{"id":42465,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/license-agreement-mso-ip-holdings-inc-and-kmart-corp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"license-agreement-mso-ip-holdings-inc-and-kmart-corp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/license-agreement-mso-ip-holdings-inc-and-kmart-corp.html","title":{"rendered":"License Agreement &#8211; MSO IP Holdings Inc. and Kmart Corp."},"content":{"rendered":"<pre>\nNOTE: CERTAIN MATERIAL HAS BEEN OMITTED FROM THIS AGREEMENT PURSUANT TO A\nREQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24B-2. THE LOCATIONS OF THESE\nOMISSIONS ARE INDICATED THROUGHOUT THE AGREEMENT BY THE FOLLOWING MARKINGS:\n[ * * * ].\n\n\n                                LICENSE AGREEMENT\n\n            THIS AGREEMENT made as of this 21st day of June, 2001, by and\nbetween MSO IP HOLDINGS, INC., a California corporation, with its principal\nplace of business at 11100 Santa Monica Boulevard, Suite 600, Los Angeles,\nCalifornia 90025 (\"MSO\") and KMART CORPORATION, a Michigan corporation, with its\nprincipal place of business at 3100 West Big Beaver Road, Troy, Michigan 48084\n(\"Kmart\").\n\n            WHEREAS, MSO and Kmart have previously entered into an agreement,\ndated January 28, 1997 (the \"Bed and Bath Agreement\"), pursuant to which Kmart\nand MSO, among other things, merchandise and develop certain home products;\n\n            WHEREAS, MSO and Kmart have previously entered into an agreement,\ndated June 1, 1998 (the \"Garden Agreement\"), pursuant to which Kmart and MSO,\namong other things, merchandise and develop certain garden products;\n\n            WHEREAS, MSO and Kmart have previously entered into an agreement,\ndated April 21, 1999 (the \"Housewares Agreement,\" and together with the Bed and\nBath Agreement and the Garden Agreement, the \"Prior Agreements\"), pursuant to\nwhich Kmart and MSO, among other things, merchandise and develop certain\nhousewares products;\n\n            WHEREAS, Kmart and MSO have determined to terminate the Prior\nAgreements and enter into this Agreement, which shall set forth revised terms\nand conditions governing the relationship between the parties and shall, as of\nAugust 1, 2001, supersede the Prior Agreements in every way (except for\nobligations relating to payment of royalties for periods prior to August 1,\n2001);\n\n            NOW, THEREFORE, for good and valuable consideration the sufficiency\nof which is hereby acknowledged by the parties hereto, the parties hereto hereby\nagree as follows:\n\n      I.    Grant. Subject to the terms and conditions of this Agreement, MSO\nlicenses to Kmart the limited right in the Territory (as defined below) to\nutilize the trademark MARTHA STEWART EVERYDAY(TM) and variations and stylized\nforms thereof designated by MSO (the \"Trademark\"), together with the name,\nlikeness, voice and signature of Martha Stewart (in each case solely in\nconnection with the Trademark) (the \"Stewart Property\"), and the designs and\nother intellectual property incorporated in the Licensed Products (as defined\nbelow) (the \"Product Designs,\" and together with the Stewart Property and the\nTrademark, the \"Licensed Property\"), all of which shall be approved by MSO in\nthe manner set forth herein, solely in connection with (i) the manufacture of\nLicensed Products, (ii) the distribution of Licensed Products to, and retail\nsale of Licensed Products by, Kmart's Kmart stores in the Territory, and (iii)\nthe manufacture and exploitation of the Materials (as defined in Section VI(1))\nin connection with Kmart's sales of Licensed Products through its Kmart stores.\nAny sale or other exploitation\n   2\nof the Licensed Products or use of the Licensed Property in a manner not\nexplicitly permitted hereunder shall be deemed a material breach of this\nAgreement. \"Licensed Products\" shall mean the Home Products (as defined below),\nthe Garden Products (as defined below), the Housewares Products (as defined\nbelow), the Seasonal Products (as defined below) and the Additional Products (as\ndefined in Section XVII). The \"Home Products\" shall mean those products\ndeveloped and merchandised by Kmart and MSO pursuant to the terms of this\nAgreement and\/or the Bed and Bath Agreement in the product categories set forth\non Schedule I(a) hereto. The \"Garden Products\" shall mean those products\ndeveloped and merchandised by Kmart and MSO pursuant to the terms of this\nAgreement and\/or the Garden Agreement in the product categories set forth on\nSchedule I(b) hereto. The \"Housewares Products\" shall mean those products\ndeveloped and merchandised by Kmart and MSO pursuant to the terms of this\nAgreement and\/or the Housewares Agreement in the product categories set forth on\nSchedule I(c) hereto. The \"Seasonal Products\" shall mean those products\ndeveloped and merchandised by Kmart and MSO pursuant to the terms of this\nAgreement in the product categories set forth on Schedule I(d) hereto. \"Product\nCategory\" shall mean a broad category of Licensed Product (1) comprising\nnarrower categories of product associated by a common theme, and (2) which Kmart\nand MSO consider a cohesive program (e.g. Home Products, Garden Products, etc.).\n\"Initial Products\" shall mean the Home Products, the Garden Products, the\nHousewares Products and the Seasonal Products. \"Territory\" shall mean the United\nStates of America and its territories, including, Puerto Rico, Guam, and the\nU.S. Virgin Islands, and the Caribbean. Additionally, if Kmart opens Kmart\nstores in additional small countries it may request of MSO for such country to\nbe added to the definition of the Territory, which request MSO shall generally\napprove so long as (x) MSO (or its affiliate) is not already actively marketing\n(either directly or through third parties) products and\/or services in such\ncountry, (y) MSO (or its affiliate) does not have plans to begin to market\n(either directly or through third parties) products and\/or services in such\ncountry in the foreseeable future, and (z) MSO has no other compelling reason\nwhy adding such country to the Territory would be detrimental to MSO's (or its\naffiliate's) business.\n\n      II. Exclusivity. (1) MSO warrants and agrees that the license of the\nLicensed Property contained herein is exclusive to Kmart in Exclusive Stores (as\nhereafter defined) in the Territory during the Term in connection with the\npromotion, advertising, manufacture, distribution and sale of any products which\nare Licensed Products. \"Exclusive Stores\" shall mean (i) the retail store\noutlets in the discount store channel of distribution which includes only\nWal-Mart, Sam's Club, Target, J.C. Penney, Montgomery Ward, Venture, Bradlees,\nKohl's, Mervyn's, Meijer, Fred Meyer, Shopko, Costco and Hill's and similar\nnational or regional discount stores which are not in business as of the date\nhereof but which may come into existence in the future during the Term, provided\nthat Kmart provides MSO with written notice of its desire to include such\nnewly-existing stores within the definition of Exclusive Stores within 60 days\nof the initial opening of any such store and MSO reasonably agrees that such\nstore should be so included, and (ii) the retail store outlets of Sears, Lowe's,\nHome Depot, HQ, Builder's Square and Hechinger's.\n\n      (2) MSO may use or permit others to use the Licensed Property on products\nwhich are of the same product type as Licensed Products and which are of a\nhigher quality and intended by MSO to be sold at a higher price point than the\nLicensed Products sold by Kmart provided, however, that such products are sold\nby such licensee other than through Exclusive Stores.\n\n\n                                       2\n   3\n      (3) In the event MSO wishes to develop, merchandise, and sell products in\ncooperation with Kmart in Product Categories other than those of the Initial\nProducts, MSO shall provide Kmart written notice describing such category and\nMSO's desire to work with Kmart in connection therewith. Promptly thereafter,\nrepresentatives of Kmart and MSO shall cooperate in good faith to agree upon\nappropriate Sales projections for such Product Category, a schedule for\ndevelopment and launch of the Licensed Products relating thereto, and other\npertinent factors relating to the Program. Upon reaching agreement on these\nelements, MSO and Kmart shall enter into an addendum to this Agreement relating\nto such Product Category and setting forth all relevant information necessary to\nincorporate such Product Category into this Agreement. Royalty rates for such\nProduct Categories shall be the same as royalty rates otherwise applicable\nhereunder and Minimum Royalty Amounts shall be [ * * * ] of agreed upon\nprojections for Sales of such Licensed Products. MSO may not enter into any\nagreement with any Exclusive Store for the sale of Martha Stewart branded\nproducts in any of the Product Categories set forth on Schedule II(3) hereto\nunless agreement has not been reached with respect to projections, development\nand launch schedule for the Licensed Products in such Product Category within 90\ndays of the giving of notice by MSO hereunder, provided that if Kmart is still\ncooperating with MSO in good faith to come to such agreement this period will be\nextended for an additional 30 days. Any Licensed Products developed pursuant to\nthis Section II(3) shall be \"Additional Products.\" Notwithstanding the\nforegoing, in no event shall MSO enter into any agreements with Target,\nWal-mart, Kohl's, J.C. Penny's, and Sears in connection with the manufacture,\ndistribution or sale at such stores of products in the categories of apparel,\nelectronics, sporting goods, automotive care, cameras or jewelry.\n\n      III. Restrictions on Use. Kmart agrees that all use of the Licensed\nProperty by Kmart shall be in the form and manner as is approved by MSO, which\napproval shall not be unreasonably withheld or delayed, and there will appear on\nall Licensed Products and their tags, labels, containers, packaging and the\nlike, such legends, markings and notices as may be reasonably deemed necessary\nby MSO for protection under trademark, copyright or other applicable laws.\n\n      IV.  Royalties. Kmart shall pay to MSO in the manner described in Section\nV below royalties based on Sales (as defined below) at the royalty rates set\nforth on Schedule IV hereto. \"Sales\" for a particular period shall mean the\naggregate retail sale prices charged by Kmart for Licensed Products sold during\nsuch period, net any amounts actually refunded by Kmart to customers on account\nof returns of Licensed Products during such period.\n\n      V.   Payments. (1) Kmart shall deliver royalty reports to MSO within\nthirty (30) days following the end of each Kmart fiscal quarter (the \"Quarterly\nReports\"). Each Quarterly Report shall be certified as accurate by an authorized\nKmart officer and shall set forth the Sales during such quarter by Product\nCategory and SKU, as well as the amount of royalties payable with respect\nthereto. In addition to the Quarterly Reports, Kmart shall deliver non-binding\n(but based on Kmart's then current knowledge), interim reports containing the\nsame sales information on a monthly basis, consistent with Kmart's practice\nunder the Prior Agreements since 1998. Additionally, Kmart shall continue to\nwork to provide MSO with electronic access to current financial information\nrelating to Sales via the workbench system, any successor system and any\nsupplemental systems necessary to provide MSO such access.\n\n\n                                       3\n   4\n      (2) When Kmart delivers the Quarterly Reports to MSO, Kmart shall also pay\nto MSO the royalties due and owing for the corresponding quarter. These payments\nshall be made by wire transfer to a bank account designated by MSO unless it is\nnot practicable for Kmart to utilize such method, in which event payment shall\nbe made by check to MSO. Additionally, Schedule V(2) hereto sets forth certain\nguaranteed royalty amounts as of each January 31 of the Term commencing on\nJanuary 31, 2002 (\"Minimum Royalty Amounts\") by Product Category and in the\naggregate which may give rise to increases in royalty payments otherwise\npayable. Specifically, the royalty payable in connection with each quarter\nending January 31 shall be increased by the aggregate Category Shortfalls, if\nany, and by the Aggregate Shortfall, if any, for such January 31. A \"Category\nShortfall\" shall mean, for any Product Category and any January 31, the excess,\nif any, of the Minimum Royalty Amount for such Product Category and such January\n31 over the amount of royalties paid and\/or payable to MSO on account of Sales\nrelating to such Product Category that occurred during the twelve-month period\nending on such January 31. An \"Aggregate Shortfall\" for any January 31 shall\nmean the excess, if any, of the aggregate Minimum Royalty Amount relating to\nsuch January 31, over the amount of royalties paid and\/or payable to MSO on\naccount of Sales of the Initial Products that occurred during the twelve-month\nperiod ending on such January 31.