This excerpt taken from the GAIA 8-K filed Aug 9, 2005.
4.3 Rights To Subscribe For Securities.
(a) In the event that Gaiam proposes to issue any of its equity and/or equity-linked Securities (the Offered Securities), other than Excluded Securities, to any Person (a Proposed New Investor), Gaiam will deliver to Revolution Living a written notice (the Company Notice) (which notice will state the number or amount of the Offered Securities proposed to be issued, the purchase price or exercise price therefor (to the extent known) and any other terms or conditions of the proposed issuance) of such issuance at least 15 days prior to the date of the proposed issuance. For purposes of this Section 4.3, Excluded Securities means Securities offered or issued (i) to officers, directors, employees or consultants of or vendors to Gaiam (other than those offered or issued to Rysavy or his Affiliates, which shall not be Excluded Securities) pursuant to plans or arrangements the terms of which are approved by the Gaiam Board, (ii) to financial institutions or lessors in connection with commercial credit arrangements or equipment financings (so long as they are offered or issued in transactions with primarily financing purposes) the terms of which are approved by the Gaiam Board, (iii) pursuant to the conversion or exercise of convertible or exercisable Securities, (iv) in connection with bona fide acquisitions by Gaiam or its Subsidiaries, whether by merger, consolidation, acquisition of assets, acquisition or exchange of capital stock or otherwise, the terms of which are approved by the Gaiam Board, (v) pursuant to a pro rata stock split or stock dividend, or (vi) pursuant to the Transaction Agreement.
(b) Revolution Living will have the option, exercisable at any time during the 15-day period (the Preemptive Offer Period) after receipt of the Company Notice, by delivering an irrevocable written notice to Gaiam (a Preemptive Offer Acceptance Notice), to subscribe for up to its pro rata share of such Offered Securities based upon the number of shares of Stock owned by Revolution Living at such time and Gaiams Fully-Diluted Capital Stock at such time. In the case of derivative Securities acquired by Revolution Living as a result of the offer or issuance of any employee stock options to Rysavy or his Affiliates, Gaiam shall have the option to condition any exercise or conversion of such Securities sold to Revolution Living on Rysavy or his Affiliates exercising or converting such Securities.
(c) Gaiam may issue to the Proposed New Investor all or any part of such Offered Securities as to which Revolution Livings Preemptive Offer Acceptance Notice has not been given by Revolution Living (the Remaining Securities) within 180 days after expiration of the Preemptive Offer Period, on substantially the same terms set forth in the Company Notice, and at a price no less than 98% of the price referenced in such notice. Upon the closing, which will include full payment to Gaiam, of the sale to the Proposed New Investor of all the Remaining Securities, Revolution Living will purchase from Gaiam, and Gaiam will sell to Revolution Living, the Offered Securities with respect to which a Preemptive Offer Acceptance Notice was delivered by Revolution Living, on the terms specified in the Preemptive Offer Acceptance Notice. In each case, any Offered Securities not purchased by the Proposed New Investor (within such 180 day period) in accordance with this Section 4.3 may not be sold or otherwise disposed of until they are again offered to Revolution Living under the procedures specified in this Section 4.3.