Insider filing report for Changes in Beneficial Ownership
- Schedule 13G & 13D forms are used to report a party's ownership of stock which exceeds 5% of a company's total stock issue.
- Schedule 13G is a shorter version of Schedule 13D with fewer reporting requirements.
"Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise"
- Peter Lynch
What is insider trading>>
- Peter Lynch
What is insider trading>>
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
(Amendment No. 1)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
Gaiam, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Class A Common Stock, $0.0001
- --------------------------------------------------------------------------------
(Title of Class of Securities)
36268Q-103
- --------------------------------------------------------------------------------
(CUSIP Number)
Ronald A. Klain
Revolution Living LLC
1717 Rhode Island Avenue, N.W.
Washington, DC 20036
202-776-1400
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
February 6, 2007
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box ".
Note. Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7 for
other parties to whom copies are to be sent.
================================================================================
- --------------------------- ---------------------------
CUSIP No. 36268Q-103 13D Page 1 of 8 Pages
- --------------------------- ---------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Revolution Living LLC
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
NUMBER OF SHARES BENEFICIALLY 7 SOLE VOTING POWER
OWNED BY EACH REPORTING PERSON -0-
WITH -----------------------------------------
8 SHARED VOTING POWER
-0-
-----------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
-----------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
- --------------------------------------------------------------------------------
Page 1 of 8
- --------------------------- ---------------------------
CUSIP No. 36268Q-103 13D Page 2 of 8 Pages
- --------------------------- ---------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Revolution Management Company LLC
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
NUMBER OF SHARES BENEFICIALLY 7 SOLE VOTING POWER
OWNED BY EACH REPORTING PERSON -0-
WITH -----------------------------------------
8 SHARED VOTING POWER
-0-
-----------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
-----------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
HC
- --------------------------------------------------------------------------------
Page 2 of 8
- --------------------------- ---------------------------
CUSIP No. 36268Q-103 13D Page 3 of 8 Pages
- --------------------------- ---------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Revolution LLC
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
NUMBER OF SHARES BENEFICIALLY 7 SOLE VOTING POWER
OWNED BY EACH REPORTING PERSON -0-
WITH -----------------------------------------
8 SHARED VOTING POWER
-0-
-----------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
-----------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
HC
- --------------------------------------------------------------------------------
Page 3 of 8
- --------------------------- ---------------------------
CUSIP No. 36268Q-103 13D Page 4 of 8 Pages
- --------------------------- ---------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Stephen M. Case Revocable Trust
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Virginia
- --------------------------------------------------------------------------------
NUMBER OF SHARES BENEFICIALLY 7 SOLE VOTING POWER
OWNED BY EACH REPORTING PERSON -0-
WITH -----------------------------------------
8 SHARED VOTING POWER
-0-
-----------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
-----------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
- --------------------------------------------------------------------------------
Page 4 of 8
- --------------------------- ---------------------------
CUSIP No. 36268Q-103 13D Page 5 of 8 Pages
- --------------------------- ---------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Stephen M. Case
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
NUMBER OF SHARES BENEFICIALLY 7 SOLE VOTING POWER
OWNED BY EACH REPORTING PERSON -0-
WITH -----------------------------------------
8 SHARED VOTING POWER
-0-
-----------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
-----------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------
------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
Page 5 of 8
This Amendment No. 1 to Schedule 13D (this "Amendment") is being filed
to report the execution of a Purchase Agreement and General Mutual Release and
Settlement ("Sale Agreement") by Revolution Living LLC ("Revolution Living"),
Stephen M. Case ("Case"), Gaiam, Inc. ("Issuer"), Jirka Rysavy ("Rysavy") and
Alps Communications LLC ("Alps"), pursuant to which (1) Revolution Living sold
all of the outstanding shares of the Issuer's capital stock held by it, (2) the
Shareholders Agreement and Transaction Agreement were terminated and (3) David
Golden resigned as a member of the board of directors of the Issuer.
This Amendment amends and supplements the statement on Schedule 13D
filed with the Securities and Exchange Commission (the "Commission") on August
15, 2005 (the "Original Statement"). Only those items that are hereby reported
are amended. All other items remain unchanged. Terms defined in the Original
Statement have the same meaning when used herein.
Item 2. Identity and Background.
