MASTER LEASE / PURCHASE AGREEMENT

dated as of March 9, 2004, between TRANSOCEAN FUNDING/HUMBOLDT, INC., as Lessor and HUMBOLDT COUNTY, as Lessee

ARTICLE I AGREEMENT TO LEASE REPRESENTATIONS AND COVENANTS HUMBOLDT COUNTY ("Lessee") requests TRANSOCEAN FUNDING/Humboldt, Inc. ("Lessor") to acquire certain property as more fully described on an Exhibit B hereto and incorporated by reference herein (the "Property"). Lessee agrees to lease the Property from Lessor and Lessor agrees to lease the Property upon written acceptance hereof signed at the Lessor's principal office by an authorized officer upon the terms and conditions of the MASTER LEASE/PURCHASE AGREEMENT (the "Lease"). Lessee represents, covenants and warrants, and as requested by Lessor, will deliver an opinion of counsel substantially in the form attached as Exhibit E hereto to the effect (i) that it is a political subdivision of the State of California, duly organized and validly existing under the laws of the State of California and has full power and authority to execute and deliver this Lease, to enter into the transactions contemplated by this lease and to carry out its obligations hereunder, and (ii) that the Lease has been duly authorized, executed and delivered by Lessee and constitutes a legal, valid and binding agreement enforceable against Lessee in accordance with its terms. Lessee agrees, declares and covenants that it will do, or cause to be done, all things necessary within its power to preserve and keep the Lease in full force and effect. Lessee further represents, covenants and warrants that Lessee has complied with all bidding requirements where necessary and by due notification presented this Lease for approval and adoption as a valid obligation on its part; that Lessee has and will have sufficient appropriations or other funds available to pay all amounts due hereunder; that the Property is necessary and essential to enable to the Lessee to operate, maintain, and provide governmental services; and that the Lease Payments during the Lease Term (as such terms are defined below) are equivalent to, and do not exceed, fair rental value for the Property for a lease/purchase of the Property by the Lessee. ARTICLE II LEASE OF PROPERTY Section 2.1. Lease. Lessor hereby leases the Property to Lessee, and Lessee hereby leasepurchases the Property from Lessor, upon the terms and conditions set forth in the Lease. Section 2.2. Possession and Enjoyment. Lessor hereby covenants to provide Lessee during the term of this Lease with the quiet use and enjoyment of the Property, and Lessee shall during the term of the Lease peaceably and quietly have and hold and enjoy the Property, without suit or hindrance from Lessor, except as expressly set forth in this Lease. Lessor will, at the request of Lessee and at Lessee's cost, join in any legal action in which Lessee asserts its right to such possession and enjoyment to the extent Lessor lawfully may do so. Section 2.3. Lessor Access to Property. Lessee agrees that Lessor shall have the right at all reasonable times to examine and inspect the Property. Lessee further agrees that Lessor shall have such rights of access to the Property as may be reasonably necessary to cause the proper maintenance of the Property in the event of failure by Lessee to perform its obligations hereunder. The rights of Lessor and Lessee to the Property are subject to applicable airport security regulations, policies, rules and orders. Section 2.4. Lessee Waiver of Certain Termination Rights. Lessee waives the benefits of subdivisions 1 and 2 of Section 1932 and subdivision 4 of Section 1933 of the California Civil Code, but such waivers shall not limit any of the rights of Lessee under the Lease. Section 2.5. Substitution of Leased Property. With the prior written consent of Lessor, such consent not to be unreasonably withheld, Lessee may substitute the Leased Property with other property or properties owned by the County (Substitute Property), provided that (i) the Substitute Property contains no liens, mortgages or other encumbrances which would adversely affect the rights of Lessor, (ii) the Substitute Property has a value, and any improvements on such Property have a useful life, at least 25% in excess of the remaining principal balance and Lease Term at the time of the substitution,

(iii) the County provides adequate documentation (including an appraisal, if requested) to confirm these conditions and pays all expenses associated with the substitution, including any fees of counsel and as required, special tax counsel, (iv) the County owns the Substitute Property free and clear of all interests of third parties, (v) a Memorandum of Lease is filed with the County Assessor respecting Lessors interest in the Substitute Property and (vi) no Event of Default has occurred and is continuing under this Lease, and no event has occurred which with the passage of time or giving of notice or both would result in an Event of Default. ARTICLE III WARRANTIES Lessor has provided Lessee with certain written limited warranties with respect to the Property. Except for such limited warranties, NEITHER LESSOR NOR ANY ASSIGNEE OF LESSOR MAKES ANY WARRANTIES WITH RESPECT TO THE PROPERTY, EITHER EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE AND EXPRESSLY DISCLAIMS THE SAME. EXCEPT AS PROVIDED ABOVE, NEITHER LESSOR NOR ANY ASSIGNEE OF LESSOR SHALL HAVE ANY LIABILITY TO LESSEE FOR ANY CLAIM, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY, INDIRECTLY, INCIDENTALLY OR CONSEQUENTIALLY BY THE PROPERTY, BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT THEREIN, BY ANY INCIDENT WHATSOEVER IN CONNECTION THEREWITH ARISING IN STRICT LIABILITY, FROM LESSOR'S NEGLIGENCE OR OTHERWISE, OR IN ANY WAY RELATED TO OR ARISING OUT OF THIS LEASE AND EXPRESSLY DISCLAIM THE SAME. The obligation of Lessee to pay the Lease Payments as defined in Section 4.2 below, shall not be abated, impaired or reduced by reason of any claims of Lessee with respect to the condition, quality, workmanship, delivery, shipment, installation, defects or other matters involving the Property, except as provided by Article VI. ARTICLE IV TERM OF LEASE; LEASE PAYMENTS; TITLE TO PROPERTY; SECURITY INTEREST Section 4.1. Lease Term. Following Lessee's execution of said Lease, this Lease shall become effective upon the execution hereof by Lessor. The term of this Lease ("Lease Term") shall commence and end as defined in an Exhibit C applicable to the Property, unless such term is reduced or extended as herein provided. If, on the date specified in Exhibit C, Lease Payments and any additional payments payable hereunder shall not have been paid, or if the Lease Payments shall have been abated at any time and for any reason and amounts by which the Lease Payments shall have been less than the amounts extablished by Section 4.2 by reason of abatement shall not have been otherwise paid, then the Lease Term shall be extended until the Lease Payments in the amounts established by Section 4.2 and any additional payments shall have been paid, but not beyond March 2, 2034, or such shorter term as may be provided by law. If the Lessee prepays the Lease Payments in full under Article XI, or pays all Lease Payments in the amounts established by Section 4.2 and any additional payments during the Lease Term as the same become due and payable, or in any event upon the date stated in the preceding sentence, this Lease shall thereupon terminate. The Lessor and the Lessee agree to take any and all steps and execute and record any and all documents reasonably required to evidence the termination of this Lease under this Section 4.1. Section 4.2. Lease Payments. (a) Lessee agrees to pay total lease payments ("Lease Payments") set forth in Exhibit C respecting the specific schedules of Property to which such exhibit relates, including interest, on the dates and in the amounts specified in an Exhibit C, for and in consideration for the right of possession of, and continued quiet use and enjoyment of, the Property during each payment period. Said Lease Payments shall be payable without notice or demand at the office of the Lessor specified in Section 15.1 of this Lease (or such other place as Lessor may from time to time designate in writing) on the dates set forth in such Exhibit C. Any notice, invoicing, purchase orders, quotation or other forms or procedures required

