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EXHIBIT 2.6
ASSIGNMENT, ASSUMPTION AND PLEDGE AGREEMENT
This Assignment, Assumption and Pledge Agreement (this
"AGREEMENT") is
made and entered into as of March 21, 2005, by and between
Genius Products,
Inc., a Delaware corporation ("PLEDGEE"), and American Vantage
Companies, a
Nevada corporation ("PLEDGOR").
WHEREAS, Pledgee and Pledgor are parties to that certain
Agreement and
Plan of Merger dated as of March 21, 2005 (the "MERGER
AGREEMENT"), pursuant to
which Pledgee will acquire the Company (as defined in the Merger
Agreement);
WHEREAS, as a further inducement to Pledgor to enter into
and
consummate the transactions contemplated by the Merger
Agreement, Pledgee
desires to assign and transfer certain assets to Pledgor,
following the
consummation of the transactions contemplated by the Merger
Agreement;
WHEREAS, as a further inducement to Pledgee to enter into
and
consummate the transactions contemplated by the Merger
Agreement, Pledgee
desires to assign, and Pledgor desires to assume, certain
obligations of the
Company, on a going-forward basis, following the consummation of
the
transactions contemplated by the Merger Agreement;
WHEREAS, American Vantage Media, Inc. is party to a separate
employment
agreement dated as of February 6, 2004 with each of David J.
Bartis ("BARTIS")
and Douglas Liman ("LIMAN") (each an "Employment Agreement" and
collectively,
the "EMPLOYMENT AGREEMENTS"); and
WHEREAS, the execution and delivery of this Agreement by the
parties
hereto is a condition to the closing of the transactions
contemplated by the
Merger Agreement.
NOW, THEREFORE, for and in consideration of the premises and the
mutual
covenants contained herein, and for other good and valuable
consideration, the
receipt, adequacy and legal sufficiency of which are hereby
acknowledged, the
parties do hereby agree as follows:
1. CAPITALIZED TERMS. Capitalized terms used but not defined
herein
shall have the meanings for such terms that are set forth in the
Merger
Agreement.
2. CERTAIN DEFINITIONS.
(a) "ASSIGNMENT OF OBLIGATIONS" has the meaning set forth in
SECTION 3 hereof.
(b) "CERTIFICATES" means the certificate or certificates
evidencing ownership of the Collateral.
(c) "COLLATERAL" means 75,000 shares of Purchaser Common
Stock
registered in the name of Pledgor and/or its Affiliates, which
comprises a
portion of the Merger Consideration, to the extent not released
and distributed
by Pledgee to Pledgor in accordance with Section 10(b)
hereof.
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(d) "DEFAULT" has the meaning set forth in SECTION 8 hereof.
(e) "OBLIGATIONS" has the meaning set forth in SECTION 3
hereof.
3. ASSIGNMENT AND ASSUMPTION. Effective as of immediately
following the
Effective Time, (i) Pledgee hereby assigns, sells, transfers and
sets over to
Pledgor all right, title and interest in and to those assets set
forth on
SCHEDULE 1 annexed hereto except for those Fees (as such term is
defined in the
Employment Agreements) relating to such assets due to Bartis and
Liman pursuant
to Section 10 of the Employment Agreements (collectively,
"PARTICIPATIONS"),
free and clear of any and all liens or encumbrances in respect
thereof; and (ii)
Pledgee hereby assigns, sells, transfers and sets over
(collectively, the
"ASSIGNMENT OF OBLIGATIONS") to Pledgor, Pledgee's obligations
and liabilities
set forth on SCHEDULE 2 annexed hereto, which the parties
expressly agree shall
not include any obligations or liabilities relating to or
arising out of the
Participations (collectively, the "OBLIGATIONS"), PROVIDED THAT,
in no event
shall Pledgor be liable for any Obligation in respect of (i)
Bartis unless and
until Bartis terminates his Employment Agreement for Good Reason
(as such term
is defined in his Employment Agreement) pursuant to Section 7
thereof and (ii)
Liman unless and until Liman terminates his Employment Agreement
for Good Reason
(as such term is defined in his Employment Agreement) pursuant
to Section 7
thereof. Subject to the above proviso, Pledgor hereby accepts
the Assignment of
Obligations and assumes and agrees to pay and discharge all of
the Obligations
when due from and after the Closing. In the event that Pledgor
fails to pay any
Obligation when it becomes due, and Pledgee shall pay such
amount on behalf of
Pledgor, then Pledgor shall pay the amount of such Obligation to
Pledgee with
such amount carrying interest at a rate of 10.0% per annum from
the due date for
such Obligation until satisfied in accordance with Section 10 of
this Agreement.
4. PLEDGE AND SECURITY INTEREST. To secure Pledgor's obligations
to
Pledgee to assume and fully discharge when due all of the
Obligations, Pledgor
hereby pledges the Collateral to Pledgee and grants to Pledgee a
continuing
security interest in the Collateral.
5. DEPOSIT OF COLLATERAL. Pledgor shall (i) deliver the
Certificate(s)
to Pledgee and (ii) deliver stock power(s) in the form of
EXHIBIT A attached
hereto, duly executed in blank, for the Collateral to
Pledgee.
6. WARRANTIES AND COVENANTS OF PLEDGOR.
Pledgor represents, warrants, covenants and agrees as
follows:
(a) NOVATIONS. Pledgor shall use its best efforts to seek
novations of all of the Obligations such that Pledgor is the
obligor of record
with respect to all of the Obligations. Notwithstanding anything
herein or in
the Merger Agreement to the contrary and for the avoidance of
doubt, upon and
following the Assignment of Obligations, Pledgor shall be the
primary obligor
with respect to all of the Obligations.
(b) OWNERSHIP OF COLLATERAL. Pledgor has good, valid
marketable title to the Collateral, free from any liens,
charges, pledges,
security interests, encumbrances, rights to purchase or other
claim or interest
of any kind, other than those granted herein.
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(c) LIENS. Pledgor will neither create nor permit the
creation
of any lien charge, pledge, security interest, encumbrance or
other claim or
interest in the Collateral without the prior written consent of
Pledgee.
(d) FIRST-PRIORITY SECURITY INTEREST. Pledgee will at all
times have a valid, perfected first-priority security interest
in the
Collateral.
(e) TRANSFERS. Pledgor will neither make nor permit any
transfer of the Collateral without the prior written consent of
Pledgee.
(f) REIMBURSEMENT OF EXPENSES. Pledgor will reimburse P
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