This Amendment is being filed on behalf of Revolution Living LLC,
Revolution, Trust, Case and, by virtue of its holdings in Revolution Living,
Revolution Management Company LLC (collectively, the "Reporting Persons").
Revolution Management Company LLC is a holding company engaged, through
subsidiaries, in health care, real estate and other businesses, including the
businesses and investments of Revolution Living. The principal business address
of Revolution Management Company LLC is P.O. Box 33139, Washington, D.C. 20033.
No person controls any of the Reporting Persons other than Case.
During the last five years, none of the Reporting Persons has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors). During the last five years, no Reporting Person was a party to a
civil proceeding or a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
Item 4. Purpose of Transaction.
Pursuant to the Sale Agreement, on February 6, 2007, (1) Revolution
Living sold all of the outstanding shares of the Issuer's capital stock held by
it, (2) the Shareholders Agreement (including the Option) and Transaction
Agreement were terminated and (3) David Golden resigned as a member of the board
of directors of the Issuer.
Accordingly, the Reporting Persons have no plans or proposals which
relate to or would result in: (a) the acquisition by any person of additional
securities of the Issuer or the disposition of securities of the Issuer; (b) an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Issuer or any of its subsidiaries; (c) sale or resale
of a material amount of assets of the Issuer of any of its subsidiaries; (d) any
change in the present Board of Directors or management of the Issuer, including
any plans or proposals to change the number or term of directors or to fill any
existing vacancies on the Board; (e) any material change in the present
capitalization or dividend policy of the Issuer; (f) any other material change
in the Issuer's business or corporate structure; (g) changes in the Issuer's
articles of incorporation, bylaws or instruments corresponding thereto or other
actions which may impede the acquisition of control of the Issuer by any person;
(h) causing a class of securities of the Issuer to be delisted from a national
securities exchange or to cease to be authorized or quoted in an inter-dealer
quotation system of a registered national securities association; (i) a class of
equity securities of the Issuer becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) any action
similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
Pursuant to the Sale Agreement, on February 6, 2007, Revolution Living
sold 2,500,000 Class A Shares to the Issuer at a price of $13.14 per share.
Accordingly, as a result of the Sale Agreement, none of the Reporting Persons
own, beneficially or otherwise, any securities of the Issuer and, on February 6,
2007, each of the Reporting Persons ceased to be the beneficial owner of more
than five percent of the Class A Shares.
Except as set forth in this Amendment, the Reporting Persons have not
effected any transactions in Class A Shares during the past sixty days.
Page 6 of 8
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
The description of the Sale Agreement set forth in this Amendment is
hereby incorporated by reference in this Item 6 and is qualified in its entirety
by reference to Exhibit 1 to this Amendment, which is hereby incorporated by
reference. In addition, as indicated above in this Amendment, the Transaction
Agreement and Shareholders Agreement have been terminated. The descriptions of
the Transaction Agreement and Shareholders Agreement set forth elsewhere in the
Original Filing are hereby incorporated by reference in this Item 6 and are
qualified in their entirety by reference to Exhibits 1 and 2 to the Original
Filing, which are each hereby incorporated by reference.
Except as set forth herein, to the best knowledge of the Reporting
Persons, there are no contracts, arrangements, understandings or relationships
(legal or otherwise) between the persons enumerated in Item 2 and any other
person, with respect to any securities of the Issuer, including any securities
pledged or otherwise subject to a contingency the occurrence of which would give
another person voting power or investment power over such securities other than
standard default and similar provisions contained in loan agreements.
Item 7. Material to be Filed as Exhibits.
Exhibit 1: Purchase Agreement and General Mutual Release and Settlement dated as
of February 6, 2007 among Gaiam, Inc., Jirka Rysavy, Revolution Living LLC, Alps
Communications LLC and Stephen M. Case.
Exhibit 2: Joint Filing Agreement dated as of February 6, 2007 among Revolution
Living LLC, Revolution Management Company LLC, Revolution LLC, the Stephen M.
Case Revocable Trust and Stephen M. Case.
