
or the Transferee, at Mississippi Avenue and The Boardwalk, Atlantic City, New
Jersey 08401 and addressed to the attention of the Corporate Secretary.
5
<PAGE>
Section 5.9. Compliance with State Gaming Regulations. Each of the
provisions of this Agreement is subject to and shall be enforced in compliance
with the provisions, regulations or approvals required by any state gaming
authority, including, without limitation, the New Jersey Casino Control
Commission and the Indiana Gaming Commission.
Section 5.10. Third Party Rights. Except as otherwise set forth herein,
nothing in this Agreement is intended or shall be construed to confer upon or
give any Person, other than the parties hereto, Trump AC and THCR, and each of
their respective successors, any rights or remedies under or by reason of this
Agreement or any transaction contemplated hereby.
Section 5.11. Limitation on Damages. No party shall be liable to the other
parties for any consequential damages resulting from a breach of this Agreement.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
------------------------------
DONALD J. TRUMP
(individually and as sole
stockholder of Trump
Casinos, Inc.)
TRUMP CASINOS, INC.
By:
------------------------------
Donald J. Trump
President
THCR/LP CORPORATION
By:
------------------------------
Nicholas F. Moles
Secretary
TRUMP HOTELS & CASINO RESORTS
HOLDINGS, L.P.
By: Trump Hotels & Casino Resorts, Inc.,
its general partner
By:
--------------------------
Robert M. Pickus
Executive Vice President
7
<PAGE>
Schedule A
Assets
Transferor Assets Transferred
- --------------------------------------------------------------------------------
Donald J. Trump 20 shares of Common Stock of
Trump Atlantic City Corporation
(fka The Trump Taj Mahal
Corporation)
Trump Casinos, Inc. 49.995% general partnership
interest in Trump Taj Mahal
Associates
THCR/LP Corporation 20 shares of Common Stock of
Trump Atlantic City Corporation
(fka The Trump Taj Mahal
Corporation)
and
49.995% general partnership
interest in Trump Taj Mahal
Associates
AMENDMENT TO TRADEMARK LICENSE AGREEMENT
AMENDMENT, dated as of April 17, 1996 (the "Amendment"), to the Trademark
License Agreement, dated as of June 12, 1995, by and between Donald J. Trump, an
individual with an address at 725 Fifth Avenue, New York, New York 10022
("Trump"), and Trump Hotels & Casino Resorts, Inc., a Delaware corporation, with
a principal place of business at Mississippi Avenue and The Boardwalk, Atlantic
City, New Jersey 08401 (the "Company").
W I T N E S S E T H:
WHEREAS, Trump and the Company are parties to that certain Trademark
License Agreement, dated as of June 12, 1995 (as the same may be amended,
modified or supplemented from time to time, the "License Agreement"); and
WHEREAS, as a result of the merger (the "Merger") of THCR Merger Corp., a
Delaware corporation ("Merger Sub") and a wholly owned subsidiary of the
Company, with and into Taj Mahal Holding Corp., a Delaware corporation ("Taj
Holding"), pursuant to the Agreement and Plan of Merger, dated as of January 8,
1996, among the Company, Taj Holding and Merger Sub, as amended by Amendment to
Agreement and Plan of Merger, dated as of January 31, 1996, and certain related
transactions, Trump Hotels & Casino Resorts Holdings, L.P., a Delaware limited
partnership and a subsidiary of the Company, indirectly wholly owns Trump Taj
Mahal Associates, the owner and operator of the Trump Taj Mahal Casino Resort.
WHEREAS, Trump and the Company have agreed that from and after the date
hereof, the License Agreement be amended subject to and upon the terms and
conditions set forth herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions. As used herein, all terms that are defined in the License
Agreement (except as modified hereby) shall have the same meanings herein.
2. Amendments.
2.1 The License Agreement is hereby amended by deleting the term "Retained
Casinos" each time such term appears therein and inserting in lieu thereof the
term "Retained Casino."
2.2 The definition of the term "Retained Casinos" set forth in paragraph
1.12 of the License Agreement is hereby amended and restated in its entirety to
read as follows:
<PAGE>
"1.12 "Retained Casino" shall mean Trump's Castle Hotel and Casino
("Trump's Castle") located in Atlantic City, New Jersey."
2.3 Paragraph 2.2 of the License Agreement is hereby amended by deleting
the phrase "the Amended and Restated License Agreement between Trump and Trump
Taj Mahal Associates dated April 1, 1991 and" and the word "respectively," set
forth therein.
2.4 Paragraph 3.1.3 of the License Agreement is hereby amended by deleting
the phrases "the Amended and Restated License Agreement between Trump and Trump
Taj Mahal Associates dated April 1, 1991 and" and ", and the security interests
in the registrations "Trump Castle" and "Trump Plaza" as of October 3, 1990 in
favor of Bankers Trust Company" set forth therein.
2.5 Schedule A to the License Agreement is hereby amended by adding the
following:
================================================================================
THE TRUMP TAJ MAHAL filed 74/587,101 perfume and cologne
10/18/94
TRUMP TAJ MAHAL filed 74/587,102 perfume and cologne
10/18/94
TAJ MAHAL filed 74/587,103 perfume and cologne
10/18/94
TAJ MAHAL filed 75/036,021 perfume, toilet water, and
12/22/95 cologne
================================================================================
2.6 Schedule B to the License Agreement is hereby amended and restated in
its entirety to read as follows:
Schedule B
"
RETAINED CASINO MARKS
I. U.S. Registrations.
Mark Reg. Date Reg. No. Goods/Service
---- --------- -------- -------------
TRUMP CASTLE 10/3/89 1,559,355 Hotel services
TRUMP CASTLE 9/19/89 1,557,303 Entertainment services,
namely providing casino
services
-2-
<PAGE>
II. U.S. Application.
Mark Reg. Date Serial No. Goods/Service
---- --------- ---------- -------------
TRUMP'S CASTLE 3/23/94 74-504,262 Entertainment services,
namely providing casino
services and hotel and
restaurant services "
3. License Agreement Ratified. Except to the extent hereby amended, the
License Agreement remains in full force and effect and is hereby ratified and
affirmed.
4. Effect of Amendment. This Amendment shall be limited precisely as
written and shall not be deemed (a) to be a consent granted pursuant to, or a
waiver or modification of, any other term or condition of the License Agreement
or any of the instruments or agreements referred to therein or (b) to prejudice
any right or rights which the parties hereto may now have or have in the future
under or in connection with the License Agreement or any of the instruments or
agreements referred to therein. Whenever the License Agreement is referred to in
the License Agreement or any of the instruments, agreements or other documents
or papers executed or delivered in connection therewith, such reference shall be
deemed to mean the License Agreement as modified by this Amendment.
5. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same agreement, it being understood that
all of the parties need not sign the same counterpart.
6. Governing Law. THIS AMENDMENT, THE LEGAL RELATIONS BETWEEN THE PARTIES
AND THE ADJUDICATION AND THE ENFORCEMENT THEREOF, SHALL BE GOVERNED BY AND
INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO APPLICABLE CONFLICT OF LAW RULES OR PRINCIPLES,
EXCEPT THAT ANY QUESTIONS GOVERNED BY THE TRADEMARK STATUTES OF THE UNITED
STATES OF AMERICA SHALL BE GOVERNED BY AND DETERMINED PURSUANT TO AND/OR UNDER
SUCH STATUTES.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and the year first above written.
------------------------------
DONALD J. TRUMP
TRUMP HOTELS & CASINO RESORTS, INC.
By:_________________________
Name: Robert M. Pickus
Title: Executive Vice President
AMENDMENT TO TRADEMARK SECURITY AGREEMENT
AMENDMENT, dated as of April 17, 1996 (the "Amendment"), to the Trademark
Security Agreement, dated as of June 12, 1995, by and between Donald J. Trump,
an individual with an address at 725 Fifth Avenue, New York, New York 10022
("Trump"), and Trump Hotels & Casino Resorts, Inc., a Delaware corporation, with
a principal place of business at Mississippi Avenue and The Boardwalk, Atlantic
City, New Jersey 08401 (the "Company").
W I T N E S S E T H:
WHEREAS, Trump and the Company are parties to that certain Trademark
Security Agreement, dated as of June 12, 1995 (as the same may be amended,
modified or supplemented from time to time, the "Security Agreement"); and
WHEREAS, as a result of the merger (the "Merger") of THCR Merger Corp., a
Delaware corporation ("Merger Sub") and a wholly owned subsidiary of the
Company, with and into Taj Mahal Holding Corp., a Delaware corporation ("Taj
Holding"), pursuant to the Agreement and Plan of Merger, dated as of January 8,
1996, among the Company, Taj Holding and Merger Sub, as amended by Amendment to
Agreement and Plan of Merger, dated as of January 31, 1996, and certain related
transactions, Trump Hotels & Casino Resorts Holdings, L.P., a Delaware limited
partnership and a subsidiary of the Company, indirectly wholly owns Trump Taj
Mahal Associates, the owner and operator of the Trump Taj Mahal Casino Resort.
WHEREAS, Trump and the Company have agreed that from and after the date
hereof, the Security Agreement be amended subject to and upon the terms and
conditions set forth herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions. As used herein, all terms that are defined in the Security
Agreement shall have the same meanings herein.
2. Amendments.
2.1 The Security Agreement is hereby amended by deleting the term "Retained
Casinos" each time such term appears therein and inserting in lieu thereof the
term "Retained Casino."
2.2 Paragraph 3(c) of the Security Agreement is hereby amended by deleting
the phrase "the Amended and Restated License Agreement between Trump and Trump
Taj Mahal Associates dated April 1, 1991 and" set forth therein.
<PAGE>
2.3 Paragraph 6(e) of the Security Agreement is hereby amended and restated
in its entirety to read as follows:
(e) If any Event of Default shall have occurred and Company has taken
possession of the Collateral or any part thereof pursuant to its rights
hereunder, Trump agrees to take whatever actions are reasonably necessary
to avoid confusion between Company's ownership and use of the Collateral,
on the one hand, and Trump's, his licensees' and/or his successors' use of
(i) the mark TRUMP in connection with hotel services and (ii) the mark
TRUMP CASTLE in connection with the services and products of Trump Castle,
on the other hand. Such actions shall include but shall not be limited to
Trump's entering into an appropriate consent agreement with Company
regarding Trump's and Company's concurrent use of the TRUMP mark or such
other actions as are deemed necessary or appropriate to protect Company's
rights in the TRUMP mark and to avoid confusion between Trump's and
Company's concurrent use of the TRUMP mark. "
2.4 Schedule A to the Security Agreement is hereby amended and replaced in
its entirety by the Amended Schedule A attached hereto.
3. Security Agreement Ratified. Except to the extent hereby amended, the
Security Agreement remains in full force and effect and is hereby ratified and
affirmed.
4. Effect of Amendment. This Amendment shall be limited precisely as
written and shall not be deemed (a) to be a consent granted pursuant to, or a
waiver or modification of, any other term or condition of the Security Agreement
or any of the instruments or agreements referred to therein or (b) to prejudice
any right or rights which the parties hereto may now have or have in the future
under or in connection with the Security Agreement or any of the instruments or
agreements referred to therein. Whenever the Security Agreement is referred to
in the Security Agreement or any of the instruments, agreements or other
documents or papers executed or delivered in connection therewith, such
reference shall be deemed to mean the Security Agreement as modified by this
Amendment.
5. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same agreement, it being understood that
all of the parties need not sign the same counterpart.
6. Governing Law. THIS AMENDMENT, THE LEGAL RELATIONS BETWEEN THE PARTIES
AND THE ADJUDICATION AND THE ENFORCEMENT THEREOF, SHALL BE GOVERNED BY AND
INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO APPLICABLE CONFLICT OF LAW RULES OR PRINCIPLES,
EXCEPT THAT ANY QUESTIONS GOVERNED BY THE TRADEMARK
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<PAGE>
STATUTES OF THE UNITED STATES OF AMERICA SHALL BE GOVERNED BY AND DETERMINED
PURSUANT TO AND/OR UNDER SUCH STATUTES.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the day and the year first above written.
----------------------------------
DONALD J. TRUMP
TRUMP HOTELS & CASINO RESORTS, INC.
By:
-------------------------------
Name: Robert M. Pickus
Title: Executive Vice President
Agreed to:
- --------------------------------
Name: Wallace B. Askins
Title: Member, Special Committee
of Trump Hotels & Casino
Resorts, Inc.
- --------------------------------
Name: Peter M. Ryan
Title: Member, Special Committee
of Trump Hotels & Casino
Resorts, Inc.
- ---------------------------------
Name: Don M. Thomas
Title: Member, Special Committee
of Trump Hotels & Casino
Resorts, Inc.
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<PAGE>
Amended Schedule A
To Amendment to Trademark Security Agreement
================================================================================
United States
MARK DATE REG./APP. NO. SERVICES
---- ---- ------------- --------
OYSTERS TRUMP 1/18/94 1,817,558 Hotel restaurant services
TRUMP PLAZA 10/30/90 1,620,477 Casino services; hotel,
bar and restaurant services
TRUMP TAJ MAHAL CASINO 3/8/94 1,825,666 See Attachment A hereto
RESORT
TRUMP TAJ MAHAL CASINO 3/2/93 1,755,971 casino services;
RESORT hotel services
TRUMP TAJ MAHAL CASINO 1/26/93 1,749,119 casino services;
RESORT hotel services
THE TRUMP TAJ MAHAL filed 74/587,101 perfume and cologne
10/18/94
TRUMP TAJ MAHAL filed 74/587,102 perfume and cologne
10/18/94
TAJ MAHAL filed 74/587,103 perfume and cologne
10/18/94
TAJ MAHAL filed 75/036,021 perfume, toilet water,
12/22/95 and cologne
================================================================================
<PAGE>
Attachment A
SPOONS; SUNGLASSES, SIGNAL BELLS, AND MAGNETS; JEWELRY; PENCILS, BALL POINT
PENS, AND STATIONERY; UMBRELLAS, LUGGAGE, HIP PACKS, TOTE BAGS AND CARRY-ON
BAGS; NON-METALLIC MONEY CLIPS, PLASTIC KEY CHAINS, AND ORNAMENTAL NOVELTY PINS;
MUGS, BEER STEINS, AND GLASSES FOR DRINKING LIQUOR; TOWELS; CLOTHING; NAMELY,
T-SHIRTS, JACKETS, SWEATSHIRT, SWEATPANTS, SWEATERS, HATS, VISORS, SOCKS, BOXER
SHORTS, ROBES, SHORTS, GOLF SHIRTS, NIGHT SHIRTS, AND BEACH COVER-UPS; PLUSH
TOYS, BOARD, CARD AND PARLOR GAMES, DICE, AND GAMING EQUIPMENT; NAMELY, GAMING
WHEELS; ASH TRAYS AND CIGARETTE LIGHTERS
THIRD AMENDED AND RESTATED PARTNERSHIP
AGREEMENT OF TRUMP PLAZA ASSOCIATES
THIRD AMENDED AND RESTATED PARTNERSHIP AGREEMENT made this 17th day of
April, 1996 by and between TRUMP PLAZA FUNDING, INC., a New Jersey corporation
("Funding"), as withdrawing partner, TRUMP ATLANTIC CITY ASSOCIATES, a New
Jersey general partnership having an address at Mississippi Avenue and The
Boardwalk, Atlantic City, New Jersey 08401 ("Trump AC"), and TRUMP ATLANTIC CITY
CORPORATION, a corporation organized under the laws of the State of Delaware
having an address at 1000 The Boardwalk, Atlantic City, New Jersey 08401
("TACC"). Trump AC and TACC are sometimes hereinafter individually referred to
as a "Partner" and collectively as "Partners."
