Common use of Vendor Subsidies Clause in Contracts

Vendor Subsidies. Subject to the next sentences of this Section 8(a), Seller will pay to Buyer the Subsidy Pro Rata Share of each Vendor Subsidy that Seller collects (by actual payment or as a credit against a Seller obligation) with respect to the Product categories sold by Seller to Buyer except to the extent that Seller is prohibited by the terms of a Vendor contract from paying a Subsidy Pro Rata Share to Buyer and except to the extent that a Vendor refuses to pay to Seller a Vendor Subsidy with respect to Seller’s sales of Products to Buyer. Vendor Subsidies received for the following will not be allocated between Seller and Buyer on a Subsidy Pro Rata Share basis: (i) “HotBuys/Door Buster” items will be allocated on an actual specific units sold basis; (ii) training events (such as Home Appliance Roadshow), Hometown Celebration, and Powerama) will be allocated to Buyer to the extent it is incurring the related expense; (iii) new store locations will be allocated to Buyer with respect to the Buyer Store locations for which the Vendor Subsidy is applicable; (iv) Buyer-specific transition merchandise subsidies will be allocated to Buyer only; (v) Seller-specific transition merchandise subsidies will be allocated to Seller only; (vi) Buyer-specific fixture subsidies will be allocated to Buyer only; and (vii) Seller-specific fixture subsidies will be allocated to Seller only. Seller will in Good Faith use commercially reasonable efforts to maximize the Vendor Subsidies and to obtain Vendors’ permission to share all Vendor Subsidies with Buyer in accordance with this Section 8(a). “Subsidy Pro Rata Share” of a Vendor Subsidy paid by the Vendor with respect to, or in connection with, a Product category means a fraction the numerator of which is Buyer’s total fiscal year-to-date sales of Products in the Product category and the denominator of which is Seller’s total fiscal year-to-date sales of Products in the Product category. Seller will calculate Subsidy Pro Rata Share on a fiscal monthly basis and pay the Subsidy Pro Rata Share to Buyer by the 15th day of the next fiscal month. “Vendor Subsidy” means support or assistance payments from Vendors relating to merchandise sold or the Vendor-customer relationship and include (regardless as to how they are entitled) advertising and marketing allowances, brand-building subsidies, display subsidies, electronic efforts subsidies, fixed-percentage subsidies, fixture subsidies, markdown support, new-outlet subsidies, product-return assistance, quality-assurance subsidies, reset subsidies, signage subsidies, transition-support subsidies, volume incentive discounts, and similar Vendor support and assistance.

Vendor Subsidies. Subject to the next sentences provisions of this Section 8(a), Seller will pay to Buyer the Subsidy Pro Rata Share of each Vendor Subsidy that Seller collects (by actual payment or as a credit against a Seller obligation) with respect to the Product categories sold by Seller to Buyer except to the extent that Seller is prohibited by the terms of a Vendor contract from paying a Subsidy Pro Rata Share to Buyer and except to the extent that a Vendor refuses to pay to Seller a Vendor Subsidy with respect to Seller’s sales of Products to Buyer. Vendor Subsidies received for the following will not be allocated between Seller and Buyer on a Subsidy Pro Rata Share basis: (i) “HotBuys/Door Buster” items will be allocated on an actual specific units sold basis; (ii) training events (such as Home Appliance Roadshow), Hometown SHO Celebration, and Powerama) will be allocated to Buyer to the extent it is incurring the related expense; (iii) new store locations will be allocated to Buyer with respect to Buyer’s store locations for which the Buyer Store Vendor Subsidy is applicable and to Seller with respect to Seller’s store locations for which the Vendor Subsidy is applicable; (iv) Buyer-specific transition and Vendor-Unique Product merchandise subsidies will be allocated to Buyer only; (v) Seller-specific transition merchandise subsidies will be allocated to Seller only; (vi) Buyer-specific fixture subsidies will be allocated to Buyer only; and (vii) Seller-specific fixture subsidies will be allocated to Seller only, Defective and return subsidies based upon actual units returned will be allocated to Buyer and Seller on an actual cost-incurred basis; however, all defective/return credits which are paid on a percentage of cost basis will be allocated based upon the Subsidy Pro Rata Share; provided further, that for Products which Buyer stops returning to Seller SHO shall no longer be entitled to share in the liquidation proceeds for such products; nor in the defective and returned subsidy for such Products (unless the Vendor has expressly agreed to provide such subsidies on defective Products which Seller (or Buyer) are repairing and reselling); Subsidies collected by Sears de Puerto Rico directly (and not by SRC) will be allocated to Buyer and Seller based on balance of Product sales in Puerto Rico (excluding Buyer’s Outlet sales in Puerto Rico); Vendor-specified subsidies for the promotion of on-line sales on Seller’s and its Affiliates’ websites and mobile applications (e.g., Xxxxx.xxx and Xxxxx.xxx) and subsidies for the placement of banner advertisements on such websites and applications, will be allocated to Seller only; and Vendor-specified subsidies for the promotion of on-line sales on the SHO Web Platforms, and subsidies for the placement of banner advertisements on such websites, will be allocated to Buyer only. Seller will in Good Faith use commercially reasonable efforts to maximize the Vendor Subsidies and to obtain Vendors’ permission to share all Vendor Subsidies with Buyer in accordance with this Section 8(a). “Subsidy Pro Rata Share” of a Vendor Subsidy paid by the Vendor with respect to, or in connection with, a Product category means a fraction the numerator of which is Buyer’s total fiscal year-to-date sales of Products in the Product category and the denominator of which is Seller’s total fiscal year-to-date sales of Products in the Product category. Seller will calculate Subsidy Pro Rata Share on a fiscal monthly basis and pay the Subsidy Pro Rata Share to Buyer by the 15th day of the next fiscal month. “Vendor Subsidy” means support or assistance payments from Vendors relating to merchandise sold or the Vendor-customer relationship and include (regardless as to how they are entitled) advertising and marketing allowances, brand-building subsidies, display subsidies, electronic efforts subsidies, fixed-percentage subsidies, fixture subsidies, markdown support, new-outlet subsidies, product-return assistance, quality-assurance subsidies, reset subsidies, signage subsidies, transition-support subsidies, volume incentive discounts, and similar Vendor support and assistance.