Page 7 of 8
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: February 6, 2007
REVOLUTION LIVING LLC
By: /s/ STEPHEN M. CASE
-------------------------------------
Name: Stephen M. Case
Title: President and Chief Executive
Officer
REVOLUTION MANAGEMENT COMPANY LLC
By: /s/ STEPHEN M. CASE
-------------------------------------
Name: Stephen M. Case
Title: Sole Director
REVOLUTION LLC
By: /s/ STEPHEN M. CASE
-------------------------------------
Name: Stephen M. Case
Title: President and Chief Executive
Officer
STEPHEN M. CASE REVOCABLE TRUST
By: /s/ STEPHEN M. CASE
-------------------------------------
Name: Stephen M. Case
Title: Trustee
STEPHEN M. CASE
/s/ STEPHEN M. CASE
-----------------------------------------
Page 8 of 8
Exhibit 1
---------
PURCHASE AGREEMENT
AND GENERAL MUTUAL RELEASE AND SETTLEMENT
This Purchase Agreement and General Mutual Release and Settlement (the
"Agreement") is entered into as of February 6, 2007 by and among Gaiam, Inc., a
Colorado corporation ("Gaiam"), Jirka Rysavy, an individual ("Rysavy"),
Revolution Living LLC, a Delaware limited liability company ("Revolution
Living"), Stephen M. Case, an individual ("Case"), and Alps Communications LLC,
a Delaware limited liability company ("Alps"). Gaiam, Rysavy, Revolution Living,
Case, and Alps are collectively referred to as the "Parties."
RECITALS
WHEREAS, Gaiam, Revolution Living and Life Balance Media Holdings LLC,
a Delaware limited liability company ("Wisdom") entered into a Transaction
Agreement dated as of August 4, 2005 (the "Transaction Agreement") and the
certain of the Parties entered into a Shareholders Agreement dated as of August
4, 2005 (the "Shareholders Agreement") pursuant to which, among other things,
Revolution Living acquired 2,500,000 shares (the "Revolution Shares") of Gaiam's
Class A Common Stock, par value $0.0001 per share (the "Class A Common Stock"),
and an option to acquire certain additional shares of Class A Common Stock from
Rysavy (the "Option").
WHEREAS, the Parties have agreed to enter into this Agreement, pursuant
to which: (i) Revolution Living will cancel the Option, and Rysavy will transfer
$7,165,478.50 to Revolution Living (the "Option Consideration"), in
consideration of Revolution Living's cancellation of the Option; (ii) Revolution
Living will sell the Revolution Shares to Gaiam, and Gaiam will purchase the
Revolution Shares for a total of $32,834,521.50 in cash; (iii) Alps will prepay
its promissory note dated February 28, 2006 payable to Gaiam in the principal
amount of $2,250,000 (together with accrued interest in the amount of $157,500)
(the "Wisdom Note"); (iv) Alps will acquire the 4,876 Series A Preferred Units
issued by Wisdom and currently owned by Gaiam for $1,462,823 in cash (such
Series A Preferred Units and all associated rights, the "Wisdom Interest"); and
(vi) the Parties will enter into certain other agreements as described in this
Agreement and the Parties will fully and finally release and settle all
disputes, claims, and demands related to any of the foregoing.
NOW, THEREFORE, the Parties, for good and valuable consideration the
receipt of which is hereby acknowledged, agree as follows:
1. Transfer of the Option Consideration; Purchase and Sale of
Revolution Shares and Purchase and Sale of Wisdom Interest.
1.1 Transactions. Effective as of the date of this
Agreement, (a) Rysavy hereby transfers the Option Consideration to Revolution
Living, (b) Revolution Living hereby sells the Revolution Shares to Gaiam, and
Gaiam hereby purchases such Revolution Shares from Revolution Living, and (c)
Gaiam hereby sells the Wisdom Interest to Alps, and Alps hereby purchases such
Wisdom Interest from Gaiam.
