CITY OF SILVERTON CITY COUNCIL SPECIAL MEETING – 6:00 p.m., Monday, March 12, 2018

Silverton Community Center – Council Chambers – 421 South Water St.

Americans with Disabilities Act – The City of Silverton intends to comply with the A.D.A. The meeting location is accessible to individuals needing special accommodations such as a sign language interpreter, headphones, or other special accommodations for the hearing impaired. To participate, please contact the City Clerk at 503-874-2216 at least 48 hours prior to the meeting.

A copy of the full packet is available for review Monday through Friday 8:00 am to 5:00 pm in the City Manager’s Office at the Silverton City Hall, located at 306 South Water Street. All documents will be available on our website at www.silverton.or.us.

I. OPENING CEREMONIES – Call to Order, Pledge of Allegiance and roll call

II. DISCUSSION ITEMS –

2.1 Oregon Garden Foundation presentation – Allison Pennell

2.2 Oregon Garden discussion

III. COUNCIL COMMUNICATIONS –

IV. ADJOURNMENT –

Page 1 City of Silverton City Council

The Oregon Garden Work Session

March 12, 2018

Oregon Garden Foundation Overview

Presented by Allison Pennell, Development Director

• The Oregon Garden Foundation was formed in 1995 as The Oregon Nurseryman’s Garden Foundation (today known as Oregon Association of Nurseries) o Showcase Oregon’s #1 Agriculture Commodity for Oregonians o Become a destination garden for tourism to Oregon o Showcase the biodiversity of plant material that thrives in Oregon o Showcase for the rest of the Country Oregon’s Nursery stock quality • City of Silverton was selected as the garden site to forge a partnership with the garden infrastructure built with the wetlands in mind. The wetlands provide a cooling mechanism for the City’s waste water while providing irrigation to the garden. • The groundbreaking ceremony was in 1997, and the garden opened to the public in 2001. The first year of the garden was free to visit. • 80 acres of botanical garden, over 20 specialty gardens, demonstration forest, formal gardens, permanent art collection, wetlands, children’s garden and homesteading demonstration Silverton Market Garden are some highlights. • Many rare and specimen plants in amazing form from original plant procurement • The Conifer Garden is an American Conifer Society reference garden for plant collection

How did the debt begin?

• Notes were sold in 2 sets as a form of loans to fund the early days of the garden, many of these loans were never repaid, some were later written off as donations. • Primarily due to low attendance and high operational costs (which resulted in low revenue) in 2005 Marion County passed a bond to assist OGF with operational costs, OGF continued to struggle and was unable to make the bond repayments. • Later on in 2005, OGF went into receivership of Marion County • In 2006 Dirk Winter of Moonstone, purchased 11 acres above the garden to build a destination resort that would complement the existing garden and bring tourism to Silverton. • In 2008 The Oregon Garden Resort opened. • OGF continued as an entity with a five-member Board of Directors, overseeing donations, fundraising, and the garden’s strategic plan. OGF has recently expanded the BOD to have 7 members, 2 OGF can appoint, 3 Marion County and 2 from The City of Silverton. In the event Marion County leaves as a partner, then 3 OGF can appoint and 4 from City of Silverton. • MGM manages the horticulture staff and day to day operations of the garden including admission, membership, visitor’s center, tours, tram, maintenance, marketing and events in the garden and at the resort.

Page 2 • The last management agreement was created in 2013. • At present TOT taxes go directly to supporting the repayment of the debt as well as rent and royalties from MGM to OGF for some specific uses of the garden. • It remains challenging for OGF to have steady revenue streams.

What would the debt forgiveness mean for OGF:

• Fundraising to repair aging infrastructure: The Oregon Garden needs updating infrastructure, certain areas are beyond maintenance repairs including: The garden entrance, some areas of tram path and the Bosque are top priorities • Free up funds to pay environmental science educators. Currently OGF fundraises or seeks grants to pay for the educators in partnership with OFRI. Over 5,000 4-6th grade students visit the garden to learn ecology and horticulture principals annually. This program originally began in partnership with Roth’s. • Enhance and redevelop areas of the Garden, as plant material and design have changed over the last 20 years • Expand certain areas of the garden, for example The Conifer Expansion campaign • Directly off set horticulture production costs, for example the Cultivate Color (new program) • Reset relationships by repaying original note holders who founded the garden and City of Silverton debt • More aggressive repayment to get OGF out from under combined remaining debt

Key Elements of OGF’s Strategic Plan:

Sp2020 Seeding the Future is supported by the core values of physical & mental well-being of people, healthier living, healthy habitats, empowered communities, sense of belonging, and education.

• Development of the Horticulture Enhancement Fund: This fund is promoted at certain events to help the Horticulture Team pay for new plants, grow and propagate annuals and perennials and ensure our plant collection is maintained • Expand the reach of the Garden beyond Willamette Valley to activate the Portland area • Increased emphasis on community, sustainability and re building relationships with the OAN and allied groups, American Conifer Society, Hardy Plant Society, Pacific Horticulture and Garden Clubs • OGF specific events, the “Golf for Education” is Oct 1, 2018 to raise funds for the environmental science educators so that those are not impacting the OGF operating budget • Community emphasis, for example 3rd of July Fireworks and Earth Day and connecting with local garden and service clubs in the Salem-Silverton area • Endowment Fund, continued emphasis on legacy planning • Education, OGF would like to provide more emphasis on adult and young adult education as well as exposing more high school age students to the field of horticulture • Facilities and Grounds repair survey in conjunction with a Capital Campaign to reinvigorate garden features and hardscape for safety and appeal.

Page 3 SILVERTON CITY COUNCIL STAFF REPORT TO THE HONORABLE MAYOR AND CITY COUNCILORS

Agenda Item No.: Topic: 2.2 Oregon Garden Discussion Agenda Type: Special Meeting Meeting Date: March 12, 2018 Prepared by: Reviewed by: Approved by: Christy S. Wurster Christy S. Wurster Christy S. Wurster

Background:

Following a generous proposal from Marion County through Commissioner Sam Brentano on January 8, 2018, the City Council requested a work session to receive additional information about the Oregon Garden. In an effort to preserve the ongoing success of the Oregon Garden, Commissioner Brentano proposed that Marion County would forgive all remaining revenue bond principle and interest, receivership costs, and SPWF & AP costs; rewrite legal property descriptions; request that the Court close the receivership; terminate the Head Lease and Sub Lease between the County and the Oregon Garden Foundation; release leasehold deeds of trust; and assist in amending the Second Restated Management Services Agreement. The County offered to perform the above with the expectation that the City of Silverton, Moonstone Resort and the Oregon Garden Foundation develop a joint plan to pay off the remaining debt. The offer also included a request that the City of Silverton subordinate its debt and continue to contribute Transient Occupancy Tax (TOT) monies to the Oregon Garden Foundation to eliminate the remaining debts owed. The Moonstone Resort would also need to provide matching funds equal to the TOT, provide meeting and office space for the Oregon Garden Foundation Board and staff. The Oregon Garden Foundation would be required to make a good faith effort to pay off the remaining debts and establish a capital campaign.

In an effort to fill in some of the details included in the proposal we will be reviewing the highlights of the following documents:

1) Marion County Proposal 2) Oregon Garden Foundation Outstanding Receivership Balances (12/05/2017) 3) Marion County/City of Silverton IGA and Grant Agreement for the Oregon Garden Foundation 4) Second Restated Management Agreement 5) Lease Agreement 6) Head Lease with Amendment #1 7) Sub-Lease with Amendment #1 8) Map of Garden

The City has been awaiting a formal response to the County’s proposal from our private partner. At the time this staff report is being drafted the information has not yet been provided to the City. City of Silverton | 306 S. Water St., Silverton, OR Page 4 SILVERTON CITY COUNCIL STAFF REPORT TO THE HONORABLE MAYOR AND CITY COUNCILORS

Budget Impact Fiscal Year Funding Source None 2017-2018 N/A

Attachments: 1. Marion County Proposal 2. Oregon Garden Foundation Outstanding Receivership Balances (12/05/2017) 3. Marion County/City of Silverton IGA and Grant Agreement for the Oregon Garden Foundation 4. Second Restated Management Services Agreement 5. Lease Agreement 6. Head Lease with Amendment #1 7. Sub-Lease with Amendment #1 8. Map of Garden

City of Silverton | 306 S. Water St., Silverton, OR Page 5 Marion County

It is Marion County's hope and intent that The Oregon Garden is a success. It is also in all parties' interest that The Oregon Garden remains a long-term asset for the City ofSilverton and Moonstone Resort. With that in mind,

Marion Countyis goingto remove itselffrom future obligations and responsibilities for the Oregon Garden.

Marion County will:

Forgive all remaining Revenue Bond principle and interest debt of $4, 359, 390

Forgive all Receivership costs and interest of $1, 372, 869

Forgive (SPWF & AP) costs of $ 415, 087

Rewrite of legal property descriptions

Request the court to close the Receivership:

The Head Leaseand Sub Leasebetween MCand OGFwill terminate upon termination ofdebt

Leasehold deeds of trust and fee deeds of trust will be released and recorded in the deed records (clears title and allows the remaining parties to transfer property without MCconsent) The Second Restated Management Services Agreement will be amended to remove Marion Countywith the waiver of all debt and termination of Head and Sub Leases

Marion County's Expectation:

It is the expectation of Marion County that the City of Silverton, Moonstone Resort and the Oregon Garden Foundation will develop in good faith a joint plan to pay offthe remaining $2, 174, 656 in debt and submit a proposal to Marion County by February 15, 2018. The proposal is to include the continued contribution of the Silverton TOT monies and the dedication of Moonstone Resort royalties to eliminate the remaining debts owed.

SUverton Subordinate receivership cost of $228,976 to unsecured

Continue T. O.T. payments to the Oregon Garden Foundation

Page 6 Moonstone Make payments to Oregon Garden Foundation to match the TOT amount (royalties, memberships, events, rentals)

Continue to provide meeting and officespace for the OGF board & staff

Continue Garden Management

Foundation OGF will still hold the 99 year Master Lease with Silverton

Good faith effort to pay offremaining $2.174M in debts

New donations will not go towards old debt

Revise By-laws to enlarge the foundationboard

Establish a Capital Campaign

Page 7 Oregon Garden Foundation Outstanding Receivership Balances (version 3)- As of November 20, 2017

CurrentOrder of Re�al/:ment Pro�ose� Order of Re�amient Years to Yearsto Description Amount Repay Description Amount Repay 1 Bond Payments: (note A) 1 Bond Payments: (noteA) principal and interest payments 6,685,386 principal and interest payments less OGF receipts through 11/20/2017 {1,936,796) less OGF receipts·through 11/20/2017 less debt reserve balance applied 6/30/2017 t319,277) less debt reserve balance applied 6/30/2017 4,429,313 29.53 0.00 2 ReceivershiR Costs (note C): 2 ReceivershiR Costs {note C}: Marion County (excluding accrued interest) 694,133 Marion County (excluding accrued interest) plus 9% interest through 12/31/2017 678,736 plus 9% interest through 12/31/2017 plus 9% interest 1/1/2018 to 6/30/2047 1,842,923 plus 9% interest 1/1/2018to 6/30/2047 plus 9% interest 7/1/2048 to 10/1/2053 161,492 plus 9% Interest 7/1/2048to 10/1/2053 City of Silverton (excluding accrued interest) 118,500 C_ity of Silverton (excluding accrued interest) 118,500 plus 9% interest through 12/31/2017 [est] 107,539 plus 9% interest through 12/31/2017 [est] 107,539 plus 9% interest 1/1/2018 to 6/30/2047 314,618 plus 9% interest 1/1/2018 to 10/1/2018 2,937 plus 9% interest 7/1/2048 to 10/1/2053 27,573 3,945,514 26.30 228,976 0.76 3 Unsecured Claims (note B): 3 Unsecured Claims (note B}: Marion County (SPWF & AP) 415,087 Marion County (SPWF & AP) OGF accounts payable 135,205 OGF accounts payable 135,205 Garden loans 1,026,129 Garden loans 1,026,129 Garden loans forgiven (66,706) Garden loans forgiven (66,706) Farm credit assignees 166,950 Farm credit assignees 166,950 OAN line of credit 231,390 OAN line of credit 231,390 1,908,055 12.72 1,492,968 4.98 4 City of Silverton SPWF 452,712 3.02 4 City of Silverton SPWF 452,712 1.51

Total amount due under distribution plan 10,735,594 71.57 Total amount due under distribution plan 2,174,656 7.25

Estimated annual TOT receipts 150,000 Estimated annual TOT receipts 150,000 Estimated annual royalty payments Estimated annual royalty payments 150,000 150,000 300,000

Notes: (A) Years to Repay computed based on estimated annual TOT receipts and royaltyfees from the garden management agreement as proposed. (B) Unsecured Claims reported at the totals noted in the OGF Receivership Distribution Plan; less known amounts forgiven by the claim holders. (C} Computation of interest assumes principal balance of receivership costs is repaid first, then accrued interest. (D) Marion County proposes to reduce the bond claim by the amount of TOT receipts applied to repayment each year. Prepared by: Cynthia Granatir, Marion County Finance Department, 12/512017

Page 8 MARION COUNTY/CITY OF SILVERTON

Intergovernmental agreement and Grant Agreement with the Oregon Garden Foundation for

TOURISM DEVELOPMENT

ThisGrant Agreement (Agreement) is entered into this 3 dayof. _2008,by and between Marion County, a political subdivisionof the Stateof Oregon(County), the City ofSilverton, a political subdivisionof the Stateof Oregon (City) andthe Oregon Garden Foimdation (Oregon Garden).

WHEREAS:

The Council ofthe City of Silverton, Oregonhas adoptedan ordinanceleveling a transient occupancy tax in Ordinance 08-05, applicable to all transient lodging facilities operating in the City; and

Seven-tenths ofrevenues from the City ofSilverton transientlodging tax (LodgingTax) are statutorily dedicated to fand tourism related purposes as defined in ORS 320. 350(6); and

Themost important tourist attraction currently and forthe next decadelocated within the city is the Oregon Garden; and

The County has invested substantial sums to promote the creation and operation ofthe Oregon Garden, continues to support the Garden financially, maldng it possible for the Garden to remain open, and has a vested interest in its continuing success, and the promotion of the Garden.

The Oregon Garden Foundation is a §501(c)(3) organization that is dedicated to the promotion and maintenance ofthe Oregon Garden; and

AGREED:

PART I. SCOPE OF WORK

Oregon Garden shall expend grant monies received from the City LodgingTax to promote tourism purposes atthe Oregon Garden consistent with ORS 320.350(6) andthis agreement. The City and(he County mayrequest that the OregonOardai submit an annual report demonstrating where grant monies have been expended and where they are planned to be spent in the coming twelve months.

Page 9 PART II. TERM Grant Amds shall be provided to Oregon Garden during the period from October 1, 2008 to September30, 2018.

PART m. PAYMENTS 3. 01. City hereby awards to Oregon Garden a grant consisting ofsix-tenfhs ofthe total net Lodging Tax revenues collected by City each fiscal year from the Moonstone resort located adjacent to the Oregon Garden.

Payment Schedule 3. 02. City shalladvance grant funds to OregonGarden on a quarterlybasis. Funds shall be disbursed within 5 business days of the start of each quarter.

Payments 3. 03.The quarterly advanceof grant funds shall be one-quarter ofsix-tenths of the annual estimated tourism-dedicated LodgingTax revenues, as reflected in the City's adopted budget. One payment per quarter shall be adjusted as necessary to correctfor anydifference in actualpayments madeand actual revenues received during the preceding quarter.

PART FV. INSPECTION AND RETENTION OF RECORDS 4. 01. Oregon Garden agrees that City, or any agent designated by City, may at its discretion,inspect any financial or program records related in anyway to useof grant funds in the performance ofthis Agreement, at anyreasonable time during biisiness hours.

4. 02. Oregon Garden shall retain all financial records, supporting documents, statisticalrecords and all other records pertaining to receipt and use of grant funds inperfbnnance of this Agreement for a minimumof three years after the close of the Agreement period.

PART V. TERMINATION Gty shall not terminate this Agreement except inthe event ofmalfeasmce, insolvency, or failureto satisfactorily. usegrant funds in accordancewith ORS 320. 350(6)or asdirected by the Council andthe County. The County or the Oregon Garden may terminate this agreement with atleast 90 daysnotice to fhe other parties.

PART VI. USE OF FUNDS

Page 10 Funds allocated under this Agreement shall be used exclusively for purposes consistentwith state law, city ordinanceand resolution, andother applicablerules. These purposes include the repayment ofdebt for tourism-related facilities as permitted in ORS 320.350 (6).

PART VII. OTHER PROVISIONS

7. 01.No person shall be denied or subjected to discrimination in receipt of(he benefitsof any services or activitiesmade possible by or resulting from thefunding provided underthis Agreement on the grounds ofrace, color, religion, gender, sexual orientation, national origin, disability, age, or marital status. Violation ofthis provisionmay be deemed a materialbreach. 7. 02.The fimds provided under this Agreement area grant. OregonGarden is not an agent ofthe City or the County and shall not represent itself as such. Oregon Garden shall hold harmless, indemniiy and defend (he County and/or the City, its ofGcers, employees and agentsagainst any claim or causeof action arising or resultingfrom {heactions or inactionof Oregon Garden under {his Agreement or relating to {he fund allocated herein.

7. 03 Tliis Agreement may be amended if agreed upon in writing by County, City and Oregon Garden.

The undersigned represent and wan-ant that they areduly authorized to execute andbind their respective principals.

MARION couNry;

Date: QI^O^f

Ciry OF SDLVERTON: OREGON GARDEN FOUNDATION:

,^.%w7/(^7, By:. ^ C(tu Title", i A/^<^ Tifle: C///?' f^ » ^

Wt'. /a' -l ^ es: Oak:. /* - -f- ay

Page 11 OREGON GARDENS AMENDMENT NO. 1 TO THE SECONDRESTATED MANAGEMENT SERVICESAGREEMENT

This Amendment No. 1 to the Second Restated Management Services Agreement ("Agreement") ismade effective January5. 2015,by and between the following parties ("Parties"):

MANAGER: Moonstone Garden Management, Inc., an Oregon corporation 2905 Burton Drive Camhria CA 93428

MARION: Marion County, a political subdivision of(he State of Oregon

SILVERTON: City ofSUverton, a municipalcorporation located in MarionCounty, Stateof Oregon

OGF Oregon Nurserymen's Garden Foundation, nka Oregon Garden Foundation, Inc., a 501 (c) (3) Oregonnon-profit corporation

NOW, THEREFORE, in consideration ofthe mutual promises, representations, and warranties ofthe parties, the parties enter into die following:

AMENDMENT

1. Paragraph 21. 1.4 is deleted.

2. Exceptas expressly amended above, all other tenas and conditions of fce Second Restated Management Services Agreement are stUIin full force and effect. INWITNESS WHEREOF, the parties have executed this Agreement below.

MANAGER: Moonstone Garden Management, Inc.

By: _.. <^-^. ^"^- ^i^= DiA Winter P&ld (Date)

OGF: By: /^^^^/^.^^ ^/J^. Randal Thbmas, ' '(Date)

Amendment 1 to Second Restated Mmagnnent Smricea Agreement, lanuay 5, 2015 Page1 of 2

Page 12 MA5UON: Marion County/ /i. ^L> By: -^^^^==___^u_/y^Jj^_ Johy^ttimerJjgE!S;Ad'3iimatrativeOSc?- ^-_^._""".»"," ."--"-^ SILVERTON: City of SflW&K f'\"'"

By: !i^/i5 ghb^. CityManager (Date)

Amendment i to Second Restated Management Services Agieement, Jaauary5, 2015 Page2 of 2

Page 13 SECONDRESTATED MANAGEMENT SERVICESAGREEMENT This SecondRestated Management Services Agreement ("Agreement") is made effective 6U<^ , 2013, andreplaces in its entiretythe Restated Management ServicesAgreement enteredinto onJanuary 1, 2008,by and between the following parties ("Parties"):

MANAGER: Moonstone GardenManagement, Inc., an Oregon corporation 2905 Bmton Drive CambriaCA 93428

MAKION; Marion County, a political subdivision ofthe State of Oregon

SILVERTON: City ofSUverton, a municipal corporationlocated in MarionCounty, State ofOregon

OGF OregonNurserymea's Garden Foundation, rita Oregon Garden Foundation, Inc., a 501 (c) (3) Oregon non-profit corporation

RECITALS

A. Silverton, under a Master Leaaedated October 28, 1995, leased certain real property consistmg ofappioxunately 140 acres tn Oregon Nurserymen's Oardea Foundation, nka Oregon Garien Foundation ("OGF"), for a term tfarough December 31, 2095 with an option to renewfor an additional 99 years. B. OGF, under a HeadLease, leased61 acresto Marion (Oregon Garden). C. Marion issued revenue bonds, Series 2002, in Ifaeamount of $5, 000, 000. 00 ("Revenue Bonds"), Ac proceeds ofwhich were used for economic development in connection withthe Oregon Garden C'Oregon GardenFoundation Project"). Marion subleased Ac Oregon Garden to OGF ("Sublease"). OGF was obligated tomake rent payments underfhe Sublease to provide Marionwith the fimds to paythe entire bonded indebtedness. Silvertoaand Manon entered into an Intergovernmental Agreement datedDecember 19,2002, relating to theOregon Garden Foundation Project. D. OGFfaUed to makethe payments necessary to staycunent on the Sublease. E. OOFReceiver, Michael Baflan, wasappointed on September 1 ,2005. By Order ofMarion County Circuit Court in CaseNo. 05C18050 entered February 14, 2008,the court approved (he receiver's final account, closed the receiveiship case,

PageI SECONDRESTATBD MANAGEMENT SERVICES AGREEMENT

Page 14 discharged fhereceiyer from further dudes, approved of the distribution plan for repayment ofOOFdebt, and approved the reorganized OGP as the successor in interest to the OGF Receiver.

Mar"maad SUVCTton' pursuaat to m agreement with the OGFlaaDage assets of &eOGF (the "OGF Property") throughmemberahip onthe OGFboari'of' directors.

G. Manager's wholly ownedaffiliate purchased anU-acre parcel included inthe real propertydescribed m theMastet Lease, wirich is part of the OOF Property andon' whichthe Manager'saffiliate has constructed a hotel/resort. H. OOF,Marion, Silvertonand Manager desire to amendthe terms of the engagement ofthe sewices ofManager to manage, operate, andmaintain the OOF Property(Esdubit T>) and fheparking easement area on the 9. 1-acreadjoimng parcel hereinafter described, excluding: the Ooidon House, andthe Three-mii^ Canyon License Agreement, (the "Management Property"). The OGFwffl administer andjmaintain its own bank accounts, restricted funds, contributions and donationsto OGF,and personal property. Maaagerdesires to provide fhese services andmanage, operate, andmaintain the Management Property onthe terms and conditions described herein.

I. rton desire Marion^and SUye {hat OGF reacli an agreement with Manager that is acceptable to Marion and SUverton andconsistent withthe court's order and distribution plan. NOW,THEREFORE, in consideratioa of the mutual promises, representations, andwamnties of the parties, the parties enter into fhe following:

AGREEMENT 1. Incorporation ofRecitals. Theabove recitals areinccroorated herein b reference.

2. Managementof Properiy. Solong as Manager is not in default under , Manager shall have the exclusive right to manage, plan ma&etmg and operations,operate, maintain, andcontrol theuse, possession, ingress andegress to die Majtlag^mtprcperty' mdtheoGF' silverton> md Marion sitaUiiotiease^Iei[''or'pant aUcenserelating to anyof the Mamgement Property to any party without the consent of ^la?r'-!rfu_'ih con?entsha11 n?t beumeasonabJy withheld. ' ManagCTshalTreasonabiy" ?!T?e'_operate' ^d maultaulae Management Property a. s a gardenopen to the public during economicaUy reasonable hours. Inmmaging, operatia& andmamtajnme the Management Properly, Manager shall be autiiorized'tof " 2. 1. Supervise andmanage the irrigation and hortieultiire;

Page2 SECONDRESTATED MANAGEMBNT SERVICESAGREEMENT

Page 15 2.2. Supervise and managethe grounds maintenance; 2. 3. Supervise andmanage all marketing necessary for promotion of fhe Management Property; 2.4. Approve and schedule private andpublic events; 2.5. Takeall necessarymeasures for (heorderly and efficient management ofthe Management Property; 2.6. Seteconomically reasonable fees for admission to the Gardenand use ofthe facilities atthe Gsuden, subject to (he consent ofMarion and Silverton. To set these fees. Manager shallprovide Marion and Silvertonwith 30 dayspnor written notice ofthe proposed feeschedule. IfMarion aad Silverton donot object to (heproposed fee schedule within 30 days ofreceiving a copy ofit, then Manager's recommendations shall become the fee schedule. Consent ofMarion and Silverton shall not be unreasonably withheld; 2.7. Manage, maintain, andaccount formemberships in the Garden;

2. 8. PeadForm all reasonable maintenance and operational duties necessaryto properlymmnfHin the OOFProperty; and 2. 9. Keepthe Oarden opento thepublic during economically reasonable horns. Onor before January 1 ofeach year. Manager shall provide Marion and Silverton with a schedule ofproposed hours anddays for (he Garden to be opento thepublic. IfMarion and Sflverton donot consent tothe schedule, the matter shall be submittedto disputeresolution pursuant to theprovisions of this Agreement. Marionand Silvertonshall not unreasonably witKhold consent 3. Special Evenfa. Manager shall make Manager's best eftbrts to utilize the Management Property to create optimal positive net cashflow&om operations, including, wifhout limitation, scheduling weddings, plant andflower shows, concert series, andother revenue-generating events. Managershall coordinate withOGF to make a positiveeffort with OGFto host fimdraising events on de property, includinguse of (he Pavilion at no costto OGF,if available andnot in conflict withthe Resort Property events Managermay limit thenumber ofOGF fimdraising events usingthe PavUion and require scheduling that does not condBict with peak demand periods for Resort Property use ofthe Pavilion. Specialevents held bythe Resortfiaperty in the Pavilion arenot "Garden Events." 3. 1. EachJuly 3 will bededicated to fhe City of Silverton andshall be knownas "Silverton Day. " Sflvsrtonresidents who demonstrate a driver's licenseor other suitableidentification caid which shows tfaat person to bea resident ofSilverton shall be admittedSee of admission charges to the Gardenexcept the concertareas.

Page3 SECONDKESTATED MANAGEMENT SERVICESAGREEMENT

Page 16 Managershall coUect all revenue fromticket salesto non-Silverton residents andother operatiocal revenue from the Garden on Sflverton Day. ., . Maintenance °f the Property. Manager ahaUuse Manager's best efforts to ensurethat the Management Property is maintained and operated in an attractive" condition m a goodstate ofrepair. Managershall supervise routine maiateiMuce and S?T^C-lheM?na8ement PICPerly 'VIlich can be performsd by the staff oremployees of n!.eMana8er;, Tllcse exPeudituresfer loutine mamtenance andrepairs to ttieMan^ement Property shallbe the sole. expenseof Manager. Managershall provide OGF,Marionand Silverton witha proposed routmemaintenance andrepair schedule and plan on an annual basis,subject to their consent. IfOGF, Marion and Savertondonot'objectto'fhe" proposedmamtenance and repair schedule and plan mthin 30 days ofreceivmg'a copy of -^-!n,ManaSer's lecommendations shaUbecome the routine maintenance mdrepafr scheduleandP1!UL Manage)". maysubcontract allor any portionofManager'siobligations andresponsibilities uuderthis Agreement forflie routine mainteaanceandTrepmscheduie andplan; provided, however, that Manager shall remain primarily TesponslUe for such obligations. Inaddition, "routine maintenance andrepairs" arefurther defined to mean anyadditional conditions which can be remedied by the staffer employees ofthe Manager. Anywork that is not on the annual routine mamtenance and repair schedule andplan or that cannot be reasonably remedied by Manager's staff or employees, and : anoutside contractor or vendor behired to complete the work shallnot bedeemed to be routiue. Other extraordinary maintenance, repairs, replacement costs, rapitalrepau-s or improvements, and other projects shall be approved md paid by OGF or rton. If such Silye extraordinary work requires contract supervision'orsubcontract work byManager, the tenns, scopeof work and compensation ofthe Manager shaUbe agreed to betweenthe Parties ina separateagreement to benegotiated atthattiae. OGFor Silvertonmay provide supervision or subcontract for extraoiduuryw)rlcwithodiCT personsthan Manager, in which case. Manager shall cooperate with fhe paities'to allow liroumeration. Manager may contnct the "n-CTtake OT, fOTemergency repaiis to extent necessary toi preseweor protect pere°ns-°^ManagcmeIIt pr°Perty60m imminent harm or catastrophic'damage, wife" noticeto OGPor Silverton assoon as possible ofthe need for the emergencyrepair.'

5. Employees. Manager shall employ, discharge, andsupervise all on-site employees or contractors required forthe efficient operation androutine mamtenmce and repairof the Management Property. All on-sitepersonnel, exceptindependent' conttactoisand employees ofindependent contractors, shall bethe employees of Manager. Manager shall paythe salaries, benefits, taxes, andofher costs relating to such on-site employees. Regulations. Managershall manage the Management Property in &I1 compliance wifhaU laws. ordersand regulations ofany federal, state, county, or mumcipai aumontytoving jurisdiction over the ManagementProperty Cthe"Le Requirements").

Page4 SECONDRESTATED MANAGBMBNT SERVICESAGREEMENT

Page 17 7. Insurance. Managershall obtainfhe following insurance at the eq)ense ofManager, and such insurance shall be maintained during the full term ofthis Agreement: 7. 1. Liability. Comprehensive public liability insurance of $2,000, 000 single limit for bodily injwy, death, andproperty damage; 7.2. Property Insurance. Fire and extendedproperty hazardinsmance in m amount equal to ffaefull replacement cost ofthe pavUion andother improvements situated on the.Management Property; 7.3, fForkers' Compensation. Worker'compensation andemployer liability insurance to cover the employees ofManager; and

7.4. Insureds. Manager and OGF are co-insureds, as their respective interests may appear. Madon County, its officers, agents, employees andvolunteers, and tfaeCity ofSflverton, its ofScers, agents, employees andvolunteers shall benamed as additional insured for general liability coverage as required by written contract. Manager shall deliver certificates evidencingsuch insurance coverage to OOF, Silverton, and Marionwithin 20 days &omthe issuance andrenewal ofthe policies. All insurance policies shall provide notice as setforth inthe policies to OOF, Saverton, andMarion priorto the cancellation, non-renewal,or material modification of the policies. 8. Liens and Indemnification. Manager shall pay (or cause to be paid), indemmfy, defend andhold OGF, Marion andSilverton Iiannless fiomall claims for work doneon ot for servicesrendered or materials ftanishedto the ManagementProperty for those costs whichare the responsibUity of the Managerand shall keepthe Management Property freefrom any liens from those coststhat could result in foreclosure ofManager's, OGF's, Silverton's, and/or Marion's interests in the Management Property. IfManager fails to pay suchclaims or to discharge any claim, OGF, after obtaining fhe writtea consent fiom Silvertoa and Marion, may advance or Marion and/or SUverton, actingjointfy or severally, may advance, afterproviding at least 10days' prior written notice to Manager andOGF ofintention to do so, the funds necessaryto pay or discharge such claim. Inthat event,the party making the advance may collect from Manager the amounts so advanced aad, iffhe party making the advance is unableto collect suchsums from Manager,fhenfhat party shall continueto havethe right to collect &e fimds fiomthe OGF, asprovided in the court ordeacreferenced in Recital E. All amounts advancedby OGF, Silvertonand/or Marion, jointly and/or severally, orpaid by OGF, Silverton, and/or Marion, relating to suchclaims shall bear interest at the rate of9% per annum. Suchadvances or payments shall not constitute a waiverof any right or remedy whichOGF, Silverton and/or Marionmay have because of Manager's default. Provided, however, that, if liens areplaced onthe Property as a result of(he activities ofone ofthe parties to this Agreemeat other than the Manager or by the thirdparties claiming through other parties to this Agreement ofher thanfhe Manager, the Manager shall not beresponsible for those claims orthe liens relatedto them; andthe

Page5 SECONDRESTATED MANAGEMENT SERVICES AGREEMENT

Page 18 party whoseactivities resulted insuch claim orlien shallindemnify, defend, andhold Managerharmless thers&om,

9. Accounting Records.

9. 1. Revenueand Expenses. Managershall receive all revenue andbe ^?'^b!^forauop';;"ltmgeJCPSnsesrelating to the Management Property uiclMmg but notiimited toroutiBe raamtenEmce and repair costs described ia Paragraph^, subjectto ' Manager's obligations to OGFto coiiect anddeliver Resort Base Payments, Resort" Royalty Fees, andto pay Garden Aoyalty Feesand Additional Payments described" herein.

9.2. Separate Accounts. Manager shallkeep sepaiate books, accounts, andrecoids that reflect allrevenues andall expendituresincurredin connectionwiththe management andoperation offhe Management Property. Manager shallreport al! revenue and expenses on Manager's tax return relating to the maiiageaent by Manager of theManagement Property aud 3flall provide Silverton, Marion, and OOF wife acocy thereof. Books, accounts, andrecords shallbe maintuaed atdie principal placeof business ofManager. Duringregular business hours.Manager shallmake the books. accounts, and records required to fcemaintained hereunder available to OGF, Marion, SilvCTton, orfheir representatives foiexamination and audit by appomtmentonm)less thanfive (5) days' notice. All suchaudits shall be atthe expense ofOGF and/orMarion andSilverton unlesssuch audits sliow a variation ofmore than four percent (4%) fi-wn theactual figures, inwhich case such audit shall be at the expense of Manager. Itis expresslyunderstood that the Manager is not accountable for donations andTofher contributions made directly to the OOF, except tothe extent ofthat portion ofa donation thatu thecustomary membership feefor award of a membership tothe donor, vwuCti shallbe paid to Manageras a deduction&om the donation.

9. 3, Mottthl^Statements. Manager shall timiish to UGF, Marion, and Sflverton, nolater (ium the 20& day of the next succeeding moEth, a detailedstatemantof customarymembarsMp fee for award cfa membsrship tothe donor, which shall be paid to Manager asa deduction nom Siedonation), a summary ofall admission revenues' wentreveaiues, aadother revoniies andexpenses. Uponreceiving a reasonable request therefore. ManagershaU provide OGF,Marion, aadSflverton wi&copies of all uvoices, statements, purchase ordara, aiidbiili'f^s teaeived andpaid during thepreceding month,' aswell asswh other iBlormatioa relating to operationand managemedt of (he Mimagement Property feat in thediscretion ofthe OGF, Mariocand Silverton, requii the attention acdrsvicw cfOGF, Mmon and Silverton. 9.4. Annual&fpori. _ WiAin30 days after ths end of each catendat year, Manager shallpsspaze arAdeliysr to Marion, Silvertoa andOGF & detailed statement of revenues rec&tvedsadexpaidito-es mcurred and paid during the calecdar year that result fi-omoperations ufthel^mgeniect Property. Within five. (5) days ipilowing expiration

Page6 SECONDRESTATED MANAGEMENT SBRVICES AGREEMENT

Page 19 ortenmnation of this Agreement, Manager shall deliver to Marion, Silverton and OGF all books,accounts, andrecords pertaining to theManagemtart Property. 9, 5. Manager Information. Thecustomer lists, telephone numbersand similarinformation relatugto theguests offheresort belong to theresort andare not ncr will theybecome anasset oflhe OGF or the OGF's assigns. 10. Managementof the Water Irrigation Systems. Managershall be rigationSystems that service Ae Oregon the of Tton, pursuant GMdens,'and which provide tfae major wetland support for City SilyC to&eteimsoffhe WaterManagement Agreement attachedasExhibit "10^" mcoTporated herein by reference. Manager's feiluie to peifoim its obligationsj Watei Management Agreement is a breach ofthis Agreement iclating to whichthe

Page? SECONDRESTATED MANAGEMENT. -SERVICESAGREEMENT

Page 20 Mat;nue. ea011yeaz ihwsaset astoneas the pavilion onthe Gaiden Property orother similar improvement is still availabfe for useby the7R'. esort. ~'~' "l'"v vl""" . .^sesort saya!tyFees:The Rs!sort Fraperiy wiU. pay the foHowina ^altyfeeI(fce''fesDrtRO^Fres'");MCTsMbet^^ ^no^S!^yrf!^^mTfcso mci^ dsnte"^^^^^ reduction provided in section 12. 6. hasbeen exceeded7

pive -j2'2VL .. , p.ercent <5%) ofthe 8ross sales receipts from ^m;mssions&om oregoa Lottery3 ales and frola ^ sales mdcoHinussio^'from" ^w^^^e^my ^^topwtedby^~o^^^^^p^w^ fthe SSSSro cwner offee Resort propelty wthm a'lo-'Imle"'radus"^u 1 i'2,,. _ . ^Fivepercent (5%^ ofthe 8ross sales receipts from allmerchandise sales on the Resort Property, ies3 sales'tax, 'i?a^y;'" _12;2:3-" Jen?ercent (10%) ofa11h(>te3 room rental fees paid^Sftllporti^. by o ! ReiortRoya¥Fees)&OI» &eResort'Pr"opatyTs"p^tiy Manager to_SUvCTton in the &nn of a trai3sient~occuDai v'tax^TOT^FsTvT SS ^isamTtIS curr tly^-bysa^n~to OCTpayable "to^h o.'?018p'-!Isumt to m a?eement between Silverton. Marm7and'theO(?F. m^must, &tita^s^eof&eTOTfo"SPa5mert°M^^^^^ courtOrder aad Distribution Plan referred to in Recite!E. -!2L2A_, . pivedollars ($5-00) PCTlioteI ovsmight paying eue^and.eaAsuchguest. aaybegive° by Ae R^ortPmpertyTticket^oSSor access_toae Garden. batingto whichthere shall be no QwdsiRoyalty Fee""Ts ' Itioaofthe Resort LO RoyaltyFees shan tominate if the Garden ceases'to operate." Sli^°LrecSedto payfhe$5 per we°"g^y"TK "e^ftose"ro^gufists L arerented under (faegovenimenfmiUtaiyper diem ratei.

MmagcrwiU pay the foUowing rt, « -r^'^.. Gar.im swa!tyFees;rs:ts royalty ^ite.?^nJ^Fe^wh!chsMbepmd-M^^^ &eiad. day cfeach mon&coil^°°ingeach ca!efida-yemafter'the'aggre^tel r*ed3 provided in section 12.6 hasbeen exceeded: ... -li^-1, - -_, Kveperceat (5%)of to grosssales receipts (less !lcstee?lifTy)ot aumealsoT bevenges sold to be served mAe"6^goD^rier ST(except sales"fsuch itel!s WIlioh ale payable by the ResortP^rtyas*required 12.3.2. ^ Teapercec,t(10%)o.fali. revenuefrompaidticket ±^!a&g£tt^aaag£CT1 property; exce^^ prwidea'to^m^a^1 guestson the Resort Property forentamce as part ofteroom'rentalT

Page8 SECONDRESTATED MANAGEMENT SERVICES AGREEMENT

Page 21 12.3.3. Fivepercent (5%) of the gross sales receipts from allmerchandise sales fless sales taxes, if any) and commissions from Oregon Lottery salesan'the Oregon. Gardenpremises and/oran affiliated business that usesfliensss. e^ r'OreaonGmdeiFor any derivative orlikeness thereof(except fee sales andconmussions which are by the ofsuSi'items'on the Resort Property, the Resort Royalties on payable ResortProperty); and 12. 3.4. Five percent (5%) oflfae gross sales receipts from all merchandise sales(less salestaxes if any) anywherein the world, formerchandise sing'mmywaytfaename "OregonGarden" or the Oregon Gaiden trademmk(ex^ sSeseofsud items'onthe Resort'Property, fheRoyalty oa^uch ispayable by fhe Resort perty). Manager shall havethe exclusive right to usethe Oregon' ancTtoenforce alfrightg relating to it andshall use reasonable efforts to i it to increaseroyalty revenue fi-om such trademark. 12.4. Additional Payments. Ifthe Management Property generates an annualpositive net caA flow from operations, flienMamgMshaUmake^tioMl^ i 99%of the Annual PositiveNet CashFlow ("AddiUc Payments"). Forthe purpose of tins section, "Annual Positive Net Cash Flow": mean the following: 12.4. 1 Annual gross"Garden Revenue" less"Garden Expenses" pertaming to the following: A. Garden ticket sales B. Garden memberships C. Garden food sales D. Garden plant and gift sales E. Miscellaneous events and tram revenue 12.4.2 "GardenExpenses" shall include tfae following: A. The Garden operating costs B. Gaiden Royalty Fees C. Costs ofgoods sold D. Garden food expense E. Garden plant and gift expenses F. Garden miscellaneous expenses 12.4.3 "GardenExpenses" shall not include depreciation, amortization, or o&ernon-cashaccruals and shall exclude extraordinary workor capital expenditures paidfrom donations ornot paid by Manager. Giiaten expenses shaUnot include expenses related to Resort Property events in the Pavilion. 12.4.4 NoAdditional Payment is payable on cash flow income &om the following: A. Income ftom the PavUion generated by the Resort

Page9 SECONDRESTATED MANAGEMBNT SERVICES AGREEMENT

Page 22 B. Banquet group meetings andfood semce relating thereto C. Donationsmade to theGarden for eidraordinary workor capital improvements

12.4. 5 Additional payments, if any, shall bspaid byFebruary 151hof each year.

12. 5.. Garden Memberships, 'lie proceeds from aU Garden Memberships sbail be collected by andpaid to Manager for operation ofthe Gardeii. Thatportion ofdonatioiis madedirsctly toflie OGP,which is the customary membership feefor awardofamembersliip to thedonor, shall bepaid over to the ManageT for operation ofthe Garden.

12.6. Base GardenExpense. Thetotal ofthe Resort BaseFee, the ResortRoyalty Fees, and the Garden Royalty Fees to be paid to the OOF by the Manager asprovided herein shall bereduced byup to fhefoUowmg Base Garden Expense Amounts:

12-6. 1. $350, 000. 00per year forthe two (2) year period commencing January 1, 2013, through December 31, 2014;

12.6.2. $300,000.00per yearfor thefollowing three (3) years;

12. 6. 3. $250, 000. 00per year for the following five (5) years;

12.6.4. $200, 000, 00pea: year for the following five (5) years;

12.6.5. $150, 000. 00per year for thefollowing five (5) years;

12.6.6. $100, 000. 00per year for the following five (5) years;

12.6.7. $50, 000. 00per year for the following five (5) years; 12. 6. 8. $25, 000, 00per yearfor the foilowug five (5) years; 12. 6.9 $0 th.ereafter, as there shall be no Base Giirden Expense'reduction aSer(he 35th year feUowing conimenceraent ofthis Agreement

12. 7. Agjlwted Business. For tfae ^. piuposes of this Agreem.ent, a business shall be considered to be aEBl'ated if one percent (1%) or more ofsuch businessis owned,directly or indirectly, byDirk Winter, Manager, owner of the Resort Property, or

Page 10 SECOND RESTATOD MANAGBMENT SBRVICBS AGB-EEMENT

Page 23 the owner ofone percent (1%) or more ofManager or tbekesort Property. However, it is not fheintent that there be a "doubling"of anyResort Royalty, GardenRoyalty, AdditionalPayment, or Resort Base Payment due pursuant to the terms of this Agreement. If a BasePayment, Garden Royalty, Resort Royalty, orAdditional Payment is payable by any partypursuant to therequirements ofthis Agreement, suchamount is not payable by any other party or any affiliated business relating to the same transaction.

13. Disbursement ofProceeds. The Resort Base Payments, Resort Royalty Fees,Garden Royalty Fees, and Additional Payments paid by Manager to OGFshall be disbursed iu the priority and manner approved by Marion and ordered by (he Circuit Court ofthe State ofOregon for Marion County in the court Order and Distribution Plan refened to in Recital E.

14. Payment Provisions. Pursuant to the court Order and Distribution Plan referred to in.Recital E, OGFshall collect all funds payableto or deliveredto the OGF including but not limited to, Resort BasePayments, Resort Royalty Fees, GardenRoyalty Fees and Additional Payments to be paid by Manager pursuant to this Agreement, andthe funds to bereceived by OGFfiom the sale ofthe 11.2 acres to GardenResort, LLC. OOFshall disburse fhe proceeds to thecreditors infhe priority andmanner specified in file court Order and Distribution Plan.

14. 1. When Manager has remitted Resort Base Payments, Resort Royalty Fees, Ganton Royalty Fees, and Additional Payments to OCT in as .amount to pay in fall fhe following OOFobligations. Manager's obligation to payAdditional Payments to OGF shall terminate: 14. 1. 1. The amount necessary for the OGF to pay the lease and/orpurchase obligations relating to thepersonal property, whichis partof the Management Property. 14. 1.2. Thepayments to Marionuntfl Marionhas received $6, 646, 012. 00, (smn ofthe original $5, 000, 000 Revenue Bonds plus an amount equal to all interestto bepaid to theholder of the Revenue Bonds). Marionshall apply any funds received to the outstanding 2002 Marion County Revenue Bonds until such Revenue Bondsliave been paid in full. Marionshall credit the above amount owing to tfaetotal amount of the payments to fhe OOF. 14.1.3. Paymentto Marionand Silverton until Marionand Silverton have received reimbursement of $626, 925. 01 owed to Marion and $118, 500.00 owed to Silverton as ofNovember 29, 2007, which are fhe funds advanced by Marion and Silverton duringthe OGFReceivership for operation ofAe Management Property, plus interest at the legal rate of9% per iumum (ORS 82. 010) from the date ofthe advancements until paid in full. Suchpayments shall be piorated between Marion and Silvertonin proportion to the amount eachhas advanced during the OGF Receiverahip for operationsof the ManagementProperty.

Page11 SECONDRESTATED MANAGEMENT SERVICES AGREEMENT

Page 24 14. 1. 4. Payment to Silvertoc and Marion until Silverton andMarion have received reimbursement ofal! Amds loaned by SilvKton and/oi Marion to OOF, which are secured by Management Pffiperty.

14. 1. 5 Payment ia the in-iseciired cred;ars ofOGF owed as of September 1, 3005 idefltifiedl -r ihs yo'urt Distrihation Plan, wiftiout fuiliier mterest, including butaot liaitedto fh.s 'mseeursd claim ofMarioa in the aiacuut of$415, 087. 12.

14, ! ,6 Payment to Silvertcm, without further interest, of Silverton's imsecured claim in tfae amount of $452.712.00.

14.2. After Resort BasePayments, Resort Royalty Fees, GardenRoyalty Fees, andAdditional Payments have beenpaid in an amount sirificisnt to paym fiiil all of the amounts detailed in paragraph 14. 1, (hen(he payments described in Paragraph 12will be paid as follows: 14. 2. 1 The RssortBase Payment described in 12. 1 shall bepaid by the ResortProperty to OGF;

14,2.2 TheResort Royalty Fees describedin 12.2 shall bepaid to OGF;

14.2.3 The GardenRoyalty Fees described m 12.3 shallbe paid to OGF; and,

14.2.4 The AdditionalPayments describedin 12.4 shall bepaid to Silvaton, less fLepercentage of'Aimual Positive Net CashPlow to be retainedby Manager.

14.3. Theparties to this Agreementdo not believe thatanyofthe ManagementProperty wfll becomesubject to propertytax obligations. However, te fhs extent property taxes are assessed relaticg to the Management Property, Manager sha'J. pay such property taxes and shall receive a credit in the amount ofsuch property taxes against Ae obligation to pay Garden Royalty Fees described herein.

15. Land Purchase.. Manager'safSUate has purchased an 11-acrepiirce; of land ("Resort Property"), formerly included in the real property described in the Master Lease, and has constructed a hoteJ/resort, To the exteirt fimds are still owed by Macager's sfliliatetowards the purchase of&e rea!property, as securedby the Tiast Deed Installment Note and Trast Deed and pursuant to the Court Order and Distribution Plan referred to in Recital E:

15. 1. Marion, Silverton, and OOF agree that fhe proceeds ofsuch sale shall be divided and disbursed as follows:

15. 1. 1. Ilie downpayment shall be distributed40% to &e OGF for disbursement to Marion and 60% to Silvarton.

Page 12 SECOND RESTATBD MANAGBMENT SERVICES AGREEMENT

Page 25 15. 1.2. The remauring payments shall be divided 30%to theOOF for disbursement: to Marion towaids the repayment of the court-ordered debt and 70% to Silvesrton. 15.2. Solong as this Agreement isnot in default andfee Resort Property owneris not in defaultof anyagreementto Marion, saverton, aad/or OGF, the owner of Ae'Resort Property shallhave an option (if such option isnot exercised, i ) topurchase or otherwise be the developer or r'orTegsorofanyfature development or saleof any portion ofthe Management Y,including all offhe real estate described in the Master Lease described anove^ L istransferred shaUlemain obligated to theterms < fhTsAgreement, ''andthe right of the Manager to exclusivepossession under fhe scaf this Agreement. 16. 9. 1 Acres. The9. 1-acreparcel hasbeen sold and conveyed to SUverton. 16. 1. The 9. 1-acieparcel shaUbe subjectto a20-footwide access easementfor the development ofthe hotel/resort andany additions orimprovements Aeretomd"fo7mgress, egressand installation ofany and all utiUties relatingto the Oregon Garden,the Resort Property, andany additions airiunprovemeatsme ngSof Ae'OGF audits assigns and Manager and Manager's ^signstocontmu£;to ).1 acres necessary for parking, including the paved and 1 asdescribed \s. Exhibit16. 1 ofthis Agreement ".Access'and ParkingEasement"). benefit ofthe 61 acres wUch constit R^rt'Property^ andfor &e benefit of fheiemaining portion of fhe^HOjacrejffOp^ whichis the subject ofthe Master Lease. Thepartie location ofsucheasement Thelegal description ofthe easement shallbe st [ inthe records ofMarion County, Oregon. Theparties agree ttotme^ widthof the easement maybe increased to the widthrequired by any | havingjurisdiction overthe development ofthe Resort Property. 16.2. Silverton shall execute appropriate documents to include the

acres m &elandde8cribedinAeHeadLease andthe parking^area portion of the 9. 1 acresshaUbe included'inflie'-defimtion ofthe OGFProperty described m to Agreement. Mmonj ; areaof the 9. 1 acres shallbe included inthe description i > the Sublease. The collateral inMarion's Trust Deedsecuring pertoi fhe"Sublease andthe Bond shallbe amended to include theparking areaportumotme^l acres"There AaUbeno prior encumbrance relating to such paridng area ofAe 9. 1 acres.

the term "Capital 17. Capital Improvements. As used iu this Paragraph, Expenditures"means all new development, majorrenovations of existing buildmgs or

Page13 SECONDRESTATED MANAOBMBNT SERVICBS AGREEMENT Page 26 gardens, new eauipment, tools or macfamery, aswell as any other expenditure which wouidbe capitalized and depreciated under Accounting Principles.

. ?le ?G^. ?ld Mma8CT shaUjoinUy sn-ve asthe Capital Expeaditure Advisory Committee (the"Comituttee"). TheCommittee wi!l, ftom time to time, leview .aad updatethe Master Plan for the Gardens Property, whichplan will iiiduds project'and improvementpriorities iffunds become availableCAerein the "Plan"). Afterthe. Plan is approvedby the Committee, thePlan will besubmitted to theCounty Board of Commissioneis andthe City Coimcil for review and consent. Ifno written objection is received bythe Committee withui 30 days after submission offte Plan, &e Pian will be deemedapproved bythat governmental body,and will becomethe then standing official MasterPlan. Marionand gilverton maynot umeasonably witiAoIdapproval ofmy proposed change in the Master Plan.

., eMaaager'. atits sole discrctioll> may implement andcomplete projects ofnot more than $25, 000 without other approval when such project is consistent with the Master Planand&fflds areavailable. The Manager shall haveno obligation to undertake a Capital Expenditure until sufficient funds areavailable to cover fheestimated cost of the project andthe ongoing maintenance ofthe project. 18. LeaseModification. Marion, Silverton, and OGFagree that the Master Lease, HeadLease, and Sublease shall be amended sothat the terms thereofare notin conflict, monetarily orofterwise. witfithe provisions ofthis Agreement. 18. 1. Inspections. Tothe extent fhe existing Master Uase, Head Lease, and ease do SyU not provide Marion and Silvertoa with adequate rights to inspect (he leasedproperty, die Master. Lease, Head Lease, and Sublease shall beamended to nrovic such inspection righls.

18.2. Termination of Leases. The HeadLease and Sublease shall terminate uponpayment mftrfl ofall ofthe payments provided inpaiagrapli 14. 1 oftfais Agreement. The Master Leasebetween SUverton md OOFwill contmue untU terminated pursuantto theterms ofthe Master Lease. At the time oftemiination ofthese leases, all ght>tMe' and. mterest ofthe OGF aad ite assigns in the real property wUch is the su^ect of(he Master Lease, Head Lease and SuMease and all Management Property shall terminate, andthere shal! be no reversioiiary rightofOGF mvested ritlfc Upon termination ofthe Master Lease, all suchproperty shall be trmsfeired to Silverton, and Silverton shall continue this Management Services Agreement withManager. 19. Indeamification. Manager siiall iadenmify, defend, andhold harmless OGF, Silverton. andMarion andOGF's, Silverton's, andMarion's respective directors, officers agents citycouncUors, coiamissionCTs, and employees (the "CoveredParties") ficm andagainst violation ofany Legal Requirements andany andaB third partyctuins for bodilyinjury aad/orproperty damagearising fi-om or m connectionwithanyamdsat. injury, or damage occurring m at, orupon the Management Property; together withall costs, expenses,and liabilities incurred or in connection witheaoA such claim, action, or

Page14 SECONDKESTATEO MANAGEMENT SERVICBS AGREHMENT

Page 27 proceedingbrought thereon including, without limitation, all attorneyfees and expenses at trial and upon appeal. 19. 1. Duly to Defend. In caseany action orproceeding is brought againstthe Covered Parties, Manager, uponnotice fi-omfile Covered Parties, shallresist anddefend suchaction orproceeding utilizing legal comisel reasonably satisfactory to fee . Covered Parties.

