EXHIBIT 10.2

 
REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is made and entered into
as of February 17, 2009, by and among Genius Products, Inc., a Delaware
corporation (the “Company”), and the investors from time to time signatory
hereto (each an “Investor” and collectively, the “Investors”).
 
Recitals
 
WHEREAS, pursuant to the terms of that certain Note and Warrant Purchase
Agreement, dated as of the date hereof, among the Company, Genius Products, LLC
(“Genius LLC”) and the Investors (the “Purchase Agreement”), the Company and
Genius have agreed to sell to the Investors and the Investors have agreed to
purchase Notes in an aggregate principal amount of up to $9,500,000 and Warrants
exercisable for that number of shares of Common Stock of the Company (the
“Warrant Shares”) set forth opposite each Investor’s name on Schedule I hereto;
and
 
WHEREAS, in order to induce the Investors to consummate the transactions
contemplated by the Purchase Agreement, the Company has agreed to grant to the
Investors the registration rights set forth in this Agreement.
 
NOW, THEREFORE, the parties hereto, in consideration of the foregoing, the
mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, hereby agree as follows:
 
1.           Definitions.  Capitalized terms used and not otherwise defined
herein that are defined in the Purchase Agreement will have the meanings given
such terms in the Purchase Agreement.  As used in this Agreement, the following
terms have the respective meanings set forth in this Section 1:
 
“Advice” has the meaning set forth in Section 6(c).
 
“Commission” means the Securities and Exchange Commission.
 
“Common Stock” shall mean the common stock of the Company, par value $0.0001 per
share, and any securities into which such common stock may hereafter be
reclassified.
 
“Effective Date” means, as to a Registration Statement, the date on which such
Registration Statement is first declared effective by the Commission.
 
“Effectiveness Date” means, subject in each instance to Section 2(f):
 
(a) with respect to the initial Registration Statement required to be filed
under Section 2(a), the earlier of (i) the 120th day following the Closing Date
(the 150th day if the Commission reviews and has written comments to the initial
Registration Statement that would require the filing of a pre-effective
amendment thereto with the Commission) and (ii) the fifth Trading Day following
the date on which the Company is notified by the Commission that such initial
Registration Statement will not be reviewed or is no longer subject to further
review and comments;
 

 
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EXHIBIT 10.2

(b) with respect to any additional Registration Statements that may be required
pursuant to Section 2(b), the earlier of (i) the 90th day following (x) if such
Registration Statement is required because the Commission shall have notified
the Company in writing that certain Registrable Securities were not eligible for
inclusion on a previously filed Registration Statement, the date or time on
which the Commission shall indicate as being the first date or time that such
Registrable Securities may then be included in a Registration Statement, or (y)
if such Registration Statement is required for a reason other than as described
in (x) above, the date on which the Company first knows, or reasonably should
have known, that such additional Registration Statement(s) is required;
provided, that, if the Commission reviews and has written comments to a
Registration Statement filed under Section 2(b) that would require the filing of
a pre-effective amendment thereto with the Commission, then the Effectiveness
Date under this clause (b)(i) for such Registration Statement shall be the
earlier of the 120th day following the date that the Company first knows, or
reasonably should have known, that such additional Registration Statement is
required under such Section, and (ii) the fifth Trading Day following the date
on which the Company is notified by the Commission that such additional
Registration Statement will not be reviewed or is no longer subject to further
review and comments; and
 
(c) with respect to a Registration Statement required to be filed under Section
2(c), the earlier of: (c)(i) the 90th day following the date on which the
Company becomes eligible to utilize Form S-3 to register the resale of Common
Stock; provided, that, if the Commission reviews and has written comments to
such filed Registration Statement that would require the filing of a
pre-effective amendment thereto with the Commission, then the Effectiveness Date
under this clause (c)(i) shall be the earlier of the 120th day following the
date on which the Company becomes eligible to utilize Form S-3 to register the
resale of Common Stock, and (ii) the fifth Trading Day following the date on
which the Company is notified by the Commission that the initial Registration
Statement will not be reviewed or is no longer subject to further review and
comments.
 
