Exhibit 10.20
LETTER
AGREEMENT
This LETTER AGREEMENT (this
“Agreement”) is entered into as of February 12, 2004,
between Trump Atlantic City Associates, a New Jersey general
partnership (“TAC”) and DLJ Merchant Banking Partners
III, L.P., a Delaware limited partnership
(“DLJMB”).
WHEREAS, on January 21, 2004, Trump
Hotels & Casino Resorts, Inc., a Delaware corporation (the
“Company”) and DLJMB entered into an Exclusivity
Agreement (the “Exclusivity Agreement”) setting forth
certain matters related to a possible transaction pursuant to which
DLJMB would make a substantial equity investment in the Company in
connection with a restructuring of the debt securities of the
Company’s subsidiaries and its controlled affiliates (the
“Transaction”), which agreement remains in full force
and effect;
WHEREAS, the Company has advised
DLJMB that it has determined that it will publicly disclose the
fact that it has entered into the Exclusivity Agreement with DLJMB
and is in active negotiations with respect to the Transaction, as
described in the term sheet being discussed by the Company and
DLJMB;
WHEREAS, the Exclusivity Agreement
provides that DLJMB may terminate such discussions with the Company
with respect to the Transaction if such a disclosure is made
without its consent;
WHEREAS, DLJMB is concerned about
the risks attendant to negotiating the Transaction in a public
forum, the reputational issues associated with the possible failure
to consummate the Transaction, and the uncertainties associated
with accomplishing the restructuring of the Company’s
subsidiaries’ and its controlled affiliates’ debt as
well as the significant time, effort and expense which needs to be
devoted to the project;
WHEREAS, DLJMB nonetheless remains
interested in the Transaction;
WHEREAS, TAC has a substantial
interest in the Transaction being consummated and has determined
that entering into this Agreement is necessary in order to assure
DLJMB’s continued pursuit of the Transaction;
WHEREAS, in light of the potential
“stalking horse” role which may be played by DLJMB and
TAC’s desire to consummate the Transaction, TAC has
determined to provide some certainty to DLJMB in connection with
the significant time, effort and expense which DLJMB will continue
to expend in order to consummate the Transaction; and
WHEREAS, the Board of Directors of
TAC has determined that it is in the best interests of TAC and its
various constituencies for TAC to enter into this
Agreement.
NOW, THEREFORE, in consideration of
the foregoing and other good and valuable consideration, and
intending to be legally bound, the parties hereto agree as
follows:
1. Expenses . TAC shall
reimburse DLJMB for all Transaction Expenses (as defined in the
Exclusivity Agreement) incurred by DLJMB beginning after the date
of this Agreement and accruing until, and shall be payable upon,
the earlier to occur of (i) the consummation of an Alternative
Transaction (as defined below) and (ii) the date that is eighteen
months following the date of this Agreement; provided, however,
Transaction Expenses through such date shall be payable immediately
upon the sale (whether through a stock sale or sale of assets) of
either the Trump Marina Hotel Casino or the Trump Indiana Casino
Hotel; provided, further, that (a) such reimbursement obligation
shall not duplicate any amounts reimbursed under the Exclusivity
Agreement and (b) the aggregate amount of Transaction Expenses
reimbursed to DLJMB shall not exceed $5 million. At such time as
TAC is required to reimburse DLJMB for the Transaction Expenses
pursuant to the preceding sentence, such reimbursement shall be
made promptly based upon the submission by DLJMB to the Company of
an invoice for such Transaction Expenses, which invoice shall
contain a reasonably detailed breakdown and supporting
documentation reflecting any amounts due under such
invoice.
2. Transaction Fee . TAC will
become obligated to pay $25 million (the “Transaction
Fee”) to DLJMB if, on or prior to December 1, 2004, an
Alternative Transaction occurs. The Transaction Fee (if any) shall
be earne
