Amendment to Development and Loan Agreement between Dry Creek Rancheria Band of Pomo Indians and Dry Creek Casino, LLC

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Summary

This amendment updates the original Development and Loan Agreement between the Dry Creek Rancheria Band of Pomo Indians and Dry Creek Casino, LLC. The agreement concerns the development and financing of a temporary casino. Key changes include revised project plans, updated budget and completion dates, new definitions for lender and revenue terms, and provisions for handling legal disputes. The Developer will arrange a $15 million loan for the Tribe, and both parties agree to updated terms for project funding, legal costs, and execution of financing documents.

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EX-10.9 20 b328327_ex10-9.txt EXHIBIT 10.9 EXHIBIT 10.9 Final Execution Copy AMENDMENT TO THE DEVELOPMENT AND LOAN AGREEMENT This Amendment to the Development and Loan Agreement (the original agreement referred to herein as the "Agreement") dated as of April 29, 2002 (the amendment referred to herein as the "Amendment"), is made between the Dry Creek Rancheria Band of Pomo Indians, a federally-recognized Indian tribe (the "Tribe") and Dry Creek Casino, LLC, a Texas limited liability company (the "Developer"). RECITALS A. Tribe and Developer entered into the Agreement pursuant to which Developer agreed to assist Tribe in the development and financing of a temporary casino ("Facility") capable of being opened as soon as possible ("Commencement Date"), on the terms and conditions set forth in the Agreement, as amended herein. B. Subsequent to execution of the Agreement, Tribe and Developer determined that the original Project plan should be revised to reflect certain changed circumstances. C. This Amendment modifies the Agreement to reflect the current needs of Tribe related to development of the Project. NOW THEREFORE, in consideration of the representations, warranties and mutual promises contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows 1. Definitions; Terms defined in the Agreement. All capitalized terms used in this Amendment and not otherwise defined herein shall have the meanings assigned to them in the Agreement. 2. Amendments to the Agreement. The Agreement shall be amended as follows: (a) Exhibit "A" of the Agreement is deleted and replaced with Exhibit "A-1" to this Amendment, and the definition of "Cost Budget" is deleted and replaced with the following: "Cost Budget" means the budget attached hereto as Exhibit "A-1" setting forth the approximate costs the parties anticipate will be incurred in order to prepare the Project for the Commencement Date and for Project completion, and including certain costs incurred by the Tribe in connection with conducting gaming on the Reservation prior to the execution of this Agreement. The Cost Budget is to be funded from the Development Advances, Loan proceeds, purchase money and/or third party financing as contemplated in the Cost Budget and, to the extent required, cash flow from the Facility. 1 Final Execution Copy (b) The definition of "Final Completion Date" is deleted and replaced with the following: "Final Completion Date" means the date on which the Facility is opened to the public, which date shall be 210 days after execution of this Agreement (unless the contractor can complete construction sooner within the approved budget), subject to the terms set forth in Section 2.13 hereof. (c) The definition of "Lender" is deleted and replaced with the following: "Lender" means one or more parties which may be third-party federally or state regulated banks or savings and loan institutions subject to exemption from the licensing requirements of the Compact, or any other individual or entity that is found suitable for licensing by the TGC, that alone or together, through Developer's efforts and pursuant to the Commitment, agree to provide the Loan to Tribe for the Project. Developer may act as Lender. (d) Exhibit "C" of the Agreement is deleted and replaced with Exhibit "C-la" to this Amendment. (e) Exhibit "E" of the Agreement is deleted and replaced with Exhibit "E-1" to this Amendment. The definition of "Commitment" is deleted and replaced with the following: "Commitment" means the Loan placement commitment letter attached as Exhibit E-1 from Developer, which Developer has obtained on behalf of Tribe in the amount of $15 million; provided that the Lender (as set forth in Exhibit E-1) may be Developer or Nevada Gold & Casinos, Inc. (f) The definition of "Net Revenues" is deleted and replaced with the following: "Net Revenues" means the Gross Revenues less Operating Expenses, provided that in the case of Gross Revenues derived from gaming, such revenues shall be net of prizes and payouts (including jackpots) so as to represent the "win" as referred to by accountants familiar with the gaming industry. (g) The following definition is added to the Agreement: "Proschold-Cadd Matter" means the dispute alleged in the matter stylized Terrance C. Proschold et al. v. United States Of America, U.S.D.C. (ND Cal), No. 01-2390 SBA, the legal cost of participating in which by the Tribe, as an intervenor or otherwise, shall be advanced by Developer as Qualified Costs as incurred, subject to receipt of a written budget and Developer's prior written approval of same, and 2 Final Execution Copy the meaningful participation of Developer in an advisory role in all legal strategy and settlement discussions. All reasonable costs of defending this Third Party Dispute and any liability, damages, demands, losses, costs or expenses incurred by Developer or Tribe shall not be an Operating Expense and shall be paid by the Tribe from its share of Net Revenues when incurred. (h) The definition of "Third-Party Disputes" is deleted and replaced with the following: "Third-Party Disputes" means all disputes or claims relating, directly or indirectly, to any Gaming on the Reservation, the Sonoma Canyon Documents, the Sonoma Falls Documents, the Proschold-Cadd Matter, failure of tribal members to relocate from the Site, any claimed agreements between the Tribe and any third party, Gross Revenues, the Facility or any Collateral, and brought by a person or entity not a party to this Agreement, against the Tribe, Developer, Lender, or the Credit Enhancer, with respect to a claim which, if successful, would materially affect Developer's economic rights under this Agreement. (i) Sections 2.2 and 2.2.1 are deleted and replaced with the following Section 2.2: 2.2 Loan Commitment. Developer shall use its best efforts to arrange for the Tribe to receive Loan proceeds, per the terms and conditions of the Financing Documents, which shall be executed as soon as practicable, in the amount of Fifteen Million and No/00 Dollars ($15,000,000), a portion of which shall be used to pay Developer all amounts advanced as Development Advances (in total, the "Loan") to be disbursed for the