{"id":43810,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/investment-agreement-martha-stewart-living-omnimedia-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"investment-agreement-martha-stewart-living-omnimedia-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/securities\/investment-agreement-martha-stewart-living-omnimedia-inc.html","title":{"rendered":"Investment Agreement &#8211; Martha Stewart Living Omnimedia Inc., ValueAct Capital Partners LP, ValueAct Capital Partners II LP, ValueAct Capital International LP and The Martha Stewart Family LP"},"content":{"rendered":"<pre>                              INVESTMENT AGREEMENT\n\n                  INVESTMENT AGREEMENT, dated as of January 8, 2002 (this\n\"Agreement\"), by and among Martha Stewart Living Omnimedia, Inc., a Delaware\ncorporation (the \"Corporation\"), ValueAct Capital Partners, L.P. a Delaware\nlimited partnership, ValueAct Capital Partners II, L.P. a Delaware limited\npartnership and ValueAct Capital International, Ltd. a British Virgin Islands\ncorporation (collectively, \"ValueAct\"), and, for the purposes of Article I,\nSection 2.3 and Article V hereof only, The Martha Stewart Family Limited\nPartnership, L.P., a Connecticut limited partnership (\"Stewart\").\n\n                                    RECITALS:\n\n                  WHEREAS, pursuant to the terms of a Stock Purchase Agreement,\ndated as of the date hereof (the \"Stock Purchase Agreement\"), Stewart has agreed\nto sell to ValueAct, and ValueAct has agreed to purchase from Stewart, an\naggregate of 3,000,000 shares of Class A Stock (the \"Stock Purchase\");\n\n                  WHEREAS, in connection with the consummation of the Stock\nPurchase, the parties hereto desire to enter into certain arrangements relating\nto ValueAct's ownership of the Class A Stock.\n\n                  NOW, THEREFORE, in consideration of the premises and mutual\ncovenants and obligations hereinafter set forth, the parties hereto agree as\nfollows:\n\n                                    ARTICLE I\n\n                                  DEFINED TERMS\n\n                  Section 1.1. Definitions. Unless the context otherwise\nrequires, the terms defined in this Article I shall, for the purposes of this\nAgreement, have the meanings herein specified.\n\n                  \"1933 Act\" means the Securities Act of 1933, as amended.\n\n                  \"1934 Act\" means the Securities Exchange Act of 1934, as\namended.\n\n                  \"Affiliate\" means with respect to a specified Person, any\nPerson that directly or indirectly controls, is controlled by, or is under\ncommon control with, the specified Person, and that Person's spouse, estate,\npersonal representative or lineal descendants or any trust for the benefit of\nsuch Person and\/or such Person's spouse and\/or such Person's lineal descendants\nor any entities controlled by such Person. As used in this definition, the term\n\"control\" means the possession, directly or indirectly, of the power to direct\nor cause the direction of the management and policies of a Person, whether\nthrough ownership of voting securities, by contract or otherwise.\n\n                  \"2002 Annual Meeting\" shall have the meaning set forth in\nSection 2.3 hereof.\n\n                                       -1-\n\n                  \"Agreement\" means this Investment Agreement, as amended,\nmodified, supplemented or restated in accordance with the terms hereof from\ntime to time.\n\n                  \"Assign\" and \"Assignment\" have the meanings set forth in\nSection 2.1 hereof.\n\n                  \"Board\" shall mean the Board of Directors of the Corporation.\n\n                  \"Class A Stock\" shall mean Class A Common Stock, par value\n$0.01 per share, of the Corporation.\n\n                  \"Class B Stock\" shall mean the Class B Common Stock, par value\n$0.01 per share, of the Corporation.\n\n                  \"Corporation\" shall have the meaning set forth in the preamble\nhereto.\n\n                  \"Delaware Act\" shall mean the Delaware General Corporation\nLaw, as amended.\n\n                  \"Directors\" shall mean those individuals elected as members of\nthe Board.\n\n                  \"NYSE\" shall mean the New York Stock Exchange, Inc.\n\n                  \"Person\" includes any individual, corporation, association,\npartnership (general or limited), joint venture, trust, estate, limited\nliability company, or other legal entity or organization.\n\n                  \"Registration Request\" shall have the meaning set forth in\nSection 3.1 hereof.