\n\n      (3) Kmart shall maintain complete and accurate records of the Sales,\nroyalty computations, royalty reports and amounts spent on advertising and\nshall, upon reasonable request, make such records and all other documents and\nmaterials in the possession or control of Kmart and reasonably required to\nconfirm Kmart's satisfaction of its obligations under this Agreement and the\nPrior Agreements available to MSO or its duly authorized representatives, during\nusual business hours at Kmart International Headquarters in Troy, Michigan, for\nthe duration of this Agreement and for one year thereafter, and to make extracts\ntherefrom at its sole expense. All such records and documents shall be deemed\nInformation under Section XXV hereof. In the event any audit reveals that Kmart\nhas underpaid MSO pursuant to this Agreement and\/or any of the Prior Agreements,\nKmart shall promptly pay MSO the aggregate difference between what MSO should\nhave been paid, and what MSO was paid, plus interest on such amount at an annual\nrate of 8%, compounded semi-annually. Moreover, in the event the amount of any\nsuch underpayment equals or exceeds two and one-half percent (2.5%) of the\namounts actually paid to MSO during the period with respect to which the audit\nwas conducted, Kmart shall bear MSO's reasonable costs of the audit, including,\nwithout limitation, any amounts payable to MSO's outside auditors in connection\ntherewith.\n\n      VI. Licensed Product Design, Consultation, Quality, Schedules, Approvals,\nand Expenses. (1) The parties recognize that the name Martha Stewart has\nvaluable goodwill with the consuming public, and that Martha Stewart (\"Stewart\")\nis recognized as an authority on quality and style in the area of domestic\nproducts and related activities. It is an objective of this Agreement that MSO,\nKmart, and Kmart's vendors of Licensed Products establish a broad spectrum of\nLicensed Products with respect to quality and design consistent with Stewart's\nimage and Kmart's pricing philosophy. The parties agree that as an integral part\nof this Agreement, MSO shall direct Kmart and Kmart's vendors of Licensed\nProducts in the establishment of the Strategic Direction (as defined below) of\nthe initial line and subsequent evolutionary lines (and all changes therein) of\nmerchandise comprising each Product Category. As used herein the \"Strategic\nDirection\" shall include development of all aspects of the Licensed Products and\nthe promotion thereof including, without limitation, (A) concepts, designs, and\nproduct selection, (B) marketing support, and (C) packages, labels, hang tags,\nsignage, other\n\n\n                                       4\n   5\nconsumer facings and advertising and promotional materials to be used in\nconnection with the Licensed Products (materials in this sub-clause (C), whether\ndeveloped under this Agreement or a Prior Agreement, the \"Materials\") . The\nStrategic Direction with respect to each Product Category shall be developed and\nmodified as follows:\n\n            (i) Approximately eighteen months prior to the scheduled store\n      implementation of each transition of Licensed Products or at such time as\n      may be mutually agreed upon, MSO and Kmart shall meet with respect to such\n      products. At such meetings, Kmart shall be responsible, in consultation\n      with MSO, for proposing a merchandise plan (including selected vendors and\n      planned linear footage) and time and action calendars for the relevant\n      Licensed Products as well as related packaging\/display requirements. MSO\n      shall review the foregoing and shall work with Kmart to finalize the same.\n\n            (ii) MSO shall then present Kmart with product and packaging design\n      concepts. Kmart shall review such concepts and shall work with MSO to\n      finalize the same. After the concepts have been finalized, MSO shall\n      deliver to Kmart and the relevant vendors Licensed Product designs, each\n      with a specific Martha Stewart Everyday design number, according to the\n      approved time and action calendars. Kmart and the relevant vendors shall\n      then review the product designs for price point, delivery and other\n      pertinent merchandise needs and Kmart quality control shall review all\n      designs to ensure that they meet or exceed industry standards.\n      Notwithstanding the foregoing, prior to any vendor receiving any designs\n      or other proprietary or confidential information, such vendor must enter\n      into an agreement (the \"Vendor Agreement\") in substantially the form set\n      forth on Schedule VI(1)(ii) hereof regarding the confidentiality and\n      proprietary nature of certain information, designs and materials to which\n      the vendors shall have access. MSO and Kmart shall cooperate to cause all\n      vendors to enter into the Vendor Agreement.\n\n            (iii) Kmart and the relevant vendors shall determine all package,\n      display and label requirements, both legal and otherwise, and forward the\n      related specifications and schedules to MSO. MSO shall then direct the\n      creative look of all packaging, display and labels for the Licensed\n      Products.\n\n            (iv) As Licensed Products are developed by vendors based on MSO's\n      approved design concepts, MSO shall review such development and submit\n      comments and direction to Kmart and the vendors. When samples of each\n      Licensed Product are completed, such samples shall be reviewed by Kmart\n      and MSO. All samples shall be reviewed by Kmart and MSO prior to comments\n      being given to the vendors and shall be tested for quality by Kmart. Both\n      Kmart and MSO must approve a sample before it can be manufactured for\n      sale. Kmart shall give such approvals based upon its merchandise needs and\n      on the results of its quality testing and MSO shall give its approvals\n      based upon the design concepts it submitted to Kmart and MSO's brand\n      objectives (including quality).\n\n            (v) Kmart shall monitor the packaging and display development to\n      insure schedules for all vendors are being met. MSO shall monitor the\n      packaging and display development to coordinate the design and art\n      direction needs of all Licensed Products being packaged and displayed.\n      Both Kmart and MSO must approve all packaging and displays before they can\n      be used in connection with the Licensed Products. Kmart shall\n\n\n                                       5\n   6\n      give such approvals based upon its merchandise needs and MSO shall give\n      such approvals based upon the design concepts it submitted to Kmart and\n      MSO's brand objectives (including quality).\n\n            (vi) The activities set forth in this Section VI(1) shall be\n      conducted in a manner generally consistent with past practice under the\n      Prior Agreements as of the date hereof.\n\n      (2) Kmart agrees that each Licensed Product sold by it pursuant to this\nAgreement, and the Materials utilized in connection therewith, shall conform to\nthe specifications developed by MSO pursuant to Section VI(1) hereof (or under a\nPrior Agreement) and shall be of a quality equal to or exceeding the samples of\nsuch Licensed Product approved by MSO pursuant to Section VI(1) hereof (or a\nPrior Agreement). Promptly following execution of this Agreement, MSO and Kmart\nshall develop and implement a mutually agreeable program for (i) reviewing and\ntesting the quality, safety and propriety for intended use of samples of\nLicensed Products prior to the time at which they are approved for mass\nmanufacture and sale, and (ii) for monitoring quality and safety on a continuing\nbasis to make sure that the factory runs of each Licensed Product are consistent\nwith the initially approved samples. The costs of this program shall be the\nresponsibility of Kmart. This program shall include vigorous testing of Licensed\nProducts for wear and tear, maintenance, use and other appropriate elements to\nbe determined by the parties. The program shall be primarily implemented by\nKmart but shall involve MSO personnel as the parties deem appropriate.\n\n      (3) Upon receipt of a notice from MSO pursuant to this Agreement setting\nforth any quality deficiencies prohibited by this Agreement, or upon Kmart's\ndiscovery of any such deficiencies, Kmart and\/or Kmart's vendors of the Licensed\nProducts containing such deficiencies shall remedy such deficiencies prior to\nthe sale of the deficient Licensed Products or, at their option, dispose of such\noff-quality merchandise through other outlets. Whenever such merchandise is sold\nas aforesaid, no use of or reference to the name Martha Stewart or any Licensed\nProperty shall be used in connection with any advertising, publicity, labeling,\nwrapping or packaging with respect to any such sales. In accordance with the\npractice in the trade, Kmart's vendors of Licensed Products shall notify their\ncustomers to assure compliance by them with the requirements of the preceding\nsentence. Kmart and its vendors of Licensed Products shall be deemed to have met\nthis obligation by the removal of all labels, tags and marks which would\nidentify the goods as Martha Stewart merchandise and by placing the following\nlegend on all purchaser's invoices for such goods and by enforcing the terms of\nsuch legend if, in the event of non-compliance and following consultation with\nMSO, MSO and Kmart deem it appropriate for brand protection:\n\n            \"Purchaser agrees that it will not use the name `Martha Stewart' or\n            the legend `designed by Martha Stewart' or any other phrase or\n            statement using the name `Martha Stewart' on any advertising,\n            publicity, labeling, wrapping or packaging with respect to the\n            merchandise listed hereon.\"\n\nIn the event certain Licensed Products must be disposed of pursuant to this\nSection VI(3) and such products have the Trademark or some derivation thereof\nembedded in the product (e.g. a stamp or mold), Kmart and MSO agree to cooperate\nin good faith to determine a manner in which such Licensed Products can be\ndisposed of that is mutually beneficial and minimizes any potential impact to\nthe Sales and brand image of the Licensed Products.\n\n\n                                       6\n   7\n      (4) Kmart shall select its vendors of Licensed Products pursuant to the\nKmart Quality Standards, Policies and Procedures set forth on Schedule VI(4)\nhereto.\n\n      (5) MSO and Kmart each agree to exercise their respective rights of\napproval hereunder in a reasonable and timely manner, consistent with any agreed\nupon time schedules and the established Strategic Direction. Notwithstanding the\nforegoing, no decision by Kmart to refuse to offer for sale a particular product\nthat MSO desires to have manufactured for sale shall be considered unreasonable,\nunless such refusal is made for purposes of frustrating the purposes of this\nAgreement. Kmart shall designate one individual authorized to exercise its\napproval rights hereunder and to be the liaison between Kmart and MSO.\n\n      (6) Except as set forth in Section VIII(2) or as otherwise explicitly\nstated herein or agreed upon by Kmart, MSO shall be responsible for the costs of\nits personnel in connection with its services and activities hereunder\n(including, without limitation, its services and activities under Section VI\n(1)) (the \"MSO Costs\"). Kmart shall bear all its own expenses incurred in\nconnection with this Agreement, as well as all other costs incurred in\nconnection with the sourcing, design, manufacturing, distribution, marketing,\nadvertising and sale of the Licensed Products and the Materials, including,\nwithout limitation, all photography and production costs relating to the\nMaterials. In connection with all still photography shoots, MSO shall continue\nto conduct such shoots, to invoice Kmart therefor and to pay all relevant third\nparty costs (including photography costs) from such invoiced amounts, provided\nthat budgets for such shoots will be determined in advance by MSO and Kmart.