payment of Qualified Costs to facilitate the immediate commencement of development and construction activities with respect to the Project. Developer (or one or more of its LLC Members) may act as lender or guarantor (in either case referred to as the "Credit Enhancer") of the Loan, in case of a guaranty to the extent a guaranty is required by the Lender. Lender may substitute a third party to act as Credit Enhancer provided such party meets all the Legal Requirements for lending funds to the Project, agrees to the terms and conditions agreed to by Developer under this Agreement, and does not require any delay in the commitments made by Developer herein. Tribe and Developer hereby consent to the terms and conditions of the Commitment. Tribe agrees to execute the Financing Documents as borrower, provided they conform in material part to the Commitment and this Agreement and subject to Tribe's reasonable approval. Developer agrees to execute the Financing Documents as lender or guarantor, provided they conform in material part to the Commitment and this Agreement and subject to Credit Enhancer's reasonable approval. (j) Section 2.3 is deleted and replaced with the following Section 2.3: 3 Final Execution Copy 2.3 Tribe shall execute all Financing Documents reasonably required, upon commercially reasonable terms and consistent with this Agreement, to enable Developer to timely meet the Loan funding obligations herein. In the event that the Tribe has not timely executed the Financing Documents in accordance with this Agreement by May 1, 2002, or Developer has not caused the Loan described in Section 2.2 above to fund by such date, either through the Commitment or otherwise, this Agreement shall thereupon be null and void, and neither party shall have any further or continuing obligation to the other, except that (a) Tribe's obligation to repay the Development Advances in accordance with the provisions of Section 2.1.1, (b) all provisions herein related to security granted by Tribe to secure repayment of said Development Advances, and (c) all remedies granted to Developer hereunder to enforce Tribe's obligations under Section 2.1.1 (including without limitation Sections 4.5, 5.2, 5.3, and 5.4) shall remain in full force and effect. Further, in the event that the Loan is available for funding in accordance with the terms of the Commitment by May 1, 2002, then any failure of the Tribe to accept such funding, whether as a result of its failure to execute any of the Financing Documents reasonably required, upon commercially reasonable terms, and consistent with this Agreement and the Commitment, or to reasonably satisfy any material condition precedent to funding set forth in this Agreement or any of the Financing Documents which is within the control of the Tribe, shall be deemed to be and shall constitute an exercise by the Tribe of the Buy-Out Option provided for in Section 6.9 of this Agreement. (k) Section 2.3.1 (4) is added to the Agreement as follows: (4) a certificate from the Secretary of the Board of Directors, duly elected by the Tribal Council that the Tribe has approved the Agreement, this Amendment, and the Financing Documents, at a duly authorized meeting conducted in accordance with all Tribe governing instruments. (1) Section 2.11(b) is deleted and replaced with the following Section 2.11(b): (b) current principal, interest (to the extent, if any, not paid as part of the month's Operating Expenses, which interest will include interest payments on the amounts received pursuant to the Financing Documents, and which will paid prior to any payments under this Section 2.11), and any other payments due pursuant to the Financing Documents, the Note, and principal payments on any capital leases. 4 Final Execution Copy (m) Section 2.12 is added to the Agreement as follows: 2.12 Tribe and Developer acknowledge that Developer and/or Lender may be required to subordinate any security interests it may have in the Collateral to a third-party, in connection with the Tribe's purchase or lease of Furnishings and Equipment or in connection with the Tribe's efforts to obtain alternate financing for the Project in the event the Lender ceases funding as provided herein and in the Financing Documents. Each of Tribe and Developer agrees to execute all documentation required to effect such subordination. (n) Section 2.13 is added to the Agreement as follows: 2.13 The Final Completion Date, as defined herein, will be tolled for any period(s) during which construction of the Facility or Project is prevented through equitable court orders entered in any existing Third Party Dispute. In addition to the foregoing, the Final Completion Date may be tolled by mutual agreement of the parties working in a close and cooperative manner, which agreement shall not be unreasonably withheld, based on a commercially reasonable conclusion that ingress and egress to the Facility or the Project will be insufficient to serve the public in a manner that renders the Project economically feasible. Notwithstanding anything in this Agreement to the contrary, in the event any tolling period herein exceeds two (2) years or in the event the parties cannot reach mutual agreement as discussed above, neither party shall have any further or continuing obligation to the other except as follows: (a) Tribe's obligations to repay any outstanding Loan Proceeds as provided hereunder on a pari passu basis with any other party(ies) that provide financing to the Tribe to complete, in whole or in part, the Facility or the Project, (b) Tribe's obligations to repay any outstanding Development Advances in accordance with the provisions of Section 2.1.1 hereof, the repayment of which shall be made on a pari passu basis with any other party(ies) that provide financing to the Tribe to complete, in whole or in part, the Facility or the Project (c) the Tribe's right to obtain additional financing to complete the Facility or the Project, (d) the Developer's right to cease funding the Facility or the Project, and (e) Developer's and Tribe's agreement that Developer's Credit Enhancement Fee will be reduced to the product resulting from multiplying the Credit Enhancement Fee by a fraction, the numerator of which will equal to the total amount of the outstanding Financing plus the amount of any guaranties made by Developer related to the Project (reduced to the extent of any release of such guaranties that the Tribe obtains following Developer's election to cease funding), and the denominator of which will equal the total cost of the Project per the attached Cost Budget, and that such Credit Enhancement Fee will be paid on a pari passu basis with any other party(ies) that provide financing to the Tribe to complete, in whole or in part, the Facility or the Project. The foregoing (a) - (e) of the above sentence represents the exclusive rights and remedies of the parties in the event any tolling period herein exceeds two (2) years or in the event