1
1.2 Representations and Warranties by Revolution Living.
Revolution Living represents and warrants to Gaiam that the following statements
are true and correct in all respects:
(a) it is the sole record and beneficial owner
of the Revolution Shares and has not transferred any interest in the Revolution
Shares;
(b) the Revolution Shares are free and clear of
any lien, security interest, encumbrance or claim (other than any of the
foregoing created under federal securities laws);
(c) it will transfer to Gaiam good and
marketable title to the Revolution Shares, free and clear of any lien, security
interest, encumbrance or claim (other than any of the foregoing created under
federal securities laws);
(d) it has had available to it the most recent
financial statements prepared by Gaiam and Wisdom and all other information
which it considers material in connection with the sale of the Revolution Shares
to Gaiam pursuant to this Agreement and the purchase of the Wisdom Interest
pursuant to this Agreement, and Revolution Living has been afforded an
opportunity to obtain such information from Gaiam and Wisdom (including
information on Gaiam's and Wisdom's prospects);
(e) it has the capacity to protect its own
interests in connection with the sale of the Revolution Shares to Gaiam and the
purchase of the Wisdom Interest from Gaiam;
(f) it acknowledges and agrees that the sale of
the Revolution Shares and the Wisdom Interest pursuant to this Agreement is made
in exchange for fair and equivalent consideration;
(g) it has entered into this Agreement based on
its own knowledge, investigation and analysis and that of its advisors, if any;
(h) it understands that Gaiam's plans for the
future, if successful, may result in Gaiam's capital stock becoming more
valuable and that the future value of the Revolution Shares could substantially
exceed the amounts Revolution Living will receive under this Agreement, and it
understands that the Wisdom Interest is a speculative investment and that the
Wisdom Interest may become worthless;
(i) none of Gaiam or any Gaiam Released Party
(as defined below) has made any representation about the advisability of the
decision to sell the Revolution Shares or the potential future value of the
Revolution Shares or the decision to purchase the Wisdom Interest or the
potential future value of the Wisdom Interest;
(j) it is solely responsible for any tax
liability it may incur as a result of the transactions specified in this
Agreement, including but not limited to any federal or state income or capital
gains tax liabilities that may arise as a result of the sale of the Revolution
Shares and the payments contemplated by this Agreement;
(k) Gaiam has not given it any tax advice and
has made no representations regarding the possible tax treatment of the
transactions contemplated by this Agreement; and
(l) it is solely responsible for the accounting
treatment for Revolution Living of these transactions.
2
1.3 Representations and Warranties by Gaiam. Gaiam
represents and warrants to Revolution Living and Alps that the following
statements are true and correct in all respects:
(a) it is the sole record and beneficial owner
of the Wisdom Interest and has not transferred any interest in
the Wisdom
Interest;
(b) the Wisdom Interest is free and clear of any
lien, security interest, encumbrance or claim;
(c) it will transfer to Alps good and marketable
title to the Wisdom Interest, free and clear of any lien, security interest,
encumbrance or claim;
(d) it has had available to it the most recent
financial statements prepared by Wisdom and all other information which it
considers material in connection with the sale of the Wisdom Interest to Alps
pursuant to this Agreement and has been afforded an opportunity to obtain such
information from Wisdom (including information on Wisdom's prospects);
(e) it has the capacity to protect its own
interests in connection with the sale of the Wisdom Interest to Alps;
(f) it acknowledges and agrees that the sale of
the Wisdom Interest pursuant to this Agreement is made in exchange for fair and
equivalent consideration;
(g) it has entered into this Agreement based on
its own knowledge, investigation and analysis and that of its advisors, if any;
(h) it understands that Wisdom's plans for the
future, if successful, may result in Wisdom's equity becoming more valuable and
that the future value of the Wisdom Interest could substantially exceed the
amounts Gaiam will receive under this Agreement and it understands that the
potential future value of the Revolution Shares could be substantially less than
the amounts Gaiam is paying Revolution Living under this Agreement;
(i) none of Revolution Living, Alps or any
Revolution Released Party (as defined below) has made any representation about
the advisability of the decision to sell the Wisdom Interest or the potential
future value of the Wisdom Interest or about the advisability of the decision to
purchase the Revolution Shares;
(j) it is solely responsible for any tax
liability it may incur as a result of the transactions specified in this
Agreement, including but not limited to any federal or state income or capital
gains tax liabilities that may arise as a result of the sale of the Wisdom
Interest and the payments contemplated by this Agreement;
(k) Neither Revolution Living nor Alps has given
it any tax advice or has made any representations regarding the possible tax
treatment of the transactions contemplated by this Agreement;
(l) it is solely responsible for the accounting
treatment for Gaiam of these transactions; and
3
(m) after giving effect to the transactions
contemplated by this Agreement, (i) Gaiam is able to pay its debts as they
become due in the usual course of business; and (ii) Gaiam's total assets exceed
the sum of its total liabilities.
