10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549

FORM 10-K

(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

for the fiscal year ended December 31, 2007

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from          to

Commission File Number: 333-115186

RIVER ROCK ENTERTAINMENT AUTHORITY

(Exact name of registrant as specified in its charter)

Not Applicable	68-0490898
(State or other jurisdiction of  incorporation or organization)	(I.R.S. Employer Identification No.)

3250 Highway 128 East
Geyserville, California 95441
(707) 857-2777

(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange On Which Registered
NONE	NONE

Securities registered pursuant to Section 12(g) of the Act:

Title of Class
NONE

Indicate by check mark if registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  o   No  x

Indicate by check mark if registrant is not required to file reports pursuant to Rule 13 or Section 15(d) of the Act. Yes  x   No  o

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x   No  o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  o	Accelerated filer  o
Non-accelerated filer  x	Smaller reporting company  o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes  o   No   x

The aggregate market value of common stock held by non-affiliates of the registrant was $0 on the last business day of the registrant’s most recently completed second fiscal quarter (June 30, 2007).

The registrant has no outstanding common equity.

Documents Incorporated By Reference

None.

RIVER ROCK ENTERTAINMENT AUTHORITY

INDEX TO FORM 10-K

		Page Number
	PART I
Item 1.	Business	5
Item 1A.	Risk Factors	19
Item 2.	Properties	25
Item 3.	Legal Proceedings	25
Item 4.	Submission of Matters to a Vote of Security Holders	25
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	26
Item 6.	Selected Financial Data	26
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 7A.	Quantitative and Qualitative Disclosure About Market Risk	38
Item 8.	Financial Statements and Supplementary Data	38
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	38
Item 9A.	Controls and Procedures	38
Item 9B.	Other Information	40
	PART III
Item 10.	Directors and Executive Officers of the Registrant	41
Item 11.	Executive Compensation	43
Item 12.	Security Ownership of Certain Beneficial Owners and Management	46
Item 13.	Certain Relationships and Related Transactions	46
Item 14.	Principal Accountant Fees and Services	48
	PART IV
Item 15.	Exhibits, Financial Statement Schedules and Reports on Form 8-K	48

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CAUTIONARY STATEMENT

Except for the historical financial information contained herein, the matters discussed in this report on Form 10-K (as well as documents incorporated herein by reference) may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are based upon current expectations that involve risks and uncertainties and include declarations regarding the intent, belief or current expectations of us and our management and may be signified by the words “believes,” “anticipates,” “plan,” “expects,” “intends” and similar expressions. Our actual results and the timing of certain events may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such a discrepancy include, but are not limited to, those discussed in “Risk Factors” and elsewhere in this report. All forward-looking statements in this document are based on information available to us as of the date hereof, and we assume no obligation to update any such forward-looking statements, whether as a result of new information, future events, or otherwise. All discussion in this report should be read in conjunction with our financial statements and the accompanying notes contained in this report.

References in this Form 10-K to the “Authority” and the “Tribe” are to the River Rock Entertainment Authority and the Dry Creek Rancheria Band of Pomo Indians, respectively. The terms “we,” “us” and “our” refer to the Authority.

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PART I

Item 1. Business.

OVERVIEW

River Rock Entertainment Authority (“we,” “us,” “our” or the “Authority”) is a governmental instrumentality of the Dry Creek Rancheria Band of Pomo Indians of California (the “Tribe”). The Tribe is a federally recognized Indian tribe with 947 enrolled members, with an approximately 75-acre reservation in Sonoma County, California (“Sonoma County” or the “County”). We were formed in 2003 as an unincorporated governmental instrumentality of the Tribe, to own and operate the River Rock Casino in Sonoma County, California. The River Rock Casino had previously operated as a wholly-owned governmental operating property of the Tribe.

The Indian Gaming Regulatory Act of 1988, (“IGRA”) as amended, permits federally recognized Indian tribes to conduct casino gaming operations on certain Indian lands, subject to, among other things, the negotiation of a compact with the affected state. The Tribe and the State of California entered into a compact (the “Compact”) in September, 1999 which became legally effective when it was approved by the U.S. Department of the Interior and notice of approval was published in the Federal Register in May, 2000. The Compact authorizes certain forms of Class III casino gaming, including slot machines and house-banked card games.

Our address is 3250 Highway 128 East, Geyserville, California 95441 and our telephone number is (707) 857-2777.

Our River Rock Casino

We own and operate the River Rock Casino, a gaming and entertainment facility located on the Tribe’s reservation, approximately 75 miles north of San Francisco, California. Our 62,000 square-foot gaming and entertainment facility, which is located in the Alexander Valley, has views of the surrounding countryside, is open 24-hours a day, seven days a week, and currently features:

·35,500 square feet of gaming space containing 1,570 slot and video poker gaming machines, 22 table games featuring Blackjack, Three Card Poker, Mini Baccarat and Pai Gow Poker, and 6 tables featuring Texas Hold’em Poker. We offer state-of-the-art gaming devices including video poker, video keno, progressive slots and guest favorites, such as Fort Knox, Red Hot 7’s, Hot Shot, Jackpot Party, Quick Hits and other various themes;

·both smoking and non-smoking gaming rooms in order to satisfy customer preferences;

·the Players Club, a player tracking system which offers our guests incentives for additional play;

·the Quail Run Restaurant, offering 24-hour menu dining, with lunch, dinner and Sunday brunch buffets, and 152 indoor seats and 96 outdoor seats, overlooking the Alexander Valley wine region and the Russian River;

·two snack bars, a lounge, the Oak Bar, which offers “bar top” video poker games in an elegant setting, a gift shop and a historic and contemporary Pomo basketry and art display;

·three parking structures and an adjacent parking lot allows us to accommodate approximately 1,584 customer vehicles;

·      an Arts and Crafts California Bungalow-style design and furnishings, incorporating Native American elements, that feature a cultural arts collection of traditional and contemporary Pomo art, including historical basketry for which the Tribe is known. The interior of our gaming facility utilizes an extensive amount of wooden casework and natural rock to emphasize the architectural style found throughout California wine country. In keeping with this motif, our gaming facility’s counters are constructed of natural stone and wood, and oak wainscoting grace the food and beverage facilities; and

·a location in the heart of the beautiful Alexander Valley with spectacular views of the surrounding countryside. Guests entering our gaming facility are treated to a large, open-beamed Porte cochere that faces out towards sweeping vistas of Alexander Valley vineyards. Our gaming and entertainment facility was designed to capitalize on the scenic vistas with the food and beverage facilities strategically placed to feature the expansive views.

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In addition, to enhance the comfort of our guests, we have installed a state-of-the-art ventilation system that greatly reduces cigarette smoke and impurities, circulates air from the ground level and provides 100% fresh-air return. Our gaming facility also incorporates other environmentally sensitive engineering features, including irrigation using surplus wastewater and non-intrusive lighting in the parking lot. Furthermore, our state-of-the-art back-up and redundant generators are designed to provide electricity in the event of a power failure.

We maintain a digital surveillance system that tracks the entire casino floor to secure our facility and operations. We employ a 59 officer security force.

Competitive Strengths

We believe the following strengths have and will continue to contribute to our success:

Attractive Location with Convenient Access.   Our gaming facility is conveniently located off of Highway 101, a four-lane highway that serves as a major thoroughfare between Los Angeles and Oregon.  Highway 101 travels directly through the nearby cities of San Francisco, San Rafael, Petaluma and Santa Rosa.  Currently CALTRANS estimates of Average Annual Daily Traffic (AADT) on Highway 101 to be around 43,400 north and south bound vehicles.  In addition, the nearby airport in Santa Rosa provides easy access for patrons traveling to wine country.

Strong Market Demographics.   Our gaming facility is easily accessible by all the approximately 6.9 million residents of the San Francisco Bay area market which include the major metropolitan cities of San Francisco, Oakland and the smaller cities of San Rafael, Berkeley, Santa Rosa, and Petaluma. We also benefit from the 7 million annual visitors to Sonoma County and 5 million annual visitors to Napa County which is known for their world-renowned wineries and related tourist attractions.

Limited Competitive Environment and High Barriers to Entry.   Class III casino gaming may not be conducted in California other than on certain lands held for the benefit of federally recognized Indian tribes and pursuant to negotiated compacts with California and approved by the U.S. Secretary of the Interior. We believe these restrictions significantly limit potential future competition. We are not subject to any betting limits on Indian gaming activities.

High Quality Products and Amenities.   Our gaming facility offers state-of-the-art gaming devices and table games in an upscale, relaxed gaming environment. Our gaming devices feature comprehensive, integrated cashless technology permitting faster wagering and payouts. In addition, our restaurant offers premium food and beverages and was designed to capitalize on the spectacular views of the Alexander Valley. Our gaming and food and beverage facilities emphasize a high level of customer service, created and maintained through comprehensive employee training.

Emphasis on Gaming Devices.   Our gaming facility emphasizes slot and video poker gaming devices, which we believe, based on industry studies, represents the most consistently profitable and lowest risk segment of the gaming business. We offer a wide variety of games not only to attract guests but also to encourage them to play for longer periods of time.

Significant Cash Flow from Operations.   We currently generate significant cash flow from operations. In addition, because these are governmental operations, they are not subject to any local, state or federal income taxes.

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Experienced Senior Management Team and Staff.   Our management team is led by seasoned executives who have significant industry experience, leadership and expertise in operations, marketing, finance and development.  Members of this team have previously worked at premier local and destination casinos for commercial and tribally owned casinos.  We believe our management team and our experienced staff provides superior employee and customer care product quality, and an in-depth understanding of the target market and how to maintain return business which enhances our competitive position.

Business and Marketing Strategies

Our business strategy is to grow our business to not only capture a greater share of our growing market, but also expand our target patron base to a broader demographic with the following competitive business strategies:

Marketing & Promotions:   Our advertising methods include radio with a strong emphasis, email blasts, billboards, TV, newspaper, magazines, bus billboards, signature shuttles, infomercials, rack cards and direct mail.  The direct mail program that will be enhanced this year will be tiered by player based on player status.  This direct mail method will include coupons and information regarding up and coming promotions which will be tailored to target our high end players. Over the years, we have analyzed promotions and player demand and have continued with the successful promotions which have led to increased revenues.  Promotions that have proven successful and increased revenues are dream car, cash spins and trip giveaways.    Along with continued promotions, we will also be adding tournaments.  Marketing will be putting more emphasis on direct mail to the ethnic marketing, i.e. Latino and Asian signature markets in the Bay area.  With giveaways and promotions throughout the year, we will be able to continue to provide cutting edge entertainment.

Capitalize on Our Prime Location and Appeal of Sonoma County.   We market our Casino to our local customer base and to our broader regional market and international patrons traveling to the area as part of the Sonoma Valley resort destination.  The picturesque Alexander Valley region in the heart of Sonoma County is a world-renowned tourist destination. We intend to capitalize on its appeal, including its reputation as one of California’s premier wine producing regions, to further expand our customer base. Sonoma County receives over 7 million tourists annually and over 5 million tourists visit Napa County annually.  Our marketing message emphasizes the convenient access to our facility.

Partners Program.   Partnerships with local businesses have created economic growth and strong community relations with local wineries, hotels, Chamber of Commerce and local businesses.  In return, promoting one another will help increase tourism and bring in new potential customers to Sonoma County and our Casino.  Our visitor’s office located in downtown Healdsburg provides tourists detailed and local area information on the casino and highlights those in the partners program with maps, lodging and transportation options.

Increase Time on Device and Win Per Unit.   We utilize state of the art technology and sophisticated player tracking software system which provides a customized and tailored gaming environment that generates increased  time spent on a device and enhances the likelihood of return business.  This data base helps us to determine our premier players and target their favorite games, and also helps us create a relationship with those patrons.

Continue to Develop our Appeal to the Asian Market.   We plan to further cultivate our Asian market customer base by expanding our bus program from San Francisco’s Chinatown with our targeted gaming promotions, host programs and agreements with Asian travel providers.

Expand Marketing and Promotion Programs.   We will monitor the effectiveness of our advertising and brand awareness efforts through an extensive research analysis program and evaluate it against measurable objectives such as first name recall for our gaming facility and satisfied resident response rates. From our database, we are able to track our repeat business. Our database also provides us with information on new player sign-ups,, which for the fiscal year of 2007, has grown by 53,000. We have also promoted more frequent and longer visits and increased wagering at off-peak demand periods through promotions such as our “Hot Nights, Cool Cash” and “Pick Your Dream Car” programs. These promotions offer customers cash rewards on weekday nights and has resulted in increased net revenue whenever offered.

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Supplement Demand with Our Bus Program.   We intend to supplement our overall demand with our line and charter bus program to provide customer transportation to our gaming facility. We believe that this program enabled us to maximize our number of guests during the off-peak times.  Our guests have appreciated the convenience offered by this program and we have experienced an increase in the use of our bus program.  We operated an average of approximately 33 buses a day in 2007. Our bus program brings guests from San Francisco, San Mateo, Contra Costa, Alameda and Marin Counties.  On our River Rock line runs, guests pay between $8 to $13 roundtrip to and from our casino. Upon arrival, they receive an incentive package in the range of $15 to $25 towards use on gaming in our casino. Our special charter bus guests also receive $20 towards use on gaming in our casino.

COMPETITION

Other Casinos In and Around Our Market

Federal and California law currently permits Class III casino gaming only on federally recognized tribal lands pursuant to compacts negotiated with the State of California and approved by the U.S. Secretary of the Interior. Class II gaming for tribes is permitted only on federally recognized tribal lands. There are currently 55 tribes operating 56 compacted gaming facilities in the State of California. The closest existing competitors are the Hopland Sho-ka-wah Casino, located approximately 35 miles north of the Tribe’s reservation, the Konocti Vista Casino, located approximately 45 miles northeast of the Tribe’s reservation, the Thunder Valley Casino, located 124 miles east of the Tribe’s reservation, and Cache Creek Indian Casino and Bingo, located approximately 95 miles east of the Tribe’s reservation. Several potential competitors are attempting to develop and open casinos near our facility.

The Hopland Sho-ka-wah Casino is located several miles east of Highway 101 on Route 175.  The facility features a 40,000 square foot casino offering 550 slot machines, 6 table games and a small 3 table poker room.  The facility contains a small café-type food and beverage area, a bar and a fine-dining steak house.  Entertainment is provided occasionally, which includes musical acts and boxing.  Hopland operates a small bus program; however it is limited by not having a hotel.

East of the Sho-ka-wah is the Konocti Casino in Lakeport.  Lakeport is located approximately 37 miles from Cloverdale with access off Highway 20.  The casino houses 660 slot machines and 8 table games.  The facility also offers an 80-room hotel and marina with small pool as well as a 74-space RV park.  The food and beverage program includes a small restaurant, buffet and a new full-service restaurant serving liquor.

The Thunder Valley Casino opened in June 2003 and is located at Highway 65 and Interstate 80 just outside of Sacramento.  The Nevada-style property offers more than 2,600 slot machines and more than 100 table games that include blackjack, baccarat, and a variety of poker games including Let It Ride and Pai Gow.  The facility features a salon, private dining rooms, bars and butler service.  In addition, it houses a 500 seat buffet, and various fast food options, including Fat Burger, Panda Express and Starbucks, and fine dining options such as Austin’s Steakhouse.  The facility also features a nightclub and live entertainment is offered every two weeks.

The Cache Creek Casino is located approximately 50 miles west of Sacramento.  Cache Creek recently expanded its facility to 2,600 slots.  The casino also houses over 140 table games including blackjack, Texas Hold’em, Pai Gow and Caribbean Stud.  The facility also includes a 200-room luxury hotel, 8 restaurant outlets, and entertainment pavilion with seating for 600, a spa and outdoor pool, an 18-hole golf course and 1,883 spot parking structure.  The facility is in the process of expanding its restaurant offerings.

The greatest competition may come from the proposed Graton Rancheria.  In April 2003, the Federated Indians of the Graton Rancheria, also known as the Coast Miwoks, announced plans to purchase land in Sonoma County near Highway 37 and Lakeville Highway, approximately 20 miles south of our gaming facility and closer to San Francisco. The proposed location would lie directly between our Casino and the majority of the 7 million population base.  The announced plans includes construction of a casino-hotel complex that will be managed by Station Casinos, Inc. based in Las Vegas, Nevada.  The proposed facility will house approximately 2,000 slot machines, 120 card tables and bingo, as well as a 300-room hotel, five restaurants and a theater with up to 2,000 seats.  As a result of environmental opposition to the development of such location, the Federated Indians of the Graton Rancheria announced plans to move the proposed casino-hotel complex to a site near Rohnert Park, California. The Rohnert Park City Council has approved an agreement with the Federated Indians of the Graton Rancheria to share with Rohnert Park and various community groups, approximately $200.0 million over 20 years, to offset the impact of the proposed project.

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The Lytton Band of Pomo Indians currently operates a 70,000 square-foot casino with 1,050 Class II electronic bingo machines on the 9-acre site of a card room in San Pablo, near Oakland, California, on land that was placed in trust for the tribe through congressional legislation.  The Lytton Band signed a compact with Governor Arnold Schwarzenegger for operating Class III casino gaming on the San Pablo site, but the state legislature withheld its approval.  In May 2007, legislation was introduced in the United States Senate, which has the support of the Lytton Band, that would require the Lytton Band to forego any Class III machines at the San Pablo site and instead limit itself to operating its existing Class II machines.  This legislation was passed by the Senate in November 2007 and referred to the House Committee on Natural Resources, but no further action has been taken.

There are a number of other Indian tribes, including the Scotts Valley Band of Pomo Indians and the Guidiville Band of Pomo Indians, who have announced preliminary plans to develop gaming projects in the San Francisco Bay area.

Each of the proposed projects faces numerous obstacles including negotiation and approval of a compact with the State of California, approval from the Bureau of Indian Affairs to put the land on which the project would be located into federal trust on behalf of the tribe, and certain environmental approvals.

New and Renegotiated Tribal Compacts

In 2004, the State of California entered into amended gaming  compacts with five California Indian tribes, including two in Northern California – the Rumsey Band of Wintun Indians and the United Auburn Indian Community. These compacts permit these tribes to operate an unlimited number of slot machines, in return for which the tribes agreed to make payments totaling $100 million per year for 18 years commencing in 2005 and thereafter an amount equal to the lesser of the original payment amount or 10% of each tribe’s “net win” for the balance of the term of the compacts (2030), to be used to pay debt service on approximately $1 billion of bonds to be issued by the State of California. The tribes also agreed to pay increased annual license fees to the State in respect of each slot machine above the then-current 2,000 permitted to be operated. We do not know what effect the compacts will have on the competition in Indian gaming in Northern California or on us in particular.  At present, these new compacts have resulted in the addition of approximately 1,300 slot machines at the Cache Creek Casino Resort (owned by the Rumsey Band of Wintun Indians) and approximately 1,500 slot machines at the Thunder Valley Casino (owned by the United Auburn Indian Community).

In the summer of 2006, Governor Schwarzenegger renegotiated five compacts with five Southern California tribes. These compacts became effective in early 2008. The new compacts allow three of these tribes to add up to 5,500 Class III slot machines to their casinos (providing for a total of up to 7,500 machines per casino), and allow the other two tribes each to add 3,000 additional machines (providing for a total of up to 5,000 machines each). In exchange, these tribes agreed to pay 10% of gaming win for their existing 2,000 machines, an additional 15% of net machine win for machines 2,001 to 5,000, and 25% of net win for machines 5,001 to 7,500.

California Lottery and Other Initiatives

We also compete with other forms of gaming such as statewide lotteries, live and simulcast pari-mutuel wagering and card rooms.

In May 2007, Governor Schwarzenegger proposed that the California State Lottery be leased to a private concessionaire to increase its revenue and efficiency. Part of the Governor’s proposal includes authorizing the use of instant lottery video terminals that resemble and operate like slot machines at locations including horse racing tracks and card rooms. Approval of this proposal

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would require a two-thirds affirmative vote of the state legislature and could require a constitutional amendment. While it is uncertain whether or when this proposal will be approved, its implementation could adversely affect our and other Indian casinos’ competitive positions. Such increased competition could negatively impact our operating results and our ability to satisfy our obligations under the notes.  Other initiatives expanding competitive forms of gaming have been approved and may, from time to time, be approved by state or local authorities. Examples include: (i) the passage in California of recent legislation expanding off-site betting on horse races through expanded advance deposit wagering and increased satellite wagering sites; (ii) a legislative proposal in the California Assembly in February 2007 to amend the California Penal Code to expand permitted bingo games by charitable organizations to include electronic bingo cards; and (iii) the amendment of county laws in Sacramento County, California to expand permitted bingo games by charitable organizations in Sacramento County. These and other initiatives that might be proposed in various locations could affect our business.

Many of our competitors serve alcoholic beverages on their premises. We have not yet obtained a liquor license for our Casino. We had initially applied for a liquor license for our Casino in 2002. In September 2004, the Department of Alcoholic Beverage Control (“ABC”) denied the Tribe’s application for a liquor license based on a building code interpretation by a state officer who was later determined to lack jurisdiction to make a code determination, and did so without consulting the Tribe’s building code official having jurisdiction. The Tribe appealed and, in May 2005, an Administrative Law Judge ruled for the Tribe and recommended that the ABC reverse itself and approve the license, which the ABC did as of October 2005, pending a hearing on the protests.

On March 18, 2008, the Tribe and the Sonoma County Board of Supervisors entered into a memorandum of agreement (“MOA”) that will, among other things, settle several long-standing legal disputes between Sonoma County and the Tribe and provide a binding framework for resolving future disputes. In a related action, the Alexander Valley Association (“AVA”), a local business and residents association which has long opposed the Tribe’s gaming project and objected to the issuance to it of a liquor license, agreed to withdraw its objections to the license and has persuaded its members and a number of other protestors to do likewise.  In light of those withdrawals (and a similar agreement in the MOA requiring the County also to withdraw its objection), and with the support of both the County and AVA, the Tribe is now seeking to expedite issuance of an alcohol license. Under the MOA, the Tribe agreed to restrict the sale of alcohol to only wine and beer between the hours of 10 a.m. and 5 p.m. on weekdays, and to stop serving alcohol altogether at midnight except for Friday and Saturday nights and the nights before holidays. The restrictions may be renegotiated following the first to occur of three years or the opening of a hotel, which is projected to occur within the next 2 to 3 years.

EMPLOYEE AND LABOR RELATIONS

As of December 31, 2007, we had 680 full and part-time employees. Our employees are not covered by any collective bargaining agreements. We believe that our relations with our employees are good. However, provisions in a labor ordinance the Tribe was required to adopt as part of the 1999 compact agreement, permits opportunities for unions to attempt to organize our labor force. In addition, a recent decision by the United States Court of Appeals for the District of Columbia upheld a finding by the National Labor Relations Board, that the National Labor Relations Act is applicable to tribal casinos.

REGULATION

General

We are subject to special federal and tribal laws applicable to commercial relationships with tribes and the management and financing of casinos owned by an Indian tribe. In addition, we are regulated by certain federal laws applicable to the gaming industry generally, with respect to the use of certain gaming equipment, and specifically applicable to the Indian gaming market. We are also regulated by the provisions of the Compact, which have been ratified under state law and are based in part on the California constitution and other state laws and policies. The following description of the regulatory environment, in which Indian gaming takes place and in which we operate our gaming facility, is only a summary and not a complete recitation of all applicable law. Moreover, our regulatory environment is more susceptible to changes in public policy considerations than others. Changes in these laws could have a material adverse impact on our operations.

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Applicability of Federal Law

Federally recognized Indian tribes are independent governments, subordinate to the United States, with sovereign powers, except as those powers may have been limited by Congress, by treaty, or, in certain instances, by the public policy of the state in which the tribe’s lands are located. The power of Indian tribes to enact their own laws to regulate gaming derives from their sovereign right to govern and regulate their own affairs, particularly where it is consistent with federal law and the state’s public policy. Indian tribes maintain their own governmental systems and often their own judicial systems. Indian tribes have the right to tax persons and businesses conducting business on Indian lands and also have the right to require licenses and to impose other forms of regulations and regulatory fees on persons and businesses operating on their lands.

The Indian Gaming Regulatory Act of 1988

Regulatory Authority.    Since 1988, the sovereign right of tribes to operate and regulate gaming on their lands has been subjected to the provisions of the Indian Gaming Regulatory Act of 1988 (“IGRA”). IGRA is administered by the National Indian Gaming Commission (“NIGC”), an independent agency within the U.S. Department of Interior that exercises certain regulatory responsibilities in connection with Indian gaming on behalf of the United States. The NIGC has authority to issue regulations governing tribal gaming activities, approve tribal ordinances for regulating Class II and Class III gaming (as described below), approve management agreements for gaming facilities, conduct investigations and generally monitor tribal gaming. The Bureau of Indian Affairs, which is a bureau of the U.S. Department of the Interior, retains certain responsibilities under IGRA, such as the approval of per capita distribution plans of gaming revenues to individual tribal members and the approval of transfers of lands into trust status for gaming. The Bureau of Indian Affairs also has responsibility to review and approve land leases and other agreements relating to Indian lands. Criminal enforcement is a shared responsibility of the U.S. Department of Justice, and, depending on the terms of a tribal-state compact that is in effect, the state in which the tribe is located, and the tribe.

The NIGC is empowered to inspect and audit all Indian gaming facilities, conduct background checks on certain persons associated with Indian gaming, hold hearings, issue subpoenas, take depositions, adopt regulations, assess fees and impose civil penalties for violations of IGRA. IGRA also provides for federal criminal penalties for illegal gaming on Indian land and for theft from Indian gaming facilities. The NIGC has adopted rules implementing certain provisions of IGRA. These rules govern, among other things, the submission and approval of tribal gaming ordinances or resolutions and the maintenance of minimum internal control standards for the operation of gambling games and equipment. IGRA and the NIGC regulations require an Indian tribe to have the sole proprietary interest in, and to maintain a high level of responsibility for, the conduct of any gaming on its lands. Tribes are required to issue gaming licenses under articulated standards, conduct or commission financial audits of their gaming enterprises, perform or commission background investigations for primary management officials and key employees, and maintain facilities in a manner that adequately protects the environment and the public health and safety. These rules also set out review and reporting procedures for tribal licensing and background activities.

Classes of Gaming.    IGRA classifies gaming that may be conducted on Indian lands into three categories: Class I gaming includes social games solely for prizes of minimal value or traditional forms of Indian gaming engaged in by individuals as part of, or in connection with, tribal ceremonies or celebrations. Class II gaming includes bingo and pull tabs, lotto, punch boards, tip jars, instant bingo and other games similar to bingo if those games are played at the same location as bingo is played, and non-banked card games (such as poker) if permitted within the state. Class III gaming includes all other forms of gaming, such as slot machines, table games, lotteries, sports betting and pari-mutuel wagering.

Class I gaming on Indian lands is within the exclusive jurisdiction of Indian tribes and is not subject to federal regulation under IGRA. Class II gaming is permitted on Indian lands if:

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·the state in which the Indian lands lie permits that gaming for any purpose by any person, organization or entity;

·the gaming is not otherwise specifically prohibited on Indian lands by federal law;

·the gaming is conducted in accordance with a tribal ordinance or resolution that has been approved by the NIGC;

·an Indian tribe has sole proprietary interest and responsibility for the conduct of gaming; and

·the primary management officials and key employees are tribally licensed and several other requirements are met.

Class III gaming is permitted on Indian lands if the conditions applicable to Class II gaming are met and, in addition, the gaming is conducted in conformity with the terms of a tribal-state compact (a written agreement between a tribe and the government of the state within whose boundaries the tribe’s lands lie).

Tribal-State Compacts.    IGRA requires Indian tribes to enter into tribal-state compacts in order to conduct Class III gaming. These tribal-state compacts may include provisions for the allocation of criminal and civil jurisdiction between the state and the Indian tribe necessary for the enforcement of these laws and regulations, taxation by the Indian tribe of the Class III gaming activity, remedies for breach, standards for the operation of the Class III gaming activity and maintenance of the gaming facility, including licensing, and certain other subjects that are directly related to the operation of gaming activities.

Tribal-state compacts usually specify the types of permitted games, establish technical standards for gaming devices, entitle the state to inspect casinos, require background investigations and licensing of casino employees, and require the tribe to pay a portion of the state’s expenses for establishing and maintaining agencies that participate in the regulatory process provided in the compact. Some tribal-state compacts are for set terms, while others are for indefinite durations.

The Tribe entered into a Compact with the State of California in September 1999, which became effective in May 2000, that permits the Tribe to engage in some levels of Class III gaming. The Compact will expire on December 31, 2020. For additional information see “Part I. Item 1. Business—Description of Material Agreements—The Compact.”

Tribal Ordinances.    Under IGRA, except to the extent otherwise provided in a tribal-state compact as described below, and subject to certain oversight and enforcement authority by the NIGC, Indian tribal governments have primary regulatory authority over gaming on land within a tribe’s jurisdiction. Therefore, our gaming operations and persons engaged in gaming activities are subject to the provisions of the Tribe’s ordinances and regulations regarding gaming. The Tribe maintains a fully staffed tribal gaming agency (“TGA”), known as the Dry Creek Gaming Commission, to carry out the Tribe’s regulatory responsibilities under IGRA, its ordinances and the compact.

IGRA requires that the NIGC review tribal gaming ordinances and authorizes the NIGC to approve these ordinances only if they meet requirements relating to:

·the ownership, security, personnel background, recordkeeping and auditing of a tribe’s gaming enterprises;

·the use of the revenues from that gaming; and

·the protection of the environment and the public health and safety.

Licensing and Registration Requirements of the Compact and State Regulation

Compact.    The Compact requires that any person who directly or indirectly extends financing to the Tribe’s gaming facility or gaming operation must be licensed as a “financial source” by the TGA. However, as permitted by the Compact, the TGA has exempted federally- and state-regulated banks and savings and loan associations, as well as persons who hold less than 10% of our $200.0 million of 9-3/4% Senior Notes, due 2011 (the “Notes”). For an applicant who is a non-exempt business entity, these licensing provisions also apply to the entity’s officers, directors, principal management employees, owners (if an unincorporated entity), partners and greater than 10% shareholders. Under the Compact, a permanent license cannot be issued unless the TGA has conducted an investigation as to the suitability of the applicant. Any application for a gaming license may be denied, and any license issued may be revoked, if the TGA determines the applicant to be unsuitable or otherwise unqualified for a gaming license. Each license is subject to review for compliance at least every two years.

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Prior to receiving a license, an applicant must apply to the California Gambling Control Commission (“CGCC”) for a determination of suitability. If the TGA receives notice that the CGCC has determined that a person is unsuitable, the Compact requires that the TGA revoke any license it has issued to such person.

The Compact states that any agreement between the Tribe and a “financial source” terminates upon revocation or non-renewal of the financial source’s license because of a determination of unsuitability by the CGCC. Upon such a termination, the Tribe’s only liability is for repayment of all outstanding sums owed as of the termination date, exclusive of unpaid accrued interest. Further, the Tribe is not permitted to enter into, or continue to make payments under, any financing agreement with anyone whose application to the CGCC for a determination of suitability has been denied or has expired without renewal.

State and Tribal Regulation.    The CGCC and the TGA, pursuant to the authority created in a tribal-state joint powers board known as the “Association,” have both adopted regulations that simplify the licensing and registration process for certain large institutional investors, both in the initial distribution of certain debt securities and the secondary market.

Under these regulations, certain regulated financial institutions with at least $100.0 million invested in non-affiliated securities may take advantage of an abbreviated licensing and certification process. The regulations do not require any licensing or registration for persons purchasing debt securities in the secondary market. However, unless a holder of debt securities is licensed or exempt from licensing, neither the holder nor the Trustee on the holder’s behalf will have any right to enforce any payment obligation relating to the debt securities. In addition, neither the Trustee nor the Tribe may make any payment of principal or interest on the debt securities as a result of any enforcement action or default acceleration of debt security payments, except to a person who is licensed or exempt from licensing.

Gaming Device Licenses

The Compact permits the Tribe to operate up to 350 gaming devices without licenses and up to an additional 1,650 machines with licenses.  From March 2000 through December 2001, the Tribe obtained 1,250 gaming device licenses through a process conducted by a public accounting firm retained by a number of tribes under the Compact, thus permitting the Tribe to operate up to a total of 1,600 gaming devices. Following the allocation, the California Attorney General opined that only the CGCC has the authority to issue gaming device licenses under the compacts, and the Governor of California ordered the CGCC to control and monitor the gaming device licensing process. In June 2002, the CGCC ratified all gaming device license issued to the Tribe and the other tribes in the earlier process.

In accordance with the Compact and California law, the Tribe is obligated to remit certain fees to the CGCC on a quarterly basis for inclusion in a Revenue Sharing Trust Fund (“RSTF”) maintained by the State of California. The RSTF is for the benefit of tribes that have no or limited gaming. The RSTF fees are fixed amounts per device, calculated on an annual basis and paid quarterly. We pay these fees on behalf of the Tribe. RSTF fees for the years ended December 31, 2007 and 2006 were $1.3 million for each year.

In the summer of 2006, Governor Schwarzenegger renegotiated five compacts with five Southern California tribes. The new compact amendments allow the tribes who agreed to the amendment to have additional slot machines, while imposing additional significant annual payments to the State of California and requiring extensive mitigation and compensation to impacted local communities and provisions affecting customers and employees. The Tribe did not seek or enter into an amendment.

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Application for Liquor License

On March 18, 2008, the Tribe and the Sonoma County Board of Supervisors entered into a memorandum of agreement (“MOA”) that will, among other things, settle several long-standing legal disputes between Sonoma County and the Tribe and provide a binding framework for resolving future disputes.

In a related action, the Alexander Valley Association (“AVA”), a local business and residents association which has long opposed the Tribe’s gaming project and objected to the issuance to it of a liquor license, agreed to withdraw its objections to the license and has persuaded its members and a number of other protestors to do likewise.  In light of those withdrawals (and a similar agreement in the MOA requiring the County also to withdraw its objection), and with the support of both the County and AVA, the Tribe is now seeking to expedite issuance of an alcohol license. Under the MOA, the Tribe agreed to restrict the sale of alcohol to only wine and beer between the hours of 10 a.m. and 5 p.m. on weekdays, and to stop serving alcohol altogether at midnight except for Friday and Saturday nights and the nights before holidays. The restrictions may be renegotiated following the first to occur of three years or the opening of a hotel, which is projected to occur within the next 2 to 3 years.

DRY CREEK RANCHERIA BAND OF POMO INDIANS

Tribal Administration

The Dry Creek Rancheria Band of Pomo Indians is a federally recognized, self-governing Indian tribe with 974 enrolled members. The reservation was established in 1915 under the authority of an Executive Order dated January 12, 1891. Pursuant to the Tribe’s Articles of Association, the Tribe is governed by a Tribal Council composed of all voting members. Certain authority is delegated to elected tribal officers who comprise the Board of Directors, consisting of a Chairperson, a Vice Chairperson, a Secretary/Treasurer and two members-at-large. The Secretary-Treasurer position has been vacant since December 12, 2006.  The members of the Board of Directors of the Tribe are the same members as our Board of Directors, but they do not serve in the same capacity.

The Tribal Gaming Commission

The Tribe enacted a tribal gaming ordinance in April 1997, which was approved by the NIGC in September 1997. Among other matters, the gaming ordinance created and established the TGA as a governmental subdivision of the Tribe. The TGA consists of three commissioners and supporting staff and is vested with the authority to regulate all gaming activity conducted on the Tribe’s lands.

Each TGA Gaming Commissioner is appointed by the Tribal Council to serve a four-year term. The tribal gaming ordinance and the Compact require that each Commissioner undergo a comprehensive background check prior to his or her assuming office. Pursuant to the tribal gaming ordinance, the TGA is responsible for, among other matters, inspection of all gaming operations within the Tribe’s reservation boundaries, enforcement of all provisions of the tribal gaming ordinance, investigation of all allegations of violations of the tribal gaming ordinance, conducting or arranging for background investigations of all applicants for tribal gaming licenses and issuing gaming licenses in accordance with the tribal gaming ordinance and the Compact. Under law, our Casino cannot operate without TGA regulation. Therefore, the costs of such regulation, including the cost of operating the TGA have, since commencement of operations of the River Rock Casino, been paid by us and will continue to be paid by us.

DESCRIPTION OF MATERIAL AGREEMENTS

The following is a summary of the material terms of our material agreements and material agreements of the Tribe relating to our Casino. This summary does not restate these agreements in their entirety. We urge you to read these agreements because they, and not these summaries, define our rights and obligations, and the rights and obligations of the Tribe, contained in the agreements. Copies of these agreements are included as exhibits to this Form 10-K.

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The Compact

In September 1999, the State of California and the Tribe entered into a Compact. Under its terms, the Compact was not effective until ratified by statute and a supporting state constitutional amendment was passed by the California voters. On March 7, 2000, the California voters amended the state constitution and enacted the Indian Self-Reliance Amendment. The Amendment permits federally recognized Indian tribes to conduct Class III gaming in California, in accordance with compacts between such tribes and the State of California, subject to approval by the Secretary of the Interior. In May 2000, the Secretary of the Interior approved the Compact, and that approval became effective when it was published in the Federal Register on May 16, 2000.

Under the Compact, the gaming activities that may be offered by the Tribe include up to 2,000 Class III gaming devices, banked and percentage card games, and any devices or games that are authorized by the California State Lottery, provided that the Tribe does not offer such games through use of the Internet unless others in California are permitted to do so.

The Compact establishes limitations on Class III gaming that may restrict our gaming activities. Among those, which are of importance to our gaming facility, are those that require the Tribe to adopt and comply with California laws prohibiting cashing any check drawn against any public fund, free or reduced price alcoholic beverages, food or lodging as an incentive, the extension of credit for gaming activities, and persons under 18 (or under 21 if alcohol may be consumed) to be present in any room where Class III gaming is offered, other than simply to pass through the room.

The Compact requires the State of California and the Tribe to establish a method for licensing all key employees of a gaming entity and issuing work permits for other service employees. While the Tribe, as a sovereign governmental entity, is not required to be licensed, the California Gambling Control Act applies to all others associated with Class III gaming at our gaming facility. To facilitate that licensing and comply with all other provisions of IGRA, in 1997 the Tribe adopted a tribal gaming ordinance establishing the TGA. The Chairman of the NIGC approved the Tribe’s gaming ordinance in 1997.

Under the Compact, all persons connected with our gaming facility are required to be licensed or to submit to a background investigation under IGRA. All “Gaming Employees” and “Gaming Resource Suppliers” (as defined in the Compact) and certain other persons must be licensed by the TGA. Licenses granted by the TGA are subject to review and renewal every two years. Holders of licenses granted by the TGA must, except in limited circumstances, also be determined suitable by the CGCC to be employed by us.

The Compact requires the Tribe to adopt and enforce regulations to ensure the physical safety of casino patrons, to prevent illegal activity, to maintain the regularity and integrity of gaming operations, and to require an annual audit conducted by an independent certified public accountant.

The Compact requires the Tribe to carry public liability insurance with initial limits of at least $5.0 million for personal injury and property damage claims. The Tribe is required to waive its sovereign immunity to the extent of the $5.0 million liability insurance limits.

The Compact also requires the Tribe to adopt and comply with standards no less stringent than federal workplace and occupational health and safety standards, and to adopt and comply with standards no less stringent than federal and state laws prohibiting employment discrimination. However, our tribal gaming ordinance permits us to give preference to Indians in employment matters.

The Compact also mandates that the Tribe must follow certain procedures to assess the off-reservation environmental impact of any reservation construction expansion projects. The procedures require the Tribe to give notice of a covered project, to determine whether a project will have any significant adverse environmental impact, to accept and respond to comments, to consult with the county board of supervisors, and to hold a public meeting.

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The Notes and the Indenture

On November 7, 2003, we issued and sold our Notes in a private placement to certain “qualified institutional buyers” pursuant to Regulation 144A of the Securities Act of 1933, as amended (the “Notes Offering”). On June 21, 2004, pursuant to a registration rights agreement entered into in connection with the issuance of the Notes, we consummated an offer to exchange all of the Notes for $200.0 million in aggregate principal amount of 9-3/4% senior notes due 2011 (the “Outstanding Notes”) registered with the Securities and Exchange Commission. The terms of the Outstanding Notes are substantially identical to the terms of the Notes, except that the transfer restrictions and registration rights applicable to the Notes do not apply to the Outstanding Notes. We did not receive any additional proceeds from the exchange offer. The Outstanding Notes and the Notes were issued under an Indenture, dated as of November 7, 2003 (the “Indenture”), among us, the Tribe and U.S. Bank National Association, as trustee. The terms of the Outstanding Notes include those stated in the Indenture, as well as those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended.

The net proceeds from the Notes Offering were used to repay a majority of our outstanding indebtedness, to fund the completion of three parking structures and related infrastructure improvements, to fund the settlement of litigation involving the Tribe, to fund the acquisition of real property adjacent to the Tribe’s reservation, to build an additional access road to the Tribe’s reservation through such property, and to repay outstanding indebtedness of the Tribe.

The Outstanding Notes bear interest at a fixed rate of 9-3/4% per year, and mature on November 1, 2011. The Outstanding Notes are secured by a first priority pledge of our revenues and substantially all of our existing and future tangible and intangible personal property. The Outstanding Notes are senior debt.  As further described in the Indenture, the Outstanding Notes are subject to optional and mandatory redemption, and in some cases, holders of the Outstanding Notes may be required to surrender them for redemption by us (or to otherwise dispose of the Outstanding Notes) if certain gaming regulations are not satisfied.

The Indenture includes affirmative and negative covenants that limit our ability to borrow money, create liens, sell assets, engage in transactions with affiliates, engage in other businesses, open other gaming facilities, engage in certain mergers and consolidations, make certain investments, make certain accelerated payments on our indebtedness that is subordinated to the Outstanding Notes, and make payments to the Tribe.

Cash Collateral and Disbursement Agreement

Pursuant to the Cash Collateral and Disbursement Agreement among U.S. Bank National Association and Wells Fargo Bank, N.A. as disbursement agents, U.S. Bank National Association, as the trustee for the holders of the Outstanding Notes, Merritt & Harris, our independent construction consultant, the Tribe and us, a portion of the net proceeds of the Notes Offering was placed into a construction disbursement account, a construction escrow account, the Dugan Property improvements account, and an operating account, all to be disbursed by the disbursement agents pursuant to the Cash Collateral and Disbursement Agreement.

Construction Disbursement Account.  Approximately $61.1 million of the net proceeds of the Notes Offering was deposited into a construction disbursement account and was used to fund the design and construction of our expansion project. All funds in the construction disbursement account are pledged to the trustee for the benefit of itself, and the holders of the Outstanding Notes, until disbursed by U.S. Bank National Association in accordance with the Cash Collateral and Disbursement Agreement. Approximately $3.5 million from the proceeds from the Notes Offering were used to reimburse the Tribe for payments made to Swinerton Builders prior to the sale of the Notes. The construction disbursement account had $2.6 million remaining as of December 31, 2007.

Construction Escrow Account.  $10.0 million of the net proceeds of the Notes Offering was deposited into a construction escrow account to fund qualifying construction cost overruns.  All funds in the construction escrow account are pledged to the trustee for the benefit of itself and the holders of the Outstanding Notes until disbursed by U.S. Bank National Association in accordance with the Cash Collateral and Disbursement Agreement.We used $10.0 million in the account to pay off the Subordinated Note on March 13, 2005.  The construction escrow account has $0.1 million remaining as of December 31, 2007.

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Dugan Property Improvements Account.  $5.0 million of the net proceeds of the Notes Offering was deposited into the Dugan Property improvements account and will be used to build an additional access road to the Tribe’s reservation. All such funds will be held in the Dugan Property improvements account and pledged to the trustee for the benefit of itself and the holders of the Outstanding Notes until disbursed by U.S. Bank National Association in accordance with the Cash Collateral and Disbursement Agreement. Subject to certain exceptions, U.S. Bank National Association, as the disbursement agent, will disburse funds from the Dugan Property improvements account only upon certification by us that we have adequate funds to complete the road project, and upon the satisfaction of the other disbursement conditions set forth in the Cash Collateral and Disbursement Agreement. The Dugan Property improvements account had $4.6 million remaining as of December 31, 2007.

Operating Account.  We deposit all of our cash and cash equivalents in excess of $2.0 million into our operating account with Bank of America, N.A. on a daily basis.  All such funds are held in the operating account and pledged to the trustee for the benefit of itself and the holders of the Outstanding Notes until disbursed in accordance with the terms of the Cash Collateral and Disbursement Agreement. Funds may generally be disbursed by Bank of America, N.A. from the operating account for all purposes permitted by the Indenture.

Investments; Pledge of Accounts.  Our disbursement agent is required to invest any money held by it in the collateral accounts established pursuant to the Cash Collateral and Disbursement Agreement, in cash equivalents and such government securities, as may be directed in writing by us from time to time. Any income or gain realized as a result of such investment is required to be held as part of the applicable account and reinvested as provided in the Cash Collateral and Disbursement Agreement. All funds, securities and other assets in the collateral accounts established pursuant to the Cash Collateral and Disbursement Agreement are pledged to the trustee for the benefit of the holders of the Outstanding Notes.

Memorandum of Agreement between the Tribe and Sonoma County, California

On March 18, 2008, the Tribe and the Sonoma County Board of Supervisors entered into a memorandum of agreement (“MOA”) that will, among other things, settle several long-standing legal disputes between Sonoma County and the Tribe and provide a binding framework for resolving future disputes.

In a related action, the Alexander Valley Association (“AVA”), a local business and residents association which has long opposed the Tribe’s gaming project and objected to the issuance to it of a liquor license, agreed to withdraw its objections to the license and has persuaded its members and a number of other protestors to do likewise.  In light of those withdrawals (and a similar agreement in the MOA requiring the County also to withdraw its objection), and with the support of both the County and AVA, the Tribe is now seeking to expedite issuance of an alcohol license. Under the MOA, the Tribe agreed to restrict the sale of alcohol to only wine and beer between the hours of 10 a.m. and 5 p.m. on weekdays, and to stop serving alcohol altogether at midnight except for Friday and Saturday nights and the nights before holidays. The restrictions may be renegotiated following the first to occur of three years or the opening of a hotel, which is projected to occur within the next 2 to 3 years.

In addition, the MOA commits the County Sheriff’s Department and Fire Marshall to providing public safety and fire services to the Casino and the Tribe’s future gaming projects on the Rancheria, provides detailed agreements on off reservation impact mitigation measures, and permits the Tribe’s application to take the Dugan Property into trust, which has already been approved by the Department of the Interior (“DOI”) but was appealed by the DOI, to move forward without further County opposition.

The Tribe has agreed to pay the County up to $75 million in mitigation fees over the next 12 years to offset impacts of the potential losses and impacts to the County resulting from the Tribe’s various ongoing projects and are intended to support the services being provided by the County.  In addition to the mitigation fees, the Tribe will pay a fee in lieu of the County’s Transient Occupancy Tax in the amount of 9% of the rental collected on occupied hotel rooms, to be paid quarterly and continuing for five years after the later to occur of the termination of the MOA, as may be extended, or the Tribe’s Compact with the State (which is now terminable in 2020 at the earliest), which fees may be applied to programs and services that serve to promote tourism in the County. Such in lieu fees could total as much as $25 million during the term of the MOA.

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We believe the MOA will have significant positive impacts on the future conduct of our business and our and the Tribe’s ability to develop our expansions plans and construct our proposed hotel and casino resort.

Lease for Casino

In May 2002, the Tribe entered into a lease with Sprung Instant Structures, Inc. for two dome-shaped structures that house our gaming facility. The lease agreement was assigned to us and was renewed through August 17, 2007. Monthly payments are $36,230. At the end of the lease term, at our option, 100% of the first four lease payments or, if all such payments have been timely made, 40% of the last twenty four lease payments will be credited towards the $1.5 million purchase price, which would result in a purchase price of $1.1 million.  Since the expiration of the lease on August 17, 2007, we have maintained the lease payments on a month to month basis.

Development and Loan Agreement

The Tribe entered into a Development and Loan Agreement with Dry Creek Casino, LLC (“DCC”) on August 26, 2001, which has been amended from time to time (as amended, the “Development Agreement”). In consideration of DCC providing credit enhancement and other services under the Development Agreement, the Tribe was obligated to pay DCC a Credit Enhancement Fee. The Credit Enhancement Fee was defined as 20% of the Authority’s net income before distributions to the Tribe plus depreciation and amortization plus annual interest on $25.0 million principal amount of the Notes less revenues from sales of alcoholic beverages. The Credit Enhancement Fee was required to be paid monthly for a period of five years commencing on June 1, 2003.

The Authority had the right to terminate the Development Agreement by exercising a buy-out option (the “Buy-Out Option”) and did so on January 31, 2007.  Subsequently on March 2, 2007, the Authority and DCC signed a mutual agreement to fix the amounts due to DCC in respect of such exercise to the sum of $11,350,000 less the amount paid after the Authority exercised the buy-out option of $737,491. The net payment of $10,612,509 was made in March 2007 and expensed in full in the three months ended March 31, 2007.

 Intercreditor Agreement

Pursuant to the Intercreditor Agreement among DCC, U.S. Bank National Association, as trustee for the holders of the Outstanding Notes, the Tribe and us, the Credit Enhancement Fees payable pursuant to the Development Agreement are subordinated to our senior debt, including the Outstanding Notes. If all or any part of our assets, or the proceeds from the sale of our assets are subject to any distribution, division or application to our creditors, then any payment shall be paid or delivered directly to the trustee for the Notes for application to senior debt. If any payment, distribution or security is received by DCC, with respect to the Credit Enhancement Fee in violation of the Intercreditor Agreement, DCC must deliver the same to the trustee for the benefit of the holders of our senior debt, including the Outstanding Notes.

We pay Credit Enhancement Fees only if we certify to the trustee as to our reasonable belief that we have adequate liquidity to meet our ordinary and reasonably foreseeable extraordinary expenses. In addition, we will accrue any such payments during any period in which we are in default on the Outstanding Notes until such time as current interest payments on the Outstanding Notes have been paid in full.

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Item 1A.  Risk Factors

The following is a description of what we consider our key challenges and risks:

Risks Related to Our Business

We have a substantial amount of indebtedness that could adversely affect our financial condition and prevent us from fulfilling our obligations under the Outstanding Notes.

As of December 31, 2007, we had approximately $198.7 million of indebtedness outstanding, represented by our Outstanding Notes. Our substantial indebtedness could have important consequences and significant effects on our business and future operations. For example, it could:

·increase our vulnerability to general adverse economic and industry conditions or a downturn in our business;

·limit our ability to fund future working capital, capital expenditures and other general operating requirements;

·require us to dedicate a substantial portion of our cash flow from operations to repay our outstanding indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, development and other general operating requirements;

·place us at a competitive disadvantage compared to our competitors that have less debt or greater resources; and

·limit our ability to borrow additional funds.

The occurrence of any one of these events or conditions could have a material adverse effect on our business, financial condition, results of operations, prospects, ability to service or otherwise satisfy our obligations under the Outstanding Notes. In addition, the Indenture permits us to incur debt in addition to the Outstanding Notes in certain circumstances. If we were to incur additional debt, the related risks could intensify.

We will require a significant amount of cash to service our indebtedness and fund our gaming operations. Our ability to generate cash depends on many factors beyond our control.

Our ability to make payments on and refinance our debt, including the Outstanding Notes, and to fund our gaming operations, will depend on our ability to generate cash flow from our gaming operations. Our ability to generate sufficient cash flow to satisfy our debt obligations will depend on our future operating performance that is subject to many economic, competitive, regulatory and business factors that are beyond our control. If we are not able to generate sufficient cash flow to service our debt obligations, we may need to refinance or restructure our debt, sell assets, reduce or delay capital investments or seek to raise additional capital. These measures may not be available to us or, if available, they may not be sufficient to enable us to satisfy our obligations under the Outstanding Notes and may restrict our ability to pay operating expenses. If our cash flow is insufficient and we are unable to implement one or more of these alternatives, we may not be able to service our debt obligations or fund our gaming operations.

Since we depend on operations in a single location, certain events that we cannot control may adversely affect the business performance of our gaming facility.

We rely primarily on guests living within 100 miles of our Casino. We rely exclusively on cash flow from our Casino to service our obligations, including our obligations under the Outstanding Notes. Therefore, we are subject to greater risks than more geographically diversified gaming operations, including:

·a decline in the economies of the local areas where our guests are located or a decline in the number of gaming guests from these areas for any reason;

·a downturn in regional or local economic conditions;

·an increase in competition in the local areas where our guests reside;

·inaccessibility due to road construction or closures of primary access routes; and

·natural and other disasters and climate conditions in the surrounding area.

The occurrence of any of the events or conditions described above could cause a material disruption in our business and cause us to be unable to generate sufficient cash flow to make payments on the Outstanding Notes.

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We have experienced landslides and may not be insured against damage resulting from landslides.

Although we maintain insurance customary in our industry, including earthquake insurance, our insurance coverage may not be adequate to cover all the risks to which our business and assets may be subject to. Although we have experienced two landslides since our operations began, our landslide-related insurance is limited to events incident to earthquakes. Although neither landslide disrupted our operations or our expansion project, including the excavation, retaining wall and parking structures, the insurance is intended for future landslides.  A landslide could occur in the future that could materially disrupt our operations and materially affect our financial condition.

We face competition from other California Indian casinos, casinos located in Nevada and elsewhere and other forms of gaming.

The gaming industry is very competitive. We face or will face competition from existing and proposed Indian gaming facilities in the surrounding area, and elsewhere in California, and with casino gaming in Nevada, including gaming facilities that could be located closer to the San Francisco Bay area. We also compete with card rooms located in the surrounding area, and other forms of gaming that are legal in California, including on and off-track wagering and the California State Lottery, as well as with non-gaming leisure activities, and the availability of such alternative gaming and non-gaming activities which may increase in the future. Many of our competitors have substantially greater resources and name recognition than our Casino. In addition, we may also face competition in our market from new facilities that may be built by other Indian tribes in the future.

Although we have applied to obtain a license to sell alcohol, we do not have one to date.

Unlike most of our competitors, we do not currently hold a license to sell alcohol on our gaming facility premises. To obtain a liquor license, the Tribe’s liquor license application must be approved by the Department of Alcohol Beverage Control (“ABC”).

On March 18, 2008, the Tribe and the Sonoma County Board of Supervisors entered into a memorandum of agreement (“MOA”) that will, among other things, settle several long-standing legal disputes between Sonoma County and the Tribe and provide a binding framework for resolving future disputes.

In a related action, the Alexander Valley Association (“AVA”), a local business and residents association which has long opposed the Tribe’s gaming project and objected to the issuance to it of a liquor license, agreed to withdraw its objections to the license and has persuaded its members and a number of other protestors to do likewise.  In light of those withdrawals (and a similar agreement in the MOA requiring the County also to withdraw its objection), and with the support of both the County and AVA, the Tribe is now seeking to expedite issuance of an alcohol license. Under the MOA, the Tribe agreed to restrict the sale of alcohol to only wine and beer between the hours of 10 a.m. and 5 p.m. on weekdays, and to stop serving alcohol altogether at midnight except for Friday and Saturday nights and the nights before holidays. The restrictions may be renegotiated following the first to occur of three years or the opening of a hotel, which is projected to occur within the next 2 to 3 years.

Restrictive covenants in the Indenture may limit our ability to expand our operations and to pursue our business strategies.

The Indenture includes covenants that limit our ability to borrow money, make investments, create liens, sell assets, engage in transactions with affiliates, engage in other businesses, open other gaming facilities and engage in mergers or consolidations. These restrictive covenants may limit our ability to expand our operations and to pursue our business strategies. If we are unable to capitalize on business opportunities, we may be unable to make payments on the Outstanding Notes. Additionally, a violation of any of these restrictive covenants would constitute a default under the Indenture.

Risks related to environmental matters could have an adverse effect on us.

We are subject to various federal laws and tribal ordinances and regulations, and the Compact which governs activities or operations that may have adverse environmental effects, such as discharges to air and water, as well as handling and disposal of hazardous material or solid or hazardous waste. Environmental laws enacted in the future may create material obligations or liabilities

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which may have a material adverse effect on us. In addition, certain provisions of the Compact regarding environmental matters may be the subject of renegotiation with the State of California and could limit any future physical expansion of our gaming facility. If so, such limitations may have a material adverse effect on our operations.

Pursuant to and in accordance with the Compact, the Tribe adopted an ordinance providing for the preparation and circulation by the Tribe of an environmental study concerning potential off-reservation environmental impacts of any renovation, modification, and construction or development project relating to or associated with the gaming facility. Among other things, the Compact requires that in fashioning the ordinance, the Tribe must make a good faith effort to incorporate the policies and purposes of the National Environmental Policy Act and the California Environmental Quality Act consistent with the Tribe’s governmental interests. The Compact’s environmental provisions are identical to such provisions in compacts for all other California tribes that entered into compacts in or around 1999. The Tribe believes it has complied, and intends to continue to comply, with all applicable requirements in its environmental ordinance, but the County of Sonoma has taken issue with the Tribe’s position and claims that the Compact’s environmental requirements are not being fulfilled. The State could claim the Tribe is in breach of the Compact and seek to have the Compact terminated.

Our business and assets could become liable for claims asserted against the Tribe if the Tribe waives its sovereign immunity with respect to our business or assets or if tribal law intended to limit such liability is ineffective.

We are an unincorporated instrumentality of the Tribe, formed pursuant to a law of the Tribe. This tribal law also provides that our obligations and other liabilities are not those of the Tribe and that the obligations and liabilities of the Tribe are not ours. This law is untested and generally has no direct counterpart in other areas of the law. If this law should prove to be ineffective at limiting our liability, our business and assets could become subject to claims asserted against the Tribe or its assets. Similarly, we would be liable for such claims if the Tribe waived its sovereign immunity (with respect to which we have no control) to an extent that allowed enforcement of such claims against our business or assets.

Changes in U.S. or regional economic conditions could adversely affect the profitability of our business.

A decrease in economic activity in the United States, particularly in the State of California, could adversely affect demand for our business, thus reducing our revenue and earnings.  A decline in economic conditions could reduce attendance and spending at our Casino.  In addition, an increase in price levels generally, or in price levels in a particular sector, could result in a shift in consumer demand away from the entertainment we offer, which could also adversely affect our revenues and, at the same time, increase our costs.

Our business is subject to contingencies beyond our control, including the aftermath of terrorist acts and wars, which may significantly and adversely affect our business, financial condition, results of operations and ability to make payments on the Notes.

The war with Iraq, the United States’ ongoing military campaign against terrorism and continued violence, conflicts and instability in other areas of the world have created many economic and political uncertainties, some of which may affect our ability to attract customers outside our current primary market as well as our operations and profitability.  The potential short-term and long-term effects that these and other similar situations and events may have for our customers, our primary and secondary markets and the U.S. economy in general are uncertain.  These and other similar future events could have a significant impact on the number of customers visiting our Casino and, as a result, may have a material adverse effect on our business, financial condition, results of operations and ability to make payments on the Notes.

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Acts of terrorism may negatively impact our future profits.

Terrorist attacks and other acts of war or hostility have created many economic and political uncertainties.  We cannot predict the extent to which terrorism, security alerts or war, or hostilities in Iraq and other countries throughout the world, will continue to directly or indirectly impact our business and results.  As a consequence of the threat of terrorist attacks and other acts of war or hostility in the future, premiums for a variety of insurance products have increased, and some types of insurance are no longer available.  Given current conditions in the global insurance markets, we are predominantly uninsured for losses and interruptions caused by terrorist acts and acts of war.  If any such event were to affect our properties, we likely would be adversely impacted.

A variety of uncontrollable events and natural disasters may reduce demand for our Casino.

Demand for our Casino is partly dependent on the general environment for travel and tourism.  The environment for travel and tourism can be significantly adversely affected in the United States or in specific regions as a result of a variety of factors beyond our control, including adverse weather conditions or natural disasters (such as excessive heat or rain, hurricanes and earthquakes); health concerns; and international, political or military developments.  These events, and others such as fluctuations in travel and energy costs, may also damage our ability to provide our services or to obtain insurance coverage with respect to these events.

Highway and bridge construction projects have impacted the length of travel to our Casino by certain customers.

In March 2006, Caltrans began construction on a 2-mile stretch of Highway 101 in the downtown section of Santa Rosa, California, approximately 20 miles south of our Casino.  The project is intended to widen Highway 101 resulting in an additional third lane in each direction.  The project requires the closure of one lane of Highway 101 in both directions from 11 p.m. to 5 a.m., Monday through Thursday, and from 12:00 a.m. to 5 a.m. on Fridays.  All lanes will be open during daylight hours and weekends. The project will also involve the closure of certain freeway entrance and exit ramps and some local streets in Santa Rosa.  The lane widening project is expected to be completed by the end of 2008. There has not been a major impact from this project on our operations.

We may face difficulties in recruiting, training and retaining qualified management employees.

The operation of the Casino requires us to continuously recruit and retain a substantial number of qualified professionals, employees, executives and managers with gaming, hospitality, management and financial reporting experience.  There can be no assurance that we will be able to recruit, train and retain a sufficient number of qualified employees.  A failure to be able to recruit and retain qualified personnel could result in management, operating and financial reporting difficulties or affect the experience and enjoyment of our patrons, either of which could have a material adverse effect on our business, financial condition, results of operations or ability to make payments on the notes.