WITNESSETH:
WHEREAS, Donald J. Trump ("Trump") and another entity, as general partners,
formed Trump Plaza Associates (the "Partnership") by entering into the Amended
and Restated Partnership Agreement of the Partnership under the laws of the
State of New Jersey on May 16, 1986, and amended such agreement on December 14,
1988, March 31, 1989 and August 8, 1990 (such Amended and Restated Partnership
Agreement, as so amended, is referred to herein as the "Original Agreement");
and
WHEREAS, pursuant to a plan of reorganization, the Partnership admitted
Funding as a Partner (in substitution of other partners) and TP/GP Corp., a New
Jersey corporation ("TP/GP"), as a general partner and TP/GP, Trump and Funding
amended and restated in its entirety the Original Agreement in an Amended and
Restated Partnership Agreement dated as of May 29, 1992, which set forth their
respective rights and obligations in connection with the Partnership (the "Prior
Agreement"); and
WHEREAS, in connection with a refinancing, TP/GP was merged with and into
Funding and Trump contributed and assigned his entire right, title and interest
in the Partnership to Trump AC and Funding and Trump AC amended and restated in
its entirety the Prior Agreement in a Second and Amended Restated partnership
Agreement dated as of June 24, 1993, which set forth their respective rights and
obligations in connection with the Partnership (the "Current Agreement"); and
WHEREAS, Funding has contributed and assigned its entire right, title and
interest in the Partnership to TACC and TACC desires to be substituted as a
general partner of the Partnership in lieu of Funding to the full extent of the
interest so assigned; and
<PAGE>
WHEREAS, TACC and Trump AC desire to set forth their respective rights and
obligations as Partners of the Partnership;
NOW, THEREFORE, TACC and Trump AC agree that the Current Agreement is
hereby amended and restated in its entirety effective as of the date hereof and
that the Partnership is hereby continued as a general partnership on the terms
and conditions set forth herein, and further agree as follows:
1. Definitions.
1 Certain Definitions.
In addition to the other terms defined elsewhere herein, the following
terms shall have the respective meanings set forth below:
"Accountants" means the national firm or firms of independent
certified public accountants selected by the Managing General Partner on
behalf of the Partnership to audit the books and records of the Partnership
and to prepare statements and reports in connection therewith, which
initially shall be Arthur Andersen LLP.
"Affiliate" means, with respect to any Person, any Person that
directly or indirectly through one or more intermediaries controls or is
controlled by or under common control with the specified Person.
"Bankruptcy" means, with respect to any Person, (i) the commencement
by such Person of any petition, case or proceeding seeking relief under any
provision or chapter of the federal bankruptcy code or any other federal or
state law relating to insolvency, bankruptcy or reorganization, (ii) an
adjudication that such Person is insolvent or bankrupt, (iii) the entry of
an order for relief under the federal bankruptcy code with respect to such
Person, (iv) the filing of any such petition or the commencement of any
such case or proceeding against such Person, unless such petition and the
case or proceeding initiated thereby are dismissed within ninety (90) days
from the date of such filing or (v) the filing of an answer by such Person
admitting the allegations of any such petition.
"Business Day" means a day other than a Saturday or Sunday or other
day on which banks are authorized or required by law to close in the City
of New York.
"Capital Account," when used with respect to a Partner, means an
amount equal to (a) the aggregate of (i) the initial amount credited to the
Capital Account of such Partner as reflected in Article 8 hereof, (ii) all
other voluntary capital contributions to the Partnership made or deemed to
be made by such Partner pursuant to this Agreement, (iii) all Net Income
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<PAGE>
and other items of income credited to the account of such Partner pursuant
to Article 9 and (iv) any additional amount resulting from the acquisition
of additional Partnership Interests, minus (b) the aggregate of (i) all Net
Losses and deductions charged to the account of such Partner pursuant to
Article 9 hereof, (ii) all distributions and (iii) any reduction in such
amount due to the transfer of a Partnership Interest. The Capital Accounts
shall be maintained in accordance with the regulations under Section 704(b)
and (c) of the Code. If a Partner is a Transferee, its Capital Account
derived from the transferor shall initially be deemed to be the product of
(x) a fraction, the numerator of which shall be the Percentage Interest
transferred to such Transferee and the denominator of which shall be the
Percentage Interest immediately prior to such transfer of the Partner
making such transfer, and (y) the Capital Account of the Partner making
such transfer immediately prior to such transfer. The Capital Account of a
Partner transferring a Partnership Interest to a Transferee shall be
reduced by the amount of its Capital Account which such Transferee is
initially deemed to have acquired.
"Capital Contribution" means, with respect to any Partner, the amount
of money and the initial Gross Asset Value of any Contributed Property (net
of liabilities to which such property is subject) set forth in Article 8,
as such Article 8 will be amended from time to time to reflect the amount
of money and the Gross Asset Value of any Contributed Property received by
the Partnership pursuant to any additional Capital Contribution.
"Casino Control Act" means the New Jersey Casino Control Act and the
regulations thereunder.
"Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time, as interpreted by the applicable regulations
thereunder. Any reference herein to a specific section or sections of the
Code shall be deemed to include a reference to any corresponding provision
of future law.
"Commission" means the New Jersey Casino Control Commission.
"Contributed Property" shall mean any property or asset, in such form
as may be permitted by the New Jersey Uniform Partnership Law, but
excluding cash, contributed or deemed contributed to the Partnership with
respect to the Partnership Interest held by each Partner.
"Depreciation" means, with respect to any asset of the Partnership for
any fiscal year or other period, the depreciation or amortization, as the
case may be, allowed or allowable for federal income tax purposes in
respect of such asset for such fiscal year or other period; provided,
however, that if there is a difference between the Gross Asset Value and
the adjusted tax basis of such asset, Depreciation shall mean "book
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<PAGE>
depreciation, depletion or amortization" as determined under Section
1.704-1(b)(2) (iv)(g)(3) of the Regulations.
"Entity" shall mean any general partnership, limited partnership,
limited liability company, corporation, joint venture, trust, business
trust, real estate investment trust, association or other entity.
"Fair Market Value" means (i) in the case of any security, its current
market price and (ii) in the case of any property or Indebtedness that is
not a security, the fair market value of such property or Indebtedness as
determined in good faith by the Managing General Partner.
"Gross Asset Value" means, with respect to any asset of the
Partnership, such asset's adjusted basis for federal income tax purposes,
except as follows:
(a) the initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be (i) in the case of any asset
described in Article 8, the gross fair market value ascribed thereto
in Article 8 and (ii) in the case of any other asset hereafter
contributed by a Partner, the gross Fair Market Value of such asset at
the time of its contribution;
(b) the Gross Asset Values of all Partnership assets shall be
adjusted to equal their respective gross Fair Market Values:
(i) immediately prior to a Capital Contribution (other than
a de minimis Capital Contribution) to the Partnership by a new or
existing Partner as consideration for a Partnership Interest;
(ii) immediately prior to the distribution by the
Partnership to a Partner of more than a de minimis amount of
Partnership property as consideration for the redemption of a
Partnership Interest;
(iii) immediately prior to the liquidation of the
Partnership within the meaning of Section 1.704-1(b)(2) (ii)(g)
of the Regulations; and
(iv) upon any other event as to which the Managing General
Partner reasonably determines that an adjustment is necessary or
appropriate to reflect the relative economic interests of the
Partners;
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<PAGE>
(c) the Gross Asset Values of Partnership assets distributed to any
Partner shall be the gross Fair Market Values of such assets as of the date
of distribution; and
(d) the Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such
assets pursuant to Sections 734(b) or 743(b) of the Code, but only to the
extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the Regulations;
provided, however, that Gross Asset Values shall not be adjusted pursuant
to this paragraph to the extent that the Managing General Partner
reasonably determines that an adjustment pursuant to paragraph (b) above is
necessary or appropriate in connection with a transaction that would
otherwise result in an adjustment pursuant to this paragraph (d).
At all times, Gross Asset Values shall be adjusted by any Depreciation taken
into account with respect to the Partnership's assets for purposes of computing
Net Income and Net Loss. Any adjustment to the Gross Asset Values of Partnership
property shall require an adjustment to the Partners' Capital Accounts; as for
the manner in which such adjustments are allocated to the Capital Accounts, see
clause (c) of the definition of Net Income and Net Loss in the case of
adjustment by Depreciation, and clause (d) of said definition in all other
cases.
"Indebtedness" means any obligation, whether or not contingent,
(i) in respect of borrowed money or evidenced by bonds, notes,
debentures or similar instruments, (ii) representing the balance
deferred and unpaid of the purchase price of any property (including
pursuant to capital leases), except any such balance that constitutes
an accrued expense or a trade payable, if and to the extent any of the
foregoing indebtedness would appear as a liability upon a balance
sheet prepared on a consolidated basis in accordance with GAAP, (iii)
to the extent not otherwise included, obligations under interest rate
exchange, currency exchange, swaps, futures or similar agreements, and
(iv) guaranties (other than endorsements for collection or deposit in
the ordinary course of business), direct or indirect, in any manner
(including, without limitation, reimbursement agreements in respect of
letters of credit), of all or any part of any Indebtedness of any
third party.
"Net Income" or "Net Loss" means, for each fiscal year or other
applicable period, an amount equal to the Partnership's net income or
loss for such year or period as determined for federal income tax
purposes by the Accountants, determined in accordance with Section
703(a) of the Code (for this purpose, all items of income, gain, loss
or deduction required to be stated separately pursuant to Section
703(a) of the Code shall be included in taxable income or loss), with
the following adjustments: (a) by including as an item of gross income
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<PAGE>
any tax-exempt income received by the Partnership; (b) by treating as
a deductible expense any expenditure of the Partnership described in
Section 705(a)(2)(B) of the Code (including amounts paid or incurred
to organize the Partnership (unless an election is made pursuant to
Code Section 709(b)) or to promote the sale of interests in the
Partnership and by treating deductions for any losses incurred in
connection with the sale or exchange of Partnership property
disallowed pursuant to Section 267(a)(1) or Section 707(b) of the Code
as expenditures described in Section 705(a)(2)(B) of the Code); (c) in
lieu of depreciation, depletion, amortization and other cost recovery
deductions taken into account in computing total income or loss, there
shall be taken into account Depreciation; (d) gain or loss resulting
from any disposition of Partnership property with respect to which
gain or loss is recognized for federal income tax purposes shall be
computed by reference to the Gross Asset Value of such property rather
than its adjusted tax basis; (e) in the event of an adjustment of the
Gross Asset Value of any Partnership asset which requires that the
Capital Accounts of the Partnership be adjusted pursuant to Regulation
Section 1.704-1(b)(2)(iv)(e), (f) and (m), the amount of such
adjustment is to be taken into account as additional Net Income or Net
Loss pursuant to Section 9.1; and (f) excluding any items specially
allocated pursuant to Section 9.2. Once an item of income, gain, loss
or deduction has been included in the initial computation of Net
Income or Net Loss and is subjected to the special allocation rules in
Section 9.2, Net Income and Net Loss shall be computed without regard
to such item.
"Nonrecourse Deductions" shall have the meaning set forth in
Sections 1.704-2(b)(1) and (c) of the Regulations.
"Nonrecourse Liabilities" shall have the meaning set forth in
Section 1.704-2(b)(3) of the Regulations.
"Partner" means each of TACC and Trump AC or any Transferee
thereof that becomes substituted as a Partner in accordance herewith
or any Person who is a partner of the Partnership at the time of
reference thereto.
"Partner Nonrecourse Debt" shall have the meaning set forth in
Section 1.704-2(b)(4) of the Regulations.
"Partner Nonrecourse Deductions" shall have the meaning set forth
in Section 1.704-2(i)(2) of the Regulations.
"Partnership Interest" means any interest of TACC or Trump AC or
any Transferee in the Partnership, including the right of such Partner
to benefits to which it may be entitled under, and the obligations of
such Partner to comply with, all the terms and provisions of this
Agreement.
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<PAGE>
"Partnership Minimum Gain" shall have the meaning set forth in
Section 1.704-2(b)(2) of the Regulations.
"Percentage Interest" means, with respect to any Partner, the
percentage ownership interest of such Partner in such items of the
Partnership as to which the term "Percentage Interests" is applied in
this Agreement, initially 1% for TACC and 99% for Trump AC, subject to
appropriate adjustment in accordance with the provisions hereof.
"Person" means any natural person or Entity.
"Pledge Agreements" means, collectively, the pledge agreement (1)
dated April 17, 1996 from Trump AC, as pledgor, to First Bank National
Association, as trustee, and (2) dated April 17, 1996 from TACC, as
pledgor, to First Bank National Association, as trustee, in each case
securing the Senior Secured Notes due 2005 of Trump Hotels & Casino Resorts
Holdings, L.P. and Trump Hotels & Casino Resorts Funding, Inc., as joint
obligors.
"Regulations" shall mean the income tax regulations promulgated under
the Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Tax Amounts" with respect to any year means an amount no greater than
(a) the higher of (i) the product of (A) the taxable income of the
Partnership (computed as if the Partnership were an individual taxpayer)
for such year as determined in good faith by the Managing Partner and (B)
the Tax Percentage and (ii) the product of (A) the alternative minimum
taxable income (computed as if the Partnership were an individual taxpayer)
attributable to the Partnership for such year as determined in good faith
by the Managing Partner and (B) the Tax Percentage, reduced by (b) to the
extent not previously taken into account, any income tax benefit
attributable to the Partnership which could be realized (without regard to
the actual realization) by its Partners in the current or any prior taxable
year, or portion thereof, commencing on the date of this Partnership
Agreement (including any tax losses or tax credits), computed at the
applicable Tax Percentage for the year that such benefit is taken into
account for purposes of this computation. Any part of the Tax Amount not
distributed in respect of a tax period for which it is calculated shall be
available for distribution in subsequent tax periods.