1.4 Representations and Warranties by Rysavy. Rysavy
represents and warrants to Revolution Living that the following statements are
true and correct in all respects:
(a) he has had available to him the most recent
financial statements prepared by Gaiam and all other information which he
considers material in connection with the transfer of the Option Consideration
to Revolution Living pursuant to this Agreement, and he has been afforded an
opportunity to obtain such information from Gaiam (including information on
Gaiam's prospects);
(b) he has the capacity to protect his own
interests in connection with the transfer of the Option Consideration to
Revolution Living;
(c) he acknowledges and agrees that the transfer
of the Option Consideration pursuant to this Agreement is made in exchange for
fair and equivalent consideration;
(d) he has entered into this Agreement based on
his own knowledge, investigation and analysis and that of his advisors, if any;
(e) none of Revolution Living or any Revolution
Released Party has made any representation about the advisability of the
decision to transfer the Option Consideration;
(f) he is solely responsible for any tax
liability it may incur as a result of the transactions specified in this
Agreement, including but not limited to any federal or state income or capital
gains tax liabilities that may arise as a result of the transactions
contemplated by this Agreement; and
(g) Revolution Living has not given him any tax
advice and neither has made any representations regarding the possible tax
treatment of the transactions contemplated by this Agreement.
2. Deliveries. In connection with the closing of the transactions
contemplated by this Agreement, (a) Revolution Living shall deliver to Gaiam one
or more stock certificates representing the Revolution Shares, duly endorsed by
Revolution Living for transfer to Gaiam, (b) Rysavy shall deliver a wire
transfer of $7,165,478.50 to Revolution Living, (c) Gaiam will deliver a wire
transfer of $28,964,198.50 to Revolution Living (representing the $32,834,521.50
amount described above, less the $2,407,500 in principal and accrued interest on
the Wisdom Note and less the $1,462,823 purchase price for the Wisdom Interest),
(d) Gaiam will deliver the Wisdom Note to Revolution Living for cancellation,
(e) Gaiam will cause Rob Sussman to resign as a director of Wisdom, and (f)
Revolution Living will cause David Golden to resign as a director of Gaiam.
3. Termination of Agreements; Option. The Parties agree that the
Transaction Agreement and the Shareholders Agreement are hereby terminated in
all respects, including, without limitation, the Option and all provisions
relating to the Option.
4
4. Release.
-------
4.1 Definition of Released Subject Matters. The term
"Released Subject Matters" means and includes any and all matters relating or
pertaining to or arising out of any agreement, arrangement, understanding or
relationship between Revolution Living, Alps, Wisdom and/or Case, on one hand,
and Gaiam and/or Rysavy, on the other hand, including, without limitation, the
Transaction Agreement, the Shareholders Agreement and the transactions
contemplated by such agreements, including without limitation the sale and
issuance by Gaiam of the Revolution Shares to Revolution Living, the purchase by
Revolution Living from Gaiam of the Revolution Shares, the issuance by Rysavy of
the Option to Revolution Living, the acquisition by Revolution Living from
Rysavy of the Option, the ownership of the Revolution Shares by Revolution
Living, the sale and issuance by Wisdom of Series A Preferred Units of Wisdom to
Gaiam, the purchase by Gaiam from Wisdom of Series A Preferred Units of Wisdom,
the making of the Wisdom Note, and the ownership of Series A Preferred Units of
Wisdom by Gaiam; provided, that the term Released Subject Matters shall not
include the obligations imposed by this Agreement.
4.2 Releases by Gaiam and Rysavy. Each of Gaiam and
Rysavy, and their respective successors, assigns and heirs, hereby irrevocably
and unconditionally releases, acquits and forever discharges each of Revolution
Living, Alps and Case and their present and former successors, assigns, heirs,
agents, employees, representatives and attorneys (the "Revolution Released
Parties"), from any and all charges, complaints, claims, liabilities,
obligations, promises, agreements, controversies, damages, actions, causes of
action, suits, rights, demands, costs, losses, debts and expenses (including
attorneys' fees and costs actually incurred) of any nature whatsoever, known or
unknown, suspected or unsuspected, which have arisen out of, or which may arise
with respect to, the Released Subject Matter, including, but not limited to,
claims arising out of alleged violations of any contracts, express or implied,
any covenant of good faith and fair dealing, express or implied, or any tort, or
the violation of any federal, state or other governmental statute, regulation,
or ordinance, which Gaiam and Rysavy, and their respective successors and
assigns at any time hereinafter may have, own or hold, or claim to have, own or
hold against each or any of the Revolution Released Parties.