The loss of management and other key personnel could significantly harm our business.

Our ability to maintain our competitive position is dependent to a large degree on the efforts and skills of the senior management team.  In addition to the senior management team, the operation of our Casino will require other qualified and skilled employees with gaming and hospitality industry experience and qualifications.  Currently, there is a shortage of skilled labor in the gaming industry in general.  In addition, we are subject to the policy of Tribal hiring preference that requires us to give preference to members of the Tribe. Despite these limitations, our future success depends upon, among other things, our ability to attract and retain senior management and highly qualified employees.  Currently, approximately 90 percent of the employees at the Casino are not members of the Tribe. We compete with other potential employers for employees, and we may not succeed in hiring or retaining the executives and other employees that we may need, particularly due to the very small number of workers skilled in the gaming industry that reside in the immediate vicinity of our businesses.

We do not have employment agreements with any key executives or employees other than with our Chief Executive Officer and our Chief Financial Officer.  We do not maintain key-man life insurance policies for any of our executives.  A sudden loss or inability to replace key employees could have a material adverse effect on our financial condition and results of operation.

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A recent federal court decision could lead to unionization in the tribal gaming industry.

A recent decision by the United States Court of Appeals for the District of Columbia upheld a finding by the National Labor Relations Board that the National Labor Relations Act is applicable to tribal casinos.  This decision could lead to unionization activities, which could adversely affect our operations.

The market data relied on by us may be inaccurate or incomplete and is subject to change.

We have based market data and other data provided herein with respect to the Casino and our market on information supplied by sources that we believe are reliable, such as independent industry publications, government publications, reports by market research firms or other published independent sources.  Some data are also based on our good faith estimates, which are derived from our review of internal surveys, as well as the independent sources listed above.  Although we believe that these sources are reliable, we have not independently verified this information, and the market data and information may not be accurate in all material respects.  Accordingly, you should not rely too greatly on this data.  The gaming market in California is subject to change, including changes in the number of facilities expanding, closing and opening, and changes in the size of these facilities.  For these and other reasons discussed herein, our estimates of our current and future market position and performance could prove to be materially inaccurate.

Energy price increases may adversely affect our costs of operations and our revenues.

Our Casino uses significant amounts of electricity, natural gas and other forms of energy.  While we have not experienced any shortages of energy to date, the recent substantial increases in the cost of energy in the United States could negatively impact our operating results.  In addition, energy price increases could result in a decline in disposable income of potential customers and a corresponding decrease in visitation to our gaming and hotel facilities, which could negatively impact our revenues.

Risks Relating to the Indian Gaming Industry

Our gaming operations are extensively regulated by federal laws and the Compact, and non-compliance with these laws or the Compact by us or the Tribe, as well as changes in the laws or future interpretations of the laws or the Compact, could have a material adverse effect on our gaming operations.

Gaming on the Tribe’s reservation is regulated extensively by federal, state and tribal regulatory bodies, including the NIGC, the CGCC, the California Department of Justice and the TGA. The Compact imposes ongoing compliance obligations on us. Our failure to observe any of these obligations could result in a breach of the Compact and the loss of our right to conduct gaming.

Changes in applicable laws or regulations, or future interpretation of these laws or regulations could limit or materially affect the types of gaming that we may offer and, consequently, our revenue. Congress has regulatory authority over Indian affairs and can establish and change the terms upon which Indian tribes may conduct gaming. Currently, the operation of all gaming on Indian lands is subject to IGRA. For the past several years, legislation has been introduced in Congress designed to amend IGRA, including proposed legislation limiting the scope of gaming that can be offered and the conditions under which gaming may be offered. While none of the substantive proposed amendments to IGRA have proceeded very far in the legislative process, we cannot predict the ramifications of future congressional legislative acts. It is possible that future legislation may result in a material adverse effect on our operations.

Tribal-state compacts are renegotiable and the outcome of any renegotiation may negatively impact our competitive position or otherwise adversely affect our financial condition, results of operations or cash flows.

In March 2003, the State of California requested renegotiations with the Tribe and other tribes with respect to matters related to the number of slot machines permitted at tribal casinos under tribal-state gaming compacts, the way in which slot machine licenses

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are allocated within the state under those compacts, and the fees charged for slot machine licenses. We did not renegotiate the terms of our compact, although some other tribes in California have done so. Those renegotiations, plus the addition of new compacts the State may be entering into with tribes in our market area that were not previously engaged in gaming, may have negative effects on our competitive position, and our results of operations could be materially and adversely affected. Even if our negotiations with the State of California were to result in an increase in the number of slot machines we could operate, the State has indicated that any increase could result in higher license fees being imposed, which, in light of possible other competition, could result in lower revenues. In addition, the State’s willingness to renegotiate over slot machine limits has been tied to its imposition of further regulations on Indian gaming, particularly on the subject of greater County involvement, provisions favoring negotiating opportunities for organized labor, and other non-economic issues. The effect of the State’s injection of those issues into the renegotiation process, and the resistance of some tribes to renegotiate because of those issues, could have a negative impact on the public’s view of Indian gaming, the effect of which we cannot predict. Finally, any amendment to our compact or any other compact in the State requires the approval of the tribe, the Governor, the California legislature and the U.S. Secretary of the Interior. Some renegotiated (and new) compacts have been approved through that process, but the public debate that has surrounded those renegotiations and the approval process could have a negative impact on Indian gaming generally within the State and on a national level, the likelihood or extent of which cannot be predicted.

A change in our current non-taxable status could have a material adverse effect on our cash flow and ability to fulfill our obligations under the Outstanding Notes.

Based on current interpretations of U.S. tax laws, we are not now, and it is anticipated that we will not be, a taxable entity for U.S. federal income tax purposes. If these interpretations are reversed or modified, or if the federal tax law changes in this regard, our cash flow, results of operations, financial conditions and our ability to fulfill our obligations under the Outstanding Notes would be adversely affected.

Efforts have been made in Congress over the past several years to tax the income of tribal business enterprises. These have included a House of Representatives bill that would have taxed gaming income earned by Indian tribes as business income subject to corporate tax rates. Although such legislation was not enacted, similar legislation could be passed in the future. Future legislation in this area could materially adversely affect our ability to fulfill our obligations under the Outstanding Notes.

BENEFIT OBLIGATIONS

On April 1, 2006, we became fully self-insured for our medical benefits plan coverage from $250 to $2,000 of medical benefit cost per covered person per year. Employees are responsible for the first $250 of medical benefit costs and 20% of the medical benefit costs from $250 to $2,000, while we are responsible for 80% of the medical benefit costs. Coverage above $2,000 is provided by a fully insured, high deductible medical benefits plan. We pay 100% of the medical benefits plan coverage cost for employees, and 50% of the coverage cost for dependents and domestic partners based on calculated premiums. Maximum coverage under the fully self-insured medical benefits plan is limited to $1,400 per covered person per year. All employees working an average of 60 hours per pay period are eligible for the medical benefits plan. Administration of the plan is provided by a third party under an administrative services agreement.

On April 1, 2006, we became fully self-insured for our dental benefits plan. We pay 100% of the dental benefits plan coverage cost for employees and 50% of the coverage cost for dependents and domestic partners based on calculated premiums. Maximum coverage under the dental plan is limited to $2,000 per covered person per year. All employees working an average of 60 hours per pay period are eligible for the dental benefits plan. Administration of the plan is provided by a third party under an administrative services agreement.

The Claims payable, Claims IBNR (incurred but not reported), and Insurance premiums payable for the above self-insured benefits plans are recorded in Accounts payable trade on the financial statements.

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	December 31,		December 31,
	2007		2006
Claims Payable	$	20,173	$	16,406
Claims IBNR (Incurred but not reported)	43,454		41,122
Insurance premiums payable	—		—
Total Benefit Obiligations	$	63,627	$	57,528

Item 2. Properties.

Our Casino is located on the Tribe’s 75-acre reservation near Geyserville, located in the heart of the Alexander Valley in Sonoma County, California. We do not own the land on which our gaming business is located. The use of tribal land is provided to us free of rent by the Tribe. The United States government holds all the real property underlying our facility in trust for the benefit of the Tribe.

We made a distribution to the Tribe from the net proceeds of the Notes Offering to enable the Tribe to acquire and develop an approximately 18-acre parcel of land adjacent to the reservation (the “Dugan Property”). Title to the parcel will initially be held by the Tribe, although the Tribe is seeking to have the parcel taken into trust for the Tribe’s benefit. The Tribe has granted us access to any benefits the property may have for our Casino, including road access and water rights. As of December 31, 2007, we had $4.6 million remaining in an improvements account which was funded from proceeds from the Notes Offering to be used primarily to build an additional access road to the Tribe’s reservation through the Dugan Property. The Dugan Property may be subject to certain zoning, use, environmental and other restrictions, permits and processes under county and state law, including but not limited to certain agreements that have been made relative to the Dugan Property regarding agricultural use limitations and related property tax benefits. We have completed the initial planning on the road from the Dugan Property to the Tribe’s reservation.

Item 3. Legal Proceedings.

Runyan Litigation

On March 7, 2008, Norman Runyan, our former Chief Operations Officer, filed suit against us, the Casino and Mr. Harvey Hopkins, the Chairman of the Tribe and a member of our Board, in the Sonoma County Superior Court.  Mr. Runyan’s complaint asserts causes of actions for breach of contract, wrongful termination in violation of public policy, intentional interference with contract and intentional infliction of emotional distress. He seeks unspecified compensatory and punitive damages. Mr. Runyan alleges that he was wrongfully terminated from his employment because he opposed certain alleged actions on the part of the defendants, including contracts for construction work allegedly performed on the reservation by affiliates of the Tribe and Mr. Hopkins. Mr. Runyan claims that the work violated the Indenture and that Mr. Runyan was forced to resign from his employment in violation of public policy after protesting that the alleged work violated the Indenture, the Compact, and the Securities Exchange Act of 1934.  He also claims that the defendants unlawfully discriminated against him in connection with his status as a debtor under the Bankruptcy Code. We believe that Mr. Runyan’s lawsuit is based on erroneous information and is without merit, and we and the Tribe intend to vigorously defend against it.

We are involved in other litigation and disputes from time to time in the ordinary course of business with vendors and patrons. The Authority believes that the aggregate liability, if any, arising from such litigation or disputes will not have a material adverse effect on its results of operations, financial condition or cash flows.

 Item 4. Submission of Matters to a Vote of Security Holders.

None.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

We have not issued or sold any equity securities.

Item 6. Selected Financial Data.

River Rock Casino has historically operated as a separate wholly owned operating property of the Tribe. We were formed as an unincorporated instrumentality of the Tribe to own and operate the River Rock Casino. Upon the issuance of our Notes, the Tribe reorganized so that its gaming business became owned and operated by us. This reorganization was accounted for as a reorganization of entities under common control. In accordance with Statement of Financial Accounting Standards 141, “Business Combinations,” the assets and liabilities of the casino operating property are presented by us on a historical cost basis.

The following table presents summary historical statements of revenues and expenses, balance sheet and other data for the periods presented and should be read in conjunction with Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our financial statements and the related notes thereto.  The three years ended December 31, 2007, 2006 and 2005 are all included elsewhere in this Form 10-K. The historical financial data for the years ended December 31, 2007, 2006 and 2005 have been derived from our audited historical financial statements included elsewhere in this report. The following table sets forth our statement of operations for the years ended December 31, 2007, 2006, 2005, 2004 and 2003.

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STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND DEFICIT

YEARS ENDED DECEMBER 31, 2007, 2006, 2005, 2004 AND 2003

	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,
	2007			2006			2005			2004			2003 (d)
	(Dollars in thousands )
Statement of Revenues and Expenses:
Revenues
Casino	$	145,714		$	136,294		$	132,831		$	101,605		$	65,446
Food, beverage & retail	7,516			6,244			6,920			4,959			2,848
Other	615			623			663			575			380
Gross revenues	153,845			143,161			140,414			107,139			68,674
Promotional allowance	(14,467		)	(12,542		)	(6,856		)	(2,632		)	(1,348		)
Net revenues	139,378			130,619			133,558			104,507			67,325
Operating Expenses
Casino	23,376			20,454			19,187			16,909			10,961
Food, beverage & retail	4,640			5,997			6,311			4,516			3,089
Selling, general and administrative	43,979			39,903			46,174			39,009			28,044
Depreciation	11,801			11,503			11,012			6,390			4,391
Credit enhancement fee	11,349			8,079			7,669			5,112			1,435
Gaming commission and surveillance expense (a)	3,023			3,154			2,773			1,780			1,335
Compact revenue sharing trust fund	1,335			1,335			1,335			1,335			—
Total Operating expenses	99,502			90,425			94,461			75,050			51,504
Income from operations	39,876			40,194			39,097			29,458			15,821
Interest expense, net	(20,872		)	(20,884		)	(21,047		)	(17,446		)	(7,064		)
Interest income	1,701			1,046			332			499			108
Gain (loss) on sale of assets	4			(126		)	(104		)	(63		)	—
Other income (expense), net	1			(1		)	(2		)	(1		)	(1		)
Other expense-net	(19,166		)	(19,965		)	(20,821		)	(17,011		)	(6,956		)
Income before distribution to the Tribe (b)	$	20,710		$	20,229		$	18,276		$	12,447		$	8,865

	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,
	2007			2006			2005			2004			2003 (a)
	(Dollars in Thousands)
Other Financial Data:
Net cash provided by operating activities	$	65,215		$	60,550		$	55,749		$	38,128		$	26,545
Net cash provided by (used in) capital and related financing activities	$	(40,505	)	$	(32,557	)	$	(45,870	)	$	(29,292	)	$	44,256
Net cash provided by investing activites	$	1,701		$	1,046		$	332		$	499		$	108
Net cash used in non-capital financing activities	$	(12,427	)	$	(14,140	)	$	(11,180	)	$	(7,613	)	$	(54,883	)
EBITDA (c)	$	53,383		$	52,615		$	50,335		$	36,283		$	20,321
Capital expenditures	$	8,193		$	4,475		$	17,456		$	57,741		$	35,511
Ratio of earnings to fixed charges	1.95X			1.92X			1.83X			1.37X			1.87X
Total Assets	$	184,504		$	174,869		$	167,678		$	174,813		$	170,180
Long term liabilities	$	198,748		$	198,500		$	198,243		$	197,823		$	197,410
Distributions to Tribe	$	12,427		$	15,521		$	11,180		$	7,613		$	54,883

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The following table reconciles EBITDA and net cash provided by operating activities for the periods indicated:

	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,
	2007			2006			2005			2004			2003 (a)
	(Dollars in Thousands)
Net cash provided by operating activities	$	65,215		$	60,550		$	55,749		$	38,128		$	26,545
Increase (decrease) in accounts receivable	104			110			39			(53		)	96
Increase (decrease) in inventories	(7		)	1			(224		)	233			145
Increase (decrease) in prepaid and other current assets	32			(32		)	654			(109		)	853
(Increase) decrease in accounts payable trade credit	(1,062		)	(322		)	1,220			2,787			(4,378		)
(Increase) decrease in accrued liabilities	(1,256		)	(533		)	338			(27		)	(800		)
Gain (Loss) on sale of fixed assets	5			(126		)	(104		)	(63		)	—
Interest income received	1,701			1,046			332			499			109
Credit enhancement fee	(11,349		)	(8,079		)	(7,669		)	(5,112		)	(2,249		)
EBITDA (c)	$	53,383		$	52,615		$	50,335		$	36,283		$	20,321

(a) Pursuant to the regulation, the tribal gaming agency (“TGA”) charged us a flat monthly fee of $324,395 to cover all operating expenses incurred by the TGA and surveillance, which are directly related and necessary to the regulation of our Casino. Following the end of each calendar quarter, the TGA must reconcile the monthly regulatory fee and actual operating expenses and make necessary adjustments.  As of July 1, 2005, the TGA and surveillance expenses are being recorded in Gaming Commission and surveillance expenses on the Statement of Revenues, Expenses and Changes in Fund Balance.  TGA and surveillance expenses for the twelve months ended December 31, 2007, 2006 and 2005 were $3,023,303, $3,154,384 and $2,773,369, respectively.

 (b) Our financial statements are prepared in accordance with Governmental Accounting Standards Board (“GASB”) pronouncements. There are differences between financial statements prepared in accordance with GASB pronouncements and those prepared in accordance with Financial Accounting Standards Board (“FASB”) pronouncements. The Statements of Revenues, Expenses and Changes in Fund (deficit) Equity are a combined statement under GASB pronouncements. FASB pronouncements allow a statement of income or operations and a separate statement of owners’ or shareholders’ (deficit) equity, which is where distributions to owners would be presented under FASB pronouncements. The amount shown above as income (loss) before distributions to the Tribe would not be different if we followed all FASB pronouncements to determine net income and would be the most comparable amount to net income computed under FASB pronouncements. River Rock Entertainment Authority is a separate fund of the Tribe, a governmental entity, and, as such, there is no owners’ or shareholders’ (deficit) equity as traditionally represented under FASB pronouncements. The most comparable measure of owners’ (deficit) equity is presented on the River Rock Entertainment Authority balance sheet as fund (deficit) equity.

 (c) “EBITDA” is income (loss) before distributions to Tribe plus interest, taxes, depreciation and amortization. EBITDA does not represent and should not be considered an alternative to net income or cash flow from operations, as determined by Generally Accepted Accounting Principals.  Moreover, our methodologies and practices in determining EBITDA may not be comparable to those used by other companies. EBITDA is included in this Form 10-K because it is a basis upon which we assess our liquidity and because certain covenants in the Indenture are tied to similar measures. EBITDA is also included in this Form 10-K because we believe that it presents useful information regarding our ability to service and incur indebtedness. EBITDA does not take into account our debt service requirements and, accordingly, is not necessarily indicative of amounts that may be available for debt service.

(d) River Rock Casino commenced full-scale operations on April 1, 2003 and increased its number of gaming devices to reach 1,600 on June 18, 2003.

 Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying financial statements and related notes beginning on page 48 of this Annual Report on Form 10-K, Item 6 — “Selected Financial Data” and Part I. Item 1. “Business.”

Overview

General

We have historically operated as a separate wholly-owned operating property of the Tribe. We were formed as an unincorporated governmental instrumentality of the Tribe to own and operate the River Rock Casino. Upon the issuance of our Notes, the Tribe reorganized so that its gaming business became owned and operated by us. This reorganization was accounted for as a

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reorganization of entities under common control. In accordance with Statement of Financial Accounting Standards 141, “Business Combinations,” the assets and liabilities of the Casino are presented by us on a historical cost basis.

We offer Class III slot and video poker gaming machines, house banked table games (including Blackjack, Three card poker, Mini-baccarat and Pai Gow poker), Poker, featuring Texas Hold’em, comprehensive food and non-alcoholic beverage offerings, and goods for sale in our gift shop.

On November 7, 2003, we issued the Notes. A portion of the net proceeds from the sale of the Notes was used to fund three new parking structures, and related infrastructure improvements, to repay various debts and accrued expenses of the Tribe, as well as to increase our cash on hand. The balance of the net proceeds was used to fund a land purchase by the Tribe and settle litigation of the Tribe. The Notes are secured by a first priority pledge of our revenues and substantially all of our existing and future tangible and intangible personal property.

At the beginning of 2003, we started our infrastructure projects, including the excavation of a hillside and the construction of retaining walls. In April 2003, we began the design process for the three new parking structures. The parking structure portion of the expansion project was completed in two phases and our existing gaming facility remained open during construction. On October 29, 2004, we obtained a temporary certificate of occupancy to open the entire first parking structure for self and valet parking. On December 1, 2004, we received a certificate of substantial completion on the first parking structure. The second phase, which included our second and third parking structures with approximately 445 and approximately 470 spaces, respectively, opened on December 29, 2004. Since December 31, 2006, we have had enough parking spaces available to accommodate a total of approximately 1,584 customer parked vehicles.

Critical Accounting Policies and Estimates

We have identified certain critical accounting policies and estimates that affect our more significant judgments and estimates used in the preparation of our financial statements. The preparation of our financial statements, in conformity with accounting principles generally accepted in the United States of America, requires that we make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, we evaluate those estimates, including those related to asset impairment, accruals for our promotional slot club, compensation and related benefits, revenue recognition, allowance for doubtful accounts, contingencies and litigation. These estimates are based on the information that is currently available to us and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could vary from those estimates under different assumptions or conditions. We believe that the following critical accounting policies affect significant judgments and estimates used in the preparation of our financial statements:

·Casino Revenues – In accordance with industry practice, casino revenue is recognized as the net win from gaming activities, which is the difference between gaming wins and losses. Casino revenues are net of accruals for anticipated payouts of progressive slot jackpots.

·Property and Equipment – Property and equipment are stated at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets as follows:

Buildings and improvements	21 years
Furniture, fixtures and equipment	5 years

·We evaluate our property and equipment for impairment in accordance with the Financial Accounting Standards Board’s Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”  When events or circumstances indicate that an asset should be reviewed for impairment, we

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compare the undiscounted cash flow derived from the asset or asset group to the net carrying value. If an impairment is indicated, the impairment loss is measured by the amount in which the carrying value of the asset or asset group exceeds its fair value. Fair value is measured by comparable sales, solicited offers or discounted cash flow models.

·Accrued Progressive Slot Jackpots – Accrued progressive slot jackpots consist of estimates for prizes relating to various games that have accumulated jackpots. We have recorded the cost of these anticipated payouts as a reduction of casino revenues and the cost is included as a component of accrued liabilities.

·Contingencies – We assess our exposure to loss contingencies, including legal matters, and provide for an exposure if it is judged to be probable and estimable. If the actual loss from a contingency differs from management’s estimate, operating results could be materially impacted. As of December 31, 2007, we have determined that no accruals for claims and legal actions are required. If circumstances surrounding claims and legal actions change, the addition of accruals for such items in future periods may be required, which accruals may be material.

Accounting Standards – There are differences between financial statements prepared in accordance with Governmental Accounting Standards Board (“GASB”) pronouncements and those prepared in accordance with Financial Accounting Standards Board (“FASB”) pronouncements. The statement of revenues, expenses and fund deficit is a combined statement under GASB pronouncements. FASB pronouncements allow a statement of income or operations and a statement of owners’ or shareholders’ (deficit) equity, which is where distributions to owners would be presented under FASB pronouncements. The amount shown on our statement of revenues, expenses and fund deficit as income before distributions to the Tribe, would not be different if we followed all FASB pronouncements to determine net income, and would be the most comparable amount to net income computed under FASB pronouncements. We are an unincorporated instrumentality created by tribal law and accounted for as a separate fund of the Tribe.  As such, there is no owners’ or shareholders’ (deficit) equity as traditionally represented under FASB pronouncements. The most comparable measure of owners’ (deficit) equity presented on our balance sheet would be Fund Deficit.

Results of Operations

Quarterly Results of Operations

The following table sets forth unaudited quarterly operations data for each full quarter for the past three years. In our opinion, this data reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the data. The results of operations for any quarter are not necessarily indicative of the results of operations for a full year or any future period. Certain amounts from prior quarters have been reclassified to be consistent with our current presentation, i.e. surveillance costs are now included in Gaming commission expense.  We expect our quarterly operating results to vary significantly in future periods.

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RIVER ROCK CASINO

STATEMENT OF REVENUES AND EXPENSES

2007, 2006 AND 2005 BY QUARTERS

	Quarters Ended
	December 31,			September 30,			June 30,			March 31,			December 31,			September 30,			June 30,			March 31,			December 31,			September 30,			June 30,			March 31,
	2007			2007			2007			2007			2006			2006			2006			2006			2005			2005			2005			2005
Statement of Revenues and Expenses:
Revenues
Casino	$	37,462		$	36,578		$	36,215		$	35,459		$	35,717		$	35,704		$	32,352		$	32,521		$	33,604		$	34,042		$	34,158		$	31,027
Food, beverage and retail	2,034			1,967			1,800			1,715			1,607			1,656			1,505			1,476			1,823			1,946			1,697			1,454
Other	144			151			161			160			169			156			145			153			155			159			168			181
Gross revenues	39,640			38,696			38,175			37,334			37,493			37,516			34,002			34,150			35,582			36,147			36,023			32,662
Promotional allowances	(4,163		)	(3,671		)	(3,403		)	(3,230		)	(3,121		)	(3,954		)	(2,940		)	(2,526		)	(2,495		)	(2,147		)	(1,438		)	(777		)
Net revenues	35,476			35,025			34,772			34,104			34,372			33,562			31,062			31,624			33,087			34,000			34,585			31,885
Operating Expenses
Casino	7,888			5,312			4,981			5,195			5,253			5,192			4,970			5,039			4,943			4,923			4,587			4,734
Food, beverage and retail	514			1,270			1,414			1,442			1,442			1,570			1,468			1,517			1,873			1,568			1,505			1,364
Selling, general and administrative	12,079			10,967			11,096			9,837			9,372			9,533			9,608			11,390			10,026			12,551			13,163			10,434
Depreciation	2,908			2,968			2,997			2,928			2,887			2,884			2,872			2,861			2,822			2,798			2,757			2,634
Credit enhancement fee	—			—			—			11,349			2,304			2,313			1,859			1,602			2,007			1,862			1,857			1,943
Gaming commission expense	780			748			820			675			1,033			673			726			723			1,258			623			356			537
Compact revenue sharing trust fund	334			333			333			334			334			333			334			334			334			334			334			333
Total operating expenses	24,503			21,598			21,641			31,760			22,625			22,498			21,837			23,466			23,263			24,659			24,559			21,979
Income from operations	10,973			13,427			13,131			2,344			11,747			11,064			9,225			8,158			9,824			9,341			10,026			9,906
Other expense - Net
Interest expense	(5,217		)	(5,219		)	(5,217		)	(5,219		)	(5,219		)	(5,219		)	(5,221		)	(5,225		)	(5,225		)	(5,230		)	(5,245		)	(5,347		)
Interest income	479			504			351			368			342			301			211			192			132			108			51			40
Gain (loss) on sale of assets	—			—			—			5			—			(85		)	(37		)	(3		)	—			(70		)	—			(34		)
Other income (expense), net	—			2			—			—			—			(1		)							—			(1		)	—			—
Other Expense, Net	(4,739		)	(4,713		)	(4,867		)	(4,846		)	(4,877		)	(5,004		)	(5,047		)	(5,036		)	(5,093		)	(5,193		)	(5,194		)	(5,341		)
Income (loss) before distribution to the Tribe (a)	$	6,234		$	8,714		$	8,264		$	(2,502	)	$	6,870		$	6,060		$	4,178		$	3,122		$	4,731		$	4,148		$	4,832		$	4,565

(a) Our financial statements are prepared in accordance with Governmental Accounting Standards Board (“GASB”) pronouncements. There are differences between financial statements prepared in accordance with GASB pronouncements and those prepared in accordance with Financial Accounting Standards Board (“FASB”) pronouncements. The Statements of Revenues, Expenses and Changes in Fund (deficit) Equity are a combined statement under GASB pronouncements. FASB pronouncements allow a statement of income or operations and a separate statement of owners’ or shareholders’ (deficit) equity, which is where distributions to owners would be presented under FASB pronouncements. The amount shown above as income (loss) before distributions to the Tribe would not be different if we followed all FASB pronouncements to determine net income and would be the most comparable amount to net income computed under FASB pronouncements. River Rock Entertainment Authority is a separate fund of the Tribe, a governmental entity, and, as such, there is no owners’ or shareholders’ (deficit) equity as traditionally represented under FASB pronouncements. The most comparable measure of owners’ (deficit) equity is presented on the River Rock Entertainment Authority balance sheet as fund (deficit) equity.

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Results of Operations – Fiscal Years ended December 31, 2007 and 2006

Net Revenues. Net revenues for the fiscal year ended December 31, 2007 (“FY 2007”), increased by $8.8 million to $139.4 million, from $130.6 million for the fiscal year ended December 31, 2006 (“FY 2006”). The increase is attributed to improved access to our Casino in FY 2007 following the lack of accessibility to our casino due to the damage and resulting closure of the Geyserville Bridge in Geyserville, California from January 1, 2006 through August 18, 2006 (the “Geyserville Bridge Closure”). Approximately 96.2% of our net revenues, net of respective promotional allowances, were from gaming activities for FY 2007. We generated $118.9 million, or 85.3% of our net revenues, net of respective promotional allowances of $11.4 million, from gaming devices and $15.2 million, or 10.9% of our net revenues, net of respective promotional allowances of $0.2 million, from table games for FY 2007, compared to $111.4 million from gaming devices, or 85.3% of our net revenues, net of respective promotional allowances of $10.2 million, and $14.5 million, or 11.1% of our net revenues, net of respective promotional allowances of $0.2 million, from table games for FY 2006. Our win per slot machine per day increased to $207 in FY 2007 from $194 in FY 2006.

For FY 2007, we generated $7.5 million in food, beverage and retail sales, compared to $6.2 million, for FY 2006.  The increase is primarily due to improved access to our Casino in FY 2007 following the Geyserville Bridge Closure during the first eight months of 2006. The retail value of our food and beverage provided to customers without charge is included in gross revenues and then deducted as promotional allowances. Such allowances were $2.9 million and $2.3 million for FY 2007 and FY 2006, respectively.

Promotional Allowances. Promotional allowances for the FY 2007 were $14.5 million, or 10.4% of net revenues, compared to $12.5 million, or 9.7% of net revenues, for FY 2006. The increase in promotional allowances is attributable to the expanded use of e-coupons.  E-coupons cannot be cashed out and requires the patron to use their Players Club card.

Operating expenses. Operating expenses for FY 2007 were $99.5 million, or 71.4% of net revenues, compared to $90.4 million, or 69.2% of net revenues, for FY 2006. The increase in operating expenses is attributable to the increased costs associated with the early buy-out of the Credit Enhancement Fee and increased costs in selling, general and administrative expenses from changing advertising agencies and enhanced marketing and guest service initiatives.

Casino expense includes costs associated with our gaming operations and an allocation of food and beverage expense related to the costs of complimentary activities. Casino expense for FY 2007 increased to $23.4 million, or 17.4% of Casino revenues, from $20.5 million, or 16.2% of Casino revenues, for FY 2006, net of respective promotional allowances. The increase in Casino expense is attributable to an increase in labor costs in gaming operations and an increase in participation fees and commissions on wide area progressive slot machines.

Food, beverage and retail expense for FY 2007 was $4.6 million, or 99.5% of food, beverage and retail revenue, decreasing from $6.0 million, or 150.6% of food, beverage and retail revenue for FY 2006, net of respective promotional allowances. We have increased our retail prices to offset the use of promotional food and beverage as part of our marketing initiatives. Our food and beverage expense ratio is still significantly higher than industry average because we have utilized these amenities as an opportunity to build customer loyalty rather than as a source of income.

Selling, general and administrative expense for FY 2007 increased by $4.1 million to $44.0 million, or 31.6% of net revenues, from $39.9 million, or 30.5% of net revenues, for FY 2006, net of respective promotional allowances. The increase in selling, general and administrative expense is attributable to increases in payroll, increased advertising costs from restructuring the marketing department’s approach to focus more on direct marketing and the change in our advertising agency.  These efforts led to increased costs in television, radio and newsprint media as compared to 2006.

Depreciation expense for FY 2007 was $11.8 million compared to $11.5 million for FY 2006. Depreciation expense was computed using the straight-line method over the useful lives of property, plant and equipment. The increase in depreciation expense is due to the addition of depreciable assets.

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Credit Enhancement Fee expense for FY 2007 was $11.3 million compared to $8.1 million for FY 2006.  We began paying the credit enhancement fee to DCC in June 2003. We had the right to terminate the Development Agreement by exercising a buy-out option  and did so on January 31, 2007.  Subsequently on March 2, 2007, we signed with DCC a mutual agreement to fix the amounts due to DCC in respect of such exercise to the sum of $11,350,000 less the amount paid after we exercised the buy-out option of $737,491. The net payment of $10,612,509 was made in March 2007 and was expensed in full in the three months ended March 31, 2007.

Gaming Commission and surveillance expenses for FY 2007 and FY 2006 were $3.0 million and $3.2 million, respectively.   The decrease is due to decreased costs and increased efficiencies from normalized operations in regulatory and surveillance.

Compact revenue sharing trust fund expense remained the same at $1.3 million for FY 2007 and 2006. Compact revenue sharing trust fund expense includes payments associated with operating 1,600 gaming devices. These fees became payable by the Tribe when we commenced operations in September 2002, and are based on the number of our gaming device licenses. Compact revenue sharing trust fund expense includes payments to the Revenue Sharing Trust Fund (“RSTF”) as required by our Compact with the State of California. The Tribe is obligated to remit certain fees to the California Gambling Control Commission on a quarterly basis for inclusion in the RSTF. The RSTF is for the benefit of tribes that have no or limited gaming. We pay these fees on behalf of the Tribe.

Income from operations. Income from operations for FY 2007 was $39.9 million, or 28.6% of net revenues, compared to $40.2 million, or 30.8% of net revenues, for FY 2006.

Other expense, net. Other expense, net for FY 2007 decreased to $19.2 million, or 13.8% of net revenues, from $20.0 million, or 15.3% of net revenues, for FY 2006.  Other expense, net included $1.7 million of interest income for FY 2007, compared to $1.0 million of interest income, for FY 2006.  No interest costs were capitalized in 2007.

Income before distributions to the Tribe. Income before distributions to the Tribe for FY 2007 increased by $0.5 million, to $20.7 million, or 14.9% of net revenues, from $20.2 million, or 15.5% of net revenues, for FY 2006.

Results of Operations – Fiscal Years ended December 31, 2006 and 2005

Net Revenues. Net revenues for the fiscal year ended December 31, 2006 (“FY 2006”), decreased by $3.0 million to $130.6 million, from $133.6 million, for the fiscal year ended December 31, 2005 (“FY 2005”). The decrease is attributed to the lack of accessibility to our casino due to the damage and resulting closure of the Geyserville Bridge in Geyserville, California from January 1, 2006 through August 18, 2006 (the “Geyserville Bridge Closure”). Approximately 96.4% of our net revenues, net of respective promotional allowances, were from gaming activities for FY 2006. We generated $111.4 million, or 85.3% of our net revenues, net of respective promotional allowances of $10.2 million, from gaming devices and $14.5 million, or 11.1% of our net revenues, net of respective promotional allowances of $0.2 million, from table games for FY 2006, compared to $114.3 million from gaming devices, or 85.6% of our net revenues, net of respective promotional allowances of $4.0 million, and $14.4 million, or 10.8% of our net revenues, net of respective promotional allowances of $0.1 million, from table games for FY 2005. Our win per slot machine per day decreased to $194 in FY 2006 from $196 in FY 2005.

For FY 2006, we generated $6.2 million in food, beverage and retail sales, compared to $6.9 million, for FY 2005.  The decrease is primarily due to the Geyserville Bridge Closure. The retail value of our food and beverage provided to customers without charge is included in gross revenues and then deducted as promotional allowances. Such allowances were $2.3 million and $2.8 million for FY 2006 and FY 2005, respectively.

Promotional Allowances. Promotional allowances for the FY 2006 were $12.5 million, or 9.7% of net revenues, compared to $6.9 million, or 5.1% of net revenues, for FY 2005. The increase in promotional allowances is attributable to the expanded use of E-coupons.  E-coupons cannot be cashed out and requires the patron to use their Players Club card.  We implemented E-coupon technology when it became available in late 2005.

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Operating expenses. Operating expenses for FY 2006 were $90.4 million, or 69.2% of net revenues, compared to $94.5 million, or 70.7% of net revenues, for FY 2005. The decrease in operating expenses is attributable to operational efficiencies, largely due to a hiring freeze, and changing from cash incentives being recorded as an operating expense in 2005, to E-coupons in 2006, which are reflected in promotional allowances.  The reason for changing cash incentives to E-coupons in 2006, is due to E-coupon technology becoming available in late 2005.

Casino expense includes costs associated with our gaming operations and an allocation of food and beverage expense related to the costs of complimentary activities. Casino expense for FY 2006 increased to $20.5 million, or 16.2% of Casino revenues, from $19.2 million, or 14.9% of Casino revenues, for FY 2005, net of respective promotional allowances. The increase in Casino expense is attributable to an increase in labor costs in gaming operations and an increase in participation fees on slot machines.

Food, beverage and retail expense for FY 2006 was $6.0 million, or 150.6% of food, beverage and retail revenue, decreasing from $6.3 million, or 154.1% of food, beverage and retail revenue for FY 2005, net of respective promotional allowances. We have increased our use of promotional food and beverage as part of our marketing initiatives. Our food and beverage expense ratio is still significantly higher than industry average because we have utilized these amenities as an opportunity to build customer loyalty rather than as a source of income.

Selling, general and administrative expense for FY 2006 decreased by $6.3 million to $39.9 million, or 30.5% of net revenues, from $46.2 million, or 34.6% of net revenues, for FY 2005, net of respective promotional allowances. The decrease in selling, general and administrative expense is attributable to reductions in payroll from a hiring freeze during an evaluation of vacant positions from attrition, reduction in advertising costs from restructuring the marketing department’s approach to focus more on direct marketing and the change in our advertising agency.  These efforts led to reduced costs in television, radio and newsprint media as compared to 2005.

Depreciation expense for FY 2006 was $11.5 million compared to $11.0 million for FY 2005. Depreciation expense was computed using the straight-line method over the useful lives of property, plant and equipment. The increase in depreciation expense is due to the addition of depreciable assets.

We began paying the credit enhancement fee to DCC in June 2003. The credit enhancement fee was $8.1 million, or 6.2% of net revenues for FY 2006, compared to $7.7 million, or 5.7% of net revenues, for FY 2005. The increase is directly attributable to our improved operating results.

Pursuant to the regulation, the tribal gaming agency (“TGA”) charged us a flat monthly fee of $235,000 from January 1, 2006 through May 31, 2006.  In June 2006, our Board approved a fee increase to $344,000 to cover all operating expenses incurred by the TGA and surveillance, which are directly related and necessary to the regulation of the Casino. Following the end of each calendar quarter, the TGA must reconcile the monthly regulatory fee and actual operating expenses and make necessary adjustments.  As of July 1, 2005, TGA and surveillance expenses are being recorded in Gaming Commission and surveillance expenses on the Statement of Revenues, Expenses and Changes in Fund Balance.  TGA and surveillance expenses for FY 2006 and FY 2005 were $3.2 million and $2.8 million, respectively.

Compact revenue sharing trust fund expense remained the same at $1.3 million for FY 2006 and 2005. Compact revenue sharing trust fund expense includes payments associated with operating 1,600 gaming devices. These fees became payable by the Tribe when we commenced operations in September 2002, and are based on the number of our gaming device licenses. Compact revenue sharing trust fund expense includes payments to the RSTF as required by our Compact with the State of California. The Tribe is obligated to remit certain fees to the California Gambling Control Commission on a quarterly basis for inclusion in the RSTF. The RSTF is for the benefit of tribes that have no or limited gaming. We pay these fees on behalf of the Tribe.

Income from operations. Income from operations for FY 2006 was $40.2 million, or 30.8% of net revenues, compared to $39.1 million, or 29.3% of net revenues, for FY 2005.

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Other expense, net. Other expense, net for FY 2006 decreased to $20.0 million, or 15.3% of net revenues, from $20.8 million, or 15.6% of net revenues, for FY 2005.  Other expense, net included $1.0 million of interest income for FY 2006, compared to $0.3 million of interest income for FY 2005.  No interest costs were capitalized in 2006.

Income before distributions to the Tribe. Income before distributions to the Tribe for FY 2006 increased by $1.9 million, to $20.2 million, or 15.5% of net revenues, from $18.3 million, or 13.7% of net revenues, for FY 2005.

Liquidity and Capital Resources

Since our inception, we have funded our capital expenditures and working capital requirements primarily through debt financing, gaming equipment supplier financing, and other financing and operating cash flow.

Construction of our Casino and infrastructure improvements commenced on April 1, 2002. The first portion of our gaming facility was completed in September 2002. As of December 31, 2007, we had spent approximately $159.2 million on the planning, development and construction of our gaming facility, infrastructure and furniture, fixtures and equipment, excluding the expansion project. We financed the development with borrowings and development advances.

As of December 31, 2007, we spent $1.1 million on the development of land adjacent to the Tribe’s reservation (the “Dugan Property”) which is expected to include an additional access road to our Casino. We have $4.6 million remaining in a restricted account funded from the proceeds of our Notes Offering for the development of the Dugan Property.

Our capital expenditures for FY 2007 and 2006 were $8.2 million and $4.5 million, respectively. The increase in 2007 is attributable to the preliminary work completed and reimbursed to the Tribe for master plan development cost for our proposed expansion project and infrastructure improvements.

As of December 31, 2007, we had cash and cash equivalents net of $46.5 million, as compared to $32.5 million, as of December 31, 2006. As of December 31, 2007, we had restricted cash of $7.3 million, as compared to $7.2 million, as of December 31, 2006. Our principal source of liquidity for uses other than our expansion project during FY 2007 consisted of cash flow from operating activities.

Net cash provided by operating activities for FY 2007 was $65.2 million, an increase of $4.6 million, from $60.6 million, for FY 2006. The increase in our net cash provided by operations is a result of improved performance of our Casino in FY 2007. Net cash provided by operating activities for FY 2006 increased by $4.9 million, from $55.7 million, for FY 2005.

Restricted cash consists of net proceeds from the Notes Offering and investment earnings thereon set aside in construction financing accounts, for construction costs for the three parking structures, infrastructure improvements and construction contingencies. It also includes funds that are reserved for additional construction contingencies and the funds for the development of the Dugan Property. Our restricted cash is held in escrow accounts that can only be used for authorized construction disbursements until the related projects are completed.

Net cash used in capital and related financing activities for FY 2007 was $40.5 million, compared to $32.6 million for FY 2006. Cash flow used in capital and related financing activities was primarily for the purchase of property and equipment, credit enhancement fee and interest paid on the Notes.  The primary increase is attributable to the exercise by us of the buy-out option on the Credit Enhancement Fee in March 2007 which increased cash used in capital and related financing activities by $4.1 million.

Net cash used in non-capital financing activities for FY 2007 was $12.4 million, a decrease of $1.7 million from $14.1 million, for FY 2006.  Net cash used in non-capital financing activities consisted of distributions to the Tribe in the amount of $12.4 million.

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We believe that existing cash balances, cash from operations, as well as permitted disbursements from our restricted cash escrow accounts will provide adequate funds for our working capital needs, planned capital expenditures and debt service requirements for the foreseeable future. However, our ability to fund our operations, make planned capital expenditures, make scheduled debt payments and refinance our indebtedness depends on our future operating performance and cash flow, which, in turn, are subject to prevailing economic conditions and to financial, business and other factors, some of which are beyond our control. Additionally, the Indenture limits our ability to incur additional indebtedness. See Item 1 – “Business – Material Agreements – The Notes and the Related Indenture.”

On June 28, 2007, we and the Tribe announced plans to build a destination resort as more fully described in the press release furnished as an exhibit to our Form 8-K dated June 28, 2007. The proposed project includes the construction of a casino, hotel and spa, several food and beverage venues, parking and storage, administrative facilities, a garden and terrace plaza, balconies and terraces, a retail area, conference facilities, and back of house facilities. The proposed project includes three above-ground levels and a hotel tower (up to eight levels) and four below-ground levels. We do not currently have adequate liquidity or cash flow to finance the project as proposed. We will consider various sources of liquidity to finance the first phase of the proposed project.

The Tribe has incurred expenses on our behalf that relate to the master planning of the proposed resort and Tribal infrastructure that benefit us. Total expenses incurred and subsequently reimbursed to the Tribe for the years ended December 31, 2007 were $4.6 million.

The Tribe has incurred an additional $5.6 million in costs relating to the master planning of the proposed resort. While the Tribe has not made any request to us for reimbursement of such amount, it may request reimbursement from us in the future.  While we have no obligation to pay such amounts when requested, and any such reimbursement would need to be approved by management and our Board of Directors, there is a possibility that such request for reimbursement may be made by the Tribe. Prior to making any reimbursement payment, we will consider various factors, including, but not limited to, whether the costs incurred were actually related to the master planning, whether such costs are beneficial to our gaming business and expansion plans, the reasonableness of such costs, the availability of cash and whether the reimbursement payment is in compliance with the covenants in the Indenture for the Outstanding Notes.

On March 18, 2008, the Tribe and the Sonoma County Board of Supervisors entered into a memorandum of agreement (“MOA”) that will, among other things, settle several long-standing legal disputes between Sonoma County and the Tribe and provide a binding framework for resolving future disputes.  We believe the MOA will have significant positive impacts on the future conduct of our business and our and the Tribe’s ability to develop our expansions plans and construct our proposed hotel and casino resort.  Pursuant to the MOA, the Tribe has agreed to pay the County up to $75 million in mitigation fees over the next 12 years to offset impacts of the potential losses and impacts to the County resulting from the Tribe’s various ongoing projects and are intended to support the services being provided by the County.  In addition to the mitigation fees, the Tribe will pay a fee in lieu of the County’s Transient Occupancy Tax in the amount of 9% of the rental collected on occupied hotel rooms, to be paid quarterly and continuing for five years after the later to occur of the termination of the MOA, as may be extended, or the Tribe’s Compact with the State (which is now terminable in 2020 at the earliest), which fees may be applied to programs and services that serve to promote tourism in the County. Such in lieu fees could total as much as $25 million during the term of the MOA.  It is currently unclear to us what, if any, amounts we will be requested to pay to the Tribe to fund its obligations pursuant to the MOA.

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Contractual Obligations as of December 31, 2007

The following table summarizes our contractual obligations and commitments as of December 31, 2007:

	Total		1 year		1-3 years		3-5 years
Long-term debt obligations (a)	$	200,015,306	$	7,992	$	7,314	$	200,000,000
Capital lease and other obligations	238,293		205,181		33,112		—
Operating lease obligations	1,047,143		242,183		455,730		349,230
Total obligations (b)	$	201,300,742	$	455,356	$	496,156	$	200,349,230

(a)       Excluded from long-term debt obligations above are interest payments of $19.5 million in 1 year; $39.0 million in 2-3 years; $35.7 million in 4-5 years.

(b)      The Compact requires us to pay a quarterly fee of $0.4 million to the RSTF based on the number of our licensed gaming devices. Total obligations do not include the RSTF payments.

Regulation and Taxes

We are subject to extensive regulation by the tribal gaming agency, the California Gambling Control Commission and the National Indian Gaming Commission. Changes in applicable laws or regulations could have a significant impact on our operations.

On March 18, 2008, the Tribe and the Sonoma County Board of Supervisors entered into a memorandum of agreement (“MOA”) that will, among other things, settle several long-standing legal disputes between Sonoma County and the Tribe and provide a binding framework for resolving future disputes.

In a related action, the Alexander Valley Association (“AVA”), a local business and residents association which has long opposed the Tribe’s gaming project and objected to the issuance to it of a liquor license, agreed to withdraw its objections to the license and has persuaded its members and a number of other protestors to do likewise.  In light of those withdrawals (and a similar agreement in the MOA requiring the County also to withdraw its objection), and with the support of both the County and AVA, the Tribe is now seeking to expedite issuance of an alcohol license. Under the MOA, the Tribe agreed to restrict the sale of alcohol to only wine and beer between the hours of 10 a.m. and 5 p.m. on weekdays, and to stop serving alcohol altogether at midnight except for Friday and Saturday nights and the nights before holidays. The restrictions may be renegotiated following the first to occur of three years or the opening of a hotel, which is projected to occur within the next 2 to 3 years.

In addition, the MOA commits the County Sheriff’s Department and Fire Marshall to providing public safety and fire services to the Casino and the Tribe’s future gaming projects on the Rancheria, provides detailed agreements on off reservation impact mitigation measures, and permits the Tribe’s application to take the Dugan Property into trust, which has already been approved by the Department of the Interior (“DOI”) but was appealed by the DOI, to move forward without further County opposition.

The Tribe has agreed to pay the County up to $75 million in mitigation fees over the next 12 years to offset impacts of the potential losses and impacts to the County resulting from the Tribe’s various ongoing projects and are intended to support the services being provided by the County.  In addition to the mitigation fees, the Tribe will pay a fee in lieu of the County’s Transient Occupancy Tax in the amount of 9% of the rental collected on occupied hotel rooms, to be paid quarterly and continuing for five years after the later to occur of the termination of the MOA, as may be extended, or the Tribe’s Compact with the State (which is now terminable in 2020 at the earliest), which fees may be applied to programs and services that serve to promote tourism in the County. Such in lieu fees could total as much as $25 million during the term of the MOA.

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We believe the MOA will have significant positive impacts on the future conduct of our business and our and the Tribe’s ability to develop our expansions plans and construct our proposed hotel and casino resort.

Since we are an unincorporated governmental instrumentality of the Tribe located on reservation land held in trust by the United States of America, we are not subject to federal or state income taxes. Various efforts have been made in Congress over the past several years to enact legislation that would subject the income of tribal governmental business entities, such as us, to federal income tax. Although no such legislation has been enacted, similar legislation could be passed in the future. It is not possible to determine with certainty the likelihood of possible changes in tax law or in the administration of such law. Such changes, if adopted, could have a material adverse effect on our operating results and cash flow from operations.

Impact of Inflation

Absent changes in competitive and economic conditions or in specific prices affecting the casino industry, we do not expect that inflation will have a significant impact on our gaming facility operations. Changes in specific prices, such as fuel and transportation prices, relative to the general rate of inflation may have a material adverse effect on the casino industry in general.

Seasonality

We anticipate that activity at our gaming facility may be modestly seasonal with stronger results expected during the summer due in part to the relatively higher levels of tourism during such times of the year. In addition, our operations may be impacted by adverse weather conditions and fluctuations in the tourism business. Accordingly, our results may fluctuate from quarter to quarter and the results of one quarter may not be indicative of results expected from future quarters.

Item 7A. Quantitative and Qualitative Disclosure About Market Risk.

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices.

Through December 31, 2007, we had not invested in derivative or foreign currency-based financial instruments. Additionally, we primarily have fixed rate debt. As such, we do not believe we have material exposure to market risk.

Item 8. Financial Statements and Supplementary Data.

Our financial statements and notes thereto, referred to in Item 15(A) (1) of this Form 10-K, are filed as part of this report and appear in this Form 10-K beginning on page 48.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that the information required to be disclosed in our reports filed with, or furnished to the SEC, pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules, regulations and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, Chief Financial Officer and Chief Operations Officer, as appropriate, to allow timely decisions regarding required disclosure based on the definition of “disclosure controls and procedures” in Rule 13a-15(e) and 15d-15(e) of the Exchange Act.  Our disclosure controls and procedures

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are designed to provide reasonable assurances of achieving its objectives.

As of the end of the period covered by this Annual Report, management performed, with the participation of our Chief Executive Officer and Chief Financial Officer, an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the report we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s forms, and that such information is accumulated and communicated to our management including our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosures.  Based on the evaluation and the identification of the material weaknesses in internal control over financial reporting described below, our Chief Executive Officer and our Chief Financial Officer concluded that, as of December 31, 2007, our disclosure controls and procedures were not effective.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act.  Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP.  Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projection of any evaluation of effectiveness to future periods is subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has conducted, with the participation of our Chief Executive Officer and our Chief Financial Officer, an assessment, including testing of the effectiveness of our internal control over financial reporting as of December 31, 2007.  Management’s assessment of internal control over financial reporting was conducted using the criteria in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.   In connection with management’s assessment of our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act of 2002, we identified the following material weaknesses in our internal control over financial reporting as of December 31, 2007:

1.There is a strong reliance on the external auditors to review and adjust the quarterly and annual financial statements, to monitor new accounting principles, and to ensure compliance with SEC disclosure requirements.

2.The Tribe contracts and pays for material capital expenditures and other Tribal department expenses on our behalf.  The Tribe submits invoices to us for reimbursement of these costs.  The signing officials (CEO and CFO) have no visibility to the specific nature of the capital expenditures or Tribal department expenses being presented for reimbursement on invoices from the Tribe.  Supporting documentation for the invoices is not subsequently furnished with the invoice to the signing officials, and as such, the signers cannot ensure that a material error or omission to Construction in Progress (“CIP”) or expense accounts would be discovered on a timely basis.

3.Subsequent to the completion of our annual financial statement review process, a computational error was discovered in the National Progressive Slot accruals and related fees.  The initial internal control procedures did not detect an error in the percentage breakdown between the progressive slot accruals included with net revenue and related progressive slot fees that should have been classified as an operating expense to the Casino Expenses balance.  An audit adjustment was recorded as part of our close process to properly reflect such activity.

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4.We did not maintain effective policies and procedures related to fixed assets.  In addition, we do not have a formal procedure for assessing potential asset impairments.

Because of the material weaknesses noted above, management has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2007, based on the Internal Control—Integrated Framework issued by COSO.

Remediation of Material Weaknesses in Internal Control Over Financial Reporting

We have engaged in, and continue to engage in, substantial efforts to address the material weaknesses in our internal control over financial reporting and the ineffectiveness of our disclosure controls and procedures.  We are in the process of remediating these material weaknesses through the following actions:

1.Management intends to decrease its reliance on the external auditors by subscribing to a service that provides regular updates and research capabilities related to SEC and accounting pronouncements, and where needed, hiring external consultants with appropriate SEC and GAAP expertise to assist in financial statement review, filing of SEC reports, policy and procedure compilation assistance and other related advisory services.  Going forward, we will be implementing the use of a disclosure checklist to ensure completeness of our disclosures.

2.To gain increased visibility for the signing officials to inter-governmental Tribal capital projects and expenses, management will plan regular meetings with the CFO of the Tribe to ensure good communication is maintained between us and the Tribe.  The purpose of these meetings will be to gather all data necessary to gain the understanding necessary to account properly for Construction in Progress and inter-governmental expenses prior to the commencement of a contract with a selected vendor for CIP projects and prior to our quarterly or annual closing process.  Management also plans to hire a Project Monitor that will work directly with Construction in Progress vendors to monitor actual project costs as compared to budget and to estimate future costs in order to ensure completeness of accrued liabilities.

3.To ensure reconciliations of significant accounts are performed at a level that will appropriately identify errors, such as the progressive slot classification error that was referenced above, the Controller is compiling a detailed closing checklist.  The checklist will provide detailed steps required to ensure account reconciliations are performed completely and accurately at the close of quarterly and annual filing periods.  Finance and Accounting employees reviewing reconciliations will be required to sign each step as evidence of the completion of their review.

4.Management plans to hire an employee with experience in accounting for fixed assets to develop fixed asset policies and procedures, including the fixed asset impairment review procedures discussed above, and add needed support to our finance staff to ensure fixed asset accounts are reconciled and reviewed in a timely manner and at a detailed level to ensure completeness and accuracy.

The foregoing initiatives will enable us to improve our internal controls over financial reporting.  Management is committed to continuing efforts aimed at fully achieving an operationally effective system of internal controls.  The remediation efforts noted above are subject to our internal control assessment, testing and evaluation process.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the fourth quarter ended December 31, 2007 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

None.

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PART III

Item 10. Directors and Executive Officers of the Registrant.

We were formed in 2003 as an unincorporated instrumentality of the Tribe. We are governed by a five-member Board of Directors consisting of the same five members as those of the Tribe’s Board of Directors. The Tribe’s Board of Directors is elected biennially by the Tribal Council (the approximately 548 voting members of the Tribe), and includes a Chairperson, a Vice Chairperson, a Secretary-Treasurer and two members-at-large. The Secretary-Treasurer position has been vacant since December 12, 2006. Our last election took place on October 7, 2006.  The members of our Board of Directors will serve for so long as they serve on the Tribe’s Board of Directors.

Our Board of Directors

The table below sets forth information about the current members of our Board of Directors:

Name	Age	Position(s) Held
Betty Arterberry	61	Chairperson
Margie Rojes	61	Vice Chairperson
Harvey Hopkins	59	Member
Augusto “Gus” Pina	64	Member
Gabriel Nevarez	44	Member

Betty Arterberry has served as Chairperson of our Board of Directors since July 18, 2006. Prior to that, Ms. Arterberry served as Vice Chairperson since our inception. On July 18, 2006, Ms. Arterberry assumed the title of Chairperson of the Authority while also serving as the Vice Chairperson of the Tribe’s Board of Directors. Prior thereto, Ms. Arterberry previously served as the Tribe’s Secretary-Treasurer for three consecutive two-year terms. Ms. Arterberry is currently employed at Sonoma County Indian Health Project as Chief Administrative Officer where she has worked since 1977. Ms. Arterberry is a member of the National Congress of American Indians and the California Nations Indian Gaming Association and serves on various other national, state and tribal associations.

Margie Rojes has served as Vice Chairperson of our Board of Directors since December 12, 2006.  Prior to that, Ms. Rojes served as our Secretary-Treasurer of our Board of Directors since our inception. Ms. Rojes has also served as the Secretary-Treasurer of the Tribe’s Board of Directors since September 9, 2001. Ms. Rojes served as member of the Board of Directors for the Tribe for the last four terms since 1994. Ms. Rojes retired from the Windsor Elementary School District after 20 years of service. Ms. Rojes is a member of the National Congress of American Indians and the California Nations Indian Gaming Association and is the tribal delegate for Indian Child and Family Preservation Program. She also serves as a member of the Finance and Legislative Committees for the Tribe.

Harvey Hopkins has served as Chairperson of the Tribe’s Board of Directors since November 20, 2004.  Mr. Hopkins served as our Chairperson from November 20, 2004 to July 14, 2006. Mr. Hopkins began a professional career in construction in 1970 and has been a licensed excavating contractor for 29 years.  He grew up in Santa Rosa, California, and has been a lifelong member of the Dry Creek Rancheria.  He and his wife have also been in the trucking business for the last 16 years and currently own American Indian Management Inc. Trucking Company.  Additionally, Mr. Hopkins worked for American Civil Constructors West Coast for the past 15 years.

Augusto “Gus” Pina has served as a member of our Board of Directors since November 20, 2004. Mr. Pina retired as vice president of the Santa Rosa office of Bank of the West. Prior to joining Bank of the West in 1992, Mr. Pina served in various managerial positions at Crocker Bank and Bank of America. Mr. Pina was honorably discharged from the US Navy in 1964. Except during his service to the US Navy, Mr. Pina has lived in Sonoma County his entire life. He has been a member of Rotary International, Cotati Planning Commissioner, Cotati Chamber President, former board member of KRCB channel 22 and a former member of the Petaluma Boys & Girls Club.

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Gabe Nevarez has served as a member of our Board of Directors since October 7, 2006. Mr. Nevarez had served on the Tribe’s Board of Directors as a member-at-large from 1998 through 2004. He had previously served on the Authority’s Board of Directors as a member-at-large from its inception through November 2004. Mr. Nevarez has been employed in retail sales in Santa Rosa, CA since 1986. Mr. Nevarez has previously served as a member of the Enrollment, Personnel, Housing and Legislative Committees of the Tribe.

Executive Officers

The table below sets forth information about certain key executive officers as of December 31, 2007.

Name	Age	Position(s) Held
Shawn S. Smyth	59	Chief Executive Officer; General Manager
Joseph R. Callahan	55	Chief Financial Officer
Anthony J. Averitt	51	Marketing Manager
Willam D. Carnahan	63	Slot Manager

Set forth below is a brief description of the business experience of our key executive officers. The following descriptions for our officers include employment by River Rock Casino as our predecessor.

Shawn S. Smyth has been our Chief Executive Officer and General Manager since April 13, 2006.  Mr. Smyth has more than 26 years experience in the gaming industry. He has been responsible for developing, enhancing and expanding operations at several Native American properties. Most recently, he was the General Manager of Paradise Casinos in Yuma, Arizona, where he oversaw a Tribal property containing two adjacent casinos. Prior to that, he was Chief Executive Officer of the Seven Feathers Hotel and Casino Resort in Canyonville, Oregon, where he was responsible for daily operations, strategic planning and master plan development. His previous experience also includes 15 years as the Chief Executive Officer of Carson Valley Inn Properties in Minden, Nevada.

Joseph R. Callahan has been our Chief Financial Officer since August 8, 2007.  Mr. Callahan has a diverse Casino Executive background in Finance and Accounting, Hotel, Food and Beverage and Gaming Operations. Most recently, Mr. Callahan worked for Fantasy Springs Casino in Indio, California where he had been the Director of Accounting and Finance since 2005.  Prior to that he spent 5 years with Mohegan Sun where he was Finance Director specializing in Strategic Planning and Analysis and Labor and Productivity.  Mr. Callahan has also spent several years working for Station Casinos in Las Vegas, Nevada as an Analyst, Finance Director and also Director of Hotel Operations.  In 1994, Colonel Callahan retired from the U.S. Air Force after 20 years of service.

Anthony J. Averitt has been our Marketing Manager since August 2002.  Mr. Averitt has more than 13 years of gaming experience and is responsible for the establishment and development of our gaming facility’s marketing department, and all our marketing policies and procedures. Prior to his employment at our gaming facility, Mr. Averitt was the Marketing Director for Casino Arizona in Scottsdale, Arizona from 1998 through 2002.  Mr. Averitt helped develop three casinos for the Salt River Pima – Maricopa Indian community, and formulated and managed the marketing, advertising and guest service departments.

