EXHIBIT 10.9
FORM OF REGISTRATION RIGHTS AGREEMENT
     This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of
April 2, 2008 among MARTHA STEWART LIVING OMNIMEDIA, INC., a Delaware
corporation (the “Company”), EMERIL’S FOOD OF LOVE PRODUCTIONS, L.L.C., a
Louisiana limited liability company (“Food of Love”), EMERILS.COM, LLC, a
Louisiana limited liability company (“emerils.com”), and Emeril J. Lagasse, III
(“Lagasse” and together with Food of Love and emerils.com, the “Original
Holders”).
RECITALS
     A. Pursuant to the Asset Purchase Agreement, dated as of February 18, 2008
(the “Purchase Agreement”), the Original Holders agreed to sell to the Company
and MSLO Shared IP Sub LLC, a Delaware limited liability company and
wholly-owned subsidiary of the Company (the “Shared IP Sub” and together with
the Company, the “Buyers”), the Business (as defined in the Purchase Agreement),
and the transactions contemplated by the Purchase Agreement are being
consummated as of the date hereof. Capitalized terms used herein but not
otherwise defined shall have the respective meanings set forth in the Purchase
Agreement.
     B. As part of the consideration to be paid in connection with the sale of
the Business, the Company is, at the Closing, issuing to the Original Holders
the amount of shares of Common Stock specified in the Purchase Agreement (the
“Closing Shares”), and the Original Holders also will have the opportunity to
earn additional shares of Common Stock (the “Continent Shares”) through
Contingent Payments upon the achievement of certain EBITDA targets by the
Business.
     C. In connection with the issuance of the Closing Shares and, if issuable,
the Contingent Shares, the Company has agreed to provide the registration rights
set forth in this Agreement.
AGREEMENT
     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, the
parties agree as follows:
ARTICLE I
DEFINITIONS
     Section 1.1 Certain Definitions. As used in this Agreement, capitalized
terms not otherwise defined herein shall have the meanings ascribed to them
below:
          ”Business Day” means any day that is not a Saturday, a Sunday or other
day on which banks are required or authorized by law to be closed in The City of
New York.

 

--------------------------------------------------------------------------------

 

          ”Common Stock” means the Class A Common Stock, par value $0.01 per
share, of the Company.
          ”Exchange Act” means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
          ”Holder” or “Holders” means any Original Holder and any Person who
shall acquire and hold Registrable Securities in accordance with the terms of
this Agreement; provided that except for the Original Holders, no Person shall
be deemed a “Holder” for purposes of this Agreement unless such Person acquires
and holds at least 100,000 Registrable Securities.
          ”Person” means any individual, corporation, partnership, limited
liability company, limited liability partnership, syndicate, person, trust,
association, organization or other entity or any governmental or regulatory body
or other agency or authority or political subdivision thereof, including any
successor, by merger or otherwise, of any of the foregoing.
          ”Registrable Securities” means (a) shares of Common Stock issued to
the Original Holders as Closing Shares or Contingent Shares pursuant to the
Purchase Agreement and (b) shares or other units of any equity securities issued
or issuable, directly or indirectly, in exchange for or with respect to the
Common Stock referenced in clause (a) above by way of a stock dividend, stock
split or combination of shares or in connection with a reclassification,
recapitalization, merger, consolidation or other reorganization or otherwise.
Any particular Registrable Securities shall cease to be Registrable Securities
when (i) a registration statement with respect to the sale of such securities
shall have been declared effective under the Securities Act and such securities
shall have been disposed of in accordance with such registration statement,
(ii) such securities shall have been sold to the public pursuant to Rule 144 (or
any successor provision) under the Securities Act or (iii) the resale of such
securities is no longer subject to any current public information, volume or
method of sale restrictions pursuant to Rule 144 (or any successor provision)
under the Securities Act.
          ”Registration Expenses” means all fees and expenses incurred by the
Company in connection with its performance of or compliance with the provisions
of Article II, including: (i) SEC, stock exchange or NASD registration, filing
fees and listing fees and fees with respect to the inclusion of securities on
the New York Stock Exchange or on any securities market on which the Common
Stock is listed or quoted; (ii) fees and expenses of compliance with state
securities or “blue sky” laws, if any; (iii) printing and copying expenses;
(iv) messenger and delivery expenses; (vi) fees and disbursements of counsel for
the Company; and (vii) with respect to the registration, the fees and
disbursements of one counsel for the Holders selected by Lagasse; provided,
however, that any such fees and disbursements with respect to such counsel in
excess of $25,000 shall not constitute “Registration Expenses” hereunder, and
the Company shall have no liability to any Person with respect thereto.
          ”SEC” means the Securities and Exchange Commission.
          ”Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