4.3 Releases by Revolution Living, Alps and Case. Each of
Revolution Living, Alps and Case, and their respective successors, assigns and
heirs, hereby irrevocably and unconditionally releases, acquits and forever
discharges Gaiam and Rysavy each of their present and former successors,
assigns, heirs, agents, employees, representatives and attorneys (the "Gaiam
Released Parties"), from any and all charges, complaints, claims, liabilities,
obligations, promises, agreements, controversies, damages, actions, causes of
action, suits, rights, demands, costs, losses, debts and expenses (including
attorneys' fees and costs actually incurred) of any nature whatsoever, known or
unknown, suspected or unsuspected, which have arisen out of, or which may arise
with respect to, the Released Subject Matter, including, but not limited to,
claims arising out of alleged violations of any contracts, express or implied,
any covenant of good faith and fair dealing, express or implied, or any tort, or
the violation of any federal, state or other governmental statute, regulation,
or ordinance, which Revolution Living, Alps and Case, and their respective
successors, assigns and heirs at any time hereinafter may have, own or hold, or
claim to have, own or hold against each or any of Gaiam Released Parties.
5. Covenants Not to Sue. From and after the date of this
Agreement, Gaiam and Rysavy each covenants not to institute, either on its or
his own behalf or on behalf of any other person or entity, any action or suit at
law or in equity, nor to institute, to prosecute or in any way to aid in the
institution or prosecution of any claim, demand, action, or cause of action for
5
damages, costs, expenses, or compensation for or on account of any damage, loss
or injury either to person or property, or both, whether developed or
undeveloped, resulting or to result, known or unknown, past, present or future,
against the Revolution Released Parties arising out of the Released Subject
Matter. From and after the date of this Agreement, each of Revolution Living,
Alps and Case covenants not to institute, either in its or his individual
capacity or on behalf of any other person or entity, any action or suit at law
or in equity, nor to institute, to prosecute or in any way to aid in the
institution or prosecution of any claim, demand, action, or cause of action for
damages, costs, expenses, or compensation for or on account of any damage, loss
or injury either to person or property, or both, whether developed or
undeveloped, resulting or to result, known or unknown, past, present or future,
against Gaiam Released Parties arising out of the Released Subject Matter.
6. Indemnification. Gaiam agrees to indemnify and hold harmless
Revolution Released Parties from and against the full amount of any liability,
loss, damage, or expense (including costs and reasonable and necessary
attorneys' fees incurred by Revolution Released Parties and any judgment
required to be paid) for any breach by Gaiam of the provisions of this
Agreement. Rysavy agrees to indemnify and hold harmless Revolution Released
Parties from and against the full amount of any liability, loss, damage, or
expense (including costs and reasonable and necessary attorneys' fees incurred
by Revolution Released Parties and any judgment required to be paid) for any
breach by Rysavy of the provisions of this Agreement. Revolution Living agrees
to indemnify and hold harmless Gaiam Released Parties from and against the full
amount of any liability, loss, damage, or expense (including costs and
reasonable and necessary attorneys' fees incurred by Gaiam Released Parties and
any judgment required to be paid) for any breach by Revolution Living of the
provisions of this Agreement. Case agrees to indemnify and hold harmless Gaiam
Released Parties from and against the full amount of any liability, loss,
damage, or expense (including costs and reasonable and necessary attorneys' fees
incurred by Revolution Released Parties and any judgment required to be paid)
for any breach by Case of the provisions of this Agreement. Alps agrees to
indemnify and hold harmless Gaiam Released Parties from and against the full
amount of any liability, loss, damage, or expense (including costs and
reasonable and necessary attorneys' fees incurred by Gaiam Released Parties and
any judgment required to be paid) for any breach by Alps of this Agreement.
