Operations & Support Services

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

March 2, 2011

C. David Taylor Osakis Development Corp. C/O Navigator Real Estate Services 3020 Issaquah Pine Lake Road, #504 Sammamish, WA 98075 RE: Termination of Lease for the Sky Valley Education Center

Mr. Taylor My apologies for any lack of clarity in my letters of February 23, 2011 and February 28, 2011. The reason that the Monroe Public Schools Board of Directors took the action they did in regards to the Sky Valley Education Center lease is directly related to current State and school district funding shortages. As stipulated in section 2.3 of the original Agreement, dated May 17, 2002, Tenant shall have the right to terminate the lease at any time, with six (6) months prior written notice, if Tenants use is no longer acceptable and the cause, such as a change in state law, rule, regulation, and/or funding to district is beyond the Tenants control. State funding to the school district has been significantly impacted by decisions made this year by the Governor and the State Legislature. The Governor and Legislature have pulled back hundreds of thousands of dollars in current (2010-11 fiscal year) budget allocation to Monroe Public Schools, and all indications are that the Legislature will further significantly reduce funding to the school district for the upcoming 2011-12 fiscal year as well. As stipulated in Section 2.3 of the original Agreement dated May 17, 2002, we have formally provided you with six months notice of termination of the Sky Valley Education Center lease, to take effect August 31, 2011, based upon the real fact that state funding to the district, which is beyond our control, has been substantially reduced. We shall have no difficulty substantiating that fact should issue be taken with its veracity. We understand your consternation at our need to terminate the lease, and regret the need to make this decision. Respectfully,

John A. Mannix Assistant Superintendent, Operations