Document:

EX-10.8

 

Exhibit 10.8

CONTINUING AND UNCONDITIONAL GUARANTY

     1. The Guaranty. FOR VALUE RECEIVED, and to induce Bank of America, N.A. (together
with any successors and assigns under the Loan Agreement (as hereinafter defined), the
“Bank”) to make the loans or advances contemplated by the Loan Agreement, each of the
undersigned (collectively, the “Guarantors”) hereby, jointly and severally, irrevocably and
unconditionally guarantees, as primary obligor and not merely as surety, to Bank of America, N.A.,
as collateral agent for the Bank under the Collateral Agreement (as hereinafter defined) (together
with any successor collateral agent, the “Collateral Agent” and, together with the Bank,
the “Guarantied Parties”), for the benefit of the Guarantied Parties, the full and prompt
payment when due, whether at stated maturity, upon acceleration or otherwise, and the faithful,
prompt and complete compliance, by MSLO Emeril Acquisition Sub LLC, a Delaware limited liability
company (the “Borrower”), of and with any and all Guarantied Obligations (as hereinafter
defined). This Guaranty is intended to provide a continuing guaranty of the payment and
performance of the Guarantied Obligations, without limitation as to amounts guarantied hereunder.

     The undertakings and obligations of each Guarantor hereunder are independent of the
obligations of the Borrower and a separate action or actions for payment, damages or performance
may be brought or prosecuted against such Guarantor, regardless of whether (a) an action is brought
against the Borrower or any other guarantor of the Guarantied Obligations or to realize upon any
security for the Guarantied Obligations, (b) the Borrower is joined in any such action or actions
or (c) notice is given or demand is made upon the Borrower.

     The Bank shall not be required to proceed first against the Borrower, or any other Person,
whether primarily or secondarily liable, or against any collateral held by it, before proceeding
against any Guarantor for payment.

     2. Definitions. As used in this Guaranty, the following terms shall have the
following meanings and shall be subject to the rules of construction set forth in Section 1 of the
Loan Agreement.

     (a) “AAA” has the meaning set forth in Section 24(c).

     (b) “Act” has the meaning set forth in Section 24(b).

     (c) “Borrower” has the meaning set forth in Section 1.

     (d) “Claim” has the meaning set forth in Section 24(a).

     (e) “Class Action Waiver” has the meaning set forth in Section 24(h).

     (f) “Collateral Agent” has the meaning set forth in Section 1.

 

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     (g) “Collateral Agreement” means (i) on or prior to the Collateral Replacement Date,
the Pledge Agreement dated as of April 4, 2008 by and between the Borrower and Bank of America,
N.A., as collateral agent, as such agreement may be amended, amended and restated, supplemented or
otherwise modified from time to time, or (ii) after the Collateral Replacement Date, the Security
Agreement dated as of the Collateral Replacement Date by and among the Borrower, Martha Stewart
Living Omnimedia, Inc. and Bank of America, N.A., as collateral agent, as such agreement may be
amended, amended and restated, supplemented or otherwise modified from time to time.

     (h) “Guarantied Obligations” means, collectively, all liabilities, indebtedness, and
obligations of the Borrower (and any successor to the Borrower) arising under the Loan Documents,
whether direct or indirect, absolute or contingent, secured or unsecured, due or not due,
contractual or tortious, liquidated or unliquidated, arising by operation of law or otherwise, now
or hereafter existing, whether created directly, indirectly or acquired by assignment or otherwise,
whether or not from time to time reduced, extinguished in part or hereafter increased or incurred,
whether or not recovery may be or hereafter may become barred by any statute of limitations,
whether or not enforceable against the Borrower, and whether due or to become due, including, but
not limited to, all extensions or renewals thereof, and all sums payable under or by virtue
thereof, including, without limitation, all amounts of principal and interest (including interest
accruing after the maturity of any Guarantied Obligations and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency or other similar proceeding,
relating to the Borrower, whether or not a claim for post-petition interest is allowed in such
proceeding), fees, expenses and indemnities provided thereunder, all Swap Obligations, and all
costs and expenses of collection with respect to this Guaranty.

     (i) “Guarantied Parties” has the meaning set forth in Section 1.

     (j) “Guarantors” has the meaning set forth in Section 1 and shall include any Person
who assumes the obligations under this Guaranty.