"Tax Distribution" shall mean distributions by the Partnership
pursuant to Section 10.2 hereof.
"Tax Items" shall have the meaning set forth in Section 9.3(a).
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<PAGE>
"Tax Payment Loan" shall have the meaning set forth in Section 10.4(a)
hereof.
"Tax Percentage" means the highest, aggregate effective marginal rate
of Federal, state and local income tax or, when applicable, alternative
minimum tax, to which any Partner would be subject in the relevant year of
determination (as certified to the Managing General Partner by the
Accountants); provided, however, that in no event shall the Tax Percentage
be greater than the sum of (x) the highest, aggregate effective marginal
rate of Federal, state, and local income tax, or when applicable,
alternative minimum tax, to which the Partnership would have been subject
if it were a C corporation for Federal income tax purposes, and (y) 5
percentage points. If any Partner is an S corporation, partnership, or
similar pass-through entity for Federal income tax purposes, the Tax
Percentage shall be computed based upon the tax rates applicable to the
ultimate shareholder or partner of such Partner, as the case may be.
"Transferee" means each Person who pursuant to Article 11 hereof or
otherwise acquires a Partnership Interest from a Partner or a Transferee
thereof.
"Withholding Tax Act" shall have the meaning set forth in Section
10.4(a) hereof.
2 Accounting Terms and Determinations. All references in this
Agreement to "generally accepted accounting principles" or "GAAP" shall mean
generally accepted accounting principles in effect in the United States of
America at the time of application thereof. Unless otherwise specified herein,
all accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made, and all financial
statements and certificates and reports as to financial matters required to be
furnished hereunder shall be prepared, in accordance with generally accepted
accounting principles, applied on a consistent basis.
2. Name. The name of the Partnership is Trump Plaza Associates.
3. Purpose. The character of the Partnership's business is (i) to own and
operate Trump Plaza Hotel and Casino in Atlantic City, New Jersey and conduct
casino gaming, and (ii) to do all things necessary, incidental, desirable or
appropriate in connection with the foregoing.
4. Place of Business. The principal place of business of the Partnership in
the State of New Jersey shall be Mississippi Avenue and The Boardwalk, Atlantic
City, New Jersey 08401.
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<PAGE>
5. Partners.
(a) The names and addresses of the Partners in the Partnership prior to
giving effect to the amendments and restatement contained herein were:
Trump Plaza Funding, Inc.
Mississippi Avenue and The Boardwalk
Atlantic City, New Jersey 08401
Trump Atlantic City Associates
Mississippi Avenue and The Boardwalk
Atlantic City, New Jersey 08401
(b) The names and addresses of the Partners in the Partnership after giving
effect to the amendments and restatement contained herein will be:
Trump Atlantic City Associates Trump Atlantic City Corporation
Mississippi Avenue and 1000 The Boardwalk
The Boardwalk Atlantic City, N.J. 08401
Atlantic City, N.J. 08401
6. Managing General Partner. All decisions affecting the business and
affairs of the Partnership, including, but not limited to the financing,
refinancing, sale, management or leasing of any Partnership property, or any
part thereof, the acquisition, development, financing, sale or leasing of other
property and all matters arising under this Agreement may be decided by either
Partner acting on behalf of the Partnership. Notwithstanding the foregoing,
Trump AC shall have the rights of the Managing General Partner as set forth
herein.
7. Term. The term for which the Partnership is to exist is to the close of
business on the 31st day of December, 2035, unless sooner terminated pursuant to
Section 13.1 hereof.
8. Capital Accounts. The capital account as of the date of this Agreement
of each Partner is as follows:
Trump AC $____________
TACC $____________
No interest shall be paid by the Partnership on balances in Capital Accounts nor
shall any other funds be distributed or distributable, except as provided in
this Agreement.
9. Allocations and Other Tax and Accounting Matters. The Net Income, Net
Loss and/or other Partnership items shall be allocated as follows:
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<PAGE>
1 Allocations of Net Income and Net Loss.
(a) Net Income. Except as otherwise provided herein, Net Income for any
fiscal year or other applicable period shall be allocated in the following order
and priority:
(i) First, to the Partners, until the cumulative Net Income allocated
pursuant to this subparagraph (a)(i) for the current and all prior periods
equals the cumulative Net Loss allocated pursuant to subparagraph (b) (ii)
hereof for all prior periods, among the Partners in the reverse order that
such Net Loss was allocated to the Permitted Partners pursuant to
subparagraph (b)(ii) hereof.
(ii) Thereafter, the balance of the Net Income, if any, shall be
allocated to the Partners in accordance with their respective Percentage
Interests.
(b) Net Loss. Except as otherwise provided herein, Net Loss of the
Partnership for each fiscal year or other applicable period shall be allocated
to the Partners in accordance with their respective Percentage Interests.
2 Special Allocations. Notwithstanding any provisions of Section 9.1, the
following special allocations shall be made, to the least extent necessary to
satisfy section 704(b) of the Code and the Regulations promulgated thereunder,
in the following order:
(a) Minimum Gain Chargeback (Nonrecourse Liabilities). If there is a net
decrease in Partnership Minimum Gain for any Partnership fiscal year (except as
a result of conversion or refinancing of Partnership Indebtedness, certain
capital contributions or revaluation of the Partnership property as further
outlined in Regulation Sections 1.704-2(d)(4), (f)(2) or (f)(3)), each Partner
shall be specially allocated items of Partnership income and gain for such year
(and, if necessary, subsequent years) in an amount equal to that Partner's share
of the net decrease in Partnership Minimum Gain. The items to be so allocated
shall be determined in accordance with Regulation Section 1.704-2(f)(6). This
paragraph (a) is intended to comply with the minimum gain chargeback requirement
in said section of the Regulations and shall be interpreted consistently
therewith. Allocations pursuant to those paragraph (a) shall be made in
proportion to the respective amounts required to be allocated to each partner
pursuant hereto.
(b) Minimum Gain Attributable to Partner Nonrecourse Debt. If there is a
net decrease in Minimum Gain Attributable to Partner Nonrecourse Debt during any
fiscal year (other than due to the conversion, refinancing or other change in
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<PAGE>
the debt instrument causing it to become partially or wholly nonrecourse,
certain capital contributions, or certain revaluations of Partnership property
(as further outlined in Regulation Section 1.704-2(i)(4)), each Partner shall be
specially allocated items of Partnership in come and gain for such year (and, if
necessary, subsequent years) in an amount equal to the Partner's share of the
net decrease in the Minimum Gain Attributable to Partner Nonrecourse Debt. The
items to be so allocated shall be determined in accordance with Regulation
Section 1.704-2(i)(4) and (j)(2). This paragraph (b) is intended to comply with
the minimum gain chargeback requirement with respect to Partner Nonrecourse Debt
contained in said section of the Regulations and shall be interpreted
consistently therewith. Allocations pursuant to this paragraph (b) shall be made
in proportion to the respective amounts required to be allocated to each Partner
pursuant hereto.
(c) Nonrecourse Deductions. Nonrecourse Deductions for any fiscal year or
other applicable period shall be allocated to the Partners in accordance with
their respective Percentage Interests.
(d) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for any
fiscal year or other applicable period shall be specially allocated to the
Partner that bears the economic risk of loss for the debt (i.e., the Partner
Nonrecourse Debt) in respect of which such Partner Nonrecourse Deductions are
attributable (as determined under Regulation Section 1.704-2(b)(4) and (i)(1)).
(e) Additional Allocations. Notwithstanding the foregoing, if, upon final
dissolution and termination of the Partnership and after taking into account all
allocations of Net Income and Net Loss (and other Tax Items) under this Section
9, the distributions to be made in accordance with the positive Capital Account
balances would result in a distribution that would be different from a
distribution under Section 10.3 hereof, then gross items of income and gain (and
other Tax Items) for the taxable year of the final dissolution and termination
(and, to the extent permitted under Section 761(c) of the Code, gross items of
income and gain (and other Tax Items) for the immediately preceding taxable
year) shall be allocated to the Partners to increase or decrease their Capital
Account balances, as the case may be, so that the final distribution will occur
in the same manner as a distribution under Section 10.3 hereof.
3 Tax Allocations.
(a) Generally. Subject to paragraphs (b) and (c) hereof, items of income,
gain, loss, deduction and credit to be allocated for income tax purposes
(collectively, "Tax Items") shall be allocated among the Partners on the same
basis as their respective book items.
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(b) Sections 1245/1250 Recapture. If any portion of gain from the sale of
property is treated as gain which is ordinary income by virtue of the
application of Code Sections 1245 or 1250 ("Affected Gain"), except to the
extent that the tax treatment of such sale is governed by Section 704(c) of the
Code as provided under Section 9.3(c) hereof, then (i) such Affected Gain, to
the extent attributable to depreciation or amortization allowed or allowable for
any taxable period subsequent to the date hereof, shall be allocated among the
Partners in the same proportion that the depreciation and amortization
deductions giving rise to the Affected Gain were allocated and (ii) other Tax
Items of gain of the same character that would have been recognized, but for the
application of Code Sections 1245 and/or 1250, shall be allocated away from
those Partners who are allocated Affected Gain pursuant to clause (i) so that,
to the extent possible, the other Partners are allocated the same amount, and
type, of capital gain that would have been allocated to them had Code Sections
1245 and/or 1250 not applied. For purposes hereof, in order to determine the
proportionate allocations of depreciation and amortization deductions for each
fiscal year or other applicable period, such deductions shall be deemed
allocated on the same basis as Net Income or Net Loss for such respective
period.
(c) Allocations Respecting Section 704(c). Property contributed to the
Partnership shall be subject to Section 704(c) of the Code and Regulation
Section 1.704-3 so that notwithstanding Section 9.2 hereof, taxable gain and
loss from disposition of such property contributed to the Partnership that is
subject to Section 704(c) of the Code shall be allocated on a property by
property basis in accordance with the Regulations promulgated thereunder.
Notwithstanding the foregoing, tax depreciation and amortization with respect to
property contributed pursuant to the Contribution Agreement between Donald J.
Trump and Trump Hotels & Casino Resorts Holdings L.P. ("THCR Holdings"), dated
as of June 12, 1995, shall be allocated on an aggregate basis for the purposes
of complying with the requirements of Section 704(c) of the Code, taking into
account, for any particular taxable year for which such allocation is made, the
aggregate amount of depreciation and amortization allowable with respect to the
aggregate basis of all such properties determined as of the date of contribution
(and not taking into account (i) any increase in the basis of such properties
resulting from improvements thereon made subsequent to the date of contribution
or (ii) any additional basis resulting from any new property purchased by any of
THCR Holdings, the Partnership or Trump AC in a taxable transaction subsequent
to the date of contribution; provided, however, that the Managing General
Partner shall not specially allocate any Tax Items (other than items of
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depreciation and amortization referred to in this Section 9.3(c)) to cure for
the effect of the ceiling rule set forth in Regulation Section 1.704-3(b).
4 Books of Account. At all times during the continuance of the Partnership,
the Managing General Partner shall maintain or cause to be maintained full,
true, complete and correct books of account in accordance with GAAP, using the
calendar year as the fiscal and taxable year of the Partnership. In addition,
the Partnership shall keep all records required to be kept pursuant to the New
Jersey Uniform Partnership Law.
5 Tax Certifications.
(a) The Partnership shall deliver to each Partner, from time to time as
necessary to implement timely the provisions of this Agreement, certificates
executed by its chief financial officer and the Accountants indicating the
respective calculations with respect to, and the amounts of, a Partner's share
of Tax Distributions and the amount of any repayments to the Partnership called
for thereunder, together with supporting schedules in reasonable detail all as
of each pertinent date and delivered at least 15 business days prior to the date
payment is due.
(b) The certificates delivered pursuant to paragraph (a) thereof shall be
deemed approved by all parties and the Partnership shall act upon such
certificate as provided in this Agreement unless within five business days of
delivery of such certificate a Partner objects to the contents of any
certificate by written notice in detail sufficient to state the basis for the
objection. The Partners shall negotiate in good faith to resolve such objection.
10. Distributions.
1 General. Distributions of cash or property may be made in accordance
herewith at such times as the Managing Partner deems appropriate in the order
provided in this Article 10, subject to the limitations, if any, set forth in
the agreements governing the Partnership's Indebtedness.
2 Distributions for Taxes.
(a) The Partnership shall distribute to each Partner in one or more
payments, including payments described in paragraph (b) from time to time during
each year, but in no event later than March 1 of the year immediately following
such year, an aggregate cash sum equal to the product of (i) Tax Amounts in
respect of the taxable year, or portion thereof, for which such distribution is
being made and (ii) the Partner's Percentage Interest. In addition, the
Partnership shall make additional pro rata distributions as are necessary to
reflect adjustments, as determined in good faith by the Managing General
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Partner, to any item affecting Tax Amounts, as reflected on the Partnership's
tax return, as it may be amended from time to time, or as a result of a
concluded tax audit.
(b) In addition to the certificates required by Section 9.5, the
Partnership shall furnish the Partners with such information as they shall
reasonably request from time to time respecting estimates of the Partnership's
taxable income or loss (and items thereof) for any fiscal year or portion
thereof. If, in any year, any Partner shall be required to make federal, state
or local estimated income tax payments under applicable law and regulations,
then, at least thirty (30) days prior to the date (the "Estimated Payment Date")
upon which any such payments are due, the Partnership shall deliver to each
Partner the certificates required by Section 9.5, indicating the amount (the
"Estimated Payment") of the tax in respect of the respective Tax Amounts due on
the Estimated Payment Date, and not later than fifteen (15) days prior to such
Estimated Payment Date, the Partnership shall pay to such Partner an amount
equal to such Estimated Payment. The amount of each Estimated Payment received
by such Partner shall be treated as a non-interest bearing advance against the
amounts distributable in respect of such Partner's pro rata share of Tax Amounts
to such Partner for such year. If the aggregate amount of the Estimated Payments
received by a Partner for any year shall exceed the distribution to which such
Partner actually is entitled under paragraph (a) above, such Partner shall
forthwith repay such excess to the Partnership on or before the date set forth
in paragraph (a) above, unless such excess shall have been paid to taxing
authorities in which event such excess shall be applied to reduce the amount
otherwise distributable pursuant to this Section 10.2 in respect of the
Partnership's next succeeding fiscal year or years. Each Partner shall seek, to
the extent entitled thereto, and contribute to the Partnership any refund of
taxes paid by such Partner out of amounts distributed pursuant to this Section
10.2 promptly after receipt of such refund.
