SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13G
(Rule 13d-102)
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INFORMATION TO BE INCLUDED IN STATEMENTS PURSUANT TO RULES 13d-1(b), (c)
AND (d) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2 UNDER
THE SECURITIES EXCHANGE ACT OF 1934 (Amendment No. 1)*
GAIAM, INC.
(Name of Issuer)
Class A Common Stock, $0.0001 Par Value Per Share
(Title of Class of Securities)
3268Q103
(CUSIP Number)
June 17, 2005
(Date of Event Which Requires Filing of this Statement)
Check the appropriate box to designate the rule pursuant to which this
Schedule is filed:
[ ] Rule 13d-1(b)
[X] Rule 13d-1(c)
[ ] Rule 13d-1(d)
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* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Schedule 13G
CUSIP No. 3268Q103 PAGE 2 OF 9
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(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Prentice Capital Management, LP
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
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(3) SEC USE ONLY
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(4) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF (5) SOLE VOTING POWER
0
SHARES ____________________________________________________________
BENEFICIALLY (6) SHARED VOTING POWER
1,555,497 (See Item 4)
OWNED BY ____________________________________________________________
EACH (7) SOLE DISPOSITIVE POWER
0
REPORTING ____________________________________________________________
PERSON WITH (8) SHARED DISPOSITIVE POWER
1,555,497 (See Item 4)
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(9) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
1,555,497 (See Item 4)
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(10) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (9) EXCLUDES CERTAIN SHARES [ ]
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(11) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (9)
14.9 % (See Item 4)
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(12) TYPE OF REPORTING PERSON
PN
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Schedule 13G
CUSIP No. 3268Q103 PAGE 3 OF 9
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(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael Zimmerman
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
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(3) SEC USE ONLY
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(4) CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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NUMBER OF (5) SOLE VOTING POWER
8,705
SHARES ____________________________________________________________
BENEFICIALLY (6) SHARED VOTING POWER
1,558,497 (See Item 4)
OWNED BY ____________________________________________________________
EACH (7) SOLE DISPOSITIVE POWER
8,705
REPORTING ____________________________________________________________
PERSON WITH (8) SHARED DISPOSITIVE POWER
1,558,497 (See Item 4)
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(9) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
1,567,202 (See Item 4)
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(10) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (9) EXCLUDES CERTAIN SHARES [ ]
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(11) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (9)
15.0 % (See Item 4)
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(12) TYPE OF REPORTING PERSON
IN
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Schedule 13G
CUSIP No. 3268Q103 PAGE 4 OF 9
ITEM 1(a). NAME OF ISSUER:
Gaiam, Inc. (the "Company")
ITEM 1(b). ADDRESS OF ISSUER'S PRINCIPAL EXECUTIVE OFFICES:
360 Interlocken Boulevard
Broomfield, Colorado 80021
ITEM 2(a). NAME OF PERSON FILING:
This statement is filed by the entities and persons listed below, all
of whom together are referred to herein as the "Reporting Persons":
(i) Prentice Capital Management, LP, a Delaware limited
partnership ("Prentice Capital Management"), with respect
to the shares of Class A Common Stock, par value $0.0001
per share (the "Shares"), reported in this Schedule 13G
held by certain investment funds and managed accounts.
(ii) Michael Zimmerman, who is the Managing Member of (a)
Prentice Management GP, LLC, the general partner of
Prentice Capital Management and (b) Prentice Capital GP,
LLC, the general partner of certain investment funds, with
respect to the Shares reported in this Schedule 13G held
by certain investment funds and managed accounts.
ITEM 2(b). ADDRESS OF PRINCIPAL BUSINESS OFFICE:
The address of the principal business office of Prentice Capital
Management and Michael Zimmerman is 623 Fifth Avenue, 32nd Floor, New York, New
York 10022.
ITEM 2(c). CITIZENSHIP:
Prentice Capital Management is a Delaware limited partnership. Michael
Zimmerman is a United States citizen.
ITEM 2(d). TITLE OF CLASS OF SECURITIES: Class A Common Stock, par value
$0.0001 per share
ITEM 2(e). CUSIP NUMBER: 3268Q103
Schedule 13G
CUSIP No. 3268Q103 PAGE 5 OF 9
ITEM 3. IF THIS STATEMENT IS FILED PURSUANT TO 13d-1(b) OR 13d-2(b) OR (c),
CHECK WHETHER THE PERSON FILING IS A:
(a) [ ] Broker or dealer registered under Section 15 of the Act;
(b) [ ] Bank as defined in Section 3(a)(6) of the Act;
(c) [ ] Insurance Company as defined in Section 3(a)(19) of the
Act;
(d) [ ] Investment Company registered under Section 8
of the Investment Company Act of 1940;
(e) [ ] Investment Adviser registered under Section203 of the
Investment Advisers Act of 1940: see Rule
13d-1(b)(1)(ii)(E);
(f) [ ] Employee Benefit Plan, Pension Fund which is
subject to the provisions of the Employee
Retirement Income Security Act of 1974 or
Endowment Fund; see Rule 13d-1(b)(1)(ii)(F);
(g) [ ] Parent Holding Company, in accordance with
Rule 13d-1(b)(ii)(G);
(h) [ ] Savings Associations as defined in Section
3(b) of the Federal Deposit Insurance Act;
(i) [ ] Church Plan that is excluded from the definition of an
investment company under Section 3(c)(14) of the
Investment Company Act of 1940;
(j) [ ] Group, in accordance with Rule 13d-1(b)(1)(ii)(J).
IF THIS STATEMENT IS FILED PURSUANT TO Rule 13d-1(c), CHECK THIS
BOX. [x]
Schedule 13G
CUSIP No. 3268Q103 PAGE 6 OF 9
ITEM 4. OWNERSHIP.
Prentice Capital Management serves as investment manager to a number of
investment funds (including Prentice Capital Partners, LP, Prentice Capital
Partners QP, LP and Prentice Capital Offshore, Ltd.) and manages investments for
certain entities in managed accounts with respect to which it has voting and
dispositive authority over the Shares reported in this Schedule 13G. Michael
Zimmerman is the Managing Member of (a) Prentice Management GP, LLC the general
partner of Prentice Capital Management and (b) Prentice Capital GP, LLC, the
general partner of certain investment funds. As such, he may be deemed to
control Prentice Capital Management and certain of the investment funds and
therefore may be deemed to be the beneficial owner of the securities reported in
this Schedule 13G.
The investment funds and managed accounts for which Prentice Capital
Management serves as investment manager entered into an amended and restated
stock purchase agreement with the Company as of June 16, 2005 (the "Purchase
Agreement"), pursuant to which the Company agreed to issue and sell to the
investment funds and managed accounts up to an aggregate of 2,821,317 Shares;
provided, however, that at any time prior to 9:00 a.m. New York City time on
July 1, 2005, the Company may elect to reduce the aggregate number of Shares to
be sold to the investment funds and managed accounts to 1,000,000 Shares. The
sale of the Shares to the investment funds and managed accounts under the
Purchase Agreement is expected to close on the earlier of the fourth business
day after the Company makes such election and July 8, 2005, and is subject to
customary closing conditions. Because the Company is obligated to sell 1,000,000
Shares to the investment funds and managed accounts, such Shares have been
included in this Schedule 13G.
The above description of the transaction is only a summary and is qualified
in its entirety by reference to the Purchase Agreement, which is attached to
this Schedule 13G as Exhibit 2 and incorporated into this Schedule 13G by
reference.
Michael Zimmerman personally owns 8,705 Shares and has voting and
dispositive authority over 3,000 Shares held by The Michael & Holly Zimmerman
Family Foundation Inc.
The percentages used herein are calculated based on the Shares issued and
outstanding as of May 3, 2005, as reported in the Company's quarterly report on
Form 10-Q filed with the Securities and Exchange Commission by the Company for
the quarterly period ended March 31, 2005.
Prentice Capital Management disclaims beneficial ownership of all of the
Shares reported in this Schedule 13G. Michael Zimmerman disclaims beneficial
ownership of all of the Shares reported in this Schedule 13G not personally
owned by him.
