Document:

EXHIBIT 10.2

 

GAIAM, INC.

 

1999 LONG-TERM INCENTIVE PLAN

AMENDED AND RESTATED AS OF JANUARY 2, 2006

 

Section 1.  Purpose.  The purpose of this
Plan is to advance the interests of Gaiam and its shareholders by providing
incentives to certain Eligible Persons (as defined below) who contribute
significantly to the strategic and long-term performance objectives and growth
of the Company.

 

Section 2.  Definitions.  The definitions
applicable to this Plan are provided in Appendix A.

 

Section 3.  Administration.  The Committee
shall administer this Plan and shall have all the powers vested in it by the
terms of this Plan, such powers to include exclusive authority to select the
Eligible Persons to be granted Awards under this Plan, to determine the type,
size and terms of the Award to be made to each Eligible Person selected, to
modify the terms of any Award that has been granted, to determine the time when
Awards will be granted, to establish performance objectives, to make any
adjustments necessary or desirable as a result of the granting of Awards to
Eligible Persons located outside the United States and to prescribe the form of
the agreements evidencing Awards made under this Plan. The Committee is
authorized to interpret this Plan and the Awards granted under this Plan, to
establish, amend and rescind any rules and regulations relating to this Plan,
and to make any other determinations that it deems necessary or desirable for
the administration of this Plan. The Committee may correct any defect or supply
any omission or reconcile any inconsistency in this Plan or in any Award in the
manner and to the extent the Committee deems necessary or desirable to carry it
into effect. Any decision of the Committee in the interpretation and
administration of this Plan, as described this Plan, shall lie within its sole
and absolute discretion and shall be final, conclusive and binding on all
parties concerned. The Committee may act only
by a majority of its members in office, except that the
members thereof may authorize any one or more of their members or any officer
of the Company to execute and deliver documents or to take any other
ministerial action on behalf of the Committee with respect to Awards made or to
be made to Participants.
Notwithstanding the foregoing or any other provision of this Plan, the
Committee shall not have the authority to accelerate the time or schedule of
any payment in a manner which is not permitted under Code Section 409A, or to
grant or amend any Award in any manner which would result in an inclusion of
any amount in gross income under Code Section 409A(a)(1).

 

No member of the
Committee and no officer of the Company shall be liable for anything done or
omitted to be done by him, by any other member of the Committee or by any
officer of the Company in connection with the performance of duties under this
Plan, except for his own willful misconduct or
as expressly provided by statute. In addition to all other rights of
indemnification and reimbursement to which a member of the Committee and an
officer of the Company may be entitled, the Company shall indemnify and hold
harmless each such member or officer who was or is a party or is threatened to
be made a party to any threatened, pending or completed proceeding or suit in
connection with the performance of duties under this Plan against expenses
(including reasonable attorneys’ fees), judgments, fines, liabilities, losses
and amounts paid in settlement actually and reasonably incurred by him in
connection with such proceeding or suit, except for his
own willful misconduct or as expressly provided otherwise by statute. Expenses
(including reasonable attorneys’ fees) incurred by a such a member or officer
in defending any such proceeding or suit shall be paid by the Company in
advance of the final disposition of such proceeding or suit upon receipt of a
written affirmation by such member or officer of his good faith belief that he
has met the standard of conduct necessary for indemnification and a written
undertaking by or on behalf of such member or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the Company as authorized in this Section.

 

 

Section 4.  Participation.  Consistent with
the purposes of this Plan, the Committee shall have exclusive power to select
the Eligible Persons who may participate in this Plan and be granted Awards
under this Plan. Eligible Persons may be selected individually or by groups or
categories, as determined by the Committee in its discretion.

 

Section 5.  Awards under this Plan.

 

(a)           Types of Awards.  Awards under this Plan may
include, but need not be limited to, one or more of the following types, either
alone or in any combination thereof:  (i)
Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, (iv)
Performance Grants and (v) any other type of Award deemed by the Committee in
its discretion to be consistent with the purposes of this Plan (including, but
not limited to, Awards of or options or similar rights granted with respect to
unbundled stock units or components thereof, and Awards to be made to
Participants who are foreign nationals or are employed or performing services
outside the United States).

 

(b)           Maximum Number of Shares that May be Issued.  There
may be issued under this Plan (as Restricted Stock, in payment of Performance
Grants, pursuant to the exercise of Stock Options or Stock Appreciation Rights
or in payment of or pursuant to the exercise of such other Awards as the
Committee, in its discretion, may determine) an aggregate of not more than
2,100,000 Common Shares, subject to adjustment as provided in Section 15.
No Eligible Person may receive Awards under this Plan for more than 400,000
Common Shares in any one fiscal year of Gaiam, subject to adjustment as
provided in Section 15. Common Shares issued pursuant to this Plan may be
either authorized but unissued shares, treasury shares, reacquired shares or
any combination thereof. If any Common Shares issued as Restricted Stock or
otherwise subject to repurchase or forfeiture rights are reacquired by the
Company pursuant to such rights or, if any Award is canceled, terminates or
expires unexercised, any Common Shares that would otherwise have been issuable
pursuant thereto will be available for issuance under new Awards.

 

(c)           Rights with Respect to Common Shares and Other Securities.  Except as provided in subsection 8(c) with
respect to Awards of Restricted Stock and unless otherwise determined by the
Committee in its discretion, a Participant to whom an Award is made (and any person
succeeding to such a Participant’s rights pursuant to this Plan) shall have no
rights as a shareholder with respect to any Common Shares or as a holder with
respect to other securities, if any, issuable pursuant to any such Award until
the date of the issuance of a stock certificate to him for such Common Shares
or other instrument of ownership, if any. Except as provided in
Section 15, no adjustment shall be made for dividends, distributions or
other rights (whether ordinary or extraordinary, and whether in cash,
securities, other property or other forms of consideration, or any combination
thereof) for which the record date is prior to the date such stock certificate
or other instrument of ownership, if any, is required to be issued based upon
the date any Award was exercised. In all events, a Participant with whom an
Award agreement is made to issue Common Shares in the future, shall have no
rights as a shareholder with respect to Common Shares related to such agreement
until issuance to him of a stock certificate representing such shares.

 

Section 6.  Stock Options.  The Committee
may sell Purchased Options or grant other Stock Options either alone, or in
conjunction with Associated Awards, either at the time of grant or by amendment
thereafter; provided that an Incentive Stock Option
may be granted only to Eligible Persons who are employees of the Company and
who have Associated Awards only to the extent that such Associated Awards do
not disqualify the Incentive Stock Option’s status as such under the Code. Each

 

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Stock Option granted or sold under this Plan shall be evidenced by an
agreement in such form as the Committee shall prescribe from time to time in
accordance with this Plan and shall comply with the applicable terms and
conditions of this Section and this Plan, and with such other terms and
conditions, including, but not limited to, restrictions upon the Stock Option
or the Common Shares issuable upon exercise thereof, as the Committee, in its
discretion, shall establish.

 

(a)           The
exercise price of a Stock Option may be equal to or greater than the Fair
Market Value of the Common Shares subject to such Stock Option at the time the
Stock Option is granted, as determined by the Committee; provided,
however, that in the case of an Incentive Stock Option granted to an
employee of the Company, the exercise price shall not be less than the Fair
Market Value of the Common Shares subject to such Stock Option at the time the
Stock Option is granted, or if granted to a Ten Percent Employee, such exercise
price shall not be less than 110% of such Fair Market Value at the time the
Stock Option is granted. In no event, however, will the exercise price per
share of a Stock Option be less than the par value per share of a Common Share.