2

--------------------------------------------------------------------------------

 

ARTICLE II
REGISTRATION RIGHTS
     Section 2.1 Mandatory Registration.
          (a) Subject to Section 2.1(b) and applicable Law, the Company shall
use its commercially reasonable best efforts:
               (i) to file an automatic shelf registration statement, as defined
in Rule 405 under the Securities Act, on Form S-3, or any applicable successor
or other available form, covering such aggregate number of Registrable
Securities which represents all of the Registrable Securities then issued or
determined by the Company to be due to the Original Holders pursuant to clause
(B) of this Section 2.1(a)(i) (the “Registration Rights”), as applicable, as
promptly as practicable upon any of the following:
                    (A) six months after the Closing Date, if at such time there
remain outstanding any Closing Shares that are not freely tradeable by the
Original Holders without any of the requirements, limitations and restrictions
of Rule 144 of the Securities Act that apply to “affiliates” (as such term is
defined in that Rule); and
                    (B) the date (the “Filing Date”) that is 30 days after the
earlier of (A) the date by which the Company first determines, in its reasonable
discretion, that the Average EBITDA exceeds the Threshold and any portion of the
Contingent Payments will be payable to the Original Holders in Common Stock
under the Purchase Agreement, or (B) the date upon which the Original Holders
agree to pay all expenses in connection with the registration of the Contingent
Shares, including the fees of the Company’s attorneys and accountants, if
Contingent Shares do not become due to the Original Holders under the Purchase
Agreement; and
               (ii) as promptly as practicable following any such filing
referenced in clause (i) above, to cause such registration statement to become
effective and remain in effect for a period of 180 days, or such longer period
until all Registrable Securities covered by such registration statement have
been sold or withdrawn (the “Registration Period”); provided, that if at any
time during such initial 180-day period, all Registrable Securities covered by
such registration statement have been sold, withdrawn or become freely tradeable
by the Original Holders without any of the requirements, limitations and
restrictions of Rule 144 of the Securities Act that apply to “affiliates” (as
such term is defined in that Rule), the Company’s obligations to keep such
registration statement in effect shall cease and terminate. If the Company is
not eligible to file a registration statement on Form S-3, then it shall file a
registration statement on Form S-1, or any applicable successor form.
     The registration statement filed pursuant to Section 2.1(a)(i)(B) will
(i) if the Filing Date occurs sufficiently in advance of the date (the “Delivery
Date”) on which the Contingent Shares are deliverable to the Original Holders
pursuant to the Purchase Agreement to permit the registration statement to
become effective prior to the Delivery Date, be a primary registration of the
transaction pursuant to which the Contingent Shares are issued to the Original
Holders or (ii) if the Filing Date is not sufficiently in advance to so permit,
or if a primary registration statement is

3

--------------------------------------------------------------------------------

 

filed but has not become effective by the Delivery Date, be a resale shelf
registration statement with respect to the Contingent Shares, which registration
statement will be filed as soon as is practicable.
          (b) Notwithstanding anything to the contrary contained in this
Agreement, the Company will not be required to file any registration statement
pursuant to this Agreement, file any amendment thereto, furnish any supplement
to a prospectus included in any registration statement, make any other filing
with the SEC required pursuant to this Agreement, cause any registration
statement or other filing with the SEC to become effective, or take any similar
action, and may withdraw the filing of any such registration statement or
related filing if, in the opinion of outside counsel to the Company, (i) an
event has occurred and is continuing as a result of which any registration
statement, prospectus or other filing relating to the Registration Rights would
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or (ii) such actions would require the disclosure of material
non-public information which the Company has a bona fide business purpose for
preserving as confidential and which the Company would not otherwise be required
to disclose ((i) and (ii) each, a “Valid Business Reason”), until such Valid
Business Reason no longer exists; provided, however, that in no event shall the
Company avail itself of such right for more than 45 consecutive days or 90 days,
in the aggregate, in any period of 360 consecutive days; and the Company shall
give notice to the Holders of its determination to take any action pursuant to
this Section 2.1(b) and of the fact that the Valid Business Reason for such
action no longer exists, in each case, promptly after the occurrence thereof.
     If the Company shall give any notice of the taking of any action pursuant
to the foregoing paragraph, the Company shall not register any equity security
of the Company during the period such action remains in effect. Each Holder of
Registrable Securities agrees that, upon receipt of any notice from the Company
that the Company has determined to take any action pursuant to the foregoing
paragraph, such Holder will discontinue its disposition of Registrable
Securities pursuant to such registration statement. If the Company shall give
any notice of the taking of any action pursuant to the foregoing paragraph, at
such time as the Valid Business Reason that caused such action no longer exists
(but in no event more than 90 days after the date of the taking of such action),
the Company shall promptly use its commercially reasonable best efforts to
effect the registration under the Securities Act of all of the Registrable
Securities the registration of which has thereby been delayed or, as the case
may be, to take all action required to permit sales of the Registrable
Securities to resume.
     Section 2.2 Registration Procedures. In connection with the registration of
Registrable Securities under the Securities Act as provided in this Agreement,
the Company as expeditiously as possible:
          (a) shall prepare and file with the SEC the requisite registration
statements, which shall comply as to form in all material respects with the
requirements of the applicable form and shall include all financial statements
required by the SEC to be filed therewith, and use commercially reasonable best
efforts to cause such registration statements to become and remain effective for
the duration of the Registration Period; provided, however, that before filing a
registration statement or prospectus or any amendments or supplements thereto,
or comparable statements under securities or blue sky laws of any jurisdiction,
the Company will furnish to one

4

--------------------------------------------------------------------------------

 

counsel for the Holders selected by Lagasse copies of all such documents
proposed to be filed (including all exhibits thereto);
          (b) shall prepare and file with the SEC such amendments and
supplements to such registration statements and the prospectus used in
connection therewith as may be necessary to keep such registration statements
effective for such period as any seller of Registrable Securities pursuant to
such registration statements shall request and to comply with the provisions of
the Securities Act with respect to the sale or other disposition of all
Registrable Securities covered by such registration statements in accordance
with the intended methods of disposition by the seller or sellers thereof set
forth in such registration statements;
          (c) shall furnish, without charge, to each seller of such Registrable
Securities such number of copies of such registration statements, each amendment
thereto, the prospectus included in such registration statements and each
preliminary prospectus, all in conformity with the requirements of the
Securities Act, and such other documents as such seller reasonably may request
in order to facilitate the public sale or other disposition of the Registrable
Securities owned by such seller, and shall consent to the use in accordance with
all applicable law of such registration statements, each amendment thereto and
each such prospectus or preliminary prospectus by each such seller of
Registrable Securities in connection with the offering and sale of the
Registrable Securities covered by such registration statements or prospectus;
          (d) if required by law, shall use commercially reasonable efforts to
register or qualify the Registrable Securities covered by such registration
statements under such other securities or “blue sky” laws of such jurisdictions
as any sellers of Registrable Securities reasonably shall request, and do any
and all other acts and things that may be required by law in order to enable
such sellers to consummate the disposition of the Registrable Securities in such
jurisdictions, except that in no event shall the Company be required to qualify
to do business as a foreign corporation in any jurisdiction where, but for the
requirements of this Section 2.2(d), it would not be required to be so
qualified, to subject itself to taxation in any such jurisdiction or to consent
to general service of process in any such jurisdiction;
          (e) shall promptly notify each Holder selling Registrable Securities
covered by each such registration statement:
               (i) when the registration statement, any pre-effective amendment,
the prospectus or any prospectus supplement related thereto or any
post-effective amendment to the registration statement has been filed and, with
respect to the registration statement or any post-effective amendment, when the
same has become effective;
               (ii) of any request by the SEC or state securities authority for
amendments or supplements to the registration statement or the prospectus
related thereto or for additional information;
               (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the registration statement or the initiation of any proceedings
for that purpose;

5

--------------------------------------------------------------------------------

 

               (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any Registrable Securities for
sale under the securities or blue sky laws of any jurisdiction or the initiation
of any proceeding for such purpose; and
               (v) if, for a Valid Business Purpose, the Company has determined
that it would be inadvisable to continue to use the registration statement or
the prospectus related thereto or the information conveyed to any purchaser at
the time of sale to such purchaser in connection with the sale of any
Registrable Securities; and
          (f) shall cause all such Registrable Securities covered by such
registration statement to be listed on the New York Stock Exchange or the
principal securities exchange on which similar securities issued by the Company
are then listed (if any), if the listing of such Registrable Securities is then
permitted under the rules of such exchange;
          (g) shall provide and cause to be maintained a transfer agent and
registrar for all such Registrable Securities covered by such registration
statement not later than the effective date of such registration statement;
          (h) shall use commercially reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of the registration
statement; and
          (i) shall cooperate with the sellers of Registrable Securities to
facilitate the timely preparation and delivery of certificates not bearing any
restrictive legends representing the Registrable Securities to be sold, and
cause such Registrable Securities to be issued in such denominations and
registered in such in accordance with the instructions of the sellers of
Registrable Securities at least three Business Days prior to any sale of
Registrable Securities and instruct any transfer agent and registrar of
Registrable Securities to release any stop transfer orders in respect thereof.
     The Company may require as a condition precedent to the Company’s
obligations under this Section 2.2 that each seller of Registrable Securities as
to which any registration is being effected furnish the Company such information
in writing regarding such seller and the distribution of such Registrable
Securities as the Company from time to time reasonably may request to comply
with Items 507 and 508 of Regulation S-K under the Securities Act; provided that
such information is necessary or desirable for the Company to consummate such
registration and shall be used only in connection with such registration.
     Each seller of Registrable Securities agrees that upon receipt of any
notice from the Company under Section 2.2(e)(v), such seller will discontinue
such seller’s disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such seller’s receipt of
copies of the supplemented or amended prospectus.
     If any such registration statement or comparable statement under “blue sky”
laws refers to any Holder by name or otherwise as the Holder of any securities
of the Company, such Holder shall have the right to require (i) the insertion
therein of language, in form and substance reasonably satisfactory to such
Holder and the Company, to the effect that the holding by such Holder of such
securities is not to be construed as a recommendation by such Holder of the
investment quality of the Company’s securities covered thereby and that such
holding does not

6

--------------------------------------------------------------------------------

 

imply that such Holder will assist in meeting any future financial requirements
of the Company or (ii) in the event that such reference to such Holder by name
or otherwise is not in the judgment of the Company, as advised by counsel,
required by the Securities Act or any similar federal statute or any state “blue
sky” or securities law then in force, the deletion of the reference to such
Holder.
     Section 2.3 Registration Expenses.
          (a) The Company shall pay all Registration Expenses with respect to
any registration effected hereunder.
          (b) Notwithstanding the foregoing, (i) the provisions of this
Section 2.3 shall be deemed amended to the extent necessary to cause these
expense provisions to comply with “blue sky” laws of each state in which the
offering is made and (ii) the Company shall, in the case of all registrations
under this Article II, be responsible for all its internal expenses.
     Section 2.4 No Required Sale. Nothing in this Agreement shall be deemed to
create an independent obligation on the part of any Holder to sell any
Registrable Securities pursuant to any effective registration statement.
     Section 2.5 Indemnification.
          (a) In the event of any registration of any securities of the Company
under the Securities Act pursuant to this Article II, the Company will, and
hereby agrees to, indemnify and hold harmless, to the fullest extent permitted
by law, each Holder of Registrable Securities, its directors, officers,
fiduciaries, employees, agents, affiliates, consultants, representatives,
general and limited partners, stockholders, successors, assigns (and the
directors, officers, employees and stockholders thereof), and each other Person,
if any, who controls such Holder within the meaning of the Securities Act, from
and against any and all losses, claims, damages or liabilities, joint or
several, actions or proceedings (whether commenced or threatened) and expenses
(including reasonable fees of counsel and any amounts paid in any settlement
effected with the Company’s consent, which consent shall not be unreasonably
withheld or delayed) to which each such indemnified party may become subject
under the Securities Act or otherwise in respect thereof (collectively,
“Losses”), insofar as such Losses arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement under which such securities were registered under the
Securities Act or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading or (ii) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary, final or summary prospectus or any
amendment or supplement thereto, together with the documents incorporated by
reference therein, or the omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and the Company will
reimburse any such indemnified party for any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such Loss as such expenses are incurred; provided, however, that the Company
shall not be liable to any such indemnified party in any such case to the extent
such Loss arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact or omission or

7

--------------------------------------------------------------------------------

 

alleged omission of a material fact made in such registration statement or
amendment thereof or supplement thereto or in any such prospectus or any
preliminary, final or summary prospectus in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such indemnified
party specifically for use therein. Such indemnity and reimbursement of expenses
shall remain in full force and effect regardless of any investigation made by or
on behalf of such indemnified party and shall survive the transfer of such
securities by such Holder.
          (b) Each Holder of Registrable Securities that are included in the
securities as to which the registration under Section 2.1 is being effected
shall, jointly and severally as to the Original Holders and any of their
Affiliates, and severally but not jointly as to any other Holders, indemnify and
hold harmless (in the same manner and to the same extent as set forth in
paragraph (a) of this Section 2.5) to the extent permitted by law the Company,
its officers and directors and each Person controlling the Company within the
meaning of the Securities Act and all other prospective sellers and their
respective directors, officers, fiduciaries, employees, agents, affiliates,
consultants, representatives, general and limited partners, stockholders,
successors, assigns and respective controlling Persons with respect to any
untrue statement or alleged untrue statement of any material fact in, or
omission or alleged omission of any material fact from, such registration
statement, any preliminary, final or summary prospectus contained therein, or
any amendment or supplement thereto, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company or its representatives by or on
behalf of such Holder specifically for use therein and reimburse such
indemnified party for any legal or other expenses reasonably incurred in
connection with investigating or defending any such Loss as such expenses are
incurred. Such indemnity and reimbursement of expenses shall remain in full
force and effect regardless of any investigation made by or on behalf of such
indemnified party and shall survive the transfer of such securities by such
Holder.
          (c) Any Person entitled to indemnification under this Agreement
promptly shall notify the indemnifying party in writing of the commencement of
any action or proceeding with respect to which a claim for indemnification may
be made pursuant to this Section 2.5, but the failure of any such Person to
provide such notice shall not relieve the indemnifying party of its obligations
under the preceding paragraphs of this Section 2.5, except to the extent the
indemnifying party is materially prejudiced thereby and shall not relieve the
indemnifying party from any liability that it may have to any such Person
otherwise than under this Article II. In case any action or proceeding is
brought against an indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, unless in the reasonable opinion of outside counsel to
the indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, to assume the defense
thereof jointly with any other indemnifying party similarly notified, to the
extent that it chooses, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified party
that it so chooses, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that (i) if the indemnifying party
fails to take reasonable steps necessary to defend diligently the action or
proceeding within 20 days after receiving notice from such indemnified party,
(ii) if such indemnified party who is a defendant in any action or proceeding
that is also brought against the

8

--------------------------------------------------------------------------------

 

indemnifying party reasonably shall have concluded that there may be one or more
legal defenses available to such indemnified party that are not available to the
indemnifying party or (iii) if representation of both parties by the same
counsel is otherwise inappropriate under applicable standards of professional
conduct, then, in any such case, the indemnified party shall have the right to
assume or continue its own defense as set forth above (but with no more than one
firm of counsel for all indemnified parties in each jurisdiction, except to the
extent any indemnified party or parties reasonably shall have concluded that
there may be legal defenses available to such party or parties that are not
available to the other indemnified parties or to the extent representation of
all indemnified parties by the same counsel is otherwise inappropriate under
applicable standards of professional conduct), and the indemnifying party shall
be liable for any expenses therefor. Without the written consent of the
indemnified party, which consent shall not be unreasonably withheld, no
indemnifying party shall effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder, whether or not the indemnified party is an actual or potential party
to such action or claim, unless such settlement, compromise or judgment
(A) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (B) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
          (d) If for any reason the foregoing indemnity is unavailable or is
insufficient to hold harmless an indemnified party under Section 2.5(a), (b) or
(c), then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party as a result of any Loss in such proportion as is
appropriate to reflect the relative fault of the indemnifying party, on the one
hand, and the indemnified party, on the other hand, with respect to such
offering of securities. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or the indemnified party and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. If, however, the
allocation provided in the second preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative faults but also the relative benefits of the
indemnifying party and the indemnified party as well as any other relevant
equitable considerations. The parties hereto agree that it would not be just and
equitable if contributions pursuant to this Section 2.5(d) were to be determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the preceding sentences
of this Section 2.5(d). The amount paid or payable in respect of any Loss shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such Loss.
No Person guilty of fraudulent misrepresentation within the meaning of Section
11(f) of the Securities Act shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
          (e) The indemnity and contribution agreements contained herein shall
be in addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract and shall remain
operative and in full force and effect regardless

9

--------------------------------------------------------------------------------

 

of any investigation made or omitted by or on behalf of any indemnified party
and shall survive the transfer of the Registrable Securities by any such party.
          (f) The indemnification and contribution required by this Section 2.5
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
ARTICLE III
GENERAL
     Section 3.1 Rule 144. The Company covenants that (i) it will timely file
the reports required to be filed by it under the Securities Act or the Exchange
Act or, if it is not required to file such reports, upon the request of any
Holder it shall make publicly available other information so long as necessary
to permit sales of such Registrable Securities in compliance with any applicable
“current public information” requirements of Rule 144 under the Securities Act
and (ii) it will take such further action as any Holder of Registrable
Securities reasonably may request, all to the extent required from time to time
to enable such Holder to sell Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by
(A) Rule 144 under the Securities Act, as such Rule may be amended from time to
time, or (B) any similar rule or regulation hereafter adopted by the SEC. Upon
the request of any Holder of Registrable Securities, the Company will deliver to
such Holder a written statement as to whether it has complied with such
requirements.
     Section 3.2 Nominees for Beneficial Owners. If Registrable Securities are
held by a nominee for the beneficial owner thereof, the beneficial owner thereof
may, at its option, be treated as the Holder of such Registrable Securities for
purposes of any request or other action by any Holder or Holders of Registrable
Securities pursuant to this Agreement or any determination of any number or
percentage of shares constituting Registrable Securities held by any Holder or
Holders of Registrable Securities contemplated by this Agreement; provided that
the Company shall have received assurances reasonably satisfactory to it of such
beneficial ownership.
     Section 3.3 Representations and Warranties of the Holders. The Holders
hereby agree and acknowledge that (i) at the time of issuance, (A) the
Registrable Securities that relate to Closing Shares will not be and (B) the
Registrable Securities that relate to Contingent Shares may or may not be,
registered under the Securities Act or under the securities laws of any other
country or jurisdiction and, except as provided herein, none of the Buyers or
the Company is under any obligation to, and does not currently intend to,
register or qualify the Registrable Securities for resale by the Holders or
assist the Holders in complying with any exemption under the Securities Act or
the securities laws of any jurisdiction; (ii) an offer or sale of the
Registrable Securities in the absence of registration under the Securities Act
will require the availability of an exemption thereunder; and (iii) a
restrictive legend in form and substance reasonably satisfactory to the Company
shall be placed on the certificates representing the Registrable Securities.
     Section 3.4 Affiliate Status. Assuming that the Original Holders and their
“affiliates” (as defined in Rule 144 of the Securities Act) do not, individually
or in the aggregate, own, beneficially or of record, any shares of Common Stock
other than shares that are issued or may