\n\n                  \"Stewart\" shall have the meaning set forth in the preamble\nhereto.\n\n                  \"Stockholders Agreement \" means the Stockholders Agreement,\ndated as of October 19, 1999, by and among the Corporation and certain of its\nstockholders.\n\n                  \"Stock Purchase\" shall have the meaning set forth in the\nrecitals hereof.\n\n                  \"Ubben\" shall have the meaning set forth in Section 2.3\nhereof.\n\n                  \"ValueAct\" shall have the meaning set forth in the preamble\nhereto.\n\n                  Section 1.2. Headings. The headings and subheadings in this\nAgreement are included for convenience and identification only and are in no way\nintended to describe, interpret, define or limit the scope, extent or intent\nof this Agreement or any provision hereof.\n\n                                   ARTICLE II\n\n                         COVENANTS AND ACKNOWLEDGEMENTS\n\n                  Section 2.1. Investment Intent. ValueAct represents and\nwarrants to the Corporation that it is acquiring the Class A Stock in the Stock\nPurchase for investment for its own account and not with the view to, or for\nresale in connection with, any distribution thereof.\n\n                                       -2-\n\n                  Section 2.2. Transfers and Assignments. Prior to the first\nanniversary hereof, ValueAct shall not sell, assign, transfer, pledge,\nhypothecate, mortgage or dispose of, by gift or otherwise, or in any way\nencumber (\"Assign,\" and such act, an \"Assignment\") all or any part of the shares\nof Class A Stock owned by ValueAct; provided, however, that following the six-\nmonth anniversary hereof, ValueAct may distribute up to 50% of the shares\nacquired in the Stock Purchase to limited partners or other fund participants in\nthe relevant ValueAct fund. The foregoing restriction shall not apply to any\nAssignment approved by the Board. ValueAct acknowledges that the Stock Purchase\nhas not been registered under the 1933 Act, and that the Class A Stock acquired\nin the Stock Purchase may not be offered or Assigned except pursuant to an\neffective registration statement under the 1933 Act or an applicable exemption\ntherefrom.\n\n                  Section 2.3. Board of Directors. Effective as of the date\nhereof, Jeffrey Ubben (\"Ubben\") has been appointed by the Board to the Board as\na Director to fill an existing vacancy thereon, to serve until the 2002 annual\nmeeting of the stockholders of the Corporation (the \"2002 Annual Meeting\"),\nunless earlier removed for cause (as such term is used in Section 141(k) of the\nDelaware General Corporation Law). The Corporation and Stewart agree that,\nsubject to the Board's fiduciary duties under applicable law (after consultation\nin good faith with outside legal counsel) and unless earlier removed from the\nBoard in accordance with the preceding sentence, Ubben shall be included in the\nslate of nominees recommended for election to the Board as Directors at the\n2002 Annual Meeting by the Board. Stewart agrees to vote all of shares of Class\nA Common Stock and Class B Common Stock beneficially held by it in favor of\nUbben's election to the Board as a Director at the 2002 Annual Meeting if Ubben\nis nominated therefor in accordance with the preceding sentence, and agrees\nthat, if Stewart should seek to transfer shares of Class A Common Stock or Class\nB Common Stock such that, following such transfer, Stewart would have less than\na majority of the outstanding voting power of the Corporation, Stewart shall\nrequire the transferees thereof to be bound by this sentence.\n\n                                   ARTICLE III\n\n                               REGISTRATION RIGHTS\n\n                  Section 3.1.     Form S-3 Registration.\n\n         (a) If Form S-3, or any successor form thereto, is available for such\noffering, ValueAct may request in writing that the Corporation effect a\nregistration on Form S-3 and any related qualification or compliance (a\n\"Registration Request\"), and the Corporation shall use its best efforts to\neffect, as soon as practicable, such registration, qualification or compliance\nas may be so requested and as would permit or facilitate the sale and\ndistribution of all Class A Stock specified in such Registration Request and to\nmaintain the registration on Form S-3 for 180 days following the effectiveness\nthereof; provided, that such 180-day period may be suspended if, in the good\nfaith judgment of the Board, a corporate event requires such suspension, the\nCorporation shall use