the parties cannot reach mutual agreement. (o) Section 4.2(c) is deleted and replaced with the following Section 2.11(b): 5 Final Execution Copy (c) Tribe has duly authorized the execution and delivery of this Agreement on the terms described herein. No further act or approval of Tribe, other than the TGC (as required under the Compact), is required as a condition for entering into or fully performing under this Agreement. This Agreement, as amended, has been ratified and approved by the Tribe, in accordance with all applicable laws, rules, or regulations of the Tribe. (p) Section 4.6 is added to the Agreement as follows: 4.6 It is anticipated that Developer (or one or more of its LLC Members) will be required to provide guaranties to various vendors and/or financial institutions related to development of the Project (including, without limitation, with relation to the Furnishings and Equipment). Tribe agrees to pay to the guarantor, as described in the preceding sentence, upon demand, any and all amounts that shall hereafter be paid by such guarantor to any vendor or financial institution under any guaranties, together with interest on such amounts at the rate of 12% per annum from the date so paid by guarantor until such amounts are reimbursed to guarantor hereunder. To secure its obligations under this section, Tribe agrees that its obligations under this section are considered "Obligations" secured as set forth in the Security Agreement dated August 26, 2001, as amended. (q) Section 4.7 is added to the Agreement as follows: 4.7 Within five (5) business days of execution of this Amendment, Tribe agrees to submit this Amendment, the Financing Documents, and all exhibits to such documents (collectively, the "Transaction Documents") to the NIGC for review and request a letter of declination confirming that the Transaction Documents will not be deemed to constitute management contracts as described in 25 U.S.C. ss. 2711. If the NIGC has any comments to such submission, or any prior submission, both parties agree to work in good faith to resolve any such comments, on an expedited basis, and to retain, as nearly as possible, the business terms of this Agreement. In no event shall Lender's obligations to fund the Loan pursuant to the terms hereof and the Financing Documents be delayed by the provisions of this Section 4.7. Tribe represents that it has submitted its request for a letter of declination to the NIGC in January 2002 and resubmitted same in February 2002 but has not heard back either orally or in writing from the NIGC other than with respect to the resubmission. (r) Section 6.9(b) of the Agreement is deleted and replaced in its entirety with the following: 6 Final Execution Copy b. In the event the Buy-Out Option is exercised prior to the Commencement Date, and the Tribe engages in gaming within six years after the Buy-Out Option is exercised, the Buy-Out Fee shall be determined and paid from the date such gaming commences, based on the Credit Enhancement Fee that would have been payable if the Buy-Out Option had not been exercised, subject to the adjustments provided below in this subparagraph b and in subparagraph c, and continuing to the end of the second full year of operation and the recomputation of the Base Fee in accordance with subparagraph c, provided that in the event the aggregate amount of the Financing actually funded plus all guaranties of Developer in respect of the Project are less than the aggregate of $15,000,000 plus all guaranties of Developer as contemplated in the approved Cost Budget, attached hereto at Exhibit A-1, due to (i) a refusal of Lender to fund the Loan solely as a result of any failure or breach of Developer, or any other reason not under Tribe's control, that is not cured by Developer within 30 days after written notice to Developer, or (ii) the development and construction of the Project being permanently enjoined as a result of a court order arising from a Third-Party Dispute that is final and non-appealable (the "Cessation Order"), and all amounts outstanding with respect to the Financing, including amounts owed to the Lender with respect to the Loan and the outstanding balance owing by Tribe to Developer under this Agreement, including outstanding Development Advances and accrued interest, have been paid in full no later than twelve (12) months following the entry of the Cessation Order, then in any such event the Credit Enhancement Fee percentage (20%) shall be reduced proportionally based on the same ratio set forth in subsection (e) of Section 2.13. Nothing in this Section shall be construed as granting Developer any additional rights in the event this Agreement is terminated pursuant to Section 2.3 hereof. (s) Section 6.9.f. is added to the Agreement as follows: f. It is anticipated that Developer (or one or more of its LLC Members) will be required to provide guaranties to various vendors and/or financial institutions related to development of the Project (including, without limitation, with relation to the Furnishings and Equipment). Tribe agrees that prior to execution of the Buy-Out Option, it will use its best efforts to negotiate and obtain an unconditional and absolute release of all guaranties made by Developer (or one or more of its LLC Members). 7 Final Execution Copy 3. Miscellaneous (a) Authority. Tribe has taken all action required by Tribe's laws, its Articles of Association and the laws of the United States and all other applicable laws to authorize the execution, delivery and performance of this Amendment. Tribe and Tribe's Board of Directors represent and warrant that Tribe's resolution, dated August 26, 2001 (Resolution No. 01-08-026-001) provides the specific authority to enter into this Amendment and the Financing Documents. (b) Agreement Otherwise Not Effective. Except as expressly amended hereto, the Agreement shall remain unchanged and in full force and effect (including, without limitation, Section 5.4 of the Agreement, which is applicable to this Amendment) and is hereby ratified and confirmed in all respects. (c) Reference within the Agreement. Each reference in the Agreement to "this Agreement" and the words "hereof," "herein," "hereunder," or words of like import, shall mean and be a reference to the Agreement as amended by this Amendment. For the avoidance of doubt, this shall include, without limitation, Section 5.3 of the Agreement. (d) Complete Agreement; Amendments. This Amendment together with the Agreement and any attachments hereto (including the schedules, exhibits and annexes hereto and thereto), and the documents delivered pursuant to the Agreement or Amendment constitute the entire agreement and understanding among the parties and supersede any prior written agreement and understanding relating to the subject matter thereto. This Amendment may not be modified, amended or otherwise altered except in accordance with the terms of the Agreement. (e) Reformation and Severability. In case