VIKING COMPANIES

Real Estate investment and Operating Companies

VIKING VENTURES HOLDING COMPANY LLC VIKING CAPITAL HOLDING COMPANY LLC VIKING CAPITAL INVESTMENTS LLC VIKING MANAGEMENT LLC VIKING VENTURES LLC

June 6, 2011

BY FACSIMILE 360-804-2529 AND BY E-MAIL MannixJ@monroe.wednet.edu Mr. John A. Mannix Assistant Superintendent, Operations Monroe School District 200 East Fremont Street Monroe, WA 98272-2336 Re: Sky Valley Education Center Dear Mr. Mannix: We are writing to follow up on the various pieces of correspondence you have sent to us recently regarding the Monroe School Districts apparent decision to consolidate schools and relocate its Sky Valley program to a currently vacant district-owned elementary school. We have delayed responding more formally to your various letters in order review them and make certain we understood the schools decision and its potential impact on our lease at Fryelands. Based on that review, we must inform you unequivocally that the Monroe School District is not entitled to terminate its lease at Fryelands and is obligated to honor its lease throughout the end of its lease term in August 31, 2013. Although we are willing to meet and discuss this in person, we believe that there can be no debate about the express terms of the lease and that these terms, even more strongly so when viewed in light of the parties intent and the history of their negotiations, do not allow the School District to terminate its lease. While the School Districts expressed reason for vacating our

819 WINDSOR DRIVE SE

SAMMAMISH, WA 98074

TELEPHONE 425-557-8400

FACSIMILE 425-557-8444

Mr. John A. Mannix June 6, 2 2011 Page 2 o 2 of

building m make economic se may e ense to the d district when viewed alo n one, it is not sufficient re eason simply to walk away from a bind o ding contract Even a cu t. ursory review of the leas itself and brief w se reflection of the Sch n hool Districts motives demonstrate that such a interpreta an ation of cont tracts would render enforce eable contra acts virtually meaningles ss. As we stated in our previous lett to you, w trust that y will care p ter we you efully review the lease a w again. We expe and will insist that the Schoo District re ect t ol emain in th premises throughout the he s remainde of the leas term. er se Sincerely y, ANDS SIXTH AVENUE L H LLC FRYELA By: Osak Developm kis ment Corp., Manager

_______ ___________ ____ C. David Taylor Presiden nt

cc:

Tom Grossi, T Navigator Rea Estate Ser N al rvices LLC Michael S. Co M ourtnage, Alston, Courtnage & Bassetti LLP A