\n\n      (7) In furtherance of the valuable goodwill that Martha Stewart products\ncarry with the consuming public, Kmart agrees that it shall cause Kmart store\nemployees in every Kmart store to dedicate adequate and substantial time to (i)\nreplenishing the shelves that display Licensed Products, (ii) monitoring store\ninventory levels of Licensed Products (including, without limitation, using\nreasonable efforts to increase inventory levels in anticipation of sale events,\nand generally maintaining inventory levels sufficient to meet demand), (iii)\nensuring that the areas in which the Licensed Products are sold are clean, and\n(v) forwarding any Licensed Products which are returned to the relevant Kmart\nstore for reasons of defect to a Kmart quality assurance representative.\n\n      (8) Kmart and MSO agree that the Seasonal Products shall be introduced at\nall Kmart stores in time for the Christmas season in 2002, provided that each\nparty acknowledges certain products requiring substantial developmental\nlead-times will not be available until 2003. The portion of the Martha Stewart\nEveryday program comprising Garden Products shall be conducted according to the\nterms set forth on Schedule VI(8) hereto as well as the rest of the terms of\nthis Agreement.\n\n      VII. Term. This Agreement shall commence on August 1, 2001 and continue in\nfull force and effect until January 31, 2008 (the \"Term\"). Provided that (i) the\naggregate royalties earned by, and paid to, MSO hereunder with respect to Sales\nof the Initial Products occurring from August 1, 2001 through January 31, 2007\nequals or exceeds [ * * * ], and (ii) the royalties earned by, and paid to, MSO\nwith respect to Sales of the Initial Products during the four quarters ending\nJanuary 31, 2007 equals or exceeds [ * * * ], this Agreement shall automatically\nbe\n\n\n                                       7\n   8\nrenewed for an additional five years (the \"Renewal Term\"). Notwithstanding the\nforegoing, the Term commences as of the date hereof solely with respect to the\nterms of Section XXIX hereof.\n\n      VIII. Promotional and Marketing Services. (1) MSO shall cause Stewart to\nrender her services in a professional manner consistent with the intent of this\nAgreement and to use her reasonable good faith efforts to participate in the\npromotion and imaging of the Licensed Products including, without limitation,\nthrough television, radio and print advertising, in-store videos, appearances\nand other media presentations or programs and shall use reasonable and\nappropriate opportunities, in her reasonable discretion, to promote the Licensed\nProducts and Kmart's sale thereof including, without limitation, interviews,\neditorials, press conferences, press releases and television appearances. In\nlight of the considerable demands on Stewart's schedule, Kmart and MSO shall\ncooperate in good faith to schedule the dates, times, places and manner in which\nStewart shall fulfill her obligations under this Section as far in advance, and\nin the most convenient manner, possible. Subject to the final sentence of this\nSection VIII(1), MSO shall cause Martha Stewart to be available to render\nservices under this Section VIII(1) consistent with past practices under the\nPrior Agreements, but in no event for more than 25 days annually, inclusive of\ntravel time. Kmart shall pay all costs and expenses in connection with such\nservices including, without limitation, costs of first class air travel (or\nprivate plane) and lodging consistent with Kmart's past practices with Stewart\nunder the Prior Agreements as of the date hereof. Any significant expenses\nanticipated by MSO in excess of those generally borne by Kmart pursuant to past\npractice under the Prior Agreements shall be first submitted to Kmart for\napproval. No failure by MSO to comply with the terms of this provision by reason\nof the death, disability or incapacity of Martha Stewart shall be considered a\nbreach of this Agreement.\n\n      (2) Each year, Kmart and MSO shall consult regarding the advertising needs\nfor the Licensed Products for the following year, taking into account the\nexistence of any Additional Products and extensions of existing product lines,\nfollowing which Kmart shall determine the aggregate amount to be spent on\nadvertising for the Licensed Products (\"MSE Advertising\") during such year.\nNotwithstanding the foregoing, the aggregate amount to be spent on MSE\nAdvertising during any twelve-month period ending on any January 31 throughout\nthe Term (the \"Annual MSE Ad Spend\"), commencing with the twelve-month period\nending January 31, 2002, shall represent a percentage of projected Sales for\nsuch period that is no less than the percentage that estimated MSE Advertising\nexpenditures for 2001 as of the date hereof (such estimate, the \"2001 MSE Ad\nSpend\") represents of Sales for 2001, provided, however, that the Annual MSE Ad\nSpend for any year shall not represent a larger percentage of the aggregate\nadvertising expenditures by Kmart during such year than the percentage that the\n2001 MSE Ad Spend represents of Kmart's aggregate advertising expenditures\nduring 2001. Marketing expenses relating to significant product launches shall\nbe outside of this budget. Kmart and MSO agree that in the event of a Renewal\nTerm the parties shall review whether the foregoing method of determining levels\nof MSE Ad Spend is in the mutual best interest of MSO and Kmart and shall make\nany changes thereto that are mutually agreed upon at the time of such renewal.\nKmart and MSO shall discuss the best allocation of the year's advertising budget\nbetween production, media selection, and timing of advertising campaigns.\nAlthough MSO shall be given the opportunity to meaningfully consult with Kmart\nregarding such allocation, Kmart shall make the final determination as to how\nsuch money should be allocated, provided that amounts dedicated to creative\ndevelopment and production of advertisements on a per advertisement basis shall\nbe mutually agreed upon each year and shall be at least consistent with past\npractice under the Prior Agreements. Once the allocations have been made and the\nadvertising needs determined, MSO\n\n\n                                       8\n   9\nshall be responsible for developing all creative elements of, and, with respect\nto television advertisements, producing, all advertising for the Licensed\nProducts. In doing so, MSO may, subject to the approved budgets, retain\nindependent advertising agencies, production companies and photographers to\nassist in developing, creating and producing the advertisements. All such\nadvertisements remain subject to Kmart's approval. Kmart shall pay MSO the\nbudgeted amounts for all creative development and production, out of which MSO\nshall pay any third party fees including, where appropriate and approved, any\ncreative service fees to MSO. All media buying for advertising of the Licensed\nProducts will continue to be done by Kmart's advertising agency of record. Kmart\nfurther agrees to continue purchasing advertising, whether or not for Licensed\nProducts, in Martha Stewart Living media properties at 2001 expenditure levels.\n\n      (3) With respect to each television commercial relating in whole or part\nto the Licensed Products and featuring Stewart, Kmart shall pay to MSO [ * * * ]\nfor Stewart's appearance in each such commercial. The foregoing payment shall be\nan advance against all residuals owed to Stewart pursuant to any applicable\nunion, guild, or collective bargaining agreement on account of the use and reuse\nof such commercials, provided that such residuals shall be credited and payable\nat twice scale. Kmart shall pay or cause to be paid any and all pension, health\nand\/or welfare fund payments required by reason of Stewart's services hereunder\npursuant to any applicable union, guild or collective bargaining agreement and\ncovenants that Kmart, or any other entity for whom Stewart is rendering her\nservices in connection with each such commercial, shall be a signatory to any\napplicable union, guild and collective bargaining agreement. The per commercial\nfee payable hereunder shall increase by 4% each calendar year.\n\n      (4) Kmart shall sell Licensed Products only through the Martha Stewart\nEveryday \"store-in-store\" format, including, but not limited to, the fixturing,\nsignage, and layouts of such \"store-in-stores.\" Unless there are compelling\nbusiness reasons dictating otherwise, Licensed Products shall be sold in\ndedicated, full-run shelf-space. In no event will products that compete with\nLicensed Products be commingled with Licensed Products in Kmart stores. The\n\"store-in-store\" format employed by Kmart shall be developed with the assistance\nof MSO and shall be subject to MSO's reasonable approval.\n\n      IX. Property Retention. (1) All right, title and interest in the Licensed\nProperty including, without limitation, all copyrights, trademarks and other\nrights therein (and all renewals and extensions thereof) shall be owned\nexclusively by MSO. Subject to the terms of this Agreement, MSO shall have the\nsole unrestricted right to exploit the Licensed Property in its sole discretion\nin any manner in perpetuity in any and all media throughout the world whether\nnow known or hereafter devised with no further obligation whatsoever to Kmart or\nany third party. Any use which Kmart may be permitted to make of the Licensed\nProperty pursuant to this Agreement shall be subject to MSO's prior approval as\nspecified herein.\n\n      (2) Kmart confirms the sole ownership by MSO of the Licensed Property and\nagrees that all use by Kmart of the Licensed Property shall inure solely to the\nbenefit of MSO and, as such, Kmart shall not at any time acquire any rights in\nthe Licensed Property or otherwise by virtue of any use or exploitation Kmart\nmay make thereof.\n\n      (3) All rights in the Licensed Property other than those specifically\ngranted herein are reserved by MSO for its sole use and benefit and exploitation\nin its sole discretion. Upon the expiration or termination of this Agreement for\nany reason whatsoever, all rights in the Licensed\n\n\n                                       9\n   10\nProperty shall automatically revert to MSO for its sole use and disposition with\nno further obligation whatsoever to Kmart or any third party, provided, however,\nKmart shall have six months from the date of termination, or three months from\nexpiration, whichever the case may be, to sell all units of Licensed Products\npurchased or ordered before expiration or termination of this Agreement and to\nuse the associated Materials approved pursuant to this Agreement prior to such\nexpiration or termination to accomplish such sell-off. MSO shall be paid\nroyalties on all such sales at the applicable rates under this Agreement.\n\n      (4) Kmart agrees to promptly inform MSO of any use by any person or entity\nof a trademark, servicemark or design similar to the Licensed Property which\ncomes to the attention of Kmart and which Kmart has reason to believe could be a\nuse unauthorized by MSO. MSO shall have the sole right to determine whether or\nnot any action shall be taken on account of any infringement and Kmart shall\njoin in such action at Kmart's expense if MSO so requests. Kmart shall have no\nright to take any action with respect to the Licensed Property without prior\nwritten approval from MSO which approval shall not be unreasonably withheld. MSO\nand Kmart shall share any award of damages net of costs including, without\nlimitation, attorneys' fees and disbursements, as a result of such actions, in\nproportion to their respective damages suffered by such infringement.\n\n      (5) All designs, concepts, patterns, names and other intellectual property\n(including copyright rights) in materials relating to the subject matter of this\nAgreement or any Prior Agreement that are developed and\/or created by MSO shall\nbe owned solely by MSO. All designs, concepts, patterns, names and other\nintellectual property (including copyright rights) in materials relating to the\nsubject matter of this Agreement or any Prior Agreement that are developed\nand\/or created by third parties under MSO's direction, or which are incorporated\ninto the Licensed Products and\/or the Materials at MSO's request, shall, as\nbetween MSO and Kmart, be owned solely by MSO. All designs, concepts, patterns,\nnames and other intellectual property (including copyright rights) in materials\nrelating to the subject matter of this Agreement or any Prior Agreement that are\ndeveloped and\/or created by Kmart shall be owned solely by Kmart. Subject to all\nother provisions of this Agreement, the physical elements of all Materials will\nbe and remain the property of Kmart, provided that, in the event MSO owns the\nintellectual property therein, Kmart will provide the necessary access to enable\nMSO to duplicate any such Materials.