A. Prentice Capital Management
(a) Amount beneficially owned: 1,555,497
(b) Percent of class: 14.9%
(c) Number of shares as to which such person has:
Schedule 13G
CUSIP No. 3268Q103 PAGE 7 OF 9
(i) sole power to vote or to direct the vote: 0
(ii) shared power to vote or to direct the vote: 1,555,497
(iii) sole power to dispose or to direct the disposition: 0
(iv) shared power to dispose or to direct the disposition:
1,555,497
B. Michael Zimmerman
(a) Amount beneficially owned: 1,567,202
(b) Percent of class: 15.0%
(c) Number of shares as to which such person has:
(i) sole power to vote or to direct the vote: 8,705
(ii) shared power to vote or to direct the vote: 1,558,497
(iii) sole power to dispose or to direct the disposition: 8,705
(iv) shared power to dispose or to direct the disposition:
1,558,497
ITEM 5. OWNERSHIP OF FIVE PERCENT OR LESS OF A CLASS.
Not applicable.
ITEM 6. OWNERSHIP OF MORE THAN FIVE PERCENT ON BEHALF OF ANOTHER PERSON.
Not applicable.
ITEM 7. IDENTIFICATION AND CLASSIFICATION OF THE SUBSIDIARY WHICH ACQUIRED
THE SECURITY BEING REPORTED ON BY THE PARENT HOLDING COMPANY.
Not applicable.
ITEM 8. IDENTIFICATION AND CLASSIFICATION OF MEMBERS OF THE GROUP.
See Item 4.
ITEM 9. NOTICE OF DISSOLUTION OF GROUP.
Not applicable.
Schedule 13G
CUSIP No. 3268Q103 PAGE 8 OF 9
ITEM 10. CERTIFICATION. (if filing pursuant to Rule 13d-1(c))
Each of the Reporting Persons hereby makes the following certification:
By signing below each Reporting Person certifies that, to the best of its
knowledge and belief, the securities referred to above were not acquired and are
not held for the purpose of or with the effect of changing or influencing the
control of the issuer of the securities and were not acquired and not held in
connection with or as a participant in any transaction having that purpose or
effect.
Schedule 13G
CUSIP No. 3268Q103 PAGE 9 OF 9
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.
DATED: June 17, 2005 PRENTICE CAPITAL MANAGEMENT, LP
By: Prentice Management GP, LLC,
its General Partner
/s/ Michael Zimmerman
-------------------------------
Name: Michael Zimmerman
Title: Managing Member
MICHAEL ZIMMERMAN
/s/ Michael Zimmerman
-------------------------------
Michael Zimmerman
EXHIBIT 1
JOINT ACQUISITION STATEMENT
PURSUANT TO RULE 13d-1(k)
The undersigned acknowledge and agree that the foregoing statement on
Schedule 13G, is filed on behalf of each of the undersigned and that all
subsequent amendments to this statement on Schedule 13G, shall be filed on
behalf of each of the undersigned without the necessity of filing additional
joint acquisition statements. The undersigned acknowledge that each shall be
responsible for the timely filing of such amendments, and for the completeness
and accuracy of the information concerning him or it contained therein, but
shall not be responsible for the completeness and accuracy of the information
concerning the others, except to the extent that he or it knows or has reason to
believe that such information is inaccurate.
DATED: June 17, 2005 PRENTICE CAPITAL MANAGEMENT, LP
By: Prentice Management GP, LLC,
its General Partner
/s/ Michael Zimmerman
-------------------------------
Name: Michael Zimmerman
Title: Managing Member
MICHAEL ZIMMERMAN
/s/ Michael Zimmerman
-------------------------------
Michael Zimmerman
EXHIBIT 2
CLASS A STOCK PURCHASE AGREEMENT
This Class A Stock Purchase Agreement (this "AGREEMENT") is made and
effective as of June 10, 2005 and amended and restated as of June 16, 2005 by
and among Gaiam, Inc., a Colorado corporation (the "COMPANY"), and each of the
Purchasers identified in the signature pages attached hereto (each, a
"PURCHASER" and collectively, the "PURCHASERS").
RECITALS
WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company desires to sell to each of the Purchasers and each of the
Purchaser desires to purchase from the Company certain shares of the Company's
Class A Common Stock, $0.0001 par value per share (the "CLASS A STOCK"), as more
fully set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each of the
Purchasers agree as follows:
1. PURCHASE AND SALE OF STOCK.
(a) AGREEMENT TO PURCHASE AND SELL CLASS A STOCK. Subject to the terms
and conditions of this Agreement, each Purchaser severally agrees to purchase
from the Company, and the Company agrees to issue and sell to each Purchaser at
the Closing (as hereinafter defined), the number of shares of Class A Stock set
forth below such Purchaser's name on the signature page to this Agreement for an
aggregate for all Purchasers of 2,821,317 shares, at a purchase price of $6.63
per share. Notwithstanding the foregoing, the Company may, in its sole
discretion, at any time prior to 9:00 a.m. (New York City time) on July 1, 2005,
elect (via electronic mail, confirmed by telephone voicemail) to reduce the
aggregate number of shares to be sold to the Purchasers pursuant to this Section
1 to one million (1,000,000) shares, and each Purchaser agrees to purchase its
pro rata portion of the reduced number of shares, at a purchase price of $6.38
per share. The shares of Class A Stock to be sold to the Purchasers at the
Closing are referred to herein as the "SHARES" and the purchase price for each
Share to be sold hereunder is referred to herein as the "PURCHASE PRICE PER
SHARE."
(b) CLOSING. The closing of the purchase and sale of the Shares
contemplated hereby (the "CLOSING") shall take place at the law offices of
counsel to the Company, Bartlit Beck Herman Palenchar & Scott LLP, 1899 Wynkoop
Street, Suite 800, Denver, Colorado 80202, at 10:00 a.m., local time, on the
fourth business day following the date the Company makes its election pursuant
to Section 1(a) (or, if no such election is made, on July 8, 2005), or on such
other date or at such other time or location as the parties shall otherwise
agree. The date of the Closing is hereinafter referred to as the "CLOSING DATE."
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(c) DELIVERY. Subject to the terms and conditions of this Agreement, at
the Closing, (x) the Company shall deliver to each Purchaser (i) a stock
certificate, registered in the name of each Purchaser, representing the number
of shares of Class A Stock purchased by such Purchaser as designated on the
signature page hereto and (ii) the legal opinion of the Company's outside
counsel in the form of EXHIBIT A; and (y) each Purchaser shall deliver to the
Company the aggregate Purchase Price Per Share set forth below such Purchaser's
signature to this Agreement, in immediately available funds by wire transfer to
an account designated in writing by the Company for such purpose.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
makes the following representations and warranties to each of the Purchasers as
of June 10, 2005 and as of the Closing Date:
(a) ORGANIZATION AND QUALIFICATION. The Company is an entity duly
incorporated or otherwise organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted. The
Company is qualified to do business as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be
so qualified would not reasonably be expected to (i) adversely affect the
legality, validity or enforceability of this Agreement, (ii) have or result in a
material adverse effect on the results of operations, assets, business or
condition (financial or otherwise) of the Company and its subsidiaries, taken as
a whole, or (iii) materially adversely impair the Company's ability to perform
fully on a timely basis its obligations under this Agreement (any of (i), (ii)
or (iii), a "MATERIAL ADVERSE EFFECT").
(b) AUTHORIZATION; ENFORCEMENT. The Company has the requisite corporate
power and authority to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its obligations
hereunder. The execution and delivery of this Agreement by the Company and the
consummation by it of the transactions contemplated hereunder have been duly
authorized by all necessary action on the part of the Company and, except as set
forth in this Agreement, no further consent or action is required by the
Company, its Board of Directors or its shareholders. This Agreement has been (or
upon delivery will be) duly executed by the Company and, when delivered in
accordance with the terms, will constitute the valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws of general applicabilty affecting creditors'
rights.
(c) NO CONFLICTS. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not (i) conflict with or violate any
provision of the Company's articles of incorporation, bylaws or other
organizational or charter documents, or (ii) subject to obtaining the approvals
described below, conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation (with or
without notice, lapse of time or both) of, any agreement, credit facility, debt
or other instrument to which the Company or any of its subsidiaries is a party,
or (iii)
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result in a violation by the Company or any of its subsidiaries of any law,
rule, regulation, order, judgment, injunction or decree of any court or
governmental authority to which the Company or such subsidiary is subject
(including, assuming the accuracy of each of the Purchaser's representations and
warranties contained in this Agreement, federal and state securities laws and
regulations) and the rules and regulations of any self-regulatory organization
to which the Company or its securities are subject; except in the case of each
of clauses (ii) and (iii), such as would not reasonably be expected to have or
result in a Material Adverse Effect.