3 Other Distributions. After payments and distributions, if any, of the
amounts set forth in Section 10.2 above, the Partnership may distribute, in the
discretion of the Managing General Partner, cash or other property, valued at
its Fair Market Value, to the Partners pro rata.
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4 Withholding Payments Required by Law.
(a) Unless treated as a Tax Payment Loan (as hereinafter defined), any
amount paid by the Partnership for or with respect to any Partner on account of
any withholding tax or other tax payable with respect to the income, profits or
distributions of the Partnership to the Code, the Regulations, or any state or
local statute, regulation or ordinance requiring such payment (a "Withholding
Tax Act") shall be treated as a distribution to such Partner for all purposes of
this Agreement, consistent with the character or source of the income, profits
or cash which gave rise to the payment or withholding obligation. To the extent
that the amount required to be remitted by the Partnership under the Withholding
Tax Act exceeds the amount then otherwise distributable to such Partner, unless
and to the extent that funds shall have been provided by such Partner pursuant
to the last sentence of this Section 10.4(a), the excess shall constitute a loan
from the Partnership to such Partner (a "Tax Payment Loan") which shall be
payable upon demand and shall bear interest, from the date that the Partnership
makes the payment to the relevant taxing authority, at the rate announced from
time to time by Citibank, N.A. (or any successor thereto) as its "prime rate",
compounded monthly (but in no event higher that the highest interest rate
permitted by applicable law). So long as any Tax Payment Loan to any Partner or
the interest thereon remains unpaid, the Partnership shall make future
distributions due to such Partner under this Agreement by applying the amount of
any such distributions first to the payment of any unpaid interest on such Tax
Payment Loan and then to the repayment of the principal thereof, and no such
future distributions shall be paid to such Partner until all of such principal
and interest has been paid in full. If the amount required to be remitted by the
Partnership under the Withholding Tax Act exceeds the amount then otherwise
distributable to a Partner, the Partnership shall notify such Partner at least
five (5) Business Days in advance of the date upon which the Partnership would
be required to make a Tax Payment Loan under this Section 10.4(a) (the "Tax
Payment Loan Date") and provide such Partner the opportunity to pay to the
Partnership, on or before the Tax Payment Loan Date, all or a portion of such
deficit.
(b) The Managing General Partner shall have the authority to take all
actions necessary to enable the Partnership to comply with the provision of any
Withholding Tax Act applicable to the Partnership and to carry out the
provisions of this Section 10.4. Nothing in this Section 10.4 shall create any
obligation on the Managing General Partner to advance funds to the Partnership
or to borrow funds from third parties in order to make any payments on account
of any liability of the Partnership under a Withholding Tax Act.
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(c) In the event that a Tax Payment Loan is not paid by a Partner within
thirty (30) days after written demand therefor is made by the Managing General
Partner, the Managaing General Partner may cause all distributions that would
otherwise be made to such Partner to be retained by the Partnership, up to the
amount necessary to repay such Tax Payment Loan, including all accrued and
unpaid interest thereon, and such retained distributions shall be applied
against, first, the accrued interest on and, second, the principal of, such Tax
Payment Loan.
5 Non-Recourse. Notwithstanding any other provisions of this Agreement, the
obligations to make distributions contemplated hereby shall be limited to the
assets of the Partnership and shall be non-recourse with respect to the Partners
and any of their assets.
11. Transfers and Withdrawal.
1 Sale and Transfer of Partnership Interests. No Partnership Interest or
any portion thereof may be sold or otherwise transferred, whether by gift,
pledge, by operation of law or otherwise, including any transfer upon
liquidation and dissolution (but excluding all transfers upon or by reason of
death), unless (x) the transfer and the Transferee are approved in advance by
all the Partners, except with respect to any transfer resulting from exercise of
any rights under the Pledge Agreements, (y) the transfer and the Transferee are
approved by the Commission and (z) the Transferee becomes a party to this
Agreement and assumes all of the obligations hereunder of its transferor and
agrees to be bound by the terms and conditions hereof in the same manner as its
transferor in each case to the extent of the Partnership Interest transferred.
Each Transferee shall have all rights hereunder as given to the original party
hereto or subsequent transferee thereof. The foregoing notwithstanding, no
transfer of a Partnership Interest (other than a transfer upon the exercise of
any rights under the Pledge Agreements) shall be effective if, in the opinion of
counsel to the Partnership, such transfer would cause the Partnership to be
treated as a "publicly-traded partnership" under the Code.
12. Books and Records.
1 Complete Books. At all times during the continuance of the Partnership,
the Partnership shall keep or cause to be kept full and complete books of
account in which shall be entered fully and accurately each transaction of the
Partnership, including the Capital Accounts of the Partners.
2 Method of Recordkeeping. All of the Partnership's books of account shall
at all times be maintained at the principal office of the Partnership and shall
be open to the inspection and examination of the Partners or their
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representatives during reasonable hours. All books and records of the
Partnership shall be kept on an accrual basis of accounting with an annual
accounting period ending December 31, except for the final accounting period
which shall end on the date of the final dissolution or termination of the
Partnership. All references in this Agreement to a "fiscal year" are to such an
annual accounting period.
3 Tax Information. The Partnership shall be treated as a Partnership for
federal and state income tax and franchise tax purposes; accordingly, the
Partnership shall cause to be prepared and filed on or before the due date
annually a United States Partnership Return of Income and any necessary state
income and franchise tax returns on a partnership basis. Such returns shall be
submitted to the Partners for review no later than the tenth Business Day prior
to the date on which such return is due, as such date may be extended as the
result of any extension obtained. Each Partner shall notify the other Partners
upon receipt of any notice of any tax examination by any federal, state or local
authority pertaining to the Partnership or the other Partners. No settlement of
any tax issue concerning or having an effect upon the Partnership shall be made
by any Partner except upon the approval of the tax matters partner, designated
pursuant to Section 14.12.
13. Dissolution, Liquidation and Winding-Up.
1 Accounting. In the event of the dissolution, liquidation and winding-up
of the Partnership, a proper accounting shall be made of the Capital Account of
each Partner and of the Net Income or Net Loss of the Partnership from the date
of the last previous accounting to the date of dissolution.
2 Distribution on Dissolution. In the event of the dissolution and
liquidation of the Partnership for any reason, the assets of the Partnership
shall be liquidated for distribution in the following rank and order:
(a) Payment of creditors of the Partnership, other than creditors who
are Partners;
(b) Payment of creditors of the Partnership who are Partners;
(c) Establishment of reserves to provide for contingent liabilities,
if any; and
(d) To the Partners in accordance with the positive balances in their
Capital Accounts after giving effect to all contributions, distributions
and allocations for all periods.
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3 Timing Requirements.
(a) In the event that the Partnership is "liquidated" within the meaning of
Section 1.704-1(b)(2)(ii)(g) of the Regulations, any and all distributions to
the Partners pursuant to Section 13.2(d) hereof shall be made no later than the
later to occur of (i) the last day of the taxable year of the Partnership in
which such liquidation occurs or (ii) ninety (90) days after the date of such
liquidation.
(b) Notwithstanding the provisions of Section 13.2 hereof which require
liquidation of the assets of the Partnership, but subject to the order of
priorities set forth therein, if prior to or upon dissolution of the Partnership
the Partners determine that an immediate sale of part or all of the
Partnership's assets would be impractical or would cause undue loss to the
Partners, the Partners may defer for a reasonable time the liquidation of any
assets except those necessary to satisfy liabilities of the Partnership.
4 Dissolution. The Partnership shall be dissolved upon the occurrence of
any of the following events:
(a) the dissolution, liquidation, termination, withdrawal, death,
insanity, retirement or Bankruptcy of a Partner or other event causing
dissolution under the New Jersey Uniform Partnership Law;
(b) the election to dissolve the Partnership made in writing by the
Partners;
(c) the sale or other disposition of all or substantially all of the
assets of the Partnership unless the Partners elect to continue the
Partnership business for the purpose of the receipt and the collection of
indebtedness or the collection of any other consideration to be received in
exchange for the assets of the Partnership (which activities shall be
deemed to be part of the winding-up of the affairs of the Partnership); or
(d) the entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the New Jersey Uniform Partnership Law, which
decree is final and not subject to appeal.
Following an event causing a dissolution of the Partnership, the
Partnership shall be wound-up and terminated unless the business of the
Partnership is continued by the Partnership in reconstituted form pursuant to
Section 13.5.
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5 Continuation of the Partnership. Upon the Bankruptcy, dissolution,
liquidation, withdrawal, death, retirement or insanity of any Partner, or any
other event of dissolution under the New Jersey Uniform Partnership Law, within
90 days thereafter, all of the remaining Partners may elect to reconstitute the
Partnership and continue its business.
14. Miscellaneous.
1 Amendments. This Agreement may be amended, modified or cancelled,
and the terms and conditions hereof may be waived, only by a written instrument
signed by each of its Partners.
2 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed as original, but all of which together shall
constitute one and the same instrument.
3 Further Assurances. Each of the Partners hereby agrees to execute and
deliver all such other and additional instruments and documents and to do such
other acts and things as may be necessary to more fully effectuate this
Partnership, carry on the Partnership's business and effectuate this Agreement.
4 Variations of Pronouns. All pronouns and all variations thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the Person may require.
5 Non-Waiver. No delay on the part of any party in exercising any right
hereunder shall operate as a waiver thereof, nor shall any waiver, express or
implied, by any Partner of any right hereunder or of any failure to perform or
breach hereof by any other Partner constitute or be deemed a waiver of any other
right hereunder or of any other failure to perform or breach hereof by the same
or any other Partner, whether or a similar or dissimilar nature thereof.
6 Survival of Rights, Duties and Obligations. Termination of the
Partnership for any cause shall not release any party from any liability which
at the time of termination had already accrued to any other party or which
thereafter may accrue in respect of any act or omission prior to such
termination.
7 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
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remaining provisions hereof or affecting the validity or enforceability of such
provisions in any other jurisdiction.
8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey regardless of the laws that
might otherwise under applicable principles of conflict of laws thereof.
9 Casino Control Commission Regulation. Notwithstanding anything to the
contrary contained herein:
(i) this Agreement will be deemed to include all provisions required
by the Casino Control Act and to the extent that anything contained herein
is inconsistent therewith, the provisions of the Casino Control Act shall
govern. All provisions of the Casino Control Act, to the extent required by
law to be included in this Agreement, are incorporated herein by reference
as if fully restated in this Agreement.
(ii) All securities (as such term is defined in the Casino Control
Act) of the Partnership are held subject to the condition that, as of the
date the Commission serves notice of its determination of disqualification
of a holder thereof, such holder shall (a) not receive any dividends or
interest upon any such securities; (b) not exercise, directly or through
any trustee or nominee, any voting right conferred by such securities; and
(c) not receive any remuneration in any form from the Partnership for
services rendered or otherwise.
(iii) If the continued holding of a Partnership Interest by any
Partner will disqualify the Partnership to continue as the owner and
operator of a casino licensed in the State of New Jersey under the
provisions of the Casino Control Act, such Partner shall enter into such
escrow, trust or similar arrangement as may be required by the Commission
under the circumstances. It is the intent of this Section 13.9 to set forth
procedures to permit the Partnership to continue, on an uninterrupted
basis, as the owner and operator of a casino licensed under the provisions
of the Casino Control Act.
(iv) (a) All transfers (as defined by the Casino Control Act) of
securities (as defined by the Casino Control Act), shares and other
interests in the Partnership shall be subject to the right of prior
approval by the Commission; and (b) the Partnership shall have the absolute
right to repurchase at the market price or purchase price, whichever is the
lesser, any security, share or other interest in the Partnership in the
event that the Commission disapproves a transfer in accordance with the
provisions of the Casino Control Act.
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(v) Each Partner hereby agrees to cooperate reasonably and promptly
with the others in obtaining any and all licenses, permits or approvals
required by any governmental authority or deemed expedient by the Partners
in connection with the Casino Control Act.
(vi) Each Partner shall have the right to offer to acquire any
Partnership Interest required to be disposed of pursuant to this Section
13.9 on the same basis as other potential purchasers, subject to the Casino
Control Act.
10 Certificate of Interest. Notwithstanding anything to the contrary
contained in this Agreement:
(i) The interest of each Partner in the Partnership shall be evidenced
by a Certificate of Interest. The Certificates of Interest in the
Partnership, together with a Certificate Transfer Ledger, shall be
maintained at the principal office of the Partnership. Each such
Certificate shall be serially numbered and shall be issued by, or at the
written direction of, each of the General Partners to the lawful holder of
an interest in the Partnership, upon payment by the issuee of the full
amount of the capital contributions then due with respect to its interest
in the Partnership represented by such Certificate. All Certificates shall
be executed in the name of the Partnership by each of the General Partners
or their designee(s). Each Certificate shall state on its face the name of
the registered holder thereof and the then interest in the Partnership held
by the issuee; and shall bear, on both sides thereof, a statement of the
restrictions imposed by Section 105 of the Casino Control Act.
(ii) Certificates of Interest in the Partnership may be transferred by
the lawful holders thereof only in connection with the transfer of all or
part of the interest of such holder in the Partnership, and only in
accordance with the provisions of this Agreement. All such transfers shall
be effected by duly executed and acknowledged instruments of assignment,
each of which shall be fully recorded on the Certificate Transfer Ledger.
No effect shall be given to any purported assignment of a Certificate, or
transfer of the interest in the Partnership evidenced thereby, unless such
assignment and transfer shall be in compliance with the terms and
provisions of this Agreement, and any attempted assignment or transfer in
contravention hereof shall be ineffectual.
(iii) In the event that a Certificate of Interest shall be lost,
stolen, destroyed or mutilated, the Partnership may cause a replacement
Certificate to be issued upon such terms and conditions as shall be fixed
by the Partners, including, without limitation, provision for indemnity and
the posting of a bond or other adequate security as security therefor. No
replacement Certificate shall be issued to any person unless such person
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has surrendered the Certificate to be replaced, or has complied with the
terms of this subsection.
(iv) The Certificate Transfer Ledger, containing the names and
addresses of all Partners and the interest of each Partner in the
Partnership, shall be open to the inspection of the Partners at the
principal office of the Partnership during usual business hours upon
request of any Partner. Such Ledger shall, in addition, be available for
inspection by the Commission or the Division of Gaming Enforcement of the
State of New Jersey and each of their respective authorized agents at all
reasonable times without notice.
