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Operations & Support Services

200 East Fremont Street Monroe, WA 98272-2336 Phone: 360 804 2570 Fax: 360 804 2529

July 28, 2011 VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED AND ELECTRONIC MAIL Fryelands Sixth Avenue c/o Osakis Development Corporation Attn: C. David Taylor 14327 169th Drive SE, Suite 100 Monroe, Washington 98272 Fryelands Sixth Avenue c/o Osakis Development Corporation Attn: C. David Taylor 819 Windsor Drive SE Sammamish, Washington 98074 with a copy to: Navigant Real Estate Services LLC Attn: Tom Grossi 3020 Issaquah Pine Lake Road, #508 Sammamish, Washington 98075 Re: Lease dated May 17, 2002 between Fryelands Sixth Avenue, LLC (as successor-ininterest to Rudeen Business Park, LLC) and Monroe Public School District for premises in the Fryelands Business Park in Monroe, Washington (the Lease) TENANTS NOTICE OF TERMINATION OF LEASE Dear Mr. Taylor: This notice is being delivered to you in your capacity as the president of Osakis Development Corporation, the manager of Fryelands Sixth Avenue, LLC (Landlord). It is intended to clarify the previous notice letters sent to Landlord on February 23, 2011, February 28, 2011 and March 2, 2011 and to respond to your letter dated June 6, 2011. The Monroe Public School District, as Tenant under the Lease, has elected to terminate the Lease pursuant to Section 2.3. The District hereby clarifies that it elects to terminate the Lease as to all of the Premises. That said, the District remains interested in entering into a new lease with Landlord for Space D of Building A on terms similar to those set forth in the existing Lease.

As previously indicated to you, the District is forced to terminate the Lease due to a decrease in state funding that is beyond the Districts control. Specifically, the Districts funding relative to Tenants use of the Lease Premises was reduced for the 2010-2011 fiscal year by approximately $2,306,000.00. The Washington Office of the Superintendent of Public Instruction (OSPI) projects that, based upon allocations by the State legislature, the Districts funding will be decreased further for the 2011-2012 fiscal year by approximately $1,869,000.00. A large portion of the additional funding reductions is directly attributable to State cuts in funding for Alternative Learning Environments (ALE) programs. Sky Valley Education Center is an ALE program. The termination option in Section 2.3 of the Lease was added specifically to address situations such as this. The District insisted on inclusion of that language to allow us flexibility to adjust to issues beyond our control. We regret that budget cuts in Olympia have made termination of the Lease necessary and understand that the termination has not been well-received by your company. However, the District must focus on its primary mission of educating its students and preserve resources to do so wherever possible. Thank you. MONROE PUBLIC SCHOOL DISTRICT

John A. Mannix Assistant Superintendent, Operations

cc: Charles Royce, Esq., K&L Gates LLP