     (k) “Loan Agreement” means the Loan Agreement dated as of April 4, 2008 by and among
the Borrower, Martha Stewart Living Omnimedia, Inc. and Bank of America, N.A., as such agreement
may be amended, amended and restated, supplemented or otherwise modified from time to time.

     (l) “Obligations” shall have the meaning set forth in the Loan Agreement.

     (m) “Swap Obligations” means all obligations of the Borrower arising under any
interest rate, credit, commodity or equity swap, cap, floor, collar, forward foreign exchange
transaction, currency swap, cross currency rate swap, currency option, securities puts, calls,
collars, options or forwards or any combination of, or option with respect to, these or similar
transactions now or hereafter entered into between the Borrower and any Guarantied Party.

     (n) All capitalized terms used herein without definition shall have the meaning set forth in
the Loan Agreement.

 

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     3. Rights of Guarantied Parties. Each Guarantor authorizes the Guarantied Parties,
without notice or demand and without affecting its liability hereunder, from time to time to:

     (a) renew, compromise, extend, accelerate, or otherwise change the time for payment, or
otherwise change the terms, of the Guarantied Obligations or any part thereof, including increase
or decrease of the amount thereof or the rate of interest thereon, or otherwise change the terms of
any Loan Documents or other documents evidencing the Guarantied Obligations; provided that
any Loan Document may only be amended in accordance with its terms;

     (b) receive and hold security for the payment of this Guaranty or any Guarantied Obligations
and exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any such
security;

     (c) apply such security and direct the order or manner of sale thereof as the Guarantied
Parties in their discretion may determine in accordance with the Loan Documents and applicable law;

     (d) release or substitute any Guarantor or any one or more of any endorsers or other
guarantors of any of the Guarantied Obligations; and

     (e) permit the Guarantied Obligations to exceed such Guarantor’s liability under this
Guaranty, and each Guarantor agrees that any amounts received by any Guarantied Party from any
source other than such Guarantor shall be deemed to be applied first to any portion of the
Guarantied Obligations not guarantied by such Guarantor.

     4. Guaranty to be Absolute. Each Guarantor agrees that until the Guarantied
Obligations have been paid in full and any commitments of the Guarantied Parties or facilities
provided by the Guarantied Parties with respect to the Guarantied Obligations have been terminated,
such Guarantor shall not be released by or because of the taking, or failure to take, any action
that might in any manner or to any extent vary the risks of such Guarantor under this Guaranty or
that, but for this paragraph, might discharge or otherwise reduce, limit, or modify such
Guarantor’s obligations under this Guaranty. Each Guarantor waives and surrenders any defense to
any liability under this Guaranty based upon any such action, including but not limited to any
action of any Guarantied Party described in the immediately preceding paragraph of this Guaranty.
It is the express intent of each Guarantor that such Guarantor’s obligations under this Guaranty
are and shall be absolute and unconditional.

     5. Guarantors’ Waivers of Certain Rights and Certain Defenses. Each Guarantor waives:

     (a) any right to require any Guarantied Party to proceed against the Borrower, proceed against
or exhaust any security for the Guarantied Obligations, or pursue any other remedy in such
Guarantied Party’s power whatsoever;

     (b) any defense arising by reason of any disability or other defense of Borrower, or the
cessation from any cause whatsoever of the liability of the Borrower;

 

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     (c) any defense based on any claim that such Guarantor’s obligations exceed or are more
burdensome than those of the Borrower; and

     (d) the benefit of any statute of limitations affecting such Guarantor’s liability hereunder.

No provision or waiver in this Guaranty shall be construed as limiting the generality of any other
waiver contained in this Guaranty.

     6. Waiver of Subrogation and Contribution. Until the Guarantied Obligations have been
paid in full and any commitments of the Guarantied Parties or facilities provided by the Guarantied
Parties with respect to the Guarantied Obligations have been terminated, even though the Guarantied
Obligations may be in excess of such Guarantor’s liability hereunder, each Guarantor waives to the
extent permitted by applicable law any right of subrogation, reimbursement, indemnification, and
contribution (contractual, statutory, or otherwise) including, without limitation, any claim or
right of subrogation under the Bankruptcy Code (Title 11, United States Code) or any successor
statute, arising from the existence or performance of this Guaranty, and each Guarantor waives to
the extent permitted by applicable law any right to enforce any remedy that any Guarantied Party
now has or may hereafter have against the Borrower, and waives any benefit of, and any right to
participate in, any security now or hereafter held by any of the Guarantied Parties.

