Exhibit 10.7(H)

 

FOURTH AMENDMENT TO LEASE AGREEMENT

 

THIS FOURTH AMENDMENT TO LEASE AGREEMENT (“Fourth Amendment”), is made on
                                 , 20    , and effective as set forth herein, by
and among the City of Evansville, Indiana (the “City”), acting by and through
the Redevelopment Commission of the City of Evansville, Indiana, organized and
operating under IC 36-7 14 (“Commission”), Aztar Indiana Gaming Company, LLC, a
limited liability company, organized and existing under the laws of the State of
Indiana (“Tenant”), and Aztar Corporation, a corporation organized and existing
under the laws of the State of Delaware (“Guarantor”) (City, Commission, Tenant
and Guarantor, collectively, the “Parties”).

 

Recitals

 

A.                                   The Commission, Tenant and Guarantor are
the parties in interest to that certain Evansville Riverboat Landing Lease dated
May 2, 1995 (the “Original Lease”), as amended by an Amendment to Lease
Agreement effective December 1, 2001 (the “First Amendment”), as further amended
by that certain Second Amendment to Lease Agreement dated August 27, 2003 (the
“Second Amendment”), as further amended by those certain Memorandums of
Understanding made effective as of December 1, 2004, March 15, 2005, May 12,
2005, and June 7, 2005, respectively (the “MOUs”), as further amended by that
certain Third Amendment to Lease Agreement effective December 1, 2005 (the
“Third Amendment”) (the Original Lease, the First Amendment, the Second
Amendment, the MOUs, and the Third Amendment, collectively, the “Lease”).

 

B.                                     On May 5, 2008, Tenant and Guarantor and
certain of their affiliates each filed a petition with the United States
Bankruptcy Court for the District of Delaware (the ““Bankruptcy Court”“) for
relief under chapter 11 of the Bankruptcy Code.

 

C.                                     Tenant entered into a Durable Power of
Attorney for the Designation and Appointment of Attorney in Fact for the
Purposes of Conducting Riverboat Gambling Operations and Related Activities (the
“POA Agreement”) under which Robert T. Dingman (since succeeded by Trinity Hill
Group, LLC) was appointed as attorney-in-fact (“Attorney-in-Fact”) to exercise
and perform certain activities and powers regarding Tenant and its riverboat
gambling operations and related business activities for and on behalf of
Tenant.  The POA Agreement was approved and ordered by the Indiana Gaming
Commission (IGC) with an effective date of April 2, 2008 in Order 2008-37 (the
“IGC Order”).  The provisions of the POA Agreement continue in effect as of the
date of execution of this Fourth Amendment.  Under the IGC Order, the POA
Agreement is to remain in effect until the IGC terminates the power and
authority of the Attorney-in-Fact by an appropriate written order.

 

D.                                    In furtherance of the objectives of the
Indiana redevelopment laws and the Downtown Redevelopment Plan, and in order to
induce Tenant to exercise its right and option to extend the term of the Lease
for an additional term of five years from December 1, 2010 to November 30, 2015
(the “Second Extended Term”), Commission and Tenant desire to amend the Lease to
reflect the agreements set forth herein subject to the terms and conditions set
forth herein.

 

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NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the Parties agree to amend the Lease as follows.

 

1.                                       Effectiveness of the Amendment.  The
Lease shall be amended as set forth in this Fourth Amendment on the date the
last of the following conditions, which the Parties acknowledge and intend to
operate as conditions precedent, are satisfied (the “Amendment Effective
Date”):  (a) The IGC confirms in writing that Tenant is granted a license (by
renewal or otherwise) issued pursuant to IC 4-33-6 to own and operate a
riverboat from and after the date hereof; (b) Tenant has assumed the Lease
pursuant to 11 U.S.C. §365; (c) the POA Agreement is terminated following the
issuance of a written order of the IGC terminating the power and authority of
the Attorney-in-Fact; (d) the Bankruptcy Court approves the Fourth Amendment, by
order or as part of a confirmed chapter 11 plan (or such approval becomes moot
as the result of the occurrence set forth in the following clause); and (e) the
chapter 11 plan of Tenant and Guarantor becomes effective (the “Plan Effective
Date”) with: (i) Columbia Sussex Corporation and; (ii) William J. Yung III
having no control, ownership or decision-making authority in Tenant (or its
successor), Guarantor (or its successor) or any of their affiliates after the
Plan Effective Date.  Tenant and Guarantor shall each provide information
regarding its ownership and control to City upon its reasonable request.

 

2.                                       Second Extended Term.  Subject to the
occurrence of the Amendment Effective Date, Tenant shall have exercised the
right to extend the Lease through and including the Second Extended Term without
any further action of notice of Tenant or Guarantor to the City and Commission
that the Lease is so extended.