William D. Carnahan has been our Slot Manager since September 2002. With over 31 years of slot experience, Mr. Carnahan has helped design slot floor layouts and been in charge of slot installation. Prior to his employment at our gaming facility, Mr. Carnahan served as Director of Slot Operations for Casino of the Sun and Casino Del Sol in Tucson, Arizona, where he was responsible for the daily operation of both casino floors. Mr. Carnahan helped design the slot floor layout and machine selection of Casino Del Sol and was responsible for the installation of machines, slot systems and progressive systems for phase one of the development of Casino Del Sol. Mr. Carnahan was employed at Cliff Castle Casino in Camp Verde, Arizona as slot repair supervisor from 1995 to 1996, and slot manager from 1996 to 2000.

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Code of Ethics

We have adopted a code of ethics that applies to all of our executive officers, including our Chief Executive Officer and Chief Financial Officer. Our code of ethics is available on our website at www.riverrockcasino.com under “Contact Us/Investor Relations/Corporate Governance.” We will provide a copy of our code of ethics to any person upon request in writing to us at our address.

Item 11. Executive Compensation.

Compensation Discussion and Analysis

Philosophy

Our compensation policies are designed to attract and retain key employees, motivating them to achieve and rewarding them for superior performance.  We choose to pay competitive levels of base compensation and discretionary bonuses in order to attract and retain the necessary executive talent, reward annual performance and provide incentive for their balanced focus on long-term strategic goals as well as short-term performance. Since we believe the performance of every employee is important to our success, we are mindful of the effect of executive compensation on all of our employees.

We believe that the compensation of our officers should reflect their success as an individual and as a management team, in attaining key operating objectives, such as growth of revenues and operating earnings. We believe that the performance of the officers in managing our company, considered in light of general economic and specific company, industry and competitive conditions, should be the basis for determining their overall compensation. In setting our officers’ compensation, we intend to be competitive with other gaming companies. Our discretionary cash bonuses are an important element of our ability to recruit and retain talented employees and reward achievement since we do not pay any equity-based compensation.

Overview of Compensation and Process

In lieu of a compensation committee, our Board of Directors acts as a whole to make determinations regarding compensation of our executive officers. Elements of compensation for our executives include: salary, incentive bonus, and benefits such as health, disability, life insurance and perquisites. Base salaries for our non-contracted executives and discretionary bonuses for all executives are set for our officers annually by the Board of Directors.

As part of its annual review of officer compensation, our Board of Directors takes into account each officer’s total compensation from prior years, as well as information contained in compensation surveys. After reviewing the above factors, our Board of Directors makes the ultimate compensation determinations.  Compensation determinations relating to incentive bonuses to our Chief Executive Officer, Chief Operations Officer and Chief Financial Officer, as well as base compensation, are determined solely by our Board of Directors.

The following are certain factors that our Board of Directors will also take into account in determining the various components of our executive officers’ total compensation package:

·Performance against corporate and individual objectives for the previous year;

·Difficulty of achieving desired results in the coming year;

·Value of their unique skills and capabilities to support our long-term performance;

·Performance of their management responsibilities;

·Responsibility and authority of each position relative to other positions within the Authority; and

·Contributions as a member of the senior management team.

These elements fit into our overall compensation objectives by helping to secure the future potential of our operations, providing proper compliance and regulatory guidance, and helping to create a cohesive team.

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In addition to wages, the Authority provides all employees including executives with 401(k) match at 100% up to 5% of gross annual pay, paid medical, dental, vision, chiropractic, acupuncture and life insurance.  The Authority also provides insurance for dependents while paying for 50% of employee dependent premiums.

Overview of Director Compensation and Procedures

We review the level of compensation of our directors on an annual basis. To determine how appropriate the current level of compensation for our directors is, we have historically obtained data from a number of different sources such as salary surveys and industry standards.

Retention Agreements

We do not have individual retention agreements with any employee except for severance arrangements with our Chief Executive Officer and Chief Financial Officer contained in their respective employment contracts that are discussed in Item 11 under “Employment Agreements.”

  Compensation Committee Interlocks and Insider Participation

No member of the Board of Directors has served as one of our officers or employees at any time. None of our executive officers serve as a member of the Board of Directors of any other company that has an executive officer serving as a member of our Board.

Board of Directors Report

Our Board of Directors has reviewed the Compensation Discussion and Analysis and discussed that analysis with management. Based on its review and discussions with management, the Board of Directors has approved the Compensation Discussion and Analysis and it is to be included in our Annual Report on Form 10-K for 2007. This report is provided by our full Board of Directors:

Betty Arterberry, Chairperson

Margie Rojes, Vice Chairperson

Harvey Hopkins, Member

Gus Pina, Member

Gabe Nevarez, Member

Executive Officers

The following table provides summary information concerning compensation of our Chief Executive Officer, former Chief Operations Officer, Chief Financial Officer and our two most highly compensated executive officers for each of our fiscal years ended December 31, 2007, 2006 and 2005:

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Name and Principal Position	Year	Salary		Bonus (a)		Other  Compensation (b)			Total
Shawn S. Smyth (c)	2007	$	324,038	$	51,500		$	18,753	$	394,291
Chief Executive Officer	2006	182,692		—			10,393		193,085
	2005	—		—			—		—
Norman Runyan	2007	$	380,265	$	66,875		13,910		$	461,050
Chief Operations Officer (d)	2006	263,317		62,500			13,467		339,284
	2005	240,973		58,320			7,386		306,679
David B. Wolfe	2007	$	56,438	$	—		1,865		$	58,303
Chief Financial Officer (e)	2006	66,807		11,250			1,975		80,032
	2005	—		—			—		—
Joseph R. Callahan	2007	$	78,346	$	19,587		2,182		$	100,115
Chief Financial Officer (f)	2006	—		—			—		—
	2005	—		—			—		—
Anthony J. Averitt	2007	$	179,357	$	26,434		7,658		$	213,449
Marketing Manager	2006	181,651		19,063			13,075		213,789
	2005	160,267		23,751			8,675		192,693
William D. Carnahan	2007	$	151,650	$	22,789		8,723		$	183,162
Slot Manager	2006	151,289		21,704			7,512		180,505
	2005	136,875		20,304			10,703		167,882

(a)  Dollar amounts for bonuses are not guaranteed and represent the maximum amount that the principal officer may receive.

(b)  “Other Compensation” includes medical, dental, vision and other health benefits provided.

(c)  Shawn S. Smyth began serving as our Chief Executive Officer in April 2006.

(d)  Norman Runyan, our former Chief Operations Officer, served until his resignation on November 14, 2007.  This position was vacant as of December 31, 2007.

(e)  David B. Wolfe, our former Chief Financial Officer, served until his resignation on April 11, 2007.

(f)  Joseph R. Callahan began serving as our Chief Financial Officer as of August 8, 2007.

Employment Agreements

We amended an employment agreement with Mr. Shawn Smyth on July 30, 2007 to continue to serve as our Chief Executive Officer. This three year amendment to the original employment agreement commenced as of July 30, 2007, and provides Mr. Smyth a base annual salary of $300,000 and a discretionary bonus, as determined by our Board, of not more than 25% of his annual salary based on various criteria.  If Mr. Smyth’s employment is terminated for other reasons set forth in the employment agreement including death or disability, Mr. Smyth will be entitled to his salary for three months.  Either party may terminate the agreement with a 90 day written notice.

We entered into an employment agreement with Mr. Joseph R. Callahan on October 17, 2007 effective as of August 8, 2007 to serve as our Chief Financial Officer. This three year employment agreement commenced on August 8, 2007, and provides Mr. Callahan an annual salary of $225,000 and a discretionary bonus, as determined by our Board, of not more than 25% of his annual salary based on various criteria.  If Mr. Callahan’s employment is terminated for other reasons set forth in the employment agreement including death or disability, Mr. Callahan will be entitled to his salary for three months.  Either party may terminate the agreement with a 30 day written notice.

We have no other employment agreements with our principal executive officers.  Compensation for our principal executive officers other than those subject to employment agreements is set based on the following criteria:

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·Performance against corporate and individual objectives for the previous year;

·Difficulty of achieving desired results in the coming year;

·Value of their unique skills and capabilities to support our long-term performance;

·Performance of their management responsibilities;

·Responsibility and authority of each position relative to other positions within the Authority; and

·Contributions as a member of the senior management team.

Compensation of Our Board

We are governed by a five-member Board of Directors consisting of the same five members as those of the Tribe’s Board of Directors. The Tribe compensates members of each Board of Directors for the services they render. In 2006, we reimbursed the Tribe for 50% of the total compensation of the Board members reflecting an estimate of the total time allocable to Authority Board matters. In 2007, we reimbursed the Tribe for 50% of the total compensation of the Board members. The members of the Board of Directors received the following amounts for their service as members of the Tribe’s Board of Directors and as members of the Authority’s Board of Directors for the fiscal year 2007:

Name	Title	Fees Paid in  Cash		All Other  Compensation		Total
Betty Arterberry	Chairperson	$	70,000	$	—	$	70,000
Margie Rojes	Vice Chairperson	60,000		—		60,000
Harvey Hopkins (a)	Board Member	100,000		—		100,000
Gus Pina	Board Member	40,000		—		40,000
Gabe Nevarez	Board Member	40,000		—		40,000

(a)Mr. Hopkins is Chairman of the Board of Directors of the Tribe.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

We have no outstanding equity securities.

Item 13. Certain Relationships and Related Transactions.

Distributions to the Tribe were $12.4 million, $15.5 million and $11.2 million for the years ended December 31, 2007, 2006 and 2005, respectively. Under the Indenture, we currently are restricted from making payments to the Tribe other than payments specifically permitted by our Indenture.

The Tribe has incurred expenses on behalf of the Authority that relate to the master planning of the proposed resort and Tribal infrastructure that benefit the Authority.  Total expenses incurred and subsequently reimbursed to the Tribe for the twelve months ended December 31, 2007 were $4.6 million.  No amounts were incurred or reimbursed in 2006 or 2005.

The Tribe has incurred an additional $5.6 million in costs relating to the master planning of the proposed resort. While the Tribe has not made any request to us for reimbursement of such amount, it may request reimbursement from us in the future.  While we have no obligation to pay such amounts when requested and any such reimbursement would need to be approved by management and our Board of Directors, there is a possibility that such request for reimbursement may be made by the Tribe. Prior to making any reimbursement payment, we will consider various factors, including, but not limited to, whether the costs incurred were actually related to the master planning, whether such costs are beneficial to our gaming business and expansion plans, the reasonableness of such costs, the availability of cash and whether the reimbursement payment is in compliance with the covenants in the Indenture for the Outstanding Notes.

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The Tribe has, or currently intends to, enter into contracts with various design, engineering and testing consultants to perform geotechnical engineering, geological services, civil engineering, traffic planning and engineering services, wastewater disposal evaluation and geotechnical investigation services, land surveying and civil engineering design services, landscape architectural design services, construction testing and inspecting services that will benefit the Casino. We intend to make payments under these contracts on behalf of the Tribe. Through December 31, 2007, we have made payments of approximately $9.6 million pursuant to such design, engineering and testing contracts.

The Tribe enacted a tribal gaming ordinance in April 1997, which, among other matters, created and established the TGA as a governmental subdivision of the Tribe. The TGA is responsible for the regulation of all gaming activities conducted by the Tribe or us on tribal lands. We pay for various expenses of the TGA (gaming commission expense), surveillance, plant operations, human resources, and as of May 8, 2006, purchasing and warehouse. All of these departments are operated by the Tribe. These expenses include but are not limited to payroll and related expenses, legal and other operational expenses.   These expenses were $7.2 million for FY 2007, $6.2 million for FY 2006 and $4.7 million for FY 2005.

The Tribe is obligated to remit certain fees to the CGCC on a quarterly basis for inclusion in the RSTF. The RSTF is for the benefit of tribes in California that have no or limited gaming. We pay these fees on behalf of the Tribe. Compact revenue sharing trust fund expense remained the same at $1.3 million for FY 2007 and FY 2006. Compact revenue sharing trust fund expense includes payments associated with operating 1,600 gaming devices. These fees became payable by the Tribe when we commenced operations in September 2002, and are based on the number of our gaming device licenses. Compact revenue sharing trust fund expense includes payments to the RSTF as required by our Compact with the State of California.

We have pledged a cash gift, on behalf of the Tribe, to the Geyserville Unified School District in the amount of $1.2 million, to be provided in equal parts during each of the 2003 through 2007 school years. The cash donation to the school district is a gift and not part of any revenue sharing agreement with state or local government.  On July 1, 2007 the Tribe and the Authority amended the $1.2 million dollar pledge to continue through December 31, 2007, which increased the total pledge to by $150,000 to $1.4 million.  The amended amount was paid equally by the Tribe and the Authority and as of December 31, 2007 the entire pledge of $1.4 million has been satisfied.

Pursuant to the MOA, the Tribe has agreed to pay the County up to $75 million in mitigation fees over the next 12 years to offset impacts of the potential losses and impacts to the County resulting from the Tribe’s various ongoing projects and are intended to support the services being provided by the County.  In addition to the mitigation fees, the Tribe will pay a fee in lieu of the County’s Transient Occupancy Tax in the amount of 9% of the rental collected on occupied hotel rooms, to be paid quarterly and continuing for five years after the later to occur of the termination of the MOA, as may be extended, or the Tribe’s Compact with the State (which is now terminable in 2020 at the earliest), which fees may be applied to programs and services that serve to promote tourism in the County. Such in lieu fees could total as much as $25 million during the term of the MOA.  It is currently unclear to us what, if any, amounts we will be requested to pay to the Tribe to fund its obligations pursuant to the MOA.

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Item 14.  Principal Accounting Fees and Services.

The following table sets forth the aggregate fees billed for professional services rendered by Deloitte & Touche LLP, for the audit of our annual financial statements for FY 2007 and FY 2006 and the aggregate fees billed for audit-related services and all other services rendered by Deloitte & Touche LLP for FY 2007 and FY 2006.

	Fiscal Year 2007		Fiscal Year 2006
Audit Fees	$	317,376	$	256,597
Audit-Related Fees	—		—
All Other Fees	55,191		24,500

The category of “Audit Fees” includes fees for our annual audit, quarterly reviews and services rendered in connection with statutory and regulatory filings, or engagements for those fiscal years.

The category of “Audit-Related Fees” includes aggregate fees billed in each of the last two fiscal years, for assurance and related services by the principal accountant, that are reasonably related to the performance of the audit or review of the Authority’s financial statements.

The category of “All Other Fees” includes aggregate fees billed in each of the last two fiscal years which are not covered by the above categories.

All above audit services were pre-approved by the TGA, which, under the Compact, has responsibility for ensuring that the audit is performed. The TGA concluded that the provision of such services by Deloitte & Touche LLP was compatible with the maintenance of that firm’s independence in the conduct of auditing functions. The TGA’s outside auditor independence policy provides for pre-approval of all services performed by the outside auditors.

PART IV

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K.

A. Financial Statements

(a) Documents filed as part of this report.

1. The following financial statements of the Authority and the Report of Deloitte & Touche LLP, independent registered public accounting firm, appear on pages 53 through 67 of this Form 10-K and are incorporated by reference in Part II, Item 8:

Report of Independent Registered Public Accounting Firm

Balance Sheets of the River Rock Entertainment Authority as of December 31, 2007 and 2006

Statements of Revenues, Expenses and Changes in Fund Deficit for the Years Ended December 31, 2007, 2006 and 2005

Statements of Cash Flows for the Years Ended December 31, 2007, 2006 and 2005

Notes to Financial Statements for the Years Ended December 31, 2007, 2006 and 2005

48

2. List of financial statement schedules. All schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

3. List of exhibits required by Item 601 of Regulation S-K. See part (B.) below.

(b) Reports on Form 8-K. The following current reports were filed on Form 8-K for the year ended December 31, 2007:

Current Report on Form 8-K filed on February 5, 2007

Current Report on Form 8-K filed on March 7, 2007

Current Report on Form 8-K filed on April 12, 2007

Current Report on Form 8-K filed on June 28, 2007

Current Report on Form 8-K filed on August 2, 2007

Current Report on Form 8-K filed on August 9, 2007

Current Report on Form 8-K filed on October 23, 2007

Current Report on Form 8-K filed on November 20, 2007

B. Exhibits.

The exhibits to this Form 10-K are listed on the exhibit index, which appears elsewhere herein and is incorporated herein by reference.

EXHIBIT INDEX

Exhibit No.	Exhibit
3.1	Dry Creek Rancheria Band of Pomo Indians Ordinance No. 03-10-25-003 setting forth the River Rock Entertainment Authority Act of 2003 (filed as Exhibit 3.1 to the Authority’s Registration Statement on Form S-4 (the “Form S-4”), filed with the SEC on May 5, 2004 (SEC File No. 333-115186), and incorporated by reference herein)
3.2	Dry Creek Rancheria Band of Pomo Indians Tribal Council Resolution No. 03-10-25-002 (the River Rock Entertainment Authority and Bond Resolution Act) approving, among other things, creation of the River Rock Entertainment Authority (filed as Exhibit 3.2 to the Authority’s Registration Statement on Form S-4, filed with the SEC on May 5, 2004) (SEC File No. 333-115186), and incorporated by reference herein)
3.3	Dry Creek Rancheria Band of Pomo Indians Ordinance No. 97-08-04, as amended October 25, 2003, authorizing and regulating gaming on the Dry Creek Band of Pomo Indians Rancheria (filed as Exhibit 3.3 to the Form S-4, and incorporated by reference herein)
4.1	Indenture, dated as of November 7, 2003, by and among the Authority, the Tribe and U.S. Bank National Association, as trustee (the “Trustee”), together with the Exhibits attached thereto (filed as Exhibit 4.1 to the Form S-4, and incorporated by reference herein)

49

4.2	Form of Global 9 ¾% Senior Note due 2011 (contained in the Indenture filed as Exhibit 4.1 herewith) (filed as Exhibit 4.2 to the Form S-4, and incorporated by reference herein)
4.3	Intercreditor Agreement, dated as of November 7, 2003, by and among the Trustee, Dry Creek Casino, LLC, the Authority and the Tribe (filed as Exhibit 4.4 to the Form S-4, and incorporated by reference herein)
10.1	Tribal-State Compact between the Dry Creek Rancheria Band of Pomo Indians and the State of California, effective May 2000 (filed as Exhibit 10.1 to the Form S-4, and incorporated by reference herein)
10.2	Cash Collateral and Disbursement Agreement, dated as of November 7, 2003 (the “Cash Collateral Agreement”), by and among the Trustee, U.S. Bank National Association, as USB disbursement agent, Wells Fargo Bank, N.A., as disbursement agent, Merritt & Harris, Inc., as independent construction consultant, the Authority and the Tribe (filed as Exhibit 10.2 to the Form S-4, and incorporated by reference herein)
10.3	Amendment No. 1 to Cash Collateral Agreement, dated as of November 17, 2003, by and among the Trustee, U.S. Bank National Association, as USB disbursement agent, Wells Fargo Bank, N.A., as disbursement agent, Merritt & Harris, Inc., as independent construction consultant, the Authority and the Tribe (filed as Exhibit 10.3 to the Form S-4, and incorporated by reference herein)
10.4	U.S. Bank National Association Control Agreement, dated as of November 7, 2003, by and among the Trustee, U.S. Bank National Association, as disbursement agent, securities intermediary and depository bank, the Authority and the Tribe (filed as Exhibit 10.4 to the Form S-4, and incorporated by reference herein)
10.5	Wells Fargo Bank, N.A. Control Agreement, dated as of November 7, 2003, by and among the Trustee, Wells Fargo Bank, N.A., as depository bank, the Authority and the Tribe (filed as Exhibit 10.5 to the Form S-4, and incorporated by reference herein)
10.6	Wells Fargo Bank, N.A. side letter dated December 1, 2003, from Wells Fargo Bank, N.A. to the Trustee (filed as Exhibit 10.6 to the Form S-4, and incorporated by reference herein)
10.7	Pledge and Security Agreement, dated as of November 7, 2003, by and among the Authority, the Tribe and the Trustee (filed as Exhibit 10.7 the Form S-4, and incorporated by reference herein)
10.8	Development and Loan Agreement, dated as of August 26, 2001, by and between the Tribe and Dry Creek Casino, LLC (filed as Exhibit 10.8 to the Form S-4, and incorporated by reference herein)
10.9	First Amendment to the Development and Loan Agreement, dated as of April 29, 2002, by and between the Tribe and Dry Creek Casino, LLC (filed as Exhibit 10.9 to the Form S-4, and incorporated by reference herein)
10.10	Second Amendment to Development and Loan Agreement, dated as of February 19, 2003, by and between the Tribe and Dry Creek Casino, LLC (filed as Exhibit 10.10 to the Form S-4, and incorporated by reference herein)
10.11	Third Amendment to Development and Loan Agreement, dated as of May 29, 2003, by and between the Tribe and Dry Creek Casino, LLC (filed as Exhibit 10.11 to the Form S-4, and incorporated by reference herein)
10.12	Fourth Amendment to Development and Loan Agreement, dated as of October 9, 2003, by and between

50

	the Tribe and Dry Creek Casino, LLC (filed as Exhibit 10.12 to the Form S-4, and incorporated by reference herein)
10.13	Fifth Amendment to Development and Loan Agreement, dated as of October 9, 2003 by and between the Tribe and Dry Creek Casino, LLC (filed as Exhibit 10.13 to the Form S-4, and incorporated by reference herein)
10.14	Sixth Amendment to Development and Loan Agreement, dated as of November 7, 2003, by and between the Authority and Dry Creek Casino, LLC (filed as Exhibit 10.14 to the Form S-4, and incorporated by reference herein)
10.15	Employment Agreement, dated as of April 17, 2006, by and between the Tribe and Shawn S. Smyth (filed as Exhibit 10.1 to the Form 8-K filed with the SEC on April 19, 2006, and incorporated by reference herein)
10.16	Employment Agreement, dated as of October 14, 2005, by and between the Tribe and Norman Runyan (filed as Exhibit 10.1 to the Form 8-K filed with the SEC on November 14, 2005, and incorporated by reference herein)
10.17	Employment Agreement, dated as of August 8, 2007, by and between the Authority and Joseph R. Callahan (filed as Exhibit 10.1 to the Form 8-K filed with the SEC on October 23, 2007, and incorporated by reference herein).
10.18	Agreement, dated as of April 1, 2004, by and between the Authority and Swinerton Builders (filed as Exhibit 10.19 to the Form S-4, and incorporated by reference herein)
10.19	Lease Agreement, dated as of May 30, 2002, by and between the Tribe and Sprung Instant Structures, Inc. (filed as Exhibit 10.20 to the Form S-4, and incorporated by reference herein)
10.20	Amendment No. 1 to Lease Agreement, dated as of February 26, 2004, by and between the Tribe and Sprung Instant Structures, Inc. (filed as Exhibit 10.21 to the Form S-4, and incorporated by reference herein)
10.21	Amendment No. 2 to Lease Agreement, dated as of August 29, 2005, by and between the Tribe and Sprung Instant Structures, Inc. (filed as Exhibit 10.20 to the Form 10-K filed with the SEC on April 17, 2007, and incorporated by reference herein)
10.22	Memorandum of Agreement between the Dry Creek Rancheria Band of Pomo Indians and the County of Sonoma, California, together with exhibits thereto (filed herewith as Exhibit 10.22)
12.1	Statement of Calculation of Ratio of Earnings to Fixed Charges (filed herewith as Exhibit 12.1)
14.1	Code of Ethics (filed as Exhibit 14.1 to the Form 10-K filed with the SEC on March 30, 2006, and incorporated herein by reference)
31.1	Certification by Shawn S. Smyth, Chief Executive Officer, pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) (filed herewith)
31.2	Certification by Joseph R. Callahan, Chief Financial Officer, pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) (filed herewith)
32.1*	Certification by Shawn S. Smyth, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

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32.2* Certification by Joseph R. Callahan, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

* These certifications are being furnished solely to accompany this annual report pursuant to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of River Rock Entertainment Authority whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Supplemental Information to be Furnished With Reports Filed Pursuant to Section 15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to Section 12 of the Act

The registrant has not sent an annual report or proxy statement to security holders. The registrant will not be sending an annual report or proxy statement to its security holders subsequent to the filing of this Form 10-K.

52

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors of River Rock Entertainment Authority

We have audited the accompanying balance sheets of the River Rock Entertainment Authority (the “Authority”), a governmental instrumentality of the Dry Creek Rancheria Band of Pomo Indians (the “Tribe”), as of December 31, 2007 and 2006, and the related statements of revenues, expenses and changes in fund deficit and of cash flows for each of the three years in the period ended December 31, 2007. These financial statements are the responsibility of the Authority’s management. Our responsibility is to express an opinion on the financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Authority is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the financial position of the River Rock Entertainment Authority as of December 31, 2007 and 2006, and the revenues and expenditures and changes in fund deficit and the cash flows for each of the three years in the period ended December 31, 2007 in conformity with accounting principles generally accepted in the United States of America.

River Rock Entertainment Authority is an unincorporated instrumentality of the Tribe and is not a separate legal entity. These financial statements reflect the financial position of the River Rock Entertainment Authority, its revenues and expenditures and changes in net assets and its cash flows and do not purport to represent the financial position and activity of the Tribe as a whole.

/s/ Deloitte & Touche LLP

San Francisco, CA
April 14, 2008

53

RIVER ROCK ENTERTAINMENT AUTHORITY

(A Governmental Instrumentality of the Dry Creek Rancheria Band of Pomo Indians)

BALANCE SHEETS
DECEMBER 31, 2007 AND 2006

	December 31, 2007			December 31, 2006
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	46,533,389		$	32,549,001
Restricted cash-current	466,517			467,997
Accounts receivable	307,386			203,555
Inventories	153,215			160,601
Prepaid expenses and other current assets	1,427,891			1,396,289
Total current assets	48,888,398			34,777,443
RESTRICTED CASH - net of current	6,868,956			6,780,256
PROPERTY AND EQUIPMENT:
Buildings and building improvements	129,642,521			129,245,481
Furniture, fixtures and equipment	29,969,430			27,110,280
Accumulated depreciation	(44,460,665		)	(32,696,126		)
Construction in progress	9,256,830			4,385,195
Property and equipment-net	124,408,116			128,044,830
DEPOSITS AND OTHER ASSETS	4,339,002			5,266,658
TOTAL ASSETS	$	184,504,472		$	174,869,187
LIABILITIES AND FUND DEFICIT
CURRENT LIABILITIES:
Accounts payable:
Trade	$	3,563,243		$	2,500,226
Construction	466,517			467,997
Accrued liabilities	7,566,821			7,094,168
Current maturities of long-term debt	213,172			642,413
Total current liabilities	11,809,753			10,704,804
LONG-TERM DEBT - net of current maturities	198,747,638			198,500,275
Total long-term liabilities	198,747,638			198,500,275
COMMITMENTS AND CONTINGENCIES
FUND DEFICIT:
Invested in capital assets-net of related debt	(74,552,694		)	(71,097,858		)
Restricted for capital projects	7,335,473			7,248,253
Unrestricted	41,164,302			29,513,713
Total fund deficit	(26,052,919		)	(34,335,892		)
TOTAL LIABILITIES AND FUND DEFICIT	$	184,504,472		$	174,869,187

The accompanying notes are an integral part of these financial statements.

54

RIVER ROCK ENTERTAINMENT AUTHORITY

(A Governmental Instrumentality of the Dry Creek Rancheria Band of Pomo Indians)

STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND DEFICIT
YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005

	2007			2006			2005
REVENUES:
Casino	$	145,714,135		$	136,294,029		$	132,831,172
Food, beverage & retail	7,516,412			6,244,262			6,920,246
Other	614,939			622,605			662,894
Gross revenues	153,845,486			143,160,896			140,414,312
Promotional allowances	(14,467,530		)	(12,541,699		)	(6,855,551		)
Net revenues	139,377,956			130,619,197			133,558,761
OPERATING EXPENSES:
Casino	23,375,622			20,454,077			19,187,233
Food, beverage & retail	4,640,121			5,996,913			6,311,028
Selling, general and administrative	43,978,609			39,903,231			46,174,080
Depreciation	11,800,855			11,502,565			11,012,094
Credit enhancement fee	11,348,897			8,078,806			7,669,147
Gaming commission and surveillance expense	3,023,303			3,154,384			2,773,369
Compact revenue sharing trust fund	1,335,000			1,335,000			1,335,000
Total Operating expenses	99,502,407			90,424,976			94,461,951
INCOME FROM OPERATIONS	39,875,549			40,194,221			39,096,810
OTHER EXPENSE-Net:
Interest expense	(20,871,677		)	(20,883,967		)	(21,046,944		)
Interest income	1,700,885			1,045,942			332,122
Gain (loss) on sale of assets	4,547			(126,394		)	(104,117		)
Other income (expense), net	869			(640		)	(1,683		)
Other expense-net	(19,165,376		)	(19,965,059		)	(20,820,622		)
INCOME BEFORE DISTRIBUTIONS TO TRIBE	20,710,173			20,229,162			18,276,188
TRIBAL CONTRIBUTIONS (DISTRIBUTIONS):
Contributions from the Tribe	—			1,381,137			—
Distributions to the Tribe	(12,427,200		)	(15,521,137		)	(11,180,000		)
NET INCOME AFTER TRIBAL DISTRIBUTIONS	8,282,973			6,089,162			7,096,188
FUND DEFICIT-Beginning of period	(34,335,892		)	(40,425,054		)	(47,521,242		)
FUND DEFICIT-End of period	$	(26,052,919	)	$	(34,335,892	)	$	(40,425,054	)

The accompanying notes are an integral part of these financial statements.

55

RIVER ROCK ENTERTAINMENT AUTHORITY

(A Governmental Instrumentality of the Dry Creek Rancheria Band of Pomo Indians)

STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2007, 2006 AND 2005

	2007			2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from gaming winnings and concessions	$	139,274,125		$	130,439,469		$	133,203,873
Cash paid for salaries and benefits	(28,936,485		)	(27,675,936		)	(30,268,234		)
Cash paid to suppliers	(43,787,259		)	(40,878,038		)	(45,851,753		)
Cash paid for compact revenue sharing trust fund	(1,335,000		)	(1,335,000		)	(1,335,000		)
Net cash provided by operating activities	65,215,381			60,550,495			55,748,886
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:
Payments of long-term debt	(835,207		)	(522,311		)	(10,478,627		)
Purchases of property and equipment	(7,876,958		)	(4,474,546		)	(17,456,371		)
Change in restricted cash	(87,220		)	125,228			8,828,240
Interest paid	(19,512,732		)	(19,525,022		)	(19,763,000		)
Credit enhancement fee	(12,131,967		)	(7,981,395		)	(7,372,759		)
Proceeds from sale of fixed assets	33,445			27,350			9,500
Other	(94,039		)	(206,398		)	362,841
Net cash used in capital and related financing activities	(40,504,678		)	(32,557,094		)	(45,870,176		)
CASH FLOW FROM INVESTING ACTIVITIES:
Interest Income	1,700,885			1,045,942			332,122
CASH FLOW FROM NON-CAPITAL FINANCING ACTIVITIES:
Distributions to Tribe	(12,427,200		)	(15,521,137		)	(11,180,000		)
Contributions from Tribe	—			1,381,137			—
Net cash used in non-capital financing activites	(12,427,200		)	(14,140,000		)	(11,180,000		)
CHANGE IN CASH AND CASH EQUIVALENTS	13,984,388			14,899,343			(969,168		)
CASH AND CASH EQUIVALENTS, Beginning of the period	32,549,001			17,649,658			18,618,826
CASH AND CASH EQUIVALENTS, End of the period	$	46,533,389		$	32,549,001		$	17,649,658
RECONCILIATION OF INCOME BEFORE DISTRIBUTIONS TO TRIBE TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Income before Distributions to Tribe	$	20,710,173		$	20,229,162		$	18,276,188
Adjustments to reconcile operating income to net cash provided by operating activities:
Depreciation	11,800,855			11,502,565			11,012,094
Interest Expense, net	20,871,677			20,883,967			21,046,944
Interest Income	(1,700,885		)	(1,045,942		)	(332,122		)
Credit enhancement fee	11,348,897			8,078,806			7,669,147
(Gain) Loss on sale of assets	(4,547		)	126,394			104,117
Changes in operating assets and liabilities:
Accounts receivable	(103,831		)	(110,303		)	(39,456		)
Inventories	7,386			(1,167		)	223,977
Prepaid expenses and other current assets	(31,602		)	31,617			(654,075		)
Accounts payable	1,061,537			322,195			(1,220,143		)
Accrued liabilities	1,255,721			533,201			(337,785		)
Total adjustments	44,505,208			40,321,333			37,472,698
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	65,215,381		$	60,550,495		55,748,886
SUPPLEMENTARY SCHEDULE OF NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES:
Acquisition of property and equipment through third party financing	$	316,080		$	980,995		$	224,267
Acquisition of property and equipment through
Accounts Payable Construction	$	—		$	467,997		$	666,517

The accompanying notes are an integral part of these financial statements.

56

RIVER ROCK ENTERTAINMENT AUTHORITY
(A Governmental Instrumentality of the Dry Creek Rancheria Band of Pomo Indians)

1.DESCRIPTION OF BUSINESS

River Rock Entertainment Authority (the “Authority”) is a governmental instrumentality of the Dry Creek Rancheria Band of Pomo Indians (the “Tribe”), a federally recognized Indian tribe. River Rock Casino (the “Casino”) is a governmental development project of the Authority. The Casino offers Class III gaming (as defined by the Indian Gaming Regulatory Act) on tribal land located in Geyserville, California. The legal authority for slot machines and table games is provided by the Tribe’s gaming compact with the State of California (the “Compact”), which was entered into in September 1999 and became effective upon approval by the Secretary of Interior on May 5, 2000.  The Compact expires on December 31, 2020.

The Tribe opened a portion of the Casino on September 14, 2002. Following completion of construction the Casino was fully opened on April 1, 2003.

The Authority was formed as an unincorporated instrumentality of the Tribe on November 5, 2003 pursuant to a reorganization whereby the Tribe’s gaming business became owned and operated by the Authority. This reorganization was accounted for as a reorganization of entities under common control. Accordingly, after the reorganization, the assets and liabilities of the Casino operating property were presented by the Authority on a historical-cost basis.

The Authority operates as a separate, wholly owned operating unit of the Tribe and is not a separate legal entity. These financial statements reflect the financial position and activity of only the Authority and do not purport to represent the financial position and activity of the Tribe.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Standards—The Authority prepares its financial statements in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles”). The financial statements presented are prepared on the accrual basis of accounting from the accounts and financial transactions of the Authority. Generally accepted accounting principles require the Authority to apply all applicable pronouncements of the Governmental Accounting Standards Board (“GASB”). The Authority is also required to follow Financial Accounting Standards Board (“FASB”) Statements and Interpretations, Accounting Principles Board Opinions and Accounting Research Bulletins issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements.  The Authority is given the option whether to apply all FASB Statements and Interpretations issued after November 30, 1989, except for those that conflict with or contradict GASB pronouncements. Accordingly, the Authority has elected to implement non conflicting FASB Statements and Interpretations issued after November 30, 1989.

There are differences between financial statements prepared in accordance with GASB pronouncements and those prepared in accordance with FASB pronouncements. The statements of revenues, expenses and changes in fund deficit is a combined statement under GASB pronouncements, FASB pronouncements allow a statement of income or operations and a separate statement of owners’ or shareholders’ (deficit) equity, which is where distributions to owners would be presented under FASB pronouncements.  The amount shown as income before distributions to Tribe would not be different if the Authority followed all FASB pronouncements to determine net income and would be the most comparable amount to net income computed under FASB pronouncements. The Authority is a separate fund of the Tribe, a governmental entity, and as such there is no owners’ or shareholders’ (deficit) equity as traditionally represented under FASB pronouncements.  The most comparable measure of owners’ (deficit) equity is presented on the Authority’s balance sheet as fund (deficit) equity.

New Accounting Pronouncements—In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of SFAS No. 157 are effective for the fiscal year beginning January 1, 2008. The future impact of the adoption of SFAS No. 157 by the Authority has not yet been evaluated.

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In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities - including an amendment of FASB Statement No. 115. SFAS No. 159 permits an entity to measure certain financial assets and financial liabilities at fair value and offers an irrevocable option to carry the vast majority of financial assets and liabilities at fair value, with changes in fair value recorded in earnings. The provisions of SFAS No. 159 are effective for the fiscal year beginning January 1, 2008. The future impact of the adoption of SFAS No. 159 by the Authority has not yet been evaluated.

Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Cash and Cash Equivalents—The Authority considers all highly liquid investments with a maturity of three months or less at date of purchase as cash equivalents. The carrying amount of cash and cash equivalents approximates its fair value. Cash and cash equivalents include cash on hand, cash on deposit with banks and highly liquid investments.  The Federal Deposit Insurance Corporation (“FDIC”) has insured $100,000 of the cash on deposit with the banks. The Authority believes that there is little risk of loss regarding the uninsured amounts of cash and cash equivalents on deposit with the banks.

Inventories—Inventories, consisting principally of gaming supplies and food and beverage items, are stated at the lower of cost (first-in, first-out) or market value.

Restricted Cash—Restricted cash consists of estimated construction expenses for three parking structures, related infrastructure improvements and construction contingencies. It also includes funds that are reserved for additional construction contingencies and the funds necessary to develop an approximately 18 acre parcel of land adjacent to the Tribe’s reservation. These funds are held in escrow accounts which are restricted for authorized construction disbursements. These escrow accounts are invested in CDs, which generate interest on a monthly basis. The FDIC has insured $100,000 of this balance. The Authority believes that there is little risk of loss regarding the uninsured amounts of restricted cash held in the escrow account. Restricted cash was $7,335,473 and $7,248,253 at December 31, 2007 and December 31, 2006, respectively.  As of December 31, 2007, restricted cash includes amounts available for construction of $2,751,535 and land development funds of $4,583,296.

Property and Equipment—Property and equipment are stated at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets as follows:

Buildings and improvements	21 years
Furniture, fixtures and equipment	5 years

The Authority evaluates its property and equipment for impairment in accordance with the FASB’s Statement of Financial Accounting Standards (“SFAS”) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. When events or circumstances indicate that an asset should be reviewed for impairment, the Authority compares the undiscounted cash flows derived from the asset or asset group to the net carrying value. If impairment is indicated, the impairment loss is measured by the amount in which the carrying value of the asset or asset group exceeds its fair value. Fair value is measured by comparable sales, solicited offers or discounted cash flow models.

Capitalized Interest—The interest cost associated with major development and construction projects is capitalized and included in the cost of the asset. Capitalization of interest ceases when the project is substantially complete or development activity is suspended.  There was no capitalized interest for the years ended December 31, 2007 and 2006.

Deposits and Other Assets—As of December 31, 2007 and December 31, 2006, deposits and other assets include $3,918,837 and $4,940,532 in unamortized bond discount, legal fees and other issuance costs related to the issuance of the Notes, $350,485 and $0 of deferred financing fees, $41,883 and $0 of equipment deposits, $11,372 and $213,218 of performance deposits and $16,425 and $112,908 of rental deposits.  Deferred loan costs are amortized using the effective interest method to interest expense over the term of the related financial arrangement.

Accrued Liabilities—Accrued liabilities consist of accrued interest, accrued payroll, accrued credit enhancement fee and other accrued liabilities.

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Accrued Progressive Slot Jackpots—Accrued progressive slot jackpots consist of estimates for prizes relating to various games that have accumulated jackpots. The Authority has recorded the cost of these anticipated payouts as a reduction of Casino revenues, and the cost is included as a component of accrued liabilities.

Accrued Slot Players Club—In accordance with Emerging Issues Task Force Issue No. 00-22, Accounting for “Points” and Certain Other Time-Based or Volume-Based Sales Incentive Offers and Offers for Free Products or Services to be Delivered in the Future, the Authority has recorded a liability related to prizes and cash incentives earned by the members of our Players Club and have adjusted the liability for the estimated future breakage. The Authority has recorded the cost of the estimated redemption of the liability related to prizes as an operating expense and the estimated redemption of the liability related to cash as promotional allowance in the accompanying statements of revenues, expenses and changes in fund deficit.

Casino Revenues—In accordance with industry practice, the Authority recognizes as casino revenue the net win from gaming activities, which is the difference between gaming wins and losses. Casino revenues are net of accruals for anticipated payouts of progressive slot jackpots.

Food, Beverage and Retail—The Authority recognizes as food, beverage and retail revenues the proceeds from its food, beverage and gift shop sales. The Authority continues to distribute beverages freely in the gaming area for playing guests.

Other Revenues—Other revenues are comprised of commissions on ATM and vending machine transactions.

Promotional Allowances—The retail value of food and beverages provided to playing customers without charge is included in gross revenues and then deducted as promotional allowances.  Such amounts that are included in Food, beverage and retail revenues for the years ended December 31, 2007, 2006 and 2005 are $2,897,660, $2,160,035 and $2,825,772, respectively.  The distribution of electronic coupons (e-coupons) to customers is included in Casino revenues and is also deducted as promotional allowances.  The total e-coupons for the years ended December 31, 2007, 2006 and 2005 are $9,562,441 $8,788,573 and $2,568,393, respectively.  The redemption of cash incentives earned by the Players Club members is also recorded as promotional allowances.  The total cash incentives for the years ended December 31, 2007, 2006 and 2005 are $2,007,429, $1,593,091 and $1,461,386, respectively.

Food and Beverage Costs—Food and beverage costs include costs associated with food and beverage, excluding amounts classified as casino expenses.  The estimated costs of providing complimentary services are reclassified from food and beverage to Casino expenses.  The costs of such services were $5,801,400, $3,845,342 and $3,642,229 for the years ended December 31, 2007, 2006 and 2005.

Advertising Costs—Advertising costs are expensed the first time advertising takes place. Advertising costs included in selling, general and administrative expenses were $7,910,198, $5,210,739 and $8,032,085 for the years ended December 31, 2007, 2006 and 2005, respectively.

Gaming Commission and Surveillance Expenses—The Authority pays for various expenses for the Tribal Gaming Commission and surveillance.  Tribal Gaming Commission expenses are reported as Gaming Commission and surveillance expense on the Statement of Revenues, Expenses and Changes in Fund Deficit. Gaming Commission and surveillance expenses for the years ended December 31, 2007, 2006 and 2005 are $3,023,303, $3,154,384 and  $2,773,369, respectively.

Income Taxes—As a governmental instrumentality of the Dry Creek Rancheria Band of Pomo Indians, a federally recognized Indian tribe, the Authority is a nontaxable entity for purposes of federal and state income taxes.

Distributions to Tribe—Distributions to Tribe consist of payments permitted by the terms of the Indenture for the Notes.  They are included in the Statement of Revenues, Expenses and Changes in Fund Deficit as distributions to Tribe. Monthly permitted payments increased by $20,800 from $1,020,000 to $1,040,800 in April 2007.  Total distributions to the Tribe were $12,427,200, $15,521,137 and $11,180,000, for the years ended December 31, 2007, 2006 and 2005, respectively.

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3.        CERTAIN RISKS AND UNCERTAINTIES

The Authority’s operations are dependent on the continued licensing and qualification of the Authority by the Tribal Gaming Commission. Such licensing and qualification are reviewed periodically by the Tribal Gaming Commission and regulatory agencies of the State of California. The Authority believes that no events or circumstances have arisen that would have an adverse effect on the Casino’s ability to continue its licensing and qualification by the Tribal Gaming Commission or regulatory agencies of the State of California to operate the Authority.

4.        RELATED PARTIES

The Authority has been constructed on federal land beneficially owned by the Tribe. The Authority does not pay the Tribe for the use of the land.

Commencing January 1, 2004, the Authority paid for various expenses for the following departments operated by the Tribe: Tribal Gaming Commission, surveillance, plant operations, human resources, purchasing and warehousing.  On January 1, 2005, the Authority operated the Purchasing and Warehouse departments and continued to pay expenses for the other departments operated by the Tribe.  These departmental expenses include but are not limited to payroll and related expenses, legal and other operational expenses.  Under direction of the River Rock Entertainment Authority Board and the Tribal Council, the Tribe assumed responsibility of the Purchasing and Warehouse departments on May 8, 2006.  The expenses associated with the Purchasing and Warehouse departments incurred by the Tribe are included in these amounts and will be reimbursed to the Tribe by the Authority as with other Tribal departments.

Total expenses for these departments, excluding Tribal Gaming Commission and surveillance, were $4,178,576, $3,188,736 and $1,874,919 for the years ended December 31, 2007, 2006 and 2005, respectively.  They are recorded as a component of Selling, General, and Administrative expenses.

The Authority pays for various expenses for the Tribal Gaming Commission and surveillance.  The Tribal Gaming Commission and surveillance expenses are recorded in Gaming Commission and surveillance expenses on the Statement of Revenues, Expenses and Changes in Fund Deficit.  Gaming Commission and surveillance expenses were $3,023,303, $3,154,384 and $2,773,369 for the years ended December 31, 2007, 2006 and 2005, respectively.

The Tribe has incurred expenses on behalf of the Authority that relate to the master planning of the proposed resort and Tribal infrastructure that benefit the Authority.  Total expenses incurred and subsequently reimbursed to the Tribe for the years ended December 31, 2007 were $4.6 million. The Tribe has incurred an additional $5.6 million in costs relating to the master planning of the proposed resort. While the Tribe has not made any request to the Authority for reimbursement of such amount, it may request reimbursement from the Authority in the future.  While the Authority has no obligation to pay such amounts when requested and any such reimbursement would need to be approved by management and the Board of Directors of the Authority, there is a possibility that such request for reimbursement may be made by the Tribe. Prior to making any reimbursement payment, the Authority will consider various factors, including, but not limited to, whether the costs incurred were actually related to the master planning, whether such costs are beneficial to the gaming business and expansion plans of the Authority, the reasonableness of such costs, the availability of cash and whether the reimbursement payment is in compliance with the covenants in the indenture for the Authority’s senior notes.

5.DEVELOPMENT AND LOAN AGREEMENT

The Tribe entered into a Development and Loan Agreement with Dry Creek Casino, LLC (“DCC”) on August 26, 2001, which has been amended from time to time (as amended, the “Development Agreement”). In consideration of DCC providing credit enhancement and other services under the Development Agreement, the Tribe was obligated to pay DCC a Credit Enhancement Fee. The Credit Enhancement Fee was defined as 20% of the Authority’s net income before distributions to the Tribe plus depreciation and amortization plus annual interest on $25.0 million principal amount of the Notes less revenues from sales of alcoholic beverages. The Credit Enhancement Fee was required to be paid monthly for a period of five years commencing on June 1, 2003.

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The Authority had the right to terminate the Development Agreement by exercising a buy-out option (the “Buy-Out Option”) and did so on January 31, 2007.  Subsequently on March 2, 2007, the Authority and DCC signed a mutual agreement to fix the amounts due to DCC in respect of such exercise to the sum of $11,350,000 less the amount paid after the Authority exercised the buy-out option of $737,491. The net payment of $10,612,509 was made in March 2007 and expensed in full in the three months ended March 31, 2007.  Credit Enhancement Fee expense was $11,348,897, $8,078,806 and $7,669,147 for each of the years ended December 31, 2007, 2006 and 2005, respectively.

6.CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

Cash and cash equivalents and restricted cash consisted of the following as of December 31, 2007 and December 31, 2006:

	December 31, 2007		December 31, 2006
Operating accounts	$	6,352,843	$	5,573,333
Money Market Accounts	3,000,298		31,967
Short Term Investments	31,013,947		22,304,924
Cash on hand	6,166,301		4,638,777
Cash and cash equivalents	46,533,389		32,549,001
Restricted cash	7,335,473		7,248,253
Total cash and cash equivalents and restricted cash	$	53,868,862	$	39,797,254

The Authority’s cash in banks and cash equivalents (the “Investments”) are categorized by level of credit risk assumed by the Authority. Category 1 includes investments that are insured or registered or for which the investments are held by the Authority or its agent in the Authority’s name. Category 2 includes uninsured and unregistered investments for which the investments are held by the counterparty’s trust department or agent in the Authority’s name. Category 3 includes uninsured and unregistered investments for which the investments are held by the counterparty’s agent but not in the Authority’s name. At December 31, 2007, the Authority had $200,000 in Category 1 investments, $6,252,843 cash in banks, $3,000,298 in Money Market accounts and $31,013,947 in short term investments which are Category 2 investments and $7,235,473 restricted cash in bank over the FDIC insurance limits, which are Category 3 investments.  Amounts in Category 2 and Category 3 investments are invested in short term, highly liquid cash equivalents and investments.  As of December 31, 2007 and 2006, these amounts are composed of money market accounts in the amount of $3,000,298 and $31,967, respectively and A1/P1 securities in the amount of $31,013,947 and $22,304,924, respectively.

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7.PROPERTY AND EQUIPMENT

Property and equipment at December 31, 2006 and December 31, 2007 consisted of the following:

	Balance,									Balance,
	December 31,									December 31,
	2006			Additions			Dispositions			2007
Buildings and improvements	$	129,245,481		$	397,040		$	—		$	129,642,521
Furniture, fixtures and equipment	27,110,280			2,924,363			(65,213		)	29,969,430
Less accumulated depreciation	(32,696,126		)	(11,800,854		)	36,315			(44,460,665		)
	123,659,635			(8,479,451		)	(28,898		)	115,151,286
Construction in progress	4,385,195			4,871,635			—			9,256,830
Property and equipment—net	$	128,044,830		$	(3,607,816	)	$	(28,898	)	$	124,408,116

Construction in progress consists of payments to various vendors related to the Authority’s master plan development and land improvements. Substantially all of the Authority’s personal property is pledged as collateral to secure its debt.  At December 31, 2007 and 2006, the Authority had $415,639 and $376,636 in capital lease assets with related accumulated depreciation of $203,781 and $117,378.

8.ACCRUED LIABILITIES

Accrued liabilities consisted of the following as of December 31, 2007 and December 31, 2006:

	December 31,		December 31,
	2007		2006
Accrued in-house progressive slot jackpots	$	1,081,121	$	779,408
Accrued payroll and related benefits	2,296,131		2,005,731
Accrued interest	3,250,000		3,250,000
Accrued credit enhancement fees	—		783,070
Accrued other expenses	939,569		275,958
Total accrued liabilities	$	7,566,821	$	7,094,168

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9.LONG-TERM DEBT

Long-term debt consisted of the following as of December 31, 2007 and December 31, 2006:

	December 31,			December 31,
	2007			2006
9-3/4% Senior Notes, net of unamortized issue discount of $1,292,789 and $1,630,039. Due 2011.	$	198,707,212		$	198,369,961
Vehicles Notes	15,306			25,439
Lease obligations	238,293			747,288
Total Long-Term Debt	198,960,810			199,142,688
Less: current portion	(213,173		)	(642,413		)
Total long-term debt - net of current maturities	$	198,747,638		$	198,500,275

Maturity schedule – Annual requirements to retire long-term debt at December 31, 2007:

	Principal		Interest		Total
2008	$	213,173	$	19,505,376	$	19,718,549
2009	38,963		19,500,735		19,539,698
2010	1,463		19,500,000		19,501,463
2011	200,000,000		16,250,000		216,250,000
2012	—		—		—
	$	200,253,599	$	74,756,111	$	275,009,710

On November 7, 2003, the Authority issued the Notes. The proceeds were utilized to fund an expansion project, which includes three parking structures and related infrastructure improvements, repayment of various debt, advances and fund payment of various accruals and payables, as well as to increase cash on hand. The proceeds were also utilized to fund a land purchase and settle litigation. The Notes were secured by a first priority pledge of the Authority’s revenue and substantially all of the existing and future tangible and intangible personal property. The Authority may redeem the Notes, in whole or in part, at a redemption price that is at a premium to the principal amount of the Notes (expressed as percentages of principal amount), plus accrued and unpaid interest.

Fair Value—The Authority’s long-term debt is recorded at an amortized historical cost basis. The fair value of long-term debt approximates $209,126,000 at December 31, 2007.

10.LEASES

The Authority leases a sprung structure, which is accounted for as an operating lease. Such lease expense was $434,760, $455,290 and $482,355 for the years ended December 31, 2007, 2006 and 2005. The Authority renewed the lease agreement on August 17, 2005 for $36,230 per month for twenty four (24) months ending August 17, 2007. Since the expiration of the lease on August 17, 2007, the Authority has maintained the lease payments on a month to month basis.

On October 1, 2003, the Tribe entered into an operating lease agreement for office and warehouse space to replace existing facilities. Prior to the Tribe taking control over the Purchasing and Warehouse departments, the Authority reimbursed the Tribe lease fees allocated based on the square footage utilized. Since May 2006, when the Tribe assumed responsibility for the Purchasing and Warehouse departments, the Authority no longer reimbursed the Tribe lease fees as a separate transaction. This reimbursement is made through the reimbursement of Tribal departments’ monthly allotment and quarterly reconciliations. The Authority reimbursed the Tribe for such lease fees in the amount of $435,763, $512,567 and $439,133 for the years ended December 31, 2007, 2006 and 2005, respectively.

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On February 21, 2007 the Authority entered into a one year operating lease for office and promotional space commencing February 21, 2007 and expiring February 20, 2008. The monthly lease fee was $600 per month. On February 21, 2008, the Authority extended the lease for three years, commencing on February 21, 2008 and expiring on February 20, 2011. The extended lease fee is $625 per month for the first year, with adjustments for the Consumer Price Index and property taxes in the second and third years.

On August 30, 2007 the Authority entered into a five year operating lease agreement for office and showroom space commencing October 1, 2007 and expiring on September 30, 2012. The monthly lease fee is $16,630. Lease expenses for  2007 totalled $66,520.

On September 1, 2004, the Authority entered into a five year capital lease to purchase two licenses to operate three-card poker tables in the amount of $120,000. The capital lease is at 7.25% interest with monthly lease fees of $2,390 and a $1 buyout at the end of the lease term, expiring August 31, 2009.

On July 31, 2005, the Authority entered into a thirty six month capital lease to purchase 13 Multi-deck shufflers in the amount of $88,307.  The capital lease is at 4.08% interest with monthly lease fees of $2,730 and a $1 buyout at the end of the lease term, expiring July 31, 2008.

On July 31, 2005, the Authority entered into a thirty six month capital lease to purchase 6 King shufflers in the amount of $61,422.  The capital lease is at 7.09% interest with monthly lease fees of $1,899 and a $1 buyout at the end of the lease term, expiring July 31, 2008.

On July 31, 2005, the Authority entered into a thirty six month capital lease to purchase 4 Ace shufflers in the amount of $45,283.  The capital lease is at 7.09% interest with monthly lease fees of $1,400 and a $1 buyout at the end of the lease term, expiring July 31, 2008.

On April 25, 2006, the Authority entered into a thirty six month capital lease to purchase 5 DECK MATE poker shuffles in the amount of $61,833.  The capital lease is at 7.92% interest with monthly lease fees of $1,937 and a $1 buyout at the end of the lease term, expiring April 30, 2009.

On August 1, 2006 the Authority entered into a 36 month capital lease to purchase 2 licenses to operate pai gow poker tables in the amount of $38,800.  The capital lease is at 4.26% interest with monthly lease fees of $1,150 and a $1 buyout at the end of the lease term, expiring July 31, 2009.

Lease expenses of $336,622, $484,334, and $995,202 for the years ended December 31, 2007, 2006 and 2005, respectively are included in general and administrative expenses in the accompanying statement of revenues, expenses and changes in fund deficit.  Expected remaining payments under operating leases are $242,183, $242,017, $213,713, $199,560 and $149,670 for the years ending December 31, 2008 thru 2012, respectively.

11.LEGAL MATTERS

Runyan Litigation

On March 7, 2008, Norman Runyan, our former Chief Operations Officer, filed suit against the Authority, the Casino and Mr. Harvey Hopkins, the Chairman of the Tribe and a member of our Board, in the Sonoma County Superior Court. Mr. Runyan’s complaint asserts causes of actions for breach of contract, wrongful termination in violation of public policy, intentional interference with contract and intentional infliction of emotional distress. He seeks unspecified compensatory and punitive damages. Mr. Runyan alleges that he was wrongfully terminated from his employment because he opposed certain alleged actions on the part of the defendants, including contracts for construction work allegedly performed on the reservation by affiliates of the Tribe and Mr. Hopkins. Mr. Runyan claims that the work violated the Indenture and that Mr. Runyan was forced to resign from his employment in violation of public policy after protesting that the alleged work violated the Indenture, the Tribe’s Compact with the State, and the Securities Exchange Act of 1934. He also claims that the defendants unlawfully discriminated against him in connection with his

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status as a debtor under the Bankruptcy Code. We believe that Mr. Runyan’s lawsuit is based on erroneous information and is without merit, and the Authority and the Tribe intend to vigorously defend against it.

The Authority is involved in other litigation and disputes from time to time in the ordinary course of business with vendors and patrons. The Authority believes that the aggregate liability, if any, arising from such litigation or disputes will not have a material adverse effect on its results of operations, financial condition or cash flows.

12. COMPACT REVENUE SHARING TRUST FUND

The Compact requires the Authority to pay a quarterly fee to the State of California’s revenue sharing trust fund, based on the number of licensed gaming devices operated by the Tribe. Revenue sharing trust fund fees assessed were $1,335,000 for the years ended December 31, 2007, 2006 and 2005.

13.COMMITMENTS AND CONTINGENCIES

The Authority is an unincorporated instrumentality of the Tribe formed pursuant to a recently adopted law of the Tribe. While the Authority is not a separate corporation or other legal entity distinct from the Tribe, this tribal law allows the Authority to own and operate its business. This tribal law also provides that the Authority’s obligations and other liabilities are not those of the Tribe and that the obligations and liabilities of the Tribe are not the Authority’s. This law is untested and generally has no direct counterpart in other areas of the law. If this law should prove to be ineffective at limiting the Authority’s liability, the Authority’s business and assets could become subject to claims asserted against the Tribe or its assets. Similarly, the Authority would be liable for such claims if the Tribe waived its sovereign immunity to an extent that allowed enforcement of such claims against the Authority’s business or assets.

On November 14, 2007, Mr. Norman Runyan resigned as Chief Operations Officer of the Authority to pursue other interests, effective as of November 11, 2007. Pursuant to a Severance Agreement, the Authority was obligated to pay Mr. Runyan a severance amount of $217,095 in installments no later than January 14, 2008, which includes, among other things, all accrued but unpaid salary, paid time off, vacation time, bonuses, and cost of COBRA benefits for five months.

On October 17, 2007, the Authority entered into an employment agreement with Mr. Joseph Callahan whereby Mr. Callahan will serve as the Chief Financial Officer of the Authority and of the River Rock Casino. The agreement is effective as of August 8, 2007, and continues through August 8, 2010, unless terminated earlier by the parties under the terms of the agreement. The agreement provides for the payment to Mr. Callahan of an initial annual base salary of $210,000, with an increase to $225,000, upon completion of 120 days of service or at the discretion of the Board. Mr. Callahan will also be eligible to receive an annual bonus in the discretion of the Board not to exceed 25% of his annual base salary. If Mr. Callahan’s employment is terminated for reasons other than cause, including death or disability, Mr. Callahan will be entitled to his salary for three months. Either party may terminate the agreement with 30 days written notice.

On July 30, 2007, the Authority entered into an amended and restated employment agreement with Mr. Shawn S. Smyth, the Chief Executive Officer of the Authority and General Manager of the River Rock Casino, to extend the term thereof through April 13, 2010, unless terminated earlier by the parties under the terms of the agreement. The agreement provides for the payment to Mr. Smyth of an annual base salary of $300,000. Mr. Smyth will also be eligible to receive an annual bonus in the discretion of the Board not to exceed 25% of his annual base salary. If Mr. Smyth’s employment is terminated for reasons other than cause, including death or disability, Mr. Smyth will be entitled to his salary for three months. Either party may terminate the agreement with 90 days written notice.

14.BENEFIT OBLIGATIONS

On April 1, 2006, the Authority became fully self-insured for its medical benefits plan coverage from $250 to $2,000 of medical benefit cost per covered person per year. Employees are responsible for the first $250 of medical benefit costs and 20%

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 of the medical benefit costs from $250 to $2,000, while the Authority is responsible for 80% of the medical benefit costs. Coverage above $2,000 is provided by a fully insured, high deductible medical benefits plan. The Authority pays 100% of the medical benefits plan coverage cost for employees and 50% coverage cost for dependants and domestic partners based on calculated premiums. Maximum coverage under the fully self-insured medical benefits plan is limited to $1,400 per covered person per year. All employees working an average of 60 hours per pay period are eligible for the medical benefits plan. Administration of the plan is provided by a third party under an administrative services agreement.

On April 1, 2006, the Authority became fully self-insured for its dental benefits plan. The Authority pays 100% of the dental benefits plan coverage cost for employees and 50% of the coverage cost for dependants and domestic partners based on calculated premiums. Maximum coverage under the dental plan is limited to $2,000 per covered person per year. All employees working an average of 60 hours per pay period are eligible for the dental benefits plan. Administration of the plan is provided by a third party under an administrative services agreement.

The Claims payable, Claims IBNR (incurred but not reported), and Insurance premiums payable for the above self-insured benefits plan are recorded in Other Accrued Liabilities on the financial statements.

15.       SUBSEQUENT EVENTS

On March 18, 2008, the Tribe and the Sonoma County Board of Supervisors entered into a memorandum of agreement (“MOA”) that will, among other things, settle several long-standing legal disputes between Sonoma County and the Tribe and provide a binding framework for resolving future disputes.

