**Exhibit 10.26**

 

**LETTER AGREEMENT**

 

This LETTER AGREEMENT (this “Agreement”) is entered into as of February 12, 2004, between Trump Hotels & Casino Resorts, Inc., a Delawarecorporation (the “Company”) and Trump Hotels & Casino Resorts Holdings, L.P., a Delaware limited partnership (“Trump Holdings”), and DLJ Merchant Banking Partners III, L.P., a Delaware limited partnership (“DLJMB”).

 

WHEREAS, on January 21, 2004, the Company and DLJMB enteredinto 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 arestructuring 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 enteredinto the Exclusivity Agreement with DLJMB and is in active negotiations with respect to the Transaction; 

 

WHEREAS, the Exclusivity Agreement provides that DLJMB may terminate such discussions with the Company with respect to the Transaction if such adisclosure is made without its consent; 

 

WHEREAS, DLJMB isconcerned 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 restructuringof 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, in light of the potential “stalking horse” role which maybe played by DLJMB and the Company’s desire to assure DLJMB’s continued pursuit of the Transaction and the Company’s desire to consummate the Transaction, the Company has determined to provide some certainty to DLJMB in connectionwith 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 the Company has determined that it is in the best interests of the Company and its various constituencies for theCompany to enter into this Agreement. 

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, andintending to be legally bound, the parties hereto agree as follows: 

 

1. Exclusivity Agreement. The Company agrees that it, and any of its respective subsidiaries or affiliates, will and will cause all of their respective officers, directors, employees, agents and representatives (including Donald J.Trump) to comply with the provisions set forth in paragraph 1 of the Exclusivity Agreement. The Exclusivity Agreement is hereby amended as follows: The Exclusivity Period defined therein shall mean the period ending on May 31, 2004. The ExclusivityAgreement, as amended by this Agreement, remains in full force and effect. 

 

2. Expenses. The Company 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 shallbe 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 dateshall 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 anyamounts 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 the Company is required to reimburse DLJMB for the Transaction Expenses pursuantto 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 supportingdocumentation reflecting any amounts due under such invoice. 

 

3. Transaction Fee. The Company 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 earnedby DLJMB upon the occurrence of any Alternative Transaction but shall not become payable by the Company until consummation of any Alternative Transaction without regard to when such Alternative Transaction occurs. 

 

An “Alternative Transaction” will occur when the Company, any ofits subsidiaries or any of its controlled affiliates enters into a definitive agreement (including an agreement subject to court approval), files a voluntary plan of reorganization with a court or files an exchange offer registration statement withthe SEC, in each case with respect to: 

 
 •Any transaction described in any of subparagraphs (a)(i)-(iii) which has an effect described in subparagraph (b), and 
 

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 •Any transaction described in subparagraph (a)(iv), 
 

in each case whether consummated out-of-court or through a bankruptcy proceeding, without the participation of DLJMB or any of its affiliates (other thanCSFB and its affiliates in connection with advisory or financing activities): 

 

(a)(i) any direct or indirect sale, whether by sale of equity or substantially all the assets, merger or consolidation (including, without limitation, any sale pursuant to Section 363 of title 11 of the United StatesCode (the “Bankruptcy Code”)) of the Company, any of its subsidiaries or any of its controlled affiliates, (ii) any sale of securities of the Company, any of its subsidiaries or any of its controlled affiliates, (iii) any restructuring ofindebtedness of the Company, any of its subsidiaries or any of its controlled affiliates, including, without limitation, the filing of a plan of reorganization under Chapter 11 of the Bankruptcy Code; or (iv) any person other than Donald J. Trump,his spouse and his legal heirs and legatees (the “Trump Group”) shall acquire and own, directly or indirectly, in the aggregate a greater percentage of the Voting Stock of the Company than the Trump Group (other than pursuant to orresulting from the confirmation of a plan of reorganization under Chapter 11 of the Bankruptcy Code that is not proposed by the Company); 

 

(b) Any such transaction shall have (x) a value in excess of $200 million to the Company, any of its subsidiaries, or any of itscontrolled affiliates, it being understood that for such purposes, value shall mean the aggregate dollar amount of proceeds received and net indebtedness assumed, forgiven or compromised or (y) shall result in the ownership of more than 50% of thevoting stock or control of the board of directors of any subsidiary or controlled affiliate of the Company with an asset fair market value of in excess of $200 million. 

