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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 trans
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