\n\n      (6) Nothing contained herein shall be construed as an assignment or grant\nto Kmart of any right, title or interest in or to the Licensed Property, it\nbeing understood that all rights thereto are reserved exclusively by MSO, except\nfor the license granted hereunder as specifically described herein.\n\n      X. Representations and Warranties. (1) By MSO. MSO represents and warrants\nto Kmart that (i) it has the full right and authority to enter into this\nAgreement and to grant the licenses herein, and (ii) Kmart's authorized use of\nthe Licensed Property shall not infringe or violate the rights of any third\nparties.\n\n      (2) By Kmart. Kmart hereby represents and warrants to MSO that (i) it has\nthe full right and authority to enter into this Agreement and the relationship\ncontemplated herein, (ii) the manufacture, distribution, marketing, sale and use\nof the Licensed Products shall not violate or infringe upon any rights\nwhatsoever of any third party (except as a result of a breach of MSO's\n\n\n                                       10\n   11\nrepresentations and warranties), (iii) the Licensed Products (including any\nlabeling thereon) will conform in all respects to, and satisfy applicable\nrequirements of, applicable federal, state and local laws, orders and\nregulations, and (iv) Kmart has sufficient systems to accurately track, and that\nit will accurately track, all Sales.\n\n      XI. Indemnification. (1) Kmart agrees to defend, indemnify and hold\nharmless MSO and its officers, directors, members, shareholders, employees and\nrepresentatives from, in respect of and against any and all claims, losses,\nliabilities, expenses (including, without limitation, reasonable attorneys' fees\nand disbursements), judgments, damages, demands, lawsuits or similar actions or\nproceedings (\"Claims\") arising out of the breach of any of Kmart's\nrepresentations, warranties or covenants hereunder (or under any Prior\nAgreement) or out of the manufacture, design, purchase, promotion, advertising,\ndistribution, use or sale of Licensed Products, including, without limitation,\nany claims for product liability (a \"Kmart Claim\"). MSO agrees to notify Kmart\nwithin a reasonable time after it receives notice of any Kmart Claim and Kmart\nshall promptly assume MSO's defense thereof either directly or through counsel\nto any relevant vendor. MSO shall have the right to participate in the defense\nof any Kmart Claim with counsel of its choosing and at MSO's expense. Any\nsettlement which affects the Licensed Property or otherwise contains a remedy\nother than the payment of money damages by Kmart (which in any way impacts upon\nMSO) must be approved in writing in advance by MSO.\n\n      (2) MSO agrees to defend, indemnify and hold harmless Kmart and its\nofficers, directors, shareholders, employees and representatives from, in\nrespect of and against any and all Claims arising out of the breach of any of\nMSO's representations, warranties or covenants hereunder (or under any Prior\nAgreement) or for copyright, trade dress, or trademark infringement or unfair\ntrade practice arising directly out of Kmart's authorized use of the Licensed\nProperty (an \"MSO Claim\"). Kmart agrees to notify MSO within a reasonable time\nafter it receives notice of any MSO Claim and MSO shall promptly assume Kmart's\ndefense thereof. Kmart shall have the right to participate in the defense of any\nMSO Claim with counsel of its choosing and at Kmart's expense. Any settlement\nwhich contains a remedy other than the payment of money damages by MSO (which in\nany way impacts upon Kmart) must be approved in writing in advance by Kmart.\n\n      XII. Insurance. Kmart shall maintain in full force and effect\ncomprehensive general liability insurance (the \"Insurance\"), including, without\nlimitation, product liability insurance, covering all Licensed Products sold by\nit as well as any liability on its part or the part of MSO in the amount of at\nleast $25,000,000 per occurrence and $100,000,000 in the aggregate. The\nInsurance shall be placed with an insurer or insurers of recognized worth and\nreputation, duly licensed to carry on the business of insurance in all parts of\nthe Territory and shall name Martha Stewart, MSO, its officers, directors,\nemployees, representatives or agents as additional insureds, for coverage\nagainst all forms of liability for death or injury to any individual, and for\nloss or damage to property. The Insurance shall provide for primary coverage and\nnot contributory coverage, notwithstanding any other insurance which MSO may\nobtain or maintain. The Insurance shall provide for prior written notice to MSO\nof cancellation, lapse or material change in the Insurance and Kmart shall\nprovide MSO with a certificate of insurance as evidence of the Insurance prior\nto, or as soon as practicable after, the execution hereof. MSO hereby\nacknowledges that Kmart self-insures a per claim deductible in the amount of\n$2,000,000.\n\n\n                                       11\n   12\n      XIII. Guaranteed Products. Kmart agrees to manufacture and market Licensed\nProducts in the categories of merchandise set forth on Schedule XIII hereto upon\nrequest from MSO and to use reasonable commercial efforts to cause Licensed\nProducts in each such product category to be available at each Kmart store.\n\n      XIV. Projections. Schedule XIV sets forth the projections for annual Sales\nrelating to the Initial Products through the Term and the Extension, if any, as\nof the date hereof (the \"Initial Projections\"). Promptly following the execution\nof this Agreement, MSO and Kmart agree to develop a strategy for materially\nincreasing Sales in each Product Category to the maximum extent practicable. The\nprojections set forth on Schedule XIV shall be increased as a result of the\noutcome of such efforts (the projections as they may be increased from time to\ntime, the \"Projections\"), and MSO and Kmart agree to meet at least annually to\nstrategize and otherwise develop programs and plans to maximize Sales and\nincrease Projections. Kmart agrees to use its best efforts to cause Sales to\nequal or exceed the Projections.\n\n      XV. [ * * * ].\n\n      XVI. Kmart Bridal and Gift Registry. MSO hereby grants Kmart the right to\noffer the Licensed Products as part of a Kmart bridal and\/or gift registry\nprogram, provided that the registry is not branded with the name \"Martha\nStewart\" or any related trademark and all aspects of the sale, marketing,\npresentation, promotion and advertisement of the Licensed Products in connection\ntherewith shall be subject to the same approvals, rights, and processes as the\nsale, marketing, presentation, promotion, and advertisement of the Licensed\nProducts under this Agreement generally.\n\n      XVII. Termination. (1) Subject to subparagraph (2) below, this Agreement\nmay be immediately terminated by either party in the event a material breach\nhereof by the other party continues uncured for a period of 30 days after\nwritten notice thereof, provided, however, such cure period shall be 15 days\nwith respect to payments due hereunder.\n\n      (2) In the event of termination or expiration of this Agreement, all\nrights granted hereunder shall terminate and revert to MSO for its sole use and\ndisposition without any further obligation to Kmart.\n\n      XVIII. Uniqueness of Services. The services to be performed by MSO and the\nrights and privileges granted to Kmart hereunder are special, unique and\nincapable of replacement and the loss thereof may not be reasonably or\nadequately compensated in an action at law. Additionally, MSO's failure or\nrefusal to perform the obligations hereunder may cause irreparable harm or\ndamage. In the event of a material breach by MSO, Kmart shall be entitled, in\naddition to any other remedies available to it, to seek injunctive or other\nequitable relief against it to prevent the continuance of such failure or\nrefusal or to prevent it from performing services or granting rights to others\nin violation of this Agreement.\n\n      XIX. Services. MSO assumes no liability whatsoever for service, defects or\nbreach of warranty or any type of product liability claim whatsoever regarding\nLicensed Products. In the event that an ultimate purchaser of such a Licensed\nProduct or any other third party claims it to be defective, in breach of\nwarranty or in need of service, Kmart or its vendor shall assume all\nobligations, liability, cost and expense relating in any manner to such Licensed\nProduct\n\n\n                                       12\n   13\nincluding, without limitation, any claimed defect, breach of warranty or\nservice need. In the event any such Licensed Product is returned to MSO on\naccount of any claimed defect, breach of warranty or service need, MSO shall\npromptly notify Kmart regarding such Licensed Product and claim and shall\nforward the same within a reasonable time to a reasonable destination designated\nby Kmart for handling of the returned Licensed Product by Kmart or its vendor.\nKmart agrees to reimburse MSO for all reasonable costs incurred in connection\nwith such returns. Kmart agrees to keep MSO timely informed of any material\nproblems with any Licensed Product and shall meaningfully consult with MSO in a\ntimely fashion in the event Kmart and\/or any vendors of Licensed Products\ninteract with the United States Consumer Product Safety Commission (\"CPSC\") and\nbefore any Section 15 Report relating to any Licensed Product is filed with\nCPSC.\n\n      XX. Creative Services. As reasonably requested by Kmart, MSO shall\nperiodically provide creative personnel to consult with Kmart regarding issues\nrelating to overall Kmart advertising, store layout and other brand issues.\n\n      XXI. Assignment. No party may assign any right or obligation under this\nAgreement, other than the right to receive money, to any person or entity other\nthan its parent or subsidiary companies or a purchaser of all or substantially\nall of the assets of a party, without the express written consent of the other\nparty, provided that MSO shall have the right to assign its interests under this\nAgreement to any entity in which Martha Stewart owns a majority of the equity,\nand which at or about the time of such assignment acquires the rights to the\nLicensed Property licensed to Kmart hereunder. Notwithstanding the foregoing, in\nthe event either party enters into a transaction in which it sells or otherwise\nconveys substantially all of the assets relevant to such party's performance of\nits obligations hereunder, the other party shall have the right to compel\nassignment of this Agreement as part of such transaction. MSO shall have the\nright to cause any of its contractual obligations hereunder to be fulfilled by\nan affiliate of MSO, and any such fulfillment shall be deemed a fulfillment of\nsuch obligation by MSO. For purposes of clarity, it is acknowledged that Martha\nStewart Living Omnimedia LLC and Martha Stewart Living Omnimedia, Inc.\n(collectively, \"MSLO\") were each predecessors-in-interest to MSO under the Prior\nAgreements, and references herein to MSO in connection with the Prior Agreements\nor actions taken thereunder shall include references to MSLO as the context\nrequires.\n\n      XXII. Choice of Law. This Agreement shall be construed and enforced in\naccordance with laws of the State of Michigan.\n\n      XXIII. No Joint Venture. Neither party shall be or be deemed to be an\nagent, employee, partner or joint venturer of or for the other party.