1998 NS Lease Renewal 501-W Franklin St Suite 105

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} f (b) The Tenant agrees to pay the County without demand at its office, or at such other place or places as County may from time to time designate in writing, the following rents for the aforementioned Premises for the term of this lease: Lease year 1 (June 1, 1998 through May 31, 1999): $12,807.58 per annum; $1,050.63 per month; Lease year 2 (June 1, 1999 through May 31, 2000): $12,922.88 per annum; $1,078.89 per month; (c) At the commencement of this Lease the Premises are owned by County and as such are exempt from ad valorem taxes as provided in Article V, Section 2 (3) of the North Carolina Constitution and North Carolina General Statutes 105-278.1. During the term, Tenant agrees to make payments to County in lieu of taxes, as additional rent, in amounts equivalent to Tenant's pro-rata share of property taxes that would be lawfully assessed if the Premises were taxable by County and any municipality in which the Premises is located. These payments are hereafter referred to as "the payments in lieu. This agreement to make the payments in lieu is to eliminate the competitive advantage accruing to Tenant, a profit-making enterprise, from the use for profit of County's tax exempt property. County shall bill Tenant annually and no later than December 1 of each year during the lease term for the full amount of the payments in lieu. Tenant will submit payment to County on or before December 31, 1998 in an amount equal to the payments in lieu for the period June 1, 1998 through May 31, 1999 and on or before December 31, 1999 in an amount equal to the payments in lieu for the period June 1, 1999 through May 31, 2000. County and Tenant recognize that the annual payments required in this subsection each span two tax years and will therefore require estimates based on estimated tax rates. Upon receipt of actual tax rates, County will reconcile the amount paid by Tenant and the actual amount due under this subsection and provide Tenant with a copy of this reconciliation. Any difference between what has been paid and what is due shall be paid on May 1 of each lease year by Tenant as additional rent or credited on May 1 by County against rent. Tenant agrees that the valuation of the Premises shall be made by County's Tax Assessor according to the Schedule of Values adopted by County from time to time and that the determination of the true value in money of the Premises shall be made by the County's Tax Assessor. Tenant may, at its expense, in good faith, contest any such taxes, assessments and other similar charges or the valuation on which the same are based, and, in the event of any such contest may pay the taxes, assessments or other charges under protest during the period of such contest and any appeal therefrom. In the event it is determined by Tenant and Landlord or by the tribunal which ordinarily has jurisdiction that such tribunal does not have jurisdiction or is otherwise not permitted to act as a forum in consequence of the fact that Tenant's liability for the tax is contractual rather than imposed by law, then either party may submit a challenge to a tax, assessment or other similar charge or valuation to arbitration by an arbitration panel made up of MAI qualified/certified appraisers. County shall select one appraiser; Tenant shall select one appraiser; the appraiser selected by County and Tenant shall select a third appraiser and the decision of the arbitration panel shall be binding on both parties. To the extent