(d) FILINGS, CONSENTS AND APPROVALS. The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority or other person in connection with the
execution, delivery and performance by the Company of this Agreement, other than
(i) the filing of a current report on Form 8-K in connection with this
Agreement, (ii) applicable Blue Sky filings, and (iii) in all other cases where
the failure to obtain such consent, waiver, authorization or order, or to give
such notice or make such filing or registration would not reasonably be expected
to have or result in a Material Adverse Effect.
(e) ISSUANCE OF THE SHARES. As of the Closing, the Shares will have
been duly authorized and, when issued and paid for in accordance with the terms
of this Agreement, will be validly issued, fully paid and non-assessable, free
of all taxes, liens and charges with respect to the issuance thereof. The
issuance of the Shares is not subject to any preemptive rights or rights of
first refusal.
(f) SEC REPORTS; FINANCIAL STATEMENTS. The Company has filed all
reports required to be filed by it under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), including pursuant to Section 13(a) or 15(d)
thereof, for the two years preceding June 10, 2005 (the foregoing materials
being collectively referred to herein as the "SEC REPORTS" and, together with
this Agreement and the Schedules to this Agreement, the "DISCLOSURE MATERIALS").
As of their respective dates, each of the SEC Reports, as of the date filed and
as they may have been subsequently amended, (x) complied in all material
respects with the applicable requirements of the Securities Act of 1933, as
amended (the "SECURITIES ACT"), and the Exchange Act and the rules and
regulations of the Securities and Exchange Commission (the "SEC") promulgated
thereunder, and (y) did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included
in the SEC Reports (i) complied as to form in all material respects with the
published rules and regulations of the SEC with respect thereto as in effect at
the time of filing, (ii) have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the periods
involved ("GAAP"), except as may be otherwise specified in such financial
statements or the notes thereto, and (iii) fairly present in all material
respects the financial position of the Company and its consolidated subsidiaries
as of and for the respective dates thereof and the results of operations and
cash flows for the periods then ended, except, in the case of unaudited
financial statements, for the omission of footnotes and subject to normal and
recurring year-end audit adjustments. All material agreements to which the
Company is a party are included as part of or specifically identified in the SEC
Reports.
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(g) COMPLIANCE. The Company is not in default under or in violation of
(and no event has occurred that has not been waived that, with notice or lapse
of time or both, would result in a default by the Company under), nor has the
Company received notice of a claim that it is in default under or that it is in
violation of, any term or provision of any material indenture, loan or credit
agreement or any other agreement or instrument to which it is a party (whether
or not such default or violation has been waived), (ii) is in violation of any
order of any court, arbitrator or governmental body, or (iii) is or has been in
violation of any statute, rule or regulation of any governmental authority,
including without limitation all foreign, federal, state and local laws relating
to taxes, environmental protection, occupational health and safety, product
quality and safety and employment and labor matters, except in each case as
would not reasonably be expected to have or result in a Material Adverse Effect.
The Company is not in violation of any term of its articles of incorporation,
bylaws or other organizational or charter documents.
(h) CAPITALIZATION. The authorized capital stock of the Company
consists of (A) 150,000,000 shares of Class A Stock, of which 9,420,118 shares
are issued and outstanding as of the May 3, 2005, (B) 50,000,000 shares of Class
B Common Stock, $0.0001 par value per share (the "CLASS B STOCK"), of which
5,400,000 shares are outstanding as of May 3, 2005, and (C) 50,000,000 shares of
Preferred Stock, $0.0001 par value per share (the "PREFERRED STOCK"), of which
no shares are issued and outstanding as of June 10, 2005. All outstanding shares
of capital stock have been duly authorized and validly issued, are fully paid
and non-assessable and were issued in compliance with all applicable federal and
state securities laws. Except as disclosed in the SEC Reports, as of March 31,
2005, there were no outstanding options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exchangeable for, or giving any person
any right to subscribe for or acquire, any shares of Class A Stock, or
contracts, commitments, understandings or arrangements by which the Company is
or may become bound to issue additional shares of Class A Stock, or securities
or rights convertible or exchangeable into shares of Class A Stock.
(i) MATERIAL CHANGES. Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in
the SEC Reports, (i) there has been no event, occurrence or development that has
had or should reasonably be expected to have a Material Adverse Effect, and (ii)
the Company has not incurred any material liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice and (B) liabilities not
required to be reflected in the Company's financial statements pursuant to GAAP
or required to be disclosed in filings made with the SEC.
(j) NO GENERAL SOLICITATION. None of the Company, its affiliates or any
person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D under
the Securities Act) in connection with the offer or sale of Shares.
(k) ACKNOWLEDGMENT REGARDING PURCHASERS' PURCHASE OF SHARES. The
Company acknowledges and agrees that each Purchaser is acting solely in the
capacity of an arm's length purchaser with respect to this Agreement and the
transactions contemplated hereby. The Company further acknowledges that each
Purchaser is not acting as a financial advisor or fiduciary of the
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Company (or in any similar capacity) with respect to this Agreement and the
transactions contemplated hereby and any advice given by such Purchaser or any
of its respective representatives or agents in connection with this Agreement
and the transactions contemplated hereby is merely incidental to such
Purchaser's purchase of the Shares. The Company further represents to each
Purchaser that the Company's decision to enter into this Agreement has been
based solely on the independent evaluation of the Company and its
representatives.
(l) PRIVATE PLACEMENT. Assuming the accuracy of the Purchasers'
representations and warranties set forth in Section 3, no registration under the
Securities Act is required for the offer and sale of the Shares by the Company
to the Purchasers as contemplated hereby. The issuance and sale of the Shares
hereunder does not contravene the rules and regulations of the NASDAQ National
Market.
(m) LISTING AND MAINTENANCE REQUIREMENTS. The Company's Common Stock is
registered pursuant to Section 12(g) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act nor has the Company received any notification that the Commission is
contemplating terminating such registration. The Company has not, in the 12
months preceding the date hereof, received notice from the NASDAQ National
Market to the effect that the Company is not in compliance with the applicable
listing or maintenance requirements thereof. The Company is, and has no reason
to believe that it will not in the foreseeable future continue to be, in
compliance with all such listing and maintenance requirements.
(n) APPLICATION OF TAKEOVER PROTECTIONS. The Company and its Board of
Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar anti
takeover provision under the Company's Certificate of Incorporation (or similar
charter documents) or the laws of its state of incorporation that is or could
become applicable to the Purchasers as a result of the Purchasers and the
Company fulfilling their obligations or exercising their rights under this
Agreement, including without limitation the Company's issuance of the Shares and
the Purchasers' ownership of the Shares.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser
hereby represents warrants and covenants to the Company, severally as to itself
only, as of the date and as of the Closing Date, as follows:
(a) ORGANIZATION. Such Purchaser is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization.
(b) AUTHORIZATION; ENFORCEMENT. Such Purchaser has the requisite power and
authority (corporate or other) to enter into and to consummate the transactions
contemplated by this Agreement and otherwise to carry out its obligations
hereunder. The execution and delivery of this Agreement by such Purchaser and
the consummation by it of the transactions contemplated hereunder have been duly
authorized by all necessary action on the party of such Purchaser. This
Agreement has been (or upon delivery will be) duly executed by such Purchaser
and, when delivered in accordance with the terms, will constitute the valid and
binding obligation of such Purchaser,
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enforceable against such Purchaser in accordance with its terms, except as may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws of general applicable affecting creditors' rights.
(c) INVESTMENT. Such Purchaser is acquiring the Shares for its own
account and not with a view towards, or for resale in connection with, the
public sale or distribution thereof, except pursuant to sales registered or
exempted under the Securities Act. Such Purchaser understands that the Shares to
be purchased by such Purchaser have not been and will not be (except as
contemplated by Section 6 of this Agreement) registered under the Securities Act
by reason of a specific exemption from the registration provisions of the
Securities Act which depends upon, among other things, the bona fide nature of
the investment intent as expressed herein.
(d) EXPERIENCE; ACCREDITED INVESTOR. Such Purchaser has such knowledge
and experience in financial or business matters that such Purchaser is capable
of evaluating the merits and risks of the investment in the Shares and
protecting its own interest in connection with such investment. Such Purchaser
is an "accredited investor" within the meaning of Regulation D promulgated under
the Securities Act.