 

Notwithstanding the foregoing, in no event shall the sale for fair market value (whether through sale of equity or assets)of only one of Trump Marina Hotel Casino or Trump Indiana Casino Hotel, taken alone, constitute an Alternative Transaction. For the purposes of this Agreement, “Voting Stock” shall mean all classes of equity interests of the Company thenoutstanding and generally entitled to vote in elections of the Company’s board of directors. 

 

4. Reimbursement Obligation. Simultaneously with the execution hereof, DLJMB has entered into certain agreements with certain of the Company’ssubsidiaries relating to the potential payment of Transaction Expenses and the Transaction Fee (the “Other Agreements”). DLJMB agrees that, at such time as it has collected amounts owing hereunder and under the Other Agreements (not toexceed an aggregate of $25 million in Transaction Fees and $5 million in Transaction Expenses), it will (a) cease its efforts to enforce such Other Agreements or collect monies due thereunder from the signatories thereto and (b) remit promptly anyamounts received in excess thereof to the Company. Notwithstanding clause (b) above, the parties will work together in order to minimize, to the extent reasonably practicable, but with no more than de minimis 

 

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unreimbursed cost (including tax cost) to DLJMB, any adverse tax consequences to the Company, any of its subsidiaries or its controlled affiliates caused bysuch remittances of any such excess amounts and, if mutually agreed, will amend this agreement in order to accomplish such purposes. 

 

5. Non-Assignability. This Agreement shall not be assignable without the prior written consent of the non-assigning party. Any assignment attemptedin violation of this paragraph shall be void. 

 

6. GoverningLaw. This Agreement shall be governed by and construed in accordance with the laws of Delaware without regard to its principles of conflicts of law. 

 

7. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedeany prior oral or written agreements related thereto. 

 

8.Amendments and Waivers. Neither this Agreement nor any of the terms hereof may be terminated, amended or waived orally, but only by an instrument in writing signed by the parties hereto. 

 

9. Counterparts. This Agreement may be executed in one or morecounterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. 

 

10. No Agreement Regarding Transaction; Effect of Definitive Agreements. This Agreement does not reflect all mattersupon which agreement must be reached in order for the Transaction to be consummated, and does not obligate the parties to execute or consummate the Investment Agreement or any other definitive agreement with respect to the Transaction. Such anobligation will arise only upon the negotiation, execution and delivery of final definitive agreements relating to the Transaction in form and substance satisfactory to the parties and their respective counsel. Neither the discussions ornegotiations among the parties hereto nor this Agreement or the Exclusivity Agreement is intended to, and they do not, create any fiduciary or other special duties or obligations between the parties hereto other than those specifically set forthherein or in the Exclusivity Agreement, including any implied covenant of good faith or fair dealing. In the event the parties enter into one or more definitive agreements with respect to the Transaction, such agreement(s), if entered into, (A)shall contain certain provisions consistent with the terms set forth in this Agreement and shall include other provisions, including payments in the event the Company terminates such definitive agreements, consistent with the terms previouslydiscussed by the parties, and (B) shall supercede this Agreement and the Exclusivity Agreement and this Agreement and the Exclusivity Agreement shall be void and have no further force or effect. 

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed on itsbehalf by its officer thereunto duly authorized, all as of the day and year first above written. 

 

TRUMP HOTELS & CASINO RESORTS, INC.
By: /s/    JOHN P. BURKE  
Name:
 **John P. Burke**
Its:
 **Vice President**
 
TRUMP HOTELS & CASINO RESORTS HOLDINGS, L.P.By: Trump Hotels & Casino Resorts, Inc., its general partnerBy: /s/    JOHN P. BURKE  
Name:
 **John P. Burke**
Its:
 **Vice President**
 
DLJ MERCHANT BANKING PARTNERS III, L.P.By: DLJ Merchant Banking III, Inc., its Managing General PartnerBy: /s/    STEVE RATTNER  
Name:
 **Steve Rattner**
Its:
 **Authorized Signatory**
 

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