“Effectiveness Period” has the meaning set forth in Section 2(a).
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Filing Date” means, subject in each instance to Section 2(f), (a) with respect
to the initial Registration Statement required to be filed under Section 2(a),
the 45th day following the Closing Date; (b) with respect to any additional
Registration Statements that may be required pursuant to Section 2(b), the 30th
day following (x) if such Registration Statement is required because the
Commission shall have notified the Company in writing that certain Registrable
Securities were not eligible for inclusion on a previously filed Registration
Statement, the date or time on which the Commission shall indicate as being the
first date or time that such Registrable Securities may then be included in a
Registration Statement, or (y) if such Registration Statement is required for a
reason other than as described in (x) above, the date on which the Company first
knows, or reasonably should have known, that such additional Registration
Statement(s) is required, but in any event no earlier than the initial Filing
Date; and (c) with respect to a Registration Statement required to be filed
under Section 2(c), the 30th day following the date on which the Company becomes
eligible to utilize Form S-3 to register the resale of Common Stock, but in any
event no earlier than the initial Filing Date.
 

 
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EXHIBIT 10.2

“Holder” or “Holders” means the holder or holders, as the case may be, from time
to time of Registrable Securities.
 
“Indemnified Party” has the meaning set forth in Section 5(c).
 
“Indemnifying Party” has the meaning set forth in Section 5(c).
 
“Losses” has the meaning set forth in Section 5(a).
 
“New York Courts” means the state and federal courts sitting in the City of New
York, Borough of Manhattan.
 
“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
 
“Prospectus” means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by a
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
 
“Registrable Securities” means: (i) the Warrant Shares, and (ii) any securities
issued or issuable upon any stock split, dividend or other distribution,
recapitalization or similar event, or any price adjustment with respect to any
of the securities referenced in (i) above.
 
“Registration Statement” means the initial registration statement required to be
filed in accordance with Section 2(a) and any additional registration
statement(s) required to be filed under Section 2(b) and 2(c), including (in
each case) the Prospectus, amendments and supplements to such registration
statements or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference or deemed to be
incorporated by reference therein.
 
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
 
“Rule 415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
 

 
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EXHIBIT 10.2

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
 
“Securities Act” means the Securities Act of 1933, as amended.
 
2.           Registration.
 
(a)           On or prior to each Filing Date, the Company shall prepare and
file with the Commission a Registration Statement covering the resale of all
Registrable Securities not already covered by an existing and effective
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415, on Form S-1 or if eligible, Form S-3 (or on such other form
appropriate for such purpose), which Registration Statement will contemplate the
ability of such Holder to do an underwritten offering.  Such Registration
Statement shall contain (except if otherwise required pursuant to written
comments received from the Commission upon a review of such Registration
Statement) the “Plan of Distribution” attached hereto as Annex A.  The Company
shall use its reasonable best efforts to cause such Registration Statement to be
declared effective under the Securities Act as soon as possible but, in any
event, no later than its Effectiveness Date, and shall use its reasonable best
efforts to keep the Registration Statement continuously effective under the
Securities Act until the date which is the earlier of (i) such time as all of
the Registrable Securities covered by such Registration Statement have been
publicly sold by the Holders, or (ii) such time as all of the Registrable
Securities covered by such Registration Statement may be sold by the Holders
pursuant to Rule 144 as determined by the counsel to the Company pursuant to a
written opinion letter to such effect, addressed and acceptable to the Company’s
transfer agent and the affected Holders (the “Effectiveness Period”).  By 5:00
p.m. (New York City time) on the Business Day immediately following the
Effective Date of each Registration Statement, the Company shall file with the
Commission in accordance with Rule 424 under the Securities Act the final
prospectus to be used in connection with sales pursuant to such Registration
Statement (whether or not such filing is technically required under such
Rule).  If for any reason other than due solely to Commission restrictions, a
Registration Statement is effective but not all outstanding Registrable
Securities are registered for resale pursuant thereto, then the Company shall
prepare and file by the applicable Filing Date an additional Registration
Statement to register the resale of all such unregistered Registrable Securities
for an offering to be made on a continuous basis pursuant to Rule 415.
 