by Lessee as a condition precedent to payment shall be fully explained and provided to Lessor or its assignee sufficiently in advance of payment due date for the completion thereof by Lessor or its assignee prior to such payment date. Notwithstanding any dispute between Lessor and Lessee, the Lessee shall make all 1Lease Payments when due, without deduction or offset of any kind, and shall not withhold any Lease Payments pending the final resolution of such dispute. Except as provided in Article VI, Lease Payments shall be paid absolutely and unconditionally in all events and without assertion of any right to any set-off, defense or counterclaim. (b) Lease Payments shall be paid from any source of legally available funds of Lessee. So long as the Property is available for Lessees use, Lessee covenants to take such action as is necessary to include and maintain all Lease Payments and any additional payments required hereunder, in each of its budgets during the Lease Term and to make the necessary annual appropriations for all such Lease Payments and additional payments. The covenants shall be deemed to be, and shall be construed to be, duties imposed by law, and it shall be the duty of each and every public official of the Lessee to take such action and do such things as are required by law in the performance of the official duty of such officials to enable Lessee to carry out and perform the covenants and agreements of this Lease agreed to be carried and performed by Lessee. (c) Lease Payments payable for the lease of the Property with respect to each payment period during the term of this Lease shall constitute the total rental amount due for said payment period, and shall be paid by Lessee on the payment date with respect to the payment period, for and in consideration of (1) the right of possession, and the continued quiet use and enjoyment, of the Property during each such payment period, and (2) the option to purchase the Property by payment of the amount prescribed in Article XI. Lessor and Lessee hereby agree and determine that the Lease Payments for lease of the Property, in the condition of the Property from time to time, constitute fair rental value for lease of the Property. Lessor and Lessee understand and intend that the obligation of the Lessee to pay Lease Payments hereunder shall constitute a current expense of Lessee, and shall not in any way be construed to be a debt of Lessee in contravention of any applicable constitutional or statutory limitations or requirements concerning the creation of indebtedness by Lessee. Section 4.3. Title to Property; Security Interest. Title to the Property is deemed to be in Lessee so long as Lessee shall not be in default pursuant to Article XII below or this Lease shall not have been terminated pursuant to the provisions of Article XI. In the event of default by Lessee under Section 12.1, title shall be reverted immediately in and shall revert to Lessor free of any right, title or interest of Lessee unless Lessor elects otherwise. This Lease creates a security interest because the consideration Lessee must pay Lessor for the right of possession and use of the Property is an obligation for the Lease Term not subject to termination by the Lessee, and Lessee has an option to become unencumbered owner of the Property for nominal additional consideration upon termination of the Lease Term and payment of all amounts due hereunder (including any early prepayment of all Lease Payments hereunder). Lessee agrees that this Lease may be filed as a financing statement, and agrees to execute and deliver all financing statements and other instruments necessary or appropriate to evidence such security interest. As applicable, Lessee further agrees that the Uniform Commercial Code shall apply as between the parties hereto and assignees of Lessor. Lessee also agrees that this Lease or a memorandum of this Lease may be filed by Lessor with the County Recorder of Humboldt County and Lessee agrees to execute such documents respecting any such filings requested by Lessor. Lessee shall have no right, title or interest in the Property or any additions, repairs, replacements or modifications thereto except as expressly set forth in the Lease. ARTICLE V USE; REPAIRS; ALTERATION Section 5.1. Use; Repairs. Lessee shall use the Property in a careful manner and shall comply with all laws, ordinances and regulations relating to, and shall pay all costs, claims, damages, fees and

charges arising out of, the Lease and the Property. Lessee, at its expense, shall keep the Property in good repair and furnish all parts, mechanisms and devices required therefor. Section 5.2. Alteration. Lessee shall not make any alterations, additions or improvements to the Property without Lessor's prior written consent unless such alterations, additions or improvement may be made without diminishing the resale value of the Property. ARTICLE VI LOSS; IRREPARABLE DAMAGE Section 6.1 Abatement of Lease Payment . The amount of the Lease Payments for the lease of the Property shall be abated, during any period in which by reason of material damage or destruction or condemnation or other loss there is substantial interference with the use and possession by Lessee of the Property. The amount of such abatement shall be such that the resulting Lease Payments represent fair consideration for the use and possession of the portions of such Property not damaged or destroyed or condemned or otherwise lost. Such abatement shall continue for the period commencing with such damage or destruction or condemnation or other loss and ending with the completion of repair, reconstruction, replacement, restoration, modification or improvement to such an extent that the damage or destruction or condemnation or other loss no longer substantially interferes with the use and possession by Lessee of the Property. In the event of any such damage or destruction or condemnation or other loss, this Lease shall continue in full force and effect and shall not be terminated by virtue of such damage or destruction or condemnation or other loss, and Lessee waives any right to terminate this lease by virtue of an such damage or destruction or condemnation or other loss. To the extent that the proceeds or rental interruption or use and occupancy insurance are available to pay Lease Payments or amounts by which Lease Payments are less than the amounts established therefore by Section 4.2 by reason of abatement pursuant to this Article VI, such proceeds constitute a special fund for the payment of the Lease payments which proceeds shall be used as provided by Section 7.3. Section 6.2 Obligation to Reconstruct or Replace. The risk of damage or destruction or other loss (not including condemnation) shall be insured against under Article VII. From condemnation or insurance proceeds (or other funds if Lessee breaches its obligation to insure), Lessee shall repair, reconstruct, replace, restore, modify or improve the Property. Section 6.3 Option to Pay Proportionate Purchase Price. In the event of any damage ro destruction or condemnation or other loss of the Property, Lessee at its option may, instead of repairing, reconstructing, replacing restoring, modifying or improving the Property, pay Lessor in cash all of the following: (i) all amounts then owed by Lessee to Lessor under this Lease, and (ii) an amount equal to that portion of the total acquisition cost of the item of Property paid for by Lessor plus any applicable premiums less the principal component of the Lease Payments made for such item of Property as determined by Lessor prior to payment of such portion of the Prepayment Purchase Option Price (in Exhibit C) by Lessee (the "Proportionate Purchase Price"). Upon Lessor's receipt of such payment, Lessee shall be entitled to whatever interest Lessor may have in said item in its then condition and location, without warranty expressed or implied, and Lessor shall deliver to Lessee a full release of Lessors right, title and interest in and to such item. When the Proportionate Purchase Price is paid to Lessor, the portion of Lease Payments equivalent to the damaged or destroyed or condemned or otherwise lost item, for which the Proportionate Purchase Price is paid to Lessor, shall be abated. ARTICLE VII INSURANCE Section 7.1 Lessees Obligation to Insure. Lessee shall, during the term of this Lease, insure all Property under this Lease against casualty occurrences, including the perils of fire, lightning, windstorm, hail, explosion, aircraft, vehicles, smoke, riot, civil commotion, strikes, locked-out workmen or theft, burglary and water damage in an amount equal to the higher of total unpaid balance of the acquisition