10

--------------------------------------------------------------------------------

 

become issuable to the Original Holders pursuant to the Purchase Agreement, the
Company represents and warrants that it has no reason to believe that any of the
Original Holders is an affiliate of the Company. In addition, the Company
represents and warrants that, on the Closing Date under the Purchase Agreement,
it meets the “current public information” requirements of Rule 144(c) of the
Securities Act.
ARTICLE IV
MISCELLANEOUS
     Section 4.1 Amendment and Waiver.
          (a) Any provision of this Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by the Company and Lagasse or, in the case of a waiver, by the party
or parties against whom the waiver is to be effective; provided, however, that
waiver by the Holders shall require the consent of Lagasse.
          (b) No failure or delay of any party in exercising any right or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such right or power, or any course of conduct, preclude any
other or further exercise thereof or the exercise of any other right or power.
The rights and remedies of the parties hereunder are cumulative and are not
exclusive of any rights or remedies which they would otherwise have hereunder.
Any agreement on the part of any party to any such waiver shall be valid only if
set forth in a written instrument executed and delivered by such party if an
individual or a duly authorized officer on behalf of such party if an entity.
     Section 4.2 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed duly given (a) on the date of delivery if
delivered personally, or if by facsimile, upon written confirmation of receipt
by facsimile, e-mail or otherwise, (b) on the first Business Day following the
date of dispatch if delivered utilizing a next-day service by a recognized
next-day courier or (c) on the earlier of confirmed receipt or the fifth
Business Day following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid. All notices hereunder
shall be delivered to the addresses set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice:
if to any Holder, to:
829 St. Charles Avenue
New Orleans, LA 70130
Attention: Anthony Cruz
Facsimile: (504) 558-3932
with a copy (which shall not constitute notice) to:

11

--------------------------------------------------------------------------------

 

Lowe, Stein, Hoffman, Allweiss & Hauver L.L.P.
One Shell Square
701 Poydras Street, Suite 3600
New Orleans, LA 70139
Attention: Mark Stein, Esq.
Facsimile: (504) 581-2461
if to the Company, to:
Martha Stewart Living Omnimedia, Inc.
11 W. 42nd Street, 25th Floor
New York, New York 10036
Attention: General Counsel
Facsimile: (212) 827-8188
with a copy (which shall not constitute notice) to:
Gibson, Dunn & Crutcher LLP
200 Park Avenue, 47th Floor
New York, New York 10166
Attention: Barbara L. Becker, Esq.
Facsimile: (212) 351-6202
     Section 4.3 Interpretation. When a reference is made in this Agreement to a
Section or Article, such reference shall be to a Section or Article of this
Agreement unless otherwise indicated. The headings contained in this Agreement
are for convenience of reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. The word “including” and words of similar import when used in this
Agreement will mean “including, without limitation”, unless otherwise specified.
     Section 4.4 Entire Agreement. This Agreement and the Purchase Agreement
(and any related agreements referred to therein) constitute the entire
agreement, and supersede all prior written agreements, arrangements,
communications and understandings and all prior and contemporaneous oral
agreements, arrangements, communications and understandings between the parties
with respect to the subject matter hereof and thereof. This Agreement shall not
be deemed to contain or imply any restriction, covenant, representation,
warranty, agreement or undertaking of any party with respect to the transactions
contemplated hereby other than those expressly set forth herein or in any
document required to be delivered hereunder, and none shall be deemed to exist
or be inferred with respect to the subject matter hereof.
     Section 4.5 No Third-Party Beneficiaries. Except as provided in
Section 2.5, nothing in this Agreement, express or implied, is intended to or
shall confer upon any Person other than the parties and their respective
successors and permitted assigns any legal or equitable right, benefit or remedy
of any nature under or by reason of this Agreement.
     Section 4.6 Governing Law. This Agreement and all disputes or controversies
arising out of or relating to this Agreement or the transactions contemplated
hereby shall be governed