(b)           If for any reason the Commission does not permit all of the
Registrable Securities to be included in the Registration Statement filed
pursuant to Section 2(a), or for any other reason any outstanding Registrable
Securities are not then covered by an effective Registration Statement, then the
Company shall prepare and file by the Filing Date for such Registration
Statement, an additional Registration Statement covering the resale of all
Registrable Securities not already covered by an existing and effective
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415, on Form S-1 or if eligible, Form S-3 (or on such other form
appropriate for such purpose); provided, however, that the Company shall not be
required to file such additional Registration Statement, or may exclude shares
from such additional Registration Statement, if it believes in good faith, based
upon advice from the Commission’s Staff, that application of Rule 415 would not
permit registration of all or the excluded portion of such Registrable
Securities; provided further that the Company shall be obligated to use
reasonable best efforts to advocate with the Commission for the registration of
all of the Registrable Securities in accordance with Commission guidance.  If
the Commission does require a reduction in the number of Registrable Securities
or other shares of Common Stock that may be included in a Registration
Statement, the number of Registrable Securities or other shares of Common Stock
to be registered on such Registration Statement will be reduced on a pro rata
basis based on the total number of unregistered shares held by the holders
thereof, subject to a determination by the Commission that certain holders must
be reduced before other holders based on the number of shares held by such
holders.  Each such additional Registration Statement shall contain (except if
otherwise required pursuant to written comments received from the Commission
upon a review of such additional Registration Statement) the “Plan of
Distribution” attached hereto as Annex A.  The Company shall use its reasonable
best efforts to cause each such additional Registration Statement to be declared
effective under the Securities Act as soon as possible but, in any event, by its
Effectiveness Date, and shall use its reasonable best efforts to keep such
additional Registration Statement continuously effective under the Securities
Act during the entire Effectiveness Period.
 

 
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EXHIBIT 10.2

(c)           Promptly following any date on which the Company becomes eligible
to use a registration statement on Form S-3 to register the Registrable
Securities for resale, the Company shall file a registration statement on Form
S-3 covering the Registrable Securities (or a post-effective amendment on Form
S-3 to the then effective Registration Statement) and shall use its reasonable
best efforts to cause such Registration Statement to be declared effective as
soon as possible thereafter, but in any event prior to the Effectiveness Date
therefor. Such Registration Statement shall contain (except if otherwise
required pursuant to written comments received from the Commission upon a review
of such Registration Statement) the “Plan of Distribution” attached hereto as
Annex A.  The Company shall use its reasonable best efforts to cause such
Registration Statement to be declared effective under the Securities Act as soon
as possible but, in any event, by its Effectiveness Date, and shall use its
reasonable best efforts to keep such additional Registration Statement
continuously effective under the Securities Act during the entire Effectiveness
Period.
 
(d)            Subject to Section 2(f), if: (i) a Registration Statement is not
filed on or prior to its Filing Date (if the Company files a Registration
Statement, except in the case of an amendment that does not  concern a Holder,
without affording the Holders the opportunity to review and comment on the same
as required by Section 3(a) hereof, the Company shall not be deemed to have
satisfied this clause (i)), or (ii) a Registration Statement is not declared
effective by the Commission on or prior to its required Effectiveness Date, or
(iii) after its Effective Date, without regard for the reason thereunder or
efforts therefore, such Registration Statement ceases for any reason to be
effective and available to the Holders as to all Registrable Securities to which
it is required to cover at any time prior to the expiration of its Effectiveness
Period for more than an aggregate of 15 calendar days (which need not be
consecutive) in any 12-month period (any such failure or breach being referred
to as an “Event,” and for purposes of clauses (i) or (ii) the date on which such
Event occurs, or for purposes of clause (iii) the date which such 15 calendar
day-period is exceeded, being referred to as “Event Date”), then in addition to
any other rights the Holders may have hereunder or under applicable law, on each
monthly anniversary of each such Event Date (if the applicable Event shall not
have been cured by such date) until the applicable Event is cured, the Company
shall pay to each Holder an amount in cash, as partial liquidated damages and
not as a penalty, equal to 1% of the fair market value as determined in good
faith by the Company’s board of directors of the Registrable Securities held by
such Holder.  If the Company fails to pay any partial liquidated damages
pursuant to this Section in full within seven days after the date payable, the
Company will pay interest thereon at a rate of 10% per annum (or such lesser
maximum amount that is permitted to be paid by applicable law) to the Holder,
accruing daily from the date such partial liquidated damages are due until such
amounts, plus all such interest thereon, are paid in full.  The partial
liquidated damages pursuant to the terms hereof shall apply on a daily pro-rata
basis for any portion of a month prior to the cure of an Event, except in the
case of the first Event Date.
 