In a related action, the Alexander Valley Association (“AVA”), a local business and residents association which has long opposed the Tribe’s gaming project and objected to the issuance to it of a liquor license, agreed to withdraw its objections to the license and has persuaded its members and a number of other protestors to do likewise. In light of those withdrawals (and a similar agreement in the MOA requiring the County also to withdraw its objection), and with the support of both the County and AVA, the Tribe is now seeking to expedite issuance of an alcohol license. Under the MOA, the Tribe agreed to restrict the sale of alcohol to only wine and beer between the hours of 10 a.m. and 5 p.m. on weekdays, and to stop serving alcohol altogether at midnight except for Friday and Saturday nights and the nights before holidays. The restrictions may be renegotiated following the first to occur of three years or the opening of a hotel, which is projected to occur within the next 2 to 3 years.

In addition, the MOA commits the County Sheriff’s Department and Fire Marshall to providing public safety and fire services to the Casino and the Tribe’s future gaming projects on the Rancheria, provides detailed agreements on off reservation impact mitigation measures, and permits the Tribe’s application to take the Dugan Property into trust, which has already been approved by the Department of the Interior (“DOI”) but was appealed by the DOI, to move forward without further County opposition.

The Tribe has agreed to pay the County up to $75 million in mitigation fees over the next 12 years to offset impacts of the potential losses and impacts to the County resulting from the Tribe’s various ongoing projects and are intended to support the services being provided by the County. In addition to the mitigation fees, the Tribe will pay a fee in lieu of the County’s Transient Occupancy Tax in the amount of 9% of the rental collected on occupied hotel rooms, to be paid quarterly and continuing for five years after the later to occur of the termination of the MOA, as may be extended, or the Tribe’s Compact with the State (which is now terminable in 2020 at the earliest), which fees may be applied to programs and services that serve to promote tourism in the County. Such in lieu fees could total as much as $25 million during the term of the MOA.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on April 14, 2008.

RIVER ROCK ENTERTAINMENT AUTHORITY
By:	/s/ Shawn S. Smyth
	Name: Shawn S. Smyth
	Title: Chief Executive Officer, General Manager

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of River Rock Entertainment Authority and in the capacities and on the dates indicated.

By:	/s/ Betty Arterberry
	Name: Betty Arterberry
	Title: Chairperson
	Date: April 14, 2008
By:	/s/ Margie Rojes
	Name: Margie Rojes
	Title: Vice Chairperson
	Date: April 14, 2008
By:	/s/ Augusto (Gus) Pina
	Name: Augusto (Gus) Pina
	Title: Member
	Date: April 14, 2008
By:	/s/ Gabe Nevarez
	Name: Gabe Nevarez
	Title: Member
	Date: April 14, 2008
By:	/s/ Shawn S. Smyth
	Name: Shawn S. Smyth
	Title: Chief Executive Officer (Principal Executive Officer), General Manager
	Date: April 14, 2008
By:	/s/ Joseph R. Callahan
	Name: Joseph R. Callahan
	Title: Chief Financial Officer (Principal Financial and Accounting Officer)
	Date: April 14, 2008

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EX-10.22

Exhibit 10.22

MEMORANDUM OF AGREEMENT

BETWEEN

THE DRY CREEK RANCHERIA BAND OF POMO INDIANS

AND

COUNTY OF SONOMA

MARCH 18, 2008

TABLE OF CONTENTS

		Page No.
I.	PURPOSE OF AGREEMENT	2
II.	ISSUES IN DISPUTE	2
III.	DEFINITIONS	3
IV.	DECLARATIONS REGARDING THE ONGOING PROJECTS AND THE PETALUMA PROPERTY	9
V.	ENVIRONMENTAL REVIEW	9
VI.	ONGOING PROJECT MITIGATION MEASURES	16
VII.	ALCOHOL LICENSE AND EMERGENCY ACCESS ROAD	18
VIII.	LAW ENFORCEMENT SERVICES	21
IX.	PROSECUTION	23
X.	FIRE AND EMERGENCY SERVICES	24
XI.	SOCIOECONOMIC CONDITIONS	28
XII.	DUGAN PROPERTY	28
XIII.	PETALUMA PROPERTY	31
XIV.	FUTURE TRUST ACQUISITIONS AND TRIBAL DEVELOPMENT	32
XV.	MITIGATION MONITORING AND REPORTING	33
XVI.	REVENUE AND MITIGATION COSTS	33
XVII.	RE-OPENER PROVISIONS	36
XVIII.	INDEMNIFICATION	38
XIX.	CONFIDENTIALITY	39
XX.	DISPUTE RESOLUTION	40
XXI.	JUDICIAL REVIEW AND ENFORCEMENT	43
XXII.	NOTICES	44
XXIII.	MUTUAL LIMITED WAIVER OF SOVEREIGN IMMUNITY	45
XXIV.	CEQA REVIEW	46
XXV.	REVIEW BY THE DEPARTMENT OF INTERIOR AND OTHER ACTIONS FOLLOWING EXECUTION	46
XXVI.	MISCELLANEOUS PROVISIONS	47

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MEMORANDUM OF AGREEMENT

This Memorandum of Agreement (“Agreement”) is effective as of March 18, 2008, by and between the County of Sonoma (the “County”) and the Dry Creek Rancheria Band of Pomo Indians (the “Tribe”) (referred to herein collectively as “the Parties” and as to each as a “Party”).  The terms “County” and “Tribe” as used herein shall include the Parties’ governmental entities, departments and officials unless otherwise stated.

RECITALS

WHEREAS, the Tribe is a federally-recognized Indian Tribe located on federal Trust Lands known as the Dry Creek Rancheria (“Rancheria”), which lands are connected to State Route 128 (“SR 128”) by BIA Reservation Road S-93 (“BIA 93”), and which lands and roads are within the geographic boundaries of the County; and

WHEREAS, under the Indian Gaming Regulatory Act, 25 U.S.C. § 2701, et seq. (“IGRA”), the Tribe may engage in gaming as a means of promoting Tribal economic development, self-sufficiency and strong Tribal government; and

WHEREAS, IGRA generally requires that Class III gaming be conducted pursuant to a Tribal-State Class III gaming compact; and

WHEREAS, on or about September 10, 1999, and effective in May, 2000, the Tribe entered into a compact with the State of California (“Compact”), as contemplated under IGRA; and

WHEREAS, the Tribe desires to operate Tribal economic development projects in a manner that benefits the Tribe, its members, and the community as a whole, and the County recognizes the mutual benefit that can be derived if those goals are achieved; and

WHEREAS, the Tribe and the County have participated in a series of joint meetings to address potential off-Reservation environmental impacts and possible additional mitigation measures that might be taken with respect to proposed economic development projects on the Reservation and other lands owned in fee by the Tribe, consistent with the Tribe’s sovereignty, applicable law, and the Compact; and

WHEREAS, proposed and future Tribal development are not County projects and are not subject to the discretionary approval of the County and absent this Agreement the County has limited opportunity to influence mitigation measures or seek compensation for adverse environmental impacts; and

WHEREAS, the Parties acknowledge that given the scope of the proposed Tribal economic development projects, specific impacts are not always subject to precise measurement and that the mitigation measures agreed upon below are intended as good faith approximate mitigation of identified impacts; and

WHEREAS, the Parties recognize that this Agreement is an important step in furthering a government-to-government relationship and building trust, mutual respect and

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cooperation that is intended to benefit the Tribe, its members and the entire Sonoma County community;

NOW, THEREFORE, the Parties agree as follows:

AGREEMENT

I.PURPOSE OF AGREEMENT

1.1The purpose of this Agreement is to:

1.1.1Memorialize understandings that are intended to resolve and settle a range of disputes between the Tribe and the County;

1.1.2Assure the implementation of measures for mitigating the off-Reservation impacts of the Existing Casino, the Dugan Projects, and the Resort Project;

1.1.3Establish a mutually agreeable process to identify and mitigate potential off-Reservation environmental impacts of future Tribal economic development projects, including, with respect to those which are on-Reservation gaming Projects, a process that meets or exceeds the processes required under the Compact;

1.1.4Create a process to resolve future disputes that may arise between the County and the Tribe under this Agreement;

1.1.5Create a framework for building and maintaining a mutually beneficial government-to-government relationship between the Tribe and the County; and

1.1.6Identify ways for the Tribe and the County to work together to provide services and benefits to the Tribal community and Sonoma County residents.

II.ISSUES IN DISPUTE

2.1The Tribe and County are involved in a number of legal disputes which are summarized below.  This Agreement is intended to settle these disputes and to provide a mechanism to resolve other controversies that may arise under this Agreement in the future.  The disputed issues include:

2.1.1Alcohol License:  In the Matter of the Protest of Sheriff Bill Cogbill, et al. Against the Person to Person and Premises to Premises Transfer of a General Public Eating Place Alcohol License - The County Sheriff, Fire Chief, Board of Supervisors and the Alexander Valley Association (“AVA”) each protested to the Department of Alcoholic Beverage Control (“ABC”) that the River Rock Casino should not be granted a liquor license.  The Tribe contends it is qualified to obtain the applied for license.  The protests are pending before an ABC administrative law judge.

2.1.2Dugan Property Trust Application:  California Department of Conservation, et al. v. Acting Pacific Regional Director, Bureau of Indian Affairs - The State of

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California, County and AVA each are appealing a Bureau of Indian Affairs (“BIA”) decision to take 18 acres of land (the “Dugan Property”), adjacent to the Rancheria, into trust for the Tribe.  The matter is pending before the Department of the Interior Board of Indian Appeals (“IBIA”).

2.1.3Fire Safety Inspections:  In the Matter of the Sonoma County Fire Chief’s Application for an Inspection Warrant - - This case involves the County Fire Chief’s application for a State civil administrative inspection warrant for the Rancheria.  The United States District Court for the Northern District of California determined that the County does not have fire code enforcement jurisdiction on the Reservation and the Ninth Circuit Court of Appeals, in a final judgment, affirmed the District Court’s determination.  A petition for certiorari to the United States Supreme Court of the Ninth Circuit judgment has not yet been filed by the County.

2.1.4Wastewater Discharge:  In re: Dry Creek Rancheria NPDES Permit – On April 30, 2007, the United States Environmental Protection Agency (“USEPA”) issued a National Pollutant Discharge Elimination System (“NPDES”) permit to allow the Tribe to discharge treated wastewater into a tributary of the Russian River.  The County and AVA filed petitions for administrative review of the permit alleging concerns over potential environmental impacts.  The Tribe contends that the permit was appropriately granted and is environmentally sound. The petitions are pending before the USEPA Environmental Appeals Board and the permit has been stayed.

2.1.5Gaming Facilities’ Potential Off-Reservation Impacts:  County’s Dispute Regarding Mitigation of Gaming Facilities’ Environmental Impacts - The County and Tribe dispute whether significant off-Reservation impacts of its existing and planned Rancheria gaming Projects have been adequately mitigated.

2.1.6Tribe’s Petaluma Trust Application:  County Opposition to Petaluma Gaming Trust Application - The County opposes the Tribe’s application to take 277 acres of land into trust for gaming purposes near Petaluma.  The Tribe contends that its pending application satisfies all applicable standards for transfer of the land into trust for gaming purposes.

III.DEFINITIONS

The following terms shall be defined in this Agreement as set forth in this subdivision.

3.1“Alternative Road Site” means a site for an Emergency Access Road other than only through the Dugan Property provided such a road is completed in the same timeframe, serve the same function, and be as effective for such purposes as the Emergency Access Road through the Dugan Property except as may be agreed to by the Parties.

3.2“Base Year” means the prior year as calculated in Section 16.5.

3.3“Binding Arbitration Provisions” means the arbitration process set forth in Section 20.2.

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3.4“Bond” means the performance and payment bond described in Section 7.8 below, provided that in lieu of providing such bond the Parties may agree on the establishment and funding of a Construction Completion Account as defined herein and described in Section 7.8.  The Bond and Construction Completion Account are referred to interchangeably as the “Construction Assurance Device.”

3.5“Conservation Easement” means an easement over a portion of the Petaluma Property as further described in Section 12.3.

3.6“Construction Assurance Device” means a performance and/or payment bond or Construction Completion Account, either of which contains sufficient resources to build or complete the Emergency Access Road and Intersection Improvements and can be accessed by the County for such purposes.

3.7“Compact” means the Tribal-State Compact entered into pursuant to IGRA between the Tribe and the State of California, effective May, 2000, any amendments or revisions thereto, or any new compact related to Gaming on the Rancheria entered into during the Term.

3.8“Construction Completion Account” means an account at a bank to be mutually agreed upon by the Parties, which agreement shall not be unreasonably withheld, to serve in lieu of a Bond in accordance with Section 7.8.5 below.  The Construction Completion Account would be an account into which the Tribe would deposit, or cause to be deposited, sufficient cash to cover the costs of completing the Tribe’s required construction of the Emergency Access Road and of the Intersection Improvement, as well as an additional 7% thereof to cover contingencies such as potential cost overruns.  Withdrawals and expenditures from the Construction Completion Account will be in accordance with Section 7.8 and 7.9 below.

3.9“Cumulatively Significant Impacts” means the possible impacts on the off-Reservation environment of a Tribal Commercial Development Project that may be individually limited but cumulatively significant if the incremental impacts of an individual project are considerable when viewed in connection with the impacts of past projects, other current projects, and reasonably foreseeable future projects.

3.10“Cultural Center” means the Tribe’s proposed cultural center located on the Rancheria.

3.11“Dugan Projects” means the Projects shown on Exhibit B and as may be otherwise described in the Final Environmental Assessment dated August 2005 and prepared for the Dugan fee-to-trust application.

3.12“Dugan Property” means the real property parcel contiguous to the Rancheria that is commonly referred to as such and is the subject of a pending fee-to-trust application to the Department of the Interior.

3.13“Effective Date” means the latter date upon which this Agreement is formally approved by the County Board of Supervisors and the Tribe’s Board of Directors, which is anticipated to be on March 18, 2008.

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3.14“Emergency Access Road” means the road described in Section 7.3 that provides emergency access connecting the Rancheria to Highway 128, either through the Dugan Property or by way of the Alternative Road Site.

3.15“Emergency Access Road Plans” means the plans reviewed and accepted by the County as described in Section 7.3 below, or the Alternative Road plans reviewed and accepted by the County as described in Section 7.7.

3.16“Environmental Assessment” means the August 2005 Final Dry Creek Rancheria Fee-to-Trust Project Environmental Assessment document drafted for the Dugan Property fee-to-trust application prepared for the Tribe by Environmental Science Associates (ESA).

3.17“Environmental Ordinance” means the Dry Creek Ordinance that was adopted on October 14, 2000 by Resolution No. 00-10-14-005, which amended an earlier version adopted on April 29, 2000.  Both ordinances were enacted pursuant to Section 10.8 of the Compact.

3.18“Environmental Study” means the Final Dry Creek Rancheria Economic Development Master Plan Environmental Study for the Resort Development dated January 2008, which was prepared for the Tribe by ESA with respect to the Resort Project.

3.19“Existing Casino” means the casino known as the “River Rock Casino” as described in Section 4.1 below, including the parking lots, parking structures, buildings, roads, utilities and other Infrastructure.

3.20“Financing” means the receipt by the Tribe or by another entity or financial institution on its behalf, of the first draw of funds derived from the major financing commitments that are part of the effort to undertake development of the Resort Project.

3.21“Gaming” or “Gaming Activities” means Class II and Class III gambling activities as defined under IGRA and as, with respect to Class III gaming, is allowed under the Compact.

3.22“Gaming Authority” means the Dry Creek Tribal Gaming Commission, the Tribal governmental agency created under Tribal law pursuant to IGRA to regulate gaming on Tribal Trust Land.

3.23“Gaming Facility” means a building in which Gaming is taking place and as is otherwise defined in the Compact.

3.24“Gaming Operations” means the conduct of Gaming and the operation of the Gaming Facility, including the administration and other necessary services.

3.25“IGRA” means the Indian Gaming Regulatory Act of 1988 and any amendments or regulations issued pursuant to the Act.

3.26“Infrastructure” means the utilities, utility facilities, and wastewater treatment plant, all currently existing on the Rancheria and Dugan Property; the wastewater storage

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facilities, above-ground detention facilities, natural gas lines, electrical sub-station, and roads (including the Acorn Road) constructed or to be constructed on the Rancheria or the Dugan Property and made available to the Existing Casino, the Resort Project or the Dugan Projects, as discussed in the Environmental Assessment or Environmental Study; Exhibit B (relating to the Dugan Projects); the Emergency Access Road; the Intersection Improvements; and the existing wells.

3.27“In Lieu Fee” means the fee determined in accordance with Section 16.9.

3.28“Interested Persons” means (i) the County; (ii) any city that has boundaries which are contiguous to the boundaries of the trust land on which a proposed Tribal Commercial Development Project is to be constructed; (iii) any state and/or federal agency which, if a project were not taking place on Indian lands, would have responsibility for approving a Tribal Commercial Development Project or would lawfully exercise authority over the natural resources that may be impacted by a Tribal Commercial Development Project; and (iv) any person, group, political subdivision, or agency that submits a timely request to the Tribe in writing to receive a Notice of Preparation or Completion of a draft TEIR, or has timely commented on a Tribal Commercial Development Project in a writing received by the Tribe in accordance with the applicable process for considering such comments.  Nothing in this Section shall be deemed to confer any rights on an Interested Person.

3.29“Intergovernmental Mitigation Agreement” means an agreement between the Parties with respect to off-reservation mitigation measures in connection with a Tribal Commercial Development Project that is subject to the environmental review provisions of this Agreement.  To the extent any provision herein requires or refers to an Intergovernmental Mitigation Agreement, this Agreement shall satisfy all such requirements with respect to the Ongoing Projects. This Agreement, including but not limited to its environmental and dispute resolution processes, is intended by the Parties to serve as any intergovernmental mitigation agreement with respect to future construction related to Tribal Gaming Operations or Activities that may be required in any Compact entered into during the Term of this Agreement.

3.30“Intersection Improvements” means the improvements at the intersections of SR 128 and BIA 93, and at SR 128 and the Emergency Access Road, as provided in Section 16.4 and Exhibit A.

3.31“Master Plan” means the Tribe’s economic development master plan described in the Environmental Study.

3.32“Non-Commercial Tribal Project” means any Project undertaken by the Tribe on trust lands involving any construction, improvement, or expansion related to an intended or existing non-commercial activity or purpose, including, but not limited to, those projects and activities described in Section 3.43.5 and excluding Commercial Tribal Development Projects.

3.33“Ongoing Projects” means the Existing Casino, the Dugan Projects, and the Resort Project, including the Infrastructure.

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3.34“Petaluma Property” means the approximately 277 acres owned by the Tribe within an unincorporated portion of the County along U.S. Highway 101 near the City of Petaluma and shown in Exhibit C.

3.35“Project” means any project undertaken by the Tribe on Trust Lands that involves any substantial construction, improvement, or expansion that is likely to cause a Significant Adverse Impact.

3.36“Rancheria” means the approximately 75 acres of Trust Land presently accessed by State Highway 128, including BIA 93.

3.37“Reservation” means the Rancheria and any other land held in trust for the Tribe by the federal government that is located within Sonoma County.

3.38“Resort Project” means Phase I and Phase II of the Gaming and hospitality Project and the Infrastructure discussed in the Environmental Study.

3.39“Sheriff’s Department” means the Sonoma County Sheriff’s Department.

3.40“Significant Adverse Impact(s)” means a substantial or potentially substantial adverse change in the off-Reservation environment as a result of a Project as determined, to the extent possible, on scientific and factual data.  Possible differences of expert opinions shall not alone require that the Tribe make a finding of Significant Adverse Impact.

3.41“TEIR” means a Tribal Environmental Impact Report, as described in Section V below.

3.42“Term” means the term of this Agreement which shall commence on the Effective Date and terminate when the Compact, including any amendment, revision, or modifications thereto expires but in any event no earlier than Midnight, December 31, 2020.  The Agreement Term therefore includes, and is automatically extended by, the term of any extension(s), modifications(s) and/or amendment(s) of the Compact.  Specific provisions may also be extended by operation of Section 26.8.  The Term is similarly extended by any new compact unless there has been at least a two year lapse since termination of the Compact and, during any such two year period, no Gaming Activities occurred on the Reservation.

3.43“Tribal Commercial Development Project” means a Project which may result in a Significant Adverse Impact and consists of the following:

3.43.1Any Project on Trust Land (including the Petaluma Property if it becomes Trust Land) that is primarily undertaken for or in connection with a commercial purpose or enterprise, but excluding the Ongoing Projects or any part thereof; or

3.43.2Any expansion or significant renovation or modification of the Existing Casino or any significant excavation, construction or development of a new Gaming Facility or proposed Gaming Facility on Trust Lands after the Effective Date for which there is a Significant Adverse Impact, other than in connection with the Ongoing Projects or those Projects described in Section 3.43.5 below, which are excluded; or

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3.43.3Each expansion in the operation of slot machines above 2,000 on the Rancheria, including in connection with the Ongoing Projects, but only as to the Significant Adverse Impacts, if any, of the increase in machines over 2,000; or

3.43.4Any Non-Commercial Tribal Projects that include the construction of more than six single family houses, six or more residential units in one building, or any building that is more than three stories in height.

3.43.5Notwithstanding any other provision of this Agreement, the term “Tribal Commercial Development Project” does not include:

a.The Resort Project, including but not limited to all Infrastructure improvements, or any renovations or demolition of all or part of the Existing Casino prior to or in connection with the development, construction or operation of the Resort Project;

b.The Dugan Projects, including but not limited to all Infrastructure improvements;

c.The Cultural Center;

d.Any expansion of Gaming Activities or the entering into, finalization, or effectuation of a Compact, new Compact, or Compact amendment during the Agreement Term which permits the Tribe to operate, or the actual operation of less than, 2,001slot machines;

e.Any Project which would be exempt under Articles 18 and 19 of the California Environmental Quality Act (“CEQA”) Guidelines; or

f.Non-commercially based development and construction activities or Projects on Trust Lands, including but not limited to activities or Projects relating to housing, education, culture, religion, government, recreation, fire and public safety services, roads, utilities, and the maintenance of Tribal lands.  In this context, non-commercially based means development or Projects and the related construction activities that are intended primarily for the Tribe and the Tribal government and all Tribal infrastructure owned and run by the Tribal government that is not substantially related to a Tribal Commercial Development Project.  Notwithstanding the above, roads that predominantly serve Reservation purposes other than a Tribal Commercial Development Project, and development and construction activities or Projects related to water resources, drinking water and wastewater facilities, including all equipment and facilities related to water wells, water treatment plants, wastewater treatment plants, treated wastewater irrigation and discharge, shall not be deemed to be Tribal Commercial Development Projects,

3.44“Trust Land” means lands located within the geographic borders of Sonoma County and held by the federal government for the benefit of the Tribe.

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IV.DECLARATIONS REGARDING THE ONGOING PROJECTS AND THE PETALUMA PROPERTY

4.1The Existing Casino.  The Tribe has operated the Existing Casino since September 2002.  It currently houses approximately 1,600 slot machines within approximately 60,000 square feet of Sprung™ brand domed facilities.  It is served by a multi-section parking garage on the Rancheria which contains approximately 1,179 spaces.  Certain modifications, not including expansion of the facility, may be made to the Existing Casino as part of the first phase of constructing and developing the Resort Project.

4.2The Resort Project.  The Resort Project involves the construction of new resort and casino facilities, including the eventual addition, through phases, of a total of an approximately 600 room hotel and related restaurant, retail and hospitality facilities.  Approximately 260 rooms are scheduled for completion during the first phase of development. The Tribe released its Environmental Study, prepared pursuant to its Environmental Ordinance, which outlined a two-phase build-out of the Resort Project.  The Environmental Study contains information that would be required in a draft TEIR for future Tribal Commercial Development Projects.  As part of the Resort Project’s construction and development, the Existing Casino may undergo certain modifications or renovations.  Such modifications and renovations are included within the meaning of the term “Resort Project” in this Agreement.

4.3The Dugan Project.  In August, 2006, the BIA approved the Tribe’s application to place the approximately 18 acre Dugan Property, which is presently owned by the Tribe in fee, into trust for the benefit of the Tribe.  The development plan contained in the fee-to-trust application included the creation of single family homes for Tribal housing, vineyards, a winery with offices (that can be used as a Tribal community room), a fire station, and a paved access road.  The environmental review process required under the National Environmental Policy Act (NEPA) with respect to placing the Dugan Property into trust, including drafting of the Environmental Assessment and meetings with the County and the public, has been completed.  The Dugan Project includes those projects shown on Exhibit B.

4.4The Petaluma Property.  In April 2006, the Tribe filed a fee-to-trust application that sought to have the Petaluma Property placed into federal trust for the Tribe’s benefit.  The trust application was filed under federal provisions for acquiring land into trust for Tribal governmental gaming purposes.  Pursuant to Section 13, the Tribe has agreed to suspend the Gaming purposes of the application, which application may remain pending to serve other uses, including non-Gaming commercial uses and the development of a mitigation bank.  If certain conditions specified in this Agreement are satisfied, the Tribe has agreed to permanently forego Gaming on the Petaluma Property.

V.ENVIRONMENTAL REVIEW

5.1The Tribe and County agree on the importance of conducting an appropriate environmental analysis of Tribal development projects to determine potential off-Reservation adverse environmental impacts and, if necessary, appropriate mitigation.  Toward this end, and pursuant to Section 10.8 of the Compact, the Tribe enacted the Environmental Ordinance to provide a process for determining off-reservation environmental impacts of Tribal development

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projects that relate to Gaming Facilities and whether or not they are likely to cause a Significant Adverse Impact outside the Reservation, and to provide procedures with respect to such determinations and the possible need for mitigation.

5.2The environmental review process under the Environmental Ordinance has been completed for the Existing Casino and for the Resort Project.  In addition, the NEPA process applicable to the Tribe’s application to take the Dugan Property into trust has been completed.  The environmental processes and reports with respect to the Existing Casino, Resort Project, and Dugan Project (collectively, the “Ongoing Projects”) have been reviewed and commented upon by the County and others.  Those comments have been considered by the Tribe in accordance with the Environmental Ordinance and the comment periods in connection with those Projects are now closed.  The Parties agree that any and all further actions, if any, to be taken by the Tribe with respect to any environmental processes applicable to the Ongoing Projects are set forth in this Agreement.

5.3Future Tribal Commercial Development Projects undertaken by the Tribe on Trust Lands shall be subject, to the off-reservation environmental impact processes set forth in this Section 5.3, including all subdivisions thereof and the Binding Arbitration process set forth in Section 20.2.

5.3.1Future Non-Commercial Tribal Projects are not subject to this Agreement.  If the Tribe, in its sole discretion, elects to adopt or follow some or all of the environmental processes set forth in this Agreement for a Non-Commercial Tribal Project(s), the County shall cooperate in good faith in timely reviewing and commenting on submissions of reports and studies to it by the Tribe, and meeting and conferring with the Tribe on mitigation measures at the Tribe’s request.  The Tribe’s participation in environmental processes with the County under such circumstances shall not be deemed to be a waiver of the Tribe’s sovereign jurisdiction or immunity unless expressly provided in writing, nor shall participation in any process in this Agreement be deemed to constitute such a waiver except as expressly set forth and limited in Section 23 below.

5.3.2As to Tribal Commercial Development Projects, the Tribe shall consider and determine whether such projects may potentially cause Significant Adverse Impacts, including in those areas identified in Section 5.3.10 c and, if so, shall issue either a Tribal Negative Declaration or a Tribal Environmental Impact Report (“TEIR”).

5.3.3The Negative Declaration, TEIR and Intergovernmental Mitigation Agreement processes set forth below shall not be applicable to any of the Ongoing Projects.  The negotiations leading to this Agreement and the provisions hereof shall be deemed to satisfy any requirement for environmental review, studies, reporting, notice, consultation, mitigation (if required) and other environmental actions that may be required by law or agreement with respect to the Ongoing Projects.

5.3.4The Tribe agrees to incorporate the environmental review provisions applicable to this Agreement into its Environmental Ordinance with respect to Tribal Commercial Development Projects that relate to Gaming.  The environmental review provisions of this Agreement applicable to non-gaming Tribal Commercial Development Projects shall be

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included in one or more separate Tribal Ordinances which shall be provided to the County immediately following enactment.  Notwithstanding such incorporation into Tribal ordinances, the environmental review and dispute resolution procedures provided for in this Agreement shall be applicable independently of any such Ordinance.

5.3.5Except as may be expressly provided herein, nothing in this Agreement shall be construed to:

a.Supplant or limit the application of any otherwise applicable federal law or regulation, including but not limited to NEPA; or

b.Confer jurisdiction on the County or the State, or diminish the Tribe’s sovereign powers and jurisdiction, over any Trust Lands; or

c.Supplant or limit the jurisdiction of any federal or State agency.

5.3.6For any Tribal Commercial Development Project, the Tribe shall either issue a Notice of Completion of a Draft TEIR or a Tribal Negative Declaration.  The Tribe shall consult with the County at the earliest practicable date, consistent with Section 5.3.7 below, and in any event at least 30 days prior to the issuance of a Tribal Negative Declaration or a Notice of Completion of a Draft TEIR.

5.3.7A purpose of the consultation process is to permit the County to have input into design considerations and mitigation measures with respect to Projects and to raise issues that may be appropriate for an Intergovernmental Mitigation Agreement.  Such consultations shall be confidential to the extent permitted by law and shall be subject to the provisions of Section 19 of this Agreement.  Nothing in this Section shall either limit the Tribe’s jurisdiction or grant to the County jurisdiction or authority regarding the design of a Tribal Commercial Development Project or Non-Commercial Tribal Development Project.

5.3.8Tribal Negative Declaration Process.

a.If, following completion of an initial study, the Tribe determines that a Tribal Commercial Development Project is not likely to have a Significant Adverse Impact in those areas identified in Section 5.3.10(c), the Tribe may prepare a Tribal Negative Declaration in lieu of conducting the studies and preparing the materials required for a TEIR under this Agreement.  The initial study may consist of an environmental checklist.  The Tribal Negative Declaration shall be circulated for comment to the public, Interested Parties, the County and the State Clearinghouse for thirty (30) days.

b.The Tribe shall consider any comments received during the 30-day review process and may adopt the proposed Negative Declaration or a mitigated Negative Declaration if it finds that, based on the record as a whole, there is no substantial evidence that the Project will have a Significant Adverse Impact.  The County may request an additional fifteen (15) day extension for further technical review or to prepare and obtain authorization to issue comments, and such request shall not be unreasonably denied by the Tribe.  Nothing in this Section 5.3.8(b) shall preclude the Parties from agreeing to a longer period of time in which to

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submit comments if such an extension is warranted.  The Tribe shall provide the record and the appropriate environmental document to the County within ten (10) days of its adoption.

c.The Parties agree that activities or Projects, such as interior remodeling, redecorating, refurbishment, maintenance or other changes to a facility that do not alter the overall footprint of the facility, and that adds less than 10% to the total square footage of an interior gaming area, and does not materially change the look of the facility as seen from off-reservation locations, and any activities or Projects that would be exempt under Articles 18 and 19 of the CEQA Guidelines, would not have a Significant Adverse Impact.

d.During the comment period for the Negative Declaration, or within such additional time period as the Parties may agree, the County may, for reasonable cause, initiate the Intergovernmental Mitigation Agreement provisions set forth in Section 5.3.18, and if no agreement can be reached, initiate the dispute resolution processes herein, including the Binding Arbitration provisions.  “Reasonable cause” means that the County has substantial evidence that the Tribal Commercial Development Project would result in a Significant Adverse Impact that will not be mitigated to an impact level, if any, that is less than significant.

5.3.9Tribal Environmental Impact Report (TEIR).  For Tribal Commercial Development Projects that the Tribe has determined will have a Significant Adverse Impact, the Tribe shall cause a TEIR to be prepared which analyzes potentially Significant Adverse Impacts, as provided below.  The Tribe shall consult with the County regarding the scope of the environmental review and consider any recommendation from the County concerning the person or entity to prepare the TEIR.

5.3.10The Tribe shall undertake good faith efforts to identify and disclose in the TEIR any Significant Adverse Impacts that will be caused by the Project.  The TEIR also shall identify ways in which Significant Adverse Impacts can be avoided or mitigated to less than significant and, where such a result cannot be reasonably obtained, analyze how impacts can be reasonably minimized, if possible, and shall include a statement setting forth all of the following:

a.All Significant Adverse Impacts of the proposed Project;

b.Any Significant Adverse Impacts that cannot be avoided or mitigated to less than significant if the Project is implemented;

c.Mitigation measures proposed to minimize or avoid Significant Adverse Impacts, including but not limited to those having an effect on aesthetics, agricultural resources, air quality, biological resources, cultural resources, geology and soils, hazards and hazardous materials, hydrology and water quality, land use, mineral resources, noise, population and housing, public services, recreation, transportation/traffic, utilities, and service systems;

d.Alternatives to the Project, provided that the Tribe need not address alternatives that would cause it to forego its right to engage in Gaming Activities, or preclude it from implementing activities or Projects that have been proposed in a trust application approved by the BIA;

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e.Any Cumulatively Significant Impacts; and

f.Whether the proposed mitigation would be effective to reduce the potential Significant Adverse Impacts to a level of less than significant.

5.3.11In addition to the information required pursuant to Section 5.3.10, the TEIR shall also contain a statement briefly indicating the reasons for determining, if such is the case, that the impacts of the Project on the off-reservation environment are not significant and consequently have not been discussed in detail in the TEIR.  Such a statement can be contained in an environmental checklist and attached as an exhibit to the TEIR.  Any Significant Adverse Impacts shall be clearly identified and described in the TEIR, giving due consideration to both the short-term and long-term impacts.  The discussion of mitigation measures shall describe feasible measures which could minimize or avoid the Significant Adverse Impacts.  If a mitigation measure is infeasible, the TEIR must demonstrate the specific economic, technological, legal, or other considerations which make the identified mitigation measure infeasible.  The TEIR must analyze the proposed project as a whole, including activities that the Tribe determines are reasonably foreseeable.

5.3.12The TEIR shall also contain an index or table of contents and a summary, which shall identify each Significant Adverse Impact on the off-Reservation environment together with proposed measures that would reduce or avoid that impact.

5.3.13Notice of Preparation and Determination of Scope of TEIR.  If it is determined by the Tribe that a TEIR is required for a Tribal Commercial Development Project, the Tribe shall issue a Notice of Preparation to the State Clearinghouse in the State Office of Planning and Research (“State Clearinghouse”) and to the County.  The Tribe shall also provide Notice to all Interested Persons.

a.The Notice shall include all of the following information:

(i)A description of the Project;

(ii)The location of the Project shown on a detailed, preferably topographical, map, and on a regional map; and

(iii)The probable off-Reservation Significant Adverse Impacts of the Project.

b.The Notice shall also inform all Interested Persons of the opportunity to provide comments to the Tribe, within thirty (30) days of the receipt of the Notice of Preparation by the State Clearinghouse and the County, of significant environmental issues, reasonable alternatives, and/or mitigation measures that such persons may contend should be explored in a draft TEIR.

5.3.14In addition, the Tribe shall meet with the County to assist the Tribe in determining the scope and content of the TEIR within fifteen (15) days of such a request by the County and such request shall be made within fifteen (15) days of receipt of the Notice. 

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Such scoping meeting between the Parties shall take place within the thirty (30) day comment period unless another date is mutually agreed upon in writing between the Parties.

5.3.15In addition, the Tribe shall conduct a scoping hearing for Projects of statewide, regional, or area wide significance and provide public notice of the hearing including written notification to Interested Persons.

5.3.16Notice of Completion of the Draft TEIR.  Upon completion of the Draft TEIR, the Tribe shall submit a copy of the draft TEIR and a Notice of Completion to the State Clearinghouse and the County.

a.The Notice of Completion shall include all of the following information:

(i)A brief description of the Project;

(ii)The proposed location of the Project;

(iii)An address where copies of the draft TEIR are available; and

(iv)Notice of a comment period of at least forty-five (45) days during which the Tribe may receive comments on the draft TEIR.

b.The Notice shall also inform Interested Persons of the preparation of the draft TEIR and of the opportunity to provide comments to the Tribe within forty-five (45) days of the Notice.  The County may request an additional fifteen (15) day extension, if such additional time is required for further technical review or to prepare and obtain approval of comments, and such an extension request shall not be unreasonably denied by the Tribe.  Nothing in this Section shall preclude the Parties from agreeing to a longer extension of time to submit comments if such an extension is warranted.

c.The Tribe shall submit seven (7) copies of the draft TEIR and Notice of Completion to the County, and the Tribe will serve, in a timely manner, a Notice of Completion to all Interested Persons and to the Healdsburg Public Library.  The Tribe shall concurrently make an electronic version of the draft TEIR available to the public on its website.  In addition, the Tribe will provide public notice by at least one of the procedures specified below:

(i)Publication, at least one time, by the Tribe in a newspaper of general circulation in the area affected by the Project.  If more than one area is affected, the notice shall be published in the newspaper of largest circulation from among the newspapers of general circulation in those areas; or

(ii)Direct mailing by the Tribe to the owners and occupants of property adjacent to, but outside, the Tribal Lands (or proposed Tribal lands) on which the Project is to be located.  Owners of such property shall be identified as shown on the latest County assessment roll.

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5.3.17Issuance of Final TEIR.  The Tribe shall prepare and make available to the County, State Clearinghouse and the public for thirty (30) days a Final TEIR, which shall consist of:

a.The draft TEIR or a revision of the draft;

b.Comments and recommendations received on the draft TEIR either verbatim or in summary;

c.A list of persons, organizations, and public agencies commenting on the draft TEIR;

d.The Tribe’s response to comments and recommendations from the review and consultation process; and

e.Any other information added by the Tribe.

5.3.18Meet and Confer to Negotiate Intergovernmental Mitigation Agreement.  Not later than fifteen (15) days following the publication of the Notice of Completion of the Draft TEIR, the Parties shall commence diligent and good faith negotiations and shall otherwise use their respective best efforts, including meeting and conferring, to finalize, approve, execute and deliver an Intergovernmental Mitigation Agreement for the Project.  The primary objective of an Intergovernmental Mitigation Agreement is to provide for binding and mutually enforceable agreements which insure the timely mitigation of Significant Adverse Impacts, where such impacts:

a.Are primarily attributable to the Project being proposed;

b.Occur outside of the geographic boundaries of the Tribe’s existing or proposed Trust Lands and within the geographic boundaries of the County; and

c.Are within the jurisdiction or responsibility of the County.

5.3.19Binding Arbitration.  If the Parties, after meeting and conferring consistent with Section 5.3.18 above, have not approved, executed and delivered an Intergovernmental Mitigation Agreement for a Tribal Commercial Development Project consistent with this Section within thirty (30) days after the date of the publication of the Final TEIR, or such other date as the Parties may mutually agree in writing, either party may initiate the binding arbitration dispute resolution processes contained in Section 20.2.

5.3.20As to Non-Commercial Tribal Projects, the requirement to enter into a final Intergovernmental Mitigation Agreement or to submit to binding arbitration or a court imposed remedy if an impasse is reached, or otherwise shall not be imposed on the Tribe.  If agreement is not reached on an Intergovernmental Mitigation Agreement regarding a Non-Commercial Tribal Project, the Tribe retains the right and jurisdiction to proceed with the Project and the County retains the right to oppose the Project.

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5.3.21Notwithstanding any provision to the contrary, the Parties acknowledge that the Tribe is subject to federal laws and regulations regarding the environment and health and safety, including but not limited to the Clean Water Act, Safe Drinking Water Act, Endangered Species Act, Indian Gaming Regulatory Act, and Occupational Safety and Health Act, and permit conditions including but not limited to conditions in any NPDES permits.  The Parties agree that the matters regulated by these laws, regulations, and permits shall be matters that are solely between the Tribe and the federal agency having jurisdiction over such statutes, regulations, and permits, and a violation of such statutes, regulations, and permits shall not be considered a violation of this Agreement or a required part of an Intergovernmental Mitigation Agreement.  Consistent with the above, disputes between the Parties over matters covered by such federal processes shall be resolved, to the extent a process for doing so is provided by law, solely before the federal agency conducting the proceedings and in accordance with its rules and regulations.  Any dispute or disagreement the County has with the process or its outcome shall not be subject to the dispute resolution or Binding Arbitration Provisions of this Agreement.  Nothing herein shall be construed as limiting the Parties’ respective rights to reach agreement on a voluntary basis with each other over such matters outside such federal process, subject to applicable law and the sole discretion of each party as to whether or not to negotiate or agree on such matters outside the context of the federal process itself.

VI.ONGOING PROJECT MITIGATION MEASURES

6.1The County and Tribe reviewed the Environmental Study prepared by the Tribe for the Resort Project and the Environmental Assessment prepared by the Tribe regarding the Dugan Projects.  The Parties participated in a meet and confer process and utilized those documents to identify measures to mitigate the Significant Adverse Impacts of the Existing Casino, Resort Project, and Dugan Projects which measures are set forth in this Agreement.

6.2The Tribe agrees to implement the mitigation measures set forth in this Agreement, including Exhibit A and, pursuant to Section 15, inform the County of the status of the implementation of such measures.  Mitigation reports shall include the information required by this Agreement and be in a form substantially similar to Exhibit A.

6.3NPDES Permits.

6.3.1Based upon the wastewater mitigation measures contained in Exhibit A, and other provisions of this Agreement, the County shall dismiss with prejudice its petition for review of the Tribe’s NPDES permit issued on April 30, 2007.

6.3.2The County further agrees that it shall not file suit or otherwise seek to challenge a future NPDES permit application by the Tribe for the Resort Project if all of the following conditions are satisfied:

a.The Tribe has submitted a discharge plan prepared by a registered engineer during the permitting process that the EPA has accepted by approving the NPDES permit and that such a plan is feasible.  As used herein, “feasible” shall mean that during the time period for considering such comments by the EPA, the Tribe has provided a discharge plan that includes:

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(i)An operational history of the existing facility that documents the rated disposal capacity of the on-site storage and disposal system;

(ii)For internal reuse of treated wastewater (in cooling towers, toilets/urinals, etc.), a reasonable estimate of potential internal reuse and documentation supporting that estimate;

(iii)For discharges to Stream P1, an estimate based upon accepted professional standards of the amount of water the stream can accommodate without resulting in a significant increase in erosion, and documentation supporting that estimate;

(iv)For discharges to vegetation:

(1)the location, size in acres, and slope of each potential discharge area;

(2)the plant species in each potential discharge area;

(3)an estimate of the irrigation needs of each potential discharge area;

(4)documentation supporting that estimate, including calculations based on the California Department of Water Resources’ Guide to Estimating Irrigation Water Needs of Landscape Plantings in California or similarly accepted scientific literature; and

(5)the location and design of runoff control structures.

(v)For storage of treated wastewater, a water balance calculation, based upon accepted professional standards, that identifies the volume of storage and discharges to irrigation and surface water on a monthly basis and documentation supporting that calculation;

b.The permit is not opposed by any federal agency;

c.The permit is not opposed by the State Regional Water Quality Control Board and it has not determined that such a permit violates the Water Quality Control Plan for the North Coast Region (the “Basin Plan”);

d.The plant treatment capacity does not exceed 500,000 gallons per day;

e.The Environmental Protection Agency determines that the proposed permit is in compliance with the Clean Water Act; and

f.The proposed wastewater treatment plant will meet Title 22 of the California Code of Regulations for disinfected tertiary recycled water.

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VII.ALCOHOL LICENSE AND EMERGENCY ACCESS ROAD

7.1The Parties agree to stipulate that the license conditions contained in Exhibit D shall be incorporated into the alcohol license for the Existing Casino, to the extent approved by the California Department of Alcoholic Beverage Control (“ABC”).  The Parties further agree that each of the conditions contained in Exhibit D are separately enforceable by the Parties as to the Existing Casino under the dispute resolution terms of this Agreement, including Section 20, whether or not any such specific condition is included as part of an ABC license as to the Existing Casino.  The Parties further acknowledge that the financial and other commitments made by the Tribe are based upon the likelihood that, if the Protests are withdrawn, an ABC license will issue to the Tribe.

7.2Based upon this Agreement, including the conditions set forth in Exhibit D, within five (5) days of the Effective Date and/or County’s written acceptance of the Emergency Access Road Plans, whichever last occurs, the County shall withdraw its protests to the Tribe’s pending alcohol license application, and make good faith efforts to persuade others to withdraw their protests.  If the ABC does not grant the Tribe an alcohol license, including interim or temporary license, on or before July 30, 2008, if the delay is due to factors beyond the Tribe’s control, the meet and confer and arbitration provision of Section 26.5 of this Agreement shall apply without the requirement that there be a determination of invalidity or material change.  Notwithstanding the above, the payments due under Section 16.4.3 shall not be affected.

7.3The Emergency Access Road Plans shall provide that the Emergency Access Road shall be a paved secondary emergency vehicle access road connecting SR 128 to the Rancheria containing a 15% or less grade throughout its length.  The required plans shall include an approved floating construction schedule, with significant construction milestones, demonstrating the amount of time needed to complete the road, from the initiation of construction, along with a cost estimate based upon industry standards.  Acknowledgement that the conditions of this Section have been satisfied shall be reflected in a writing by the County, which shall not be unreasonably denied or delayed.  The Emergency Access Road Plans may be amended pursuant to a written agreement of the Parties.

7.4The Tribe agrees to commence construction of the Emergency Access Road pursuant to the Emergency Access Road Plans accepted by the County within sixty (60) days of the Dugan Property going into trust, or upon a time mutually agreed to by the Parties in writing, and to complete construction within 365 days (“Road Completion Date”).  If the date to start such construction falls within the rainy season as determined by NOAA Fisheries, the date to start construction shall be extended to 30 days following the end of the rainy season as determined by that agency, and the Road Completion Date shall be extended by a like amount.  The time frame to complete construction also shall be extended for a reasonable period, upon notice to the County, due to any other delays not within the control of the Tribe, but the County may invoke the dispute resolution process if it disagrees with the need for such extension.

7.5The Tribe shall be responsible for complying with the accepted Emergency Access Road Plans.  If the Tribe requests technical assistance or otherwise consults with County regarding the construction of the Emergency Access Road, it shall pay standard fees typically imposed by the County for inspection-related services.

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7.6The County shall perform a final inspection of the Emergency Access Road improvements to verify that the construction is materially consistent with the agreed upon Emergency Access Road Plans, and the Tribe hereby grants the County permission to enter the Rancheria and any Tribal Trust Lands or other lands upon which the Emergency Access Road is to be constructed, to perform any necessary inspections authorized under this Section.

7.7This Agreement and the preceding subsections assume that the Emergency Access Road will be constructed on the Dugan Property, but that the County shall not unreasonably withhold its approval of a request by the Tribe to construct the Emergency Access Road at the Alternative Road Site, provided that a set of completed plans are submitted to and accepted by the County, which acceptance shall not be unreasonably withheld, and that the Emergency Access Road can be constructed on the Alternative Road Site by the Road Completion Date, or such other date to which the Parties may agree.  If the land is not in trust, the Tribe shall apply for appropriate permits which the County agrees to process on a reasonable basis. The County shall cooperate with the Tribe in the processing of such permits.

7.8The Tribe agrees to construct the Emergency Access Road at its sole expense.  No later than sixty (60) days following Financing or 15 days prior to commencing construction, whichever comes first, the Tribe shall create a “Construction Assurance Device,” either in the form of a completion bond or a cash deposit into an escrow account as provided below, to guarantee construction of the Emergency Access Road in accordance with the accepted Emergency Access Plans.  The Tribe shall be responsible for any costs associated with the Construction Assurance Device.  The purpose of the Construction Assurance Device shall be to assure the availability of funds to the County to build or complete the road or to remediate any material deviation from the agreed upon Emergency Access Road Plans.  If the County determines that the Tribe has defaulted or is about to default on its Emergency Access Road construction obligations under this Agreement, it shall notify the Tribe in writing of that fact and provide the Tribe with a reasonable opportunity to cure the alleged default.  If the matter has not been cured, or the Tribe disputes the need to cure or otherwise take corrective action within such reasonable time, the County may notify the Tribe of the County’s intent to utilize the Construction Assurance Device.  If the Tribe objects, it shall notify the County within seven (7) business days and initiate the dispute resolution process of this Agreement, which process shall be completed prior to a demand on the Construction Assurance Device.

7.8.1The Tribe warrants that it has conducted a construction estimate of the road consistent with industry standards and that a reasonable estimated cost of the Emergency Access Road is Thirteen Million Five Hundred Thousand dollars ($13,500,000) if constructed in the location now designated on the Dugan Property, and such amount, plus 7%, shall be the principal amount of funding the Construction Assurance Device, provided that such estimated cost may be revised upwards or downwards in accordance with Section 7.8.5 below.

7.8.2The Tribe agrees to expeditiously take all necessary steps to work with the County and BIA to have the Dugan Property taken into trust at the earliest possible date so that construction work on the Road can begin as soon as possible following the Effective Date and Financing, or, if applicable, to expedite the submission and approval from the County of plans for an Emergency Access Road on the Alternative Road Site.

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7.8.3County approval of the Emergency Access Road on the Alternative Road Site shall be based on a sufficient Construction Assurance Device being provided by the Tribe with respect to the completion costs for constructing the road and appropriate assurances as to its equivalency in terms of safety and time for construction completion as compared to the Emergency Access Road proposed for the Dugan Property.

7.8.4Within thirty (30) days following acceptance of the Dugan Property into trust, an escrow account shall be set up pursuant to the Form of Escrow Instructions attached hereto as Exhibit E or a Bond substantially in the form of the Bond attached hereto as Exhibit F.  The Tribe shall be responsible for any cost associated with the setting up of either Construction Assurance Device.  Within such a time period the Tribe and the County shall agree upon a licensed and independent escrow agent and shall execute and deposit the instructions into escrow or with a licensed and independent surety.  Within ten (10) days after opening of the escrow or within ten (10) days of the agreement on the surety, the Tribe will deliver to the County a written budget setting forth in reasonable detail the anticipated costs of constructing the Emergency Access Road (“Budget”) which shall include a description of costs by construction milestones.  The County shall have ten (10) days from receipt of the Budget to reasonably approve or reject the Budget.  The Budget amount, as finally approved (or not disputed) by the County shall be the final estimated cost of the Emergency Access Road, and such amount shall constitute the principal amount to be deposited into the escrow account for release to contractors and materialmen in accordance with the Escrow Instructions or the principal amount of the completion bond.

7.8.5In addition to the Budget amount, a contingency reserve of 7% of the final Budget amount shall be determined as the required contingency amount, subject to adjustment as necessary as provided below and in Exhibit E,, unless a Bond is provided as set forth in Section 7.8.6 below.  The contingency reserve shall be deposited into the escrow account along with the Budget amount.  The total amount deposited in escrow shall be termed the Construction Completion Account”.  If either party determines a need to readjust the amount of the Bond or the Construction Completion Account in material part at some later date, it shall submit a proposal to do so to the other party, together with the reasons therefore, and the other party shall have ten (10) days in which to approve such revision, which approval shall not be unreasonably withheld.  Substantial progress in construction, or in savings from the original approved Budget, thereby lowering the remaining cost of completion, may be reasons for seeking a reduction of the Bond or Construction Completion Account.  Similarly, cost overruns or increased costs of construction materials or labor may be reasons for seeking an increase in the Bond or Construction Completion Account.  If the Budget is reduced or increased, the portion of the Account or of the Bond representing such contingency amount shall be reduced or increased pro rata to such change.

7.8.6The principal amount of the Construction Assurance Device shall either be secured by a Bond, or in lieu thereof deposited into the Construction Completion Account.  The Escrow Instructions (Exhibit E), direct the escrow agent to disburse amounts from the Construction Completion Account to the Tribe or its designated contractors, vendors or consultants, to timely meet payments due in connection with the construction of the Emergency Access Road.  The Escrow Instructions also shall provide that the Construction Completion Account shall be available to the County, if the Tribe defaults or otherwise does not meet its

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construction obligations, so that the County can obtain the funds as necessary to complete the work either by its own forces or through the use of contractors.  The Tribe shall ensure that the account balance, until construction is completed, shall be no less than that necessary to complete the Emergency Access Road plus not less than 7% above such amount to cover any cost overruns or contingencies, provided that until the County has inspected and approved the final construction as being in accordance with this Agreement, the balance in the account shall not be less than 7% of the overall budget for construction. The County shall be permitted to monitor and audit the account at any time during construction to ensure compliance with the goals of this paragraph.

7.8.7The Construction Completion Account shall remain on deposit, or in lieu thereof, the Bond shall remain in effect, until the Emergency Access Road has been completed and approved in writing by the County, which approval shall not be unreasonably withheld, immediately following which all remaining funds on deposit in the Account after paying final amounts due to contractors shall be returned to the Tribe, and if there is a Bond in place, all necessary steps shall be taken to terminate the Bond.

7.9In the event that the Emergency Access Road improvements are not substantially completed within the approved time frames and in conformance with the plans and specifications submitted to and accepted by the County, or there is otherwise a default in these construction obligations under this Agreement, and the County makes a demand on the Construction Assurance Device after conclusion of the dispute resolution process (if instituted), in addition to any other remedy available by law or equity, the Tribe expressly authorizes the County and/or its or its or the surety’s contractors to enter the Dugan Property or any other site designated for construction of the approved Emergency Access Road for the purpose of constructing said road and completing such work.  In the event of such a default by the Tribe and the County’s or surety’s subsequent conduct of such construction, the Tribe shall fully reimburse the County for all costs incurred in connection with any remedy of the default including but not limited to materials, labor costs, engineer costs, expenses, attorney fees, expert fees, and other reasonable costs and expenses not covered by the Construction Assurance Device’s proceeds.  If provided for under the terms of the Construction Assurance Device, any excess proceeds from the Construction Assurance Device may be used to reimburse the Tribe for any Emergency Access Road construction expenses it incurred.

VIII.LAW ENFORCEMENT SERVICES

8.1Sonoma County Sheriff’s Department Service.

8.1.1The Sheriff’s Department (“Sheriff”) shall continue to provide general law enforcement services to the Reservation, particularly with respect to Gaming Operations and Gaming Facilities, and recognizes the need for possible increased services in the future.  These Sheriff Department services include, but are not limited to, deputy availability for crime prevention and the prompt investigation, detention, interrogation, removal and possible prosecution of individuals suspected of committing crimes, including but not limited to offenses related to Gaming Operations on the Reservation, as well as other services to protect the safety of the public as provided for pursuant to Public Law 280.

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8.1.2The Sheriff’s Department shall not provide gaming security, or enforcement of Tribal laws, provided that nothing herein is intended to diminish, and in fact is intended to reinforce, the prosecution of anyone engaged in criminal conduct, such as theft, embezzlement and fraud, or any criminal activity generally that may occur in, near or related to a Tribal Gaming Facility or on the Reservation.

8.1.3Nothing in this Agreement, or other contract with the Sheriff, is intended or shall be construed to expand or limit the jurisdiction of the County and Sheriff beyond that which would be exercised pursuant to Public Law 280.  Nothing in this Agreement or other contract with the Sheriff is intended, or shall be construed, to expand or limit the jurisdiction of any Tribal law enforcement agency beyond that which would be exercised pursuant to applicable law.

8.2Tribe Provided Services.

8.2.1The Tribe agrees to provide an adequate level of security personnel at the Gaming Facilities, who shall be on duty during all hours of operations.  The Tribe shall seek input and will consult with the Sheriff’s Department in determining the reasonable level of security staffing for all Tribal Gaming Facilities.  Nothing in this Agreement or other contract with the Sheriff is intended or shall be construed to give the County or Sheriff the right to decide the adequate level of Tribal security personnel.  Nothing in this Section, however, is intended to conflict or supersede the provisions of Exhibit D related to minimum levels of security staffing.

8.2.2The Tribe shall provide space of reasonably adequate size to allow Tribal Security and Sheriff’s Department personnel to conduct necessary law enforcement activities as contemplated herein in connection with the investigation, detention, interrogation, report writing, file storage, secure computer access, and removal of suspected offenders and processing of evidence.  The Sheriff and Tribal authority, including, but not limited to, the Gaming Commission and Tribal Security, shall mutually cooperate on a government-to-government basis, as set forth below, in conducting law enforcement activities.

8.2.3The Tribe shall provide for any additional radio communications equipment that may be reasonably needed for public safety purposes (e.g., signal repeaters), as jointly determined by the Tribe and the Sheriff, consistent with the Tribe’s gaming security requirements and applicable law.  The Tribe shall also work with the Sheriff to provide a suitable location for emergency helicopter landings on the Reservation in connection with the Sheriff’s services.  The Sheriff will cooperate with the Tribe to help obtain any necessary permits or other qualifications for the emergency landing zone.

8.3County Services.

8.3.1Pursuant to this Agreement, the County agrees to provide an adequate level of law enforcement service to the Reservation, as determined by the Sheriff in consultation with the Tribe, including timely response to security needs.  The Tribe shall not be liable for the direct payment of any salaries, wages, or other compensation to any County personnel performing services for the County except for the reimbursement of special event services provided under separate contract or fee schedule.

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8.3.2The Parties shall develop procedures addressing the interface between the Tribe, Sheriff, and the Sonoma County District Attorney’s Office (“District Attorney”) to aid in the provision of law enforcement services under Public Law 280, including procedures regarding interaction between the Sheriff’s Department and Tribal security personnel, the proper handling and preservation of evidence (particularly with respect to the preparation and protection of surveillance tapes), service of process in criminal proceedings, preparation of incident reports, witness statements, and patrol and arrest procedures.

8.3.3The Sheriff and Tribe shall cooperate in good faith to resolve any conflict between the Sheriff’s and Tribe’s procedures; however, the Sheriff retains the final authority to determine how any procedural conflicts pertaining to matters strictly within its criminal jurisdiction under Public Law 280 shall be resolved.  Such resolution shall serve the purposes and policies of Public Law 280 and this Agreement.  Similarly, the Tribe retains the final authority to resolve any internal procedural conflicts pertaining to matters strictly within its jurisdiction.  Such resolution shall serve the purposes and policies of applicable laws and this Agreement.

8.3.4If requested by the Sheriff or Tribe, a Memorandum of Understanding (MOU) may be entered into by and between the Sheriff and Tribe to establish a protocol addressing the provision of services under this Agreement.  No such MOU shall have the effect of amending this Agreement unless an amendment to this Agreement is approved in writing by the Tribe and the County Board of Supervisors.  In the event of any inconsistency between the terms of such an MOU and the terms of this Agreement, the terms of this Agreement shall prevail.

8.4Supplemental Security Services.

8.4.1At the Tribe’s request, the Sheriff may agree to provide extra law enforcement services for special events and functions.  The County shall bill the Tribe under separate contract for the cost of such services.  All Sheriff services provided for special events shall be billed at rates established by the County for special security services and paid within thirty (30) days of receipt of any invoice.

8.4.2Should the Sheriff incur extraordinary expenses in connection with a response to a significant and unplanned incident relating to the Resort Project or other Gaming Operations on the Rancheria that involves criminal activity and requires efforts that are beyond the range of typical emergency law enforcement response, the Tribe and the Sheriff shall negotiate in good faith for reimbursement of Sheriff’s reasonable and necessary extraordinary expenses incurred in connection with such incident.  Such reimbursement shall not include payment of any claims for personal injury associated with the incident.

IX.PROSECUTION

9.1The District Attorney will prosecute violations of criminal law on Tribal Lands to the extent consistent with Public Law 280, except for prosecutions under the jurisdiction of the federal Department of Justice or a tribal court, provided that concurrent jurisdiction therewith shall not lessen the District Attorney’s authority or duties with respect to

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such prosecutions.  Nothing in this Agreement is intended or shall be construed to expand or limit the jurisdiction of the County and/or District Attorney beyond that which would otherwise be exercised pursuant to Public Law 280.

9.2The Tribe shall identify the Tribal officials with whom the District Attorney shall coordinate all such prosecutions so that they may be carried out as effectively as possible.  The District Attorney shall review all complaints referred by the Tribe, but all prosecutorial decisions and strategies as to County prosecutions shall be exclusively within the discretion of the District Attorney.  Subject to applicable federal and Tribal law, the Tribe shall cooperate with District Attorney investigators in the collection of evidence, service of process, obtaining of witness statements, and providing assistance to investigators to facilitate the prosecution of all criminal cases that are within the District Attorney’s jurisdiction that may occur in, near or related to a Tribal Gaming Facility or on the Reservation.

X.FIRE AND EMERGENCY SERVICES

10.1Cooperation Agreement.

10.1.1The Parties acknowledge that the Tribe’s development, construction, operation and maintenance of Projects on Tribal lands, including Ongoing Projects and Tribal Commercial Development Projects, require fire protection and emergency response services.

10.1.2The Tribe and the Sonoma County Department of Emergency Services (“County Fire”) shall cooperate on a government-to-government basis to promote public safety and to provide the Tribe with the opportunity to benefit, on a voluntary, non-jurisdictional basis, from the constructive suggestions County personnel may have with respect to fire issues, and to share expertise to maximize public and emergency personnel safety.  Such cooperation shall include the Tribe allowing fire safety inspections (and re-inspections), building plan review, and emergency services by County Fire for Reservation Projects.  These activities shall occur subject to and in accordance with the County/Tribe Fire Protocol (“Fire Protocol”) attached as Exhibit G.

