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<br />which otherwise would have been paid to the CITY without the benefit of abatement, together with <br />interest to be charged at the statutory rate for delinquent taxes as determined by Section 33.01 of the <br />Property Tax Code 0 f the State 0 fT exas, wi th all penalti es permi tted by the Property Redevelopment <br />and Tax Abatement Act and the Property Tax Code of the State of Texas, shall be recaptured and <br />will become a debt to the CITY and shall be due, owing, and paid to the CITY within sixty (60) days <br />of the expiration of the above-mentioned applicable cure period as the sole remedy of the CITY, <br />subject to any and all lawful offsets, settlements, deductions, or credits to which OWNER may be <br />entitled. The parties acknowledge that actual damages in the event of default and termination would <br />be speculative and difficult to detennine. <br /> <br />VII. <br />Tax Abatement <br /> <br />7.1 Subject to the temlS and conditions of this AGREEMENT, and subject to the rights <br />and holders of any outstanding bonds of the CITY, a portion of the ad valorem property taxes <br />assessed upon the IMPROVEMENTS and the PROPERTY specifically upon which they are <br />constructed and otherwise owed to the CITY, shall be abated. Said abatement shall be (i) an amount <br />equal to eighty percent (80%) of the taxes assessed upon the completed value of the <br />IMPROVEMENTS and the PROPERTY upon which they are constructed on January 1, of the year <br />in which the tax abatement commences that is granted by this AGREEMENT, with such tax <br />abatement continuing at such percentage for the first three (3) years of this AGREEMENT. Then, <br />in accordance with the terms of the POLICY STATEMENT CRITERIA AND GUIDELINES FOR <br />T AX ABATEMENT adopted by the CITY, said tax abatement will be reduced by 20% of the <br />original percentage abated [which was 80%], beginning with year four (4) of this AGREEMENT. <br />Thereafter, in years 5,6 and 7 of this AGREEMENT, there will be a similar reduction of the tax <br />abatement of 20% in each such year of the original percentage of taxes abated, until 1 00% of the <br />valuation of the IMPROVEMENTS and the PROPERTY upon which they have been constructed <br />is added to the tax rolls. This formula is exemplified in Exhibit 0 attached to this AGREEMENT. <br />This tax abatement shall in accordance with all applicable state and local regulations or valid waiver <br />thereof; provided that the O\\'NER shall have the right to protest or contest any assessment of the <br />PROPERTY or of the IMPROVEMENTS, and said abatement shall be applied to the amount of <br />taxes finally determined to be due as a result of any such protest or contest. For the purposes of this <br />AGREEMENT, the initial value of the existing PROPERTY of the O'vVNER that is not subject to <br />tax abatement and which does not include any IMPROVEMENTS (as defined herein) shall be <br />deemed to be the value as shown on the tax rolls of the Lamar County Appraisal District as of <br />January I of the year in which this AGREEMENT is executed, said amount being $7,500.00 <br />(composed offive (5) acres ofland valued@$1,500.00peracre). The current abatement which is <br />the subject of this AGREEMENT shall extend for a period of seven (7) years, beginning on January <br />1,2007. <br /> <br />7.2 The abatement granted herein shall be subject to and governed by the POLICY <br />STATEMENT CRITERIA AND GUIDELINES for TAX ABATEMENT, a copy of which is <br />attached hereto as Exhibit E, and OWNER shall comply with the requirements of Exhibit E in the <br />performance of this AGREEMENT, save and except that, in the event of a conflict between the <br /> <br />TAX AnA TE~IE:'1T AGREDIENT. Page ~ <br />