PROMISSORY NOTE

$300,000.00  Portland, Oregon  October ___, 2003

The City of Portland promises to pay to the order of McCormick Pier Condominium Association, at 600 NW Naito Parkway, Portland, Oregon 97209, or at such other address as directed by the holder of this Promissory Note (the “Note”), the principal sum of THREE HUNDRED THOUSAND AND NO/100 DOLLARS ($300,000.00) plus interest thereon at the rate of Five Percent (5%) per year in Ten (10) annual payments, each in the amount of Thirty Thousand and No/100 Dollars ($30,000.00) plus accrued but unpaid interest on the then unpaid principal balance, with the first payment of $30,000 due on the date of this Note and with subsequent payments due on each anniversary of this Note.

This Note may be prepaid at any time, in whole or in part, without advance notice or penalty.

In the event the City of Portland does not make an annual payment when due, and the payment is not made within 10 days after notice from the holder that the payment has not been made, then the holder may accelerate this note, by written notice to the City, and after such acceleration, all principal and accrued but unpaid interest shall be immediately due and payable. Any amount due under this Note, which is not paid when due, shall bear interest at the default rate of 12% from the due date until paid in full.

In the event the holder of this Note files suit to enforce this Note, the prevailing party shall be entitled to recover from the losing party, its costs, paralegals’ fees and attorneys’ fees as determined by the judge at trial or upon any appeal.

All notices to the City of Portland to be given under the terms of this Note shall be given by certified mail, return receipt requested as follows, and shall be effective on the third business day after mailing, properly addressed, postage prepaid:

City of Portland
Portland Parks and Recreation
1120 SW Fifth Avenue, Room 1302
Portland, OR 97204
Attn: Property Manager

With copies to:

Office of the City Attorney
1221 SW Fourth Avenue
Portland, OR 97201
Attn: City Attorney

and to:

City Auditor
1221 SW Fourth Avenue
Portland, OR 97204
Attn: City Auditor

or to such other offices as the City of Portland may direct by written notice to the holder.

This Note may be negotiated by the holder, but upon negotiation, the holder must give written notice of the new holder of the Note to the City of Portland.

IN WITNESS WHEREOF, the City of Portland has executed and delivered this Note to be effective on the date first set forth above.

CITY OF PORTLAND


By:  
Its:  

Approved as to form:

Office of the City Attorney

By:  
Its: