A.RECITATION OF AGREEMENT

Plaintiff, Secretary of Labor ("the Secretary"] and the settling defendants^l hereby advise the Court that these parties have agreed to fully settle all claims raised in the Amended Complaint. The parties consent to the entry of this Consent Decree by the Court and to be bound to by its terms.

1. Plaintiff commenced this action on May 5, 1986, pursuant to the Employee Retirement Income Security Act of 1974 ["ERISA"], 29 U.S.C. § 1001 et seq. (1982), as amended, alleging in his Complaint and Amended Complaint that the Defendants, current and former Trustees of the defendant Hotel Employees and Restaurant Employees International Union Welfare Fund [HERE

1 "Settling defendants" include all defendants identified in the caption to the First Amended Complaint in this case (a copy of which is attached hereto as Exhibit A),. except defendants Ben Schmoutey, Gregory E. Smith, Jack Stafford and the estates of defendants Paul McCastland, A. W. Mitchell, Mario Vaccarino and Herbert Triplett.

Welfare Fund' or the "'Fund"], or former Trustees of the former Southern Nevada Culinary Workers and Bartenders Health and Welfare Trust Fund ["SN Fund'], violated ERISA §§ 404, 405 and 406, 29 U.S.C. §§ 1104, 1105 and 1106. In addition, the Complaint and Amended Complaint seek relief from certain other parties who were not fiduciaries of the Fund, alleging that they participated in these breaches as parties in interest, or as knowing participants. Plaintiff has requested equitable relief and restitution to the defendant HERE Welfare Fund from the defendants for those acts and practices alleged to have violated ERISA.

2. The settling defendants acknowledge service of the Complaint and the Amended Complaint and admit the jurisdiction of this Court.

3. The settling defendants expressly waive Findings of Fact and Conclusions of Law.

4. Nothing in this Consent Decree shall constitute or be deemed an admission of any fact alleged in the Complaint or the Amended Complaint in this action. Nothing in this Decree may be used by the Secretary or any other party in any other Court, administrative agency, or any other proceeding as evidence of any kind except as evidence of the existence of this Decree and its terms.

5. This Consent Decree shall be deemed full and final settlement of any and all civil claims under Title I of ERISA that were or could have been asserted in the Complaint or Amended

Complaint, or that were or could have been asserted by, amongst or between any of the parties hereto, relating to or arising out of the provision or termination of dental services for eligible participants and beneficiaries of Fund Unit 150, Hotel Employees and Restaurant Employees International Union Welfare Fund, and its predecessors-in-interest, from January 1, 1978, to the date of entry of this Consent Decree, except that plaintiff does not release any claims arising under section 406(b)(1) and (3) of ERISA, the facts relating to which were unknown to the Secretary. In addition, all settling defendants acknowledge that no pleadings in this case or in McLaughlin v. Gerace, Civil Action No. 85-3669 (D. N.J.), present any issues concerning transactions with insurance companies. Accordingly, all defendants further acknowledge that, in this consent Decree and in the Consent Decree entered in Gerace, plaintiff does not compromise any ERISA claims relating to such transactions.

WHEREFORE, this Court finds that there is no just reason for delay and that it has jurisdiction over the parties and subject matter jurisdiction of this action, and that it is empowered to provide the following equitable and remedial relief:

IT IS, THEREFORE, ORDERED, ADJUDGED, AND DECREED THAT

B. MONETARY RELIEF

6. In settlement of all claims and causes of actions alleged by Plaintiff against them in this case and in McLaughlin v. Gerace, the defendants identified in paragraphs 7, 8 and 9 of

the First Amended Complaint shall pay, not later than fourteen (14) days after entry of this Consent Decree, the sum of $2.8 million to the HEREIU Welfare Fund. Contemporaneously with the payment, defendants shall provide documentation of said payment to the Secretary of Labor.

7. The defendants identified in paragraphs 10-14 of the First Amended Complaint in this case shall pay to the HEREIU Welfare Fund, in the following amounts and under the following terms:

(a) Defendant Arnold shall pay $250,000 upon entry of this Consent Decree;

b) Defendant Dr. Charles R. Mitchell shall pay $250,000, plus interest at 9.67$ per year to commence upon entry of this Consent Decree, in 24 equal monthly installments beginning on the first day of the 19th month that begins after the date on which this Consent Decree is entered. Defendant Mitchell agrees that, during the period from the entry of this Consent Decree until the date on which his payment obligation hereunder is satisfied, he will not transfer any asset in his possession, custody or control for the purpose of impairing his ability, or which would materially impair his ability, to make the payments required hereunder or under subparagraph (c).

Within thirty (30) days of entry of this

Consent Decree, defendant Mitchell may provide adequate security for his obligations hereunder. Such security shall be subject to the approval of plaintiff. In the event of a default (as defined in subparagraph (c)) and at the option of plaintiff, this security either shall be forfeited or plaintiff may pursue collection of the actual unpaid balance of defendant Mitchell's obligation.