 

(b)           The
Committee shall determine the number of Common Shares to be subject to each
Stock Option. In the case of a Stock Option awarded in conjunction with an
Associated Award, the number of Common Shares subject to an outstanding Stock
Option may be reduced on an appropriate basis to the extent that the Associated
Award has been exercised, paid to or otherwise received by the Participant, as
determined by the Committee.

 

(c)           Any
Stock Option may be exercised during its term only at such time or times and in
such installments as the Committee may establish.

 

(d)           A
Stock Option shall not be exercisable:

 

(i)            in
the case of any Incentive Stock Option granted to a Ten Percent Employee, after
the expiration of five years from the date it is granted, and, in the case of
any other Stock Option, after the expiration of ten years from the date it is
granted; and

 

(ii)           unless
payment in full is made for the shares being acquired thereunder at the time of
exercise as provided in subsection 6(i).

 

(e)           The
Committee shall determine in its discretion and specify in each agreement
evidencing a Stock Option the effect, if any, the termination of the
Participant’s employment with or performance of services for the Company shall
have on the exercisability of the Stock Option; provided,
however, that an Incentive Stock Option shall not be exercisable at
a time that is beyond the time an Incentive Stock Option may be exercised in
order to qualify as such under the Code.

 

(f)            In
the case of an Incentive Stock Option, the amount of the aggregate Fair Market
Value of Common Shares (determined at the time of grant of the Stock Option)
with respect to which incentive stock options are exercisable for the first
time by an employee of the Company during any calendar year (under all such
plans of his employer corporation and its parent and subsidiary corporations)
shall not exceed $100,000 or such other amount as is specified in the Code.

 

(g)           It
is the intent of Gaiam that Nonqualified Stock Options granted under this Plan
not be classified as Incentive Stock Options, that the Incentive Stock Options
granted under this Plan be consistent with and contain or be deemed to contain
all provisions required under

 

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Section 422
and the other appropriate provisions of the Code and any implementing
regulations (and any successor provisions thereof), and that any ambiguities in
construction shall be interpreted in order to effectuate such intent.

 

(h)           A
Purchased Option may contain such additional terms not inconsistent with this
Plan, including but not limited to the circumstances under which the purchase
price of such Purchased Option may be returned to the holder of the Purchased
Option, as the Committee may determine in its sole discretion.

 

(i)            For
purposes of payments made to exercise Stock Options, such payment shall be made
in such form (including, but not limited to, cash, Common Shares, the surrender
of another outstanding Award under this Plan or any combination thereof) as the
Committee may determine in its discretion; provided, however,
that, unless the Committee determines otherwise, for purposes of making such
payment in Common Shares, such shares shall be valued at their Fair Market
Value on the day of exercise and shall have been held by the Participant for a
period of at least six (6) months.

 

Section 7.  Stock Appreciation Rights.  The
Committee may grant Stock Appreciation Rights either alone, or in conjunction
with Associated Awards, either at the time of grant or by amendment thereafter.
Each Award of Stock Appreciation Rights granted under this Plan shall be
evidenced by an agreement in such form as the Committee shall prescribe from
time to time in accordance with this Plan and shall comply with the applicable
terms and conditions of this Section and this Plan, and with such other terms
and conditions, including, but not limited to, restrictions upon the Award of
Stock Appreciation Rights or the Common Shares issuable upon exercise thereof,
as the Committee, in its discretion, shall establish.

 

(a)           The
Committee shall determine the number of Common Shares to be subject to each
Award of Stock Appreciation Rights. In the case of an Award of Stock
Appreciation Rights awarded in conjunction with an Associated Award, the number
of Common Shares subject to an outstanding Award of Stock Appreciation Rights
may be reduced on an appropriate basis to the extent that the Associated Award
has been exercised, paid to or otherwise received by the Participant, as determined
by the Committee.

 

(b)           The
Award of Stock Appreciation Rights shall not be exercisable:

 

(i)            unless
the Associated Award, if any, is at the time exercisable;

 

(ii)           if
the Associated Award is a Stock Option and the Fair Market Value per share of
the Common Shares on the exercise date does not exceed the exercise price per
share of such Stock Option; and

 

(iii)         if
the Associated Award is an Incentive Stock Option and the exercise of the Award
of Stock Appreciation Rights would disqualify the Incentive Stock Option as
such under the Code.

 

(c)           The
Committee shall determine in its discretion and specify in each agreement
evidencing an Award of Stock Appreciation Rights the effect, if any, the
termination of the Participant’s employment with or performance of services for
the Company shall have on the exercisability of the Award of Stock Appreciation
Rights.

 

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(d)           An
Award of Stock Appreciation Rights shall entitle the holder to exercise such
Award or to surrender unexercised an Associated Award (or any portion of such
Associated Award) to Gaiam and to receive from Gaiam in exchange thereof,
without payment to Gaiam, that number of Common Shares having an aggregate
value equal to (or, in the discretion of the Committee, less than) the excess
of the Fair Market Value of one share, at the time of such exercise, over the
exercise price, times the number of shares subject to the Award or the
Associated Award, or portion thereof, that is so exercised or surrendered, as
the case may be. The Committee shall be entitled in its discretion to elect to
settle the obligation arising out of the exercise of a Stock Appreciation Right
by the payment of cash or Other Gaiam Securities or property, or other forms of
payment or any combination thereof, as determined by the Committee, equal to
the aggregate value of the Common Shares it would otherwise be obligated to
deliver. Any such election by the Committee shall be made as soon as
practicable after the receipt by the Committee of written notice of the
exercise of the Stock Appreciation Right.

 

(e)           A
Stock Appreciation Right may provide that it shall be deemed to have been
exercised at the close of business on the business day preceding the expiration
date of the Stock Appreciation Right or of the related Stock Option (or other
Award), or such other date as specified by the Committee, if at such time such
Stock Appreciation Right has a positive value. Such deemed exercise shall be
settled or paid in the same manner as a regular exercise thereof as provided in
subsection 7(d) of this Agreement.

 

Section 8.  Restricted Stock.  The Committee
may grant Awards of Restricted Stock either alone, or in conjunction with
Associated Awards, either at the time of grant or by amendment thereafter. Each
Award of Restricted Stock under this Plan shall be evidenced by an agreement in
such form as the Committee shall prescribe from time to time in accordance with
this Plan and shall comply with the applicable terms and conditions of this
Section and this Plan, and with such other terms and conditions as the
Committee, in its discretion, shall establish.

 

(a)           The
Committee shall determine the number of Common Shares to be issued to a
Participant pursuant to the Award of Restricted Stock, and the extent, if any,
to which they shall be issued in exchange for cash, other consideration, or
both.

 

(b)           Until
the expiration of such period as the Committee shall determine from the date on
which the Award is granted and subject to such other terms and conditions as
the Committee in its discretion shall establish (the “Restricted
Period”), a Participant to whom an Award of Restricted Stock is
made shall be issued, but shall not be entitled to the delivery of, a stock
certificate representing the Common Shares subject to such Award.

