Location Rental Agreement - Martha Stewart and Martha Stewart Living Omnimedia Inc.
EXECUTION COPY
LOCATION RENTAL AGREEMENT
LOCATION RENTAL AGREEMENT (this "Agreement"), dated as of
September 17, 2004, by and between Martha Stewart ("Stewart") and Martha
Stewart Living Omnimedia, Inc. (together with its subsidiaries, "MSLO").
WHEREAS, Stewart or entities controlled by Stewart own or control
certain real property (together with the improvements thereon, the "Real
Property") which MSLO desires to use in connection with its businesses; and
WHEREAS, Stewart wishes to allow MSLO to use Real Property in
connection with its businesses, on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the mutual premises set forth
herein, and for such other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Term. The term of this Agreement shall commence on September
17, 2004 (the "Effective Date") and continue until the third anniversary of
such date, unless this Agreement is terminated pursuant to Section 7
hereof.
2. Consideration. Subject to Section 7, on the Effective Date and
on each of the first and second anniversaries of the Effective Date, MSLO
shall pay Stewart, or any entity designated by Stewart, an annual location
rental fee of $500,000 (the "Annual Rental Fee"); provided that, with
respect to each of the twelve month periods commencing on the first
anniversary of the Effective Date and the second anniversary of the
Effective Date, if during such twelve month period MSLO is producing any
original network, cable or syndicated television show for which Stewart
serves as on-air talent, the Annual Rental Fee for such twelve-month period
shall be $750,000 (the "Enhanced Payment Amount"); and provided that the
parties may agree to increase the foregoing payment if they determine such
increase to be appropriate.
3. Use and Availability. During the term of this Agreement,
Stewart shall provide MSLO access to the Real Property, and MSLO shall be
able to use the Real Property, in each case in connection with MSLO's
businesses and in a manner consistent with past practice and applicable
law.
MSLO shall provide reasonable notice of the intended dates and
manner of use and the parties shall cooperate therewith. At the request of
Stewart, any alterations of the Real Property by MSLO in connection with
the use thereof by MSLO shall be remedied and the Real Property returned to
its previous condition.
4. Disclaimer of Legal Right; Subordination. MSLO disclaims all
right, title and interest in the Real Property, other than the right of
access provided by this Agreement. MSLO acknowledges that the right of
access provided for in this Agreement is subordinate in all respects to,
and subject to, all other interests in the Real Property.
5. Stewart's Duty to Maintain. Subject to the other terms of this
Agreement, Stewart shall, at her expense, cause the Real Property to be
maintained, landscaped, gardened and developed in a manner generally
consistent with past practice since October 1999, provided that any such
costs incurred with respect to the Real Property directly as a result of an
approved and scheduled story or project shall be paid for directly by MSLO.
6. Sale of the Real Property; Costs of Filming. Nothing in this
Agreement shall be construed to obligate Stewart to bear any costs of
filming or other business-related activities (other than capital
improvements to the Real Property that remain on the property, the costs of
which shall be borne by Stewart to the extent Stewart chooses to make such
improvements) conducted on the Real Property on behalf of MSLO. At any time
during the term of this Agreement, Stewart may sell any of the Real
Property without the consent of MSLO. Subject to the next sentence of this
Section 6, such sale shall not affect the obligations of MSLO under Section
2 of this Agreement. Notwithstanding the foregoing, in the event that
Stewart sells a significant portion of the Real Property (based on MSLO's
use of such property) and, due to such sale, MSLO is required to pay money
for the use of additional locations owned by other parties to conduct its
business, Stewart and MSLO shall, in good faith, agree to adjust the Annual
Rental Fee, taking into account any increased use (compared to such use on
the date hereof) by MSLO of the remaining Real Property as well as any use
by MSLO of other real property that Stewart may acquire after the date
hereof.
7. Termination. The term of this Agreement shall end as though
the term specified in Section 1 hereof had ended upon any termination of
Stewart's employment with MSLO. If MSLO terminates Stewart's employment
other than for Cause (as defined in the Employment Agreement (the
"Employment Agreement"), by and between Stewart and MSLO, dated as of the
date hereof), or if Stewart terminates her employment for Good Reason (as
defined in the Employment Agreement), then all sums due Stewart under this
Agreement during the remainder of the term specified in Section 1 shall
accelerate and become immediately payable by MSLO and this Agreement shall
terminate; provided that for purposes of determining the amounts payable
under this Section 7 the Enhanced Payment Amount shall be used. If MSLO
terminates Stewart's employment for Cause (as defined in the Employment
Agreement), or Stewart terminates her employment other than for Good
Reason, then this Agreement shall immediately terminate and neither MSLO
nor Stewart shall have any further obligations under this Agreement. In
addition, this Agreement may be terminated by Stewart, effective as of the
day immediately prior to the first or the second anniversary of the
Effective Date, by not less than 60 days' prior written notice to the
Company. In the event of a termination of this Agreement pursuant to the
preceding sentence, neither MSLO nor Stewart shall have any further
obligations under this Agreement.
8. Miscellaneous. (a) This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without
reference to principles of conflict of laws. The captions of this Agreement
are not part of the provisions hereof and shall have no force or effect.
This Agreement may not be amended or modified except by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.
(b) This Agreement is assignable by MSLO to any successor of MSLO
which acquires all or substantially all of the assets or businesses of MSLO
or to an acquiror, whether by sale, merger, recapitalization or other
business combination, of all or substantially all of the assets or
businesses of MSLO without Stewart's consent, provided that any such
successor or assignee shall provide Stewart with a written agreement that
it shall be bound by all the terms of this Agreement. This Agreement shall
be assignable by Stewart to any entity controlled by her, and inure to the
benefit of and be binding upon the successors, heirs and assigns of
Stewart. Except as specified in this Section 8(b), this Agreement is not
assignable.
(c) All notices and other communications under this Agreement
shall be in writing and shall be given by hand delivery to the other party
or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to Stewart:
At her residence address most recently filed with MSLO.
If to MSLO:
Martha Stewart Living Omnimedia, Inc.
11 West 42nd Street
New York, NY 10036
Attention: General Counsel
Tel: (212) 827-8036
Fax: (212) 827-8188
or to such other address as either party furnishes to the other in writing
in accordance with this Section. Notices and communications shall be
effective when actually received by the addressee.
(d) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement. If any provision of this Agreement shall be
held invalid or unenforceable in part, the remaining portion of such
provision, together with all other provisions of this Agreement, shall
remain valid and enforceable and continue in full force and effect to the
fullest extent consistent with law.
(e) Stewart and MSLO acknowledge that this Agreement supersedes
any other agreement between them concerning the subject matter hereof,
including, without limitation, the Location Rental Agreement, dated as of
October 22, 1999, as amended, to which Stewart and MSLO were parties and
which expired on July 4, 2004.
(f) This Agreement may be executed in several counterparts, each
of which shall be deemed an original, and said counterparts shall
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly caused this
Agreement to be executed in its name on its behalf, all as of the day and
year first above written.
/s/ Martha Stewart
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Martha Stewart
MARTHA STEWART LIVING OMNIMEDIA, INC.
By: /s/ Sharon L. Patrick
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Name: Sharon L. Patrick
Title: President and Chief Executive
Officer