In the event that plaintiff, in her sole discretion, determines that any security offered by defendant Mitchell is not adequate, she shall notify defendant Mitchell, who shall within twenty (20) business days thereafter provide plaintiff and the Court with sworn statements showing all of his assets, liabilities, income and expenses. Thereafter, defendant Mitchell shall provide notice to plaintiff ten (10) business days prior to transferring any asset whose value is in excess of $5,000. In the event that plaintiff believes that the transfer will materially impair defendant Mitchell's ability to make the payments required hereunder, defendant Mitchell shall have the burden of demonstrating his compliance with the provisions of this paragraph.

on which such installment is due, apply to the Court for a modification of the terms of payment set forth in subparagraph (b). The filing of such an application, if accompanied by the documents described in Exhibit B hereto and evidence of notice to plaintiff as described in Exhibit C hereto, shall stay his obligation to pay further installments pending the Court's decision on such application.

Upon application for modification, plaintiff may (without resort to motion or order) require defendant Mitchell to testify (at deposition or elsewhere) under oath concerning the documents and subjects described in Exhibit B. In such testimony, defendant Mitchell shall assert no privileges concerning such documents and subjects. Plaintiff may oppose such application on the completion of such discovery. The Court may grant relief from the payment terms of subparagraph (b) if it determines that defendant Mitchell cannot comply with the terms of subparagraph (b). Such relief shall be limited to a modification of the time remaining during which defendant Mitchell must complete payment of the balance owing on the date of the application, at an interest rate that

reflects the time value of money, but in no event shall the Court permit payments over a period longer than seven (7) years from entry of this Consent Decree, or provide for interest on the unpaid balance of less than 9.67% per year.

A default shall occur if, at any time before satisfaction of the obligation described in subparagraph (b), defendant Mitchell fails to pay an installment within ten (10) days of its due date (having not applied to the Court for a modification of the terms of payment). Upon notice of a default, the Court shall enter a default judgment against defendant Mitchell equal to two hundred percent (200%) of the balance (including interest) then owing, to be effective thirty (30) days from issuance.

(d) In the event that defendant Mitchell obtains a modification in accordance with the provisions of subparagraph (c), he shall annually, beginning one year after the date such modification becomes effective, serve plaintiff with a sworn statement as to assets, liabilities, income and expenses. Upon learning of material improvements in defendant Mitchell's financial condition, plaintiff may apply to the Court for modification of the terms of payment.

C. CONTRACTS WITH DEFENDANT SERVICE PROVIDERS

8. Defendants Nevada Health Services, Inc. ["NHS], Stratum Five International, Inc. [“SFI”], and Health Care Benefits Services, Inc. [“HCBS”], shall not, directly or indirectly, or through any entities in which they own or control any interest, provide any goods or services to any employee benefit plan covered by ERISA or, directly or indirectly, derive any income from any ERISA-covered employee benefit plan.

9. Except as set forth in paragraph 10, with respect to any ERISA-covered employee benefit plan or to any entity that provides goods or services for an ERISA-covered employee benefit plan, defendant Arnold shall not, directly or indirectly -

(a) provide any goods or services;

(b) derive any income, compensation, or other form

of value or benefit;

five percent (5%);

(d) provide management or business consulting

services;

(e) extend, receive, or otherwise arrange credit;

(f) negotiate, broker, or otherwise arrange

transactions.

10. Under the terms of this Consent Decree, defendant Arnold may serve as outside legal counsel to a person or entity providing goods or services with respect to an employee benefit

plan covered by ERISA, or to an employee benefit plan covered by ERISA, provided that the income derived by Arnold therefrom, directly or indirectly, shall not exceed a reasonable fee. Defendant Arnold shall not enter into nor maintain any relationship or interest with an ERISA-covered employee benefit plan, or a person or entity providing goods or services with respect to an ERISA-covered employee benefit plan, except as set forth in this Consent Decree, and shall not derive any income or thing of value, directly or indirectly, from such ERISA-covered plan, person or entity, except as compensation for actual legal services rendered. In addition, neither defendant Arnold nor any law firm of which he is a member or shareholder, or with which he is otherwise associated, shall serve as counsel to the Fund, or any person or entity providing goods or services with respect to the Fund, provided, however, that defendant Arnold or any such law firm may serve as counsel to or otherwise represent the HEREIU International Union and any of its subordinate bodies on any matter unrelated to the Fund.

11. Defendant HEREIU Welfare Fund shall not enter into any future contracts, arrangements, or understandings, directly or indirectly, with NHS, SFI, HCBS, Arnold or Mitchell. In addition, the Fund shall not, directly or indirectly, enter into any future contracts, arrangements, or understandings with an entity providing goods or services with respect to any employee benefit plan in which entity any of the persons or entities named in this paragraph separately or in the aggregate, (a) own or

control, directly or indirectly, more than five percent (5%) of the combined voting power of all classes of stock entitled to vote, or of the total value of shares of all classes of stock entitled to vote, or of the total value of shares of all classes of stock (if a corporation), (b) own or control, directly or indirectly, more than five percent (5%) of the capital interest or the profit interest (if a partnership), or (c) own of control, directly or indirectly, more than five percent (5%) of the beneficial interest (if a trust or unincorporated enterprise); however, except as set forth in paragraphs 9 and 13, defendants Arnold and Mitchell shall not, directly or indirectly, own or control an interest in an entity which provides goods or services with respect to an ERISA-covered employee benefit plan. For the purposes of this paragraph, 'persons' shall include any individual who, with respect to defendant Arnold or defendant Mitchell, has a relationship described in section 267(c)(4) of the Internal Revenue Code.