 

(c)           Unless
otherwise determined by the Committee in its discretion, a Participant to whom
an Award of Restricted Stock has been made (and any person succeeding to such a
participant’s rights pursuant to this Plan) shall have, after issuance of a
certificate for the number of Common Shares awarded and prior to the expiration
of the Restricted Period, ownership of such Common Shares, including the right
to vote such Common Shares and to receive dividends or other distributions made
or paid with respect to such Common Shares (provided that
such Common Shares, and any new, additional or different shares, or Other Gaiam
Securities or property, or other forms of consideration that the Participant
may be entitled to receive with respect to such Common Shares as a result of a
stock split, stock dividend or any other change in the corporation or capital
structure of Gaiam, shall be subject to the restrictions set forth in this Plan
as determined by the Committee in its discretion), subject, however, to the
options, restrictions and limitations imposed thereon pursuant to this Plan.

 

5

 

(d)           The
Committee shall determine in its discretion and specify in each agreement
evidencing an Award of Restricted Stock the effect, if any, the termination of
the Participant’s employment with or performance of services for the Company
during the Restricted Period shall have on such Award of Restricted Stock.

 

Section 9.  Performance Grants.  The
Committee may grant Awards of Performance Grants either alone, or in
conjunction with Associated Awards, either at the time of grant or by amendment
thereafter. The Award of a Performance Grant to a Participant will entitle him
to receive a specified amount determined by the Committee (the “Actual Value”), if the terms and
conditions specified in this Plan and in the Award are satisfied. Each Award of
a Performance Grant shall be subject to the applicable terms and conditions of
this Section and this Plan, and to such other terms and conditions, including
but not limited to, restrictions upon any cash, Common Shares, Other Gaiam
Securities or property, or other forms of payment, or any combination thereof,
issued with respect to the Performance Grant, as the Committee, in its discretion,
shall establish, and shall be embodied in an agreement in such form and
substance as is determined by the Committee.

 

(a)           The
Committee shall determine the value or range of values of a Performance Grant
to be awarded to each Participant selected for an Award and whether or not such
a Performance Grant is granted in conjunction with an Associated Award. As
determined by the Committee, the maximum value of each Performance Grant (the “Maximum Value”) shall be:
(i) an amount fixed by the Committee at the time the Award is made or
amended thereafter, (ii) an amount that varies from time to time based in
whole or in part on the then current value of the Common Shares, Other Gaiam
Securities or property, or other securities or property, or any combination thereof
or (iii) an amount that is determinable from criteria specified by the
Committee. Performance Grants may be issued in different classes or series
having different names, terms and conditions. In the case of a Performance
Grant awarded in conjunction with an Associated Award, the Performance Grant
may be reduced on an appropriate basis to the extent that the Associated Award
has been exercised, paid to or otherwise received by the Participant, as
determined by the Committee.

 

(b)           The
award period (“Award Period”) related to any
Performance Grant shall be a period determined by the Committee. At the time
each Award is made, the Committee shall establish performance objectives to be
attained within the Award Period as the means of determining the Actual Value
of such a Performance Grant. The performance objectives shall be based on such
measure or measures of performance, which may include, but need not be limited
to, the performance of the Participant, the Company or one or more of its
divisions or units, or any combination of the foregoing, as the Committee shall
determine, and may be applied on an absolute basis or be relative to industry
or other indices or any combination thereof. The Actual Value of a Performance
Grant shall be equal to its Maximum Value only if the performance objectives
are attained in full, but the Committee shall specify the manner in which the
Actual Value of Performance Grants shall be determined if the performance
objectives are met in part. Such performance measures, the Actual Value or the
Maximum Value, or any combination thereof, may be adjusted in any manner by the
Committee in its discretion at any time and from time to time during or as soon
as practicable after the Award Period, if it determines that such performance measures,
the Actual Value or the Maximum Value, or any combination thereof, are not
appropriate under the circumstances.

 

(c)           The
Committee shall determine in its discretion and specify in each agreement
evidencing a Performance Grant the effect, if any, the termination of the
Participant’s employment with or performance of services for the Company during
the Award Period shall have on such Performance Grant.

 

6

 

(d)           The
Committee shall determine whether the conditions of a Performance Grant have
been met and, if so, shall ascertain the Actual Value of the Performance Grant.
If the Performance Grant has no Actual Value, the Award and such Performance
Grant shall be deemed to have been canceled and the Associated Award, if any,
may be canceled or permitted to continue in effect in accordance with its
terms. If the Performance Grant has any Actual Value and:

 

(i)            was
not awarded in conjunction with an Associated Award, the Committee shall cause
an amount equal to the Actual Value of the Performance Grant earned by the
Participant to be paid to him or his permitted assignee or Beneficiary; or

 

(ii)           was
awarded in conjunction with an Associated Award, the Committee shall determine,
in accordance with criteria specified by the Committee (A) to cancel the
Performance Grant, in which event no amount with respect thereto shall be paid
to the Participant or his permitted assignee or Beneficiary, and the Associated
Award may be permitted to continue in effect in accordance with its terms,
(B) to pay the Actual Value of the Performance Grant to the Participant or
his permitted assignee or Beneficiary as provided below, in which event the
Associated Award may be canceled or (C) to pay to the Participant or his
Beneficiary, the Actual Value of only a portion of the Performance Grants, in
which event all or a portion of the Associated Award may be permitted to
continue in effect in accordance with its terms or be canceled, as determined
by the Committee.

 

Such determination by the
Committee shall be made as promptly as practicable following the end of the
Award Period or upon the earlier termination of employment or performance of
services, or at such other time or times as the Committee shall determine, and
shall be made pursuant to criteria specified by the Committee.

 

(e)           Payment
of any amount with respect to the Performance Grants that the Committee
determines to pay as provided above shall be made by Gaiam as promptly as
practicable after the end of the Award Period or at such other time or times as
the Committee shall determine, and may be made in cash, Common Shares, Other
Gaiam Securities or property, or other forms of payment, or any combination
thereof or in such other manner, as determined by the Committee in its discretion.
Notwithstanding anything in this Section to the contrary, the Committee may, in
its discretion, determine and pay out the Actual Value of the Performance
Grants at any time during the Award Period.

 

Section 10.  Deferral of Compensation.  The
Committee shall determine whether or not an Award shall be made in conjunction
with the deferral of the Participant’s salary, bonus or other compensation, or
any combination thereof, and whether or not such deferred amounts may be:

 

(a)           forfeited
to the Company or to other Participants or any combination thereof, under
certain circumstances (which may include, but need not be limited to, certain
types of termination of employment or performance of services for the Company);

 

(b)           subject
to increase or decrease in value based upon the attainment of or failure to
attain, respectively, certain performance measures; and/or

 

(c)           credited
with income equivalents (which may include, but need not be limited to,
interest, dividends or other rates of return) until the date or dates of
payment of the Award, if any.