10.2County Fire also will be informed of, and may participate in, Tribal inspections as allowed for the State under Compact Section 6.4.2.

10.3The inspections and plan review contemplated in this Agreement shall be conducted subject to the Fire Protocol.  Nothing in the Agreement shall be construed to give any non-Tribal entity, including County or County Fire, jurisdiction over the Tribe or Tribal Commercial Development Projects on Tribal Trust Land, or over building and safety code application, interpretation, inspections and determinations by the Tribe (subject to oversight by the State of California and National Indian Gaming Commission as to the Tribe’s Gaming Facility).

10.4Building and Fire Safety Standards.

10.4.1The Tribe shall comply with the most current adopted editions of building and fire codes in effect at the time of construction of a Tribal Commercial Development Project, as adopted by the Tribe as Tribal law, which for Phase I of the Resort Project include

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California Building Code 2001 (CBC), Dry Creek Rancheria High-rise Building and Breathing Air Standards, California Fire Code 2001 (CFC), California Mechanical Code 2001(CMC), California Plumbing Code 2001 (CPC), California Electrical Code 2001 (CEC), California Disabled Accessibility Guidebook (CALDAG) 2003, California Elevator Code 2001, NFPA 13 (Standard for the Installation of Sprinkler Systems) 1999 Edition, NFPA 14 (Standard for the Installation of Standpipe Systems and Hose Systems) 2000 Edition, NFPA 20 (Standard for the Installation of Stationary Pipes for Fire Protection) 1999 Edition, NFPA 22 (Standard for Water Tanks for Private Fire Protection) 1998 Edition, NFPA 72 (National Fire Alarm Code) 1999 Edition, CBC Standard No. 10-1 (Selection, Installation, Inspection, Maintenance and Testing of Portable Fire Extinguishers) 2001 Edition, CBC Standard No. 10-2 (Stairway Identification) 2001 Edition, California Code of Regulations, Title 19, Public Safety and California Code of Regulations, Title 24 (California Referenced Code) 2001 Edition, unless inconsistent with applicable law, including the 1999 Uniform Building Codes and related uniform codes as provided in the Compact.  In addition, the Tribe shall give good faith consideration to voluntary adoption of such reasonable, and economically feasible, County amendments or supplements to said codes as County may reasonably propose.  Notwithstanding the foregoing, the Tribe need not give good-faith consideration to any County standard that solely applies, in name or fact, to Tribal facilities or to development on Tribal land.  Nothing in this Section shall be construed to grant to the County, or to limit the Tribe’s, authority or jurisdiction with respect to such codes or any matter related directly or indirectly thereto.

10.4.2The Parties acknowledge that recent court decisions have confirmed that the County does not have fire code enforcement authority on the Reservation or BIA 93 under Public Law 280, or any other applicable law, and nothing in this Agreement, including the Fire Protocol, is intended to or may be interpreted as effecting any change in this area.  Nonetheless, as part of government-to-government consultations, and subject to the background checking and protection of documents and proprietary information regarding secure areas of any Gaming Facility set forth in the Fire Protocol or above, the County shall be permitted by the Tribe to inspect and review Tribal Commercial Development Projects and review plans consistent with and pursuant to the terms specified in this Agreement, including the Fire Protocol, provided that County inspection or review of residential Tribal Commercial Development Projects shall not take place following occupancy.

10.4.3Prior to the occupancy of any building of the Resort Project or any future proposed Tribal Commercial Development Project, the Tribe shall provide to the County a certificate issued by a qualified Tribal Building Official attesting that the subject improvements comply with the applicable codes.  The Tribe will consider, on a voluntary but not jurisdictional basis, reasonable and feasible suggestions, as determined by the Tribe in its sole discretion, made by County Fire personnel intended to increase fire safety at and around Tribal Commercial Development Projects.  However, pursuant to applicable law, the Compact and recent court decisions, the County does not have jurisdiction or authority over the design, development and/or construction of improvements on trust land or to make code determinations or undertake enforcement actions of any potential code violation related to such improvements.

10.4.4The activities and the terms of this Section 10 and the Fire Protocol are subject to the meet and confer process set forth in Section 20.1 of this Agreement but are not subject to binding arbitration, except for, (1) an alleged failure by the Tribe to permit the

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inspections of facilities or review of Tribal building plans in accordance with this Agreement and the Fire Protocol, (2) a disagreement between the Tribe and County regarding whether a consultant has a conflict of interest under Section I.D. of the Fire Protocol, and/or (3) an alleged failure by County Fire to adhere to the terms and conditions of this Agreement and the Fire Protocol, which are subject to the dispute resolution process. provided in Section 20.2 below.  In any such proceedings an arbitrator’s remedies include the award of monetary damages or equitable relief.  The Tribe’s compliance with the applicable building and safety codes, regulations, guidelines, or Compact provisions and any safety concerns discussed in this Section 10 and the Fire Protocol shall not be subject to binding arbitration under 20.2.

10.4.5Any disagreements arising out of or in connection with any inspection or plan review contemplated in this Agreement shall be addressed through the good faith meet and confer process outlined in the Fire Protocol.  Given the Tribe’s exclusive jurisdiction under the recent court decisions, applicable law and Compact in this area (and which is subject to State and Federal oversight and dispute resolution mechanisms), such disagreements are not subject to the arbitration provisions of this Agreement.

10.5Tribe’s Pre-Existing Agreement with Geyserville Fire Protection District.  The Tribe has provided for essential fire and emergency service needs, including first response services, and has mitigated fire-related off-Reservation impacts related to the Casino, in part through separate agreement with the Geyserville Fire Protection District.  Nothing in this Agreement, including the Fire Protocol, is intended to or may be interpreted as altering or effecting Geyserville Fire Protection District’s agreement with or services to the Tribe.

10.6Future On-Reservation Tribal Fire Station. The Tribe’s fee-to-trust application for the Dugan Property includes a plan for a fire station.  If, at the Tribe’s sole discretion, such a station is built on the Dugan Property, Reservation, or any other Tribal Trust Land, the Tribe shall determine whether County Fire services differing from those contemplated in this Agreement are desirable and, if so, shall consult with County Fire regarding the provision of fire services for such a facility.

10.7General Fire Service Provisions.

10.7.1Roads and Developed Areas.  Subject to applicable law, including IGRA and the Compact, the Tribe agrees to comply with its fire safe standards with respect to all roads and developed areas covered by such standards as a matter of Tribal law.

10.7.2Other Aid Agreements.  The Parties recognize that there are automatic aid and mutual aid agreements for fire and emergency services in Sonoma County, under which the County provides hazardous material response to the Reservation, and is responsible for central dispatch services, as well as other command/support and disaster preparedness functions.  The increased need for fire protection and emergency services required for the Resort Project may have an impact on those agreements and services and may require additional training and/or services.

10.7.3Emergency Preparedness Plan.  The Tribe has in place an emergency preparedness plan that addresses evacuation and access issues.  The Plan and any updates shall

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be made available to the County for informational purposes and the County and Tribe shall consult and coordinate services to further develop the Plan and to prepare to respond to any emergency at the Casino.

10.7.4Hazardous Materials.  The Tribe shall consult with the Sonoma County Department of Emergency Services regarding the use, storage, disposal, and transportation of any and all hazardous materials to be used by any Ongoing Project or Tribal Commercial Development Project.  Nothing in this Agreement shall expand the County’s jurisdiction regarding regulation of hazardous materials.

10.8Based upon the commitments made by the Parties in the Fire Protocol, and the other terms of this Agreement, the County shall not file a writ of certiorari or take any other additional appeals or actions with respect to the litigation of In the matter of the Sonoma County Fire Chief’s Application for an Inspection Warrant.

10.9Public Health.  The Tribe shall continue its duty to enforce environmental health standards under applicable law and its Compact, specifically including Compact Sections:

10.9.110.1 (public health, safety and welfare);

10.9.210.2(a) (public health standards for food and beverage handling);

10.9.310.2(b) (water quality and safe drinking water standards);

10.9.410.2(e) (workplace and occupational health and safety standards);

10.9.510.2(f) (public health and safety);

10.9.610.4 (emergency fire, medical, disaster services); and

10.9.710.6 (prohibition against firearms).

10.10Pursuant to and consistent with the Compact, the Tribe shall provide for inspection by federal or state inspectors of all commercial food and beverage operations and swimming pools and spas in connection with the Existing Casino and Resort Project on a regular basis.  The Tribe shall provide the County copies of all such inspection reports.  In lieu of federal or state inspections, the Tribe may, in its sole discretion, elect to contract with the County to provide such services, for standard and reasonable fees, and the County shall provide such services.  If the Tribe elects to continue to obtain federal or state inspections, but they are not conducted on a regular basis, then following notice and an opportunity to have any dispute with regard to such matter determined through the dispute resolution provisions herein, the County may seek to have such inspections conducted by County Health Department inspectors, who shall apply the standards set forth under applicable law.  The Tribe shall pay standard and reasonable County Health Department fees to the County for such inspection services.  Inspections shall take place during normal hours of operation.  The Tribe shall consider any recommendations by the County regarding such matters.  Notwithstanding such County inspections, and regardless of whether conducted at the Tribe’s request or through dispute resolution provisions, nothing in this Agreement gives or shall be construed to give the County

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jurisdiction over food and beverage operations or swimming pools and spas, or to alter the Compact’s jurisdictional allocation on these issues.

XI.SOCIOECONOMIC CONDITIONS

11.1The Sonoma County Human Services Department (“Department”) and the Tribe shall work together to help identify and refer potential qualified applicants for employment at the Tribe’s gaming related facilities.  The Tribe shall transmit copies of job postings and announcements for its gaming and other facilities to the Department, and the Department will cause the same to be posted and distributed in the same manner as job postings and announcements submitted by other outside employers.  The Tribe also shall work in good faith with the Department to employ qualified participants in the County’s welfare program at the Tribe’s gaming related facilities.  Such qualifications may, at the Tribe’s discretion, include passing any necessary background checks and the ability to obtain any required gaming licenses.  Notwithstanding anything herein to the contrary, the County acknowledges that an important congressional goal under IGRA is to encourage Tribal member and Indian job training and employment, and that the Tribe maintains the right to enforce its Tribal Employment Rights Ordinance (TERO) and exercise Tribal and Indian preferences to the extent permitted by law.

11.2The Department shall work with the Tribe to identify job and other relevant training to eligible Tribal members attempting to make the transition from unemployment to employment.

11.3The Tribe shall make good faith efforts to assist Gaming Facility employees in meeting their child care needs while working at the Gaming Facility, either through on-site or off-site care, direct employee benefits, or providing assistance to expand capacity of local childcare center(s).

11.4The Tribe shall adopt and comply with standards that are no less stringent than state laws prohibiting a gaming enterprise from cashing any checks drawn against Social Security, unemployment insurance, disability benefits, or public assistance payments.

XII.DUGAN PROPERTY

12.1The County and State of California Department of Conservation (“DOC”) have appealed a decision by the BIA to take the Dugan Property into trust for the Tribe, based in part upon California Government Code Section 51256, et seq., and the contention that the Tribe’s proposed uses would conflict with the Williamson Act contract on the land, which requires agricultural related use of the property.  The BIA and Tribe contend that the contract is invalid when the land goes into trust.

12.2The Tribe agrees that it will not construct any Gaming Facilities or conduct Gaming Activities (including Class II or III gaming under IGRA), or provide parking for Gaming Facilities, on the Dugan Property.  Construction or use of the Emergency Access Road on the Dugan Property shall not be deemed to be a violation of this Section.

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12.3Williamson Act Rescission and Creation of Conservation Easement.

12.3.1To resolve the Williamson Act contract dispute the Tribe shall request that the County and State approve rescission of the Dugan Property Williamson Act contract in favor of an easement exchange and other public benefits pursuant to Government Code Section 51256.  The Tribe will also submit a request for non-renewal of the Williamson Act contract.  The Tribe shall proceed in good faith to submit, in a timely manner, all appropriate environmental documents and appraisals necessary for consideration of such an easement exchange by the Board of Supervisors or shall pay the County to contract for such documents to be prepared.  The Tribe will take all necessary steps for the rescission request to be considered in a timely manner.

12.3.2Immediately following the Tribe’s submission of its requests to rescind and not renew the Dugan Property Williamson Act contract and the submission of this Agreement to the DOI as provided for in Section 25, the County and the DOC shall withdraw their IBIA appeal, with prejudice, of the BIA decision to take the Dugan Property into trust.

12.3.3The withdrawal by the County and the DOC of their appeals, and forbearance in making any further objections regarding the Dugan Property Williamson Act contract, shall be without prejudice to the County or the DOC, or either, from being able to take a contrary position as to any other property.

12.3.4The public benefits to be provided by the Tribe in connection with a Williamson Act rescission include but are not limited to the following:

a.Providing the Emergency Access Road to the Rancheria at the Tribe’s sole expense; and

b.Resolution of litigation with the County and the DOC in which the validity of a Williamson Act contract following the acceptance of the land into trust was at issue.

12.3.5Pursuant to Government Code Section 51256 and this Agreement (but without subjecting the Tribe to the jurisdiction or application of such Code as to any other property), the Tribe has agreed to dedicate a perpetual agricultural and open space easement on at least 90 acres of the Petaluma Property (“Conservation Easement”), as described in Exhibit H, or in another location approved by County, limiting uses of the land to agricultural, open space, and/or wetland restoration purposes.  Consistent with applicable law, the County will cooperate with the Tribe in reviewing and processing any application which seeks to divide the Conservation Easement area into a separate parcel(s) from the remaining Petaluma Property.

12.3.6The County, through the Sonoma County Agricultural Preservation and Open Space District or other organization approved by the County that conforms with the California Land Conservation Program Act as provided pursuant to Public Resources Code Section 10200, et seq., and without subjecting the Tribe to the jurisdiction thereof with respect to any other property, shall have the power to hold, enforce and maintain the character of the Conservation Easement on the Petaluma Property.  The Conservation Easement shall allow for the agricultural use of the property, the development, restoration and/or enhancement of wetlands

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to provide for native vegetation and wildlife and for use as a mitigation bank and shall be in a form substantially similar to Exhibit H.

12.3.7The Parties understand that the proposed easement, is part of a Williamson Act contract easement exchange program, and must further meet the requirements set forth in Government Code Section 51256 (d), but that such requirements shall not delay withdrawal of the IBIA appeal.  To the extent such requirements or any other provision of law in connection with the rescission, termination or cancellation of a Williamson Act contract requires the payment of fees, costs, taxes, fines, penalties or other charges, including but not limited to the repayment or recoupment of taxes, such charges shall be entirely satisfied through the value of the easement exchange provided for in this Agreement.  If the Tribe is subject to a judgment that requires it to pay any fees, costs, taxes, fines or other charges in connection with the cancellation or rescission of the Dugan Property Williamson Act contract that are payable to or for the direct benefit of the County, any local or County governmental or public agency or entity, or any beneficiary or holder of the Easement, the County, to the full extent authorized by law, shall waive the collection and judgment, including any indebtedness or lien that might arise as a result thereof, of any such amounts.  Notwithstanding the foregoing, in the event the rescission penalty (12.5% of the rescission valuation of the Dugan Property) as appraised by the Sonoma County Assessor’s Office is greater than the appraised value of the 20 acres of Conservation Easement dedicated to unrestricted agricultural production, the Tribe agrees to one of the following: (1) pay the difference between the rescission penalty and the appraised value of the portion Conservation Easement dedicated to unrestricted agricultural production to the California State Controller for deposit in the Soil Conservation Fund; or (2) increase the size of the Conservation Easement area dedicated to unrestricted agricultural production so that its appraised value is equal to the rescission penalty; or (3) some combination thereof.  As a result of this uncertainty, should the Conservation Easement be terminated, in whole or in part, either by eminent domain or judicial termination, the DOC is entitled to a portion of any proceeds awarded in connection with such termination pursuant to the terms of Paragraph 17 of the Conservation Easement (Exhibit H) as provided as follows.  Such a portion shall be an amount equal to the percentage of the appraised value of that portion of the Conservation Easement dedicated to unrestricted agricultural conservation in relation to the appraised value of the entire Conservation Easement, as of the date of the final Williamson Act contract rescission.  This percentage, once determined, shall be reflected in Paragraph 17 of the Conservation Easement.

12.3.8Nothing in this Agreement shall prevent the Tribe from developing a mitigation bank on lands that will be subject to the Conservation Easement, and to collect fees for such use, nor shall the County’s right to preserve such easement interfere with the Tribe’s ability to market such mitigation bank rights on such an easement, in a manner in compliance with the Conservation Easement, provided that the Tribe takes no action that would impair such easement or alter its use without the written consent of the County as provided for in the Conservation Easement attached as Exhibit H.

12.4If the County determines that a CEQA environmental review is required to cancel or rescind the Dugan Property Williamson Act contract or establish the Conservation Easement, the Tribe shall act as the applicant for such project and hire a consultant to prepare any necessary environmental review studies or reports and a qualified independent appraiser at its own cost.  The Tribe and County shall agree on the consultants.  County costs for

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environmental review and processing shall be paid by the Tribe pursuant to a PRMD “at cost project” recovery schedule and procedure.  The County shall hire an appropriate consultant, at the Tribe’s expense, if the Tribe does not timely initiate the required environmental review.  Payment by the Tribe for any consultant and/or qualified appraiser hired shall be through the County, unless the Parties agree on an alternative arrangement.  Notwithstanding anything herein to the contrary, any decision of whether or not to rescind the Williamson Act contract will be independently determined by the Board of Supervisors based upon the available evidence and in accordance with applicable law.

12.5The County further agrees that the Conservation Easement will be held in an escrow account and shall not become effective unless the County approves the Tribe’s request to rescind the Dugan Property Williamson Act contract and the Dugan Property goes into trust.  Notwithstanding the above, if the Dugan Property is placed into trust without rescission of the Williamson Act contract, the Conservation Easement shall be recorded and become effective.  However, if the Tribe is unable to complete the Dugan Project due to interference related to the Williamson Act contract, such interference shall be grounds to cancel or void the Conservation Easement.  If the County disputes the Tribe’s claim that the Williamson Act contract was the basis for the Tribe’s inability to complete the Dugan Project, the issue will be subject to the Agreement’s dispute resolution provisions and a decision on the cancellation made by an arbitrator unless otherwise resolved by the Parties.

XIII.PETALUMA PROPERTY

13.1In April 2006, the Tribe submitted an application to the BIA to take approximately 277 acres into trust for gaming purposes near the City of Petaluma located between U.S. Highway 101 and the Petaluma River (the “Petaluma Property”).  The Tribe agrees that it will not conduct Gaming Activities or operate Gaming Facilities (including Class II or III Gaming as defined under IGRA) on the Petaluma Property for a period of at least eight (8) years from the Effective Date of this Agreement.

13.2Within ten (10) days of the Effective Date, the Tribe will take all steps necessary to suspend and otherwise stay its fee-to-trust application for gaming purposes during such eight (8) year period, including but not limited to communicating to the BIA through a duly passed Tribal resolution that the BIA is not authorized to further process any fee-to-trust application for gaming purposes on the Petaluma Property or to take any steps inconsistent with this Agreement.  The resolution to the BIA will be substantially identical to Exhibit I.

13.3If sewer and water utilities become reasonably available to the Petaluma Property within eight years from this Agreement’s effective date, the Tribe agrees never to conduct Class II or Class III Gaming Activities (as defined under IGRA) on the Petaluma Property without the written consent of the County.  Such agreement is based on an understanding by the Tribe that the City of Petaluma and the County Board of Supervisors currently oppose such use for that land.  For purposes of this Section, “reasonably available” with respect to the utilities means that water and sewer connections become legally and physically available to the Tribe for development on the Petaluma Property without the Tribe’s having to bring such utilities across, either above or below ground, U.S. Highway 101, or the Petaluma River, and without the Tribe’s having to acquire easements or other property rights

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over private or public property at a prohibitive fee.  The Tribe may, however, take such steps at its sole discretion.  The Tribe shall bear the sole cost of obtaining such utilities once a connection is reasonably available within 1,000 feet of the Petaluma Property.  The Tribe shall be relieved of its obligation to perpetually forgo Gaming Activities on the Petaluma Property under this Agreement, if another Tribal casino opens for operation in Sonoma County along the U.S. Highway 101 corridor between Cotati and the southern Sonoma County boundary.

13.4The County shall consult with the Tribe and the community to explore potential non-gaming economic development Projects on the Petaluma Property that would be of substantial benefit to both the Tribe and the community.  In addition, the County agrees that, where permissible under applicable law, planning actions on projects submitted by the Tribe on the Petaluma Property, if such property is not in trust, the Board of Supervisors will exercise its original jurisdiction to directly review the matter.

13.5The Tribe agrees that if the Petaluma Property is taken into trust, in addition to a restriction not to conduct Gaming Activities, as specified herein, it will be subject to enforcement of the Conservation Easement (if it has not been cancelled pursuant to Section 12.5) or any other agricultural or other easement(s) or conditions placed on the land pursuant to this Agreement and shall seek approval of these encumbrances from the Department of the Interior, provided that such approval shall not be a condition of this Agreement.

XIV.FUTURE TRUST ACQUISITIONS AND TRIBAL DEVELOPMENT

14.1The Tribe shall consult with the County prior to filing or modifying any application by the Tribe to the United States to take additional land into trust within Sonoma County.  The Tribe further recognizes that the County General Plan is an important and valued exercise of County authority and agrees, as a separate jurisdictional government, to give meaningful consideration to the County’s General Plan in trust applications and other Tribal planning activities.  The Tribe further recognizes that the County has taken the position that economic development proposals on future Trust Lands should meet the following criteria for County support:  1) the Tribe has significant ties to the land that is subject to the trust proposal; 2) the economic proposal is, consistent with this Agreement, subject to an appropriate environmental review process; and 3) the Tribe and County have entered into an Intergovernmental Mitigation Agreement to insure mitigation of any adverse environmental impacts of the proposal.  Nothing in this Agreement, however, shall be construed to subject or otherwise bind the Tribe to the County General Plan for development on Trust Land or require that the County support any specific trust application or Project.

14.2The County recognizes that the Tribe is not bound by the General Plan on Trust Lands.  The Parties agree to work together on a government-to-government basis to maximize consistency with the General Plan for Tribal Commercial Development Projects, to the extent possible consistent with Tribal goals, and to minimize off-Reservation adverse environmental impacts.

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XV.MITIGATION MONITORING AND REPORTING

15.1Consistent with Compact Section 10.8.2 and this Agreement, the Tribe shall periodically apprise the County Board of Supervisors of the progress and status of all Ongoing Projects and Tribal Commercial Development Projects.

15.2During the construction of any Ongoing Project and/or Tribal Commercial Development Project, and continuing until all agreed to mitigation measures are implemented, the Tribe shall prepare and provide the County a mitigation monitoring report on at least a quarterly basis that summarizes the implementation of all agreed to mitigation measures and their effectiveness in reducing the related impact.  During periods of construction such reports shall be provided on a monthly basis.  This mitigation report shall be prepared in a form substantially similar to that contained in Exhibit A.

15.3The mitigation reports shall be prepared by an independent qualified consulting firm, hired and compensated by the Tribe and provided to the County.  The County may review the qualifications of any consulting firm the Tribe intends to hire and object to such firm’s engagement based upon lack of qualifications or bias.  The County may seek resolution of any dispute with respect to the engagement of a consultant, or the mitigation monitoring, pursuant to the dispute resolution process in this Agreement.  The consultant(s) engaged by the Tribe shall have a contractual independent duty to provide current and accurate unbiased timely reports to the County.  The contract shall further specify that the monitoring reports to be produced will be relied upon by the Parties who are depending upon the objective nature of the mitigation reports, provided that, if the consultants are unwilling to so specify, they (or an alternative consultant if the County and Tribe cannot agree to jointly engage them) shall become engaged by the Tribe and the County jointly, or alternate consultants shall be so engaged.  The consultants engaged in the monitoring shall have the necessary engineering degrees and/or other expertise necessary to monitor the mitigation measures contained in this Agreement.

XVI.REVENUE AND MITIGATION COSTS

16.1In addition to the promises and covenants otherwise contained in this Agreement, the Parties acknowledge that Tribal Commercial Development Projects and the Ongoing Projects may create a certain increased demand for public services and may, in some cases, result in lost revenues and/or fees to the County.

16.2The Parties agree that the County does not have permitting authority over development on Trust Lands and that the payments made under this agreement do not constitute taxes, exactions or fees.

16.3The payments agreed to below are approximate off-sets to the potential losses and impacts to the County of the Ongoing Projects and are intended to support an appropriate level of County services to the Reservation and affected communities.

16.4In addition to the other mitigation measures the Tribe has and will implement, including but not limited to the construction of the Emergency Access Road, intersection improvements at both HWY 128 and BIA 93 and at HWY 128 and the Emergency Access Road (if applicable approvals and rights are obtained), and donations to the local community and

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government, the Tribe shall pay the County Seventy Five Million dollars ($75,000,000) over the term of this Agreement (“Mitigation Fee”), for mitigation of tangible and intangible Ongoing Projects impacts, payable on the terms stated below.  The Intersection Improvements shall be guaranteed through a Construction Assurance Device to cover the budgeted costs that will be in substantially the same form as Exhibit E or F.  The payment terms are as follows:

16.4.1Upon the later of thirty (30) days after the date that the Tribe obtains Financing for the Resort Project or within seven (7) business days following approval of this Agreement by the Board of Supervisors and the Tribe, whichever last occurs, the Tribe shall pay the County an installment of Seven Million Five Hundred Thousand dollars ($7,500,000) (“Initial Installment”).

16.4.2Notwithstanding the previous paragraph, in the event that the Tribe receives a license from the ABC authorizing the Tribe to sell alcoholic beverages at the Existing Casino or at the casino, hotel or restaurants at the Resort Project prior to the date that the Tribe obtains Financing, the Tribe shall pay the County Three Million dollars ($3,000,000) of said $7.5 million installment within seven (7) business days following issuance of the license, and the remaining Four Million Five Hundred Thousand dollars ($4,500,000) of said installment within thirty days (30) days after the date that the Tribe obtains Financing.

16.4.3Notwithstanding the above, if the above triggering events have not occurred at least $3 million of the Initial Installment shall be paid to the County on or before June 30, 2008.  The entire remaining balance of the $7.5 million Initial Installment shall be paid in full on the schedule of the triggering events stated in Section 16.4.2, but in no event shall the entire balance be paid later than September 30, 2008.

16.4.4No later than June 30, 2009, the Tribe shall pay the County an additional installment in the amount of Two Million Eight Hundred Thousand dollars ($2,800,000).

16.4.5Upon the earlier of three (3) years from the Effective Date of this Agreement or the opening of Phase One of the Resort Project, as defined by availability of hotel rooms to the public or opening of the Phase I casino floor to gaming, the Tribe shall pay an installment of Five Million dollars ($5,000,000) to the County.

16.4.6On July 1 of each calendar year following the year in which the payment in the immediately preceding subparagraph is due, but regardless of whether such payment was paid, beginning no later than July 1, 2011, the Tribe shall make annual installments toward payment of the Mitigation Fee in the amount of Five Million dollars ($5,000,000) each year, adjusted as provided below.

16.4.7Beginning no later than the installment due on July 1, 2011, the annual installment payments due to the County shall be increased by 4% from the installment payment made in the previous year, provided that if the July 1, 2011 installment is the first of the Five Million dollar ($5,000,000) annual installment payments, it shall be increased by 4% to Five Million Two Hundred Thousand dollars ($5,200,000).  For example if the $5 million dollar installment payment required above was made in 2010, the subsequent payments would be $5.2

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million dollars in 2011 and $5.408 million dollars in 2012, and so on until the entire $75 million has been paid.

16.4.8No later than July 1, 2020, the Tribe shall pay to the County any unpaid balance of the Mitigation Fee in full so that the total Mitigation Fee paid under this Agreement (without regard to the in lieu Transient Occupancy Tax equivalent payments described below) shall equal no more and no less than $75 million dollars plus any interest for which the Tribe may become obligated under Section 16.12.

16.5Notwithstanding the foregoing payment schedule, except for payment of the Initial Installment and payment in year 2020, in the event that the annual gross revenues of the Tribe’s Casino and Resort Project in any calendar year are 20% less than the annual gross revenue of the prior calendar year (the “Base Year”), then the Tribe may reduce the annual installment due in proportion to the percentage amount of the total reduction.  For example, if the gross revenue is 20% below the Base Year, the $5 million dollar installment would be reduced by $1 million to $4 million dollars.  The reduction shall continue in effect for each consecutive year in which the gross revenues remains 20% or more below the Base Year.

16.5.1Any and all reductions shall be treated as deferrals only and shall not reduce the balance payment due in full on or before July 1, 2020.

16.5.2The Tribe shall bear the burden of demonstrating that such reduction in gross revenues has in fact occurred, and shall support such claim by making available to the County, on a confidential and proprietary basis, fully audited Casino and Resort Project financial statements certified by an independent qualified accounting firm for the relevant year(s).

16.5.3Notwithstanding the above, in no event shall payment in any year fall below a minimum payment of $2.8 million dollars other than for a suspension of this Agreement under the force majeur provisions of Section 26.6 or the permanent cessation of Gaming Activities, hotel operations, and the service of alcohol by the Tribe on the Rancheria, in which case the Tribe shall have no further financial obligations under this Section.

16.6Annual payments shall return to the payment schedule described in Section 16.4 as soon as the gross revenue increases to more than 80% of the Base Year’s amount.  Payment of deferred amounts shall be fully amortized, without interest, over the remaining term of the Agreement and paid accordingly.  However, deferred amounts do not need to be paid in years where gross revenue is 20% or more below the Base Year.

16.7Any interest due under this Agreement shall be limited to interest imposed due to the failure to timely make payments as provided for above in Sections 16.4 and 16.6, and shall accrue as provided for in Section 16.12.

16.8Notwithstanding any other provision of this Agreement, the entire Mitigation Fee and any accrued interest shall all be paid on or before July 1, 2020.

16.9In addition to the $75 million dollars in Mitigation Fee payments described above, the Tribe shall pay to the County a fee in lieu of the County’s Transient Occupancy Tax (“In Lieu Fee”) in the amount of 9% of the rental collected on occupied hotel rooms.  The In

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Lieu Fee shall be paid on a quarterly basis to the County.  The first payment shall be due following the completion of the first quarter immediately after the hotel opens.  Notwithstanding any other provision of this Agreement, unless a longer period is agreed to by the Parties, the In Lieu Fee payments shall be paid through the later of the fifth (5th) year following the end of the Term of this Agreement, including any extension thereof, or the 5th year following the termination of the Compact, whichever is longer.  The County shall apply such In Lieu Fees to programs and services that serve to promote tourism in the County as determined by the Board of Supervisors, provided that the Resort Project shall be promoted on at least as comparable a basis as any other casino and/or resort is promoted by the County.  If there is a dispute as to TOT In Lieu Fee payments and supporting computations, the Tribe will provide the information/receipts to verify payment and the supporting basis for the computation.  Any disputes regarding the payment amount shall be subject to the dispute resolution provisions of the Agreement.

16.10As a separate matter from the foregoing, the Tribe is encouraged but not required to pay, along with all other hotels in the unincorporated areas of the County which gross more than $350,000 per year, an additional voluntary in lieu fee in the amount of 2% of the amounts collected from the rental of hotel rooms, to be paid to the Sonoma County Tourism Improvement Area Assessment.  If paid, this voluntary in lieu fee also shall be calculated and paid in the same manner as the Sonoma County Transit Occupancy Tax.

16.11Any funds received by the County from the Tribe pursuant to this Agreement are subject to the sole discretion of the County Board of Supervisors with the exception of In Lieu Fee payments which shall be applied as set forth in Section 16.9.

16.12On the later of the 31st day after the due date of any payment under this Agreement or ten (10) days after receipt of written notice from the County following such due date, any amounts due from the Tribe shall bear interest from the scheduled payment date at a rate equal to the prime rate of interest announced by the Wall Street Journal plus 2% per annum.

XVII.RE-OPENER PROVISIONS

17.1The Parties recognize that additional impacts or events, not foreseen or compensated for in this Agreement, may occur and that the projected income from which the Tribe intends to pay the County fees may be negatively impacted in the future, including the possible inability to open the Resort Project as planned.  Balancing this recognition against the Parties’ need for certainty and stability with respect to this Agreement, the Parties agree that upon the occurrence of any of the following, either party may request the reopening of this Agreement for the purpose of negotiating amendments to it:

17.1.1The Compact is amended, or a new compact entered into within the Agreement Term, to permit the Tribe to operate more Class III slot machines than the 2,000 machines allowed under the Tribe’s current Compact, and the operation by the Tribe of such additional machines, provided that with regard to such Compact amendment or new compact, the County shall join with the Tribe in urging the State and the Governor that this Agreement be deemed to meet the requirements of any Intergovernmental Agreement required in any such compact;

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17.1.2Phase I is not opened within three years from the Effective Date;

17.1.3More than seven years has elapsed from the Effective Date;

17.1.4The Tribe’s gross revenues declined by at least 20% over a previous year and remained at or below that Base Year revenue level for a consecutive three-year period;

17.1.5A significant portion of the Tribe’s Gaming Facility ceased operations for a continuous period of at least seven (7) consecutive days, due to forces entirely beyond the Tribe’s control, and the Tribe’s annual gross revenues during the year in which that occurred declined by more than 20% from the preceding year;

17.1.6Prior to the opening of Phase I, the Tribe’s annual net revenue from casino and related operations (including but not limited to alcohol sales) for the twelve (12) month period following June 30, 2008, the issuance of an alcohol license, or the date of Financing, whichever is later, decreased more than 20% from that of the immediately preceding 12 month period;

17.1.7The ABC alcohol license is not issued for the Existing Casino or is issued with conditions significantly more restrictive than those contained in Exhibit D, and that any such additional restrictions have a demonstrated material negative effect on Tribal Gaming gross revenues;

17.1.8The Resort Project does not have an alcohol license following the completion of Phase I;

17.1.9The Dugan Property is not taken into trust by the BIA for the Tribe;

17.1.10The Williamson Act contract on the Dugan Property is not rescinded by the County and the Tribe has suffered a material detriment as a result;

17.1.11The Tribe undertakes Ongoing Project development beyond the projects and Infrastructure discussed in the Environmental Study, Environmental Assessment, or Exhibit B (relating to the Dugan Projects); or

17.1.12There is a Significant Adverse Impact of an Ongoing Project beyond that discussed by the Tribe in the Environmental Study or Environmental Assessment or which was anticipated or should have been anticipated by the County, including but not limited to those effects which were anticipated and described in its written comments to the Tribe in reply to those documents.

17.2Upon written request by a Party with respect to matters arising under Section 17.1, the Parties shall meet and confer in good faith to discuss such matters.

17.3The Tribe and Gaming Authority shall make relevant audited financial statements prepared by an independent accounting firm available if the Tribe makes a request to reopen negotiations based upon any of the financial events listed above.

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17.4Any request to renegotiate one or more terms of this Agreement shall be made in writing, addressed to the other party.  The request shall specify the basis and provide documentation to support reopening the Agreement.

17.5If the request meets the requirements for renegotiation pursuant to this Section, the Parties shall meet within 30 days from the receipt of the request and will commence to renegotiate in good faith.  If agreement regarding amendment of this Agreement or the right to reopen is not reached after a reasonable period of time following a request to reopen, the other party may invoke the Section 20 dispute resolution provisions.  If the matter goes to arbitration, the arbitrator shall determine only whether a party was acting in good faith in the negotiations under the dispute resolution and reopener provisions.  If the arbitrator found that a party was acting in bad faith, the Parties shall be ordered back into negotiations.

17.6The sole purpose of the renegotiation will be to determine if, due to the circumstances set forth above under which the re-opener may be invoked, there are alternate terms providing for mitigation measures, payments or other benefits that are consistent with the requirements of IGRA, the Compact, and this Agreement and that, following a negotiation, would retain essentially the same rights, level of mitigation, intent of the Parties, their positions relative to each other, and the aggregate economic benefits anticipated at the time of execution of this Agreement.  Based on the above, the Parties will determine whether or not there is good cause and a reasonable basis for amending this Agreement to provide for such alternate terms.  A measure of any proposed mitigation amendment shall be the basis of mitigation that was used by the Parties in reaching this Agreement.

XVIII.INDEMNIFICATION

18.1The Tribe agrees, under the terms and conditions set forth in Sections 18.2 and 18.3 below, to indemnify and defend the County with respect to claims made by third Parties that are related to or arise from the following County activities:

18.1.1Work undertaken or funds disbursed related to completion of the Emergency Access Road under the Construction Assurance Device;

18.1.2Actions of County personnel responding to fire, criminal activity or other Reservation emergencies;

18.1.3Any action challenging the County’s approval of this Agreement; or

18.1.4Any action challenging the County’s cancellation or rescission of the Dugan Property Williamson Act contract including but not limited to creation of the Conservation Easement or entering into the easement exchange (the claims set forth in Sections 18.1.1 – 18.1.4 are referred to collectively as the (“Indemnification Claims”).

18.2The scope of the indemnity with respect to the Indemnification Claims is as follows: the Tribe agrees to provide defense costs only, with respect to matters arising under Section 18.1.1 and 18.1.2 above, and, as to Sections 18.1.3 and 18.1.4, to defend, indemnify, hold harmless, and reimburse the County, including its officers, agents, and employees, from and against any and all actions, claims, damages, disabilities, liabilities, and expense, including but

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not limited to attorneys’ fees and the cost of litigation incurred in the defense, arising out of the Indemnification Claims, whether arising from personal injury, property damage or economic loss of any type (but excluding economic losses based on alleged lost taxes, revenues or lost economic opportunity to the County, State, or any person, business or entity, claims that such actions lowered the use or market value of any property or business, or claims in the nature of an alleged taking) that may be asserted by any third party, but to the extent required or permitted by law, excluding liability due to the primary negligence, willful misconduct, or contractual liability or breach of the County, or any claims for punitive damages against the County or any entity insuring it against such claims that may have subrogation rights against the Tribe.  If there is a reasonably possible obligation to indemnify or defend under Sections 18.1.1-18.1.4, the Tribe’s duty to defend exists regardless of whether it is ultimately determined that there is not a duty to defend or indemnify.

18.3The County shall vigorously defend any such actions and shall have the right to select its own legal counsel at local prevailing rates at the expense of the Tribe, but the Tribe shall have the right to review counsel fees and costs to be incurred, and to be informed regarding the progress in the litigation and of any and all settlement proposals.

18.4The Tribe will obtain and maintain a policy of commercial general liability insurance with limits not less than Ten Million dollars ($10,000,000) per occurrence and in the aggregate covering bodily injury and property damage, including excess medical coverage.  The policy shall contain endorsements for coverage, which includes but is not limited to:  premises liability, general liability, personal injury, blanket contractual coverage and contractual indemnity.  The policy shall be endorsed to name the County of Sonoma, its officers, officials, employees and volunteers as an additional insured.  The County shall cooperate in providing any information reasonably required to obtain such insurance.  The Tribe shall provide a copy of the policy to the County for review and approval and timely provide proof of such insurance on an annual basis.  Any dispute over the existence of a duty to indemnify or defend shall be resolved through the dispute resolution process set forth below in this Agreement.

XIX.CONFIDENTIALITY

19.1Any information or documents obtained, observations made, or conclusions drawn directly or indirectly under this Agreement, including without limitation, where the source or information comes from inspections, plan reviews, examinations of financial information, negotiations, consultations, disputes or other activities under this Agreement, shall be deemed confidential to the extent allowed under law and shall not be shared with any third party.  The County shall promptly provide the Tribe notice of any Public Records Act request related to this Agreement and afford the Tribe, within the time limits allowed under the Act, an opportunity to seek an injunction by the Court against any such disclosure.  Notwithstanding this confidentiality agreement, County Fire retains the right to communicate such confidential information obtained pursuant to the terms of this Agreement to the State Fire Marshall and/or other appropriate State and/or Federal government agencies following exhaustion of all procedural provisions of the Fire Protocol.

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XX.DISPUTE RESOLUTION

20.1Meet and Confer Process.

20.1.1In recognition of the government-to-government relationship between the Tribe and County, the Parties shall make their best efforts to resolve disputes that occur under this Agreement by good faith negotiations whenever possible.  Therefore, the Parties hereby establish a threshold requirement that disputes arising under this Agreement shall first be subject to a good faith meet and confer procedure to give the Parties an opportunity to work together to solve identified issues.

20.1.2Disputes arising between the Parties regarding a party’s alleged failure to meet its obligations imposed by this Agreement, including a refusal to meet and confer or, in the case of a Tribal Commercial Development Project, to enter into an Intergovernmental Mitigation Agreement, shall be addressed through the following process:

a.The Parties may meet and confer informally to discuss their concerns.  This stage may include an informal exchange of views among Tribal and County personnel and may remain confidential in accordance with applicable law.

b.A party desirous of invoking the meet and confer provisions of this Agreement shall provide confidential written notice to the other party, identifying with specificity the alleged issue or issues and the actions requested to resolve the dispute.  Within seven (7) days after receipt of the notice, the recipient shall provide a written response agreeing or disagreeing with the complaint.  If the party agrees it will set forth detailed steps to address the alleged breach of the Agreement or the unreasonable refusal to enter into an Intergovernmental Mitigation Agreement.  If the Parties disagree, they shall proceed in accordance with the next subsection.

c.The Parties shall formally meet and confer in good faith within ten (10) business days of receipt of such notice, or at such other time as the Parties may agree in writing, to attempt to resolve the dispute.  If both Parties agree, a mediator may be used to help resolve the dispute at this stage.  The Parties and mediator, if any, shall ensure that any disputed issues are clearly and directly communicated according to any agreed upon process and timeline.  Multiple meetings under this step may be reasonably required depending upon the nature of the dispute, provided that the meet and confer process shall be completed within thirty (30) days of the notice provided pursuant to subsection (b) above, unless extended in writing by mutual agreement of the Parties.  Failure to substantially comply with the procedures and timelines contained in this Section with respect to a Tribal Commercial Development Project shall entitle the complaining party to proceed directly to arbitration.  If a dispute has not been resolved through the meet and confer process, and the issue is subject to dispute resolution as provided for in this Agreement, the Parties shall proceed pursuant to Section 20.2 below.

20.2Binding Arbitration Procedure.

20.2.1Subject to compliance with the meet and confer process stated above, either party may initiate binding arbitration to resolve any dispute regarding a term of this Agreement except for those disputes expressly excluded from arbitration, such as those so

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designated in Exhibit A, and any dispute regarding a Tribal Commercial Development Project arising out of a party’s alleged failure to meet its obligations under this Agreement, including the duty to enter into an Intergovernmental Mitigation Agreement where required, unless expressly exempted from arbitration by the terms of this Agreement.

20.2.2The arbitration shall be conducted by a single arbitrator in accordance with the JAMS Streamlined Arbitration Rules and shall take place in Santa Rosa or another location mutually agreed upon by the Parties.  The arbitrator shall be an attorney or retired judge selected pursuant to the following terms:

a.The arbitrator shall be from the list of prior approved arbitrators attached as Exhibit J.  The list of arbitrators shall be reviewed and revised, if necessary, through good faith negotiations of the Parties at least once every five (5) years during the Term.  If the Parties are unable to agree to a new list or upon the selection of a single arbitrator, then each Party shall name one arbitrator and the two arbitrators thus selected shall select a third arbitrator who shall be a retired United States District Court or California Superior Court judge; provided, however, if either Party fails to select an arbitrator within fourteen (14) days of delivery of the request for arbitration, or if the two arbitrators fail to select a third arbitrator within fourteen (14) days after the appointment of the second arbitrator, then in each such instance, a proper court, on petition of any Party, shall select the necessary arbitrator(s), in accordance with California Code of Civil Procedure Sections 1280, et seq., or any successor statutes then in effect.

b.Arbitrators shall be contacted in the order their names appear on the list and the person highest on the list whom is available within sixty (60) days to conduct the arbitration shall be selected, unless another arbitrator is mutually agreed upon by the Parties in writing.

c.Once an arbitrator has been passed on the list, the selection process shall continue to move through the list in order as to the remaining arbitrators on the list, following which the selection process from the top of the list, in order, shall be repeated.  If no arbitrator is available during the sixty day time frame, the first available arbitrator on the list shall be selected.  If an arbitrator on the list is not available within a reasonable time frame an arbitrator shall be selected as provided for in Subsection (a) above.  Notwithstanding the foregoing, a person shall not be eligible to serve as an arbitrator under this Agreement if the person has an interest in, or is related to, affiliated with, or has represented in a legal capacity, either Party without a written waiver from the other party.

20.2.3The issue of whether the County has jurisdiction to make determinations regarding the enforcement of any law or ordinance on trust property shall be deemed to be a question of law and shall not be the subject of any arbitration process, except where the County has expressly agreed not to assert such jurisdiction and the claim is that the County is violating that agreement.  The arbitrator shall have jurisdiction to interpret and apply this Agreement’s terms, but shall lack jurisdiction to modify the Agreement or relieve a party of its obligations, or add to those obligations under the Agreement, except in the event that a material term(s) of this Agreement is determined to be void.  In such an instance the arbitrator may order the Agreement modified, terminated or rescinded to maintain the relative positions of the Parties at the time the Agreement was entered.  Notwithstanding the above, but subject to the

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limitations in the preceding sentence and in Sections 20.2.4 - 20.2.8 below, an arbitrator may determine appropriate mitigation for Tribal Commercial Development Projects when the Parties have been unable to complete an Intergovernmental Mitigation Agreement.  This Agreement does not provide for, and the arbitrator shall not have jurisdiction to:

a.Enforce or order remedies with respect to federal, state, Tribal or County laws, regulations, ordinances, codes or other laws against the Tribe, including its government entities, officials, members or employees or its Trust Lands, and shall only consider or evaluate such laws as expressly permitted under this Agreement;

b.Make determinations as to fire, building and safety and related code compliance, inspections, or plan review determinations by Tribal officials with jurisdiction over such matters; or

c.Limit the Tribe’s authority to pursue non-gaming trust applications with the United States government.

20.2.4Arbitration judgments may include monetary awards, specific performance, declaratory relief, and/or injunctive relief, provided that monetary awards shall be limited to reasonable amounts as may be necessary to cure a breach within the terms of this Agreement, or to mitigate a Significant Adverse Impact on a practical basis, taking all circumstances, including federal law and policy into account, and subject to the limitations in this Section.  No punitive or consequential damages shall be awarded.  Equitable relief shall be limited to compelling some actual performance that is described in this Agreement or preventing a party from failing to take such action.

20.2.5Any controversy regarding whether an issue is subject to arbitration shall be determined by the arbitrator, but the arbitrator’s jurisdiction shall be limited to ordering forms of relief agreed to in this Agreement.

20.2.6In arbitrating disputes under this Agreement, the arbitrator shall apply applicable law, including where appropriate, IGRA and federal laws and policies regarding Tribal economic development.

20.2.7In making a decision with respect to the failure to enter into an Intergovernmental Mitigation Agreement when required under this Agreement, or in determining appropriate mitigation measures, the arbitrator only has jurisdiction to impose reasonable measures to mitigate the Significant Adverse Impacts of the proposed Tribal Commercial Development Project and may not off-set or compensate for impact of other Project(s), including but not limited to the Resort Project, the Dugan Projects, or the Cultural Center.  Reasonable mitigation measures are those that would be or have been undertaken in other comparable projects within Northern California to mitigate similar adverse environmental impacts.  Nothing herein shall limit either Parties’ ability to request that reimbursement of actual and reasonable out of pocket costs be considered as part of such an Agreement but the Tribe shall not be subject to any County fees or exactions for Projects on Trust Lands Since the arbitrator only has authority to impose reasonable mitigation measures, the Parties recognize that some Significant Adverse Impacts may not be mitigated to less than significant and that such fact does not prevent the

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Parties from entering into an Intergovernmental Mitigation Agreement, or the Tribe from developing such Tribal Commercial Development Project, or the arbitrator from imposing reasonable mitigation measures that would decrease or minimize the Significant Adverse Impact.  Accordingly, the arbitrator does not have authority to determine that such Tribal Commercial Development Project shall not be built; that authority remaining solely with the Tribe.

20.2.8In making a decision regarding satisfaction of the Tribe’s obligation for the Emergency Access Road, the arbitrator may award all reasonable costs related to curing the defect including but not limited to labor costs, material costs, professional consulting and engineering costs, and all costs and reasonable expenses and fees, including reasonable attorneys’ fees, incurred by County in enforcing the Tribe’s obligations under the Construction Assurance Device and this Agreement.  The County is not entitled to attorneys’ fees if the Tribe prevails in the legal dispute decided under this Section.

20.2.9The arbitrator shall provide a written award and a reasoned decision supporting the basis of the award within thirty (30) days of submission of the dispute following hearing.  The provisions of California Code of Civil Procedure, Section 1283.05 are incorporated into this Agreement, provided, however, that no such discovery may be conducted without leave of the arbitrator.  Any discovery conducted shall be subject to the Confidentiality provisions of this Agreement, and the arbitrator shall make such orders as are necessary to enforce such provisions.

20.3Notwithstanding anything to the contrary in this Agreement, disputes related to compliance with federal laws and regulations, and permit conditions in connection therewith, or regarding whether or not the Compact (including any amendments) has been complied with, shall not be subject to the dispute resolution provisions in Sections 20.1 and 20.2 and shall be resolved, in the case of federal laws, regulations and permits, through the dispute resolution provisions applicable to such laws, regulations and permits, and in the case of the Compact (including any obligations to abide by it in this Agreement), through the dispute resolution provisions between the Tribe and the State contained therein.

XXI.JUDICIAL REVIEW AND ENFORCEMENT

21.1The award of an arbitrator shall be final and binding.  Jurisdiction to take any action necessary to enforce an arbitrator’s award, or to take any other action provided for under this Agreement, shall be in the United States District Court for the Northern District of California as well as any appellate courts with jurisdiction over relevant proceedings.  The Parties hereby agree that interpretation of this Agreement may involve questions of federal law, including without limitation IGRA and federal regulations promulgated thereunder, the Tribal-State Gaming Compact, and the federal common law of Indian affairs.  The Parties hereby agree to not raise or challenge the jurisdiction of said federal court to adjudicate matters as provided under this Agreement.  In the event that the federal court declines or lacks jurisdiction, the Parties agree to submit the matter, including the enforcement of an arbitrator’s award, to the Sonoma County Superior Court and any related appellate proceedings.

21.2Except for matters expressly exempted from arbitration under this Agreement, the Parties agree not to assert, and will waive any defense alleging any governmental immunities,

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indispensable party, exhaustion of tribal or administrative remedies (except for the procedures required under this Agreement), improper venue or forum non-conveniens as to any federal court action brought pursuant to this Agreement in the United States District Court for the Northern District of California, or, if the federal court declines or lacks jurisdiction, in the Sonoma County Superior Court, including related appellate proceedings.

21.3In any proceeding brought pursuant to this Agreement and as to which sovereign immunity has been waived, the Parties consent to service of process made in accordance with the notice provisions of this Agreement or the Federal Rules of Civil Procedure.

21.4Except as provided in Section 20.2.8, each party shall bear its own costs and attorneys’ fees in any court action or arbitration proceeding brought pursuant to this Agreement.

21.5Nothing in this Agreement shall preclude or restrict the ability of Parties to voluntarily pursue, by mutual agreement, any other method of dispute resolution.

XXII.NOTICES

22.1Notices and service of process shall be sent to the contacts listed below or to such other person or address as shall be provided in writing by the party.  Service of process in any judicial or arbitration proceeding is waived in favor of delivery of documents by Certified Mail – Return Receipt Requested to the following:

For the Tribe:

Tribal Chairperson

Dry Creek Rancheria Band of Pomo Indians

190 Foss Creek Circle, Suite A

Healdsburg, CA 95548

Tel: 707 473 2106

With a copy simultaneously delivered to:

Jerome L. Levine

Holland & Knight, LLP

633 W. 5th Street, Suite 2100

Los Angeles, CA 90071

Tel: 213 896 2565

Counsel for the Tribe

For the County:

Sonoma County Administrator

575 Administration Dr.

Santa Rosa, CA 95403

Tel: 707 565 2431

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With copy simultaneously delivered to:

County Counsel

575 Administration Dr.

Santa Rosa, CA 95403

Tel:  707 565 2421

XXIII.MUTUAL LIMITED WAIVER OF SOVEREIGN IMMUNITY

23.1The Parties agree that the Parties’ waiver of immunity from arbitration or suit, or the enforcement of any order or judgment related thereto, is limited to the express provisions of this Section 23, and neither the agreement to arbitrate nor any other provision of this Agreement shall be construed as creating any implied waiver of such immunity.

23.2The Parties each expressly covenant and agree that they may each sue and be sued, including the resolution of disputes in arbitration and the judicial enforcement thereof, as provided herein and pursuant to the Dispute Resolution procedure above, to resolve any controversy arising from this Agreement or to enforce or interpret the terms and conditions of this Agreement, as provided for in this Agreement.  The Parties, their officers and agents expressly agree to waive governmental immunities, including sovereign immunity, in connection with any claims arising from this Agreement, as provided for herein for the enforcement of any arbitration award, or judgment to enforce such an award, or enforcement of any easement created as a result of this Agreement.  The Parties further consent to the jurisdiction of an arbitrator and/or specified court under this Agreement including the consent to be sued and bound by a lawful order or judgment, to the extent provided for herein.  Each of the Parties represent that its agreement to such dispute resolution processes and waivers have been effectively and lawfully granted and that nothing further needs to be done to effectuate those processes.

23.3With respect to any action arising out of the Agreement for which there is a waiver of sovereign immunity, the Tribe and County expressly consent to the jurisdiction of the United States District Court for the Northern District of California and, as limited herein to, the Sonoma County Superior Court and all related appellate courts, and/or an arbitrator selected pursuant to this Agreement and specifically waive sovereign immunity for that purpose.  The Parties specifically agree that the applicable court shall have jurisdiction to enter judgments enforcing rights and remedies provided for in this Agreement that shall include, but not be limited to injunctive relief, declaratory judgment, specific performance, and/or the awarding of monetary damages, which shall be binding and enforceable on the Parties, subject to the limitations set forth in this Agreement.  No party to this Agreement shall contest jurisdiction or venue of the above-referenced courts, provided their jurisdiction and venue are invoked in the order specified, but only for disputes or claims arising out of this Agreement.  Neither the Tribe nor the County shall plead or invoke the doctrine of exhaustion of Tribal or other administrative remedies, defenses of immunity or indispensable Parties beyond those contemplated in this Agreement.

23.4The County and the Tribe may not join or consent to the joinder of any third party to any action (including but not limited to any arbitration) contemplated herein, unless failure to join such party would deprive the court or arbitration tribunal of jurisdiction; provided

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that nothing in this Agreement shall be construed to constitute a waiver of the sovereign immunity or other protection from lawsuit (or other dispute resolution process), or the effect, orders or judgments thereof, of either the Tribe or the County with respect to any claim of any kind by any such third party.  In the event of intervention by any third party into any such action without the consent of the Tribe and the County, nothing herein shall be construed to constitute a waiver of any immunity with respect to such third party, and no arbitrator or court shall have jurisdiction to award any relief or issue any order as against the County or Tribe with respect to such third party in that or any other proceeding.

23.5Authorization.

23.5.1The County and Tribe each represent and warrant that each has performed all acts precedent to adoption of this Agreement, including but not limited to matters of procedure and notice and each has the full power and authority to execute this Agreement and perform its obligations in accordance with the above terms and conditions, and that the representative(s) executing this Agreement on behalf of each party is duly authorized to so execute and deliver the Agreement.

23.5.2In evidence of the above, each governing body shall execute formal resolutions indicating approval of this Agreement and these resolutions are attached in Exhibits K and L.

XXIV.CEQA REVIEW

24.1The Tribe’s Trust Land activities and the Parties’ approving, executing and performing this Agreement, currently and in the future, are not activities that, within the meaning of CEQA; (a) are directly undertaken by the County or surrounding communities, (b) are supported, in whole or in part, through contracts, grants, subsidies loans or other forms of assistance by the County, or (c)  involve the issuance of a lease, permit, license, certificate or other entitlement for use by the County.

24.2By approving, executing and performing this Agreement the County has not, and is not, making any commitment to (a) issue a lease, permit, license, certificate or other entitlement for use, or (b) develop, construct or improve any facilities or cause any other physical changes in the environment.

24.3This Agreement should be construed to be a government payment and funding mechanism that does not commit the County to make any specific physical changes in the environment.

24.4If the County determines that it is required to comply with CEQA with respect to any activities related to this Agreement, the County shall comply with CEQA at such time.

XXV.REVIEW BY THE DEPARTMENT OF INTERIOR AND OTHER ACTIONS FOLLOWING EXECUTION

25.1The Tribe shall submit this Agreement to the United States Department of the Interior for either (a) approval pursuant to 25 U.S.C. § 81, or (b) a written response that this

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Agreement does not require approval under 25 U.S.C. § 81.  A response from the Department of the Interior shall not be a condition to the County’s obligations under Section 25.3 below.

25.2The County, at its sole discretion, has the right to withdraw its support for the Agreement if it is not submitted to the Department of the Interior pursuant to this Section within ten (10) days following the Effective Date.

25.3Upon the Tribe’s submission both of this Agreement to the DOI and of the Williamson Act contract rescission and non-renewal requests to the County, and regardless of the outcome as to either, and following acceptance of the Emergency Access Road plans, which acceptance shall not be unreasonably withheld, the County shall withdraw its opposition to the Dugan Property fee to trust application, consider the Tribe’s request to rescind the Williamson Act contract on the terms provided for in this Agreement, withdraw its and its officials’ protests to the Tribe’s application for an ABC license, support an expedited conclusion of the ABC hearing consistent with this Agreement, and join the Tribe in actively advocating that the ABC issue a temporary license.

25.4If the Department of Interior determines that portions of this Agreement violate 25 U.S.C. § 81 or are otherwise invalid, the severability provisions set forth below at Section 26.5 of this Agreement shall govern.

XXVI.MISCELLANEOUS PROVISIONS

26.1Authority Over Tribal Activities.  Nothing in this Agreement is intended to confer or expand the jurisdiction of any local, state or federal agency or other governmental body, nor is this Agreement intended to infringe or otherwise usurp the authority of any regulatory body including local, state, federal or Tribal agencies that may have jurisdiction over or related to Tribal activities, development or Projects.  Further, nothing in this Agreement shall be construed to relieve the BIA’s or Tribe’s obligation to comply with the National Environmental Policy Act (NEPA) as may be required as part of any trust application or any other Project requirement.  The County acknowledges that to the extent required by applicable law, activities that normally require County permitting are exempt from such requirements when they take place on the Reservation or Tribal Trust Land due to Tribal sovereignty and preemptive, plenary federal power over Indian affairs.  The Tribe similarly acknowledges and agrees that its development projects located on fee lands located within the County’s geographical boundaries shall conform to County permitting and other regulatory requirements.

26.2Third Party Beneficiaries.  This Agreement is not intended to, and shall not be construed to, create any right on the part of a third party including, without limitation, no rights in any Interested Persons, nor does it create any private right of action for any third party nor permit any third party to bring an action to enforce any of its terms.

26.3Amendments.  This Agreement may be modified or amended only by mutual and written agreement of the Parties.

26.4Final Agreement.  This Agreement contains the entire agreement of the Parties as to the subject matter herein and supersedes any other agreements of the Parties to the contrary.  The Agreement is intended both as the final expression of the agreement between the Parties

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with respect to the included terms and as a complete and exclusive statement of the terms of the Agreement consistent with California Code of Civil Procedure Section 1856.  No modification of this Agreement shall be effective unless and until such modification is evidenced by a writing approved and signed by the Parties.

26.5Severability of Provisions.  The invalidity of any provisions or portion of this Agreement as determined by a court of competent jurisdiction or the United States Department of the Interior shall not affect the validity of any other provisions of this Agreement or the remaining portions of the applicable provisions, unless such provision is material to the reasonable expectation of the Parties.  Without limiting the foregoing, if the Agreement or any provision thereof is declared invalid by a court of competent jurisdiction or the Department of Interior, then the Parties shall use their best efforts to renegotiate the terms of the invalid provisions.  In the event that the Parties are unable to successfully renegotiate the invalid terms, they shall resolve the matters at issue through the dispute resolution provisions of this Agreement which shall allow an arbitrator to modify, terminate or rescind, this Agreement in the event that material terms of this Agreement are determined to be void or are materially changed and shall apply the standards and limitations set forth in Section 20.2.

