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FROM BRIGGS & MORGAN (WED) 07. 08' 98 15:26/ST. 15:23/NO. 3561732864 P 5 <br />BRt:GGs ..an MoRGA.N <br />Joel Hanson <br />July 8, 1998 <br />Page 4 <br />the Ground Lease format to shift development risks to the City. Cinemark USA, Inc.'s form <br />Ground Lease was so systematically biased in favor of the Tenant that I believe it would be <br />very difficult, if not impossible, to negotiate from that form to a form that protects the City <br />from the development risks which, in my opinion, the Developer should be required to bear. <br />The form of Lease which I prepared and which we reviewed yesterday contemplates <br />that the Developer will conduct whatever due diligence it deems appropriate before the <br />execution of the Lease. Once the Lease is signed and the City commits to acquiring the <br />property the Developer is bound to proceed with the development. If, as a result of <br />undiscovered environmental contamination, changes in market conditions or other factors <br />the development costs are mare than anticipated, the Developer must bear those costs. If, on <br />the other hand, development costs are less than anticipated or the success of the project is <br />greater than anticipated, the Developer will reap those rewards. <br />Joel, if you would like me to appear at the next Council Meeting to discuss these <br />issues directly with the Council, please let me know. <br />TLB:se <br />cc: Rusty Fifield <br />956328.1 <br />Very truly yours, <br />Thomas L. Bray <br />Page 4 <br />