its best efforts to reinstate the effectiveness thereof\nfor the remaining number of days. The Corporation shall not be obligated to\neffect more than three registrations on Form S-3 for ValueAct pursuant to this\nSection 3.1(a), or be obligated to effect more than one registration on Form S-3\nduring any six-month period; provided, however, that in no event shall the\nCorporation be obligated to effect a registration statement under this Section\n3.1(a) within 120 days of the end of the effective period of any prior\nregistration statement effected by the Corporation pursuant to a Registration\nRequest. The anticipated net offering price of the shares of Class A Stock\nspecified in the Registration Request shall be at least $10,000,000. Any\nregistration\n\n                                       -3-\n\nstatement filed pursuant to this Section 3.1(a) may include other shares of\nClass A Stock that the Corporation is required to include in such registration\nstatement by virtue of the Stockholders Agreement; provided, that in no event\nshall the number of shares of Class A Stock to be registered pursuant to the\nRegistration Request be reduced in order to comply with any provision of the\nStockholders Agreement\n\n         (b) The Corporation shall not be obligated to effect the filing of a\nregistration statement pursuant to Section 3.1(a) hereof (i) if the\nCorporation has furnished to ValueAct, within 30 days after receipt of a\nRegistration Request an opinion of counsel (in form and substance reasonably\nsatisfactory to ValueAct) to the Corporation to the effect that ValueAct may\neffect the sale and distribution of shares of Class A Stock held by ValueAct\nincluded in the Registration Request in accordance with its intended method of\ndistribution without the registration of such securities under the 1933 Act; or\n(ii) if the Corporation has furnished to ValueAct within 30 days after receipt\nof a Registration Request a certificate signed by an executive officer of the\nCorporation stating that, in the good faith judgment of the Board such\nregistration would require premature disclosure of material information\nrelating to a pending corporate development or a special audit of the\nCorporation, in which event the Corporation shall have the right to defer the\nobligations contained in this Section 3.1 for a period of not more than 165\ndays (including the time period used for filing the applicable registration\nstatement) after receipt of the Registration Request, and provided that the\nCorporation has not, in any twelve-month period, utilized the right in this\nclause (ii) more than once.\n\n                  Section 3.2.     Corporation Registration.\n\n         (a) If the Corporation proposes to register any of its capital stock or\nother equity securities (including any securities convertible into or\nexchangeable for equity securities) under the 1933 Act in connection with the\npublic offering of such securities solely for cash (other than a registration on\nForm S-8 or any successor form relating solely to the sale of securities to\nparticipants in a Corporation Class A Stock plan, or a registration on Form\nS-4 or any successor form), the Corporation shall, at such time, promptly give\nValueAct written notice of such registration. Upon the written request of\nValueAct given within 20 days after the receipt of such notice by the\nCorporation, the Corporation shall, subject to the provisions of Section 3.2(b),\nuse commercially reasonable efforts to cause a registration statement covering\nall of the shares of Class A Stock that ValueAct has requested to be registered\nto become effective under the 1933 Act. The Corporation shall have no\nobligation under this Section 3.2 to make any offering of its securities or to\ncomplete any offering of its securities that it proposes to make, and shall\nincur no liability to ValueAct for its failure to do so.\n\n                  (b) In connection with any offering involving an underwriting\nof securities being issued by the Corporation, the Corporation shall not be\nrequired under this Section 3.2 to include any of the securities of the\nCorporation owned by ValueAct in such underwriting unless it accepts the terms\nof the underwriting as agreed upon between the Corporation and the underwriters\nselected by it, and then only in such quantity, if any, as will not, in the\nreasonable opinion of the underwriters, jeopardize the success of the offering\nby the Corporation. If the managing underwriter for the offering shall advise\nthe Corporation in writing that marketing factors require a limitation of the\nnumber of shares to be underwritten, then the Corporation shall so advise\nValueAct, and the number of shares that may be included in the underwriting\nshall be allocated in priority as follows: (i) all shares of Class A Stock\nproposed to be underwritten on behalf of the Corporation, and then (ii) all\nshares of Class A Stock required to be registered on behalf of other\n\n                                       -4-\n\nstockholders of the Corporation pursuant to the Stockholders Agreement, and then\n(iii) all shares of Class A Stock proposed to be underwritten on behalf of\nValueAct.