11 Headings. The descriptive headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
12 Tax Matters Partner. Trump AC shall be the "Tax Matters Partner" under
the Code and all applicable tax laws and shall, in its sole discretion, make or
revoke all tax elections, resolve allocations issues and handle all tax audits,
controversies and proceedings. TACC and Trump AC agree that Trump AC, acting
through the Partnership, shall have the authority to handle and resolve all tax
controversies involving Trump AC, TACC and/or the Partnership in such manner as
Trump AC in its sole discretion determines, provided that the Partnership shall
bear all accounting and legal expenses incurred in connection therewith.
Notwithstanding the foregoing, Trump shall have the right to control the
resolution of tax matters affecting or relating to the Partnership in respect to
periods ending on or prior to the date hereof, including requiring the
Partnership to adjust the tax basis of assets held by the Partnership in
connection with the resolution of such tax matters to the extent such basis
adjustments shall not reduce Trump Hotels & Casino Resorts, Inc.'s share of
federal income tax depreciation and cost recovery deductions in respect of
assets held by the Partnership as of the date hereof and contributions of any
interest in the Partnership to Trump AC.
13 Indemnification. The Partnership shall indemnify and hold harmless each
Partner, its Affiliates, and all officers, directors, employees and agents
(individually, an "Agent") of such Partner, and its affiliates (individually, an
"Indemnitee") from and against any and all losses, claims, demands, costs,
damages, liabilities, joint and several, expenses of any nature (including
reasonable attorneys' fees and disbursements), judgments, fines, settlements,
and other amounts arising from any and all claims, demands, actions, suits, or
proceedings, civil, criminal, administrative or investigative, brought or
threatened in which the Indemnitee may be involved, or threatened to be
involved, as a party or otherwise, arising out of or incidental to the business
of the Partnership or their status as an Agent including without limitation
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liabilities under the Federal and state securities laws, regardless of whether
the Indemnitee continues to be a Partner, an Affiliate of a Partner, or an Agent
of a Partner or of an Affiliate of a Partner at the time any such liability or
expense is paid or incurred, so long as such indemnified person acted in good
faith on behalf of the Partnership, TACC or Trump AC and in a manner reasonably
believed by such person to be in or not opposed to the best interests of the
Partnership, TACC or Trump AC but only if such course of conduct does not
constitute gross negligence or willful misconduct; provided that such
indemnification or agreement to hold harmless shall be recoverable only out of
assets of the Partnership and not from the Partners and; provided, further that
no indemnification shall be made to or on behalf of an Indemnitee if a judgment
or other final adjudication adverse to the Indemnitee establishes that his or
its acts or omissions (i) in the case of an Indemnitee who is or was a director
of TACC or the Trump AC managing general partner, were in breach of his duty of
loyalty to TACC or the Trump AC managing general partner, as the case may be, or
were not in good faith or involved a knowing violation of law, or resulted in
receipt by the Indemnitee of an improper personal benefit or (ii) in the case of
all other Indemnitees, constituted gross negligence or willful misconduct.
Termination of any proceeding by judgment, order, settlement, conviction or upon
a plea of nolo contendre or its equivalent shall not itself create a presumption
that such Indemnitee did not meet the applicable standard of conduct for
indemnification. Indemnity shall be paid in advance of the final disposition of
the proceeding to an Indemnitee provided that the Indemnitee undertakes to repay
the Partnership if it shall ultimately be determined that he or it is not
entitled to indemnification as provided by this Section 14.13. The
indemnification provided by this Section 14.13 shall be in addition to any other
rights to which an Indemnitee may be entitled under any agreement, as a matter
of law or equity, or otherwise, both as to action in the Indemnitee's capacity
as a Partner, an Affiliate of a Partner, or as an officer, director, employee or
agent of a Partner or Affiliate of a Partner and as to any action in another
capacity, and shall continue as to an Indemnitee who has ceased to serve in such
capacity and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee. No Indemnitee shall be denied indemnification
in whole or in part under this Section 14.13 by reason of the fact that the
Indemnitee had an interest in the transaction with respect to which the
indemnification applies if such interest was fully disclosed and the transaction
was approved by Funding.
Any indemnification or advance under this Section 14.13 to an Indemnitee
shall be made promptly and in any event within thirty (30) days upon the written
request of the individual seeking indemnification. The right to indemnification
or advances as granted under this Section 14.13 shall be enforceable by any such
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individual seeking indemnification in any court of competent jurisdiction, if
the Partnership denies such request, in whole or in part, or if no disposition
thereof is made within thirty (30) days. Such person's costs and expenses
incurred in connection with successfully establishing his right to
indemnification or advances, in whole or in part, in any such action shall also
be indemnified by the Partnership. It shall be a defense to any such action that
there has been a judgment or other final adjudication adverse to the claimant
which established that his acts or omissions did not meet the standard of
conduct required by the first paragraph of this Section 14.13, but the burden of
proving such defense shall be on the Partnership. Neither the failure of the
Partnership to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct, nor the fact that there
has been an actual determination by the Partnership that the claimant has not
met such applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable standard of
conduct.
The Partnership shall have the power to purchase and maintain insurance,
and to furnish similar protection (including but not limited to providing a
trust fund, letter of credit, self-insurance or indemnification contract), on
behalf of any individual to whom indemnification or advances may be paid
hereunder, against any expenses, fees or liabilities for which indemnification
or advances may be paid hereunder.
14 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their heirs, executors, administrators,
successors, legal representatives and permitted assigns, including any pledgee
upon the foreclosure of any pledge of a Partner's Partnership Interest in the
Partnership.
Partners:
TRUMP ATLANTIC CITY ASSOCIATES
By: TRUMP HOTELS & CASINO RESORTS
HOLDINGS, L.P., General Partner
By: TRUMP HOTELS & CASINO RESORTS,
INC., general partner
By: /s/ Nicholas L. Ribis
----------------------------------
Nicholas L. Ribis
President
TRUMP ATLANTIC CITY CORPORATION
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By: /s/ Nicholas L. Ribis
----------------------------------
Nicholas L. Ribis
Vice President
Withdrawing Partner
TRUMP PLAZA FUNDING, INC.
By: /s/ Donald J. Trump
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Donald J. Trump
President
AMENDED AND RESTATED PARTNERSHIP AGREEMENT
OF TRUMP ATLANTIC CITY ASSOCIATES
AMENDED AND RESTATED PARTNERSHIP AGREEMENT made this 17th day of April,
1996 by and between TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P., a Delaware
limited partnership having an address at Mississippi Avenue and The Boardwalk,
Atlantic City, New Jersey 08401 ("Holdings"), and TRUMP ATLANTIC CITY HOLDING,
INC., a corporation organized under the laws of the State of Delaware having an
address at Mississippi Avenue and the Boardwalk, Atlantic City, New Jersey 08401
("TACHI"). Holdings and TACHI are sometimes hereinafter individually referred to
as a "Partner" and collectively as "Partners."
WITNESSETH:
WHEREAS, Donald J. Trump ("Trump") and TACHI, as general partners, formed
Trump Plaza Holding Associates (the "Partnership") by entering into the
Partnership Agreement of the Partnership under the laws of the State of New
Jersey on February 17, 1993, and amended such agreement on June 3, 1993 (said
Partnership Agreement, as so amended, is referred to herein as the "Original
Agreement"); and
WHEREAS, on June 12, 1995, Trump contributed his 99% general partnership
interest in the Partnership to Holdings; and
WHEREAS, Trump, TACHI and Holdings entered into Amendment No. 2 to
Partnership Agreement of Trump Plaza Holding Associates ("Amendment No. 2") on
June 12, 1995 to provide for Trump's withdrawal as a general partner of the
Partnership and Holdings' admission as a 99% general partner in the Partnership;
and
WHEREAS, TACHI and Holdings entered into Amendment No. 3 to Partnership
Agreement of Trump Plaza Holding Associates ("Amendment No. 3"; the Original
Agreement as amended by Amendment No. 2 and as further amended by Amendment No.
3 is referred to herein as the "Prior Agreement") to provide for the change of
the Partnership's name to Trump Atlantic City Associates; and
WHEREAS, TACHI and Holdings desire to amend and restate in its entirety the
Prior Agreement and to set forth their respective rights and obligations as
Partners of the Partnership;
NOW, THEREFORE, TACHI and Holdings agree that the Prior Agreement is hereby
amended and restated in its entirety effective as of the date hereof and that
the Partnership is hereby continued as a general partnership on the terms and
conditions set forth herein, and further agree as follows:
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1. Definitions.
1 Certain Definitions. In addition to the other terms defined elsewhere
herein, the following terms shall have the respective meanings set forth below:
"Accountants" means the national firm or firms of independent certified
public accountants selected by the Managing Partner on behalf of the Partnership
to audit the books and records of the Partnership and to prepare statements and
reports in connection therewith, which initially shall be Arthur Andersen LLP.
"Additional Distributions" means distributions by the Partnership pursuant
to Section 10.3 hereof.
"Affiliate" means, with respect to any Person, any Person that directly or
indirectly through one or more intermediaries controls or is controlled by or
under common control with the specified Person.
"Bankruptcy" means, with respect to any Person, (i) the commencement by
such Person of any petition, case or proceeding seeking relief under any
provision or chapter of the federal bankruptcy code or any other federal or
state law relating to insolvency, bankruptcy or reorganization, (ii) an
adjudication that such Person is insolvent or bankrupt, (iii) the entry of an
order for relief under the federal bankruptcy code with respect to such Person,
(iv) the filing of any such petition or the commencement of any such case or
proceeding against such Person, unless such petition and the case or proceeding
initiated thereby are dismissed within ninety (90) days from the date of such
filing or (v) the filing of an answer by such Person admitting the allegations
of any such petition.
"Business Day" means a day other than a Saturday or Sunday or other day on
which banks are authorized or required by law to close in the City of New York.
"Capital Account," when used with respect to a Partner, means an amount
equal to (a) the aggregate of (i) the initial amount credited to the Capital
Account of such Partner as reflected in Article 8 hereof, (ii) all other
voluntary capital contributions to the Partnership made or deemed to be made by
such Partner pursuant to this Agreement, (iii) all Net Income and other items of
income credited to the account of such Partner pursuant to Article 9 and (iv)
any additional amount resulting from the acquisition of additional Partnership
Interests, minus (b) the aggregate of (i) all Net Losses and deductions charged
to the account of such Partner pursuant to Article 9 hereof, (ii) all
distributions and (iii) any reduction in such amount due to the transfer of a
Partnership Interest. The Capital Accounts shall be maintained in accordance
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with the regulations under Section 704(b) and (c) of the Code. If a Partner is a
Transferee, its Capital Account derived from the transferor shall initially be
deemed to be the product of (x) a fraction, the numerator of which shall be the
Percentage Interest transferred to such Transferee and the denominator of which
shall be the Percentage Interest immediately prior to such transfer of the
Partner making such transfer, and (y) the Capital Account of the Partner making
such transfer immediately prior to such transfer. The Capital Account of a
Partner transferring a Partnership Interest to a Transferee shall be reduced by
the amount of its Capital Account which such Transferee is initially deemed to
have acquired.
"Capital Contribution" means, with respect to any Partner, the initial
Gross Asset Value of any Contributed Property (net of liabilities to which such
property is subject) set forth in Article 8, as such Article 8 will be amended
from time to time to reflect the amount of money and the Gross Asset Value of
any Contributed Property received by the Partnership pursuant to any additional
Capital Contribution.
"Casino Control Act" means the New Jersey Casino Control Act and the
regulations thereunder.
"Code" means the Internal Revenue Code of 1986, as amended and in effect
from time to time, as interpreted by the applicable regulations thereunder. Any
reference herein to a specific section or sections of the Code shall be deemed
to include a reference to any corresponding provision of future law.
"Commission" means the New Jersey Casino Control Commission.
"Contributed Property" shall mean any property or asset, in such form as
may be permitted by the New Jersey Uniform Partnership Law, but excluding cash,
contributed or deemed contributed to the Partnership with respect to the
Partnership Interest held by each Partner.
"Depreciation" means, with respect to any asset of the Partnership for any
fiscal year or other period, the depreciation or amortization, as the case may
be, allowed or allowable for federal income tax purposes in respect of such
asset for such fiscal year or other period; provided, however, that if there is
a difference between the Gross Asset Value and the adjusted tax basis of such
asset, Depreciation shall mean "book depreciation, depletion or amortization" as
determined under Section 1.704-1(b)(2) (iv)(g)(3) of the Regulations.
"Entity" means any general partnership, limited partnership, limited
liability company, corporation, joint venture, trust, business trust, real
estate investment trust, association or other entity.
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"Fair Market Value" means (i) in the case of any security, its current
market price and (ii) in the case of any property or Indebtedness that is not a
security, the fair market value of such property or Indebtedness as determined
in good faith by the Managing General Partner.
"Gross Asset Value" means, with respect to any asset of the Partnership,
such asset's adjusted basis for federal income tax purposes, except as follows:
(a) the initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be (i) in the case of any asset described
in Article 8, the gross fair market value ascribed thereto in such Article
and (ii) in the case of any other asset hereafter contributed by a Partner,
the gross Fair Market Value of such asset at the time of its contribution;
(b) the Gross Asset Values of all Partnership assets shall be adjusted
to equal their respective gross Fair Market Values:
(i) immediately prior to a Capital Contribution (other than a de
minimis Capital Contribution) to the Partnership by a new or existing
Partner as consideration for a Partnership Interest;
(ii) immediately prior to the distribution by the Partnership to
a Partner of more than a de minimis amount of Partnership property as
consideration for the redemption of a Partnership Interest;
(iii) immediately prior to the liquidation of the Partnership
within the meaning of Section 1.704-1(b) (2)(ii)(g) of the
Regulations;
(iv) upon any other event as to which the Managing Partner
reasonably determines that an adjustment is necessary or appropriate
to reflect the relative economic interests of the Partners;
(c) the Gross Asset Values of Partnership assets distributed to any
Partner shall be the gross Fair Market Values of such assets as of the date
of distribution; and
(d) the Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such
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assets pursuant to Sections 734(b) or 743(b) of the Code, but only to the
extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the Regulations;
provided, however, that Gross Asset Values shall not be adjusted pursuant
to this paragraph to the extent that the Managing General Partner
reasonably determines that an adjustment pursuant to paragraph (b) above is
necessary or appropriate in connection with a transaction that would
otherwise result in an adjustment pursuant to this paragraph (d).
At all times, Gross Asset Values shall be adjusted by any Depreciation taken
into account with respect to the Partnership's assets for purposes of computing
Net Income and Net Loss. Any adjustment to the Gross Asset Values of Partnership
property shall require an adjustment to the Partners' Capital Accounts; as for
the manner in which such adjustments are allocated to the Capital Accounts, see
clause (c) of the definition of Net Income and Net Loss in the case of
adjustment by Depreciation, and clause (d) of said definition in all other
cases.
