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<br />EVIDENCE OF COMMITMENT <br />(Corporate Letterhead) <br /> <br />October 21, 1991 <br /> <br />Joe Cameron <br />Mayor <br />City of Ballinger <br />P,O. Box 1 <br />Ballinger, Texas 76821 <br /> <br />Dear Mayor Cameron: <br /> <br />As you are aware, the XYZ Corporation has experienced a great deal of <br />growth over the last several years. A result of this growth is the need to <br />expand our operation. The XYZ Corporation plans to expand by constructing a <br />25,000 square foot building on land purchased by the firm two years ago at <br />the Westside Industrial Park. <br /> <br />The total project cost of the purchase of land, construction of the building and <br />required infrastructure improvements is $1,300,000. The proposed financing <br />for the project can be summarized as follows: <br /> <br />Bank Loan Funds <br />Corporate Equity <br />EDIGP <br /> <br />$ 750,000 <br />500,000 <br />200.000 <br />$ 1,450,000 <br /> <br />The equity is from two sources. The XYZ is contributing $200,000 cash <br />(verification from ABC Bank is attached) and $300,000 in land equity to the <br />project. The land equity is derived by the following: <br /> <br />Appraised Market Value <br />Less Debt on Land <br />Discount (25%) on Land <br /> <br />$ 750,000 (See Attached MAl Appraisal) <br />- 350,000 <br />- 100.000 <br />$ 300,000 <br /> <br />The XYZ Corporation is committing this equity to the project. <br /> <br />The project's feasibility, taking into consideration current long-term financing <br />costs and competitive investment alternatives, is contingent upon XYZ <br />Corporation obtaining EDIGP funds.. Any increase in XYZ Corporation's cash <br />equity injection would seriously jeopardize our working capital requirements. I <br />cannot overemphasize the importance of the EDIGP funds. Without these <br />funds, we cannot proceed with the project at this time. <br /> <br />Sincerely, <br /> <br />Joe Smith <br />President <br /> <br />26 <br />