     7. Waiver of Notices. Each Guarantor waives all presentments, demands for
performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices
of intent to accelerate, notices of acceleration, notices of any suit or any other action against
the Borrower or any other Person, any other notices to any party liable on any Loan Document or
other document evidencing any Guarantied Obligation (including such Guarantor), notices of
acceptance of this Guaranty, notices of the existence, creation, or incurring of new or additional
Guarantied Obligations to which this Guaranty applies, and notices of any fact that might increase
such Guarantor’s risk.

     8. Subordination. Any obligations of the Borrower to any Guarantor, now or hereafter
existing, including but not limited to any obligations to such Guarantor as subrogee of the
Guarantied Parties or resulting from such Guarantor’s performance under this Guaranty, are hereby
subordinated to the Guarantied Obligations. In addition to such Guarantor’s waiver of any right of
subrogation as set forth in this Guaranty with respect to any obligations of the Borrower to such
Guarantor as subrogee of the Guarantied Parties, each Guarantor agrees that, if the Collateral
Agent or any other Guarantied Party so requests, such Guarantor shall not demand, take, or receive
from the Borrower, by setoff or in any other manner, payment of any other obligations of the
Borrower to such Guarantor until the Guarantied Obligations has been paid in full and any
commitments of the Guarantied Parties or facilities provided by the Guarantied Parties with respect
to the Guarantied Obligations have been terminated. If any payments are received by any Guarantor
in violation of such waiver or agreement, such payments shall be received by such Guarantor in
trust for the Guarantied Parties and shall be paid over to the Collateral Agent, for the benefit of
the Guarantied Parties on account of the Guarantied Obligations, but without reducing or affecting
in any manner the liability of such Guarantor under the other provisions of this Guaranty. Any
security interest, lien, or other

 

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encumbrance that any Guarantor may now or hereafter have on any property of the Borrower is
hereby subordinated to any security interest, lien, or other encumbrance that the Guarantied
Parties may have on any such property. Notwithstanding the foregoing, so long as no Default or
Event of Default shall have occurred and be continuing, the Borrower may make, and any Guarantor is
entitled to accept and receive, payments on any indebtedness owing by the Borrower or to any such
Guarantor provided that such indebtedness and payment is permitted under the Loan Agreement.

     9. Partial Invalidity and/or Enforceability of Guaranty. The unenforceability or
invalidity of any provision of this Guaranty shall not affect the enforceability or validity of any
other provision herein and the invalidity or unenforceability of any provision of any Loan Document
or other agreement evidencing the Guarantied Obligations as it may apply to any Person or
circumstance shall not affect the enforceability or validity of such provision as it may apply to
other Persons or circumstances.

     10. Limitation of Guaranty. The liability of each Guarantor that is a Subsidiary of
the Borrower shall not exceed at any one time the largest amount during the period commencing with
such Guarantor’s execution of this Guaranty and thereafter that would not render such Guarantor’s
obligations hereunder subject to avoidance under Section 548 of the Bankruptcy Code (Title 11,
United States Code) or any comparable provisions of any applicable state law.

     11. Reinstatement of Guaranty. In the event that any Guarantied Party is required to
relinquish or return any payments, any collateral securing the Guarantied Obligations or the
proceeds thereof, in whole or in part, which had been previously applied to or retained for
application against the Guarantied Obligations, by reason of a proceeding arising under any
applicable bankruptcy or insolvency law, or for any other reason, this Guaranty shall automatically
continue to be effective or be reinstated notwithstanding any previous cancellation or release
effected by the Guarantied Parties.

     12. Stay of Acceleration. In the event that acceleration of the time for payment of
any of the Guarantied Obligations is stayed upon the insolvency, bankruptcy, or reorganization of
the Borrower or otherwise, all such Guarantied Obligations guarantied by any Guarantor shall
nonetheless be payable by such Guarantor immediately if requested by the Collateral Agent.

     13. Representations, Warranties and Covenants in Loan Agreement. Each Guarantor
(other than the Parent Guarantor) hereby represents and warrants to the Guarantied Parties that the
representations and warranties set forth in Section 6 of the Loan Agreement as they relate to such
Guarantor and the Loan Documents to which such Guarantor is a party, each of which is incorporated
herein by reference, are true and correct on and as of the date hereof, and the Guarantied Parties
are entitled to rely on each of them as if they were fully set forth herein; provided, that each
reference in each such representation and warranty to the Borrower’s or Parent Guarantor’s
knowledge shall, for the purposes of this Section 13, be deemed to be a reference to such
Guarantor’s knowledge. Each Guarantor agrees to comply with the covenants set forth in the Loan
Agreement to the extent they govern such Guarantor.