 
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EXHIBIT 10.2

(e)           Each Holder agrees to furnish to the Company a completed
Questionnaire in the form attached to this Agreement as Annex B (a “Selling
Holder Questionnaire”).  The Company shall not be required to include the
Registrable Securities of a Holder in a Registration Statement and shall not be
required to pay any liquidated or other damages under Section 2(d) to any Holder
who fails to furnish to the Company a fully completed Selling Holder
Questionnaire at least two Trading Days prior to the Filing Date (subject to the
requirements set forth in Section 3(a)).
 
(f)           Notwithstanding the defined terms set forth in Section 1, if on or
prior to May 30, 2009 the Company has terminated, or taken material steps
towards terminating (including filing of a Form 15 with the Commission), the
registration of the Common Stock under the Exchange Act in compliance with
applicable securities laws, then the term “Closing Date” used in the definitions
of “Filing Date” and “Effectiveness Date” hereunder shall mean the date that is
the one-year anniversary of the effectiveness of the termination of registration
of the Common Stock, but no later than June 30, 2010.  For example, if the
registration of the Common Stock is terminated on March 31, 2009, the “Filing
Date” for purposes of filing the initial Registration Statement under Section
2(a) shall be the 45th day following the one-year anniversary of such date, or
May 15, 2010.
 
3.           Registration Procedures.
 
In connection with the Company’s registration obligations hereunder, the Company
shall:
 
(a)           Not less than four Trading Days prior to the filing of a
Registration Statement or any related Prospectus or any amendment or supplement
thereto, the Company shall furnish to each Holder copies of the “Selling
Stockholders” section of such document, the “Plan of Distribution” and any risk
factor contained in such document that addresses specifically this transaction
or the Selling Stockholders, as proposed to be filed which documents will be
subject to the review of such Holder.  The Company shall not file a Registration
Statement, any Prospectus or any amendments or supplements thereto in which the
“Selling Stockholder” section thereof differs from the disclosure received from
a Holder in its Selling Holder Questionnaire (as amended or supplemented).  The
Company shall not file a Registration Statement, any Prospectus or any
amendments or supplements thereto in which it (i) characterizes any Holder as an
underwriter, (ii) excludes a particular Holder due to such Holder refusing to be
named as an underwriter (except as otherwise permitted in Section 2(b)), or
(iii) reduces the number of Registrable Securities being registered on behalf of
a Holder except pursuant to, in the case of subsection (iii), comments received
from the Commission, without, in each case, such Holder’s express written
authorization.
 

 
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EXHIBIT 10.2

(b)           (i)  Prepare and file with the Commission such amendments,
including post-effective amendments, to each Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep such
Registration Statement continuously effective as to the applicable Registrable
Securities for its Effectiveness Period and prepare and file with the Commission
such additional Registration Statements in order to register for resale under
the Securities Act all of the Registrable Securities; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement,
and as so supplemented or amended to be filed pursuant to Rule 424; (iii)
respond as promptly as reasonably possible to any comments received from the
Commission with respect to each Registration Statement or any amendment thereto
and, as promptly as reasonably possible provide the Holders true and complete
copies of all correspondence from and to the Commission relating to such
Registration Statement that would not result in the disclosure to the Holders of
material and non-public information concerning the Company; and (iv) comply in
all material respects with the provisions of the Securities Act and the Exchange
Act with respect to the Registration Statements and the disposition of all
Registrable Securities covered by each Registration Statement.
 
(c)           Notify the Holders as promptly as reasonably possible (and, in the
case of (i)(A) below, not less than three Trading Days prior to such filing and,
in the case of (v) below, not less than three Trading Days prior to the
financial statements in any Registration Statement becoming ineligible for
inclusion therein) and (if requested by any such Person) confirm such notice in
writing no later than one Trading Day following the day (i)(A) when a Prospectus
or any Prospectus supplement or post-effective amendment to a Registration
Statement is proposed to be filed; (B) when the Commission notifies the Company
whether there will be a “review” of such Registration Statement and whenever the
Commission comments in writing on such Registration Statement (the Company shall
provide true and complete copies thereof and all written responses thereto to
each of the Holders that pertain to the Holders as a Selling Stockholder or to
the Plan of Distribution, but not information which the Company believes would
constitute material and non-public information); and (C) with respect to each
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to a Registration Statement
or Prospectus or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of a Registration
Statement covering any or all of the Registrable Securities or the initiation of
any Proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event or passage of time that makes
the financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
 

 
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EXHIBIT 10.2

(d)           Use its reasonable best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of (i) any order suspending the effectiveness of a
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.
 