26.6Force Majeur.  The Parties shall not be liable for any failure to perform, or for delay in performance of a party’s obligations, and such performance shall be excused for the period of the delay and the period of the performance shall be extended when a force majeur event occurs; provided however that the party whose performance is prevented or delayed by such event of force majeur shall give prompt written notice (i.e., within 72 hours of the event) of such event to the other party.  For purposes of this Section, the term “force majeur” shall include, without limitation, war, epidemic, rebellion, riot, civil disturbance, earthquake, fire, flood, acts of governmental authorities, acts of God, acts of terrorism (whether actual or threatened), acts of the public enemy and in general, any other severe causes or conditions beyond the reasonable control of the Parties, the consequences of which in each case, by exercise of due foresight such party could not reasonably have been expected to avoid, and which by the exercise of due diligence it would not have been able to overcome, when such an event prevents the Tribe from meeting its obligations under this Agreement due to Gaming Activities ceasing operations for an extended period or prevents the County from meeting its obligations under this Agreement due to an interruption of County government operations.  An interruption of performance, or the delayed occurrence of any event, under this Agreement caused by an event of force majeur shall as far as practical be remedied with all reasonable dispatch.  During any period in which a party is excused from performance by reason of the occurrence of an event of force majeur, the party so excused shall promptly, diligently, and in good faith take all reasonable action required in order for it to be able to commence or resume performance of its obligations under this Agreement.

26.7Governing Law.  This Agreement shall be construed according to applicable federal and California substantive law to the extent not inconsistent with the express provisions of this Agreement, unless federal law as to the Tribe or the County, or California law as to the County, prohibits such Parties from abiding by such express provision, in which case the provision will be deemed to be invalid and resolved, if possible, under the severability provisions in Section 26.5.  Notwithstanding the foregoing, California rules of construction shall be applied in interpreting this Agreement. This Agreement shall be deemed to have been drafted jointly by

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the Parties and shall not be construed as having been drafted by, or construed against, one party against another.

26.8Obligations to Continue.  Unless specifically designated otherwise, all of the Parties’ obligations under this Agreement shall continue through the Term, including any extensions thereof.  Notwithstanding the end of the Term, any covenant, term or provision of this Agreement which, in order to be effective, or is necessary to enforce an unfulfilled material term of this Agreement or obligation that may continue beyond the end of the Term shall survive termination.

26.9Payments.  Unless otherwise indicated, all payments made pursuant to this Agreement shall be made payable to the County of Sonoma and sent to the Office of the Auditor, County of Sonoma, on the schedule set out above.

26.10Representations.  By entering into this Agreement each signatory represents that, as of the execution date, the undersigned has the authority to execute this Agreement on behalf of their respective governing bodies.  Each signatory will provide written proof of such authority and ratification of the Agreement by the respective governing body as provided above.

26.11Duplicate Originals.  At least two copies of this Agreement shall be signed and exchanged by the Parties each of which shall be considered an original document.

26.12Approval. Each Party’s execution, delivery and performance of this Agreement shall be approved by resolution of each party’s respective governing body, which shall provide that the party shall not enact a law impairing the rights and obligations under this Agreement.

26.13Obligation on Related Entities.  This Agreement binds the Parties and their departments, affiliates, agents, representatives, successors, contractors, officials and related entities, which such Agreement shall also be reflected in a resolution of each Party’s respective governing body approving the Agreement.

IN WITNESS WHEREOF, the Parties hereby execute and enter into this Agreement with the intent to be bound thereby through their authorized representatives whose signatures are affixed below.

Dated:	DRY CREEK RANCHERIA BAND OF POMO
	INDIANS
	BY:	/s/ Harvey Hopkins
		Harvey Hopkins, Tribal Chairperson
		Dry Creek Rancheria Band of Pomo Indians

49

ATTEST:
Dated:
/s/ Marjie Rojes
MARJIE ROJES,
Tribal Secretary
Dated:	COUNTY OF SONOMA
	BY:	/s/ Mike Kerns
		Mike Kerns, Chairperson
		Sonoma County Board of Supervisors
ATTEST:
Dated:
/s/ Bob Deis
BOB DEIS,
ex-officio Clerk of the Board of Supervisors
APPROVED AS TO FORM:
Date:	HOLLAND & KNIGHT LLP
	BY:	/s/ Jerome L. Levine
		JEROME L. LEVINE, Counsel
		For Dry Creek Rancheria
Dated:	OFFICE OF THE COUNTY COUNSEL
	STEVEN WOODSIDE, County Counsel
	BY:	/s/ Bruce D. Goldstein
		BRUCE D. GOLDSTEIN,
		Assistant County Counsel

50

EXHIBIT A

MITIGATION MEASURES AND MONITORING PROGRAM

The following is a chart of the mitigation measures agreed to as part of the Memorandum of Agreement (“MOA”) between the Dry Creek Rancheria Band of Pomo Indians (“Tribe”) and the County of Sonoma (“County”) with respect to the Resort Project and Dugan Property development.  This Exhibit A is a part of the MOA and is to be interpreted in accordance with its provisions.  Nothing in this Exhibit shall be deemed or shall be construed to confer jurisdiction on the County over the Tribe, the Rancheria or the activities conducted on the Rancheria, including the Resort and Dugan projects.  Disputes under Exhibit A shall be resolved based on the contractual terms of the MOA through the mechanism indicated in the Dispute Resolution Forum or Process category.  As used in Exhibit A, “feasible” means capable of being accomplished in a successful manner within a reasonable period of time, taking into account economic, environmental, legal, social, and technological factors.  Further, as used in this Exhibit in the Dispute Resolution Forum or Process section, reference to “Meet and Confer” means the term is subject to the meet and confer process of MOA Section 20.1 only and reference to “MOA Dispute Resolution Process” means the term is subject to the binding arbitration process contained in MOA Sections 20.2 and Fire Protocol refers to the Fire Protocol attached as Exhibit G.

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
Part A	Resort Project Mitigation. These mitigation measures are applicable to the Resort Project only.
	LEED Certification
A.1	The Tribe will apply for Leadership in Energy and Environmental Design (LEED) certification from the U.S. Green Building Council for the hotel portion of the Resort Project. The granting of such application is not a requirement of the MOA and is not subject to the dispute resolution provisions of the MOA.	MOA Dispute Resolution process as to the submittal of the application for LEED certification only.
	Fire Suppression
A.2	During construction, staging areas, welding areas, and other areas slated for development using spark-producing equipment will be cleared of dried vegetation and combustible materials that could serve as fire fuel to the extent reasonable. The Tribe will prepare a vegetation management plan for the Resort Project after construction. Such plan, during and after construction, will include, where feasible, the removal of extremely flammable non-landscaping vegetation around structures to create a defensible space of up to 100 feet from the structure.	Meet and confer only. (See also Fire Protocol)
	Aesthetics
A.3.a	When the Tribe’s preliminary design plans for building, lighting, and landscaping become available, the Tribe will	MOA Dispute Resolution process as

Exhibit A to MOA

Page 1 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	transmit such plans to the County for review and comment.	to the transmission of such plans only.
A.3.b	The preliminary design plans will include the colors and materials of proposed buildings, as well as lighting and landscaping details.	Meet and confer only.
A.3.c	Before the Tribe makes final building, landscaping, and lighting decisions, the County, Tribe, and Tribe’s building, landscaping, and lighting consultants will meet and confer to discuss the preliminary design plans. The Tribe will seriously consider any recommendations by the County, particularly those which are in keeping with the Tribe’s plan on adopting Tuscan themes and architectural suggestions and colors, but will retain sole discretion regarding final color, lighting, landscaping and other aesthetic decisions. Such design plans will include the provisions of A.3, A.4, and A.5.a.	MOA Dispute Resolution process as to the holding a meet and confer only. Remainder meet and confer only.
A.3.d	Groupings of large 48-72” box evergreen trees and other appropriate trees and shrubs will be planted to screen, to the extent feasible, the northern parking garage exposed to valley views from County roadways, in keeping with the Tribe’s design aesthetic.	Meet and confer only.
A.3.e	To the extent practicable, berms or other earthen mounds, and Evergreen trees and shrubs, including large trees and plantings for large walls and buildings, will be employed to help blend or screen lower building levels, foundations, sheer walls, parking garages, retaining walls, water tanks, and utility structures. Where feasible and in keeping with the Tribe’s design aesthetics, such trees and shrubs shall be placed in natural groupings to break up linear rows of plantings. The kind, style, variety, size and shape of any berms, mounds, trees or vegetation shall be determined by the Tribe in its sole discretion	Meet and confer only.
A.3.f	Where feasible, as determined by the Tribe, new power and communication utilities that require above ground wiring that is visible from off-Reservation valley views will be placed underground. Such undergrounding of utilities will not be required where placement would result in significant adverse environmental effects. Where undergrounding is not feasible, utilities will be substantially screened from valley views.	Meet and confer only.

Exhibit A to MOA

Page 2 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
A.3.g	If the Tribe locates the temporary office trailers on top of the existing parking garages, the Tribe will lessen the aesthetic impact of temporary office trailers from valley views through potted trees and other landscaping, exterior paint colors that are non-reflective and are neutral colors that complement the adjacent environment. The Tribe will remove all temporary office trailers from the top of the existing parking garages upon completion of Phase I unless otherwise agreed to by the parties. The Tribe may reinstall temporary office trailers on top of the existing parking garages if necessary for construction of Phase II, but will remove them upon completion of Phase II. Upon the Tribe’s request, the County will meet and confer regarding moving the location of such temporary office trailers to the Dugan Property.	MOA Dispute Resolution process.
	Night Lighting – Interior
A.4.a	Interior lighting plans will be designed to meet or exceed Title 24 energy efficiency standards.	MOA Dispute Resolution process.
A.4.b	Light fixtures in the existing parking garages will be replaced within a time period no longer than that specified by LEED regulations. Such replacement will reduce the energy and light output to a minimum level necessary for security cameras and public safety and commercial needs and in keeping with all applicable laws and regulations and insurance requirements. Light bulbs visible from valley views will be shielded to the maximum extent feasible.	MOA Dispute Resolution process.
A.4.c	The Tribe is committed to minimizing night light pollution from the Resort Project, including light emanating from hotel guest room windows. As part of this effort, all hotel guest rooms facing the valley floor will have low-emissivity (Low-E) glazing where feasible and in keeping with the Tribe’s design aesthetic. The Tribe also agrees to shield or shade light bulbs in those rooms whose light is visible to the valley floor.	MOA Dispute Resolution process.
	Night Lighting – Exterior
A.5.a	As set forth in Section A.3.a above, the Tribe will submit a preliminary lighting plan to the County, meet and confer with the County regarding the preliminary plan, and seriously consider any recommendations by the County. Unless otherwise agreed to by the parties, the Tribe will incorporate the following design criteria as part of designing such plan for the Resort Project:	MOA Dispute Resolution process as to the submission of the preliminary lighting plan only. Meet and Confer for the remainder.

Exhibit A to MOA

Page 3 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	i.The Tribe will use the least amount of lighting equipment possible to achieve the goals of the project, while balancing the quantity of equipment used with the need to provide for glare control and uniform lighting, safety and commerce and in keeping with all applicable laws and regulations and insurance requirements. ii.Exterior lighting plans will be designed to meet or exceed Title 24 LZ2 energy efficiency standards for rural areas. iii.Where feasible and in keeping with Tribe’s design aesthetics, luminaire locations will be selected to minimize glare and contain light within the design area and shield light sources from valley views. iv.All new outdoor roadway and parking area lighting will consist of high-pressure sodium or low-wattage metal halide or comparable sources in full cutoff shielded luminaries, unless necessary to meet applicable laws and regulations or insurance requirements. The intensity of all outdoor lights will be kept to a minimum necessary for safety and commerce and in keeping with all applicable laws and regulations and insurance requirements. v.All permanent exterior decorative lighting with transparent or translucent shades will utilize an integral lamp shield. These fixtures will be for decorative purposes only, and not used for general site lighting. Lighting under building canopies or rooftops not visible from the valley floor (e.g. port cochere, arcades, porticos etc.) or otherwise not visible from the valley floor will be exempt from this requirement. Lighting under building canopies or rooftops that is visible from the valley floor will be fully shielded from valley views. vi.All permanent exterior site lighting visible to the valley will utilize shielded luminaries with horizontal cutoff optics to minimize or eliminate all light directed above the horizontal. All permanent exterior site lighting visible to the valley will use high efficacy sources, such as Compact Fluorescent or Ceramic (metal halide). In such locations, high wattage incandescents will not be utilized for site lighting. Maximum wattage of any permanent lamp used for exterior site lighting will be 100 watts unless required for roadway (street) or security lighting.

Exhibit A to MOA

Page 4 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
A.5.b	Holiday lighting (“Christmas Lights,” or festoon string lights) may be used during holidays for not more than 60 days at a time. Nothing herein is intended to limit the use of low-level, decorative “twinkle”– type lights (whether or not actually twinkling) however, where feasible, such lights will be placed so as not to create a significant visual impact to the valley floor.	MOA Dispute Resolution process.
A.5.c	Outdoor on-Reservation signs that contain neon, readerboard or are internally lit, if any, will not be visible from valley views or beyond the Reservation boundaries, except at the intersection of BIA 93 and State Route 128 and any additional access road where such sign(s) will not contain neon but may be internally or externally lit and will be no larger than legally permitted entrance signs for commercial ventures in rural areas within an eight mile radius of the Rancheria. The Tribe will provide a design plan for such sign(s) to the County for review and comment and will seriously consider any recommendations that the County has regarding such sign(s).	MOA Dispute Resolution process.
	Air Quality – Construction
A.6.a	The Tribe will adopt a law that regulates construction air quality emissions at least as strictly as the Chapter 4, Rules 410 and 430 of the District Rules of the Northern Sonoma County Air Pollution Control District (“NSCAPCD”) in effect at the time of the effective date of this Agreement. Nothing herein is intended or shall be deemed to confer jurisdiction on the NSCAPCD for enforcement or any other purposes.	MOA Dispute Resolution process as to the adoption of such law only.
A.6.b	The Tribe will require its construction contractors to implement an appropriate dust abatement program during construction, including, but not limited to, the following measures: i.Water all active construction areas daily to the extent necessary. Increase watering as necessary when wind speeds exceed 15 mph during dry conditions. ii.Apply asphalt, oil, water or suitable chemicals on unpaved roads, parking areas, staging areas, materials stockpiles, and other surfaces at construction sites that can give rise to airborne dust. iii.Sweep all paved construction site areas so as to maintain them in a clean condition.	Meet and confer only.

Exhibit A to MOA

Page 5 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	iv.Sweep streets if visible soil material is carried onto adjacent public streets so as to maintain them in a clean condition. v.Hydroseed or apply (non-toxic) soil stabilizers or otherwise cover or stabilize exposed disturbed soils that have remained inactive for ten days or more during October 15th to April 15th. vi.Limit traffic speeds on unpaved roads and circulation areas to 15 mph, install sandbags or other erosion-control measures to prevent silt runoff to public roadways. vii.Replant vegetation in disturbed areas as quickly as possible. viii.Designate a person or persons to monitor the dust control program and order increased watering if necessary to prevent offsite transport of dust.
	Air Quality – Operations
A.7.a	Any generators purchased or leased after the effective date of this Agreement will comply with the requirements and standards set by the California Air Quality Board (“CARB”), including those articulated in the California Code of Regulations, title 17, sections 93115-93115.5 and 93116-93116.5, in effect at the time of such purchase or lease. Nothing herein is intended or shall be deemed to confer jurisdiction on CARB for enforcement or any other purposes.	MOA Dispute Resolution process.
A.7.b	Preference will be given in contract negotiations, which take place after the effective date of this Agreement, to bus transportation companies providing buses powered by natural gas or other low emission alternative fuel, provided that the pricing and rates of such companies are comparable to other bus companies not using such fuel.	MOA Dispute Resolution process.
A.7.c	The Tribe will adopt and enforce a law prohibiting the open burning of refuse from Resort Project operations.	MOA Dispute Resolution process as to the adoption of the law only. Meet and Confer for the remainder.
A.7.d	A non-smoking area will be provided in the casino area and a ventilation system will be utilized throughout the gaming	MOA Dispute Resolution process.

Exhibit A to MOA

Page 6 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	facility that exhausts tobacco smoke.
A.7.e	The Tribe will implement the measures specified in the serpentine soils hazard dust mitigation plan required for the Dugan Project, as stated in the Final Environmental Assessment, if serpentine soils are found on the Resort Project site.	Meet and confer only.
A.7.f	The Tribe will, where it determines it is feasible and practical, implement the following control measures to reduce emissions of CO2 and other greenhouse gases: i.Install temporary electrical service installation to avoid the need for independently powered equipment (e.g., compressors) where reasonable. ii.Restrict idling of non-construction diesel equipment (other than for emergency purposes) and commercial vehicles, including delivery vehicles but excluding buses, to no more than 20 minutes. iii.Promote ride-sharing programs, including but not limited to a trip reduction program for employees. The Tribe may accomplish these programs by designating parking spaces for high-occupancy vehicles, providing preferred parking for employee carpools, providing larger parking spaces to accommodate vans used for ride-sharing, and designating adequate passenger loading and unloading and waiting areas.	MOA Dispute Resolution process.
	Biological Resources
A.8.a	Underground placement of utilities will be designed to minimize tree damage and removal. Any trees removed shall be replaced at a 3-to-1 ratio and maintained for three years after the planting.	MOA Dispute Resolution process.
A.8.b	With regard to road improvements along State Route 128 that requires construction in waters of the United States, the Tribe shall make a good faith effort to work with Caltrans and/or other permitting authorities to develop mitigation measures to reduce or eliminate impacts to aquatic species during the removal and replacement of the culvert at State Route 128 if that action is required for roadway improvements. These measures may include limiting construction activities to the dry season as determined by NOAA Fisheries, implementing construction BMPs and onsite restoration of temporarily impacted areas.	Meet and confer only.

Exhibit A to MOA

Page 7 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	Water Quality
A.9.a	The Tribe will concurrently provide the County a copy of its annual Consumer Confidence Report prepared by the Tribe after the effective date of this Agreement when it sends its report to the Environmental Protection Agency.	MOA Dispute Resolution process as to providing such copy only.
A.9.b	The Tribe will use a California State certified lab to test samples taken under the sampling plan.	MOA Dispute Resolution process.
A.9.c	The Tribe will concurrently provide the County a copy of its sampling plan prepared by the Tribe when it sends its plan to the Environmental Protection Agency, and will meet and consult with the County regarding such sampling plan.	MOA Dispute Resolution process as to provision of the plan only.
A.9.d	The Tribe will comply with drinking water quality standards no less stringent than the federal Safe Drinking Water Act.	Meet and confer only.
	Surface Water Quality
A.10.a	The Tribe will take reasonable measures to prevent petroleum-related pollutants from being carried from roadway surfaces into Rancheria Creek, including, but not limited to, the following measures: i.“Fossil Filters” or an equivalent product will be installed at the drainage structures that collect roadway runoff. The filters will be regularly inspected and replaced as necessary during the rainy season to maintain effectiveness. The used filters will be handled and disposed of in accordance with all applicable laws. ii.“Stormcepter” grease and sediment traps or an equivalent product will be installed in the storm drain lines just upstream of the discharge points into the creek. The traps will be periodically cleaned out and the trapped material disposed of in a proper manner. iii.In lieu of the combined “Fossil Filters” and “Stormceptor” grease and sediment traps, a stormwater treatment method from “Guidelines for the Standard Urban Stormwater Mitigation Plan Stormwater Best Management Practices for New Development and Redevelopment for the Santa Rosa Area and Unincorporated Areas around Petaluma and Sonoma,” dated June 3, 2005, may be utilized.	Meet and confer only.

Exhibit A to MOA

Page 8 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	Drainage and Stormwater
A.11.a	Drainage improvements will be designed by a registered Civil Engineer and will comply with the Tribe’s Ordinance requirements on post construction stormwater runoff control. The Tribe’s Ordinance will adopt standards that are no less stringent then the EPA’s current regulations on post construction stormwater run off control.	Meet and confer only.
A.11.b	The Tribe will provide the County with a copy of its current construction Stormwater Pollution Prevention Plan (“SWPPP”), including any final amendments (but excluding daily inspection and adjustment documentation), for both the existing Casino and all future Gaming Facility construction SWPPPs. The Tribe will consult with the County in good faith regarding the adequacy of any SWPPP component and will seriously consider any feasible and reasonable comments and recommendations. Nothing herein is intended or shall be deemed to confer jurisdiction on the County for enforcement or any other purposes.	MOA Dispute Resolution process for providing copy of SWPPP only. Meet and confer only for remainder of mitigation measure.
A.11.c	The Tribe will prepare a construction SWPPP for the construction of the Resort Project. The Tribe will implement the Best Management Practices (BMPs) set forth in its SWPPP to avoid downstream impacts, including channel erosion and sedimentation in Stream P1 (as such term is identified in the Tribe’s NPDES permit application). The BMPs will be based on the latest editions of the following publications: i.California Stormwater BMP Handbook (www.cabmphandbooks.com), by the California Stormwater Quality Association; ii.Erosion and Sediment Control Field Manual, by the San Francisco Bay Regional Water Quality Control Board; iii.Manual of Standards for Erosion & Sediment Control, by the Association of Bay Area Governments; and iv.Construction Site Best Management Practices Manual, by the California Department of Transportation.	Meet and confer only.
A.11.d	The SWPPP will include schedules for construction, maintenance, and inspection of proposed BMPs.	Meet and confer only.
A.11.e	The Tribe will inspect its erosion prevention and sediment control measures before forecasted storm events and after actual storm events to ensure that measures are functioning properly. “Storm events” are events that produce at least	Meet and confer only.

Exhibit A to MOA

Page 9 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	one (1) inch of precipitation in a 24-hour period. The Tribe will promptly replace erosion prevention and sediment control measures that have failed or are no longer effective.
	Wastewater
A.12.a	The Tribe will make a good-faith effort at all times to employ a lead wastewater plant operator that is a certified Grade II operator or higher classification or equivalent experience.	Meet and confer only.
A.12.b	Treated wastewater storage ponds will be double lined and include both electronic monitoring devices to detect leakage and a leachate collection and removal system between the two liners constructed in accordance with applicable federal and Tribal regulations.	Meet and confer only.
A.12.c	The Tribe will maintain equipment that automatically shuts off treated wastewater used for irrigation if a significant leak occurs in the irrigation system equipment.	MOA Dispute Resolution process.
A.12.d	To the extent feasible, the Tribe will significantly reduce the aesthetic impact of storage tanks over 30,000 gallons from valley views through exterior paint colors that are non-reflective and are neutral colors that complement the adjacent environment, vegetative screening, and other practical measures. The Tribe will provide the County with a sample of such colors and any proposed vegetative screening and other practical measures and will meaningfully consider any input the County may have regarding such color choice and any proposed vegetative screening and other practical measures.	MOA Dispute Resolution process.
A.12.e	The Tribe agrees to share with the County its engineering design report with supporting computations, construction drawings, specifications, and operating plans for effluent storage and irrigation facilities pursuant to its existing NPDES permit. The Parties will make good-faith efforts to resolve any concerns regarding the design, rated disposal capacity, or proposed operation of the effluent storage and irrigation facilities. Such discussions, and any information obtained therefrom, are subject to the confidentiality provisions set forth in Section 19 of the MOA. Nothing herein is intended or shall be deemed to confer jurisdiction on the County for enforcement or any other purposes.	MOA Dispute Resolution process regarding sharing of information and compliance with confidentiality provisions only. Meet and confer regarding the remainder, including good-faith efforts to resolve concerns.
A.12.f	In recognition of the government-to-government relationship between the Tribe and County, the Tribe agrees to meet and confer with the County regarding its wastewater	MOA Dispute Resolution process regarding participation

Exhibit A to MOA

Page 10 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	operations and to provide a tour for the County upon reasonable request by the County. Such discussions, tour and any information obtained during such discussions are subject to the confidentiality provisions set forth in Section 19 of the MOA. The Parties will make good-faith efforts to resolve any concerns regarding the Tribe’s wastewater operations subject to the limitations set forth in Section 5.3.21 of the MOA.	in meet and confer and provision of tour and compliance with confidentiality provisions. Meet and confer regarding the remainder, including good-faith efforts to resolve concerns.
A.12.g	The Tribe agrees to contact and meet and confer with the County before deciding to apply for a new NPDES permit or any major modification of its existing NPDES permit for the discharge of treated wastewater on the Rancheria. The Tribe agrees to share with the County its engineering design report with supporting calculations, construction drawings, specifications, and operating plans for the potential new or modified wastewater treatment facility. Such discussions, and any information obtained there from, are subject to the confidentiality provisions set forth in Section 19 of the MOA. The Parties will make good-faith efforts to resolve any concerns regarding potential changes to the Tribe’s wastewater operations subject to the limitations set forth in Section 5.3.21 of the MOA.	Meet and confer only.
A.12.h	The Tribe will notify the County within 24 hours of notifying the EPA of any unlawful discharge of wastewater effluent.	MOA Dispute Resolution process as to notification only.
A.12.i	The County and Tribe will work cooperatively to explore the possibility of having the Tribe’s wastewater treated off-site or the Tribe providing Title 22 water for off-Reservation irrigation use.	MOA Dispute Resolution.
	Solid Waste Management
A.13.a	The Tribe will adopt a recycling plan for the Resort Project and provide a copy of the plan to the County.	MOA Dispute Resolution process as to the adoption and provision to the County of such plan only.

Exhibit A to MOA

Page 11 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	Noise
A.14.a	All generators purchased after the effective date of this Agreement will be operated with mufflers that meet the applicable requirements of the State Resources Code and the Vehicle Code at the time of such purchase.	MOA Dispute Resolution process.
A.14.b	The Tribe will implement a Noise Complaint System.  The Tribe will respond to complaints about outdoor live music or outdoor amplified sound from the Resort Project submitted to the Tribe by off-reservation homes  existing at the time of the execution of the MOA.  The Tribe will investigate such complaints.  If a complaint cannot be resolved between the Tribe and the homeowner within a reasonable time, the Tribe will take noise measurements to document the levels of the outdoor live music or outdoor amplified sound from the Resort Project at such off-Reservation residences.  The sound measurement will measure the L02, which is the sound level exceeded one minute in any hour.  If measured levels from such outdoor live music or outdoor amplified sound at the exterior of the off-Reservation residence exceed a LO2 of 65 dBA before 10 p.m. or 60 dBA after 10 p.m., the Tribe will provide windows rated for a 10 dBA exterior to interior noise reduction for all habitable rooms on the side of the residence facing the Rancheria.  The Tribe will set up a procedure for taking and responding to such complaints, which will include a hotline.  The Tribe will provide specifications for the windows to the homeowner.  The homeowner will then be responsible for receiving three (3) bids from qualified contractors to purchase and install the windows.  The Tribe will promptly pay the homeowner for the cost of the lowest bid after the windows are installed and accepted by the homeowner.  The Tribe will pay for normal installation of the windows but will not pay for any additional work necessary to allow installation, such as repair of dry rot or termite damage.	MOA Dispute Resolution process.
A.14.c	Construction contractors will be required to implement “quiet” pile-driving technology (such as sonic or vibratory pile-driver use; pre-drilling of piles; and jetted pile-driving), where reasonable, with consideration of geotechnical and structural requirements and conditions.	MOA Dispute Resolution process.
A.14.d	Except as to any exception agreed to by the parties, following a meet and confer process, construction activities during nighttime hours (10:00 p.m. to 7:00 a.m.) shall be limited to those related to interior work and exterior work that	MOA Dispute Resolution process.

Exhibit A to MOA

Page 12 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	does not produce significant noise or require the use of significant noise producing equipment.  The Tribe will provide a hotline for nearby residences to call to complain about noise from construction activities during the nighttime hours of 10:00 p.m. to 7:00 a.m. and will respond to such complaints.  Unresolved complaints shall be subject to the Noise Complaint System and remediation procedure described in Section A.14.b. In such circumstances, Section A.14.b shall be read to require the Tribe to respond to complaints regarding noise from construction activities on the Rancheria during the nighttime hours of 10:00 p.m. and 7:00 a.m. from residents in existence at the execution of the MOA and that sound measurements will be taken of noise from such construction activities at the complaining residence if such complaint is not resolved between the Tribe and the homeowner within a reasonable time.  Construction of the Emergency Access Road, as that term is defined in the MOA, shall meet the provision of this Section A.14.d and not the provisions set forth in B.8.a.
A.14.e	Construction contractors will be required to implement the following measures to reduce noise levels due to construction: i.Equipment and trucks used for project construction will use the industry standard noise control techniques (e.g., improved mufflers, equipment redesign, use of intake silencers, ducts, engine enclosures, and acoustically-attenuating shields or shrouds) wherever reasonable. ii.Impact tools (e.g., jack hammers, pavement breakers, and rock drills) used for project construction will be hydraulically or electrically powered wherever reasonable to avoid noise associated with compressed air exhaust from pneumatically powered tools.  External jackets on the tools themselves will be used where reasonable.  Quieter procedures, such as use of drills rather than impact tools, will be used whenever reasonable. iii.To the extent reasonable, stationary noise sources that could affect off-Reservation residences will be located as far as possible from adjacent receptors, will be muffled and enclosed within temporary sheds, and will incorporate insulation barriers or other measures.	MOA Dispute Resolution process.

Exhibit A to MOA

Page 13 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	Traffic and Transportation
A.15.a	The Tribe will install improvements to the intersections of State Route 128 at BIA 93, and State Route 128 at the Dugan Property entrance in conformance with Caltrans construction standards (“Intersection Improvement”), if the rights and approvals necessary to make such improvements are obtained.  Improvements will include acceleration lanes, deceleration lanes, and a left-turn pocket into BIA 93 and the Dugan Property.  These improvements will be installed at the earliest feasible date, subject to Caltrans approval, and the Tribe will make good faith efforts to obtain all approvals, permits, and easements necessary for the construction of such improvements.  The cost of such improvements, which will be constructed at the Tribe’s sole expense, is approximately $4 million for the Dugan Property intersection and $4 million for the BIA 93 intersection, exclusive of any land acquisition(s).  The Tribe will not be required to make the improvements where State Route 128 intersects the Dugan Property entrance if the Tribe obtains another emergency access road to the existing Reservation.  However, any emergency vehicle access point, if other than on the Dugan Property, will have an equivalent level of intersection improvements as agreed above.	MOA Dispute Resolution process.
A.15.b	The Tribe shall provide a Construction Assurance Device, as that term is used in the MOA, to guarantee construction of the Intersection Improvements in accordance with accepted plans for the intersection.  The device shall be provided to the County no later than sixty (60) days following approval of the intersection by Caltrans.  The purpose of the Construction Assurance Device shall be to assure the availability of funds to the County to build or complete the road or to remediate any material deviation from the agreed upon Intersection Improvement plans approved by Caltrans, and shall be in substantially the form or method contained in the MOA.	MOA Dispute Resolution process.
A.15.c	The County will communicate to Caltrans its support of the improvements and timely provide all available information requested to attempt to expedite construction.  County acknowledges that such improvements may require acquisition of certain easements or land parcel(s), as well as, other permitting matters that may be out of the Tribe’s control.  Prior to any construction within a California state right-of-way, the Tribe will submit a copy of the Caltrans approved Encroachment Permit to the County	MOA Dispute Resolution process.

Exhibit A to MOA

Page 14 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	Transportation Department.
A.15.d	The Tribe will obtain a Construction Assurance Device in connection with the Intersection Improvements on the same terms and conditions set forth in Section 7.8 of the MOA.  The Tribe will expeditiously take all feasible steps to procure any property necessary to improve the intersection.  If the required property proves unavailable, the Tribe will make a good-faith effort to obtain approvals for and implement the following improvements prior to the opening of any Resort Project:	MOA Dispute Resolution process.
	i.One combination through-right turn lane on Northbound State Route 128 will be installed.
	ii.One combination left-through lane on Southbound State Route 128 will be installed.
	iii.One left-turn lane and one right-turn lane (with overlapping phasing) on Westbound BIA 93 will be installed.
	iv.A signalized control at the intersection of State Route 128/BIA 93 will be installed that will operate under “Split” phasing for all three turning movements.
A.15.e	The Tribe will make good faith efforts to provide, to the extent permissible, adequate traffic control on State Route 128, so that vehicles do not queue beyond the planned turn lanes on State Route 128 as patrons wait for entrance to the Reservation when parking or other facilities are full or access otherwise restricted.	MOA Dispute Resolution process.
A.15.f	The traffic mitigation measures of Section 19 of the Conditional Permit for License attached as Exhibit D of the MOA is hereby incorporated by reference.  Section 19 provides as follows: “19Petitioner shall make good faith efforts to minimize traffic congestion on Highway 128 caused by activities on the Premises, including construction activities and Special Events (as defined in this Section 19),  and in the case of a Special Event shall undertake the following measures: (a)Petitioner shall provide to County of Sonoma, the California Highway Patrol and the AVA at least two weeks’ notice in writing of all Special Events, which notice will describe the specific mitigation	MOA Dispute Resolution process between the County and the Tribe only.  The terms of this Section A.15.f are only subject to enforcement as long as such terms are in effect as a condition of a liquor license for the Resort Project.

Exhibit A to MOA

Page 15 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	measures to be taken to minimize congestion from the event. (b)If any of the parties entitled to notice pursuant to subparagraph (a) above has reasonable concerns that the proposed mitigation measures will not be effective, or if following the Special  Event, a party entitled to notice believes that there was traffic congestion that could have been mitigated, then at that party’s request, Petitioner will meet and confer with the authorized representatives of the parties to discuss possible further mitigation measures to minimize traffic congestion for the planned occasion or any future similar occasion. (c)Petitioner will make best efforts to secure and utilize offsite parking facilities that are near Highway 101 but which are not located either on Hwy 128 between the Geyserville Bridge and the NAPA County line or on Alexander Valley Road between the intersection of Hwy 128 and the intersection of Healdsburg Avenue, and will take measures to direct traffic to such parking facilities, from which transportation by bus or van will be furnished to and from the Premises.    This parking provision can be satisfied by the Tribe or another person or entity making such parking available to the Tribe’s patrons, and may include a privately or publicly owned park and ride facility. (d)For the purposes of this Section 19, a Special Event shall mean an advertised special drawing or giveaway of a prize worth more than $30,000 or of an automobile, but does not include any pre-drawing or giveaway qualifying days or events leading up to such drawing or giveaway.  Except as otherwise agreed by the AVA and the Tribe, the Tribe agrees not to schedule a special event, as defined above, during the activities set forth in subparagraphs i) through iii) below in which the AVA has an interest (“AVA Events”), unless such AVA Events fall on a Holiday (as defined in paragraph 7 above) or on Valentine’s Day, St. Patrick’s Day, Cinco de Mayo, Mother’s Day, Father’s Day or Indian Days: i.“Taste of the Valley” which is held on the first full weekend in June

Exhibit A to MOA

Page 16 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	between the hours of 10:00 am to 5:00 pm; ii.“Alexander Valley School Annual Spaghetti Dinner & Auction” which isheld on the first Saturday in March between the hours of 6:00 pm to 11:30 p.m.; and iii.“AVA Wine Barrel Tasting” which is  held on the first and second full  weekends in March between the hours of 10:00 am to 5:00 pm. The Petitioner and the AVA will meet each January to discuss any potential conflicting activities so that Petitioner, if at all possible, can avoid scheduling Special Events on such dates.  If this is not possible, the Petitioner will present a plan for handling the increase in traffic flow.” The above terms are subject to amendment and termination.  Tribe is only subject to the above terms as long as such terms are in effect as a condition of a liquor license for the Resort Project.
A.15.g	In addition to the foregoing, the Tribe will place “no parking” signs on BIA 93 and, if approval is obtained from Caltrans, on SR 128.  The Tribe will make good faith efforts to obtain all approvals, permits, and easements necessary to install the signs and will coordinate with applicable law enforcement authorities to reasonably ensure enforcement of these provisions.  The County will communicate to Caltrans its support of the signage and timely provide all available information requested to attempt to expedite the installation of such signs.  The Tribe will also contract with the California Highway Patrol and/or the County Sheriff to assist in traffic control for large special events at the Reservation.  The need for contracted assistance from the CHP or County Sheriff will be determined by the Tribe.	MOA Dispute Resolution process.
A.15.h	The Tribe will monitor Casino related traffic, including special event use, and share such monitoring information on a quarterly basis with the County for the purposes of identifying and remedying congestion problems without affecting the commercial performance, viability and feasibility of the Casino and Resort Project.  The Tribe and County will thereafter meet and confer regarding traffic issues, if any.  The information provided to the County will be subject to the confidentiality provisions contained in Section 19 of the MOA.	MOA Dispute Resolution process as to the provision of monitoring, the sharing of such monitoring, the participation in meet and confer and the compliance with confidentiality

Exhibit A to MOA

Page 17 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
		provisions. Meet and confer only regarding the remainder, including the type of monitoring and any identification and remediation of congestion problems.
Part B	Dugan Projects.  These mitigation measures are applicable to the Dugan Projects only.
	Land Resources
B.1.a	The Tribe will have an expanded Geotechnical Study completed to evaluate the location and placement of the proposed residential units, emergency service building and vineyard(s).  The study should evaluate areas of deeper colluvium or on steeper slopes (excess of 25 feet vertical height).  Permanent cut or fill slopes shall be constructed at inclinations of 2:1 (horizontal: vertical) or less, as recommended in the project geotechnical report.  Steeper slopes (both cut and fill) may be achieved if specific design measures demonstrate a satisfactorily level of safety (i.e., reinforced earth for steeper fill slopes and shotcrete and/or soil nailing).	Meet and confer only.
B.1.b	Mitigation for lurching and ground cracking will consist of special foundation design, use of structural retaining walls, and/or moderate set backs from channel banks depending on the channel depth and location.  In addition, surface and subsurface drainage improvements shall be designed by a Civil Engineer to include paved V-ditches, swales, or other methods to collect surface runoff water from the above planned roads and other improvements to help mitigate lurching and ground cracking hazard potential.  At a minimum, surface drainage should be directed to the project storm drainage system with retaining walls incorporated into the project design to support excavations into any unstable/wet areas.	Meet and confer only.
B.1.c	At a minimum, mitigation for seismic shaking will include designing the improvements and structures in accordance with the provisions of the most recent Uniform Building Code (1997 UBC) or California Building Code (2001 CBC).  UBC/CBC seismic design criteria for the roadway and infrastructure design as summarized in Table 4-1of the	Meet and confer only.

Exhibit A to MOA

Page 18 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	August 2005 Final Environmental Assessment for the Dry Creek Rancheria Fee to Trust Project.  Subsequent engineering will address overall site grading, staging and drainage (particularly sub-surface drainage) to promote long-term stability of site slopes.  This will include the use of retaining walls along portions of the new road alignment to promote both short term (during construction) and long term stability of permanent excavations (i.e., cut slopes).
	Water Resources
B.2.a	All construction stormwater pollution prevention plans will include BMPs to provide effective erosion and sediment control.  These BMPs will be selected to achieve maximum sediment removal and represent the best available technology that is economically achievable.  Performance and effectiveness of these BMPs will be determined either by visual means where applicable (i.e., observation of above-normal sediment release), or by actual water sampling in cases where verification of contaminant reduction or elimination (inadvertent petroleum release) is required to determine adequacy of the measure.  BMPs to be implemented as part of this mitigation measure will include, but are not limited to, the following measures: i.BMPs for temporary erosion control (such as silt fences, staked straw bales/wattles, silt/sediment basins and traps, check dams, geofabric, sandbag dikes, and temporary revegetation or other ground cover) will be employed for disturbed areas, stockpiled soil, and along culverts and drainage ditches on the site and in downstream off-site areas that may be affected by construction activities.  Requirements for the placement and monitoring of the BMPs will become part of the contractor’s project specifications. Performance and adequacy of the measures will be determined visually by site construction management and verified by the Tribe as appropriate. ii.Construction contractors will prepare Standard Operating Procedures for the transportation, handling and storage of hazardous and other materials (e.g., paints, stucco, concrete, oils, etc.) on the construction site to prevent discharge of these materials to surface waters. iii.Grass or other vegetative cover will be established on the construction site as soon as possible after	Meet and confer only.

Exhibit A to MOA

Page 19 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	disturbance.  If grass is chosen, a native seed mix will be used.  At minimum, vegetative application will be completed by September 15th to allow for plant establishment.  No disturbed surfaces or stockpile areas will be left without erosion control measures in place during the period of October 1st to April 30th.  Application, schedule, and maintenance of the vegetative cover will be the responsibility of the contractor and requirements to establish a vegetative cover will be included in the construction contractor’s project specifications. iv.The Tribe will ensure, through the enforcement of contractual obligations, that the construction site will be monitored at least once per week for compliance with the SWPPP.  Such information shall be provided to the Tribe’s mitigation monitor.  Quantitative performance standards for receiving water quality during construction will be consistent with the Regional Board’s adopted Basin Plan objectives for the Russian River, applicable TMDL plans and/or CCR Title 22. v.If discharges of sediment or hazardous substances to drainage ways are observed, construction will be halted until the source of contamination is identified and remediated. Visual indications of such contamination include an oily sheen or coating on water, and noticeable turbidity (lack of clarity) in the water.
B.2.b	The Tribe will have a Master Drainage Plan prepared for the project site by a registered Civil Engineer. The Drainage Plan will incorporate measures to maintain runoff during peak conditions to pre-construction discharge levels. The Plan will include the following items: i.An accurate calculation of pre-development runoff conditions and post-development runoff scenarios will be conducted using appropriate engineering methods.  This analysis will more accurately evaluate potential changes to runoff through specific design criteria.  The model will account for increased surface runoff. ii.An assessment of existing drainage facilities within the project vicinity, and an inventory of necessary upgrades, replacements, redesigns, and/or rehabilitation. iii.Design specifications for additional retention basins if needed to attenuate peak flows.  Retention basins will	Meet and confer only.

Exhibit A to MOA

Page 20 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	be sized to result in no net increase in peak stormwater discharge from the site. iv.A description of the proposed maintenance program for the on-site drainage system. v.Standards for drainage systems to be installed on a project-specific basis. vi.The Drainage Plan will include, and the Tribe will implement, a schedule for identified drainage improvements.  This approach will ensure that drainage improvements are installed concurrently with each proposed use (e.g., residential) to avoid exceeding the capacity of on-site drainage systems and maintaining peak stormwater discharge rates at pre-project levels.
B.2.c	The Drainage Plan described above in Mitigation Measure B.2.b will include BMPs to maximize stormwater quality.  The Drainage Plan will include both BMPs that will address the project site as a whole, as well as guidance for BMPs to be implemented for specific future-tenets.  These BMPs will be selected to achieve maximum contaminant removal and represent the best available technology that is economically achievable.  The BMPs will include a combination of source control, structural improvements, and treatment systems.  BMPs may include but not be limited to the following: i.A wet retention basin(s), which holds a volume of stormwater until it is displaced by the next storm event, designed to provide effective water quality control. Wet retention basins have been shown to be more effective at contaminant removal than dry detention basins. Basin features will include the following: (A)Maximize retention time for settling of fine particles. (B)Establish maintenance schedules for periodic removal of sedimentation, excessive vegetation, and debris that may clog basin inlets and outlets. (C)Maximize the retention basin elevation to allow the highest amount of infiltration and settling prior to discharge.  Wet retention basins are expected to remove, at a minimum, 50 percent of suspended solids and metals, 30 percent of nitrogen and phosphorus, and up to 30 percent of pathogens. ii.Grass strips, high infiltration substrates, and grassy	Meet and confer only.

Exhibit A to MOA

Page 21 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	swales will be used where reasonable throughout the project site to reduce runoff and provide initial stormwater treatment.  This type of treatment would apply particularly to parking lots. iii.Small settling, treatment, and/or infiltration devices may be installed beneath large parking areas to provide initial filtration prior to discharge into flood control basins.  This may include the use of oil and grease separators. iv.Roof drains will drain to natural surfaces or swales where possible to avoid excessive concentration and channelization of stormwater.  Roof drains may be directly connected to the storm drain system, if treatment control measures are provided downstream. v.To minimize the amount of pollutants entering the storm drain system, project roadways and parking areas will be cleaned regularly using street sweeping equipment.  Additionally, litter and debris that may accumulate on the project site will be regularly collected and properly disposed.  These activities will be the responsibility of the Tribe. vi.The Tribe will develop and implement a pesticide and fertilizer management plan for landscaped areas with the goal of reducing potential discharge of such chemical, chlorpyrifos and diazinon in particular, to on-site waterways.
B.2.d	To reduce the impacts of erosion and sedimentation from the vineyard site the Tribe will implement the following operational BMPs, similar to those required by Sonoma County, during vineyard planting and/or replanting activities: i.All initial vineyard planting work will be carried out between February 1 and October 15. ii.Appropriate best management practices will be implemented to protect all disturbed areas on the vineyard site from the effects of storm runoff.  Use of both temporary and permanent measures that incorporate natural systems are encouraged and will consist of seeding, mulching, cover cropping, revegetation, and/or other recognized surface stabilization measures. iii.A stormwater management system designed for an average storm recurrence interval of not less than	Meet and confer only.

Exhibit A to MOA

Page 22 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	twenty-five (25) years will be installed on the vineyard site. The system will allow excess stormwater runoff to be carried through the vineyard site with minimum erosion and consistent with the overall drainage patterns present in the area. iv.An erosion and sediment control plan will be prepared by a qualified civil engineer or qualified professional, will include the following requirements: (A)Location of all soil protection measures, including but not limited to, mulching, cover cropping, netting, revegetation, and other surface stabilization measures; (B)Location of all stormwater management and sediment control measures, including, but not limited to, drainage swales, interceptor and diversion ditches, pipes and culverts, berms, energy absorbing structures, vegetative filter strips, sediment buffers, sediment basins, channels, and drop inlets; and (C)Design calculations for storage capacities of any sediment basins.
B.2.e	With regard to the application of recycled water for vineyard irrigation: i.Application rates of recycled water shall be restricted to the agronomic rate of the crop(s) under irrigation (e.g., grape vines), such that no surface runoff or groundwater contamination will result. To calculate the appropriate irrigation rate, the Tribe may utilize resources such as Wateright (ATIN and CIT, 2000; http://www.wateright.org) or another such tool for irrigation scheduling. ii.The Tribe shall adhere to all Title 22 requirements, as well as DHS’s Guidelines for the Preparation of an Engineering Report for the Production, Distribution and Use of Recycled Water. iii.In addition, the Tribe shall not approve irrigation with recycled water within 50 feet of a domestic well, or surface impoundments of reclaimed water within 100 feet of a domestic well, consistent with Title 22 standards.	Meet and confer only.

Exhibit A to MOA

Page 23 of 29

MOA Exhibit A	Mitigation Measure		Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	Air Quality
B.3.a	To reduce construction emissions of PM10, the Tribe will:		Meet and confer only.
	i.	Water all active construction areas at least twice daily;
	ii.	Cover all trucks hauling soil, sand, and other loose materials or require all trucks to maintain at least two feet of freeboard (i.e., the minimum required space between the top of the load and the top of the trailer);
	iii.	Pave, apply water three times daily, or apply (non-toxic) soil stabilizers on all unpaved access roads, parking areas and staging areas at construction sites;
	iv.	Sweep daily (preferably with water sweepers) all paved access roads, parking areas and staging areas at construction sites;
	v.	Sweep streets daily (preferably with water sweepers) if visible soil material is carried onto adjacent public streets.
	vi.	Hydroseed or apply (non-toxic) soil stabilizers to inactive construction areas (previously graded areas inactive for ten days or more);
	vii.	Enclose, cover, water twice daily, or apply (non-toxic) soil stabilizers to exposed stockpiles (dirt, sand, etc.);
	viii.	Limit traffic speeds on unpaved roads to 15 miles per hour;
	ix.	Install sandbags or other erosion control measures to prevent silt runoff to public roadways; and
	x.	Replant vegetation in disturbed areas as quickly as possible.
B.3.b	The Tribe shall adopt and enforce a law that prohibits open burning as strict as NSCAPCD Regulation II (Open Burning). Nothing in this provision shall be deemed to confer jurisdiction on NSCAPCD.		MOA Dispute resolution process as to the adoption of such law only. Meet and Confer for the remainder.
B.3.c	Before start of construction or operations involving ground disturbance, the project proponent shall prepare a serpentine soils hazard dust mitigation plan in the event		Meet and confer only.

Exhibit A to MOA

Page 24 of 29

MOA Exhibit A	Mitigation Measure		Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	serpentine soils are found during construction and/or excavation activities on the Dugan Property. The plan shall contain the following measures:
	i.	During grading activities, the contractor shall implement dust control measures, such as wetting down exposed serpentine and covering areas exposed to vehicle traffic with non-asbestos material. Employees must be notified of the potential health risk of airborne asbestos, and the contractor and construction workers shall take every precaution possible to reduce the exposure to potential airborne asbestos, such as wearing appropriate clothing and respiratory devices.
	ii.	Vehicle access and speed shall be limited and reduced to the least feasible number of vehicles in construction areas containing serpentine rock. Areas along vehicle travel routes that consist of exposed serpentine shall be covered with non-asbestos material.
	iii.	During construction activities, construction vehicles shall be rinsed before leaving the construction sites to reduce the dispersion of asbestos dust.
	iv.	During construction, any excavated material containing serpentine rock shall be covered to reduce wind erosion and particulate dispersion. Disturbed surfaces and stockpiles shall be maintained with high-moisture conditions or applied with a binder to seal fibers.
	v.	Any exposed serpentine soils along the corridor shall be covered with clean soils to reduce potential health hazards.
	vi.	Vegetation shall be planted to reclaim disturbed serpentine rock areas where feasible.

Exhibit A to MOA

Page 25 of 29

MOA Exhibit A	Mitigation Measure	Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	Biological Resources
B.4.a	If construction activities take place during the migratory bird and raptor breeding season (March 1 through August 15), a pre-construction survey for nesting migratory birds shall be conducted by a qualified biologist within the 30 days prior to construction activities to establish the status of these species on the project site. If ground-disturbing activities are delayed or suspended for more than 30 days after the pre-construction survey, the site shall be resurveyed. If active nests are observed within 500 feet of proposed construction areas, a limited operating period shall be implemented to restrict construction activities within 500 feet of the nest site until young have fledged. Should this buffer distance become infeasible, the USFWS shall be consulted to develop measures to avoid or reduce disturbance to viable nests within 500 feet of an active nest site.	Meet and confer only.
B.4.b	Prior to construction, all wetlands and drainage channels in the study area shall be identified in the field and protected with temporary fencing if within 50 feet of construction activities. Temporary fencing shall consist of silt fencing and temporary construction fencing. A qualified biologist shall direct the placement of fencing in the field using pin flags or similar field identifiers. The fencing shall be placed between the wetland or aquatic feature and the construction area. During construction, fencing shall be maintained and inspected daily by the construction manager. No construction activities or spoils shall be allowed within protected areas.	Meet and confer only.			Army Corps has verified wetlands delineation for the Dugan Property.
B.4.c	Prior to construction, the Tribe shall purchase credits of wetland and riparian habitats from a local mitigation bank to compensate for the permanent loss of these habitats on the Dugan Property. Based on the Environmental Assessment evaluation conducted, up to 0.13 acre of riparian and wetland habitat would be impacted by the Proposed Action. Mitigation shares will be purchased by the Tribe at a 1:1 ratio in direct proportion to the acreage of wetland and riparian habitats eliminated by construction activities, in accordance with the San Francisco District’s Mitigation and Monitoring Proposal Guidelines (December 30, 2004).	Meet and confer only.

Exhibit A to MOA

Page 26 of 29

MOA Exhibit A	Mitigation Measure		Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
B.4.d	Only the minimum amount of vegetation will be pruned that is necessary to construct the project. Where feasible, riparian vegetation that is removed should be cut at or just below grade to facilitate plant re-growth.		Meet and confer only.
B.4.e	Following construction, appropriate erosion control measures will be used on all disturbed areas to minimize the potential for erosion, and may include hydroseeding, erosion control blankets, and revegetation with native plant species.		Meet and confer only.
B.4.f	All oak trees that are removed with a diameter at breast height of five inches or greater will be replanted within suitable habitat at a rate of 3:1 and maintained for three years after the planting.		Meet and confer only.
	Cultural Resources
B.5.a	Any cultural resources, such as chipped or ground stone, historic debris or bone, or paleontologic resources that are inadvertently unearthed during ground disturbing activities, will be handled under Tribal law and processes.		Meet and confer only.
B.5.b	If human remains are discovered or recognized in any location on the Project site other than in a dedicated cemetery, there will be no further excavation or disturbance of the site or any nearby area reasonably suspected to overlie adjacent human remains until:		Meet and confer only.
	i.	The Sonoma County coroner has been informed and has determined that no investigation of the cause of death is required; and,
	ii.	If the remains are of Native American origin, the Tribe shall dispose of such remains and any grave goods associated therewith in accordance with its laws, customs and traditions, preserving the dignity of the decedent and with appropriate efforts to determine his or her descendants. In addition, the Bureau of Indian Affairs will be requested to comply with the Native American Graves Protection and Repatriation Act (NAGPRA) regulations relating to the discovery of human remains of Native American origin on federal land.

Exhibit A to MOA

Page 27 of 29

MOA Exhibit A	Mitigation Measure		Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	Public Services
B.6.a	Any construction equipment that normally includes a spark arrester shall be equipped with an arrester in good working order. This includes, but is not limited to, vehicles, heavy equipment, and chainsaws.		Meet and confer only. (See also Fire Protocol.)
B.6.b	During construction, staging areas, welding areas, or areas slated for development using spark-producing equipment shall be cleared of dried vegetation or other materials that could serve as fire fuel. To the extent feasible, the contractor shall keep these areas clear of combustible materials in order to maintain a firebreak.		Meet and confer only. (See also Fire Protocol.)
B.6.c	A defensible space of no less than 30 feet from proposed residential structures shall be maintained to reduce the intensity of a wildfire. Extremely flammable vegetation and other material shall be removed as much as possible to provide a firebreak around the residences. This buffer will reduce the volume and density of fuels to provide increased safety for fire equipment and evacuating individuals and residents as well as a point of attack or defense from a wildfire. This buffer will also provide possible containment should a fire occur within or near any of the proposed developments.		Meet and confer only. (See also Fire Protocol.)
	Public Health/Hazardous Materials
B.7.a	An asbestos survey and a lead based paint survey, to include conclusions and recommendations, should be completed on all existing structures on the Dugan Property prior to any renovation or demolition activities. All asbestos and lead-based paint work will comply with California OSHA regulations, Northern Sonoma County Air Pollution Control District and/or California Air Resources Board regulations, as well as any local ordinances. The recommendations in the asbestos and lead based paint survey report(s) will be followed to ensure proper handling and disposal of the above identified materials.		MOA Dispute Resolution process as to the completion of the surveys only. Meet and confer only as to the remainder.
B.7.b	The Tribe shall develop a cross-connection control program for the recycled water that will include, but not be limited to, the following elements:		Meet and confer only.
	i.	All piping, valves and outlets should be color-coded and marked to differentiate recycled water from domestic water, and all reclaimed water controllers and valves should be affixed with reclaimed water notification signs.

Exhibit A to MOA

Page 28 of 29

MOA Exhibit A	Mitigation Measure		Dispute Resolution Forum or Process	Completion Signature	Date	Notes: status and degree of measure implementation and other comments
	ii.	Recycled water lines shall be separated from potable water lines by 10 feet in a horizontal direction and 1 foot in a vertical direction, with the potable line at the higher elevation.
	iii.	Maintain buffer zones between irrigated areas and domestic wells.
	iv.	Maintain a 50-foot distance between drinking water wells and wastewater pipelines and impoundment areas.
	v.	Monitor nitrate levels in recycled water and adjust application rates.
	vi.	Recycled water will be monitored quarterly for nitrate levels by the Tribe.
	vii.	The drinking water wells on the Dugan Property will be monitored quarterly for nitrate levels to assure that drinking water standards are maintained in accordance with domestic water quality and monitoring requirements in Title 22, Chapter 15. Nothing in this provision shall be deemed to confer jurisdiction on the State.
	Noise
B.8.a	Except as to any exception agreed to by the parties, following a meet and confer process, the Tribe will restrict the hours of exterior construction at the project site to 7:00 a.m. to 7:00 p.m., Monday through Saturday, and prohibit exterior construction on Sundays and Holidays.		MOA Dispute Resolution process.
B.8.b	Use of the helicopter landing pad discussed in the Final Environmental Study shall be limited to medical, fire, or law enforcement emergencies only. The Tribe will conduct a TEIR and utilize the process for a Tribal Commercial Development Project as those terms are defined in the MOA if the Tribe intends to use such helicopter landing pad for other purposes.		MOA Dispute Resolution process.

Exhibit A to MOA

Page 29 of 29

DUGAN PROPERTY PROJECTS

APN 140-260-003

EXHIBIT B TO MOA

BEFORE THE

DEPARTMENT OF ALCOHOLIC BEVERAGE CONTROL

OF THE STATE OF CALIFORNIA

In the Matter of the Application of:		)
		)	File:	47-396835
		)	Reg:
	Dry Creek Rancheria of Pomo Indians	)
	3250 Hwy 128 East	)	PETITION FOR CONDITIONAL LICENSE
	Geyserville, CA 95441	)
		)

For issuance of an On Sale General Eating Place License

Under the Alcoholic Beverage Control Act

WHEREAS, Dry Creek Rancheria of Pomo Indians (“Petitioner”) has filed an application for the issuance of an On Sale General Eating Place License (“License”) for the River Rock Casino, located at 3250 Highway 128 East, Geyserville, California 95441 (the “Premises”); and,

WHEREAS, sixty-eight (68) protests have been filed against the issuance of the applied-for License; and,

WHEREAS, the protests deal with the proposed operation of the applied-for Premises; and,

WHEREAS, Petitioner has entered into a Tribal – State Gaming Compact with the State of California; and,

WHEREAS, Petitioner is operating Class III gaming as defined by 25 U.S.C. § 2703(8) on the applied-for Premises; and,

WHEREAS, Petitioner wishes to permit consumption of alcoholic beverages in the premises;

WHEREAS, Petitioner wishes to respect community concerns and work to minimize any potential impacts of the License by limiting alcohol beverage weekday, daytime services to beer and wine only; and

WHEREAS, there is not presently a hotel on Petitioner’s reservation and Petitioner intends to build a hotel on such reservation.

NOW THEREFORE, the undersigned Petitioner does hereby petition for a License with the following conditions, to-wit:

1.The Department shall issue the License to Petitioner upon the withdrawal of the protests.

2.Persons under the age of 21 years old shall not be permitted to loiter in any room in which Class III gaming activities are being conducted unless the person is en route to a non-gaming

Exhibit D to MOA

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area of the Premises, except that employees under the age of 21 years old shall be permitted to be in such areas in the performance of their duties as employees.

3.Petitioner shall report to the Department and the County of Sonoma in writing any change in membership of the elected tribal Board of Directors.  This report shall be made within 30 days of said changes.

4.There shall be no live entertainment of any type at the Premises requiring the payment of a separate entrance, admission or other entertainment fee.  In no case shall there be any fighting events, nude or semi-nude entertainment, or adult entertainment as defined in 4 California Code of Regulations § 143.3 at the Premises.

5.Petitioner shall not allow amplified music or amplified sound in the exterior area of the Premises, with the exception of the patio areas and entrances.  Outside amplified music and amplified sound shall only be permitted from 10 a.m. to 10 p.m. except for soft background music that cannot be heard by persons located off the reservation.

6.Petitioner shall regularly police the area under its control in an effort to prevent loitering of persons about the Premises.

7.The sale, service, and consumption of alcoholic beverages at the Premises shall be permitted only during the following hours:

Sundays.  The sale, service, and consumption of alcoholic beverages shall be permitted only between the hours of 10:00 a.m. and midnight (12:00 a.m.), without restriction as to the type of alcoholic beverages that may be sold, served and consumed (the “Sunday Schedule”).

Mondays, Tuesdays, Wednesdays, and Thursdays (“Weekdays”).  Except as provided below for a Weekday that falls on a Holiday (as defined below) or on the day before a Holiday, the sale, service, and consumption of alcoholic beverages on Weekdays shall be permitted only between the hours of 11:00 a.m. and midnight (12:00 a.m.), and shall be limited to beer and/or wine between the hours of 11:00 a.m. and 5:00 p.m.

Fridays.  Except as provided below for a Friday that falls on a Holiday, on Fridays the sale, service, and consumption of alcoholic beverages shall be permitted only between the hours of 11:00 a.m. and 1:00 a.m.  , and shall be limited to beer and/or wine between the hours of 11:00 a.m. and 5:00 p.m. (the “Friday Schedule”).

Saturdays.  The sale, service, and consumption of alcoholic beverages on Saturdays shall be permitted only between the hours of 10:00 a.m. and 1:00 a.m., without restriction as to the type of alcoholic beverage that may be sold, served and consumed (the “Saturday Schedule”).

Holidays.  On the days that are observed (“Holiday(s)”) for the following federal holidays: New Year’s Day, Birthday of Martin Luther King, Jr., Presidents’ Day, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day, and Christmas Day, the sale, service, and consumption of alcoholic beverages shall be subject to the Sunday Schedule, except that if the day before the Holiday is a Weekday, the sale, service, and consumption of alcoholic beverages on that Weekday before the Holiday shall be

Exhibit D to MOA

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permitted on the Friday Schedule, and if the Holiday falls on a Friday or Saturday, or if the day before the Holiday is a Sunday, the sale, service and consumption of alcoholic beverages on that Holiday Friday or Saturday, or on the Sunday before the Holiday, shall be permitted on the Saturday Schedule.

8.Petitioner shall be responsible for litter control on the Premises and roads adjacent to the Premises, including B1A 93 and State Highway 128 from the intersection on Alexander Valley Road north to the Geyserville Bridge.

9.No “Happy Hour” or other type of reduced price or free alcoholic beverage promotion or discounts shall be allowed at the Premises.

