10-APPROVE ABATEMENT REQUEST OF T&K MACHINE

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NOW, THEREFORE, The Parties hereto do mutually contract and agree as follows: I. Term The effective date of this AGREEMENT is the 12th day of November, 2012, with tax abatement beginning with the tax year commencing January 1, 2013, and expiring on December 31, 2019, for a total tax abatement term of seven (7) years, as is hereinafter described in an Exhibit attached to this AGREEMENT, which abatement term complies with the Guidelines and Criteria for Tax Abatements in effect in the CITY. II. Area to be Improved TBEI, L.P. a Texas limited partnership ("Taylor") is the owner of the real property (the "Land") upon which the IMPROVEMENTS are situated. Taylor, as landlord, has leased the land under the provisions of a long-term lease of 5 years (such lease terminating in the year, 2017), to T& K MACHINE, INC., as tenant (defined above as the OWNER for purposes of convenience in documenting this AGREEMENT). The Land is described in Exhibit B, attached hereto and made a part hereof for all purposes. Under the terms of the lease OWNER is and has been in possession of the Land and OWNS all buildings and other improvements on the Land, and will continue to do so during and exceeding the term of this AGREEMENT, unless otherwise agreed to by all parties. OWNER is the party conducting the business on such Land. The PROJECT which is the subject of this AGREEMENT will consist of the OWNER constructing one additional building upon the Land, installing some of the new IMPROVEMENTS within said additional building and adding additional employees to its workforce in Paris, Lamar County, Texas, extending over a period of FIVE (5) YEARS, commencing on the date of this AGREEMENT. The IMPROVEMENTS will be located within the first additional building to be constructed at the location shown on the drawing attached hereto as Exhibit C. OWNER will initially construct one 5,000 square foot additional building at its existing facility on the Land at a cost of $160,000.00 to house the production of precision- machined parts to be supplied to the aerospace industry. OWNER'S existing facility at the time of execution of this AGREEMENT consists of a 27,000 square foot group of buildings composed of 15,000 square feet of production space and 12,000 square feet of office and support space. OWNER will over the first five (5) years of the term of this AGREEMENT purchase and install eight (8) new machining centers at a total cost of $1,400,000.00, which will be placed within the additional 5,000 square foot building to be constructed. A possible additional seven (7) machining centers may later be purchased and placed within a contemplated second additional building not included within this tax abatement, to be constructed on the Land. In addition, during the initial 5-year term of this AGREEMENT, 2 �-� 40