 

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     14. No Setoff or Deductions: Taxes.

     (a) Each Guarantor represents and warrants that it is organized in the United States of
America. All payments by such Guarantor hereunder shall be paid in full, without setoff or
counterclaim or any deduction or withholding whatsoever, including, without limitation, for any and
all present and future taxes. If any Guarantor must make a payment under this Guaranty, such
Guarantor represents and warrants that it will make the payment from one of its U.S. offices to the
Guarantied Parties so that no withholding tax is imposed on the payment. Notwithstanding the
foregoing, if any Guarantor makes a payment under this Guaranty to which withholding tax applies or
if any taxes (other than taxes on net income and franchise taxes in lieu of net income taxes (i)
imposed by the country or any subdivision of the country in which a Guarantied Party’s principal
office or actual lending office is located and (ii) measured by the United States taxable income a
Guarantied Party would have received if all payments under or in respect of this Guaranty were
exempt from taxes levied by such Guarantor’s country) are at any time imposed on any payments under
or in respect of this Guaranty including, but not limited to, payments made pursuant to this
paragraph, such Guarantor shall pay all such taxes to the relevant authority in accordance with
applicable law such that such Guarantied Party receives the sum it would have received had no such
deduction or withholding been made (or, if any Guarantor cannot legally comply with the foregoing,
such Guarantor shall pay to such Guarantied Party such additional amounts as will result in such
Guarantied Party receiving the sum it would have received had no such deduction or withholding been
made). Further, such Guarantor shall also pay to each Guarantied Party, on demand, all additional
amounts as necessary to preserve the after-tax yield such Guarantied Party would have received if
such taxes had not been imposed.

     (b) Each Guarantor shall promptly provide the Collateral Agent with an original receipt or
certified copy issued by the relevant authority evidencing the payment of any such amount required
to be deducted or withheld.

     15. Information Relating to Borrower. Each Guarantor acknowledges and agrees that it
has made such independent examination, review, and investigation of the Guarantied Obligations and
the Loan Documents and other documents governing the Guarantied Obligations as such Guarantor deems
necessary and appropriate, including, without limitation, any covenants pertaining to such
Guarantor contained therein, and shall have sole responsibility to obtain from the Borrower any
information required by such Guarantor about any modifications thereto. Each Guarantor further
acknowledges and agrees that it shall have the sole responsibility for, and has adequate means of,
obtaining from the Borrower such information concerning the Borrower’s financial condition or
business operations as such Guarantor may require, and that no Guarantied Party has any duty, and
such Guarantor is not relying on any Guarantied Party, at any time to disclose to such Guarantor
any information relating to the business operations or financial condition of the Borrower.

     16. Borrower’s Authorization. It is not necessary for any Guarantied Party to inquire
into the powers of the Borrower or of the officers, members or agents acting or purporting to act
on its behalf, and any Guarantied Obligations made or created in reliance upon the professed
exercise of such powers shall be guarantied hereunder, subject to any limitations on any
Guarantor’s liability set forth herein.

 

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     17. Remedies. Upon the failure of any Guarantor to fulfill its duty to pay and
perform the Guaranteed Obligations as required hereunder, the Collateral Agent, on behalf of the
Guarantied Parties, shall have available all of the remedies of a creditor of such Guarantor under
all applicable law and without limiting the generality of the foregoing, the Collateral Agent may,
at its option and without notice or demand: (a) declare any Guarantied Obligations to be
immediately due and payable, at which point such Guarantied Obligations shall become immediately
due and payable; and (b) set-off against any or all liabilities of such Guarantor all money owed by
any Guarantied Party or any of its agents or affiliates in any capacity to such Guarantor whether
or not due, and if exercised by such Guarantied Party, the Guarantied Party shall be deemed to have
exercised such right of set-off and to have made a charge against any such money immediately upon
the occurrence of such default although made or entered on the books subsequent thereto.

