AND SWORN TO BY THE PARENT'S CHIEF FINANCIAL OFFICER, CERTIFYING TO THE
AUTHORITY THAT THE CORPORATE OVERHEAD ALLOCATION GUIDELINES ARE APPLIED ON A
CONSISTENT BASIS WITH RESPECT TO ALL OF PARENT'S OPERATING UNITS AND
SUBSIDIARIES AND THAT THE ALLOCATION TO TENANT OF ITS SHARE OF THE CORPORATE
OVERHEAD FOR THAT PERIOD HAS BEEN MADE IN ACCORDANCE WITH THE THEN-APPLICABLE
CORPORATE OVERHEAD ALLOCATION GUIDELINES.
THE AUTHORITY SHALL HAVE THE RIGHT,
AS PART OF ANY AUDIT PERFORMED BY THE AUTHORITY AS DESCRIBED ABOVE IN THIS
SUBSECTION (C)(3), TO AUDIT THE PARENT'S BOOKS AND RECORDS RELEVANT TO THE
CORPORATE OVERHEAD ALLOCATION
IN ORDER TO VERIFY (I) THAT THE CORPORATE
OVERHEAD ALLOCATION GUIDELINES THAT WERE USED TO CALCULATE TENANT'S SHARE OF
CORPORATE OVERHEAD WERE IN FACT APPLIED ON A CONSISTENT BASIS TO ALL OF THE
PARENT'S OPERATING UNITS AND SUBSIDIARIES AND (II) THAT THE CALCULATION OF
TENANT'S SHARE OF CORPORATE OVERHEAD PURSUANT TO THE CORPORATE OVERHEAD
ALLOCATION GUIDELINES WAS CORRECTLY CALCULATED.
THE PARENT SHALL RETAIN ITS
BOOKS AND RECORDS PERTAINING TO CORPORATE OVERHEAD AND ALLOCATIONS THEREOF FOR
NOT FEWER THAN FIVE (5) YEARS AFTER THE EXPIRATION OF EACH TENANT FISCAL YEAR
FOR WHICH TENANT IS ALLOCATED ANY PORTION OF CORPORATE OVERHEAD.
(D)
CORPORATE DIRECT CHARGES: CHARGES REASONABLY
ASSESSED TO TENANT, FOR TIME AND ACTUAL MATERIALS COSTS INCURRED BY EMPLOYEES AT
THE PARENT'S HEADQUARTERS IN PROVIDING SUPPORT SERVICES (INCLUDING, WITHOUT
LIMITATION, LEGAL SUPPORT, SYSTEMS PROGRAMMING OR DIRECT SUPPORT HARDWARE,
ENVIRONMENTAL SUPPORT, AND HUMAN RESOURCES SUPPORT) DIRECTLY TO AND FOR THE
BENEFIT OF TENANT WITH RESPECT TO TENANT'S OPERATIONS AT THE LEASED PREMISES.
SUCH CHARGES SHALL NOT INCLUDE ANY "PROFIT" COMPONENT, AND SHALL BE IN AMOUNTS
AND AT RATES THAT ARE COMMERCIALLY REASONABLE AND NOT IN EXCESS OF WHAT WOULD
REASONABLY BE CHARGED TO TENANT IF TENANT WERE TO OBTAIN SUCH SERVICES FROM A
SERVICE PROVIDER UNAFFILIATED WITH TENANT.
(E)
SYSTEMS ALLOCATION:
ACTUAL, REASONABLE
COSTS AND EXPENSES FOR THE PARENT'S MAINTAINING SYSTEMS THAT ARE SHARED
GENERALLY BY MEMBERS OF THE GROUP, SUCH AS A CORPORATE EMAIL SYSTEM, SECURITY
SYSTEMS, AND SIMILAR TYPES OF SYSTEMS.
THESE COSTS AND EXPENSES ARE TO BE
ALLOCATED EQUALLY, BY DIVISION, ACROSS THE PARENT COMPANY ORGANIZATION (THE
GROUP CONSTITUTING ONE OF THOSE DIVISIONS), WITH EACH DIVISION BEING CHARGED AN
AMOUNT EQUAL TO THE AMOUNT CHARGED TO EACH OTHER DIVISION IN THE PARENT COMPANY
ORGANIZATION.
TENANT'S SHARE OF THOSE COSTS AND
36
EXPENSES SHALL BE EQUAL TO THE SHARE OF THOSE COSTS AND EXPENSES THAT ARE BORNE
BY OTHER MEMBER COMPANIES IN THE GROUP.
Capital charges and income taxes are not to be deducted from Gross Sales in
determining Operating Profit.
The cost of goods and services received by Tenant
from its Affiliates and from other Persons must not exceed what Tenant would
reasonably be required to pay in an arm's-length transaction. Allocation to
Tenant by its vendors, suppliers, and contractors of costs, expenses, fees,
charges, rebates, credits, allowances, price reductions and other such items
must be done in a manner that will not (a) allocate to Tenant more than Tenant's
rightful