 

7

 

Section 11.  Deferred Payment of Awards.  The
Committee may specify that the payment of all or any portion of cash, Common
Shares, Other Gaiam Securities or property, or any other form of payment, or
any combination thereof, under an Award shall be deferred until a later date.
Deferrals shall be for such periods or until the occurrence of such events, and
upon such terms, as the Committee shall determine in its discretion, provided however, that any such
deferral shall comply with the requirements of Code Section 409A. Deferred
payments of Awards may be made by undertaking to make payment in the future
based upon the performance of certain investment equivalents (which may
include, but need not be limited to, government securities, Common Shares,
other securities, property or consideration, or any combination thereof),
together with such additional amounts of income equivalents (which may be
compounded and may include, but need not be limited to, interest, dividends or
other rates of return or any combination thereof) as may accrue thereon until
the date or dates of payment, such investment equivalents and such additional
amounts of income equivalents to be determined by the Committee in its
discretion.

 

Section 12.  Transferability of Awards.  A
Participant’s rights and interest under this Plan or any Award may not be
assigned or transferred, hypothecated or encumbered in whole or in part either
directly or by operation of law or otherwise, including, but not by way of
limitation, execution, levy, garnishment, attachment, pledge, bankruptcy or in
any other manner; provided, however, the Committee
may permit such transfer to a Permitted Transferee; and provided,
further, that, unless otherwise permitted by the Code, any Incentive
Stock Option granted pursuant to this Plan shall not be transferable other than
by will, by the laws of descent and distribution, and shall be exercisable
during the Participant’s lifetime only by Participant or by such Permitted
Transferee.

 

Section 13.  Amendment or Substitution of Awards under this Plan.  The
terms of any outstanding Award under this Plan may be amended or modified from
time to time by the Committee in its discretion in any manner that it deems
appropriate (including, but not limited to, acceleration of the date of
exercise of any Award and/or payments thereunder) if the Committee could grant
such amended or modified Award under the terms of this Plan at the time of such
amendment or modification; provided that
no such amendment or modification shall adversely affect in a material manner
any right of a Participant under the Award without his written consent, unless
the Committee determines in its discretion that there have occurred or are
about to occur significant changes in the Participant’s position, duties or
responsibilities, or significant changes in economic, legislative, regulatory,
tax, accounting or cost/benefit conditions that are determined by the Committee
in its discretion to have or to be
expected to have a substantial effect on the performance of the Company, or any
affiliate, division or department thereof, on this Plan or on any Award under
this Plan and provided further that the Committee shall not have the authority
to accelerate the time or schedule of any payment in a manner which is not
permitted under Code Section 409A, or to grant or amend any Award in any manner
which would result in an inclusion of any amount in gross income under Code Section
409A(a)(1). The Committee may, in its discretion, permit holders of Awards
under this Plan to surrender outstanding Awards in order to exercise or realize
the rights under other Awards, or in exchange for the grant of new
Awards, or require holders of Awards to surrender outstanding Awards as a
condition precedent to the grant of new Awards under this Plan.

 

Section 14.  Termination of a Participant.  For
all purposes under this Plan, the Committee shall determine whether a
Participant has terminated employment with, or the performance of services for,
the Company; provided, however, an absence or
leave approved by the Company, to the extent permitted by applicable provisions
of the Code, shall not be considered an interruption of employment or
performance of services for any purpose under this Plan.

 

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Section 15.  Dilution and Other Adjustments.  If
any change in the outstanding Common Shares of the Company occurs by reason of
any stock split of or stock dividend on the Common Shares, then, except as
otherwise determined by the Committee, the terms of any outstanding Awards
shall be equitably adjusted. If any change in the outstanding Common Shares
occurs by reason of any split-up, split-off, spin-off, recapitalization, merger,
consolidation, rights offering, reorganization, combination or exchange of
shares, sale by the Company of all of its assets, distribution to shareholders
(other than a stock dividend or a normal cash dividend on the Common Shares),
or other extraordinary or unusual event (other than a stock split of the Common
Stock as provided above), then the Committee may determine, in its discretion,
to terminate all outstanding Awards immediately prior to the consummation of
any such event, or make an equitable adjustment in the terms of any outstanding
Award and/or the number of Common Shares available for Awards. Any such
termination or adjustment made by the Committee and shall be final, conclusive
and binding for all purposes of the Plan. Unless otherwise provided by the
Committee, all outstanding Awards shall terminate immediately prior to the
consummation of any dissolution or liquidation of the Company.

 

Section 16.  Designation of Beneficiary by Participant.  A
Participant may name a beneficiary to receive any payment to which he may be
entitled with respect to any Award under this Plan in the event of his death,
on a written form to be provided by and filed with the Committee, and in a
manner determined by the Committee in its discretion (a “Beneficiary”).
The Committee reserves the right to review and approve Beneficiary
designations. A Participant may change his Beneficiary from time to time in the
same manner, unless such Participant has made an irrevocable designation. Any
designation of a Beneficiary under this Plan (to the extent it is valid and
enforceable under applicable law) shall be controlling over any other
disposition, testamentary or otherwise, as determined by the Committee in its
discretion. If no designated Beneficiary survives the Participant and is living
on the date on which any amount becomes payable to such a Participant’s
Beneficiary, such payment will be made to the legal representatives of the
Participant’s estate, and the term “Beneficiary”
as used in this Plan shall be deemed to include such person or persons. If
there are any questions as to the legal right of any Beneficiary to receive a
distribution under this Plan, the Committee in its discretion may determine
that the amount in question be paid to the legal representatives of the estate
of the Participant, in which event the Company, the Board, the Committee, the
Designated Administrator (if any), and the members thereof, will have no
further liability to anyone with respect to such amount.

 

Section 17.  Financial Assistance.  If the
Committee determines that such action is advisable, the Company may assist any
Participant in obtaining financing from the Company (or under any program of
the Company approved pursuant to applicable law), or from a bank or other third
party, on such terms as are determined by the Committee, and in such amount as
is required to accomplish the purposes of this Plan, including, but not limited
to, to permit the exercise of an Award, the participation therein, and/or the
payment of any taxes with respect thereto. Such assistance may take any form
that the Committee deems appropriate, including, but not limited to, a direct
loan from the Company, a guarantee of the obligation by the Company or the
maintenance by the Company of deposits with such bank or third party.

 

Section 18.  Miscellaneous Provisions.

 

(a)           Any
proceeds from Awards shall constitute general funds of Gaiam.

 

(b)           No
fractional shares may be delivered under an Award, but in lieu thereof a cash
or other adjustment may be made as determined by the Committee in its
discretion.

 

(c)           No
Eligible Person or other person shall have any claim or right to be granted an
Award under this Plan. Determinations made by the Committee under this Plan
need not be uniform and may be made selectively among Eligible Persons under
this Plan, whether or not

 

9

 

such Eligible
Persons are similarly situated. Neither this Plan nor any action taken
hereunder shall be construed as giving any Eligible Person any right to continue
to be employed by or perform services for the Company, and the right to
terminate the employment of or performance of services by Eligible Persons at
any time and for any reason is specifically reserved.

 

(d)           No
Participant or other person shall have any right with respect to this Plan, the
Common Shares reserved for issuance under this Plan or in any Award, contingent
or otherwise, until written evidence of the Award shall have been delivered to
the recipient and all the terms, conditions and provisions of this Plan and the
Award applicable to such recipient (and each person claiming under or through
him) have been met.

 

(e)           No
Common Shares, Other Gaiam Securities or property, other securities or property
or other forms of payment shall be issued hereunder with respect to any Award
unless counsel for Gaiam shall be satisfied that such issuance will be in
compliance with applicable law and any applicable rules of any stock exchange
or other market quotation system on which Common Shares are listed.