19.2. Claims. It is imderstood that Manager has no responsibility for any claims, knownor untaiown, existingprior to the dateManager commences management offheManagement Property as described in this Agreement. Silverton, Marion, and OGF shall indemnyy, defend, andhold Manager harmless fi-om any such claims and agreethat this Agreement shallnot beconstrued to create anysuch claims. 20. Term. ThisAgreement shall be for a term of 75 years commencing March 1, 2006, and tenninating February 28, 2081.

21. Contingenciesand Other Agreements. 21. 1. ThisAgreement shall have no force or effect until the foUowmg conditions are satisfied:

21. 1. 1. Approval ofthis Second Restated Management Services Agreement andall transactions relating thereto bythe City Council ofSilverton and the Board of Commissioners of Marion County.

21.1.2. Agreementby Silvertonthat the first principal payment of$100, 000.00due fiom fhe Resort Property for purchase ofthe 11 acreparcel dueJune 1, 2012, bemodified whCTeby the payment dueis deferredfor two yearsto June 1, 2014, with interest. The remaining principal balance of$600, 000 is to bepaid in annual installments begimriBg with the first payment.

21. 1.3. Marion and Silvertan have successfully applied for anexemption fiom property tax for the Management Property; and,if the Management Property is foundto besubject to propertytax, then the amount of the propfsrty tax payableto Silverton and/or Marion shall bea credit againstthe GaidenRoyalties dueas provided in this Agreement.

21. 1.4 Approval ofthis Second Restated Management Agreementby the CircuitCourt of the Stateof Oregon for Marion County as a modification of the final Order referred to in Recital E.

22. Hazardous Materials. Manager shall keep a list of aU Hazardous Material which have been brought upon, kept, or used in or about the Management Property by Manager's agents, employees, contractors, or invitees and shall provide the listto Marionaad/or SUverton upon receiving five (5) daysprior writtBn request for such

Page15 SECONDRESTATED MANAGEMENT SERVICES AGREEMENT

Page 28 list. Manager,without seeking specific prior written consent ofOGF, Marion, and SUverton, mayallow Hazardous Materiels wluch are reasoiiably necessary to carryout Manager's duties under this Agreeaiect to be toougbt upon, kept, or used m or about the Management property.

22. 1. Manager alitfi iadesmijfy, defend. a.adAoid .Sjivirtori, JVfarioa, and

Management Property, damages for (he loss or restriction on u'se or rent ofthe Management Property, damages arising &ora any adverss impact onmarketing offhe Management Property and sums paid in sctflemect, including attomey, coasidtant, and expertfees) that arise during or afterthe Agreemer. 1 term d;aeto contamiaatioaby HazardousMaterials asa result ofManager's use or aciiv.tdesor ofits employees, agents or contactors.

22.2. Thisindemuification by Managsrof OGF, Silverton, andMarion includes,without limitation, costsincuired in connectionvAQi any investigation of site conditions or anyclean-up, remedial, removal, or restoration workrequired by aay federal, state, or local governmentaf agencyor political subdivisionbecause ofHazardcus Materials present in the soU or ground water orunder the Mauagesnmt Property 22.3. Manager shall immsdiate'y notify andprovide OGF, Marion and Silvertonwith copies ofany inquiry, test, mvestigation, notice, eitetiQn, enforcement proceedmg, order, warning, claim, or complaint by oragainst Manager or the Management Property concernijngHazardous Materials.

22.4. No regulated herbicide, pesticide, fertilizer, poison, or other foreign chemical or substance other thanthose currently approvsd by (heUmted States DepartmentofAgricuitme andby the scppiopc. sstegovsmmeEtal agenciesof the Stateof that such Oregon regulates substances shali be applied to thi". Management Property or flowers or plants growing thereoa.

22. 5. As used in this Agreement, the term Hazardous Materials means anyhazardous or toxic substance, materia!, or .waste, iflcluding but nol iicrited to f&ose substances,materials, andwastes iisted in the United StatesDsspartment of TransportationHazsrdous Materials Table (49 Cm § 172. 101)or by tlie United States Envnonmental PiotectionAgecey as hazarduus substances (40 CFPpt 302)aud amendments thereto,petroleum products, or other suofisubstances, matemis, andwastes thatare or becomeregulated under any applicable local, state, or federallaw. 23. WetlandsSactaded. TheMaaagffliisiit Pmpsrty includes a portionof property whichis designated as wetlands under Oiegus lawas depicted in cheattached Exhibit17 (the "Wetlands Area"), SUveTtonhas easemects aad ottier ayeemeafs to diverttreated wastewater to the WetlandsArea on the Mansgemeat Property and shal] make reasocaUs and best efforts to make the wet land area an attractive addition to the Garden andcreate an attractive interface between the Ponds andfhe Garden. Theportion

Page 16 SECOND RESTATED MANAGEMENT SERVICES AGREEMENT

Page 29 oftreated wastewaterwiiich does not evaporate or otherwiseget used u irrigationof the Management Property collects withinthe Wetlands Area. Npfhingcontaiaed in flus Agreementshall be deemed to alter or amend SUverton's right to dischargetreated wastewater onto the Management Property. Silverton shaUbe solely responsible for managingand mamtainiBg the Wetlands Area in compliance with all federal, state, md local regulations regarding weflands. Silverton shaUpiotect, manage, andpromote the fimctioMl value offee Wettands Area and wdeasmfy and hold harmless Manager &om anyviolation ofwetlands regulations by Silverton. Manager may usethe treated wastewater to irrigatethe Oaidenat no costto Manager andthe Resort Property mayuse such water for irrigation. 24. The Gordon House. Located onthe puperty ownedby Silverton isthe Gordon House, which is owned by the Oregon Garden Foundation but is managed by a separatenon-profit entity. Nothingcontained inthisAgreement shallbe deemed to createor shalibe construed as creating any rights in Manager to operateor managefhe Ooidon House. TheGordon House will be managedand operated separately by its own non-profit entity andthat entity's Board ofDirectors. It is understood thatthe Gordon House conservatorship claims fliat OGF owes the Gordon House conservatorship cCTtam obligations relating tothe Gordon House. Marion, Manager, andOGF donot intend, by this Agreement, to assume suchobligations orrequire Manager to perform anyof such obligations. Silvertonintends to assume all suchobUgations as part of the acquisition of the 9. 1-acre parcel. 25. Default. The follovnng shall constitute a default ofthis Agreement: 25. 1. Payment Default. The failure ofManager to make anypayments to OGFor any other party asrequired herein within 20 days of written demandby OOF or anysuccessor-in-interest thereto orSflverton or Marion, as the case may be. 25.2. Non-payment Default. The failure ofManager to comply with my term or condition ofthis Agreement within 30 days after written notice by aay party, including but not limited to OGF, Sflverton, andMarion spectfying thenature ofthe defaultwith reasonable particularity shaUbe an event a! default. Ifthe defaultis ofsuch a nature that it cannotbe remedied fuUy withinthe 30-dayperiod, this requirement shall be satisfied ifManager begins conection offhe default withia the 30-dayperiod and thereafter proceeds withreaspnaMe diligence andin good fiuth to effect fheremedy as soon aspractical but in no event later thanwithin 60 days ofnotice. 25. 3. Sublease Default. Manager doingan act or failing to do an act which would constitute a default ofthe Sublease regariing the mamtenance and operation ofthe OregonGarden. 25.4. DefaultRemedies. OGFmay tennmate this Agreement and take possession ofthe Management Property afterany default by Manager andmay pursue any other legal remedy forbreach ofcontract includiDg, without limitation, specific performance, collection ofdamages, andcoUecdon ofattorney feesand other costs and

Page17 SECONDRESTATED MANAGEMENT SERVICES AGBBEMENT

Page 30 expenses. In the event ofsuch default, managermay, among all otherremedies, seek the appointment of a receiver, in which case, (he receiver shall serve without bond.

25. 5 Cure ofDefault. Without prejudice to any oAei remedy for default, Marion; Silvertor^ or OGFmay perform aayobligation ormake anypayment required to curedefault by Manager, rhcreasonable costofj;erfbnnifflce, includmg Teasoaable attorney fees andall disbursements, shall be immediately. repaid by Mmiagsr upondemand, together with interest from the dateof expenditure at the rate ofnine percent (9%) per annum until faliy paid but, in anyevent, notat anyrate greater thanthe maximumrate oftntsrestpermitted by iaw. 26. Notices. All notices thatmay be sent among fbe parties shall be sentby certifiedmail return receiptrequested, andfirst class mail with postage prepaid to the parties at the following addresses. Notices shall be deemed effective as offlis dateof mailing. The parties may changethe designee or address to receive notice by giving written notice to the other parties in accordaace with this paragraph.

MARION: Marion County Atta: JolmLattimer, ChiefAdmmistrative Officer P.O. Box 14500 SalemOR 97309

Counsel: GloriaM. Roy MarionCounty Legal Counsel P. O. Box 14500 Salem, OR 97309

MANAGER: OregonGardens Management Company, Inc. Attn: Dirk Winter, Owner/President 2905 Burton Drive Cambria CA 93428

Counsel: R. John Kohlbraad Attorney at Law 3075 Thousand Oaks Boulevard WestlakeVillage CA 93362

SILVERTON: CityofSUverton Atta: Bob Willoughby, City Manager 306 S. WaterStreet Silverton OR 97381

Counsel: Paul C. Elsner Beery Elsner & Kammond LLP 1750 SWHarbor Way, Suite 380

Page 18 SECOND KBSTATED MANAGEMENT SERVICES ABEEEMENT

Page 31 Portland, OR 97201-5106

OGF: Oregon Garden Foundation Sam Brentano, Chair 879 West Main St. Silverton, OR 97381

27. Assignment. '1his Agreement is personal between the parties. Manager shall not assignits rights01 obligations under this Agreementwithout the prior written consent of Marion and Silverton, which Marion and Silverton can withhold only in good faith. ThisAgreement shall bebinding upou the successors andpermitted assigneesof the parties.

28. OGFReceiver. The OGFis the court-approvedsuccessor-in-interest to the OGP Receiver.

29. No Third-party Beneficiaries. Nothing in this Agreement, express or implied, is intendedto conferon any person, otherthan the parties to this Agreement, any rightor remedyof aaynature whatsoever.

30. DisputeResolution.

30. 1. Mediation. InIfae event there is anydispute between the parties to the Agreement, theparties must mediate any such dispute before commencmg any legal action. No partyto thisAgreement canbring legal actionagainst another party without first participating in mediation, unless one party refuses to submit to mediation andlegal action is brought to specifically enforce this mediation provision ofthis Agreement If the partiescannot agree upon the personto act asthe mediator, fhen (he Arbitration Service ofPortland, Inc. in Portland, Oregon, will select a person to act as the mediator. The mediator's charges and expenses shall be paid 50% by Manager and 50% by the remainingparties to (he mediation. Mediationfees and costs do not include eachparty s attorney's fees aadcosts. Eachparty shall beresponsible for its own attorney fees and costs at mediation. In the event oflitigation to enforce the mediation agreement, the prevailingparty will beentitled to its attorneyfees and reasonable costs oflitigation incurred.

30. 2. Litigation. In case any disagreememt, diB'erence, or controversy shall arise between or among the parties relating to or arising out of or under this Agreement, includingany tort claims, andthe parties to thecontroversy cannotmutually agreeupon the resolution thereof and the mediation provided for hereindoes not provide a resolution, ftien such disagreement, difference, or controversy may be the subject of litigationshall bebrought in Marion County CircuitCourt for fhe State ofOregon. The

Page 19 SECONDRESTATED MANAGEMENT SERVICESAGREEMENT

Page 32 SSE:?oc5;veveDueforanylitigationshaubeintheci«:»itforth^tate

La1 B' The PMPerty is iocated in the State of £s.«... IL- AAP?'icaMSS^f«^SF="t-'l!ss'07ua£'^ Oregon. The ^gS^T^Z5r SS Ay

N%otiated &ffwasa- Ts Agreement has been ^. i3A A. by, negotiated by the

INWmjBSS WHEREOF, the parties have executed this Agreement below. MANAGES: Moonstone GardenMaBageaent, Inc.

By: c-Sti'*' ^. ^lx Wuitei^PnsideBt-""-^S^ CGF: By:^^L^^^^^^^ ? > Sam Brectano, Chair (Date)

MABION: Marion County ^r~~-- /y By: ^&^-^^^-^A-/L Jo^ll, atfmer, ^^i«f^i!nistTadve0^cer/(Date) SILVERTON: City ofSjfa^toT-^-^ BY: LXJ.L ;<-/$3 Bob W;Houghby, Rfty ManagiT (Date)

Page20 SECONDRESTATED MANAGEMENT SERVICES AGREEMENT

Page 33 Oregon Gardens Second Restated Management Services Agreement

APPROVEDAS TO FORM: .. je^^j^-. V^ ^ & /tTI Q Marion County Legal Counsel

JULi W5 Maria jt/Contracts Date

Page 34 EXHIBIT

TSE OKSGON GARDEN FROPERTy

Legal Description of a 61-Acre LeasedTract Located witfun the City of SavertoE Tracts Described in Reel 1247, Page 288, Reel 1282, Page 779, andReel 1241, Pages481 Bearings and distances in this dsscriptioa Eire grid and mteciatiocal feet, lespecdvely, and based on inversesbetween State Plane CooidinatesNAD 83(91)Datum, Zoue3601, OregonNmth. Begiruririg at-fhe southeast corner ofthat certain tract of land conveysdtothe City of Si'verton by deed recorded in Reel 1247, Page 228 of She Marion County Deed Records, whichpoint is located in Section 3 of Township 7 South, Range 1 West of the Wiilamette Meridiac, Marion County, Oregon, and running (hence North 01°45'40" East along the east line of said City of Silverton tract, a distance of 1499. 58 feet; thence North 90°00'00" West, a distance of 219. 12 feet thence North 33°15'38" West, a distance of9.50. 52 feet; thence North 35°38'18" West, a distance of 19. 18 feet; thence Ncarth 25°08'27" West a distame of 31.35 feet; Aeace North 16°25'14" West, a distance of 30.53 feet; thence North 07°47'17" West, a distance of30. 00 feet; thenceNorth 06°15'16"East, a distanceof 37. 02 feet; thenceNorth 18°28'10"East a distanceof 25.52 feet; thence North 28021'52" East, a distame of 29. 14 feet; fiience North 33°44'35" East, a distance of 26.90 feet; thence Nortfa 42°08'47" East, a distance of 24.07 feet; thence North 53°11'07" East, a distance of 26.05 feet: thsnce North 71°17'2l" Bast, a distance of 37.07 feet; thence North 74°23'15" East, a distance of 34.91 feet; theuce North 78°42'44" East, a distmce of 20.24 feet; thence North 54°01'38"East, a distanceof i. 7.62 feet; Aence North 32°46'04"East, a distance of 4.74 feet; fhence South 01°I9'10" East, a distance of 1C5. 82 feet; thence South. 89°58'05" East, a distance of 480,49 feet to the northeast line of said City of Silverton teact; thenceNorth 15°20'40" West alongthe northeast lane'of said City of Sflvertontract, a distanceof 790.63 feet to the northeast comer of said City ofSavertoa tract; thence Norife &8°08'15" West along fhe north line of said City of Silvertor. tract, a distance of 32.9. 78 &8t to ths nordwest comer of said City of.SUverton tract; thence Norifa 57°39'40" West alor-g ttie northeast iice of that certaintact ofland conveyedto the City ofSilverton by deedrecorded m Reel 1241, Pages 481 offhe Marion Coimty. Deed Records, a distmce of 258. 63 feet; flience South 44°54'59" West, a distance of 189.17 feet to the northeast comer of the I -acre Frank Uoyd Wright trai.-t; fheuce South 00°00'00"East along ftie east line of said 1-asre tract, a distacee of 183. i7 feet to the southeast comer of said 1-acre tract; thenceNorth 90°00>00" West along the sasteriy south line of said 1-acre teact, a distance of 110. 52 feet to an angle in the so'uthsriy tee of said 1-acre tract; thence South 47°35'15" West alosg &e southeast line of said I-acre tact, a distance of 255.06 feet to an angle in said south line; thsace North S9°44'59" Wsst alOEgtfae most westerly south,line ofsaid 1-acretract, a tlistaiKseof 52.47 feet; thence South22°45!38" East, a distanceof 45.80 feet; thence South 37°31'20" East, a di.itance of43. 64 feet; &eace South S2"54'54"East, 'a distajics of 50. 70 feet; fhencs South 69°54'52" East, a disTSMe of 42. 67 feet; theBce Si-uth 85°44'54" East, a distance of 54.46 feet: fcense North g5°58'42" East, a distaiice "f 41. 12 fset; thence North 72°37'2S" East, a distsuue cf 40. 56 feet; theace SoiA 66°42'1'7" Easi, a distaiice of 32.69 feet;theuce SouthS3°28'5 1" West, a distanceof 35. 46 feet; th.sncc Souifa7S°59'27" West, a distance of 39. 05 feet; tfaence Norfb. 90°00'00" West, a distance of 52.56 feet; thence North

EXHIBIT-T' n:\wpdocs\54

Page 35 84°26'20" West, a distance of 55.54 teet; thence North 67°52'26" West. a distance of 39.48 feet; tfaeace North 54°38'22" West, a distance of 45.44 feet; fhence North 40°49'14" West, a distance of 51. 69 feet; .thence North 24°20'52" West, a distance of 45. 89 feet; thence North 14°33'45" West, a distance of 37. 66 feet; fheace North 00°00'00" East, a distance of 40. 37 feet; fhence North 01°50'58" East, a distance of 82.50 feet; tiience North 06°07'40" East, a distance of 113. 10 feet; theuce North 03°44'14" East, a distance of 27.24 feet; fhence North 03°06'01" West, a distance of 27. 61 feet, thence North l8°00'10" West, a distance of 28.95 feet; thence North 29°24'25" West, a distance of 27.32 feet; Aence North 43°16'03" West, a distance of 33. 81 feet; tiienee North 53°11'07" West, a distance of 1 8. 60 feet; fheace North 62°14'36" West, a distance of 11.21 feet; fhence South 20°29'50" West, a distance of 307. 13 feet; flience South OO'OO'OO'" West, a distance of 710. 64 feet; thence North 89°56'53" East, a distance of 330. 46 feet; theace South 00°00'00" West, a distance of 1108.97 feet; tfaeace South 58°47'40" East, a distance of 755.27 feet to the most southeriy west line of that certain tract of land conveyed to the City of Silverton. by deed recorded in Reel 1247, Page 288 ofthe Marion County Deed Records; thence South 02°03'40" West along said southeriy west line, a distance of 279.26 feet; thence South 45°51'40" East, a distance of 737. 93 feet to the point of beginzung; and contoining 61 suaes, more or less.

EXBBBrr "I" nAwpdocs\S4615065\mgtagmt41. do

Page 36 EXHIBIT"10. 0"

Water Managammt Agfsemsa't the Parties intendto provide a means for flie Managerto carry out the responsibilities for the management of the Water Irrigation Systems thai service &- Oregon Gardens, and. which provide a major wetland support for the City of Siiverton (the "City'). Tke City adopted an Oregon Garden Water Maisagemert P;an prepaied by HDR ^Engmeenng Inc. ia November 2000, hereinafter referred to as the "Plan". Tfle Plan has guided (he provision of flow mmagement for the effluent generated by the City's Wastewater Treatment Plant (the Plant hereina.fter). The Plan is designed to effectivety -utaize the effluent and to protect md entiancedie v/etlands onthe OregonGarden, andto provide a cost effective irrigationsource for the Garden. The City hadagreed with theOregon Garden Foundation to implanent the Plan. The Manager is nowreplacing the role played by the Foundation m the Plm. This Agreement summarizes the responsibilities of each party. NOW, THEBSFOKE, in consideration cf the mutaal pronuses and obHgatioas of the parties,Macaager and City agreewith eachother as follows: . 1. The parties shall work cooperatively and in good faith, for the implementation ofthe Plan. The Plan is by fhis-reference incorporated herein. 2. The City agrees to continue to provide finished high quality ef3ueat from thewastewater treabnent plantto the Manager for usein the Garden andthe wefland areas. 3. TheManger shallfollow the specifications ofthe Plan m themanagement ofthe effluent flow. 4. The Manager shall make an annual budget application to tfae City for operations of the irrigation system. All costs of the irrigation system from the diversion point to the emittec nozdea wili be shared 80percent by fhe Manager and20 percent by the City. Tie City will bear 100percent ofthe costs ofnumaging the flowto andbetween flie wetland ponds fhroughout the wtlaud system. Ifthe City audManager come to agreement rega'dingthe cost sharingbudget; it shall be siAmitted to the City for final review asd adoption by the City's Budget Committee andCity Council. 5. . Once the mnual budget application is approved by the City, Ihe Manager agrees to suhant a request for reimbursement to tile City of SUvertoa, Oregon for tfae inigation plan operation in May md November ofeach year forthe prior six months imgation. 6. The City shall be in breachof tfais Agreement ifthe City doesnot budget orpay forthe Plan implementation in each year. 7. The Manager shall be in breachof this Agreement if the Managerdoes not manage fhs inigation system in accordance wifh(he specifications ofthe Plan.

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Page 37 8. ThisAgreement shall not beassignable except at the written consent of the parties hereto, andif so assigned, shall extend to andbe bindingupon the successors and assigns of the parties hereto.

9. This Agreement will be govecned by the laws ofthe State of Oregon. 10. This Agreement shall be in effect for a period oftwenty (20) years from fhe date ofthis Agreement.

11. If a breach of this Agreement shall occur, the parties may exercise any of the following rights and remedies, in additionto any other remedies whictimay be available at law, in equity, ar otherwise:

11. 1 City may, after 20 days notice of default to Marion Ccnmty, and after 10 days notice of defiwlt to Manager, disconnect the City's potable water system from the Oregon Garden. This discomiection shall be a result offlus ccmtract, andnot as a result ofany ordinance or resolution describing disconnection fmm the City utility system.

12. This Water Management Agreement is not subject to the dispute resolution provisions under Section30 ofthe ManagementServices Agreement.

WTTNESSETH:

The parties have executed this Water Management Agreement asoftfae day fiist set forth above.

MANAGER: Moonstone Garden Management Inc.

By: 'A. y. DiA Winter, President

SILVERTON: City pfSiIverton, Oregon ^y By: dS-^w s4^ Bryan Cosgrove, CityMauager

SXHIBIT"10. 0" a:\wpdocA546I5065\mgtagmt41. doc\lsg 7/1&0708-27

Page 38 SXBBBIT"i6. 1"

i of9. 1 AcreProperty (4. 3 Acres]}

A tract of land situated in Sftttion 3.. T'yvmssss 7 s0Sn,.^tl, »«..". i n,-. ^,,,. Marion Cmmty, 'Q[swa~^^^^^^p^, Aaa^ 1 wes!> WUJamgtte Msu&ao, ^^i^S^sS^foS^S ^°f, partiti

EXfflBn'-liS. l- n:\wpiioCT\546IS06flmEtagmt41. docV3g 7/1&W08.-27

Page 39 Legend ^V COIBTEY ^^ STATRHWy wjajms fl-l-Ll WETLANDS

Un. = 704ft. Vicinity

U m»«sipnifaad uibin toMlrion CuntoQB d.u Tttwnlwitth &^ Tohib' . t i Page 40 Page 41 LEASE AGREEMENT

The Oregon Garden Project Silverton, Oregon

Landlord: City of Silverton (City) 306 S. Water Street Silverton, Oregon 97381 Faxtelecopier (503) 873-3210

Tenant: Oregon Nurserymen's Garden Foundation (ONOF) 2780 S. E. Harrison, Suite 204 Milwaukie, Oregon 97222 Fax telecopier (503) 653-9558

This is an exclusive lease of 140 acres of land located at 879 West Main Street and named the "Property" anddescribed in ExhibitA attached. An additional 80 acres locatedat 4592 Pettit Lane N.E. named the "Pettit Property" may be added to the Property at a later date according to the tenns ofthis Leaseif andwhen (he "Pettit Property" falls withinthe definition ofthe Property and described in Exhibit B attached.

The purpose of this Lease is to enable the ONGF to establish a world class botanical garden for research, education, display, recreation, and for the public enjoyment as a major tourist attraction. for Oregon (Oregon Garden) and a reclaimed water distribution system for the City. The operationis named "Garden"for the purpose ofthis Lease. The ONGFintends to operatethe Garden for the benefit of the general public and to charge an admission fee. Included would be display gardens, special visitorfeatures, education, researchactivities, related facilities suchas picnic areas, amphitheater, parking, ponds, gift shop, restaurant, andother facilities related to fhe destination attraction.

The purpose for the involvement ofthe City is to utilize the Property to (1) reusetreated waste water (hereafter reclaimed water), irrigation and wetland mitigation; (2) enable ONGF to create the Garden as a tourist and educational attraction for the community and the State; (3) preserve and enhance the beauty and natural features of the Property; (4) diversify the community's economic base; and (5) minimize waste water treatinent expenses and generate revenues as a return on the City's capitalmvestment.

LEASEAGREEMENT The Oregon Garden Project - SUverton, Oregon October28, 1995 - Page I

Page 42 Section 1. Occupancy

1. 1 Original Term. The terra of this Lease shall commence on November I , 1995 and continue through December 31, 2095, unless sooner tenninated as hereinafter provided

1. 2 Access and Possession.

(1) Possession. City shall retainpossession of the Property andaccept tiill maintenance responsibility of the Property until the time fail possession is granted by the City in writing to ONGF. Granting ofpossession shall occur after ONGF and City approve the Master Plan, ONGFprovides evidence to the City ofSUvertonofONGF's financial commitment asdescribed in Exhibit C, and ONOF provides the City with 60 days written notice of its desire to take possession ofthe Property and ONGF'sreadiness to proceed with development. City shall issue a written notice to ONOF granting possession on a date certain, which shall not be unreasonably withheld.

(2) Access. (a) ONGF. Priorto thetime it takes full possessionof the Property, ONOF,its employees, agents andrepresentatives, shall be granted full access to the site for purposes ofsite investigations, design,tours, or otherreasonable garden related activities. ONGFagrees to notify City prior to visits andagrees to minimize impacts onboth tenants residing onthe Property and on fann-related operations. (b) City. Cityretains full rightsof access to theProperty forpurposes of construction, maintenance, inspection or any other activities deemed necessary throughout the term ofthe Lease. Once ONGF hastaken possession ofthe Property, Cityagrees to notify ONGF prior to visits and agrees to minimize impacts on Garden operations. 1.3 Renewal Option. If the Lease is not in default, ONGF shall havethe option to renew this Lease for an additioual 99 years. At each Review Period scheduled every 10 years (as defined in Section 1. 8) theterms canbe extended by mutual agreement ofthe City and ONGF. Renewal is subject to the following conditions: (1) The option to renew may beexercised by written notice to City givenno; less than one year or not more than five years prior to the last day ofthe expiring term. The giving of suchnotice shall be sufGcientto make the Leasebinding for the renewalterm withoutfarther acts of the parties. (2) Theterms andconditions of the Lease for the renewal term shallbe identical with the original term.

LEASE AGREEMENT The Oregon Garden Project - SUverton, Oregon October 28, 1995 - Page 2

Page 43 1.4 Expansion of Lease. City shall maintain an option to purchase the additional 80 acres of property known as the Pettit Property. City shall assure that it has the ability to assign the option to ONGF. City shall notify ONGF at the time that the ability to exercise the City option is available. Consideration of options for acquisition will be conducted' in the following order:

(1) City will purchasethe Pettit Property for the purpose ofexpanding the reclaimed water distributionsystems and to expandthe Garden. Funds will be obtainedby the City to support the purchase and installation of irrigation aud related facilities. The Property shall be redefinedto includethe Pettit Property and shall be subjectto the terms of this Lease unless a separate lease for the Petdt Property is negotiated..

(2) City shall purchase the Pettit Property. The Property shall be redefined to include the Pettit Property and shall be subject to the terms ofthis Lease unless a separate lease for the Pettit Property is negotiated. City will not pursue condemnation for acquisition ofthe property.

(3) In the event the City elects not to purchase the Pettit Property within two years of the ability to exercise the option. City shall assign the option to purchase the Pettit Property to ONGF so that ONGF may exercise the purchase option. If the Pettit Property is purchased by ONGF, it shall not be part ofa the Lease.

1. 5 Commencement of Construction. ONOF must commence construction of the Garden onthe Property by December31, 1999 or this Leaseshall beterminated withneither partyhaving any further liabilityto the other. Bothpardes may agree in writing to extendthis deadline.

1. 6 Commencement of Operations. ONGF must commence operations ofthis Garden by opening the Garden to the public by December 31, 2005 or this Lease shall be terminated. If circumstances beyond the control ofONGF prevent opening the Garden, the City shall not unreasonably withhold an extension ofthe opening date.

1. 7 Condition to Proceeding. City has assured that the Property has been obtained and all land use requirements including urban growth boundary, plamiing, zoning and annexation to the City ofSUverton has beenaccomplished. Such certification is attached as ExhibitD. Ifthe Joint Venture is tenninated, the Lease is terminated.

1. 8 Review Period. The Review Period is scheduled for 10 years from the date that ONGF begins collecting paid admissions and each 10 year period thereafter. Both parties agree to review all terms and conditions ofthis Lease. Any changes to the Lease must be prescribed iu the Lease or amendments to the Lease and are subject to mutual approval.

LEASEAGREEMENT The Oregon Garden Project - SUverton, Oregon October 28, 1995 - Page 3

Page 44 Section!. Rent

2. 1 Initial Rent. For the period of construction of the Garden and for the first five years after the ONGF begms collecting gate admissions revenue from the general public, rent shall be $1 per year.

2.2 Rent for Years 6-10 of Garden Operation. Commencingon January 1 of the year following the fifth yearof collection ofgate admissionsrevenue from the general public, ONOF shall pay rent to the City based upon a formula related to the total admissions, admissions revenues, andmembership dues attributed to annualpass privileges providedto members. Rent shall be calculatedon the basisof total admissions andaverage paid admissionsas follows:

(1) Assure a minimum rent as prescribed in Section2. 7 belowfor the first 100, 000 annual visitors.

(2) 2% of the averagepaid admission multiplied bythe number oftotal admissions from100,000 to 400, 000 annual visitors.

(3) 8% ofthe averagepaid admissionmultiplied bythe number oftotal admissions from 400,000 to 800, 000 annual visitors.

(4) 10% ofthe average paid admission multiplied by the number oftotal admissions above 800,000 annual visitors.

2. 3 Paid Admissions. Paid admissions is defined as all visitors that pay upon entry to the Garden including individuals, groups, senior citizens and children plus a portion of standard member subscriptions. Paid admissions would be calculated annually by adding the total admissions to the annual standard member subscriptions revenue multipliedby 30%. Standard member dues does not include contributions by members above the standard.

2.4 Average Paid Admissions. Average paid admissions is defined as the total annual paid admissions (Section 2.3, paidadmissions plus 30% ofstandard member subscriptions) divided by the total number of admissions that year. The Average Paid Adniissions shall be used in the calculation ofpercentage rent to be paidto the City in the formula described in Section2.2 above.

2. 5 Rent After Initial 10 Years. Both parties agree that the formula for rent for the first 10years shall beapplied according to theprovisions in Section2. 1 to 2.4 withoutexception. Beginning withthe following year, rent to the City shall becalculated on the basis ofannual cash flow as described in Exhibit E attached to this Lease, Annual payments shall be made to the City

LEASE AGREEMENT The Oregon Garden Project - Silverton, Oregon October 28, 1995 - Page 4

Page 45 equal to 20% of the positive cash flow for the previous year of operation or the minimum payment as described in Section2. 7 belowwhichever is greater.

2.6 Silverton Day. ONGFshall provide one dayper year in whichall admissionsto the Garden on the specified daywould be dedicatedto the City ofSilverton arid known as Silverton Day. Silverton Day is to be a aon-holidayweekday or weekendnot in conflict with ONGF program activities and selected by fhe City. The City shall be allowed to set its own admissionrate and utilize the Gardenfor community promotionor special events in keeping with the pupose of the Garden. The proceeds from the admissions would be provided to the City.

2.7 Minimum Rent. Commencing on year 6 as determmed in Section2. 2 above, ONGF agreesto assure a minimum annual rent of$7, 500 to the City. The revenue from Silverton Day provided in Section 2. 6 is included in the calculation of minimum rent.

2.8 Concession Revenues. Concession revenues are gross sales revenues for all activities withinthe Gardenincluding gift shop, amphitheater,food service, nursery sales or other on-site ONGF owned and operated concession activities not including a formal sit down restaurant. All concession revenues shall be that of the ONGF.

2. 9 Enterprise Activities. Enterprise activities are defined as all other revenue producing activities not specifieally included in Concession Revenues. City and ONGF shall share revenues from Enterprise Activities including a formal sit down restaurant, if established. Enterprise Activities and related responsibility and revenue sharing shall be approved by ONGF and City before such activities are commenced.

2. 10 Payments. ONGF shall provide an annual report ofpaid admissions based upon the calendar year by March 1 of(he following year. The initial year ofpayments shall be prorated for the number ofdays applicableto rent for that year. ONGFshall provide payment by April lof the following year. Latepayment shall bearinterest at 1%per month ofthe unpaid balance overdue.

Section 3. Use of Property

3. 1 Property. ONGFshall usethe Property for a display gardenopen to the general public. Approved uses may includedisplay gardens andresearch gardens (i.. e. rose, rhododendron, conifer, tulip, organic, environmental, nature), educationconference center, food service, picnic areas, gift shop, amphitheater, andrelated support facilities asmay be deteimined in the Master Plan. Other activitiesmay be conductedon the Property with approval of ONOF and City.

3.2 Garden. ONGFshall establisha display gardenon the Property for whichan admissionwill be charged. Section2 addressespayments to the City for uses withinthe defined

LEASEAGREEMENT The Oregon Garden Project - SUverton, Oregon October 28, 1995 - Page 5

Page 46 Garden area. All uses inside the admission area are included in the lease payment requirements ofthis Lease except for the formal sit down restaurant. All uses outside the admission areaare considered Enterprise Activities andrequire City approval and Leasepayments separate &om this Lease.

3. 3 Master Plan. ONGF shall develop and maintain a Master Plan which must be approved by the City. The Master Plan will be designedto maximize the volume ofreclaimed waterutilized on the site. Construction offacilities must be approvedby the City andmust be consistent with the adopted Master Plan. City will not unreasonably withhold approval of the Master Plan.

3. 4 Wetlands.

(1) Initial Wetlands. The City shall develop approximately eight acres of wetlands that are identified as "Phase I Wetlands" on the attached map Exhibit F of this Lease. ONGF must assure compliance with regulations and permits for the maintenance ofthese wetlands.

(2) AdditionalWetlands. ONGFagrees to accommodatethe development ofan additional eight acres ofwetlands in the Master Planfor the Garden for a total - City developed - wedands notto exceed 16 acres. The development ofup to 16 acres ofwetlands is the financial responsibility ofthe City. Any additional wetlands proposed in the Master Planare the responsibility ofthe ONGF. ONGF agrees to comply with all applicable regulations for the wetlands and to maintain the wetlands as part ofthe Garden.

3.5 Restrictions on the Use. In connection with use ofthe Property, ONGF shall:

(1) Conform to all applicable laws andregulations ofany public authority affecting the Property. (2) Refrain from any activity that would violate laws regarding nuisances. (3) ONOFmay use or otherwise handle onthe Property only those hazardous substances typically used or sold in the prudent andsafe operation ofthe Garden. ONGF shall comply withall environmental lawsand exercise care in the use, handling, and storage of ha22rdous substances and shall take all practicable measures to minimize the quantity and toxicity ofhazardous substances, used, handled, or stored onthe Property. The term environmental law shall mean any federal state, or local statue, regulation, or ordinance or any judicial orother governmental orderpertaining to theprotection of health, safetyor the environment.

LEASE AGREEMENT The Oregon Garden Project Sih'erton, Oregon October28, 1995-Page 6

Page 47 3.6 ExistingImprovements. City shall retain ownershipof existing land and improvements as identifiedin Section 15.5 below. Until ONGFtakes possession, City shall have the right to rent facilities on the condition that all rentals contain a maximum 60 day notice provision that accommodates ONGF ability to take possession of the Property inclusive ofthe existing improvements. Any demolition of existing improvements requires written approval of both parties or agreement in the Master Plan. Once ONGF takes possession, ONGF shall have the right to use existing improvements as part of the Garden or in support of construction at no additional rent; and City and ONGF must approve the terms, conditions, and rent of any sublease of existing improvements to a party other than ONGF. Revenues and responsibilities of the parties shall be detenninedwith the written approval ofrental.

3. 7 Farm Use. Any agreement for farm use requires the approval in writing of both parties beyondDecember 31, 1995. Priorto ONOFpossession. City shall beresponsible for developing and administeringany agreementfor farm use. AU revenues andresponsibilities of suchan agreementshall belongto City. Any agreementto conduct farm use afterpossession by ONGF shall require written approval ofboth parties which will include distribution of revenues and responsibilities. In the event that ONGF requires termination of farm operations based upon anagreement approvedby ONGF,ONGF agrees to eitherpermit harvest ofthe existing crop or to be responsible for any compensation to the farmer as required in the agreement.

Section 4^ Irrifia&m an

4. 1 Waste WaterTreatment. ONGFagrees to acceptreclaimed water fi-om the City wastewater treatment facility forpurpose ofirrigation and reuse up to the maximum amount allowedin the NPDES(National Pollution DischargeElimination System) permit to be obtained by the City. The pipe and distributionsystem will be sizedadequately to property receive specified volumes ofreclaimed water and distribute it on the Property in a manner that is consistent with the Master Plan and adequate for the City. Adequate level is defined as sufficient to accommodate the maximum volume of reclaimed water deteimined in Section 4. 10 below.

4.2 Cost Included in the Lease. The price ofproviding reclaimed water from the City is included in overall lease payment specified in Section 2 in this Lease.

4. 3 Installation. The cost of installation of the main line and initial reclaimed water distribution system on the initial 140 acres ofthe Property will be the responsibility ofthe City as specifiedin the JointVenture Agreement.

4. 4 Maintenance. The maintenance of all main line and reclaimed water distribution systems on the Property will be the responsibility of ONGF. ONGF agrees to maintain the systems to an adequate level to assurereceipt ofreclaimed water from the City.

LEASEAGREEMENT The Oregon Garden Project - Silverton, Oregon October 28, 199S. Page 7

Page 48 4. 5 Permit Requirements. ONGF agrees to adhere to ail permit requirements established as conditions for this reclaimed water distribution system.

4. 6 Reclaimed Water Supply. The City ;s responsible for assuring that the reclaimed water is available to the Property, Aii niaintenance, reguiatior-s acid rsplacement of the- system not on the Property will be the respossib'.lity oftne City, ONGFshall have the first right {o all of the City's reclaimedwater within the volumes definedin Sec'rioa4. 10 below subject to the NPDES permit requirements.

4.7 Reclaimed Water Quality. The City shall b" responsible to assure that the reclaimedwater that is providedto the Gardenis ofsufficieffi:quality as follows:

(1) No federal or state waterquality standards establishedfor this permitted activity are violated.

(2) City shall be responsible for noxious odors resulting from the use ofreclaimed wateron the site. City will expedite eiiminatingany such odor to the extentpracticable. City shall provide an alternative source ofwater until noxious odoTS are eiimiaated from the use of reclaimed water. The replacement waterprovided by the City shall be part ofthe Leaseand shall be in an amountthat is necessaryto assure survivability and contmued growthof the Garden. The provision ofthe replacement water shall not threaten the health and safety ofthe citizens of Silverton.

(3) City shall accept responsibility for damage to the Uarden caused by the provision ofreclaimed waterthat is outside ofthe ascertainable ranges ofquality asestablished in Exhibit 0 ofthis Lease. Both parties agree to review these standards by January 1, 1997 based upon the Master Plan andat eachsubsequent Revisw Period.

4. 8 Non-Garden Areas. The total acreage ofthe initial 14U acres of the Property is avaUable for reclauned water distribution. ONGF agrees to manage aieas not included in the Gardenin activities that wouldsupport the receiptof reclaimed water includingplantings, irrigation and water features, 4.9 Supply. City agreesto supply ONOFan amount of'eclaimedwater as defined in 4. 10 below for the operation ofGardeu acdthe Property accordmg to the Master Plan for the deveiopmect of the Property- ONGF agrees to accept the reciaimsd water for iirigation, reuse and water treatment. The pipe and distribution system shall be sized adequately to receive the amount ofreclaimed waterto serve the Gardenas determined ir; Section4. 10 below.

4. 10 Volume. The City and CNGF shall establish misiararei and maximum volumiss of reclaimed water by Januaiy 1, 1997, based upon the Master Plan of the Garden and the City's NPDESpermit.

LEASEAGREEMENT The Oregon Garden Project - SLiyertca, Oregon October 28, 1995 - Page 8

Page 49 4. 11 WaterRights. City agrees to preserve existingwater rights on the Property for use within the Garden subject to limitation of state law. City shall provide full use of water rights to ONGF.

Section 5. Repairs and Maintenance

5. 1 City Obligation. City shall be. under no obligation to make or perform any repairs, maintenance, replacements, alterations, or improvements on the Property after initial construction ofthe reclaimed water distribution system except as otherwise provided in this Lease.

5.2 ONGF Obligation. ONGF, at its expense, shall maintain the Garden including the irrigationsystem, reclaimedwater distribution system, andwetland in compliance withpeimit requirements.

5. 3 Reimbursement for Repairs. If ONOF fails or refuses to make repairs that are required to meet permit requirements, the City may, after 30 days written notice to ONOF, make the repairs and charge the actual cost of repairs to ONGF. Such expenditures by City shall be reimbursed by ONGF on demand together with interest at one percent per month on the outstanding balance from 90 days after the demand.

Section 6. Insurance

6. 1 Casualty Insurance. ONGF shall procure and maintain insurance policies covering the risks of directphysical loss on a replacement value basisas commonly insured in a multi-peril msurance policy for the benefit ofCity, Permitted Leasehold Mortgagee (Section 14. 1) and ONGF. ONGFshall provide the City withproof of msurance, notificationin the event ofcancellation and the opportunity to cure any delinquentpremiums.

6.2 Liability Insurance. During the term ofthis Lease, ONGFshall maintainpublic liability andproperty damage insurance. City andPermitted Leasehold Mortgages are named msureds.

6. 3 Proceeds from Insurance. In the event of casualty loss proceeds shall be paid: (1) if 10% or more in excess ofreplacement cost to Permitted LeaseholdMortgagee, if any, otherwise, ONGF; (2) if less than replacement cost, to ONGF.

6.4 Replacement. ONGFis responsible for replacement ofdamaged improvements.

6.5 Reclaimed WaterDamage. City shall provide insurance or indemnity against damages caused by reclaimed water supplied by the treatment plant that does not meet agreed ascertainable standards as contained in Exhibit G. City shall provide annually proof of

LEASEAGREEMENT The Oregon Garden Project - SUvertoa, Oregon October28, 1995-Page 9

Page 50 insurance and level of coverage to ONOF. ONGF shall provide annually to the City an estimate ofthe value of improvements on the Property. Coverage limits may be increasedupon agreementby both parties.

Section 7. Taxes

7. 1 Property Taxes. ONOF shall pay as due all real and personal property taxes and special assessments levied against the Property,

7.2 Contest ofTaxes. ONGFshall be permitted to contest the amount of any tax or assessment as long as suah contest is conducted in a manner that does not cause any risk that the City's interest in the Property will be foreclosed for nonpaymem.

7. 3 City Taxes. City agrees not to levy special taxes on the Garden operation including admissionstaxes, entertainmenttaxes or other taxes thatwould directly affectadmissions revenue. In the event that such a tax is levied, ONGF shall deduct an amount equal to the tax levied by the City from rent payments described in this Lease.

7.4 Property Tax Exemption. ONGF is a nonprofit corporation and anticipates an exemption from the local property taxes levied by Marion County. Theresponsibility for obtaining this exception is ONGF's. In the event property taxes are levied, ONGF shall pay requiredtaxes andsuch amounts wouldnot be considereda City tax as describedin Section 7.3 above.

Section 8. Damage and Destructjfin

8. 1 Casualty Loss.

(1) If the Property is damagedby any casualtywhich is coveredunder fire and extended coverage insurance sarried on the Property, then ONGF shall restore any damagethat impairsthe reclaimedwater distribution requirements for the City.

(2) If the Property is damaged by any casualty which is not covered 'ay msurance or the proceeds ofavailable msurance are less that one hundred percent (100%) ofthe cost of restoration, then City shallpay for the cost ofrestoratioa for the reclaimedwater distribution systems. The City and ONGF shall endeavor or develop mutual agreements on the restoration plan. If unable to agree, the City canrestore the reclaimed water distribution system at its discretion.

LEASEAGREEMENT The Oregon Garden Project - Silverton, Oregon October 28, 1995 - Page 10

Page 51 Section 9. Liens

9. 1 Liens. Except with respect to activities for which the City is responsible, ONGF shall pay as due all claims for work done on and for servicesrendered or material furnishedto the Property, and shall keep the Property free from any liens. IfONGF fails to pay any such claims or to discharge any lien, the City may do so and collect the cost as additional rent.

Section 10. Assignment and Subletting

10. 1 Subletting. ONGFshall have the rightto sublet anypart ofthe facilities and improvements owned by ONGF so long as the sublease does not extend beyond the term and conditions of the Lease or renewals thereof and does not encumber the Property.

10.2 Property. Nopartofthe Property exceptforthoseprovidedinSection 10. 1 above may be assigned, mortgaged, or subleased, nor may a right ofuse of anyportion ofthe Property be conferred on my third person by any other means, without prior written consent of both parties whichconsent will not beunreasonably withheld.

10.3 Timely Response. The City and ONGF shall not unreasonably delay consent or otherwise unreasonably withhold consent if the ONGF is seeking approval for contractors, subcontractors and other activitiesthat support the development ofthe Garden.

Section 11. Default

The following shall be events ofdefault:

11. 1 Default in Rent. FaUureof ONGF to pay anyrent or other chargewithin 120 days after it is due.

11.2 Default m Other Covenants. Faillire of ONGF to comply with any tenn or condition or fulfill any obligation ofthe Lease, other than the payment ofrent or other charges, within 30 days after written notice by the City specifying the nature of the default with reasonable particularity. Ifthe default is of such a nature that it cannot be completely remedied within the 30 day period, this provision shall be complied with ifONGF begins correction of the default within the 30 day period and thereafter proceeds with reasonable diligence and in good faithto effect the remedy as soonas practicable.

11.3 Other Acts ofDefault. An assignment by ONGF for the benefit of creditors; the filing by ONGF of a voluntary petition in bankruptcy; an adjudication that ONGF is bankrupt or the appomtment of a receiver ofthe properties ofONGF; the filing of any involuntary petition of bankruptcy and failure on ONGF to secure a dismissal ofthe petition within 30 days after filing;

LEASEAGREEMENT The Oregon Garden Project - Silvertnn, Oregon October 28, 1995-Page 11

Page 52 attachment of or the levying of execution on th.; leasehold interest and failure ofONGF to secure discharge of the attachment or release of the levy of execution within 10 days shall constitute a default.

11.4 Abandonment. Failure of ONGF for 60 days or more to occupy the Property for the purpose permitted in this Lease, unless such failure is excused under other provisions of this Leaseor by the express writtea consentof the Ciiy.

11.5 City Defzalt. Failure of the City to proi'ide reclaimed water or aitemarive water fo? a period exceeding30 coasscativsdays as specifiedin this Leaseupon written notice ofONGF is a default by the City.

Section 12. Remedies on Default

12. 1 Termination. In the event ofa default, the Leasemay be terminatedat the option ofthe non-defaultingparty by written 15 day notice to the defaultingparty.

12.2 Remedies. Upon an uacureddefault the non defaultingparty may cure the default and seekreimbursement fsomthe defaultingparty or teiminate the Lease. Dispositionof the Property upon termination:

a. In the event oftennination because ONGF determined to locate the Garden at some other site, OKGF shall pay City for its non-recoverable expenses which are agreed to be $500, 000 and shall have no further obligation.

b. In the event the Garden or ONGF fails or ceases to exist due to insufGcient funds or anyother reason whatsoever and the Gardenis not relocatedthe Leaseis terminatsd and ONOF shall vacate the property and shall be (eiieved ofany further obligation.

c. In the event City fails to auppiy the reclaimed water, alternative water, or otherwise defaults, ONGF shall have the ootion to purchase the Property for $250,000. Upon the exercise ofthis optionto purchaseby ONOE,the City shallhave no obligationunder the Lease and ONGF shall have no obligation to the City for reclaimed water distribution or wedaads

Section 13. Surrender at Expiration

13. 1 Condition of Property. Upon expiration ofthe Lease tenn or any extension thereofor earlier terminaiionon account ofdefault by ONGF,ONGF shall deliver all keys to the City and surrender the Property including all facilities and improvements,

LEASEAGREEMENT The Oregon Garden Project - SUvertoa, Oregor. October 28, 1995 - Page 12

Page 53 Section 14. Garden Financine

14. 1 The parties acknowledge that the project will require some outside financing by ONGFand that the financing sources will, in all probability, require appropriate security interests in the Property and/or income stream generated by the Garden and related activities. In addition, the City may be subject to certain limitations, restrictions, andconditions relating to the Property associated with funds received by the City as part of its reclaimed water distribution system and environmentallyrelated permits. Bothparties agree to proceedin good faithto addto this Lease Agreement by way of an addendum at the appropriate time provisions relating to Garden financing and the security therefore in the Property and other Garden related assets.

Sectifln_15. Modifications. Additional Improvements

15. 1 Improvements. ONGF may modify the improvements which are consistent with the Master Plan (including demolition of existing improvements) on the Property and may make additional improvements to the Property at any time. Improvements consistent with the Master Plan can be iniliated by ONGF through the normal City permit process and requires no special review.

15.2 ONGFTitle. Title to all improvements and additionalimprovements fundedby ONGF shall be and remain in ONGF.

15.3 City Title. Title to all improvements andadditional improvements fundedby City shall be and remain in City.

15.4 Joint Title. Title to all improvements and additional improvements funded by ONGF and City shall bejointly held according to the percentage ownership held by each party.

15. 5 Existing Improvements. Tide to existing improvements on the Property as listed in Exhibit H shaU be and remain in City.

Section 16. Indemnity

16. 1 ONGF shall be in exclusive possession ofthe Property and City shall not be liable for any injury or damage to any person or property from whatever cause except that causedby the reclaimed water that City is obligated to supply and any enterprise activity that includes the City either in operations or in receipt of revenue.

16. 2 ONGF Indemnifkation. ONGF shall indemnily and defend the City, its ofGcers, employees, and agents from any claim, loss, or liability arising out ofor related to any activity of ONGF on the Property or any condition ofthe Property in the possession or under the control of

LEASE AGREEMENT The Oregon Garden Project - Silverton, Oregon October28, 1995 - Page 13

Page 54 ONOFexcept from events causedby the provision ofreclaimed wateror actionsby the City. ONGF shall indemnify and hold City harmless against all liabilities that may be imposed on or incurred by City by reason of any of the following:

(1) Work done on the Property by ONGFor contractor ofONG?.

(2) Any operations of the Garden or otherwise on the Property for its mEenaed pi upose.

(3) Negligence of ONGF or any of its agents, empl oyees. inviises. .'ubiwsses or licensees.

(4) Injury or damage to any person or property occurring on the Pmperty related to Garden activities.

(5) Failure of ONGF to perform any provisions of this Lease.

16. 3 ONGF shall defend City &om any such claims as included in Section 16. 1.

16. 4 City Indemnification. City shall indemnify and defend ONGF, its officers, employees, and agents from any claim, loss, or liability arising out of or related to a&y activity of ONGFon the Property or any conditionof the Property in ihe possessionor imderthe control of the City. The City shall mdemnify andhold ONGFharmless againstal; liabilities that may be imposed on or incurred by ONGF by reason of any of the following:

(1) Workdone on the Property by the City or contractor ofthe City.

(2) Distributionof reclaimed water.

(3) Negligenceof the City or any ofits agents, employees, iavitees, subiiiss?£3or licensees.

(4) Failure ofthe City to perform any provisions ofthis Lease.

16. 5 City shall defend ONGF from any such claims as included in Section i6.4.

16. 6 Joint lease activities shall specifythe responsibilityand liability ofthe parties.