cost at the time (plus any unpaid charges and expenses and accrued interest for the next semi-annual period in Exhibit C) or the cost of replacement of all Property and shall insure public liability and property damage insurance sufficient to protect Lessor from liability in all events. Insurance shall be maintained by self-insurance (with prior written consent of Lessor) or with standard insurers and the Lessee shall give the Lessor thirty days notice of cancellation or non-renewal. Section 7.2 Additional Insured. All payments for damage, destruction, or other loss to Property shall be payable to the Lessor or other assignee as additional insured as their interest may appear under the terms and conditions of the Lease. Upon acceptance of the Property and upon each insurance renewal date, Lessee shall deliver to Lessor or its assignee a duly authenticated Certificate evidencing such insurance. In the event of any loss, damage, destruction, or other loss, or injury or accident involving the Property, Lessee shall promptly provide Lessor with written notice thereof and make available to Lessor all information and documentation relating thereto. Section 7.3 Rental Interruption Insurance. Lessee shall procure, and maintain throughout the Lease Term, rental interruption or use and occupancy insurance with an insurance company reasonably acceptable to Lessor, with such deductibles that are also reasonably acceptable to Lessor, to cover loss, total or partial, of the use of the Property as a result of any of the hazards covered in the insurance required by this Article VII and the resulting loss of rental income to Lessor, in an amount at least equal to the maximum total Lease Payments payable with respect to the lease of the Property during the immediately following twelve (12) month period. All payments of such insurance shall be payable to the Lessor or its assignee, as additional insured as their interests may appear under the terms and conditions of this Lease, and used first to pay any amounts by which the Lease Payments have been less than the amounts established therefore by Section 4.2 by reason of abatement pursuant to Article VI, and second any excess for credit upon payment of the Lease Payments in the order in which such Lease payments become due and payable. Upon acceptance of the Property and upon each insurance renewal date, Lessee shall deliver to Lessor and its assignee a duly authenticated certificate evidencing such insurance. All such insurance shall require 30 days notice of cancellation or non-renewal to the Lessor and its assignee. ARTICLE VIII LIENS AND TAXES Lessee shall keep the Property free and clear of all levies and encumbrances. Lessee shall pay, when due, all charges and taxes (local, state and federal) including, but not limited to sales, use, excise and property taxes and penalties and interest advanced upon behalf of the Lessee which may now or thereafter be imposed upon the ownership, leasing, rental, sale, purchase, possession or use of the Property, excluding, however, all taxes on or measured by Lessor's net taxable income. If Lessee fails to pay said charges and taxes when due, Lessor shall have the right, but shall not be obligated, to pay said charges and taxes. In the event the Lessor has paid such charges or taxes, Lessee shall pay immediately Lessor the amount advanced upon behalf of the Lessee. ARTICLE IX INDEMNIFICATION To the extent permitted by law, Lessee shall indemnify Lessor against and hold Lessor harmless from any and all claims, actions, causes of action, suits, proceedings, expenses, damages, liabilities, obligations, losses, penalties, costs or similar charges of whatever nature, including attorney's fees, arising out of or connection with the Property, including, without limitation, its design, fabrication, manufacture, selection, purchase, delivery, construction, possession, use, operation or return and the recovery of claims under insurance policies thereon. To the extent permitted by law, Lessee shall indemnify Lessor and hold Lessor harmless against any and all claims, actions, proceedings, expenses, liabilities, damages, costs or similar charges of whatever nature, including attorneys' fees, in connection with any property, sales, use, lease or excise taxes which may be assessed against the Property or the transaction contemplated by this Lease.

Lessee shall defend, save, protect, indemnify and hold Lessor and its assigns harmless from and against all liabilities, claims, actions, foreseeable and unforeseeable consequential damages, penalties, costs (of whatever nature), and expenses (including sums paid in settlement of claims and all consultant, expert and legal fees and expenses of Lessors counsel) or loss directly or indirectly arising out of or resulting from any Hazardous Substance in, on, or around any part of the property or in the soil, groundwater or soil vapor on or under the property, including those incurred in connection with any investigation of site conditions or any clean-up, remedial, removal or restoration work, or any resulting damages or injuries to the person or property of any third parties or to any natural resources. The term Hazardous Substance means any substance, material or waste, including asbestos and petroleum (including crude oil or any fraction thereof), which is or becomes designated, classified or regulated as being toxic, hazardous, a pollutant or similar designation under any federal, state or local law, regulation or ordinance." Lessee represents, warrants and covenants that throughout the term of this Lease it will not take or permit any of its officers, employees or agents to take any action which would cause the tax-exempt nature of the obligations evidenced by this Lease to be contested, challenged or denied by applicable governmental authorities. In the event any such action by Lessee results in the denial or revocation of the tax-exempt status of such obligations, Lessee shall be responsible for all taxes, penalties, and interest arising in connection therewith to Lessor or any assignee. Construction Management Lessor grants Lessee the right to handle all construction and construction management activities associated with the Property, including but not limited to all architects selection, review of plans, review of construction activities and all equipment, fixtures, appliances and systems, review of all bid documents and specifications, review of all bid or surety bonds, insurance requirements and acceptance of all aspects of the Property and all associated actions or omissions. Lessee shall be obligated to monitor and ensure maintenance by the architect, contractor, subcontractors and materialmen of adequate liability insurance, errors and omissions insurance, workmens compensation insurance and all other insurance required for projects similar to the Property in an amount reasonably satisfactory given the scope of the Project, and Lessee agrees to protect and hold harmless Lessor in the event of any failure to monitor such insurance and its continued coverage. Lessee assumes liability for and agrees (whether or not Lessor is otherwise insured) to indemnify, protect, and hold harmless Lessor from and against all liabilities, obligations, losses, damages, penalties, costs, expenses, claims, actions, causes of action, suits and proceedings (including legal expenses, attorneys fees and costs and court costs) of whatever kind or nature imposed upon, incurred by or asserted against Lessor in connection with the planning, permitting, design, construction, installation, delivery, and acceptance of the Project and all other related aspects of the Property. The indemnities contained in this Section shall survive the termination or expiration of this Lease Agreement. ARTICLE X ASSIGNMENT AND SUBLEASING Section 10.1. Assignment by Lessor. This Lease, and the obligations of Lessee to make payments hereunder, may be assigned and reassigned in whole or in part to one or more assignees or subassignees (INCLUDING HOLDERS OF CERTIFICATES OF PARTICIPATION, TRUST INSTRUMENTS, PAYING AGENTS OR TRUSTEES) by Lessor at any time subsequent to this execution, without the necessity of obtaining the consent of Lessee; provided, however, that no such assignment or reassignment shall be effective unless and until Lessee shall have received notice of the assignment or reassignment disclosing the name and address of the assignee or sub-assignee. Upon receipt of notice of assignment, Lessee agrees to reflect in a book entry the assignee designated in such notice of assignment, and to make all payments to the assignee designated in the notice of assignment, notwithstanding any claim, defense, set-off or counterclaim whatsoever (whether arising from a breach of

this Agreement or otherwise) that Lessee may from time to time have against Lessor, or the assignee. Lessee agrees to execute all documents, including notices of assignment and chattel mortgages or financing statements which may be reasonably requested by Lessor or its assignee to protect their interests in the Property and in this Agreement. Upon assignment by the Lessor, Lessee shall make payments only to assignee or a designated agent of assignee. All assignments, certificates of participation, beneficial interests or similar divisions or creations of rights in this Agreement of whatever nature must be in full compliance with all applicable laws, including any regulations of the Securities and Exchange Commission, at no cost or expense to Lessee. Lessee expressly acknowledges and consents to the issuance by the Lessor of Certificate of Participation in this Lease or any amendments hereto through a private offering arranged by the Lessor. AT LESSORS SOLE OPTION, LESSOR HAS DETERMINED THAT IT SHALL DECLARE ITSELF AGENT ON BEHALF OF REGISTERED OWNERS OF CERTIFICATE OF PARTICIPATION to be issued pursuant to a Paying Agency Agreement between Lessor and Pacific Capital Bank, N.A., dba First National Bank of Central California, or First Bank & Trust, as paying agent or another banking institution as paying agent, or any successor paying agent. Pursuant to the Paying Agency Agreement, Lessor has agreed to maintain a register containing the names and addresses of such registered owners. Lessor hereby agrees that upon execution and delivery of the Paying Agency Agreement it will provide a confirmation of same to Lessee. Lessee shall not provide, nor shall it be required to provide, continuing disclosure with respect to this Agreement pursuant to Rule 15c2-12 of the Securities and Exchange Commission, and all transfers and assignments by Lessor shall be subject to this section. Section 10.2. No Sale, Assignment or Subleasing by Lessee. THIS LEASE AND THE INTEREST OF LESSEE IN THE PROPERTY MAY NOT BE SOLD, ASSIGNED, SUBLEASED OR ENCUMBERED BY LESSEE WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR. SUCH CONSENT SHALL NOT BE UNREASONABLY WITHHELD BY LESSOR AND SHALL BE SUBJECT TO ASSUMPTION BY THE NEW ASSIGNEE OR SUBLESSEE OF LESSEE OF ALL TERMS OF THIS LEASE, AND COMPLIANCE WITH THE TERMS THEREOF, INCLUDING SECTION 13.1 HEREOF. ANY SUBLEASE SHALL BE SUBORDINATE TO THIS LEASE AND SHALL NOT AFFECT ANY OBLIGATIONS OF LESSEE HEREUNDER, AND LESSEE SHALL EXECUTE AND FILE SUCH EVIDENCES OF ASSIGNMENT AS REASONABLY REQUESTED BY LESSOR. ARTICLE XI OPTION TO PURCHASE; DEFEASANCE Section 11.1. Option to Purchase. Lessee shall have the option to purchase all the Property on a specific Exhibit or Schedule of Property on any Lease Payment Date for such Exhibit or Schedule at the written request of the Lessee, delivered to the corporate offices of the Lessor thirty (30) days prior the Lease Payment Date on which Lessee intends to exercise its purchase option, at a price equal to the Prepayment Purchase Option Price set forth in Exhibit C. The Prepayment Purchase Option Price set forth in Exhibit C assumes the Lease Payment due on the same date has been paid. Upon payment of the Prepayment Purchase Option Price set forth in Exhibit C and any Lease Payments due, and upon satisfaction of Lessor that Lessee is not on such date in default pursuant to any term of this Lease, Lessor shall deliver to Lessee a full release of Lessor's right, title or interest of Lessor in and to the Property, and the portion of the Lease Payment equivalent to the Property for which the Prepayment Purchase Option Price was made shall be abated. Section 11.2. Defeasance of Rental Payments. Lessee may at any time irrevocably deposit in escrow with a defeasance escrow agent for the purpose of paying all of the principal component and interest component accruing under a Schedule of Property, a sum of cash and non-callable securities consisting of direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America or any agency or instrumentality thereof, in such aggregate amount, bearing interest at such rates and maturing on such dates as shall be required to provide funds sufficient for this purpose. Upon such defeasance, all right, title and interest of Lessor in the Property under said Schedule of Property shall terminate. Lessee shall cause such investment to