10.The sale of alcoholic beverages for consumption off the Premises is strictly prohibited.

11.The parking lot of the Premises shall be equipped with lighting of sufficient power to illuminate and make easily discernible the appearance and conduct of all persons on or about the parking lot.  Consistent with security requirements, however, steps shall be taken to minimize any off-reservation effects of any outdoor lighting.

12.Petitioner shall provide a minimum of eight (8) uniformed security guards during the hours of sales of alcoholic beverages, two (2) of whom shall be specifically assigned to the parking lot area of the Premises.

13.At all times, the sale and service of alcoholic beverages shall be made only in the Premises’ restaurants or bars.  There shall be no sale or service of alcohol on the casino gaming floor.  No person shall be permitted to purchase more than one alcoholic beverage at a time except for the sale of bottles of wine served in a restaurant with a meal.

14.At all times while Petitioner is selling or serving alcohol, food service shall be available.  In addition, at all times while Petitioner is selling or serving alcohol, Petitioner shall provide free food in all areas of the Premises where alcohol is sold except that free food shall not be required in the Premises’ restaurants.

15.There shall be no minimum drink requirement at the Premises.

16.Petitioner shall provide a 24-hour “hot line” phone number for the receipt of any complaints from the community regarding the issues set forth in this License.  Petitioner shall keep a log of such complaints received on the hot line, the date and time received, the specific substance of the concern, and Petitioner’s response to such complaints.  The log shall be retained for a minimum of one year.  On written request by the Department, the County of Sonoma, or the Alexander Valley Association (“AVA”), the log shall be made available for inspection at the Premises within seven (7) days of the request.

17.Signs prohibiting the removal of alcoholic beverages shall remain posted at all points of exit from the Premises.  These signs shall be of sufficient size so as to be easily seen and read by patrons exiting the Premises.

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18.The Tribe acknowledges that it is required to abide by the County of Sonoma’s and the State of California’s sign regulations and requirements when erecting signs on off-reservation land within such entities’ jurisdiction.

19.Petitioner shall make good faith efforts to minimize traffic congestion on Highway 128 caused by activities on the Premises, including construction activities and Special Events (as defined in this Section 19), and in the case of a Special Event shall undertake the following measures:

(a)Petitioner shall provide to County of Sonoma, the California Highway Patrol and the AVA at least two weeks’ notice in writing of all Special Events, which notice will describe the specific mitigation measures to be taken to minimize congestion from the event.

(b)If any of the parties entitled to notice pursuant to subparagraph (a) above has reasonable concerns that the proposed mitigation measures will not be effective, or if following the Special  Event, a party entitled to notice believes that there was traffic congestion that could have been mitigated, then at that party’s request, Petitioner will meet and confer with the authorized representatives of the parties to discuss possible further mitigation measures to minimize traffic congestion for the planned occasion or any future similar occasion.

(c)Petitioner will make best efforts to secure and utilize offsite parking facilities that are near Highway 101 but which are not located either on Hwy 128 between the Geyserville Bridge and the NAPA County line or on Alexander Valley Road between the intersection of Hwy 128 and the intersection of Healdsburg Avenue, and will take measures to direct traffic to such parking facilities, from which transportation by bus or van will be furnished to and from the Premises.    This parking provision can be satisfied by the Tribe or another person or entity making such parking available to the Tribe’s patrons, and may include a privately or publicly owned park and ride facility.

(d)For the purposes of this Section 19, a Special Event shall mean an advertised special drawing or giveaway of a prize worth more than $30,000 or of an automobile, but does not include any pre-drawing or giveaway qualifying days or events leading up to such drawing or giveaway.  Except as otherwise agreed by the AVA and the Tribe, the Tribe agrees not to schedule a special event, as defined above, during the activities set forth in subparagraphs i) through iii) below in which the AVA has an interest (“AVA Events”), unless such AVA Events fall on a Holiday (as defined in paragraph 7 above) or on Valentine’s Day, St. Patrick’s Day, Cinco de Mayo, Mother’s Day, Father’s Day or Indian Days:

i.“Taste of the Valley” which is held on the first full weekend in June between the hours of 10:00 am to 5:00 pm;

ii.“Alexander Valley School Annual Spaghetti Dinner & Auction” which is held on the first Saturday in March between the hours of 6:00 pm to 11:30 p.m.; and

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iii.“AVA Wine Barrel Tasting” which is  held on the first and second full weekends in March between the hours of 10:00 am to 5:00 pm.

The Petitioner and the AVA will meet each January to discuss any potential conflicting activities so that Petitioner, if at all possible, can avoid scheduling Special Events on such dates.  If this is not possible, the Petitioner will present a plan for handling the increase in traffic flow.

20.Except as otherwise agreed by the County of Sonoma and the AVA, Petitioner shall not apply to the Department for any modification or removal of the conditions of this License set forth herein that would go into effect prior to (1) three years from the date issuance of a license to Petitioner by the Department, or (2) the opening of a hotel on the reservation, whichever first occurs.  The County of Sonoma, AVA and Petitioner agree that this condition does not prevent the Petitioner from applying for the modification or removal of the conditions of this License set forth herein prior to the expiration of such time period so long as the change, if granted, is not to become effective until the expiration of the time period described above. Furthermore, the County of Sonoma and those parties represented by Keker & Van Nest, LLP in connection with the application for this License, including the AVA, and Keker & Van Nest as to others it may represent, agree not to oppose the transfer and/or modification of this License, if the conditions set forth herein remain the same.  Before applying to the Department for modification or removal of any conditions of this License set forth herein, Petitioner agrees to notify and, if requested to do so within ten (10) days after such notice, meet within twenty (20) days in good faith with the authorized representatives of, the County of Sonoma and the AVA to discuss the proposal.

Petitioner understands that any material violation of the foregoing conditions and failure to correct after written notice and a reasonable opportunity to do so shall constitute grounds for the suspension or revocation of the License.

DATED THIS	DAY OF	, 2008.
Applicant/Petitioner

Exhibit D to MOA

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EXHIBIT E

ESCROW INSTRUCTIONS

RE EMERGENCY ACCESS ROAD

CONSTRUCTION COMPLETION ACCOUNT DISBURSEMENTS

This Exhibit E, (the “Escrow Instructions”) to the Memorandum of Agreement (“MOA”) between the Dry Creek Rancheria Band of Pomo Indians (“Tribe”) and the County of Sonoma (“County”) (individually the “Party” and collectively the “Parties”) is intended to serve as the basis for Instructions to be jointly provided by the Parties to an escrow holder (“Escrow Holder”) under Section 7.8, et seq. of the MOA for the Emergency Access Road Construction Completion Account disbursements.  Capitalized terms shall have the same meaning as they do within the MOA unless indicated otherwise. The Parties shall enter into final Instructions that meet the criteria and purposes set forth in this Exhibit and the MOA, provided that if, in connection with the Financing, different requirements must be met for construction disbursements, such requirements shall be adopted in lieu of those set forth below, except that in no event shall the County’s rights; to notices, disbursements, or to take over construction as provided herein and in the MOA be diminished.  Nothing herein shall prohibit the Parties from revising or modifying the Escrow Instructions by mutual agreement.

1.Budget and Funding of Emergency Access Road Construction Costs.

1.1An escrow account has been created at                                          pursuant to Section 7.8.4 of the MOA.  In accordance with the MOA, within ten (10) days after opening of the escrow, the Tribe will deliver to the County an updated written budget, which shall include a breakdown of costs by project milestones and set forth in reasonable detail the anticipated costs of constructing the Emergency Access Road (“Budget”).  The County shall have ten (10) days from receipt of the Budget to reasonably approve or reject the Budget.  The Budget amount, as finally approved (or not disputed) by the County shall be the final estimated cost of the Emergency Access Road (subject to such later adjustments as the MOA or the Escrow Instructions permit), and such amount shall constitute the principal amount to be deposited into the escrow account for release to contractors and materialmen in accordance with the Escrow Instructions.  If the Parties are unable to agree on the Budget, the Parties shall proceed to engage in the dispute resolution process set forth in Section 20 of the MOA.

1.2In addition to the Budget amount, a contingency reserve of 7% of the final Budget amount shall be determined as the required contingency amount, subject to adjustment as necessary based upon adjustments to the Budget and shall be deposited into the escrow account along with the Budget amount.  The total amount deposited in escrow shall be termed the Construction Completion Account Fund.  In no event shall the Construction Completion Account Fund be deposited later than five (5) days from the start of construction related to the Emergency Access Road.

Exhibit E to MOA

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1.3If either party determines a need to readjust the amount of the Construction Completion Account Fund in material part at some later date, it shall submit a proposal to do so to the other party, together with the reasons therefore, and the other party shall have ten (10) days in which to approve such revision, which approval shall not be unreasonably withheld.  Substantial progress in construction, or in savings from the original approved Budget, thereby lowering the remaining cost of completion, may be reasons for seeking a reduction of the Construction Completion Account Fund.  Similarly, cost overruns or increased costs of construction materials or labor may be reasons for seeking an increase in the Construction Completion Account Fund.  If the Budget is reduced or increased, the portion of the Account representing such contingency amount shall be reduced or increased pro rata to such change.

1.4These Escrow Instructions hereby direct the escrow agent to disburse amounts from the Construction Completion Account to the Tribe or its designated contractors, vendors or consultants, or to the County, to timely meet payments due in connection with the construction of the Emergency Access Road, in accordance with Section 2 below.  These Escrow Instructions also hereby require that the Construction Completion Account shall be available to the County, if the Tribe defaults or otherwise does not meet its construction obligations, so that the County can obtain the funds as necessary to complete the work either by its own forces or through the use of contractors.

1.5The Tribe shall ensure that the account balance, until construction is completed, shall be no less than that necessary to complete the Emergency Access Road plus not less than 7% above such amount to cover any cost overruns or contingencies, provided that until the County has inspected and approved the final construction as being in accordance with this Exhibit and the MOA, the balance in the account shall not be less than 7% of the overall budget for construction. The County shall be permitted to monitor and audit the account at any time during construction to ensure compliance with the goals of this Section 1.

1.6The Construction Completion Account Fund shall remain on deposit until the Emergency Access Road has been completed and approved in writing by the County, which approval shall not be unreasonably withheld, immediately following which all remaining funds on deposit in the Account, after paying final amounts due to contractors, shall be returned to the Tribe.

2.Conditions Precedent to Disbursement of Escrow Funds.

2.1All disbursements of Escrow Funds shall be for the purpose of paying, at the direction of the Tribe (or the County pursuant to Section 8 below) contractors, materialmen, consultants, architects, and others entitled to payment under contracts relating to the construction of the Emergency Access Road (individually or collectively, “Construction Contractor(s)”), for services rendered or goods and materials delivered to said project, and in connection with the termination of the Instructions and liquidation of the Escrow Fund as provided in the Instructions.

Exhibit E to MOA

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2.2These Instructions hereby direct the Escrow Holder to disburse such amounts as may be necessary to pay the Construction Contractors as and when due, provided:

a.a written directive for such payment (“Disbursement Request”) has been issued in writing to the Escrow Holder by the Tribe (or the County pursuant to Section 8 below) with a simultaneous copy to the other Party, which is in the form and is accompanied by the documents required under Section 3 below, certifying that payment is due, and identifying the name and address where payment should be made, provided that nothing herein shall prohibit the Tribe (or the County pursuant to Section 8 below) from requesting payment to it for direct disbursement to the Contractor;

b.the balance in the Escrow Fund prior to the requested disbursement is in excess of the Contingency Reserve and sufficient to make such payment and the Escrow Holder has determined that making such disbursement will not reduce the balance in the Escrow Fund to below such reserve amount;

c.within five (5) business days of receipt of the Disbursement Request the County has not notified the Escrow Holder and the Tribe in writing that it protests such disbursement, and the specific reasons supporting such protest, provided that if either of the Parties disagree with respect to the protest and the reasons for delaying the Escrow Holder’s authority to disburse such funds, such Party may demand that the Parties proceed to engage in the dispute resolution process set forth in Section 20 of the MOA, and provided further that in such event the dispute resolution process shall be conducted on an expedited basis in which all meet and confer requirements have been reduced to five (5) business days or waived by mutual agreement of the Parties, and an arbitration if required shall be held as soon as practicable after an impasse has been reached.  The Escrow Holder shall follow the joint directions of the Parties, or of an arbitrator if an arbitration on that issue is held, with respect to any disbursements that are disputed in accordance with this subparagraph c.  Similarly, if the Tribe (or the County pursuant to Section 8) has not requested, or has otherwise delayed payment to a Contractor under circumstances that the other Party believes may unreasonably delay completion of the Project or is unjustified, said expedited dispute resolution process shall be commenced to resolve those issues; and

d.the disbursement is in accordance with the Budget and project milestones.  No amendment of the Budget shall be made without County’s prior written consent, provided that the Tribe may reallocate line items within the Budget if the Tribe can demonstrate to the County’s satisfaction, which shall not be unreasonably withheld, that (i) sufficient funds remain in the line item from which the amount is to be reallocated to pay all remaining costs which are required to be paid from that line item;  (ii) no line items in the Budget (other than the line item to which the reallocation is sought) are required to be increased without a deposit by the Tribe of such additional amount; and (iii) there are sufficient funds remaining in the budget to meet the future construction milestones.

Exhibit E to MOA

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e.This Section, other than subparagraph (a), shall not apply to payments made to County pursuant to Section 8.

3.Documents Required for Each Construction Disbursement.

3.1Prior to, and as a condition of, each disbursement by the Escrow Holder, the Tribe (or the County pursuant to Section 8) shall furnish to the Escrow Holder and to the County a disbursement request.

3.2The Tribe’s Disbursement Request, shall, among other things, specify the amount of the requested disbursement (exclusive of interest), direct Escrow Holder to disburse such funds in accordance with this Agreement and certify to Escrow Holder, as of the date of the applicable Disbursement Request, that:

a.the amount of the Disbursement Request represents the actual amount payable (exclusive of contractual retainage) to the Contractor(s) and indicating what payment requests, if any, have been received by Tribe from the Contractor(s) but have not yet been approved by Tribe for payment;

b.all amounts shown as previous payments on the current Disbursement Request have been paid to the parties entitled to such payment;

c.approval by Tribe (or by the Contractor pursuant to Section 8) of all work and materials for which a payment is then due and for which disbursement of the Construction Budget is being requested;

d.all work and materials theretofore furnished for the Project conform with the Plans and Specifications;

e.copies of all Construction Contracts, as then in effect, have been delivered to Escrow Holder;

f.following disbursement, the Escrow Funds will be sufficient to meet future Budget disbursements and the maintenance of the Contingency Reserve;

g.a certificate is provided properly executed by the Contractor waiving liens for all work for which disbursement has been made (including the disbursement that will be made pursuant to the Disbursement Request) to a date specified therein and included within the Disbursement Request, less any contractual retainages, together with such invoices, contracts or other supporting data as Escrow Holder or the other Party may require; and

h.disclaimers from suppliers of fixtures and equipment of any vendor’s lien or purchase money security interest therein have been provided together with evidence satisfactory to Tribe that all fixtures and equipment are and will remain free of security interests of all kinds other than security interests of any lender of the Financing.

Exhibit E to MOA

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3.3Insufficient Escrow Fund Balance.   Tribe agrees that if for any reason the Escrow Fund, exclusive of the Contingency Reserve, is insufficient to complete the Project, Tribe, within ten (10) days after request by the County, will deposit with Escrow Holder cash in an amount which will place the Escrow Fund back in balance with the Budget, which deposit shall first be exhausted before any further disbursement of the proceeds of the Escrow Fund shall be made.  If the Tribe fails to make the required payment it shall be liable to pay directly to the County any amounts required to fully fund the completion of the Emergency Access Road.

4.Escrow Holder’s Verification of Contracts.  At any time after deposit of the Construction Completion Account Fund, the Tribe may request, and the Escrow Holder shall demand, that any Contractor verify the terms and amounts due under its contract, and the work to be completed.  If the Tribe determines that there is any discrepancy between the terms and amounts as shown by the Contractor, the Tribe may require, as a condition to seeking further disbursements, that such discrepancies be eliminated to its satisfaction.

5.Payments Directly to Contractor.  Escrow Holder, at the direction of the Tribe (or the County pursuant to Section ) may direct that payments for the cost of construction of the Project be made directly to any Contractor and/or subcontractor or to any vendor of fixtures and equipment, jointly to Tribe and any of such parties, or directly to Tribe (or County) for subsequent payment to such contractor.

6.Retainages.  Disbursement from the Construction Completion Account Fund shall be limited to an amount equal to the percentage thereof required by the terms of any contract related to the payee’s goods or services, but in no event shall Escrow Holder be obligated in respect of any contract, until final disbursement of that particular contract, to disburse in excess of ninety percent (90%) of the value of the materials and labor incorporated in the Project from time to time pursuant to such contract.

7.Final Disbursement. Escrow Holder will release to Tribe, with accrued interest thereon and less any accrued but unpaid escrow fees and costs, the full amount of the Escrow Funds not theretofore disbursed (“Final Disbursement”) when:

7.1the Tribe has certified to the Escrow Holder and the County in writing that the Project has been fully and satisfactorily completed in substantial accordance with the Plans and Specifications; and

7.2all Subcontractors and the Contractor have supplied Escrow Holder and the Title Insurance Company with final sworn statements and full and complete final, unconditional lien waivers and releases of all mechanics’ and materialmens’ lien claims, complying with the requirements of California Civil Code Section 3262; and

7.3the County has performed its final inspection of the Emergency Access Road Improvements, as set forth in Section 7.6 of the MOA, and has verified in writing to the Escrow Holder and Tribe that the construction is materially consistent with the Emergency Access Road Plans.

Exhibit E to MOA

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8.Recognition of County as Substitute for Tribe.

8.1In the event the County contends that the Tribe is in default of its obligation to build the Emergency Access Road in accordance with the MOA it will notify Tribe of such claim and the issue will be resolved in accordance with the MOA.

8.2If resolution of such claim results in the County being granted, through the provisions of the MOA, of the right to take over the Tribe’s rights and responsibilities (but through the use of the Construction Completion Account Fund and not through any requirement that the County fund the completion of the project), the Escrow Holder will be so notified and shall thereafter recognize the County in the place and stead of the Tribe with respect to the control and completion of the Emergency Access Road, including directions for disbursing the Construction Completion Account Fund through the issuance of Disbursement Requests.    Under such circumstances the County will have the option to: (i) keep any contracts in full force and effect and promptly notify Escrow Holder and each other of any default thereunder of which the Party becomes aware. Tribe will continue to execute all documents necessary for the consummation of the transactions contemplated thereby; or (ii) use its own forces or contractors to complete the Emergency Access Road.

8.3Notwithstanding anything to the contrary herein, if the Tribe shall fail to perform any of its covenants or agreements herein or in any of the other MOA provisions with respect to completion of the Emergency Access Road, County may (but shall not be required to) perform any of such covenants and agreements.  Any amounts expended by County in so doing shall be deemed advanced by Escrow Holder under an obligation to do so, and County shall be reimbursed therefor from the Escrow Funds, provided that County shall not expend any monies on its own account unless it is in accordance with the Budget and the Escrow Holder, after being duly provided with a Disbursement Request by the County in accordance with the substitute rights of the County, refuses to honor such request.

9.Escrow Holder’s Determination of Facts.  Escrow Holder at all times shall be free to establish independently to its satisfaction and in its sole and absolute discretion the existence or nonexistence of any fact or facts, the existence or nonexistence of which is a condition of this Agreement.

10.Disclaimer by Escrow Holder.  Escrow Holder shall not be liable to any contractor, subcontractor, architect, supplier, laborer, engineer or any other party for services performed or materials supplied in connection with construction of the Project. Escrow Holder shall not be liable for any debts or claims accruing in favor of any such parties against Tribe or against the Premises.  Neither Tribe nor County is and shall not be deemed to be an agent of Escrow Holder for any purposes, and Escrow Holder is not a venture partner with Tribe or County in any manner whatsoever.  Escrow Holder shall not be deemed to be in privity of contract with any contractor, subcontractor, architect or provider of services on or to the Premises, nor shall any payment of funds directly to a Contractor or other provider of goods or services be deemed to create any third party beneficiary status or recognition of same by Escrow Holder or any other person or entity.

Exhibit E to MOA

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No contractor, subcontractor, architect, supplier, laborer, architect, engineer or other party shall be deemed to be a third party beneficiary of this Agreement or of the MOA.  Approvals granted by Escrow Holder for any matters covered under this Agreement shall be narrowly construed to cover only the parties and facts identified in any written approval or, if not in writing, such approvals shall be solely for the benefit of Tribe.

11.Notices.  Escrow Holder and the parties shall direct all notices to the Parties as set forth in connection with the signatures below.  The Parties hereby execute and agree to the Escrow Instructions through their authorized representatives whose signatures are affixed below.

	ESCROW HOLDER: By: Name: Title: Address:
Dated:	DRY CREEK RANCHERIA BAND OF POMO INDIANS
	BY:
		Harvey Hopkins, Tribal Chairperson
		Dry Creek Rancheria Band of Pomo Indians
		190 Foss Creek Circle, Suite A
		Healdsburg, CA 95548
Dated:	COUNTY OF SONOMA
	BY:
			County Administrator
			575 Administration Dr.
			Santa Rosa, CA 95403

Exhibit E to MOA

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APPROVED AS TO FORM:

	HOLLAND & KNIGHT LLP
Date:	BY:
		JEROME L. LEVINE,
		Counsel For Dry Creek Rancheria
		633 W. 5th Street, Suite 2100
		Los Angeles, CA 90071
Dated:	OFFICE OF THE COUNTY COUNSEL
	STEVEN WOODSIDE, County Counsel
	BY:
			BRUCE D. GOLDSTEIN,
			Assistant County Counsel
			For the County of Sonoma
			575 Administration Dr.
			Santa Rosa, CA 95403

Exhibit E to MOA

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Bond Number:              

Contract Number:                     

PERFORMANCE AND PAYMENT BOND

(California)

WHEREAS, the County of Sonoma, California a political subdivision of the State of California (“Obligee”) and Dry Creek Rancheria Band of Pomo Indians, a federally recognized Indian tribe (“Principal”) have entered into a Memorandum of Agreement effective                     , 2008 (“MOA”), approved by the County Board of Supervisors and Tribe’s Board of Directors, pursuant to which Principal agrees to install and complete certain designated road improvements (the “Emergency Access Road”).  The MOA is hereby incorporated as part of this Performance and Payment Bond (“Bond”); and

WHEREAS, the design and construction specifications for the Emergency Access Road (“Design and Construction Specifications”) have been reviewed and accepted by the Obligee, and the Principal is contractually required to construct the Emergency Access Road according to the design, specifications, and timeline contained in the MOA and the specifications which are attached hereto as Exhibit A; and

WHEREAS, under the terms of the MOA, Principal also is required to file a good and sufficient Bond with the Obligee to secure the claims to which reference is made in the MOA, including but not limited to the construction of the Emergency Access Road according to the Design and Construction Specifications provided for in Exhibit A and the terms of the MOA; and

WHEREAS, Tribe hereby agrees to a limited waiver of sovereign immunity for the purposes of enforcing the Bond and consents to jurisdiction in the Sonoma County Courts or other court of competent jurisdiction for the limited purposes of enforcing the Bond, and specifically agrees that such a court shall have jurisdiction to enter judgments enforcing rights and remedies expressly provided for in the Bond, including but not limited to monetary damages, injunctive relief, declaratory judgment, and specific performance.

1.             NOW, THEREFORE, Principal and                         (“Surety”), are held firmly bound unto the Obligee for the construction of the Emergency Access Road as provided for in Exhibit A and the MOA (as either shall be amended by agreement of the Obligee and Principal from time to time), and the payment of all sums incurred in such performance, in the penal sum of Thirteen Million Dollars ($13,000,000) (“Construction Sum”), for materials furnished, services provided, or labor thereon of any kind, that said Surety will pay the same in an amount not exceeding the amount set forth above and so binds all heirs, executors, administrators, successors, and assigns, jointly and severally, firmly by these covenants and agreement.

2.             It is expressly stipulated and agreed that the Bond shall inure to the benefit of Obligee only and no other person or entity.

3.             Should the condition of this Bond be fully performed, then this obligation shall become null and void; otherwise it shall be and remain in full force and effect.

Exhibit F to MOA

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4.             The Surety, for value received, hereby stipulates and agrees that no change, extension of time, alteration, addition, omission and/or any other modification to the MOA, or to any of the work to be performed thereunder with respect to the Emergency Access Road nor any forbearance on the part of either the Principal or the Obligee shall in any way impair or affect its obligations under this Bond and hereby waives notice of any and all such changes, extensions of time, alterations, additions, omissions and/or any other modifications or any forbearance on the part of either the Principal or the Obligee.

5.             The condition of this obligation is such, that Principal, or its heirs, executors, administrators, successors, or assigns approved by Obligee, shall promptly and faithfully perform the covenants, conditions, and agreements of the MOA in constructing the Emergency Access Road according to the Design and Construction Specifications during the approved MOA terms and any extensions thereof as may be granted by Obligee, with or without notice to Surety, and shall also promptly and faithfully perform all the covenants, conditions, and agreements of any alteration of the Emergency Access Road, notice of which alteration to Surety being hereby waived, on Principal’s part to be kept and performed at the time and in the manner therein specified, and in all respects according to their true intent and meaning, and shall indemnify, defend, protect, and hold harmless Obligee.

6.             The Surety hereby stipulates that no extension of time, change, alteration, modification, or addition to the MOA or accepted Design and Construction Specifications (Exhibit A), or of the work required thereunder, shall release or exonerate Surety on this bond or in any way affect the obligation of this bond; and Surety does hereby waive notice of any such extension of time, change, alteration, modification, or addition.

7.             Whenever Principal shall be and declared by Obligee in default under the MOA with respect to construction of the Emergency Access Road, Surety shall, promptly (within 30 days) remedy the default and shall promptly, at the election of the Obligee:

a.Undertake through its agents or independent contractors, reasonably acceptable to Obligee, to complete the Emergency Access Road in accordance with its terms and conditions and to pay and perform all obligations of Principal under the MOA, including without limitation, all obligations with respect to warranties, guarantees, indemnities, and the payment of liquidated damages; or

b.Obtain a bid or bids for completing the Emergency Access Road in accordance with the Design and Construction Specifications, and, upon determination by Obligee of the lowest responsible bidder, arrange for a contract between such bidder and Obligee and make available as work progresses (even though there should be a default or a succession of defaults under the contract or contracts of completion arranged under this paragraph) sufficient funds to pay the cost of completion less the balance of the Construction Sum, and to pay and perform all obligations of Principal, including, without limitation, all obligations with respect to warranties, guarantees, and the payment of liquidated damages not to exceed the Construction Sum.

8.             Surety’s obligations hereunder are independent of the obligations of any other surety for performance, and suit may be brought against Surety and such other sureties, jointly

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and severally, or against any one or more of them, or against less than all of them without impairing Obligee’s rights against the others.  Surety may not use Principal, its heirs, assigns, administrators or successors to complete the Emergency Access Road absent Obligee’s consent.

9.             No right of action shall accrue on this Bond to or for the use of any person or corporation other than Obligee or its successors or assigns.

10.           If Surety does not proceed as provided in paragraph 7, above, then Surety shall be deemed to be in default on this Bond ten (10) days after receipt of an additional written notice from Obligee to Surety demanding that Surety perform its obligations under this Bond.  At all times Obligee shall be entitled to enforce any remedy available to Obligee at law including, without limitation, and by way of example only, rights to perform work, protect work, mitigate damages, advance critical work to mitigate schedule delay, or coordinate work with other consultants or contractors.

11.           Surety’s monetary obligation under this Bond is limited by the amount of this Bond identified herein as the Construction Sum.  Subject to these limits, Surety’s obligations under this Bond are commensurate with the obligations of Principal under the MOA to construct the Emergency Access Road Construction Contract.  Surety’s obligations shall include, but are not limited to:  additional legal, design professional and/or delay costs resulting from Principal’s default or resulting from the actions or failure to act of the Surety under paragraph 7, above (but excluding attorney’s fees incurred to enforce this Bond); and

12.           The Parties agree that any proceeding, legal or equitable, under this Bond shall be instituted in the courts of the County of Sonoma, or in a court of competent jurisdiction if the Sonoma County courts are without jurisdiction.

13.           All notices to Surety or Contractor shall be mailed or delivered (at the address set forth on the signature page of this Bond), and all notices to Obligee shall be mailed or delivered as provided in the MOA.  Actual receipt of notice by Surety, Obligee or Contractor, however accomplished, shall be sufficient compliance as of the date received at the foregoing addresses.

14.           Any provision in this Bond conflicting with any statutory or regulatory requirement shall be deemed deleted here from and provisions conforming to such statutory requirement shall be deemed incorporated herein.

IN WITNESS WHEREOF, this instrument has been duly executed by the Principal and Surety on the                  day of                                 , 2008.

PRINCIPAL		SURETY
Company:	(Corp. Seal)	Company:	(Corp. Seal)
Signature:		Signature:
Name and Title:		Name and Title:
Address:		Address:

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Exhibit G

DRY CREEK RANCHERIA-SONOMA COUNTY

DEPARTMENT OF EMERGENCY SERVICES

FIRE PROTOCOL

I.GENERAL

A.Background: The Dry Creek Rancheria Band of Porno Indians of California (“Tribe”) is a federally recognized Indian Tribe, with federal trust reservation lands (“Rancheria”) located within the boarders of Sonoma County. The Tribe retains sovereign governmental authority over its reservation lands and its tribal members. The Tribe has exclusive jurisdiction over building, safety and fire code matters pertaining to its Rancheria. To that end, the Tribe, its Board of Directors and its Gaming Commission retain the services of qualified specialists in the fields of Fire Safety and Building Codes Administration (collectively, the Board of Directors, Gaming Commission, Tribal Certified Building Official and Tribal Fire Marshal are referred to herein as “Tribal Officials”), to oversee Fire Life Safety elements of operating the existing Rancheria and River Rock Casino (“Casino”), and review and approval of future projects, including a recently proposed Resort Project encompassing a proposed casino and hotel on the Rancheria, as well as non-gaming Tribal projects.

In addition to its own resources, the Tribe currently relies in part upon Geyserville Fire Protection District (“GFPD”) to provide first response fire and emergency medical services on the Rancheria. The Tribe also is the beneficiary of wildland fire fighting services provided by the Bureau of Indian Affairs and California Department of Forestry and Fire Protection. In addition, through mutual aid agreements, the Tribe may benefit from services from other local public agencies, including the Sonoma County Department of Emergency Services (“County Fire”), which may individually and/or collectively be called upon by GFPD and/or the Tribe to provide emergency response services to the Rancheria, including mutual aid and hazardous materials response services (collectively first response, mutual aid, and hazardous materials are hereinafter referred to as “Emergency Response Services”). The Tribe, Tribal Officials and County Fire shall collectively be referred to in this Fire Protocol as “the Parties.”

B.Purpose: The purpose of this Fire Protocol is to provide for a process by which County Fire will be allowed access by the Tribe to review building and safety plans and to participate in inspections of tribal buildings and areas which may receive Emergency Response Services from GFPD, other local public agencies, and/or County Fire. The Protocol is exclusively technical in nature, focusing only on life/safety issues related to patrons, employees, Tribal members, and the First Responders to the Rancheria under codes made applicable under Tribal law. Nothing in this Protocol is intended to, or may be interpreted to, alter the Tribe’s exclusive jurisdiction over the subjects of this Fire Protocol and the Tribal Officials’ authority to make final, binding code determinations.

C.Geyserville Fire Protection District: The Tribe currently is party to a Memorandum of Agreement with the Geyserville Fire Protection District (“GFPD”) to alleviate impacts resulting from providing EMS and Fire Suppression Services to the Rancheria. This Protocol does not modify said Memorandum of Agreement. As such, GFPD will continue to be invited to participate in future discussions, meetings and inspections related to fire/life safety

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issues pertaining to the Rancheria.

D.Retention of Consultants: County Fire may retain consultants to assist County Fire in plan review and/or inspections. Any consultants retained by County Fire shall be subject to the same confidentiality requirements that are applicable to County Fire, as set forth herein below. With respect to any Gaming Facility plan review or inspection, such County Fire consultants shall be subject to conflict-of-interest clearance, background investigation and licensing by the Dry Creek Gaming Commission. With respect to non-gaming project plan review or inspections, such County Fire consultants shall be subject to a conflict-of-interest check by the Tribal Officials which will review a consultant’s resume and other information as requested to insure the consultant does not have a divergent financial or other potentially relevant conflict with the Tribe. If such a gaming or non-gaming conflict is found, the Tribal Officials will inform County Fire within seven (7) days of submission of a complete application for a gaming license, or for a non-gaming project, submittal of the consultant’s name and resume to the Tribe. If the Tribal Officials determine there is a conflict County Fire shall select a different consultant, any dispute over whether a conflict of interest exists shall be resolved through the MOA dispute resolution process.

II.FIRE PLAN REVIEW PROTOCOL

A.Notification/Response: When the Tribal Officials receive a proposed building plan relevant to the design, development or construction of a proposed project(s) which may receive Emergency Response Services, Tribal Officials shall provide timely notice via e-mail of receipt of such plan to County Fire. County Fire shall respond promptly via e-mail to the Tribal Officials to propose dates and times to review the proposed plan. Such review shall take place within five (5) business days from notice. Alternatively, County Fire may decline review, again via e-mail notification.

B.Comment Format/Feedback: County Fire shall provide comments regarding potential fire/life safety concerns at the time of viewing of plans, and shall provide written comments, if any, within two (2) business days of such plan review to the Tribal Officials as designated below. The Tribe’s Building Official is generally required to process plan check review within 10 days. As a result, the initial plan review process as provided for in this Fire Protocol shall not exceed a total of 10 business days. Any recheck of corrections to the initial plan review shall not exceed 5 business days.

C.Location for Site Plan Reviews: All plan review shall occur at the Gaming Commission office unless the Parties agree otherwise in writing prior to the plan review. Custody of all plans shall remain exclusively with Tribal Officials at all times.

D.Review of As Built Plans: For projects that have already been completed, the Tribe shall allow County Fire an opportunity to review the as built drawings upon reasonable notice. Said plan review shall occur at the Gaming Commission office unless the Parties agree otherwise in writing prior to the plan review:

E.Notices: Notices under this protocol will be sent to the following:

Dry Creek Fire Marshall Vernon Brown
& Associates, Inc. 6060 Sunrise Vista Dr.
Ste 1425 Citrus Heights, CA 95610

Phone: 916-726-0404 Fax: 916-726-0464 Cell: 916-995-7650 Email: vernoa@vbi2.com

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Dry Creek Building Official

Lowell Brown

190 Foss Creek Circle, Suite B

Phone 707-473-2188

Fax (707) 473-2172

Email: lowell.brown@us.bureauveritas.com

Dry Creek Gaming Commission 190
Foss Creek Circle, Suite B

Phone(707)473-2100

Fax (707) 473-2172

Email: vwattles@dcgc.net; ljohnson@dcgc.net; kadams@dcgc.nct;

dcastaneda@dcgc.net

Dry Creek Board of Directors

190 Foss Creek Circle, Suite A

Healdsburg, CA 95448

Phone(707)473-2106

Fax (707) 473-2197

Email: HarveyH@DryCreekRancheria.com; DCRBOD@DryCrcekRanchcria.com;

LynnL@DryCreekRancheria.com

Department Director

Sonoma County

Department of Emergency Services

2300 County Center Drive #221A

Santa Rosa, CA 95403

Phone-707.565.1152

Fax-707.565.1172

Email: vlosh@sonoma-county.org

County Administrator

County of Sonoma

575 Administration Drive.

Santa Rosa, CA   95403

Phone:707-565-2431

Fax: 707-565-3778

Email: cthomas@sonoma-counry.org

Any party may designate in writing, to all of the above persons, alternate designated contact(s).

III.FIRE INSPECTION PROTOCOL

A.Inspections per Fire Code: The Tribe’s fire inspections are performed as required by Tribal law. County Fire’s participation in the Tribe’s fire inspections shall be performed as outlined

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in this Fire Protocol and subject to the terms and conditions of the Memorandum of Agreement (“MOA”) by and between the County and Tribe, to which this Protocol is appended. Inspections are to be scheduled as the work progresses on an area-of-work basis, an example of which would be: installation of underground fire piping included placement and thrust blocks, and hydrostatic and flush testing. The Parties anticipate that these inspections may be repeated in several areas of a site, depending on construction requirements, schedules and other variables. The Parties anticipate a similar routine occurring for interior sprinkler piping inspections and fire alarm systems. Annual fire code inspections of trust lands and the Rancheria improvements, including any proposed projects, shall be conducted to the extent mandated by the Tribe’s Fire Code, and County Fire will be given two (2) business days advance notice via e-mail and shall have an opportunity to attend such inspections. If County Fire is unable to participate in inspections it may review, in the Tribal Gaming Commission Office, or other location mutually agreed upon by the Parties, documents showing the results of the inspection(s) or other certifications related to the project.

B.Notification of Inspections: When a contractor notifies the Tribal Officials of the need to have a fire code inspection, a Tribal Official representative shall notify County Fire of the inspection request via e-mail. Should County Fire desire to participate in the inspection, it shall respond via e-mail within two (2) business days of notice to the Tribal Officials, and shall view the work at the same time the normal inspection occurs.

C.No Delay: Under no circumstance will construction inspections be delayed or performed at a time outside the normal business schedule to accommodate peer viewing by County Fire.

D.Comment Format/Feedback: Potential concerns or suggestions discussed in the field shall be based upon good faith interpretations of the Tribe’s Fire Code. The Parties recognize that such code interpretations may vary among reasonable, qualified code officials, depending upon, among other things, individual understandings of the applicable code and individual professional experiences. Thus, the Parties acknowledge that County Fire may have a code interpretation as to a specific matter that may differ from the Tribal Official constituting the Authority Having Jurisdiction (“AHJ” defined as the officer or other designated Authority charged with the administration and enforcement of the Tribe’s code, or duly authorized representative). Under such circumstances, County Fire shall have an opportunity to express its concerns to the Tribal Officials within two (2) business days of the relevant inspection. Nothing in the foregoing may be deemed to alter or modify the Tribe’s exclusive jurisdiction over building and fire safety issues and code interpretations.

IV.MEET & CONFER PROCEDURE

A.Informal Discussion: If as a result of plan review, inspections, or other information, County Fire transmits fire or other life safety concerns to the Tribe’s Fire Marshal and/or Building Official, they shall meet or teleconference within two (2) business days on an informal basis with County Fire to discuss the issue. The Parties shall use good faith, best efforts to resolve the issue informally.

B.Meet and Confer: If informal discussions outlined above do not resolve an issue, County Fire shall prepare and deliver to all Tribal Officials, in accordance with the notice

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designations above, a written explanation of the factual basis and/or code interpretation underlying its view of the issue (hereinafter “County Fire’s Position Paper”). The Tribe’s Fire Marshal and/or Building Official shall provide a written response (the “Determination”) to County Fire within two (2) business days after receipt of County Fire’s Position Paper. County Fire’s Position Paper and the Tribe’s Fire Marshall and/or Building Official’s Determination shall be discussed at a meeting to be scheduled within one week after the Determination in response to County Fire’s Position Paper is provided, unless the Parties mutually agree to a different schedule. The meeting may be in person or via teleconference and may involve an inspection if the Tribe determines that it would be useful in resolving the dispute.

C.Tribal Board/Gaming Commission Decision: Should the above efforts not result in satisfactory resolution of a concern, County Fire may request a meeting with the Tribal Board of Directors with respect to non-Gaming Facility projects, or alternatively the Gaming Commission with respect to Gaming Facility projects. The meeting is subject to Tribal and Gaming Commission laws and procedures but, notwithstanding the foregoing, shall be scheduled within 10 days of County Fire’s express written request under this section and the notice provisions contained herein. The Board is the final authority for such decisions with respect to non-Gaming Facility projects, and the Gaming Commission is the final authority for such appeals with respect to Gaming Facility projects, and their respective determinations shall not be subject to reversal or modification by any person or entity. Unless a revised written Determination is made by Tribal Officials within seven (7) business days of the meeting, pursuant to the Tribe’s exclusive jurisdiction in this area, the prior Determinations by the Tribal Fire Marshal and/or Building Official shall be final.

D.State Fire Marshall Notification: Upon conclusion of the Meet and Confer and Dispute Resolution procedures provided for in this Fire Protocol, including review by the Tribal Board/Gaming Commission, County Fire may notify the State Fire Marshal, Bureau of Indian Affairs (“BIA”) (as to non-gaming related issues) and/or the National Indian Gaming Commission (as to gaming related issues) of its concerns, provided County Fire simultaneously provides the Tribal Officials with a copy of its comments to the State Fire Marshall, BIA and/or National Indian Gaming Commission.

E.Timelines: The timelines contained in this Protocol may only be revised by the written mutual agreement of the Parties.

V.SCOPE OF FIRE REVIEWS

A.Areas of Site and Building Improvements: The scope of County Fire’s review of plans and inspections of buildings and areas shall include all areas which may receive Emergency Response Services.

B.Gaming Facility Projects: Existing Casino & Parking Garage, proposed Gaming Facility project, and future Gaming Facility projects are subject to the Tribe’s Fire Code, conditions of the MOA and Fire Protocol, Compact, and other applicable Tribal laws.

C.Non-Gaming Facility Projects on Trust Lands: Other non-Gaming Facility projects which may receive Emergency Response Services from County Fire on Tribal trust lands shall be subject to the Tribe’s Fire Code, the MOA and Fire Protocol, and other applicable Tribal laws.

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Examples include, but are not necessarily limited to, the Rancheria Emergency Response Plan, Proposed Roadway Improvements, Dugan Projects,, and tribal housing.

D.Emergency Plan Review: With respect to the Rancheria Emergency Response Plan, and any amendments thereto, Tribal Officials shall consult with County Fire for the purpose of improving coordination and response to any emergencies or disasters. Notwithstanding the consultation, nothing in this Protocol or the MOA shall give County Fire jurisdiction over the Tribe’s Emergency Response Plan.

E.Fee Lands: Projects on fee lands located within Sonoma County are subject to applicable law and are not governed by this Fire Protocol.

VI.CONFIDENTIALITY

The Parties agree that the subjects addressed in the Protocol, including plan review and fire code inspections, encompass matters that involve significant governmental, proprietary and security concerns. The Parties further acknowledge that the MOA by and between the County and Tribe, to which this Protocol is appended, includes significant confidentiality provisions and that those confidentiality provisions are essential components of this Protocol. County Fire expressly recognizes the importance of maintaining the confidentiality information obtained under or related to this Fire Protocol and the MOA, and expressly agrees to do so. Any breach of the confidentiality provisions of this Fire Protocol or MOA shall be subject to the dispute resolution provisions of the MOA, including possible damages.

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EXHIBIT H

RECORDING REQUESTED BY AND

WHEN RECORDED RETURN TO:

Sonoma County Agricultural

Preservation and Open Space District

575 Administration Drive, Room 100A

Santa Rosa, CA  95403

DEED AND AGREEMENT BY AND BETWEEN

ALEXANDER VALLEY VENTURES, LLC, AND THE SONOMA COUNTY
AGRICULTURAL PRESERVATION AND OPEN SPACE DISTRICT CONVEYING AN
AGRICULTURAL AND OPEN SPACE CONSERVATION EASEMENT AND
ASSIGNING DEVELOPMENT RIGHTS

Alexander Valley Ventures, LLC, (“GRANTOR”), and the Sonoma County Agricultural Preservation and Open Space District, a public agency formed pursuant to the provisions of Public Resources Code sections 5500 et seq. (“DISTRICT”)(GRANTOR and DISTRICT are hereinafter referred to as Parties or separately as Party), hereby enter this Conservation Easement and Assignment of Development Rights (“Easement”) and agree as follows:

RECITALS

A.GRANTOR is the owner in fee simple of that certain real property located in the unincorporated area of the County of Sonoma (“COUNTY”) more particularly described in Exhibit “A”, attached hereto and incorporated herein by this reference (“the Property”).

B.The Property includes prime agricultural land located within the Petaluma River area of Sonoma County.  Portions of the Property are currently in active commercial agricultural production and the Property includes significant open space values.  The Property has the soil quality, growing season, and moisture supply needed for sustained agricultural production.

C.Another property owned by an affiliate of GRANTOR, The Dry Creek Rancheria Band of Pomo Indians, a federally recognized Tribe, (“TRIBE”), which property is located at 2970 Highway 128, Geyserville, CA 95441 (the “Dugan Property”), is currently subject to a Land Conservation Contract pursuant to Government Code sections 51200, et seq., (“the Williamson Act contract”).  In connection with certain other agreements, GRANTOR and the TRIBE have jointly requested that the COUNTY rescind the Williamson Act contract in favor of a perpetual easement providing agricultural conservation and open space protection over an approximately 90 acre portion of the Property as more particularly described in Exhibit B, attached hereto and incorporated herein by this reference (“the Easement Area”).  Such rescission and entering into this easement is requested pursuant to section 51256 of the California Government Code.  GRANTOR and TRIBE have each determined that it is in its and their best interests to seek rescission of the Williamson Act contract on the Dugan Property and to enter

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into this agreement.

D.Sections 10251 and 10252 of the Public Resources Code govern the findings that must be made in order for the California Department of Conservation (“DEPARTMENT”) to approve the rescission of the Williamson Act contract.  The DEPARTMENT has determined, in accordance with section 51256.1 of the Government Code, that the findings of COUNTY, in approving the rescission of the Williamson Act contract and the execution of this Easement are supported by substantial evidence, that the Easement is consistent with the eligibility criteria set forth in section 10251 of the Public Resources Code and that the Easement will make a beneficial contribution to the conservation of agricultural land in the area.

E.The COUNTY has determined that the Easement Area possesses agricultural, scenic, and openness values of importance to the people of Sonoma County which deserve to be protected through a perpetual agricultural and open space conservation easement.  Accordingly, COUNTY, has accepted GRANTOR’s and TRIBE’s offer and required GRANTOR to enter into this Deed and Agreement By and Between Alexander Valley Ventures, LLC and the Sonoma County Agricultural Preservation and Open Space District Conveying an Agricultural and Open Space Conservation Easement and Assigning Development Rights (“Easement”) as a condition of rescission of the Williamson Act contract on the Dugan Property.

F.DISTRICT was formed in 1990 by COUNTY voters to preserve agriculture and open space, and to meet the mandatory requirements imposed on COUNTY and each of its cities by Government Code sections 65560 et seq. and the open space elements of their respective general plans.  It is the policy of COUNTY that non-possessory interests in open space lands acquired pursuant to COUNTY’s land use regulatory policies or otherwise by gift, devise, or purchase shall be taken in the name and for the benefit of DISTRICT.  Consistent with that policy, this Easement is granted to DISTRICT.  At the time DISTRICT accepted this Easement, DISTRICT confirmed the agricultural and open space values of the Easement Area and the importance of preserving those values through this Easement.

G.DISTRICT has the authority to acquire this Easement by virtue of Public Resources Code section 5540 and possesses the ability and intent to enforce the terms of this Easement.

H.GRANTOR acknowledges that this Easement is granted pursuant to Public Resources Code section 5540 and is in consideration of COUNTY’s approval of the Dugan Property Williamson Act contract rescission.

EASEMENT

1.Grant and Acceptance of Agricultural and Open Space Conservation Easement and Assignment of Development Rights.  Pursuant to the common and statutory law of the State of California, GRANTOR hereby grants to DISTRICT and DISTRICT accepts an agricultural and open space conservation easement over the Easement Area in perpetuity and GRANTOR hereby irrevocably assigns to DISTRICT all development rights associated with the Easement Area, except those rights which are specifically reserved by GRANTOR through this Easement and described in the exhibits hereto.  Reserved ownership rights include

but are

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not limited to, the right to sell, lease, or otherwise transfer the Easement Area and/or the Property to anyone the GRANTOR chooses, as well as the right to privacy, the right to exclude any member of the public from trespassing on the Easement Area and/or the Property, the right to the use and quiet enjoyment of the Easement Area and/or the Property and any other rights found to be consistent with the terms and purpose of this Easement.  The Easement does not grant DISTRICT or any other party any rights in or over the portion of the Property outside of the Easement Area.

2.Purpose.  It is the purpose of this Easement to preserve and conserve the Easement Area’s agricultural productive capacity, its soils and its agricultural character, as well as to preserve, enhance, protect and maintain the scenic and openness values, including wetland and species habitats and natural values, of the Easement Area for the benefit of the public generally (collectively “the agricultural and open space values of the Easement Area”).  It is further the purpose of this Easement to prevent any uses of the Easement Area that will significantly impair or interfere with those agricultural and open space values.  These purposes shall hereinafter be referred to collectively as “the purpose of this Easement”.

3.Affirmative Rights of DISTRICT.  DISTRICT shall have the following affirmative rights under this Easement:

(a)DISTRICT shall have the right to preserve and protect in perpetuity the agricultural and open space values of the Easement Area in keeping with the terms of this Easement and GRANTOR’s reserved rights, including GRANTOR’s rights to the use and quiet enjoyment of the Property.

(b)DISTRICT shall have the right to hold, use, enjoy, dispose of, and otherwise benefit from the interests in real property conveyed to it by this Easement in accordance with applicable law, including, but not limited to, Public Resources Code section 5540 or any successor statute then in effect, and in keeping with the terms of this Easement and GRANTOR’s reserved rights, including GRANTOR’s rights to the use and quiet enjoyment of the Property.

(c)DISTRICT shall have the right to enter upon the Easement Area and to inspect, observe, and study the Easement Area for the purposes of (i) identifying the current activities and uses thereon and the condition thereof, (ii) monitoring the activities and uses thereon to determine whether they are consistent with the terms and purpose of this Easement, (iii) enforcing the terms of this Easement, and (iv) exercising its other rights under this Easement.  Such entry shall be permitted at least once a year at reasonable times, upon twenty-four hours’ prior written notice to GRANTOR, and shall be made in a manner that will not unreasonably interfere with GRANTOR’s use and quiet enjoyment of the Property consistent with the terms of this Easement.  Each entry shall be for only so long a duration as is reasonably necessary to achieve the purposes of this Paragraph 3, but shall not be necessarily limited to a single physical entry during a single twenty-four hour period.  Notwithstanding the foregoing, should DISTRICT’s General Manager have a reasonable belief that GRANTOR is in breach of this Easement, DISTRICT shall have the right at any time, upon twenty-four hours’ prior written notice to GRANTOR, to enter upon the Easement Area for the purpose of determining whether such breach has occurred.  Such entry shall be made in a manner that will not unreasonably

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interfere with GRANTOR’s use and quiet enjoyment of the Property consistent with the terms of this Easement.  The rights of entry provided by this Paragraph 3(c) shall extend to the officers, agents, and consultants of DISTRICT.

(d)DISTRICT shall have the right to enforce the rights herein granted and to prevent or stop, by any legal means, any activity or use on the Easement Area that is inconsistent with the terms or purpose of this Easement and to require restoration of such areas or features as may be damaged by such activities or uses.  Nothing in this Easement, however, shall require GRANTOR to take any action to restore the condition of the Property, including the Easement Area, after any Act of God, terrorism, war, or any other natural event over which GRANTOR had no control.

(e)In the event DISTRICT fails to enforce any term, condition, covenant or purpose of this Easement, as determined by Director of DEPARTMENT, Director of DEPARTMENT and his or her successors and assigns shall have the right to enforce this Easement by any means available to District under this Easement after giving notice to GRANTOR and DISTRICT and providing a reasonable opportunity under the circumstances for DISTRICT to enforce any term, condition, covenant or purpose of the Easement.  In the event that Director of DEPARTMENT determines that DISTRICT has failed to enforce any of the terms, conditions, covenants or purposes of the Easement, Director of DEPARTMENT and his or her successors and assigns shall be entitled to exercise the right to enter the Easement Area granted to DISTRICT including right of immediate entry where Director of DEPARTMENT or his or her successor or assign determines that immediate entry is required in the event of an emergency circumstance or prevention of a threatened breach of this Easement.

4.GRANTOR’s Use of the Easement Area.  GRANTOR shall confine the use of the Easement Area to activities and uses that are consistent with the purpose of this Easement.  GRANTOR shall not perform, nor knowingly allow others to perform, any act on or affecting the Easement Area that is inconsistent with the purpose of this Easement.  Without limiting the generality of the foregoing, GRANTOR and DISTRICT agree that the activities and uses described in Exhibit “C”, attached hereto and incorporated herein by this reference, are expressly permitted, prohibited or restricted as set forth therein.  Nothing in this Easement requires GRANTOR to conduct agricultural or wetland and species mitigation banking on any part of the Easement Area.

5.Notice and Approval Procedures.  Certain provisions of this Easement require that prior written notice be given by GRANTOR to DISTRICT or vice versa, while other provisions require that GRANTOR obtain prior written approval of DISTRICT.  Any required prior written approval shall not be unreasonably delayed or withheld.  Copies of any written notice or approval shall be provided to the DEPARTMENT.  Unless and until notice is given or approval is obtained in accordance with this Paragraph, any use that requires such notice or approval shall be deemed to be prohibited on the Easement Area.  The procedure for giving such notices and obtaining such approvals are as follows:

(a)For any activity or use that requires prior written notice to DISTRICT, GRANTOR shall deliver such notice to DISTRICT at least 45 days prior to the commencement of such activity or use unless such activity or use is in response to an emergency in which case

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the Parties will meet and confer so as to allow any necessary activity or use to take place in a reasonable amount of time.  The notice shall inform the DISTRICT of all relevant aspects of the proposed activity or use, including, but not limited to, a description of the nature, siting, size, capacity, uses, and/or enterprises.

(b)For any activity or use that requires prior written approval from DISTRICT, GRANTOR shall file a written request for such approval (“GRANTOR’s request”) with DISTRICT at least 45 days prior to the commencement of such activity or use unless such activity or use is in response to an emergency in which case the Parties will meet and confer so as to allow any necessary activity or use to take place in a reasonable amount of time.  The request shall inform DISTRICT of all relevant aspects of the proposed activity or use, including, but not limited to, a description of the nature, siting, size, capacity, uses, and/or enterprises. 

Unless such activity or use is the result of an emergency, DISTRICT shall have forty-five (45) days from the receipt of GRANTOR’s request to review and to approve, conditionally approve, disapprove or notify GRANTOR of any objection thereto.  Disapproval or objection, if any, shall be based on DISTRICT’s good faith determination that the proposed activity or use is inconsistent with the terms or purpose of this Easement or that the request is incomplete or inaccurate.  If, in DISTRICT’s judgment, the proposed activity or use would not be consistent with the terms or purpose of this Easement or the request is incomplete or inaccurate, the DISTRICT’s notice to GRANTOR of any disapproval or objection shall inform GRANTOR of the reasons for DISTRICT’s disapproval or objection. Only upon DISTRICT’s express written approval may the proposed activity or use be commenced, and then only in accordance with the terms and conditions of the approval.

(c)Should DISTRICT fail to respond to GRANTOR’s request within the 45-day time period, GRANTOR shall file a second written request with DISTRICT by registered or certified mail.  Should DISTRICT fail to respond to the second request within ten (10) days after receipt of the request, GRANTOR may commence an action in a court of competent jurisdiction to compel DISTRICT to respond to the request.  In the alternative, GRANTOR may commence a proceeding in arbitration under Paragraph 16 of this Easement.

(d)For written notice to GRANTOR, the DISTRICT shall deliver such notice to the GRANTOR pursuant to the time lines provided for such notice in this Easement.  As to the notice under Paragraph 3(c), such notice shall provide the date and time of such entry.

6.Costs and Liabilities Related to the Easement Area.

(a)GRANTOR agrees to bear all costs and liabilities of any kind related to the operation, upkeep, and maintenance of the Easement Area and does hereby indemnify and hold DISTRICT and DEPARTMENT harmless therefrom.  Without limiting the foregoing, GRANTOR agrees to pay any and all real property taxes, fees, exactions and assessments levied or imposed by local, state or federal authorities on the Easement Area.  GRANTOR shall be solely responsible for any costs related to the maintenance of general liability insurance covering acts on the Easement Area.  Except as specifically set forth in Paragraph 7(b) below, DISTRICT and DEPARTMENT shall have no responsibility whatever for the operation, upkeep or maintenance of the Easement Area, the monitoring of hazardous conditions thereon, or the protection of GRANTOR, the public, or any third parties from risks relating to conditions on the

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Easement Area.  GRANTOR does hereby agree to indemnify and hold DISTRICT and DEPARTMENT harmless from and against any damage, liability, claim, or expense, including attorneys’ fees, relating to such matters.  Without limiting the foregoing, DISTRICT and DEPARTMENT shall not be liable to GRANTOR or any other person or entity in connection with approvals given or withheld hereunder, or in connection with any entry upon the Easement Area occurring pursuant to this Easement, or on account of any claim, liability, damage, or expense suffered or incurred by or threatened against GRANTOR or any other person or entity related to this Easement, except to the extent that such claim, liability, damage, or expense is the result of DISTRICT’s or DEPARTMENT’S respective negligence, gross negligence or intentional misconduct.

(b)(1)Notwithstanding any other provision of this Easement to the contrary, the parties do not intend and this Easement shall not be construed such that it creates in DISTRICT or DEPARTMENT:

(A)  The obligations or liabilities of an “owner” or “operator”  as those words are defined and used in environmental laws, as defined below, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 United States Code, sections 9601, et seq.) (“CERCLA”);

(B)  The obligations or liabilities of a person described in 42 United States Code section 9607(a)(3) or any successor statute then in effect;

(C)  The right to investigate and remediate any hazardous materials, as defined below, associated with the Easement Area; or

(D)  Any control over GRANTOR’s ability to investigate and remediate any hazardous materials, as defined below, associated with the Easement Area.

(2)GRANTOR represents, warrants, and covenants to DISTRICT that GRANTOR’s use of the Easement Area shall comply with all environmental laws, as defined below.

(3)For the purposes of this Easement:

(A)  The term “hazardous materials” includes, but is not limited to, any flammable explosives, radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic substances, or related materials defined in CERCLA, the Hazardous Materials Transportation Act, as amended (49 United States Code sections 1801, et seq.), the Resource Conservation and Recovery Act of 1976, as amended (42 United States Code sections 6901, et seq.), sections 25117 and 25316 of the California Health & Safety Code and in the regulations adopted and publications promulgated pursuant to them, or any other federal, state, or local environmental laws, ordinances, rules, or regulations concerning the environment, industrial hygiene, or public health or safety now in effect or enacted after the effective date of this Easement.

(B)  The term “environmental laws” includes, but is not limited to, any applicable federal, state, local, or administrative agency statute, ordinance, regulation, rule,

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order, or requirement relating to environmental conditions or hazardous materials.

7.Indemnification.

(a)GRANTOR shall hold harmless, indemnify, and defend DISTRICT  and DEPARTMENT from and against damages, liabilities, claims and expenses, including reasonable attorneys’ fees, arising from or in any way connected with (i) injury to or the death of any person, or physical damage to property resulting from any act or omission, condition or other matter related to or occurring on or about the Easement Area, except to the extent that such damage, liability, claim, or expense is the result of the respective negligence, gross negligence or intentional misconduct of DISTRICT or DEPARTMENT (it being the intent of this provision to limit GRANTOR’s indemnity to the proportionate part of DISTRICT’s and DEPARTMENT’S damage, liability, claim or expense for which GRANTOR is responsible); and (ii) the obligations specified in Paragraph 6.  In the event of any claim, demand, or legal complaint against DISTRICT or DEPARTMENT, the right to the indemnification provided by this Paragraph 7(a) shall not apply to any cost, expense, penalty, settlement payment, or judgment, including attorneys’ fees, incurred prior to DISTRICT’s or DEPARTMENT’s written notice of such claim, demand, or legal complaint to GRANTOR, unless GRANTOR has acquired knowledge of the matter by other means, nor to any costs, expenses, or settlement payment, including attorneys’ fees, incurred subsequent to that notice unless such cost, expense, or settlement payment shall be approved in writing by GRANTOR, which approval shall not be unreasonably withheld.

(b)DISTRICT shall hold harmless, indemnify, and defend GRANTOR,  its heirs, devisees, successors and assigns, and DEPARTMENT from and against all damages, liabilities, claims and expenses, including reasonable attorneys’ fees, arising from or in any way connected with injury to or the death of any person, or physical damage to any property, resulting from any act, omission, condition, or other matter related to or occurring on or about the Easement Area and attributable to DISTRICT, except to the extent that such damage, liability, claim or expense is the result of the respective negligence, gross negligence or intentional misconduct of GRANTOR or DEPARTMENT (it being the intent of this provision to limit DISTRICT’s indemnity to the proportionate part of GRANTOR’s and DEPARTMENT’s damage, liability, claim or expense for which DISTRICT is responsible).  In the event of any claim, demand, or legal complaint against GRANTOR or DEPARTMENT, the right to the indemnification provided by this Paragraph 7(b) shall not apply to any cost, expense, penalty, settlement payment, or judgment, including attorneys’ fees, incurred prior to GRANTOR’s or DEPARTMENT’s written notice of such claim, demand, or legal complaint to DISTRICT, nor to any costs, expenses, or settlement payment, including attorneys’ fees, incurred subsequent to that notice unless such cost, expense, or settlement payment shall be approved in writing by DISTRICT, which approval shall be in DISTRICT’s sole discretion.