(e) RULE 144. Such Purchaser acknowledges that the Shares are
restricted securities within the meaning of applicable securities laws, have not
been registered under the Securities Act, and must be held indefinitely unless
subsequently registered under the Securities Act and applicable state and other
securities laws or unless an exemption from such registration is available. Such
Purchaser is aware of the provisions of Rule 144 promulgated under the
Securities Act that permit limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions. The Shares will
bear a legend reflecting these conditions on transferability thereof and stop
transfer instructions will be given to the Company's transfer agent accordingly.
(f) INFORMATION. Such Purchaser has had an opportunity to discuss the
Company's business, management and financial affairs with the Company's
management, an opportunity to review the Company's facilities, and an
opportunity to obtain all information such Purchaser deems necessary in order to
make the decision in invest in the Shares. Such Purchaser has had an opportunity
to ask questions and receive answers from the Company's officers, employees and
directors regarding the terms and conditions of the offering of the Shares.
(g) FURTHER LIMITATIONS ON DISPOSITIONS. Without in any way limiting
the representations set forth above, such Purchaser further agrees that, if at
the time of any transfer of any Shares, such Shares shall not be registered
under the Securities Act, prior to any disposition of all or any portion of the
Shares, the Company may require, as a condition of allowing such transfer, that
the holder or transferee furnish to the Company (i) such information as is
appropriate to establish that such transfer may be made without registration
under the Securities Act; and (ii) at the expense of the holder or transferee,
an opinion of legal counsel designated by such holder or transferee and
reasonably satisfactory in form and substance to the Company, to the effect that
such transfer may be made without registration under the Securities Act. No such
opinion of counsel shall be necessary for any transfer to any person or entity
that is deemed to be an "affiliate" of such Purchaser for purposes of the
Securities Act, if the transferee agrees in writing to be subject to the terms
of this
6
Agreement to the same extent as if the transferee were an original Purchaser
hereunder. Notwithstanding the foregoing, with the prior written consent of the
Company, which consent shall not be unreasonably withheld, the Shares may be
pledged in connection with a bona fide margin account or other loan secured by
the Share and such pledge of Shares shall not be deemed to be a transfer, sale
or assignment of the Shares hereunder, and no Purchaser effecting a pledge of
Shares shall be required to provide the Company with any notice thereof or
otherwise make any delivery to the Company pursuant to this Agreement; PROVIDED
that in order to make any sale, transfer or assignment of Shares, such Purchaser
and its pledgee must make such disposition in accordance with or pursuant to a
registration statement or an exemption under the Securities Act.
(h) RESIDENCE. Such Purchaser is a resident of that jurisdiction
specified in its address listed on the signature page to this Agreement.
(i) CONFIDENTIALITY. Such Purchaser shall not disclose or provide to
any other person or entity any non-public information or materials, or copies
thereof, whatsoever about the Company, disclosed or made available to the
Purchasers in connection with the transactions contemplated hereby, or in such
Purchaser's capacity as a shareholder of the Company; PROVIDED, however, that
such Purchaser may disclose such information to its legal and financial advisors
in connection with advice to be rendered by them to such Purchaser, or to such
Purchaser's investors or potential investors or affiliates, or to any transferee
or potential transferee of the Shares if such transfer is made in compliance
with the terms and conditions of this Agreement. Prior to such disclosure, such
Purchaser shall advise such legal and financial advisors or Purchaser's
investors or potential investors or affiliates, or transferees or potential
transferees, as the case may be, that each of them shall not further disclose
such information or materials to any person or entity or utilize such
information or materials for the benefit of any person or entity other than the
Company or the Purchasers, or such transferee in the capacity of a stockholder
of the Company, or in connection with the transactions contemplated hereby. The
nondisclosure obligations set forth above shall not apply to any information
which the Company determines in writing shall not be the subject of such
nondisclosure obligations nor shall such obligations apply to any information
which, by applicable law, the Company may not prohibit the Purchasers from
disclosing. Such Purchaser may disclose any information to any governmental
authority having jurisdiction over it, provided that such Purchaser gives the
Company reasonable advance written notice of such Purchaser's intent to disclose
any information covered under this Section 3(i) unless such Purchaser is
precluded from doing so by applicable law.
(j) GENERAL SOLICITATION. Such Purchaser is not purchasing the Shares
as a result of any advertisement, article, notice or other communication
regarding the Shares published in any newspaper, magazine or similar media or
broadcast over television or radio or presented at any seminar or any other
general solicitation or general advertisement.
(k) BROKER-DEALER. Neither such Purchaser nor any affiliate of such
Purchaser is a registered broker-dealer under the rules and regulations of the
SEC or the National Association of Securities Dealers, Inc.
7
(l) NO SHORT POSITION. Neither such Purchaser nor any of its affiliates
has an open short position in the Class A Stock, and such Purchaser agrees that
it will not, and that it will cause its affiliates not to, engage in any short
sales of, or hedging transactions with respect to the Class A Stock.
4. CONDITIONS TO PARTIES' OBLIGATIONS.
(a) CONDITIONS TO PURCHASERS' OBLIGATIONS AT THE CLOSING. The
obligation of each Purchaser hereunder to purchase Shares at the Closing is
subject to the fulfillment on or prior to the Closing of each of the following
conditions, PROVIDED that these conditions are for each such Purchaser's sole
benefit and may be waived by such Purchaser at any time in its sole discretion
by providing the Company with written notice thereof.
(i) REPRESENTATIONS AND WARRANTIES CORRECT. The representations
and warranties made by the Company in Section 2 shall be true and
correct when made, and shall be true and correct on and as of the
Closing Date with the same force and effect as if they had been made on
and as of the same date.
(ii) COVENANTS. All covenants, agreements, and conditions in
this Agreement required to be performed or complied with by the Company
on or prior to the Closing shall have been performed or complied with
in all material respects by the Company.
(iii) STOCK CERTIFICATES. The Company shall have executed and
delivered to such Purchaser the certificates representing the Shares
being purchased by such Purchaser at the Closing (in such denominations
as such Purchaser shall request in writing).
(iv) NO INJUNCTIONS. No temporary restraining order, preliminary
or permanent injunction or other order or decree, and no other legal
restraint or prohibition shall exist which prevents or arguably
prevents the consummation of the transactions contemplated by this
Agreement, nor shall any proceeding have been commenced or threatened
with respect to the foregoing.
(v) OPINION OF COUNSEL. Such Purchaser shall have received an
opinion of Bartlit Beck Herman Palenchar & Scott LLP, special counsel
to the Company, dated the Closing Date, in substantially the form as
attached hereto as EXHIBIT A.
(vi) NO SUSPENSION OF TRADING. The Class A Stock shall not have
been suspended by the NASDAQ National Market from trading on such
market.
(b) CONDITIONS TO COMPANY'S OBLIGATIONS AT THE CLOSING. The Company's
obligation to issue, sell and deliver the Shares at the Closing is subject to
the fulfillment at or prior to the Closing of the following conditions, any of
which may be waived in whole or in part by the Company at any time in its sole
discretion by providing the Purchasers with written notice thereof.
8
(i) REPRESENTATIONS AND WARRANTIES CORRECT. The representations
and warranties made by the Purchasers in Section 3 shall be true and
correct when made, and shall be true and correct on and as of the
Closing Date with the same force and effect as if they had been made on
and as of the same date.
(ii) PAYMENT OF THE PURCHASE PRICE. The Purchasers shall have
delivered to the Company the aggregate Purchase Price Per Share for the
Shares purchased at the Closing.
(iii) COVENANTS. All covenants, agreements, and conditions in this
Agreement required to be performed or complied with by the Purchasers
on or prior to the Closing shall have been performed or complied with
in all material respects by such Purchasers.
(iv) NO INJUNCTIONS. No temporary restraining order, preliminary
or permanent injunction or other order or decree, and no other legal
restraint or prohibition shall exist which prevents or arguably
prevents the consummation of the transactions contemplated by this
Agreement, nor shall any proceeding have been commenced or threatened
with respect to the foregoing.
5. COVENANTS. The parties hereby covenant and agree as follows:
(a) OBLIGATIONS. Each party shall use reasonable best efforts to
satisfy in a timely manner each of the conditions to be satisfied by it as
provided in Section 4(a) (in the case of the Company) or Section 4(b) (in the
case of the Purchasers).