     18. Notices. Unless otherwise provided in this Guaranty or in another agreement
between the Collateral Agent and the Guarantors, all notices required under this Guaranty shall be
personally delivered or sent by first class mail, postage prepaid, or by overnight courier, to the
addresses set forth on the signature page to this Guaranty, or sent by facsimile to the fax numbers
listed on the signature, or to such other addresses as the Collateral Agent or any Guarantor may
specify from time to time in writing. Notices and other communications shall be effective (i) if
mailed, upon the earlier of receipt or five (5) days after deposit in the U.S. mail, first class,
postage prepaid, (ii) if telecopied, when transmitted, or (iii) if hand-delivered, by courier or
otherwise (including telegram, lettergram or mailgram), when delivered.

     19. Successors and Assigns. This Guaranty (a) binds each Guarantor and such
Guarantor’s successors, and assigns, provided that no Guarantor may assign its rights or
obligations under this Guaranty without the prior written consent of the Collateral Agent (except
that any Guarantor may merge into or consolidate with another Guarantor or the Borrower to the
extent permitted by the Loan Agreement) and (b) inures to the benefit of the Guarantied Parties and
their indorsees, successors, and assigns. Notwithstanding anything to the contrary in this Section
19, any assignment of a Guarantor’s rights and obligations under this Guaranty through a merger or
consolidation of such Guarantor into or with (as applicable) another Guarantor or the Borrower that
is permitted under the Loan Agreement shall not require the Collateral Agent’s prior written
consent. The Guarantied Parties may, without notice to any Guarantor and without affecting any
Guarantor’s obligations hereunder, sell, assign, grant participations in, or otherwise transfer to
any other Person the Guarantied Obligations and this Guaranty, in whole or in part. Each Guarantor
agrees that the Guarantied Parties may disclose to any assignee or purchaser, or any prospective
assignee or purchaser, of all or part of the Guarantied Obligations any and all information in the
Guarantied Parties’ possession concerning such Guarantor, this Guaranty, and any security for this
Guaranty, provided that such party first agrees in writing to abide by the confidentiality
provisions of Section 13.15 of the Loan Agreement or confidentiality restrictions that are
substantially similar.

     20. Amendments, Waivers, and Severability. No provision of this Guaranty may be
amended or waived except in a written agreement executed by the Collateral Agent and each
Guarantor. No failure by any Guarantied Party to exercise, and no delay in exercising, any of its
rights, remedies, or powers shall operate as a waiver thereof, and no single or partial

 

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exercise of any such right, remedy, or power shall preclude any other or further exercise
thereof or the exercise of any other right, remedy, or power. The unenforceability or invalidity
of any provision of this Guaranty shall not affect the enforceability or validity of any other
provision of this Guaranty.

     21. Costs and Expenses. Each Guarantor agrees, jointly and severally, to pay on
demand all costs of collection and reasonable attorney’s fees, including allocated costs of
in-house counsel to the extent permitted by applicable law, and all other costs and expenses that
may be incurred by the Collateral Agent and each of the other Guarantied Parties in connection with
(a) the enforcement of this Guaranty or (b) the preservation, protection, or enforcement of any
rights of the Guarantied Parties in any case commenced by or against any Guarantor or the Borrower
under the Bankruptcy Code (Title 11, United States Code) or any other bankruptcy, insolvency or
similar law.

     22. Governing Law and Jurisdiction. This Guaranty shall be governed by and construed
and enforced in accordance with the law of the State of New York. To the extent that the Bank has
greater rights or remedies under federal law, whether as a national bank or otherwise, this
paragraph shall not be deemed to deprive any Guarantied Party of such rights and remedies as may be
available under federal law. Jurisdiction and venue for any action or proceeding to enforce this
Guaranty shall be the forum appropriate for such action or proceeding against the Borrower, to
which jurisdiction each Guarantor and Guarantied Party irrevocably submits and to which venue such
Guarantor and Guarantied Party waives to the fullest extent permitted by law any defense asserting
an inconvenient forum in connection therewith. It is provided, however, that if any Guarantor owns
property in another state, notwithstanding that the forum for enforcement action is elsewhere, the
Bank may commence a collection proceeding in any state in which such Guarantor owns property for
the purpose of enforcing provisional remedies against such property. Service of process in
connection with such action or proceeding shall be binding if sent by registered or certified mail
to a party to this Guaranty at such party’s address listed on the signature page to this Guaranty
or to such other addresses as the Collateral Agent or any Guarantor may specify from time to time
in writing in accordance with Section 18.