any provision of this Amendment shall be invalid, illegal, unenforceable, it shall, to the extent possible, be modified in such manner as to be valid, legal, and enforceable but so as to most nearly retain the intent of the parties, and if such modification is not possible, such revision shall be severed from this Amendment and in either case the validity, legality, and enforceability of the remaining provisions of this Amendment shall not be in any way affected or impaired hereby. (f) Counterparts. This Amendment may be executed simultaneously in counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same instrument. (g) Release of Claims. Tribe has heretofore asserted that Developer has or may have breached its obligations to Tribe under the Agreement, including, without limitation, the failure of Developer or its affiliates to fulfill its obligations under the Commitment. Developer has disputed these assertions and maintained that the Tribe did not furnish complete and accurate disclosures concerning access to the Project. Notwithstanding these various assertions between the parties, Tribe and Developer have determined to resolve their contentions and assertions by this Amendment, and to describe and limit the rights and remedies of the parties regarding such 8 Final Execution Copy execution of this Amendment, Tribe has not breached its obligations under the Agreement (and Developer presently knows of no facts that would or could give rise to any claim against Tribe), nor has Tribe committed an event of default pursuant to Section 5.1 of the Agreement (and Developer presently knows of no facts that would represent such an event of default). Tribe acknowledges and agrees that as of the date of execution of this Amendment, Developer (including its affiliates) has not breached its obligations under the Agreement (and Tribe presently knows of no facts that would or could give rise to any claim against Developer or its affiliates), nor has Developer (including its affiliates) committed an event of default pursuant to Section 5.1 of the Agreement (and Tribe presently knows of no facts that would represent such an event of default). To the extent that any such claims presently exist between the parties, Tribe and Developer hereby waive and release one another from all such claims and causes of action of any type whatsoever, including, without limitation, those arising out of or relating to the various assertions and contentions between the parties discussed in this paragraph, whether known or unknown. The term "affiliates" means the limited liability company members of Developer. (h) Additional Representations and Warranties. (i) Both parties represent and warrant that neither party has made any representations to the other party concerning the matters addressed in the Agreement and this Amendment, except as expressly set forth in such documents. (ii) Both parties represent and warrant that neither party has relied upon any statements not expressly set forth in the Agreement and this Amendment, in entering into this Amendment. (iii) Both parties represent and warrant that they have entered into this Amendment on their own free will, without compulsion or duress, and after consultation with their legal counsel. (i) Exhibit F-1 of the Agreement is deleted and replaced in its entirety with Exhibit F-la to this Amendment, attached hereto. (Remainder of this page intentionally left blank) 9 Final Execution Copy IN WITNESS WHEREOF, Developer and Tribe have executed this Agreement as of this 30th day of April, 2002, effective as of the date first written above upon approval of the Tribe's Tribal Council, and ratification of such approval by the Tribe. DRY CREEK CASINO, LLC DRY CREEK RANCHERIA BAND OF POMO INDIANS By: /s/ H. Thomas Winn By: /s/ Elizabeth Elgin DeRouen ------------------------------- ------------------------------- Title: Manager Title: Chairperson ---------------------------- ---------------------------- [Signature page to Amendment] 10 Final Execution Copy Exhibit Index Cost Budget............................................................. A-1 Expense Budget...........................................................C-1 Commitment Letter........................................................E-1 Disclosures.............................................................F-la 11 EXHIBIT A-1 Cost Budget River Rock Temporary Casino Preliminary Conceptual Budget of Development costs & Protection of Costs through 5/31/2002 Based on Tribal Budget Revision #1a 4/30/2002 Revision 1 Phase 1 Costs Only ------------------
Phase 1a Phase 1a Phase 1b Phase 1a+1b Incurred Pending Pending Pending LLC Deferred PDS Total Changes Total Total Total 1.0 Site Construction 1,417,597 200,000 1,130,005 5,447,601 1,500,000 6,941,601 1,000,000 7,947,601 2.0 Permanent Casino Construction - - - - - - - - 3.0 Site Architecture & Engineering 770,000 145,000 - 915,000,00 185,000 1,100,000 89,000 1,169,000 4.0 Casino Architecture & Engineering, Temp Casino 632,500 76,500 - 711,000 40,000 751,000 - 751,000 5.0 Additional Development Costs 2,792,988 505,791 - 3,298,777 1,422,423 4,721,200 - 4,721,200 6.0 Temporary Casino Construction 1,059,267 45,000 2,418,271 6,522,558 1,678,640 8,401,398 931,000 9,332,398 7.0 FF&E, Special Equipment & Services 76,500 - 20,746,724 20,823,224 (1,059,274) 18,863,950 1,148,000 20,011,950 8.0 Pro-Opening Expense 1,100,000 300,000 - 2,400,000 - 2,400,000 - 2,400,000 9.0 Working Capital & Opening Deficit 400,000 - - 400,000 - 400,000 - 400,000 10.0 Project Contingency 750,000 - - 750,000 - 750,000 - 750,000 ------------------------------------------------------------------------------------------------- Total for Temporary Casino 11,999 869 1,274.291 24,905 000 41,268,160 3,066,969 44,335,150 3,146,000 47,483,150 ------------------------------------------------------------------------------------------------- Total Budget 11,000,000 41,268,160 44,335,150 ------------------------------------------------------------------------------------------------- Phase 1+0. F. P. Costs 16,273,160 1.0 On & Off Site Construction (12 Acres) 1,417,597 200,000 1,830,005 5,447,601 1,500,000 6,947,601 1,000,000 7,947,601 10.7 Marquee & On-Site Signage Subtotal 1.01-1.09 - - 1.10 Traffic Signaling - - & Controls - - Subtotal 1.10 -1.12 - - Subtotal 1.13-1.15 1,417,597 200,000 1,830,005 5,447,601 1,500,000 6,947,601 1,000,000 7,947,601 ------------------------------------------------------------------------------------------------- Total Site Development 1,417,597 200,000 1,830,005 5,447,601 1,500,000 6,947,601 1,000,000 7,947,601 (1.01-1.16) 3.0 Architecte, Enginnrs & Design Services for Site & Related Construction 3.01 Land Planning & Expenses 50,000 - 50,000 50,000 50,000 3.02 Site Engineering & Expenses 530,000 35,000 565,000 185,000 750,000 39,000 789,000 3.03 Environmental Revisions 80,000 80,000 80,000 80,000 3.04 SWPP Revision 5,000 5,000 5,000 5,000 3.05 Geotechnical Consultant 10,000 