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Mr. Aaron Parrish August 15, 2003 Page Four . The extraordinary decline in our economy has brought the real estate market to a virtual standstill. The current vacancy levels have also resulted in reduced rental rates, increased tenant improvement allowances, and free rent. Status of A TS Steels: Please refer to the letter dated April 25, 2002, for the background on our discussion with ATS prior to our last City Council meeting in September, 2002. Since our last City Council meeting, we have been active in pursuing the acquisition of ATS even though the economy and the real estate market is in a major recession. The following is a summary of our activities. September, 2003 September 17, 2002 October 28, 2002 November 25, 2002 January 14, 2003 January 30, 2003 February 3, 2003 Just prior to the September, 2002, City Council meeting, we found out that the property had been listed with Welsh Companies and on the market for at least 30 days before we found out through another broker. No attempt had been made by ATS to contact us. Upon learning that Welsh was involved, we immediately contacted them for a meeting. We believed that ATS retaining Welsh was a positive step because they are one of the best firms in the Twin Cities with excellent experience and market knowledge. Based on our discussion with Welsh, we made an offer to ATS on September 17, 2002. This was rejected by ATS on October 28, 2002 in writing from Welsh. We subsequently revised our offer and resubmitted another offer on November 25, 2002. ATS rejected our offer but did not respond with any comments .or counter offer in writing. . On January 14,2003, we talked with Welsh to renew discussions regarding our offer. We communicated that we might be able to increase our offer by a small amount but it would depend on the other terms of the purchase. We ca!led Welsh to inquire about the status of our offer. ATS continued to reject our offer with no counter offers or direct communication. We contacted Welsh again regarding the status. Still no willingness on the part of ATS to even communicate with us. We made further contact with Welsh on the following dates: February 19, 2003 March 24, 2003 April 9, 2003 August 20, 2003 See attached letter .