5% SUBORDINATED UNSECURED PROMISSORY NOTE

EXHIBIT 4.01

5% SUBORDINATED UNSECURED PROMISSORY NOTE

$_____________                                                                                                                     February 17, 2009

  This Note is one of several notes aggregating up to Nine Million Five Hundred Thousand Dollars ($9,500,000) in principal amount that may be issued pursuant to the Note and Warrant Purchase Agreement, dated as of February 17, 2009 (as amended, modified or supplemented, the “ Purchase Agreement ”), by and among the Obligor, Genius Products, Inc., a Delaware corporation (the “ Company ”), the Holder and certain other parties (collectively, as the same may be amended or modified from time to time, the “ Notes ”).

1.  Payment, Prepayment.

(a)   Subject to the terms and conditions of this Note, including the Extension (as defined below) and the subordination provisions under the Senior Secured Obligations owing to the SG Lenders, and subject to this Note being earlier accelerated pursuant to the terms hereof, the Principal Amount of this Note shall be due and payable in full to the Holder on December 31, 2010 (the “ Maturity Date ”).

(b)   The Principal Amount of this Note and accrued interest may be prepaid at the election of the Obligor at any time in whole or in part, without penalty or premium, provided, however, Obligor shall not make any Distribution with respect to this Note until and unless the Senior Secured Obligations owing to the SG Lenders have been Paid in Full or consent to such Distribution is received in writing from the SG Lenders.  Any such prepayment will be applied first to interest accrued on this Note and second, if the amount of prepayment exceeds the amount of all such accrued interest, to the payment of the Principal Amount.

(c)   Subject to clause (b) above, the Obligor agrees that it shall not make any payments (including, without limitation, prepayments) of principal and interest, fees or other charges (or redemption, purchase, retirement, defeasance, sinking fund or similar payment) under that certain 5% Subordinated Unsecured Promissory Note, dated December 31, 2008, issued by the obligor in favor of The Weinstein Company Holdings LLC (or its assigns) in the principal amount of $20,000,000 (as the same may be amended or modified from time to time, the “ TWC Note ”) unless the Obligor makes concurrent pro rata payments or prepayments under the Notes; provided, however, that this clause (c) shall not apply to (i) payments made under the TWC Note with the proceeds from the sale of the Notes, and (ii) payments made upon maturity of the TWC Note if, and only if, the Maturity Date of this Note has been extended in accordance with clause (d) below.  For so long as this Note is outstanding, the Obligor shall not amend or modify the TWC Note in a manner adverse to the holders of the Notes, including, without limitation, any change to the principal amount, interest rate or maturity date of the TWC Note, or exchange the TWC Note for (or replace the TWC Note with) other debt of the Obligor, without the prior written consent of a Majority in Interest.

(d)   The Obligor may at its option and in its sole discretion extend the Maturity Date until December 31, 2011 (the “Extension”) provided, that, no later than December 31, 2010, the Obligor or its subsidiaries have entered into a distribution agreement (including any extension of a distribution agreement) with The Weinstein Company LLC or its affiliates (collectively, “TWC”), relating to the distribution of feature film and direct-to-video releases owned or controlled by TWC, on substantially similar terms (or terms more favorable to the Obligor) as the current distribution agreement between the Obligor and TWC, which by its terms does not expire prior to December 31, 2011 (as the same may be amended or modified from time to time, the “ TWC Distribution Agreement ”), and such agreement is effective at the time of such extension.

(e)   Payments under this Note shall be made in U.S. dollars in immediately available funds.

(f)   If any payment on this Note becomes due and payable on a Saturday, Sunday or other date on which commercial banks are authorized or required by law to close, the maturity thereof shall be extended to the next succeeding business day, and with respect to payments of principal, interest thereon shall be payable at the applicable rate during such extension.

(g)   The Obligor agrees to pay all costs and expenses incurred by the Holder in connection with the collection of any amounts due under this Note, including reasonable attorneys’ fees.

(h)   Except with respect to the Senior Secured Obligations, this Note ranks pari passu with all other Notes and other unsecured notes now or hereafter issued.  In  addition, Obligor agrees that it shall not make any payments or prepayments of principal and interest under any Note unless the Obligor makes concurrent pro rata payments or prepayments under all of the Notes.