Section 17. Condemnation

17. 1 If all the PrepeTty is taken by eminent domain by other governmental entities. or that portion taken which b. ONOF's sole judgment recdeis the remaiuf.ie't act su'taaie ;c fstore and continue the Gardeniiud other related activities, then at ONG? option, &'s Leasemay be

LEASEAGREEMENT The Oregon Garden Project - Silverton, Oregon October 28, 1995 - Page 14

Page 55 terminated without penalty. It is the intent ofthe City not to use condemnation authority with regard to the leasehold interest ofONGF.

17.2 If so tenninated City shall be entitled to thatportion ofthe awardreferred to as the "LandAward". ONGF shall be entitled to that portion referred to as "LeaseholdAward".

17. 3 If less thanall the Property is taken City shall be entitled to that portion ofthe award referred to as Land Award . If there is a Permitted Leasehold Mortgagee it shall be entitled to the balance up to the amount owing on the debt with the remainder to ONGF, and if there is no Permitted LeaseholdMortgagee, ONGFshall be entitled to the balance.

17. 4 Any dispute over the division of the award shall be decided in the same court in which the condemnation action was brought.

Section 18. Dispute Resolution

18. 1 In the event ofany claims, controversies anddisputes, whetherthey be statutory, contract, or in fort (includmg claims of misrepresentation, concealment, negligence or fraud) between or among any of the parties, which arise out of or are related to this Lease, or which relate to the interpretation or breach of this Lease shall be resolved by the parties whenever possible.

18.2 In the event that the parties are unable to resolve the claim, controversy or dispute, theparties agree to resolve the issue m accordancewith the process ofmediation. A request for appointment ofa mediatorshall be submitted to the WiIIametteUniversity Centerfor Dispute Resolution (WUCDR), attention Director. In the event the WUCDR ceases to exist, an alternative for mediation shall be selected by mutual agreement The parties agree to participate in good faith with the appointed mediator. Any dispute arising between the parties relating to or concerning this Lease which is not resolved by mediation shall be resolved by Marion County Circuit Court. Nothingherein shall prevent a party from filing an appeal or petition for review with the Oregonappellate courts. All costs for the mediationshall be split equally amongthe parties.

18.3 Each party to this Lease shall bear the costs ofattorney or other representative who shall assist or represent the party in mediation and its own court or other costs.

Section 19. Miscellaneous

19. 1 Nonwaiver. Waiverbyeitherpartyof strict performance ofany provision ofthis Leaseshall not be a waiverof or prejudice the party's rightto require strict performance ofthe same provision in the future or of any other provision.

LEASEAGREEMENT The Oregon Garden Project Silverton, Oregon October 28, 1995 - Page 15

Page 56 19.2 Attorney Fees. If suit or action is instituted in connectionwith any controversy arising out of this Lease assuming the dispute could not be resolved by the parties through negotiation or mediation in accordance with Section 18, the prevailing party shall be entitled to recover in addition to costs such sums as the court may adjudge reasonable as attorney fees at trial, on petition for review, and in any appellate proceeding.

19. 3 Notices. Any notice required or permitted under this Lease shall be given when actually delivered or 48 hours after deposited in the United States mail as certified mail, addressedto theaddress and with attention to the parties first given in this Lease, or to suchother address and may be specified from time to time by either of the parties in writing.

19. 4 Non-Transferable Interest. City's interest in the Property is not transferable without the consent ofONGF. ONGF's interest in the Lease is not transferable without the consent of the City.

19. 5 Force Majeure. If the performance by either of the parties oftheir respective obligations under this Lease (excludmg monetary obligations) is delayed or prevented in whole or in part by any LegalRequirement (andnot attributable to an act or omissionof the party), or by any acts of God, fire or other casualty, floods, drought, earthquake, storms, explosions, accidents, epidemics, war, civil disorders, strikes or other labor difBculties, shortage or failure of supply ofmaterials, labor, fuel, power, equipment, supplies or transportation, or by any other causenot reasonably withinthe party's control, whetheror not specifically mentioned, the party shall be excused, discharged, andreleased from performance to the extent suchperformance or obligation (excluding any monetary obligation) is so limited or prevented by such occurrence without liability of any kind. As used herein (he term "Legal Requirement" includes all present and future laws, ordinances, orders, rules, regulations, and requirements ofall federal, state, and municipal govenunents, departments, commissions, boards, and ofBcere, unforeseen, ordinary as well as extraordinary.

19. 6 Captions. The capdons ofthis Lease are for convenience and reference only, and in no way define, limit, or describe the scope or intent ofthis Lease or in any way affect this Lease.

19.7 BindingEffect, The provisions ofthis Leaseshall be bindingupon and inure to the benefit of the successors and to the extent permitted, assigns ofthe parries. There are no third party beneficiarieshereof.

19, 8 Amendments. No supplement, modification, or amendment ofthis Leaseshall binding unless executed in writing by both parties.

19.9 Interpretation. The use in this Lsase ofthe words "including, " "such as," and words of similar import following a general statement, term, or matter, shall not be constmed to

LEASEAGREEMENT The Oregon Garden Project - Silverton, Oregon October 28, 1995 - Page 16

Page 57 limit suchstatement, term, or matter in any manner, whetheror not language ofnon-limitation (such as "without limitation") or ("but not limited to") is used in connection therewith, but rather shall be deemed to referto all ofthe provisions or matters that could reasonably fall withinthe scope ofthe general statement, term or matter.

19. 10 Severability. If a court ofcompetent jurisdiction finally determines that any provision of this Lease is invalid or unenforceable, the court's determination should not affect the validity or enforceabilityof the remainingprovisions ofthis Lease. In such event, this Lease shall be constmed as if it did not contain the particular provision that is determined to be invalid or unenforceable. No such determination shall affect anyprovision of this Leaseto the extend that is otherwise enforceable under the laws of any other applicable jurisdiction.

19. 11 Survival. Ttie covenants and representations of parties, specifically including, but not limited to, the covenants regarding indemnification and attorneys fees shall survive the expiration or termination of this Lease.

19. 12 Mutual Negotiation. The parties hereto confinnthat they have mutually negotiated this Lease and fflat none of the terms or provision of this Lease shall be construed by presumption againsteither party.

19. 13 Authority. Each individual who executes this Lease on behalf of a party warrants his or her authority to do so,

19. 14 Reasonableness. In all cases where City's consent or approval is required in this Lease, City shall not unreasonablywithhold, delayor conditionsuch consent or approval. In all caseswhere ONGF'sconsent or approval is required in this Lease,ONGF shall not unreasonably withhold, delay or condition such consent or approval

CityofSilverton:

<-A^ /ff. Ken Hector, Mayor Date

Oregon Nurserymen's Garden Foundation:

Arthur R. Anderson, President Date

LEASEAGREEMENT The Oregon Garden Project - Silverton, Oregon October 28, 1995 - Page 17

Page 58 EXHIBITS

Exhibit A Deaerspitoii of tb

Ed-fcitB MeatiScatioa ofPettit Property

Exhibit C ONGF Financial Commitments

Exhibit D Letter from City Asaariog Zoning and Annexation

Exhibit E Periodic Review of Rent

Exhibit F Initial ^VetiaEds on the Property

Extubit G Wagte Water Quality Standards

Exhibit H List oi'Sristisg fcnprovements

LEASEAGREEMENT The Oregon Garden Project - Silverton, Oregon October28, 1995 - Page 18

Page 59 EXHIBIT A Description of the Propert)'

Situs Address: 6098 Cascade Hwy., Silvenon, Oregon Begiimmg at the Southeast comer of the Leander Davis Donation Land Claim No. 59, in Township 7 South, Range 1 West of the WiUamette Meridian, Marion County, Oregon; thence North 89° 59' West along the South boundary of said Davis Claim 2411. 64 feet to the middle of the County Road leading from SUverton to SubUmity, Oregoa;_thence North 22° 37' East alongthe middle of saidRoad 230. 38 feet; thence North 37° 50- East alongthe middle ofthe said'road 1118. 23; thence North 39° 04' East along the middle of said road 79. 00 feet to the true pointof begimimg; thenceSouth 50° 56' East 91 00feet, thmce North 39° 04' East 160 00 feet:'thence North 50°' 56' West 91. 00 feet to the middle of the County Road; thence South 39° 04' West 160. 00 feet to the tme point of besmning.

Situs Address: 879 W. Main Street, SUverton, Oregon

Parcel I: at the Southeast corner of the Lsander Davis Donarion Land aaim No. 59, in To^miiu^TSouth, Range1 Westof the WiUamene Mendian m Marion County, oreS°n;dle^s 64feM tQ the middle North~89ro 59'" West, along the. South boundary of said Davis Claim, 241l_. of'the County roadleading from Saverton to SubUmit^ Oregon. North22° 37'E. ast, alongthe middle~of-saldroad, 230"38feet; thence Nonh 37° 50- East, along_the middle^of said road, "Uli^'feetTthence North 39' 04' East, along the middle of saidRoad, 79. 00 feet^&ence South50°'56'East91. 0(Keet; thence North 39° 04- East 160. 00 feetj tfaenceNorth 50° 56; West 91. 00 feetTo the middle of the County Road; thence North 39° 04'_East 800. 02 feet; 59° 3V East thMce'North400 05'-Eastalong the middle of said Road, 75. 67_feet; Aence Sou± l'0"77~70feetto'aa'iron'pipeset'onthe East line of said Davis Claim; thence South O" 04-East 1413. 06 feet to the place of beginmng.

Parcel H: Begnmingit a pointwhich is North0- 04- West14^3. 06feet ^ South89° 50^E^ 330^00 Davis Donation Land Claim No^9m Twn^p teTfrom'the Southeastco rner of the Leander 7Sw&, ~Swge1 Wesiof the WiUamette Meridian in Manon County J3regon^tbeiicel, South 59- East 157/74 50""West'330°OOfaetrt hence South 0° 04- East 1413. 06 feet; thence 89^ feet:"ttoice South 0° Ts7East 1816. 98 feet; thence North 89° 41- East 543. S4 feet; thence Noith-0°"l6'~West 2009. 04 feet; thence Northwesteriy to the place of begimiing.

Page 60

EXHIBIT B Identification of Pettit Property

Situs Address: 4592 Pettit Lane, NE, Suvertoa, Oregon ginnmgat a pointwhich is 973. 25feet South 85°J8_ 19-Wea n'cm^soultle^ome/^ ^TeS'Da'v'i:Donation Land'Claiffl Number 59 Towuiup^Sou^R^^ mst^^ ^Uan^e'Men^Marion'County, Oregon an^rar^g ten^3^J^';J^ di^ofl43^7Tfeet®tteCM^ofMaA«Road^ ^ &eIiM^^^OV^, Z^tteeenieriineo?M^tei°^No. 34a^^°f231^^^ the^N^h.f^i ^^ ^^ng'Ae'^edme'S'Maitat RmdNo. M a dtea^ 0^23;^e^^:^ri^9; ^^l^ato^the^tee of te R=adNo^ ^ d^tance^T3^t;^e ^4yWWs^mg^ eeaertu^Marte RoadNo^a d^";6^2^^; A^eS'outh'59r3 3"W)"i~a^adistmce of 1071.77 Swttoi M/2" iron p^e^enc^Nor&J9^ ^ |e4so^3aydi^ue'o^^Te^t:au3M';^"boJ^^ ^ Tl^2alSTet"oTl-T/4^ P^^So^_0^ 07^ E^a^=e^ ^oTS feet^o a:l/2n'in)n'pipe; thence^South 89° 40- _36"^st^a ^^°"^ ^t^ feei;lhence 59' ^iT1^ thence North'0;'l5700" West a disimce o^204_41 NoA4^ ^."V^^TececfT^. U70 ^""Ae^N^^rfoO^T^ce of'584. 79 feet M thepoint o7beguming, andeontamiag 140. 13acres of landmore orless. Less the 28. 50 acre parcel described below: riMine atthe southeast comer ofthe Donation_Land Clmni ofL^^Dawaad^the

ss^i^^i^§?sstract; thence North line ofsaidSmaU ^yy^iSSl^SS^5"OOTEasri 610~76 feet along ^^^E1Ae east 0^^^ ^d ^ cS ^nceuN^ ^'48- ~^ ^ 973. 25 feetto thepote ofbeginmng; and containing 28. 50 acres of land, more or less.

Page 61 EXHIBIT C Financial Commitments Oregon Nurserymen's Garden Foundation

The ONGF has prepared financial projections which are attached to this Exhibit and titled Development Budget and Operating Projections. These are preliminary analyses based upon the experienceof other Gardens in North Americaand do not representproposals or firm commitments.

Development Budget. The Development Budget is based upon assumptions that the Garden groundbreakingwill occur in August, 1996, the initial admissionsaccepted in June, 1998, and the Grand Openingto be conducted in June, 2000.

The Development Budget includes fimdraising goals established by the ONGF which includes Cash contributions from industry, $2 million; In-Kind Contributions from industry, $2 million; Contributions &oa foundations and individuals, $3 million; Contributions from Corporations, $1 million; public grants, $3 million; and Silverton, $4.981 million; for a total of$16 million. Contributions are being provided as pledges and extend from 3 to 10 years from the initial pledge.

Current Status of ONGF. The Development Budget provides the status of contributions per the date of the report. Actual pledges and commitments are included and the projected contributions are shaded. ONGFhas received$1. 5 million in cashpledges fern the industry andhas exceeded the 1996 projections for contributions in this area. In-kindpledges have beenreceived and are anticipatedto be increasedwith the development ofthe MasterPlan.

ONGFhas retainedNational Community Development Servicesto conduct a major capital campaign. NCDS is scheduledto complete PhaseII ofthe campaignin April, 1996. PhaseI of the campaign toachieve industry support is nearly completed and is nearing the $2 nuUion initial goal.

ONGFhas submitted an applicationto the Regional StrategiesBoard ofMid-Willamette Valley for a grant of$200, 000 to support the development ofthe MasterPlan. With approval ofthis giant, ONGFwill have sufiBcientresources to complete the MasterPlan and prepare for possession of the Property.

SufficientSupport. Bothparties agreethat ONOFhas demonstrated that there are sufBcieat financial resources to commence the development of the Oregon Garden Project on a schedule that would allow the groundbreaking to occur in August, 1996.

The only remaining requirement for enabling possession ofthe Property by ONGF is the development ofa Master Plan for the Gardenby ONGF and approval by the City.

Page 62 THE OREGON GARDEN PROJECT Development Budget

., *r''::'i

Hyvenuts Admissions Membership Pdvats Coatdbydofls so Public Grants S25000 aoo.ooo S3.225.0CO Cash/Nursery Ptedg S232.491 !300, U6 SU63.W Cash/Nursery Froj , w S26C.7.02 Casii/Fouod. Indiv. i". .800. 000 Casti/Corporations S60C,000 10 lii-Kind Projected so Sl.758.051 [n-Kimt Pledged S241.949 11 Silverraa JV 51,000,000 S200,000 S4.9S1.000 12; 131 TOTAL REVENUE Sl,257,491 il.300, 166 $2,300,000 514,893.657 141 151 Expenditures 16| Land Acquisition Sl.000.000 $1,000,000 17] Them®Gardens S152, 000 1950,000 S418.000 $380,000 Sl.900,000 18| Display Oardeus $180,000 S2.070.000 SZ.250,000 191 Ajttmin/Vis Services 163.600 5754,400 SS20,000 20| Educ Coaf Centsr 5162,400 Sl.867, 600 £2,030,000 21 Couservatory $!60, COO SL840.COO $2.000, 000 22| Infta3tTUjCtur& $62,800 1200,960 $188,400 $175. 840 1628,000 23| Water Feature $109,760 !;,2(S2, 240 $.1.372,000 241 25 [TOTAL EXPENSE Sl., 000,000 $214, 800 $l,IS03,!20 $6,031,840 !3, 150.2-!0 S12,000,000 26] 27| Start-Up/Construct 28| SlafHng & Office SIW.OOO S160.000 S225.000 SZSO. OOO i S2SO, OCO iii.!)*S,(»0 29] Master Plan S200. 000 S200,000 301 Prof Services S355.000 S350,CWO $250, OCO $150,000 | S50.000 $1, 155,000 31 321 TOTAL START 1515,000 $710,000 1475,000 5400,000 S3CO.OOO $2,400,CCO lUtAlflUUiiErtftu .neuNiENuaLfli«»&d!naah7< sv, 331 34| Rev8aus?[Loss) (S257. 509) S375.366 S72L88C S469.I60 (W15. 240) $493,657 35 36 iOperations 37| Maintenance 1200.000 t4SO,000 s«».ooo 31.200.COO 38| Marketing so so S100. 000 1200. 000 5300,000 S600.000 39| OAN Credit $0 S157,423 SU7.423 40| Payables so S90.3U3 S90. 303 41 EQdcwmooi so S7. 600 S36.500 S 15,000 515,000 S94. 100 47. 43;TOTAL OP so 5255, 326 S356.500 S015.000 ! $915,000 S2. 141.82lS 44 45 46 Cumulative Balance (S257.509) (S137.469) S227.921 S32. 071 ($1, 648, 169)

Shiels Obletz Johnsea September 28, 1995

Page 63

THE OREGON GARDEN PROJECT Optratiae Pridectluu

31 32| 33 34| 35| Ml 371 381 39 Endowment Balance (55,000 MO.OOO ws. am $70,000 $75.000 tso. oflo" $85,ii56- $90,006 i95,000 40 CapKatBalance (d, 178,601) ($1,464,L<0) ($1,586.594) (tl. 726,042) ((1,734,525) ($1,655,M8) 1,435.032) ($1,147,341) (S927,B61) ($368,341)

Sbiels Qbfeiz Johiisen OOober 6. 1995

Page 64 o^5^ A. EXHIBIT D Letter from City Assuring Zoning and Annexation

August 21, 1935

Ciayton Kannon ______... "" OREGON ASSOCIATION OF NURSERYM.EN 2780 S2 Harriso.n, Suite 204 Milwaukie, OR 97222

Dear Clayton: S^" ££1:^^^ ^ ^^°^ "^° S; decisions are final. in summary, the City has co^leced the £oUowing land use actions: 1. Amended Urban Growth Boundary to add 140. acres for the Oregon Gardens Sifce. 2- %;;lr%ss -s.^'^i"-^^ 'as: development as a permitted use. 3. Aimexed fche site to the City of Silverton. ^e^es^rsr"^d ^^^^^S^^ &^ i^T^4'of^ ^i^B^dla2is^^ar^derf o?'your records.. ?he^81£?ne°^L^,.

Sincerely, Cl'7'iJW SILVERTON ^&, J^_^-"^ Da'vIdTw. Kinn^y Acting City Manage

ec: Rick Gustafsoa, Shiels, Otaiefcz S Jota^a

»v\oan. Itr. dfsAntMttwe* Shop puiiilfi Wuttw Wot.rtW-twam Fadlia«o PlnwKia 0

Page 65 EXHIBIT E Periodic Review of Rent

The parties to this Leaseagree to reviewthe formula for rent payments from ONGFto the City for the use ofthe Property at eachReview Period of the Leaseas defined in Section 1. 8 ofthe Lease. The rent for the fastten years ofoperation has beenestablished m Sections 2. 1 through 2.4 ofthe Lease. The rent for eachyear thereafter is definedin Section2. 5. Modificationto the rent shall be by mutoal agreement per Section 19. 8 of this Lease. It is agreed by both parties that rent payments shall be basedupon the economic performance ofthe Garden.

1. Principles.

1. 1 Reclaimed Water Distribution. The primary goal of the City is to assure that the reclaimed water from the waste water treatment plant is being received by (he ONGFand distributed on the Property. The tenns ofthe Lease that establish requirements for operation and maintenance by ONGF at no additional cost to the City are mtended to remain throughout the term ofthe Lease. The terms ofthe Lease that require responsibility by the City to assure the quality and quantity of reclaimed water by the City is intended to remain throughout the term of the Lease.

1.2 Economic Performance of the Garden. It is agreed that the Garden is being establishedthrough a JointVenture betweenthe City and ONGFas demonstrated through the length ofthis Lease and the implementation ofthe Joint Venture agreement for the construction ofPhase I of the Garden. The financial performance of the Garden is the primary responsibility ofONGF. It is agreed that both parties as participants m the agreements shall share in the positive cash flow of the operation of the Garden. The primary responsibility for capital improvements and negative cash flow for operations shall be that of ONGF.

1. 3 Attendance. The ONGF has established a goal of 400, 000 annual visitors and 10,000 members ofthe ONGFin response to economic analysesthat indicate these levels ofpublic admission and support are required to achieve positive cash flow for the annual operations of the Garden. These financial projections are the basis on which the rent payment formula was established for the initial period of the Lease. The Lease includes a five year period from the commencement of accepting admissions in which ONGF would have rent set at $1 per year.

Page 66 Rent after Initial Period.

2. 1 Calendar Year. ONGF agrees to maintain fmaseial records on the basis of calendar year.

2.2 Reportg. ONGF shall provide by March 1 ofthe year ofPeriodic Review, amual financialstatements ofthe operation ofthe Garden for the previoiis five calendar years. Informationand reports shall be provided as determiuedunder generally acceptedaccounting principles.

2. 3 Operaticg Revenue. Operating Revenue is defined as admissions revenue, standardmembership dues, rental revenues, tuition, rssea.m'agrants, concession activities, fees, and other revenues related to the operation ofthe Garden, Operatingrevenue shall beused in calculating positive cashflow.

2. 4 CoatributioE Revenue. Contnbution Revenue is aefined as membership payments by individuals above the standard dues, contabutions, foundation grants, revenue &om Enterprise Activities ia which separate agreement with the City establishes revenues, interest earned from ONGF funds Or endowments, and bequests.

2. 5 Operating Expense. Operating expense is defined as all expenses associated with the annual operation ofthe Garden excluding capital expense and depreciation.

2. 6 Cash Flow. Cash flow for ttie Uarden shall be detennined by subtracting Operating Expense from Operating Revenue on an amuai basis.

2. 7 Payment. Both parties agrse 20% of the positive eash flow shall be paid to the City in recognitionfor its role in the successof the Garden.

Page 67 Initial Wetlands on the Property

7B.UJ170 2/tO/'SS FIGURE Waludm u th.Milt Itaemlr >il.souUl of Sil»»ma. Onion. 4 SRI/SHAPIRQ, Fw <; o B p . 11 AT a a,

Page 68 JE^AQJUCllA' <-» Waste Water Quality Standards P?<=-GON AssmnsTaAaivE RELZS.

. CHAPTS3JMQ, DIVfiM>m5M ;g - nES-vg.TKEfn: OF Esms. Qtfi TCAL aUAUTY DNTSION 55 at Sreatnienc^ is suitable for a dirstst benatlsial purpose or a eanc-olled usa thac could noi acharwnse R.EGTJIAnONS PESTACTOfG. TO qccw. THS USE OF RECLAIMED WATER (3) "yser" maacia any person who uses (TBEATE33 ETFLUENT1 ?EOM, reciaiTtiad wacer. SEWAGS TREATMEMT PLAiVTS (10) "Oxidiz'ad wassewatar' inaans ireatad sewage jn which the dTs^inic mac^er has beea p-umo.ie atabiHasd, is iKinput-escibie, &nd coni^ins dissolved 340-S3-()OS Tli« parpsaa of' .Sheaa rulaa ;3 ta oxygen, gratee .SiobgieaJ tTeatmmt" means meriioaa lit" Cres"n fay presisibfag^Uis attiiaila, srnetdure^ aiisi aewags Teiiaiint la w'niea baeiaiai or bioditmial natrIeUoaa n<(air«S for tha M<'far beneiicsa; aseCtoa a pnnetati aa a 'Beana at" producng an par?oaea ofmlanaiid wata-a. !)idd S<3£ waaSewa&ay. (:2) ''CtariiKation* aiaaaa.the Tfaaval by Stat. Aatil- 0113 C!l. Oa.Oa). W3.711S & ua.no erawr/rfieEtkaIiIe mlidareaitsang' ia Ui"v«l iaboratsr7ta»Ehiid~&es Stu. AuLh-;OBS CTi. isa.aso. 40.708 A 40.711) aa6 Q3?tiafl4 ast svttrags 8p

. S.3) "Sewage tTeatmant ay^tem* cieana an^ facility OF KpnptaCTt ased ta alter the quaitty of (fslaaniad water ia wfiieh 'eo'sation 13 SaritBd ta sewa^a by piiysxtsstl, ehaaacat or biolasical m^Atts er aafung,.hnatins and athf nm-ticdy-tsistaa »ar.sr a taabmadoh thareof nUifa thac ihi tandmey af nervieian acnvifiia. BMtrietad inipocndBiei; said wagtawasw to eanstt any degradatMnm wat^r amstruned and apmatfi jronuant ta liieae qualtSy OT otirr snvtTiiua«aut conditiaca ia shall ba conridareil (iart_i>f . sawase (r'aeaeiie reduced*^ system and not waters rfths seats for water qaal&ir (4) . ?«waga tnatanmt systm owner" u say j>uiT)oasa_^ .... parsan wha.ainu a Mwaga 6na(n«at sfscsm Usy'Ncanacrieted tmpaundiamt* laeaaa s. juwidfsaeiadaiedwaft %r aaa Ixriy efndynieil iffisr in wllicfc as fcrite'tioaa tes (S) *P«nan' intana tha (Jniud Stacaa and linp'issei on iMtly.csnuet 'wusr rsenwsR acsvW. aa; ag«ria«a thtreof, suiy autt, y. jndividaal, aublic N

Page 69

QSEGON ADMICaSTRATTVE RUt. f.-s CBASTES.340. DmSKWK-- SB^^S^^Si^^^^^ ^M^TY (20) "pataDle water aupply J, . Cantralted ma' means a usa of rgdaimed |§§(^S^5SiSj v'isK. C"-''""sh_thexv"V» treacmenc pisuiYamei7 r-e?^"me"ti-.. l!'a^omPTiM«. "8S'^aS^'?ec .fee °;l'f-°r, ^"'"gnY'wTtt'enmnc'rac;;' hu "ai3anaola tellwledE!e "the uae'and'faia'of ths sSSs'T^sr^^6p^^ , wuer and"ia aMe. to .discantinus 'the use

.(4>Jle°!a.ime

. -.. C22). "prac833e'iE'I!ad Crops' aeana thos« CTDS WJUffl-Iude%3. til«?">Pr°'e8;"in.s~»uffi°"t~to"it !'u fbr *at5?

, J;a>J%°<.TUIeI<.&f^e^«l'tts«i, raqurea S?.""-"" £l°"rid"m bo.cat?num. WaaUn?; tfeyumdi^atern°nv^Eub2c»T"ag3a'SS f, fermeatmg, milliaff or ca'emi'uf Ehrmcad°°;^Stratf°tt~treata;ui'c'TlS' ^SSSS: c'aatneau are not ariBS'enc. tkeDeparcnentmilmnwter'by^nTSn'c'SS Scu. Auk. oas cs. waj isa. ul.a!LdLaat^riJfa"°^atTa'^r°'n%"t?Si aea. . Tas A 46a.-io 8quLyilIra"ffiuant?n2Iit? U'thu'acttiend %&' ELu-DEq 32. i990, 11& wt. 1C.i. lS-90 c°aSyte?"°a. c?ati*. 'ie,a°"";"tea.-JRie'?eB Exemprioaa Lui"°BIL'".t^d"o"8'°n'He*i£'ISfvSifS -340"33*013 Raelaimed water used ae tha A'nJ°Sn'i*"n?. ?lt'"laBTO'ts:»'="»«'P"cSs°u c"acmMt i>iai" nfa> wnen'it (a generaud'shaU'M iwad.&r under this sectiaa; rolea Bnvided? -<.l'). TS?.-I3??art'nu b* n&m'ri-OTt"-m7_anumAra£'I~?.dTiSE i"?8??, tt"!alld^ ta'the'tnacnent'B'iaut uatenn!nmt?-*at *°ajd ii"P°se'P»uaOal'hazSS ^S^.°.a?ray " ^d^-ahaii b" al?w;5"aif'3, 'e ealth '""tke .liyironinenE^ar tnatmenc plant site shall lic. il cau* ?°t-tl":luda PnT<"y that. is.aac cona'gnaaa-ta~tfae effects on an.allowed ase;

. (°}. _t? °a3M yhara enlorine or diiIariBa Pan8', °t laod "P«" wuca tha tnaoianc glanc-;a an uaea u the diriiuBainiFagenc, ihe s . "ay. Ws^r in the penmt'a mnuinm Stat-Auii. oas a. <«ajna. isa-Tas A 463. TII) concmtration to bo nec i&en SauDEq a-SSW. £ a anx.«t S-U^O auntmum eantaet tin*. In caaaa . heraTther a°? aSmt3..a" !"«i- .t!i«D«Danamt ratu»"yier additional uaaitorinff'reqmrameata »»aure a No. uwaga tnatment ayiMm °'"'ar ?°au. nI*ua-.'aiy~TJ'"'n*3"mtwSr1uS " -w CA>Tlr Del!«t^"i^nay. redacg eha huiftr ,ui?'3 ".."?h"Bulby* WFCTo'r'NTOlB'puSZ 2."3u"*» ~vT<"''i^"'?tRm!a°t protect, public haaltii' »ait~ tlie aaneoasaiytn avaluata anil deteRBuie 'nvlranm'nt' Atematin ontnla nay be..but ue mmpjiania with this Divinan. aoc Imuted. to, *aI»M tiiac an aedvac«Tby~wEd or itireetion, law traj'eciorr sprinlc(en-or far BtMof nelained water incaraoadfala oses: ;^h.°.ri£*d.lby-"r°"6'l'y~tha-D«p"'t"T~"~^i -(B)Auffls" f'"'.«S?«in. TibT«~:t-fa?-LavBl [ sewap tnatnanc systun'awnur ihaUnfiaM' tCmsntafiaUba siwanttlinthe^mnttand Bialiha ; irater far iaa mtil a radaimul watar use an * littennuutian that aenaala .nil be ?lan^m"tiI'S tht ngninmenta of OAa~»«d55^S Italy Bmtnlhd ao au to pnteaiiabBc hMitii:' Sa?-Be"l. *?I"?n ?c°?""°S"y, pla»<. tli«L°Ur aa aptdfled in Table 1 an nec. iy l">S ??int ^°r nmitnring nmpliance with th« rulea »f shia Diviaioa regiu'n "aur quality limitations shall hi speduri jo che condicwna that are difFerent or pernait. m°r°-str"'6a'u t*'T^andittnu in ariadng pennits, IS^a-f parmit, /aelaimed waur far a use noc ^XHtin^permjt limitaSmaandetmdifiom' shall id In TatiIe. I nay be authariaBti. Tn _unaliui:h tima. aAe . Depanmencc'haMes cansidtringaych auUipriza'cian..th f Depanmenc permit Umifeaciaai and candiciona awf nquut informacion uid siiall impoatswh permit mcdillcation or renewal. When tile imiCadona u deemed necaasary'en assure (September, 1391) 1-Div. SS

Page 70 / t aEGONAD»n?ieYrfthls OwuiaE. Voaer »Bca Shalf"at~3'°"naanm'.°5set fe&-r*quBsm "-:i2ud madiaaiu, yie, «wags .»*a"'' °< aubaitted to the Separcneneaea Bl«ntB;_ ^ ._ i5-A tterBui; aatfcoriziai. Bad »f FMiaiiae issailSethtfEe^artamt. , _,, __^i al eae6a ratar'Aroi'MWa^trsatnanc. ilan" anap require T15 %*'B«pu5°Tlcmay «??y<]r e. ?i if MniatapGar.«e inSi EUs^Diviaioa^and hlandinera»Iaim«a-»at8r nth»th?r-''""!-'?. tha »ewaEe traasarot ayatetn owfi8 SUt.Aath- OBS Ol. rtm^ &r^S&BgA:»""q5r^!BBrfthsi»^ giajto sSS-SS-WtOKai;»5ua»3»au ^s Mw%13a£ «3yauu»m«'»_?«Tit&^«^ ana'2Hw'tw"that'9aiua_tlOTUgn_th«^«5*^ »^S^hr'-»»^»^»3»y"W. jai SaSlaurt Ttont~fiy'naiBT. w!'""mantf_. ri.» . f ,t canaaee*ras5S5Si«rorumpIUan'"t!Lti"E'e' 5T'Tiw5iM-Sati'?>»ialn_i..'iff7ip'M"Jrtt.? and the smsvs tmtmaat sW>?«rn'a-. ^.. de»ffl'lS~4'?m*raKe""£<. !aa.';. ' ^W.^A^AW yteS5a^w nqmnmtna ofAis Dinsion ars BatbtinSmac. be A'CT'dwmiliBM fc'r, mi««b<_Ae_Os(»tme^ n"A"ea3ditioiithac ratiairfi sheutt'_ SikS'AtuhlSteaimdudaa Chris .amf\ea safiu redumai «aitartor.«p«nM, thaaw^jtS"'"''<^acA thelierraitfartM aw"tgaw*Bn«"»»«";, unit. fmea.w to Sbepeirt »[1"?- ,.,. . ..", 5>"nttict"sh.a[!*is<>~ns»inA,i^-ic/i ^niiini &ha<»aa<^"S"S;:»I5 tticceadina user co w "(S')'~A!anT&wrs«3 aha". b« iP""^d^ contract '"neh any adilitionsl lucsuding recW nwm^ta"Si':wiSi'»winii'S at" 1»» °f P°wer wacar users. 3. DW. S3 (3»pumb

Page 71 siai°.tjailwej"jflvwaa «I"ipmentusential to the waur tyaurna are uare than 100 ttsc frain c"°°.°n^c°rt!'a """n unag ndaimJKiirace-.' ix^E§SS="^ no connecaon becwesn p.°.ubte "rat"Ja"lI>' y"n "a'ch.'autrio'udo'i Ly."!2."r.7j°S_C?cfa"°"i «'*". .aare'iTThe . ""S6"".?" 'haU flave'Bandbypow'e? w, °[-3ufficie"t_':aPacV'°_Ml7<.peTe~^i un°eca"l-i3 ti'""Sn "ther an unnarKudiim; ^";"iai.treacn'°C. PTW;e"a'~T'h7'D^»'SSe?lc aciauttwica as mae as the diamemVaiSeSm£& SS,£mt-an aat5atlt ll*~"waS;'*S6a^M?^^ S«.mt Unit or amdltion or Orasm'ASunucauve "."?to'L?u°mit. at..lea3<:.su'""n"a?'"!9°n"u"yi *e j(,1LS5was?-tr?atinent. sy«T" t.ha( provid. 2Spare°enttoCT°InS.^e '"R'STen'eM'a? Sl ^"m, ^c.°i!LplyLW'tff, t!le. ?P"we?'"c'""i'e"d . -""" i°r lu< lhan "ntan-au5cieat 5!»;L;'.'luada"t. treataa"t~C"i'"tiea""'a WSSl.!uaJllan! 'tlla,. rule3 at't&li Dm;no'a."^5 ;n2Sit.°."'n.s[..aSui?.m?at-tl>'*Ef'c";ri'iy'p"<*«n't penuilimiiiiandunditioni. " ~'- -.-"".

. (a>^?-nctemed-mtar'!kail 1» nade anilabh ^^e^6^^T~sw"^^w^ tS.*p*"°° 'nSaiV. ta '"".Samd^ra-ISiES ?l&l?s?th*"'u**i'P"ln" »"'ine °y.Aa ^~fm^^^m. ^t'"i^'^w'^'^S. . idju"le"a5d the provirioM uTthesa'ruIu' ^S , &?1Pmf. "'"a.""? oth«77oreiT "1UM ""iwacioa aiiall'ba lupTw" slTby'ih'2 , J.wiIa"°'Lwat?r''u«';y""""aTbS ^c^ri-"d-uari d_-"Tmm~""~""pn'w°^ "w?S?, _tr"!3n'!Bt 'ya"m~own;r ud"b'e"ma"dS ^aaa-eaaneetian wiib potablB wa.car'swsums'. CTfluh to the D

. OLC°m°"a?" wtfa.thS" Tla shaUnot CTata ?l°SSa%?£'^S"a~eli53t.^aiutn»caon and''. narlans'snafl'be5i"-S?s(sf^ ^»aur right mder OHSChapcanS36753T;539'o; ia£!^^d'5ia">"-§toTa«ttoa t&a ^3afl<£abl? -watar' '>f. Caffforaia": [PnUiearioau Tk« pallllaitiaahl nfan. »il u ar Sr^S3a^s tI°aoftllaAT"^tt w»"r^^Sa ttnnc. Ja ihu nl. u» anilul* iha th. a-"TOWi saPteniMsr 14. 1SS3.~TS . nay_allaw cueptiona'fiir'euating Snvmiamaiul qiuUtyl !Sy"Bn"_m, . rara^. *"a3 wh«ra Tt can~b? Stu. Andl_ OR3 Ol. 01021). 40. 701 A <6a. no aemanaaatal that hodi'prmua aaS'pubilc doTOroS HuuSEq S. 1330, i A amv. lC. a. tiao

(Septembar, 1991) .t . Oiv. 3S

Page 72 f -E&ONADSmCSTBAIIVEjyjLSS,, CBAPTEB340. DHTS.': .<'£'_ nKp.35tTa<5iTQ'ffE?fVSO« -EIiTAL QUAUTY TABI^l (OAR340.5S-01S1 TRSATMEW AND MONTTORSW -aSWTBETSEyTS FORUSE'OjF iUSCLABifSD W/OEB.'

NOTS. - This tabie spwifies u^ [frscia, izned u/at&r is to. be ai n.ocicss, bu£ utdudine foctn^e: .y AixaGflaz. Lwir Law! Ft issaUE, isasUS. s x s gn^al TnsBsauu; i x x Dzamectian x ClarincaCKin x C.qagutanais PiltraCtm x 'BitatCeijfima (n-gaBnsinsKM 09: N7L 240 N-/L K/L Vw Coaxaacfva Saafllea 2.2 '7

. Agneultagl; WA N/A N/A Onrastricted N/A 1 I Unnamctad iwseas 0'Eirescricted Qnfayis.antt VinffiaB N7A 2 Fadder, F&er, and Sttl Crops ast GTansatricssii Human Tngustion 3 I N/A * gflns(riase4 Pa-scurs for Amataia U'flrsaEignete4 Sad N/A I QjTaavmtal. afmssrf Stack WA I ynnacncced N7A I Bnroaiend tJmiBSCrictsd Fhwrood. . WA I 3 I Unrescricced Partes, Ptayprsunds, Schooiyards, Sclf (s. e} Counes mA Contiguous Residsncss WA t-wrt N/A Golffcuraas without Contiguous 5,6 ResK encea WA S. t \ S,7 -t- Cemeteries, Highway Medians, L£n&- 3,S scapes without'E'raquani. Public Accfcia N7A 5,7 5,7 9. 10, 12 Industrial or CommeroiaJl Use WA 9, 10, i.1, 12 9, 10. U. 12 N/A 9, id. ll, 9, J^-11 9, U. 12, U CdAsferuction Uaa "IS.'U" ~i2. ~i3 ^tnpoundments: N/A N/A 8. LQ Unnatncted 3: 10 WA N/A 8, 10. U Ressnciad 8: 10, U .3, 10 Landssape [n'spoundin^nE^ N/A 3, t0. 14

. Table (September, 1391)

Page 73 . SSEGm'A5KmIST3LUTVE BULZS j. uj.vtay- - iar^DEPAa'mENTOFENvmoM- '.^(TAL_e^ALmr . DEnNmoNs; .\ 5^ 5S^^ ffl^s?;^s. "h-"t"'v"w wh ti« - ^- iKSad s?"r'r"T"l°a "'"" .1"'"°"°° «f"ri.>a..i«;w'ac,;c~i.Tyi, nyiii,It ta., .rifto inplpiBg. c"f" SSl*,IS!l^,f"?a."M'T"°"°ut"l"°'" " U '?«"'«fC2"rt^» 4

SuriT ro^doa . h^ »T,1. p, ^. ,f^, d^ ". ^^ a» ^ ^. ^^j, ^ ^ , ^ ^ ^ ^^^^^ ^^

"" k~tt!' ".' "" . mJnS5^Sd?'S£. e1 "">"»" '".a b. .faiuuiy s^^^^y^£s^o^s^^syM2'"S3Jf!;;:eStte"M°"d-'^' ^^:m"i"s^s''^u'^^-^ 4 S'"<«'«'>»nrinitnloii:Na«BiaaIaa!uBb«aulA<|]unu»ifniutlnli»liail.

ss^^s^b* *wadfa * °*°a*r"'!T'''''"'ap''~1 °°°"~ *""f"1a'^uri «. ""«.... «." r .i?^^ri^^Si 2^^m"w"^''t°m3p"^^°"l~''ta°""-""r<"''ui'"?"d"-'«v«i sl'"-^^J"d**^ ^ """"^^ M!w!"&" """"togdm nldnri w«t»tauriari ia ant uft 6r.

^^j^g^^^T^£-56'(r°Tmma":;m

.10 Tlrn ,ua1>. u dlipa.d afnd.inri-un imlurfaa or pimiuinan-l idmt .ntharizutalby a CTDE3ar WPC? jnnnil. u 'md ''"""*"'""** °» 'l"u I" 2^f"dM °"1!°' 'yT «P!'""rf anlr ifth. un- eu d.nuinu due uiub .a nnt prcswt a ttaaart ta oubUe i&'°tea rtt^^l«*n'l«n!'l»ycl^p«nuiu«lulIl«ntaii<'t!l««a««rndriin«d»un'aMlIl«ni>U«iyiutlwn

ADVTSnnv ivi-nTrf flNL'e fa"ro,.1Sw.state. H?a!th-DIV"T'rec°'I"'"»"d3 that persons who must handle imgation or other equipment ?th"J'"S'"at'.r_"Lwh° ar"x°?"dto_. ,reaai,ml!d "acer shauH'be iul^adTOed'yiny'huSas uposun and should be prawded with aecassary prata±ive-3ochingL~

(Sepcamber, 1991) 2. Table 1

Page 74 EXHIBIT H List of Existing Improvanenfcs

SITUS ADDRSSS: 879 Main Street Silverton OR 97381

DESCRIPTION SIZE

5 bedroom, 2 1/2 bath wood frame single family residence 4, 930 s£

Wood frame pool house not available

3). - 3 bedroom, I bath wood frame single family residence 1, 080 af

4) 1 bedroom, I bath wood frame single"family residence 624 sf

Metal barn with riding arena, 35 horse stalls, bleachers, bathrooms and 3-ton grain dump 72 x 136

6) Metal barn with 30 box stalls 5, 400 af

7) Wood frame horse stablss with ten box stalls 2, 340 s£

8) Shop/storage building 2, 584 s£

9) Veterinary lab 32 x 16

10) Wood frame accessory storage structure 25 x 25

25 x 21 11) Sawdust cover

Sources Uniform Agricultural Appraisal Report dated 02/24/95 C & X Real Estate Appraisal Carol J. Scppecstaili, Appraiser

Page 75 EXHIBIT H List of Existing Improvements continued

SITUS ADDRESS: 6098 Cascade Highway Silverton OR 97381

DESCRIPTION SIZE

1) Concrate building with garage bays 1, 590 s£

2). Metal ahop/ofiice building 1, 906 sf

SOURCE: Uniform Agricultural Appraisal Report dated 02/27/95 C & K Real Estate Appraisal Carol J. Koppenstein, Appraiser

Page 76 ». <]'<. :. .- Gnc-iUW

' . ,..^'SW*-<>TU-^ ;'';'' :^^^. <^i±E^'Il'^'-n*s:s^^.^ 'A*''"4

11. Site Itessgsa. Foundation iuteads to proceed with design of the Oregoa Gardea in an expedidous manner that is conducted in joint venture with the City. The goal is to complete the Phase I design, as developed by Foundation, by Aagust, 1996.

12. Site Improvements. Foundation intends to develop a Oregon Garden on the site the incorporates the irrigation and aerarioa requirements called for ia tfae City requirements for affluent treatment The goal is to commence Phase I improvements on the site by January, 1997. Foundation shall comply with all applicable land use and building rules, regulations, ordinances and laws of the City of Silverton, Marion County, Oregon, ^ 13. Water Service. The City will instaU necessaiy equipment to assure m adequate supply of waste water from the City's treatment facility to the site. The goal is for the installation to be complete by August, 199fi. The lease will address other consideration to the city for the provision of the waste water, and the City shall not charge the Foundation for providing the water. The scope, extent, and responsibility for the provision of water will be included in the lease. Foundadcsaagrees to assume responsibility for the maintenance of equipment pipes located on the site once installation is completed. Odors emitting from the site will be the City's responsibility.

14. Wetlands. City intends to develop a minunum of 7 acrra of wetlands on the site in 1995. The site and nature of the wetlands wili be mutually agreed with the Foundation. The City is required by other directives unrelated to the Garden to develop an additional 27 acres on the site as part of the entire development. The additional wetlands will be developed cooperatively with the Foundation at the City's expense.

15. Joint venture. The Foundation and the City agree to develop the Oregon Garden through a joint venture that assures one orgaaization designing and constFucriag the site with sppmval by both entities. The organizational strucaire will be established through formal agreements to be developed '

16. Finandal Reaponsibilities. Foundation agrees to assume financial responsibility for the design aad coauSmctson of the Oregon Garden. The City agrees to assume financial responsibility for acquisiti8n of the site, the design ami coastroction of facilities reqiured for waste water iaciuding lead, pipes, mgation, wetlands aad aeration. Attached as amsaded (ExhibitB) to this agieanaatis ths letter d-ated March 2, 1995 fmm City Maiiager Scott

. ._.. n B M&di&. ffWSSSK'. lasUSiKt'te'"-'- 'Y'rS. 'W

Page 77 Original #1 - City of Silverton

Addendum #1

Lease Agreement The Oregon Garden Project Silverton, Oregon

Landlord: City of Silverton (City) 306 S. Water St. Silverton, OR 97381

Tenant: Oregon Garden Foundation (OGF) (formerly Oregon Nurseiyman's Garden Foundation) 2780 S. E. Harrison St, Suite 204 MUwauUe, OR 97222

WHEREAS, the Oregon GardenFoundation andCity ofSilverton havejointly received a S 1.6 million grant fromthe U. S.Department of Commerce, Economic Development Administration (EDA) to finance the design and construction of infrastructure and garden improvements; and

WHEREAS, EDA requires the parties to provide a $681, 785 match for the project; and WHEREAS,OGP desires lo obtainfunds Siom the State of Oregon, Economic Development Department, under the Special Public Works Fundfor the purpose ofproviding $581, 785 ofthe matching fimds; WHEREAS,the City may applyfor and receive SPWFfunds from the Stateof Oregon for on-site andofiF-site public infrastmcture improvements to The Oregon Gaiden; WHEREAS,the Cityand OGF wish to guarantee to the Cityof Silverton andlocal sewerratepayers that the debt service on an SPWF loan will be secured by OGF without any impact to Silverton ratepayers; The Cily andOGF mutually agree Section 14 ofthe Lease Agreement dated October 28, 1995 is hereby amended as follows:

Section 14. Garden Financing 14. 1 Theparties acknowledge that the project will requiresome outside financing by OGF and that the financing sourceswill, in all probability,require appropriate security interests in the Property and/or income stream generatedby the Garden and related activities. Inaddition, the Gty maybe subject to certain limitations, restrictionsand conditions relating to flieProperty associated with funds received by the City as part of its reclaimedwater distribution system and environmentally related permits. Bothparties agree to proceed in goodfaith to addto tliis Lease Agreement byway of an addendum atthe appropnate time provisions relating to the Gardenfinancing and the security therefore in the Property andother Gardenrelated assets.

14.2 SPWFLoan.

Lease Addendum # 1 OGF/City of Silvertoa Lease for The Oregon Garden site page 1 of 3

Page 78 Pmpose: The purpose of this lease addendum is to addprovisions related to the receipt ofa Special Public Works Fund (SPWF) loan from the Slate of Oregon Economic Development Department (OEDD), The City ofSilvsrton iatsnds to applytbr and -eceive. loan funds in theamount of $581, 000 forthe purpose of on -site and off-sile inTrastn. iCtiusdevetopaient forThe Oregon Garden. The $581,000loan provides match'iig funds fr. r s tl. 6 million srantfrora tte U. S, Depanmeniof Commerce, Ecoaoinic Deveicpment AtiriJBisU-stion 10 the Cily of Silvertoa and Oregon Garden Foundation.

Payments. The Oregoc Garden Foactiarion agreesto provide !oanpayments to the City ofSilverton in theamount prescribed in tile loanpayment schedule developed by the State of Oregon. Thegeneral terms are ilirss years interesi only payraents ar.d the remaining principal and iciefest payments amortfzed over 2C years. Security. The Oregon Garden Foundation agrees to provide collateral to the City ofSilverton with a minimum value equai to or greater thanthe outstanding loan balance. I. From the date ofexecution ofthe loan agreement through November 1, 1998, OGFmust provide collateral equal to all encumbered SPWFfunds.

2. BeginningNovember 1, 1998,OGF must provide $58i,COOin collateral. Fromthat time until loan closing OOF must provide collateral wifna value equal to or gieater than the outstandug loan balance. The collateral to loan balance ratio mua always be greater than 1.00.

3. OGFagrees to pledge any01 all of the following sources ascollateral to the leasepayments in the event of default:

a. SPWFfunds: All unencumbered SPWFloan funds, including accrued interest earnings. b. QQPjealproperty and improvements: OGF-owned real property andfixed assstt, as agreedupon by both parties. Collateralfor any real property wUl be 100%of its value. Collateralfor building or fixed asset improvements on 140-acreOregon Garden site at 879 Main SL will "cf: set ai 50% 01 iis valae.

i. Real property must be solely ownedby OGF.

II. The vaiue of the real properly will be established by using either (1) a certified appraisal completed mtiiin the prior yeai, or (2) the assessed value ofthe real property asestablished by the Manon Count}' Assessor, or (3) s f'iurm.irket valiie estiiblished b? an independent party, ficceptable to both City and OCT,

III. A security instrument will beprepared and executedfor real property orfixed assets pledged as collateral.

c. SinkineFund: Afterexecuticn of (lie loanagrednent between the City of SilveUon and tiieStaieofOregon, OGFwill estabiishand niaintain, a sinkingfimd pledged as coliateraifor tiieloan. Ail, or a portionof the sinking fund, will be piedged to !he City of Silverton. i. The an'-ount ptedseiito the C'.ty of Siiverton ascoliatsral for the SPVVF!oa;i will be detennusedannueily un Noyemter 1" in orderto guaranteethe total. 5eci. rity, from all sources,is equalto or greaterthan the outstanding loan balance, and ii. Thefunds pledged to ll'e Cityof Silverton as collateral maynot he encumbered by

Lease Addendum #1 CXff/City ofSilverton Lease for The Oregon Garden site page? of 3

Page 79 OGF for any other purposes, and

ill. The minimum amount of the sinking fimd pledged to the City of Silverton shall be equalto threeyeais annual debt service payments (estimated to be $150, 000),and iv. OGFwill provideCity with quarterly reports on fund balances and earnings, and

V. In the event OGF does not have sufficient other funds to place in the siridng find, OGFpledges lo placeup lo 90%of the lottery revenues it receivesfrom OEDD to providethe necessary collateral. OGF has entered into a contractwith OEDD to receive $500, 000 in lottery proceeds ill 1997 and 1998. The flmds will be distributed quarterly beginning August 31, 1997 in payments of$62, 500. This paymentschedule anticipates OGF will use the lotteiy funds as fellows: 1997-1998 SinkingFund-Securily for SPWFloan $250,000 1998-1999 SinkingFund-Security tm SPWFloan 200,000 1998-1999 Undesignated-to cover potential shortfall 50.000 Total $500, 000

vi. As thevalue ofOGF's real property and improvements grows excess OGFfunds m the sinking fiind may be released.

4. SecuritySchedule: Table 1,attached hereto, providesa debtservice and security schedule. The aclual debt service schedule will be established by the State ofOregon. The actual collateral amounts provided by OGF in any given year mayvary from those shown onTable 1.

5. Reopener: Theparties agreeto review thesecurity terms oftMs addendum in 2002 atwhich timethe security terms may be modified by nrntualconsent of the parties.

6. The City shall havethe right to require Binds from the SinkingFund to be usedto make ddit servicepayments inthe event ofOOFfailure to make loan paymenls tothe Cityin a timely manner. Approvedby the Board of Directors of the Oregon GardenFoundation on 17"'day of September 1997. Approvedby the SilvertonCity Comril on the 6"' day of October, 1997.

CKy of Silverton: 3X. 3//^f/9Sl DavidMeriwether, City Manager 'Dat?

Garden Foundation:

Vi^vt^f^,. '5/tS/9S_ Rick Gustafson, E^fcutiw Director / <)ale

E:\Corelwp\GARDENS\Ol!d(l\SPWF\lcase. add-l. &]al-a. l»pd

Lease Addendum # 1 OOF/CityofSilverton Leasefor The Oregon Garden site page 3 of 3

Page 80 The Oregon Garden City ofSilverton/Oregon Garden Foundation Joint Venture

David Kwney, JV Director Rkk gsslafiois, JV Director 7f IE. WlllUrSwxl ShielsOblsaJohnsm Slaylon, OR 97383-1334 ItStWFirMAmmic, Sate 1W Partfcmf, OR97209

March 18, 1998

Rick Gustafson Executive Director The OregonGarden Foundation P. O. Box 155 Silverton, OR 97381

RE: LeaseAddendums #1

Dear Rick: OnFebmary 8tt Lease Addendum rfl was forwarded to Torn for execution by him and David Menwether' Apparently it has not been signed byboth parties. Theaddendum was approved by 0^^sePtembe^^99J^^SS£? on'Oc'tobei'6', "1997.~''TomMeek ofOEDD has no objections to thelanguage in the addendum. Pleaseexecute the addendum and forward i. to the City ^Silverto^D^e-s signature. The O^dd'returo oneoiiglnaltoyour office and retain one for their recoris.