\n\n      XXIV. Confidentiality. After the date hereof, each of Kmart and MSO (i)\nshall hold and shall cause its officers, directors, employees, agents,\naccountants, representatives and advisors (\"Representatives\") to hold in strict\nconfidence all the terms of this Agreement and the Prior Agreements and all\ninformation furnished to such party or its Representatives in connection with\nthe transactions contemplated by this Agreement as well as information\nconcerning the other party contained in analyses, compilations, studies or other\ndocuments prepared by or on behalf of such party (collectively, the\n\"Information\"); provided that the Information shall not include any information\nwhich has become (A) generally available to the public other than as a result of\na disclosure by such party or such party's Representatives, (B) available to\nsuch party on a non-\n\n\n                                       13\n   14\nconfidential basis from a source other than the other party or the agents of one\nof them if such source is to such party's knowledge entitled to disclose such\ninformation, or (C) independently acquired or developed by such party; and (ii)\nshall not, without the prior written consent of the other party, release or\ndisclose any Information to any other person, except (A) to such person's\nRepresentatives who need to know the Information in connection with the\nconsummation of the transactions contemplated by this Agreement, who are\ninformed by such person of the confidential nature of the Information and who\nare caused by the relevant party to comply with the terms and conditions of this\nSection XXV, and (B) as may be required by applicable law, regulations or legal\nprocesses (including, without limitation, any disclosures of Information which\nare required to be made by applicable securities laws in connection with any\nfinancing activities of either party or standard disclosure requirements under\nthe Securities Exchange Act of 1934, as amended). The parties hereto agree to\ncooperate with respect to a joint press release announcing the execution of this\nAgreement.\n\n      XXV. Notice. All notices under this Agreement shall be in writing and\nshall be given by either party by certified mail, guaranteed express mail or\nfacsimile (confirmation of delivery received) as follows:\n\nIf to MSO:\n\n                  MSO IP Holdings, Inc.\n                  11100 Santa Monica Boulevard\n                  Suite 600\n                  Los Angeles, California 90025\n\n      copy to:\n\n                  Howard Shire, Esq.\n                  Kenyon &amp; Kenyon\n                  One Broadway\n                  New York, New York  10004\n\nIf to Kmart:\n\n                  Kmart Corporation\n                  3100 West Big Beaver Road\n                  Troy, MI 48084\n                  Attention: General Counsel\n\n                  Facsimile No.  (248) 463-1054\n\n      copy to:\n\n                  Kmart of Michigan, Inc.\n                  Suite 329\n                  3250 West Big Beaver Road\n                  Troy, MI 48084\n                  Attention: Intellectual Property Counsel.\n\n\n                                       14\n   15\n                  Facsimile No.  (248) 637-3057\n\n      XXVI. Compliance with Human Rights and Labor Standards. Kmart warrants and\nrepresents that purchase order terms and conditions for the purchase of all\nLicensed Products require that such merchandise conforms in all respects with\nall applicable federal, state and local laws, orders and regulations. Kmart will\nrequire all manufacturers of Licensed Products hereunder to sign a Certification\nof Compliance substantially similar to the form attached hereto as Schedule\nXXVII. Upon written request from MSO, Kmart shall supply MSO with the\nidentification of all manufacturers of Licensed Products. Upon reasonable prior\nwritten notice of MSO and at MSO's sole expense, MSO shall have the right to\ninspect the physical facilities of any manufacturer of Licensed Products for the\npurpose of assuring that such manufacturer is in satisfactory compliance with\nlegal and ethical human rights and labor standards and shall have the right to\nrefuse approval of any Licensed Product manufactured by any such manufacturer\nwhich after such inspection may be reasonably found not to be in substantial\ncompliance with such standards.\n\n      XXVII. Bankruptcy. Kmart and MSO shall each, in addition to its other\nrights, have the right, on written notice to the other, to terminate this\nAgreement if the other party files a petition in bankruptcy, or is adjudicated a\nbankrupt, or if a petition in bankruptcy is filed against it and is not\ndismissed within (60) days thereafter, or if it becomes insolvent, or makes an\nassignment for the benefit of creditors, or files a petition or otherwise seeks\nrelief under or pursuant to any federal or state bankruptcy, insolvency or\nreorganization statute or procedure, or if a custodian, receiver or trustee is\nappointed for it or a substantial portion of its business or assets (and such\nreceivership is not discharged within sixty (60) days thereafter).\n\n      XXVIII. Integration. This Agreement shall be the final and complete\nagreement between Kmart and MSO with respect to the subject matter hereof. No\nrepresentations, inducements, premises or understandings exist in relation to\nthe subject matter hereof, whether oral or written, except as expressly set\nforth herein, and this Agreement shall supercede all prior understandings,\nagreements, contracts or arrangements between the parties, whether oral or\nwritten, unless otherwise expressly incorporated herein. No agreement or other\nunderstanding purporting to add to or to modify the terms and conditions hereof\nshall be binding unless agreed to by the parties in writing. Any terms or\nconditions in any forms of the parties used in the performance of this Agreement\nwhich are in conflict with the terms and conditions hereof shall be void.\nNotwithstanding the foregoing, the Prior Agreements shall continue in full force\nand effect through July 31, 2001, and shall continue to govern matters arising\nunder such agreements prior to August 1, 2001 (including, without limitation,\npayment obligations relating to periods prior to August 1, 2001), unless\notherwise indicated herein.\n\n      XXIX. Interim Period. From the date hereof through July 31, 2001, Kmart\nagrees that it shall continue to conduct its purchasing practices with vendors\nand inventory replenishment practices and all other matters relating to the\ncalculation of the royalties payable under the Prior Agreements in a manner\nconsistent with past practice and without any regard for the switch in the basis\nfor calculating royalties to MSO from wholesale purchases to retail sales that\nwill occur on August 1, 2001.\n\n\n                                       15\n   16\n      IN WITNESS WHEREOF, the parties have executed this Agreement on the date\nfirst above written.\n\n\n                                KMART CORPORATION\n\n\n\n                                By:  \/s\/ Charles Conaway\n                                     --------------------\n                                 Name: Charles Conaway\n                                 Title: Chairman and CEO\n\n                                MSO IP HOLDINGS, INC.\n\n\n\n                                By:  \/s\/ Martha Stewart\n                                     ------------------\n                                 Name:  Martha Stewart\n                                 Title:  Authorized Signatory\n\n\n\n                                       16\n   17\n                                  SCHEDULE I(a)\n\n                                  Home Products\n\nBED ROOM\n      Sheets (180 and 200 thread count)\n      Mattress pads\n      Slip covers\n      Pillows (synthetic and natural)\n      Pillow cases\n      Pillow shams\n      Comforters\n      Quilts\n      Bed Spreads\n      Bed Skirts\n      Duvet\/comforter covers\n      Blanket\/throws\n      Coordinating window treatments\n      Coordinating decorative borders and wallpaper\n      Coordinating rugs\n\nBATH\n      Towels (sheet, beach, bath, hand and wash cloth)\n      Shower Curtains\n      Coordinating bath rugs\n      Bath accessories (tooth brush holder, lotion dispenser, soap dish,\n      tumbler, tissue cover, etc.)\n      Waste baskets\n      Coordinating window treatments\n      Coordinating decorative borders and wallpaper\n\nKITCHEN\n      Towels\n      Pot holders\n      Dish Cloths\n      Tablecloths\n      Napkins\/Napkin rings\n      Chairpads\n      Placemats\n      Coordinating decorative borders and wallpaper\n      Coordinating window treatments (curtains, valances, fabric shades,\n      vertical blinds, mini blinds, decorative hardware, drapery, panels, swags,\n      tab tops, top treatments, tiers)\n      Coordinating rugs\n\nGENERAL SOFT HOME\n      Window treatments (valances, mini blinds, decorative hardware, tab tops,\n      top treatments, tiers)\n      Decorative pillows\n      Home Fragrances\n      Closet Organizers\n\nSEASONAL HOME TEXTILES\n\nHOME TEXTILES FOR BABIES\n\n\n                                       17\n   18\nSCHEDULE I(b)\n\n                                 Garden Products\n\nLIVE PLANTS\n\nINDOOR FLORAL\/PLANT KIOSK\n\nOUTDOOR\/GARDEN FURNITURE\n\nWATERING EQUIPMENT\n\nLONG HANDLE GARDEN TOOLS\n\nSHORT HANDLE GARDEN TOOLS\n\nGARDEN CUTTING TOOLS\n\nGARDEN GLOVES\n\nFERTILIZERS\n\nSOILS\n\nPEST CONTROL\n\nGARDEN STORAGE &amp; CARRIERS\n\nGARDEN ACCESSORIES\n\nPLANT POTS\n\nGRILLING\n\nOUTDOOR LAWN DECORATION\n\nFALL BULBS\n\nSPRING BULBS\n\nSEED STARTING\n\nWATER GARDENING\n\nSEEDS\n\nBIRD\n\nLIGHTING\n\n\n\n\n                                       18\n   19\n                                  SCHEDULE I(c)\n\n                               Housewares Products\n\nHOME\n\n      Dinnerware (ceramic, glass, enamel)\n      Flatware (18\/0-18\/8)\n      Glassware (glass, plastic)\n      Decorative Accessories\n      Lamps and shades\n      Picture Frames\n      Candles\n\nFOOD\n\n      Kitchenware\n\n\nKEEPING\n\n      Closet Accessories                        Dish Felt Pads\n      Hangers                                   Floor Savers\n            Plastic                             Food Storage Containers\n            Wood                                Kitchen Containers\n            Metal                               Shelf Paper\n      Cedar Products\/Moth Protection            Trash Receptacles\n      Clothing Storage - Bags and Boxes         Recycling Receptacles\n            Shoes\n            Sweaters\n            Blankets\n            Hanging\n      Closet Shelving Organization Systems\n      Laundry Organization Items\n      Underbed Storage Containers\n      Wire and Cable Ties\n      Kitchen Organization Containers\n      Kitchen Labels\n      Dish Storage Containers\n\n\nSEASONAL VARIATIONS OF HOUSEWARES PRODUCTS\n\n\n\n                                       19\n   20\n                                  SCHEDULE I(d)\n\n                                Seasonal Products\n\n\n[***]\n\n\n                                       20\n   21\n                                 SCHEDULE II(3)\n\n                          ADDITIONAL PRODUCT CATEGORIES\n\nSmall appliances\n\nNotions and crafts\n\nReady-to-assemble furniture\n\nDecorative artificial flowers\n\nArea rugs\n\nHardware\n\n\n\n                                       21\n   22\n                                   SCHEDULE IV\n\n                                  Royalty Rates\n\n[ * * * ]\n\n\n\n                                       22\n   23\n                                  SCHEDULE V(2)\n\n                             Minimum Royalty Amounts\n\n[ * * * ]\n\n\n\n                                       23\n   24\n                               SCHEDULE VI(1)(ii)\n\n          VENDOR CONFIDENTIALITY AND PROPRIETARY MATERIALS AGREEMENT\n\n                      MARTHA STEWART LIVING OMNIMEDIA, INC.\n                               11 WEST 42ND STREET\n                            NEW YORK, NEW YORK 10036\n\n\n                           As of ____________________\n\n[Vendor Name and Address]\n\n\n      Re:   \"Martha Stewart Everyday\"\n\nDear ______________________:\n\n            As you know, you may soon be, or have been, manufacturing products\nto be sold under the \"Martha Stewart Everyday\" brand. Although these products\nwill be and\/or have been manufactured by you pursuant to agreements between you\nand certain retailers, you recognize that such retailers have made this\nagreement a condition to your manufacturing \"Martha Stewart Everyday\" products\n(the \"Products\") for them. Accordingly, in consideration of your selection, or\npotential selection, to manufacture certain Products, you hereby agree with\nMartha Stewart Living Omnimedia, Inc. (\"MSLO\") as follows:\n\n      1.    