WY ar Hawarl COMMUNITY FOUNDATION March 18,2013 Mr, Jeffrey L Oso. 1426 Greentree Circle Lake Oswego, Oregon 97034 Ree Jack L. Suhley Trost Dear Me. Olson: “This lees is in response to your lee dated March 6, 2013 regarding the Jack I. Staley Trust. You indicate in your Letter thatthe Trustee of the Jack L- Staley Trust ater to seek a Declaratory Judgment in an Oregon State Court challenging a chastable gift to the Hawaii Community Foundation. Your Leter ater that under Oregon law the pf o the Hawaii Commusity Foundation is somehow invalid. You ean understand our surpaise at eecsiving the Letter when we have been receiving notifications from you for almost a year asa beneficiary of the Trust, including most recently, an accounting of expenses. We undetstand the Trustee of the Trust i the Ite Me. Stahley’s son, Jefiey L. Staley. As you know, tuustees ate under a duty to administer «trast in accordance withthe state intent ofthe stor a at fost inthe trust instrament and consistent with applicable law. In addon, a trustee has 2 duty of loyalty to all beneficiaries that inckades a duty to deal imparsally with alllbeneficases. ‘The Trost cleasy and unequivocally provides for the gift tothe Hawai Community Foundation of 500% interes inthe remainder of Trast assets after certain specific bequests. We note that JeffcyL. Stably is also co-benefcary of the Trust and infact, one of five benefiates of the other 50% remainder interest in the Trust. Itis clear the interests of Jeffry L. Staley as beneficiary conflicts with his duties as a Trustee to deal impartially with all beeficiares. Please clarify whether the statements and assertions in your Letter egarding the possible invalid ofthe gift to the Hawaii ‘Community Foundation are on behalf of Jeffiey L. Stabley in his capacty as a beneficiary or as Trustee. We assume that you represent Jeffrey L. Stabley only in his fdaciary capacity and are aware ‘of both his and your obligation to all beneficiaries ofthe Trust. Hows does Me, Stahley intend to deal with his ireconeilable confit in this purported egal action? We would also lke to cotrect afew factual inaccuracies inthe Letter. Ns, Budd is nota “member” of ‘the Hawaii Community Foundation as we are a non- member nonprofit corporation under that laws of the State of Hawail Nor is Ms. Budd a eurent or former officer of drector of the Hawaii ‘Community Foundation. Ms. Budd has no legal dties to the Foundation that might have somehow inerfered with her sepresentation ofthe ate Me. Staley. Ms. Budd is curently, and has served in the pst, asa member of HCP's Kaus Island Leadership Councl, which, as noted in HCF's most recent ssnval report, is composed of “community-minded volunteers” Ms. Badd serves as a member of Hawai’s State Board of Education and has served on other private nonprofit organization boards like other active community volunteers. We simply do not understand yourassertions inthe Letter that the generous gift by the late Mr. Staley is a result of “unethical self-desing”Mr. Jefzey L. Olen, March 15, 2013, Page 2 In summary, we do not understand the basis for any form of legal action since the Trust language ie clear and provides for a valid charitable gift o che Hawaii Community Foundation to support ‘underprivileged youth. Further, we object to any legl action being taken in Oregon asthe Trust ‘Agreement also makes clear cha thatthe lawe of the State af Hawaii apply to this Trust ‘notwithstanding the fat thatthe principal place of administration was changed to Oregon. Finally, we bring to your attention tothe fact that the Attorney Genetal ofthe Sute of Hawaii, in his capaicy as patens patriae would likely bean interested party i any proceeding challenging the validity of a charitable bequest ro « Hawaii chaitable organization, ‘We await your reply and look forward tothe Trustee's timely distribution of assets as contemplated by the Trast to establish the Jack L. Stabley Fund atthe Hawaii Community Foundation. Sincerely, ‘Kathatine Lloyd, Esq, (ge General Counsel and VP of Operations KUT exe Enclosure ‘Ce: Jeftey 8. Piper, Bsq.