X^a)^ DavidW. Kinney^y Joint Venture Director

Page 81

Cityof Silverton/OregonGardenFoundation - SPWF . Loan

Loan Amount $581,000 Annual Interest: 6.00% Interest Only Paymunte1 «t ThreeYaan

Debt Service Payment Schedule LoanSecurity to Cityof Sllverton Value of Real Lottery S$ Ratio ot Sinking Fund Property Guararties SFWF Beginning (OGBOEDD UnusodLoan Total Valua of Sacuntyto 1Balance ($-yre PWgedas Pnrt Payment Loan coflteactL Funds Securttv oanBaiance |_ OTtSJ . Secwitv * Date Balance Interest Rate HKW. &ntatte

581.000 SO*^rip*dQmi«BPMo«<» 581LOOO_ 0-

585,000 1.01 275.000 275,000 0 200,000 110.000 6.00% 0 34.860 34.880 581.000 11-01-98 581.000 0 600,000 1.03 15C»,000 0 0 34,860 34,880 581.000 175,000 450,000 114)1-89 581.000 S.OCK 1.05 30(7,500 0 0 607.500 34,880 581,000 (150,000) 300,000 1141. 00 581,000 8.00% D 34,680 ijao 200,000 415,375 0 0 fl15.375 15.7M 34,660 50.654 565308 (100,000) 11-01-CM 581,000 8.00* 1.24! 154,000 523,044 0 0 (177,844 1flk742 33.812 50,654 548.484 (0,001) 11.01-02 565,206 600% 1.331 154,000 M8. 626 0 0 703,826 546, 8,00% 17,748 32,OOS 50.854 530.717 11.01-03 464 0 731,317 1.4S 0 164,000 577,317 0 6.00% la. 31,843 BO.B54 511.BQB I 11.01.04 530,717 sii 780,183 1.5S 0 154,000 80B.183 0 0 600% 1B.S40 30,714 50,854 491,8W 11-01-05 511,906 0 790,492 1.66 470,830 0 154.000 636,492 0 11-01-06 481.866 6.00% 21.13B 29,516 50.654 668,317 0 822,317 1.83 50.854 448,428 0 154,000 0 11-01-07 470,830 AOEHt 22.W 28.250 701,733 0 655.733 2.02 26,906 50,G54 424,677 0 154,000 11-01-08 446,426 6,00% 23.749 Z23 154,000 73C.&19 0 890,818 6.00% 25.174 25.4S1 50,854 399,904 0 11-01-09 424.677 0 0 927.860 Z49 50,654 372.820 154,000 773,660 11-01-10 6.00* 26,684 23^70 0 0 &12.343 0 988,343 2.80 SO.GSA 344.S34 0 154,000 11-01-11 372,820 e.oo% 28,285 22.389 0 852,960 0 1.0Q6.9GO 3.20 50.654 314.553 154.000 11-01-12 344.534 6.00» 28.982 20.872 ift 3L71 0 154,000 895,609 0 0 1.049,809 314,552 6,00» 31.781 1B.B73 50654 282,771 1141-13 0 1,094,389 4.39 50.654 249.083 0 154.000 940.3B9 0 11411-14 282,771 6.00% 33,688 16,966 987,408 1,141,408 &35 50L854 213,374 154,000 0 0 11.01-15 249,083 8.00% 35>70g 14,845 0 1.038,779 0 1,100,778 8.7E 50,664 175.522 0 164,000 11.01-16 213,374 6.00% 37.852 12,802 0 0 0 0 1,242,816 9.11 135,300 0 154,000 1.088.B18 175,822 6.00%

trtaty -tiOW: MSf* U1M»

Nd« 1. CWb^<"""l^'»^»"^^^'l<^^to_d^~"SL"S*^. S'^S.^£'"d*"':*y' ~ 2. l««e«n«ndm«lt»>'b«IEnialulyap|»andl»n[]»l,bUllirl««oJ«on«Jh

SPWFTwnwRaqueatOd; _ _ . . . . ^. __^. ^,_^ ___ l7'OGF'3«h«]»«ll«il"»»«"ll*""!»»T«l''l"*1«l"»ala>n«ucl]l»ip«fodl98^ma^ 1 C(n'fOrt3]parswioterestonty OOOpwyBar. 3. 6o'FdMii«-'tehaw»natXimum»u'>i»tlwnp»!firont

Page 82 'u

CityofSilverton - Original #1

Addendum #2

Lease Agreement The Oregon Garden Project Silverton, Oregon

Landlord: City of Silverton (City) 306 S. Water St. Sitverton, OR 97381

Tenant; Oregon Garden Foundation (OGF) (fennerly Oregon Nurseiyman's Garden Foundation) 2780 S. E. Harrison St., Suite 204 Milwaukie, OR 97222

WHEREAS, dieOregon Garden Foundation desires to obtain funding *. o renovate theexisting barn at The Oregon Gaiden site as an exhibition facility, and WHEREAS, thelending institution requiresthe City of Silverton, asowner, to release and authorize the use of the barn as collateral for ths loan; WHEREAS. Section 14 ofthe leasebetween the City andOGF states The Oregon Garden project will require someoutside finacdagby OGF and that the financing sources will, inall protebiUty, requireappropriate securiQf mterests'in7hfi~raal-property and/orincome stream generatedby the Garden and related activities andthat bofli City airiOGF agree to proceed in good faith to add to this Lease Agreement by way of an addendum at theappropnate tfmeprovistoiuirelating to the"Garien financing and the security therefore in the Property and other Gariea related assets; and WHEREAS,the Ciiy and OGF agree that the improvements tothe barn will addsignificant value to the property whichWUl benefit both OGF and the City; TheCity and OGF mutaally agree Section 14. 3 ofthe Lease Agreement datedOctober 28, 1995is hereby added as follows:

Section 14. Garden Financing

14. 3 Barn Renovation:

loan the U. S. Dqiartment of A, Puipose: OGF intends to apply for and receive funds guaranteed by Agnculture forthe purpose of reno'. 'atiagthe existing barn intc acaxliibition hall facility for The Oregon Garden. B. LoanAgreement andRelease of Barn for SecuriiyPurposes: OGFwill bethe loau applicant and loanrecipient. Cityhereby releases and autlwrizBs OGF So use the value of the existing bara, but not

Lease Addendum #2 OOF/City ot'Silverton Lease for The Oregon Oarden site page 1 of 2

Page 83 the underlying real property, as security for a loan to renovate the existing barn as an exhibition hall facUityand City taUier agrees to executerequired loan documents stating its release and authorization to OGF. The barn will be a leasehold improvement.

Waiverof City Responsibility for Debt: OGF and City agfec OGF will notencumber and Cify shall haveno responsibilityfiw any debt service or loan payments under terms ofOGF'sloan to renovate the barn as an exhibition hall.

D. Restriction ofUsing Barn as Collateral fer SPWF loan in Section 14. 2: City and OGF agree that the value ofthe barn improvements may not be usedas collateral fin the SPWFloan as describedin Section 14.2. C.3.b

Approvedb}'tlie Board of Direaois of the Oregon Gardeu Foundation on the lSh dayofFebniaiy, 1998. Approved ly the Sihrenon City Council onthe on the 2"' day ofMarch, 1998.

CitynfSilwton: cT~> ->l ^L 9/'s-v^'y DavidMeriwetlier, Cily'REiiager l5atc

Ocemn Garden Foundation: 2>/

E:\Corelwp\OARDENS\Oedd\SFWF\lease. add-2.fiiuil.wpd

Lease Addendum #2 OOF/City ofSilverton Lease for Tl» Oregon Garden site page 2 of 2

Page 84 City of Silverton - Original #1

AddEm'ium #3

Lsase Agreeme'rt The Oregon Garden Project SBwrton, Oregon

Landlord: City of SHvertcn (City) 306 S. Water St. SUverton, OR 973S1

Tenant: Oregon Garden Foundation (OGF) (formerly Oregon Narseiyman's Garden Foundation) P. O. Box 155 Silverton, OR 97381

WHEREAS, the OregonGarden Foundation desires to obtainBinding to renovate the existingbarn at The Oregon Garden site asan exliibitisn fiicility, named the J.Frank Schmldt, Jr. Pavilion; and WHEREAS,the lending institution requires the City of Silverton, as owner, to releaseand authorize the use of the barn as collateral far the loan;

WHEREAS. Section 14 of the lease between die Ci'y and OGF states The Oregon Garden project mil require some outside financing by OGF and that ths financing sources will, in all probabffily, require appropriate security interests in the real property and/or income streiun generated by Ui£ Gardenand related activities andthat bothCity andOGF agree to proceed ir. good faith to addto this LeaseAgreement byway ofan addendum at the appropriate timeprovisions relatingto the Garden fuaccing and 'he security therefore in the Property andother Gardenrelated assets', and WHEREAS,the City and OGF agree that the improvements to thebarn will addsignificant value to the property which will benefit both OGF and the City', The City andOGF imrtirtlly agree Section 14. 3 ofthe LeaseAgreement datedOctober 28, 1995 is hereby amended 10 read as follows:

Section 14. Garden Financing

14. 3 Barn Renovation: A. Purpose: OGFintends to apply for andreceive loan funds guaranteed by the U. S Department of Agnculrore for thepurpuss ofieiiavatiiig tlie existiig barn into anexhibition hall faciiity for The Oregon Oa;den. B. LoanAgreement andRelease ofBarn fof SecurityPurposes; OQFwill bethe loan applicant and loan recipient. City hereby releases andauthorizes OGFto usethe value ofthe existing barn, bu'-not

Lease Addendum #3 OOF/City ofSiivCTtun Lease for The Oregon Garien site page 1 of 2

Page 85 theunderlying real property, as security for a loanto rcncwatethe existingbarn as an exhibitionhall facility and City further agreesto execute required loandocuments stating its release and authorization to OGF. The barn will be a leasehold improvement.

Waiverof City Responsibility for Debt: OGF and Cily agree OGF will notencumber and City shall have no respoDsibililyfar any debt service or loanpaymeats under terms ofOOF's loan to renovate the barn as an exhibition hall.

D. Restriction ofUsing Barn as Collateral for SPWFloan in Section 14. 2: City andOGF agree that the value ofthe barn improvements may not beused as collateral for the SPWFloan asdescribed in Section 14.2. C.3.b

E. In the event the Oregon Garden Foundation defaults on the loan, the City of Silverton agrees to continue a leaseagreement withthe subsequent ownerfor thebarn subjectto thefollowmg stipulations:

1. The lease term will not exceed the useful life of the building whichis defined as the amortization period for the loan guaranteed by the U. S. Department of Agriculture; and

2. Theuse of the facility shallbe limited to usesthat are complimentaiy and compatible with the overall purpose of a botanical garden and public paik facility and are allowed within the City of Silverton Public Attractions (PA) zone, asdefined by the City ofSilverton. The City of SUverton reserves the right to approve any other use of the facility within the Public Attraction (PA) zonethat is complimentary andcompatible with a batanical gardenand public park facility.

3. The City of Silverton shall ensure accessis providedto the barn through the entry road establishedby the Oregon GardenFoundation tmm CascadeHighway to the facility. The City will assume no responsibility for maintenance ofthe entry road. Cily shall allow parking on the site in tlie currently developed parking areas or alternative parking areas on the site, as approved by the City. TheCity and OGF further agree that Lease Addendum #2 datedMarch 5, 1998is hereby superceded and replaced in full by this lease addendum #3.

Approvedby the Boardof Directors ofthe Oregon GardenFoundation on (he_ dayof October, 1998. Approvedby the Silverton City Council onthe on the 5* day ofOctober, 1998.

City of Silverton: ^S^ssg'-'-^SL /K. -7- yy Dawriileriwether,City Manager Date

/°^ hick Gustafson, Executiv^Dlrector

E:\Corelwp\GARDENS\Bam\lease. add-3. final. wpd

Lease Addendum. # 3 CXiF/Cityof Silverton Leasefor TheOregon Garden site page 2 of 2

Page 86 Changes in italicized bold text City of Silverton Braft for Council Review Deletions in strikeout rtrikeout

Addendam #4 Rent Payments

Lease Agreement The Orsgon Garden Project Silvwton, Oregon

Landlord; City of Silvcrton (City) 306 S. Water St. Silverton, OR 97381

Tenant: Oregon Garden Foundation (OGf) (formerly Oregon Nurseryman's Garden Foundation) P.O. Box 155 Silwrton, OR 97381

WHEREAS, Section 2. 1 ofthe lease agreement states leasepayments from The Oregon GardenFoundation will start after gate admissions arecharged to the genera!pubiie, WHEREAS,the parties agree that the intent otfhe original lease was to enableThe Oregon Garden Foundation to use its financial .resources during the period from 1996 to 2000 to develop the gardens and complete the waterrecoveiy system prior to openingand then to begin lease payments at the time the gardsn opens to thegeneral public; WHEREAS,the Oregon Garden Foundaiiu-i will openThe Oregon OardCT in theyears 1999and 2000 for special events andactivities andwill open to the general pubik; in tlie year 2000 without chsrging a mandatoiy gate admission, but will seek voluntary donations or contributions from visitors; and

WHEREAS, the City and OGF agree that in order to abide by the origya; iniem ofthe Issse. initial rent payments should begin on January !, 2000. TheCity and OGF mulualiy agree Sections 2, 1 and2. 2 ofthe Lease Agreement dated October 28, 1995arc hereby amended to read as follows;

Section 2 Brat 2.1 InitialRent. Forthe period of construction of the Garden ard for the first Fiveyeais of garden operetioiis teginning fanvcry I, 2906, itficr Iht ONOF bcgtiwioltoetntg^a'e-adinissions revcnnc from the gcfieral public, rent shall be S I pe- year.

2.2 Rent for Years 6-10 ol' Garace Opcrstioris: Comnie"cing on Jsnuaiy 1, 2005,vt tile yur foliun'ing (lit Gnhycai-ofcclleciieirof^ttt tldimssicns rew/.uc &ec-. llie ger.eral puUic, ONOF The Oregon GardenFoundation sluili pay rentto the City basedupsn a ibrmulE relatedto tire total aduiissions,admission revenues, andinerabersliip dues atiribated to annualpass privileges provided

Lease Addendum #3 OGF/City of Silvertoa Lease for The Oregon Oarden site page I of 2

Page 87 to members. Rent shall be calculated on Uie basis of total admissions and average paid admissions as follows:

(1) Assure a minimum rent in Section 2, 7 below for the first 100, 000 annual visitors.

(2) 2% ofthe average paid admission multiplied by the number of total admissions from 100,000 to 400,000 annual visitors.

(3) 8% of the average paid admission multiplied by the number of total admissions from 400,000 to 800,000 annual visitors.

(4) 10% of the average paid admissions multiplied by the number of total admissions above 800, 000 annual visitors.

Approved bythe Board ofDirectors ofthe Oregon GardenFoundation on the dayafjanuaiy, 1999.

Approved by the Silverton City CouncU on the on the 4th day of January, 1999.

City of Silverton: ?^L 1T.f^ /^<^. yy r. City Manager Date

/ /^o/y?- Rick Gustafsort, Executive Director Date

E:V;orelwp\GARDENS\OeddSPWF\Ieasaadd-4. drafLwpd

Lease Addendum #3 OOF/City of Silverton Lease for The Oregon Garden site page 2 of 2

Page 88 Addendum KfiC,

Lease Agreement Oregon Garden Foimdatio'a Cityoi'Siiverton

Landlord: City of Silverton (City) 306 S. Water Street Silverton, OR 97381

Tenant: Oregon GardenFoundation (OGF) 879 W. Main Street Silverton, OR97381

WHEREAS, the Oregon Garden Foundation desires to obtain funding to complete the construction of The Oregon Garden; and

WHEREAS, Marion County has a4opted a policy to support issuance of tax exempt revenue bonds to support non-profit capital construction projects in the County; and

WHEREAS, Section 14 of die lease between the City and OGF states the Oregon Garden Foundation will require some outside financing by OGF that the finans'nE sources will, in all probability, require appropriate security interests in the real property and/or income sb-eam generated by OG? and related activities andthat both City aiid OGF agree to proceed in good faith to add to this Lease Agreement by way of an addendumat the appropriate time provisions rslatingto OCT fiiiaccingand the security therefore in the Property and other OGF related assets; and

WHEREAS, the City has a long term interest in assuring the effective operation of the wetlands on the OGF site for support of the wastewater system for the City; and

WHEREAS,the City and OGFhave agreed to assure no first lien obligations on the Gordon House and the 1 acre of land on whichit is placed; and

WHEP.EAS, OGF has provided substantial leasehoid improvements to the land includingutilities,, ;. FrankSchmidt Jr. Pavilion, upgradingthe house to full office occupancy, mid the Natural Resources Education Center; aad WHEREAS, Marion Coiinty requires that tax-exempt bonds issued in support of aon-profits must provide security interest in support of the bonds in the 160% ofthe total bond amount.

Page 89 THEREFORE BE IT RESOLVED, the City and OGF mutually agree Section 14. 4 of the Lease Agreement dated October 28, 1995 is hereby added as follows;

Section 14. Garden Financing

14. 4 Marion County Tax Exempt Bond Financing

A. Purpose: OGF intends to apply for and receive bond funds from Marion County guaranteedby pledge ofvideo poker funds received by the County.

B. Loan Agreement and Release of Property: OOF will be the loan applicant and loan recipient. City hereby releases and authorizesthe value ofapproximately 61 acres of land and improvements as described in Exhibit A attached to this document to be pledged in support of the Marion County Bonds.

C. Waiver of City Responsibility for Debt: OOF and City agree OGF will not encumber and City shall have no responsibility for any debt service or loan payments under terms ofOGF's commitment to Marion County. Approved by the Board ofDirectors ofthe Oregon Garden Foundation on June 19 , 2002.

Approved by the Silverton City Council on July 1 , 2002.

CityofSilverton:

"7,^ Bryan'Cosgrove, City-Manager Date

Oregon Garden Foundation

^° Rick D&e

Page 90 q^. -i

LEASE AGREEMENT

The Oregon Garden Project Siiveitoa; Oregon

Laiidiai-d; City of Silverton (City) 306 S. Water Street Siiverton, Oregon 9738; Fax telecopier (503) 373-3210

Tenant: OregonNurserymen's GardenFoundation (ONGF) 2780 S.E. Harrison, Suite 204 Milwaukie, Oregon 97222 Fax teleeopier (503) 653-9558

This is an exclusive lease of 140 acres of land located at 879 West Main Street and named &e "Property" and described in Exhibit A attached. Ac additional 80 acres located at 4592 Pettit Lane N.E. named the "Pettit Property" may be added to the Property at a later date according to the terms of this Lease if and when the "Pettit Property" falls witfca the defaiiuoa of the Property and described in Exhfoit B attached. Thepuipose ofthis Lea-seis to enablethe ONGF to establisha worldclass botanical gardenfor research, education, display, rscreatioa, and for ihe pubue snjoymeut as a major to'jrist attract'. oc for Oregon (Oregon Garden) and a reclaimed watsr distribution system for the City. The operation is named "Garden" for the puipose ofthis Lease. The ONGF intends to operate the Gardenfor the benefit ofthe generalpublic andto ciuugean admission fee. Includedwould be display gardens, special visitor features, education, researchactivities, related facilities suchas picnic areas, amphitheater, parking, ponds, giftshop, restauiant, andother facilities related to the destination attraction,

Tae purpose for the involvement ofthe City is to utilize the Property to (1) reuse treated waste water (hereafter reclaimed water); icrigation and wetland mitigation; (2) enable ONGF to create the Garden as a tourist and educatio'ial attraction for the community and the State; (3) preserve and enhance the beauty- and .idtural features ot' the Property; (4; diversify the cotnmuaity' s economic base; and (5) mirJmize waste water treatment expenses and generate revenues as a return on the City's capital investment.

LEASE AGREEMENT The Oregon Garden Project Silverton, Oregon October 28, 1995-Page 1

Page 91 Section 1. Occupancy

1. 1 OriginalTerm. Theterm ofthis Leaseshall commence onNovember 1, 1995and continue through December 31 , 2095, unless sooner terminated as hereinafter provided.

1. 2 Access and Possession.

(1) Possession. City shall retain possession of the Property and accept lull maintenance responsibility of the Property until the time full possession is granted by the City in writing to ONGF. Granting of possession shall occur after ONGF and City approve the Master Plan, ONGFprovides evidence to the City ofSilverton ofONGF's financial commitment as described in Exhibit C, and ONGF provides the City with 60 days written notice of its desire to take possession ofthe Property and ONGF's readiness to proceed with development. City shall issue a written notice to ONGF granting possession on a date certain, which shall not be unreasonably withheld.

(2) Access. (a) ONGF. Priorto thetime it takesfull possessionof the Property, ONGF,its employees, agentsand representatives, shallbe grantedfall accessto thesite for purposes ofsite investigations, design,tours, orother reasonable garden related activities. ONGFagrees to notify City prior to visits andagrees to minimize impacts onboth tenants residing onthe Property and on fann-related operations. (b) City. Cityretains full rightsof access to theProperty for purposes of construction, maintenance, inspection or any other activities deemed necessary throughout the term ofthe Lease. Once ONOFhas taken possession ofthe Property, City agrees to notify ONGF prior to visits and agrees to minimize impacts on Garden operations. 1.3 Renewal Option. Ifthe Leaseis not in default, ONGFshall have the optionto renew this Lease for an additional 99 years. At each Review Period scheduled every 10 years (as defined in Section 1. 8) the terms canbe extended by mutual agreement ofthe City and ONGF. Renewal is subject to the following conditions: (1) The optionto renewmay be exercised by written notice to City givennot less than one year or not more than five years prior to the last day ofthe expiring term. The giving of suchnotice shall be sufficientto make the Leasebinding for the renewal term withoutfiirther acts of the parties. (2) Theterms andconditions ofthe Lease for the renewal term shallbe identical with the original term.

LEASE AGREEMENT The Oregon Garden Project - SUverton, Oregon October 28, 1995 - Page 2

Page 92 1.4 Expansionof Lease. City shallmamtain anoption to purchasethe additionalSO acresof property knownas the Pettit Property. City shall assurethat it hasthe ability to assign theoption to ONGF. City shaUuotify ONGFat &e aroethat tt<.e ability to exercise±e City option is available. Consideration ofoptioas for acquisition vdll be conducted in the foUowing order:

(1) City wiiipurchase the Pettit Property for thepurpose ofexpanding the reclaimed water distribution systems andto expand ths C-ardsn. Funds will be obtained by the City to support the purchase and installation ofirrigation and related facilities. Vw Property shall be redefmed to include the Pettit Property and shall ba subject to the terms of this Lease unless a separate lease for the Pettit Property is negotiated., (2) City shall purchase the Pettit Property. The Property shall be redefmed to includethe Petrit Property andshall be subject to the terms ofthis Lease unless a separate lease for the Pettit Property is negotiated. City will not pursue condemnation for acquisition ofthe property. (3) Inthe eventthe City electsnot to purchasethe Pettit Property withintwo years ofthe ability to exercise the option, City shall assign the option to purchase the Pettit Property to ONGFso thatONOF may exercisethe purchase option. Ifthe Pettit Property is purchasedby ONGF,it shall not be part ofa the Lease. 1. 5 Commencement of Constructioa. ONGF must commence constructiou ofthe Garden onthe Property by December 31, 1999 or this Lease shall beterminated with neither party having any farther liability to the other. Both parties may agree inwriting to eKtend this deadline. 1.6 Commencement ofOperations. ONGFmust commence operations ofthis Garden by opening the Garden to the public byDecember 31, 2005 or this Lease shall be terminated. If circumstances beyond the control ofONGF prevent opening the Garden, the City shal! not unreasonably withhold an extension ofthe opening date. 1.7 Condition to Proceeding. Cityhas assured that the Property hasbsen obtained and al! land use requirements including urban growth boundary, planning, zoning and amiexation to the City ofSilverton hasbeen accomplished. SuchcertiScation is attached asExhibit D. Ifthe Joint Venture is terminated, the Lease is tsrmmated,

1.8 Review Period. The Review Period is scheduledfor 10 years from the date that ONOFbegins collecting paidadmissiciu eAd easb 10year "eriod. thereafter. Both partiesagree to review all terms and conditions of this Lease. Any changes to the Lease must be prescribed in the Lease or amendments to the Lease and are subject to mutual approval.

LEASEAGREEMENT The Oregon Garden Project - Silverton, Oregon October 28, 1995 - Page 3

Page 93 Section 2. Rent

2. 1 InitialRent. Fortheperiod of construction ofthe Gardenandforthe firstfive years after the ONGFbegins collecting gate admissions revenue from the general public, rent shall be $1 per year.

2.2 Rent for Years 6-10 of Garden Operation. Commencing on January 1 ofthe year following the fifth year ofcollection of gate admissions revenue from the general public, ONGF shall pay rent to the City basedupon a formula related to the total admissions, admissions revenues, and membership dues attributed to annual pass privileges provided to members. Rent shall be calculated on the basisof total admissions and averagepaid admissions as follows:

(1) Assure a minimum rent as prescribed in Section2. 7 belowfor the first 100,000 annual visitors.

(2) 2% ofthe average paid admission multiplied by the number oftotal admissions from 100, 000 to 400, 000 annual visitors.

(3) 8% of the average paid admission multiplied by the number oftotal admissions &om 400, 000 to 800, 000 annual visitois.

(4) 10% offhe averagepaid admission multiplied by the number oftotal admissions above 800,000 amiual visitors.

2.3 Paid Admissions. Paid admissions is defined as all visitors that pay upon entry to the Garden including mdividuals, groups, senior citizens andchildren plus a portion ofstandard member subscriptions. Paidadmissions would be calculated annually by addingthe total admissions to the annual staadard member subscriptions revenue multiplied by 30%. Standard member dues does not includecontributions by members abovethe standard.

2.4 Average Paid Admissions. Average paid admissions is defined as the total annual paid admissions (Section 2. 3, paidadmissions plus 30% ofstandard member subscriptions) dividedby the total number ofadmissions that year. The Average PaidAdmissions shall beused inthe calculation ofpercentage rent to bepaid to the Cityin the fonnula described in Section2.2 above.

2.5 Rent After Initial 10 Years. Both parties agree that the formula for rent for the first 10 years shall be applied according to the provisions in Section 2. 1 to 2. 4 without exception. Beginningwith the following year, rent to theCity shallbe calculated on the basis of annual cash flow as described in Exhibit E attached to this Lease. Annual payments shall be made to the City

LEASE AGREEMENT The Oregon Garden Project - SUverton, Oregon October 28, 1995 - Page 4

Page 94 equal to 20% ofthe positive cash flow for the previous year of operation or the minimum payment as describedin Section2. 7 beiow whicheveris greater.

2.6 Siiverton Day. ONGF shall provide one day per yearin whichall admissionsto the GEirdeii on the specified day would be dedic&t. -d to the City ofSiivsrtoc. arid known as SilveaonDay. Silverton Dayis to be a non-holiday weekdaycr weekendnot in contuct wiTb. ONGFprogram activities andselected by the City, TheCity shallbe ailowadto setits own adiiission rate and utilize the Garden for co.mmdp. ity promotion or special events in keepicg with thepurpose ofthe Garden. Theproceeds fromthe admissions wouid be provided to the City

2. 7 Minimum Rent. Commencing or. year 6 as determined in Section 11 above, ONGFagrees to assurea minimum annualreut of$7, 500to the City. The revenue from Silverton Dayprovided in Section2. 6 is includedin the calculation ofminimum rent.

2. 8 ConcessionRevenues. Concessionrevenues are gross sales revenues for all activities within the Garden including gift shop^amphitheater, food servicg, nursery sales or other on-site ONGF owned and operated concession activities aotiaeludiag a &rraai sit down restaiBaat. All concessionrevenues shall be that of the ONGF.

2. 9 Enterprise Activities. Enterprise activities are defined as all other revenue producing activities not specifically included ir. Concession Revenues. City and ONGF shall sharerevenues from Enterprise Activities includiaga formal sit downrestaurant, if established. Enterprise Activities andrelated responsibility andrevenue sharingshai! be approved by ONGF and City before such activities are commenced. 2. 10 Payments. ONGF shall provide an annual report ofpaid admissions basedupon the calendar year by March 1 ofthe following year. The initial year ofpayments shall be proratedfor the number ofdays applicable to rentfor that year. ONGFshall provide paymentby April 1 ofthe following year, Latepayment shallbear interest at 1%per month of the unpaid balance overdue.

Section_3^_IIse nf Property 3. 1 Property. ONGFshall use the Property fora displaygarden open to the general public. Approved uses may include display gardens andresearch gardens (i.. e. rose, rhododendron, conifer, Uilip, organic, envu-oiuneatal, nature), edueaiion conference center, food service,,picnic areas,gift Shop, amphitheater, andrelated support facilities as may be detenm. aed in the MasterPlan. Otheractivides maybe conductedon the Property witti approval ofONOF and Citv.

3.2 Garden, ONGFshall establish a dispiay garden on the Property for whichan admission will be charged. Section 2 addresses payments to the City for uses within the defined

LEASEAGREEMENT The Oregon Garden Project - Silverton, Oregon October 28, 1995-Page 5

Page 95 Garden area. All uses inside the admission area are included in the lease payment requirements ofthis Lease except for the formal sit down restauiant. All uses outside the admission area are consideredEnterprise Activities andrequire City approval andLease payments separatefrom this Lease.

3. 3 Master Plan. ONGF shall develop and maintain a Master Plan which must be approved by the City. The Master Planwill be designed to maximize the volume ofreclaimed water utilized on the site. Construction of facilities must be approved by the City and must be consistent with the adopted Master Plan. City will not unreasonably withhold approval of the Master Plan.

3. 4 Wetlands.

(1) InitialWetlands. The City shall developapproximately eightacres of wetlands that are identified as "Phase I Wedands" on the attached map Exhibit F of this Lease. ONGF must assure compliance with regulations and permits for the mamtenance ofthese wetlands.

(2) AdditionalWetlands. ONGFagrees to accommodate the development ofan additional eight acres ofwetlands in the Master Plan for the Garden for a total - City developed - wedandsnot to exceed 16 acres. The development ofup to 16 acres ofwetlands is the financial responsibility ofthe City. Any additional wetlands proposed in the Master Plan are the responsibility ofthe ONGF. ONGF agrees to comply with all applicable regulations for the wetlands and to maintain the wetlands as part of the Garden.

3.5 Restrictions on the Use. In connection with use of the Property, ONGF shall:

(1) Conformto all applicablelaws andregulations of any public authority affecting the Property.

(2) Refrain fcom any activity that would violate laws regarding nuisances. (3) ONGFmay use or otherwise handle on the Property only those hazardous substancestypically usedor sold in the prudent andsafe operation of the Garden. ONGFshall comply withall environmental lawsand exercise care in the use, handling, and storage of hazardous substances and shall take all practicable measures to minimize the quantity and toxicity ofhazardous substances, used, handled, or stored onthe Property. The term environmental law shall meanany federal state, or local statue, regulation, or ordinanceor any judicial or other governmental order pertaining to the protection ofhealth, safety or the environment.

LEASE AGREEMENT The Oregon Garden Project - Silverton, Oregon October 28, 1995 - Page 6

Page 96 3. 6 Existing Improvements. City shall retain ownership ofexisting land and improvements asidentified in Section 15. 5 below. Until ONGFtakes possession. City shall have theright to rent facilitieson the condiiion that all rentals containa maximum60 daynotice provisionthat accommodates ONGFability to take possession of the Property inclusive ofthe existing improvements. Any demolition ofexisting improvements requires vrt-ittenjlpprovsl cf both parties or agreement in the Marter Plm. Once ONGF takes possession, ONGF shall have the right to use existing improvemests aspart ofthe Garden or in support ofconstruction atno additional rent; and City and ONGF must approve the terms, conditions, and rent of anysublease ofexisting impiovsments to a party other than ONGF. Revenues andresponsibilities ofthe parties shall be detennined with the written approval of rental. 3. 7 Farm Use. Any agreement for farm use requires the approval in writing ofboth parties beyond December 31, 1995. Priorto ONGFpossession, City shallbe responsible for developingand adnumstering any agreement for farm use. All revenues andresponsibilities of such anagreement shall belong to City. Any agreement to conduct faimuse afterpossession by ONGFshall require written approval ofboth parties which will include distribution ofrevenues andresponsibilities. Inthe event thatONGF requires termiuationoffarm operations basedupon anagreement approved by ONGF, ONQFagrees to eitherpermit harvest ofthe existing crop or to beresponsible forany compeasatioc to thefarmer asrequired inthe agreement.

Section 4. Irrigation and RedainK-il Water pistrit'KtiflB 4. 1 Waste Water Treatment. ONOF agrees to accept reclaimed water &om the City waste water treatment facility for purpose ofimgatioa andreuse up to the maximum amount allowed in theNPDES CNational Pollution Discharge Elimination System) pemut to be obtained by the City. The pipe anddistribution system will be sizedadequately to properly receive specified volumes ofreclaimed waterarid distribute it onthe Property m a mannerthat is consistent with the Master Planand adequate for the City. Adequate level is defined assufficient to accommodate the maximum volume ofreclaimed water detennined in Section 4. 10 below. 4.2 Cost Included m the Lease. The price ofproviding wclaimed waterfrom the City is included in overall lease paymeit specified in Section 2 in this Lease, 4.3 Installation. Thecost ofinstallation ofthe main line andinitial reclaimed water distributionsystem on the irjtial 140acres of the Property will be the responsibility of the City as specified in the Joint Venture Agreement. 4.4 Maintenance. The maintenance ofall main line andreclaimed water distribution systems onthe Property willbe the resconsibuity ofONGF. ONGFagreesto maintainthe systems to an adequate leve: to assure recaipi ofreclamied water from the City.

LEASE AGREEMENT The Oregon Garden Project - SUverton, Oregon October 28, 1995 - Page 7

Page 97 4.5 Permit Requirements. ONGF agreesto adhereto all permit requirements established as conditions for this reclaimed water distribution system.

4. 6 Reclaimed Water Supply. The City is responsible for assuring that the reclaimed water is available to the Property. All maintenance, regulations andreplacement ofthe system noton the Property will bethe responsibility ofthe City. ONGFshall havethe first rightto all of the City's reclaimed water within the volumes defined in Section 4. 10 below subject to the NPDES permit requirements.

4. 7 Reclaimed Water Quality. The City shall be responsible to assure that the reclaimedwater that is providedto the Gardenis ofsufficient quality asfollows:

(1) No federal or state water quality standards established for this permitted activity are violated. (2) City shallbe responsible for noxious odorsresulting from theuse of reclaimed water on the site. City will expedite eliminating any such odor to the extent practicable. City shall provide analternative source ofwater until noxious odors are eliminated from the useof reclaimedwater. Thereplacement waterprovided by the Cityshall be part ofthe Leaseand shall be in an amount that is necessary to assure survlvability and continued growth ofthe Garden. The provision ofthe replacement water shall not threaten the health and safety ofthe citizens of Silverton.

(3) City shall accept responsibility for damage to the Garden causedby the provision ofreclaimed water that is outsideof the ascertainable ranges of quality asestablished m ExhibitG ofthis Lease. Bothparties agree to reviewthese standaids by January 1, 1997based uponthe MasterPlan and at each subsequent Review Period.

4. 8 Non-Garden Areas. The total acreage ofthe initial 140 acres ofthe Property is available for reclaimedwater distribution. ONGFagrees to manageareas not included in the Garden in activities that would support the receipt ofreclaimed water includmg plantings, irrigation andwater features. 4. 9 Supply. City agrees to supply ONGF anamount ofreclaimed water as defined in 4. 10 below for the operation ofGarden andthe Property according to the Master Planfor the development ofthe Property. ONGFagrees to accept the reclaimed water for imgation, reuse andwater treatment. The pipe anddistribution system shall be sized adequately to receive the amount of reclaimed water to serve the Garden as determined in Section 4. 10 below.

4. 10 Volume. The City and ONGF shall establish minimum and maximum volumes of reclaimed water by January 1, 1997, based upon the Master Planof the Garden and the City's NPDES permit.

LEASE AGREEMENT The Oregon Garden Project - Sflverton, Oregon October 28, 1995 - Page 8

Page 98 4. 11 Water Rights. City agrees to preserve existing water rights on the Property for use within the Garden subject to limitation of state law. City shall provide ful! use of water rights to ONGF.

Section 5. Repairs and Mainteiiance

5. 1 City ObligatiOE. City shall be under no obiiguion M make or perform any repairs, maintenance, replacemer-ts, alterations, or improvements onthe Property afterinitial construction of the reclaimed water distribution system except as otherwise prcvMed in this Lease.

5. 2 ONGF Obligation. ONGF, at its expense, shall maintain the Garden iacludmg the urigationsystem, reclaimedwater distribution system, andwetland in compliance withpemiit requirements.

5, 3 Reimbursement for Repairs. If ONGFfails or refuses to makerepairs that are required to meet permit requirements, the City may, after 30 days written notice to ONGF, make the repairs and charge the actual cost ofrepairs toONGF. Suchexpenditures by City shall be reimbursedby ONGFon demand together with interest atone percent per month on the outstanding balance from 90 days after the demand.

Section 6. Insurance

6. 1 CasualtyIcsurance. ONGFshall procure andmaintaui insurance policies covering the risks ofdirect physical loss on a replacement vaiue basis ascommonly insured in a multi-peril insurance policy for the benefit ofCity, Permitted Leasehold Mortgagee (Section 14. 1) and ONGF. ONGF shall provide the City -wvhproof of insuaace, notification in the event ofcancellation andthe opportunity to cure any delinquent premiums. 6.2 Liability Insurance. During the temi cfthis Lease, ONGFshall maintain public liability andproperty damage insurance. City andpemsittsd Leasehold Mortgagee arenamed insureds.

6.3 Proceeds from Insuracce. In the event of casualtyloss proceeds shall bepaid- (1) if 10%or more inexcess ofreplacement cost to Permitted Leasehold Mortgages, ifany, otherwise, ONGF; (2) ifiess thanreplacement cost, to ONGF. 6, 4 Replacement. ONGF is respoasible for replacement ofdamaged improvements.

6. 5 Reclaimed Water Damage. City shail provida lasurance or indemnity against damagescaused by reciaimed watersiippiied by thetreatiaect. plant that does not meetagreed ascertainable standards as contained m Exhibit 0. City shall provide simualiy proofof

LEASEAGREEMENT The Oregon Garden Project - Silverton, Oregon October28, 1995-Page 9

Page 99 insurance and level of coverage to ONOF. ONGF shall provide annually to the City an estimate ofthe value of improvements on the Property. Coverage limits may be increased upon agreementby both parties.

Section 7. Taxes

7. 1 Property Taxes. ONGF shall pay as due all real and personal property taxes and special assessments levied againstthe Property.

7.2 Contest ofTaxes. ONGFshall be pemiitted to contest the amount ofany tax or assessment as long as such contest is conducted in a manner that does not cause any risk that the City's interest m the Property will be foreclosed for aonpayment.

7.3 City Taxes. City agreesnot to levy special taxeson the Gardenoperation including admissions taxes, eutertauunent taxes or other taxes that would directly afiect admissions revenue. In the event that such a tax is levied, ONGF shall deduct an amount equal to the taK levied by the City from rent payments described in this Lease.

7.4 Property Tax Exemption. ONGF is a nonprofit corporation and anticipates an exemption from the local property taxes levied by MarionCounty. The responsibility for obtainingthis exceptionis ONGF's. In the event property taxes arelevied, ONGFshall pay required taxes and suchamounts would not be considereda City tax as describedin Section7.3 above.

Section 8. Damage and Deatruction

8. 1 Casualty Loss.

(1) If theProperty is damagedby any casualtywhich is coveredunder fire and extended coverage insurance carried on the Property, then ONGF shall restore any damagethat impairs the reclaimed water distribution requirements for the City.

(2) Ifthe Property is damagedby anycasualty which is not covered by insurance or the proceeds ofavailable insurance are less that one hundred percent (100%) ofthe cost of restoration, then City shall payfor the cost ofrestoration for the reclaimed water distribution systems. The City and ONGF shall endeavor or develop mutual agreements on the restoration plan. If unable to agree, the City can restore the reclaimed water distribution system at its discretion.

LEASEAGREEMENT The Oregon Garden Project - SUverton, Oregon October 28, 1995 - Page 10

Page 100 Section 9. Liens

9. 1 Liens. Except with respect io activities for whichthe City is responsible, ONGF shall pay as due ali claims for work done oil and for services rendered or maierial ftOT;ished to :he Propsrty, andshall keep (he Property free from any liens. IfONGF fails to pay any such c!aims or to discharge any lien, the City may do so and ccUsct the cost as additional rent.

Section 10. Assignment and Sublettjng

10. 1 Subletting. ONGF shall have the right to sublet any part ofthe faciiiiies and improvements owned by ONGF so long as the sublease does not extend beyond the ieim and conditions of the Lease or renewals thereof and does not encumber the Property.

10.2 Property. Nopart of the Property exceptfor those providedin Section 10. 1 above may be assigned, mortgaged, or subieased, normay a right ofuse ofany portion ofthe Property be conferred on any third person by any other means, without prior written consent ot Both parties which consent will not be um-easonabiy withheld.

10. 3 Timely Response. Tbe City and ONGF shall not unreasonably delay cdiiseiit or otherwise unreasonably withhold consent if the ONGF is seeking approval for contractors, subcontractors and other activities that support the development of the Garden.

Section 11. Default

The following shall be events of default: 11. 1 Default in Rent. Failure ofONGF to pay any rent or other charge within 120 days after it is due.

11.2 Default in Other Covenaats. Failure of ONGF to compiy with any term or condition or fulfill any obligation ofthe Lease, other than the payment ofrent or other charges, within30 daysafter written notice by the Cityspecifying the nature of the default wiih reasonableparticularity, Ifthe defaultis ofsuch a. cataie that it cannotbe completely rerasdied withinthe 30 day period, this provision shallbe complied with ifONGP begins comsticn ofihe default within the 30 day period andthereafter proceeds with reasonable diligence and is. good faith to effect the remedy as soon as practicable. 11.3 OtherActs ofDefault. An assignmentby ONGFfor thebenefit of creditors; the fiiing by ONGFof a voluntary petidoa ic bankruptcy; ar.a. jjudication thatONGF is baDkrapto.^ the appointment ofa receiver ofthe properties ofONGF; the filing ofaiiy invoiuaiary petit. anof bankruptcy andfailure on ONGF to secure a dismissal ofthe petition within 30 days S&STfiling;

LEASE AGREEMENT The Oregon Garden Project - Silverton, Oregon October 28, 1995. Page 11

Page 101 attachment of or the levying ofexecution on the leasehold interest and failure ofONGF to secure discharge of the attachment or release ofthe levy of execution within 10 days shall constitute a default.

11.4 Abandonment. Failure of ONGF for 60 days or more to occupy the Property for the purpose peimitted in this Lease, unless such failure is excused under other provisions ofthis Lease or by the express written consent of the City.

11. 5 City Default. FaUureoftheCity to provide reclaimed water or alternative water for a period exceeding 30 consecutive days asspecified in this Leaseupon written notice ofONGF is a default by the City.

Section 12. Remedies on Default

12. 1 Termination. In the event of a default, the Lease may be terminated at the option ofthe non-defaulting party bywritten 15 daynotice to the defaulting party.

12.2 Remedies. Upon anuncured default the nondefaulting party may cure the default and seek reimbursement from the defaulting party or terminate the Lease. Disposition of (he Property upon termination:

a. In the event oftennination because ONGF deteimined to locate the Garden at some other site, ONGF shall pay City for its non-recoverable expenses which are agreed to be $500,000 and shall have no further obligation.

b. In the eventthe Gardenor ONGFfails or ceasesto exist dueto insufScieut funds or anyother reason whatsoever and the Garden is notrelocated the Lease is terminatedand ONGF shaU vacate the property and shall be relieved ofany further obligation.

c. In the event City fails to supply the reclaimed water, alternative water, 01 otherwise defaults, ONGF shall have the option to purchase the Property for $250, 000, Upon the exercise ofthis option to purchase by ONOE,the City shallhave no obligation under the Lease and ONGF shall have no obligation to the City for reclaimed waterdistribution or wetlands.

Section 13. Surrender at Exniration

13. 1 Condition of Property. Upon expiration ofthe Lease temi or any extension thereof or earlier termination on account of default by ONGF, ONGF shall deliver all keys to (he City and surrender the Property including all facilities and improvements.

LEASE AGREEMENT The Oregon Garden Project- Silverton, Oregon October 28, 1995 - Page 12

Page 102 Section 14. Garden FiaanUBg

14. 1 The pries acknowledge that the project will require some outside financing by ONGF and that the fmaccing sources will, in all probability, require appropriate security interests in the Property and-'orT. come stream generatedby the Garden and related activities. Inaddition, the Citymay be subject, to certainiiiuitauons, restrictions, andcondidoss rslating to theProperty associatedwith funds received by the City aspart ofits reeiaimedwater distribution system and environmentally related permits. Both parties agree to proceed in good faithto addto this Lease Agreement by wayof an addendum atthe appropriate dine provision? relating to Garden financing andthe seeuaty therefore inthe Property and other Garden related assets.

Section 15. Modifications. AiWitional IlKprmment? 15. 1 Improvements. ONGF may modify the improvements which are consistent with the Master Plan (including demolition of existing unprovements) onthe Property andmay make additional improvements to theProperty atany time. Improvements consistent withthe Master Plan can be mifiated by ONGF through the normal City permit process andrequires no special review. 15.2 ONGFTitle. Title to all improvements andadditional improvements fundedby ONGF shall be and remain in ONGF. 15.3 City Title. Title to all improvements andadditional improvements funded byCity shall be and remain in City. 15.4 Joint Title. Title to all improvements andadditional improvements funded by ONGFand City shallbe jointly heldaccording to thepercentage ownership held by each party. 15.5 ExistingImprovements. Titieto existingmiprovements onthe Property aslisted in Exhibit H shall be and remam in City.

Section 16. Indemnity 16. 1 ONOF shall be in exclusive possession c the Property and City shall not be liable forany injury ordamage to anyperson orproperty fromwhatever causeexcept thatcaused by thereclaimed waterthai Ciiy is obligatedto supplyand any enterprise activitythai includes the City either in operations or in receipt ofrevenue. 16. 2 ONGF Indemmificatioc. ONGF shall isidemnify and defend the City, its officers, employees, andagents from anyclaim, loss,or liability arisingout of o; related to anyactivity of ONGFas theProperty or anycondition ofthe Property inthe possession orunder the control of

LEASEAGREEMENT The Oregon Garden Project Silverton, Oregon October 28, 1995 - Page 13

Page 103 ONGFexcept from events causedby the provision ofreclaimed water or actions by the City. ONGF shall indemnify and hold City harmless against all liabilities that may be imposed on or incurred by City by reason of any ofthe following;

(1) Work done onthe Property by ONGFor contractor ofONGF. .

(2) Any operations ofthe Gardenor otherwise on the Property for its intendedpurpose.

(3) NegligenceofONGF or any of its agents, employees, invitees, sublessees or licensees.

(4) Injury or damageto anyperson or property occurring on the Property related to Garden activities.

(5) Failure of ONGF to perform any provisions ofthis Lease.

16.3 ONGF shall defendCity from any suchclaims as includedin Section 16. 1.

16.4 City Indemnification. City shall indemnifyand defend ONOF, its officers, employees, andagents from anyclaim, loss, or liability arisingout ofor related to anyactivity of ONGF on the Property or any condition of the Property m the possession or under the control of the City. The City shall indemnify and hold ONGF harmless against all liabilities that may be imposed on or incurred by ONGF by reason ofany ofthe following:

(1) Work done on the Property by the City or contractor ofthe City.

(2) Disteibution ofreclaimed water.

(3) Negligence ofthe City or any ofits agents, employees, invitees, sublessees or licensees.

(4) Failure ofthe City to perform anyprovisions ofthis Lease.

16. 5 City shall defend ONGF from any such claims as mcluded in Section 16. 4.

16. 6 Joint lease activities shall specifythe responsibility and liability ofthe parties.

Section 17. Condemnation

17. 1 If all the Property is taken by eminent domain by other governmental entities, or that portion taken which in ONGF's solejudgment renders the remainder not suitable to restore and continue the Garden and other related activities, then at ONGF option, this Lease may be

LEASE AGREEMENT The Oregon Garden Project - SUverton, Oregon October28, 1995 - Page 14

Page 104 terminated without penalty. It is the intent ofthe City not to use condemnation authority with regard to the teasehoid interest ofONGF.

17.2 If so terminaced City shall bs entitled to thai portion ofthe awardreferred to as the "Lacd Award". ONGF shall be entilied to that portion re&rred to as "i.easehold Award",

i 7. 3 If iess thanall the Propsrty is taken Ciiy ihall be entitled to thatportion ofthe awardreferred to as "LandAward". !f there is a PermirtsdLeasehoid Mortgagee it shall be entitled to the baimce up to Ae amount owing on fee debt withthe remainder to ONQF, and if there is no Permitted Leasehold Mortgagee, ONGF shai) be er.titied to the balance.

17.4 Any dispute over the division ofthe awardshall be decided in the same court in which the condemnation action was brought.

Section IS. Dispute Resolutisu!

18. 1 In the event of any claims, conteoversies and disputes, whether they be Statutory, contract, or in tort (including claims ofraisreprssentation, concealment, negligence or fraud) between or among any of the parties, which arise out of or are related to this Lease, or which relate to the interpretation or breach of this Lease shall be resolved by the parties whenever possible.

18.2 Inthe event that the parties areunable to resolve the claim, controversy or dispute, theparties agreeto resolvethe issuein accordance with the process ofmediation. A.request for appointment ofa mediator shall be submitted to the Wiliamette University Center &r Dispute Resolution fiVUCDR), attention Director. In the event the \VUCDR ceases to exist, aa alternative for mediation shall be selected by mutual agreement. The parties agree to participate in good faith with the appointed mediator. Any dispute arising between the parties relating to or concerningthis Lease which is not resoived by mediation shall be resolved by MarionCounty Circuit Court. Nothing herein shall prevent a party from filrag ail appeal or petition for review withthe Oregon appellate courts. All costs for the mediation shall be split equally among the parties. 18.3 Eachparty to this Leaseshall bearthe costs ofattorney or other representative who shall assist or represent the party in mediation and its own court or other costs.

Section 19. Miscellaneous

19. 1 Nonwaiver. Waiver by either party of strict performance of any provision of this Leaseshall not be a waiverof or prejudice theparty's rightto requirestrict perfonnanceof the same provision in ths future or of any other provision.

LEASE AGREEMENT The Oregon Garden Project - Siivertoa, Oregon October 28, 1995 - Page 15

Page 105 19.2 Attorney Fees. If suit or action is instituted in connection with any controversy arising out ofthis Lease assuming the dispute could not beresolved by the parties through negodation or mediation in accordance with Section 18, the prevailing party shall be entitled to recover in additionto costs suchsums as the court may adjudgereasonable as attorney fees at trial, on petition for review, and in any appellate proceeding.

19.3 Notices. Any notice requiredor pemiitted underthis Leaseshall be given when actually delivered or 48 hours after deposited in the United States mail as certified mail, addressed to the address and with attention to the parties first given in this Lease, or to such other address and may be specified 6om time to time by either of the parties in writing.

19. 4 Non-TransferabIe Interest. City's interest m the Property is not transferable without the consent ofONGF. ONGF's interest in the Lease is not transferable without the consent of the City.

19. 5 Force Majeure. Iftheperfonnanceby either of the parties of their respective obligations under this Lease (excluding monetary obligations) is delayed or prevented in whole or in part by assy Legal Requirement (and not attributable to an act or omission ofthe party), or by any acts of God, fire or other casualty, floods, drought, earthquake, storms, explosions, accidents, epidemics, war, civil disorders, strikes or otherlabor difficulties, shortageor failureof supply ofmaterials, labor, fuel, power, equipment, supplies ortransportation, or by anyother cause not reasonably within the party's control, whether or not specifically mentioned, the party shall be excused, discharged, andreleased &om performance to the extent such performance or obligation (excluding any monetary obligation) is so limited or prevented by such occurrence without liability of any kind. As used herein the tenn "Legal Requirement" includes all present andfuture laws, ordinances, orders, rules, regulations, andrequirements ofall federal, state, and municipal governments, departments, commissions, boards, andoSBcers, unforeseen, ordinary as well as extraordinary.

19. 6 Captions. The captions ofthis Lease are for convenience and reference only, and in no way define, limit, or describe the scope or intent ofthis Lease or in any way affect this Lease.

19.7 BindingEffect. Theprovisions ofthis Lease shall be binding upon and inure to the benefitof the successors andto the extent permitted, assignsof the parties. There areno third party beneficiaries hereof.

19. 8 Amendments. No supplement, modification, or amendment of this Lease shall binding unless executed in writing by both parties. 19.9 Interpretation. The use m this Lease ofthe words "including, " "suchas, " and wordsof similar import following a general statement, term, ormatter, shallnot beconstrued to

LEASE AGREEMENT The Oregon Garden Project - SUverton, Oregon October 28, 1995 - PageId

Page 106 limit such statement, term, or matter in any manner, whether or not language ofnon-limitation (suchas "without limitation") or ("but not limited to'') is usedin connection therewith, butrather shall be deemed to referto all ofthe provisions or matters that could reasor.ably fall within the scope ofthe general statement, lean w matter.