2.   Interest .

(a) Except as set forth in clause (b) below, any amount due and outstanding hereunder (including, without limitation, the Principal Amount) shall accrue interest at a rate of five percent (5%) per annum, which accrual shall commence as of the date hereof and continue until the Principal Amount is paid.  Accrued interest shall be payable in full on the Maturity Date.

(b) During the period of the Extension, if any, any amount due and outstanding hereunder (including, without limitation, the Principal Amount) shall accrue interest at a rate of ten percent (10%) per annum.

(c) Interest shall be calculated on the basis of the actual number of days elapsed over a year of 360 days and shall accrue daily.  Presentment for payment, notice of dishonor, protest and notice of protest are hereby waived.

3.  Events of Default .  Upon the occurrence of any of the following events:

(a)   default shall be made in the payment of any principal of or interest on this Note, on a date which such payment shall be payable;

(b)   (i) the Obligor shall commence (or petition to commence) any lawsuit, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debtors, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets, or the Obligor shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against the Obligor a proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment, or (B) remains undismissed, undischarged or unbonded for a period of 30 days; or (iii) there shall be commenced against the Obligor a proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) the Obligor shall authorize or take any action in furtherance of, or acquiescence in, any of the acts set forth in clause (i), (ii) or (iii) above; or (v) the Obligor shall generally be unable to, or shall admit in writing its inability to, pay its debts as they become due; or (vi) the business of the Obligor shall cease; or (vii) the TWC Distribution Agreement is terminated during the term of the Extension; or (viii) the Obligor fails to make any payment of principal, interest or any other amount payable under the TWC Note or the SG Credit Agreement as it falls due or any such debt is accelerated; or (ix) the Obligor or the Company materially breaches any representation, warranty, covenant or other term or condition of any Transaction Document, except in the case of a breach of a covenant of any Transaction Document which is curable, only if such breach remains uncured for a period of at least five (5) Business Days; then, and in any such event set forth in clauses (a) and (b) of this Section 3, Holder may, at its option (A) declare all amounts of the Principal Amount outstanding under this Note to be forthwith due and payable, together with any accrued interest hereunder, whereupon this Note shall become forthwith due and payable, without presentment, diligence, demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein to the contrary notwithstanding; provided , that with respect to Events of Default under this Section 3(b)(i) through and including (iv), this Note shall automatically become immediately due and payable with respect to the Principal Amount outstanding under this Note, together with any accrued interest hereunder, and (B) exercise any and all other remedies provided hereunder or available at law or in equity upon the occurrence and continuation of an Event of Default.  The Obligor shall pay all out-of-pocket expenses incurred by the Holder (or its successors and assigns) after a Default, including the fees, charges, and disbursements of any counsel or consultants engaged by Holder to enforce the terms of this Note.

Each event specified in this Section 3 is an “ Event of Default ,” provided there has been satisfied any requirement in connection with such event for the giving of notice, or the lapse of time, or the happening of any further condition, event or act, and such event, whether or not any such requirement has been satisfied, is a “ Default .”

4.  Unconditional Obligations .  The Obligor agrees that its obligations to make payments of principal and interest as provided for herein are independent obligations and shall be absolute and unconditional, and shall not be subject to any defense, counterclaim, setoff or other right, existing or future, which the Obligor may have against the Holder, any other holder hereof or any other person or entity.

5.  Subordination .

(a) Obligor covenants and agrees, and the Holder by its acceptance of this Note (whether upon original issue or upon transfer or assignment), likewise covenants and agrees, notwithstanding anything to the contrary contained herein, that the payment of any and all of the obligations of the Obligor to the Holder evidenced by this Note (the “ Subordinated Debt ”) shall be subordinate and subject in right and time of payment, to the extent and in the manner hereinafter set forth, to the Payment in Full of the Senior Secured Obligations owing to the SG Lenders.

(b) The Obligor agrees that during any time that any Proceeding (defined below) involving the Obligor or any of its Significant Subsidiaries is pending:

(c) Notwithstanding anything to the contrary contained herein, the Obligor shall not make, and the H