For the purposes of this Agreement, \"Proprietary Materials\" shall\n            mean all (i) information or material, whether or not in tangible\n            form, relating to MSLO or Martha Stewart or which is supplied to\n            you by MSLO, or which is supplied to you by an Approved Retailer\n            (as hereafter defined) in connection with the Products, other\n            than  (A) any such information known to you, or material in your\n            possession, prior to the commencement of your discussions\n            regarding the manufacture of Products with any Approved Retailer\n            or MSLO, as the case may be, (B) any such information generally\n            known to, or such materials generally possessed by, the public at\n            large (other than as a result of (X) a breach of this agreement\n            by you, (Y) distribution of the Products, or (Z) the acts of any\n            other party which you know, or have reason to know, is under an\n            obligation of confidentiality to MSLO), and (C) any such\n            information or material acquired by you from a third party (other\n            than a third party which you know, or have reason to know, is\n            under an obligation of confidentiality to MSLO or who acquired\n            such information or material as a result of the distribution of\n            the Products), (ii) materials, whether or not in tangible form,\n            which you develop with MSLO or with any contribution, input,\n            advice or direction whatsoever from MSLO (the \"Vendor Materials\")\n            (for the sake of clarity, Vendor Materials shall include the\n            entire applicable material, not just the portion developed with\n            MSLO's contribution, input, advice or direction), and (iii)\n            information or materials, whether or not in tangible form, with\n            respect to which you gain access or knowledge as a direct result\n            of (A) your relationship relating to the Products with an\n            Approved Retailer\n\n\n                                       24\n   25\n            or MSLO, as the case may be, or (B) carrying out any of your\n            obligations to MSLO or an Approved Retailer relating to the\n            Products. Notwithstanding the foregoing, the Proprietary Materials\n            shall include any Materials (as defined below) in which MSLO owns\n            any proprietary rights (including, without limitation, any copyright\n            rights, trademark rights, or other intellectual property rights).\n\n            The Proprietary Materials may include, but are not necessarily\n            limited to, the following: concepts; techniques; data;\n            documentation; research and development; customer lists; advertising\n            plans; distribution networks; new product concepts; intellectual\n            property of all types, including, without limitation, designs,\n            patterns, ideas, and any physical manifestations thereof; prints;\n            sketches; planned introduction dates; processes; marketing\n            procedures; \"know-how\"; marketing techniques and materials;\n            development plans; names and other information related to strategic\n            partners, suppliers, or vendors; pricing policies and strategic,\n            business or financial information, including business plans and\n            financial pro formas (all of the foregoing, \"Materials\").\n\n            Notwithstanding the foregoing, the Proprietary Materials shall not\n            include materials you develop at your sole cost and expense with no\n            contribution, input, advice or direction whatsoever from MSLO (the\n            \"_____ Materials\"); provided, however, that no ______ Materials may\n            in any way contain, embody or reference any Proprietary Materials,\n            including, without limitation, any MSLO trademark, servicemark,\n            mark, name or other designation.\n\n            For purposes of this Agreement, \"Approved Retailers\" shall mean\n            those entities set forth on Exhibit A hereto, which exhibit may be\n            amended from time to time by MSLO.\n\n      2.    You acknowledge that MSLO exclusively owns, in perpetuity and\n            throughout the world, all right, title and interest, including,\n            without limitation, all copyrights, trademarks and other\n            proprietary rights (and all renewals and extensions thereof)\n            embodied in, or related to, the Proprietary Materials, and any\n            and all good will therein.  You recognize the great value of the\n            publicity and good will associated with the Proprietary Materials\n            and acknowledge that such value and good will belongs exclusively\n            to MSLO.  You agree that you shall not acquire any rights in or\n            to the Proprietary Materials by virtue of your performance of any\n            obligations to MSLO or any Approved Retailer or otherwise.  Any\n            use which you may make of the Proprietary Materials shall solely\n            be pursuant to your agreements with MSLO or the Approved\n            Retailers in connection with the Products and shall not restrict,\n            limit or otherwise diminish MSLO's rights therein with respect to\n            any other products or use.  You hereby acknowledge and agree that\n            the Vendor Materials shall be and\/or have been solely created by\n            you as a \"work-made-for-hire\" specially commissioned by MSLO for\n            use in connection with the Products pursuant to the United States\n            Copyright Act, and any and all extensions and\/or renewals\n            thereof, it being understood that in the event any of the Vendor\n            Materials are determined not to be a \"work-made-for-hire\", then\n            you hereby irrevocably assign to MSLO all rights therein.  You\n            represent and warrant that (i)\n\n\n                                       25\n   26\n            you shall not undertake or cause any third party to undertake any\n            act that violates, infringes, diminishes, challenges or otherwise\n            conflicts with MSLO's exclusive ownership of all rights, title and\n            interest in and to the Proprietary Materials, and (ii) that MSLO's\n            exploitation of the Vendor Materials shall not infringe the rights\n            of any third party.\n\n1.          All notes, data, reference materials, sketches, drawings, memoranda,\n            documentation and records in any way incorporating or reflecting any\n            of the Proprietary Materials shall belong exclusively to MSLO and\n            you agree to turn over all copies of such materials in your\n            possession or control to MSLO upon the earlier of MSLO's request or\n            termination of the final agreement pursuant to which you manufacture\n            any Products.\n\n2.          You shall hold in confidence and not directly or indirectly reveal,\n            report, publish, disclose or transfer any of the Proprietary\n            Materials in any form to any person or entity, nor shall you utilize\n            any of the Proprietary Materials for any purpose, except in each\n            case as may be necessary in the course of your manufacture of\n            Products, provided that no Proprietary Materials which are\n            designated as being \"confidential\" by MSLO may be revealed,\n            reported, published, disclosed or transferred without the express\n            written consent of MSLO. You shall cause each of your employees,\n            agents or representatives that is provided access to any Proprietary\n            Materials to abide by the same obligations and restrictions to which\n            you are subject hereunder.\n\n3.          You agree that you shall not sell any products incorporating any of\n            the Proprietary Materials to any entity other than MSLO or an\n            Approved Retailer, except as expressly permitted herein.\n\n4.          Upon receipt of a notice from MSLO or an Approved Retailer that any\n            Products manufactured by you are deficient in quality or are not\n            consistent with the relevant specifications, or in the event of\n            an Overrun (as hereafter defined), you may sell such deficient\n            Products or Products with respect to which there has been an\n            Overrun (collectively, \"Excess Products\") to parties other than\n            Approved Retailers, provided that (i) no use of or reference to\n            the name Martha Stewart, MSLO or any variation thereof is used in\n            connection with any advertising, publicity, labeling, wrapping or\n            packaging with respect to any such sales, (ii) that prior to\n            making any such sale you receive assurances from the party to\n            whom you sell such Excess Products that they will comply, and\n            will cause any subsequent purchasers to comply, with the terms of\n            sub-clause (i) above, and (iii) that such sales are made to\n            purchasers who have warranted to you in writing that they shall\n            only re-sell the Excess Products outside of North America (unless\n            prior approval for North American sales is received from MSLO or\n            the Approved Retailer for whom the Excess Products were\n            originally manufactured). For purposes of this Agreement, there\n            shall be an \"Overrun\" on a Product only in the event that (1) you\n            have received notice from all Approved Retailers for whom you\n            manufacture such Product that such Approved Retailers do not\n            intend to purchase any more of such Product from you in the\n            future, (2) you have delivered to the relevant Approved Retailers\n            and to MSLO the amount of Product in your possession with\n\n\n                                       26\n   27\n            respect to which there is an Overrun, and (3) MSLO and the relevant\n            Approved Retailers have approved the quantity of such Overrun. MSLO\n            and the Approved Retailers may, in their sole discretion, limit the\n            amount of Excess Product you may dispose of pursuant to the terms of\n            this paragraph if they determine that the amount of such Products\n            that you have on hand for such disposal is excessive and beyond the\n            quantity you would have possessed had you followed a normal and\n            prudent manufacturing schedule.\n\n5.          In the event that you receive a request to disclose any Proprietary\n            Materials under a subpoena or court order, you will (a) promptly\n            notify MSLO thereof, (b) consult with MSLO on the advisability of\n            taking steps to resist or narrow such request, and (c) if\n            disclosure is required or deemed advisable, cooperate with MSLO\n            in any attempt that it may make to obtain an order or other\n            reliable assurance that confidential treatment will be accorded\n            to designated portions of the Proprietary Materials.\n\n6.          Because of the unique nature of the Proprietary Materials, you\n            understand and agree that MSLO will suffer irreparable harm in\n            the event that you fail to comply with any of your obligations\n            hereunder and that monetary damages may be inadequate to fully\n            compensate MSLO for such breach.  Accordingly, you agree that\n            MSLO will, in addition to any other remedies available to it at\n            law or in equity, be entitled to injunctive relief, including,\n            without limitation, temporary restraining orders and\/or\n            preliminary injunctions, to enforce the terms of this Agreement.\n            In the event of any breach or purported breach by MSLO hereunder,\n            your rights shall be limited to an action at law for money\n            damages actually suffered.  In no event shall you be entitled to\n            rescission, injunction or other equitable relief of any kind.\n\n7.          In case any one or more of the provisions (or portions of the\n            provisions) of this Agreement shall for any reason be held to be\n            invalid, illegal or unenforceable in any respect, such\n            invalidity, illegality or unenforceability shall not affect any\n            other provisions (or portions of the provisions) of this\n            Agreement and this Agreement shall be construed as if the\n            invalid, illegal or unenforceable provisions (or portions of the\n            provisions) had never been contained therein.\n\n8.          In the interest of being guided by a well-developed body of law in\n            the event of a dispute, the parties agree that this Agreement,\n            including the validity and enforceability hereof, shall be\n            interpreted in accordance with the laws of the State of New York\n            pertaining to agreements made and performed therein, and the courts\n            located in the State of New York, County of New York (federal, if\n            jurisdiction is present, state, if federal jurisdiction is lacking),\n            shall have exclusive jurisdiction and venue over all disputes\n            hereunder.