(b) FORM D AND BLUE SKY. The Company agrees to file timely a Form D
with the SEC with respect to the Shares as required under Regulation D and to
provide a copy thereof to each Purchaser promptly after such filing. The Company
shall, on or before the Closing, take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for, or to
qualify the Shares for, sale to the Purchasers at the Closing pursuant to this
Agreement under applicable state securities or "Blue Sky" laws (or to obtain an
exemption from such qualification).
(c) REPORTING STATUS. With a view to making available to the Purchasers
the benefits of Rule 144 promulgated under the Securities Act or any similar
rule or regulation of the SEC that may at any time permit the Purchasers to sell
securities of the Company to the public without registration ("RULE 144"), the
Company shall take all action reasonably available to: (1) make and keep public
information available, as those terms are understood and defined in Rule 144;
and (2) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act. This
Section 5(c) shall terminate with respect to a Purchaser when such Purchaser is
able to sell pursuant to Rule 144(k) all the shares of Class A Stock acquired
hereunder then held by such Purchaser.
9
(d) SEC FILINGS BY PURCHASERS. The Purchasers agree to file timely a
Statement of Beneficial Ownership on Schedule 13D or such other filings as may
be required by federal securities laws and the rules and regulations of the SEC
with respect to the Shares.
(e) LISTING OF COMMON STOCK. The Company hereby agrees to use best
efforts to maintain the listing of the Class A Stock on the NASDAQ National
Market, and as soon as reasonably practicable following the Closing to list all
of the Shares on such trading market. The Company further agrees, if the Company
applies to have the Class A Stock traded on any other trading market, it will
include in such application all of the Shares, and will take such other action
as is necessary to cause all of the Shares to be listed on such other trading
market as promptly as possible.
6. REGISTRATION RIGHTS.
(a) DEFINITIONS. For purposes of this Section 6:
(i) HOLDER. The term "HOLDER" means any shareholder owning of
record Registrable Securities or any permitted assignee of record of
such Registrable Securities to whom rights under this Section 6 have
been duly assigned in accordance with this Agreement. For any Holder
that is a partnership, the Holder and the partners and retired partners
of such Holder, or the estates and family members of any such partners
and retired partners and any trusts for the benefit of any of the
foregoing persons, and for any Holder that is a corporation, the Holder
and all corporations that are affiliates of such Holder, shall be
deemed to be a single "Holder," and any pro rata reduction with respect
to such "Holder" shall be based upon the aggregate amount of shares
carrying registration rights owned by all entities and individuals
included in such "Holder," as defined in this sentence.
(ii) REGISTRATION. The terms "REGISTER," "REGISTERED," and
"REGISTRATION" refer to a registration effected by preparing and filing
a registration statement in compliance with the Securities Act and the
declaration or ordering of effectiveness of such registration
statement.
(iii) REGISTRABLE SECURITIES. "REGISTRABLE SECURITIES" means:
(A) all the shares of Class A Stock issued under the
Purchase Agreement that are now owned or may hereafter be acquired
by any Purchaser; and
(B) any shares of Class A Stock issued (or issuable upon the
conversion or exercise of any warrant, right or other security
which is issued) as a dividend or other distribution with respect
to, or in exchange for or in replacement of, all such shares of
Class A Stock described in clause (A) of this subsection
6(a)(iii); excluding in all cases, any shares of Class A Stock
which have previously been registered or which have been sold to
the public either pursuant to a registration statement or Rule
144, or which have been
10
sold in a private transaction in which the transferor's rights
under Section 6 of this Agreement are not assigned.
(iv) REGISTRABLE SECURITIES THEN OUTSTANDING. The number of
shares of "REGISTRABLE SECURITIES THEN OUTSTANDING" shall mean the
number of shares of Class A Stock which are Registrable Securities that
are then (1) issued and outstanding or (2) issuable pursuant to the
exercise or conversion of then outstanding and then exercisable or
convertible and qualifying options, warrants or convertible securities.
(v) REGISTRATION EXPENSES. "REGISTRATION EXPENSES" shall mean
all expenses incurred by the Company in effecting any registration
pursuant to this Agreement, including without limitation, all
registration and filing fees, printing expenses, fees and disbursements
of counsel for the Company, Blue Sky fees and expenses, and expenses of
any regular or special audits incident to or required by any such
registration, but shall not include Selling Expenses or fees and
disbursements of counsel for the Holders.
(vi) SELLING EXPENSES. "SELLING EXPENSES" shall mean all
underwriting discounts, selling commissions and stock transfer taxes
applicable to the sale of Registrable Securities and fees and
disbursements of counsel for any Holder.
(b) PIGGYBACK REGISTRATIONS.
(i) NOTICE TO HOLDERS. The Company shall notify all Holders of
Registrable Securities in writing at least fifteen (15) days prior to
the filing (provided that the Company will use reasonable efforts to
provide thirty (30) days notice if it can) of any registration
statement under the Securities Act for purposes of effecting a public
offering of securities of the Company (whether in connection with a
public offering of securities by the Company, a public offering of
securities by shareholders of the Company, or both, but excluding a
registration statement relating to any employee benefit plan or a
corporate reorganization or other transaction on Form S-4, or a
registration on any registration form which does not permit secondary
sales or does not include substantially the same information as would
be required to be included in a registration statement covering the
resale of Registrable Securities) and will afford each such Holder an
opportunity to include in such registration statement all or any part
of the Registrable Securities then held by such Holder as set forth
herein. Each Holder desiring to include in any such registration
statement all or any part of the Registrable Securities held by such
Holder shall, within fifteen (15) days after receipt of the
above-described notice from the Company, so notify the Company in
writing, and in such notice shall inform the Company of the number of
Registrable Securities such Holder wishes to include in such
registration statement. If a Holder decides not to include all of its
Registrable Securities in any registration statement thereafter filed
by the Company, such Holder shall nevertheless continue to have the
right to include any Registrable Securities in any subsequent
registration statement or registration statements as may be filed by
the Company with respect to offerings of
11
its securities, all upon the terms and conditions set forth herein. The
Company shall have no obligation to include any Registrable Securities
of a Holder in a registration statement under this Section 6(b) if, in
the reasonable opinion of counsel to the Company delivered to such
Holder, all such Registrable Securities proposed to be sold by such
Holder may be sold in a three (3) month period without registration
under the Securities Act pursuant to Rule 144 under the Securities Act.
(ii) UNDERWRITING. If the registration statement under which
the Company gives notice under this Section 6(b) is for an underwritten
offering, then the Company shall so advise the Holders of Registrable
Securities in such notice. In such event, the right of any such
Holder's Registrable Securities to be included in a registration
pursuant to this Section 6(b) shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided
herein. All Holders proposing to distribute their Registrable
Securities through such underwriting shall enter into an underwriting
agreement in customary form with the managing underwriter(s) selected
for such underwriting by the Company. Notwithstanding any other
provision of this Agreement, if the managing underwriter(s)
determine(s) in good faith that marketing factors require a limitation
of the number of shares to be underwritten, then the number of shares
that may be included in the underwriting shall be allocated first to
the Company (if the Company is initiating the registration) or to the
initiating shareholders on a pro rata basis (if such shareholders
exercised a demand right to require the registration); second, to all
Holders who are entitled to participate and who have elected to
participate in the offering pursuant to this terms of this Agreement,
on a pro rata basis based upon the total number of shares held by each
such participating Holder that are subject to piggyback registration
rights pursuant hereto; and, third, to any other shareholder of the
Company on a pro rata basis (or, if the Company did not initiate the
registration, to the Company). If any Holder disapproves of the terms
of any such underwriting, such Holder may elect to withdraw therefrom
by written notice to the Company and the underwriter, delivered at
least ten (10) business days prior to the effective date of the
registration statement. Any Registrable Securities excluded or
withdrawn from such underwriting shall be excluded and withdrawn from
the registration.
(iii) RIGHT TO TERMINATE REGISTRATION. The Company shall have the
right to terminate or withdraw any registration initiated by it under
this Section 6(b) prior to the effectiveness of such registration
whether or not any Holder has elected to include securities in such
registration. The Registration Expenses of such withdrawn registration
shall be borne by the Company in accordance with Section 6(e).
(c) DEMAND REGISTRATION.