(e)           Furnish to each Holder, without charge, at least one conformed
copy of each Registration Statement and each amendment thereto and all exhibits
to the extent requested by such Person (including those previously furnished)
promptly after the filing of such documents with the Commission.
 
(f)           Promptly deliver to each Holder, without charge, as many copies of
each Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request.  The
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto.
 
(g)           Prior to any public offering of Registrable Securities, register
or qualify such Registrable Securities for offer and sale under the securities
or Blue Sky laws of all jurisdictions within the United States, to keep each
such registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statements.
 
(h)           Cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be delivered
to a transferee pursuant to the Registration Statements, which certificates
shall be free, to the extent permitted by the Purchase Agreement, of all
restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Holders may request.
 
(i)           Upon the occurrence of any event contemplated by Section 3(c)(v),
as promptly as reasonably possible, prepare a supplement or amendment, including
a post-effective amendment, to the affected Registration Statements or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, no Registration Statement nor any Prospectus will
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
 
(j)           Make available to any underwriter participating in such offering
and the representatives of any underwriter (but not more than one firm of
counsel to such Holders), all financial and other information as shall be
reasonably requested by them, and provide the underwriter and the
representatives of such underwriter the opportunity to discuss the business
affairs of the Company with its principal executives and independent public
accountants who have certified the audited financial statements included in such
Registration Statement, in each case all as reasonably necessary to enable them
to exercise their due diligence responsibility under the Securities Act;
provided, however, that information that the Company determines, in good faith,
to be confidential and which the Company advises such Person in writing is
confidential shall not be disclosed unless such Person signs a confidentiality
agreement reasonably satisfactory to the Company.
 

 
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EXHIBIT 10.2

(k)           In the event of any underwritten or agented offering, select an
underwriter reasonably acceptable to Holders of a majority in interest of the
Regsitrable Securities, enter into and perform its obligations under an
underwriting agreement, in customary and usual form, with the managing
underwriter of such underwritten offering, including, without limitation, to
obtain a so-called “comfort letter” from the Company’s independent public
accountants, and legal opinions of counsel to the Company addressed to the
underwriter participating in such offering, in customary form and covering such
matters of the type customarily covered by such letters, and in a form that
shall be reasonably satisfactory to the underwriters.  Delivery of any such
opinion or comfort letter shall be subject to the recipient furnishing such
written representations or acknowledgements as are required or customarily
provided by selling shareholders who receive such comfort letters or opinions.
 
(l)           Otherwise use its reasonable efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months, beginning with the first fiscal quarter
beginning after the effective date of the Registration Statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act;
 
(m)           Use its reasonable efforts to list such Registrable Securities on
any securities exchange or interdealer quotation system on which the Common
Stock is then listed, if the listing or quotation of such Registrable Securities
is then permitted under the rules of such exchange or interdealer quotation
system;
 
(n)           Upon the request of the Holders, take any and all other actions
which may be reasonably necessary to complete the registration and thereafter to
complete the distribution of the Registrable Securities so registered.
 
4.           Registration Expenses.  All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to a
Registration Statement.  The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with any Trading Market on which the Common Stock is then
listed for trading, and (B) in compliance with applicable state securities or
Blue Sky laws), (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities and of printing prospectuses
if the printing of prospectuses is reasonably requested by the holders of a
majority of the Registrable Securities included in the Registration Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement.  In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.  The Company shall not be responsible
for the payment of underwriting discounts or similar fees, discounts or
commissions.
 

