CALCULATING OPERATING PROFIT)):
(A)
PRODUCTION MATERIALS AND LABOR FROM SISTER
COMPANIES: THE ACTUAL COST AND EXPENSES INCURRED BY TENANT IN PROCURING
PRODUCTION MATERIALS AND LABOR FROM A "SISTER COMPANY" (I.E., AN ENTITY THAT IS
DIRECTLY OR INDIRECTLY OWNED, IN WHOLE OR IN PART, BY TENANT'S PARENT) FOR
PURPOSES OF TENANT'S PROVIDING GOODS AND SERVICES TO TENANT'S CUSTOMERS AT, FROM
OR WITH RESPECT TO THE LEASED PREMISES.
THE PRICE CHARGED BY TENANT'S SISTER
COMPANIES TO TENANT SHALL BE AT NOT MORE THAN NORMAL AND CUSTOMARY MARKET RATES
CONSISTENT WITH AN ARM'S LENGTH TRANSACTION.
(B)
GROUP OVERHEAD ALLOCATION: ALLOCATION OF
GENERAL GROUP OVERHEAD COSTS AND EXPENSES, WHICH SHALL CONSIST OF TENANT'S
PROPORTIONATE SHARE OF ALL COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION,
SALARIES, BENEFITS, TRAVEL AND LIVING EXPENSES, SUPPLIES, AND EDUCATIONAL COSTS)
REASONABLY INCURRED THAT ARE ASSOCIATED WITH THE OPERATION OF THE GROUP, IN
GENERAL, AND ARE NOT SPECIFICALLY ALLOCABLE TO ANY PARTICULAR DIVISION OR ENTITY
WITHIN THE GROUP (THE "GROUP OVERHEAD").
SUCH COSTS AND EXPENSES MAY INCLUDE,
BY WAY OF EXAMPLE, COSTS AND EXPENSES GENERALLY INCURRED BY THE GROUP, AS A
WHOLE, FOR THE FOLLOWING: BUSINESS DEVELOPMENT, OPERATIONS, FINANCE, AND SALES.
TENANT'S PROPORTIONATE SHARE OF GROUP OVERHEAD, FOR A PARTICULAR PERIOD, SHALL
BE A PERCENTAGE EQUAL TO TENANT'S GROSS SALES FOR THAT PERIOD DIVIDED BY THE
GROSS SALES OF THE ENTIRE GROUP.
TENANT'S PROPORTIONATE SHARE OF GROUP OVERHEAD
SHALL NOT EXCEED FOR ANY TENANT FISCAL YEAR, THE AMOUNT OF FOUR HUNDRED THOUSAND
DOLLARS ($400,000) PER TENANT FISCAL YEAR, FOR PURPOSES OF CALCULATING OPERATING
PROFIT FOR THAT TENANT FISCAL YEAR.
(C)
CORPORATE OVERHEAD ALLOCATION: ALLOCATION
TO TENANT, AS DESCRIBED IN THIS SUBSECTION (C), OF TENANT'S PROPORTIONATE SHARE
OF THE CORPORATE OVERHEAD COSTS AND EXPENSES OF TENANT'S PARENT, REASONABLY
INCURRED IN CONNECTION WITH THE OPERATION OF THE PARENT AND THOSE SUBSIDIARIES
WHICH PARENT (DIRECTLY OR INDIRECTLY) WHOLLY OWNS, INCLUDING THOSE FOR INSURANCE
PREMIUMS, BANKING SERVICES, ROUTINE FINANCIAL STATEMENT AUDITS, TAX PREPARATION
SERVICES, BENEFITS ADMINISTRATION, PENSION ADMINISTRATION, PAYROLL
ADMINISTRATION, ACCOUNTS PAYABLE ADMINISTRATION, ROUTINE COMPLIANCE PROCEDURES
UNDER THE SARBANES-OXLEY ACT OF 2002, 15 U.S.C. ¶7201 ET SEQ., AND ROUTINE
TREASURY-RELATED ADMINISTRATIVE ACTIVITIES WITH RESPECT TO THE RECEIPT, CUSTODY
AND DISBURSEMENT OF FUNDS (THE "CORPORATE OVERHEAD"). TENANT'S PROPORTIONATE
SHARE OF CORPORATE OVERHEAD, FOR A PARTICULAR PERIOD, SHALL BE AS ALLOCATED
PURSUANT TO THE PARENT'S "GENERAL GUIDELINES FOR CORPORATE
35
EXPENSE ALLOCATION" (AS PARENT MAY AMEND FROM TIME TO TIME), PROVIDED THAT THE
PARENT'S "GENERAL GUIDELINES FOR CORPORATE EXPENSE ALLOCATION" ARE APPLICABLE ON
A CONSISTENT BASIS TO ALL OF PARENT'S OPERATING UNITS AND SUBSIDIARIES (THE
"CORPORATE OVERHEAD ALLOCATION GUIDELINES"). THE AMOUNT OF TENANT'S SHARE OF
CORPORATE OVERHEAD WHICH MAY BE DEDUCTED FOR PURPOSES OF CALCULATING OPERATING
PROFIT FOR A PARTICULAR PERIOD SHALL BE NO GREATER THAN AN AMOUNT THAT IS
PROPORTIONATE TO THE RATIO THAT TENANT'S GROSS SALES FOR THAT PERIOD BEAR TO
PARENT'S ENTIRE GROSS SALES FROM ALL OF PARENT'S OPERATIONS (WHETHER AT THE
LEASED PREMISES OF AT OTHER PARENT LOCATIONS) FOR THAT PERIOD. TENANT'S
PERCENTAGE RENT CERTIFICATE FOR EACH PERIOD SHALL INCLUDE A CERTIFICATE, SIGNED