12

--------------------------------------------------------------------------------

 

by, and construed in accordance with, the internal Laws of the State of New
York, without regard to the Laws of any other jurisdiction that might be applied
because of the conflicts of laws principles of the State of New York (other than
the conflicts of laws principles set forth in Section 5-1401 of the New York
General Obligations Law, which shall apply to this Agreement).
     Section 4.7 Submission to Jurisdiction. Each of the parties irrevocably
agrees that any legal action or proceeding arising out of or relating to this
Agreement brought by any party or its or his successors or assigns shall be
brought and determined in any New York State or federal court sitting in the
Borough of Manhattan in The City of New York (or, if no such court has subject
matter jurisdiction, in any appropriate New York State or federal court), and
each of the parties hereby irrevocably submits to the exclusive jurisdiction of
the aforesaid courts for itself or himself and with respect to its or his
property, generally and unconditionally, with regard to any such action or
proceeding arising out of or relating to this Agreement and the transactions
contemplated hereby. Each of the parties agrees not to commence any action, suit
or proceeding relating thereto except in the courts described above in New York,
other than actions in any court of competent jurisdiction to enforce any
judgment, decree or award rendered by any such court in New York as described
herein. Each of the parties hereby irrevocably and unconditionally waives, and
agrees not to assert, by way of motion or as a defense, counterclaim or
otherwise, in any action or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby, (a) any claim that it or he
is not personally subject to the jurisdiction of the courts in New York as
described herein for any reason, (b) that it or he or its or his property is
exempt or immune from jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or
otherwise) and (c) that (i) the suit, action or proceeding in any such court is
brought in an inconvenient forum, (ii) the venue of such suit, action or
proceeding is improper or (iii) this Agreement or the subject matter hereof, may
not be enforced in or by such courts.
     Section 4.8 Assignment; Successors. This Agreement will be binding upon,
inure to the benefit of, and be enforceable by, the parties and their respective
successors and assigns; provided that such successors and assigns acquire at
least 100,000 Registrable Securities. If any Person shall acquire at least
100,000 Registrable Securities from any Holder in any manner, whether by
operation of law or otherwise, such Person shall promptly notify the Company,
and such Registrable Securities acquired from such Holder shall be held subject
to all of the terms of this Agreement, and by taking and holding such
Registrable Securities such Person shall be entitled to receive the benefits of
and be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement. Any such successor or assign shall
agree in writing to acquire and hold the Registrable Securities acquired from
such Holder subject to all of the terms hereof. If any Holder shall acquire
additional Registrable Securities, such Registrable Securities shall be subject
to all of the terms, and entitled to all of the benefits, of this Agreement. The
number of shares shall be adjusted to reflect stock splits, dividends, reverse
splits and comparable events.
     Section 4.9 Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
Accordingly, each of the parties shall be entitled to specific performance of
the terms hereof, including an injunction or injunctions to

13

--------------------------------------------------------------------------------

 

prevent breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement in any New York State or federal court sitting in
the Borough of Manhattan in the City of New York (or, if no such court has
subject matter jurisdiction, in any appropriate New York State or federal
court), this being in addition to any other remedy to which such party is
entitled at law or in equity. Each of the parties hereby further waives (a) any
defense in any action for specific performance that a remedy at law would be
adequate and (b) any requirement under any Law to post security as a
prerequisite to requesting or obtaining equitable relief.
     Section 4.10 Severability. Whenever possible, each provision or portion of
any provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable Law, but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable Law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
     Section 4.11 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
     Section 4.12 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same instrument and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
     Section 4.13 Facsimile Signature. This Agreement may be executed by
facsimile signature and a facsimile signature shall constitute an original for
all purposes
     Section 4.14 Time of Essence. Time is of the essence with regard to all
dates and time periods set forth or referred to in this Agreement.
     Section 4.15 No Presumption Against Drafting Party. Each of the parties
hereto acknowledges that it has been represented by counsel in connection with
this Agreement and the transactions contemplated by this Agreement. Accordingly,
any rule of law or any legal decision that would require interpretation of any
claimed ambiguities in this Agreement against the drafting party has no
application and is expressly waived.
[The remainder of this page is intentionally left blank.]

14

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.

            MARTHA STEWART LIVING OMNIMEDIA, INC.
      By:   /s/ Susan Lyne         Name:   Susan Lyne        Title:   CEO       
EMERIL’S FOOD OF LOVE PRODUCTIONS, L.L.C.
      By:   /s/ Emeril J. Lagasse III         Name:   Emeril J. Lagasse III     
  Title:   Member        EMERILS.COM, LLC
      By:   /s/ Emeril J. Lagasse III         Name:   Emeril J. Lagasse III     
  Title:   Member        EMERIL J. LAGASSE
      /s/ Emeril J. Lagasse III