The Independent Fiduciary, on behalf of the Fund, or, after the expiration of the term of the Independent Fiduciary, any fiduciary to act on behalf of the Fund, shall inquire into the ownership of any entity providing goods or services with respect to any employee benefit plan established as part of the Fund to ensure compliance with this paragraph, except that no inquires shall be required of any entity which does not derive more than $ 100,000 per year from the Fund.

12. Except as set forth in paragraph 13, with respect

to any ERISA-covered employee benefit plan or to any entity that provides goods or services for an ERISA-covered employee benefit plan, defendant Mitchell shall not, directly or indirectly

(a) provide any goods or services:

(b) derive any income, compensation, or other form

of value or benefit

(d) provide management or business consulting

services;

(e) extend, receive, or otherwise arrange credit:

(f) negotiate, broker, or otherwise arrange

transactions.

13. Under the terms of this Consent Decree, defendant Mitchell shall not, directly or indirectly, own or control an interest in an entity which has contracted directly with an ERISA-covered employee benefit plan to provide any goods or services. In addition, defendant Mitchell shall not in any way be involved in the establishment of an entity for the purpose of contracting with an ERISA-covered employee benefit plan to provide any goods or services. Nothing in this Consent Decree shall be construed to prohibit defendant Mitchell from owning or controlling an interest in a dental practice, or providing goods or services to a dental practice, which has contracted with a service provider organization to provide dental services to the

participants or beneficiaries of one or more ERISA-covered employee benefit plans. For the purposes of this paragraph, the term "'service provider organization" shall mean –

(a) an organization described in section 833(c) of the Internal Revenue Code of 1986, or (b) an insurance company which --

(1) is licensed to conduct business in more than one state:

(2) has reserves in excess of $100 million; and

(3) does not receive in excess of ten percent (10$) of its annual revenues from any ERISAcovered employee benefit plan: or

(4) is a wholly owned subsidiary of such an insurance company.

14. Defendants Arnold and Mitchell shall not act as fiduciaries, as defined in section 402(a)(2) of ERISA, 29 U.S.C. § 1102(a)(2), with respect to any employee benefit plan covered by ERISA.

D. PRESENT PLAN ADMINISTRATOR

. 15. Defendant William L. Meyers, Inc. ["Meyers”] shall not provide consulting services to the Fund. Meyers shall continue to provide administrative and ministerial services in accordance with its contractual obligations to the Fund.

However, the Independent Fiduciary shall have the sole authority to terminate Meyers in accordance with the terms of Meyers' contract under the procedures of paragraph 17, below. Any further duties and responsibilities of Meyers shall not include any of the powers, duties and responsibilities of the Independent Fiduciary as described in paragraphs 18-25, below. In any transition, Meyers recognizes its continuing obligations under ERISA, and further shall consistent with paragraphs 5 and 7 of its Amended Agreement with the Fund effective January 1, 1984, provide any requested data and software. The Fund and Meyers acknowledge their mutual contractual obligations.

Nothing in this Decree shall be construed to preclude the Independent Fiduciary, as part of any termination of Meyers as a service provider to the Fund, from causing the Fund to purchase any assets from Meyers provided that such a purchase is otherwise in accordance with law.

E. INDEPENDENT FIDUCIARY

16. The governing documents of the Fund are hereby amended to provide for the appointment by the Court of an independent named fiduciary [Independent Fiduciary'], as defined in section 402(a)(2) of ERISA, 29 U.S.C. § 1102(a)(2), with the powers and duties set forth in this Decree. Within ten (10) days of entry of this Decree, the Trustees of the Fund shall nominate an-entity to serve as the Independent Fiduciary by filing with the Court the name and a statement of the nominee's qualifications, with notice to the Secretary of Labor. Within

thirty (30) days of receipt of said Notice, the Secretary may file objections to the nominee, stating any reasons which the Secretary believes demonstrate that the nominee's appointment would not be in the interests of the Fund. If no objections are filed, the Court shall appoint the Independent Fiduciary nominated by the Trustees. In the event that objections are filed, the Court shall appoint the entity nominated by the Trustees unless the Court determines, based on written findings of fact and conclusions of law, that the Secretary has proven by a preponderance of the evidence that appointment of the entity nominated by the Trustees is not in the best interest of the Fund. In the event that the Court rejects the initial nominee, or, in the Court's discretion, any subsequent nominee, the Trustees shall name at least one additional nominee and the Secretary or the Trustees may submit additional nominees. From such additional nominees, the Court shall select that nominee whose appointment is found to be in the best interest of the Fund, provided that the nominee meets the qualifications set forth herein and the Court does not find, based on objections filed by a party hereto that the nominee's appointment would not be in the best interests of the Fund. The Court may, in its discretion, and at any time, require the parties to submit additional nominees.