comply with the requirements of federal tax law so that the exclusion from gross income of the interest component of Rental Payments on said Schedule of Property is not adversely affected. ARTICLE XII EVENTS OF DEFAULT AND REMEDIES Section 12.1. Events of Default. An event of default ("Event of Default") under the Lease means the occurrence of any one or more of the following events: (a) Lessee fails to make any Lease Payment (or any other payment) as it becomes due in accordance with the terms of this Lease, and any such failure continues for ten (10) days after the due date thereof; (b) Lessee fails to perform or observe any other covenant, condition, or agreement to be performed or observed by it hereunder or under the Lease and such failure is not cured within thirty (30) days after written notice by Lessor; provided, however, that if the failure stated in the notice can be corrected, but not within such period, Lessee may request a reasonable extension of time to cure and Lessor shall not unreasonably withhold consent to such extension if corrective action is instituted by Lessee within the thirty (30) day period and is diligently pursued until the failure is corrected; (c) The discovery by Lessor that any material statement, representation or warranty made by Lessee in the Lease or in writing ever delivered by Lessee pursuant to or in connection with the Lease is false, misleading, or erroneous in any material respect; or (d) Lessee becomes insolvent or admits in writing its inability to pay its debts as they mature or applies for, consents to, or acquiesces in the appointment of a trustee, receiver or custodian for the Lessee or a substantial part of its Property; or in the absence of such application, consent or acquiescence, a trustee, receiver or custodian is appointed for Lessee or a substantial part of its Property and is not discharged within thirty (30) days; or any bankruptcy, reorganization, debt arrangement, moratorium, or any proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceedings, is instituted by Lessee and, if instituted against Lessee, is consented to or acquiesced in by Lessee or is not dismissed within thirty (30) days. Section 12.2. Remedies. Upon the occurrence of an Event of Default under Section 12.1 of the Lease and as long as such Event of Default is continuing, Lessor may, at its option, exercise any and all remedies available pursuant to law or granted pursuant to this Lease, except that Lessor may not exercise any remedy for Default described by Section 12.1(a) for a period of ten (10) days after written notice specifying such failure to pay and requesting that payment be made has been given to Lessee by Lessor; provided that notwithstanding anything herein to the contrary, THERE SHALL BE NO RIGHT BY LESSOR UNDER ANY CIRCUMSTANCES TO ACCELERATE THE LEASE PAYMENTS OR OTHERWISE DECLARE ANY LEASE PAYMENTS NOT THEN IN DEFAULT TO BE IMMEDIATELY DUE AND PAYABLE. Each and every covenant hereof to be kept and performed by Lessee is expressly made a condition hereof and upon the breach thereof, Lessor may exercise any and all rights of repossession of the Property, and also, at its sole option, with or without such repossession, may terminate this Lease; provided, that no such termination shall be effected either by operation of law or acts of the parties hereto, except only in the manner herein expressly provided. In the event of such default and notwithstanding any taking of custody or repossession by Lessor, Lessee shall, as herein expressly provided, continue to remain liable for the payment of the Lease Payments and damages for breach of this Lease and the performance of all conditions herein contained and, in any event, such Lease Payments and damages shall be payable to Lessor at the time and in the manner as herein provided, to wit: (a) Lease Not Terminated. In the event Lessor does not elect to terminate this Lease in the manner hereinafter provided for in subparagraph (b) hereof, Lessor may, with the consent of Lessee, which consent is hereby irrevocably given, take custody of the Property and re-lease it for the account of Lessee, in which event Lessees obligation will accrue from rental period to rental period in accordance with this lease and Lessee will continue to receive the value of the use of the Property from rental period