(i) RIGHT TO DEMAND REGISTRATION. In the event that a
registration statement including all Registrable Securities has not
been filed and declared effective by the SEC on or prior to March 15,
2006, the Holders shall have the right to demand, and the Company shall
be obligated to effect, registration of the
12
Registrable Securities on the terms and subject to the conditions set
forth in this Section 6(c).
(ii) PROCEDURE FOR MAKING DEMAND. Subject to the conditions of
this Section 6(c), if, after March 15, 2006, the Company shall receive
a written request from the Holders of at least 1,500,000 shares of
Class A Stock (or, in the event only 1,000,000 Shares are sold pursuant
to this Agreement, the Holders of at least 1,000,000 shares of Class A
Stock) that constitute Registrable Securities (the "INITIATING
HOLDERS") that the Company file a registration statement under the
Securities Act covering the registration of Registrable Securities for
an anticipated aggregate offering price of not less than $5,000,000,
then the Company shall, within thirty (30) days of the receipt thereof,
give written notice of such request to all Holders and, subject to the
limitations of this Section 6(c), effect as expeditiously as reasonably
possible, the registration under the Securities Act of all Registrable
Securities that the Holders request to be registered. Notwithstanding
the foregoing, any request for registration pursuant to Section 6(c)
received by the Company during the period from the last business day of
a calendar quarter until the date on which the Company publicly
announces its earnings for such calendar quarter (the "BLACKOUT
PERIOD") shall not be deemed to have been received by the Company for
purposes of this Section until the Company publicly announces its
earnings on the last day of the Blackout Period.
(iii) UNDERWRITING. If the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means
of an underwriting, they shall so advise the Company as part of their
request made pursuant to this Section 6(c) and the Company shall
include such information in the written notice referred to in Section
6(c)(ii). In such event, the right of any Holder to include such
Holder's Registrable Securities in such registration shall be
conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided therein. All Holders proposing to
distribute their securities through such underwriting shall enter into
an underwriting agreement in customary form with the managing
underwriter(s) selected for such underwriting by the Company (which
managing underwriter(s) shall be reasonably acceptable to a majority in
interest of the Initiating Holders). Notwithstanding any other
provision of this Section 6(c), if the underwriter advises the Company
that marketing factors require a limitation of the number of securities
to be underwritten (including the Registrable Securities) then the
Company shall so advise all Holders of Registrable Securities which
would otherwise be underwritten pursuant hereto, and the number of
shares that may be included in the underwriting shall be allocated to
the Holders of such Registrable Securities pro rata based on the number
of Registrable Securities held by all such Holders (including the
Initiating Holders). Any Registrable Securities excluded or withdrawn
from such underwriting shall be withdrawn from the registration.
(iv) MAXIMUM NUMBER OF DEMANDS. The Company shall be obligated
to effect only two (2) such registrations pursuant to this Section
6(c); PROVIDED,
13
however, that, if the Company shall provide the Holders the opportunity
to participate in a registration pursuant to Section 6(b) covering all
Registrable Securities and the Holders shall not elect to register all
their Registrable Securities pursuant to such registration, then the
Company shall be obligated to effect only one (1) such registration
pursuant to this Section 6(c). The Company shall have no obligation
with respect to any registration requested pursuant to this Section
6(c) if either the amount of Registrable Securities held by the
Initiating Holders or the anticipated offering price of the Registrable
Securities to be included in the registration does not equal or exceed
the amount of Registrable Securities or anticipated offering price,
respectively, required to originally trigger the Company's obligation
to initiate such registration as specified in Section 6(c).
(v) DEFERRAL. If the Company shall furnish, to Holders
requesting a registration statement pursuant to this Section 6(c), a
certificate signed by the President or Chief Executive Officer of the
Company stating that, in the good faith judgment of its Board of
Directors, it would be seriously detrimental to the Company and its
shareholders for such registration statement to be effected at such
time, in which event the Company shall have the right to defer such
filing for a period of not more than sixty (60) days after receipt of
the request of the Initiating Holders; PROVIDED that such right to
delay a request shall be exercised by the Company not more than once
during the period from the Closing until the second anniversary of the
Closing. The Company shall also have the right to delay the filing of a
registration requested pursuant to this Section 6(c) for up to thirty
(30) days in order to attempt to arrange a private sale of the
Registrable Securities for which registration is sought.
(vi) DELAY IN EFFECTIVENESS OF REGISTRATION STATEMENT;
LIQUIDATED DAMAGES. If a registration statement covering the resale of
all Registrable Securities pursuant to Section 6(c) is not declared
effective by the SEC on or before the date that is one hundred twenty
(120) days after the date of the request delivered by the Initiating
Holders pursuant to Section 6(c)(ii), as such date shall be extended by
any deferral period pursuant to Section 6(c)(vi), then as the exclusive
remedy for the harm to any Holder by reason of any such delay in or
reduction of its ability to sell the shares of Class A Stock, the
Company shall pay to the Holders on a pro rata basis relative to the
number of Registrable Securities sought to be registered by each Holder
pursuant to such registration an aggregate amount in cash equal to two
percent (2%) per annum of the aggregate Purchase Price Per Share of
such Registrable Securities sought to be registered for the first month
in which such registration is not effective, three percent (3%) per
annum of the aggregate Purchase Price Per Share of such Registrable
Securities for the second month in which such registration is not
effective, four percent (4%) per annum of the aggregate Purchase Price
Per Share of such Registrable Securities for the third month in which
such registration is not effective, and five percent (5%) per annum of
the aggregate Purchase Price Per Share of such Registrable Securities
for the fourth month in which such registration is not effective and
for each month thereafter, in each case payable within ten business
days of each such month end.
14
(d) EXPENSES OF REGISTRATION. Except as specifically provided herein,
all Registration Expenses incurred in connection with any registration,
qualification or compliance hereunder shall be borne by the Company. All Selling
Expenses incurred in connection with any registrations hereunder shall be borne
by the Holders of the securities so registered pro rata on the basis of the
number of shares so registered. The Company shall not, however, be required to
pay for expenses of any registration proceeding begun pursuant to Section 6(c),
the request of which has been subsequently withdrawn by the Initiating Holders
unless (i) the withdrawal is based upon material adverse information concerning
the Company that the Company had not publicly revealed at least forty-eight (48)
hours prior to the request or that the Company had not otherwise notified the
Initiating Holders of at the time of such request or (ii) the Holders of a
majority of Registrable Securities agree to forfeit their right to one requested
registration pursuant to Section 6(c), in which event such right shall be
forfeited by all Holders. If the Holders are required to pay the Registration
Expenses, such expenses shall be borne by the Holders of securities (including
Registrable Securities) requesting such registration in proportion to the number
of shares for which registration was requested. If the Company is required to
pay the Registration Expenses of a withdrawn offering pursuant to clause (i)
above, then the Holders shall not forfeit their rights pursuant to Section 6(c).
(e) OBLIGATIONS OF THE COMPANY. When required to effect the
registration of any Registrable Securities pursuant to this Agreement, the
Company shall keep each Holder participating in such registration advised in
writing as to the initiation of each registration and as to the completion
thereof, and shall, as expeditiously as reasonably possible:
(i) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use commercially
reasonable efforts to cause such registration statement to become
effective;
(ii) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement;
(iii) Furnish to the Holders participating in such
registration and the underwriters of the securities being registered
such number of copies of the registration statement, preliminary
prospectus, final prospectus, in conformity with the requirements of
the Securities Act, and such other documents as such underwriters may
reasonably request in order to facilitate the public offering of such
securities;
(iv) Use its commercially reasonable efforts to register and
qualify the securities covered by such registration statement under
such other securities or Blue Sky laws of such jurisdictions as shall
be reasonably requested by the Holders, provided that the Company shall
not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of
process in any such states or jurisdictions;
15
(v) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in
usual and customary form, with the managing underwriter(s) of such
offering. Each Holder participating in such underwriting hereby agrees
to also enter into and perform its obligations under such an agreement;
(vi) Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing and
(vii) Use its commercially reasonable efforts to furnish, on
the date that such Registrable Securities are delivered to the
underwriters for sale, if such securities are being sold through
underwriters: (1) an opinion, dated as of such date, of the counsel
representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an
underwritten public offering, addressed to the underwriters, and (2) a
"comfort" letter dated as of such date, from the independent certified
public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the
underwriters.
(f) DELAY OF REGISTRATION. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 6.
