X0202 4 2005-06-30 0 0001089872 GAIAM INC GAIA 0001326150 Prentice Capital Management, LP 623 FIFTH AVENUE, 32ND FLOOR NEW YORK NY 10022 0 0 1 0 0001326156 Zimmerman Michael 623 FIFTH AVENUE, 32ND FLOOR NEW YORK NY 10022 0 0 1 0 Class A Common Stock ("Common Stock") 2005-06-30 4 X 0 1821317 6.63 A 3388519 I See Put Option (obligation to buy) 6.63 2005-06-30 4 X 0 1 6.63 D 2005-06-16 2005-07-01 Common Stock 1821317 0 I See Prentice Capital Management, LP (the "Investment Manager") 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 Common Stock reported in this Form 4. Michael Zimmerman ("Mr. Zimmerman") is responsible for the supervision and conduct of all investment activities of the Investment Manager, including, without limitation, for all investment decisions with respect to the assets of such investment funds and managed accounts. The Investment Manager does not directly own any shares of Common Stock. Mr. Zimmerman personally owns 8,705 shares of Common Stock. The Investment Manager may be deemed to beneficially own 3,376,814 shares of Common Stock held by the investment funds and managed accounts. Mr. Zimmerman may be deemed to beneficially own 3,388,519 shares of Common Stock held personally, by the The Michael & Holly Zimmerman Family Foundation Inc. and by the investment funds and managed accounts. Each of the Reporting Persons disclaims any beneficial ownership of the shares of Common Stock included in this report to the extent such beneficial ownership exceeds such Reporting Person's pecuniary interest. The investment funds and managed accounts for which the Investment Manager serves as investment manager entered into an amended and restated stock purchase agreement with Gaiam, Inc. (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 of Common Stock; provided, however, that the Company had the option, at any time prior to 9:00 a.m. New York City time on July 1, 2005, to elect to reduce the aggregate number of shares of Common Stock to be sold to the investment funds and managed accounts to 1,000,000 shares of Common Stock. The Company informed the Reporting Persons on June 30, 2005, that it will not elect to reduce the aggregate number of shares of Common Stock to be sold to the investment funds and managed accounts. Because the Company has informed the Reporting Persons that it will not reduce the aggregate number of shares of Common Stock to be sold to the investment funds and managed accounts, the Put Option may be deemed to be exercised pursuant to an exempt closing of the derivative security under Section 16b. PRENTICE CAPITAL MANAGEMENT, LP, By: /s/ Michael Weiss as Chief Financial Officer 2005-07-05