to rental period in the form of credits against its obligation to pay Lease Payments. Lessee agrees to and shall remain liable for the payment of all Lease Payments and the performance of all conditions herein contained (including but expressly not limited to reimbursement for any loss of tax benefits, interest and penalties due to such re-leasing) and shall reimburse Lessor for any deficiency arising out of the releasing of the Property, or, in the event Lessor is unable to re-lease the Property, then for the full amount of all Lease Payments to the end of the Lease Term, but SAID LEASE PAYMENTS AND DEFICIENCY SHALL BE PAYABLE ONLY AT THE SAME TIME AND IN THE SAME MANNER AS HEREINABOVE PROVIDED FOR THE PAYMENT OF LEASE PAYMENTS HEREUNDER (ON AN ANNUALIZED BASIS), notwithstanding the taking of custody by Lessor or any suit in unlawful detainer, or otherwise, brought by Lessor for the purpose of effecting such custody of the Property or the exercise of any other remedy by Lessor. Lessee irrevocably appoints Lessor as the agent and attorney-infacdt of Lessee to re-lease the Property in the event of default by Lessee in the performance of any covenants herein contained to be performed by Lessee, including the expenditure of money to facilitate such re-lease (including but not limited to site and Property improvements and repairs) and to effect such re-lease (including but not limited to hiring consultants and leasing agents), and to do all other acts to maintain or preserve the Property, and Lessee hereby exempts and agrees to save harmless Lessor from any costs, loss or damage whasoever arising or occasioned by any such taking of custody or re-leasing of the Property, including any such re-leasing expenditures. Lessee agrees that any such expenditures shall be treated as made by Lessor (and not Lessee) for purposes of State law. Lessee also waives any and all claims against Lessor in the event Lessor is unable to re-lease the Property to eligible entities under the federal tax law, and additional damages result to Lessor due to loss to tax benefits, interest or penalties, which are reimbursable or payable by Lessee hereunder. Lessee hereby waives any and all claims for damages caused or which may be caused by Lessor in taking custody of the Property as herein provided and all claims for damages that may result from the destruction of or injury to the Property and all claims for damages to or loss of any property belonging to Lessee that may be in or upon the Property. Lessee agrees that the terms of this Lease constitute full and sufficient notice of the right of Lessor to re-lease the Property without effecting a surrender of this Lease, and further agrees that no acts of the Lessor in effecting such re-leasing shall constitute a surrender or termination of this Lease irrespective of the term for which such re-leasing is made or other terms and conditions of such re-leasing, or otherwise, but that, on the contrary, in the event of such default by Lessee the right to terminate this Lease shall vest in Lessor to be effected in the sole and exclusive manner hereinafter provided for in subparagraph (b) hereof. Lessee further waives the right to any rental obtained by Lessor in excess of the Lease Payments and hereby conveys and releases such excess to Lessor to the extent of Lessors damages, costs and losses, re-leasing expenditures, and reasonable compensation for its services in re-leasing the Property. (b) Lease Terminated. In an event of default hereunder, Lessor at its option may terminate this lease and re-lease all or any portion of the Property; provided that such termination shall not operate to terminate any of the rights of Lessee under this Article XII. In the event of termination of this lease by Lessor at its option and in the manner hereinafter provided on account of default by Lessee (and notwithstanding any repossession of the Property by Lessor in any manner whatsoever or the releasing of the Property), Lessee nevertheless agrees to pay Lessor all costs, loss or damages howsoever arising or occurring payable at the same time and in the same manner as herein provided in the case of Lease Payments. Neither notice to pay rent nor to deliver up possession of the Property given pursuant to law nor any proceeding in unlawful detainer taken by Lessor shall of itself operate to terminate this Lease, and no termination of this Lease on account of default by Lessee shall be or become effective by operation of law, or otherwise, unless and until Lessor shall have given written notice to Lessee of the election on the part of Lessor to terminate this Lease. Lessee covenants and agrees that no surrender of the Property or of the remainder of the lease Term hereof, no abandonment, and no termination of this Lease shall be valid in any manner or for any purpose whatsoever unless stated or accepted by Lessor by such written notice. (c) Term Limitation of any New Leases. In the event that Lessor enters into a new lease or leases pursuant to this Section 12.2 in the event of a default or in the event that the Lease Term terminates before all Lease Payments have been paid, then such new lease shall have a term no longer than one day less than the remaining Lease Term as such may be extended under Section 4.1, and, in all cases, no longer than is necessary to recover all Lease Payments, damages, lost interest (due to an extended recovery period, computed at the rate of seven and one-half percent (7.5%) per annum, or if the prime rate of interest of the largest banking institution located in California is higher than 6.5%, then

the prime rate of interest plus 100 basis points), loss of tax benefits (as applicable), costs and losses, any further expenditures of money made in order to facilitate the execution of such new lease and reasonable compensation to Lessor for its leasing services. (d) Lessee to Become Owner of Property. Upon expiration of the Lease Term, as such may be extended under Section 4.1 and limited by Section 12.2 (c), Lessor shall deliver to Lessee a full release of Lessors right, title and interest in and to the Property, and Lessee shall become owner thereof free of all claims regardless of any intervening rights authorized by this Section 12.2. Section 12.3 Agreement to Payment of Attorneys Fees and Expenses. In the event either party to this Lease should default under any of the provisions hereof and the non-defaulting party should employ attorneys or incur other expenses for the collection of moneys or the enforcement of performance or observance of any obligation or agreement on the part of the defaulting party herein contained, the defaulting party agrees that it will on demand therefor pay to the non-defaulting party the reasonable fees and expenses of such attorneys, any court costs and such other expenses so incurred by the non-defaulting party. Section 12.4 Application of Proceeds. All net amounts received from the re-lease of the Property under this article XII, and all other amounts derived by Lessor as a result of an Event of Default hereunder, except as otherwise provided by Sections 12.2(a) and (b) regarding remedies, shall be applied as follows: First, to the payment of the fees, costs and expenses of Lessor in declaring such Event of Default, including reasonable compensation to its agents, attorneys and counsel; and Second, to the payment of the whole amount then owing and unpaid for principal or other payment and interest, if any, and interest on the overdue principal or other payment at the rate of seven and one-half percent (7.5%) per annum (provided that if the prime rate of interest of the largest banking institution located in California is higher than 6.5%, then the prime rate of interest plus 100 basis points), and in case such moneys shall be insufficient to pay in full the whole amount so owing and unpaid, then to the payment of such principal and interest, without preference or priority, ratably to the aggregate of such moneys. ARTICLE XIII TAX COVENANTS AND EXPECTATIONS Section 13.1. Tax Covenants. Lessee covenants that it will not take or permit any of its officers, employees or agents to take any action with respect to the Lease, the Property or the property described in Exhibit B to the Escrow Agreement (the Financed Property) (including allowing such Property or the Financed Property to be used in any private use) which would cause the Lease to be classified as a "private activity bond" or an "arbitrage bond" or "federally guaranteed" within the meanings of Sections 141, 148 and 149 respectively of the Internal Revenue Code of 1986, as amended or superseded (the "Code"), and any regulations from time to time adopted thereunder or which would cause the interest portion of the Lease Payments to become includible in gross income under the Code, and the Lessee covenants that it will take all actions necessary to maintain such exclusion from gross income under the Code. In addition, the Lessee hereby represents that it is a political subdivision of the State of California and that all of the net proceeds of the Lease are to be used for local governmental activities of the Lessee. The Lessee further covenants that it will comply with the information reporting requirements of Section 149(e) of the Code, including filing of Form 8038-G or 8038-GC with respect to the Lease. Section 13.2. Expectations. Lessee represents, warrants and covenants as follows with regard to the Lease, to its best information, knowledge and belief: (a) Lessee has entered into a contract to lease with option to purchase the Property in order to finance the costs of the Financed Property. The acquisition of the Financed Property will proceed with due diligence and all proceeds received from the Lessor will be spent within six months of the date of the funding of this Lease as to personal property and within two years of the date of this Lease as to real

property (provided that for real property 10% of the funds for such property are spent within six months following funding, 45% within the first year, 75% within 18 months and the balance within two years). (b) No lease payment account has been or will be established with respect to the Lease. Lease Payments will be paid directly to the Lessor or its Assignee. (c) No reserve fund or similar fund has been or will be established by Lessee with respect to the Lease. An escrow fund with Pacific Capital Bank, N.A., dba First National Bank of Central California, is being established pursuant to that certain Escrow Agreement of even date herewith, among the Lessor, Lessee and Pacific Capital Bank, N.A., dba First National Bank of Central California, respecting acquisition of the Financed Property and improvements contemplated by the County. (d) Lessee has not established and does not expect to establish any sinking fund from which Lease Payments under the Lease will be paid or any fund for which there is reasonable assurance that amounts therein will be available to pay such Lease Payments if Lessee encounters financial difficulties. ARTICLE XIV DELIVERY OF RELATED DOCUMENTS Lessee will execute or provide, as required by Lessor, the following documents and information satisfactory to Lessor: (a) Documents evidencing acceptance and delivery; (b) Essential Use Letter regarding Property; (c) Uniform Commercial Code financing statements, as applicable; (d) Certificate of insurance or Certificate that the Lessee is self insured under its funded self insurance program, as is acceptable to Lessor; (e) Memorandum of Lease in recordable form; (f) Current financial statements and copies of budget showing appropriations (as available); (g) Certificate of incumbency; (h) Resolution of Lessee approving this Lease or statutory authority respecting such approval; (i) Acknowledgment and Consent to Assignment and/or appointment of the Paying Agent; and (j) Other documents as reasonably requested by Lessor. ARTICLE XV MISCELLANEOUS Section 15.1. Notices. Except where another form of notice is specifically authorized in a section of this Lease, all notices to be given under this Lease to Lessee shall be made in writing and mailed by certified mail, return receipt requested, faxed or sent by private courier service to: HUMBOLDT COUNTY, 825 Fifth Street, Eureka, CA 95501, Attn: Treasurer and Tax Collector, (707) 476-2434; fax: (707) 445-7608, or at such address as the party may provide in writing from time to time. Notices to Lessor shall be addressed to it at Lessor's address at TRANSOCEAN FUNDING/Humboldt, Inc., 111 Anza Boulevard, Ste. 107, Burlingame, CA 94010, (650) 342-2266, fax: (650) 342-9719, Attn: President, or at such other address as Lessor or Lessor's assignee may provide in writing from time to time. Any such notice shall be deemed to have been received five (5) days subsequent to mailing, or