(g) FURNISHING OF INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Sections 6(b) or (c)
that the selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them and the intended method of
disposition of such securities as shall be required to effect the registration
of their Registrable Securities.
(h) INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under Sections 6(b) or (c):
(i) BY THE COMPANY. To the extent permitted by law, the
Company shall indemnify and hold harmless each Holder, the current and
former partners, officers, directors and members of each Holder, any
underwriter (as defined in the Securities Act) for such Holder and each
person, if any, who controls such Holder or underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses,
claims, damages, or liabilities (joint or several) to which they may
become subject under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages, or
liabilities (or actions in respect
16
thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively, the "VIOLATIONS"
and, individually, a "VIOLATION"):
(A) any untrue statement or alleged untrue statement
of a material fact contained in such registration statement,
including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto; or
(B) 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
(C) any violation or alleged violation by the Company
of the Securities Act, the Exchange Act, any federal or state
securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any federal or state
securities law in connection with the offering covered by such
registration statement.
The Company shall reimburse each such Holder, partner, officer,
member or director, underwriter or controlling person for any
documented legal or other expenses reasonably incurred by them, within
one (1) month after a request for reimbursement has been received by
the Company, in connection with investigating or defending any such
loss, claim, damage, liability or action; PROVIDED, however, that the
indemnity agreement contained in this subsection 6(h)(i) shall not
apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld), nor
shall the Company be liable in any such case for any such loss, claim,
damage, liability or action to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in conformity
with written information furnished expressly for use in connection with
such registration by such Holder, partner, officer, member, director,
underwriter or controlling person of such Holder.
(ii) BY SELLING HOLDERS. To the extent permitted by law, each
selling Holder shall severally, but not jointly, indemnify and hold
harmless the Company, each of its directors, each of its officers who
have signed such registration statement, each person, if any, who
controls the Company within the meaning of the Securities Act, any
underwriter and any other Holder selling securities under such
registration statement or any of such other Holder's partners,
directors, members or officers or any person who controls such Holder
within the meaning of the Securities Act or the Exchange Act, against
any losses, claims, damages or liabilities (joint or several) to which
the Company or any such director, officer, member, controlling person,
underwriter or other such Holder, partner or director, member, officer
or controlling person of such other Holder may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar
as such losses, claims, damages or
17
liabilities (or actions in respect thereto) arise out of or are based
upon any Violation set forth in subsections 6(h)(i)(A) and (B) above,
in each case to the extent (and only to the extent) that such Violation
occurs in reliance upon and in conformity with written information
furnished by such Holder with respect to the Holder (and none other)
for use in connection with such registration. Each such Holder shall
reimburse any documented legal or other expenses reasonably incurred by
the Company or any such director, officer, member, controlling person,
underwriter or other Holder, partner, officer, member, director or
controlling person of such other Holder in connection with
investigating or defending any such loss, claim, damage, liability or
action within one (1) month after a request for reimbursement has been
received by the indemnifying Holder; PROVIDED, however, that the
indemnity agreement contained in this subsection 6(h)(ii) shall not
apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent
of the Holder, which consent shall not be unreasonably withheld; and
PROVIDED, further, that the total amounts payable in indemnity by a
Holder under this subsection 6(h)(ii) in respect of any Violation shall
not exceed the net proceeds received by such Holder in the registered
offering out of which such Violation arises.
(iii) NOTICE. Promptly after receipt by an indemnified party
under this Section 6(h) of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party
under this Section 6(h), deliver to the indemnifying party a written
notice of the commencement thereof. The indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party
so desires, jointly with any other indemnifying party similarly
noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; PROVIDED, however, that an indemnified
party shall have the right to retain its own counsel, with the fees and
expenses to be paid by the indemnifying party, if representation of
such indemnified party by the counsel retained by the indemnifying
party would be inappropriate due to actual or potential conflict of
interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of
the commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any
liability to the indemnified party under this Section 6(h), but the
omission so to deliver written notice to the indemnifying party will
not relieve it of any liability that it may have to any indemnified
party otherwise than under this Section 6(h).
(iv) DEFECT ELIMINATED IN FINAL PROSPECTUS. The foregoing
indemnity agreements of the Company and Holders are subject to the
condition that, insofar as they relate to any Violation made in a
preliminary prospectus but eliminated or remedied in the amended
prospectus on file with the SEC at the time such registration statement
becomes effective or the amended prospectus filed with the SEC pursuant
to SEC Rule 424(b) (the "FINAL PROSPECTUS"), such indemnity agreement
shall not inure to the benefit of any person if a copy of the Final
Prospectus was furnished to the
18
indemnified party and was not furnished to the person asserting the
loss, liability, claim or damage at or prior to the time such action is
required by the Securities Act.
(v) CONTRIBUTION. If the indemnification provided for in this
Section 6(h) is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any loss,
liability, claim, damage or expense referred to herein, then the
indemnifying party, in lieu of indemnifying the indemnified party,
shall contribute to the amount paid or payable by such indemnified
party with respect to such loss, liability, claim, damage or expense in
the proportion that is appropriate to reflect the relative fault of the
indemnifying party and the indemnified party in connection with the
statements or omissions that resulted in such loss, liability, claim,
damage or expense, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and the
indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of material fact
or the omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party, and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. In any
such case, (x) no such Holder will be required to contribute any amount
in excess of the public offering price of all such Registrable
Securities offered and sold by such Holder pursuant to such
registration statement; and (y) no person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) will be entitled to contribution from any person or
entity who was not guilty of such fraudulent misrepresentation.
(i) "LOCK-UP" AGREEMENT. Each Holder hereby agrees that prior to the
second anniversary of the Closing, such Holder shall not sell, transfer, make
any short sale of, grant any option for the purchase of, or enter into any
hedging or similar transaction with the same economic effect as a sale, any
Class A Stock (or other securities) of the Company held by such Holder (other
than those included in the registration) for a period specified by the
representative of the underwriters of Class A Stock (or other securities) of the
Company not to exceed ten (10) day prior to and one hundred eighty (180) days
following, the effective date of a registration statement of the Company filed
under the Securities Act; PROVIDED that all officers and directors of the
Company and holders of at least five percent (5%) of the Company's voting
securities enter into similar agreements and only if such persons remain subject
thereto (and are not released from such agreement) for such 180 day period. Each
Holder agrees to execute and deliver such other agreements as may be reasonably
requested by the Company or the underwriter which are consistent with the
foregoing or which are necessary to give further effect thereto.
The obligations described in this Section 6(i) shall not apply to a
registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a SEC Rule 145 transaction on Form S-4 or similar forms that
may be promulgated in the future. The Company may impose stop-transfer
instructions with respect to the shares of Class A Stock (or other securities)
subject to the foregoing restriction until the end of said one hundred eighty
(180) day period. Each Holder agrees that any transferee of any shares of
Registrable Securities shall be bound by this Section 6(i).
19
7. MISCELLANEOUS.
(a) FEES AND EXPENSES. The Company agrees to pay to Prentice Capital
Management, LP at Closing a fee equal to one and one-half percent (1-1/2%) of
the aggregate Purchase Price Per Share payable by such Purchaser pursuant to
Section 1(c)(y), which payment may be deducted by such Purchaser from the
aggregate Purchase Price Per Share to be paid by it pursuant to Section 1(c)(y).
Except as expressly set forth in this Agreement to the contrary, each party
shall pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement.
The Company shall pay all transfer agent fees, stamp taxes and other taxes and
duties levied in connection with the initial sale and issuance of the Shares.
(b) PUBLICITY. Neither the Company nor any Purchaser shall issue any
press release or make any other public announcement relating to this Agreement
unless (i) the content thereof is mutually agreed to by the Company and the
Purchasers, or (ii) such party is advised by its counsel that such press release
or public announcement is required by law or, in the case of the Company, the
rules of the Nasdaq Market. The Company shall issue a press release mutually
agreed to by the Company and the Purchasers, disclosing the transactions
contemplated hereby, and, on or prior to June 16, 2005, the Company shall file a
Current Report on Form 8-K with the SEC describing the terms of the transactions
contemplated by this Agreement in the form required by the Exchange Act.