"Indebtedness" means any obligation, whether or not contingent, (i) in
respect of borrowed money or evidenced by bonds, notes, debentures or similar
instruments, (ii) representing the balance deferred and unpaid of the purchase
price of any property (including pursuant to capital leases), except any such
balance that constitutes an accrued expense or a trade payable, if and to the
extent any of the foregoing indebtedness would appear as a liability upon a
balance sheet prepared on a consolidated basis in accordance with GAAP, (iii) to
the extent not otherwise included, obligations under interest rate exchange,
currency exchange, swaps, futures or similar agreements, and (iv) guaranties
(other than endorsements for collection or deposit in the ordinary course of
business), direct or indirect, in any manner (including, without limitation,
reimbursement agreements in respect of letters of credit), of all or any part of
any Indebtedness of any third party.
"Net Income" or "Net Loss" means, for each fiscal year or other applicable
period, an amount equal to the Partnership's net income or loss for such year or
period as determined for federal income tax purposes by the Accountants,
determined in accordance with Section 703(a) of the Code (for this purpose, all
items of income, gain, loss or deduction required to be stated separately
pursuant to Section 703(a) of the Code shall be included in taxable income or
loss), with the following adjustments: (a) by including as an item of gross
income any tax-exempt income received by the Partnership; (b) by treating as a
deductible expense any expenditure of the Partnership described in Section
705(a)(2)(B) of the Code (including amounts paid or incurred to organize the
Partnership (unless an election is made pursuant to Code Section 709(b)) or to
promote the sale of interests in the Partnership and by treating deductions for
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any losses incurred in connection with the sale or exchange of Partnership
property disallowed pursuant to Section 267(a)(1) or Section 707(b) of the Code
as expenditures described in Section 705(a)(2)(B) of the Code); (c) in lieu of
depreciation, depletion, amortization and other cost recovery deductions taken
into account in computing total income or loss, there shall be taken into
account Depreciation; (d) gain or loss resulting from any disposition of
Partnership property with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Gross Asset
Value of such property rather than its adjusted tax basis; (e) in the event of
an adjustment of the Gross Asset Value of any Partnership asset which requires
that the Capital Accounts of the Partnership be adjusted pursuant to Regulation
Section 1.704-1(b)(2)(iv)(e), (f) and (m), the amount of such adjustment is to
be taken into account as additional Net Income or Net Loss pursuant to Section
9.1; and (f) excluding any items specially allocated pursuant to Section 9.2.
Once an item of income, gain, loss or deduction has been included in the initial
computation of Net Income or Net Loss and is subjected to the special allocation
rules in Section 9.2, Net Income and Net Loss shall be computed without regard
to such item.
"Nonrecourse Deductions" shall have the meaning set forth in Sections
1.704-2(b)(1) and (c) of the Regulations.
"Nonrecourse Liabilities" shall have the meaning set forth in Section
1.704-2(b)(3) of the Regulations.
"Partner" means each of TACHI and Holdings, their duly admitted successors
and assigns or any Person who is a partner of the Partnership at the time of
reference thereto.
"Partner Nonrecourse Debt" shall have the meaning set forth in Section
1.704-2(b)(4) of the Regulations.
"Partner Nonrecourse Deductions" shall have the meaning set forth in
Section 1.704-2(i)(2) of the Regulations.
"Partnership Interest" means any interest of TACHI or Holdings or any
Transferee in the Partnership, including the right of such Partner to benefits
to which it may be entitled under, and the obligations of such Partner to comply
with, all the terms and provisions of this Agreement.
"Partnership Minimum Gain" shall have the meaning set forth in Section
1.704-2(b)(2) of the Regulations.
"Percentage Interest" means, with respect to any Partner, the percentage
ownership interest of such Partner in such items of the Partnership as to which
the term "Percentage Interests" is applied in this Agreement, initially 1% for
TACHI and 99% for Holdings, subject to appropriate adjustment in accordance with
the provisions hereof.
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"Person" means any natural person or Entity.
"Pledge Agreements" means, collectively, the pledge agreement (1) dated
April 17, 1996 from Holdings, as pledgor, to First Bank National Association, as
trustee, and (2) dated April 17, 1996 from TACHI, as pledcgor, to First Bank
National Association, as trustee, in each case securing the Senior Secured Notes
due 2005 of Trump Hotels & Casino Resorts Holdings, L.P. and Trump Hotels &
Casino Resorts Funding, Inc., as joint obligors.
"Regulations" means the income tax regulations promulgated under the Code,
as such regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).
"Tax Amounts" with respect to any year means an amount equal to (a) the
higher of (i) the product of (A) the taxable income of the Partnership (computed
as if the Partnership were an individual taxpayer) for such year as determined
in good faith by the Managing Partner and (B) the Tax Percentage and (ii) the
product of (A) the alternative minimum taxable income (computed as if the
Partnership were an individual taxpayer) attributable to the Partnership for
such year as determined in good faith by the Managing Partner and (B) the Tax
Percentage, reduced by (b) to the extent not previously taken into account, any
income tax benefit attributable to the Partnership which could be realized
(without regard to the actual realization) by its Partners in the current or any
prior taxable year, or portion thereof, commencing on the date of this
Partnership Agreement (including any tax losses or tax credits), computed at the
applicable Tax Percentage for the year that such benefit is taken into account
for purposes of this computation. Any part of the Tax Amount not distributed in
respect of a tax period for which it is calculated shall be available for
distribution in subsequent tax periods.
"Tax Distribution" means distributions by the Partnership pursuant to
Section 10.2 hereof.
"Tax Items" shall have the meaning set forth in Section 9.3(a).
"Tax Payment Loan" shall have the meaning set forth in Section 10.4(a)
hereof.
"Tax Percentage" means the highest, aggregate effective marginal rate of
Federal, state and local income tax or, when applicable, alternative minimum
tax, to which any Partner would be subject in the relevant year of determination
(as certified to the Managing General Partner by the Accountants); provided,
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however, that in no event shall the Tax Percentage be greater than the sum of
(x) the highest, aggregate effective marginal rate of Federal, state, and local
income tax, or when applicable, alternative minimum tax, to which the
Partnership would have been subject if it were a C corporation for Federal
income tax purposes, and (y) 5 percentage points. If any Partner is an S
corporation, partnership, or similar pass-through entity for Federal income tax
purposes, the Tax Percentage shall be computed based upon the tax rates
applicable to the shareholder or partner of such Partner, as the case may be.
"Transferee" means each Person who pursuant to Article 11 hereof or
otherwise acquires a Partnership Interest from a Partner or a Transferee
thereof.
"Withholding Tax Act" shall have the meaning set forth in Section 10.4(a)
hereof.
2 Accounting Terms and Determinations. All references in this Agreement to
"generally accepted accounting principles" or "GAAP" shall mean generally
accepted accounting principles in effect in the United States of America at the
time of application thereof. Unless otherwise specified herein, all accounting
terms used herein shall be interpreted, all determinations with respect to
accounting matters hereunder shall be made, and all financial statements and
certificates and reports as to financial matters required to be furnished
hereunder shall be prepared, in accordance with generally accepted accounting
principles, applied on a consistent basis.
2. Name. The name of the Partnership is Trump Atlantic City Associates (the
"Partnership").
3. Purpose. The character of the Partnership's business is (i) to own and
operate Trump Plaza Hotel and Casino in Atlantic City, New Jersey and conduct
casino gaming, (ii) to own and operate the Trump Taj Mahal Casino Resort in
Atlantic City, New Jersey and conduct casino gaming, (iii) to own and operate
such other gaming properties and facilities as the Partnership may acquire, and
(iv) to do all things necessary, incidental, desirable or appropriate in
connection with the foregoing.
4. Place of Business. The principal place of business of the Partnership in
the State of New Jersey shall be Mississippi Avenue and The Boardwalk, Atlantic
City, New Jersey 08401.
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5. Partners. The name and place of residence of the General Partners
interested in the Partnership is as follows:
Trump Hotels & Casino Resorts Trump Atlantic City Holding, Inc
Holdings, L.P. Mississippi Avenue and
Mississippi Avenue and The Boardwalk
The Boardwalk Atlantic City, N.J. 08401
Atlantic City, N.J. 08401
6. Managing General Partner. All decisions affecting the business and
affairs of the Partnership, including, but not limited to the financing,
refinancing, sale, management or leasing of any Partnership property, or any
part thereof, the acquisition, development, financing, sale or leasing of other
property and all matters arising under this Agreement may be decided by either
Partner acting on behalf of the Partnership. Notwithstanding the foregoing,
Holdings shall have the rights of the Managing General Partner as set forth
herein.
7. Term. The term for which the Partnership is to exist is to the close of
business on the 31st day of December, 2035, unless sooner terminated pursuant to
Section 13.1 hereof.
8. Capital Accounts. The capital account as of the date of this Agreement
of each Partner is as follows:
Holdings $____________
TACHI $____________
No interest shall be paid by the Partnership on balances in Capital Accounts nor
shall any other funds be distributed or distributable, except as provided in
this Agreement.
9. Allocations and Other Tax and Accounting Matters. The Net Income, Net
Loss and/or other Partnership items shall be allocated as follows:
1 Allocations of Net Income and Net Loss.
(a) Net Income. Except as otherwise provided herein, Net Income
for any fiscal year or other applicable period shall be allocated in
the following order and priority:
(i) First, to the Partners, until the cumulative Net Income
allocated pursuant to this subparagraph (a)(i) for the current
and all prior periods equals the cumulative Net Loss allocated
pursuant to subparagraph (b) (ii) hereof for all prior periods,
among the Partners in the reverse order that such Net Loss was
allocated to the Permitted Partners pursuant to subparagraph
(b)(ii) hereof.
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(ii) Thereafter, the balance of the Net Income, if any,
shall be allocated to the Partners in accordance with their
respective Percentage Interests.
(b) Net Loss. Except as otherwise provided herein, Net Loss of
the Partnership for each fiscal year or other applicable period shall
be allocated to the Partners in accordance with their respective
Percentage Interests.
2 Special Allocations. Notwithstanding any provisions of Section 9.1, the
following special allocations shall be made, to the least extent necessary to
satisfy section 704(b) of the Code and the Regulations promulgated thereunder,
in the following order:
(a) Minimum Gain Chargeback (Nonrecourse Liabilities). If there is a
net decrease in Partnership Minimum Gain for any Partnership fiscal year
(except as a result of conversion or refinancing of Partnership
Indebtedness, certain capital contributions or revaluation of the
Partnership property as further outlined in Regulation Sections
1.704-2(d)(4), (f)(2) or (f)(3)), each Partner shall be specially allocated
items of Partnership income and gain for such year (and, if necessary,
subsequent years) in an amount equal to that Partner's share of the net
decrease in Partnership Minimum Gain. The items to be so allocated shall be
determined in accordance with Regulation Section 1.704-2(f)(6). This
paragraph (a) is intended to comply with the minimum gain chargeback
requirement in said section of the Regulations and shall be interpreted
consistently therewith. Allocations pursuant to those paragraph (a) shall
be made in proportion to the respective amounts required to be allocated to
each partner pursuant hereto.
(b) Minimum Gain Attributable to Partner Nonrecourse Debt. If there is
a net decrease in Minimum Gain Attributable to Partner Nonrecourse Debt
during any fiscal year (other than due to the conversion, refinancing or
other change in the debt instrument causing it to become partially or
wholly nonrecourse, certain capital contributions, or certain revaluations
of Partnership property (as further outlined in Regulation Section
1.704-2(i)(4)), each Partner shall be specially allocated items of
Partnership in come and gain for such year (and, if necessary, subsequent
years) in an amount equal to the Partner's share of the net decrease in the
Minimum Gain Attributable to Partner Nonrecourse Debt. The items to be so
allocated shall be determined in accordance with Regulation Section
1.704-2(i)(4) and (j)(2). This paragraph (b) is intended to comply with the
minimum gain chargeback requirement with respect to Partner Nonrecourse
Debt contained in said section of the Regulations and shall be interpreted
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consistently therewith. Allocations pursuant to this paragraph (b) shall be
made in proportion to the respective amounts required to be allocated to
each Partner pursuant hereto.
(c) Nonrecourse Deductions. Nonrecourse Deductions for any fiscal year
or other applicable period shall be allocated to the Partners in accordance
with their respective Percentage Interests.
(d) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for
any fiscal year or other applicable period shall be specially allocated to
the Partner that bears the economic risk of loss for the debt (i.e., the
Partner Nonrecourse Debt) in respect of which such Partner Nonrecourse
Deductions are attributable (as determined under Regulation Section
1.704-2(b)(4) and (i)(1)).
(e) Additional Allocations. Notwithstanding the foregoing, if, upon
final dissolution and termination of the Partnership and after taking into
account all allocations of Net Income and Net Loss (and other Tax Items)
under this Section 9, the distributions to be made in accordance with the
positive Capital Account balances would result in a distribution that would
be different from a distribution under Section 10.3 hereof, then gross
items of income and gain (and other Tax Items) for the taxable year of the
final dissolution and termination (and, to the extent permitted under
Section 761(c) of the Code, gross items of income and gain (and other Tax
Items) for the immediately preceding taxable year) shall be allocated to
the Partners to increase or decrease their Capital Account balances, as the
case may be, so that the final distribution will occur in the same manner
as a distribution under Section 10.3 hereof.
3 Tax Allocations.
(a) Generally. Subject to paragraphs (b) and (c) hereof, items of income,
gain, loss, deduction and credit to be allocated for income tax purposes
(collectively, "Tax Items") shall be allocated among the Partners on the same
basis as their respective book items.
(b) Sections 1245/1250 Recapture. If any portion of gain from the sale of
property is treated as gain which is ordinary income by virtue of the
application of Code Sections 1245 or 1250 ("Affected Gain"), except to the
extent that the tax treatment of such sale is governed by Section 704(c) of the
Code as provided under Section 9.3(c) hereof, then (i) such Affected Gain, to
the extent attributable to depreciation or amortization allowed or allowable for
any taxable period subsequent to the date hereof, shall be allocated among the
Partners in the same proportion that the depreciation and amortization
deductions giving rise to the Affected Gain were allocated and (ii) other Tax
Items of gain of the same character that would have been recognized, but for the
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application of Code Sections 1245 and/or 1250, shall be allocated away from
those Partners who are allocated Affected Gain pursuant to clause (i) so that,
to the extent possible, the other Partners are allocated the same amount, and
type, of capital gain that would have been allocated to them had Code Sections
1245 and/or 1250 not applied. For purposes hereof, in order to determine the
proportionate allocations of depreciation and amortization deductions for each
fiscal year or other applicable period, such deductions shall be deemed
allocated on the same basis as Net Income or Net Loss for such respective
period.