10,000 5,000 15,000 15,000 3.06 Hydrology & Well Analysis 15,000 15,000 15,000 15,000 3.07 Municipality Approvals & Fees (Deferred) - 100,000 100,000 100,000 100,000 3.08 Landscape Architecture & Expenses 60,000 10,000 70,000 (30,000) 40,000 30,000 70,000 3.09 Site Related Structural & Engineering 10,000 10,000 25,000 35,000 35,000 3.10 Sight Lighting, Electrical Engineering 10,000 - - 10,000 - 10,000 - 10,000 ------------------------------------------------------------------------------------------------- Subtotal 3.01-3.05 770,000 145,000 - 915,000 185,000 1,100,000 69,000 1,160,000 4.0 Architecture, Engineers & Casino Design 4.01 Architecture Engineering & Expenses, (MEPS in 477,500 52,500 530,000 530,000 - 530,000 4.02 MEPS Consultant 40,000 11,000 61,000 10,000 61,000 61,000 4.03 Plan Check & Inspections Consultant to Tribe 85,000 15,000 80,000 30,000 110,000 110,000 4.04 Food Service Design 10,000 10,000 10,000 10,000 4.05 Corporate Identity & Graphic Design & Expenses 40,000 40,000 40,000 40,000 4.06 Interior Architecture & Theme Design & Expenses - - - - - - - - ------------------------------------------------------------------------------------------------- Subtotal 4.01-4.04 632,501 78,500 - 711,000 40,000 751,000 - 751,000 5.0 Additional Development Costs 5.01 Legal Contingency 150,007 200,000 350,000 233,000 583,000 583,000 5.02 Accounting - - 200,000 200,000 200.000 5.03 Insurance 25,000 25,000 18,000 43,000 43,000 5.04 Finance Placement Fees 410,000 170,440 580,440 580,440 580,440 5.05 Construction Interest POS Lease Payments 489,760 489,760 489,760 489,760 5.06 Tribal Relocation and G & A Fund 1,693,228 135,351 1,828,577 871,423 2,700,000 2,700,000 2 5.07 Market Feasibility Study(s) 25,000 25,000 25,000 25,000 5.08 Environmental Assessment - - - - 5.09 Traffic Study - - - - 5.10 Generator Deposit - - 100,000 100,000 100,000 5.11 Consulting & Technical Services Fee - - - - - - - - ------------------------------------------------------------------------------------------------- Subtotal 5.01-5.11 7,792,916 505,791 - 3,298,777 1,422,423 4,721,200 - 4,721,200 3 6.0 Temporary Casino Construction 6.00 Construction Management Fee & Expenses 282,505 45,000 327,595 121,405 449,000 31,000 480,000 6.01 Temp Construction (See Attached Detail) 3,776,682 - 2,418,271 6,141,963 1,757,438 7,952,399 900,000 8,852,399 6.02 Architecture & Engineering, (See 4.01) - - - - - - - - ------------------------------------------------------------------------------------------------- Subtotal 6.01-6.10 4,059,207 45,000 2,418,271 6,522,558 1,878,640 8,401,391 931,000 9,332,391 7.0 FF&E, Special Equipment & Sarvices 7.01 Testing Allowance 40,000 40,000 40,000 40,000 7.02 Casino FF&E, Office Furniture & Cubicles (partial Lease) 6,500 645,924 652,424 379,576 1,032,000 213,000 1,245,000 7.03 Computers Lease-Pur Included - 120,000 120,000 120,000 7.04 Slot Repair Equip Lease-Pur Included - 10,000 10,000 10,000 Min to 5/31/02 Casino w Cons- Opens truction Jun Jul Aug Sep Oct Nov Dec 1.0 Silo Construction 716,547 1,677,919 1,888,952 719,911 700,000 600,000 600,000 744,265 2.0 Permanent Casino Construction - - - - - - - - 3.0 Site Architecture & Engineering 903,650 45,000 42,500 33,640 22,500 25,060 27,500 - 4.0 Casino Architecture & Engineering, Temp Casino 495,407 50,000 125,000 12,500 12,500 20,000 20,000 15,593 5.0 Additional Development Costs 3,029,163 547,573 274,014 410,619 275,887 164,438 108,000 - 6.0 Temporary Casino Construction 527,707 575,847 764,319 1,119,261 1,316,364 1,497,948 1,3509,664 1,249,209 7.0 FF&E, Special Equipment & Services 505,000 20,000 5,000 1,050,000 400,000 11,115,000 3,753,950 2,015,000 8.0 Pro-Opening Expense 610,271 200,000 225,000 225,000 265,564 326,584 527,869 - 9.0 Working Capital & Opening Deficit - - - - - 150,000 250,900 - 10.0 Project Contl - - - - - 300,000 450,000 - ------------------------------------------------------------------------------------------------ Total for Temporary Casino 6,787,955 1,116,339 2,624,845 3,571,138 3,012,855 14,185,860 7,087,983 4,024,067 ------------------------------------------------------------------------------------------------ Total Budget ------------------------------------------------------------------------------------------------ Phase 1+0. F. P. Costs 6,787,955 8,036,721 9,490,052 10,829,231 12,345,615 13,943,615 15,000,000 1.0 On 6 Off Silo Construction (12 Acres) 716,547 1,677,919 1,188,952 719,918 700,000 600,000 600,000 600,000 10.7 Subtotal 1.01-1.09 1.10 Traffic Signaling & Controls Subtotal 1.10 -1.12 Subtotal 1.13-1.15 716,547 1,677,919 1,188,952 719,918 700,000 600,000 600,000 600,000 ------------------------------------------------------------------------------------------------ Total Site Development 716,547 1,677,919 1,188,952 719,918 700,000 600,000 600,000 600,000 (1.01-1.16) 3.0 Architecte, Enginnrs & Design Services for Site & Related Construction 3.01 Land Planning & Expenses 28,660 15,000 5.000 1.140 3.02 Site Engineering & Expenses 700,000 25,000 15,000 10,000 3.03 Environmental Revisions 80,000 3.04 SWPP Revision 5,000 3.05 Georechnical Consultant 15,000 3.06 Hydrology & Well Analysis 15,000 3.07 Municipality Approvals & Fees (Deferred) - 20,000 20,000 20,000 20,000 20,000 3.08 Landscape Architecture & Expenses 15,000 5,000 2,500 2,500 2,500 5,000 7,600 3.09 Site Related Structural & Engineering 35,000 3.10 Sight Lighting, Electrical Engineering 10,000 - - - - - - - ------------------------------------------------------------------------------------------------ Subtotal 3.01-3.05 903,660 45,000 42,500 33,640 22,500 25,000 27,500 - 4.0 Architecture, Engineers & Casino Design 4.01 Architecture Engineering & Expenses, (MEPS in 434,407 90,000 5,593 4.02 MEPS Consultant 36,000 5,000 5,000 2,500 2,500 5,000 5,000 4.03 Plan Check & Inspections Consultant to Tribe 25,000 15,000 10,000 10,000 10,000 15,000 15,000 10,000 4.04 Food Service Design 10,000 4.05 Corporate Identity & Graphic Design & Expenses 20,000 20,000 4.06 Interior Architecture & Theme Design & Expenses - _ - - - - - ------------------------------------------------------------------------------------------------ Subtotal 4.01-4.04 495,407 50,000 125,000 12,500 12,500 20,000 20,000 15,583 5.0 Additional Development Costs 5.01 Legal Contingency 450,000 25,000 25,000 25,000 25,000 25,000 8,000 5.02 Accounting - - 100,000 100.000 5.03 Insurance 43,000 5.04 Finance Placement Fees 350,000 230,440 5.05 Construction Interest POS Lease Payments 32,000 80,387 94,901 108,292 123,458 139,435.63 5.06 Tribal Relocation and G & A Fund 2,129,183 111,766 154,113 177,527 127,431 5.07 Market Feasibility Study(s) 25,000 5.08 Environmental Assessment 5.09 Traffic Study 5.10 Generator Deposit 100,000 5.11 Consulting & Technical Services Fee - _ - - - - - ------------------------------------------------------------------------------------------------ Subtotal 5.01-5.11 3,029,163 547,573 274,014 410,619 275,887 164,436 108,000 - 6.0 Temporary Casino Construction 