7. Covenants. Each of Gaiam and Rysavy agrees that it or he will
not, for a period of three years after the date of this Agreement, make any
disclosure, issue any public statements or otherwise cause to be disclosed any
information which is designed, intended, or might reasonably be anticipated to
disparage or be derogatory to Case or Revolution Living. Each of Revolution
Living and Case agrees that it or he will not, for a period of three years after
the date of this Agreement, make any disclosure, issue any public statements or
otherwise cause to be disclosed any information which is designed, intended, or
might reasonably be anticipated to disparage or be derogatory to Rysavy or
Gaiam. Gaiam agrees (and agrees that it will cause its controlled affiliates to
agree) that it will not, directly or indirectly, in any capacity, for a period
of three years after the date of this Agreement, solicit any employee as of the
date hereof of Revolution Living or any other controlled affiliate of Revolution
LLC to leave his or her employment (other than solicitations by general
advertisements), or hire any employee as of the date hereof of Revolution Living
or any other controlled affiliate of Revolution LLC (other than in response to a
solicitation by general advertisements). Revolution Living agrees (and agrees
that it will cause the controlled affiliates of Revolution LLC to agree) that it
will not, directly or indirectly, in any capacity, for a period of three years
after the date of this Agreement, solicit any employee as of the date hereof of
Gaiam or any of its controlled affiliates to leave his or her employment (other
than solicitations by general advertisements), or hire any employee as of the
date hereof of Gaiam or any of its controlled affiliates (other than in response
to a solicitation by general advertisements).
6
8. Confidentiality. Each of the Parties understands and agrees
that the negotiations leading to this Agreement, the terms of this Agreement,
including the financial terms, and the information provided in connection with
this Agreement, shall be strictly confidential; provided, however, that the
Parties shall be permitted to disclose (i) information required by law,
including federal securities laws, any order of any court or administrative
tribunal and the requirements of the Nasdaq Global Market, (ii) information in
confidence to the Parties' respective attorneys, accountants and other
professional advisors and (iii) information as necessary to enforce or uphold
the rights of the Parties under this Agreement or to effectuate the terms of
this Agreement. In addition, each of the Revolution Released Parties that has
attended a meeting of the board of directors of Gaiam and is not otherwise
subject to a confidentiality or non-disclosure agreement with Gaiam agrees to
keep confidential, and not to disclose (except as required by law) or use for
any purpose, any confidential information provided to such Revolution Released
Party in connection with any such board meeting of Gaiam for a period of twelve
months following the date of the board meeting at which
such Revolution Released
Party received the materials, and each of the Gaiam Released Parties that has
attended a meeting of the board of directors of Wisdom and is not otherwise
subject to a confidentiality or non-disclosure agreement with Wisdom agrees to
keep confidential, and not to disclose (except as required by law) or use for
any purpose, any confidential information provided to such Gaiam Released Party
in connection with any such board meeting of Wisdom for a period of twelve
months following the date of the board meeting at which such Gaiam Released
Party received the materials.
9. No Admission. Neither any undertaking made nor any action
taken hereunder nor the fact that this Agreement was executed by the Parties
shall be construed as an admission of any fact which might otherwise give rise
to liability on the part of any Party. Each Party hereby expressly denies any
such liability.
10. Consultation with Counsel. Each of the Parties acknowledges
that it or he, respectively, has read this Agreement and understands all of its
terms, and that this Agreement is executed voluntarily, without duress, and with
full knowledge of its legal significance. Each of the Parties has received
independent legal advice from an attorney with respect to the legal consequences
of making the settlement and release and the purchases and sales provided for in
this Agreement and with respect to the execution of this Agreement.
11. Entire Agreement. This Agreement contains the entire agreement
between the Parties and fully supersedes any and all prior agreements or
understandings between the Parties pertaining to the subject matter hereof. None
of the Parties are relying on any oral or written representation, warranty or
statement of any other Party, other than as expressly set forth in this
Agreement. This Agreement is not intended to confer any rights or remedies upon
any person or entity other than the Parties, except that Wisdom shall be a third
party beneficiary of the obligations of the Gaiam Released Parties in Section 8.
12. Severability. The provisions of this Agreement are severable.
If any provision is found to be unenforceable, all other provisions shall remain
in full force and effect. This Agreement shall survive the termination of any
arrangements contained herein.
13. Counterparts and Facsimile Signatures. This Agreement may be
executed in two or more counterparts each of which may be considered an
original, and all of which together shall constitute one and the same document.
Facsimile copies of signature pages shall be treated as original signature
pages.