\n\n            Upon execution hereof by your authorized signatory, this letter\nshall constitute a binding agreement between you and MSLO, enforceable according\nto its terms.\n\n                                Sincerely yours,\n\n\n                                       27\n   28\n                              MARTHA STEWART LIVING OMNIMEDIA, INC.\n\n\n                              By:_______________________________\n                                 Name:\n                                 Title:\n\nACCEPTED AND AGREED BY:\n\n______________________________\n\n\nBy:____________________________\n   Name:\n   Title:\n\n\n\n                                       28\n   29\n      EXHIBIT A\n\nKmart Corporation\n\nHudson's Bay Company\n\n\n\n                                       29\n   30\n                                 SCHEDULE VI(4)\n\n             VENDOR SELECTION STANDARDS, POLICIES AND PROCEDURES\n\nA.    BEST QUALITY DESIGN\n\n      1. An acceptance that Martha Stewart Everyday is the driver of product\n      content defined as design, packaging, and all other consumer-related\n      \"facings\"; and willingness to work in an open-minded and highly responsive\n      development and design process that is based upon: a) hearing MSE's\n      requirements, and b) meeting those needs through vendor knowledge and\n      experience.\n\n      REQUEST:    MSE REQUESTS THAT KMART TAKE VENDOR WILLINGNESS TO WORK WITH\n                  AND FOR MSE DURING PRODUCT DESIGN AND DEVELOPMENT INTO ACCOUNT\n                  IN SELECTING MANUFACTURERS FOR THE MSE PRODUCT COLLECTIONS AND\n                  LINES.\n\n      2. A desire to work with MSE and Kmart to meet and beat \"best of industry\"\n      standards for all product SKU's and agreement to work within a process of\n      prototype-testing with Kmart that ensures all product meets \"best\"\n      standards prior to production and shipment.\n\n      REQUEST:    MSE REQUESTS THAT KMART AND THE VENDORS WORK WITH MSE TO\n                  DEVELOP \"BEST OF INDUSTRY\" STANDARDS FOR ALL MSE SKU'S, AND\n                  THAT ALL SKU'S BE TESTED TO \"MEET OR BEAT\" THESE STANDARDS.\n                  FOR THOSE SKU'S THAT FAIL TO MEET \"BEST OF\" STANDARDS, PRODUCT\n                  IS RECALLED AND IS NOT STOCKED OR RESTOCKED UNTIL STANDARDS\n                  ARE MET.\n\nB.    MAINTAIN QUALITY THROUGH MANUFACTURING\n\n      1.  A willingness of the vendor to inspect, inspect, inspect \"out the\n      door\".\n\n      REQUEST:    VENDORS SET A \"ZERO\" DEFECT TOLERANCE TARGET LEVEL TO BE\n                  MONITORED ON SITE BY KMART FOR ALL MSE PRODUCT PRODUCED AND\n                  SHIPPED, INCLUDING THE OUTPUT OF ALL SUBCONTRACTED\n                  MANUFACTURING.\n\n      2.  A willingness by Kmart to inspect, inspect, inspect \"in the door\" and\n      \"on the floor\".\n\n      REQUEST:    MSE REQUESTS THAT KMART SIGNIFICANTLY IMPROVE ITS IN-STORE\n                  AUDIT WORKFORCE AND CAPABILITIES TO FILTER OUT ANY IN-STORE\n                  MSE MERCHANDISE THAT DOES NOT MEET APPROVED PRODUCT STANDARDS\n                  AND THAT THIS PRODUCT BE RECALLED AND RETURNED TO THE\n                  MANUFACTURER WITHOUT PENALTY TO MSE.\n\nC.    COMMUNICATE WITH THE CUSTOMER IN BRAND TERMS\n\n      1. Over and above \"best of breed\" product, willingness to honestly\n      disclose to MSE any and all potential \"maintenance\" problems with the\n      product, set reasonable consumer expectations, and immediately rectify all\n      problems.\n\n      REQUEST:    THE SEWN IN LABELS AND HANG TAGS FULLY DISCLOSE ALL\n                  POTENTIAL MAINTENANCE \"ADVISORIES\" AND CARE TIPS, AND\n                  EXPECTED SHRINKAGE\/STRETCH ADJUSTMENTS. CONSUMER PROBLEMS\n                  BE IMMEDIATELY RECTIFIED IN WRITING AND THROUGH REFUND\n                  PROGRAMS.\n\n\n                                       30\n   31\n      2.  Agreement to qualify foreign manufacturing operations up-front against\n      Kmart\/MSE standards prior to commencing manufacturing.\n\n      REQUEST:    MSE REQUESTS THAT THE PROCEDURES RECENTLY INSTITUTED BE\n                  FORMALLY DOCUMENTED AND THAT ALL RESULTS BE PROMPTLY PASSED TO\n                  MSE AND THE VENDORS. ALSO THAT A HIGH LEVEL POINT PERSON\n                  (EXECUTIVE) BE RESPONSIBLE AND ACCESSIBLE TO MSE TO ASSURE\n                  PROMPT RESOLUTION AND FOLLOW UP WHEN PROBLEMS ARISE.\n\n      3. Agreement by all vendors, foreign and domestic, to uphold the highest\n      level of manufacturing standards with regard to Human Rights and fair\n      treatment of the vendors' workforce.\n\n      REQUEST:    ALL VENDORS USE THE KMART 35-PAGE CHECKLIST TO QUALIFY AND ALL\n                  FOREIGN AND DOMESTIC PLANTS PRIOR TO COMMENCING ANY MSE\n                  MANUFACTURING AND THAT VENDORS ALLOW KMART AND MSE ACCESS TO\n                  ITS FACILITIES TO HELP ASSURE THAT COMPLIANCE STANDARDS ARE\n                  MET. KMART AGREES THAT NO VENDOR WILL BE USED WHO DOES NOT\n                  MEET THESE STANDARDS.\n\n\n                                EXCLUSIVELY AT KMART\n\n\n\n                                       31\n   32\n                                 SCHEDULE VI(8)\n\n                          Specifics to Garden Products\n\n      (A) Under the Garden Agreement, live plants sold in connection with the\nLicensed Property were intended to be sold pursuant to Schedule VI(7) of that\nagreement. Following the execution of this Agreement the parties will cooperate\nin good faith to revise that Schedule VI(7) to eliminate the roll of the\nDesignated Broker and the Required System and to otherwise simplify the program\nin mutually agreeable ways, provided that the program will continue to be\ncomprised of Martha Picks and MSEG Commodities, that MSO will continue to have\nthe ability to determine the Martha Picks and will endeavor, along with Kmart,\nto maintain the secrecy of such picks, and that MSO will be permitted to approve\nall care and other instructions relating to the live plants. The revised\nSchedule VI(7) will be adopted and become a part of this schedule.\n\n      (B) Garden Products that are intended for indoor use shall generally be\navailable for sale at Kmart year-round. Garden Products that are intended for\noutdoor use shall generally be available at all times from March 1 to September\n15 of each year (the \"Outdoor Availability Period\") and at any other times the\nparties deem desirable, provided that, with respect to certain Kmart Stores\nlocated in the southern, southwestern and western portions of the Territory,\nsuch products shall be available during longer periods (such periods and such\nindividual stores to be mutually determined by the parties). In the event of\nunseasonal weather in particular regions of the Territory, Kmart and MSO shall\nmutually agree on whether certain products intended for outdoor use should be\nwithheld from sale during a portion of the Outdoor Availability Period.\n\n      (C) MSO shall be entitled to select the vendors who supply Licensed\nProducts that fall within the \"All Natural Organics\" product categories.\n\n      (D) Kmart hereby agrees to dedicate funds annually throughout the Term to\nthe promotion of Sales of the Garden Products through innovative, MSO sponsored\nevents or promotions consistent with the publication of the Martha Stewart\nEveryday Garden magazine in 2001 or the planned sponsorship of the National\nFlower Show in 2000. MSO and Kmart shall mutually agree each year on the nature\nof the event or project and the cost thereof, but it shall generally be a Martha\nStewart-branded project or promotion intended to enhance Martha Stewart-brand\nawareness and Sales of Garden Products at Kmart.\n\n\n\n\n\n                                       32\n   33\n                                  SCHEDULE XIII\n\n                               GUARANTEED PRODUCTS\n\n\n\nGARDEN\n<\/pre>\n<table>\n<caption>\n                  1999                  2000                       2001<br \/>\n<s>               <c>                   <c>                        <c><br \/>\nTOOL SHED<br \/>\n                  Garden Fork           Compost Bin                &#8220;Best&#8221; Level<br \/>\n                  Round Point Shovel    LH Bulb Planter<br \/>\n                  Flat Head Hoe         Square Spade<br \/>\n                  Bamboo Rake           Border Spade<br \/>\n                  Garden Rake           Heart Hoe<br \/>\n                                        Wheel barrow<br \/>\n                                        Hedge Shears<br \/>\n                                        Loppers<br \/>\n                                        Small Bamboo Rake<br \/>\n                                        Compost Fork<br \/>\n                                        Pistol Grip Saw<br \/>\n                                        Large Pruning Saw<br \/>\n                                        Pole Pruner<br \/>\n                                        Bow Saw<\/p>\n<p>TOOL BAG<br \/>\n                  Pruning Shears        SH Bulb Planter            &#8220;Best&#8221; Level<br \/>\n                  Trowel                Garden Reel<br \/>\n                  Hand Cultivator       Fishtail Weeder<br \/>\n                  Hand Weeder           Holster for Shears<br \/>\n                  Planting Dibber       Mini Claw Cultivator<br \/>\n                  Tool Bag<\/p>\n<p>STORAGE<br \/>\n                  Large Galvanized Bin  Garden Cart                Storage Hooks<br \/>\n                  Galvanized Bucket     Large Plastic Bin\/Leaf     Med Plastic Bin<br \/>\n                  Soil Scoop            Small Bucket w\/ Handle     Small Plastic Bin<br \/>\n                  Harvest Basket        Compost Pail w\/ Lid        Wire Harvest Basket<br \/>\n                                        Folding Tarp\/Leaf<br \/>\n                                        Small galvanized Bucket<br \/>\n                                        Lid for Galv. Bucket<br \/>\n                                        Scoops &#8211; large and small<br \/>\n                                        Tool Storage Rack<\/p>\n<p>INDOOR FLORAL<br \/>\n                                        Floral Shears<br \/>\n                                        Plant Mister<br \/>\n                                        Small Watering Can<br \/>\n                                        Folding Floral Knife<br \/>\n                                        Floral Buckets<br \/>\n                                        Thinning Clippers<br \/>\n                                        Arranging Kit<\/p>\n<p>WATERING<br \/>\n                  Watering Can          (4) Sprinklers<br \/>\n                  50&#8242; Garden Hose       80&#8242; &amp; 100&#8242; Garden Hose<br \/>\n                  Quick Coupler Set     Watering Wand<br \/>\n<\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n<p>                                       33<br \/>\n   34<\/p>\n<table>\n<s>               <c>                             <c>                                  <c><br \/>\n                  Adjustable Grip Nozzle          Soaker Hose<br \/>\n                  Skylands Sprinkler              Hose Hanger or Reel<br \/>\n                                                  Manual Irrigation Timer<br \/>\n                                                  Electronic Irrigation Timer<br \/>\n                                                  Misting Rose<br \/>\n                                                  Shut Off Valve<\/p>\n<p>ACCESSORIES<br \/>\n                  Bamboo Stakes (3&#8242;, 5&#8242;)          Sharpener for Shovel                 Wide Brim Hat<br \/>\n                  Metal Plant Labels              Clogs<br \/>\n                  Wooden Plant Labels 2 sizes     Bamboo Stakes (7&#8242;)                   Tool Belt<br \/>\n                  Pen for Plant Markers<br \/>\n                  Twine (2 weights_                                                    Apron<br \/>\n                                                                                       Plant Supports Nails<\/p>\n<p>SEED STARTING<br \/>\n                                                  Planting Tray<br \/>\n                                                  Large Cell Seed Starting Insert<br \/>\n                                                  