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<br />EVIDENCE OF FINANCIAL COMMITMENT <br />(On Corporate Stationary) <br /> <br />May 7, 2003 <br /> <br />The Honorable <br />Mayor, City of San Marcos <br />630 E. Hopkins <br />San Marcos, Texas 78666 <br /> <br />Dear Mayor: <br /> <br />As you are aware, the XYZ Manufacturing Corporation (XYZ) has experienced a great deal of growth over <br />the last several years. A result of this growth is the need to expand our operation. XYZ plans to expand by <br />constructing a 2,500 square foot building on land purchased by the firm two years ago at the Westside <br />Industrial Park. <br /> <br />The total project cost, including the equity in the land, the construction of the building, and working capital, is <br />$16,350. The proposed financing for the project can be summarized as follows: <br /> <br />Bank Loan Funds <br />Corporate Equity <br />RLF Loan Fund <br /> <br />8,850 <br />5,000 <br /> <br />2,500 <br />$16,350 <br /> <br />The equity is from two sources. XYZ is contributing $2,000 cash (verification of deposit from First Bank of <br />Some City, Texas is attached) and $3,000 in land equity to the project. The land equity has been calculated <br />as follows: <br /> <br />Current Market Value 7,500 <br />(see attached tax appraisal) <br />Less Debt on the Land -4,500 <br />Land Equity $3,000 <br /> <br />The project's feasibility, taking into consideration the lack of available financing or the current long-term <br />financing costs and competitive investment alternatives is contingent upon XYZ obtaining financing from the <br />San Marcos Revolving Loan Fund. Any increase in XYZ's cash equity injection would seriously jeopardize <br />our working capital requirements. Without financing from the RLF, we cannot proceed with the project at <br />this time. <br /> <br />Sincerely, <br /> <br />John Sanchez <br />President <br />