19. 10 Severability. If a court ofcompeient jurisdiction finally detennmes that any provision ofthis Lease is invalid or unenforceable, fee court's deteranmanofl should not affect the validity or ecforceability ofthe remaimng provisions ofthis Lease, (n such evsst, this Lease shall be construed as if it did not contain the particular provision thai is determined to be invalid or unenforceable. No such determination shall affeci any provision of this Lease to the extend that is otherwise enforceable under the laws ofaay other appiicable jurisdiction.

19. 11 Survival. The covenants andreprsssatations ofparties, spesifically including, but not limited to, the covenants regarding indemmfication and attorneys fees shall survive the expiration or terminauoa ofthis Lease. 19. 12 Mutual Negotiation. Theparties hereto confirmthat they have mutually negotiated this Leaseand fflat none ofthe terms or provision ofthis Leaseshall be construed by presumption against either party.

19. 13 Authority. Each individual who executes this Lease on behalfof a party wan-ants his or her authority to do so.

19. 14 Reasonableness, In all cases where City's consent or approval is required in this Lease,City shallnot umeasonably withhold, delayor condition such consent or approval. Inall caseswhere ONOF's consent or approval isrequired in thisLease, ONGF shall not unreasonably withhold, delay or conditionsuch consentor approval

City ofSUverton: ^^ftr Ken Hector, Mayor Date

Oregon Nurserymen's Garden Foundation: _^^=^^2^^=^^^f/^ Arthur R. Afldersoa, President Date

LEASE AGREEMENT The Oregon Garden Project - Silverton, Oregon October 28, 1995 - Page 17

Page 107 EXHIBITS

Exhibit A Description of the Property

Exhibit B Identification of Pettit Property

Exhibit C ONGF Financial Commitments

Exhibit D Letter from City Assuring Zoningand Annexation

Exhibit E Periodic Review of Rent

Exhibit F Initial Wetlands on the Property

Exhibit G Waste Water Quality Standards

Exhibit H List of Existing Improvements

LEASEAGREEMENT The Oregon Garden Project - Silverton, Oregon October 28, 1995 - Page 18

Page 108 EXHIBIT A Description of the Property

Siais Address; 6098 Cascade Kwy., Silverton, Oregon u the Southeast eocaer of the Lasmde- Oavte Dcnauoa Lawi Clum No. 59, in ToS? 7"SoaA,-5mge'I Westof &a WmameKe ?^ndian, _MaiT Couuy, Ote^ thence NortlTs^ '59rV 3Sng^ Souiii bouadu? ofsaM paw Clami2411^faa ®^mddle ofZ 'CwKf Road ieaSig'from Siiverton to SuiriJmity^Oregon^thwcs^orf; 2y, 3TE^ alongthe mddle'of'saidiori 230. 38f^_ thence No«h3^50-j^^ng ^ ^ ^ ^ Sad IIIs:23:'EtoceNorth 39°_04-^ along^auddk^sa^°^;^^^^ ^ po^ofbegS^grt hence'SouASO; 56' Ea.t 9^00 ^wcs^°^w^60^ fa^:tthmce'No^~50?5o-'-West 91. 00feet tothe middle of the County Road;tiiecce South 39° 04' West 160. 00 feet to the true point of beginmng.

Sims Address: 379 W- Mair. Street, Suverton, Oregon

Parcel I: ; at the Southeast corner rf the Umder Dayis D°°^°n. Laad_am. N0;.^ hws7aSouuAWRMgeTwestoftteWfflamet» Meadiaa ^M onGl'm^ore^fc^ ^° 59u'We^ngth^SGuA&o. mciaryof said Davfe Qaim, 24";^OTtothemd$e S^ £^ ^S^S^^^En S?:^^ aLl^d"27oa38"feetTthenceNoah 37- 50' Bast. ^ongtiia irn^le^ saidroad, ^30ffe?A^e ^3yI04me^,l^gJthe^of^7ltoa^ ^^^'^^O^SZ^9T. OO"feeT^the"middle oT'the County Ro^then, S^S^Ss&ce,NO;A.. 3,^^',E^^o'^S ^=^oATot ^5rE^"al^mi^o^d^^67^^^^^^^ ^7'70 feetto'aniroiTpipeseFon the East line of said Davis Claim; thence South ( 1413. 06 feet 10 ihe place of begimiing.

Parcel H:

^XR^olu^^Wu^^^dra nmM^^unty

=Si?l^^i^ES?st^rth"OTTi"West 200'9. 04-fee& thencs Northwesterly to the placa of begiiming.

Page 109 EXHIBIT B Identification of Pettit Property

Situs Address: 4592 Pettit Lane, NE, Silverton, Oregon Beginningat a pointwhich is 973. 25_feetSouth 89^48^'W^ tom^^3^0rae/^ ArLZ17Da'vi:DonanonYandaaunN^be^59J^^jo^ ^Ula^ettrM eridian:Manon-County, Oregon, andrunnmg ^ thenc^sCT1^89;^81 ^'^we^^ &^^ 1436~7Tfeet»the centerUneof Market Road No. 34;dlenceNonh, 2^3,3;^, E^t Z^heu=en(erime o7MarketRoadN.. -34^ ^an=eof231_82fe^; ^eN^f7;^' ^: ^?alTng"the&c^rime'of"Maricet RoadNo. J4a Stance°^2_3;14Jee^^ce^0^ ^S^S;si§^i^=t:s'S S^^^^Ssj^?208^nfe^ &n^ ^AFlS:'l^'OOrW^rdis^^0^fa^^ ^ ^ ^' '^a^cTofTs^O fw&ence^N^O0 l=', 00;west.l. dls1mce of 584-79 feet to'thepoto of'begiimmg;andcontaming 140. 13acres of land more or Less. Less the 28.50 acre parcel described below: , Beaming aithe southeast corner of the Donation_Laad ClamafLemd^w^^:^ esB Meridian in °aSLaIru^°i^lTg ^wmhio'7'south7Range 1 West of the WiUaaette

B,. s^,oyhal?a5recOOOTeEa^\6]'0"76'feet'Jong'Se~east-line ofsaid SmaU bact; thence North

^y^^5s. ^1^^ w^c ^^^^and Sd 5D9avLl C^: ^^±^43^ East'973. 25 feet to the point of begnmmg; contaimng 28.50 acres of land, more or less.

Page 110 EXHIBIT C Financial Commitments Oregon Nurserymen's Garder> Foundation

The ONGFhas prepared financial projections whichase attached to thisExhibit and tided Development Budget and Operatmg Projections. Tbe,je are.preliminary anaiyses basedupon the experienceof other Gardensin North America and do notrepresent proposals or firm commitments.

Dsveiopment Budget. TheDevelopment Budgetis basedupon assumptions thatthe Garden groundbrealdng will occui in August, 1996, the initial admissions accepted in June, 1998, and the Grand Opening to be conducted in June, 2000. TheDevelopment Budgetincludes fimdraisinggoals establishedby the ONGFwhich includes Cash contributions from industry, $2 million; In-Kiad Contributions from industry, $2 million; Contributions from foundations and individuals, S3 million; Contributions from Corporations, $1 million; public grants, $3 million; and SUverton, $4. 981 million; for a total of$ 16 million. CoDtributions are being provided as pledges and extend from 3 to 10 years from the initial pledge. Current Status of ONGT. The Development Budget provides the status of contributions per the date ofthe report. Actual pledges and commitments are included and theprojected contributions are shaded. ONGFhas received $1.5 miliion in cashpledges from the industry andhss exceeded the 1996 projections for contributions in (his area. Li-kind pledges have been received andare anticipated to be increased withthe development ofthe Master Plan. ONGF has retainedNational Community Development Services toconduct a major capital campaign. NCDS is scheduled to complete PhaseII ofthe campaign inApril, 1996. PhaseI of thecampaign to achieveindustry supportis nearly completed andis neaiuig(he $2million mirial goal. ONGF hassubmitted anapplication to the Regional Strategies Board ofMid-Willamette Valley fora grantof $200, 000to supportthe development ofthe Master Plan. Withapproval ofthis grant, ONGFwill have sufficient resources to complete theMaster Planand prepare for possession of the Property. Sufficient Support. Both parties agree that ONGF has demonstrated that there are sufficient financial resources to commence ths development ofthe Oregon Garden Project ona. schedule that would allow the groundbreakmg to occur in August, 1995,

The only remaining requirement for eaablicg possession ofthe Property by ONGF is the dsvelopment ofa Master Plan for the Garden by ONGF andapproval by the City.

Page 111 THE OREGON GARDEN PROJECT Development Budget

ms tse'iws:, .;;;[ N97 ww fiw? TOtM.t,

1 Revenue 7 Adaussioas S175. 000 S500.000

J Membership S45.000 5135, 000 4 Private Contributions so so

3 Public Graces S25. 000 S200. 000 ;S},oea. ooo SZ,DCO,000 53. 225. 000 6 Cash/Nursery Pledg S232. 491 S300. K6 S2;3 532 5232, 783 S182 183 51, 163. 455 7 Cash/Nursery Proj . SB SEE sa*w wi^n yii'^tiT S269. 202 8 Casti/Fouad, Indiv '.. so soo'.oeo : sw.ooo S4so,aoa WOW} Sl. SOO.OOO 9 Cash/Corporarioos '. ' ss 'Stio,@as &so,ooo S<50. BOO wstt. wxi S600. 000 10 In-Kmd Projecwd so :mi.w SfWf-f

Shiels Obletz Johnsea Sepramber28, 1995

Page 112 1VE OKEGON GABDEN FROJECT OpcnUiug JE^(Iec(toi» ^BirtBB^Wa E'W-'XX IBM '^SSE ^n 'MT MK Total Admissions 400,000 305,000 330,000 345,000 360, 000 400. 000 405^000 435,000 440. 000 495. 000 Paid Admissions 300.000 200,0(10 220.000 230.000 240.000 275,000 275.000 300.000 300.000 350.000 $5.50 (5. 50 $6.00 AverageAilmissions (4:00 (4. 00 $4.50 $4.50 $5.00 $5.00 (5.50 13,500 14,000 14,500 Mcmbcrsh'ip 10,000 in.ioo 11.000 11,500 12.000 12.500 13,000 Membership Fee t50.00 (50.00 (55.00 (55.00 tSO.OO '$60.00 $65.00 $65.00 S70.00 (70.00 S2.75 (3.00 $3.00 GiftShopRevenue (2.00 12.00 $2.25 t2-25 $2.50 $2.50 K. 1S Marg Cost/Visitor (1.50 S1.55 $1.59 $1.64 $1.69 $1.74 tl. 79 SI.84 tl. 90 $1.96 S<3 E'%MR? EiReveriue: 10 Admissions $1.200,000 8800,000 $990.000 $1,035,000 $], 200.000 (1,375,000 W,512,100 I $1,650,000 j tl. 650,000 ) {2,100,(X» $877.500 !980.iX)0 51.015,000 11 Mftmbcrehip (500,000 $525,000 (605,000 S632.500 $720,000 ^750,000 1845,000 $1,485,000 12 Gift Shop sa», ooo $610.000 $742.500 »776.250 $900,000 $1,000,000 »1,>13,750 $1.19,804 M. 468,130 Reveaue/Loss ($377.932) ($733.289) ($580,454) ($597,697) ($466,983) ($379.874) 9228,384) ($161.559) ($130,i27) $262,347

251 ^ ssas. 26J SilvertunXiays "iio. ooo T -- $10,500 $i i. ooa t!1, 500 (12,000 $12.500 $13.000 SIS.'.OO $14,000 (15,000 271 Silvertou Rent See 2.5 i (52.469 28 i TOTAL BEOT $10.001 $10.501 $11,001 (11,501 $32,453 $36,500 $38.744 S4U.815 $n, i3s $67,469 29 RyiWBMs B:l °3KR? '^ 301Contnbtjitguesl.^ to w $10,000 $10.000 $10,000 $10,000 S200. 000 jL^SSfLL-J'100'000- $100, 000 31 i Endowment Contrib. ($5,000) <»5.000) ($5.000) ($5,000) (S5.000) ($5.000) (t5, 000) _S5,onu] ffS.OCO) ffS.OOO) 32| Rndownusnt Interest M. SOO 331 Cash/NiirRdyPledge 34] 3S| 36| 37| 38 (TOTAL 39 BBd&mfieni Sfiisnw (50.000 $55.000 $60,000 $65,000 S70.000 S75.000 MO.OOfl $85,000 $90,000 $9S,000 40 Capital Balance (»I ,S')8.601) ffl, 464,i40) ($1,586,594) ($1.726,042) ($1,734,525) ($1,655,648) ()>I,435,Oi2) (il, ]it7,31I) (S>

Shiels Obieu Joluisen Ociobsr6, 1S95 Page 113 i

o^ s!i1^ ^ EXHIBIT D Letter from City Assuring Zoning and Annexation

August 21, 1995

Clayton Hannon OREGON ASSOCIATION OF NURSERYMEN 2780 S2 Harrison, Suita 204 MiLwaukia, OR 97222

Dear Claytan: s^"^£".',tr^t^l^d s^ss^w^s s: decisions are final. in summary, the Cifcy has ca.pleced the following land usa actions: 1. vended Urban Growth Boundary to add 140* acres for the Oregon Gardens Site. 2. ssw^ -s.^-^r^;^ 'as aevelapment as a pemiittsd us s. 3. Annexed fche site to the City of SUverton. eje^e^^"r^^^:is^^m^^^e^e^ ISls eT iA3T.lp y4'o£19?h5e ^

Thank you for your assistance throughout the land use hearings and approval process.

Sincerely, CITY ft? SILVERTON A^^^:l Da'vFd W. Kinn6y Acting City Manages- ec: Rick Gustafson, Shiels, Obletz & Johnson

WuwW-iwmur F-ltlKt Mamtwix*Shop Pdka Ow"- Public Worlu aaoMcCu"!!. Cltyt lOtS. WnnSl. 14S3 Pln< 5t. IQSS. W-rSI. Sawnn. OR »7381 3ib«mn:a«»n" 306 3. WanIt -"".'"""&. Sauman. Oft 97381 Stwrton, OR SWt Shnnn. OR mSI 1303) «73.S43< iso) *n-u" Siiww. OR ynai ISCT na-MK 1503) .71.W IS031 »73-< 117 ""'-«ni"" (.. laoim-rtsz FU15031813. 3210 hxismitn. 3210 fcisai 873-3210

Page 114 EXHIBIT E Periodic Reyisw of Rent

Theparties to thisLease agree to reviewthe formula for rentpayments from ONGFto the City for the use of the Property at each Review Period of (he LesAe as defined in Section l. S of the Lease. The rent for ihe first ten years ofoperation has been established in Sections 2. 1 through 2.4 ofthe Lease. The rent for eachyear thereafter is defined in Section 2.5, Modification to the rent shall be by mutual agreement per Section 19. 8 of this Lease. It is agreed by both partias that rent payments shall be based uponthe economic perfonnance ofthe Garden.

I. Principles.

1. 1 Reclaimed Water Distribution. The primary goal of the City is to assurs that the reclaimed water from the waste water treatment plant is being received by the ONGF and distributed on the Property. The temu of the Lease that establish requirements for operation and maintenance by ONGF atno additional cost to the City areintended to remainthroughout ths tem ofthe Lease. The terms ofthe Leasethat require responsibility by the City to assure the quality and quantity of reclaimed water by the City is intended to remain throughout the term ofthe Lease.

1.2 Economic Performance of the Garden. It is agreed that the Garden is being establishedthrough a JointVenture between the City andONOF as demonstrated through the length of this Lease and the implementation ofthe Joint Venture agreement for the construction ofPhase I ofthe Garden. The financial per&miance ofthe Gardenis the primary responsibiUty ofONGF. It asagreed that bothparties asparticipants in the agreements shall share inthe positivs cash flowof the operation of the Garden. Tneprimary responsibility for capital improvements and negative cashflow for operations shdll bethat ofONOF.

1. 3 Attendance. The ONGF has established agoal of 400, 000 acnuii! visitors and 10, 000 members of the ONGF in response to economic analyses that indicate theselevels ofpublic admissionand support aresequired to achievepositive cash flowfor theannual operations ofthe Garden, Thesefinancial projections are the basis on which the rent paymsnt formula was established for the initial period of the Lease. The Leaseincludes a Si'e yearperiod from the commencement of accepting admissions in which ONO? wcaid have rent set at $1 per year.

Page 115 2. Rent after Initial Period. 2. 1 CalendarYear. ONOFagrees to maintainfinancial records on the basisof calendar year. 2, 2 Reports. ONGF shall provide by March 1 ofthe year ofPeriodic Review annual financialstatements ofthe operation ofthe Gaidenfor theprevious five calendar years. Infonnation andreports shall beprovided asdetermined under generally accepted accounting principles.

2.3 OperatingRevenue. OperatingRevenue is definedas admissions revenue, standard membership dues, rental revenues, tuition, research grants, concession activities, fees, andother revenues related to the operation ofthe Garden, Operating revenue shall be used in calculating positive cashflow. 2.4 Contribution Revenue. Contribution Revenue is definedas membership payments by individuals above the standard dues, contributions, foundation grants, revenue from Enterprise Activities inwhich separate agreement withthe City establishes reveuues, interest earned from ONOF funds or endowments, and bequests. 2. 5 Operating Expense. Operating expense is defined asall expenses associated with the annual operation ofthe Garden excluding capital expense and depreciation. 2.6 Cash Flow. Cashflow for the Gardenshall bedetenniaed by subtracting OperatingExpense from Operating Revenue on anannual basis. 2. 7 Payment. Both parties agree 20% ofthe positive cash flow shall bepaid to the City in recognition for its role in the success ofthe Garden.

Page 116 Waste Water Quality Standards

OP^GON ABMINISTBA3TVE SULZS CHAPTEH 340. DrVTSM 5o- DEFASTME?ur?aae at' tSseie riies u to o:cygBtti. Brutes? th 9 sn'nTaai&srit *.ud iiuaUc haa'. th in 71U "Bscicgicai treatment" meana initiiiics of Offtgoa by pTttwriam^die "tsstha^, procaduTes ,Mwa^w%raafcn«nc In which bactarial ir oiochemieal ("sa&mnong rs^Bjrad for slxs . &SA t'cr benaiicial aeciun \s promsed as a mean^ cif prcducing an gnraoso oi'mc'jumed water'f. oridizal waatawatar. (12) "CIariSeatfea" na&ns tile esssavait hy Suit. Auth- CS3 l^l. .tSB.aai. <6a.!03 & -a TU Suu flsq u-um, !. & nirt. xaUfey bv .feduteing apyUisd to . oxidiasd, eieaiyaia.tied, stanflti^ Siae'aarsaa it trBaced tfftaentai ta. mrSa. ee waters wa^cawacar wfeach baa^be-m. gaased &fouigii aafiUTdi. and tay^nsernngsfeT eam fiowa^isftmtigfa radu.ced andtstarnei sails w.Gltar media,, sucii u sand w' dei^and. for wi'fchdrawaia fEtr CTAC-of'^s'qaffi, ase* diatamaeeaua . arti, aa. t.'iaE sb* tac&idity »s decennKiedTey SM a9pnve*A ki»rst c>''matho^ dqss 3t*t. AB>iu OSSCl. 463.020, t6a.?C« & ^ea'iv: %d& exc&a'ti &a Ayera. g% op6 r%tuRgt turoidB&y af S 3u<- DEQ m-uao. c. k a«n. .£. S.U.M turiiitllty aaics and Sees'&at. exaad. S. tarmaity times more than 5 jEKirsaaBfe ^ sha Smxa 'teiaiy Siiy Cefusiti0X313 24-hoiu' senod. 340-SS-OIO (U "3

. 0) *S*was'« tnatTaeat ayatam'' neana any. facility n tpapment luea .to alter th* quaUty 1'' neiaienai water ic »'ftiel» recriattan ia liatt»d w ?ewags by ptiys&eu, ehetccicai gr feiol^ieai in&atns or Safaiog, baatSng; anii atfcm- asa-isody-anna .otar » cambinaiaoa tile'rtaf suclt tbac il)» taadency of racreatua tcaTilaes. Vasasx\es. wi anaaimaaeaM said. 'wasta'wgtay to cause any degradation in water euiutructed and efsnwi surauaat to vhasa quality or other enviranmenu, ! conditions is shall he csiaaidtg-es pr us^. taody ofredaimad water in wiich na liraifctisana »re (S) *?<-'san" meaaa (h- C'nitad Stasss an< imposad w. hixjyianac: water racreaeioR aav. tisa; iginee* tharroi, aay stata, any. inaiwdnai. p'lbltc Na'arMtricseil' iBipaundinOTts eonatnististi. ar privata corpQtd. ssiin, pqlit?eai, iii sut?

I Civ. 5S (September. 13911

Page 117 . PREGPN'ADMS

, »aur and ~u abl^hi . discanciiiue the use

.(.'l)-Rec!aim'dl_ "?'". kam "wage trucg 0( Ue reclaimed water if it ia deurmined thac t.'ia 3yn'T-u3'd^W:aIItu"C"a''n?''asr?jiS^ r-qulrameacs at the rules and tha oermic in thuDlT loming use of redaimed watar u-a aa'i. heii 5" !"ud ?'a!'le L" Oioa'sEir mec* yttJhs^maa^taymtqiMliCThnuaa'o'ru'SSi'S J"s'tmKlt' nmutoring aiu acae-'reqmre'nea'u ,_. (23) "Pncassttl Food Craps* means thost CTIDS far thataM that are suuS a'aMe'l:' wruci unaergo theraMpraceaaing' iuffideni: ta Iiail _(a) WhenTaiiIe 1.^ jbrapeded usaa. regui; "oir".. ?1 gla'OTliun bii.cullnum. Waahiny; . water rwa'nTSioioeaTcaamll'S^ r, fermantin^. oiuHngr OT chemicai c"rmuoQa-eitra9;°u^bnmc'pias'mnSfa^n': creacneau are nas. sumcsent DegartamtmII cmnder'Lnacaenc'iinraSas' -n.°CACiI"e_"a»'IIati?n pn'naeaTha^ Stac.Antk- ORS Ol. Wa.aM. isa.ras A wa.Tia 'KI*"'ralmteffl'ue"c,

(September. L991) 2 . Div, S5

Page 118 ^aAUTY cTR ^. To aw^^l^"M2CTTAL tll'. The as* at"j«;!an;etl, water from a sewage ortteaian at peblic health and *(.. » iinvlnnment^ Beiare'che'beBU'cnent 3;-ia;i luthoriss. a. sef at -eclaiffled water andsr thu taesion of 4 ro^ei nriKan'Mncatreaca hvm tkt Oragsn Esa;ta e'5acu-*a"<5'<" iit°38ncai Quility CfitnraKiSfetL. .. , . ___^_ __. ^-. ^ . S's'tnasneat syaum Rsay intiride ac be i"aam_.a_manne.'"?r Th the rsctoed Stu. Aullt- OSS C&. «a.020, «a.7as & isa. no watirm!i ba'uaaritsy the natr, ^. ______Hin- DESa-1391, C & an. .^ ».U-SO T»a~m5mSn'xT dgCT-ndainrf w«xt that snail ha amd w ?""""u"ili"u:_,--.. "- Bariauaea WaiarUse Plan _., ___... "W"A co'MBtTsa'tbafth't Stws. »'-y^S, WV, c3?0?3M2S'Sriuiasd-wacer "'^ Pl'"13.sna11 recl2mtri~'"ace?"U guraee waua af Ae Stats flf bT ^mm~awate-fiw&<_3Wag5^^aai^a^^^ e5]aaSaIlb«i)rahitllt2^ . _^_ __^, ^, ... ,» S^wlnlfSanriy .ri&'theM relM^.'I snail ue»c '""°!e>'A"SaUn*"t^»3^S?.tila.i;5fri*2.1c,,% lAe&SwinsBriaHB'nn '»T*i"nena_._>;.. ... soncS'nrtspoBaaila far °°'"vliancs'"'5, ut*ss "'""' '''c(irTte'1irM 'Bfccfl£ua-*53 m»t»n^»h; ind'AB~sew;^tr8afaimtj^»m^ra»^ ~a{~c&f~yr9fwvi. wtla.mwaa syst"! "(0"A~aw%ton~» i«nag tb« '»'vtf*S'aSW& Siia'lT'sltoriy'indisate til« B'eana &'. "' lyatisnww (a esaae gmndmg. t»«to'a"<». mmri, SrD'epwment w~A«sTw_a*urg"n^ &^ »« witi|te^S%. tr"ewew'':!y.the_D?p.anm,T; rffi'A"c?n'ditii»'tt-tS>acreacr<^the_as^J; SSSi'SS'a'uS'mittaitadades Ares mmplMa rao-es ndaTm.'i wUtrt6'??»... ;. SUt. Anih- OR3 <». US. OZO, isa. Tna ^ «a.-u '(TOY~Tn ' euo w B a ra i'«l a i n'«i i."a ".?. ^ traas?erted~fro"Bi aoeuir " »n°th?.r'..?".u Kiat-;OEq 32. 1SSO,& ^ "". a5Siniih^ba_aI^wri^- syKHD aadwh^l aatiaestluaua^u^^aam^. w'aSr"M<.?'a''£e"raauOTiB «nu rfsta Oiuuwi .^ ^£3^S^as^^; S1)V^ftTar'aB °w"''W,»»?aaeni. SSC8^J^ gSE?^t':S;altaiS>"n%. n}t»i"2»g&l»S5^a "itj"%s^^T^? rf;^? S'BtrSct '»"'ui any aa'dltionai tuKMding redaime'd ne<:e3»a'ry'to"prcnde warning of loss at powa- water users. 3 - Div. SS [September, 199"

Page 119 J. EGpN^DMIMISTOAFTVE 5ULSS ? . DrVTS*»^ 55 - _3-M. DEPAaTMEKT'bFENVisbM MEmU. QO-AUTY MLa.°rMm".'i°I'f'TOCe'3 equipment esseaa'al ta the p".?"-°peraci°" ae. the ."wae'e-trearaienc~sy»Mn; ""erjiya""" "8 nore than 100 tess from an'/ SUIa.5 'p.mpliance with this Dm:sion.- ':!"nR?.nmt" as '"'stBm usi"s reciaiinea water. -'" I6> Thers shall be no uriH ecam becwean aiiv otherwue approved'in . miBng by the tale waur supply sysusm and the'airo-iusa'n ins, aewags h-BaaiBnc aystems onvidir syssa°>. ".":.;<"g r8c[siimad wits' unIesYTii'e ,l:'CSmed_wace£far iu<'ana;U"haveTusabyp'ow'e? connerion ia chraugh aither an utnacricseaur "10 ^nfsurSdenf capacity to ftiiiy-(rae'rau all acteu^hrica u wae u the diaaeEa-'. tlie anprona'reciaimSa water far aaa shall contain aumdenc *"" u3e.. PIa''t 'the. "?Ie' oi't&ia Dim5ion'."and ii^a;^ redundant treataient fadliciea and permit limiiy and condiMona. "- ~ . '"-"* monitoring . qttipmeat ta "ttfective'l inaaequately ir»»ted water fi-an bein'e'iueit'or . wys. Tedaimed water shall be mane availauie icharsKJ to pubKe waton." toa-?e"°-nI>"I"13i"SM '"a. ndaiinad'waur'unie'm

tea otherariae nwad .?*"on-"nmea " *TilmS tlia'. c!">y have'naa api in

(Sepumfaer, L99L) 4 . Div. 55

Page 120 CHApm. 340. DrvBSR ESON^^^^^^oy ^i^:^ " CESTNIIIONS: \ aurtuE s"&CT*"i"*'"*«CT »PpS"ti. na(ndlltin«

_*°"S'"'. "7, "'"rn^. U'S °" b* '""Bncnnua jniiUc bflth ua tit* .ovuD luiriu .-l;l b« ,_. f°°ut dyi tnamualy ph",'^to^.'*^^^""'y(f°a°'. OB>lr:tt" *WI1sfa" H«utkD'im?<;'S^"%ituiiaf tiriBrta:h«rmsctaiiT. ' -. - ---^-"">. "».. ^.., Surfae»wipnyin. <^atiaa:No uiaala ahaU ba au A« putuw awric? irri^atiaa.

s°«ndarnm«

^d*°°*d '*u*rli*u l». 'PpU« -«--^ S S^«^^j»ndumiritiup«ria<»yarf^CT!<«a&iMtoatedagtk»erriumri»«twiaa^arilaBat«^fnrii«^

^mi^g^^^mSJg^-aoKWO^-"^m 'SCI2aw53smB Ie:OOE 9 Th^ Dapanueai nuy uapaM iBdw niuyeat limits aa dw iu«of reeiaia*d wawr IfIt Iwlians it ia aeceaauv to oraucs aiui tcal

.10 T&wia*U b» aa dlapoaai gf redumed watan inta ronaca ar jiBaaawttaR iridwut unJiarizaciOB by an NPDES of W?C? panaic.

II .UM of pedautwl -weertu .noondw aoalin^tystmiu ahaflb* apprewd aaiyif th*wr eu (LaaaaaiTau that -raanla witi rt

12 ii(«ioonaflfUx»pufa(IeiU<(mnpla3mdp«noaMl at thasritooCUrww reclaimed waUFF'gkAlt b< aacifiadlAAt Aa wswu Peduawd wuenPlBviswna Ibrhawthu aadficauoo wS. ba prairidttdaiuU fcnaFoafirimt^'f^Ma^t^tM'UMy'tiB.. 13 -!-ti^?J^?l°?^lulu?*1te * ?t^?all<'»W">v?d in wfeuu?^y (&» Oftt^ift BnBttA Diviswc.. tagAarwtciaaTtrttSin tiiau iN. aaptin ftA. taaSarWKskor .frikd!Jan>h«nrto_n(qN TOTAai2 WBEB." mium t»8-

ASVTSORY NDTTfP; ONT.r. l]?le-?J'ie?on_5^ate^aa^n Division reco'mmends chacpersons whomust handle imgadan jradl^araqmprnent E,(3-Il/5^l^i71. ??. i.w?at?*'as;21' or w ho, are ejcpasad tareclaimed wacar s^iGuld be fuHy advsea w any hsy&srds such eypssure and sha^iJd'be priswded with oeceasaiy pr&tsctive -:lodiing.

(Sepumber, 1.991) 2. Table L

Page 121 EXfflBFTH list of Ensdng Improvanaits

SITUS ADDRESS! 879 Main Street Silvertan OR 97381

DESCRIPTION SIZE

) 5 bedroom, 2 1/2 bath wood frame single family residence 4, 930 sf

2) Wood frame pool hoase not available

3).. 3 bedroom, I bath wood frame single family residence 1, 080 at

4) 1 bedroom, I bath wood frame single' faiaily residence 624 sf

5) Me-tal barn with riding arena, 35 horse stalls, bleachers, bathrooms and 3-ton grain dump 72 x 136

6) Metal barn with 30 box stalls 5, 400 sf

7) Wood frame horse stables with ten box stalls 2, 340 s£

8) Shop/storage building 2, 584 s£

9) Veterinary lab 32 x 16

10) Wood frame accessory storage structure 25 x 25

25 x 21 11) Sawdust cover

Source: Uniform Agricultural Appraisal Report dated 02/24/95 C & K Real Estate Appraisal Carol J. Koppenstein, Appraiser

Page 122 EXHBBFTH List of Existing Improvements - continued

SIOTS ADDRESS: 6098 Cascade Highway Sil'rertoa OR 97381

DESCBIP'i'IOK SIZE

1) Concrete building with garaga bays 1, 590 s£

2). Metal shop/office building 1, 906 s£

SOURCE: Oniform Agricultural appraisal Report dated 02/27/95 C & K Real Estate Appraisal Carol J- Koppenstein, Appraiser

Page 123

f 'EGONADMDOSTEUmyE jmLES^ CHAPTER 340. DIVTS. ..TsT- bEFAS'raiiE?

nniltliral; Unraa&irtad . WA WA N/A "oodCropa. I Unreatncud FncK WA L WA 2 2 Uarescicted

Fodder, Fiber, and Setl Cropa not I Unrestricted Human Tngwcwn 3 I 'ascure forAmmaia N/A 4 4 imtncte4 I I (Jnrestrictad iod N7A Qraamantai. Nuiaery Stock WA 1 I Cnnatriettd I t Unnstncaed . WA ChriatnaaTreea Uarestrictsd ruT N/A I 1 iwoocl. , 3 1 I Uarestricud

Parks, Playgnumla. Schaalyarda. Golf Courses mLh. Cootigwus Reaidances WA WA. N/A Golf Courses without Contiguous Resit sncea N/A S.T S,T S,6

Camateriea. Highway Medians, Lajid- S.6 scapea withaut'Fnquent Public Access N/A S. -l S,T 9, LO. 12 In-dustrial or Commercial Usa WA 3. 10, U, 12 9, ID. 11, 12 9. 10. 12. 13 Construction Use N/A 9. 10. U, s1^-11 12, 13 'is,' [mpoundmencs:. a. la Unnstrictad N/A. WA WA N/A N/A a, 10. i4 8. 10 Restricted 3, 10 Landscape [mpoundmencs N/A a, la. 14 a; 10, u t. Tabla I (September, 1991)

Page 124 Initial Weuanas on ine rropuy

I _--. '/' s-1

- . c-'!- SUrt. teim . ra. aJB^aSa W.itodua. " -heP«d> teavoit ite Mud> .f Sihron.Orqso". SRI/SHAPIRQ. Tiioo n FBI* *t e a

Page 125 Page 126 Page 127 EXECUTIONCOPY

LEASE

This Lease (the "Lease") is made and entered into effectiveDecember 19, 2002, by andbetween theLessor and Lessee named below.

RECITALS

A. Lessor is the lessee of certain real property located in Marion County, Oregon pursuantto the tenfui of a leaseagreement between the City of Silverton.as lessor, and Lessor, as lessee, dated October 28, 1995, as amended by Addendum #1 dated February 17, 1998, by Addendum#2 datedMarch 5, 1998, by Addendum #3 datedOctober 9, 1998, by Addendum#4 datedJanuary 20, 1999, andby Addendum #3 [sic, 5] datedJuly 8, 2002 (the lease agreement datedOctober 28, 1995, asame:nded, is referredto herein as the "MasterLease");

B. Lessee desires to � aportion of the propertythat is thesubject of theMaster Leasefrom Lessor. The portionof the property that Lessee desires to leaseconsists of 61 acres andis describedin ExhibitA (the"Leased Premises").

C. This Lease in c:ntered intoin connection with the issuance of Marion County Revenue Bonds, Series 2002 (Oregon Garden Foundation Project) in the aggregate principal amountof $5,000,000.00 (''Bonds") to refinance indebtedness of Lessorincurred in connection .. withthe acquisition and improvement of theproperty that is thesubject of the MasterLease and to financea portionof theimprovements locatedor to become located on the LeasedPremises. Thepurchaser of theBonds will Bank be of America, N.A.(the "Purchaser").

D. Lessor and Lessee acknowledge that Lessee intends to sublease the Leased Premises toLessor under an agreement of evendate herewith (the "'Sublease''), and the parties contemplatethat a leasehold

E. Capitalized tenns not otherwise defined in this Leaseshall have the meaning set forthin the Sublease or in theAppendix to the Sublease.

NOW TIIEREFORE, inconsideration of the mutual covenants contained herein, Lessor andLessee hereby agree as follows:

1. CERTAIN TERMS. In this Leas� the following terms shall have the following l meanings:

PAGE 1 - LEASE 201105_3/HRT/070633-0009

Page 128 Lessor: Oregon GardenFoundation (fka, OregonNurserymen's GardenFoundation) (pleaseprint or typefull name) Contact: Rick Gustafson Phone: (503) 874-8100 Address: 879 W. Main St., POBox 155 City: Silverton County; Marion State: OtGf^n Zip Code: 97381

Lessee: Marion County

Contact: ChiefAdmimstrative Officer "Phone: (503)588-5212 Address: 555 Court Street NE City: Salem County: Marion State: Oregon Zip Code: 97301-3636 555 Court Street NE

Real Estate: The real property described on the attached Exhibit A Street Address: 879 W Main St County: Marion City: Silverton State OR

Term: Commencing on the date hereof and ending on the date that all of (he Bonds purchased under the Bond Purchase Agreement have been paid, discharged and defeased.

Base Rent per year: $12.00

2. GRANT OF LEASE. In consideration of the rents and covenants to be paid and perfonned as herein provided by Lessee, Lessor hereby leases to Lessee the Leased Premises as described above, together with all improvements located thereon, all appurtenances thereto, and adequate right of access to a public and traveled roadway. Lessor also hereby grants to Lessee a aonexclusive perpetual leasehold easement for Lessee and its guests and invitees to 'use those portions of(he real property leased under the Master Lease that are devoted to roadways, enttyways and (he like andthose portions ofthe real property leased under the Master Lease that are devoted to parking areas, for purposes ofingress, egress, and parking.

3. TERM. This Lease shall commence on the date hereof ("Commencement Date") and shall continue for the term described above (the "teem"). The term "Lease Year" shall mean a successiveperiod oftwelve (12) calendarmonths beginning on the Commencement Datehereof and each anniversaryhereafter during the Term.

PAGE 2 LEASE 201105 3/HRT/070633.0009

Page 129 4. RENT. The rent due hereunder shall be composed of base rent ("Base Rent'') as described herein. Base Rent shall be payable annually starting on the CommencementDate, andpaya�le on each anniversarythereafter duringthe Tenn hereof

5. USE; IMPROVEMENTS. Lessee may use the Leased Premises for any lawful pmpose permitted under the MasterLease as modifiedby that Intergovernmental Agreement of even date herewith between theCity of Silverton as landlord under theMaster Lease and Lessee. Lessee's use of the Leased Premises shall at all times conform to all applicable laws, ordinances, regulations andcodes and shall at all times be conductedso as not to create or suffera condition thatresults in the landlord declaringa defaultunder the Master Lease. Lessee shall be entitledto constructimprovements on theLeased Premises in anymanner allowed by law. Lesseeshall not . remove such improvemeµts at any time dming the term of this Lease without the consent of Lessor, except as provided otherwise in the Sublease. Until termination or expiration ofthis Lease, allimprovrmcmts, fixtures, andequipment construct.ed, installed or placed onthe Leased Premises by Lessee or its assigns or privities shall be the sole property of Lessee. Upon termination or expiration of this Lease, all improvemen� fixtures, and equipment constructed, installed orplaced on the LeasedPremises by Lessee or its assigns orprivities shallbe the sole propertyof Lessor, except asprovided otherwisein the Sublease.

6. SUBLEASE. Lessee may freely transfer or assign this Lease or any interest- in this Lease, without the consent of Lessor.. Lessee may freely sublet the Leased Premises and improvementsthereon, orany portions or partsthereof, withoutthe consent of Lessor.

7. INSURANCE. Lessor shall obtain and maintain in full force and effect dming the term of this Lease the insm,mce policies required by Section 6 of the Master Lease-.and Section 7 .4 of the Sublease.

8. LIENS. . Except for the Bondi or any lien created as a result of the transactions contemplated in connection withthe issuance and purchase of the_Bonds, Lessee agrees that it will keep or cause to be kept the Leased Premises free and clear of mechanics, laborers or materialmen's liens and other liens of a similar nature (J"Liens") which may arise in connection with work of anytype performed on the Leased Premises by or at the direction of the Lessee other than work performed by Lessor under the Sublease for which Lessor shall be solely responsible; provided, however, thatthe Lessee shall have theright to contestthe v�dityor the amountof anysuch Lien or claimof Lien. On final detenninationof suchLien or claim of Lien. theLessee shall immediatelypay anyjudgment rendered against Lesseewith allproper costs and charges and shall have the lien released or judgment satisfied at the Lessee's expense. Notwithstanding the above� � agrees that it shall keep or cause to be kept the Leased Premises free of all other Liens that are not caused by Lessee or _its assignee, unless Lessor receives th� consent of Lessee,which consent shall not be unreasonably withheld or delayed. It is understood and agreed that Lessor may construct improvements and acquire fixtures and equipment to expand capacity of the existing facility on the Leased Premises ("Expansion Project") and that Lessee will cooperate in any commercially reasonable manner to

PAGE 3 - LEASE 20110�_3/HRT/070633-0009

Page 130 accommodate the commercially reasonable requests of the institutional lender providing financing for the Expansion Project so long as such requests do not adversely affect the value of anysecurity held by Lesseeand as furtherprovided in the Sublease.

9. TAXES; PRIOR UENS. Lessor shall pay all taxes and assessments and any otfaer amounts due on account of any lien or encumbrance affecting the LeasedPremises or affecting any larger parcel of which the Leased Premises are a part. Lessor shall immediately provide to Lesseecopies ofeach assessment or tax valuation notice received by Lessoraffecting the Leased Premises. Lessor shall assume andpay any tax, assessment or charge levied against or measured by the Base Rent and/or other amounts payable by Lessee pursuant to this Lease.

10. QUIET ENJOYMENT. Lessor represents, wairants and covenants thai, subject to Lessor's remedies-in case of any .breach of this Lease by Lessee, Lessee shall have and enjoy quiet and undisturbed possession ofthe LeasedPremises during the Term.

11. UTILmES; ACCESS. Lessor represents and warrants to Lessee that gas, electricity, water, heat, sewage and other utilities are available to (he Leased Premises. Lessee shall be entitled to access over, upon and across any other land owned by Lessor in order to gain access to such utilities. The Leased Premises have free and full access to and from all adjoining streets, roads and highways, and there is no pending or threatened action which would impair such access

12. CONDEMNATION. In the event of the taking or condemnation by any competent- authority for any public or quasi-public use or purpose of any or all of (he Leased Premises at any time during the lease tenn. Lessor shall be entitled to all of the condemnation award, except as otherwise provided in the Sublease.

13. LESSORREPRESENTATIONS. Lessor represmts andwairants to Lesseethat:

(a) Authority. Lessor has full right and authority to enter into this Lease and perform the Lessor's obligations under this Lease as of the commencement of the term hereof and, subject to the Master Lease and except for Permitted Encumbrances, has good, marketable and insurable title to the Leased Premises in fee simple, free and clear of all restrictions, leases, tenancies, and easements;

(b) Condemnation: Dedication. Lessor has not received any notice, nor is it aware of any pending action to take by condemnation all or any portion of the Leased Premises, nor has Lessor agreed or committed to dedicate any part of the Leased Premisesfor any street, easementor public purpose.

(c) Violations. To the best of Lessor's knowledge, the Leased Premises are not in violation of any local governmental rule, ordinance, regulation or building code,

PAGE 4- LEASE 201105 3/HRT/070633-0009

Page 131 nor is there a pending or threatened investigation regarding a possible violation of any of the foregoing.

15. POSSESSION UPON TERMINATION. The Lessee agrees with Lessor that upon termination of this Lease, whether by \apse of time or because of any of the conditions or provisions contained herein, the Lessee will peaceably and quietly yield up and surrender possession of the Leased Premises to Lessor in their then as-is condition subject, however, to Lessee s right to remove improvements, fixtures and equipment as provided in paragraph 5, above.

16. FURTHER ASSURANCES. Concurrently with the execution of this Lease, Lessor and Lessee shall execute before a notary and deliver to the Marion County Recorder for recording a Memorandum of tease Agreement in the foim of attached Exhibit B. The Lessor at its own expenseswill promptly andduly execute anddeliver to the Lesseesuch documents, conveyances and assurances and take such further action as the Lessee may from time to time reasonably request in order to establish and protect the rights and remedies created or intended to be created in favor ofthe Lessee, and to establish and perfect the Lessee's interest in the Leased Premises.

17. TRANSFER OF LAND. Lessor shall not (voluntarily or involuntarily) sell, transfer, convey or assign its interest in the Leased Premises without Lessee's consent which consent may bewithheld or delayedfor anyreason.

18. LESSEE'S DEFAULT. In the event of defiurit hereunder by Lessee, Lessor, sixty (60) days after written notice, may exercise its remedies provided by law, unless during said sixty (60) day period Lessee has cured the default specified in saidnotice.

19. LESSOR'SDEFAULT. In the event of any breach or default by Lessor under tfais Lease, which continues for a period of thirty (30) days after notice Ihacof from Lessee (01 without notice in case of an emergency), then in addition to all other rights and remedies of Lessee under this Lease and at law or equity. Lessee may (but shall not be obligated to) cure such breach on behalf of Lessor and upon demand by Lessee, Lessor shall promptly pay to Lessee (he costs and expenses of such cure. All costs and expenses incurred or advanced by Lessee under any provision of this Lease to cure any default by Lessor shall bear interest from the date Lessee advancespayment thereofuntil payment in full by Lessor at a per annum rate equal to 2% over the Prime or Base Rate of Interest published fi-om time to time in the Midwest Edition of the Wall Street Journal under the heading "Money Rates" but not in excess of the maximum rate permitted by law. IfLessor fails to pay any sums due Lesseeunder this Leasewithin thirty (30) daysafter demand. Lessee, at its option, may offset such amount againstsubsequent payments of Base Rent or other amounts due hereunder or to become due hereunder until the amount owed, plusinterest, is paidin Ml, and may exercise anyother remedy available at law or equity.

20. NOTICES. All notices and invoices required or peimitted under the temis and provisions hereof shall be in writing and any such notice shall become effective when delivered or on the

PAGE 5- LEASE 201105 3/HRT/070633-0009

Page 132 day sent prepaid at straight rates by telex, telegram or telecopier or on the second business day after deposit in the United States mail, with proper postage and first class mail prepaid, addressed to either Lessee or Lessor at their respective addresses listed above.

21. ENVIRONMENTAL REPRESENTATION. For piuposes of this Section, the following terms shall havethe followingmeanings:

"Environmental Laws" means any and all state, federal and local statutes, regulations and ordinancesrelating to theprotection ofhuman health or the environment

"Hazardous Substances" is used in its very broadest sense and refers to materials that, because of thdr quantity, concentration or physical, chemical or iufectious characteristics, may cause or pose a present or potential hazard to human health or tfae environment when improperly used, treated, stored, disposed of, generate^, manufactured, bansported or otherwise handled. "Hazardous Substances" shall include, without limitation, petroleum products or cmde oil and any and all hazardous or toxic substances, materials or waste as defined by or listed under the Resource Conservation and Recovery Act, the Toxic Substances . Control Act, the CoiDprehensiveEnvironmental Response, Compensation and ReliabilityAct, or any other ofthe Environmental Laws.

Lessorrepresents, warrants andcovenants as follows:

(a) To the best of Lessor's actual knowledge, wifhout inquiry, all Hazardous Substances on or in the Leased Premises have been or will be used, generated, manufactured, refined, transported, treated, stored, handled and disposed of only in strict compliance with all Environmental Laws.

(b) Lessor shall exercise care m handling Hazardous Substances and shall undertake any and all preventive, investigatory or remedial action (including, without limitation, emergency response, removal, containment and other remedial action):

(1) required by any applicable Environmental Laws or orders by any governmental authority having jurisdiction under Bnvironmental Laws; or

(2) necessary to prevent or minunize property damage (including, without limitation, damage to the Lessor's own property), personal injury or damageto the environment or threat of any such damage or injury, by releases of or exposureto Hazardous Substancesin connectionwith the LeasedPremises. In the event Lessor fails to perform any of its obligations under this Section, Lessee may perform (but shall not be required to perfonn) such obligations at Lessor s expense. In performing any such obligations of Lessor, Lessee shall at all times be deemed to be the agent of Lessor and shall not by reason of any such

PAGE 6- LEASE 201105 3/HMW70633-0009

Page 133 performance be deemedto be assuming any responsibility of the Lessorunder any Environmental Laws or toany other person.

(c) Lessor shall release, indemnify and hold harmless the following (collectively the ••1ndemnitees"): Lessee and its officers, directors, employees, agents, and all of their successors and assigns against any and all claims, demands, losses, liabilities, costs and expenses (including, without limitation, attorney fees at trial and on anyappeal or petitionfor review) incurred by anyIndemnitee:

(1) arising out of relating to any investigatory or remedial action involving the Leased Premises, or the operations conducted on the Leased Premises, andrequired by Environmental Laws or by orders of anygovernmental authorityhavingjurisdiction under any Environmental Laws; or

(2) on account of injury to any person or damage to any property arisingout of or inconnection with or inany way relating to:

(i) Any laws or regulations, including, without limitatio� EnvironmentalLaws, applicable to the LeasedPremises; or

(ii) the use, treatment, storage, generation, manufacture,

transport, release,. spill, disposal or other handling of Hazardous Substances on the Leased Premises or in connection with �ons conducted on theI.eased Premises; or

(ii.1") the contamination of any of the Leased Premises by HazardousSubstances; or

(iv) on account of all of the above with respect to the Leased Premises whetheror not causedby Lessor.

(d) Toe covenants contained in this Section shall survive any termination of thisLease forany reason. andshall be for thebenefit of theLessee andits successors and assigns.

(e) Nothingcontained in this Leaseshall be construedto release, indemnifyor hold harmless any Indemnitee for any matters with respect to which an Indemnitee may be liable due to acts oromissions of suchIndemnitee prior to the date of thisLease.

22. MISCELLANEOUS.

(a) Any provision of this Lease which is proln"bitcd or unenforceable in any jurisdiction shall, as to suchjurisdiction, be ineffective to the extent of such prohibition

PAGE7 - LEASE 201105_3/HRT/070633-0009

Page 134 or unenforceability without invalidating the remaining provisions hereof: and anysuch prohibition or unenforceable in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the Lessee hereby waives any provision of law which renders any provision hereofprolul>ited or unenforceable in any respect. To the extentpermitted by applicable law, the Subtenant hereby waives any provision of law which renders any provision hereof prohibited or unenforceable in any respect. Without limiting the generality of the foregoing, the parties hereto specifically intend that Lessor's interest underthis Lease shallnot mergeinto its interestunder the Sublease orthe Master Lease, aridthat all such interests shall be in effectconcurrently and shall not be extinguishedor otherwise affected by the application of the doctrine of merger or other legal theory, exceptas specificallyset forth in thisLease, the Sublease, or theMaster Lease.

(b) No term. or provision of this Lease may b� changed, amended, waived, dischm:ged or tenniuatedorally, but only by aninstrument in writingsigned by theparty against which the enforcement of the change, amendment, waiver, discharge or termination is sought.

(c) Thecaptions in this Leaseare forconvenience or reference onlyand shall notdefine or limitany of theteqns or provision thereo£

(d) This Lease shall in all respects be governed by, and construed in accordancewith, the laws of theState of whichthe Leased Premises are located including all matters of construction,validity and performance .

.. **Signatureson NextPage**

PAGE 8 - LEASE 2011 OS_3/HRT/070633..()009

Page 135 EXECUTED effective as of the day and year firstabove written.

MARIONCOUNTY, asLessee

t\<, t\,... -"' STATE OF OREGON, County ofJwf Jp,. ) ss.

On this I� qay of Decem�er, 2002, before me, a Notary Public )Vitbin andfor M \11.,._a,..C't\g b County, pers�ly appeared Rs\ �b 6:r1 r<'\ to me personallyknown beto the � R O of Marion ounty, andto me personally known to be the person who executed the within and foregoing instrument on behalf of said publicbody, and, who beingduly swom did acknowledge said instrument to be the free·act and deedof said public body.

=����-· · =--· this1"� day of December,2002. MICHELf ;t·HARINSKI . NOTARYPllBUC:-OREGON , COM�1i'i',;:�x fi:J 341083 lJ, �� MYCOM MIS Slr.f� .:xr·'lif:i �i:c 10. 2004 d � • .. :�:·��-�:�.---,�i,�$:S?t-:-�« NotaryPublic MyCommi�onBxpires: l�l"lo � I'\ �.,...... , STATE OF OREGON, CountyofJ f "rt ) ss.

On this \� day of December, 2002, before me, a No� Public within and for l\,\uH:n�-;:::- °' � County, �nally appeared R ,c.� 6-us+ci��:n to me personally known tobe the E>te,c;. .t;,,r�� of Oregon Garden Foundation, an Oregon non­ profit corporation, and to me personally known to be the person who executed the within and foregoinginstrument on behalfof said corporation, and, who beingduly sworn did acknowledge saidinstrument to be the ftccact and deedof saidcorporation.