\n\n                  Section 3.3. Expenses of Registration. The Corporation shall\nbear and pay all expenses other than underwriting fees, discounts and\ncommissions relating to shares of Class A Stock incurred in connection with each\nregistration, filing or qualification pursuant to this Article III, including\n(without limitation) all registration, blue sky, securities exchange or listing\nfees (including NYSE, NASD and similar fees), filing and qualification fees,\nprinting and accounting fees (including for audits and comfort letters), fees\nand disbursements of counsel for the Corporation; provided, however, that the\nCorporation shall not be required to pay for any expenses of any registration\nproceeding begun at the request of ValueAct if the registration request is\nsubsequently withdrawn at any time at the request of ValueAct, in which case\nValueAct shall bear such expenses (including all out-of-pocket expenses and fees\nincurred by the Corporation), unless ValueAct agrees to forfeit one Form S-3\nregistration. If ValueAct withdraws a registration request after the filing of\nthe applicable registration statement, ValueAct, shall reimburse all such\nexpenses and fees and shall also forfeit such applicable registration right,\nprovided, however, that if such withdrawal is due primarily to (i) the\nCorporation's failure to comply in all material respects with its obligations\nunder Sections 3.1 through 3.5, or (ii) the failure of the Corporation at a\nreasonable time, in light of the circumstances, prior to the filing of such\nregistration statement to advise ValueAct, of its knowledge of the existence of\nan event relating to the Corporation that would reasonably be expected to have a\nmaterial effect on the business, financial condition or market valuation of the\nCorporation, such registration right shall not be forfeited. Underwriting\ndiscounts and commissions relating to the shares of Class A Stock included in a\nregistration pursuant Section 3.2 shall be borne and paid ratably by ValueAct\nin proportion to its participation in such registration.\n\n                  Section 3.4. Furnishing of Information. It shall be a\ncondition precedent to the obligations of the Corporation to take any action\npursuant to this Article III that ValueAct shall have furnished to the\nCorporation such information as the Corporation shall request regarding\nValueAct, the shares of Class A Stock held by ValueAct, and the intended method\nof disposition of such shares of Class A Stock as shall be required to effect\nthe requested registration, and that ValueAct shall have provided the\nCorporation with such representations and warranties, covenants and opinions as\nare customary for a selling Class A Stockholder in connection with the\nregistration of a selling Class A Stockholder's securities. The Corporation\nshall provide ValueAct with copies of all correspondence with the Securities and\nExchange Commission related to any registration statement filed pursuant to this\nArticle III and in which ValueAct is participating on a reasonably prompt basis.\n\n                  Section 3.5. Indemnification. In the event that any Class A\nStock of ValueAct is included in a registration statement under this Article\nIII, ValueAct and the Corporation shall agree to customary indemnification\nprovisions (which may include indemnification of any underwriter of such\nregistration) in connection therewith relating to compliance with the 1933 Act,\nthe 1934 Act, any state securities law or any rule or regulation promulgated\nunder the 1933 Act, the 1934 Act or any state securities law in connection with\nany matter relating to such registration statement.\n\n                  Section 3.6. Additional Registration Rights. In the event that\nthe Corporation shall grant to any stockholder of the Corporation registration\nrights (other than those contained in\n\n\n                                       -5-\n\nthe Stockholders' Agreement), the Corporation shall provide written notice of\nsuch grant to ValueAct.