For the Seminole Nation of Oklahoma

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Leonard M. Hayjo;

For the National Indian Gaming Commission:

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J6hodev O. ChaudHori, Chairman

Date: 2— S = Lhe



21. The Nation and the NIGC Chairman agree that this Agreement fully resolves the
Nation’s appeal of NOV 16-1 and that Presiding Official Epstein’s certification of this
Agreement shall constitute dismissal of the appeal and final agency action pursuant to
25 C.F.R. § 584.10(d). To that end, the Nation waives all rights to pursue an appeal of
the Presiding Official’s order relative to this Agreement; waives all rights to any further
proceedings before the NIGC regarding this matter; and waives all rights to judicial
review of NOV 16-01. These waivers do not affect the Nation’s right to appeal a
closure order that may result from failure to comply with any settlement term, as
discussed in paragraph 19, above.

22. After the Effective Date, the NIGC Chairman shall transmit a copy of the Settlement
Agreement to Presiding Official Epstein and shall request that he certify this
Agreement and dismiss the administrative appeal. The Nation consents to the motion
to certify the Settlement Agreement and the NIGC may represent that such consent is
given.

23. The Chairman agrees that, upon execution of this Agreement, the NIGC shall not
institute further proceedings or actions or assess any additional sanctions against the
Nation for actions or omissions arising out of, or related to, the subject matter of NOV
16-1 and occurring prior to the Effective Date.

ADDITIONAL COVENANTS

24. This Agreement constitutes the entire agreement between the NIGC Chairman and the
Nation relating to NOV 16-01, and supersedes all prior verbal or written agreements
and understandings between the parties related to the subject matter hereof. No
warranties, representations, covenants, or agreements shall be binding upon any party
except as set forth herein. Any modification or waiver of any term of this Agreement
must be in writing and signed by all the parties.

25. The NIGC Chairman and the Nation expressly agree and acknowledge that time is of
the essence in this Agreement. The recitals herein and above set shall be binding upon
the parties, their agents, heirs, personal representatives, successors and assigns.

26. The parties agree that, after the Effective Date, this Agreement shall be a public
document and may be published or disclosed by either party.

27. This Agreement may be executed on one or more counterparts and each shall constitute
an original. A signature produced by facsimile shall be deemed to be an original
signature and shall be effective and binding for purpose of the Agreement.


SEMINOLE NATION OF OKLAHOMA

TR 2016-103

A TRIBAL RESOLUTION OF THE SEMINOLE NATION OF OKLAHOMA AUTHORIZING
THE EXECUTIVE DEPARTMENT TO EXECUTE A SETTLEMENT AGREEMENT WITH
THE NATIONAL INDIAN GAMING COMMISSION (NIGC) TO RESOLVE NIGC NOTICE
OF VIOLATION NO. NOV-16-1

BE IT RESOLVED BY THE SEMINOLE NATION COUNCIL ASSEMBLED:

WHEREAS, the Seminole Nation of Oklahoma is federally recognized by the Secretary of
the Interior as a Native American Tribe for the purpose of government to
government relations, as evidenced by publication: Indian Entities
Recognized and Eligible to Receive Services from the U.S. Bureau of Indian
Affairs, 79 Fed. Reg. 4,748 (Jan. 29, 2014);

WHEREAS, Article V of the Seminole Nation Constitution empowers the General Council
to negotiate with federal, state, and local governments and others on behalf
of the Nation, and to enter into any contract on behalf of the Nation in
conjunction with any activity that will further the well-being of the members
of the Nation;

WHEREAS, the Nation conducts Indian gaming pursuant to the Indian Gaming
Regulatory Act, 25 U.S.C. §§ 2701, et seq. and subject to regulation by the
NIGC;

WHEREAS, on May 20, 2016, pursuant to its statutory and regulatory authority, the NIGC
issued NOV-16-1 to the Nation, alleging that the Nation’s gaming operation
had committed a number of Minimum Internal Control Standards (MICS)
violations;

WHEREAS, on June 17, 2016 the Nation appealed NOV-16-1 to the Department of
Interior's Office of Hearings and Appeals, and thereafter the appeal was
stayed to give the parties an opportunity to pursue settlement;

