Exhibit 10.6

 

SECOND AMENDMENT TO GROUND LEASE AND SUBLEASE

 

This SECOND AMENDMENT TO GROUND LEASE AND SUBLEASE (this “Second Amendment”) is
entered into as of the 7th day of January, 1997 by and between KB ENTERPRISES, a
Nevada corporation (“Landlord”), and BOULDER STATION, INC., a Nevada corporation
(“Tenant”).

 

Recitals

 

A.                                   Landlord and Tenant entered into that
certain Ground Lease and Sublease dated June 1, 1993, as amended by that certain
First Amendment to Ground Lease and Sublease dated June 30, 1995 by and between
Landlord and Tenant (the “Original Lease” and, as amended by this Second
Amendment, the “Lease”).

 

B.                                     Landlord and Tenant desire to amend the
Original Lease as provided herein.

 

Agreement

 

NOW, THEREFORE, in exchange for the mutual promises and covenants contained
herein, the sufficiency of which is hereby acknowledged by each of the
undersigned, the undersigned parties agree as follows:

 

1.                                       The Original Lease is hereby amended by
insertion of the following as Article XIII(Z):

 

Z.                                        Landlord Accomodations.

 

1.                                             
Defined.                                           Landlord and Tenant
acknowledge that Tenant’s improvements and operations on the Land have been and
will continue to be subject to various regulatory requirements applicable to the
gaming industry, and that as a result of such requirements, Tenant or certain
gaming regulatory agencies may request that Landlord take, or refrain from
taking, certain actions in order to accomodate Tenant’s development and
operation of gaming facilities (collectively, “Landlord Accommodations”). The
result of such Landlord Accommodations may even limit or dictate to whom
Landlord can or cannot transfer the Land, enter into loans therewith or other
activities which restrict the normal operation of income-producing property,
thereby potentially impacting the value. The compliance with any such request of
Landlord Accommodation shall be in the sole discretion of the Landlord. Any
granting or performance by Landlord of any Landlord Accommodation shall be
conditioned upon Tenant’s agreement to Subsections (2) and (3) of this
Section XIII(Z).

 

2.                                              Reimbursement of Expenses.
Tenant shall promptly reimburse Landlord, upon written demand and presentation
to Tenant of appropriate

 

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documentation, for any and all actual costs, direct and indirect, which Landlord
incurs in the granting or performance of Landlord Accommodations. Such
reimbursable costs shall include, but not be limited to, reasonable attorneys’
fees and a reasonable allocation of Landlord’s internal management expenses.

 

3.                                             Landlord’s Sale of
Land.                                  In the event Landlord or The Frank J.
Fertitta and Victoria K. Fertitta Family Trust (“Designated Beneficiary”)
contract to sell, transfer or convey the Land, Tenant shall reimburse Landlord
for any Impairment of Value (as defined herein) of the Land which is caused
directly or indirectly by Landlord Accommodations.

 

(a)                                      Determination of Impairment of Value.
“Impairment of Value” shall mean the difference, if any between the contracted
purchase price and the purchase price ultimately paid at closing; provided,
however, in no event shall the contracted purchase price, for purposes of this
calculation, exceed the fair market value of the Land as determined by
Section I(K)(2) of the Lease. In the event that a sale or transfer was
terminated and that termination was “caused directly or indirectly by Landlord
Accommodations,” the Impairment of Value shall equal the contracted purchase
price.

 

(b)                                      Burden of Proof. The Impairment of
Value shall be deemed to be “caused directly or indirectly by the Landlord
Accommodations” if, and only if, Landlord can prove that Impairment of Value was
attributable to one of the following:

 

(i)                         restrictions imposed as a result of Landlord
Accommodations;

 

(ii)                     Landlord or Designated Beneficiary’s inability to
consummate a sale or conveyance of the Land in a timely manner caused by the
Landlord’s Accommodations; or

 

(iii)                 costs and expenses attributable to compliance with and
seeking approvals related to Landlord Accommodations.

 

(c)                                       Right of First Refusal. In the event
the Impairment of Value is more than five percent (5.0%) of the contracted
purchase price, Landlord’s sale shall be subject to a right of first refusal by
Tenant to purchase the Property at the contracted purchase price, which right of
first refusal will be deemed to be waived unless exercised in writing within
thirty (30) days of Landlord’s notice to Tenant asserting an Impairment of Value
and requesting payment therefore.

 

3.                                             Automatic Termination of This
Section XIII(Z).                             This Lease shall be automatically
amended, with no further execution of documents or other

 

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actions required, to delete this Section XIII(Z) in its entirety immediately
upon the first to occur of any of the following:

 

(i)                                  Tenant consummates an acquisition of the
Landlord’s Interest;

 

(ii)                              The Designated Beneficiary no longer has any
direct or indirect interest in the Land; or

 

(iii)                          The date on which the Landlord Accommodations are
no longer in effect.

 

2.                                              The terms and provisions of this
Second Amendment shall be applicable only to the undersigned Landlord and Tenant
and may not be assigned, transferred or conveyed to any other party whatsoever.

 

3.                                              Except as amended herein, the
Lease remains in full force and effect, and Landlord and Tenant ratify the Lease
as amended herein.

 

4.                                              All capitalized terms used in
this Second Amendment and not defined herein shall have the meaning ascribed
thereto in the Original Lease.

 

5.                                              This Second Amendment shall be
governed by and construed in accordance with the laws of the State of Nevada.

 

6.                                              This Second Amendment may be
executed in any number of counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the same instrument.

 

WITNESS THE EXECUTION HEREOF by each of the undersigned, to be effective as of
the date first set forth above.

 

LANDLORD

 

TENANT

 

 

 

KB Enterprises, a Nevada corporation

 

Boulder Station, Inc., a Nevada

 

 

corporation

 

 

 

By:

 /s/ W. J. Bullard

 

 

By:

 /s/ Scott M Nielson

 

Name:

William J Bullard

 

 

Name:

Scott M Nielson

 

Title:

Secretary

 

 

Title:

Secretary

 

 

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