 

(f)            It
is the intent of Gaiam that this Plan comply in all respects with Rule 16b-3
and Section 162(m) with respect to Awards granted to executive officers of
Gaiam, that any ambiguities or inconsistencies in construction of this Plan be
interpreted to give effect to such intention and that if any provision of this
Plan is found not to be in compliance with Rule 16b-3 or Section 162(m), such
provision shall be deemed null and void with respect to Awards granted to
executive officers of Gaiam to the extent required to permit such Awards to
comply with Rule 16b-3 and Section 162(m). It is also the intent of Gaiam that
this Plan comply in all respects with the provisions of the Code providing
favorable treatment to Incentive Stock Options, that any ambiguities or inconsistencies
in construction of this Plan be interpreted to give effect to such intention
and that if any provision of this Plan is found not to be in compliance with
the Incentive Stock Option provisions of the Code, such provision shall be
deemed null and void with respect to Incentive Stock Options granted to
employees of the Company to the extent required to permit such Incentive Stock
Options to receive favorable treatment under the Code.

 

It is the intent of Gaiam that this Plan comply in all respects with
any applicable provisions of Code Section 409A with respect to Awards granted
under this plan and any amendment or revision of such Awards, that any
ambiguities or inconsistencies in construction of this Plan be interpreted to
give effect to such intention and that if any provision of this Plan is found
not to be in compliance with any applicable provisions of Code Section 409A
such Plan provision shall be deemed null and void to the extent required to
permit such Awards to comply with any applicable provisions of Code Section
409A. Specifically, the Committee shall not have the authority to accelerate
the time or schedule of any payment in a manner which is not permitted under
Code section 409A or the regulations issued thereunder, or to grant or amend
any Award in any manner which would result in an inclusion of any amount in
gross income under Code Section 409A(a)(1).

 

(g)           The
Company shall have the right to deduct from any payment made under this Plan
any federal, state, local or foreign income or other taxes required by law to
be withheld with respect to such payment. It shall be a condition to the
obligation of Gaiam to issue Common Shares, Other Gaiam Securities or property,
other securities or property, or other forms of payment, or any combination
thereof, upon exercise, settlement or payment of any Award under this Plan,
that the Participant (or any Beneficiary or person entitled to act) pay to
Gaiam, upon its demand, such amount as may be required by the Company for the
purpose of satisfying any liability to withhold federal, state, local or
foreign income or other taxes. If the amount requested

 

10

 

is not paid, Gaiam
may refuse to issue Common Shares, Other Gaiam Securities or property, other securities
or property, or other forms of payment, or any combination thereof.
Notwithstanding anything in this Plan to the contrary, the Committee may, in
its discretion, permit an Eligible Person (or any Beneficiary or person
entitled to act) to elect to pay a portion or all of the amount requested by
the Company for such taxes with respect to such Award, at such time and in such
manner as the Committee shall deem to be appropriate (including, but not
limited to, by authorizing Gaiam to withhold, or agreeing to surrender to Gaiam
on or about the date such tax liability is determinable, Common Shares, Other
Gaiam Securities or property, other securities or property, or other forms of
payment, or any combination thereof, owned by such person or a portion of such
forms of payment that would otherwise be distributed, or have been distributed,
as the case may be, pursuant to such Award to such person, having a Fair Market
Value equal to the amount of such taxes).

 

(h)           The
expenses of this Plan shall be borne by the Company; provided,
however, the Company may recover from a Participant or his
Beneficiary, heirs or assigns any and all damages, fees, expenses and costs
incurred by the Company arising out of any actions taken by a Participant in
breach of this Plan or any agreement evidencing such Participant’s Award.

 

(i)            This
Plan shall be unfunded. The Company shall not be required to establish any
special or separate fund or to make any other segregation of assets to assure
the payment of any Award under this Plan, and rights to the payment of Awards
shall be no greater than the rights of the Company’s general creditors.

 

(j)            By
accepting any Award or other benefit under this Plan, each Participant and each
person claiming under or through him shall be conclusively deemed to have
indicated his acceptance and ratification of, and consent to, any action taken
under this Plan by the Company, the Board, the Committee or the Designated
Administrator (if applicable).

 

(k)           The
appropriate officers of the Company shall cause to be filed any reports,
returns or other information regarding Awards hereunder of any Common Shares
issued pursuant hereto as may be required by applicable law and any applicable
rules of any stock exchange or other market quotation system on which Common
Shares are listed.

 

(l)            The
validity, construction, interpretation, administration and effect of this Plan,
and of its rules and regulations, and rights relating to this Plan and to
Awards granted under this Plan, shall be governed by the substantive laws, but
not the choice of law rules, of the State of Colorado.

 

(m)          Records
of the Company shall be conclusive for all purposes under this Plan or any
Award, unless determined by the Committee to be incorrect.

 

(n)           If
any provision of this Plan or any Award is held to be illegal or invalid for
any reason, the illegality or invalidity shall not affect the remaining
provisions of this Plan or any Award, but such provision shall be fully
severable, and this Plan or Award, as applicable, shall be construed and enforced
as if the illegal or invalid provision had never been included in this Plan or
Award, as applicable.

 

(o)           The
terms of this Plan shall govern all Awards under this Plan and in no event
shall the Committee have the power to grant any Award under this Plan that is
contrary to any of the provisions of this Plan.

 

11

 

(p)           For
purposes of interpretation of this Plan, the masculine pronoun includes the
feminine and the singular includes the plural wherever appropriate.

 

Section 19.  Plan Amendment or Suspension.  This
Plan may be amended or suspended in whole or in part at any time from time to
time by the Board. No amendment of this Plan shall adversely affect in a
material manner any right of any Participant with respect to any Award
previously granted without such Participant’s written consent, except as
permitted under Section 13.

 

Section 20.  Plan Termination.  This Plan
shall terminate upon the earlier of the following dates or events to occur:

 

(a)           upon
the adoption of a resolution of the Board terminating this Plan; or

 

(b)           the
tenth anniversary of the Effective Date; provided, however,
that the Board may, prior to such date, extend the term of this Plan for an
additional period of up to five years for the grant of Awards other than
Incentive Stock Options. No termination of this Plan shall materially alter or
impair any of the rights or obligations of any person, without his consent,
under any Award previously granted under this Plan, except
that subsequent to termination of this Plan, the Committee may make amendments
or modifications permitted under Section 13.

 

Section 21.  Effective Date.  This Plan shall
be effective, and Awards may be granted under this Plan, on or after the
Effective Date.

 

12

 

APPENDIX
A

 

The following terms shall
have the meaning indicated:

 

(a)           “Actual Value” has the meaning set
forth in Section 9.

 

(b)           “Associated Award” shall mean an
Award granted concurrently or subsequently in conjunction with another Award.

 

(c)           “Award” shall mean an award of rights
to an Eligible Person under this Plan.

 

(d)           “Award Period” has the meaning set
forth in subsection 9(b).

 

(e)           “Beneficiary” has the meaning set
forth in Section 16.

 

(f)            “Board” shall mean the board of
directors of Gaiam.

 

(g)           “Code” shall mean the Internal
Revenue Code of 1986, as it now exists or may be amended from time to time, and
the rules and regulations promulgated thereunder, as they may exist or may be
amended from time to time.