Vendor Subsidies. Subject to the next sentences of this Section 8(a), Seller will pay to Buyer the Subsidy Pro Rata Share of each Vendor Subsidy that Seller collects (by actual payment or as a credit against a Seller obligation) with respect to the Product categories sold by Seller to Buyer except to the extent that Seller is prohibited by the terms of a Vendor contract from paying a Subsidy Pro Rata Share to Buyer and except to the extent that a Vendor refuses to pay to Seller a Vendor Subsidy with respect to Seller’s sales of Products to Buyer. Vendor Subsidies do not include 10(c)(i) Payments. Vendor Subsidies received for the following will not be allocated between Seller and Buyer on a Subsidy Pro Rata Share basis: (i) “HotBuys/Door Buster” items will be allocated on an actual specific units sold basis; (ii) training events (such as Home Appliance Roadshow), Hometown Celebration, and Powerama) will be allocated to Buyer to the extent it is incurring the related expense; (iii) new store locations will be allocated to Buyer with respect to the Buyer Store locations for which the Vendor Subsidy is applicable; (iv) Buyer-specific transition merchandise subsidies will be allocated to Buyer only; (v) Seller-specific transition merchandise subsidies will be allocated to Seller only; (vi) Buyer-specific fixture subsidies will be allocated to Buyer only; and (vii) Seller-specific fixture subsidies will be allocated to Seller only. Seller will in Good Faith use commercially reasonable efforts to maximize the Vendor Subsidies and to obtain Vendors’ permission to share all Vendor Subsidies with Buyer in accordance with this Section 8(a). “Subsidy Pro Rata Share” of a Vendor Subsidy paid by the Vendor with respect to, or in connection with, a Product category means a fraction the numerator of which is Buyer’s total fiscal year-to-date sales of Products in the Product category and the denominator of which is Seller’s total fiscal year-to-date sales of Products in the Product category. Seller will calculate Subsidy Pro Rata Share on a fiscal monthly basis and pay the Subsidy Pro Rata Share to Buyer by the 15th day of the next fiscal month. “Vendor Subsidy” means support or assistance payments from Vendors relating to merchandise sold or the Vendor-customer relationship and include (regardless as to how they are entitled) advertising and marketing allowances, brand-building subsidies, display subsidies, electronic efforts subsidies, fixed-percentage subsidies, fixture subsidies, markdown support, new-outlet subsidies, product-return assistance, quality-assurance subsidies, reset subsidies, signage subsidies, transition-support subsidies, volume incentive discounts, and similar Vendor support and assistance.