(c) Allocations Respecting Section 704(c). Property contributed to the
Partnership shall be subject to Section 704(c) of the Code and Regulation
Section 1.704-3 so that notwithstanding Section 9.2 hereof, taxable gain and
loss from disposition of such property contributed to the Partnership that is
subject to Section 704(c) of the Code shall be allocated on a property by
property basis in accordance with the Regulations promulgated thereunder.
Notwithstanding the foregoing, tax depreciation and amortization with respect to
property contributed by Trump to Holdings pursuant to the Contribution Agreement
between Holdings and among Trump, dated as of June 12, 1995, and Partnership
property contributed pursuant to the Contribution Agreement among Trump, TTMI,
TM/GP and the Partnership, dated as of the date hereof, shall be allocated on an
aggregate basis for the purposes of complying with the requirements of Section
704(c) of the Code, taking into account, for any particular taxable year for
which such allocation is made, the aggregate amount of depreciation and
amortization allowable with respect to the aggregate basis of all such
properties determined as of the date of contribution (and not taking into
account (i) any increase in the basis of such properties resulting from
improvements thereon made subsequent to the date of contribution or (ii) any
additional basis resulting from any new property purchased by any of Holdings,
the Partnership, Taj Associates or Plaza Associates in a taxable transaction
subsequent to the date of contribution; provided, however, that the Managing
General Partner shall not specially allocate any Tax Items (other than items of
depreciation and amortization referred to in this Section 9.3(c)) to cure for
the effect of the ceiling rule set forth in Regulation Section 1.704-3(b). The
Partnership shall allocate items of income, gain, loss and deduction allocated
to it by a partnership to the Partner or Partners contributing the interest or
interests in such partnership, so that, to the greatest extent possible and
consistent with the foregoing, such contributing Partner or Partners are
allocated the same amount and character of items of income, gain, loss and
deduction with respect to such partnership that they would have been allocated
had they contributed undivided interests in the assets owned by such partnership
to the Partnership in lieu of contributing the interest or interest in the
partnership to the Partnership.
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4 Books of Account. At all times during the continuance of the Partnership,
the Managing General Partner shall maintain or cause to be maintained full,
true, complete and correct books of account in accordance with GAAP, using the
calendar year as the fiscal and taxable year of the Partnership. In addition,
the Partnership shall keep all records required to be kept pursuant to the New
Jersey Uniform Partnership Law.
5 Tax Certifications.
(a) The Partnership shall deliver to each Partner, from time to time as
necessary to implement timely the provisions of this Agreement, certificates
executed by its chief financial officers and the Accountants indicating the
respective calculations with respect to, and the amounts of, a Partner's share
of Tax Distributions and the amount of any repayments to the Partnership called
for thereunder, together with supporting schedules in reasonable detail all as
of each pertinent date and delivered at least 15 business days prior to the date
payment is due.
(b) The certificates delivered pursuant to paragraph (a) thereof shall be
deemed approved by all parties and the Partnership shall act upon such
certificate as provided in this Agreement unless within five business days of
delivery of such certificate a Partner objects to the contents of any
certificate by written notice in detail sufficient to state the basis for the
objection. The Partners shall negotiate in good faith to resolve such objection.
10. DISTRIBUTIONS.
1 General. Distributions of cash or property may be made in accordance
herewith at such times as the Managing General Partner deems appropriate in the
order provided in this Article 10, subject to the limitations, if any, set forth
in the agreements governing the Partnership's Indebtedness, including the
indenture governing the Partnership's and Trump Atlantic City Funding, Inc.'s
First Mortgage Notes due 2006 and ancillary documents relating thereto.
2 Distributions for Taxes.
(a) The Partnership shall distribute to each Partner in one or more
payments, including payments described in paragraph (b) from time to time during
each year, but in no event later than March 1 of the year immediately following
such year, an aggregate cash sum equal to the product of (i) Tax Amounts in
respect of the taxable year, or portion thereof, for which such distribution is
being made and (ii) the Partner's Percentage Interest. In addition, the
Partnership shall make additional pro rata distributions as are necessary to
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reflect adjustments, as determined in good faith by the board of directors of
the Managing General Partner, to any item affecting Tax Amounts, as reflected on
the Partnership's tax return, as it may be amended from time to time, or as a
result of a concluded tax audit.
(b) In addition to the certificates required by Section 9.5, the
Partnership shall furnish the Partners with such information as they shall
reasonably request from time to time respecting estimates of the Partnership's
taxable income or loss (and items thereof) for any fiscal year or portion
thereof. If, in any year, any Partner shall be required to make federal, state
or local estimated income tax payments under applicable law and regulations,
then, at least thirty (30) days prior to the date (the "Estimated Payment Date")
upon which any such payments are due, the Partnership shall deliver to each
Partner the certificates required by Section 9.5, indicating the amount (the
"Estimated Payment") of the tax in respect of the respective Tax Amounts due on
the Estimated Payment Date, and not later than fifteen (15) days prior to such
Estimated Payment Date, the Partnership shall pay to such Partner an amount
equal to such Estimated Payment. The amount of each Estimated Payment received
by such Partner shall be treated as a non-interest bearing advance against the
amounts distributable in respect of such Partner's pro rata share of Tax Amounts
to such Partner for such year. If the aggregate amount of the Estimated Payments
received by a Partner for any year shall exceed the distribution to which such
Partner actually is entitled under paragraph (a) above, such Partner shall
forthwith repay such excess to the Partnership on or before the date set forth
in paragraph (a) above, unless such excess shall have been paid to taxing
authorities in which event such excess shall be applied to reduce the amount
otherwise distributable pursuant to this Section 10.2 in respect of the
Partnership's next succeeding fiscal year or years. Each Partner shall seek, to
the extent entitled thereto, and contribute to the Partnership any refund of
taxes paid by such Partner out of amounts distributed pursuant to this Section
10.2 promptly after receipt of such refund.
3 Other Distributions. After payments and distributions, if any, of the
amounts set forth in Section 10.2 above, the Partnership may distribute, in the
discretion of the Managing General Partner, cash or other property, valued at
its Fair Market Value, to the Partners pro rata.
4 Withholding Payments Required by Law.
(a) Unless treated as a Tax Payment Loan (as hereinafter defined), any
amount paid by the Partnership for or with respect to any Partner on account of
any withholding tax or other tax payable with respect to the income, profits or
distributions of the Partnership to the Code, the Regulations, or any state or
-14-
<PAGE>
local statute, regulation or ordinance requiring such payment (a "Withholding
Tax Act") shall be treated as a distribution to such Partner for all purposes of
this Agreement, consistent with the character or source of the income, profits
or cash which gave rise to the payment or withholding obligation. To the extent
that the amount required to be remitted by the Partnership under the Withholding
Tax Act exceeds the amount then otherwise distributable to such Partner, unless
and to the extent that funds shall have been provided by such Partner pursuant
to the last sentence of this Section 10.4(a), the excess shall constitute a loan
from the Partnership to such Partner (a "Tax Payment Loan") which shall be
payable upon demand and shall bear interest, from the date that the Partnership
makes the payment to the relevant taxing authority, at the rate announced from
time to time by Citibank, N.A. (or any successor thereto) as its "prime rate",
compounded monthly (but in no event higher that the highest interest rate
permitted by applicable law). So long as any Tax Payment Loan to any Partner or
the interest thereon remains unpaid, the Partnership shall make future
distributions due to such Partner under this Agreement by applying the amount of
any such distributions first to the payment of any unpaid interest on such Tax
Payment Loan and then to the repayment of the principal thereof, and no such
future distributions shall be paid to such Partner until all of such principal
and interest has been paid in full. If the amount required to be remitted by the
Partnership under the Withholding Tax Act exceeds the amount then otherwise
distributable to a Partner, the Partnership shall notify such Partner at least
five (5) Business Days in advance of the date upon which the Partnership would
be required to make a Tax Payment Loan under this Section 10.4(a) (the "Tax
Payment Loan Date") and provide such Partner the opportunity to pay to the
Partnership, on or before the Tax Payment Loan Date, all or a portion of such
deficit.
(b) The Managing General Partner shall have the authority to take all
actions necessary to enable the Partnership to comply with the provision of any
Withholding Tax Act applicable to the Partnership and to carry out the
provisions of this Section 10.4. Nothing in this Section 10.4 shall create any
obligation on the Managing General Partner to advance funds to the Partnership
or to borrow funds from third parties in order to make any payments on account
of any liability of the Partnership under a Withholding Tax Act.
(c) In the event that a Tax Payment Loan is not paid by a Partner within
thirty (30) days after written demand therefor is made by the Managing General
Partner, the Managing General Partner may cause all distributions that would
otherwise be made to such Partner to be retained by the Partnership, up to the
amount necessary to repay such Tax Payment Loan, including all accrued and
unpaid interest thereon, and such retained distributions shall be applied
against, first, the accrued interest on and, second, the principal of, such Tax
Payment Loan.
-15-
<PAGE>
5 Non-Recourse. Notwithstanding any other provisions of this Agreement, the
obligations to make distributions contemplated hereby shall be limited to the
assets of the Partnership and shall be non-recourse with respect to the Partners
and any of their assets.
11. Transfers and Withdrawal.
1 Sale and Transfer of Partnership Interests. No Partnership Interest or
any portion thereof may be sold or otherwise transferred, whether by gift,
pledge, by operation of law or otherwise, including any transfer upon
liquidation and dissolution (but excluding all transfers upon or by reason of
death), unless (x) the transfer and the Transferee are approved in advance by
all the Partners, except with respect to any transfer resulting from exercise of
any rights under the Pledge Agreement, (y) the transfer and the Transferee are
approved by the Commission and (z) the Transferee becomes a party to this
Agreement and assumes all of the obligations hereunder of its transferor and
agrees to be bound by the terms and conditions hereof in the same manner as its
transferor in each case to the extent of the Partnership Interest transferred.
Each Transferee shall have all rights hereunder as given to the original party
hereto or subsequent transferee thereof. The foregoing notwithstanding, no
transfer of a Partnership Interest (other than a transfer upon the exercise of
any rights under the Pledge Agreements) shall be effective if, in the opinion of
counsel to the Partnership, such transfer would cause the Partnership to be
treated as a "publicly-traded partnership" under the Code.
12. Books and Records.
1 Complete Books. At all times during the continuance of the Partnership,
the Partnership shall keep or cause to be kept full and complete books of
account in which shall be entered fully and accurately each transaction of the
Partnership, including the Capital Accounts of the Partners.
2 Method of Recordkeeping. All of the Partnership's books of account shall
at all times be maintained at the principal office of the Partnership and shall
be open to the inspection and examination of the Partners or their
representatives during reasonable hours. All books and records of the
Partnership shall be kept on an accrual basis of accounting with an annual
accounting period ending December 31, except for the final accounting period
which shall end on the date of the final dissolution or termination of the
Partnership. All references in this Agreement to a "fiscal year" are to such an
annual accounting period.
-16-
<PAGE>
3 Tax Information. The Partnership shall be treated as a Partnership for
federal and state income tax and franchise tax purposes; accordingly, the
Managing General Partner shall cause the Accountants to prepare and file on or
before the due date (as such date may be extended as the result of any extension
obtained) annually a United States Partnership Return of Income and any
necessary state income and franchise tax returns on a partnership basis. Such
returns (or drafts of such returns) shall be submitted to the Partners for
review no later than March 31st of each year. Each Partner shall notify the
other Partners upon receipt of any notice of any tax examination by any federal,
state or local authority pertaining to the Partnership or the other Partners. No
settlement of any tax issue concerning or having an effect upon the Partnership
shall be made by any Partner except upon the approval of the tax matters
partner, designated pursuant to Section 14.12.
13. Dissolution, Liquidation and Winding-Up.
1 Accounting. In the event of the dissolution, liquidation and winding-up
of the Partnership, a proper accounting shall be made of the Capital Account of
each Partner and of the Net Income or Net Loss of the Partnership from the date
of the last previous accounting to the date of dissolution.
2 Distribution on Dissolution. In the event of the dissolution and
liquidation of the Partnership for any reason, the assets of the Partnership
shall be liquidated for distribution in the following rank and order:
(a) Payment of creditors of the Partnership, other than creditors who
are Partners;
(b) Payment of creditors of the Partnership who are Partners;
(c) Establishment of reserves to provide for contingent liabilities,
if any; and
(d) To the Partners in accordance with the positive balances in their
Capital Accounts after giving effect to all contributions, distributions
and allocations for all periods.
3 Timing Requirements.
(a) In the event that the Partnership is "liquidated" within the meaning of
Section 1.704-1(b)(2)(ii)(g) of the Regulations, any and all distributions to
the Partners pursuant to Section 13.2(d) hereof shall be made no later than the
-17-
<PAGE>
later to occur of (i) the last day of the taxable year of the Partnership in
which such liquidation occurs or (ii) ninety (90) days after the date of such
liquidation.
(b) Notwithstanding the provisions of Section 13.2 hereof which require
liquidation of the assets of the Partnership, but subject to the order of
priorities set forth therein, if prior to or upon dissolution of the Partnership
the Partners determine that an immediate sale of part or all of the
Partnership's assets would be impractical or would cause undue loss to the
Partners, the Partners may defer for a reasonable time the liquidation of any
assets except those necessary to satisfy liabilities of the Partnership.
4 Dissolution. The Partnership shall be dissolved upon the occurrence of
any of the following events:
(a) the dissolution, liquidation, termination, withdrawal, death,
insanity, retirement or Bankruptcy of a Partner or other event causing
dissolution under the New Jersey Uniform Partnership Law;
(b) the election to dissolve the Partnership made in writing by the
Partners;
(c) the sale or other disposition of all or substantially all of the
assets of the Partnership unless the Partners elect to continue the
Partnership business for the purpose of the receipt and the collection of
indebtedness or the collection of any other consideration to be received in
exchange for the assets of the Partnership (which activities shall be
deemed to be part of the winding-up of the affairs of the Partnership); or
(d) the entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the New Jersey Uniform Partnership Law, which
decree is final and not subject to appeal.
Following an event causing a dissolution of the Partnership, the
Partnership shall be wound-up and terminated unless the business of the
Partnership is continued by the Partnership in reconstituted form pursuant to
Section 13.5.