Givenwider my hand andnotarial seal this \c."""day of December, 2002. 7r4/du�� NotaryPublic # My CommissionExpires:\� 10 \ ��

PAGE9- LEASE 201 IOS_l/HRT/070633-0009

Page 136 EXHIBIT A

Description ofReal Property

Legal Description of a 61-Acre Leased Tract Locatedwithin the City ofSilverton Tracts Described in Reel 1247, Page 288, Reel 1282, Pa{ 779, and Reel 1241, Pages 481

Bearings anddistances in this description are grid andinternational feet, respectively, andbased on inverses between State Plane Coordinates NAD 83(91) Datum, Zone 3601, Oregon North. Beginning at the-seutheast cocner of that certain tract of land conveyed to (he City of Silverton by deed recorded in Reel 1247, Page 228 of the Marion County Deed Records, which point is located in Section 3 of Township 7 South, Range 1 West of the WiUamette Meridian, Marion County, Oregon, and mnaing thence North 01045'40" East along the east line of said City of Silverton tract, a distance of 1499.58 feet; flience North 90°OOfX)" West, a distance of219. 12 feet; thence North 33°1538" West, a distance of 950.52 feet; thence North 35<>38'18" West, a distance of I9-18 feet' thellce North 26°08'27" West, a distance of 31.35 feet; Ihence North 16°25'14"West, a distanceof 30. 53 feet; thenceNorth 07°47'17"West, a distanceof 30. 00 feet: fhence North 06°15'16" Bast, a distance of37. 02 feet; thence North 18°28'10" East, -adistance of 25.52 feet; thenceNorth 28°21'52" East, a distanceof 29. 14 feet; fhenceNorth 33°44'35n East, a distance of 26.90 feet; tfaence Norfli 42°08'47" East, a distance of 24. 07 feet; thence Norlfa 53°11'07" East, a distance of 26. 05 feet; thence North 71°17'21" East, a distance of 37. 07 feefc thence North 74°23'15" East, a distance of34. 91 feet; thence North 78°42'44" East, a distance of 20.24feet; (henceNorth 54°0138" East, a distance of 17.62 feet; thenceNorth 32°46'04"East, a distance of 4.74 feet; thence South 01°19'10" East, a distance of 105. 82 feet; thence South 89°58'05"East, a distance of 480.49 feet to the northeast line of said City of Silverton tract; thence North 15°20'40" West along thenoiAeast line ofsaid City ofSflverfam tract, a distance of 790. 63 feet to the northeast comer of said City ofSUvaton tract; thence North 88°08'15" West along the north line of said City of Silverton tract, a distance of 329. 78 feet to the northwest comer of said City ofSilverton tract; thence North 57°39'40" West along the norttieast line of that certain tractof land conveyed to tfaeCity ofSilverton by deed recoided in Reel 1241, Pages 481 of the Marion County Deed Records, a distance of 258.63 feet; {hence South 44°54'59" West, a distance of 189. 17 feet to the northeast comer ofthe 1-acreFrank Lloyd Wright tract; thence South 00°00'00" East alongthe east line ofsaid 1-acrebact, a distance of 183. 17 feet to the southeast comer ofsaid 1-acre tract; thence Nortfa 90°00'00" West along the easterly south line of said 1-acre tract, a distance of 110.52 feet to an angle in the southerly line of said 1-acre tract; thence South 47°35'I5" West along (he southeast line of said 1-acre tract, a distance of 256.06 feetto an angle in saidsouth line; thence North 89°44'59" West along the most westerly south line ofsaid 1-acre tract, a distance of52. 47 feet; thence South 22°45'38" East, a distance of 45. 80 feet; thenceSouth 37°31'20" East, a distanceof 43. 64 feet; thence South52°54'54" East, a distance of 50. 70 feet; thence South 69°54'52" East, a distance of 42. 67 feet; thence South 85°44'54" East, a distance of54. 46 feet; thence North 85°58'42" East, a distance of41. 12 feet; thence North 72°37'28" East, a distance of40. 56 feet; thence South 66°42'17" East, a distance of

PAGEl-EXHIBFTA 201105_3/HRT/070633-0009

Page 137 32 69 feet; thence South 63°28'51" West, a distanceof 35. 46 feet; thenceSouth 75°59'27" West, a distance of 39. 05 feet; tfaence North 90°00'00" West, a distance of 52. 56 feet; thence North 84°26'2q" West, a distance of55. 54 feet; thence North 67°52'26" West, a distance of39. 48 feet; thence North 54°38'22" West, a distance of45. 44 feet; thence North 40°49'14" West, a distance of 51.69 feet; thence North 24°20'52" West, a distance of 45.89 feet; thence North 14°33'45" West, a distance of 37. 66 feet; thence North 00°00'00" East, a distance of 40. 37 feet; thence North 01°50'58"East, a distanceof 82. 50 feet; thenceNorth 06°07'40"East, a distanceof 113. 10 fwst-, thence North 03°44'14" East, a distance of 27.24 feet; thence North 03°06'01" West, a distance of 27. 61 feet; thence Norifa 18°00'10" West, a distance of 28. 95 feet; thence North 29°24'25" West, a distance of27. 32 feet; thence North 43°16'03" West, a distance of 33. 81 feet: thmce North 53°I1'07" West, a distance of 18. 60 feet; thence North 62°14'36" West, a distance of 11.21 feet; thmce South 20°29'50'1 West, a distance of 307. 13 feet; thence South OOWOO" West, a distance.of710.64 feet; thence North 89°56'53" East, a distance of330. 46 feet; thence South 00°00'00" West, a distance of 1108. 97 feet; thence South 58°47'40" East, a distance of Z?. ^ fa!t^1?most soudlcdy west line ofthat certain tract ofland cciaveyed to the Gty. of Sihwtonby deedrecorded m Reel 1247, Page288 ofthe Marion CountyDeed Records; thence South 02°03'40" West along said soutfaeriy west line, a distance of 279.26 feet; thence South 45°51'40" East, a distance of737. 93 feet to thepoint ofbeginning; and containing 61 acres, more or less.

PAGE 2-EXHIBIT A 20110S_3/HRTA)70633-0009

Page 138 Exhibit B

Memorandum of Lease

Afterrecording, please return to: Marion County Attn: Chief Administrative Officer PO Box 14500 Salem, OR 97309

This is a Memorandum of Lease ("Lease") by and between Oregon Garden Foundation, an Oregon nonprofit corporation ("Lessor"), whose mailing address is PO Box 155, Silverton, Oregon 97381-015$, and Marion County, State of Oregon, a municipal subdivision of the State of Oregon and body politic ("Lessee") whose mailing address,is PO Box 14500, Salem, OR 97309.

Dateof Lease: December 19, 2002

Description of DemisedPremises: See Exhibit "A" attachedhereto.

Term: Fifteen(IS) yearscommencing upon the date hereof(the "CommencementDate").

The pmposeof thisMemorandum of Lease is to giverecord notice of theLease and of the rights createdthereby, all of which arehereby confirmed and incorporated herein.

NOW, THEREFORE, Lessor, in consideration of therents and covenantsprovided for in the Lease to be paidand performed by Lessee, does hereby demise, convey, grant and· let unto Lessee the LeasedPremises upon the terms andsubject to the conditions set forth in the Lease, a copy of whichis being held by Lessor at its address stated above.

**Signatureson Next Page••

PAGE 1 - EXHIBITB 201105_3/HRT/070633..0009

Page 139 EXECUTED as of the date set forth in the respective acknowledgments of the parties hereto.

LESSOR: OREGONGARDEN FOUNDATION, an Oregon nonprofit corporation By:. Its;

LESSEE: MARION COUNTy, a municipal subdivisionof (he State of Oregon By: Its:

STATE OF OREGON ss: COU Y OFMARION

This instrument was acknowledged before me this day of 2002_by_ fhe of Marion County, a municipal subdivision ofthe State ofOregon, onbehalfofsaid county.

NOTARY PUBLIC in and for die State of Oregon. (Seal, if any) My commission expires

STATE OF OREGON ss: COUNTy OFMARION

This instrummt was acknowledged before me this day of 2002_by_ flie of Oregon Garden Foundation, anOregon nonprofit corporation, onbehalf of said corporation.

NOTARYPUBLIC in andfor the Stateof Oregon. (Seal, if any) My Commission expires

PAGE 2-EXHIBIT B 2011053/NRTO70633-0009

Page 140 Exhibit "A" toMemorandum and Confirmation of Lease

Legal Description ofa 61-AcreLeased Tract Located within the City of Silverton Tracts Described in Reel 1247, Page 288, Reel 1282, Page 779, andReel 1241, Pages 481

Bearings and distances in this description are grid and international feet, respectively, and based on inverses between State Plane Coordinates NAO 83(91) Datum, Zone 3601, OregonNorth.

Beginning at thesoutheast comerof that certain tract of land conveyed to the Cityof Silverton by deed recorded inReel 1247, Page 228 of the Marion County Deed Records, which point is located iri Section 3 of Township 7 South, Range 1 West of the Willamette Meri� Marion County, Oregon, and running thence North 01 °45'40" East along the east line of said City.of Silverton tract, a distance of 1499.58 feet; thence North 90°00'0011 West, a distance of 219.12 feet; thence North 33°15'38" West, a distance of 950.52 feet; thence North 35°38'18" West; a distance of 19.18 feet; thence North 26°08'27" West, a distance of 31.35 feet; thence North 16°25'14" West, a distance of 30.53 feet; thence North 07°47'17" West, a distance of 30.00 feet; thenceNorth 06 °15'16" East,a distanceof37.02 feet; thenceNorth 18 °28'10" East,distance a of 25.S2 feet; thence North28 °21'52" East, a distance of29.14 feet; thence North 33°44'35.. Bast, a distance of 26.90 feet; thence North 42°08'47" East, a distance of 24.07 feet; thence North· 53°11'07" East, a distance of 26.05 feet; thence North 71°17'21" East, a distance of 37.07 feet; thenceNorth 74°2311511 East, a distance of 34.91 feet; thence North 78°42'44" East, a distance of 20.24 feet; thenceNorth 54°01 '38" East, a distance of 17.62 feet; thenceNorth 32°46'04" East, a distance of 4. 74 feet; thence South 01 °19'10" East, a distance of 105.82 feet; thence South 89°58'05" East, a distance of 480.49 feet to the northeast line of said City of Silverton tract; thenceNorth 15°20'40" West along thenortheast line of said City of Silverton tract, a distance of 790.63 feet to the northeast comer of said City of Silverton tract; thence North 88°08'1S" West along the north line of said City of Silverton tract, a distance of 329. 78 feet to the northwest comer of said City of Silverton tract; thence North 57°39'40" West along the northeast line of that certain tract ofland conveyed to the City of Silverton by deed recorded in Reel 1241, Pages 481 of the Marion County Deed Records, a distance of 258.63 feet; thence South 44°54'59" West, a distance of 189.17 feet to the northeast comer of the I-acre Frank Lloyd Wright tract; thence South 00°00'00" East along the east line of said I-acretract, a distance of 183.17 feet to the southeast comer of said 1-acre tract; thence North 90°00'00" West along the easterly south line of said 1-acre tract� a distance of 110.52 feet to an angle in the southerly line of said 1-acre tract; thence South 47 °35'1S" West along the southeast line of said I-acre tract, a distance of 256.06 feet to an angle in said south line; thenceNorth 89°44'59" West along the most westerly southline of said 1-acretract, a distance of 52.47 feet; thence South 22 °45'38" East, a distance of 45.80 feet; thence South 37°31'20" East, a distance of 43.64 feet; thence South S2°5.4'54" East, a distance of 50. 70 feet; thence South 69°54'52" East, a distance of 42.67 feet; thence South 85°4415411 East, a distance of 54.46 feet; thence North 85°58'42" East, a distance of 41.12 feet; thenceNorth 72°37'28" East, a distance of 40.56 feet; thence South 66°42'17" East, a distance of 32.69 feet; thence South 63°28'51" West, a' distance of 35.46 feet; (Qence South 75 °59'27!' West,

PAGE 1 - EXHmITA 201105_3/HRT/070633-0009

Page 141 a distance of 39.05 feet; thence North 90°00'00" West, a distance of 52.56 feet; thence North 84°26120" West, a distance of S5.54 feet; thence North 67°52'26" West, a distance of 39.48 feet; thenceNorth 54°38'22" West, a distance of 45.44 feet; thence North 40°49'14" West, a distance of 51.69 feet; thence North 24°20'52" V,est, a distance of 4S.89 feet; thence North 14°33'45" West, a distance of 37.66 feet; thence North 00°00'00" East, a distance of 40.37 f�t; thence North 01 °50'58" East, a distance of8�.50 feet; thence North06 °07'40" East, a distance of 1�3.10 feet; thence North 03°44'14• East, a distance of 27.24 feet; thence North 03°06'01" W� a distance of 27.61 feet; thence North 18°00'10" West, a distance of 28.95 feet; thence North 29°24'25" West, a distance of 27.32 feet; thence North 43°16'03" West, a distance of33.81 feet; thence North 53°11 '07" W� , distance of 18.60 feet; thenceNorth 62°14'36" West, a distance of 11.21 feet; thence South 20°29'50" West, a distance of 307.13 feet; thence South 00°00'00" West» a distanceof 710.64 feet; thence North 89°56'53" :East, adistance of 330.46 feet; the:nce South 00°00'00" -West, a distance of 1108.97 feet; thence South 58°47'40" East, a distance of 755:J.7 feet'to the most southerly west line of that certain tractof land conveyed to theCity of Silvertonby deed recorded in Reel 1247� Page 288 of theMarion County Deed Records; thmco South 02°03'40" West along said southerly west line, a distance of 279.26 feet; thence South 45°51 '40" East, a distance of 737.93 feet to the pointofbeginniJ:tg; and containing61 acres, more orless .

...

PAGE2-EXHIBIT A 201105_3/HRT/070633-0009

Page 142 Page 143 Page 144 R¡ch Rodeman Law offices

1100 van Buren Ave.; corvallis, oR 97330 Telephone: $411754-3648 Facsimile: (541)752-1135 email: rodeman@pealcorg

August 2,2005

City Manager 306 South Water Street Silverton, Or 97381

Dear Bryan,

Here is a copy of the sub lease with the County and the Garden for your files. I obtained this from the County. Let me know of scheduled mediations.

at Law

Page 145 EXECUTION COPY

SUBI,EASE

THIS SUBLEASE is made as of this 19th day of Decernber, 2002, betwcen Marion County ("Sublandlord') and Oregon Garden Foundation ("S ubten ant')-

RECITAIS

A. Subtenant, as lessor, and Sublandlord, as lessee, are also parties to that certain lease of even dete herervith, a cop1 of which is attached hereto as Exhibit A (as it may be ametrded from time to time, the "Head Loasc'), covering certain leased prenriscs described therein (the'ieased Prcmiscs"), which.-Lcasc Prcmiscs a¡-e leased to Subterra¡rt by thu City of Silverton, Oregon, pttrsltattt to the terms of a lease agreement dated October 28, 1995, as amended (the 'Master [æa.se").

B. Sublandlord desires to sublease the Leased kemises to Subteriant and Subtenant desires to sublease the same from, Sublandlord, on the terms and conditioris of this Sublease.

C. This sublease is cntered into in conneclion with the issuance of Muion County, Oregon Revenue Bonds, Series 2002 (Oregon Garden Foundation Project) in the âggregats principal cmount of $5,000,000.00 ("Donds") to rcfinancc indcbtcd¡ress of Subteuaut i¡rcur¡cd i¡r connection with the acquisition and improvernent of the Leased Premises and to finance a portion nf the irnçrovements located or to beeome located on the Leased kemises. The purchaser of the Bonds will be Bank of Americq N.A. (the "Purchaser'J.

D. The parties contenplate that a leasehold deed of trust will be given by Subtenant to Sublandlord (the "Trust Deed'), and that a fee deed of tn¡st will be givør by the City of Silverton, Oregon to Sublandlord (the '?ee Deed of Trust'), both to secure the Subtenant's obligations to Sublandlond under this Sublease.

E. Capitalized terms not otherwise defined in this Sublsase or in the Âppendix to this Sublease shall have the meaning set forth in the Head Lease.

NOW, TI{EREFORE, Sublandlord and Sublenant. for themselves, their successors, and assigns egrö€ as l'ollows:

l- LEASE OF PREMISES. Sublancllord hereby leases to Subtenant, and SubtenâDt does hereby lease frorn Sublandlord, the l,eased Premises for a term (the "sublease Term') commsncing on the Comrnencement Date and ending on the date thot all of the Bonds purchascd under the Bond Purchase Agreement have been paid, disch.arged and clefeasecl. Subla¡dlord also hereby grants to Subtenant a noncxclusive perpctual leasebold easement for Subtenant and its guests atrd invitees to use those portions of the real property leased under the Master Lease that are

PAGE I- SUBLEASE 20 I ¡ 06-5/ÞrRT/0706314009

Page 146 devoted to roadways, entD¡lvays and the like and ttrose portions of the realproperty leased under the Master l-ease that are devoted to parkirrg areas, for purposes of ingres*, .nd parking. ".gr"ss, 2. BOI\TD FT.JNDS AI.{D PROJECT.

2.'l Bonds- To provide for thc financing of the Project, Sublandlord has, concurrortly with the cxccution of this $ublcase, issued arlrJ ¡Jyliv¡x¡xl ro the Purchasor rhereof the Bonds a¡ld Sublandlord has depositcd the proceeds of the Bonds as required by rhe Bond hrchase AE¡eernant and by Section 2-2 of this .S¡rblease. In the event rhat tbe available fünde in the hoject Fund a¡e insufficient to pay for the Proj""ç then Subtenant agrees to pay the ørcesr from other fi¡nds legally available for such prwose without ¡eimbursement Êom Sublandlord, the Pr¡rchaser or the owners of any of the Bonds, subject to such conditions and limitations as ar€ provided in the Bond Purchæe Agreemerit and this Sublease.

2-2 Thcre are hereby established with the Sublandlord the following funds (collectively, the "Bond Fundc'):

(l) the.Marion Cnunty, C)regnn. R.euenue Bonds Series 2002 (Oregon Gerden Foundation Project) Debt Service Fund (the'I)ebt Service Fund');

(2) the Marion County, Oregon Revenue Bonds Scries 2OO2 (Orsgon Garden Foundation Project) Debt Reservc Fund (the "Debi ReserveFurd');

(3) the Marion County, Oregon Revenue Bonds Seríes 2002 (Oregon Ga¡den Foundation ProjecQ Projcct Fund (thc "Projcct trund'); and

(4) the Marion County, Oregon Revenue Bonds Series 2002 (Oregon Garclen Foundation Project) Rebate Frmd (the "Rebate Fund")-

On the date of issusnce and delivery of the Bonds, the net proceeds derived ftom the sale tbereof shall be delivered to the sublandlo¡d and applied as foilows:

(a) fui amount equal to the Reserve Requirønent shall be deposited in the De.ht Resen¡e.Fund; and

(b) The balance of the net proceecls of thc Bonds shalt be deposited into the Project Fund.

2.3 Use and Application of Pro¡ect Fwrd. Moneys in the .koject Fund shall be expended and disbursed in accordance with the provisions of this Snbleasi- The Sublandlord shnll kee'p and maintain adcquatc rccords prtaining to the Project Frurd a¡¡rJ all rcucipts and disbursemelts pertaining thereto, and shall furnish upon request periodic statemcnts with respect thcrcto to tbe Subtensnt and Pr¡reJr¡.sø. lhe ræ¡¡rds of the Sublandtord with rcspect to ¿tl income and disbursenrents relating to rhe Project Fund shall be made availablc by the Sublandlord et its ofñce during normal business hours to the Subtandlord and Purchaser-

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Page 147 2.4 f)isbursement.ç from thc Pmject Fund. Subta¡rdlord will malce pa¡rnents ñom the Projoct Fund to pay (or to reimburse Subtenaut or Sublandtord for the peyment o$ thc Costs of Capital Projects and Costs of Issuance. Except with respæt to payment of Reñ¡nded Indebtedness that is paid at the closing of the Bonds and capitalized interest, each payment of the Costs of Capital Projects or the Çosts of Issuance shall be made ouly upon receipt by tbe Sublandlord of a requisitiou (in the form set forth in Exhibit C hereto) signed by a Designated Representative of Subte¡ra¡rt and approved by the Sublandtord (which approval shall not be unrcasonably witbheld, dcla¡,cd or conditio¡red), ur sigrrcrl by Sublandlord and approved by a Designated Representative of Subtenant stating (i) the requisition numbe,Í, (ii) the name and addre.ss of the pe,rson, firm ot corporation 1o whor¡ pa¡rnent is due or \ rs6 made, inoluding, if requested and approvd a transfer to Subtenant represeoting reimbursed fwrds of Subtenut, (iii) the amount to be paid, (iv) that none of the items for whích the pa)'ment is proposed to be made has formed the basis for any pa¡rment therctofore made from the Project Fund, (v) the nature of each itcrn for whiclr the payment is proposed to be made and that such item is or was reasonable and necessary in counecdon with each respective projecl forwhich the ltoject .t'und was founded and is a proper charge against the Project Fund, (vi) that upon payment of the amount requested in such rcquisition, thc anount rcmaining in thc Project Fund, togcdher willr otùcr legally available moneys of the Subtenant, æc sufEcicnt to pay the portion of tt¡e Cost of Capital Projects for each such prnject then rrnpai.rl, and (vii) that the use of the monrys requisitioned by Subtenant will not adversely affect rhe tax-exempt stâtus of the Bonds.

2.5 Establishment of Complction Date. The Completion Daté for the Project shall be evidenced to the Sublandlord and the P¡r¡ctraser Uy a Comþledon Certificate. Subtenanr and Sublandlord agrec thaq absent unforeseen circumstances, the Completion Date (i.e., the filing of the Completion Ce¡tificate required by this Section 2.5) will occur not later than Decernber 19, 2005, wrless otherwisc agrccd to in writing by the Subla¡dlord and providcd Subtcnant ¡rrovicles the Sublandlor,

_ 2.6 _ Completion of Projcct. Upon receipt by the Sublandlord of a Completion Certificate frorn Subtenant, eny rnone)õ remaining on deposit in the Project Fund (less any a¡rount which Subtenant inst¡rcts Sublar¡dlord to retain in the Projed Fund for the purpose of Payug atry Costs trf C4pital Projects to be paid ar a later rimc) shall be transfer¡ed to rhe Debt Service Furd to be applied against the amounts nørt coming due under the Bonds and such âmorrnt shall be a credit against the Rental Amounts next coming due hereunder; provided that, prior to any strch application of moneys remaining in ttre Project Fund. there shali frnt be filed with Sublandlord an Opinion of Bond Counsel on the pro,per application thereof.

2.7 Use and Application of Debt Service Frurd. There sball be deposited by tbe Sublancflorcl, when received, in the Debt Service Fund (a) all Rental Amounts received by Sublandlord, (b) all moneys required to be transfened fiom ttre Project Fund to the Dcbt Service Fr¡nd as providcd iu this Sublease, arrd (c) all utl¡sr inuntrys rcscivcd by the Sublandlord under this Su.blease for deposit in the Debt Service Fund for the Bonds. Sublandlord shall use rhe

PAGE3_ SUBLEASE 201 t06 5/HRT/0706Ð4009

Page 148 interest, if any, accn¡ed on the Debt Service Fund to pay interest on the Bonds on each Rental Payment Date, and the amount of such payment shsll be a credit againet the Rental Âmounts next coming due hereundq.

Except as hereinafter provided, moneys and ínvestments in the Debt Service Fund shall be used solely for the payment oi the principal o[, prsrnium, if an¡ and interqst on the Bonds when due (whether at mahrrit¡ upon mandatory or optional redernptíon, or upon acceleration following the occurrence of an Event of Default)- Mone¡ns in the Debt Service Fr¡nd representing ¡¡repaid Rental â,¡¡¡ounts under the Sublease may, at the wriner¡ direction of Subtenant, be used for the redernption of Bonds in accordance wÍth the Bond Purchase Agreement pmvided such fiurds a¡e Seasoned Funde" To thE extsnt that Rento,l ./rmounts ure poid by Subtcrrant dircctly to Pr¡rchaser Pursuant to Section 3.1, such Rental Amormts shall be appli.ed to pay the principal of and interest on the Bonds ar¡d the Sublandlord shall be cntitled to a reduction of the payments due on the Bonds in au amouut equal to such Rental Amounts.

'l'he 2.8 Rebate fund.

(a) Ft¡nd. Subtenant covenants and aglees that, in accordance with the applicable pmvisions of the Cod*, it sheJl ceuse to be calculated the Rebate Amor¡nt accruing with respect to the Bonds. \tyithin 25 days after each Install.rnenf Computation Date for the Bonds, the Subtenant shall provide Sublandlord and the Rebate Änal¡æt with detailed information concønirrg the investments made during the Calculation Period just ended with any mone'6 related to the Bonds held by the Sublandlord hereunder a¡d the Rebate Analyst shall compute the Rebate Amount for the Bonds in accorda¡ce wrth the requirements of Section l4E(f) of the Code and shall provide to the Sublandlord, the Subtenant and the Iìrchasc'r a Rcbatc Rcport sctting fo¡1h such calculatious.

In the event a Rehete Report shows a positive Rehate rdmorrnt, Suhterrant shall, within five days of the receipt by the Subtenant of such Rebate Report but in no everit later than one Business pay prior to the date by which the Subtenânt is required to pay such Rebate Anount to the United States of America, make a Rebate Paymcnt by dçositing into the Rebate Fund an amouut equal to such Rebate Arnount-

ln the event that a Rebate Report shows that the ar,nounts on deposi.t in the Rebate Fund gxceed the cr¡nrulgtive Rebgtc Amount with reepoct to the Bonds, thc Sublandloril ie directed to fansfer an amount equal to the amount of such ð(cess from the Rebate Fund to the Dobt Service Fund (but only to the extent of any amounts on deposit in the Rebate Fund).

Amounts on deposit fro¡n time to time in the Rebate Frurd shall, to the extent practicable, be invested by the Sublandlond in direct obligations of the United States of A¡¡rcrica.

PAGE 4 - SUBLEASL, 20 1 r 06_5/HR T/070ót3-0009

Page 149 (b) Payment of Rebate Agrpunt to United States. Not later than 55 days after each Installmemt Computation Date for the Bonds. the Subtenant shall pay to the United States of America, from mone¡æ on deposit in the Rebate Fund or, if moneys on deposit in the Rebatc Fund are i¡rsufficient or unavailable to make such payments. from moncys paid by Subtenant, at least 90% of the Rebate Amount, as defined in the parties' Tax C¿rrificate and Regulatory Agreement. I¡ addition, not later than 60 da¡a aftw the Final Computation Date for the Bonds, the Subtenant shall pay to the United States of A¡nerica atl amounts required to be paid thereto pursumt to Section 148(D of the Code as set forth in the fiDal Rsbatc Rcpurt, said paynrclt to be rnarle out of rnoneys on rlyposit in the Rebate Fund or, to the extent the moneys on deposit in the Rebate Fund are insufficient for such pupose, out of mône)¡s paid by Subtenant. Sublandlord shall in no went be responsible for payrnent of any penalties related to the Rebate Fund.

Notwithstanding ar¡llúng expressed or implied herein to the contrary, it is the intent that there sball be paid to the United Statcs of A¡ncrica, out of moneys on deposit in the Rebate Ïund or paymø.ts urade by Subteuant, all amounts required to be paid pursuant to Section I4E(Ð of the Code at the times required thereb¡

(.) Conformancejo the Code Requirements: "Iszue of TÐ(-Exempt Bcnds" f)c5ncd: Covenent tn Srrn¡ive Prynent. Notwithstanding anything expresserl or irnplied herein to the contrary: (i) the provisions of this Section 2.8 may be amerrded from time to time by the Sublandlord and the Subteriant without the cons€nt of or notice to any Ovmers in order to conform to the requirefilents of the Code regarding the payment of the Rebate Arnor¡nt to the United States of Am.erica or the manner or time of calculating such Rebate Amount; and (ii) in no event shall Sublantllord be deemed to be in dethult in respect of its obligations undcr this Section 2.8 so tong as all actions taken by Subtenant with rccpcct to thc calculation of thc Rcbatc Àmount a¡rd thc paymcnt thcrcof to thc United States of America conform to the reguirements of the Code as such requirements may be changed, modified or arnc¡dcd frcrn time to tirne.

As used in this Section and as used in the definitions of the tcrrns 'Bond Year¡ and "Rebate Anount" that appcar in this Section 2, the phrases "Tær-Exempt Bonds" and 'Bonds" or any wo,rds of similar import shall mean all Tax-Exempt Bonds for purposes of the arbitrage rçbatc pruvisions of the Code that a¡e considercd ¡o bc a single "issue" ofobligations.

The Sublandlord shgll have no duty to calcrrlate any Rebate Ârnount, or review calculations of thc samg and no duty to enforce the Subtenant's obligations with respect to payment of Rebate Amount.

Notwithstanding anything expressed or irnplied hcrein or in any other Bond Doq¡ment to thc contmry, the covenants of Subtenant set forth in this Section 2.8 shall survive the paymcnt in full and/or defeasancc of any series of Bonds.

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Page 150 2.9 Use and Application of Debt Reserve Fund.

(a) Funding. In connection with th.e issuancc of the Bonds, the Sublandlord and Subtenant shall cause to be dçosited in the Debt Rcscrvc Fund Bond procecds in an amount equal to the Reserrre Reqrrirement.

(b) Withdr-au¡als ñop Debt Resqve Fund. If, on any datc upon which any amormts of principal of or inte,rest on the Bonds are due and payable (including any arnounts of principal due aad pa¡able by virtue of a mandatory sinking fiurd redønption rcquiranent), the arnotmts on deposit in. the Debt Senrice Fund are insufficient to pay zll atr¡ounl¡r uf principal o{, premium (if any) and interest on the oußranding Bonds due on such date, theri the Sublandlord shall withdraw fiom the Debt Reserve Fund, in thc order of priority set forth below, aril âmount equal to such delicicncy and ûpply the amount so withdrawn+o the payment of the a¡nounls of principal of, prernium (if any) arrd intErest due on the Bonds on such d¡te.

(c) P¡icniw of Withdrawalq. Withdrawals from the Debt Rescwe Fund shall be rnade in the following order of priority:

First, Êom auy cash on de¡rosit i¡r tl¡g Dcl¡t Reservc Fuurl; anü

.Secnnd, fr.nm the liqrrirlation proceeds'of eny investnents made from mone)ñ on deposit in the Debt Ressve Fund, with the Sublandlord first liquidating those investments with the shortest tsrm to maturity unless otherwise inslructed by Subtenant. 'lhe (d) Yglgalion of Debt Reserve ¡'und. amounts on cleposit in ll¡e Debt Reserve Fund shall be determined by the Sublandlord:

(l) on June I ofeach year; and

(2) as of the date of any withdrawal from thè Debt Reserve Fund fpr the purpose ofmaking up âny deñciencies in the Debt Servíce Fund.

For purposes of determining the arnounts on tleposit from tirne to time in the Debt Rt$crve Funcl all investments shall be valued at the lower of:

(i) the mean between the bid and àcked price therefor ae shown in the Wall Stcct Joumal last published immcdiately prior to thc date ofsuch determination: or

(iÐ the cost of such investment.

\-, PAGE6- SUBLEASE 20t I 06 5/HRT/070633-0009

Page 151 (") Disposition qf Excess: Oblieation to Restore Deficiencies. If, on any June I uf arry year, the anrounts on dçosit in thc Dcbt Rcscrvc Fund ore in excess of the Reserve Requiranent (u¡ith investme¡lts on dçosit therein being valued as provided above), then the Sublandlord shall promptly inform Sutrtenant of srreh F¡cf and. if sn instmcted by Subtenant, shall withdraw from. the Debt Reserve Fund ân âmount equal to such excess and tansfer the a¡nount so withdrawn to Subtenant-

In the everrt thai ary amounts are withdräwn from the Debt Reserve Fund .for the pnrpose of making up any deficiency m the Debt Service Fund as described above or in thc event that ¿s of June 1 of any year the íImounts on deposit in the Debt Reserve Fund (determined punuaurt tu a val.rra(ion by thc Sublandlord as providcd abovc) arc lcss than the Reserve Requirernøt, Subtenant shall cause to be dcposited in the Debt Rescrve Fund an amount such that the amornt on deposit in the Debt Resen¡c Fund shall at least equal the Reserve Requiremcnl which deposis shall be made in not more than twelve equal rnonthly installme,lrts commencing on the first day of the rnonth next succeeding the date of the valua,tion sr withdrðwal giving rise to such deficiency. If Subtemant fails to make any monthly payment to replenish the Debt Resen e Fund within five Businesr Da¡m after the paytnent is duen the liublandtord shall malce the delinquerrt Paylnent to the Debt Reserve Funcl from Video l,ottery Procee.ds or other amounts of the Security available to Subla¡rdlo¡d. Fø purposcs of this parûEfêph, rhe Srrblcndtord shqll daermine tbe a¡nou¡rt on deposit in rhe Debt Reserve Fund as of the clate upon which Subtenant makes the last deposit in the Deht Reserve Fund pursuant to the first sentence of this paragaph, Subtenant agrees that it will pay or cause to be paid tio Sublandlord all aslounts required to be deposited in the Debt Reserve Fund to comply with this Sublease-

(f) All amounts on dePosit in the Debt Reserve Fund maybe applied to the final payment (whcrhcr at rtratutity, Lry prior redernption or by rneans of a defeasance as provided in the Bond Purchase Àgrccm.ent) of oll outstonding Bonds.

2.1O Repayment to Subtenant from the Funds Upon an Optional Rcdemption. Upon an optional redemption of the Bonds or when the Bonds have otherwise been paid, discharged and defeased, any emounts renraining in the Debt Se,rvice Ftmd, the Debt Reserve Fund or the Pnoject Fun{ afrer payment in full of the Bonds, the fecs and expmses and other costs specified in Sestion 3 of this Sublcase whict¡ relaæ to the Bonds and all other am.otrnts required to be paid under this Sublcasc, shall be tra¡¡sferrsd tc Subtcnant.

2.ll Construction of the Project- Subtenant shall e.onsfnrct the Project in cooperation witlr Sublandlord in accordance with the provisions of this Sublease. The Subtenant shall keep and maintain adequate r.ecords pertaining to the all receipts a¡rd di.sbnrsernents penaining to the Project, and shatl fr¡rnish upon roquest periodic staternents with respect thereto to the Sublandlord ancl Purchæer. The records of the Subtenant with respect to all receipts and disbursements relating to the Project shall be made available by lhe Subtenant at i$ officc during normal business hours te the Sublandlord and Purchaser.

PAGE 7 - SUBLEASL. 20 I 106 54{RT/07061}4009

Page 152 z.lz ownership uf thc Pruject' until thc cnd of thc Sublcasc Term' the hoject shall be owned by Sublandlord aé security for payment on the Bonds and therefore 'þrír.narily to Protect a ac-cnrity interect" c¡ thrt phrase i" used and defined in ORS 465 2.0O et s¿q- anrt OAR t4ç122- 0120.

2.13 Designated Representative. At all times dr¡ring the Sublease Term, Subtenant any one shall designate a responsible ftrson or persons to act as a Dcsignated Representative, of whom shall t¡ke aoá matce any and all actions and cefifications r€quired ¡o be taken and made by Subtenant or the Designated Representative hereunder and shall provide written notice to the purchaser and SublandJortl 1¡f aly such designation a¡rd of a¡lT succecoor Designated Rçresentative. In the event that all of the p€rsons so designated and their designeÌed successors sre $av¡ilable to act, Sublandlord may rlesignate any officer or director of Subtenant as a Desi gnated Representative for Subtenant.

Z.l4 Remedies to be Pursued Against Contractors and SubcontrÀctors and thelr Sureties. tn the ever¡t of default of arry contractor or subcontractor undcr any contract made by it in connectionr with the Project or in the ever¡t of a breach of warranry with ruspeut to arty be materials, workrnanship or perbrmance guarânry, Subtenant wi.ll cause promPt proceedingS to insfitutcd ur take othqr actic,n as Subtcnant dcc¡srs oppropriate or neceÊsery, cither separately nr in conjunction with othets, to exhaust the remedies of Subtenant against the contractor or subcontractor so in defa¡¡lt and against each surety, if any. for th.e performance of such contract-

AnÍ amounts recovsred by way of dam.agcs, refunds, adjustmørts or othet'wise in conneciion with this Section 2.14 ifter dõduction of êxpenses incurre

\-"' PAGES- SUBLEASE 20 I I 06 s/rrRl/070633-0009

Page 153 Sublease. The Sublandlord shall be entitled to assrme, abscnt reccipt of written notice to the contrsry, that all invcstmcnts madc at thc dircction of tbc Subtcnant arc nuthorizcd undcr Statc law for invcstment of firnds by the Sublandlord- The Sublandlord shall not be liable for any loss .suffererl ín connection with nny investme¡rf of firnds made hy it in acconlance with this Sention 2.15, unless such loss results from its gr.oss negligence orwillful misconduct.

The Sublandlord acknowledges that to the extent regulations of the Comptmller of the Currency or any olher regulato¡y entit/ grent the Sublandlord the right to rcceive brokerage confirmations of the secuity Ear¡sactions as tbey oocur, the Sublandlord specifically waives receipt of such confirmations to the extent permitted by law. The Sublandlord shall furnish the Subtcnært monthly cash transaction statcmcnts which includc the detail for all invsstmcnt transactions made by the Sublandlord herer¡¡der.

3. RENT.

3.1 Rent and Other Amounts Pa)¡able. The following are pa)¡ôblc by Subtcnant and collectively constihrte "Rental Arnounts" under this Sublease:

On or before each Rental Payment Date as defined in Exhibit B hereto, Subtenant egrees to and shall pay to Þrrchaser for the henefit of Sublandlord at the add¡ess çecified in Section 14.16 as Rerrtal Arnounts for tbe use of the Leased Pre,mises the Rental A¡nount due as set forth in Exhibit B and owing on such Rental Payment Date. Subtenant also agrees to pay as a Rental Amouut to Sublandlord or reimburse Sublandlord for all reasonable cxpcnscs of Sublandlord, including without limitation the fees and costs of its legal counsel, if any, related to the Leâsed Prernises or the Bonds, or required by this Sublcase. Subtenant also agrees to pay as a Rental Amount the fees, costs Bnd cxpense.s of Bond Counsel.

Failure by Subtenatt tro make any peyment rcquired by this Section 3.1 shall constitutc an Event of Default, and the required payment shall continue to be an obligation of Subtenant, payable in full frorn the date of such Event of Default.

3.2 Notice of lnsuffrcient Funds. No later than 5 days prior to the next applicabl.e Rcntal Payrncut Datc, Subtcnaut sl¡¿ll provide uotice to h,uclrascr aud Sublandlord of arry anticipated fu.lwe to make e peymenl on the applicable Rental Payment Dâte. Upon receipt of such notice, or upon notie.e from the Ptuchascr to the Sr¡blandl.or.rl rhat lhe Sr¡htment has failed to pay Rental Amounts when due, the Sublandlord shall pay the Rental Amounts rlue, first from anounts in the Debt Reserve Fund, and second from Video Lonery Revenues or other amounts of the Security then available to Sublândlord.

3.3 Obligations of Subtenanl Hereunder Unconditional. I.hc obligations of Subtenanl to make the payments required in Section 3.1 hereof and to perforrr and obser:ve the other agrccrnents on its part containcd hcrcin, to thc cxtent pcrmittcd by law, shall bc abEolt¡tc and unconditional, pmvided that the payrnent required in Section 3.1 hereof shall be reduced to the exfe.nt that Suhtenant rlefaults rrnrler this Suhlease and the Sublandlord uses the proceeds of the

PAGE9- SUBLEASE 20r r 06 5/HRT/070633-0009

Page 154 Bonds to pay Pr¡rchaser. Until such time as the principal of and intercst on the Bonds shall have beun fully ¡raid or provision for tbe payment thcrcof shall havc been made in acc,ordance with Section 12 of this Subleasq Subtenant, to the extent permitted by law (i) will not suspend or discontinue â¡y peyments provided for in Section 3.1 he-reoi (ii) \vill perform and observe all of its other ag¡eemmts contained in this Subtease, and (iii) will not terminate this Sublease for any cÀuse. including but not limited to âny ects or circumstances that may constitute failure of consideration. destn¡ction of of damage to the Leased Prerniscs, commercial &r¡stration of purpose, any change in the tax or other laws or adminishative actions by the Uniterl States of America or the State of Oregon or any polihcal subdivision of eithsr, or âny fàilue of Sublandlord to pedorm and observe Àny âgreemcnt, whether *prassed or irnplie{ or any dut¡ liability or obligatir.rtt arisi¡g uut uf or çoturcctcd w'ith thc Dond Documcnts.

Nothing contaíned in this Sec.tion 3.3 shall he constmed to release Sublandlord from the performance of any of the egrcements on its put contained in this Sublease; and in the event Sublandlord shall fail to perform any such agreernent on its part, Subtenant may irxtin¡te such action against Sublandlord as Sublenant may deem necesary to compel performance or recovcr ib denaggs for non-performance. In addition, Subtenant may' at its or¡¡n cost and exPense and in its own name or in th€ narne of Subla¡rdlord, 10 the extcnt psrnitted by law a¡rd wíth cur¡scr¡t uf Sublandlord, prosecute or defend any action or proceeding or take any other action involving tbird persons which Subte¡rant dcc¡r¡s rcosonlbly necesstry to Eeçure or protect its rights of possession, occupancy and use hereunder.

3.4 Covenant as to Rates, Fees and Charges. Subtenaot covenants and agfees to operste a garden displaying a diversity of plant m¡terial for education, rçsea(ch and public enjoymentãn rtre I¡ased Prernises, and to fix, charge md collect such reasonablê rates, fees and rhrrg"r for the services rendered by, and for the use and occupancy of, the hoject, so that there sb¡tf ¡nure to Subtilânt gross cash receipts in an arnou¡rt sufficieut to Pay currcntly all of Subtenrrt's exp€rises of operation, pay all Rentat Amounts under this Sublease, and pay all other obligations imposed by thic Sublease upon Subtenant-

3-5 Income Tax Stats. Subtenant reprcsents th¿t it has taken and covenants and agrees t$at it shatl take all appropriate measures to asswe that it rernains cxempt from income tix,es as a norprofit SOllc¡i¡ organization under federat income tax laws and regulations thereunder of the Internal Revenue Senrice and that it witl not sublease the Leased Premises to any eritity which is rrot e governmeotal entity or a nonproñt 501(cX3) organization all in ae¡ordance with the pruvisiurs of Section I1.1 hcrcof-

1.6 Govem¡nental Controls. Sublandlonl end Subtenant covenant and agrBe that they sball, either jointly or separatcl¡ take all action, if an¡ that may be required to obtain such consents, exieptions, exemptions or approvals of govcrrunental authorities as may be necessarJ¡ to pernrit c¿ch of them to comply fully with all covena¡ts, stipuLations, obligations and of Sublandlord and Subtenant contsined in this Sublease- Notwithstandin! this provision,"gË"tn-t. it shall be the sole responsibility of Sub¡enant to ob¡ain any anrl all colrsents, àxceptions, exemptions or approvals of government autho¡ilies nccessary to operate and manage

20 I 5/FIRT/070611-0009 PAGE IO - SUBLEASE 106

Page 155 the t,eascd Premises anct to comply with any Environmental Law conceming the Leased Premises.

4. USE. Subtenant sþall use the Leased Prcmiscs only for a garden displaying a diversity of plant material for education, research and public enjoyment ancl such other uses as are permitted Èy the Head Lease, and for no other purposes. Subtcnant's use of the Leased Premises shall at all times conform to all applicable laws, ordinances, regulalions ancl codes,

5. POSSESSION. Subtc¡arrt sfiall þc e¡rtitlcd to sole a¡rd sxclusivc posscssion, morisgsment and operation of the Leased Prernises. Sublandlord shall not þarticipate in lhe management of a facili!y' as tlrat phrase is used a¡rd defined in ORS 465.200 et seq. enrl OAR i4fiJ122-O120 concerning the L¿ased Property. Sublaodtord shall be cntitled to entÉr the Leased Premises as provided in Secúou 9.2. Sublandlord covenants and agrees thef it will not take any action, other ih* p*"uot t to Section 13 of this Sublease or set forth hcrcirl to prevent Subtenant from having quierand peaceable possession and enjo¡anent of the Leased Pre,nises during the Sublease Term. .tn the event of a dispute, the Subtenant's rÍghrs shatl yield to those of the Sublarullonl as necessary to fulfill Súblandlora's obligations under the Sublease, without any diminution in Re¡rtal Amouuts or auy otlrcr amounts due undc¡ thc Sublcasc.

6- DISPOSITION OF THF. t.ËfSED PREMISES. Upon payment by Subtenant of amounts zufficietrt to effecl defeasance of the Bonds in accordancc with the Resolution and paymemt in full of all expanses of Sublandlord provided for hereunder druing the Sublease Tertn and under the Trust Deed, Sublandlord will convey i.ts righ.ts to the I-eased Prenises, the Debt Semce Fund, the Debt Reserte Fund and tlre Project to Subtenant by lease termination and othcr appropriate docr¡¡nents wi¡hout any frrrtlrer consideration. lf the Subleasu Tcrur euds based on térmínation caused by an Event of Default, Subtenant will convey its riglrts in the lÆased Prcrmiscs and Projerct to Sublsndlord by sublease terminalion and other appropriate docttments without any further consideration. 7. MAINTENANCE. LIENS-JA)(ES AND INSUR-AIìICE

7.1 Maintenance and Modi.fìcations of and Liens on thu Lcilscù Preuúses. Subtsnant agrees that during thc Sublease Term it will faithfully and efliciently administer, rnaintain and opcrstc the læa.red kemisee, including kccping such facilities in good repair and good operating conclition at Subtenart's owtr cost. and upon canoellation, expiration or termination of this Sublease it will" unless cancellation. terrnination. or cxpiration of this Sublease is caused by Subtenant payrng sums sufficient to effect defeasance of the Butds, srr¡rende¡ the Project to Sublandlord in as good condition as prevailed at the date of this Sublease or, with rcspect to facilities constucted hereaftero at the datc the Subtsnant took possession ot'the fâcilities, loss by fire or other casualty covøed by insrance, onlinary wear and tear, obsolescence and acts of God excepted, subject to the provisious of thc llullowirrg par-'agrqÍr and of $ection 7.2 of this Sublòase. Sublandlo¡d sbalt not be under any obligation to administer, maintain, operate or repair the Leased Preroises.

PAGE II - SUBLEASE 20t 106 5/HRT/070613-0009

Page 156 Subtenant shaU, with the prior written consent of Sublandlord, have the privilege of remodeling or rehabilitating the Leased Prerrrises or mrking additionc, modificotions ond improvemenls to tl¡em from tirne to time as the Subtenant may deem desirable for the oporation of the facility, the cost of which shall be paid by Subtenant, and the sarne shall be rhe properry of Sublandlord and be included under the temrs of this Sublease as part of the Project. Sublandlord hereby consents to rernodeling or rehabilitating the Leased Premises or making additions, modifications, and improvements thereto.

Nsiürcl Sulutqra¡rt rror Sublar¡dlonl will permit any mechanics' or other liens to be established or remain against the Leased Prernises, except for the Trust Deed and Fee Deed of Trust; provided, that if Subtens¡rt shall firct noti$ the Sublsndlord of its intcntion so to do, it may in good faith contest any mechanics' or other liens filed against the læased Premises. and in such event may permit the item.s so contested 1o remain undischarged and unsatisfied druing the period of such contsst and any appeal therefrom unless Sublandlor_d shall notiS Subtenant that by non-payment of any such i.terns the interest of Sublandlord under this Sublease or under the Head Lease n'ill be materially endangered or the Leased Premises or any part thereof witl be subject to loss or forfeinte, in which event the Subtenant shall prornptly cause such mechanics' or othcr licn to bc released. Subladlord will uoo¡.rcratc fully with Sut¡tcuart iJr any such contest.

7.2. Removel or Addition. of Fumishings or Equipmerrl- Sublandlord shall not be uuder any obligation to rcmodel, rehabilitatg repair or replace any fumishings, equipment or related property included in the læased kemises unless Sublandlord darnages such itcms.

Subtenant shall have the privilege from time to time of adding firuishings or zubstituting fiunishings, equipmmt or related property for any lurnishings, equipment or related property', provided that any zuch substitution or rcmoval shall n'ot impair rhe character or significance of thc l¡ascd Prcrniscs or rcducc thc total valuc.of thc Lcased Prcmises. Any such substituted fumishings, equipment or related propeny shall become the property of Sublarrdlord aud be includcd under the terms of this Sublease, and the replaced or removed furnishings. equipment or rElated property shall, to tbe exterit then permitted by law, becorne the property of Subtenant-

In the event any addition or removal of fumishings, equipmant or related property under this Section 7.2 causes darnage to øxisting buildings or sh¡ctures, Subtenant shall restore the same or repair wch damage at its sole expense.

Sublandlord egrees to ørecute and deliver eny documenLs that Subter¡.a¡rt may reasonabl.y request in order to give efiect 1o this Section. The rernoval of any furnishings, equipment or related property included puisu¡nt to the provisions of this Section 7.2 shall not entitle Subtenant to any abatement or diminution of the Re¡¡tal A¡nounts or other arnounts payab[e under Section 3.1 hereof.

7.3 Tæres, Other Governmental Charges and Utility Charges. Subtenant will pay. as lhc s¿rr¡¡s rus¡ruutivcly trccur¡rc rluc as Rq¡rhl A¡¡lou¡rts hcreuntlcr, all taxus, asstlss¡nsnls, whethcr general or special, and governmental charges of any kind whatsoever that may at any time be \- PAcE 12 - suBLEASE 20r r 06 5/HRT/070633.0009

Page 157 to the Leased Premises, including but not e receipts, income or profrts of Sublandlod becorne or be made a lien on the Leased premises, and all utility and other charges incu.rred in the operation, maintenançg' use, occupancy and upkeep of the Leased Prernises. Notwithstanding the foregoing, nothing contained in this Sublease reguires Subtenant to pay any franchise, estatg inheritancg n¡ccession, capital lewy, or transfq tax of Sublandlor{ or any income, excess Profits' or revsnue taxi or any other tr*, *r"rr*ent, charge, or lev'y on the Rental Amounts payable by Subtemant under this Sublease.

Subtenänt llay, ut its ex¡rense a¡rd in its own name and bchalf,, in good faith contest any zuch ta¡res, and other charges and, in the event of any sttch contest, arrd with prior notice to the^rorr.nit Sublandlord, mây permir the tâxes, ¿ssæsrnents or other charges so contested to remain unpaid during the periôd of sr¡ch contest and any appeal therefrom rrnless Sublandlord shall notifo Subtenani that, by nofipayment of any such items the lien of the Decd of Trust $'ill be materiatly endangered or rhe tæased Premises or any part threof will be zubject to loss or forfeiture, in which event such taxes, assessments or charges shall be paid prumptly by Subtenant,

?.4 fnsurancc.

(a) Property lnsura¡ce. Subtenant, at Subtenant's cxpense, wlll p'rovide business.inturuption or business continuation insurance with rsspect to ttrg LEâsed Premises through the Completion Date, During the Sublease Term, Subtenant shall at its expense maintãn a prope,rty insurar¡ce poticy or policies ot'a blanket, all-risk policy .*¡tr* on a replac.-*t cõst basis, at deductible levels reasonably satisfactory to the Sublendlord. ine ¡lmouil of insurau¡;e to be car¡icd will bc for thc full "insuable rqllacemenr çost" of building and equipment which ü.i11be detcrmined once co{Etn¡ction is-compteted. Covetege will be pleced in a carrie.r acce¡rtable to hoth the Subtenant and Sublarrrt)ord, as evidenced by a certificate of insurance to be provided to Sublandlord upon completion of constn¡ction- Until thc Completion Datc, the Subtenant will e'nn¡re that those contractors perficnning work on the Project under contracts exceeding $100,000.00 shall maintain commercial general liability coverage with CG-F-40 endorsement.

(b) Liability Insurançr>. Subtcnont shsll obtrin, at Subtenent's et(Pc{rse, erid kce,p in effpct duríng the Sublease Term, Cornrnercial General Liabitity lnsurance covering Bodily hju.y arul Property f)amage on a "claims made" form (1986 ISO or eguivalenÇ. tliJ *r.*ge shall include Contactr¡al Liability insurance for the indemnity provided r¡nder this Subtease. The following inswance will be ca¡ried:

20r r 06 5/ltRT/070633-0009 PAGE 13 - SUBLEASE

Page 158 Coverage Limit

Person¡l & Advertising Injury $1,000,000 Each Claim 1,000,000 Fire Damage (any one firÐ, 50,000 Medical Expense (any one per.son) 5,000

(c) Additional I¡sured Provision- Subtancllor4 its officers, directors, employees a¡d Indenrnitees shatt be added as arldirional insured with respect to claims a;s¡nj out of or ælating to the operâtion or ocçupe¡rcy of the l¡ased Premiscs. All liabiliiy ü¡su¡a¡rce policies, witlr thc cxccption of profcssionol liability policice will be endorsed to sholv this additional coverage.

(d) - Insurance Canier Rating. Coverage provided by the Subtenant rnust be underwritten by an insurance corûpany deerned acceptable to Sublandlord. Insr¡rance coverage strall be provided by companies admitted to do business in Oregon and rated B+ or better by Best's Inzurance Rating.

of the insurance coverage required (e)-Sublcas,e, Certificates of Insurance. As evidence by lhis the SubtEnant shall furnish príor to the use of tbe Leåsed Premises a certiftcate of insurance to Sublandlord and Purchaser. A renewal ceíificate of inzurance wilt be sent to Sublandlord and Purchaser at least l0 days prior to coverage expiration.

7.5 Advances.' In the cvent Subtenant shall fail to make any payment required by Section 7.3,or to maintain the required insurance coveragel orto kecp thc Lcased Pr.emises in good repair and operating condition, Sublandlord or Purchaser may þut shall be under no obligration to) make zuch pa¡rment, or takc uu,t tl¡ç ra¡uiral policies of insr¡ra¡¡oc and pay the premiums on the sÍtrne, or may make zuch repairs or replacerner¡ts as etre necessary and pmvide for payment thereof; and all smor¡¡rts so. advanced thsefor by Srrblancllor.rl or Prrrchrçer shall become an additional obligation of Subtanant to the one making the advancancnt" and Subtenant aPr6es to pey such amounts.

