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NEGOTIATING KEY LEASE PROVISIONS A Landlord's Point of View - page 32 / 60





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During each "Lease Year" (as defined in Section

____) of the Term, Tenant shall pay to

Landlord as provided below the dollar amount by which the percent specified as "Percentage Rate" in Section ____ of Tenant's Gross Sales (as defined in subparagraph (___) of this Section ____) exceeds the Minimum Annual Rental paid by Tenant to Landlord during each Lease Year of the Term ("Percentage Rental"). During the Term, Tenant shall report to Landlord on or before the date which is thirty (30) days following the expiration of each calendar month, the amount by which the Percentage Rate of Gross Sales during the preceding month exceeds the installment of Minimum Annual Rental paid by Tenant for that month. For the purpose of reporting Percentage Rental, Gross Sales made during the first partial month, if any, in which Minimum Annual Rental commences shall be added to the Gross Sales made during the first full calendar month. For the purpose of computing Percentage Rental, Tenant's Gross Sales for any period during which Tenant does not continuously and uninterruptedly conduct its business as required by Article ____, shall be deemed to be Tenant's Gross Sales for the corresponding period during the last calendar year in which Tenant operated continuously and uninterruptedly.


The term "Gross Sales", as used in this Lease, shall mean the gross selling price of all

merchandise or services sold or rented in or from the Premises by Tenant, its subtenants, licensees and concessionaires, whether for cash or on credit and whether made by store personnel or by machines, as well as any business interruption insurance proceeds received by

Tenant with respect to the Premises, excluding therefrom the following: (i) The selling price of all merchandise returned by customers and accepted for full credit: (ii) interest or other charges paid by customers for extension of credit: (iii) receipts from vending machines solely used by Tenant's employees; (iv) Sales taxes, excise taxes or gross receipts taxes imposed by governmental entities upon the sale of merchandise or services, but only if collected from customers separately from the selling price and paid directly to the respective governmental entities; (v) proceeds from the sale of fixtures, equipment or property which are not stock in trade. The exclusions listed above in this subparagraph (b) shall be referred to as "Exclusions from Gross Sales". All Sales originating at the Premises shall be deemed made and completed from the Premises, even though bookkeeping or payment of the account is transferred to another location for collection or filling of the sale or service order and actual delivery of the merchandise is made from a location other than the Premises. notwithstanding the foregoing, all sales relating to gift certificates sold at the Premises shall be deemed made and completed from the Premises at such time as such gift certificates are redeemed at the Premises. Each installment

sale, credit or layaway sale shall be treated as a sale for the full cash price at the time of sale or deposit.


Tenant shall furnish to Landlord a certified statement of Gross Sales within thirty (30)

days after the close of each calendar month, and a certified annual statement, including a

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