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<br />h. If an Exercise Notice is delivered by the Company to PEDC, and <br />the purchase is not Closed by the Company within the thirty (30) <br />day time allotted therefor (with no delay in Closing having been <br />caused by PEDC), the preferential right to purchase hereunder shall <br />terminate, and the earnest money paid to PEDC shall be retained by <br />PEDC as liquidated damages to PEDC for the Company's failure <br />to Close. <br /> <br />4. The Company shall be eligible to receive monetary credits against the <br />annual principal installments owing on the Note as set forth in the Loan <br />Agreement and in Section C below, with such credits to equal $1.00 to be <br />applied to the principal installment becoming due each year for every <br />$10.00 paid by the Company in salary to all new employees working for the <br />Company in the Paris, Texas location; provided, however, that the <br />maximum amount of the credit allowed in any twelve (12) month period <br />shall not exceed the annual Loan payment amount of $100,000.00 due to <br />PEDC from the Company, and there shall be no carry-over or accumulation <br />of credit to be made on the Note by PEDC from one annual period under <br />the Note to the next, notwithstanding that additional credit was earned from <br />salaries paid out by the Company during that year. No portion of the <br />salaries, dividends, other income and profits paid by the Company to its <br />CEO or other principal officers in charge of the Business and/or the <br />shareholders of the Company will be included in calculating principal <br />credits to be contributed by PEDC to the Company toward the annual <br />principal installments, nor will more than $60,000.00 of any compensation <br />of any kind whatsoever paid to any individual director, officer or employee <br />of the Company in anyone year be included in calculating these principal <br />credits to be granted on the Note by PEDC. The employment of new <br />employees engaged to work for the Company in the Paris, Texas, area will <br />be verified by the customary means utilizing Texas Workforce Commission <br />reporting data, which will be provided to PEDC by the Company on a <br />regular and continuing basis during the term of the Loan. <br /> <br />B. Obligations of the Company to PEDC. <br /> <br />1. The Company will commence business operations in Paris, Texas, on or <br />before June 16, 2003. "Commencing business" shall mean, in addition to <br />opening its doors for the operation of the business, having in place on June <br />16,2003 (a) a binding lease for the use of not less than 20,000 square feet in <br />one or more buildings in Paris, Texas, of suitable size to accommodate the <br />operations of the Company for at least the first two (2) years of its business, <br />or until the Company's new building upon the Land is completed for <br />occupancy prior to the second anniversary of this Agreement, whichever <br /> <br />4 <br />