**Exhibit 10.11**

 

**SECONDAMENDMENT TO GROUND LEASE**

 

This SECONDAMENDMENT TO GROUND LEASE (this **“Second Amendment”**)is entered into as of the 7th day of January, 1997 by and between TEXASGAMBLING HALL & HOTEL, INC., a Nevada corporation (**“Landlord”**), and TEXAS STATION, INC., a Nevadacorporation (**“Tenant”**).

 

**Recitals**

 

A.                                   Landlordand Station Casinos, Inc. entered into that certain Ground Lease dated June 1,1995, as amended by that certain First Amendment to Ground Lease dated June 30,1995 by and between Landlord and Station Casinos, Inc., and assigned byStation Casinos, Inc. to Tenant by that certain Assignment, Assumption andConsent Agreement (Ground Lease) dated as of July 6, 1995 (the **“Original Lease”** and, as amended by this SecondAmendment, the **“Lease”**).

 

B.                                     Landlordand 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, theundersigned parties agree as follows;

 

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

 

Z.                                     *Landlord Accomodations*.

 

*1.**                                        **Defined**.**                            **Landlord and Tenantacknowledge that Tenant’s improvements and operations on the Land have been andwill continue to be subject to various regulatory requirements applicable tothe gaming industry, and that as a result of such requirements, Tenant orcertain gaming regulatory agencies may request that Landlord take, or refrainfrom taking, certain actions in order to accomodate Tenant’s development andoperation of gaming facilities (collectively, **“LandlordAccommodations”**)*.*The result of such Landlord Accommodationsmay even limit or dictate to whom Landlord can or cannot transfer the Property,enter into loans therewith or other activities which restrict the normaloperation of income-producing property, thereby potentially impacting thevalue. The compliance with any such request of Landlord Accommodation shall bein the sole discretion of the Landlord. Any granting or performance by Landlordof any Landlord Accommodation shall be conditioned upon Tenant’s agreement toSubsections (2) and (3) of this Section XIII(Z).*

 

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*2.**                                         Reimbursementof Expenses.  Tenant shall promptly reimburse Landlord, uponwritten demand and presentation to Tenant of appropriate documentation, for anyand all actual costs, direct and indirect, which Landlord incurs in thegranting or performance of Landlord Accommodations. Such reimbursable costsshall include, but not be limited to, reasonable attorneys’ fees and areasonable allocation of Landlord’s internal management expenses.*

 

*3.**                                         Landlord’sSale of Land.  In the event Landlord or The Frank J. Fertitta andVictoria 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)**                                  Determinationof Impairment of Value*. ***“Impairment of Value”****shall mean the difference, if any between thecontracted purchase price and the purchase price ultimately paid at closing;provided, however, in no event shall the contracted purchase price, forpurposes of this calculation, exceed the fair market value of the Land asdetermined by Section I(1)(2) of the Lease. In the event that a saleor transfer was terminated and that termination was “caused directly orindirectly by Landlord Accommodations,” the Impairment of Value shall equal thecontracted purchase price.*

 

*(b)**                                  Burdenof Proof.  The Impairment of Valueshall be deemed to be “caused directly or indirectly by the LandlordAccommodations” if, and only if, Landlord can prove that Impairment of Valuewas attributable to one of the following:*

 

*(i)**                                    restrictionsimposed as a result of Landlord Accommodations;*

 

*(ii)**                                Landlord or DesignatedBeneficiary’s inability to consummate a sale or conveyance of the Land in atimely manner caused by the Landlord’s Accommodations; or*

 

*(iii)**                            costs and expensesattributable to compliance with and seeking approvals related to LandlordAccommodations.*

 

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

 

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*3.**                                         AutomaticTermination of This Section XIII(Z).**                                 ThisLease shall be automatically amended, with no further execution of documents orother actions required, to delete this Section XIII(Z) in its entiretyimmediately upon the first to occur of any of the following:*

 

*(i)**                                  Tenant consummates anacquisition of the Landlord’s Interest;*

 

*(ii)**                              The Designated Beneficiaryno longer has any direct or indirect interest in the Land; or*

 

*(iii)**                          The date on which theLandlord Accommodations are no longer in effect.*

 

2.*                                      *Theterms and provisions of this Second Amendment shall be applicable only to theundersigned Landlord and Tenant and may not be assigned, transferred orconveyed to any other party whatsoever.

 

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

 

4.                                       Allcapitalized terms used in this Second Amendment and not defined herein shallhave the meaning ascribed thereto in the Original Lease.

 

5.                                       ThisSecond Amendment shall be governed by and construed in accordance with the lawsof the State of Nevada.

 

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

 

WITNESS THEEXECUTION HEREOF by each of the undersigned, to be effective as of the datefirst set forth above.

 
| **LANDLORD**                                                | **TENANT**                              |
|-------------------------------------------------------------|-----------------------------------------|
|                                                        |                                    |
| **Texas Gambling Hall &* *Hotel, Inc.,** | **Texas Station, Inc.**,  a Nevada |
| a Nevada corporation                                        | 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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