 

(h)           “Committee” shall mean the person or
persons responsible for administering the Plan. The Board shall constitute the
Committee until the Board appoints a Board Committee, after which time the
Board Committee shall constitute the Committee, provided, however, that at any
time the Board may designate itself as the Committee or designate itself to
administer certain of the Committee’s authority under the Plan, including
administering certain Awards under the Plan. The Board or the Board Committee
may designate a Designated Administrator to constitute the Committee or to
administer certain of the Committee’s authority under the Plan, including
administering certain Awards under the Plan, subject to the right of the Board
or the Board Committee, as applicable, to revoke its designation at any time
and to make such designation on such terms and conditions as it may determine
in its discretion. For purposes of this definition, the “Board Committee” shall mean a committee of the
Board designated by the Board to administer this Plan. Except as otherwise
determined by the Board, the Board Committee (i) shall be comprised of not
fewer than two directors, (ii) shall meet any applicable requirements under
Rule 16b-3, including any requirement that the Board Committee consist of “nonemployee
directors” (as defined in Rule 16b-3), (iii) shall meet any applicable
requirements under Section 162(m), including any requirement that the Board
Committee consist of “outside directors” (as defined in Treasury Regulation §1.162-27(e)(3)(i)
or any successor regulation), and (iv) shall meet any applicable requirements
of any stock exchange or other market quotation system on which Common Shares
are listed. For purposes of this definition, the “Designated Administrator” shall mean a person or
person designated by the Board or a Board Committee to act as a Designated
Administrator pursuant to this Plan. Except as otherwise determined by the
Board, a Designated Administrator shall only be appointed if Rule 16b-3 permits
such appointment and the exercise of any authority without adversely affecting
the ability of Awards to officers of Gaiam to comply with the conditions for
Rule 16b-3 or Section 162(m).

 

(i)            “Company” shall mean Gaiam and any
parent, subsidiary or affiliate of Gaiam.

 

13

 

(j)            “Common Shares” shall mean shares of
Class A common stock, par value $0.0001 per share, of Gaiam and stock of any
other class into which such shares may thereafter be changed.

 

(k)           “Effective Date” shall June 1, 1999.

 

(l)            “Eligible Person(s)” shall mean those
persons who are full or part-time employees of the Company or other individuals
who perform services for the Company, including, without limitation, directors
who are not employees of the Company and consultants and independent
contractors who perform services for the Company.

 

(m)          “Exchange Act” shall mean the Securities Exchange Act of
1934, as it now exists or may be amended from time to time, and the rules
promulgated thereunder, as they may exist or may be amended from time to time.

 

(n)           “Fair Market Value” shall mean such
value rounded up to the nearest cent as determined by the Committee in
accordance with applicable law.

 

(o)           “Incentive Stock Option” shall mean a
Stock Option that is an incentive stock option as defined in Section 422 of the
Code. Incentive Stock Options are subject, in part, to the terms, conditions
and restrictions described in Section 6.

 

(p)           “Maximum Value” has the meaning set
forth in subsection 9(a).

 

(q)           “Gaiam” shall mean Gaiam, Inc., a
Colorado corporation.

 

(r)           “Nonqualified Stock Option” shall
mean a Stock Option that is not an incentive stock option as defined in Section
422 of the Code. Nonqualified Stock Options are subject, in part, to the terms,
conditions and restrictions described in Section 6.

 

(s)           “Other Gaiam Securities” shall mean
Gaiam securities (which may include, but need not be limited to, unbundled
stock units or components thereof, debentures, preferred stock, warrants,
securities convertible into Common Shares or other property) other than Common
Shares.

 

(t)            “Participant” shall mean an Eligible
Person to whom an Award has been granted under this Plan.

 

(u)           “Performance Grant” shall mean an
Award subject, in part, to the terms, conditions and restrictions described in
Section 9, pursuant to which the recipient may become entitled to receive
cash, Common Shares, Other Gaiam Securities or property, or other forms of
payment, or any combination thereof, as determined by the Committee.

 

(v)            “Permitted Transferee” means
(i) any person defined as an employee in the Instructions to Registration
Statement Form S-8 promulgated by the Securities and Exchange Commission, as
such Form may be amended from time to time, which persons include, as of the
date of adoption of the Plan, (a) executors, administrators or beneficiaries of
the estates of deceased Participants, guardians or members of a committee for
incompetent former Participants, or similar persons duly authorized by law to
administer the estate or assets of former Participants, and (b) Participants’
family members who acquire Awards from the Participant other than for value,
through a gift or a domestic relations order and (ii) any trust established for
the benefit of

 

14

 

any person
described in clause (i). For purposes of this definition, “family
member” includes any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the
Participant’s household (other than a tenant or employee), a trust in which
these persons have more than fifty percent of the beneficial interest, a
foundation in which these persons (or the Participant) control the management
of assets, and any other entity in which these persons (or the Participant) own
more than fifty percent of the voting interests. For purposes of this
definition, neither (i) a transfer under a domestic relations order in
settlement of marital property rights; nor (ii) a transfer to an entity in
which more than fifty percent of the voting interests are owned by family
members (or the Participant) in exchange for an interest in that entity is
considered a transfer for “value”.

 

(w)           “Plan” shall mean this Gaiam, Inc.
1999 Long-Term Incentive Plan.

 

(x)           “Purchased Option” shall mean a Stock
Option that is sold to an Eligible Person at a price determined by the
Committee. Purchased Options are subject, in part, to the terms, conditions and
restrictions described in Section 6.

 

(y)           “Restricted Period” has the meaning
set forth in subsection 8(b).

 

(z)           “Restricted Stock” shall mean an
Award of Common Shares that are issued subject, in part, to the terms,
conditions and restrictions described in Section 8.

 

(aa)         “Rule 16b-3” shall mean Rule 16b-3
promulgated by the Securities and Exchange Commission under the Exchange Act
and any successor rule.

 

(bb)         “Section 162(m)” shall mean §162(m)
of the Code, any rules or regulations promulgated thereunder, as they may exist
or may be amended from time to time, or any successor to such section.

 

(cc)         “Section 409A”
shall mean §409A of the Code, any rules or regulations promulgated
thereunder, as they may exist or may be amended from time to time, or any
successor to such section.

 

(dd)         “Stock Appreciation Right” shall mean
an Award of a right to receive (without payment to Gaiam) cash, Common Shares,
Other Gaiam Securities or property, or other forms of payment, or any
combination thereof, as determined by the Committee, based on the increase in
the value of the number of Common Shares specified in the Stock Appreciation
Right. Stock Appreciation Rights are subject, in part, to the terms, conditions
and restrictions described in Section 7.

 

(ee)         “Stock Option” shall mean an Award of
a right to purchase Common Shares. The term Stock Option shall include
Nonqualified Stock Options, Incentive Stock Options and Purchased Options.

 

(ff)           “Ten Percent Employee” shall mean an
employee of the Company who owns stock representing more than ten percent of
the voting power of all classes of stock of Gaiam or any parent or subsidiary
of Gaiam.

 

(gg)         “Treasury Regulation” shall mean a
final, proposed or temporary regulation of the Department of Treasury under the
Code and any successor regulation.