(c) ENTIRE AGREEMENT; AMENDMENTS. This Agreement contains the entire
understanding of the parties with respect to the subject matter and supersedes
all prior agreements and understandings, oral or written, with respect to such
matters, which the parties acknowledge have been merged into this Agreement and
its Exhibits and Schedules. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and Purchasers of a
majority of Class A Stock to be issued pursuant to Section 1; PROVIDED, however,
that no such amendment shall increase the amount of Shares to be purchased by a
Purchaser or the Purchase Price Per Share to be paid therefore without the
consent of the affected Purchaser. The waiver by either party hereto of any
right hereunder or the failure to perform or of a breach by the other party
shall not be deemed a waiver of any other right hereunder or of any other breach
or failure by said other party whether of a similar nature or otherwise.
(d) NOTICES. Except as otherwise provided in this Agreement, any and
all notices or other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number specified in this Section
prior to 5:00 p.m. (Broomfield, Colorado time) on a business day, (ii) the
business day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Agreement
later than 5:00 p.m. (Broomfield, Colorado time) on any date and earlier than
11:59 p.m. (Broomfield, Colorado time) on such date, (iii) the business day
following the date of mailing, if sent by nationally recognized overnight
courier service, or (iv) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications shall be
as follows:
20
If to the Company: Gaiam, Inc.
360 Interlocken Blvd.
Broomfield, Colorado 80021
(303) 222-3645
Attn: Jirka Rysavy
With a copy to: Bartlit Beck Herman Palenchar & Scott LLP
1899 Wynkoop Street, Suite 800
Denver, Colorado 80202
(303) 592-3100
Attn: Thomas R. Stephens, Esq.
If to a Purchaser: To the address set forth under the
Purchaser's name on the signature pages
attached hereto.
or such other address as may be designated in writing hereafter, in the
same manner, by such person.
(e) GOVERNING LAW. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Colorado, without regard to the principles of conflicts of law thereof. Each
party hereto hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in Broomfield County for the adjudication of
any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the
enforcement of any of this Agreement). Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby. If either party shall
commence an action or proceeding to enforce any provisions of this Agreement,
then the prevailing party in such action or proceeding shall be reimbursed by
the other party for its reasonable attorneys' fees and other reasonable costs
and expenses incurred with the investigation, preparation and prosecution of
such action or proceeding.
(f) EXECUTION. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
(g) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
No Purchaser may assign its rights under this Agreement to any person without
the prior written consent of the Company, except that a Holder may assign its
registration rights under Section 6 in connection with any transfer or
assignment of Registrable Securities by such party, PROVIDED, that (i) such
transferee or assignee
21
acquires from such party all of the Registrable Securities then held by such
party, (ii) such assigning or transferring party provides written notice thereof
to the Company stating the name and address of the assignee or transferee and
identifying the securities as to which the rights in question are being assigned
or transferred, and (iii) the assignee or transferee agrees in writing to
receive such assigned or transferred rights subject to the terms and conditions
of this Agreement.
(h) REPLACEMENT OF SHARES. If any certificate or instrument evidencing
any Shares is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof, or in lieu of and substitution therefor, a new certificate or
instrument, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. The applicants for a new certificate or instrument
under such circumstances shall also pay any reasonable third-party costs
associated with the issuance of such replacement Shares.
(i) LEGENDS. Each certificate representing the Class A Stock shall be
endorsed with a legend referencing such restrictions of such rules and
regulations of the SEC and such contractual restrictions as the Company deems
appropriate and a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFCATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT
BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT COVERING SUCH
SECURITIES, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
Each certificate representing Class A Stock shall also bear any legend required
by any applicable state or foreign securities laws. The Company need not
register a transfer of Shares unless the conditions specified in the foregoing
legends are satisfied. The Company may also instruct its transfer agent not to
register the transfer of any of the Shares unless the conditions specified in
the foregoing legend are satisfied.
(j) REMOVAL OF LEGENDS AND TRANSFER RESTRICTIONS. The legend relating
to the Securities Act endorsed on a stock certificate pursuant to Section 7(i)
of this Agreement and the stop transfer instructions with respect to the Shares
represented by such certificate shall be removed by the Company if such shares
are sold pursuant to an effective registration statement under the Securities
Act or Rule 144 or, in the event subsection (ii) below applies, are eligible to
be sold and such holder provides to the Company an opinion of counsel reasonably
satisfactory to the Company to the effect that (i) a public sale, transfer or
assignment may be made without registration or (ii) such shares may be sold
pursuant to Rule 144(k) of the Securities Act.
(k) INDEPENDENT NATURE OF PURCHASERS. The obligations of each Purchaser
under this Agreement are several and not joint with the obligations of any other
Purchaser, and no Purchaser shall be responsible in any way for the performance
of the obligations of any other
22
Purchaser under this Agreement. The decision of each Purchaser to purchase
Shares pursuant to this Agreement has been made by such Purchaser independently
of any other Purchaser and independently of any information, materials,
statements or opinions as to the business, affairs, operations, assets,
properties, liabilities, results of operations, condition (financial or
otherwise) or prospects of the Company which may have been made or given by any
other Purchaser or by any agent or employee of any other Purchaser, and no
Purchaser or any of its agents or employees shall have any liability to any
other Purchaser (or any other person) relating to or arising from any such
information, materials, statements or opinions. Nothing contained herein, and no
action taken by any Purchaser pursuant hereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Purchasers are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by this Agreement. Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any proceeding for such
purpose.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOLLOW]
23
IN WITNESS WHEREOF, the parties hereto have caused this Class A Stock
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
GAIAM, INC.
By: /s/Jirka Rysavy
-------------------
Name: Jirka Rysavy
Title: Chief Executive Officer
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES OF PURCHASERS' FOLLOW]
24
IN WITNESS WHEREOF, the parties hereto have caused this Class A Stock
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
PRENTICE CAPITAL PARTNERS, LP
By: Prentice Capital GP, LLC, its general partner
By: /s/Michael Weiss
-------------------
Name: Michael Weiss
Title: Managing Director
Number of Shares to be acquired: 56,420 (22,962*)
Address: c/o Prentice Capital Management, LP
623 Fifth Avenue, 32nd Floor
New York, NY 10022
Telephone: 212-756-8045
Email: MichaelW@prenticecapital.com
PRENTICE CAPITAL PARTNERS QP, LP
By: Prentice Capital GP, LLC, its general partner
By: /s/Michael Weiss
-------------------
Name: Michael Weiss
Title: Managing Director
Number of Shares to be acquired: 280,512 (114,166*)
Address: c/o Prentice Capital Management, LP
623 Fifth Avenue, 32nd Floor
New York, NY 10022
Telephone: 212-756-8045
Email: MichaelW@prenticecapital.com
* Shares to be acquired if only 1,000,000 Shares in the aggregate are acquired
under the Agreement.
25
IN WITNESS WHEREOF, the parties hereto have caused this Class A Stock
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
PRENTICE CAPITAL OFFSHORE, LTD.
By: Prentice Capital Management, LP, its investment manager
By: /s/Michael Weiss
-------------------
Name: Michael Weiss
Title: CFO
Number of Shares to be acquired: 927,471 (377,473*)
Address: c/o Prentice Capital Management, LP
623 Fifth Avenue, 32nd Floor
New York, NY 10022
Telephone: 212-756-8045
Email: MichaelW@prenticecapital.com
GPC XLIII, LLC
By: Prentice Capital Management, LP, its advisor
By: /s/Michael Weiss
-------------------
Name: Michael Weiss
Title: CFO
Number of Shares to be acquired: 271,255 (110,399*)
Address: c/o Prentice Capital Management, LP
623 Fifth Avenue, 32nd Floor
New York, NY 10022
Telephone: 212-756-8044
Email: MichaelW@prenticecapital.com
* Shares to be acquired if only 1,000,000 Shares in the aggregate are acquired
under the Agreement.
26
IN WITNESS WHEREOF, the parties hereto have caused this Class A Stock
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
S.A.C. CAPITAL ASSOCIATES, LLC
By: S.A.C Capital Advisors, LLC
By: /s/Peter A. Nussbaum
--------------------
Peter A. Nussbaum
General Counsel
Number of Shares to be acquired: 1,285,659 (375,000*)
Address: c/o S.A.C. Capital Advisors, LLC
72 Cummings Point Road
Stamford, CT 06902
Attention: General Counsel
Telephone: 212-756-8045
Email: MichaelW@prenticecapital.com
PeterN@sac.com
Resident of Anguilla
* Shares to be acquired if only 1,000,000 Shares in the aggregate are acquired
under the Agreement.
27
EXHIBIT A
Opinion of Counsel
28