WHEREAS, the Nation and NIGC have worked to negotiate terms of a settlement of the
dispute, resulting in a proposed settlement as set forth in the attached
document;

WHEREAS, the Nation has proposed and the NIGC is considering certain revisions to the
proposed settlement terms pertaining to the sample size for sampling of
monthly footing and tracing of redeemed bingo vouchers so as to make the
terms more practical and desirable to the Nation; and

Page 1 of 2
TR 2016-103


SETTLEMENT AGREEMENT

This Settlement Agreement (“Agreement”) is entered into by and between the Seminole
Nation of Oklahoma (Nation), a federally-recognized Indian Nation, and Jonodev O. Chaudhuri,
Chairman of the National Indian Gaming Commission (Chairman), relating to the matters
contained in the Notice of Violation No. NOV-16-1.

RECITALS

1. Whereas, under the Indian Gaming Regulatory Act and NIGC regulations, the NIGC
Chairman may issue a Notice of Violation (NOV) to any person for violations of any
provision of the IGRA, NIGC regulations, or any provision of a tribal gaming
ordinance or resolution approved by the Chairman. 25 U.S.C. § 2713; 25 C.F.R. §
573,3(a).

2. Whereas, NIGC Minimum Internal Control Standards (MICS) regulations, 25 C.F.R.
Part 543 are the primary procedures used to protect the integrity of casino funds and
games and are a vitally important part of properly regulated gaming. Inherent in
gaming operations are risks associated with customer and employee access to cash,
questions of fairness of games, and the threat of collusion to circumvent controls. The
MICS promote IGRA’s purposes by ensuring that a Nation is the primary beneficiary of
the gaming operation and protecting gaming as a means of tribal revenue.

3. Whereas, the MICS require that the Seminole Nation Gaming Agency (SNGA), the
Nation’s gaming regulatory body, ensure that Tribal Internal Control Standards (TICS)
are both established and implemented that provide a level of control that equals or
exceeds those set forth in the NIGC MICS. 25 C.F.R. §543.3(b).

4. Whereas, the Seminole Tribal Gaming Ordinance requires the Nation’s Chief Tribal
Regulator to issue regulations to implement TICS. Seminole Nation of Oklahoma Tribal
Ordinance No. TO-2011-11, Sections 105(a)(4) and 107(b)(5), codified at Title 15 of
the SEMINOLE NATION CODE ANNOTATED.

5. Whereas, NIGC regulations also require that the Nation’s gaming operations develop a
System of Internal Control Standards (SICS) to implement the TICS, as approved by
the SNGA. 25 C.F.R. § 543.3(c). Thus, both the SNGA and the operations have an
obligation to ensure the implementation of the TICS.

6. Whereas, on May 20, 2016, the NIGC Chairman issued NOV-16-1 alleging that, for the
fiscal years 2012, 2013, and 2014: the SNGA’s internal audit department failed to
adequately produce documentation to evidence the work it performed or the
conclusions it reached including the documents examined, testing procedures
performed, or the persons interviewed for the completion of routine audit checklists.
See 25 C.F.R. § 543.23(c)(4). Because of this failure, the SNGA internal audit
department could not provide sufficient audit evidence to determine whether the


WHEREAS, the Nation desires to resolve this matter without undertaking the burdens,
costs, risks and uncertainties associated with formal administrative fact
finding and judicial proceedings.

NOW THEREFORE BE IT RESOLVED, that the General Council of the Seminole Nation
of Oklahoma hereby authorizes the Principal Chief to negotiate the final details of and
execute a settlement agreement with the NIGC on terms substantively equivalent or more
favorable to the Nation than those contained in the attached proposed settlement
document in order to fully and finally resolve the dispute arising from NOV-16-1.

CERTIFICATION
PASSED AND APPROVED by the General Council of the Seminole Nation of Oklahoma

this 3 day of December 2016, at Mekusukey Mission, South of Seminole, Oklahoma, by
a vote of 23 Yes, 0 No, and 2 Abstaining, a quorum of Fifteen (15) Council members being

present.
(pid ZL Hoag
Leonard M. Harjo, Pfincipal Chief //7
Seminole Nation of Oklahoma
ATTEST:

Alvina Coker, General Council Secretary
General Council, Seminole Nation of Oklahoma

Page 2 of 2
TR 2016-103



Nation’s three gaming operations were in substantial compliance with the TICS. The
NIGC also identified 19 separate MICS violations, as more fully set forth in the NOV.