\n\n\n                                   ARTICLE IV\n\n                                   ARBITRATION\n\n                  Section 4.1. Dispute Resolution. To the fullest extent\npermitted by the Delaware Act and other applicable law, any controversy or\nclaim arising out of or relating to this Agreement, or any breach thereof, shall\nbe settled by arbitration in accordance and to the extent permitted by the\nUniform Arbitration Act (10 Del. C. Section 5701, et seq.) and, to the extent\nnot inconsistent therewith, the then-prevailing Rules for Non-Administered\nArbitration of Business Disputes of the CPR Center for Dispute Resolution. Each\nparty to the arbitration shall select one (1) arbitrator. The arbitrators'\nruling shall be binding and conclusive upon the parties hereto to the fullest\nextent permitted by law. Any arbitration shall occur in Wilmington, Delaware,\nand judgment upon the award rendered may be entered in any court having\njurisdiction thereof. The arbitrators shall be governed by and shall apply the\nsubstantive law of the State of Delaware in making their award. The expenses of\nthe arbitration shall be borne equally by the parties to the arbitration,\nprovided that each party shall pay for and bear the cost of its own experts,\nevidence and legal counsel.\n\n                                    ARTICLE V\n\n                                  MISCELLANEOUS\n\n                  Section 5.1. Notices. All notices provided for in this\nAgreement shall be in writing, duly signed by the party giving such notice, and\nshall be delivered, or mailed by registered or certified mail, as follows:\n\n                  (a)      if given to the Corporation, at the following\n                           address:\n\n                           Martha Stewart Living Omnimedia, Inc.\n                           20 West 43rd Street\n                           New York, New York 10036\n                           Attention: General Counsel\n\n\n                           with a copy to:\n\n\n                           Wachtell, Lipton, Rosen &amp; Katz\n                           51 West 52nd Street\n                           New York, New York 10019\n                           Attention:  Andrew J. Nussbaum, Esq.\n\n\n                  (b) if given to Stewart or ValueAct, at the address on file\nwith the Corporation, or at such other address as Stewart or ValueAct may\nhereafter designate by written notice to the Corporation.\n\nAll such notices shall be deemed to have been given when received.\n\n                                       -6-\n\n                  Section 5.2. Amendments. Except as otherwise provided herein,\nno modification, amendment or waiver of any provision of this Agreement shall be\neffective against any party hereto unless such modification, amendment or waiver\nis approved in writing by each party hereto. The failure of any party to enforce\nany of the provisions of this Agreement shall in no way be construed as a waiver\nof such provisions and shall not affect the right of such party there- after to\nenforce each and every provision of this Agreement in accordance with its terms.\n\n                  Section 5.3. Failure to Pursue Remedies. The failure of any\nparty to seek redress for violation of, or to insist upon the strict performance\nof, any provision of this Agreement shall not prevent a subsequent act, which\nwould have originally constituted a violation, from having the effect of an\noriginal violation.\n\n                  Section 5.4. Specific Performance. The parties hereto\nacknowledge that there would be no adequate remedy at law if any party fails to\nperform any of its obligations hereunder, and accordingly agree that each party,\nin addition to any other remedy to which it may be entitled at law or in equity,\nshall be entitled to compel specific performance of the obligations of any other\nparty under this Agreement in accordance with the terms and conditions of this\nAgreement. Any remedy under this Section 5.4 is subject to certain equitable\ndefenses and to the discretion of the court before which any proceedings\ntherefor may be brought.\n\n                  Section 5.5. Cumulative Remedies. The rights and remedies\nprovided by this Agreement are cumulative and the use of any one right or remedy\nby any party shall not preclude or waive its right to use any or all other\nremedies. Said rights and remedies are given in addition to any other rights the\nparties may have by law, statute, ordinance or otherwise.