6.00 Construction Management Fee & Expenses 148,336 35,000 40,000 40,000 40,000 50,000 50,664 45,000 6.01 Temp Construction (See Attached Detail) 379,371 540,847 724,379 1,079,261 1,276,364 1,447,948 1,300,000 1,204,209 6.02 Architecture & Engineering, (See 4.01) - - - - - - - - ------------------------------------------------------------------------------------------------ Subtotal 6.01-6.10 527,707 575,647 764,379 1,119,261 1,316,384 1,497,948 1,350,664 1,249,209 7.0 FF&E, Special Equipment & Sarvices 7.01 Testing Allowance 25,000 10,000 5,000 7.02 Casino FF&E, Office Furniture & Cubicles (partial Lease) - - - 100,000 200,000 300,000 232,000 200,000 7.03 Computers - - - - - 40,000 40,000 40,000 7.04 Slot Repair Equip - - - - - 10,000 - - Total 1.0 Silo Construction 6,947,601 0 2.0 Permanent Casino Construction - - 3.0 Site Architecture & Engineering 1,100,000 - 4.0 Casino Architecture & Engineering, Temp Casino 751,000 - 5.0 Additional Development Costs 4,809,892 (88,692) 6.0 Temporary Casino Construction 8,401,399 (1) 7.0 FF&E, Special Equipment & Services 18,863,950 (1) 8.0 Pro-Opening Expense 2,400,000 - 9.0 Working Capital & Opening Deficit 400,000 - 10.0 Project Contl 750,000 - ----------------------- Total for Temporary Casino 44,423,842 - ----------------------- Total Budget ----------------------- Phase 1+0. F. P. Costs 1.0 On 6 Off Silo Construction (12 Acres) 744,265 6,947,601 10.7 Subtotal 1.01-1.09 1.10 Traffic Signaling & Controls Subtotal 1.10 -1.12 Subtotal 1.13-1.15 744,285 6,347,601 ----------------------- Total Site Development 744,285 6,347,601 (1.01-1.16) 3.0 Architecte, Enginnrs & Design Services for Site & Related Construction 3.01 Land Planning & Expenses 50,000 3.02 Site Engineering & Expenses 750,000 3.03 Environmental Revisions 80,000 3.04 SWPP Revision 5,000 3.05 Georechnical Consultant 15,000 3.06 Hydrology & Well Analysis 15,000 3.07 Municipality Approvals & Fees (Deferred) 100,000 - 3.08 Landscape Architecture & Expenses 7,500 - 3.09 Site Related Structural & Engineering 35,000 - 3.10 Sight Lighting, Electrical Engineering 10,000 - ----------------------- Subtotal 3.01-3.05 1,100,000 - 4.0 Architecture, Engineers & Casino Design 4.01 Architecture Engineering & Expenses, (MEPS in 530,000 - 4.02 MEPS Consultant 61,00 - 4.03 Plan Check & Inspections Consultant to Tribe 110,000 - 4.04 Food Service Design 10,000 - 4.05 Corporate Identity & Graphic Design & Expenses 40,000 - 4.06 Interior Architecture & Theme Design & Expenses - - ----------------------- Subtotal 4.01-4.04 751,000 - 5.0 Additional Development Costs 5.01 Legal Contingency 583000 - 5.02 Accounting 200,000 - 5.03 Insurance 43,000 - 5.04 Finance Placement Fees 580,440 - 5.05 Construction Interest POS Lease Payments 578,452 (88,691) 5.06 Tribal Relocation and G & A Fund 2,100,000 - 5.07 Market Feasibility Study(s) 25,000 - 5.08 Environmental Assessment - - 5.09 Traffic Study - - 5.10 Generator Deposit 100,000 - 5.11 Consulting & Technical Services Fee - - ----------------------- Subtotal 5.01-5.11 4,809,892 6.0 Temporary Casino Construction 6.00 Construction Management Fee & Expenses 449,000 (0) 6.01 Temp Construction (See Attached Detail) 7,952,399 (0) 6.02 Architecture & Engineering, (See 4.01) - - ----------------------- Subtotal 6.01-6.10 8 ,401,399 7.0 FF&E, Special Equipment & Sarvices 7.01 Testing Allowance 40,000 - 7.02 Casino FF&E, Office Furniture & Cubicles (partial Lease) 1,032,000 - 7.03 Computers 120.000 - 7.04 Slot Repair Equip 10,000 -
7.05 Office Equip Lease-Pur Included - 40,000 40,000 40,000 7.00 Cabling & Non- Leasehold Slot Machine Items 30,000 30,000 30,000 30,000 7.06 Gaming Devices, Equipment & Furniture Lease-Pur. 18,167,000 18,167,000 (4,467,000) 13,700,000 13,700,000 Slot Bases Lease-Pur. 80,000 80,000 80,000 Lease-Pur. Locks & Parts Lease-Pur. 10,000 10,000 10,000 7.06 Soft & Hard Count Equip Lease-Pur. included - 75,000 75,000 75,000 7.07 Cage Equip - 205,000 205,000 205,000 7.08 Lockers - 20,000 20,000 20,000 7.09 Kitchen Equip. Small Wares, China, Lease-Pur. 1,309,800 1,308,800 (1,308,800) - 935,000 935,000 Glass Silver 7.10 Restaurant FF&E 275,000 275,000 (275,000) - - 7.11 First Aid Equip 1,950 1,950 1,950 7.12 SOS Lease-Pur. - 2,400,000 2,400,000 2,400,000 7.13 Surveillance System/POS/Access Lease-Pur. Included - 954000 950,000 950,000 System/Telephone interior Signs Lease-Pur. - 150,000 150,000 150,000 7.14 Themed Finishes, Lighting & Theatrical Lease-Pur. - 350,000 350,000 (350,000) - - - ------------ --------- -------- ---------- ---------- ---------- ---------- --------- Subtotal 7.01-7.14 76,500 - 20,746,724 20,823,224 (1,959,274) 18,563,950 1,143,000 20,011,950 8.0 Pre-Opening 2,100,000 300,000 - 2,400,000 2,400,000 2,400,000 610,271 200,000 9.0 Working Capital & Opening Deficit 400,000 - 400,000 400,000 400,000 9.0 Project Contingency 750,000 - 750,000 750,000 150,000
7.05 Office Equip 10,000 20,000 7.00 Cabling & Non- Leasehold Slot Machine Items 20,000 10,000 7.06 Gaming Devices, Equipment & Furniture 460,000.00 10,000,000 2,240,000 Slot Bases 40,000 40,000 Locks & Parts 10,000 7.06 Soft & Hard Count Equip 35,000 7.07 Cage Equip 105,000 50,000 7.08 Lockers 20,000 7.09 Kitchen Equip. Small Wares, China, - Glass Silver 7.10 Restaurant FF&E - 7.11 First Aid Equip 1,950 7.12 SOS 800,000 400,000 800,000 7.13 Surveillance System/POS/Access 150,000 200,000 200,000 200,000 System/Telephone interior Signs 75,000 7.14 Themed Finishes, Lighting & Theatrical - - - - - - - - ---------- -------- -------- --------- -------- ---------- --------- --------- Subtotal 7.01-7.14 505,000 20,000 5,000 1,050,000 400,000 11,115,000 3,753,950 2,015,000 8.0 Pre-Opening 225,000 225,000 285,584 326,278 527,869 2,400,000 9.0 Working Capital & Opening Deficit 150,000 250,000 400,000 9.0 Project Contingency 300,000 450,000 750,000 7.05 Office Equip 10,000 40,000 7.00 Cabling & Non- Leashold Slot Machine Items 30,000 7.06 Gaming Devices, Equipment & Furniture 1,000,000 13,700,000 Slot Bases 80,000 Locks & Parts 10,000 7.06 Soft & Hard Count Equip 40,000 75,000 7.07 Cage Equip 50,000 205,000 7.08 Lockers 20,000 7.09 Kitchen Equip. Small Wares, China, Glass Silver 7.10 Restaurant FF&E 7.11 First Aid Equip 1,950 7.12 SOS 400,000 2,400,000 7.13 Surveillance System/POS/Access 200,000 950,000 System/Telephone interior Signs 75,000 150,000 7.14 Themed Finishes, Lighting & Theatrical - - ---------- --------- Subtotal 7.01-7.14 16,663,950 8.0 Pre-Opening 9.0 Working Capital & Opening Deficit 9.0 Project Contingency