To be eligible for appointment, the Independent Fiduciary shall have substantial experience as a manager of, consultant to, or administrator of employee benefit plans or other tax exempt

trusts; have previously served or be serving as manager or consultant to such plans or trusts with assets exceeding $50 million subject to its control or advice; charge a fee which is reasonable, does not exceed the fees charged by consultants for comparable services to comparable clients, and which does not constitute more than five (5) percent of the consultant's gross annual revenues. An Independent Fiduciary may not now be nor have been affiliated with any administrator, officer, trustee, agent or employee of the HEREIU Welfare Fund or the HEREIU International Union, except that nothing in this sentence shall be construed to disqualify Martin E. Segal & Co. [“Segal”] as Independent Fiduciary because of any current or prior connection between Segal and the Fund. No party who has served as a consultant to any administrative agency or legislative body with regard to the HEREIU Local 54 or Fund Unit 150 dental plans shall be eligible to be the Independent Fiduciary. In addition to these qualifications for the Independent Fiduciary, where more than one nominee is before the Court, and if other qualifications are found by the Court to be equal, preference shall be given to a candidate for Independent Fiduciary who has had experience in acting as a manager of, consultant to, or administrator of TaftHartley Act welfare funds.

The Independent Fiduciary, prior to its appointment, shall agree to execute a document formally acknowledging its fiduciary status with respect to the Fund and, upon selection by the court, shall execute said document. The participants of the Fund and

the service providers to the Fund shall be notified of the appointment of the Independent Fiduciary and be provided by the Fund with a summary of its powers and duties within sixty (60) days of its appointment.

17 The Independent Fiduciary shall provide written recommendations to the Board of Trustees with respect to every matter now committed to the Board of Trustees' discretion under the terms of the documents currently governing the Fund, except as to those matters set forth in paragraphs 18 and 19, below, and such recommendations shall in each case include a recommended resolution for the Board's adoption where action of any kind is recommended. In all matters where the Independent Fiduciary is required to make recommendations to the Board of Trustees, the Board shall take no action, other than actions they deem necessary to study such subject matter in connection with their review of the forthcoming recommendations of the Independent Fiduciary, without first receiving such recommendations and advice at or in advance of a meeting of the Board of Trustees.

The Trustees shall adopt and be bound by each recommendation made by the Independent Fiduciary required by this paragraph and paragraphs 15 and 20-25, below, except as specifically provided in paragraphs 18 and 19, below. The Board of Trustees shall meet at least quarterly to act upon the recommendations of the Independent Fiduciary, and those recommendations shall be provided to the Trustees to the extent possible thirty (30) days prior to such meetings. All recommendations made pursuant to

this procedure shall be deemed to have been adopted by the Trustees at the meeting following timely service of the recommendations. In the event of an emergency, defined as an unforeseen and unpredictable event relating to the provision of benefits by the Fund, the Independent Fiduciary may call a special meeting on seven (7) days notice and make recommendations which shall be deemed adopted at such special meeting.

Where action cannot be deferred for seven (7) days without compromising the interests of the Fund or its participants, the Independent Fiduciary may act on less than seven (7) days notice or without notice to the extent that notice is impractical, provided that the Independent Fiduciary shall obtain, by telephone or other method, the concurrence of the Chairman and Secretary of the HEREIU Welfare Fund with the Independent Fiduciary's conclusion that an emergency exists which requires that action not be deferred for seven (7) days. In the event that the Independent Fiduciary is unable to contact the Chairman or Secretary of the HEREIU Welfare Fund, the Independent Fiduciary shall obtain the concurrence of one union trustee and one management trustee of the HEREIU Welfare Fund.

The documents governing the Fund shall not be amended in any way so as to diminish the powers of the Independent Fiduciary. The Independent Fiduciary shall serve for a period of five (5) years from his appointment. For an additional two (2) years thereafter, the Fund shall retain a consultant possessing the

experience and size qualifications set forth for the Independent Fiduciary in paragraph 16.

In exercising any veto provided for under this order, the Independent Fiduciary shall inquire into the relevant facts and exercise its veto in accordance with § 404 of ERISA.

18. The Trustees of the Fund shall retain full discretionary authority and control with respect to determinations as to the benefits owing under the terms of governing plan documents to individual participants and beneficiaries of the Fund, and with respect to the resolution on behalf of the Fund of all individual disputes arising out of such determinations. The Trustees shall retain the authority to select Fund accountants responsible for the annual Fund audit, subject to the veto of the Independent Fiduciary based on its conclusion that the selectee designated by the Trustees is unfit to serve as accountant to the Fund. The Independent Fiduciary must set forth the specific reasons and all underlying facts justifying those reasons that demonstrate that the Trustees' selectee is not fit to serve. The Independent Fiduciary shall review the performance of the Fund accountant on an annual basis following the submission by the Fund accountant of the annual report, and may make objections to the retention of the Fund accountant in the same manner as allowed for the initial selection of the Fund accountant. The first such review shall occur after the submission of the annual report first due following the appointment of the Independent Fiduciary. In the event that the Independent Fiduciary makes an

objection to the continued retention of the Fund accountant, the Trustees shall select a new Fund accountant in the manner provided in this paragraph. To be qualified to serve as Fund accountant, the accounting firm nominated shall derive no more than five percent (5%) of its annual income from the Fund. The Trustees shall retain the authority to conduct audits of the Independent Fiduciary. Nothing in this decree shall preclude the Trustees from seeking and the Independent Fiduciary from giving advice concerning any matter in this paragraph. Advice by the Independent Fiduciary given pursuant to this paragraph, other than the annual approval of the Fund accountant, shall not be binding.

