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A F <br />Glen L. Svendsen <br />May 19, 2000 <br />Page 2 <br />Although the Option Agreement is also based on the Option Agreement in the Station 7 <br />transaction, I question whether the City should be required to pay fair market value for the building <br />in the event it repurchases the building under the Option Agreement due to a default by WISTEC <br />under the Ground Lease, since WISTEC will not have paid the City for the building in the first <br />place. However, I have perpetuated the fair market value provision from the Station 7 transaction, <br />because it is my understanding that the WISTEC transaction is to be modeled after the Station 7 <br />transaction and because it is my understanding that the parties contemplate that WISTEC will invest <br />several hundred thousand dollars, over and above the $150,000 facility improvement allowance <br />contributed by the City, to improve the building. <br />In any event, please give me your comments and let me know when you would like the draft <br />documents sent to WISTEC's attorney. <br />HARRANG LONG GARY RUDNICK P.C. — <br />CITY ORNEYS <br />Patricia Lockary Chapman <br />PLC:dh <br />Enclosures <br />