8.

8.1 Damage and Destruction. If the I¡esed Premises shall be damaged or destroyed by fire, floo

If the amount of the loss is 20Yo or less of the replacement cost of the læased Premises (exclusive of land costs):

(a) Subtenant will promptly canse the repair or r,esloration of the Leased Pre¡uises (ilcluding nrodifications of or substitutions for thc propctty damagcd);

\- PAcE 14 - suBLEASE 20 ¡.1 06_5/H RTio706t3-0009

Page 159 (b) The Ner praceeds resulting frorn claims for such loss shall be paid to snd Subrer.¡aut a¡d cxpcndcd for tho dirccr and indircct coets of repsir or restorstion;

(") The Subtenant and Sublandtord shall notify the Purchaser of actions takefl-

If tlte amount of the loss earceeds 2OYo of the replacemcnt cost of the .Leascd Premises and Purchaser (exclusive of land costs), the Subtenant shall imrnediateþ noti.fy thc Sublandlord insurance loss of the loss. An wet próccds shall be paid to and hcld by Sublandlord in a special ;:'*ï'å'i',iH,f."J;f"äÍRi'ff Ï; including o oertiñcate of the Designated Represantative as to the estimated costs ther€of, (45) deys after the receipt of such plan anrl determine that theplan is mt economically feasi to plan and shall uoris the Subtenant of the decision not to repair and use tl¡e Net Proceeds r"¿r"tn Bonds. Eicepr in such case, the Sublandlord shalt disbr¡rsc the Net Proceeds' in ins¿llments in the smè rnârurcr as provided for r¡nder Section 2.4wiÌ!t respect !o disbursements ''erll ¡;osts of liom the project f'und, as requirecl io accomplish the plan. The Subtenanl shall ¡ray repair in excess of tbe Nãt Proceeds, without téimb*semerit atrd without reduction or posþoncmcrt of Rcntal Amounts.

Any ba¡ance of Net Proceeds in the spocial insurancc loss account upon completion of r€pair or óstoration, oi fotto**ing a decision íot to rePair, shall be allocated amorB tbe series of Bonds then OutS¡nding on a prã rata basis I used to rodeern the Bonds as provided in the Bond h¡rchase Agreenr-ent. If any exce.ss firnds remain after sr¡ch exhaorrdinary redemption of all Bonds, and paþent of all otirer fees and costs due under this Sublease, including Rental Amounts, the sxcess shall be pairl to tirc Subtç¡ral¡t-

8,2 Condenrnation. If, prior to defeasanee, all or any portrrm of the T,eased Premises shall be taken by erninent domarn, and unless ttre Sublandlord shalt have exercised its option to call the Bonds for redemption, there shall be ho abålement or ¡eduction in any Âmounts payable pursuant to this Sublease or any Rental Amounts or other charges papble by the Subtenant unde¡ this Sublease.

The Net hoceeds of the condemnation award shall be paid to and held by the Sublandlo¡d ín a special condcmnation award account. As soon as possible after the tnkingo end, fur case, within forty-five (a5) dap after notice from thc Sublandlo¡d, th.e Subtenant shall prepare"ny and submit to the Sublandlo¡d snd the Prrehaser a plan, including a certificate of tlie Designated Rcpresentativc as to the costs of and sources of funds for, one of the following:

(a) The ¡estoration of the Lcased Premises to substantially their prior condition;

20t t06 5/HR1/070ó33-0009 PAQE 15 - SUBLEASE

Page 160 99r 9L. LVVJ

(b) The acquisition, by constnrction or otherwise, of new facilities or shall' propcrties for a tse p"i-it od ,rndár Scction 4 (which new facilitics or pr'ope-zties upon acquisition, become subject to this Sublease); or

(c) Redemption of all or a portlon of the Bonds' the sublandlord a1æ after the rcceipt of such plan and certificate, tlie ptan is not ..onomically feasibte and in such cÍNe rnay reñIse case, so åotify the subtenanr and redeem Bonds. Excryt ir¡ suclr the same manner as provided the Subla¡dlord shall disburse the Net Procceds, in installments in Fund, to accomplish the fior urrder. Section 2-4;ih rasp€ct to disburscmcnts Êom the Projerct plan. The Subtenant shall Pay any costs of rÉpair i reimbtrrsernent ânrì witholrt reduction or postponement as appropriate. Aoy unexpended hocee Bonds then Outstanding on a Pro Bond Pr¡¡chase Agreeruent. If N Bond.ç and payment of all other fees and costs thc Subtcrtaut. Sublease, inct"Oing Xentat Ainounts, tbe excess shall be paid to

9. SPECTAI,COVF,NANT.S g.l No warranty of condition of suitability. Sublurdlord does not make any wenanty, either express orimplied, âs to,the suitabiliry of the l.eased Premises for SubtEnant's puçoro or its earning capaclty, or as to the condition of the Lease.d Premises- To the ø(tent i"ti"itt.A by law, SuUtcnant releascs Sublandlord from, agrees thât Snblandlord strall not be îi"bl" fo., and agrees to hokl Sublandlord harmless against, any loss or damage to property or any injury to or ãeoth of any person that may be occaEioned by îriy cause whaGosver pertaining to tb"-Lursed Prernises or the use thereof; provided, that the indernnity in this sentence shall be effective only to the ottent of any loss that may be sustained by Sublandlord in excess of the Net Proceeds r""ri".¿ by Sublandlord from any insurance carried with respect to the loss swtained and provided that such indemnity and release provisions shall have no effect to the extent the loss, damage, injury or dcath rcsults solcly from negligençe or willful misconduct on the part o!- Sublandlord.

9.2 Right of Access to the Leased Prernises. Subtenant ag¡ees that Sublandlord and its duly autborize.d agents shall h¡ve the righr at all reasonable times and trpon 24-hour prior notice to Subtenant to enter upon the Leased Prernises for the Purpose of examining and inæecting the same in order to deùermine compliance with this Sublease. Subtenant fi,¡rther agfees that Sublandlord and is duly authorizecl agents shall have such rights of access to the Lcased Premises irs may be reasonably necessary to cause to be completed the constn¡ction and installation provrcted f'or in Section 2 hereot, ând thefeatter fbr the proper maintcnance of the Leased kemises in the ev€r¡t of faih¡re by the Subtenant to perfonn its obligations r¡nder Section 2 or Scction 7.1 or any othcr provision hcrcof.

'\., PAGE 16- SUBLEASE 201 r 06 5/r{R.T/07o6ll-0009

Page 161 9.3 Subtenant to Maintain its Corporate Existence: Conditions Under Which Exception.s Permitted. Srrblenant agrees that during the Sublease Term it will m¡intain its corporate existence, will not dissolve or otherwise dispose of all or substantially all of its assets and wíll not consolidate with or merge into another corporation or perrnit one or more other corporations to consolidate with or merge into them without the approval of Sublandlord; providcd, however, that such appmval shall not be required for consolidation or merg€r with or into anothe,î organization which is a federally ta,r exernpt organization so long as such consolidation or merger (i) does not adversely affæt the exemption from federal income tar( of thc intcrest paid on thc Bonds as deteuni¡red by rur opinion of Bond Counscl, (ii) does not affect the status of this Subleasg or (iii) does not reduce the net assets or net earnings of the suwiving corporation below one-half of the eggregâte of the net ascetc or net eornings, rcspcctivcly, of Subtenant during its immediately precedíng two fiscal years as shown by financial stat€me,nts audiled by a fi.rm qf nationally or regionally recomized certified public accountants. and (iv) the zurviving corporation shall rernain fully obligated and responsible for the performance of this Sublease and any obligations of Subtenant under the Bond Docurnents.

Further, if consolidation, merger, sale or other transfer is made as provided in this Section 9.3, the surviving or succcssor co¡poration shall cxccute such fi¡ftI¡et dor;u¡nc¡rts as Sublandlord may reesonably require to evidence the assumption of the Subtenant's obligations under this Sublease. The provisions of this Section 9-3 shell continrre in ñrll force and effect and no further consolidation, merger, Eale or transfer shall be rnade cxcept in cornpliance with the provisions of this Section.

9.4 Release of Cenain Land. Thc parries hereto reserve the rigbt, at any time and frur¡r timc to time, to a¡r¡end this Subleæe for the purpose of effecting the release of end rernoval .from this Sublease and the leasehold estete creatcd hereby of any part of thc Leased Pr.ernises if the releese ís for tbe purpose of obtaining utí.lity serwiccs, toaÀ:, or othcr ingr€ss or egrcss. No such arnendment shall be made withoul the consent of thc Sublandlord, who may withhold consent if it finds that the rclease will materially md adversely affect the secu¡ity for the Bonds-

9.5 Granting Easernents. If ¡either Sublandlord nor Subter¡ant are then in defaulÇ Sublandlord at the request of Subtmant from time to time may grent easements, liccnses, ngbts- of-way (including the dedicatíon of public higlrways) and othe,r ríghts or privileges in the narure of casqncnts, liccnscg or: rights

9.6 Annual Audit and Financial Statements; Access to Records. Within 120 days after the close ofeach fiscal year, Subtenant agrees to: (a) have an annual audit of its operations made by its regular indçenderrt certified public accountants, which shall be a nationally or regionally recognized public accounting f,rm of good repute, and to furnish copies of such audit to the Sublandlord; and (b) to provide, upon written request (which request shall be deemed to be continuing mtil revoked in writing) by the Sublandlord or the Purchaser, copies of the Subtenant's unouditcd guartcrly financial statcmcnts, withi¡ 45 days allc¡ tlrc cr¡d of cach quaner and shall make available to the recipients of zuch financial statefüerits appropriate officers of the

\-- PAGE t7- suBtEAsE 201 I 06 s/ÞrRt0706J34009

Page 162 Subtenant to respond to questions during normal business hours, regarding such financial statements- In the event eny of the Bonds sh¡ll at thc timc bc Outs6nding and rrnpaid, Sublandlord may have access to and inspect, examine and make copies of the books and fecords, including without limitation any and all accounts, dara an

9.7 No Abatement or Diminution of Rental Amount. No release or grant effected under the provision of Sections 9.4 or 9.5 of this Sublease shall entitle the Subtenant to eny abatcrnc¡rt or diuúuutiun uf the Renral Ariount or other amor¡nts payable under this Sublease.

9.8 Tax Cove,n¡ntc. The Sublo¡ldlord and the Subtcn¿nt hcrcby cover¡aüt with the Purchaser of the Bonds issued hera¡nder that they will not knowingly make any rse of the proceeds of the Bonds- or any other fi¡nds which may be deemed to he ¡rrnc.eeds of the Bonds pursu¡mt to the Code, wttich if zuch use had been reasonÂbly expected ori the date of issr¡ance of the Bonds, would have caused the Bonds to bé "arbihage bonds" within the meaning of the Code, and will cornply with the requiremmts of the Code tluoughoul the temr of the Bonds to prescrye their st¡t¡¡s as Tex-Exurpt Bonds.

10. REPRE-.SENTATIONS

l0.l Representations and Covenants by Sublandlord. Sublaudlord makes the following representations as the basis for its undertaking herein:

(") Sul¡laudlonl agrËcs that it will do or cause to be done all thlngs ncccssery !o pres€f,ve and keep in ñ¡ll force atd e.ffoct its cxistence. Sublandlord hæ been duly ar¡thoriz.ed to ex.eeute and deliver this Sublease.

(b) Sublaudlord has acquired the leasehold interest to the Leased Premises, subject to Permitted Encumbrances, and hereby Subleases thc Leased Premises to Subtcnant.

(c) Sublandlord agrees to issue the Bonds as provided in the Resolution. The Bonds sholl bc in thc agtregatc pnncipal arirount of $5,000,000, will be scheduled to be retired by payment according to tbeir staþd rnaturit¡ will bear interest payrable at maturity at the rate per annum state¡l in the Bond Pu¡chrse Agreemeat a¡rd will be subject to rcdanption as set forth therein

(d) Sublandlord agrees to comply with its obligations under this Sublcase, including without limit¡tion Section 2.

(e) Sublandlord agrees that all money, investments and other assets held in tbe ñ¡nds described in Section 2.1(l ) through (a) will be subject to a propcrly pelfèctet first priority security interest in favor of the Purchaser.

PAGE 18 -.SIJBLEASE 20r I 06 5/t{RT/0?06iJ-000t

Page 163 lO.2 Represen.tations and Cover¡ants by Subtenant. Subtenant makes the following representations and covenanLs as thp basis for the unrleûaking orr. its part herein contained:

(a) Subtenant is a nonprofit corporation duly incorporated rrnder the lavrs of the State of Oregon, no part of tbe net earnings of which inure or may lawfrrlly inure to the benefit of any member or private individuat and is an organization qualified under 501(c)(3) of (he Code. Subtenant is exrsting under tbe laws of the State of Oregon and has power to enter into tbis Sublcase and by pmper corporate action has been duly euthorized to sxecute und dclivcr this Sublcasc.

(b) Subtenenf will operate a garden displaying a diversity of plant mqterial for education, research and public ørjoyment on the Leased Premises.

(c) -- For so long as the Bonds are Outstanding and unpaid, Subtena¡t shall not" withoul the approval of Sublandlord, issue any bonds, notes, debentures or othq similar indcbtcdncss of a fi¡lcd shdracter or enter into any lease or Rer¡tel A¡nount obligatiors secured by a pledge or othr hlpothecation of Subtenanl's leasehold interest rn the l.eased Premises, which pledge or other h¡rpothccatrbn is prior to or on a parity with tl¡¡¡ obligation of Subtenant to pay Rental Arnounts or other obligations under this Sublease.

(d) Subtenant's articles of incorporation and its code of regulations, if an¡ aud its operations conform., and Subtenant coveriants and agrees that the same will conform at all trmes druing the Sublease Term, to those acceptable:

(1) for crcurptit¡n from income tÐ(es as a nonpr.ofit organization under federal and state income tax legislation and regulations: aod

(21 for a duly constituted and empowered Oregon corporation, organized for public beneñt purposes a¡ld not for proñt.

(.) Subtenant shall at all times throughout tbe Sublcasc Tcrm operate or cãuse to be operated all activities on tlre Lease

(0 Subtenant shdl, throughout the Sublease Term, administer, operate, mainuin and reprir tbe I¿ased Prenrises in accordanee with the terms of this Sublease; shall as its obligatÍon and at its ørpøse, during the Sublease Term, use and occupy the Iæased hemises exclusively for such purposes, and shall faithfully, efficiently a¡rd exclusively administer, operate, maintain and repair tb.e same and shall abide by all Present and future applicable laws, ordinances, rules, regulations, requirements and urders of all govcmmen¡al authorities or agencies having jurisdiction over the Leased Premises or the operations of the Subtena¡t.

PAGE 19- SUBLEASE 20 r I 06J/FlRl/07063J4009

Page 164 G) Subtenant shall enrploy and maintain in its employ an administrator, mânâger, executive director, or other chief exocuüve of tlre Leosed Prcñiscs, qualiÍicd by traíning and experience in managemçnt or administration.

(h) At least 95 percent of tl¡e sum of the net proceeds of thc Bonds plus income from the investnrcnt thereof will be used to pey the costs of acquiring equipping, renovating or constructing the Leased Premises, or otherwise paytng the Coss of Capital Projecs.

(i) Any real or pøsonal prorpøty acquired, equipped, renovated, improved or otheru'ise finenced with the procoedc of the Bonds shal.l bc owned by a political subdivision of the State or an organtzalion de,scribed in Section 501(c)(3) of the Code-

6) - Not more than two per.cent (2Y) oî the proceeds of the Bonds wilt be used þ Pay the costs of issuance of the Bonds including n'ithout lirnitation, the fees and cxpenses of Bond Counsel or the unrterwriter's qpread irrcurred in connection with the sale of the Bonds. Subtenant will pay all costs of issuance in excess of the two percent Qo/) íncludíng the fccs and sr(¡,çnses of Bouü Counsrl all fees and expenses incr¡ned in coturcction with tbe pre,paration of the Heed Lease, this Sublease, the Bond Prrrchase fureemenÇ disclosure rlocuments anrJ all rclated transactjon costs.

(k) Subtenant will cornply wift and make all filings requircd by, all effective rules, rulings or regulations promulgatcd by the Departnent of the Treasury or tbe Intemal Revenue Service with respect to obligations descrjbed in Scction 103 and Secblon 145 of the Code, such as the Bonds.

(t) Subtensnt will continuc to conduct its operations in a nt¿uìnË!' ü¡at will result i¡ its continuing to qualiff as an organization describcd in Section 501(cX3) of the Code, including but not limited to the timely fili_ng of all retums, refrorts and reqrresr.s frrr determination with the Internal Revenue Service and the timely noti.fication of the Inte'mal Rwenue Servico of all changes in its organization and the purposes from the organization and purposes previously disclosed to the Internal Revenue Service.

(m) The proceeds uf thc Bonds and any investment earnings thereon will be expended for the purposÊs set fofh in this Sublease and no portion thereof will be used in any "unrctaterl trarle nr business" of the Subtenant within the meaning of Section 513(a) of the Code.

(n) Subtenant will not u¡¡o or cause any portion of the Leased Premises to be used or invest tbe præeeds of the Elonds, or any investrnent eaminp thereon, in a manner that will cause lhe tsonds to be private activity bonds (oth.er than qualiñed 501(c)(3) bonds) u'ith¡n the meaning o.f Sections l4l and 145 of the Code.

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Page 165 (o) Subtenalt will not cause tbe Bonds to be treated as "fedcrally guaranteed" ohligations for prrrposes of Section 149(b) of the Code, 4.6 m.ay be modificd in any applicable rules, rulings, policies, procedures, regulations or other of.fici¿rl statanents promulgated or proposed by the Departrnent of the Treasury or the Intetnal Reventre Service with respect to 'Tederally guaranteed" obligations described in Section 149(b) of the Code. For purposes of this paragraph, rhe Bonds shall be treated as "federally guaranteed" it (i) all or any portion of the principal or interest is or will be guaranteed directly or indi¡ectly by the United States of America or any agency or insturnantality thcrcof, or (íi) 5a/o ot ¡norc uf thc pnrceeds of the Bonds will be (A) used in making loans the payment of principal or interest with respect to which is to be guarantesd ir whole oi in perf by the LTnited Ststes of Arnerics or any rgêncy or ingtrumcntaliþr thcrcof, or (B) invested directly or indirectly in federally insured dçosits or accounts, and (iii) nonc of the exceptions described in Section 149(bX3) of thc Code apply.

(p) Subtenant wilt not u$e or invest the proceeds of the Bonds or any investmenr eamingB thereon in a man¡ter that will cause the Bonds to be "arbitrage bonds" within the rneaningof Section 148 of the Code.

(q) The weightcd average matr.rrity of the Bonds will not exceed l20Yo of ¡be reasonably e*pected remaining economic life of the Leascd Premises finsnced with the proceeds of the Bonds, taking into account the respective cost of each item comprising the Leased kemises financed with the proceeds of the Bonds. For purposes of the I preceding sentence, the reasonabty expectod rcrnaining economic life of each component of the Leased Prcmises financed witb the proceeds of the Bonds shall be detemtined as of tlrc date on which the Bonds are issued. In additibn, land shall not be takerr into accotut in determining the reasonably expected remaining economic life of the Leased Premises financed with the proceeds of the Bonds, cxccpt that, in thc cvcnt 25yo or morc of the proceeds of the Bonds originally issued to finsncc the land financed with the proceeds of the Bs¡ds have been cxpended for land, such land bhall be treated as having an economie life of 30 years and shall be taken into account for purpoies of determining the reasonably øxpeoted remaining economic life of tbe Leased Premises financed with the proceeds of-the Bonds,

G) No amount o.C rrct ¡rruueals of the Bonds will be usect, directly or indirectly, to provide any airplanes, sky-box or other luxury box, fbcilþ primarily used for consumption nff¡rrernises ar eny health club facility rurless the health club hcility is dircctly used for the puqpose of qualiffing the Subtenant for ta;r o

(s) None of the proceeds of the Bonds will be used dir.ectly or indirectly to provide residential rsrtal housing for family rmits within the meaning of Section 145(dxl) of the Codc unles the rcquírernents of Section 145(dX2) of the Code æe satisfied.

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Page 166 (t) Subtenant is not in violation 'of any provisíon of its articles of incorporation, as aûrended, hac the corporatc powcr to ent€r into this Sublease, atxl has duly authorized the execution and delivery of this Sublease.

(u) The execution and delivery of this Sublease and the consummation of the Fansactions conterrplated hereby and thereby, and the fulfillment of or compliance with the terms and conditions hereof or thereof do not conflict with or result in a breach of the terrns, conditions or provisions of any agreement or instrument to which Subtenant is r¡ow a ¡rarty on by which Subtenant is bound, or constitute a default under any of the foregoing, or result in tt¡e creation or imposition of any irnpermissible lien, charge or encurnbrance whatsoevsr upon sriy of thc progerly or assçts of Subtenat¡t u¡dtr the terms of any such instrurnent or agreement.

(v) - There is no action, zuit, proceeding inquiry or investi.gation, et lary or ín equity, before or by any courl, public board or body, known to bc pmding or threatened against or atlêcting the Subtenant or sny of its of,ficers, nor to the best knowledgc of SubtenEut is there any basis therefoç wherein an unfavorable decision, ruling, or findíng would matcrially advyrucly affect rhe transactlons contenrplated by this líublease or which would adversely affect, in aoy way, the validity. or cnforceability of the Bonds or this Suhleese, or e¡ry rgre€me¡rt or inskument to which Subtcrrant is a party, uscd or contønplated for use in the conzummation ofthe transactions contemplated hmeby.

10.3 Environmental Rçresentation, For purposes of this Section, the following tcfifrs shall have the following meanings:

"Environmental Laws" means any and all state, federal a¡d local statutes, regul.ations and ordinances relrting to thc protcction of huma¡r hcalth or the s¡ryirunrnsnt.

'Tlazardous Substances" is u-setl in its very trroadest sense snd refers to rngterials that. because of their quantit¡ concentration or physical, chemical or infectious characteristics, may cause ot pose a Present or pot€ntial hazard to human healtll qr the eîvifûnme,ût whe¡r improperly used, teated, stored, disposed of;, generated, manufactured, transported or otherwise hsndled. "Hazardous Substances" shall include, without limitation, petroleum products or crude oil and any and all hazarduus or toxic substances. materials or waste as deñnerl by or listed undq thc Resor¡rce Consewation r¡d Recovery Act, the Toxic Substances Control Ac! the Crrmprehensive Envircnmental Reeponee, Compensation and Reliability Act. or arry other of the Environmentat Laws.

Subtenant represents, werrants and covenants as follows:

(a) To the best of Subtenant's ach¡al knowledge, without further inquiry, all Haza¡dous Substanccs on or in the læased Premises have lreen or will be used, gcnerated, manufacturcd. refi¡rçrl, trans¡rorted, trcated, stord, hanclled and disposed of'only in strict compliance with all Environmental Laws.

\-.. PAGE 22 - sUBLEASE 20 I I 06 5/¡tRT/0?0633.0009

Page 167 (b) $uhfarant shall exercise cere in handling Huzardous Substanccs and shall und€rtake any and all preventive, investigatory or rernedial action (including without limitation, emergencyresponse. removal, containment and other remedial action):

(1) .requíred by any applicable Environmental Laws or orders by any govemmental authod ty having j wisdi cti on uncler Environmental Laws; or

(2) rrËÇss.síry to prev€fit or minimi¿e property damage (including, without limitation, damage to the Sulrtenant's own property), personal rnjury or damage to the eflvíronsrent or tb¡cat of any such damage ol iujury, by releases of or exposure to Hazardous Substances in connectlon with the Leased kefiiises. In tbo event Subtenant fails to perform any of its ohligations under this Sectio,n, Sublandlord may perform (but shall not be required to perform) such obligations at Subtenant's expense. In performing any such obligations of Subtenant, Sublendlord shall 4 all hmes be deemed ûo be tbe agcnt of Subtcnant ard shall not by reason of any such perfornance be deemed to be assuming any rosponsibility of thc Sul¡æuar¡t urxlcr any Environmeilal Laws or to any other p€rson.

(c) Subtenant shall release, indemnify and hold harmJess the following: Sublandlord ard its ofñcers, dirËctors, employees, agents, and all of their succcssors ancl assigns (collectivel¡ the "Indemnitees') against any and all claims. denrands, losses, liabilities, costs and expenses (including, without limitation, attorney fees at trial and on auy appcal or peticion fot rwiew) incurred by any .lndemnitee:

(1) arisrn8 out of rclating to auy investigarory ur remedial action involving the Leased Pranrises. or the operations conducted on the l-eased Pretnises, and required by Envi¡onmenÞl I ¿ws or hy orders of any governmental authority having jurisdiction r¡nder any Environmental Laws; or

(2) on account of injury to any person or damage to any property arising out of or in connection with or in any way relating to:

(Ð Auy laws or regulations, including, without limitatioq Environme¡rtal Laws, applicable to the Leased Prcmiscs; or

(ii) the use. treatment, storage, genernfinn, manufachrre, transport, release, spill, disposal or othcr handling of Flazarrlous Substancqs on the læased Premises or in connection with operations conducted on tbe I-cased Premises; or

(iii) the coutarnination of any of rhe Leasect PremiseS by Haza¡dous Substanccs; or

I.\-., PAGE 23 - SUBLEASE 20r 106 5/ltRT/0?063]4009

Page 168 (iv) on account of all of the s,bove with rcspoct to the Lcased Prernises whether or not causcd by Subtenant.

(d) The covenants contained in this Section .shall survive {ty termination of this Sublease for any reason. including tcrmination pursuâr¡t to Section 13.2 hereof and shall be for the benefit of the Sublandlord and is succcssors and assigns.

(e) Nothing containcd iu this Sublease shall be construed to release, indemniff or hold harrnless any Indernnitee for any matters with respect to which an Indernnítee may he líahle dr¡e to acts or omissione of such Indcrnnitcc piior to the datc uf this Sublease.

I ¡. ASSIGNMÐNT AND SUBLETTING.

tt.l Sul¡Icase and Assignmenr by Subtenant. 'fhis Sublease may be assigned or the læased Premises zubleased only aflø obtaining tl¡e conse,nt of the Sublandlord and firrnishing to Sublandlord an opinion of Bond Counvcl that such assigrrrucnt or sublease will not advøsely affect the nx exefirpt status of the Bonds.

11.2 Restrictions on Tra¡rsfer and Encumbrances of Leased Prernises by Sublandlond. Sublandlord atrees thaÇ except as otherwis€ provided in this Sublease, it will not sell, assigt, transfer, convey or othert¡rise disposc of the l-eased Premises or any portion thereof during the Suble¡se Term and that it will nog to the extent permitted by law, take any action which may reosonably bc corsEued as tcnding to causc or induce the leny of special assessments by otherc against the Leased hemises without the written consent of Sutrtena¡rt, nor will it create or suffer to be c¡eated any dehl, lien or charge thereon or m¡lce any plcdgc or assignmc;nt of or creatc any Iien or encumbrance upon the Leased Premises other than as provided in Section 7.1 hereof.

12. REDEMPTIONAI.[DPREPAYIUE}TT.

l2.l Redernption of Bonds. Sublandìord, at the request at any time of Subtenant, shall fofthwith take all steps required to be taken by Subland,lord rulder the optional redemption provisions eet forth in thc Bond l\¡rctrasc Agrcerrreut to cffect an opdonat redemption of all or any portion of the then Outstanding Bonds, es may be specifred by Subtcnant and in accordance with thc terms oftheBoud h¡rchase Agrcæmenr

12.2 Prepayment of Rental Amounts. Subtenant may deliver to Sublandlord moneyr with irutn¡ctions to Sublandlsd ûo use such rnonq¡s for the purpose of calling for optional r.edeription arry of lhe Bonds in accordance with the provisions of the Bond Pu¡chase Agrccurcnt. Auy rnoneys so delivered to the Sublandlord shall be held in a separate bank account and shall not be considered as payment of Rental Amounts or prepayment of Rcntal Arnounts unda this Subloase o¡rd shall not operatc to abate tlre payment of Rental Amounts required by Section 3.1 of this Sublease and shall not be used foi optional redemption of any

PAGE24- SUBLEASE 20t r06 5/HRT/070613-0009

Page 169 Bonds r¡ntil such ftnds become Seasoned Funds. When Seasoned Funds are used for a parrial optional redemption of Bonde, the Rentol Àmounts sct forth in Exhibit B sluJl bc'ruvistxl by Sublandlord to reflect such optional redemption. 13. DEFAULT.

13.1 The occurrence of any'one or more of tlre following shall constitute an 'Event of Default" unde¡ this Suble¿se:

(a) Subtenant shall fail to pay any rent or othc¡ sum due hereunder within five (5) dalrs after the samc is due and par¿ble;

(b) Subtenant shall create or suffer a default under any pmvision of the Head I-ease, Trusl Dccrl, Fee Deed of Trust or ¡he Intergovemmental Agreement appl¡cable to Subtenant or the Leased Premis€s and Subtenant shall Dot cu¡c such defr.ult at least five (5) days prior to the expiration of any rp¡licoble curc pcriod undor such documcnts with respect to such default.

(c) Subtenant shall default in the due keeping, observing or performance of any covenant, term, provision or condition of this Sublease not described above on the part ofSubtcnant to be kepÇ observcd or perforrned, and such default shall conhnue and shall not be remedied by Subtenant within fifteen (15) da1a aftcr Sublandlord shall have give.n to Subtenant a rvrittsr notice speciffing the eame;

(d) Subtanant shall rnake an assigrrnent of its property for the benefit of creditors or shall file a voluntary paition under any banlmrptcy or insolvcnry law, or an involuntary petition under any bankmptcy or insolvency law shall bc filed against Sublc¡ru¡rt a¡rd such involuntary peridon is not dismissed within sixty (ó0) days after the filing thereof;

(e) A petitiod is filed by or against Subtenant under the reorgurization provisions of the United States Bankruptcy. Code or undetr the provisions of any law of like irnporr, unless such petition under said reorganizalionpmvisions be one filed against Subte¡rant which is disnissed within slxty (60) days after its 6ling;

(0 A permanent receiver, trustee or liquidæor shall be appointed for Subte¡rant or of or for thc property of Suhtenan! and s¡rch rec.eiver, tnstee or liquidator shall not have been discharged within sixty (60) days ftom the date of his or hEr appointrnent;

(g) Loss by Subtenant of its status as a feder.ally tax-excmpt organizaiion which rezul¡s in a loss of federal tax-exeûrpt status for interest paid on the Bonds; or

I'eveflt (h) Án of default" occurs undcr the Dond Purchasc Agieeurerrt ¿¡¡rl h¿rs not been remedied following such notice and oppornrnity to cure âs is provided for under the Boncl Purchase Agreement.

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Page 170 l1-2 Whe..never any Event of Defauh refe¡red to in Section t3.l of this Sublcasc slratl have happened and be continuing, to the extent pefnitted by law, any one or more of the following rernedial steps may be taken:

(a) Sublandlord mây åt its option, and in the casc of an Event of Default under paragraph (g) of Section l3.l of this Sublease shall, declarc all ínstallments of Rerrtal A¡nounts payable under Section 3. I hereof for the remaindet of the Sublease Terrn to be duc and payablu, wlrcrcupon the same shall become due a¡¡d payable on the date specified in the notice of default (which date shall be no less than twelve (12) monrhs from the.date of the notice of defeult). Þuring the interim, installrncnts of all Rsntâl Amorurts shall continue to be due and pa¡able. Subtenant rnay cure any Event of Default under Section 3-l by palang the pæt due Rental Amou¡rts before the date the accelerate.d Rental Arnounts are due under theNotice of Defaul

(b) Sublandlord may re-enter and take possession of the Leased Prc¡nises without terminating this Sublease, and sublease the Leased Premises for the account of Subtørant, holding Subtcnarrt liable fit tl¡c rliffcreTrce betwegn the rent and otber amoufis pa¡rable by such Subtenants in subleasing and the Rerrtal Amounts, and other amounts payable by Suhtenant he.¡eunder-

(c) After written notice to Subtecrent of an Event of Default and acceleration under Section l3-2(a), if all ¡ccelerated Rental Amor¡nts and all other amounts due hereundcr have not been paid in ñrll by the date specified in the notice of default (which da¡e shall be no less than twetve (12) montbs liom the date of the notice of default), the Sublease Term shall terrninate and Sublurdlord may require Subtenant to transfer all interest in the l¡ased Premiscs arrd Projcct to Subtandlord or rsquire that ull improvements be removed, holding Subtenant liabte for all Rental Amounts, and other payments due up to the effective date of snch termination.

(d) Sublandlord may take whatever action at law or in equity rnay eppear necessâry or desirable to collect the Rental Arnounts and other âmounts thereafter to beco'me due, or to enforce perforrnance and obserrance of any obligation, agreement or covcnant of Sul¡terr¿¡rt u¡.rdtr this Sublease.

(e) If Subla¡rdlord terminates the Sublease Term under Section 13.2(c) Ebey,r, Subtenant shall be entitled to corlveyence of Sublandlord's remaining lcasehotd interest in the læased Premises and Projea to Subtenant or its legal successors when anrl if Sublandlord shall have recovercd from Subtenant or from Sublandlord's operation of the Iæased Prenrises and Project: amounts suflicient to reimburse Sublandlord in ñ¡ll for all Renlal Amowts and other amounts for which Subtenant would have been tiable under this Sublease if the Sublease had not been terminated bascd on Subtenant's default; togethcr with all attou\Ëys fccs u¡rl costs incuffed by Sublandlord as a result of Subænant's default; together with all of Sublandlo.rd's unrecovercd carr¡ring costs for

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Page 171 êÔl oLl ¿aøJ Lz- 1)

leasing and operation of the Leased Prenrises and Pmject following lease termination and up to the date of reconveyance includin¿, without limitation. all coete of maintcnancc or improvement to the Iæased Premises, leasing eir(penses, tenant improvemcnt expenses, repair or replacemmt expcnses, taxæ and insurance, and any other expenses of any sort. Upon payment of all such amounts by Subtenant or rcrovery of such amounts through operation of the Leased hemises and Project, Sublandlord shall convey Sublandlonl's tcmaining leasehold interest in the l-cased Premises and Project to Subtenant ot its lege¡ stlcccssors.

If Sublandlord terminates the Sublease Term under Section 13.2(c) above, Subla¡rdlord's rernaining leasehold intercst in the [.e.¡se.d Premises and Project will be convcycd to Subtcnaut by assignment of the remaining leasehold, and Subtenant shall be entitled to the L,eased Prernises and Project in their then+r¡rrent, "as-is" condition, without r@resentation or warrnnty of any kind whatsocver,'except warranty of title and wananty against encunbreÍces created or suffered by Sublandlord or its successors in interest, but otherrrrise subjec{ to all title orceptions, cnc'¡rmbranccs, leases arrd other maners ttren existing. During its operation of tlre Leased henrises and Project, Sublandlord shall owe no duty to SubtaranL fiduciary or otherwise; Sttblandlrn¡l shall o*,e no obligation to occourtt for any inconrc frour tlrc f,eased Prenrises or Project er(c€pt that achrally receive4 shall owe no duty to ma:rimizc tlre return on the Leased Premises aud hojecÇ to operate the Leased Premises or Project sô as to produce incomc, or ro maintain. the L¡ased hernises and Project in any partiorlar condition. During its operation, Sublandlord mry malce all decisions conceming thc læased Premises and Project in its absolute and unfettered discretion. Should Sublaudlord receive all amounts due under this Section 13.2(e) and bc in a position to convey its interest in the l-eesed Prernises and Project to Subtenant or its suocessorsr Sublandlord shall have no rluty to convey its intercst in ttre Lcasecl lìemises and Project unless Subtenant or its legal successors then legally exist.

13.3 No'Waivcr. No delay or ornission to exercise any right or powet accruing upon any dcfault shall imply to the extcnt ænnined by law any such right or power or slurll be constued to be a waiver thcreof, but any such right and ¡rcwer may be $(ercised from timc to time and as often as may be de¿rned expedient. In order to entitle Sublandtord to exercise any Lerucrly reseryed to it in this Section 12, it shall not be necessar], to give any notice, other than such notice as maybe herein ø

13.¿ Agreanent to Pay Attorneys' Fees and Expenses- In the event SubtEnant should dcfault rurder any of the provisions of this Suhlease nr if Sublandlord is required to trke any oùer action r¡nder this Subleasc and Sublandlord should employ attomeys or incur other expensõt for such action or for the collection of Rental Amounts or the cnforcement of pertbrmance or observancc of any obligation or agreement on the part of Subtenant contained in tbis Sublease, Subtenant agrecs that it will on dan¡¡nd therefor reirnburse the reasonable fees of such attorncys ard such other expenses so incrrred. ln the event suit or aclion c¡r othe,r proceeding of any nature is brought to enforce or construe the terms of this Sublease, the prevailing party shall be entitted to its reagonablc attomcys' fccs ancl costs, at triat or on appeal and in any otber proceeding.

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Page 172 13.5 No Additional \Araiver Implied by Onc Waiver. In thc svcnt any â8r'Ec¡¡rent contained in this Sublease should be breached by either party and thereafler waivcd by the othcr party, such waivc¡.shall be limited to the partierrlar breach so waived and shall not be deemed to waive any other breach hereunder.

13.6 lüaiver of Appraisement, Valtration Etc. fault urder any of the provisions of this Subleaie, Subtenan m y lawfulty rlu so, the bencñt of all appraisemeît, valuation, now or herea-frer in force, and all right of appraisernent and redemption to which it may be er,titled- 1.4. MISCEU¿NEOUS.

l4.l Sr¡r¡eurler of Leased Premises. In the event Subtenant should default r¡nder this Sublease and the Sublease Tenn is terminated, Subtenant egrees to sunender possession of the Leascrl Pn*nises (real pmperty and irnprovønents) peaceably arrd promptly to Sublandlord in as good condition æ prwailed at the time it was put in ñrll possession thereof, loss by fire or other -asualty covered by insurancc, ordinary wcar an{ tcar, obsolcscçnce a¡rd acts uf OrxJ îixse?ted.

14.2 Net Sublease. This Sublease shall be deemed and constn¡ed to be a 't¡et subleasg" and Subtenant shall pay absolutety net during the Sublease Terrn the Rental Amounts and all other paymarts requiredthereulder, free of any deductions, without ebâtoment, deduction or set{ll othèr than those herein expressly providcd or required by law.

14.3 Birrdiug EffecL This sublease shau inufe ro thc benefit of and sball be bindrng upon Sublandlord, Subtenant arid their respective successors arrd assigns, subject, however, to the limitrtions contained iu Sections 9.3. tl.l gnd ll.2 hereof and subjc.ct to thc furthcr li¡nitæion that any obligation of Subtandlord created by or arising out of this Sublease shall not be a general. obligation or debt of Sublandlord but shall be payable solelv out of the revenues of the Project as provided in the Resolution.

L4.4 Amendmcnts; LJhanges and Modifications. Except as othe(wise provided in tbis Subleass, prior to pa¡rment of theBonds in full (orprovision forthe payment tbereof having beeti nrede in occordsncc with thc provisions of thc Bond Pru'cbase Agtccutcrr[), this Subl.ease may not be effectively rrrended, changed, modificd, altered or tenninated without the prior written consent of the hrrchaser if sr¡ch amendment materially affee.ts its rights-

14,5 Execution Counterparts. This Sublease rnay be exçcuted in several countelpaÍs. each of which shall be regardecl es an original and all of whioh shall constitute but onc and the same Subles.se.

14.6 Conflíct Between Tgrms- In the event of a cooflict between the terms of this Sublease a¡rd the Head Leaee, the terms of this Sublcasc shall cont¡ol, and with respect to thc rights of thc Sublandlord to exercise nlghts and remedies h,ereunder.

PAGE 28 - SUBLEi\SE 20t 106 s/HRTi070633{009

Page 173 u9a !Lt -99¿

14.7 Limitation on Liability of Sublandlord. The Sublandlord shall not be obligated to pay the princípal of, ot premium, if any, or intetest on the Bonds, e

t4.E No General Obtigation. Any obligation or liability of the Sublandlord created by or arising out of this Sublease (including without limitation any liability created by or arising out of the representotions, warrantics or covcna¡rts set fort)r l¡çrci¡r or otherwise) shall not impos€ a debt or pecuniary liability upon the Sublandlord or a chargc upon its general crcdit or ad valorem te¡ring powers, but shall he payable solely out of the Secwity. Neither the issuqrce of thc Bonds nor the delivery of this Sublease shall, directly or contingently, obligaæ the Sublandlord to lerr.y any form of ad valorem ta¡ration therefor or to make any apprcDriation for tbeir pavrnqlt Uõtnrng in the Bonds or this Sublease or the proceedings of the Sublandlord authorizing the Bonds or in the Act or in any other related document shall be co¡rstn¡ed to authorize thc Subla¡rdlord to srÉðtn a debt of thc Subtandlord within lhe meaning of any constih¡tional or stelutory provi.sion of the State- No breacb of any p¡edge, obligation or egreement of the Sublaudlord hererurder may impoca any pccuoí.ery liabitity upon thc Sublandlo¡d lrercurdrr to any charge upon its general credit or against its taxing powcr.

14.9 Expenses. The Subtenant covenants and agrees to pay and to indemnify the Sublandlord and other Indemnitees ageins¡ all costs and charges, including reasonable fees and disbr¡rserrenB of ettorneys, accountants, consultants arid other expcrts, inc¡¡r¡ed in connectiorr with the Bond Docrrme[ts or the Bonds including the reasonable fees and costs of Sublandlord's accountânt$, if any.

l4.t0 Tndernnificaúon- To the sr(tent permined by larv in oddition to and not in limitation of Section l0 hcrein but zubject to Section 10.3(e), the Subtenaut releases the Subtandlorct fror¡r and covenants and agrees that the Sublandlord shall not be liable for, and covenants and agrees, to indemniû and hold harmlcss the Sublandlord and its oflicærs, manågersr dírcctors, employe€s and agents from and against any and all losses, claimq damages, liabiliúes or e(penses, of every conceivable kind, character a¡rd nature whatsocver arising out of, rqsulting from or in any way connected with (l) the Leased hernises; (2) the issuance of the Bonds or my certificotions or rcprcscntations madc ín connection therewitlt autl thc carrying out of arry of the treri$actions contenrplated by the Bonds and this Sublease; and (3) the exercise or perfonnance of the Sublandlord's powers or duties un¿le¡ ¡ucl in aceordance rvrtb this Sublease¡ pmvided that such indannity shall not be r.equired for damages that result from negligencc or willful misconduct or materiel misrepresentation on the part of the p¡rrty seeking such indemnity. Subten¡nt further cover¡¡nts and agrees, to thc extent permined by law, to pay or to reimburse the Sublandlord and its ofücers, employees and age,nts for any and all cosls, reasonable attomeys' fccs, liabilities or cxp€nses incunpd in c-onnection with eny such losses, claims. darnages, liabilities, expenses or actions for which tbe Sublandlord is errtitled to indernnity under this paragraph, except to the extent that the samc arisc out of the negligcncc or willful ulisc¡rndusl or material misrepresentation of the party claiming sucb payment or reimbursernent. In addition to

PAGE29- SUBLEASE 20t t0ó 5/HRT|070633.4W

Page 174 the foregoing (and not by way of ), the Sublandlord hereby specifically agrees that in the event the Intemal Revenl¡e chatlenges the federel tax-exempt status of thc intcrcst on the Bonds or threatens to the Sublandlord pursuant to Treasury Regulalion 1.103- 13(a)(2)(iv) by reason ofth€ of the Bonds, the Subtenant will prnmptly, upon request of the Sublandlord, take any ancl all necessary to avoid the loss of fedcral tax-exempt status of the interest on the Bonds or such ualification of the Sublandlord, iucluding but not limited 1o lhe payment (atter ñnal resolution any adminisftative or legal proceedings challenging such actions or assertions by the Iniernal Sewice) to the United Stntes Govemment of any and all carnings on tbc invcstmeut o prtx;ceds and the earnings on the investrnent income derived thereËorn (investment paid to the Sublandlord) if the pa¡urent thereof wiU preserve the fndçal tâx-e(empt of the intorest on thc Bonds or prwcnt suclr disqualification, and the Subtenant will pay all reasonable costs and expørses (including attorneys' fees and expenses) by the Sublaudlord in connection there;urith, and thê Sublandlord agee$that it will with ths Subtenant in connection with any action taken by tt¡e Subtenant under this including cooperating wrlth the Subtenant in any legal or administrati ve procee

l4.ll Relationship of Nothing hcrein shall bc construed so as to constitute a ioint venture. partrership or loan Suhlenrl lnrd and Subtenant.

14.12 Consent- Wherever or approval of either Sublandlord or Subtemant is required or allowed uuder this such consent or approval will not be rureasonably wittrheld, dela¡,ed, or conditioned.

14.13 Any provision of this Sublease which is prohibitcd or unenforceable in any jruisdiction shall, as to such jurisd be ineffective to the ertent of such prohibitíon or uncnforceability without invalidating remaining provisions hereof, and any such prohibition or unenforceabiliry in any jurisdiction not i.nvalidate or rcnder unenforceable such provision in any othcr jurisdiction. To tbe perrnitted by applicable law, the Subtenant hereby waíves any provision of law which renders provision hereof prohibited or unenforceable in any rt¡pËsL ïVithout liuriting the of the foregoing, the parties hereto speciñcally intend that Subænant's interest r¡nder this shall not merge into its interest uncler the Head Lease or the Master Lease, arid thct al guch intcrcsts shall bc in effcct concurrcr¡tly and sl.r.all uut be extinguished or otherwise affected the application of the doctrine of merger or other legal theory, except as specifically set forth this Sublcase, the Head Lease, or the Maste¡ l-ease.

14.i4 Tbe captions in this are for convenience or reference only and shall not rlcfine or limir any of the rerms or otls thsreof,

14.15 This Sublease shall in ll respects be govcrned by, aod constn¡od in acoordancc with, the laws of the State í¡ which Leased Prernises a¡e locared including all matters of constnrction, validíty and

PACE3O- SUBLEASE 20r I 06 5/HRT/0?0633.0009

Page 175 14.16 All notices or other corn-rnunicaf.ions hercundcr shall be sufñciently given and shall be deemed given nn the date shown as delivered wherr mai.lecl by registered or certified mait, posAg. pt"puia, r€rturn receipt requested, adclressed to the Sublandlord, tbe Subtenant and the Puchæer, as the case may be. at the addresscs for each set forth below, or when personally served to the above parties at their res¡recúve adtlræses. À duplicate copy of each such notice or other communication given hercunder to the Sublandlord, the Subtcnant a¡rd the Purchaser, as the case may be, shali also be given to the others- The Subtandlord, the Subtenant and the Pr¡chaser, as the case may be, rnãy by notice givm hereunder designate any further or di.fnere¡rt addrcsscs to which subscqucut ¡rotices o¡ otl.rcr çu¡¡ur¡uniqations hereunde¡: shall be sent. For delivered by telecopy or other means of any such mesnc shsll be deemed to havc bovei or (ii) the intended recipient of such notice acknowledges in writing æceipt thereof.

The initial notice addresses ,rre as follows:

Sublandlord Marion CountY, Oregon 555 Coul SrcetNE Salem, Orcgon 9'l 3Ol'37 36 Attention: C.hief Arlministrative Ofïice¡ Facsimile: (503) 373-4367

Subtenant: Oregon Garden Foundation E79 \¡/. Main Street P.O. Box 155 Silverton, Oregon 973 I I Attention: Executivc Director Facsimite: (503) 874-8200

The Purchaser; Ba¡rk of Amøica, N.A. tZt S.lV- Morison, Suite 1700 Portla¡rd, Oregon 97 20+3111 Attsntiou: Public Sector Balking Facsimile: (503) 27 5-127 4

**signatures on Next Page+*

\- PAGE3I- SUBLEASE 20r ¡ 06 5/HRT/070613-0009

Page 176 EXECUTED effective as of thc day.{irst above written.

MARION COUNTY, as Sublandlord OREGON GARDEN FOLTNDATION, as Subþnent

By: By: Name: Title: e-AÕ Title: r( h'¡l{¡"t'^'*- STA.TE. OF OREGON, Count¡rof&lmFon ) ce.

On this _4 A.y of Decernber- ZAO2, before me, lYqflc'-^oh County, persou.ally .appeared personally known to be the (1 ¡âo of known ro be the pcrso(¡ who executed the within and foregoing instnrment on behalf of said public body, and, who being duly sworn did aclcrowledge said instrument to be the free ect and deed of said public body.

Given under my hand ancl notari.al seal this L{t¿"v of December,

NotaryPublic \__ MyCommi.ssion Expires,l>lrolo ul STArE oF oREGoN. Counry "f#tà On this day December, before m.e, Notary Public within and l* of 2002, ^a for -û4-yll.ns ¡-.-c h CounU. pensonally ppeared Ktc-k É r.stçÎs,s n to me personally known to be the Ercc.. Drf""\'-.- of Oregon Garden Foundation, an Oregon non- profit corporation, and to me perconally known to be the person who executed the within and foregoing rnstn¡rnent on behalf of said corporation, and, who being duly sworn did acknowledge said instrument tro be tbe free act a¡rd deed of said corporation.

Given under my hand and notarial scal this lth¿ay of Dcccmbcr,2002.

NotaryPublic My Commission Expires: t¿l ,olo.L

!NSX|

MY MlsstoN rxf

I \.-. P/\GE 32 - SUBLEASE 201 r 06 5/llRT/070ó13.0009

Page 177 F.x.hiþit A

lCopy oflease]

I \_-, PAGE 1 - EXHtsfT A 201 106 5/HR1/070631-0009

Page 178 EXDCUTION COPY

LEÂSE

This L¡asc (the "[æase') is made and ente,red into e.ffective December 19,2002. by and between the Lessor and Lessee naned below.

RECITALS

A, Lessor is the lessee of certain real proporty locæed in M-adon Counly, Orcgon pursuatt to the terms of a lease agreement betu¡een the City of Silverton, as l.essor, and læssoç as lesseg dated Octoba 28, 1995, as arnended by Adctendum #t dated Fehnmry 17, 1998' by Adden&nm #2 d^¡d ltfâ¡cb 5, 199E, by Addendum #3 dâted October 9, 1998, by Addendum #4 dated January 20, 1999, and by Acldendum #3 [sic, 5] dated July 8, 2002 (the loasc agreement da¡ed OclOber 28, 1995, Ss arnended, is refcrred to herein as the "Master Lcase");

B. Lcsscc dcsircs to lcasc a poÉiou uf thc prupcrty that is the subjcct of the Master I-ease from Lessor. The poftion of tlre property that Lessee rlesircs to lease consists of 61 acrcs and is desctibed in Exhibit A (the "Leese¡t Premises")-

C. This lrase in entered into in connection with the issuance of Marion Counþ Revenue Bonds, Series 2002 (Oregon Garden Foundation Project) in the aggregate principat anount of $5,000,000.00 ("Bonds") to refurance indebted¡less of Lessor incrrred in cono.ection wirl¡ thc acquisirion and lmproveme,lrt of the property tlrat rs the suþject of the Master Leasc and to finance a portion of the irnprovements located or to become locatcrl on the Leased Premises' The purchaser of the Bonde will be Bank of .r\mcrica, N.A. (thc "Purchase/)-

D. Lcssor and Lessee acknowledge thal. I essee intends to sublease the Leascd Premises ûo lÆssor under an âgreement of evør date hcrcwith (the "sublease'), and the parties contemplate that a leasehold deed of ftr¡st will be given by I-aqsor to læssee, and that a fee deed of trust w:ll be given by the City of Silverlon, Oregon to l.esseq both to secure tbe Lessor's obligations as Subterrant !o Lessee as Sublandlord r¡nder the Sublease.

E. Capitalized, terrns not otherwise defined in this Lcasc shall have the rneaning set fnrth in the Sublcase or in the Apperrdix to the Sublease.

NOW TITEREFORE, in consideration of the muh.ral covenants containerl herein, Lessor and Lesscc hereby agrci as follows:

l- CERTAIN 'l'El(MS, In this Lease, the following terms shall have the followirtg meanings:

PAGE I - LEASE 20 ¡ r 05 ]/¡lRr/0706334009

Page 179 Lessor: Oregon Gardqn Fou¡dation (fka, Oregqn NurseryTen's Gargen Foundation) (please prìnt or type lull nøme) Coilact: Rick GustatSon Phone: (503) 87+8100 Address: 879 W.Main St., PO Box 155 Cit¡r Silvelon County: Marion $tatc: Orcgorr zip Code: 9738L

Lessee: Merion CounÇ

Contact: ChiefAdminiskative Oflicer ?hone: (503) 588-5212 Address: 555 Court StrEet NE Cit¡c Salem Cottntf,: Marion State: Oregon ZipCúe: 97301-3636 555 Court Strect N.b

Reel Estate: The real property described on the attached Exhibit A SueetAddress: 879 W Main St County: Marion City: Silverton - State OR Term: Commencing on the date hereof and ending on the date thal all of the Bonds pruchased under the Bond Purchase Agreernent bave been paid, discharged and defeased.