Notes Phase 1 costs include design for the whole Project. Phase 1 does not include construction for the Kitchen, Bar, Buffet, Restaurant, Wine Room or Boulevard Lighting. Underground construction only in the Kitchen, Bar, Buffet, Restaurant and Wine Room is included in Phase 1. 1 The above Budget is conceptual and very preliminary based on limited documentation and verbal explanations from others. 2 All contracts for services will be contracted directly with N Dry Creek Rancheria. 3 SWPP mitigation requirements at lower site are assumed XXX. 4 Items indicated as Lease may be leased or secured through alternate financing. 5 This Conceptual Budget is for Phase 1 only, and includes: Temp Structure is 40,000 SF +/- with 800 coinless Gaming Machines & 16 Table Games. A second tent, (the Slot Tent) is used to warehouse a second 300 gaming machine and public restrooms for the main tent. Restaurant is in Phase 1b and has 125 seats & Bar has 75. 200 +/- paved Parking Space at upper Site and 3000 +/- enpaved Parking Spaces at Lower and Peripheral areas. No Bingo, Poker, Sports Book or Gift Shop. 3,000 SF of executive office are on the Sprung Structure, balance is in adjacent modular buildings. Some admin functions may be off-site. There will be an 8,000 SF +/- separate Warehouse/Receiving Sprung Structure to be located on site in Phase 1b. Some off-site roadwork on BIA 93 is included in Phase 1b, but no work on SR 128 is included. There is a total of $583,000 for legal costs allowed in this Budget. 6 There are no costs In the 8udget for the following Items, which are assumed to be due after opening: Proschold/Cadd issues MOA, Emergency Services and related costs County Utility Costs Advent lawsuit and related issues beyond Legal Contingency. 7 There are no costs in the Budget for the following items, which may be in a future Phase or not done at all. Parking Garage Off-site work on SR 128 Construction at areas which receive run-off to the stream during the rainy season. 8 This Conceptual Budget Total is the same as the one approved by the Tribe and forwarded to the LLC 1/12/2002 by D. Searle. 9 It is the intent of the Dry Creek Casino LLC to guarantee the Sprung Structures and PDS Leases that are part of the Phase la Budget. EXHIBIT C-1 Expense Budget Start-up Budget 8/13/02 Tribal Administration/Relocated Members/Gaming Commission
Exhibit "C" Revision 1a Relocated Members Budget Aug/Sept Oct Nov Dec Jan Feb March - ----------------- ------ ---------- ---------- ---------- ---------- ---------- ---------- ---------- Nine Family's 392,500 122,500 22,500 22,500 22,500 22,500 22,500 22,500 Floyd Dollar 27,500 - 7,500 2,500 2,500 Homer Dollar 15,000 - - - - AnnaLopez 193,500 6,000 10,000 157,500 2,500 2,500 Dino Lopez 101,006 - 81,006 2,500 2,500 Tanya Lopez 25,000 - - 2,500 2,500 Nadine Russ 20,000 - - 1,000 - Gloria Martin 19,750 - - 4,750 - Karen Casillas 20,000 - - - - Four Prefabricated Homes 484,800 Monthly Totals $ 128,500 $ 22,500 $ 22,500 $ 32,500 $ 268,506 $ 38,250 $ 32,500 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total $1,299,056 ========== Tribal Administration Staff (wages) 146,900 11,300 11,300 11,300 11,300 11,300 11,300 11,300 Accounts Payable 49,820 16,606 16,606 16,608 - Payback Funds (BIA Program) 111,000 27,750 27,750 27,750 27,750 - - - Past Due Professional Services 10,000 10,000 - Consultant 550,000 200,000 200,000 CILS 40,000 10,000 - 20,000 10,000 Past Due Living Expense 11,915 11,915 Property Taxes 15,000 15,000 Phone/Communications 6,500 500 500 500 500 500 500 500 Travel Expense 6,000 1,000 1,000 1,000 1,000 1,000 Replacement Funds (Tribal) 28,956 4,826 4,826 4,826 4,826 4,826 4,826 - Meeting Expense 9,100 700 700 700 700 700 700 700 Audit Costs 4,552 - 4,552 Monthly Totals $293,597 $61,682 $102,236 $56,076 $ 18,326 $ 18,326 $213,500 ----------- ----------- ----------- ----------- ----------- ----------- ----------- Total $ 989,743 =========
Relocated Members April May June July Aug Sept Tot Budget - ----------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- Nine Family's 22,500 22,500 22,500 22,500 22,500 22,500 Floyd Dollar 2,500 2,500 2,500 2,500 2,500 2,500 Homer Dollar 2,500 2,500 2,500 2,500 2,500 2,500 AnnaLopez 2,500 2,500 2,500 2,500 2,500 2,500 Dino Lopez 2,500 2,500 2,500 2,500 2,500 2,500 Tanya Lopez 7,500 2,500 2,500 2,500 2,500 2,500 Nadine Russ 6,500 2,500 2,500 2,500 2,500 2,500 Gloria Martin 2,500 2,500 2,500 2,500 2,500 2,500 Karen Casillas 7,500 2,500 2,500 2,500 2,500 2,500 Four Prefabricated Homes 484,800 Monthly Totals $ 541,300 $ 42,500 $ 42,500 $ 42,500 $ 42,500 $ 42,500 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total $1,299,056 ========== Tribal Administration Staff (wages) 11,300 11,300 11,300 11,300 11,300 11,300 Accounts Payable Payback Funds (BIA Program) - Past Due Professional Services Consultant 25,000 25,000 25,000 25,000 25,000 25,000 CILS Past Due Living Expense Property Taxes Phone/Communications 500 500 500 500 500 500 Travel Expense 1,000 Replacement Funds (Tribal) - Meeting Expense 700 700 700 700 700 700 Audit Costs Monthly Totals $ 38,500 $ 37,500 $ 37,500 $ 37,500 $37,500 $ 37,500 ----------- ----------- ----------- ----------- ----------- ----------- ---------- Total $ 989,743 ==========
Start-up Budget 8/13/02 Tribal Administration/Relocated Members/Gaming Commission Exhibit "C" Revision 1a
Budget Aug/Sept Oct Nov Dec Jan Feb March April ------- -------- ------- -------- -------- -------- -------- --------- --------- Tribal Gaming Commission Commissioners (3) 124,937 - 1,965 2,352 3,627 4,111 4,548 10,834 16,250 Secretary(1) 20,412 - - - 2,916 2,916 Investigators (5) 32,076 - - Compliance Agent (3) 17,500 - - Auditor(1) 12,498 - - Administrator (1) 7,500 - Equipment/Supplies 86,619 319 2,623 377 50,000 500 Consultant 7,000 1,000 1,000 Training/Travel 37,169 704 568 148 1,740 3,000 3,000 Background Investigations 99,995 - 2,000 1,000 500 3,500 1,000 Utilities 8,100 4,500 600 Misc. 10,500 - - - 1,500 1,500 Monthly Totals - 1,965 3,056 6,514 7,882 7,165 77,250 26,766 -------- ------- -------- -------- -------- -------- --------- --------- Total $ 464,297 ========== Monthly Grand Totals $422,097 $86,147 $127,792 $ 95,090 $294,714 $ 63,741 $ 323,250 $ 606,566 ======== ======= ======== ======== ======== ======== ========= ========= Total Budget $2,753,096 ========== Current Funds Available Dry Creek Casino LLC $ 420,000 $ - $101,000 $ 90,000 $780,000 $ 90,000 $ 90,000 $ 90,000 $ 90,000 Tribe's Contribution $ 200,151 Additional LLC Contributions Req. $ 68,246 Current Expenditures Relocated Members $ 128,500 $ 22,500 $ 22,500 $ 32,500 $268,506 $ 38,250 $ 32,500 $ 541,300 Tribal Administration $ 293,597 $ 61,682 $102,236 $ 56,076 $ 18,326 $ 18,326 $ 213,500 $ 38,500 Gaming Commission 1,965 3,056 6,514 7,882 7,165 77,250 26,766 Required C/F from Available Funds $ (2,097) $ 12,756 $(25,036) $659,874 $455,160 $481,419 $ 248,169 $ -