5 Continuation of the Partnership. Upon the Bankruptcy, dissolution,
liquidation, withdrawal, death, retirement or insanity of any Partner, or any
other event of dissolution under the New Jersey Uniform Partnership Law, within
90 days thereafter, all of the remaining Partners may elect to reconstitute the
Partnership and continue its business.
-18-
<PAGE>
14. Miscellaneous.
1 Amendments. This Agreement may be amended, modified or cancelled, and the
terms and conditions hereof may be waived, only by a written instrument signed
by each of its Partners.
2 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed as original, but all of which together shall
constitute one and the same instrument.
3 Further Assurances. Each of the Partners hereby agrees to execute and
deliver all such other and additional instruments and documents and to do such
other acts and things as may be necessary to more fully effectuate this
Partnership, carry on the Partnership's business and effectuate this Agreement.
4 Variations of Pronouns. All pronouns and all variations thereof shall be
deemed to refer to the masculine, feminine or neuter, singular or plural, as the
identity of the Person may require.
5 Non-Waiver. No delay on the part of any party in exercising any right
hereunder shall operate as a waiver thereof, nor shall any waiver, express or
implied, by any Partner of any right hereunder or of any failure to perform or
breach hereof by any other Partner constitute or be deemed a waiver of any other
right hereunder or of any other failure to perform or breach hereof by the same
or any other Partner, whether or a similar or dissimilar nature thereof.
6 Survival of Rights, Duties and Obligations. Termination of the
Partnership for any cause shall not release any party from any liability which
at the time of termination had already accrued to any other party or which
thereafter may accrue in respect of any act or omission prior to such
termination.
7 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provisions in any other jurisdiction.
8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey regardless of the laws that
might otherwise under applicable principles of conflict of laws thereof.
-19-
<PAGE>
9 Casino Control Commission Regulation. Notwithstanding anything to the
contrary contained herein, this Agreement will be deemed to include all
provisions required by the Casino Control Act and to the extent that anything
contained herein is inconsistent therewith, the provisions of the Casino Control
Act shall govern. All provisions of the Casino Control Act, to the extent
required by law to be included in this Agreement, are incorporated herein by
reference as if fully restated herein.
All securities (as such term is defined in the Casino Control Act) of the
Partnership are held subject to the condition that, as of the date the New
Jersey Casino Control Commission (the "Commission") serves notice of its
determination of disqualification of a holder thereof, such holder shall (a) not
receive any dividends or interest upon any such securities; (b) not exercise,
directly or through any trustee or nominee, any voting right conferred by such
securities; and (c) not receive any remuneration in any form from Trump Plaza
Associates, a New Jersey general partnership ("TPA"), in which the Partnership
holds a partnership interest, or Trump Taj Mahal Associates, a New Jersey
general partnership ("TTMA"), in which the Partnership holds a partnership
interest for services rendered or otherwise.
All transfers (as defined by the Casino Control Act) of non-publicly traded
securities (as defined by the Casino Control Act), shares and other interests in
the Partnership shall be subject to the right of prior approval by the
Commission. The Partnership shall have the absolute right to repurchase at the
market price or purchase price, whichever is the lesser, any security, share or
other interest in the Partnership in the event that the Commission disapproves a
transfer in accordance with the provisions of the Casino Control Act.
Any publicly traded securities of the Partnership are held subject to the
condition that, if a holder thereof is found to be disqualified by the
Commission, such holder shall dispose of its, his or her interest in the
Partnership. If any unsuitable or disqualified holder fails to dispose of its,
his or her Securities, within 180 days following each disqualification:
(i) such publicly traded securities shall be subject to redemption by
the Partnership, if in the judgment of the Managing Partner such action
should be taken, to the extent necessary to prevent the loss or secure the
reinstatement of any government-issued license or franchise held by TPA,
TTMA, the Partnership or any subsidiary thereof, to conduct any portion of
the business of TPA, TTMA, the Partnership or such subsidiary, which
license or franchise is conditioned upon some or all of the holders of the
Partnership's securities possessing prescribed qualifications, and
-20-
<PAGE>
(ii) such unsuitable or disqualified holder shall indemnify the
Partnership for any and all direct or indirect costs, including attorneys'
fees, incurred by the Partnership as a result of such holder's continuing
ownership or failure to divest promptly.
The redemption price for all publicly traded securities, including the
Securities, to be redeemed by the Partnership pursuant to this Section 14.9
shall be equal to:
(b) the mean of the average closing sales prices for the thirty
trading days immediately prior to the date of determination of such value
on the largest national securities exchange on which such securities shall
have traded on such trading days,
(c) if no such sales of such securities occurred during such
thirty-day period or if the securities are not so listed but are traded in
the over-the-counter market the quotations available in the National
Association of Securities Dealers Automated Quotation System ("NASDAQ"),
the mean between the "bid" and "asked" prices on such national securities
exchange or as quoted in NASDAQ, as the case may be, during such thirty-day
period, or
(d) if (a) or (b) above do not apply, at a redemption price equal to
the fair value of such securities as determined by the Managing Partner
(such determinations to be conclusive and binding on all parties).
Notwithstanding the preceding paragraph, with respect to such publicly
traded securities, including the Securities, held in an interim casino
authorization trust which the Commission has ordered to become operative:
(a) during the time such 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
(b) after disposition of the securities by the trustee of the interim
casino authorization trust, proceeds distributed to an unqualified former
holder of same 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.
10 Certificate of Interest. Notwithstanding anything to the contrary
contained in this Agreement:
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<PAGE>
(i) The interest of each Partner in the Partnership shall be evidenced
by a Certificate of Interest. The Certificates of Interest in the
Partnership, together with a Certificate Transfer Ledger, shall be
maintained at the principal office of the Partnership. Each such
Certificate shall be serially numbered and shall be issued by, or at the
written direction of, each of the General Partners to the lawful holder of
an interest in the Partnership, upon payment by the issuee of the full
amount of the capital contributions then due with respect to its interest
in the Partnership represented by such Certificate. All Certificates shall
be executed in the name of the Partnership by each of the General Partners
or their designee(s). Each Certificate shall state on its face the name of
the registered holder thereof and the then interest in the Partnership held
by the issuee; and shall bear, on both sides thereof, a statement of the
restrictions imposed by Section 105 of the Casino Control Act.
(ii) Certificates of Interest in the Partnership may be transferred by
the lawful holders thereof only in connection with the transfer of all or
part of the interest of such holder in the Partnership, and only in
accordance with the provisions of this Agreement. All such transfers shall
be effected by duly executed and acknowledged instruments of assignment,
each of which shall be fully recorded on the Certificate Transfer Ledger.
No effect shall be given to any purported assignment of a Certificate, or
transfer of the interest in the Partnership evidenced thereby, unless such
assignment and transfer shall be in compliance with the terms and
provisions of this Agreement, and any attempted assignment or transfer in
contravention hereof shall be ineffectual.
(iii) In the event that a Certificate of Interest shall be lost,
stolen, destroyed or mutilated, the Partnership may cause a replacement
Certificate to be issued upon such terms and conditions as shall be fixed
by the Partners, including, without limitation, provision for indemnity and
the posting of a bond or other adequate security as security therefor. No
replacement Certificate shall be issued to any person unless such person
has surrendered the Certificate to be replaced, or has complied with the
terms of this subsection.
(iv) The Certificate Transfer Ledger, containing the names and
addresses of all Partners and the interest of each Partner in the
Partnership, shall be open to the inspection of the Partners at the
principal office of the Partnership during usual business hours upon
request of any Partner. Such Ledger shall, in addition, be available for
inspection by the Commission or the Division of Gaming Enforcement of the
State of New Jersey and each of their respective authorized agents at all
reasonable times without notice.
-22-
<PAGE>
11 Headings. The descriptive headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
12 Tax Matters Partner. Holdings shall be the "Tax Matters Partner" under
the Code and all applicable tax laws and shall, in its sole discretion, make or
revoke all tax elections, resolve allocations issues and handle all tax audits,
controversies and proceedings. TACHI and Holdings agree that Holdings, acting
through the Partnership, shall have the authority to handle and resolve all tax
controversies involving Holdings, TACHI and/or the Partnership in such manner as
Holdings in its sole discretion determines, provided that the Partnership shall
bear all accounting and legal expenses incurred in connection therewith.
Notwithstanding the foregoing, Trump shall have the right to control the
resolution of tax matters affecting or relating to TTMA in respect to periods
ending on or prior to the date hereof, including requiring the Partnership and
TTMA to adjust the tax basis of assets held by TTMA in connection with the
resolution of such tax matters to the extent such basis adjustments shall not
reduce Trump Hotels & Casino Resorts, Inc.'s share of federal income tax
depreciation and cost recovery deductions in respect of assets held by TTMA as
of the date hereof and contributions of the interest in TTMA to the Partnership.
13 Indemnification. The Partnership shall indemnify and hold harmless each
Partner, its Affiliates, and all officers, directors, employees and agents
(individually, an "Agent") of such Partner, and its affiliates (individually, an
"Indemnitee") from and against any and all losses, claims, demands, costs,
damages, liabilities, joint and several, expenses of any nature (including
reasonable attorneys' fees and disbursements), judgments, fines, settlements,
and other amounts arising from any and all claims, demands, actions, suits, or
proceedings, civil, criminal, administrative or investigative, brought or
threatened in which the Indemnitee may be involved, or threatened to be
involved, as a party or otherwise, arising out of or incidental to the business
of the Partnership or their status as an Agent including without limitation
liabilities under the Federal and state securities laws, regardless of whether
the Indemnitee continues to be a Partner, an Affiliate of a Partner, or an Agent
of a Partner or of an Affiliate of a Partner at the time any such liability or
expense is paid or incurred, so long as such indemnified person acted in good
faith on behalf of the Partnership, TACHI or Holdings and in a manner reasonably
believed by such person to be in or not opposed to the best interests of the
Partnership, TACHI or Holdings but only if such course of conduct does not
constitute gross negligence or willful misconduct; provided that such
indemnification or agreement to hold harmless shall be recoverable only out of
assets of the Partnership and not from the Partners and; provided, further that
-23-
<PAGE>
no indemnification shall be made to or on behalf of an Indemnitee if a judgment
or other final adjudication adverse to the Indemnitee establishes that his or
its acts or omissions (i) in the case of an Indemnitee who is or was a director
of TACHI or the Holdings managing general partner, were in breach of his duty of
loyalty to TACHI or the Holdings managing general partner, as the case may be,
or were not in good faith or involved a knowing violation of law, or resulted in
receipt by the Indemnitee of an improper personal benefit or (ii) in the case of
all other Indemnitees, constituted gross negligence or willful misconduct.
Termination of any proceeding by judgment, order, settlement, conviction or upon
a plea of nolo contendre or its equivalent shall not itself create a presumption
that such Indemnitee did not meet the applicable standard of conduct for
indemnification. Indemnity shall be paid in advance of the final disposition of
the proceeding to an Indemnitee provided that the Indemnitee undertakes to repay
the Partnership if it shall ultimately be determined that he or it is not
entitled to indemnification as provided by this Section 14.13. The
indemnification provided by this Section 14.13 shall be in addition to any other
rights to which an Indemnitee may be entitled under any agreement, as a matter
of law or equity, or otherwise, both as to action in the Indemnitee's capacity
as a Partner, an Affiliate of a Partner, or as an officer, director, employee or
agent of a Partner or Affiliate of a Partner and as to any action in another
capacity, and shall continue as to an Indemnitee who has ceased to serve in such
capacity and shall inure to the benefit of the heirs, successors, assigns and
administrators of the Indemnitee. No Indemnitee shall be denied indemnification
in whole or in part under this Section 14.13 by reason of the fact that the
Indemnitee had an interest in the transaction with respect to which the
indemnification applies if such interest was fully disclosed and the transaction
was approved by Funding.
Any indemnification or advance under this Section 14.13 to an Indemnitee
shall be made promptly and in any event within thirty (30) days upon the written
request of the individual seeking indemnification. The right to indemnification
or advances as granted under this Section 14.13 shall be enforceable by any such
individual seeking indemnification in any court of competent jurisdiction, if
the Partnership denies such request, in whole or in part, or if no disposition
thereof is made within thirty (30) days. Such person's costs and expenses
incurred in connection with successfully establishing his right to
indemnification or advances, in whole or in part, in any such action shall also
be indemnified by the Partnership. It shall be a defense to any such action that
there has been a judgment or other final adjudication adverse to the claimant
which established that his acts or omissions did not meet the standard of
conduct required by the first paragraph of this Section 14.13, but the burden of
proving such defense shall be on the Partnership. Neither the failure of the
Partnership to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
-24-
<PAGE>
because he has met the applicable standard of conduct, nor the fact that there
has been an actual determination by the Partnership that the claimant has not
met such applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable standard of
conduct.
The Partnership shall have the power to purchase and maintain insurance,
and to furnish similar protection (including but not limited to providing a
trust fund, letter of credit, self-insurance or indemnification contract), on
behalf of any individual to whom indemnification or advances may be paid
hereunder, against any expenses, fees or liabilities for which indemnification
or advances may be paid hereunder.
14 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their heirs, executors, administrators,
successors, legal representatives and permitted assigns, including any pledgee
upon the foreclosure of any pledge of a Partner's Partnership Interest in the
Partnership.
Partners:
TRUMP HOTELS & CASINO RESORTS
HOLDINGS, L.P.
By: TRUMP HOTELS & CASINO RESORTS,
INC., general partner
By: /s/ Nicholas L. Ribis
----------------------------
Nicholas L. Ribis
President
TRUMP ATLANTIC CITY HOLDING, INC.
By: /s/ Donald J. Trump
----------------------------
Donald J. Trump
President
-25-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 21,612
<SECURITIES> 0
<RECEIVABLES> 21,205
<ALLOWANCES> 6,326
<INVENTORY> 2,640
<CURRENT-ASSETS> 56,181
<PP&E> 602,318
<DEPRECIATION> 151,495
<TOTAL-ASSETS> 605,548
<CURRENT-LIABILITIES> 59,815
<BONDS> 503,338
0
0
<COMMON> 101
<OTHER-SE> 37,576
<TOTAL-LIABILITY-AND-EQUITY> 605,548
<SALES> 82,868
<TOTAL-REVENUES> 93,551
<CGS> 0
<TOTAL-COSTS> 49,797 <F1>
<OTHER-EXPENSES> 26,305 <F2>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,026
<INCOME-PRETAX> (9,864)
<INCOME-TAX> 0
<INCOME-CONTINUING> (9,864)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,864)
<EPS-PRIMARY> (.97)
<EPS-DILUTED> (.97)
<FN>
<F1>Includes gaming, lodging, food & beverage and other
<F2>Includes general & administration and depreciation & amortization
</FN>
</TABLE>