upon delivery if by facsimile or private courier service. The parties may designate electronic mail addresses for providing notices, but all notices must also be sent as set forth above. Section 15.2. Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provisions of this Lease. Section 15.3. Governing Law. This Lease shall be governed by, and construed in accordance with, the laws of the State of California. Section 15.4. Inventory; Registration. Lessee shall maintain a detailed inventory of each item of Property, which inventory shall identify the item as being leased from Lessor pursuant to this Lease. SECTION 15.5. AMENDMENTS; MODIFICATIONS; LESSEE WAIVERS. ALL AMENDMENTS OR MODIFICATIONS OF THE TERMS OF THE LEASE MUST BE AGREED TO IN WRITING IN ADVANCE BY LESSEE AND LESSOR OR ITS ASSIGNEE; PROVIDED, HOWEVER, THAT NO AMENDMENTS OF THIS LEASE SHALL OPERATE TO REDUCE OR DELAY ANY LEASE PAYMENTS TO BE MADE HEREUNDER WITHOUT CONSENT OF LESSOR AND ITS ASSIGNEE, IF ANY, AT THE TIME OF AMENDMENT. Initials of Lessee: ___________ Section 15.6. Entire Agreement; Waiver. This Lease and the other attachments, documents or instruments executed by Lessee and Lessor in connection herewith, including any applicable Exhibits A through H (incorporated by reference herein), constitute the entire agreement between the parties with respect to the Property. There is no understanding or agreement, oral or written, which is not set forth herein. The waiver by Lessor of any breach by Lessee of any term, covenant or condition hereof shall not operate as a waiver of any subsequent breach thereof. Section 15.7. Execution in Counterparts. This Lease may be executed in any number of counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument, provided, however, that one counterpart shall be identified as the sole original of this Lease for the purpose of assignment and transfer of chattel paper under the California Commercial Code. Section 15.8. Severability Clause. In the event of a dispute, controversy or litigation arising under this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees. In the event any provision, phrase or term of this Agreement shall be deemed unenforceable, such unenforceability shall not affect any of the other terms hereof and this Agreement shall be construed thereafter as including all provisions hereof except the provision or term held unenforceable. Section 15.9. Special Resolution. Lessor and Lessee agree that the Resolution of Lessee identified on Exhibit H hereto is incorporated by reference herein as if fully set forth and shall apply to this Lease and to Lessor. Section 15.10 Nuclear Free Ordinance. Lessor certifies by its signature below that Lessor is not a nuclear weapons contractor as defined by the Nuclear Free Humboldt County Ordinance (the Ordinance), in that Lessor is not knowingly or intentionally engaged in the research, development, production, or testing of nuclear warheads, nuclear weapons systems, or nuclear weapons components as defined by the Ordinance. Lessor agrees to notify the Lessee immediately if it becomes a nuclear weapons contractor, as defined above. Lessee may immediately terminate this Agreement if it determines that the foregoing certification is false or if Lessor becomes a nuclear weapons contractor. Section 15.11 Compliance with Certain Laws. Lessor agrees to comply with all local, state and federal laws and regulations, including but not limited to the Americans with Disabilities Act. Lessor further agrees to comply with any applicable federal, state or local licensing standards, any applicable accrediting standards, and any other applicable standards or criteria established locally or by the state or federal government.

IN WITNESS WHEREOF, the Lessor has caused this Lease to be executed in its name by its duly authorized officers, and the Lessee has caused this Lease to be executed in its name by its duly authorized officers, as of the date first set forth above. TRANSOCEAN FUNDING/HUMBOLDT, INC., as Lessor By: __ Joshua G. Cooperman, President

HUMBOLDT COUNTY, as Lessee By: Jill Geist, Chair __

Attest: By:

Secretary

EXHIBIT A HUMBOLDT COUNTY MASTER LEASE / PURCHASE AGREEMENT DATED AS OF MARCH 9, 2004 The following list of Exhibits are made a part of this Lease. Exhibit B Exhibit C Exhibit D Exhibit E Exhibit F Exhibit G Exhibit H Schedule of Property Amortization Schedule Certificate of Acceptance Opinion of Lessee's Counsel Certificate of Essential Use Proof of Insurance Resolution of the Board of Supervisors

EXHIBIT B HUMBOLDT COUNTY MASTER LEASE / PURCHASE AGREEMENT DATED AS OF MARCH 9, 2004 SCHEDULE OF PROPERTY The Property which is the subject of the attached MASTER LEASE / PURCHASE AGREEMENT is as follows: Description: That portion of certain real property, including all land, buildings, facilities, improvements and fixtures, commonly known as and located at Eureka-Arcata Airport, Mc Kinleyville, CA, bearing Assessors Parcel Number __________, which will be utilized for the Countys animal shelter and all means of access and egress thereto. The following Real Property Description sets forth the legal description of the Eureka-Arcata Airport, McKinleyville, CA, upon which a building to be constructed for use as the Lessees animal shelter, and securing this Lease Agreement, is located. Notwithstanding anything to the contrary in the following Real Property Description, the Property subject to this Lease Agreement is specifically limited to the animal shelter building, the precise square footage of real property upon which the building is located and rights of access and egress to the building and parking thereto. Parcel One All that real property situated in the southwest quarter of Section 19, Township 7 North, Range 1 East, Humboldt Base and Meridian, County of Humboldt, State of California, described as follows: A portion of the lands described in the deed from Scudamore to the County of Humboldt recorded in Book 252 of Deeds, Page 454 on November 12, 1941, and the deed from Scudamore to the County of Humboldt recorded in Book 257 of Deeds, Page 278 on October 26, 1942, Records of Humboldt County, more particularly described as follows: BEGINNING on the east right of way line of State Highway 101 at Caltrans station 384+40.64, 100 right, as said stationing is based on Highway Map 01-HUM-101-R93.85, page 18, and from which point the south quarter corner of said Section 19 bears South 772711 East 1582.83 feet (calculated tie, said quarter corner not visited this survey); THENCE along said east right of way line North 062708 West (highway map = North 0750 West) 414.07 feet; THENCE leaving said highway right of way North 753441 East 361.38 feet to the west edge of pavement of Lycoming Avenue; THENCE along the west side of said Lycoming Avenue South 144957 East 416.78 feet; THENCE leaving said Lycoming Avenue South 762913 West 421.83 feet to the POINT OF BEGINNING. Parcel Two A non-exclusive easement 50 feet in width for ingress, egress, and public utilities (including but not limited to sewer, water, gas, power, phone, and cable TV) together with all appurtenances thereto, the centerline of which is the centerline of Lycoming Avenue that borders the east side Parcel One described

above and running thence southerly and easterly to Coast Guard Road, and southerly to Airport Road, said Airport Road being in the northeast quarter of Section 30, Township 7 North, Range 1 East. Parcel Three A non-exclusive easement 20 feet in width for public utilities (including but not limited to sewer, water, gas, power, phone, and cable TV) and access thereto, over existing facilities that fall in or near Lycoming Avenue on the east boundary of Parcel One described above and running thence southerly to the point at which Lycoming Avenue curves easterly, thence leaving Lycoming Avenue southerly to Airport Road, said Airport Road being in the northwest quarter of Section 30, Township 7 North, Range 1 East. Parcel Four A non-exclusive easement that consists of the right to direct stormwater runoff into the existing drainage course that runs in a southwesterly direction across the south line of Parcel One described above.