     23. Waiver of Consequential Damages. Each Guarantor hereby irrevocably and
unconditionally waives, to the maximum extent not prohibited by law, any right it may have to claim
or recover any special, punitive, indirect or consequential damages relating to this Guaranty or
any other Loan Document or arising out of its activities in connection herewith or therewith
(whether before or after the Closing Date).

     24. Dispute Resolution. This paragraph, including the subparagraphs below, is
referred to as the “Dispute Resolution Provision.” This Dispute Resolution Provision is a material
inducement for the parties entering into this agreement.

     (a) This Dispute Resolution Provision concerns the resolution of any controversies or claims
between the parties, whether arising in contract, tort or by statute, including but not limited to
controversies or claims that arise out of or relate to: (i) this Guaranty (including any renewals,
extensions or modifications); or (ii) any document related to this Guaranty (collectively a
“Claim”). For the purposes of this Dispute Resolution Provision only,

 

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the term “parties” shall include any parent corporation, subsidiary or affiliate of the Bank
involved in the servicing, management or administration of any obligation described or evidenced by
this Guaranty.

     (b) At the request of any party to this Guaranty, any Claim shall be resolved by binding
arbitration in accordance with the Federal Arbitration Act (Title 9, U.S. Code) (the
“Act”). The Act will apply even though this Guaranty provides that it is governed by the
law of the State of New York.

     (c) Arbitration proceedings will be determined in accordance with the Act, the then-current
rules and procedures for the arbitration of financial services disputes of the American Arbitration
Association or any successor thereof (“AAA”), and the terms of this Dispute Resolution
Provision. In the event of any inconsistency, the terms of this Dispute Resolution Provision shall
control. If AAA is unwilling or unable to (i) serve as the provider of arbitration or (ii) enforce
any provision of this arbitration clause, the Bank may designate another arbitration organization
with similar procedures to serve as the provider of arbitration.

     (d) The arbitration shall be administered by AAA and conducted, unless otherwise required by
law, in any U.S. state where real or tangible personal property collateral for this credit is
located or if there is no such collateral, in the state specified in the governing law section of
this Guaranty. All Claims shall be determined by one arbitrator; however, if Claims exceed Five
Million Dollars ($5,000,000), upon the request of any party, the Claims shall be decided by three
arbitrators. All arbitration hearings shall commence within ninety (90) days of the demand for
arbitration and close within ninety (90) days of commencement and the award of the arbitrator(s)
shall be issued within thirty (30) days of the close of the hearing. However, the arbitrator(s),
upon a showing of good cause, may extend the commencement of the hearing for up to an additional
sixty (60) days. The arbitrator(s) shall provide a concise written statement of reasons for the
award. The arbitration award may be submitted to any court having jurisdiction to be confirmed and
have judgment entered and enforced.

     (e) The arbitrator(s) will give effect to statutes of limitation in determining any Claim and
may dismiss the arbitration on the basis that the Claim is barred. For purposes of the application
of any statutes of limitation, the service on AAA under applicable AAA rules of a notice of Claim
is the equivalent of the filing of a lawsuit. Any dispute concerning this arbitration provision or
whether a Claim is arbitrable shall be determined by the arbitrator(s), except as set forth at
paragraph (h) of this Dispute Resolution Provision. The arbitrator(s) shall have the power to
award legal fees pursuant to the terms of this Guaranty.

     (f) This paragraph does not limit the right of any party to: (i) exercise self-help remedies,
such as but not limited to, setoff; (ii) initiate judicial or non-judicial foreclosure against any
real or personal property collateral; (iii) exercise any judicial or power of sale rights, or (iv)
act in a court of law to obtain an interim remedy, such as but not limited to, injunctive relief,
writ of possession or appointment of a receiver, or additional or supplementary remedies.

     (g) The filing of a court action is not intended to constitute a waiver of the right of any
party, including the suing party, thereafter to require submittal of the Claim to arbitration.

 

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     (h) Any arbitration or trial by a judge of any Claim will take place on an individual basis
without resort to any form of class or representative action (the “Class Action Waiver”).
Regardless of anything else in this Dispute Resolution Provision, the validity and effect of the
Class Action Waiver may be determined only by a court and not by an arbitrator. The parties to
this Guaranty acknowledge that the Class Action Waiver is material and essential to the arbitration
of any disputes between the parties and is nonseverable from the agreement to arbitrate Claims. If
the Class Action Waiver is limited, voided or found unenforceable, then the parties’ agreement to
arbitrate shall be null and void with respect to such proceeding, subject to the right to appeal
the limitation or invalidation of the Class Action Waiver. The Parties acknowledge and agree that
under no circumstances will a class action be arbitrated.