Base Rent per yerr: $12.00

2. GRÂl.iT OF LEASE. In corsideration of the rents nnd covsnants to be paid ard performed as hcrein provided by læssee, Lessor hcreby leasas to l.açsee the Iease.¡J Premises as described abovc, together with all imptorærnents located thereon, all ap,purterrances thereto, and adequate right of access to a public and traveled roathvay. læssor also hereby gfants to læssee a nonocclusive perpetual leæehold easement for læssee ard its guests md invitee"s to use those portiors of the real pmperty leãs€d u¡rdcr the Mastq k¿se lhat are devotedto roaùva¡æ, eotrytr'ays and tlrc tilsc and tbosc portio¡rs of 0re rcal prupurty leased under the Mastq l¡asc tl¡at are da¡oted to parking areas, for pr.rrposes of ingress, egress, and parking.

3. TERM. This l-ease shall commencc on the date hereof ("Commencement Date') and shall continue for the tersr described above lthe "Terut'). Ths term "[¡a.se Yea/'.shatl mean ¡ successive period of twelve (12) calendar months bcginning on the Commencernent Date hereof and each anniversary hereafter during the Term.

\.--, PAGE2- LEASE 20 I I 05 3/FÍRT/070633-0009

Page 180 4. RENT. The rent due hereunder shall be composed of base renr (*Base Rent') as described hereín. Base Rent shalt be payable mnually starting on the Commencement Date, and payable on each anniversary thereafter during the Term hereof-

5. USE; IMPROVEMENIS- Lessee'may use the Leased Premises for any lawful pu{pose Psrmined undq the Master l-ease as nodified by that Intergoverrurerrtal Agreement of even date herewith between the City of Silverton as tandlord uncler the Master Iæase ancl Lessee. Lessee's use of the Leascd Pre¡niscs shall at all tirncs couforrrl lu all applicable lawq ordinances, regulations and codes and shall at all times be conductcd so as not to create or suffer a condition that results in the landlord declaring n rlefarrlt under the Mastcr Lease. Lsesee eholl bc cntitlcd to constsuct improvements on the Leased Premises in any manner atlowed by law. Lessee shall not rEtrlove such ímprovemeots at any time'during the term of this Lease witbout the cons¿nt of Lessoç exoept ar provided otherrrrise iu the Sublease, Until termination or expiration of this Iæase, all improvements, fixhrres, and eqriiprnent conskrrcûed, installed or placed on the Legsed Frsrriscs by Lcsscc or Íts assigns or prívities shall be the sole property of Issee. Upon tcrminatíon or expiration of this Lease, all improvements, fixtures, and equipment constnräed, in.stalled or placed on the Leased Prsrnises by t csscc or irc assigns or privities shall be the sole property of f¡ssor, €r(cept as provided otherwise in tbe Subtease.

6- SUBLEASE. Lesseç rray freely tra¡¡sfer or æsign this l¿ase or any inteîest in this Lease, without tbe consent of Lessor. Lessee may freely sublet the Lsased PrEmises and impmvernents thereoo, or any portions or parts thereof,, without the consent of Lessor.

7. INSUR.À}¡CE. Lussor shall obtain and rnaintain in ñrll force and eflbct during the term of this Lease the insurance policies required by Seotion 6 of the Master Lease and Sectioa 7.4 of the Sublesgc.

8. LIENS. Except for thc Bonds or any lien createrl as a resnll of the transactions contemplatcd in connection rvith the issuance and purchase of the Bonds, Lessee agrees that it will keep or cause to be kept the Le¡scd Prerníses fiee and clear of mechanics, laborers or materialmer¡'s licns a¡d other liens of a similar natu¡e ('T,ie,Í¡s*) which may arise in connection with work of any type performed on the LEased Premises by or at the direction of the tæssee other than work performcd by Lessor unclt-r the Subleasc for which Lessor shall be solely reqponsible; provided, however, that the Lessce shall have thc right to sontest the valídity or ttre amountof any sr¡ch l-.ie.¡ or claim of Lien. On final determination of such Licn or clairn of Licn, the Lessee shall immediately pey anyjudgrnent rendered agains Lessee with all proper costs and charges and shall have the lien released or judgment satisfied at rhe Is.çsee's experrse. Notwithsan

PAGE3_ LEASE 20 I I 05_3/I{RT/07061 34009

Page 181 êút êLt ¿0ê) L¿a za JOJJ'J9JÞ'

accÆnmodete the comrnercially rcasonable rerluesfs nf the institutional lmder providing financing lor the Expansion Project so long as such requests do not advøsely affect the value of any security held by Lessee and as further provided in the Sublease.

9. TAXES; PRIOR LIENS. Lessor shall pay all taxes and assessments and any other a¡uoru:ts duu on account of any lien or encumbrance afl-ecting the Lcased Premiscs or affecting any larger parcel of which the Lea.sed Premises are a part. Lessor shall imrnediately provide to Lessee copies of essh rssessmcnt or tÐ( valuation notice receivcd by Lessor affecting the Leased Premises. Lessor shall assume and pay any tax, assessment or charge levied against or measured by the Base Rent and/or other amounts payahle by Le.ssee pursuant to this Lease.

10. QUIET ENJOYMENT. Les.sor reprcsemts, wa¡rants and covenants that, subject to Lessor's remediesin case of any breach of this læase by Lessee, Lessce shall havc and enjoy quiet and r¡ndisturbed possession of tbe Leased Premises during the Term.

ll. I-flLITIES; ACCESS. Lessor represents and warrants to Lessee that gas, electricity, watetr, heat, sewage and otber utilities ¡re availablc to tbc Lcased P¡re,miscs. Less¿e shall be e¡rtitled ûo access over, upon and across any other lancl owned by Lessor in order to gain aecess to such utilitles. The Leased Premises have fiec and fuü access to and from all arljnining stneetg roads and highways, and there is no pending or tbreatened aotion whictr would impair such ¿rocess

12. CONDEMNATION. In thc evenß of the taking or condenuration by any corpeþnt authority for- any pubtiu rx r¡u'asi-public use or pwpose of any on all of the læased tlemises at auy time during the lease term, Lessor shall be cntitled to all of the condcmnation award, except as otherwise provided in the Subleage.

I3. LESSOR REPRESENTATIONS. Lessor represents and warrants to T.essee that

(a) Authorilv- Lessor has ftill right and authority to €nter into tl¡is Lease snd perform the l-essor's obligations under this Leasc as of thc commencement of the tenn hereof and, subject to tbe Master Lease and except fur Permined Encumbrances, has good, markctable ar¡d insurable title to the Leased P¡emises in fee simple, free and clear of all restrictions, leases, tenancies, and easernents;

(b) Coudernnation: Dedication. læssor h.æ not receivcd eny notice, nor is it aware of any pending action to take by condernnation all or any portion of the l.eeqed Premises, nor has l-essor agreed or cornmitted to dedicate any part of the Leased Premises for any sfrect, eôsement orpublic purpose.

(c) Violations. To the best of Lessor's knowledgc, the Leased Premises are not in violation of any loual goveu-r¡¡rçr¡lal ruls, ordinance, regulation or building code,

\_. PAGE4- I-EASE 201 r 05 3/t-rRT/070633{009

Page 182 nor is there a pending or tlìfeatened investigation regarding a po.ssihle violation of anj, of the foregoing.

15. POSSESSION UPON TERMINATION. The Lessee agrees with Lessor that upon tcrmination of this Lease, whether by lapse of lime or because of any of the conditioni or provisions containcd hercirr, the Lesree will peaceabty and quretly yield up and surrender possession of rhe Leased Premises to læssor in their thm as-is condition subjecf however, to Lessee's right to reTnove improvenents, fixtures and cquipm¿nt as providcd irr ¡rau'agreph 5, above.

16. FURTHER ASSURANCES. Concurrerrtly with the execution of this Lease, I¿ssor and l,cssee sball execute before a notary and deliver to the Marion County Recorder for recording a Memorandum of, Lease Agreernent in the form of anacbed Exhibit B. The Lessor at its own CItpcrises will pnomptly and duly execute and deliver to the Lessee such documents, conve¡mnces aad aser¡ranc$ and t¡kc zuch fi¡rthcil arliutt ¿rs lhe Lessee may frorn time to time reasonably request iu order to establish and protect the riglrts and rernedies creatd or intended to bc created in favor of the Lessee, and to e-stablisb and perfect the Lessee's interoct rn the l-cascd Frc¡niscs.

17. TRANSFER OF LAl.lD. Lessor shalt nbt (voluntarily or involuntarily) sell, transfer, convey or assign iß intetest in the l-eased Prcrnises without Læssee's cons€nt which coosent may be withheld or delayed for any reason.

18. LESSEE'$ DEFAULT. In the event of default hereunder by Lessee, Lessor, sixty (60) days after written notice, moy cxcrcisc its rcmcdics provided by law, u¡rless during sald sixly (60) day perid Lessec has cured tl¡c default specified in said noticc.

19. LESSOR'S DEFALJLT. In the event of any breach or default by Lessor underthis Lease, which continues for a period of thirty (30) da¡æ afrer notice thercof from Lessee (or without norice in casg of an emagmcy), then in addition to all other rights and rernedies of Lessee uncler this Lease and at law or quity, Lessee may (but shall not be obligated to) cure such breactr on bchalf of Lessor and upon rlcurúxl by l-essee, Iæssor shalt promprly pay to Lessee the costs and expen$Es of such sure. AJI costs and orpenses incurred

20, NOTICES- All notic.es and invoices reguired or permitted under the terrrs and provisions hereof shall be in writing and any such notice shall become effective when clelivered or on the

L. PAGE5- I_E^SE 20t t05 3/HRT/070ó3]-0009

Page 183 ëðMl'¿6Va t-.'25 ÞUJJ/Jq5Þ/

day sent prepaid ât staight rates by telex. telegram or telecopier or on the secnnd business day after deposit in the United States mail, with proper postage and 6rst class rnail prepaid, addressed to cither Lessee or Lessor at their respective addresses listed above.

21,. EIWIRONMENTAL REPRESENTATION- Forpurposes of this Section, the following ter¡¡rs shsll have thc followíng mcarùrgs.

'Environmental T.aw.s" means any and all state, federal and local statutes, rcgulatiurts anrl ordinances relating to the protection of human health or the environrnent.

"Hazardous Substances" is used in its vcry broadest sørse and refers to materials thaÇ bec"use of their quarrtit¡ concentration or ph¡æical, chemical or infectiorrs charactetistics, may çause |Jr Fuse a prEsefit or poteirtial hazañ to human health or the environmenl when ímproperly used, treated, stored, diqposed o{, gørerated, manufach¡red, rançorted or othErwise handled. 'Tlazædoss SubstâDceo'eholl includc, without limitatiorr, pctrulcum producrs or crude oil and any and all hazardous or toric substances, materials or waste as defined by or listed uder the Rçource Consen¡ation and Recovery Ac.l, the Toxic Subetaoces Control A.ct, thc Compreheosive Environu¡ental Respolrse, Compensation and Reliabilify Act, or any other of the Envi¡onmental Laws.

Lessor represcnts, warrants and covenants as follows:

(a) To the best of Iæssor's actual knowledge, without inquiry, all Hazardot¡s Sr¡bstences on or rn the l-eased Prcmiscs have bccrr or will be used, gÞneretoq manufactr¡re{ refined, transported, treated, stored, hândled and disposed of only in stict compliance r¡'ith all Environmcntal Laws.

(b) Iæssor shall exercise care in hadling Hazardous Substances and shail uodenake ¡uly and all preventive, investigaÛory or remedial action (including, without limitetion, ernergency respônsE removal. containment and other rcmedial action):

(1) requiled by any applicable Environmental Laws or orders by any governmental euthority having jurisdiction under Environmmtal Laws; or

(2, necessary to prwent or minirnize property damage (including; without lirnitation, damage to the Lessor's owtr propeTty), personal injury or damage to thc environment or threat of any such da,mage or injury, by releases of or e,(posur€ to Hazardous Substances in connection with the f.eased Premises. ln the event Lessor fails to perform any of its obligations under this Section, Lessee may perforrn (but shall not bc rcquirÈd tu ptrform) such obligatioDs at Lessor's expensc. In performing a¡y such obligations of Lessor, l,essee shall at all times bc deemed to be ilre agent of Lessor a¡rd shall not by r€rson of ony such

PAGË 6 - LEA.SE 20 r | 05_3/HRT/0?0ó33.0009

Page 184 ou, aLt ¿99J

Perforrnance bo deemed to be assuming anv responsibility of the'Lessnr trnder any Environmental Laws or to ânyother person.

(c) Lessor shall releasq indemni$ ar¡d hold hannless the following (collectively the "Inde,mnitecs'): Lessee and its ofücers, directors, employees, agents, and oll of thcir sr¡Gccssols aurl assigns agatnst any artd all claims, dcrnands, losses, liabilities, costs and expenses (includi.ng, without limitation, attorncy fees at trial ærd on any appeal or ¡retitinn for rcview) incurred by Indemnitcc: "tty (l) arising out of relating to any inveshìgatory or remedial action involving the I-eased Premises, or the operstions conducæd on the Leased Prernises, and required by Environmental Laws or by orders of any governmental authoriry having jwisdiction under any Environmental Laws; or

(2) on ûccount of injuy tu aüy psrson or damage lo any pfoperty arising out of or in connection with or in any wayrelating to:

(D Any laws or regulations. including, without limitation, Environmental Laws, applicable to the Leased Premisesl or

(iÐ the uscr treatnent, storage, generation, manufacture, tra¡uporÇ releasc, spill, disposal or other lrandling of Hazardous Substances on the Leased Prernises or in connectiort with operations conducted on the Leoscd Prctrtiscs; or

(iii) the contaminatiorr of any nf th.e fnased Pr.enises by Haza¡dous Substances; or

(i") on account of all of the abovc with respect to the Leased Prernises whether or not caused by Lessor.

' (d) The covenants 6sntained in. this Section shall survive any tennination of this l¡ase for any renson, and shell be for the benefit of the Lee¡ese and it¡ succc*sors and assigns.

(e) Nothing contained in this Lease shall be construed to rclease, indcmnify or hold harmlcss any Indenrnitee for any matters with respect to which an Inderuritee may be liable due to ac¡s of omissions of. such Indemnitee prior to tbe date ofthis l-nase.

22. MISCELI-AI.IEOUS

(a) Any provision of this læase which is prohibited or unenforceable in any jurisdiction shall. as to such jurisdiction, be ineffective to the extent of such prohibition

PAGET- LEASE z0t ¡ 05_3/HR1/0706¡34009

Page 185 or r¡nc'nforceability without invalidating the rernaining provisions hereof. and any such prohibition or unenforceable in any juridiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent pernritted by applicable law, the Lessee hereby waives any provision of law which re,nders any pmvision hereof prohibited or unenforceable in any respect. To the exte,nt pemitted by a¡rplicable law, the Subtcna¡rt hcrcby waives -any provision of law which rcnde,rs any provision hereof prohibited or unenforceable in any respect. Without limitíng ü; gørerality of the foægoing, the partics hereto specilically intend that Lessor's intercst under this L,easc shall not m€rgp into its interest under the Sublease or the Master Læasc, and that all such interests shall be in effect concurrently and shall not bc extinguished or otherwisc affected by the application of the doctrine of merger or other legal theory, exccpt as spocifically set forth in this Leasg the Sublease, or rhe Mestér Lease.

(b) No temr or provisiør or füs Lease may be cha4ged, amonded, waived, discharged or terminated orally, but only by a¡r inln¡mcut in writilg signed by ttre pary against which tbe enforcement of tbe change, amendrnent, waiva, dischargs or terrrination is sou¡þt.

(c) The captions ín this Leæe are for convenience or reference only and shall nol deflne or lirlt any of the terms or pr.ovision thereof.

(d) This Lcase st¡all i¡r all respects be governod by, ancl const¡¡ed in accorda¡rce with the laws of the State of which the l-eesed Prer¡dses a¡e located including all matters of constn¡ction, validity and performance.

r+Signatures on Next Page++

P.AGE LEASE \_. E- 20t ¡ 05_3/HRT/0zQf33-9909

Page 186 '.*-.. E)GCUTED effective as of the day and year first above written.

MARION COUNTY, as Lessee OREGON GARDEN FOUNDATION, as Lessor

By: By: Name: Name: Title: litlc:

srAtb t-lt oREcoN, County"fH"îì. On this ]{ ¿"¡ of Dcccmber, 2002, before fle, -t]$h{\_srÀ Cor¡uty,-"t- personally appeared perso"rityknõ"iliãlãì'u Ld ^' or known to be the person who executed the within and foregoing insuunent on behalf of said public body, ah4 who being duly swolTr did acknowledge said instrr¡ment to he tbe free aet and deed of said public body.

tnislth day ot'Decearb e¡.2002.

lvfYCQI/M Notary Pubtic My Commission Exoircs: l¡J,slo v

STATE OF OREcoN, County oHí* ¡ ,r. On this !f day of December, 2002, before me, -e Notary Public within and for Myl't^--. . Ñ Cotmty, pogorroily rppcared nt.ç C;=+"+=-. -- to IDe perso'nally lmown to be thc _eæ_qe¡sfe¡_ of Oregon Garden Foundation, an Oregon non- profit corporation, and to me pcrsonelly l¡rown to be the person who ececuted the within ond forcgoing instrument on behalf of said corporation, and, who being duly sworn did actnowledge said instrument to be the free act and deed of said corporation.

Givøt under my hand and notarial seal this tçfrday of Decenrber,2002.

Notary Public My Commission Expires: I>lto ö

t PAGE9- LEASE 20t I 05 3/HRT/0?0613{009

Page 187 EXHIBITé

Description of Real Property

Legal Deccription of a 61-Acre Le¿scd Tract l.ocated within the City of Silvertou Tracts Described in Reel L247,Page 288, Reel 1282, Page 779, andReel 1241, Pages 48 I

Bearings and distances in this description are edd anrl intero.ational feet, respectively, and bascd on inverses betwem Stafe Plsne Coordinates NAD 83(91) Dahrm, Zone 3601, Oregon North.

Begiruring at rhe sourlrqrst comeî of that certain tract of land conveyed to the City of Silverton by cleed recorded in Reel 1247, Page 228.of thå Ma¡ion County Deed Records, which point is lcrc¡ted in Section 3 of Township 7 Soutll Range I Wtst of ùe \¡fitlamene Mendtrn, Marion C-ounty, Orego'r¡ and nruning ther¡eæ North 01"45'40" East along thc east line of said City of Silvefton Fact, a distance of l499.58.feet thence North 90000'00" Wc.st, a distauce ul2L9.l2 feet; thEnce North 33o1538" West, a distance of 950.52 feet; thence North 35"38'lE" Wæq a distarrce of 19.18 feet; thence North 26"0827" West, a distance of 31.35 feet; tlre.nr.e North Itò"25'14' West, a distance of 30.53 feet; thence Nortlr 07o4'l'11" West, a distance of 30.00 fea; tbencc North 06o I 5'16' East, a distance of 37 .O2 feet; thence North I 8"28'10" East,'a dista¡ce of 25.52 fctÌ; tlrcncc Norttr 28"21'52" East, a distance gf.'29.14 têet; thcnce North 33"M'35" East, a distance of 26.90 feet; thence Norlh 42o08'47" East, a distance of 24.07 feet; thørce North 53"1 lïl7' EasÇ a dista¡rce of 26.05 fest; thcncc North il"l7'21' Easl, a distance of 37.07 feet; thence Notth '14o23'15" EasÇ a distance of 34.91 fcet; thence North 78"42'44 East, a distance of 20.24 fæt; thence North 54'01'38' East, a'distance of t 7.62. feet thence North 32046'04" EasÇ ¡ distance of 4-74 feet; thence South 01"19'10" East, a distance of 105.82 feeq theDce South 89o58'05" East, a distu¡ce of 480.49 feet to ùe northeast line of said City of Silverton tact rhe,lrce Noflh I 5"20'40- West atong tbe northeast líne of said City of Sitverton Eact, a distance of 'West 7W-63 feet to the northeast corner of said City of Silverton tracÇ thence North 88o08'15" along the north linc of said City üf SilverL¡:n lract, a distanoe of 329.78 feet to the northwæt cornq of seid City of Silverton tracÇ tbcnce North 5'1039'40" West along the no¡theast line of that cqtain tract of land conve¡rcd to the City of Silverùon by deed rccordcd in Rccl 1241, Pages 481 of the Marion County Deed Records, a distance of 258.63 feet; thence South 44o54'59" lVesç a distance of l89.l7 foet to the northcast corner of the l-acre Freûk Lloyrl Wright tract; thence South 00o00'00" East along the east line of said l-acre tracít, a distance of 1E3.17 feet to the southeast comer of said l-acre tract; thence North 90"00'00" West along the easterly south lir¡e of said l -acre EacÌ, a tlistance of I l(l.52 f eet to an angle in thc soutberly line of said l-acre kact; thárce South 47035'15'West along the southeast line of said l-acre Eact, a distance of 256.06 feet to an onglc in said south linc; thance North 89"4'59" West atong the rnost westerly south line of said l-acre tnct, a distance of 52.47 fect; thelrce Soulh 22"45i8'Eæt, a distance of 45.80 feeE thence South 37o11'20" East, a distance of 43.64 feet; thenco South 52054'54" Dast, a distance of 50.70 feet; thencc South 69o54'52" East, a distance of 42-67 feet; thcnce South E5"4,,!'54" East, a distance of 54.46 feet; thence Nor1h 85o58'42n East. a distancc of 41.12 feet; thence North 72o37'28" Easq a distance of 40.56 feet; thence South 66042'17" East, a distance of

PACB I -EXHIBIT A 20t I 05 3/ItR.T/070633400t

Page 188 32.69 fæt; thence South 63028'51" West, a distance of 35.46 feet; thence South 75"5927" WesL a distance of 39.05 feet; thence Nortl¡ 90"00'00" West, a distance of 52.56 feet; thence North 84426'2Qu West, a dístance of 55.54 feet; thence North 67"52'26' lrVest, a distancc of 39.48 fe.et; tl¡c¡rse North 54"38'ZZ" lilesq a distance ot'45.M feet thørce No¡th 40"49'14" West a distence of 51.69 fea; thenceNorth 24"20'52" West, a distanoe of 45.89 feet; thencc North 14o33'45u Wesf a distanco of 37.66 fcct; thcncc North O0"OO'00|' East, a diskurce of 40.37 feet; thence North 01o50'58" East, a distance oî 82.50 feet; thence North 06"07'40" East, a distance of I 13- lO feet; thence North 03"M'14" East, a distance of ?.7 2.4 fcet; thence North 0300610l' Wee!, a distance o127.61 feet; thence North 18"00'10" West, a distance of 2E.95 fecÇ thence North '\ilest, thence North 53"1l'07u \Vest, a distance of 18.60 feet; thence Norrh 62o14'36" a distance of tl.2l feet; thence South 20"2950'West, a distance of 307.13 feet; thcnce South 00000'00" Wcst a dista¡rrue. ol7lO.64 feet; thcnce North E9"56'53' bast, a drstance of 330.46 feeç thence South 00o00'00" WesÇ a distance of I108.97 féet; thence South 58"47ß" EasÇ a distf,nce of 755-27 feet to the most sornlredy wect line of that ccrtain kact of land corrvcycd to the City uf Silverton by deed recorded in Reel 1247,Page 288 of the Ma¡ion County Deed Records; tìence South 02"03'40" West elong said southerly west line, a distance of 279.2-6 f.ert; thcnce South 45"5140" EasÇ a distance of 737.93 fect to the point of beginningi an¿ contaidng 6l acres, more or lees.

FAGE 2- EXHIBIT A 201 r05 3/l-rRT/070633-0009

Page 189 uot 0Lt LgUJ L¿. ¿)

Exhibit E

Memorandtlm of læase

A-fter rocording; plcase return to Marion County ,{ttn: ChiefAdministratiye Officer POBox 14500 Salcru, OR 97309

this is a Memorandum of Lease ("Lge5g') by and between Oregon Garda Foundation, an Oregon nonprofit corporation ("Lessot''), whose mailing address is PO Box l55,.Silverron, Oregon 97381^01Í5, and Marion County, State of Oregpq a municipal srrbtlivisio¡¡ of the State of Oregon and body potitic ("Iessee") whose mailing address is PO Box 14500, Salem, OR 97309.

Date of Lease: Desernber 19,2002

Description of Demised Prernise.s: Sce Exhíhit "4" aitached hereto-

Term: Fifteen (15) yean cornrnacing upon the date hereof (the "Commencqnqtt Date').

the purpose of this Memmandum of Lease is to give record notice of the Lease and of the rights o.r.catcd thcroby, all of which are hereby confirmed an

NOW, THEREFORE, Lessor, in consideration of thc rcnts and covenants provided ful in the Lease !o be paid and perfomred by Lessee, does hcreby dernise convey, grant and let unto læssee tte L€ased Premises upon the terms and subject to the conditions set forth in the l.ense, a copy of which is beiug held by Lessor at its add¡ess stated above.

++Signatures on Next Page+t

PAGEI.ÐüIBITB 20 r I 05_3/HRT/07063 3{009

Page 190 EXECUTED as of the date set forth in the tespective acknowledgments of the parties hereto.

LESSOR: OREC'ON GARDEN FOUNDATION, an Or.egon nonprofit corporation

Its

LESSEE: MAzuONCOI-INTY, a mruricipal subdivision of the State of Oregon

By: Its:

STATE OF OREC'ON ) ) ss: COTINTY OF MARION ) 'fhis instn¡ment was acknowledged before me rlils day of 2OQ2-by ths of Marion County, a municipal subdivisiorr of ttrc State of Oregon, on behalf of said corrnty.

NOT^RY PUBLIC in end for rlre Søtc of Oregon. (Seal, if any) My commission expires

STATE OF OREGON ) ) ss: COTJNTY OF MARION )

fiis instument was aclarowledged before me this day of 2W2_by the of Orcgon Ga¡'deu Foundation, an Oregon nonpro6t corporation, on behalf of said corporation

NOTARY PUBLIC in and forthe State of Oregon (Seal. if any) My commission expires

PAOE z-EXHIBIT B 201 r 05_]/HRT/0706134009

Page 191 rtAtr Exhibit to Memorendum and confìrmation of Lerse

Legal Description of a 6l-Acre T.eased Tract .1282, L.ocated within the City of Silvcrton Tracrs Dcscribed i¡r Reel 1247, page 26E, Reel page 779, and Reel 1241, Pages 481

Bearings and distances in tT-is description are grid and intemational feet, respectivel¡ and based oninverses between StntePlane Coordinates NA 83(91) Dahup. Tone36Oi,Oregon Norr.h. Beginning at the southeast corner of that certaín üact of land conve¡æd to the City of Silverron bv dccd recordcd i¡¡ Rccl 124?,Page 226 of rhe Marion CounÈy oée¿ Recor¿s, *ínicfrfoint is located in Section 3 Township -of 7 Soutb, ri¡e I West of the \viuamene n¡oiOi.o, Marion County' Oregon, and nmning therr.ce North 0loi5'4o" East along thc east lius of said Ciry of Silverton tracÇ a distance of 1499.58 feeg tharce North 90o00'0õ" WesÇ a d.istance of 2l9.IZ feeÇ tbence Nortlr 33o15'38" \ryes( a distarrce of 950.52 feer; rhence Norrh 35o3gl3"'Weer, a distarce 'West, of 19.18 feeq tbence North ?;6"08'27" a distance of 31.35 feet; thence North 16"25'14" WesÇ a dilance of 30.53 feet; thence North 07"41'17" West, a distancá of 30.00 feet: ürence Nortll 06"15'16" East, a distance ol37.U2.fæt; thence North l8.iB'10" East, a distance of 25-52 feel; thence No¡th 28o21'52" EasÇ a clistance of 29.14 feet; thence North 33o44'?¡1" East, a distance of 26-90 fc'ct; thcncc Nortl¡ 42"08'47' Eust, a distance oî 24.O7 feet; thence North 53o I I East, a t '07' distance ol. 26.05 feet; thence North 7¡"lT2lu EasÇ a dístmce of lT .o7 fset; thence Nofh 7423'15" F.ast, a rlistance of 34.91 .feet; thence North 7S'4Z,U" East, a dista¡ce of 20.24 feet; therrce North 54001'38" East, a dist¡nce of 17.62 feet; thence Nortb 32;46,04" E"sq a distance of 4.74 feet; thence South 01o19'l0u East, a distance of lO5-82 fceg thence Sorrrh t9"58'05" East' a distance of 480.49 feet to the northeast line of said City of Silverton racq, thence North I 5"2040" west along the northeast line of said City of Sitvrrtoí t ot, a distance of 790.63 Èct to ore uorürcast oomer of s.rid City of Silverîon tracÇ thence Norúr 8d"0g,15" West along the north line of said City of Silverton tract! e distance of 329.78 fÞet to thc northwcst cnflrer said of City of Silverton troct; thcacc No¡th S7o]¡g,4}".Wcst atu¡rg the nor¡he¿sr line of tlnt certain tract of land conve¡æd to tbe City of Silverton by decd rccorded in Reel 1241, pages 481 of the Marion CounW Deed 'West, Records, a distance o¡ z.sn.nt feet; the,zrce South 44o541gu a distance of lE9.l7 feet to thc nortbeast comer thence South 00000'00" East along the east tine of said the sou¡heast corner ot'said l.-acre bact; tbence North line of said l -acre trac! a distance of I t 0.52 feet to an tract; thcncc South 47^35,15-'West along the kact, a distance of 256,06 feet to an angle in said south linei then g the most westerly south line nf saicl I ,, -acre tr.ect, a distanse of 52.47 East, a

Page 192 a distance of 39.05 feet; the,nce Nortr 90000'00" We.sL a distance of 5?..56 feet; thence Nortb 8426'2C¡ West, a disunce of 55.54 feet; thence North 67052'26"'Wesl, a distance of 39.4E feet; thence North 54o38'22" W'est, a distance of 45.M feet; thence North 40"49'14" V/est. n distance of 51.69 feet; thencc North 24"2A'52" WesL a distance of 45.89 feet; thence North 14"33'45" West, a distance of 37.66 fect; thence North 00P00'00" East, a distance of 40.37 feet; thence North 01050'58" East, a distaluc of 82.5O feeq thence North 06"0'l'41)" tlast, a distance of I13.10 fceg thenceNorth 03o44'l4".East, a distance of 27.24 feeq thence North 03"06'01" \ilesÇ a distance of 7.7-61 feet; thence North 18o0O'10" Wcst, a dista¡rcc of 28.95 fuct; lhrrce Nonh 29"2425" \Vest, a distance oî27.32 feeg thence Nortb 43"16'03" West, adistance of 33.81 fcet; thence North 53"11'07" WesL a distarrce of t8.60 feet; thmce North 62o¡4'36" West, a distsrce of 11.21 feet; thence South 2O"29'5O'West, a distance of 307.13 feet; thence South 00o00'00" Wesq a distance of 710.64 feet; thencc North 8905653" East, a distance of 330.¿16 feet; tlrcnce Soutl¡ 00"00'OO".SresÇ a distance of 1108.97 fea; thence South 58"4T4A East, a distance of 755,21 feet to the mo* southerly west line of that ccrtain tract of land conveyed to the City of Silverton by deed rccordcd in Recl l?47rPrgc 2EE of the Marion County Deed Kecords; thc¡rce South U2"03'4o' West along said southerly west line, a dista¡rce o1279.26 feet; thence South 45"5¡40" East, a distance of 737.93 feet to the point of boginning; and containing 6l acrcs, nrürË Or lcss.

PAGE2-EXHIEITA 20t t05 I/HRT/0706134009

Page 193 ExhibitB

Rental Payment Schedute

Rcnt¡l Pa¡nnent lhte Rentrl A.uount Re¡tel PaymentDete Rental AEount

March l,2003 49,171.6t September l,2010 l-18,015.87 Jrme 1,2003 60,625.00 December 1,2010 138,015.87

ScToember lrZOOS 60,625-0ü March l,2Ol I t 3E,0 I 5_97 December 1.2003 60,625.00 June 1,201 I l3t,0l5_97 Ma¡ch 1.2004 60,625.00 Septerrbr 1,201I t39,015.87

June 1,20M 60,62.5.O0 Decernbs l, 201I r 38.015.87 Scptember l,2U)4 60,ó25.00 March 1,2012 138,0t5.E7

Dcus¡rrb¡r lr2U)4 ó0,ó25.O0 .June 1,2ú12 138,015.87 March l,2005 @,625.00 Sc"tember l,20l2 138,0t5.87 Jme 1,2005 60,625.00 Deccrnbq l,2Ùl2 138,0t 5.t7

September I.2005 60.625.00 March l,2013 138,01S_87

Deccmber 1,2005 60,625.00 June l,2013 t 38.0r5.87 March \,ãOOG r 38.015.E7 Septentbcl 1,2013 t3E,015,ú i Iune 1,2ü)6 l3g,0l5-E7 December l,2013 138,015.87 September 1,2006 138,015.87 March 1.2014 138,015.87 December 1,2006 138,0t5.87 June 1.2014 13E.0t5.E7

Ma.rch 1,2007 t 38,015.E7 Septembcr 1,2014 13E,015.87 Iune l, 2(X)7 138,015.87 f)ra;eu¡tr¡ lråOl4 136,015.67 September 1,2007 138,015.87 March 1,2015 138,015.87 Decsnber 1,2007 138,015.87 Jrme l,2015 139,015.97 'September Ma¡ch 1,2008 138,015.97 1,2015 138,0t 5.97 June 1,2008 138,015.87 Deccrnber l,2015 138,015.8? September 1,2008 138,015.87 March 1.,2016 138,015.87 Decernber 1,200E 138,0t 5.E7 June 1,2016 138,015.87 March 1,2009 t38,015.87 Septcmber 1,2016 138,015.87 Junc 1,2009 138,015.87 Þecernber 1,2016 138,015.87

Scptember 1.2009 138,0t 5.87 March 1,2017 138,0 t 5.97 Decernber l,20Oq 138,015.87 Jr¡ne 1,2017 138,015.87

March 1,2010 I3g,ol5,g7 September 1.2017 13E,015.87 June 1,2010 138,0t5.E7 Decernba l,20l7 138,015 g7

PAGE I _ EXI{IBITB 20t I 06 5/HRT/070633.0009

Page 194 Exhibit C

Requ isi tion Certifi cate (Project Fund)

DISBURSEMENT REQUEST

Marion County, Oregon 555 Court Strea N.E. Salern, OR 97301-3?36 A¡tention: Chief Adrnirustrative Ofïìcer

Re: 85,0!0,0O0 Marion County, Oregon . Ræenac DondrSaies 2002 (Oregon Ganlen Foundatìon Proiæl)

h¡rsuant to tbe provisions of Section 2.4 of the Sublcase, dated as of Deccmber L9,2002, bchreefi Mrion County, Oregon (the'Counqy'), as sublandl'ord, õd the Orcgon Gar{en Foundatior, an Orcgon non-proñt corporarioñ ç'CiCf"¡, as subEnant, the undersigned, as a Designaæd Representativc of OGF, haeby rËqr¡ests withdrawal fiom the Project Frmd of the amount of $ ('Requested Amognt') which Reqrreçted Amotrnt is due ¡nd payable in accordancc with the attochcd Schedule. The undersigrcd certifies that the Schedule statcs: (i) the requisition numba, (ü) the narne and addrcss of the pcrson,:firm or corporation to whom payn€nt is duc or was made, including, if requested and approve

DATED this _ day ot 2O--. OREGON GARDEN FOUNDATION

Natne: Desi gnated Rcpresentrti're

'*"' PAGE I - EXHIBIT C 20t r06 5/HRT/070631{009

Page 195 SCHEDULE TO Rf,QUEST (Project Funrl)

PROJESI FUND REQUÍSITION NO.

PAYEE: Name; Address:

Telephone: Facsimile:

AIvÍOLJNT: $

None the of items'f& which tle tra]rment is proposcd to be made has formed the basis fcr any paymerit therctofore mede from the project Fund.

The nature of the itetn for which the payment i.s proposed to be rnade:

Such item was is or reasgnab-le and necessary in connectiom with each respective project for which the Projcct Fund was founded and is a prop€r charie against thc hojed Fund.

ning in the hojcct Fund, together with othq arc sulficienr ro pay the ponlm of the Gost of

The usc of the rnone)¿s requisitioned by the Oregon Gardcn Foundation will not adversely affect thc tax- exempt status of the Bonds. DATED this_day of Z0_.

OREGON GARDEN FOTJI\IDAIION

By: Name: Desí gnated Represørtati ve APPROVËD BY: MARTON COfT¡rrY, ORIGON CITY OFSILVERTON (signatrrc not rcquired for Costs oflssuance)

Name: Name: Àutborizsd Rcprcõcntative Tirle:

L' PAcEz- ExHTBITc 20 I I 06_5/HR1/070631 {009

Page 196 APPENDIX DEFINITIONS

nAct" or "Uniform Revç¡us Bond Act" means Orcgon Revised Statutes Scctions 288.815 to 288.945, as the same may be ameflded from time to time (tnrf only tn rhe e.xte¡t any such ameirdments, by their terms or by appropriate election of the County. apply to the Bonds outstanding as of the effeclive date of such amendments).

"Act of Banlcruptcy'r meâns the commencerner.t of bankruptcy or similar proceedings r¡nder any opplicablc baukruptcy, insolvency reorgarrizatiou ur siurilar law as noyu or hereafter in .effect and the failure of the Sublandlord or Subtenan( if such proceedings are commenced against Sublaodlord or Subtenant, to lift or stây such proceedings within 9O days-

"fuinual DeH Service'rasans the aggregate amount of principal and interest due on the Bonds in any Fisoal Year, excluding interest to be.pard liom the proceeds of the Bonds and any inveshent earnings on the Debt Reserr¡e Fund in tbat Fiscal Year.

"Bond Counsel" mean Ater Wynne LLP, or any other nationally recognized bond counsel appointed by the County. nBond Documents" means the Resolution, the Head Lease, this Subleasq and the Bond Ptrrvhasc Agrremøtt-

"Bnncl Ptrrch¡se Agreement" nteens the Bond Purchase Agreement betwee¡n the County, the Subtenant and the Pnrchaser, dated æ of December 19,2W2.

"Bond Yea¡" means, with respect to the Bonds, each one-year period commencing on: (i) the date of issua¡rce and delivery of such Bonds; or (ii) such other date as the County may elect in accorda¡rcc with the provisiuls of S¡¡;tit¡n l4E(f) of the Code and the regulatíoru thereunder.

"Bonds" meaos the County's 55,000.000 aggregate principel amorrnt of R¡venue Bonds, Series 2002 (Oregon CardEn Foundation Project) authorized to be issued untler the Resolution.

"Business Day" means any day of.thc week whiclr is not a Saturday, Sunday or a day upon which the principal corporate tust oflice of the Purchaser i,s not open for normal busi-ness kcnsoctions.

"Calsulation Period' means the annual period, beginning Dcccrnher I nf e:ch year, in accordance with and purs¡rint to the regulations promulgated pursuaut to Section l4S(Ð of the Code (or any successor thøeto) forcalculating tbe Rebate Amount with respect to such scries.

"Code" means the Internal Revenue Code of 1986, as amer¡ded. and the mles and regulations promul gatcd or aprplicablc tùersunder.

P¿\GE I - APPENDD( 20t I 06 t/HRT/07063t4009

Page 197 "Completion Certificate' moanÊ a certificate signed by a Dcsiguatcd Reprcscntative of the Subtcnant and states that all construction obligdions and costs in connection with the Project and payable oul of the Project Fund have been paid and di.scharged exce¡t for ¡mounts retained for tlre payment of costs of such Project not then due and payable as therein provided.

"Completion Dete" means the clate ot'completion of construction of the Project which shall be no later than December 19,2005.

"Costs of Capital Projects" means all rcasonable or necessary capitalizable costs, includine capitalized intercst, incidental to the Project, including the a.monnt nf Re.ftrnded Indebtedness initially used for capitalizable costs.

'Costs of Issuance" meâns all costs necessâry or attrj.butablc to the issuance of the Bonds, including, but not limited to, legal fees and e*penses, fees and expenses of any consulting engioeer and financial adwisors, coet of sudito, advertising and printing cxpflrscs, thc i.nitial fccs, expenses and other amounts payable to any person whose scrvices are requíred wiú respect to the i*ilance of the Bonds, and also including discounts to the Pun:haser of fhe Bonds incr¡rred in the issuance and sale of the Bonds.

"Çoung/' means Marion County, Llregon, as issuer of the Bonds.

"f)ebt Rese.rr¡e Fund" meâns the fund establishcd pursuent to Section 2.1(2\ and rvhich shall be e¡rtitled, 'Marion Counly, Oregon Revenue Bonds, Seriæ 2002 (Oregon Ga¡den Foundation Projcct) Debt Reserve Fund."

'Debt Service Fund" menns the fìmd established pursuant to Section 2.1(1) .ancl which shall bc crrtitlul, "Marion County, Oregon Revenue Bonds, Series Z0OZ (Oregon Ciarden Foundation Project) Debt Servíce Fund."

"Default" and "Event of Defaulf' mea¡ those defaults and events of default, respectively, speciñed and defined in Section l3 of rhis Sublease.

'Designated Representative" meâns the Subtenant's Prcsident or his designee or, in the abscncc of the Prcsidcrrt or his dcsigrree, tlre Executivs Dirçrtur, wilh the advice and consent of the Subtenant's legal counsel, or the Executive Director's designec.

"Effcctive Date" means the date of delivery of the Bonds. at which trrne the Sublease becomqs eflective and the Sublease Term commenc€s.

"Excess Eamings" means, with respect to the Bonds, the amount of; (a)(i) investmøll etmings dcrivcd from rnoncys on dcposit Êom tilnc to tin¡e in the r:elatËd Funtls uslnblished hereucfer with respect to such Bonds or any other fund or account established hereunder in connection therewith, to the exlent that sr¡ch investment eemings are required to be taken into accolnt for purposes of determining the Rebate Amount for such Bonds; and (ii) investmcnt amings derived from moneys on deposit in any other fund or account (whether or not hcld by l- PAGE 2 - AppEÌ,¡DD( 20r 106 5/Ì{RT/0706r.0009

Page 198 the Coun$r) conte¡ning fünds the inves,tment cnrnings on w-hich arc rcquircd to bÊ tâkÉ¡r intu account for purposes of determining the Rebate Amount for such Bonds; less (b) the arnount that would have been eamed on such mÕneys harl s¡rch moneys been invested at a yietd equal to the yield on such Bonds (with the yield on such Bonds being determined in accordance with the provisions of Serction 148(0 of the Code); provided that the investment eamings on amowrts on depoeit from time to time in any "bona fide debt service firnd" (within the meaning of Section 148(Ð of the Code) established in connection with such Bonds shall not be taken into accounr to the exte¡¡t thal tÌ¡e gross investment eamings on such accotrnt tbr the tJond Yea¡ are less than $100,000, all within the meaning of and as contemplated by Section l4S(Ð(4XA)(ii); it being the intmt of this definition th¡t "Exccss Eamingsn shall bo calculatcd so tl¡at Ulc Rcbatc Amount is deterrnined in accordance with the requirements with Section la8(f) of the Code (or any successor thereto).

"Execution Date" meens as of December 19,2002. -Fee Decd of Trust" means the ConsEr¡ction Deed of Trust, Security Agrcønent and Fixù¡re Filing, and Assigrrment of Lèases and Rente, dated DecEmb€r 19, 2002, among the City of Silverton, Oregon, as grantoç and the Count¡ as beneliciary relating to the kased Premiscs.

"Final Computation Dâte" means "final computation date" as such phrase is used in thc regulations promulgated pursuant to Section 148(f) of the Code (or any successor thereto).

"Fiscal Year" means the period beginriing on luly I of each year rind ending on the next succeeding June 30, or es othenr¡ise defined by State law-

'Tunds" means any one or more of the funds established under this Sublease, including any special zubaccounts therein.

"Head Lease" mefins tbe Flesd Lease between thc Orcgort Garclcî Foundation as lcssol and Marion County as lessee dated as of the Execution Date relaling to the Bonds, as the same maybe amended in accordance with its terms.

"Intergovernmental Agreement" means the intergovemmEntal agre€ment dated as of DEssmber 19,20OZ between the County and the Ciry of Silverton, Oregon rclating to the Lcase Premisæ.

"Installment Computation Dete" meÂns "installrnant computation date" as such phrase is uscd in the regulations promulgated pursuant to Section 148(Ð of the Code (cn any succassor thcretQ.

"Investment SecurÍties" means any investmeflts authorizcd undsr ORS Chapter 294 and the Sublandlo¡id's investment policy for investmer¡t of funds by the Sublandtord.

"Leased Prcmises" means the property described in Exhibit A of this Sublease.

\_.. PAGE3- APPENDD( 201 106 s/t{RT/0?0633.0009

Page 199 "Net kpceeds" when used with respect to rny insurmcc or condcmriation award, n¡cans the gross proceeds Êom the insurance or condemnation award rernaining after payment of all e'xpemes. after taking inûo accOunt amounts paid or payablc În the lenrìlord r¡nde¡ the Master Lease. *Opinion of Bond Cor¡nsel" meüts an opinion of: (i) Ater Wynne LIÌ, attomeys of Portland, Oregon, or (ii) other Bond Counsel who, at the time of rendition of such opinion is r¡nder contract with thc County to scnre as thc County's Bond Corrnsel, ür who l¡as otbervrrise been appointed by the Board of County Commissioners of the County to perform thc functions of Bond Cotunsel for the County in ¡ situation where no Bond Counsel is under contract with the County at thc time in question or the Bond Counsel then under contract is faced with a coriflict of intsest under the ethical or disciplinary rules for attomè¡a which prevent zucb Bond Counsel from reirdcring therequircd o'pinion; which opinion shall be addressed to the County, and shall be to the effect that the action proposed to be takcn is authorized or permittcd by this Sublease a¡xl will not advssely affect the excludability for federal incorne tax purposq¡ of the interest on any Bonds issued as, end which at the lime.of rendition of such ophion stíll arc, Ta,r-Exempt Bonds.

"Outlanding" meâns Bonds which have been authenticated and delivered under this. Sublease and the Bond Purchasc Agreem.e¡t, except:

(i) Donds ca¡lcelel or delivclcd fur canoellation; and

(ii) Bonds for the payment or redempfinn of which ñrnds or pe.rmissible securities shall have becn deposited with the County; pr.ovided, however, that if such Bonds are to be redeemed prior to maturity thcreof, notice of such reilemption shall have been given in accordance with the provisions of the Bond Prnchase Agrcc'ment when such fund.s are availablc, or arrang€rnenE satisfactory to the County shall have been made therefor, or waiver of such notice satisfactory in form to thc Couuty shall l¡avç bcc¡r filetl with tbe Counry.

"Permitted Encumhrances" meân.s, as of any partieular tirne (i) Iims for acl valorem tues and special assessments not tlre¡r delinçent, (ii) this Sublease, and all encumbnences expressly permiüed herein, (iii) utility, aæess and other eLsements and rights-of-wa¡ mineral rights, restrictions, and other minor defects, irregularities, encumbrances, easements, rights-of-way and clouds on title as normally exist with respcct to propcrties simitar in character to the Projcct ald whiuh rlu nol. materially inlerferc with or impair the use or operation of úre Project.

"Project" means the construction of certain improvemørts to the I-eascd Premiees and refinancin.g of the Refunded Indebtedness.

"hoject Fund" mcalrs the Project Fund established pursuant to Section 2.1(3) and which shall be entitled "MarÍon Counly, Oregon Revenue Bonds, Serics 2ffi2 (@egon Gardcn Foundati o¡r Pruj cct) Pruject Fur¡d."

PAGE4- APPENDD( 20r r06 5/HRT/070613{009

Page 200 "Purchaser" meens Bank of America, N.A.

"Rebate Arnount" mcans. the sum of the Excess Earnings plus all invcstment earnings on such Exccss Eamings; it being the intent of this definition that the Rebate Arnount shall be calcrrlatcd in accordance with the requirements of Section 148 of the Code (or any successor tltercl<;).

"Rehate An¡lyst" means any entity sclected by the Counb¡r ond opprovcd by thc Subtenant that is competent to perform the calculations required by Section 2.E hLreof,

"Rebate Ftrnd" rneâns the ñ¡nd established pûrsuâDt to Section 2.1(4) and which shall be entitled, "Marion Cormt¡ Otegon Rwenue Bonrls, Scrio.s 2002 (Oregon Garden Foundation Projcct) Rcbate Fulrrl."

"Rebate Paymeat" shall mean tt e. *-or-rc required ro be deposited fr,om time to time in the Rebate Fund purnrant to Section 2.8 hereof.

"Rebate Report" shall meen a report for each Calculation Period prepared by a Rebate fuial¡æt pursuant to Section 2-8 hereof calculating the Rebate AmounÇ all lor the purpose of enabling thc County to comply with thc rcquirÈu)cnts ef S$qtion 2.E hereof and Secúon l4E of the Code (or any successor thereto).

'Refr¡¡ded Indebtedners" shall mean the amount of principal and interest peyrnents requircd to retire the following obligatiolls of Subtenant: 1l¡esi Coast Ba¡rk Loan * SZoOOtSl, Mid valley Credit l¡an # 12013, Farm Credit Services Loan # 42-888-141, Oregon Association of Nuneryrncn loan, Silver Falls Bank l¡an # 81, Valley Dwelopment IniriativeJÍ.oan # 2O41.

"Rental Amounts" mean the rcguired amount of money under the Sublease as more particula¡ly set fo¡th in Section 3.1 of this Sublease. nRental Payrnent Date" rneans each date idcntificd in Exhibit B on which Rental A.moun¡s are due.

'T-eserve Requiremmtr meane for the Bonds an emount cqual to thc lesser of tbc maximum Annual Debt Service on the Bonds, 125%o of average Annual Debt Service on tbe Bonds. or l0% of the proceeds of the Bonds within the meaning of Section la8(dXl) of the Code.

"Resolution" means Resolution No. ü2-6lR aclopted by the County on December ll, 2002, authorizing the issuance of the Bonds.

"Seasoned Funds" shall inean moneys deposited by the Subtenant with the County and so designated by the Subtenanq hich rnonep either (i) a¡e accornpanied by an opinion of nationally recognizæd bankruptcy counsel (selected by rhe Subtenant and acceptable to the Sublandlo¡d and the Purchaset) to the effect th.at such moncys are nor subject to avoidance as a

PAGE 5 - ÀPPENDX 201t06 5/HRTi0706134009

Page 201 preferential transfer undcr Section 547 of the Federal Bankruptcy Codc ìn ihc cvc¡¡t of tbc filing of a petition under Chapter 3 of the Feder¿l Banllruptcy Coae by or against ihe County, or thé lubjenant (or âny "insider" of the Subtenant within the meaning of the Federel Banlmrptcy Code), or (i¡) shall have bea¡ held by the County for at least 123 dayrs (367 aap, if Oe Subterrant's obligations unde¡ the Sublease are at an] timc guaranteed by an "insider,' of the Subtenant within the rneaning of the Federal Banlcnrptcy Code) prior to tbe date such moneys are to be used to make pa¡rrrcnts on the Bonds, provided thal no Act of Banlauptcy shdf have occurred (or bc continuiag) during sur;h l23day period (367-day period, if the obligations of the Sub,te¡l¡nt undq the Sublease ere et any time guaranteed by an "insíder'of the Subtenant within the meaning of the Ferferel Fanknrptcy Code) after euch moneys wcrc dcpositcd with the County.

"Securityt'sleans the properties, sssets, raoneys and rights a¡rd intercstç therein pledgul -the in tbe Resolution æ security for payment of all amounæ owing under end with respaut to Bonds, including Vidco Lottery Prucesls.

"State" meârs the State of llregnn.

"Sublandlord" means Marion County, Orcgoq a body politic and corporate and a political sub

"Sr¡btease" mea¡rs this Subleese betwecn thc County as Sublar¡dlorrJ arrd rþe Oregou Guden Foundation as Subt€nânt dated as of the Execution Date relating ro the Bonds, th. same may be amended in accordance with its terms- "*

"Subteasc Term" means the term of the Sublease as set fofh in Section I of the Sublease-

"Subtenant" means the Oregon Garden Foundation, an Oregon nonprofit co,rporation and qualified 50 I (cX3) orgeniz.ntion. countyslïd8ïlåi"i;**iffii$,ï'å:iä:.:'*î:iËi'"'ijåiHH,å*iJ,*; from gross income for fideral incorne tax purposes of the interest on the Bonds.

"Tax-Exctnpt Bond" shall rnean any bond issued hereunder. the interest on which is excluded from gross income for federal income tâx prrr.¡nse.s

'"Trusl Deed" mcans the Constmction Deed of Trust, Security Agreernent and Fíxture Filing and Assignm€nt of Leases and Rents, dated Decernber 19, 2002, arnong the Subtenant, as grantor, and the Sublandlord, as beneficiary relating to the Leased Premises.

"Video Lottery Pmceeds" means all video lottery proceeds of the State Lottc,ry received by the County putsuâut to OR^S 461.547, or, irr the event the. Srate Lottery discontinues video lottery garnes, any replacement lottery funds provided to the Counry by ttre Stâte for the video onery program under ORS 461.547. t--, PAGE 6 - APPEIIDIX 201106 5/HRT/07063J{002

Page 202 Oregon Gardens

Resort Property (2007) Parking Prop ExhibitA (2006) Parking Prop Exhibit B (2006) Head / Sublease(2002) Silverton Purchased(2002) / I j OGFMaster Lease (1995)

w»"iJ.. '. ftsA. f' AW's-sli ^

Page 203