10-APPROVE ABATEMENT REQUEST OF T&K MACHINE

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VI. Default 6.1 In the event that (a)(1) the IMPROVEMENTS for which an abatement has been granted are not completed in accordance with this AGREEMENT, (2) the expenditure for the IMPROVEMENTS does not meet the amount required herein, or (3) OWNER does not hire at least twenty-two (22) new employees over the first five (5) years of the term of this AGREEMENT, as is represented herein; or (b) OWNER allows its ad valorem taxes owed to the CITY to become delinquent and fails to timely and properly follow the legal procedures for protest or contest of any such ad valorem taxes; or (c) OWNER materially breaches any of the other terms and conditions of this AGREEMENT, then this AGREEMENT shall be in default. If OWNER defaults in its performance of either (a), (b) or (c) above, then the CITY shall give the OWNER written notice of such default and if the OWNER has not cured such default within sixty (60) days of said written notice, this AGREEMENT may be modified or terminated by the CITY. Notice shall be in accordance with paragraph 13.3. As liquidated damages in the event of default, and in accordance with the requirements of Section 312.205 (a)(4) of the Property Tax Code of the State of Texas, all taxes which otherwise would have been paid to the CITY without the benefit of abatement, together with interest to be charged at the statutory rate for delinquent taxes as determined by Section 33.01 of the Property Tax Code of the State of Texas, with all penalties permitted by the Property Redevelopment and Tax Abatement Act and the Property Tax Code of the State of Texas, shall be recaptured and will become a debt to the CITY and shall be due, owing, and paid to the CITY within sixty (60) days of the expiration of the above-mentioned applicable cure period as the sole remedy of the CITY, subject to any and all lawful offsets, settlements, deductions, or credits to which OWNER may be entitled. The parties acknowledge that actual damages in the event of default and termination would be speculative and difficult to determine. 6.2 Notwithstanding the foregoing provisions of Section 6.1 above, the parties hereto understand that compliance with Section 6.1(a) (1), (2) and (3), above is to a large degree dependent upon the demands for parts such as are manufactured by OWNER, by the aerospace industry. At the time of signing this AGREEMENT such demand is very high. However, should the demands of the industry substantially decline during the term hereof such that OWNER cannot comply with the employment of personnel and construction of IMPROVEMENTS requirements of this AGREEMENT, OWNER may apply to the CITY for an amendment to this AGREEMENT to reduce the requirements upon it in an effort to avoid a default by OWNER hereunder due to a significant downturn in the market for parts in the aerospace industry. VII. Personal Property Tax Abatement 7.1 Subject to the terms and conditions of this AGREEMENT, and subject to the rights and holders of any outstanding bonds of the CITY, a portion of the ad valorem property taxes assessed upon the IMPROVEMENTS and otherwise owed to the CITY shall be abated as is provided for in the Property Tax Abatement Schedule attached hereto as Exhibit E. Said 5 -- � 4 3