19. Except as specifically provided below, the Trustees of the Fund shall retain full discretionary authority and control with respect to the amount of money to be spent by the Fund on benefits in the aggregate, on any particular benefit, and on the level of the benefits to be provided by each Fund Unit. Any advice of the Independent Fiduciary with respect to the amount of money to be spent by the Fund on benefits in the aggregate or on any particular benefit, as well as the level of benefits to be provided by each Fund unit, shall not be binding on the Trustees, and may be provided in the form of options or a range of recommendations rather than in the form of a resolution for the Trustees' adoption. In addition, the Trustees shall retain full discretionary authority and control regarding the level of benefits and spending for any Fund Unit or selection of a benefit

delivery system, provided that the Independent Fiduciary shall veto any level of benefits which the Independent Fiduciary concludes cannot be paid without depleting the total HEREIU Fund assets to less than four (4) months reserves, and shall veto the selection of any benefit delivery system which, in the opinion of the Independent Fiduciary, would be unreasonable. In determining whether a benefit level or delivery system is unreasonable, the Independent Fiduciary shall determine, in addition to any other factors deemed appropriate by the Independent Fiduciary, whether the Trustees' decision is likely to result in the selection of a service provider which is not reasonably accessible to the participants and beneficiaries or whether the Trustees' decision is likely to restrict the number of qualified bidders so as to preclude a competitive selection process in which a sufficient number of similarly situated providers could be expected to bid so as to assure that plan benefits are provided at a reasonable price. If the Independent Fiduciary determines that the Trustees' decision is unreasonable or would deplete HEREIU Fund reserves to less than four (4) months reserves, the Trustees are obligated to set a level of benefits which the Independent Fiduciary determines can be paid for without depleting HEREIU Fund reserves to less than four (4) months reserves or to select a benefit delivery system which the Independent Fiduciary determines to be reasonable.

In addition, the Trustees shall retain the following powers:

(a) To accept and receive all contributions and other payments and income to be paid to the Fund, to collect delinquent contributions and overpayments to beneficiaries, to make refunds of amounts erroneously paid to the extent permitted by law, and to adjust, compromise, or settle each of the above as provided by law.

(b) To merge with trust funds created for similar purposes as the Fund and to accept and receive the properties and assets of trust funds which merge with the Fund, provided that, prior to any such merger, the Independent Fiduciary advises the Trustees that, in the opinion of the Independent Fiduciary, the merger will not reduce HEREIU Fund reserves to less than four months reserves. The Independent Fiduciary shall advise the Trustees of its opinion within ninety (90) days of a request by the Trustees for review of a proposed merger and the receipt of any information which the Independent Fiduciary requires to render an opinion.

(c) To accept, receive, and hold income from earnings and property of the Fund and to invest and reinvest the same as a part of the Fund.

(d) To deposit, or cause to be deposited, monies received by the Fund in such bank or banks as the Trustees designate and to. withdraw, or cause to be withdrawn, said funds to effect the purposes of the Fund and the requirements of this Decree, provided that no money may be spent as to any matter over which the Independent Fiduciary has the authority to make binding

recommendations to the Trustees without the consent of the Independent Fiduciary. Nothing in this paragraph shall preclude the payment of existing obligations of the Fund pending the completion of any review by the Independent Fiduciary.

(e) To adopt eligibility requirements for receiving benefits with respect to participation, length of service, and other conditions for obtaining benefits, to amend those requirements, to provide for portability of service for the payment of benefits, and to enter into reciprocity agreements with other welfare funds, except that no such action may be taken by the Trustees if the Independent Fiduciary determines that such action will deplete HEREIU Fund reserves to less than four (4) months reserves.

(f) To pay all taxes that may be levied on the Fund.

(g) To make, execute, and deliver any and all deeds, leases, mortgages, conveyances, releases, waivers, or other written instrument which the Trustees deem necessary for the accomplishment of the purposes of the Fund as to any matter over which the Trustees retain discretion under this Decree and to make, execute, and deliver any and all deeds, leases, mortgages, conveyances, releases, waivers, or other written instrument required to implement any recommendation of the Independent Fiduciary in any matter over which the Independent Fiduciary has authority to make binding recommendations.

(h) To dispose of any claim of the Fund as to any matter over which the Trustees retain discretion, including, but not

limited to, claims by beneficiaries regarding eligibility or benefits; to conduct any contributing employer payroll audits and employee eligibility audits relating to the confirmation of hours of service with employers obligated to make contributions to the Fund: and to require employers who are delinquent in paying their contributions to the Fund to pay the costs of collection, including the costs of payroll audits, attorneys* fees and court or arbitration costs.

(i) To establish investment policies: engage investment managers on such terms as are contained in the Trust Agreement or any amendments thereto; and transfer assets to such investment manager for investing.

(j) To assign to specific Trustees or committees of Trustees such tasks as permitted by law and this Decree.

(k) To terminate the Fund or any portion thereof, and to take any action necessary to segregate, transfer and liquidate the assets of any portion of the Fund being terminated. However, a partial termination, transfer, or segregation may not occur unless the Independent Fiduciary determines that such action will not deplete HEREIU Fund reserves for the remaining Fund units in the aggregate to less than four (4) months reserves.

(1) To determine the time and place of all Trustee meetings upon reasonable notice to all Trustees and the Independent Fiduciary; to adopt all necessary procedures for the holding of Trustee meetings, including the assignment to specific Trustees or committees of Trustees such tasks as are permitted by law and

this Decree. Nothing in this Decree shall be read to limit the authority of the Trustees to engage in any Executive Session of the Trustees or any committee of Trustees as to any aspect of the Trustees' responsibility to oversee the Independent Fiduciary or to limit the authority of the Trustees to exclude the Independent Fiduciary from attending such Executive Session.