May June July Aug Sept --------- -------- -------- -------- -------- Tribal Gaming Commission Commissioners (3) 16,250 16,250 16,250 16,250 16,250 Secretary(1) 2,916 2,916 2,916 2,916 2,916 Investigators (5) - 2,916 14,580 14,580 Compliance Agent (3) - 2,500 7,500 7,500 Auditor(1) - 4,166 4,166 4,166 Administrator (1) - 3,750 3,750 Equipment/Supplies 500 500 10,600 10,600 10,600 Consultant 1,000 1,000 1,000 1,000 1,000 Training/Travel 3,000 4,000 4,000 7,000 10,000 Background Investigations 4,000 5,000 27,665 27,665 27,665 Utilities 600 600 600 600 600 Misc. 1,500 1,500 1,500 1,500 1,500 Monthly Totals 29,766 31,766 74,113 97,527 100,527 --------- -------- -------- -------- -------- Total $ 464,297 ========== Monthly Grand Totals $ 109,766 $111,766 $154,113 $177,527 $180,527 ========= ======== ======== ======== ======== Total Budget Total $2,753,096 ========== Current Funds Available Dry Creek Casino LLC $ 90,000 $ 90,000 $ 90,000 $ 90,000 $ 90,000 Tribe's Contribution Additional LLC Contributions Req. $ 19,766 $ 21,766 $ 64,113 $ 87,527 $ 90,527 $ 351,945 Current Expenditures Relocated Members $ 42,500 $ 42,500 $ 42,500 $ 42,500 $ 42,500 Tribal Administration $ 37,500 $ 37,500 $ 37,500 $ 37,500 $ 37,500 Gaming Commission 29,766 31,766 74,113 97,527 100,527 Required C/F from Available Funds $ - $ - $ - $ - $ -
EXHIBIT E-1 Commitment Letter [NEVADA GOLD & CASINOS, INC. LETTERHEAD] December 13, 2001 Ms. Liz Elgin DeRouen, Chairperson Dry Creek Rancheria Band of Pomo Indians 4988 Moore St. Healdsburg, CA 95448 Re: Financing for the Dry Creek Rancheria Band of Pomo Indians Temporary Casino Project Dear Madame Chair, The purpose of this letter is outline the terms to fund the development and construction of a temporary casino ("Casino"} on the Dry Creek Rancheria Hand of Pomo Indians reservation. The terms and conditions of the financing are described as follows: SUMMARY Lender: Nevada Gold and Casinos, Inc. on behalf of the Dry Creek Casino, LLC. Borrower: The Dry Creek Band of Pomo Indians (the "Borrower"). Amount: $15,000,000 (the "Financing"). Advancer: The Financing will be available to be advanced in increments of not less than Five Hundred Thousand and no/100 Dollars ($500,000) upon written request by the Borrower to the Lender. Interest Rate: The Financing shall bear an interest rate of 12% per annum. Placement Fee: 3.5% of the principal amount of the financing. Term: Five years. Payment Terms: Payment of interest only for the first year, payable monthly, beginning one month following the initial advance. Thereafter, the principal amount advanced and accrued interest thereon shall be payable monthly over a four-year period. Collateral: The collateral for the Financing will be a security interest in the revenues of the casino. Additional collateral will be a security interest in the furniture, fixtures, equipment and slot machines utilized in the Casino provided, however, that the Borrower may incur purchase money loans secured by such gaming equipment, furniture, fixtures and equipment, lender shall subordinate its interest to such purchase money lenders. Documentation: The Financing will be made pursuant to transaction documents reasonably satisfactory to the Borrower and the Lender, which will be drafted by counsel to the lender, at cost of the Borrower. The documentation shall include the terms set forth herein and any additional terms agreed to by Borrower and Lender. Please confirm your agreement to the foregoing by signing below. Very truly yours, /s/ H. Thomas Winn H. Thomas Winn AGREED AND ACCEPTED: /s/ Liz Elgin DeRouen - ---------------------------------- Ms. Liz Elgin DeRouen, Chairperson EXHIBIT F-la Disclosure EXHIBIT F-la DISCLOSURES 1. That certain claim made by the Alexander Valley Association against the Tribe pursuant to letters dated September 12, 2000, and April 15, 2002, and alleging certain violations by the Tribe of the federal Endangered Species Act and correspondence from the National Marine Fisheries Service regarding potential takings by the Tribe under that Act with respect to the creek bed on the lower part of the Dry Creek Rancheria, review of which has been acknowledged by Lender; 2. That certain claim styled Terrance C. Proschold et al. v. United States of America, U.S.D.C. (ND Cal), No. 01-2390 SBA, pursuant to which the claimants seek declaratory and injunctive relief relating to property held by claimants and burdened by an access easement to such property, that such access easement does not permit the use of such access for utilization of the property for casino use, which claim has been acknowledged by Lender; 3. A dispute by certain voting members of the Tribe who claim they have successfully recalled the present members of the Tribe's Board of Directors and replaced them with an "interim board." The Bureau of Indian Affairs continues to recognize the current board. An appeal of that recognition is pending; 4. A claim by Advent Communications & Entertainment Company and its partners, affiliates and co-venturers (including each party identified under "Third Party Disputes" in the Loan Agreement) that the negotiation and execution of the Loan Agreement is an express breach of the Sonoma Canyon Documents and/or the Sonoma Falls Documents (as such terms are defined in the Loan Agreement) and documents related thereto, including an "Exclusive Negotiating Agreement" dated August 7, 1999, all of which claims have been acknowledged by Lender; 5. That certain litigation entitled Artichoke Joe's, et al. v. Norton, et al. (No. CV-S-01-248 DFL/GGH. E.D. Calif.) filed on February 7, 2001 challenging the constitutionality of California Constitution Article IV, Section 19 (f), the effect of which, if successful, cannot be determined but could limit the Tribe's ability to offer certain gaming in the Tribe's gaming facility (the "Prop 1 A Litigation"); and 6. The opinion of the Attorney General of California dated February 23, 2001 that California "Compacts entered into by the State and 62 federally recognized Tribes contemplate that the Gambling Control Commission ("GCC") will issue the licenses for gaming devices pursuant to the Compact's provisions;" that the Tribe purchased gaming device licenses that were issued on or about May 15, 2000 through a process established by the Compact tribes utilizing the Michael Sides Accountancy Corporation and not by the GCC, although the State commended the tribes on the process at the time; that gaming devices operated pursuant to those licenses were not placed in commercial operation within 12 months of issuance as required under the Compact; that further gaming device license issuance and other compliance procedures may be necessary to effectuate the Tribe's right to operate more than 350 gaming devices; and that further licenses may not be available if and when needed. Members of the GCC have indicated informally that it is possible that new licenses to replace those issued through the Sides process will be issued by the GCC and that the one-year deadline will not begin to run until then, but there has been no formal announcement to that effect. 7. A contention by various parties that, because the Rancheria property is held in fee by the United States of America in a Deed dated June 1, 1915 that does not expressly state that it is held "in trust" for the Tribe, the Rancheria is in fact not held in trust, and does not constitute a reservation or other "Indian land" that is eligible for gaming activities under the Indian Gaming Regulatory Act.