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EXHIBIT 2.2
GENIUS PRODUCTS, INC.
RESALE AND VOTING AGREEMENT
THIS RESALE AND VOTING AGREEMENT (this "Agreement") is made as of
March
21, 2005 by and among GENIUS PRODUCTS,
INC., a Delaware corporation (the
"Company"), and the Investor (as defined
below).
RECITALS
A. The Company is issuing to American Vantage Companies, a
Nevada
corporation ("AVC"), on the date hereof (i)
7,000,000 shares of Company Common
Stock (the "Initial Shares") and (ii)
warrants to purchase in the aggregate
1,400,000 shares of Company Common Stock
(the "Warrants"), in connection with
that certain Agreement and Plan of Merger,
dated March 21, 2005 (the "Merger
Agreement"), to which each of the Company
and AVC are parties.
B. The obligations of the Company and AVC to consummate the
transactions contemplated by the Merger
Agreement are conditioned, among other
things, upon the execution and delivery of
this Agreement by each of them.
NOW, THEREFORE, in consideration of the mutual premises and
covenants
set forth herein, the parties hereto agree
as follows:
1. DEFINITIONS. Capitalized terms used and not otherwise defined
herein
that are defined in the Merger Agreement
shall have the meanings given such
terms in the Merger Agreement. In addition,
for purposes of this Agreement:
"Affiliate" has the meaning specified in Rule 13e-3 promulgated
under
the Securities Exchange Act of 1934, as
amended.
"Company" has the meaning shown above.
"Company Common Stock" means the Company's common stock, par
value
$0.0001 per share.
"Expiration Date" means, with respect to any Investor, the earlier
of
(i) the date on which such Investor ceases
to constructively or beneficially own
less than 5% of the issued and outstanding
shares of Company Common Stock or
(ii) March 21, 2010.
"Investor Shares" means (a) the Initial Shares issued to AVC on
the
date hereof, (b) any shares of Company
Common Stock issued upon exercise of any
of the Warrants (the "Warrant Shares") and
(c) any securities distributed in
respect of the Initial Shares or the
Warrant Shares prior to the Expiration Date
by reason of a stock dividend, split-up,
recapitalization, reclassification,
combination, merger, exchange of shares or
otherwise.
"Investor" means AVC and its Affiliates.
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"QIB" means a qualified institutional buyer, as such term is
defined
Rule 144A under the Securities Act of 1933,
as amended, but who are not required
to file as an investment adviser under the
Investment Advisers Act of 1940
pursuant to SEC Release No. IA-2333.
"Transfer Restrictions" has the meaning specified in Section
2.2.
2. RESALE AGREEMENT.
2.1 AGREEMENT. The Investor agrees that, except in compliance
with the Transfer Restrictions or with the
prior written consent of the Company,
from the date hereof through the Expiration
Date, Investor will not (a) offer,
pledge, sell, contract to sell, sell any
option or contract to purchase,
purchase any option or contract to sell,
grant any option, right or warrant to
purchase, or otherwise transfer or dispose
of, directly or indirectly, any of
the Investor Shares or Warrants, or any
securities convertible into or
exercisable or exchangeable for any of the
Investor Shares or Warrants, or (b)
enter into any swap or other arrangement
that transfers to another, in whole or
in part, any of the economic consequences
of ownership of any of the Investor
Shares or Warrants, whether any such
transaction described in clause (a) or (b)
above (in each case, a "SALE") is to be
settled by delivery of any Investor
Shares or Warrants, other securities, in
cash or otherwise.
2.2 TRANSFER RESTRICTIONS. For purposes of this Section 2, the
"Transfer Restrictions" are as follows:
(a) Sales in open market transactions, including
sales pursuant to an effective registration
statement or Rule 144, may only be
made (i) at a price per share that is no
less than 85% of the volume
weighted-average closing price per share of
the Company Common Stock on its
primary trading market or exchange during
the ten (10) trading days prior to the
date that the Investor agrees to make such
sale; and (ii) in such volume that,
when combined with all other sales of
Investor Shares during the immediately
preceding ten (10) trading days, is no more
than 15% of the aggregate volume of
trading in Company Common Stock on all
exchanges during the ten (10) trading
days immediately preceding the date of such
sale.