7
14. Continuing Assistance. The Parties agree, without further
consideration, to sign and/or cause to be signed, and to deliver to the
appropriate person or entity any other documents and to take any other action as
may be reasonably necessary to fulfill their respective obligations under this
Agreement.
15. Governing Law; Jurisdiction. This Agreement shall be governed
by the laws of the State of Delaware without regard to principles of conflicts
of law or choice of law. All disputes relating to the validity, the
interpretation, or the enforcement of this Agreement shall be brought and
maintained exclusively in the state or federal courts within the State of
Delaware, and the Parties hereby consent to jurisdiction and venue therein.
16. Attorneys' Fees. It is understood and agreed by the Parties
that each Party shall bear his or its own attorneys' fees and costs in
connection with this Agreement.
17. Construction. The section headings used in this Agreement are
intended solely for convenience of reference and shall not in any manner
amplify, limit, modify or otherwise be used in the interpretation of any of the
provisions hereof.
18. Amendments; Successors and Assigns. This Agreement may be
modified, or any provision waived, only by a writing executed by the Parties.
This Agreement is binding upon and for the benefit of the respective successors
and assigns of the Parties. For purposes hereof, the successors and assigns of
the Parties shall include any person or entity succeeding to a substantial
portion of the assets (or rights to assets) of a Party, whether pursuant to a
sale or other transfer or disposition and whether in a single transaction or a
series of related transactions.
19. Injunctive Relief. The Parties confirm and acknowledge to each
other that money damages might not be a sufficient remedy for any breach of this
Agreement and that a Party seeking to enforce this Agreement shall be entitled
to seek to enforce this Agreement by injunctive relief as a remedy for such
breach or any threatened breach of this Agreement, but that such remedy shall
not be deemed the exclusive remedy for breach of this Agreement.
20. Representations. Each Party represents and warrants that: (a)
such Party has the requisite power and authority to make, execute, deliver and
perform this Agreement, (b) the execution, delivery and performance of this
Agreement by such Party has been duly authorized by all necessary action on the
part of such Party and (c) this Agreement has been duly executed and delivered
by such Party and constitutes the legal, valid and binding obligation of such
Party, enforceable against such Party in accordance with its terms.
[Signature Page Follows]
8
In witness whereof, the Parties have executed this Agreement as of the
date first set forth above:
Gaiam, Inc.
/s/ LYNN POWERS
-----------------------------------------
By: Lynn Powers, President
/s/ JIRKA RYSAVY
-----------------------------------------
Jirka Rysavy
Revolution Living LLC
/s/ STEPHEN M. CASE
-----------------------------------------
By: Stephen M. Case
Its: President and CEO
/s/ STEPHEN M. CASE
-----------------------------------------
Stephen M. Case
Alps Communications LLC
/s/ JOHN RICHARDSON
-----------------------------------------
By: KA PO'E HANA LLC
Its: Manager
By: John Richardson
Its: President and CEO
[Signature Page to Purchase Agreement and General Mutual Release and Settlement]
9
Exhibit 2
---------
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(k) under the Securities Exchange Act of
1934, as amended, the undersigned hereby agree to the joint filing with all
other Reporting Persons (as such term is defined in the Schedule 13D referred to
below) on behalf of each of them a statement on Schedule 13D (including
amendments thereto) with respect to the Class A Common Stock, par value $0.0001
per share, of Gaiam, Inc. and that this Joint Filing Agreement be included as an
Exhibit to such joint filing. This Joint Filing Agreement may be executed in any
number of counterparts all of which taken together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the undersigned hereby execute this Joint Filing
Agreement.
February 6, 2007
REVOLUTION LIVING LLC
By: /s/ STEPHEN M. CASE
-------------------------------------
Name: Stephen M. Case
Title: President and Chief Executive
Officer
REVOLUTION MANAGEMENT COMPANY LLC
By: /s/ STEPHEN M. CASE
-------------------------------------
Name: Stephen M. Case
Title: Sole Director
REVOLUTION LLC
By: /s/ STEPHEN M. CASE
-------------------------------------
Name: Stephen M. Case
Title: President and Chief Executive
Officer
STEPHEN M. CASE REVOCABLE TRUST
By: /s/ STEPHEN M. CASE
-------------------------------------
Name: Stephen M. Case
Title: Trustee
STEPHEN M. CASE
/s/ STEPHEN M. CASE
-----------------------------------------
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