7. Whereas, the NIGC Chairman alleges 22 violations in the NOV!. The Nation asserts it
had cured many but not all of the 19 separate MICS violations and that a good faith
factual dispute exists as to the number of the NOV violations the Nation had cured as of
June 19, 2016.

8. The Nation and the NIGC have worked, and continue to work to resolve any remaining
deficiencies that still exist, and the Chairman now acknowledges that the Nation has
made significant progress and improvement resulting in substantial compliance with the
19 separate MICS violations.

9. Whereas, on June 17, 2016 the Nation appealed NOV-16-1, and the Department of
Interior’s Office of Hearings and Appeals assigned Presiding Official Joshua N. Epstein
to the matter on August 25, 2016. Presiding Official Epstein stayed the appeal to give
the parties an opportunity to pursue settlement.

10. Whereas, the Nation and the NIGC Chairman desire to resolve this matter without
undertaking the burdens, costs, risks and uncertainties associated with formal
administrative fact finding and judicial proceedings.

11. Therefore, the NIGC Chairman and the Nation have agreed to execute this Agreement
and perform in accordance with the following covenants and conditions:

TERMS OF SETTLEMENT
12. This Agreement shall be effective upon execution by the parties (Effective Date).
13. The term of this Settlement Agreement shall be three years from the Effective Date.
14. The Nation admits each of the 22 allegations in the NOV.

15. The NIGC Chairman acknowledges that, prior to the execution of this Settlement
Agreement, the Nation took significant affirmative steps to correct the violations, and
that the Nation has corrected 16 of the violations.

1 The NIGC Chairman asserts that the violations are counted as one violation for each of 2012, 2013, and 2014
internal audit deficiencies, and the 19 specific MICS violations identified in paragraphs 20-37. Due toa
typographical error, the NIGC Chairman counted paragraph number 36 twice in the NOV.


16. While such actions represent a significant step toward compliance, the NIGC Chairman
requires the following additional corrective actions:

A. The Nation must, no later than 60 days from the execution of this Agreement, hire an
outside Certified Public Accounting firm, registered with the Oklahoma
Accountancy Board, to perform the SNGA’s internal audit function required by 25
C.F.R. § 543.23(c). The CPA firm engaged to perform this function shall not be the
same CPA firm engaged to perform the external audit required by 25 C.F.R.

§ 532.23(d). The NIGC will review the engagement letter to ensure that it meets the
Statements on Standards for Attestation Engagements and Agreed-Upon Procedures
Engagements. At the beginning of each fiscal year, the Nation shall provide the
NIGC with its annual internal audit schedule.

B. By December 31, 2016, as required by 25 C.F.R. § 543.23(b)(2)(ix), the SNGE must
ensure the completion of an annual fixed asset inventory comparison for each of the
gaming operations.

C. Within 60 days from the execution of this Agreement, as required by 25 C.F.R.
§ 543.18(c)(4) the SNGA must demonstrate an understanding of the minimum
bankroll formula and apply this to ensure an accurate and consistent calculation of
the gaming operations’ bankroll requirements. The SNGA shall, quarterly, submit
the calculation to the NIGC for verification.

D. The gaming operations must ensure, pursuant to 25 C.F.R. § 543.24(d)(1)(v), the
continued daily footing and tracing of 100% of redeemed bingo vouchers. .

17. The Nation must maintain compliance with NIGC MICS, the TICS, and the three
gaming operations’ SICS.

18. The Nation must otherwise comply fully with all IGRA and NIGC regulations.

19, The Nation agrees to periodic on-site review by the NIGC to determine substantial
compliance, and agrees to allow entry and inspection pursuant to 25 U.S.C. §
2706(b)(2) and 25 C.F.R. §§ 571.5 and 571.6.

20. Failure to comply with any settlement term may result in the immediate closure of one
or more of the Nation’s three gaming operations by order of the NIGC Chairman. A
substantial deficiency in compliance which relates to only one facility will justify a
temporary closure order as to only that facility. The Nation may have any closure
decision reviewed by the full NIGC Commission. The Nation reserves its right to
administrative and federal appeal of any closure order.