 

15Exhibit 10.5

 

SECOND LEASE AMENDMENT

 

THIS
SECOND LEASE AMENDMENT (the “Amendment”) is executed this 5th day of October,
2005 and effective as of the 1st day of October, 2005  by and between DUGAN FINANCING LLC, a
Delaware limited liability company (“Landlord”), and GAIAM, INC., a Colorado
corporation (“Tenant”).

 

W  I  T  N  E
S  S  E  T  H :

 

WHEREAS, Duke-Weeks Realty Limited Partnership, as predecessor in
interest to Landlord, and Tenant entered into a certain lease dated December 16,
1999, as amended April 12, 2000 (collectively, the “Lease”), whereby
Tenant leases from Landlord certain premises consisting of approximately
208,120 square feet of space (the “Leased Premises”) in a building commonly
known as World Park at Union Centre, Building No. 8, located at 9107
Meridian Way, Cincinnati, Ohio 45069; and

 

WHEREAS, Landlord
and Tenant desire to extend the Lease Term; and

 

WHEREAS,
Landlord and Tenant desire to amend certain provisions of the Lease to reflect
such extension and other changes to the Lease;

 

NOW, THEREFORE,
in consideration of the foregoing premises, the mutual covenants herein
contained and each act performed hereunder by the parties, Landlord and Tenant
hereby agree that the Lease is amended as follows:

 

1.             Incorporation
of Recitals.  The above recitals are
hereby incorporated into this Amendment as if fully set forth herein.

 

2.             Extension
of Lease Term.  The Lease Term is
hereby extended through 

September 30, 2008.

 

3.             Amendment
of Section 1.01.  Basic Lease
Provisions and Definitions.  Commencing
October 1, 2005, Section 1.01 of the Lease is hereby amended
by deleting subsections D, E, F, H and M and substituting the following in lieu
thereof:

 

“D.          Minimum
Annual Rent:

 

	
  October 1,
  2005 - September 30, 2006

  	
   

  	
  $

  	
  613,953.96

  	
   

  
	
  October 1, 2006 - September 30, 2007

  	
   

  	
  $

  	
  628,522.44

  	
   

  
	
  October 1, 2007 - September 30, 2008

  	
   

  	
  $

  	
  645,171.96;

  	
   

  

 

E.             Monthly
Rental Installments:

 

	
  October 1,
  2005 - September 30, 2006

  	
   

  	
  $

  	
  51,162.83 per month

  	
   

  
	
  October 1, 2006 - September 30, 2007

  	
   

  	
  $

  	
  52,376.87 per month

  	
   

  
	
  October 1, 2007 - September 30, 2008

  	
   

  	
  $

  	
  53,764.33 per month;

  	
   

  

 

F.             Landlord’s
Share of Expenses:  $0.00;

 

H.            Lease
Term:  extended through September 30,
2008;

 

M.           Address
for payments and notices as follows:

 

	
  Landlord:

  	
  Dugan Financing
  LLC

  
	
   

  	
  c/o Duke Realty
  Services Limited Partnership

  
	
   

  	
  Attn.: Senior
  Property Manager

  
	
   

  	
  4555 Lake Forest
  Drive, Suite 400

  
	
   

  	
  Cincinnati, OH
  45242

  

 

 

	
  With a copy to:

  	
  Dugan Financing
  LLC

  
	
   

  	
  c/o Duke Realty
  Services Limited Partnership

  
	
   

  	
  Attn: Jeff Behm

  
	
   

  	
  600 East 96th
  Street, Suite 100

  
	
   

  	
  Indianapolis, IN
  46240

  
	
   

  	
   

  
	
  With payments
  to:

  	
  Dugan Financing
  LLC

  
	
   

  	
  75 Remittance
  Drive, Suite 1128

  
	
   

  	
  Chicago, IL
  60675-1128

  
	
   

  	
   

  
	
  Tenant:

  	
  Gaiam, Inc.

  
	
   

  	
  Attn.: Mark
  Lipien

  
	
   

  	
  360 Interlochen
  Boulevard, Suite 300

  
	
   

  	
  Broomfield, CO
  80021

  
	
   

  	
   

  
	
  With a Copy to:

  	
  Gaiam, Inc.

  
	
   

  	
  9107 Meridian
  Way

  
	
   

  	
  Cincinnati, OH
  45069;”

  

 

 

4.             Amendment
of Section 2.02.  Construction
of Tenant Improvements.  Section 2.02
of the Lease is hereby amended by substituting Exhibit B-2, attached hereto and incorporated herein
by reference, in lieu of Exhibit B-1 attached to the Lease.  Landlord shall ensure that the improvements
set forth in Exhibit B-2
shall be made in accordance with all applicable laws, regulations and building
codes.  Landlord shall use commercially
reasonable speed and diligence to timely complete such improvements.

 

5.             Amendment
of Section 3.02.  Additional
Rent.

 

(a)           Commencing
October 1, 2005, the first sentence of Section 3.02 of the
Lease is hereby deleted and the following is substituted in lieu thereof:

 

“In addition to the
Minimum Annual Rent Tenant shall pay to Landlord for each calendar year during
the Lease Term, as “Additional Rent,” Tenant’s Proportionate Share of all costs
and expenses incurred by Landlord during the Lease Term for Real Estate Taxes
and Operating Expenses for the Building and common areas (collectively “Common
Area Charges”).”

 

(b)           Commencing
October 1, 2005, the portion of the second sentence of Section 3.02
of the Lease that reads “management fees not to exceed four percent (4%) of
gross rent for the Building” is hereby deleted and the following is substituted
in lieu thereof:  “management fees not to
exceed three percent (3%) of gross rent for the Building”.

 

6.             Amendment
of Article 4.  Security
Deposit.  The last two sentences of Article 4
of the Lease are hereby deleted in their entirety and shall be of no further
force or effect.

 

7.             Amendment
of Section 9.02.  Tenant’s
Insurance.  Section 9.02
of the Lease is hereby amended to require in lieu of the limits of the policy
stated in subparagraph (B) thereof the following:  Commercial General Liability Insurance,
including blanket, contractual liability, broad form property damage, personal
injury, completed operations, products liability, and fire damage:  Not less than $3,000,000 Combined Single
Limit for both bodily injury and property damage.

 

8.             Amendment
of Section 16.13.  Option to
Extend.  Section 16.13 of
the Lease is hereby deleted in its entirety and shall be of no further force or
effect.

 

9.             Amendment
of Section 16.14.  Right of
First Refusal.  Section 16.14
of the Lease is hereby deleted in its entirety and shall be of no further force
or effect.

 

 

10.           Amendment
of Article 16.  Article 16
of the Lease is hereby amended by adding the following additional sections:

 

“Section 16.15.  Financial Statements.  During the Lease Term and any extensions
thereof, Tenant shall provide to Landlord on an annual basis, within ninety
(90) days following the end of Tenant’s fiscal year, a copy of Tenant’s most
recent certified and audited financial statements prepared as of the end of
Tenant’s most recent fiscal year.  Such
financial statements shall be prepared in conformity with generally accepted
accounting principles, consistently applied. 
Notwithstanding the foregoing, if (i) the named tenant, Gaiam, Inc.,
is Tenant, (ii) Tenant’s financial statements are publicly available, and (iii) such
statements comply with the provisions hereinabove, then Landlord shall not
request Tenant’s financial statements from Tenant.

 

Section 16.16.  ERISA Matters.