     (i) By agreeing to binding arbitration, the parties irrevocably and voluntarily waive any
right they may have to a trial by jury in respect of any Claim. Furthermore, without intending in
any way to limit the agreement to arbitrate, to the extent any Claim is not arbitrated, the parties
irrevocably and voluntarily waive any right they may have to a trial by jury in respect of such
Claim. This waiver of jury trial shall remain in effect even if the Class Action Waiver is
limited, voided or found unenforceable. WHETHER THE CLAIM IS DECIDED BY ARBITRATION OR BY TRIAL BY
A JUDGE, THE PARTIES AGREE AND UNDERSTAND THAT THE EFFECT OF THIS DISPUTE RESOLUTION PROVISION IS
THAT THEY ARE GIVING UP THE RIGHT TO TRIAL BY JURY TO THE EXTENT PERMITTED BY LAW.

     THIS WRITTEN GUARANTY AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[This space left intentionally blank.]

 

 

     25. Counterparts. This Guaranty may be executed in as many counterparts as necessary
or convenient, and by the different parties on separate counterparts each of which, when so
executed, shall be deemed an original but all such counterparts shall constitute but one and the
same agreement. Signatures may be delivered via telecopy of in PDF format via electronic mail and
signatures delivered by such means shall be deemed originals for all purposes.

     Executed this 4th day of April, 2008.

	 	 	 	 	 
	 	MARTHA STEWART LIVING OMNIMEDIA, INC.

 	 
	 	By:  	/s/ Howard Hochhauser
 	 
	 	 	Name:  	Howard Hochhauser 	 
	 	 	Title:  	CFO 	 
	 
	 	MSO IP HOLDINGS, INC.

 	 
	 	By:  	/s/ Howard Hochhauser
 	 
	 	 	Name:  	Howard Hochhauser 	 
	 	 	Title:  	EVP, Treasurer 	 
	 
	 	MARTHA STEWART, INC.

 	 
	 	By:  	/s/ Howard Hochhauser
 	 
	 	 	Name:  	Howard Hochhauser 	 
	 	 	Title:  	Treasurer and Secretary 	 
	 
	 	BODY AND SOUL OMNIMEDIA, INC.

 	 
	 	By:  	/s/ Howard Hochhauser
 	 
	 	 	Name:  	Howard Hochhauser 	 
	 	 	Title:  	EVP, Treasurer 	 

[Signature page to Guaranty]

 

 

 

	 	 	 	 	 
	 	MSLO PRODUCTIONS, INC.

 	 
	 	By:  	/s/ Howard Hochhauser
 	 
	 	 	Name:  	Howard Hochhauser 	 
	 	 	Title:  	EVP, Treasurer 	 
	 
	 	MSLO PRODUCTIONS — HOME, INC.

 	 
	 	By:  	/s/ Howard Hochhauser
 	 
	 	 	Name:  	Howard Hochhauser 	 
	 	 	Title:  	EVP, Treasurer 	 
	 
	 	MSLO PRODUCTIONS — EDF, INC.

 	 
	 	By:  	/s/ Howard Hochhauser
 	 
	 	 	Name:  	Howard Hochhauser 	 
	 	 	Title:  	EVP, Treasurer 	 
	 
	 	FLOUR PRODUCTIONS, INC.

 	 
	 	By:  	/s/ Howard Hochhauser
 	 
	 	 	Name:  	Howard Hochhauser 	 
	 	 	Title:  	EVP, Treasurer 	 
	 

	 	 	 
	Address for notices to each

	 	Address for notices to each Guarantor:
	Guarantied Party:
	 	 
	 

	 	Martha Stewart Living Omnimedia, Inc.
	767 Fifth Avenue, Floor 12A

	 	11 West 42nd Street
	New York, NY 10153

	 	New York, NY 10036
	Attention: Jane R. Heller

	 	Attention: Chief Financial Officer
	Telecopy: 212-407-5402

	 	Telecopy: 212-827-8551

[Signature page to Guaranty]EX-10.9

 

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.

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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:

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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

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