 

3.                                       Guaranteed Prepayment Credits.  Tenant
shall make two payments, at City’s direction, to the Evansville Bond Bank or to
such other City entity as the City Controller may direct, which shall constitute
prepayments of Percentage Rent due and payable for the period between
January 2011 and December 2015 (the “Prepayment Period”). Tenant shall make the
first such payment in the amount of Five Million Dollars ($5,000,000) on or
before that date thirty (30) days after the Plan Effective Date, said due date
hereafter the “First Payment Due Date”. Tenant shall make the second such
payment in the amount of Five Million Dollars ($5,000,000) no later than
December 31, 2010.  Tenant shall be entitled to recoup the prepayments in the
form of a credit ratably applied at the rate of One Hundred Sixty-Six Thousand
Six Hundred Sixty-Six Dollars and Sixty-Seven Cents ($166,666.67) per month
against Percentage Rent payable during each of the sixty (60) months of the
Prepayment Period (the “Prepayment Credit”).  Such Prepayment Credit shall be
applied in the calculation of Net Projected Percentage Rent and Actual
Percentage Rent.

 

4.                                       City Development Projects.  City and
Commission desire to create jobs, increase tax revenues, provide direct economic
benefits and promote tourism and additional economic development by promoting
the construction or acquisition or real estate or facilities or capital projects
to be owned by City, Commission, or parties approved by the Commission.  Tenant
agrees, on or before the later of (a) January 31, 2010, or (b) thirty (30) days
after the Plan Effective Date, to pay into escrow or another restricted account
Three Million Five Hundred Thousand and 00/100 Dollars ($3,500,000.00) (the
“Economic Development Funds”).  The

 

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Economic Development Funds shall be accessed upon written notice solely by City
to Tenant, provided that such notice certifies that the Economic Development
Funds are to be used only to pay, allow the City or a City entity to pay or
reimburse actual expenditures on the City’s downtown arena project or other
downtown economic development projects located within one (1) mile of the Leased
Premises.

 

5.                                       Pedestrian Bridge.  Tenant shall
construct a pedestrian bridge from the City of Evansville “Entertainment
District” to the Leased Premises at an estimated cost of approximately Three
Million and 00/100 Dollars ($3,000,000.00).  Tenant shall commence design
development work as soon as is practicable following the Plan Effective Date and
use its best efforts to have construction of such pedestrian bridge completed
and open to public use on or before the third (3rd) anniversary of the Plan
Effective Date.  After the first (1st) anniversary of the Plan Effective Date
and subject to the City’s discretion, Tenant shall deliver a presentation and
status report on the pedestrian bridge project to the Commission.  Tenant shall
own and shall be solely responsible for the design, development, construction,
operation, maintenance, and repair of the pedestrian bridge.  Tenant’s
obligations with respect to construction of the pedestrian bridge are subject to
acquisition by Tenant or Tenant’s contractors, sub-contractors, agents or
representatives of all local, state or federal governmental permits required or
necessary for said construction.  Tenant agrees to use reasonable and good faith
efforts to obtain said permits and City and the Commission agree to assist and
support Tenant with respect to said permit acquisition in a reasonable and
expeditious manner.

 

6.                                       Rent Schedule. Clause B of Schedule
4.01 set forth in the Third Amendment to the Lease shall be deleted in its
entirety and replaced with the following:

 

Second and Third Extended Terms.  During the Second Extended Term and Third
Extended Term, if applicable, Tenant shall make rental payments consisting
solely of Percentage Rent, based on Tenant’s Adjusted Gross Receipts (“AGR”) as
defined in the IC 4-33 et seq. (the “Act”) showing in detail all receipts of
Tenant’s gaming operations and an itemized statement of the allowable deductions
therefrom for the Lease Year to date on a cumulative basis, which shall be
calculated and determined as follows:

 

(i)                                     two percent (2%) of the AGR for the
Lease Year up to Twenty-Five Million Dollars ($25,000,000), plus

(ii)                                  four percent (4%) of the AGR for the Lease
Year that is in excess of Twenty-Five Million Dollars ($25,000,000) up to Fifty
Million Dollars ($50,000,000), plus

(iii)                               six percent (6%) of the AGR for the Lease
Year that is in excess of Fifty Million Dollars ($50,000,000) up to Seventy-Five
Million Dollars ($75,000,000), plus

(iv)                              eight percent (8%) of the AGR for the Lease
Year that is in excess of Seventy-Five Million Dollars ($75,000,000) up to One
Hundred Million Dollars ($100,000,000), plus

(v)                                 during Lease Years of the Second Extended
Term, twelve percent (12%) of the AGR for the Lease Year that is in excess of
One Hundred Million Dollars ($100,000,000), and

 

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(vi)                              during Lease Years of the Third Extended Term,
ten percent (10%) of the AGR for the Lease Year that is in excess of One Hundred
Million Dollars ($100,000,000).