(m) To retain legal counsel, auditors, actuaries, agents, accountants, advisors, and other professional consultants to assist the Trustees in the performance of their duties of monitoring the Independent Fiduciary or exercising their responsibilities under this Decree.

20. As soon as practicable following the entry of this Decree, the Independent Fiduciary shall systematically review, analyze, and evaluate all benefit delivery agreements and arrangements for all HEREIU Welfare Fund Units and make specific recommendations to the Trustees of the Fund regarding any appropriate changes in those agreements and arrangements, including recommendations regarding the continuation of and/or termination of any contract or arrangement with respect to the provision of Fund benefits to any of the Fund Units; make specific recommendations regarding the selection of contractors to provide health and welfare benefits to any of the Fund Units; and make a specific recommendation as to which contractor or contractors to hire and at what level of compensation, whether or not competitive bidding is employed. Pursuant to paragraph 16 all such recommendations shall be binding on the Trustees. The

review by the Independent Fiduciary provided in this paragraph, or any aspect of that review, shall commence at the earliest time deemed practicable by the Independent Fiduciary.

The Trustees, after consultation with the Independent Fiduciary, shall communicate to the Independent Fiduciary their conclusions with respect to the cost of benefits and benefit levels which the Fund shall endeavor to provide through each unit. Prior to the communication of such views by the Trustees to the Independent Fiduciary, however, the Independent Fiduciary shall be empowered to review any benefit plan for any Fund unit and to modify or replace any existing benefit plan contract with one providing benefits at no less than the same levels and at no more than the same cost. Any delay by the Trustees in communicating their conclusions to the Independent Fiduciary concerning cost and benefit levels which has the effect of preventing the Independent Fiduciary from fulfilling its responsibilities under this paragraph within eighteen (18) months from the date of this Decree shall be reported by the Independent Fiduciary to the Secretary, and shall be grounds for an extension of the term of the Independent Fiduciary.

21. In the course of exercising the powers granted in this Decree, the Independent Fiduciary shall:

a. Develop a system to regularly monitor the performance of all persons and entities providing benefits for or services to the Fund or any of its Units, and make appropriate binding recommendations to the Trustees of the Fund based upon

those regular performance reviews, except that the Independent Fiduciary shall have no power to make binding recommendations as to any person or entity hired by the Trustees solely pursuant to paragraph 19(m).

b. Negotiate, together with legal counsel or other appropriate persons of the Independent Fiduciary's selection, all benefit or service provider agreements on behalf of the Fund, except contracts or arrangements with persons or entities hired by the Trustees solely pursuant to paragraph 19(m).

c. Monitor contract provisions for all benefit provider agreements, determine that contract provisions are complied with, hire any persons necessary to perform such monitoring, including, but not limited to, medical or dental peer reviewers, and report regularly to the Trustees regarding the status of each Fund Unit and the performance of contractors and providers and, where appropriate, make binding recommendations concerning the addition, modification, and/or deletion of provisions to service provider agreements.

d. Advise the Trustees of the Fund of the anticipated cost of any proposed benefits and of increases needed in contributions to maintain or improve particular benefits. Monitor the provision of benefits, and advise the Trustees if any benefit is not or will not be adequately funded so as to maintain the established level of benefits.

e. As appropriate, recommend non-binding options for

the designation of new benefits or elimination of existing benefits.

f. Attend all meetings of-the Fund's Board of Trustees, and each meeting of any committee or subcommittee thereof, assist in the preparation of the agenda, and review the minutes of such meetings subject to the provisions of paragraph 19(1). Prepare regular reports outlining income, expenses, assets, benefits, disbursements, delinquent accounts, and other information relating to the Fund.

g. Make binding recommendations as to an auditing schedule, where appropriate, concerning payments made to and for health care providers relating to Fund benefits, specifying the scope of such audits and selecting the service providers to perform such audits.

h. Oversee record-keeping, claims processing, and accuracy of utilization data in connection with all Fund benefits.

i. Review all reports and documents required by law to be filed by the Fund with the Internal Revenue Service, the Department of Labor, and any other federal or state agency, and prepare portions of those reports and documents which relate to the functions and responsibilities of the Independent Fiduciary..

j. Provide non-binding recommendations to the Fund

Trustees regarding appropriate insurance coverage against all

risks to which the Fund is exposed and all coverage required by

law. In addition, seek to obtain, together with other persons,

where appropriate, one or more insurance policies for the Fund, the Independent Fiduciary, the Trustees of the Fund, and other persons at the most favorable available cost, provided that such cost is reasonable. The Trustees shall have the authority to select appropriate insurance coverage after consultation with the Independent Fiduciary and subject to the prior approval of the Independent Fiduciary. The Trustees and the Independent Fiduciary retain the right to obtain riders to obtain such additional insurance they deem necessary provided that such riders are not obtained at Fund expense. Nothing in this paragraph shall be read as relieving any person from the provisions of § 410 of ERISA.

k. Provide to the United States Department of Labor, upon request, access to all documents and records in its possession or under its control which relate to the Fund. The Independent Fiduciary shall give prior notice to the Trustees of any documents to be provided to the Labor Department or any government agency and shall report to the Trustees the substance of any contacts with officials of the Labor Department or other government agency. Nothing herein shall prevent the Trustees from obtaining adequate errors and omissions insurance on behalf of the Fund provided that not more than a reasonable amount is paid for-the protection of the Fund.