EXHIBIT C HUMBOLDT COUNTY MASTER LEASE / PURCHASE AGREEMENT DATED AS OF MARCH 9, 2004 SCHEDULE OF LEASE PAYMENTS This Exhibit applies to Property set forth on Exhibit B.

Date

Amount

Principal

Prepaymen t Purchase Interest Option*

GRAND TOT'L

* Assumes payment on this date has been made.

AGREED TO AND ACCEPTED. COUNTY OF HUMBOLDT _____________________________ Jill Geist, Chair

EXHIBIT D HUMBOLDT COUNTY MASTER LEASE / PURCHASE AGREEMENT DATED AS OF MARCH 9, 2004 CERTIFICATE OF ACCEPTANCE I, the undersigned, hereby certify that I am the duly qualified Chair of the Board of Supervisors of HUMBOLDT COUNTY ("Lessee"), and, with respect to the MASTER LEASE/PURCHASE AGREEMENT dated as of March 9, 2004 (the "Lease"), by and between Lessee and TRANSOCEAN FUNDING/Humboldt, Inc. (the "Lessor"), certify that: 1. Proceeds sufficient to acquire the Financed Property (as described in the Lease), which proceeds will be used by Lessor to acquire the Financed Property, have been accepted by Lessee for disposition as provided in the Escrow Agreement dated as of March 9, 2004, among the Lessee, Lessor and Pacific Capital Bank, N.A., dba First National Bank of Central California,. The Financed Property described in Exhibit B to the Escrow Agreement, upon acceptance by Lessee, shall be complete in all respects, shall be inspected by Lessee and shall be acceptable in all respects to Lessee. The Property described in Exhibit B hereto has been delivered to, inspected by, and accepted by, Lessee and constitutes the Property being leased hereunder. 2. Lessee has appropriated necessary moneys sufficient to pay all Lease Payments required to be paid under the Lease during the current fiscal year of Lessee, and such moneys will be applied in payment of all Lease Payments due and payable during such current fiscal year. Lessee will budget for, request, appropriate, provide and otherwise obtain and make available sufficient moneys to pay all Lease Payments required to be paid under the Lease during the Lease Term (as that phrase is defined in the Lease), and such moneys will be applied in payment of such Lease Payments. 3. Lessee is exempt from all personal property taxes, and is subject to sales and/or use taxes with respect to the Property and the Lease Payments. 4. During the Lease Term, the Financed Property and the Property will be used by Lessee to perform only the essential governmental functions specified in the Lease. 5. The Lease Payments on a lease to purchase basis (with a nominal buyout) for the Property under the Lease and during the Lease Term do not exceed the fair rental value for the lease/purchase of the Property by the Lessee. Dated: March 9, 2004 LESSEE: HUMBOLDT COUNTY

By: Jill Geist, Chair

EXHIBIT E OPINION OF COUNSEL ON COUNSEL'S LETTERHEAD March 9, 2004 Lessee: HUMBOLDT COUNTY 825 Fifth Street Eureka, CA 95501 Lessor: TRANSOCEAN FUNDING/HUMBOLDT, INC. 111 Anza Boulevard, Ste. 107 Burlingame, CA 94010 RE: MASTER LEASE/PURCHASE AGREEMENT dated as of March 9, 2004, by and between TRANSOCEAN FUNDING/HUMBOLDT, INC. ("Lessor") and HUMBOLDT COUNTY ("Lessee") Ladies and Gentlemen: I have acted as counsel to the Lessee with respect to the MASTER LEASE/PURCHASE AGREEMENT described above (the "Lease") and various related matters, and in this capacity have reviewed a duplicate original or certified copy of the Lease and the Exhibits attached thereto. Based upon the examination of these and such other documents as I deem relevant, it is my opinion that: 1. Lessee is a county and political subdivision of the State of California (the "State"), duly organized, existing and operating under the constitution and laws of the State. The Lessee is organized under and pursuant to the Government Code of California (Sections ___________ et seq.). 2. Lessee is authorized and has the power under State law to enter into the Lease, and to carry out its obligations thereunder and the transactions contemplated thereby. 3. The Lease has been duly authorized, approved, executed and delivered by and on behalf of Lessee, and is a valid and binding contract of Lessee enforceable in accordance with its terms, except to the extent limited by State and Federal laws affecting remedies and bankruptcy, reorganization or other laws of general application relating to or affecting the enforcement of creditors' rights. 4. The authorization, approval and execution of the Lease and all other proceedings of Lessee relating to the transaction contemplated thereby have been performed in accordance with all open meeting, public bidding and other laws, rules and regulations applicable to the Lessee. 5. The execution of the Lease and the appropriation of moneys to pay the Lease Payments coming due thereunder, do not result in the violation of any constitution, statutory or other limitation relating to the manner, form or amount of indebtedness which may be incurred by Lessee.

6. There is no litigation, action, suit or proceeding pending or before any court, administrative agency, arbitrator or governmental body, that challenges the organization or existence of Lessee; the authority of its officers, the proper authorization, approval and/or execution of the Lease, the Exhibits and other documents contemplated thereby; the appropriation of moneys, or any other action taken by Lessee to provide moneys sufficient, to make Lease Payments under the Lease; the performance by Lessee of all its obligations under the Lease; the enforceability and enforcement of the Lease against the Lessee; or the ability of Lessee otherwise to perform its obligations under the Lease and the transactions contemplated thereby. Very truly yours,

Attorney for HUMBOLDT COUNTY

EXHIBIT F HUMBOLDT COUNTY MASTER LEASE / PURCHASE AGREEMENT DATED AS OF MARCH 9, 2004 CERTIFICATE OF ESSENTIAL USE The undersigned, as Chair of the Board of Supervisors of HUMBOLDT COUNTY (the "Lessee"), hereby certifies that the Property described in Exhibit B to MASTER LEASE/PURCHASE AGREEMENT dated as of March 9, 2004, with TRANSOCEAN FUNDING/Humboldt, Inc. (the "Lease"), and the Financed Property (as defined in the Lease) is essential to the functions of the Lessee or to the services the Lessee provides. Further, the Lessee has an immediate need for, and expects to make immediate use of, all such Property and Financed Property, the need for which is not temporary or expected to diminish in the foreseeable future. Such Property and Financed Property will be used by the Lessee only for the purpose of performing one or more governmental or proprietary functions consistent with the permissible scope of authority. Specifically, such Property and Financed Property was selected by the Lessee to be used for the following governmental purposes: 1. Animal Shelter Purposes 2. Animal Protection Purposes 3. General Services Purposes 4. Animal Quarantine Purposes 5. Animal Neutering Purposes 6. Animal Licensing and Regulation Purposes 7. Administrative Purposes 8. Humane Officer Purposes This Exhibit relates to Exhibit B to the Lease. HUMBOLDT COUNTY, as Lessee By:

Jill Geist, Chair

Date: March 9, 2004

EXHIBIT G HUMBOLDT COUNTY MASTER LEASE / PURCHASE AGREEMENT DATED AS OF MARCH 9, 2004 PROOF OF INSURANCE COVERAGE REQUIREMENTS 1. In accordance with Article VII of the MASTER LEASE/PURCHASE AGREEMENT between the undersigned as Lessee and TRANSOCEAN FUNDING/Humboldt, Inc., as Lessor ("Lease"), we have instructed the insurance agent named below (Please fill in name, address and telephone number). _______________________________________________________ _______________________________________________________ _______________________________________________________ to issue: (a) All Risk Physical Damage Insurance on the Property as defined in the Lease, evidenced by a Certificate of Insurance and Long Form Loss Payable Clause naming Lessor and/or its assigns as an Additional Insured. (b) Public Liability Insurance evidenced by a Certificate of Insurance naming Lessor and/or its assigns as an Additional Insured. OR 2. We are self-insured for all risk, physical damage, and public liability and will provide proof of such self-insurance in letter form together with a copy of the statute authorizing this form of insurance (SUBJECT TO LESSORS PRIOR WRITTEN CONSENT). Proof of insurance coverage will be provided to you prior to the time that the Property is delivered and accepted. The coverages and deductibles are subject to approval by the Lessor. This pertains to Property set forth on Exhibit B to the Lease. HUMBOLDT COUNTY