8.No Public Access.  Nothing contained in this Easement shall be construed as granting, permitting, or affording the public access to any portion of the Property, including the Easement Area, or limiting or precluding GRANTOR’s right to exclude the public from all or any portion of the Property.  Nothing in this Easement shall be construed to preclude GRANTOR’s right to grant access to third parties across the Easement Area, provided that such access is allowed in a reasonable manner and is consistent with the purpose of this Easement and

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so long as such activity is undertaken subject to the terms and conditions of this Easement.

9.Compliance with Governmental Regulations.  The activities and uses permitted on the Easement Area pursuant to this Easement shall be subject to and undertaken in accordance with all applicable federal, state, and local statutes, ordinances, rules, and regulations.

10.No Further Division of the Easement Area.  GRANTOR shall not divide the Easement Area into separate parcels by subdivision, lot line adjustment, partitions or other means, including, but not limited to gaining recognition, by certificate of compliance or otherwise, of parcels which may have previously been created on the Easement Area by prior patent or deed conveyances, subdivisions, or surveys except as provided in this Paragraph and Paragraph 5 of Exhibit C.  This prohibition against division of the Easement Area shall be inapplicable to (a) divisions necessary for public acquisition, (b) divisions necessary for the voluntary conveyance of all or a portion of the Easement Area to a government or non-profit entity exclusively for conservation, mitigation banking or public access purposes, provided however that no acreage set aside for agricultural conservation pursuant to Paragraph 11 shall be included in such voluntary conveyance, and (c) leases for agricultural purposes.  As used in this Paragraph 10, “agricultural purposes” means the cultivation of food or fiber, or the grazing or pasturing of livestock.  Nothing in this Easement shall prevent the TRIBE from seeking to have the federal government take the Property or a portion of the Property into trust as long as this Easement or an equivalent easement of equal or greater restriction remains in force on the Easement Area.  Nothing in this Easement shall prevent the GRANTOR and/or TRIBE from seeking to separate the Easement Area into a separate parcel from the remainder of the Property.

11.Permitted Use of Easement Area as Mitigation Bank.    Notwithstanding any other provisions of this Easement to the contrary, GRANTOR shall retain the right to dedicate, use and permit others to use the Easement Area or any portion thereof as part of a mitigation bank and to receive consideration therefore.   No part of any such consideration shall be payable to DISTRICT, and DISTRICT shall not claim to have any interests in said mitigation bank.  Notwithstanding the above, a minimum of 20 acres of the 90 acre Easement Area will be set aside for agricultural conservation.

12.Interpretation, Construction and Severability.  To the extent that this Easement may be uncertain or ambiguous such that it requires interpretation or construction, then it shall be interpreted and construed in such a way that meets the purpose of this Easement.  It is the intention of the Parties that any interpretation or construction shall promote the purpose of this Easement.  If any provision of this Easement is found by appropriate court to be invalid or unenforceable, all remaining provisions of this Easement shall remain valid and binding.  If the application of any provision of this Easement is found to be invalid or unenforceable as to any particular person or circumstance, the application of such provisions to persons or circumstances, other than those as to which it is found to be invalid, shall not be affected thereby.

13.Baseline Documentation for Enforcement.   GRANTOR shall prepare documentation acceptable to DISTRICT establishing the physical condition of the Easement Area and the activities and uses thereon as of the effective date of this Easement; provided, however, DISTRICT reserves the right, in its sole discretion, to prepare all or part of such documentation if it deems appropriate.  This documentation shall be maintained on file with

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DISTRICT and shall serve as an objective information baseline for monitoring compliance with this Easement.  Any monitoring report prepared by DISTRICT shall be provided to DEPARTMENT.

14.Remedies for Breach.

(a)In the event of a violation or threatened violation by GRANTOR of any term, condition or restriction contained in this Easement, DISTRICT may, following notice to GRANTOR, institute a suit to enjoin and/or recover damages for such violation and/or to require the restoration of the Easement Area to the condition that existed prior to such violation.  The DISTRICT’s notice to GRANTOR shall contain a general description of the condition claimed by DISTRICT to be a violation and shall contain a reasonable and specific cure period during which the violation is to cease and the Easement Area is to be restored to the condition that existed prior to the violation.  Such cure period shall be for a minimum of thirty (30) days.  The notice shall be mailed or otherwise delivered by DISTRICT to GRANTOR.  If DISTRICT reasonably determines that circumstances require immediate action to prevent or mitigate significant damage to the agricultural and open space values protected by this Easement, DISTRICT may pursue any and all remedies available under law without waiting for the cure period to expire, and shall have the right, upon the giving of 24 hours notice, to enter the Easement Area for the purpose of assessing damage or threat to the agricultural and open space values protected by this Easement and determining the nature of curative or mitigation actions that should be taken.  DISTRICT’s rights under this Paragraph 14 shall apply equally in the event of either actual or threatened violations of the terms of this Easement.  GRANTOR agrees that DISTRICT’s remedies at law for any violation of the terms of this Easement are inadequate and that DISTRICT shall be entitled to the injunctive relief described herein, both prohibitive and mandatory, in addition to such other relief, including damages, to which DISTRICT may be entitled, including specific performance of the terms of this Easement, without the necessity of proving either actual damages or the inadequacy of otherwise available legal remedies.

(b)Enforcement of the terms of this Easement shall be at the sole discretion of DISTRICT, and any forbearance by DISTRICT to exercise its rights under this Easement in the event of any violation or threatened violation by GRANTOR of any term of this Easement shall not be deemed or construed to be a waiver by DISTRICT of such term or of any subsequent violation or threatened violation of the same or any other terms of this Easement.  Any failure by DISTRICT to act shall not be deemed a waiver or forfeiture of DISTRICT’s right to enforce any and all of the terms of this Easement in the future.

(c)Inasmuch as the monetary value of the loss or deprivation of the agricultural and open space values of the Easement Area caused by a violation by GRANTOR of the terms of this Easement are uncertain and would be impractical or extremely difficult to measure, GRANTOR and DISTRICT agree that if a loss of agricultural and open space values occurs, the damages for such loss allowed by Civil Code § 815.7 (c) shall be measured as follows:

(1)For an improvement prohibited by this Easement, an amount equal to ten percent of the market value of the improvement for each month, or portion thereof, that the improvement remains on the Easement Area after the DISTRICT provides notice to the

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GRANTOR that such improvement is prohibited; and

(2)For an activity or use prohibited by this Easement, an amount equal to any economic gain realized by GRANTOR as a result of the activity or use after the DISTRICT gives notice to the GRANTOR that such an activity or use is prohibited; and

(3)For an activity or use prohibited by this Easement, where there is no measurable economic gain realized by GRANTOR, an amount equal to $100 a day for each day that the use or activity continues, adjusted annually for inflation in accordance with Consumer Price Index calculated, after the DISTRICT gives notice to the GRANTOR that such an activity or use is prohibited by this Easement.

(4)The damages provided for in this Paragraph 14( c)(1)-(3) shall not accrue during any cure period provided pursuant to Paragraph 14(a).

(5)The damages calculated in this Paragraph 14(c)(1)-(3) are in addition to any direct costs incurred by DISTRICT for enforcement of this Easement and restoration of the Easement Area.  The damages calculated in this Paragraph  4(c)(1)-(3) shall not exceed the appraised value of this Easement.  Nothing in this Paragraph prevents DISTRICT from exercising its right to enjoin the prohibited use or activity and to seek restoration of the Easement Area.

(d)If DISTRICT, in the notice to GRANTOR, demands that GRANTOR remove an improvement, discontinue a use, or both and claims damages from such improvement and/or use, then GRANTOR may avoid all damages by fully complying with DISTRICT’s notice within the cure period provided therein.  In the event of litigation arising out of the notice, brought either by GRANTOR or DISTRICT, in which GRANTOR prevails, then GRANTOR shall be entitled to economic damages; provided, however, that neither DISTRICT nor GRANTOR shall be entitled to damages where DISTRICT has not claimed damages in its notice.

(e)The remedies set forth in this Paragraph 14 are not intended to displace and are in addition to any other remedy available to either Party or the COUNTY as provided by this Easement or any applicable Memorandum of Agreement, local, state or federal law.

15.Acts Beyond GRANTOR’s Control.  Nothing contained in this Easement shall be construed to entitle DISTRICT to bring any action against GRANTOR for any injury to or change in the Easement Area resulting from causes beyond GRANTOR’s control, including, but not limited to, fire, flood, storm, and earth movement, or from any prudent action taken by GRANTOR under emergency conditions to prevent, abate, or mitigate significant injury to the Easement Area resulting from such causes so long as such action, to the extent that GRANTOR has control, is designed and carried out in such a way as to further the purpose of this Easement.

16.Arbitration.

(a)If a dispute arises between the Parties concerning the consistency of any proposed activity or use with the terms or purpose of this Easement, or any other matter arising under or in connection with this Easement or its interpretation, either Party, with the written

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consent of the other, may refer the dispute to arbitration by a request made in writing upon the other, provided that GRANTOR agrees not to proceed with any activity or use that is the subject of the dispute pending resolution of the dispute, and further provided that the Parties agree to proceed to arbitration within sixty (60) days of the delivery of such request for arbitration, or such other date as is mutually agreeable.

(b)The written notice of the request to arbitrate shall identify with specificity the alleged issue or issues and the actions requested to resolve the dispute.  Within seven (7) business days after receipt of the notice, the recipient shall provide a written response agreeing or disagreeing with the complaint.  If the Party agrees it will set forth detailed steps to address the complaint or alleged easement breach.  If the Parties disagree, they shall proceed in accordance with the next subsection.

(c)The Parties shall formally meet and confer in good faith within ten (10) business days of receipt of such notice, or at such other time as the Parties may agree in writing, to attempt to resolve the dispute.  If both Parties agree, a mediator may be used to help resolve the dispute at this stage.  The Parties and mediator, if any, shall ensure that any disputed issues are clearly and directly communicated according to any agreed upon process and timeline.  Multiple meetings under this step may be reasonably required depending upon the nature of the dispute, provided that the meet and confer process shall be completed within thirty (30) days of the initial notice unless extended in writing by mutual agreement of the Parties.

(d)If the GRANTOR and DISTRICT agree to arbitration, the arbitration shall be conducted by a single arbitrator from the list contained in Exhibit “D” to this Easement and shall be conducted in accordance with the JAMS Streamlined Arbitration Rules or AAA Arbitration Rules or successor rules then in effect and shall take place in Santa Rosa or another location mutually agreed upon by the Parties.  The list of arbitrators contained in Exhibit “D” shall be reviewed and revised, if necessary, every five (5) years.  If not revised the prior list shall remain in effect.   If no such list is created or the arbitrators contained on any agreed upon list are not available within a reasonable time period, an arbitrator shall be selected as provided by Paragraph 16(e), below.  Arbitrators shall be contacted in the order their names appear on the agreed upon list and the person highest on the list, whom is available within sixty (60) days from the date of the original notice to conduct the arbitration, shall be selected unless another arbitrator is mutually agreed upon by the Parties in writing.  If no arbitrator is available during the sixty (60) day time frame, the first available arbitrator on the list, available within a reasonable period, shall be selected.

(e)If an arbitrator on the list is not available within a reasonable time frame or if the Parties are unable to agree to a new list or upon the selection of a single arbitrator, then each Party shall name one arbitrator and the two arbitrators thus selected shall select a third arbitrator who shall be a retired United States District Court or California Superior Court judge; provided, however, if either Party fails to select an arbitrator within fourteen (14) days of delivery of the request for arbitration, or if the two arbitrators fail to select a third arbitrator within fourteen (14) days after the appointment of the second arbitrator, then in each such instance, a proper court, on petition of any Party, shall appoint the second or third arbitrator or both, as the case may be, in accordance with California Code of Civil Procedure sections 1280, et seq., or any successor statutes then in effect.

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(f)The provisions of California Code of Civil Procedure, Section 1283.05 are incorporated into this Agreement, provided, however, that no such discovery may be conducted without leave of the arbitrator.  Except as otherwise expressly provided in this Paragraph 16, the arbitration shall be determined in accordance with California Code of Civil Procedure sections 1280, et seq., the purpose of this Easement, the terms of this Easement, and the applicable laws of the State of California, as the basis for determination and resolution, and a judgment of the arbitration award may be entered in any court having jurisdiction thereof. The prevailing Party shall be entitled, in addition to such other relief as may be granted, to a reasonable sum as and for all its costs and expenses related to such arbitration, including, but not limited to, the fees and expenses of the arbitrators, but excluding attorneys’ fees, which sum shall be determined by the arbitrators and any court of competent jurisdiction that may be called upon to enforce or review the award. The arbitrator shall provide a written award and a reasoned decision supporting the basis of the award within thirty (30) days of submission of the dispute following hearing.

(g)Notwithstanding the foregoing, a person shall not be eligible to serve as an arbitrator if the person has an interest in, or is related to, affiliated with, or has represented in a legal capacity, a Party to this Easement, without a written waiver from the other Party.

17.Termination of Easement.

(a)If the Easement Area is taken, in whole or in part, by exercise of the power of eminent domain, GRANTOR or DISTRICT or both may commence appropriate action to recover the full value of the portion of the Easement Area so taken.  Any expenses incurred by GRANTOR or DISTRICT, or both, in connection with any such action, shall be reimbursed out of the recovered proceeds prior to any division of such proceeds between DEPARTMENT, GRANTOR and DISTRICT.  After reimbursement of all expenses incurred by GRANTOR and DISTRICT,         % of the remainder of the proceeds shall be paid to DEPARTMENT.  After payment to DEPARTMENT,  the remaining proceeds shall be divided between GRANTOR and DISTRICT as agreed upon by them in writing or, in the absence of such an agreement, as ordered by the court in the action recovering the proceeds.  If DISTRICT determines that the portion of the Easement Area to be taken is being sought for a use incompatible with this Easement, DISTRICT may assert the presumptions contained in California Code of Civil Procedure section 1240.680 and California Public Resources Code section 5542.5, or any successor statutes then in effect, to protect DISTRICT’s interest in the Easement Area and to preserve the agricultural and open space values thereof.  The terms of this Easement shall terminate as to the portion of the Easement Area taken, but shall remain in effect relative to all other portions of the Easement Area.

(b)In the event that the Easement, in whole or in part, is terminated by judicial termination and proceeds are awarded by the Court, any and all such proceeds shall be distributed as follows.  Before any payments are made, GRANTOR and DISTRICT shall be reimbursed for any expenses incurred in connection with such action.   After reimbursement of all expenses incurred by GRANTOR and DISTRICT,         % of the remainder of the proceeds shall be paid to DEPARTMENT. After payment to DEPARTMENT, the remaining proceeds shall be divided between GRANTOR and DISTRICT as agreed upon by them in writing or, in the absence of such an agreement, as ordered by the court in the action awarding the proceeds.

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18.Easement to Bind Successors.  The agricultural and open space conservation easement granted and the assignment of development rights provided herein shall be a burden upon and shall continue as a restrictive covenant and equitable servitude running in perpetuity with the Easement Area and shall bind GRANTOR, its heirs, personal representatives, lessees, executors, successors, including, but not limited to, purchasers at tax sales, assigns and all persons claiming under them.  The Parties intend that this Easement shall benefit and burden, as the case may be, their respective successors, assigns, heirs, executors, administrators, agents, employees, and all other persons claiming by or through them pursuant to the common and statutory law of the State of California.  Further, the Parties agree and intend that this Easement creates an easement encompassed within the meaning of the phrase “easements constituting servitudes upon or burdens to the property”, as that phrase is used in California Revenue & Taxation Code section 3712(d), or any successor statute then in effect, such that a purchaser at a tax sale will take title to the Easement Area subject to this Easement.

19.Subsequent Transfers.  GRANTOR agrees that a clear reference to this Easement will be made in any subsequent deed or other legal instrument by means of which any interest in the Easement Area, including, but not limited to, a leasehold interest, is conveyed and that GRANTOR will attach a copy of this Easement to any such instrument. GRANTOR further agrees to give written notice to DISTRICT of the conveyance of any interest in the Easement Area at least ten (10) days prior to the date of such conveyance.  These obligations of GRANTOR shall not be construed as a waiver or relinquishment by DISTRICT of the rights created in favor of DISTRICT by Paragraph 18 of this Easement.  The failure of GRANTOR to perform any act required by this Paragraph 19 shall not impair the validity of this Easement or limit its enforceability in any way.

20.Warranty of Ownership.  GRANTOR warrants that it is the owner in fee simple of the Easement Area, and that on the date it executed this Easement the Easement Area is not subject to any deeds of trust other than the deeds of trust identified in Exhibit “D,” attached hereto and incorporated herein by this reference, whose trust deed beneficiaries have therein consented to this Easement, agreed to subordinate their respective interests in the Easement Area to this Easement, and covenanted that any sale made under the provisions of the respective deeds of trust shall be subject to this Easement.

21.Notices.  Except as otherwise expressly provided herein, any notice, demand, request, approval, disapproval, or other communication that either Party desires or is required to give to the other shall be in writing and either served personally or sent by first class mail, postage prepaid, private courier or delivery service, or telecopy addressed as follows:

To GRANTOR:

Tribal Chairperson

Dry Creek Rancheria Band of Pomo Indians

190 Foss Creek Circle, Suite A

Healdsburg, CA 95548

Telephone: (707) 473-2106

Telecopier:                                         

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With a copy simultaneously delivered to:

Jerome L. Levine

Holland & Knight, LLP

633 W. 5th Street, Suite 2100

Los Angeles, CA 90071

Telephone: (213) 896-2565

Telecopier: (213) 896-2450

To DISTRICT:

General Manager

Sonoma County Agricultural Preservation and Open Space District

747 Mendocino Avenue

Santa Rosa, CA 95401

Telephone: (707) 565-7360

Telecopier: (707) 565-7370

With copy simultaneously delivered to:

County Counsel

575 Administration Dr.

Santa Rosa, CA 95403

Telephone:  (707) 565-2421

Telecopier:  (707) 565-2624

To DEPARTMENT:

Any notices required by this Easement to be sent to the DEPARTMENT shall be in writing and shall be personally delivered or sent by first class mail, at the following address, unless a Party has been notified by the DEPARTMENT of a change of address.

Director

Department of Conservation

801 K Street, MS 18-01

Sacramento, CA 95814

Attn:  Williamson Act Program

or to such other address as either Party from time to time shall designate by written notice to the other.  Notice, if mailed, shall be deemed given upon the day following the date shown on the postmark of the envelope in which such notice is mailed or, in the event there is no such date shown, then the day following the date of mailing shown on the Party’s written declaration of mailing, which declaration shall have been executed by a an officer or employee of the Party.  In all other instances, notice shall be deemed given at the time of actual delivery.  Changes may be made in the names and addressees of the persons to whom notices, demands, requests, approvals, disapprovals, or other communications are to be given by giving notice pursuant to this Paragraph 21.

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22.Amendment.  If circumstances arise under which an amendment or modification of this Easement would be appropriate, GRANTOR and DISTRICT shall be free to jointly amend this Easement, provided that any amendment (a) shall be consistent with the purpose of this Easement, (b) shall ensure protection of the agricultural and open space values of the Easement Area, (c) shall not affect the Easement’s perpetual duration and (d) shall maintain the term set forth in Paragraph 11 of this Easement requiring that a minimum of 20 acres of the Easement Area be set aside for agricultural conservation.  Any such amendment shall be in writing, executed by GRANTOR and DISTRICT, and recorded in the Office of the Sonoma County Recorder.  A copy of such amendment shall be provided to the DEPARTMENT for approval, which approval shall not be unreasonably withheld.

23.No Forfeiture.  Nothing contained in this Easement shall result in a forfeiture or reversion of GRANTOR’s title in any respect.

24.Termination of Rights and Obligations.  A Party’s rights and obligations under this Easement shall terminate upon transfer of the Party’s interest in the Easement Area, except that liability for acts or omissions occurring prior to transfer shall survive transfer.

25.Third Party Beneficiary.  GRANTOR and DISTRICT agree that COUNTY shall be a third party beneficiary of this Easement within the meaning of Civil Code section 1559 or any successor statute then in effect, and that COUNTY shall have all rights attendant thereto.  Such rights shall include, but not be limited to, the right, but not the obligation, to enforce the terms of this Easement.  Should COUNTY elect to exercise its right to enforce the terms of this Easement, it shall be entitled to recover from GRANTOR any costs and expenses it incurs in so doing.

26.Limited Waiver of Sovereign Immunity.

(a)GRANTOR and DISTRICT each expressly covenant and agree that, subject to the procedural provisions of this Easement, they may each sue and be sued to resolve any controversy arising from this Easement or to enforce or interpret the terms and conditions of this Easement.  GRANTOR further hereby agrees to a limited waiver of sovereign immunity, in accordance with its Memorandum of Agreement with the COUNTY entered into in March, 2008, in connection with any claims arising from this Easement and for the enforcement of any arbitration award, or judgment to enforce such an award resulting from any claims arising from this Easement only.  The Parties further consent to the jurisdiction of an arbitrator and/or specified court under this Easement including the consent to be sued and bound by a lawful order or judgment, to the extent provided for herein.

(b)With respect to any action arising out of the Easement, GRANTOR and DISTRICT expressly consent to the jurisdiction of an arbitrator selected pursuant to this Easement, to the Sonoma County Superior Court and all related appellate courts, and, if that court is without jurisdiction, to the United States District Court for the Northern District of California, and specifically agree to a limited waiver of sovereign immunity for those purposes only.  The Parties specifically agree that the above referenced courts shall have jurisdiction to

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enter judgments enforcing rights and remedies provided for in this Easement.  No Party to this Easement shall contest jurisdiction or venue of the above-referenced courts, for disputes or claims arising out of this Easement.  Neither GRANTOR nor DISTRICT shall plead or invoke the doctrine of exhaustion of Tribal or other administrative remedies or the defenses of immunity or failure to name indispensable party for disputes or claims arising out of this Easement.

(c)In the event that DEPARTMENT takes any action to enforce the provisions of this Easement pursuant to Paragraph 3(e), all covenants, agreements and waivers set forth in this Paragraph 26 shall apply to such action and may be invoked and enforced by DEPARTMENT

27.Enforceable Restriction.  This Easement and each and every term contained herein is intended for the benefit of the public and constitutes an enforceable restriction pursuant to the provisions of Article XIII, section 8 of the California Constitution, California Public Resources Code section 5540, and California Revenue and Taxation Code section 420 et seq., or any successor constitutional provisions or statutes then in effect.

28.Applicable Law and Forum.  This Easement shall be construed and interpreted according to the substantive law of California, excluding the law of conflicts.  Any action to enforce the provisions of this Easement or for the breach thereof shall be brought and tried as provided for in Paragraphs 16 and 26

29.Pronoun Number and Gender.  Wherever used herein, unless the provision or context otherwise requires, the singular number shall include the plural and the plural the singular, and the masculine gender shall include the feminine and neuter.

30.GRANTOR and DISTRICT.  Wherever used herein, the terms GRANTOR and DISTRICT, and any pronouns used in place thereof, shall mean and include the above-named GRANTOR and its heirs, devisees, personal representatives, lessees, executors, successors, and assigns, including any persons claiming under them, and the above-named DISTRICT and its agents, officers, employees, successors and assigns, respectively.

31.DISTRICT’s General Manager.  Wherever used herein, the term DISTRICT’s General Manager, and any pronoun used in place thereof, shall mean and include the General Manager of DISTRICT and duly authorized representatives.

32.Director of DEPARTMENT.  Wherever used herein, the term Director of DEPARTMENT, and any pronoun used in place thereof, shall mean and include the Director of DEPARTMENT and duly authorized representatives.

33.Fees and Charges.  DISTRICT shall have the right to establish and impose reasonable fees and charges on GRANTOR for inspections, approvals, and other services performed by DISTRICT pursuant to this Easement.

34.Entire Agreement.  This instrument sets forth the entire agreement of the Parties with respect to the Easement and supersedes all prior discussions, negotiations, and understandings relating to the Easement, all of which are merged herein.  No alteration or variation of this instrument shall be valid or binding unless contained in a written amendment

Exhibit H to MOA

Page 16 of 28

prepared, executed and recorded in accordance with Paragraph 22.

35.Authorization.  GRANTOR and DISTRICT each represent and warrant that each has performed all acts precedent to adoption of this Easement, including but not limited to matters of procedure and notice and each has the full power and authority to execute this Easement and perform its obligations in accordance with the above terms and conditions, and that the representative executing this Easement on behalf of each Party is duly authorized to so execute and deliver the Easement.

36.Estoppel Certificates.  DISTRICT shall at any time during the existence of this Easement, upon not less than thirty (30) days prior written notice from GRANTOR, execute and deliver to GRANTOR a statement in writing certifying that this Easement is unmodified and in full force and effect (or, if modified, stating the nature of such modification) and acknowledging that there is not, to DISTRICT’s knowledge, any default by GRANTOR hereunder, or, if DISTRICT alleges a default by GRANTOR, specifying such default.  DISTRICT’s obligation to deliver the statement of certification is conditioned on GRANTOR reimbursing DISTRICT for all costs and expenses reasonably and necessarily incurred in its preparation as determined by DISTRICT’s General Manager.

37.Execution.  GRANTOR shall execute this Easement, cause the same to be acknowledged, and deliver said executed and acknowledged instrument to DISTRICT in such form as to permit its acceptance by DISTRICT and recordation in the Office of the Sonoma County Recorder.

38.No Liens, Encumbrances, or Conveyances.  GRANTOR warrants that after it has executed this Easement, it will not record any lien, encumbrance, or otherwise convey any right, title, or interest in and to the Easement Area until such time as this Easement has been accepted and recorded by DISTRICT.

39.Effective Date.  This Easement shall be effective as of the date of its acceptance by DISTRICT pursuant to California Public Resources Code sections 5500, et seq.

40.Captions.  The captions in this Easement have been included solely for convenience of reference.  They are not a part of this Easement and shall have no effect upon its construction or interpretation.

IN WITNESS WHEREOF, the Parties hereto have executed this Easement as set forth below.

	GRANTOR:
	Alexander Valley Ventures, LLC
Dated:	By:

Exhibit H to MOA

Page 17 of 28

			DISTRICT:
			SONOMA COUNTY AGRICULTURAL
			PRESERVATION AND OPEN SPACE
			DISTRICT
Dated:			By:
			President, Board of Directors
ATTEST:
By:
BOB DEIS,
ex-officio Clerk of the Board of Directors
NOTE: ACKNOWLEDGMENTS MUST BE ATTACHED FOR ALL SIGNATORIES.
			APPROVED AS TO SUBSTANCE:
Dated:	By:
			General Manager
			APPROVED AS TO FORM:
Dated:		By:
				Deputy County Counsel
Dated:		By:
				Jerome L. Levine, Counsel
				For Alexander Valley Ventures, LLC

Exhibit H to MOA

Page 18 of 28

EXHIBIT

CONSENT AND SUBORDINATION OF LIEN HOLDER

(BENEFICIARY)

____________, a __________, beneficiary under that certain Deed of Trust recorded on _________, as Document No. ____________, Official Records of Sonoma County, affecting the title to the real property described in Exhibit “B” of this Easement, hereby consents to this Easement, agrees to subordinate the lien of said Deed of Trust to this Easement, and covenants that any sale made under the provisions of said Deed of Trust shall be subject to this Easement.

Dated: By:

NOTE:  ACKNOWLEDGMENTS MUST BE ATTACHED FOR ALL SIGNATURES.

Exhibit H to MOA

Page 19 of 28

EXHIBIT

CONSENT AND SUBORDINATION OF LIEN HOLDER

(ASSIGNEE BENEFICIARY)

____________, a ______________, assignee beneficiary (Document No. _____, Official Records of Sonoma County) under that certain Deed of Trust recorded on ____________, as Document No._____, Official Records of Sonoma County, affecting the title to the real property described in Exhibit “B” of this Easement, hereby consents to this Easement, agrees to subordinate the lien of said Deed of Trust to this Easement, and covenants that any sale made under the provisions of said Deed of Trust shall be subject to this Easement.

Dated: By:

NOTE:  ACKNOWLEDGMENTS MUST BE ATTACHED FOR ALL SIGNATURES.

Exhibit H to MOA

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Exhibit C

Use of the Easement Area

Use of the Easement Area shall be confined to activities and uses that are consistent with the purpose of this Easement.  Any activity or use of the Easement Area that is inconsistent with the purpose of this Easement is prohibited.  Without limiting the generality of the foregoing, the activities and uses set forth below are expressly permitted, restricted or prohibited on the Easement Area as follows:

1.Agricultural Use.  GRANTOR reserves the right to engage in agricultural uses of the Easement Area, as defined below, in accordance with sound, generally accepted agricultural and soil conservation practices, so long as such use is undertaken in a manner consistent with the purpose of this Easement.

1.1.Livestock for the Production of Food and Fiber.  GRANTOR may breed, raise, pasture, and graze livestock of every nature and description for the production of food and fiber, but in no event shall commercial feedlots be permitted on the Easement Area.  For purposes of this Easement, “commercial feedlot” is defined as a permanently constructed confined area or facility which is used and maintained for purposes of engaging in the business of feeding livestock and which is not grazed or cropped annually.  For purposes of this Easement, a “commercial feedlot” shall not include the establishment, use or maintenance of corrals, holding pens or pastures.  Nothing in this Easement shall prevent GRANTOR from confining livestock for discretionary seasonal feeding or from leasing grazing rights for livestock owned by others.

1.2.Bees.  GRANTOR may breed and raise bees.

1.3.Crops.  GRANTOR may plant, raise, and harvest agricultural, aquacultural, horticultural, and forestry crops and products of every nature and description.

1.4.Sale of Harvested Crops and Products.  GRANTOR may store and sell, including direct retail sale to the public, agricultural crops and products grown, harvested and produced primarily on the Property.

1.5.Use of Agrichemicals.  In connection with permitted agricultural uses, GRANTOR reserves the right to use government approved agrichemicals, including but not limited to, fertilizers and biocides, in those amounts and with that frequency of application necessary to accomplish reasonable agricultural purposes within federal, state and local government regulations and guidelines.

1.6.Removal of Non-Native Plant Species and Animal Control.  In connection with permitted uses, GRANTOR reserves the right to remove non-native plant species and to control predatory and problem animals by the use of selective control techniques consistent with the policies of the Sonoma County Agricultural Commissioner.

Exhibit H to MOA

Page 21 of 28

2.Commercial and Industrial Uses.  Other than the agricultural use set forth in Paragraph 1 of this Exhibit C, commercial or industrial use of or activity on the Easement Area is prohibited, except as follows:

2.1.Mitigation Banking.  GRANTOR reserves the right to and to permit others to create, operate and maintain a wetlands and/or species mitigation bank.  In connection with such permitted use, GRANTOR may develop, restore, enhance, and maintain wetlands and other natural habitats.

3.Structures and Improvements.  No residences, buildings or other structural improvements, shall be placed, constructed or reconstructed on the Easement Area except as provided in this Paragraph 3.

3.1.Roads.  Construction of new roads and the reconstruction or expansion of existing roads in the Easement Area shall be subject to the DISTRICT’s prior written approval.  Roads shall be restricted to those roads directly required for uses and activities permitted herein.  Road construction, expansion or reconstruction shall be undertaken in a manner consistent with the purpose, terms and conditions of this Easement.  Roads shall be constructed and maintained so as to minimize erosion and sedimentation and ensure proper drainage, utilizing Best Management Practices as recommended by the U.S. Natural Resources Conservation Service or other similar or successor entity.

3.2.Fences.  Construction of new fences is restricted to fencing necessary for furthering the purpose of this Easement.  Such fencing must be the minimum necessary for such uses.   In the event of destruction or deterioration of any fences, whether existing at the date hereof or constructed subsequently pursuant to the provisions of this Easement, GRANTOR may replace such fencing with a fence of similar size (i.e., no greater in height or length), function, capacity and location, without prior notice to or approval by DISTRICT, provided, it meets the terms of this Paragraph.  All fencing, whether new or replacement, shall be placed in a manner that:  (i) is consistent with the purpose of this Easement, including the preservation of the agricultural and open space values of the Easement Area; (ii) does not impede wildlife movement except in cases where necessary to protect the permitted uses described in this Easement; and (iii) complies with the DISTRICT’s standards for fences on conservation lands.  In the event any fence, or portion thereof, becomes unnecessary for the uses described in this Paragraph, GRANTOR shall remove such fencing from the Easement Area.

3.3.Maintenance, Repair and Replacement of Existing Structures and Improvements.  All structures and improvements existing at the date hereof or constructed subsequently in accordance with the provisions of this Easement, may be maintained, repaired or replaced at the same location, with a structure or

Exhibit H to MOA

Page 22 of 28

improvement of the same size, character and function,  without notice to or approval of DISTRICT.

3.4.Agricultural Structures and Improvements.  Subject to the prior written approval of DISTRICT, GRANTOR may place or construct, structures and improvements reasonably necessary for permitted agricultural uses, including, but not limited to, barns, farm worker housing, and corrals, provided that all such structures and improvements shall be sited and designed, to the maximum extent practicable, so as not to negatively impact the aesthetics of the Easement Area.

3.5.Mitigation Bank Structures and Improvements.  After written notice to DISTRICT in accordance with this Easement, including Paragraph 7 of this Exhibit C, GRANTOR may place or construct structures and improvements reasonably necessary for creation, operation and maintenance of permitted wetland and species conservation mitigation banks, provided that all such structures and improvements shall be sited and designed to the extent practicable, so as not to negatively impact the aesthetics of the Easement Area.

3.6.Utilities.   GRANTOR may construct, place and maintain underground utilities, including, but not limited to, electric power, septic or sewer, stormwater, communication lines, and water delivery systems necessary for permitted uses of the Property.

3.7.Signs.  No signs shall be placed on the Easement Area except such informational and cautionary signs necessary to ensure its protection consistent with the purpose of this Easement.

3.8.Improvements shall not refer to trees, vines, or other living improvements planted nor to irrigation improvements which are undertaken in connection with permitted uses and in a manner consistent with the purpose of this Easement, all of which may be made without prior notice to or approval by DISTRICT.

4.Water Resources.  GRANTOR shall retain and reserve all ground water, and all appropriative, prescriptive, contractual or other water rights appurtenant to the Property at the time this Easement becomes effective. Draining, filling, dredging, diking, damming or other alteration, development or manipulation of watercourses, springs and wetlands on the Easement Area is prohibited, except as necessary to preserve farmland and as provided in Paragraphs 2.1 and 7 of this Exhibit C for the development, restoration, enhancement and maintenance of wetlands and other natural habitats.

5.Existing and Subsequent Easements.

5.1.Use of existing easements of record granted prior to this Easement may continue.

5.2.Existing easements of record may be amended and new temporary or permanent easements granted only with prior written approval of DISTRICT and only if

Exhibit H to MOA

Page 23 of 28

such amendment or easement is consistent with the terms and purpose of this Easement.  In no case shall any amendment to any existing easement or any new temporary or permanent easement be granted that might in any way diminish or impair the agricultural productive capacity or open space character of the Property.  Notwithstanding the foregoing,  GRANTOR may, with DISTRICT approval, grant subsequent conservation easements or use restrictions designed for natural resource preservation or enhancement on the Property provided that such easements or use restrictions do not restrict agricultural husbandry practices on the 20 acre portion dedicated to agricultural conservation as set forth in Paragraph 11, or otherwise interfere with any of the terms of this Easement as determined by DISTRICT.  DISTRICT and DEPARTMENT find and agree that the grant of easement(s) to create a mitigation bank as set forth in Paragraph 11 of this Easement and Paragraphs 2.1 and 7 of this Exhibit C is consistent with the purpose of this Easement and does not interfere with any of the terms this Easement.  “Husbandry practices” means agricultural activities, such as those specified in section 3482.5(e) of the California Civil Code, conducted or maintained for commercial purposes in a manner consistent with proper and accepted customs and standards, as established and followed by similar agricultural operations in the same locality.

5.3.DISTRICT’S written approval under this Paragraph 5 shall be obtained at least thirty (30) days in advance of executing any proposed amendment to an existing easement, new easement or use restriction on the Property, and such subsequent amendments, easements and use restrictions shall make reference to this Easement and be subordinate to this Easement.  DISTRICT’s approval shall not be unreasonably withheld and shall be based upon a finding that such new or modified easements are consistent with the provisions of this Paragraph 5.

5.4.The DISTRICT shall notify the DEPARTMENT immediately upon receipt of request by the GRANTOR to grant a subsequent easement, easement amendment, interest in land, or use restriction on the Property.  The DISTRICT shall promptly notify the DEPARTMENT in the event that it approves the grant of any subsequent easement, easement amendment, interest in land, or use restriction on the Property

5.5.It is the duty of GRANTOR to prevent the use of the Easement Area by third parties which may result in the creation of prescriptive rights.

6.Recreational Use.  GRANTOR reserves the right to use the Easement Area for private non-commercial recreational, social and or educational purposes provided that no significant surface alteration, significant impact to natural or agricultural resources, or other development of the land occurs in connection with such use. Such uses may include, but are not limited to, non-commercial/private hiking, trails, horseback riding, fishing, and nature study and other such uses similar in nature and intensity.

Exhibit H to MOA

Page 24 of 28

7.Natural Resource Management.

7.1.General Natural Resource Conservation Activities.  GRANTOR reserves the right to undertake natural resource conservation and restoration activities including, but not limited to, bank and soil stabilization, practices to reduce erosion, enhancement of plant and wildlife habitat; and activities which promote biodiversity in accordance with sound, generally accepted practices and all applicable laws, ordinances and regulations.

7.2.Wetland and Species Conservation Mitigation Banks.  GRANTOR further reserves the right to develop, restore, enhance and maintain wetlands and other natural habitats on the Easement Area to provide protection or preservation of native vegetation and wildlife and for use as a mitigation bank, provided that such development, restoration, enhancement and maintenance of wetland or other habitat is undertaken in accordance with sound, generally accepted practices and all applicable laws, ordinances and regulations.  GRANTOR shall provide DISTRICT with written notice of GRANTOR’s intention to undertake development, restoration or enhancement of wetland or other habitat on the Easement Area no less than forty-five (45) days prior to commencement.  The written notice shall include grading and development plans, management agreements and a full description of the nature, scope and location of all proposed work.  GRANTOR reserves the right to receive consideration in connection with the sale of mitigation credits.  No part of any such consideration shall be payable to DISTRICT and DISTRICT shall not claim to have any financial interest in said mitigation bank.

8.Fire Management.  GRANTOR reserves the right to undertake fire management plans for the purpose of fire control and/or natural resource management.  Such methods may include prescriptive burning, limited brush removal, and limited grazing of the Easement Area.  DISTRICT shall receive prior notification of such plans which shall be acceptable to the California Department of Forestry and Fire Protection and appropriate local fire protection agencies.

9.Motorized Vehicles.  Motorized vehicles shall not be used off roads, except in an emergency, or directly in connection with permitted agriculture, conservation or wildlife management activities, and then only in a manner consistent with the terms and purpose of this Easement.

10.Soil Degradation.  Any use or activity that causes soil degradation, loss of productivity, or erosion, or contributes to the pollution of any surface or sub-surface waters is prohibited with the exception of what is considered to be consistent with sound generally accepted farm practices or what is the minimum necessary to construct the structures and improvements expressly permitted in this Easement.

Exhibit H to MOA

Page 25 of 28

11.Mineral Exploration.  The exploration for, or development and extraction of, geothermal resources, minerals and hydrocarbons by any surface or sub-surface mining or any other method is prohibited.

12.Storage/Dumping.  The dumping, release, burning, permanent storage, or other disposal of wastes, refuse, debris, motorized vehicles or hazardous substances is prohibited.

13.Surface Alteration or Excavation. The significant alteration of the surface of the land, including, but not limited to, the excavation or removal of soil, sand, gravel, rock, or sod, is prohibited except (a) grading necessary in connection with the development, restoration, enhancement or maintenance of wetland or other habitat in accordance with Paragraph 11 of the Easement and Paragraphs 2.1 and 7 of this Exhibit C, or (b) removal of soil, sand, gravel or rock as may be reasonably required for the repair of the roads and levees on the Easement Area.  GRANTOR shall give notice of such surface alteration or excavation to DISTRICT.

14.Tree Removal.  The harvesting, cutting, removal, or destruction of any native trees is prohibited, provided, however, that GRANTOR reserves the right to cut or remove trees as reasonably necessary (a) to control insects and disease, (b) to prevent personal injury and property damage, (c) to allow construction or repair of structures and improvements expressly permitted under this Easement, and (d) the minimum necessary for the purpose of natural resource management, fire management or agricultural or mitigation bank activities expressly permitted under this Easement.

Exhibit H to MOA

Page 26 of 28

EXHIBIT “D”

AGREED UPON LIST OF ARBITRATORS

1.	Hon. Raul A. Ramirez (Ret.) ADR Services 50 Fremont Street, Suite 2110 San Francisco, CA 94105 Telephone: (415) 772-0900 Fax: (415) 772-0960 E-mail: Not Available	5.	Hon. Charles A. Legge (Ret.) JAMS 2 Embarcadero Center, Suite 1500 San Francisco, CA 94111 Telephone: (415) 982-5267 Fax: (415) 982-5287 E-mail: Not Available
2.	Hon. Fern M. Smith (Ret.) JAMS 2 Embarcadero Center, Suite 1500 San Francisco, CA 94111 Telephone: (415) 982-5267 Fax: (415) 982-5287 E-mail: Not Available	6.	Hon. Eugene F. Lynch (Ret.) JAMS 2 Embarcadero Center, Suite 1500 San Francisco, CA 94111 Telephone: (415) 982-5267 Fax: (415) 982-5287 E-mail: Not Available
3.	Frederick S. Wyle 3 Embarcadero Center, 7th Fl. San Francisco, CA 94111 Telephone: (415) 788-0781 Fax: (408) 788-3410 E-mail: Not Available	7.	Hon. Edward Panelli JAMS 160 West Santa Clara Street, Suite 1150 San Jose, CA 95113 Telephone: (408) 288-2240 Fax: (408) 288-2240 E-mail: Not Available
4.	Palmer B. Madden ADR Services 3000 Danville Blvd., Suite 543 Alamo, CA 94507 Telephone: (925) 838-8593 Fax: (925) 831-209     E-mail: pbm@netvista.net

The above list may be modified or supplemented by mutual written agreement of the Parties.  The Parties shall contact the arbitrators to determine their availability to conduct arbitration consistent with the timelines and procedures set forth in Paragraph 16 of this Easement.

Exhibit H to MOA

Page 27 of 28

Exhibit B

Easement Area Description

Exhibit H to MOA

Page 28 of 28

EXHIBIT I

DRY CREEK RANCHERIA
BAND OF POMO INDIANS

RESOLUTION OF DRY CREEK BOARD OF DIRECTORS APPROVING

DEVELOPMENT RESTRICTIONS ON PROPERTY AND PROHIBITING GAMING
ACTIVITIES ON THE PETALUMA PROPERTY

RESOLUTION No. [08-month-day-PETALUMA-00  [

WHEREAS, the Dry Creek Rancheria Band of Pomo Indians (“Tribe”) is a federally recognized Indian tribe organized under Articles of Association adopted on September 13, 1972, approved by the Deputy Assistant Secretary of the Interior on April 16, 1973, and amended effective September 22, 1979 (“Articles”), by virtue of the powers inherent in tribal sovereignty and those delegated by the United States of America; and

WHEREAS, pursuant to Article IV of the Articles, all powers and responsibilities of the Tribe are vested in the Tribal Council, which may delegate powers to the Tribal Board of Directors (“Board”); and

WHEREAS, pursuant to Article VII of the Articles, the Board shall take such actions as are necessary to carry into effect the ordinances, resolutions, or other directions of the Tribal Council and represent the community in all negotiations with local, state, and federal governments; and

WHEREAS, the Tribe has filed a gaming application with the Secretary of the Interior to take into trust for the Tribe’s benefit an approximately 277 acre parcel of land south of the City of Petaluma owned in fee by the Tribe and commonly known as the “Petaluma Property;” and

WHEREAS, pursuant to a Memorandum of Agreement (“MOA”) approved in concept and material terms by the Tribal Council and, pursuant to a delegation by the Tribal Council to the Board in accordance with the Tribe’s Articles of Association, the Board has finalized the MOA, which includes certain commitments to create a permanent conservation easement and preclude gaming activities on the Petaluma Property for at least an eight (8) year period; and

NOW, THEREFORE, BE IT RESOLVED, that the Dry Creek Board of Directors hereby approves the conservation easement on the Petaluma Property and, consistent with the terms of the MOA and, in accordance with the Articles and the delegation to it by the Tribal Council, directs the Tribal Chairman to take all steps necessary to implement the conservation easement, and to execute all documents necessary to carry out this provision of the MOA; and

BE IT FURTHER RESOLVED, that the Dry Creek Board of Directors, in accordance with the Articles and the delegation to it by the Tribal Council, hereby agrees, pursuant to the MOA, that Gaming Activities shall not be conducted on the Petaluma Property for at least an eight (8) year period and shall permanently forgo Gaming Activities on the Petaluma Property if the conditions contained in Section 13.3 of the MOA are satisfied; and

Exhibit I to MOA

Page 1 of 2

BE IT FURTHER RESOLVED, that the Dry Creek Board of Directors shall notify the Bureau of Indian Affairs of the agreed upon use restrictions on the Petaluma Property and its withdrawal and/or suspension of its current gaming application which action it hereby takes in accordance with its delegation from the Tribal Council and the terms of the MOA.

CERTIFICATION

The undersigned, being the Secretary-Treasurer of the Dry Creek Rancheria Band of Pomo Indians, a federally recognized Indian tribe (“Tribe”), and acting pursuant to subsection C of Article XI of the Tribe’s Articles of Association, hereby attests to the enactment of the foregoing Board Resolution, which was presented at a duly held meeting of the Dry Creek Tribal Board of Directors on ___________, 2008 with a quorum present, and approved by a vote of _______ “for,”_______“against,” and ________ “abstentions,” and that such Resolution has not been rescinded or amended in any way.

Harvey Hopkins	Date
Chairman
Margie Rojes
Secretary/Treasurer	Date

Resolution No. 08-xx-xx-Dugan-003

Exhibit I to MOA

Page 2 of 2

EXHIBIT J
AGREED UPON LIST OF ARBITRATORS

1.	Hon. Raul A. Ramirez (Ret.) ADR Services 50 Fremont Street, Suite 2110 San Francisco, CA 94105 Telephone: (415) 772-0900 Fax:(415)772-0960 E-mail: Not Available	5.	Hon. Charles A. Legge (Ret.) JAMS 2 Embarcadero Center, Suite 1500 San Francisco, CA 94111 Telephone: (415)982-5267 Fax: (415)982-5287 E-mail: Not Available
2.	Hon. Fern M. Smith (Ret.) JAMS 2 Embarcadero Center, Suite 1500 San Francisco, CA 94111 Telephone: (415)982-5267 Fax: (415)982-5287 E-mail: Not Available	6.	Hon. Eugene F. Lynch (Ret.) JAMS 2 Embarcadero Center, Suite 1500 San Francisco, CA 94111 Telephone: (415)982-5267 Fax: (415)982-5287 E-mail: Not Available
3.	Frederick S. Wyle 3 Embarcadero Center, 7l Fl. San Francisco, CA 94111 Telephone: (415)788-0781 Fax: (408)788-3410 E-mail: Not Available	7.	Hon. Edward Panelli JAMS 60 West Santa Clara Street, Suite 1150 San Jose, CA 95113 Telephone: (408) 288-2240 Fax: (408) 288-2240 E-mail: Not Available
4.	Palmer B. Madden ADR Services 3000 Danville Blvd., Suite 543 Alamo, CA 94507 Telephone: (925) 838-8593 Fax: (925)831-209   E-mail: pbm@netvista.net

The above list may be modified or supplemented by mutual written agreement of the Parties.  The Parties shall contact the arbitrators to determine their availability to conduct an arbitration consistent with the timelines and procedures set forth in the Agreement at Section 20.

Exhibit J to MOA

Page 1 of 1

DRY CREEK RANCHERIA BAND
OF POMO INDIANS

RESOLUTION OF DRY CREEK BOARD OF DIRECTORS APPROVING
MEMORANDUM OF AGREEMENT WITH THE COUNTY OF SONOMA INCLUDING
A WAIVER OF SOVEREIGN IMMUNITY

RESOLUTION No. [08-month-day-MOA-OOl]

WHEREAS, the Dry Creek Rancheria Band of Pomo Indians (“Tribe”) is a federally recognized Indian tribe organized under Articles of Association adopted on September 13, 1972, approved by the Deputy Assistant Secretary of the Interior on April 16, 1973, and amended effective September 22, 1979 (“Articles”), by virtue of the powers inherent in tribal sovereignty and those delegated by the United States of America; and

WHEREAS, pursuant to Article IV of the Articles, all powers and responsibilities of the Tribe are vested in the Tribal Council, which may delegate powers to the Tribal Board of Directors (“Board”); and

WHEREAS, pursuant to Article VII of the Articles, the Board shall take such actions as are necessary to carry into effect the ordinances, resolutions, or other directions of the Tribal Council and represent the Tribal community in all negotiations with local, state, and federal governments; and

WHEREAS, on September 15, 2007, at a duly held meeting of the Tribal Council, with a quorum present, the Tribal Council adopted Resolution No. 07-09-15 approving the concept and terms of a draft Memorandum of Agreement (“MOA”) between the Tribe and the County of Sonoma which was presented at said meeting, and, pursuant to Article VII of the Articles, delegated to the Board the authority to finalize the documentation of the MOA terms and to execute the final MOA upon substantially identical terms, which included a limited waiver of sovereign immunity of the Tribe in enforcing the MOA including the Performance and Payment Bond; and

WHEREAS, pursuant to the powers and duties delegated to it under Tribal Council Resolution, including No. 07-09-15, the Board has engaged in discussions and negotiations with the County of Sonoma and has now reached final agreement on said MOA; and

WHEREAS, the agreement reached with the County of Sonoma, as contained in the negotiated MOA are consistent with the terms and concepts of the draft MOA presented to the Tribal Council at its September 15, 2007 meeting and approved by the Tribal Council; and

WHEREAS, it is now the intent and desire of the Tribal Council and Board: (i) to execute and deliver the MOA, and to perform its obligations; (ii) to adopt the applicable law, waivers of sovereign immunity and other consents set forth therein for the sole and exclusive purpose of providing a mechanism for the establishment of the validity, legality and enforceability of the MOU in accordance with its terms; and (iii) to declare and confirm the legality, validity and enforceability and binding nature of the MOA in accordance with its terms at such time as it is fully executed; and

Exhibit K to MOA

Page 1 of 3

WHEREAS, the MOA negotiated by the Tribe with the County of Sonoma (“County”), includes numerous benefits for the Tribe, as well as a dispute resolution provision for the binding arbitration of certain disputes between the Tribe and the County in accordance with the MOA terms;

NOW, THEREFORE, BE IT RESOLVED, that the Dry Creek Board of Directors exercises its delegated authority to approve and hereby does approve the Memorandum of Agreement, which is attached hereto as Exhibit A, and is incorporated herein by this reference, between the Dry Creek Rancheria Band of Pomo Indians and the County of Sonoma and authorizes the Tribal Chairman to execute and deliver said MOA to the County, and to take such other steps as may be necessary to finalize such agreement and carry out its terms; and

BE IT FURTHER RESOLVED that the Tribe, through the Board acting through its delegated powers, hereby expressly approves and authorizes the limited waiver of the sovereign immunity of the Dry Creek Rancheria Band of Pomo Indians to the full extent provided for in the MOA and the Performance and Payment Bond and the incorporation of applicable and choice of law and judicial forums, as set forth therein; and

BE IT FURTHER RESOLVED that the Tribe, through the Board acting through its delegated powers, hereby expressly approves and authorizes binding arbitration as a mechanism to resolve disputes and insure the enforceability of the agreement as specified in the MOA and the enforcement of arbitration awards in court, as provided in the MOA; and

BE IT FURTHER RESOLVED that the Tribe, through the Board acting through its delegated powers, approves the form of the MOA. The Chairperson is hereby authorized, empowered and directed to execute and deliver the MOA on behalf of the Tribe, and to execute and deliver such other instruments, agreements and certifications as may be contemplated by the MOA or as may be required to implement the terms of the MOA or give effect to the transactions therein contemplated, and to take such other actions as may hereafter be necessary and appropriate to carry out the obligations of the Tribe thereunder; and

BE IT FURTHER RESOLVED that the Tribe, through the Board hereby declares that upon due execution of the MOA by the Tribal Board of Directors and the Board of Supervisors, it shall be and become a legal and valid obligation of the Tribe, enforceable in accordance with its terms. Except as expressly set forth in or expressly contemplated by the MOA, no physical delivery, filing or other act need be performed to validate the interests of the parties thereunder; and

BE IT FURTHER RESOLVED that the Tribe, through the Board hereby determines that no laws, ordinances, resolutions or other actions of the Tribe, Tribal Council, Board, or any of the agencies or instrumentalities of the Tribe, either written or established by custom or tradition, prohibit the Board from approving the execution or delivery of the MOA or undertaking any of the foregoing approved action; and

BE IT FURTHER RESOLVED, that the Board shall not pass or adopt any resolutions or approve or allow any other action of the Tribe, or any of its officers, employees, agents, subdivisions, agencies or instrumentalities, or any nature that shall impair the contractual rights of any party under the MOA or the obligations of the Tribe under the MOA; and

Resolution No. 08-xx-xx-MOA-OOl

Exhibit K to MOA

Page 2 of 3

BE IT FURTHER RESOLVED, that this Resolution shall become effective as of the date and time of its passage and approval by the Board.

CERTIFICATION

The undersigned, being the Secretary-Treasurer of the Dry Creek Rancheria Band of Pomo Indians, a federally recognized Indian tribe (“Tribe”), and acting pursuant to subsection C of Article XI of the Tribe’s Articles of Association, hereby attests to the enactment of the foregoing Board Resolution, which was presented at a duly held meeting of the Dry Creek Board of Directors held on    , 2008, with a quorum present, and approved by a vote of _______ “for,” _______ “against,” and ________ “abstentions,” and that such Resolution has not been rescinded or amended in any way.

Harvey Hopkins	Date
Chairman
Margie Rojes
Secretary/Treasurer	Date

Exhibit K to MOA

Page 3 of 3

EXHIBIT L

Resolution No.

Sonoma County Administration Center

Santa Rosa, CA 95403

Date:

RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF SONOMA APPROVING THE MEMORANDUM OF AGREEMENT BETWEEN THE COUNTY OF SONOMA AND THE DRY CREEK RANCHERIA BAND OF POMO INDIANS

WHEREAS, the County of Sonoma (herein referred to as “County”) has worked on a government to government basis with the Dry Creek Rancheria Band of Pomo Indians (herein referred to as “Tribe”) to establish a mutually agreeable process to identify and mitigate off-Reservation environmental impacts of Tribal development projects; and

WHEREAS, the Tribe desires to operate Tribal development projects in a manner that benefits the Tribe, its members, and the community as a whole, and the County recognizes the mutual benefit that can be derived if those goals are achieved; and

WHEREAS, proposed and future Tribal development projects are not County projects and are not subject to discretionary approval of the County and, absent an agreement, the County has limited opportunity to influence mitigation measures or seek compensation on behalf of its citizens for adverse environmental impacts caused by such projects; and

WHEREAS, given the scope of Tribal development projects, the limited County jurisdiction over such projects, and the inability to always precisely measure such off-reservation environmental impacts, enforceable mitigation commitments are critical to minimize the off-reservation impacts of Tribal projects; and

WHEREAS, the County has been involved in a number of legal disputes against the Tribe including: In the Matter of the Protest of Bill Cogbill et al. to transfer an Alcohol License to the River Rock Casino; County of Sonoma v. Bureau of Indian Affairs; and In the Matter of the Sonoma County Fire Chief’s Application for an Inspection Warrant and the parties wish to settle those disputes, as well as disagreements over appropriate mitigation regarding Tribal development projects, through a Memorandum of Agreement (hereinafter referred to as “Agreement”); and

WHEREAS, the proposed Agreement with the Tribe reflects a good faith effort to resolve these disputes and to address the impacts of the River Rock Casino (“Casino”) and the future tribal development project described in the Dry Creek Rancheria Economic Development Master Plan Environmental Study dated January 2008, including payment of mitigation fees to the County during the remaining years of the Tribe’s gaming Compact with the State and, for a period beyond the

Exhibit L to MOA

Page 1 of 2

Agreement term with respect to the hotel project, to off-set impacts on public services as well as implementation of specific mitigation measures to reduce off-reservation impacts; and

WHEREAS, the proposed Agreement provides a CEQA type environmental review process for future identified Tribal development projects, including for commercial non-gaming development, and creates a binding process for resolving disputes over appropriate mitigation of off-reservation environmental impacts; and

WHEREAS, the proposed Agreement places important restrictions on the operations of any alcohol license the Tribe may obtain from the ABC for the Existing Casino; and

WHEREAS, the proposed Agreement provides for the construction of an emergency access road to allow emergency vehicles to access the Casino in an emergency; and

WHEREAS, as part of the Agreement the Tribe has agreed to stay its application to conduct gaming on its Petaluma property for at least eight years and to place 90 acres of that property into a perpetual open space easement; and

WHEREAS, the proposed Agreement is an important step in furthering a government to government relationship and building trust, mutual respect and cooperation to benefit both the Tribe and the County;

NOW, THEREFORE, BE IT RESOLVED, that the Board of Supervisors approves the Agreement between the County of Sonoma and the Dry Creek Rancheria Band of Pomo Indians and that the Chair of the Board of Supervisors is fully authorized, on behalf of the County, to execute the Agreement, including any minor amendments thereto approved by County Counsel, and to execute any other instruments or writings as may be required to implement the terms of the Agreement; and

BE IT FURTHER RESOLVED, that the Board of Supervisors specifically approves the dispute resolution process identified in the Agreement which includes binding arbitration and consents to enforcement of such awards as described in the Agreement.

SUPERVISORS:

Kerns ______ Reilly ______ Brown ______ Kelley ______ Smith ______

Ayes: ______ Noes: ______ Abstain: ______ Absent: ______ 

SO ORDERED.

Exhibit L to MOA

Page 2 of 2

EX-12.1

Exhibit 12.1

RIVER ROCK ENTERTAINMENT AUTHORITYSTATEMENT OF CALCULATION OF
RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in Thousands)

For the purpose of calculating the ratio of earnings to fixed charges, “earnings” represents income before Distributions to Tribe plus fixed charges. “Fixed charges” consist of (a) interest expensed and capitalized; (b) amortized premiums, discounts and capitalized expenses related to indebtedness; and (c) an estimate of the interest within rental expenses.

	Fiscal Year Ended
	2007			2006			2005			2004			2003
	(Dollars in Thousands
Earnings:
Income before Distributions to the Tribe	$	20,710		$	20,229		$	18,276		$	12,447		$	8,865
Fixed charges
Exp (Inc Amort of Debt Costs)	22,231			22,243			22,406			22,822			8,553
Less Capitalized Interest	—			—			—			(4,017		)	(1,489		)
Estimated Interest within Rental Expenses	—			—			—			—			—
Total Fixed Charges	22,231			22,243			22,406			18,805			7,064
Amort of Capitalized Interest	318			318			318			318			39
Less Capitalized Interest	—			—			—			(4,017		)	(1,489		)
Total	318			318			318			(3,699		)	(1,450		)
Total Earnings	43,259			42,790			41,000			31,570			15,968
Fixed Charges	22,231			22,243			22,406			22,822			8,553
Ratio of Earnings to Fixed Charges	1.95		X	1.92		X	1.83		X	1.37		X	1.87		X

EX-31.1

Exhibit 31.1

RIVER ROCK ENTERTAINMENT AUTHORITY

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Shawn S. Smyth, certify that:

1. I have reviewed this report on Form 10-K of the River Rock Entertainment Authority;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b)	Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 14, 2008
By:	/s/ SHAWN S. SMYTH
Shawn S. Smyth
Chief Executive Officer, General Manager

EX-31.2

Exhibit 31.2

RIVER ROCK ENTERTAINMENT AUTHORITY

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Joseph R. Callahan, certify that:

1. I have reviewed this report on Form 10-K of the River Rock Entertainment Authority;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b)	Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 14, 2008
By:	/s/ JOSEPH R. CALLAHAN
Joseph R. Callahan
Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of River Rock Entertainment Authority (the “Authority”) on Form 10-K for the year ending December 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Shawn S. Smyth, Chief Executive Officer of the Authority, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Authority.

By:	/s/ SHAWN S. SMYTH
Shawn S. Smyth
Chief Executive Officer, General Manager
April 14, 2008

A signed original of this written statement required by Section 906 has been provided to the River Rock Entertainment Authority and will be retained by the River Rock Entertainment Authority and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of River Rock Entertainment Authority (the “Authority”) on Form 10-K for the year ending December 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph R. Callahan, Chief Financial Officer of the Authority, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Authority.

By:	/s/ JOSEPH R. CALLAHAN
Joseph R. Callahan
Chief Financial Officer
April 14, 2008

A signed original of this written statement required by Section 906 has been provided to the River Rock Entertainment Authority and will be retained by the River Rock Entertainment Authority and furnished to the Securities and Exchange Commission or its staff upon request.