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• DRAFT Friday,Eldredge & Clark, LLP AGREEMENT FOR PAYMENTS IN LIEU OF TAXES City of Batesville, Arkansas City Hall, 500 E. Main Street Batesville, Arkansas 71501 Attention: Mayor Scroll Compressors LLC, a Delaware limited liability company (the "Company"), has requested the City of Batesville, Arkansas (the "City") to issue not to exceed $100,000,000 in principal amount of its Taxable Industrial Development Revenue Bonds(Scroll Compressors LLC Project), Series 2008 (the 'Bonds"),under the laws of the State of Arkansas,including particularly Title 14, Chapter 164, Subchapter 2 of the Arkansas Code of 1987 Annotated, for the purpose of financing the cost of acquiring, constructing, and equipping an industrial project in the City(the "Project"),and paying the expenses of issuing the Bonds. The Project will be owned by the City and leased by the City to the Company under a Lease Agreement dated as of December 1, 2008 (the "Lease Agreement"). The properties leased under the Lease Agreement are herein referred to as the "Leased Premises." • The Lease Agreement will provide that the Company is obligated to pay all taxes and assessments levied and assessed on the Leased Premises during the term of the Lease Agreement. The Company and the City understand and agree that,notwithstanding such provision in the Lease Agreement,under Article 16, Section 5 of the Constitution of the State of Arkansas, as interpreted by the Arkansas Supreme Court in Wayland v. Snapp, 232 Ark. 57, 334 S.W.2d 633 (1960), and Pulaski County v.Jacuzzi Bros.Div.,332 Ark.91,964 S.W.2d 788(1998),the Leased Premises will be exempt from ad valorem taxes because they will be owned by the City and used for a public purpose within the meaning of the applicable Constitutional and statutory provisions affording the exemption. Thus,the Company and the City agree that the Company, as lessee of the Project,will, in fact, have no ad valorem taxes to pay under the provisions of the Lease Agreement. To induce the City to proceed with the issuance of the Bonds,which will inure to the benefit of the Company, and for other valuable consideration,the receipt and adequacy of which is hereby acknowledged, the Company agrees with the City as follows: 1. Payments. The Company will make annual payments in lieu of taxes to the Treasurer of Independence County, Arkansas (the "County"), on or before October 10 of each calendar year (or on or before such other date regular ad valorem taxes may then be payable), as follows: (a) In the years 2010 through 2030,inclusive,an amount equal to thirty-five percent (35%) of the ad valorem taxes which • would be payable if the property comprising the Project were subject to ad valorem taxes. .