EXHIBIT 99.2
GENIUS PRODUCTS, INC.
RESALE AGREEMENT
THIS RESALE AGREEMENT (this "Agreement") is made as of July 20, 2005 by and
among GENIUS PRODUCTS, INC., a Delaware corporation (the "Company"), and
Xxxxxxxx Capital Corp.("Xxxxxxxx").
RECITALS
A. The Company is issuing to Xxxxxxxx 175,000 shares of Company Common
Stock (the "New Shares") in connection with an amendment, of even date herewith,
to the Company's engagement letter with Xxxxxxxx.
B. The obligations of the Company to issue the New Shares are
contingent upon the execution of this agreement.
NOW, THEREFORE, in consideration of the mutual premises and covenants set forth
herein, the parties hereto agree as follows:
1. DEFINITIONS. 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 March 21, 2010.
"Xxxxxxxx Shares" means (a) the NewShares issued to Xxxxxxxx
on the date hereof, and (b) any securities distributed in respect of the New
Shares prior to the Expiration Date by reason of a stock dividend, split-up,
recapitalization, reclassification, combination, merger, exchange of shares or
otherwise.
"Xxxxxxxx" means Xxxxxxxx and its Affiliates.
"Transfer Restrictions" has the meaning specified in Section
2.2.
2. RESALE AGREEMENT.
2.1 AGREEMENT. Xxxxxxxx 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, Xxxxxxxx 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
Xxxxxxxx Shares, or any securities convertible into or exercisable or
exchangeable for any of Xxxxxxxx Shares, 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 Xxxxxxxx Shares, whether any such
transaction described in clause (a) or (b) above (in each case, a "SALE") is to
be settled by delivery of any Xxxxxxxx Shares, 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) if the price per share of the last trade on the Company's primary
trading market is at or above $1.50, then a sale may only be made 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 Xxxxxxxx agrees to make
such sale; and (ii) in such volume that, when combined with all other sales of
Xxxxxxxx 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) Sales made in bona fide private placements.
(c) 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
Xxxxxxxx Shares to Xxxxxxxx.
(d) Upon a Sale made in accordance with the Transfer
Restrictions, each of Xxxxxxxx Shares subject to such Sale and the
purchaser/transferee of such Xxxxxxxx Shares 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 Xxxxxxxx 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 Xxxxxxxx.
3. REPRESENTATIONS AND WARRANTIES OF COMPANY AND XXXXXXXX.
3.1 Xxxxxxxx hereby represents and warrants to the Company as
follows:
(a) NO INCONSISTENT ARRANGEMENTS. Xxxxxxxx has not
entered into any agreement with respect to Xxxxxxxx Shares which would be
covered by Section 2 if entered into after the date hereof.
(b) POWER; BINDING AGREEMENT. Xxxxxxxx has the
corporate power and authority to enter into and perform all of its obligations
hereunder. The execution, delivery and performance of this Agreement by Xxxxxxxx
will not violate any other agreement to which Xxxxxxxx is a party. This
Agreement has been duly and validly executed and delivered by Xxxxxxxx, and
constitutes a valid and binding agreement of Xxxxxxxx, enforceable against
Xxxxxxxx in accordance with its terms, except that (A) such enforcement may be
subject to applicable bankruptcy, insolvency, moratorium, or other similar laws,
now or hereafter in effect, affecting creditors' rights generally and (B) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
3.2 The Company represents and warrants to Xxxxxxxx as
follows:
(a) Power; Binding Agreement. The Company has the
corporate power and authority to enter into and perform all of its obligations
under this Agreement. This Agreement has been duly and validly executed and
delivered by the Company and constitutes a valid and binding agreement of the
Company, enforceable in accordance with its terms, except that (A) such
enforcement may be subject to applicable bankruptcy, insolvency, moratorium, or
other similar laws, now or hereafter in effect, affecting creditors' rights
generally and (B) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
4. TERMINATION. This Agreement and the covenants,
representations, warranties, and agreements contained herein shall terminate
upon the earlier of the mutual agreement of the parties or the Expiration Date.
Upon any termination of this Agreement, this Agreement shall thereupon become
void and of no further force and effect, and there shall be no liability in
respect of this Agreement on the part of any party hereto or any of its
directors, officers, partners, stockholders, employees, agents, advisors,
representatives or Affiliates; provided, however, that nothing contained herein
shall relieve any party from any liability for such party's willful breach of
this Agreement prior to termination.
5. AMENDMENTS AND WAIVERS. Any term hereof may be amended and the
observance of any term hereof may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of each of the parties hereto.
6. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
be binding upon any transferee, successor in interest, heir or assignee of
Xxxxxxxx or any of Xxxxxxxx Shares, except for transfers of Xxxxxxxx Shares in
open market transactions, including sales pursuant to an effective registration
statement or Rule 144, to a non-Affiliate of Xxxxxxxx.
7. GOVERNING LAW; VENUE. This Agreement is to be construed in
accordance with and governed by the internal laws of the State of Delaware
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
Delaware to the rights and duties of the parties. All disputes and controversies
arising out of or in connection with this Agreement shall be resolved
exclusively by the state and federal courts located in the State of Delaware,
and each party hereto agrees to submit to the jurisdiction of said courts and
agrees that venue shall lie exclusively with such courts.
8. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9. TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
10. NOTICES. Except as may be otherwise provided herein, all
notices, requests, waivers and other communications made pursuant to this
Agreement shall be in writing and shall be conclusively deemed to have been duly
given (a) when hand delivered to the other party against written receipt
therefor; (b) three business days after deposit in the U.S. mail with first
class or certified mail receipt requested postage prepaid and addressed to the
other party at the address set forth below; or (c) the next business day after
deposit with a national overnight delivery service, postage prepaid, addressed
to the parties as set forth below with next business day delivery guaranteed,
provided that the sending party receives a confirmation of delivery from the
delivery service provider. A party may change or supplement the addresses given
above, or designate additional addresses, for purposes of this Section 10 by
giving the other party written notice of the new address in the manner set forth
above.
11. EXPENSES. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled as shall be
determined by a court of competent jurisdiction.
12. SEVERABILITY. The parties hereto agree that each provision of
this Agreement shall be interpreted in such a manner as to be effective and
valid under applicable law. If any provision of this Agreement shall
nevertheless be held to be prohibited by or invalid under applicable law, such
provision shall be effective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Resale
Agreement as of the date first above written.
COMPANY:
GENIUS PRODUCTS, INC.
By: /s/ Xxxxxx Xxxxxxxxxx
Name: Xxxxxx Xxxxxxxxxx, President
Address: 000 Xxxxx Xxxxx Xx, Xxxxx 000
Xxxxxx Xxxxx, XX 00000
XXXXXXXX:
XXXXXXXX CAPITAL CORP.
By: /s/ Xxx Xxxxxxxxxx
Name: Xxx Xxxxxxxxxx
Address: 000 Xxxxxxxx Xxxx., Xxxxx 0000
Xxxxx Xxxxxx, XX 00000