22. The administrative service provider(s) for the Fund shall be selected and compensated according to the system specified in paragraph 23, below, after each particular

administrative service provider position has been established by the Trustees. The Trustees shall establish administrative service provider positions after receiving non-binding recommendations of the Independent Fiduciary. In establishing an administrative service provider position, the Trustees shall specify the duties associated with such a position. Such duties may include the performance. of any of the following services reasonably necessary to the administration of the Fund: the maintenance, or creation of Fund books and records, the payment of and evaluation of claims by participants and beneficiaries (other than appeals to the Trustees) including the performance of all services necessary to establish and maintain eligibility rosters for Fund benefits, the receipt and disbursement of Fund monies, any clerical duties, and compliance with ERISA's reporting and disclosure provisions. Nothing in this paragraph shall be construed to preclude the Trustees from establishing an administrative service provider position which includes the power to hire and fire Fund employees under the direction and control of the person or entity filling the position, or which includes the power to hire contractors or subcontractors to assist in the performance of his assigned duties, provided that the scope of such provider's authority is specified in establishing his position. A single administrative service provider position may encompass duties that can only be performed by an entity such as an insurance company or a firm with the capacity to perform plan administration. The Independent Fiduciary shall veto the

creation of an administrative service provider position if it finds that the creation of that position is not in the best interest of the Fund, or is not reasonably necessary to administer the Fund.

23. With respect to each administrative service provider position established by the Trustees pursuant to paragraph 22, the Independent Fiduciary shall select up to three nominees, and submit the names of such nominees to the Trustees, after ascertaining how much each will charge the Fund for specified services. In providing such nominees to the Trustees, the Independent Fiduciary shall certify in writing that the selection of any of them by the Trustees would be prudent. The Trustees shall be obligated to select for each administrative service provider position, one of the nominees provided by the Independent Fiduciary. The Independent Fiduciary shall determine, in its sole discretion, whether providing the Trustees with more than one nominee is practicable, and the failure to provide more than one nominee shall not be deemed a violation of this order.

24. The Independent Fiduciary shall be responsible for entering into any contract on behalf of the Fund with an administrative service provider selected pursuant to the terms of paragraphs 22 and 23 above, but shall not enter into any such contract unless the terms of the contract are consistent with the duties of the administrative service provider position established by the Trustees and the contract price remains no

greater than that reported to the Trustees at the time of the service provider's nomination unless the Trustees approve.

25. The Independent Fiduciary may employ, at the expense of the Fund, attorneys, auditors, and others reasonably necessary and appropriate to aid it in the exercise of its powers, duties and responsibilities. The amounts paid to such persons shall not exceed a reasonable fee. The Trustees may not employ others to duplicate services provided by service providers hired by the Independent Fiduciary, but nothing in this decree shall limit the rights of the Trustees to retain legal counsel, auditors, actuaries, agents, accountants, advisors, and other professional consultants to assist the Trustees in the performance of their duties of monitoring the Independent Fiduciary or exercising their responsibilities under this Decree.

26. The Independent Fiduciary shall not be discharged or terminated during its term except by leave of Court. The Trustees of the Fund and the Secretary of Labor shall each have the right, with thirty (30) days notice to the other, to petition the Court at any time for removal of the Independent Fiduciary (or other relief) upon a showing that the Independent Fiduciary has committed, or is about to commit, a breach of fiduciary duty, a violation of a substantive provision of this decree or violation of law in connection with the Fund.

Upon the removal or resignation of an Independent Fiduciary during the term of this Consent Decree, the Trustees shall nominate a successor Independent Fiduciary who shall be appointed

in accordance with the provisions of paragraph 16. The term of a successor Independent Fiduciary shall be limited to the unexpired term of its predecessor.

27. On a monthly basis, or upon such other basis as agreed by the Fund and the Independent Fiduciary, the Fund shall pay the Independent Fiduciary reasonable fees and expenses actually incurred by the Independent Fiduciary in the exercise of its powers, duties and responsibilities. The Court shall approve such rates of compensation as set forth in the fee schedule for the Independent Fiduciary upon motion of the Independent Fiduciary, with twenty (20) days notice to the Secretary and the Trustees, and the Secretary and the Trustees shall have a right to file objections with the court. The Independent Fiduciary shall submit to the Court, and the other parties receiving notice, any documentation supporting said fee, and if objections are filed, the burden shall be on the Independent Fiduciary to demonstrate the reasonableness of its proposed fee.

F. RETENTION OF JURISDICTION

28. This Court shall retain jurisdiction over the parties, the Independent Fiduciary and subject matter of this action for the purpose of administration, application, and interpretation of this Consent Decree. In furtherance of the Court's retention of jurisdiction, the Independent Fiduciary shall furnish the Court, the Trustees, and the Secretary with

semiannual reports describing the activities undertaken by the Independent Fiduciary pursuant to this Decree.