Small Cell Seed Starting Insert<br \/>\n                                                  Planting Dome<br \/>\n                                                  Seed Starting Mix<br \/>\n                                                  Mist Bottle<br \/>\n                                                  Small Wood Plant Labels<br \/>\n                                                  Cold Frame<\/p>\n<p>GLOVES<br \/>\n                  Printed Jersey (W)              Plaid Jersey<br \/>\n                  Non-Skid Jersey                 Dot Jersey w\/ Vinyl<br \/>\n                  Printed Jersey (K)              Plaid Jersey w\/ Vinyl<br \/>\n                                                  Solid Jersey w\/ Suede<br \/>\n                                                  Non-Skid Jersey (M)<br \/>\n                                                  Leather\/Goatskin (W)<br \/>\n                                                  Suede Work Glove (W)<br \/>\n                                                  Solid Twill (W)<br \/>\n                                                  Surgical (W)<br \/>\n                                                  1 x 1 Rib Knit\/Nitrile (W)<br \/>\n                                                  Velux<br \/>\n                                                  Fleece Chore Glove (M)<br \/>\n                                                  Solid Jersey (M)<br \/>\n                                                  Leather (M)<br \/>\n                                                  Surgical (M)<br \/>\n                                                  Heavy Suede &amp; Twill (M)<br \/>\n                                                  Twill (M)<br \/>\n                                                  Heather Jersey (K)<br \/>\n                                                  Solid Jersey w\/ Suede (K)<\/p>\n<p>OUTDOOR POTS<br \/>\n                  Garland Rose                    &#8220;Better&#8221; \/ &#8220;Best&#8221; Plastic\/Seasonal<br \/>\n                  Rolled Rim &#8211; Large              &#8220;Better&#8221; \/ &#8220;Best&#8221; Clay<br \/>\n                  Rolled Rim &#8211; Small<br \/>\n                  Basketweave<\/p>\n<p>SOILS<br \/>\n                  General Soil Mix                Orchid Mix<br \/>\n                  Soilless Mix with Bark          Bulb Mix<br \/>\n                                                  Indoor Plant Mix<br \/>\n<\/c><\/c><\/c><\/s><\/table>\n<p>                                       34<br \/>\n   35<\/p>\n<table>\n<s>                       <c>                         <c>                                                 <c><br \/>\nFOODS\/FERTILIZERS<br \/>\n                          Rose                        Soil Testing Kit<br \/>\n                          Tomato\/Vegetable            Fish\/Seaweed Concentrate<br \/>\n                          Acid Loving                 Fish\/Seaweed Concentrate Tree &amp; Shrub<br \/>\n                          Bonemeal                    Basic\/Granular Tree &amp; Shrub<br \/>\n                          Bulb Food<br \/>\n                          All Purpose<\/p>\n<p>OUTDOOR LIGHTING<br \/>\n                                                      Solar\/Low Voltage                                   Outdoor Decor Lighting<br \/>\n                                                      Lighting &amp; Accessories<\/p>\n<p>TRELLIS\/EDGING\/FENCE<br \/>\n                                                      Expandable Trellis<br \/>\n                                                      Basis Arch<br \/>\n                                                      Wild Lattice Components<br \/>\n                                                      Pound-in Edging<br \/>\n                                                      Rolled Edging<\/p>\n<p>CHILDREN&#8217;S GARDEN<br \/>\n                                                      Children&#8217;s Tool Set (Cultivator, trowel, weeder)<br \/>\n                                                      Bamboo Leaf Rake<br \/>\n                                                      Shovel<br \/>\n                                                      Cultivator<br \/>\n                                                      Garden Rake<\/p>\n<p>BIRDS<br \/>\n                                                      Seed                                                &#8220;Best&#8221; Level<br \/>\n                                                      Suet<br \/>\n                                                      Bird Baths<br \/>\n                                                      Feeders<br \/>\n                                                      Bird Houses<\/p>\n<p>LAWN\/ORNAMENT\/DECOR<br \/>\n                                                      Stone\/Concrete Decor                                &#8220;Better&#8221;\/&#8221;Best&#8221; Levels<\/p>\n<p>PEST CONTROL<br \/>\n                          Mosquito Barrier            Garden Insecticide<br \/>\n                          Yellow Jacket &amp; Flying      Garden Pesticide<br \/>\n                                  Insect Trap         Garden Fungiside<br \/>\n                          Flying Insect Killer<br \/>\n                          Wasp &amp; Hornet Killer<br \/>\n                          Ant Killer<br \/>\n<\/c><\/c><\/c><\/s><\/table>\n<p>HOUSEWARES<\/p>\n<p>FOOD<\/p>\n<p>      Enamel Cast Iron Cookware<br \/>\n      Cast Iron Cookware<br \/>\n      Enamel Steel Cookware<br \/>\n      Anodized Aluminum Cookware<br \/>\n      Stainless Steel Cookware<br \/>\n      Aluminum Cookware<br \/>\n      Metal Bakeware<\/p>\n<p>                                       35<br \/>\n   36<br \/>\n      Ceramic Bakeware<br \/>\n      Glass Bakeware<br \/>\n            Clear<br \/>\n            Colored<br \/>\n      Cutlery<br \/>\n            Serrated<br \/>\n            Non-Serrated<br \/>\n      Tea Kettles<br \/>\n      Kitchen Gadgets &amp; Utensils<br \/>\n            Wooden<br \/>\n            Stainless Steel<br \/>\n            Nylon<br \/>\n            Melamine<br \/>\n            Ergonomic<br \/>\n      Specialty Cookware<br \/>\n            Ethnic<br \/>\n            Healthy<br \/>\n      Barbeque Accessories<br \/>\n      Baking Gadgets &amp; Utensils<br \/>\n      Mixing Bowls<br \/>\n            Glass<br \/>\n            Stainless Steel<br \/>\n            Plastic<br \/>\n            Ceramic<br \/>\n      Spice Racks<br \/>\n      Cleaners for Stainless Steel Cookware<\/p>\n<p>HOME<\/p>\n<p>      Embossed Whiteware Dinnerware<br \/>\n      Mix and Match Stoneware, Dinnerware and Serveware<br \/>\n      Glass Dinnerware<br \/>\n      Plastic Dinnerware<br \/>\n      Beverageware<br \/>\n      Stemware<br \/>\n      Glass Serveware<br \/>\n      Flatware<br \/>\n            18\/0<br \/>\n            18\/8<br \/>\n      Wooden Serveware<br \/>\n      Enamelware<br \/>\n      Picture Frames<br \/>\n      Mirrors<br \/>\n      Lamps<br \/>\n            Accent<br \/>\n            Desk<br \/>\n            Floor<br \/>\n      Lamp Shades<br \/>\n      Clocks<br \/>\n      Candles<br \/>\n            Scented<br \/>\n            Non-Scented<br \/>\n      Candle Accessories<br \/>\n            Holders<br \/>\n            Snuffers<br \/>\n            Lanterns<br \/>\n            Hurricanes<\/p>\n<p>                                       36<br \/>\n   37<br \/>\n      Matches<\/p>\n<p>KEEPING<\/p>\n<p>      Closet Accessories<br \/>\n      Hangers<br \/>\n            Plastic<br \/>\n            Wood<br \/>\n            Metal<br \/>\n      Cedar Products\/Moth Protection<br \/>\n      Clothing Storage &#8211; Bags and Boxes<br \/>\n            Shoes<br \/>\n            Sweaters<br \/>\n            Blankets<br \/>\n            Hanging<br \/>\n      Closet Shelving Organization Systems<br \/>\n      Laundry Organization Items<br \/>\n      Underbed Storage Containers<br \/>\n      Wire and Cable Ties<br \/>\n      Kitchen Organization Containers<br \/>\n      Kitchen Labels<br \/>\n      Dish Storage Containers<br \/>\n      Dish Felt Pads<br \/>\n      Floor Savers<br \/>\n      Floor Storage Containers<br \/>\n      Kitchen Containers<br \/>\n      Shelf Paper<br \/>\n      Trash Receptacles<br \/>\n      Recycling Receptacles<\/p>\n<p>SEASONAL<\/p>\n<p>[TO COME FROM MSO]<\/p>\n<p>                                       37<br \/>\n   38<br \/>\n                                  SCHEDULE XIV<\/p>\n<p>                                Sales Projections<\/p>\n<p>[ * * * ]<\/p>\n<p>                                       38<br \/>\n   39<br \/>\n                                  SCHEDULE XXVI<\/p>\n<p>                    LABOR STANDARDS COMPLIANCE CERTIFICATE<\/p>\n<p>All Kmart Vendors:<\/p>\n<p>Kmart is strongly committed to full compliance with human rights and labor<br \/>\nstandards as related to the manufacturing of all merchandise sold at our stores.<br \/>\nAs a vendor to Kmart, you must ensure that there is no misstatements as to the<br \/>\ntrue country of origin of your merchandise, and that none of your merchandise is<br \/>\nmade in whole or in part using any child, forced or prison labor. This<br \/>\nobligation applies not only to your own company, but to any subcontractors you<br \/>\nmay use in producing goods for Kmart.<\/p>\n<p>If Kmart learns that a factory used by any of our vendors for the production of<br \/>\nmerchandise has committed legal violations, or failed to comply with our<br \/>\nstandard Kmart order terms, we will:<\/p>\n<p>&#8211;     Cancel the affected order(s)<\/p>\n<p>&#8211;     Terminate our relationship with the vendor<\/p>\n<p>&#8211;     Take legal action or pursue other equitable remedies to recoup any<br \/>\n      financial losses incurred by Kmart<\/p>\n<p>&#8211;     Assess a payment to the vendor, equivalent to 50 percent of the order(s),<br \/>\n      that Kmart will donate to a human rights or children&#8217;s organization<\/p>\n<p>With our current and planned growth in global sourcing, Kmart is increasing our<br \/>\nquality control staff to ensure compliance with all applicable human rights and<br \/>\nlabor standards as well as other critical elements of quality assurance.<br \/>\nConsistent with these actions, we expect all of our vendors to increase their<br \/>\nfactory inspections and take vigilant and immediate action to eliminate any<br \/>\nproblems that are found to exist.<\/p>\n<p>Please sign and return the following Certification of Compliance to John<br \/>\nRutherford, _______________, 3100 W. Big Beaver, Troy, MI 48084 by<br \/>\n_______________.<\/p>\n<p>Thank you for your prompt attention and personal commitment to this very<br \/>\nimportant matter.<\/p>\n<p>Sincerely,<\/p>\n<p>Kmart Representative<\/p>\n<p>________________________________________________________________________________<br \/>\nCertification of Compliance<\/p>\n<p>&#8220;By my signature below, as Chief Executive Officer, and on behalf of my company,<br \/>\nI acknowledge receipt of the above letter, and do hereby certify and agree that<br \/>\nthe company will comply with all applicable labor laws and the order terms and<br \/>\nconditions set forth on the back of this agreement for any and all goods<br \/>\nsupplied to Kmart regardless of country of origin. My company also agrees to<br \/>\nmake the above assessed payments for donation by Kmart to a human rights or<br \/>\nchildren&#8217;s organization in the event of failure to comply with the above<br \/>\nrequirements.&#8221;<\/p>\n<p>________________________________________________________________________________<br \/>\n(Print) Name &amp; Title &#8211; Chief Executive Officer        Signature         Date<\/p>\n<p>________________________________________________________________________________<br \/>\nCompany Name &amp; Address<\/p>\n<p>                                       39<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7994,8137],"corporate_contracts_industries":[9464,9495],"corporate_contracts_types":[9613,9616],"class_list":["post-42465","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-kmart-corp","corporate_contracts_companies-martha-stewart-living-omnimedia-inc","corporate_contracts_industries-media__books","corporate_contracts_industries-retail__department","corporate_contracts_types-operations","corporate_contracts_types-operations__ip"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42465","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42465"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42465"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42465"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42465"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}