 

Within twenty (20) days after the end of each month, Tenant shall deliver a
statement of AGR to City.  As each month’s statement of AGR is delivered to
City, the amount of the Percentage Rent for the Lease Year to date will be
calculated and Tenant shall be credited against the cumulative liability for the
Percentage Rent paid for the Lease Year through the last day of the prior month
and any balance of Percentage Rent due after said credits shall be paid at that
time.  In no event shall the Percentage Rent ever be less than Two Million and
00/100 Dollars ($2,000,000.00) for any Lease Year.  Each monthly statement of
AGR shall be certified by the chief financial officer of Tenant to be true,
correct and complete.  Not later than ninety (90) days after the end of each
Lease Year, Tenant shall deliver to City a complete statement showing in
reasonable detail all items of Gross Receipts (as defined in IC 4-33-2-11), and
all deductions therefrom as set forth in IC 4-33-2-2, together with all other
receipts derived by Tenant during the Lease Year certified as being true,
correct and complete by an independent Certified Public Accountant approved for
such purpose by City, all as described in Sections 4.04 and 4.06 of the Lease.

 

7.                                       Future Rent. Without any modification
to Tenant’s rights to extended terms set forth in Section 1 of the Third
Amendment, Clause C of Schedule 4.01 set forth in the Third Amendment to the
Lease shall be stricken from the Lease and be of no further force and effect.

 

8.                                       Naming Rights.  Tenant and City agree
to enter into good faith discussions regarding naming rights and advertising if
City builds an arena as referenced above in Section 4.

 

9.                                       Tenant’s Commitments to Capital
Improvements; Workforce Levels, and Operational Targets.  Tenant shall satisfy
its commitments related to capital improvements, workforce levels, and
operational targets consistent with Tenant’s business plan upon which its
effective chapter 11 plan is based, subject to reasonable adjustments based on
material variations in Tenant’s financial performance. Tenant shall provide City
with documentation reasonably requested by and reasonably satisfactory to City
substantiating Tenant’s adjustment of modification of any such commitment.  City
acknowledges that such documentation will include confidential information,
which City agrees to keep and maintain as confidential.

 

10.                                 Feasibility Study.  Tenant agrees to
undertake a study of the feasibility of substantially remodeling certain
portions of the Leased Premises in connection with its licensed riverboat gaming
operations, including, but not limited to, the feasibility of locating a new
vessel in the Leased Premises (the “Study”).  The Parties shall mutually agree
upon a consultant to perform the Study.  Thereafter, the Study shall commence on
or before July 1, 2014, and shall be completed and a final report delivered to
the Parties on or before December 31, 2014.

 

11.                                 Payment of Prior Costs Incurred by the
City.  City acknowledges that Tenant has already reimbursed City for City’s
out-of-pocket costs in connection with its quiet title action involving Columbia
Sussex Corporation.

 

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12.                                 Binding Effect.  This Fourth Amendment binds
the parties hereto and inures to the benefit of their respective successors or
permitted assigns.  Subsequent to the Plan Effective Date, upon a transfer or
sale of the riverboat gaming license, Tenant shall assign the Lease and this
Fourth Amendment to the transferee contingent upon the transferee’s licensing by
the Indiana Gaming Commission (“IGC”).  The parties acknowledge the
applicability of 68 IAC 1-4 et seq. in the event of an application to transfer
Tenant’s gaming license.

 

13.                                 Lease in Full Force and Effect.  Except as
expressly amended by this Fourth Amendment, the Lease shall remain unchanged and
in full force and effect, as amended herein.

 

14.                                 Affirmation of Guaranty.  Guarantor hereby
unconditionally guarantees and promises to perform and reaffirms its obligations
under the Lease, as amended by this Fourth Amendment to the Lease consistent
with this Fourth Amendment.

 

15.                                 Third Party Approvals.  This Fourth
Amendment is subject to approval by the Bankruptcy Court, any lender to Tenant
or to Guarantor and by the Indiana Gaming Commission, as may be required.

 

16.                                 Authorization.  Subject to authority of the
Bankruptcy Court, the Parties respectively represent to one another that the
execution, delivery and performance of this Fourth Amendment have been duly
authorized and this Fourth Amendment constitutes the legally binding obligation
of the respective Parties.

 

17.                                 Definitions.  All of the capitalized terms
used herein, but not defined in this Fourth Amendment shall have the meaning set
forth in the Project Agreement and the Lease.

 

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IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Fourth Amendment to Lease Agreement as of the
day and year first above written.

 

AZTAR INDIANA GAMING COMPANY, LLC

 

AZTAR CORPORATION

 

 

 

By:

 

 

By:

 

 

 

 

 

 

 

 

 

 

 

Printed Name:

 

 

Printed Name:

 

 

 

 

 

 

 

 

 

 

 

Title:

 

 

Title:

 

 

 

REDEVELOPMENT COMMISSION OF

THE CITY OF EVANSVILLE, INDIANA

 

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