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<br />created and maintained in accordance with this AGREEMENT; or (c) OWNER allows its ad
<br />valorem taxes owed the CITY to become delinquent and fails to timely and properly follow the legal
<br />procedures for protest or contest of any such ad valorem taxes; or (d) OWNER materially breaches
<br />. any of the other terms and conditions of this AGREEMENT, then this AGREEMENT shall be in
<br />default. In the event the OWNER defaults in its performance of either (a), (b), (c), or (d) above, then
<br />the CITY shall give the OWNER written notice of such default and if the OWNER has not cured
<br />such default within sixty (60) days of said written notice, this AGREEMENT may be modified or
<br />terminated by the CITY, Notice shall be in accordance with paragraph 13.3, As liquidated damages
<br />in the event of default, and in accordance with the requirements of Section 312.205 (c) of the
<br />Property Tax Code of the State of Texas, all taxes which otherwise would have been paid to the
<br />CITY without the benefit of abatement, together with interest to be charged at the statutory rate for
<br />delinquenttaxes as determined by Section 33.01 of the Property Tax Code of the State of Texas, with
<br />all penalties permitted by the Property Redevelopment and Tax Abatement Act and the Property Tax
<br />Code of the State of Texas, shall be recaptured and will become a debt to the CITY and shall be due,
<br />owing, and paid to the CITY within sixty (60) days of the expiration of the above-mentioned
<br />applicable cure period as the sole remedy of the CITY, subject to any and all lawful offsets,
<br />settlements, deductions, or credits to which OWNER may be entitled. The parties acknowledge that
<br />actual damages in the event of default and termination would be speculative and difficult to
<br />determine.
<br />
<br />VII.
<br />Tax Abatement
<br />
<br />7.1 Subject to the terms and conditions of this AGREEMENT, and subject to the rights
<br />and holders of any outstanding bonds of the CITY, a portion of ad valorem property taxes from the
<br />PROPERTY otherwise owed to the CITY shall be abated. Said abatement shall be an amount equal
<br />to one hundred percent (100%) of the taxes assessed upon the increased value of the
<br />IMPROVEMENTS (including real and personal property, but excluding inventory and supplies) over
<br />the value in the year in which this AGREEMENT is executed and in accordance with the terms of
<br />this AGREEMENT and all applicable state and local regulations or valid waiver thereof; provided
<br />that the OWNER shall have the right to protest or contest any assessment ofthe PROPERTY and
<br />said abatement shall be applied to the amount oftaxes finally determined to be due as a result of any
<br />such protest or contest. For the purposes of this AGREEMENT, the initial value of the existing
<br />property (not subject to abatement) shall be deemed to be the value as shown on the tax rolls of the
<br />Lamar County Appraisal District as ofJanuary I of the year in which the AGREEMENT is executed,
<br />said amount being $9,555,260.00 (Base Year Value), the same consisting of$158,200.00 for Land,
<br />$3,219,720,00 for Buildings, $1,645,400.00 for Inventory, and $4,531.840,00 for Equipment, with
<br />$1,739,570.00 of the Equipment value already abated through 2006. Said abatement shall extend
<br />for a period of seven (7) years beginning January 1,2006.
<br />
<br />7,2 The abatement granted herein shall be subject to and governed by the Guidelines and
<br />Criteria for Tax Abatements, a copy of which is attached hereto as Exhibit C, and OWNER shall
<br />comply with the requirements of Exhibit C in the performance of this AGREEMENT, save and
<br />except that, in the event of a conflict between the requirements of Exhibit C and this AGREEMENT,
<br />
<br />TAX ABATEMENT AGREEMENT - Page 4
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