29. The parties to this Consent Decree will bear their own costs and attorneys' fees. Under no circumstances shall any legal fees or costs incurred during the course of the litigation or settlement of this action be borne by the Fund. However, such legal fees and costs which are reasonably incurred after the entry of this Consent Decree and which relate to administration, application or interpretation of this Consent Decree may be borne by the Fund, provided that such fees or costs are reasonable in amount and necessary to the administration of the Fund.

G. NOTICE

30. Provisions of this Consent Decree requiring notice to the HERE Welfare Fund shall be satisfied by delivering it in writing to the Welfare Fund in care of:

Edward Hanley

1219 28th St., NW

Washington, D.C. 20007

Patrick Kane

National Realty & Investment Co.

Suite 2001

Northfield, IL 60093

John J. Reynolds _

Suite 830

29 S. LaSalle St.

Chicago, IL 60603

Provisions of this Consent Decree requiring notice to the Secretary shall be satisfied by delivering it in writing to:

Charles Lerner

Associate Director for Enforcement

Pension and Welfare Benefit Administration

U.S. Department of Labor 200 Constitution Avenue, N.W.

Room N-5716

Washington, D.C. 20210:

with duplicates delivered to:

Associate Solicitor

Plan Benefits Security Division

Office of the Solicitor
U.S. Department of Labor

200 Constitution Avenue, N.W.

Room N-4611

Washington, D.C. 20210

John R. Bolton

Assistant Attorney General

Civil Division

U.S. Department of Justice

Room 3143 10th & Pennsylvania Avenue, N.W.

Washington, D.C. 20530

The parties to this Consent Decree may, as they deem necessary, change from time to time the designation of persons to receive notice on their behalf by filing with the Court notification of such change and serving a copy thereof on the other parties to this Consent Decree.

H. CONSENT DECREE NOT TO AFFECT

ENFORCEMENT OF LAWS

31.. Nothing herein shall be construed to limit in any manner the powers and responsibilities of any agency, officer or employee of the United States under ERISA or any other law.

I.EXECUTION OF AGREEMENT

AND ENTRY OF JUDGMENT

32. This Consent Decree may be executed in counterpart originals by the parties thereto or by their respective attorneys pursuant to a power of attorney executed by each party. All original copies shall be filed with the Court. There being no just reason for delay, 'the Clerk of the Court is hereby expressly directed to enter this Consent Decree forthwith in accordance with the provisions of Rule 54(a) and (b) of the Federal Rules of Civil Procedure.

For the Secretary of Labor:

GEORGE R. SALEM Solicitor JOHN R. BOLTON

Assistant Attorney

General

WILLIAM A. MADDOX

United States Attorney

DALY D. E.'' TEMCHINE SURELL BRADY

Deputy Assistant Solicitor
for Special Litigation

For Defendants Joseph Belardi, Lewis Cohen, John Cullerton,

Donald G. DePorter, Paul DiAmico, Gail Fabian,

Florence Farr, Frank Gerace, Brian Handleman,

Edward T. Hanley, Patrick Kane, John C. Kenneally,

Herman Leavitt, Dominic P. Luongo, Frank Marolda,

Vito Pitta, A.M. Quarles, Ronald Richardson,

Frederick N. Richman, William Schuman,

Vincent Sirabella, Dale Stormer, Donald R. Williams,

Jerry Burns, C.A. Bud Cataldo, John O'Gara,

John Penman and H.W. Ward

_____________________

HOWARD S. SIMONOFF

Tomar, Seliger, Simonoff,

Adourian & O'Brien

41 Haddon Avenue

Haddonfield, N.J. 08033

For Defendant Hotel Employees and Restaurant Employees

International Welfare Fund

_______________

JOHN A. SLEZAK

Iverson, Yokum, Papiano

& Hatch

624 South Grand Avenue

27th Floor

Los Angeles, CA 90017

For Defendant William L. Meyers, Inc.

__________________

DONALD L. HOMYK

11 South LaSalle St.

Suite 730

Chicago, IL 60603

Re: McLaughlin v. Edward T. Hanley, et al

FOR DEFENDANTS:

Joseph Belardi Florence Farr

John Cullerton Jerry Burns

Edward T. Hanley

Patrick Kane

John C. Kenneally

Herman Leavitt

A. M. Quarles

Frederick N. Richman

Ronald Richardson

Frank Gerace

Paul DiAmico

John O'Gara

Dale Stormer

Brian Handleman

H. W. Ward

John Penman

Gail Fabian

By HOWARD S. SIMONOFF

Attorney for the above

Designated defendants

Dated:March 16, 1988

Re: McLaughlin v. Hanley, et al.

FOR DEFENDANTS:

Vito Pitta

Donald J. DePorter

William Schuman

Dominic Luongo

Lewis R. Cohen

Vincent Sirabella

Donald R. Williams

Frank Marolda

C.A.Bud Cataldo

By:HOWARD S. SIMONOFF

Attorney for the above Designated Defendants

DATED: March 31, 1988

RE: McLaughlin v. Hanley, et al.

FOR DEFENDANT:

Roy Chinman

By: HOWARD S. SIMONOFF

Attorney for the above Designated Defendant

DATED: April 7, 1988

For Defendants Hugh Arnold, Charles R. Mitchell,

Health Care Benefit Services, Inc.,

Nevada Health Services, Inc., and

Stratum Five International, Inc.

_______________

STEVEN SACHER

Pepper, Hamilton & Scheetz

1777 F Street, N.W.

Washington, D.C. 20006