By:______________________________ Authorized Officer Date: March 9, 2004

EXHIBIT H HUMBOLDT COUNTY MASTER LEASE / PURCHASE AGREEMENT DATED AS OF MARCH 9, 2004 BOARD OF SUPERVISORS, COUNTY OF HUMBOLDT, STATE OF CALIFORNIA Certified Copy of portion of proceedings, Meeting on March 9, 2004. RESOLUTION FOR FINANCING OF A NEW ANIMAL SHELTER COMPLEX, MC KINLEYVILLE, HUMBOLDT COUNTY, CALIFORNIA RESOLUTION NO. 04-____ WHEREAS, Humboldt County (the County) desires to enter into a Master Lease/Purchase Agreement (or a similar lease arrangement as specified by bond counsel) dated as of March 9, 2004 (the Lease), with Transocean Funding/Humboldt, Inc. or a similar special purpose corporation (the Lessor), for the lease-purchase financing of facilities and improvements to certain County-owned property at Arcata-Eureka Airport, Mc Kinleyville, to be utilized for an animal shelter and such other related purposes, all for use by the County and other municipalities and eligible parties, and WHEREAS, the County has the full legal right, power and authority to enter into the transactions hereinafter authorized; and WHEREAS, the Board of Supervisors has reviewed the terms and conditions of the Lease and finds that they provide positive benefits to the County and achieve a public benefit to the County; and NOW, THEREFORE, BE IT RESOLVED by the Board of Supervisors of the County of Humboldt: 1. The County hereby specifically finds and declares that the action authorized hereby constitutes and is with respect to public affairs of the County and that the statements, findings and determinations of the County set forth above are true and correct. 2. The form of the Master Lease/Purchase Agreement (or a similar lease-purchase arrangement as specified by bond counsel) between the County and Transocean Funding/Humboldt, Inc., or a similar special purpose lessor, dated as of March 9, 2004 (the Lease), a form of which is on file with the Clerk of the Board of Supervisors, is hereby approved and the Chair of the Board of Supervisors and the Clerk of the Board of Supervisors, or their designees, are hereby authorized and directed to execute and deliver said Lease, substantially in said form, with such changes, supplements, modifications, amendments and additional exhibits, schedules and addenda (including substitution of collateral, changes to the project financed through the Lease and lease requirements), as the officers signing the Lease may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof, provided that the aggregate principal component of the rental payments payable under the Lease shall not exceed $6,000,000, the interest rate shall not exceed 6.50% on a fixed rate basis and if on a variable basis, the maximum allowable by law, and the term of the Lease shall not exceed 22 years. 3. The form of the Site Lease between the County and Lessor, dated as of March 9, 2004 (the Site Lease), a form of which is on file with the Clerk of the Board of Supervisors, is hereby approved and the Chair of the Board of Supervisors and the Clerk of the Board of Supervisors, or their designees, are hereby authorized and directed to execute and deliver said Site Lease, substantially in said form, with such changes, supplements, modifications, amendments and additional exhibits, schedules and addenda, as the officers signing the Site Lease may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof, provided that the Site Lease shall not exceed 32 years.

4. The form of the Memorandum of Lease between the County and Lessor, dated as of March 9, 2004 (the Memorandum of Lease), a form of which is on file with the Clerk of the Board of Supervisors, is hereby approved and the Chair of the Board of Supervisors and the Clerk of the Board of Supervisors, or their designees, are hereby authorized and directed to execute and deliver said Memorandum of Lease, substantially in said form, with such changes, supplements, modifications, amendments and additional exhibits, schedules and addenda, as the officers signing the Memorandum of Lease may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof 5. The form of the Escrow Agreement between the County and the Lessor and First National Bank of Central California, as Escrow Agent, dated as of March 9, 2004 (the Escrow Agreement), a form of which is on file with the Clerk of the Board of Supervisors, is hereby approved and the Chair of the Board of Supervisors and the Clerk of the Board of Supervisors, or their designees, are hereby authorized and directed to execute and deliver said Escrow Agreement, substantially in said form, with such changes, supplements, modifications, amendments and additional exhibits, schedules and addenda, as the officers signing the Escrow Agreement may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. 6. The Officers of the County are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable in order to consummate the transactions herein authorized and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution. The Chair of the Board of Supervisors, the Clerk of the Board of Supervisors, and the officers of the County are hereby authorized and directed to execute and deliver any and all certificates, tax and rebate certificates, cusip number applications, continuing disclosure certificates, and any and all additional instruments, documents or writings necessary or desirable to accomplish the transactions set forth above. 7. The County hereby declares its official intent, solely for purposes of establishing compliance with the requirements of Section 1.150-2 of the Treasury Regulations of the United States, to use proceeds of the Lease to reimburse itself for any County expenditures in connection with the property being acquired prior to the execution and delivery of the Lease. Adopted on motion by Supervisor ________________ and the following vote: AYES: Supervisors: NAYS: Supervisors: ABSENT: Supervisors: ABSTAIN: Supervisors: , second by Supervisor

STATE OF CALIFORNIA County of Humboldt

) )

I, _______________________________, Clerk of the Board of Supervisors, County of Humboldt, State of California, do hereby certify the foregoing to be a full, true, and correct copy of the original made in the above-entitled matter by said Board of Supervisors at a meeting held in Eureka, California as the same now appears of record in my office. IN WITNESS WHEREOF, I have Hereunto set my hand and affixed Affixed the Seal of said Board of Supervisors. ______________________

Clerk of the Board of Supervisors Of the County of Humboldt, State of California. By: _________________________ Date: March ___, 2004

NOTICE OF ASSIGNMENT
Transocean Funding/Humboldt, Inc. ("Lessor/Assignor") hereby gives notice to the COUNTY OF HUMBOLDT ("Lessee"), that Lessor has sold, assigned and transferred all of Lessor's right, title and interest in, to and under (a) that certain Master Lease/Purchase Agreement dated as of March 9, 2004 (the "Agreement"), by and between Lessor and Lessee; (b) the property described in Exhibit B to the Agreement (the "Property"); and (c) all payments respecting the Property now or hereafter due or payable pursuant to the Agreement, including (but not limited to) rental payments and purchase option payments, to Pacific Capital Bank, N.A., dba First National Bank of Central California, as paying agent on behalf of the registered owners of Certificates of Participation in the Lease. All payments should be made payable to Transocean Funding/Humboldt Account No. 42-104141, First National Bank of Central California, as paying agent, 1001 South Main Street, Salinas, CA 93901 (I.D.: 46-0465279). Lessee confirms that forty (40) semi-annual lease payments of interest and twenty (20) annual payments of principal due according to the schedule set forth on Exhibit C to the Agreement remain as of the date set forth below, and that no event of default (or event which with the passage of time or giving of notice or both would mature into an event of default) has occurred or is continuing under the Lease, and that there exists no defense, counterclaim, recoupment or similar occurrence (other than the right of non-appropriation) which would cause the Lessee not to make the remaining payments due under the Agreement. Dated as of the Ninth day of March, 2004. TRANSOCEAN FUNDING/HUMBOLDT, INC., as Lessor/Assignor By: ________________________________________ President ACKNOWLEDGED AND ACCEPTED. COUNTY OF HUMBOLDT, as Lessee By: ________________________________________ Jill Geist, Chair PACIFIC CAPITAL BANK, N.A., dba FIRST NATIONAL BANK OF CENTRAL CALIFORNIA, as paying agent By: ________________________________________ Sue Burnham, Vice President
(winword\leases\Humboldt\\humboldtcty 3.6M animal shltr lsepurch 3.04 24s)