 

(a)           Tenant
acknowledges that it has been advised that an affiliate of Landlord is a
collective investment fund (the “Fund”) which holds the assets of one or more
employee benefit plans or retirement arrangements which are subject to Title I
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)
and/or Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”)
(each a “Plan”), and with respect to which Morgan Guaranty Trust Company of New
York (“MGT”) is the Trustee and that, as a result, Landlord may be prohibited
by law from engaging in certain transactions.

 

(b)           Landlord
hereby represents and warrants to Tenant that, as of the date hereof, the only
Plans whose assets are invested in the Fund which, together with the interests
of any other Plans maintained by the same employer or employee organization,
represent a collective interest in the Fund in excess of ten percent (10%) of
the total interests in the Fund (each, a “10% Plan”) are referenced on Exhibit E (collectively, the “Existing
10% Plan”).

 

(c)           Tenant
represents and warrants that as of the date hereof, and at all times while it
is a Tenant under this Lease, one of the following statements is, and will
continue to be, true:  (1) Tenant is
not a “party in interest” (as defined in Section 3(14) of ERISA) or a “disqualified
person” (as defined in Section 4975 of the Code) (each, a “Party in
Interest”) with respect to the Existing 10% Plan or, (2) if Tenant is a
Party in Interest, that:

 

(A)          neither
Tenant nor its “affiliate” (as defined in Section V(c) of PTCE 84-14,
“Affiliate”) has, or during the immediately preceding one (1) year has,
exercised the authority to either:  (i) appoint
or terminate MGT as the qualified professional asset manager (as defined in Section V(a) of
PTCE 84-14, “QPAM”) of any of the assets of the Existing 10% Plan with respect
to which Tenant or its Affiliate is a Party in Interest; or (ii) negotiate
the terms of the management agreement with MGT, including renewals or
modifications thereof, on behalf of the Existing 10% Plan; and

 

(B)           neither
Tenant nor any entity controlling, or controlled by Tenant owns a five percent
(5%) or more interest (within the meaning of PTCE 84-14, “5% Interest”) in J.P.
Morgan Chase & Co.

 

(d)           In the
event that Landlord or the Fund notifies Tenant in writing that a Plan other
than the Existing 10% Plan may become a 10% Plan, Tenant will, within ten (10) days
of such notification, inform the Fund in writing as to whether it can make the
same representations which it made in subsection (c) of this Section with
respect to such prospective 10% Plan. 
Thereafter, if based on such representations made by Tenant such Plan
becomes a 10% Plan, Tenant represents and warrants that, at all times during
the period Tenant is a tenant 

 

 

under
the Lease, one of the statements set forth in subsection (c) will be
true with respect to such 10% Plan.

 

Section 16.17. 
Option to Extend.

 

(a)           Grant
and Exercise of Option.  Provided
that (i) no default has occurred and is then continuing, (ii) the
creditworthiness of Tenant is then reasonably acceptably to Landlord, and (iii) Tenant
originally named herein [or its Permitted Transferee] remains in possession of
and has been continuously operating in the entire Leased Premises throughout
the Lease Term, Tenant shall have one (1) option to extend the Lease Term
for one (1) additional period of three (3) years (the “Extension Term”).  The Extension Term shall be upon the same
terms and conditions contained in the Lease except (x) Tenant shall not have
any further option to extend, (y) any improvement allowances or other
concessions applicable to the Leased Premises under the Lease shall not apply
to the Extension Term, and (z) the Minimum Annual Rent shall be adjusted as set
forth herein (“Rent Adjustment”).  Tenant
shall exercise such option by delivering to Landlord, no later than six (6) months
prior to the expiration of the current Lease Term, written notice of Tenant’s
desire to extend the Lease Term.  Tenant’s
failure to properly exercise such option shall be deemed a waiver of such
option.  If Tenant properly exercises its
option to extend, Landlord shall notify Tenant of the Rent Adjustment no later
than ninety (90) days prior to the commencement of the Extension Term.  Tenant shall be deemed to have accepted the
Rent Adjustment if it fails to deliver to Landlord a written objection thereto
within five (5) business days after receipt thereof.  If Tenant properly exercises its option to
extend, Landlord and Tenant shall execute an amendment to the Lease (or, at
Landlord’s option, a new lease on the form then in use for the Building)
reflecting the terms and conditions of the Extension Term within thirty (30)
days after Tenant’s acceptance (or deemed acceptance) of the Rent Adjustment.

 

(b)           Rent
Adjustment.  The Minimum Annual Rent
for the Extension Term shall be an amount equal to the Minimum Annual Rent then
being quoted by Landlord to prospective renewing tenants of the Building for
space of comparable size and quality and with similar or equivalent
improvements as are found in the Building, and if none, then in similar
buildings in the Park; provided, however, that in no event shall the Minimum
Annual Rent during the Extension Term be less than the highest Minimum Annual
Rent payable during the immediately preceding term.  The Monthly Rental Installments shall be an
amount equal to one-twelfth (1/12) of the Minimum Annual Rent for the Extension
Term and shall be paid at the same time and in the same manner as provided in
the Lease.”

 

11.           Acknowledgment
of Completion of Improvements.  Tenant hereby acknowledges that the
improvements designated as Landlord’s obligations in Exhibit B-1 of
the Lease have been completed in a satisfactory manner.

 

12.           Brokerage
Commissions.  The parties hereby
represent and warrant that the only real estate brokers involved in the
negotiation and execution of this Amendment are Duke Realty Services Limited
Partnership, representing Landlord, and Colliers Turley Martin Tucker,
representing Tenant.  Each party shall
indemnify the other party from any and all liability for the breach of this
representation and warranty on its part and shall pay any compensation to any
other broker or person who may be entitled thereto.

 

13.           Tenant’s
Representations and Warranties.  The
undersigned represents and warrants to Landlord that (i) Tenant is duly
organized, validly existing and in good standing in accordance with the laws of
the state under which it was organized; (ii) all action necessary to
authorize the execution of this Amendment has been taken by Tenant; and (iii) the
individual executing and delivering this Amendment on behalf of Tenant has been
authorized to do so, and such execution and delivery shall bind Tenant.  Tenant, at Landlord’s request, shall provide
Landlord with evidence of such authority.

 

 

14.           Examination
of Amendment.  Submission of this
instrument for examination or signature to Tenant does not constitute a
reservation or option, and it is not effective until execution by and delivery
to both Landlord and Tenant.

 

15.           Definitions.  Except as otherwise provided herein, the
capitalized terms used in this Amendment shall have the definitions set forth
in the Lease.

 

16.           Incorporation.  This Amendment shall be incorporated into and
made a part of the Lease, and all provisions of the Lease not expressly
modified or amended hereby shall remain in full force and effect.

 

IN
WITNESS WHEREOF, the parties have caused this Amendment to be executed on the
day and year first written above.

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  DUGAN FINANCING LLC,

  
	
   

  	
  a Delaware
  limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Dugan Realty,
  L.L.C., its sole member

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Duke Realty
  Limited Partnership,

  
	
   

  	
   

  	
  its manager

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Duke Realty
  Corporation,

  
	
   

  	
   

  	
  its general
  partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
  Kevin T. Rogus

  
	
   

  	
   

  	
  Senior Vice President

  
	
   

  	
   

  
								

 

	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  GAIAM, INC., a
  Colorado corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Printed:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}]]