\n\n                  Section 5.6. Binding Effect. This Agreement shall be binding\nupon and inure to the benefit of all of the parties and, to the extent permitted\nby this Agreement, their successors, legal representatives and assigns.\n\n                  Section 5.7. Interpretation. Throughout this Agreement, nouns,\npronouns and verbs shall be construed as masculine, feminine, neuter, singular\nor plural, whichever shall be applicable. All references herein to \"Articles,\"\n\"Sections\" and \"Paragraphs\" shall refer to corresponding provisions of this\nAgreement.\n\n                  Section 5.8. Severability. The invalidity or unenforceability\nof any particular provision of this Agreement shall not affect the other\nprovisions hereof, and this Agreement shall be construed in all respects as if\nsuch invalid or unenforceable provision were omitted.\n\n                  Section 5.9. Counterparts. This Agreement may be executed in\nany number of counterparts with the same effect as if all parties hereto had\nsigned the same document. All counterparts shall be construed together and shall\nconstitute one instrument\n\n                  Section 5.10. Integration. This Agreement constitutes the\nentire agreement among the parties hereto pertaining to the subject matter\nhereof and, except as otherwise provided herein, supersedes all prior agreements\nand understandings pertaining thereto.\n\n                  Section 5.11. Governing Law. This Agreement and the rights of\nthe parties hereunder shall be interpreted in accordance with the laws of the\nState of Delaware, and all rights and remedies shall be governed by such laws\nwithout regard to principles of conflict of laws.\n\n                                       -7-\n\n                  Section 5.12. Term. Except as otherwise provided herein, the\nregistration rights provided for in this Agreement shall terminate at such time\nas ValueAct is able to sell all of its shares of Class A Stock beneficially\nowned by it in one transaction pursuant to Rule 144 under the 1933 Act.\n\n                                       -8-\n\n                  IN WITNESS WHEREOF, the parties hereto have executed this\nAgreement as of the date first above stated.\n\n                                        MARTHA STEWART LIVING OMNIMEDIA, INC.\n\n                                        By: \/s\/ Greg Blatt\n                                        Name: Greg Blatt\n                                        Title: Executive Vice President &amp; General Counsel\n\n                                        VALUEACT CAPITAL PARTNERS, L.P.\n\n                                        By: \/s\/ Jeffrey W. Ubben\n                                        Name: Jeffrey W. Ubben\n                                        Title: Managing Partner\n\n                                        VALUEACT CAPITAL PARTNERS II, L.P.\n\n                                        By: \/s\/ Jeffrey W. Ubben\n                                        Name: Jeffrey W. Ubben\n                                        Title: Managing Partner\n\n                                        VALUEACT CAPITAL INTERNATIONAL, LTD.\n\n                                        By: \/s\/ Jeffrey W. Ubben\n                                        Name: Jeffrey W. Ubben\n                                        Title: Managing Partner\n\n                                        For purposes of Article I, Section 2.3\n                                        and Article V hereof only.\n\n                                        THE MARTHA STEWART FAMILY LIMITED\n                                        PARTNERSHIP, L.P.\n\n                                        By: \/s\/ Martha Stewart\n                                        Name: Martha Stewart\n                                        Title: General Partner\n\n\n                                      -9-\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8137],"corporate_contracts_industries":[9464],"corporate_contracts_types":[9629,9633],"class_list":["post-43810","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-martha-stewart-living-omnimedia-inc","corporate_contracts_industries-media__books","corporate_contracts_types-securities","corporate_contracts_types-securities__shareholder"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43810","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43810"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43810"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43810"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43810"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}