(b) Private Sales to a QIB may only be made (i) to
those entities listed on SCHEDULE A to this
Agreement (which has been provided
to the Company at least one day prior to
the date hereof); (ii) at a price per
share (in the case of Warrants that are
detached from Investor Shares at a price
which when combined with the Warrant
exercise price) that is no less than 85% of
the volume weighted-average closing price
per share of the Company Common Stock
on its primary trading market or exchange
during the ten (10) trading days prior
to the date that the Investor agrees to
make such sale; and (iii) in such volume
(in the case of the Warrants such volume
shall include the shares then issuable
upon exercise of the Warrants) which, when
combined with all other sales of
Investor Shares or Warrants by the Investor
to such QIB or its Affiliates, does
not exceed 3,100,000 shares. The Company
agrees that (x) except as may otherwise
be required by law or judicial process, it
will hold SCHEDULE A and its contents
in strict confidence and will not divulge
the names of the entities listed on
SCHEDULE A to any other party, except for
its CEO and CFO, directors, and such
employees, investment bankers and attorneys
with a need to know the contents of
SCHEDULE A, and (y) until the one-year
anniversary of the date hereof, it will
not contact any party set forth on SCHEDULE
A for any debt or equity financing
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without the prior approval of Jefferies
& Company, Inc., unless at the time of
such contact (1) such party is a
stockholder of the Company and such contact
relates to a debt or equity financing being
offered to all stockholders of the
Company (E.G., a rights offering) or (2)
the Investor then holds less than 10%
of the Initial Shares.
(c) Private Sales to a non-QIB purchaser may only be
made (i) at a price per share (in the case
of Warrants that are detached from
Investor Shares at a price which when
combined with the Warrant exercise price)
that is no less than 85% of the volume
weighted-average closing price per share
of the Company Common Stock on its primary
trading market or exchange during the
ten (10) trading days prior to the date
that the Investor agrees to make such
sale; and (ii) in such volume (in the case
of the Warrants such volume shall
include the shares then issuable upon
exercise of the Warrants) which, when
combined with all other sales of Investor
Shares or Warrants by the Investor to
such purchaser or its Affiliates, does not
exceed (A) 1,000,000 shares or (B)
such amount which, combined with all other
holdings of Company Common Stock by
such purchaser or its Affiliates, does not
exceed 3.0% of the then issued and
outstanding shares of Company Common Stock.
The Investor will be permitted to
rely on a written representation by the
purchaser of its holdings of Company
Common Stock and that of its Affiliates in
complying with the foregoing
restriction.
(d) Sales (i) may only be made, directly or
indirectly, in accordance with applicable
federal and state securities laws or
exemptions to such laws, and (ii) will not
cause the Company to violate any
federal or state securities laws with
respect to the original issuance of
Investor Shares or Warrants to the
Investor. The Investor agrees to indemnify
and hold harmless the Company, together
with its officers, directors, employees
and agents, from and against any and all
losses, claims, actions, damages,
liabilities and expenses arising out of or
resulting from any Sales in violation
of this Section 2.2(d).
(e) Upon a Sale made in accordance with the Transfer
Restrictions, each of the Investor Shares
and Warrants subject to such Sale and
the purchaser/transferee of such Investor
Shares and Warrants shall no longer be
subject to this Agreement.
2.3 EXCEPTIONS. The Transfer Restrictions in Section 2.2 shall
not apply to Sales to an Affiliate of the
Investor if such Affiliate shall have
executed a written agreement, substantially
in the form of this Agreement,
pursuant to which such Affiliate becomes a
party to this Agreement and agrees to
be bound by all the provisions hereof as if
such Affiliate were the Investor.
2.4 ESCROWED SHARES AND PLEDGED SHARES. For so long as any of
the Escrowed Shares or Pledged Shares are
being held pursuant to the Escrow
Agreement or Assumption Agreement, as
applicable, the Investor agrees not to (a)
offer, pledge, sell, contract to sell, sell
any option or contract to purchase,
purchase any option or contract to sell,
grant any option, right or warrant to
purchase, or otherwise transfer or dispose
of, directly or indirectly, any of
such Escrowed Shares or Pledged Shares or
any securities convertible into or
exercisable or exchangeable for any of
them, or (b) enter into any swap or other
arrangement that transfers to another, in
whole or in part, any of the economic
consequences of ownership of any of such
Escrowed Shares or Pledged Shares,
whether any such transaction described in
clause (a) or (b) above is to be
settled by delivery of any shares of
Company Common Stock, other securities, in
cash or otherwise.
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2.5 COOPERATION OF THE COMPANY IN CONNECTION WITH ALL SALES.
The Company shall reasonably cooperate with
Investor in the transfer (each, a
"Transfer") of all Investor Shares and
Warrants subject to Sales made in
accordance with the Transfer Restrictions.
Such cooperation shall include, but
not be limited to, (a) instructing the
tran