 
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EXHIBIT 10.2

5.           Indemnification.
 
(a)           Indemnification by the Company.  The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold harmless
each Holder, the officers, directors, agents, investment advisors, partners,
members and employees of each of them, each Person who controls any such Holder
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) and the officers, directors, agents and employees of each such
controlling Person, to the fullest extent permitted by applicable law, from and
against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable costs of preparation and reasonable attorneys’
fees) and expenses (collectively, “Losses”), as incurred, arising out of or
relating to any violation by the Company of the Securities Act, Exchange Act, or
any state securities law or any rule or regulation thereunder in connection with
the performance of its obligations to register securities under this Agreement,
or any untrue or alleged untrue statement of a material fact contained in any
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of
any Prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, except to the extent,
but only to the extent, that (1) such untrue statements or omissions are based
solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement thereto
(it being understood that the Holder has approved Annex A hereto for this
purpose) or (2) in the case of an occurrence of an event of the type specified
in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder of
an Advice or an amended or supplemented Prospectus, but only if and to the
extent that following the receipt of the Advice or the amended or supplemented
Prospectus the misstatement or omission giving rise to such Loss would have been
corrected.  The Company shall notify the Holders promptly of the institution,
threat or assertion of any Proceeding of which the Company is aware in
connection with the transactions contemplated by this Agreement.
 

 
10

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EXHIBIT 10.2

(b)           Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, arising solely out of or based solely upon: (x) such Holder’s failure
to comply with the prospectus delivery requirements of the Securities Act
(without regard to the content of such prospectus) or (y) any untrue statement
of a material fact contained in any Registration Statement, any Prospectus, or
any form of prospectus, or in any amendment or supplement thereto, or arising
solely out of or based solely upon any omission of a material fact required to
be stated therein or necessary to make the statements therein not misleading to
the extent, but only to the extent that, (1) such untrue statements or omissions
are based solely upon information regarding such Holder furnished in writing to
the Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement (it
being understood that the Holder has approved Annex A hereto for this purpose),
such Prospectus or such form of Prospectus or in any amendment or supplement
thereto or (2) in the case of an occurrence of an event of the type specified in
Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or  defective and prior to the receipt by such Holder of
an Advice or an amended or supplemented Prospectus, but only if and to the
extent that following the receipt of the Advice or the amended or supplemented
Prospectus the misstatement or omission giving rise to such Loss would have been
corrected.  In no event shall the liability of any selling Holder hereunder be
greater in amount than the dollar amount of the net proceeds received by such
Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
 
(c)           Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
“Indemnified Party”), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the “Indemnifying Party”) in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof; provided, that
the failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it shall be finally determined by a court
of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have proximately and materially
adversely prejudiced the Indemnifying Party.
 
An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless:  (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a conflict of interest is likely to exist if the same counsel
were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing that
it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense thereof
and such counsel shall be at the expense of the Indemnifying Party).  The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld.  No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.
 

 
11

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EXHIBIT 10.2

All fees and expenses of the Indemnified Party (including reasonable fees and
expenses to the extent incurred in connection with investigating or preparing to
defend such Proceeding in a manner not inconsistent with this Section) shall be
paid to the Indemnified Party, as incurred, within ten Trading Days of written
notice thereof to the Indemnifying Party (regardless of whether it is ultimately
determined that an Indemnified Party is not entitled to indemnification
hereunder; provided, that the Indemnifying Party may require such Indemnified
Party to undertake to reimburse all such fees and expenses to the extent it is
finally judicially determined that such Indemnified Party is not entitled to
indemnification hereunder).
 
(d)           Contribution.  If a claim for indemnification under Section 5(a)
or 5(b) is unavailable to an Indemnified Party (by reason of public policy or
otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable
considerations.  The relative fault of such Indemnifying Party and Indemnified
Party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission of a material fact, has been taken
or made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such action, statement or
omission.  The amount paid or payable by a party as a result of any Losses shall
be deemed to include, subject to the limitations set forth in Section 5(c), any
reasonable attorneys’ or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its terms.
 
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding
paragraph.  Notwithstanding the provisions of this Section 5(d), no Holder shall
be required to contribute, in the aggregate, any amount in excess of the amount
by which the net proceeds actually received by such Holder from the sale of the
Registrable Securities subject to the Proceeding exceeds the amount of any
damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
 

 
12

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EXHIBIT 10.2

The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties and are not in diminution or limitation of the
indemnification provisions under the Purchase Agreement.
 
6.           Miscellaneous.
 
(a)           Remedies.  In the event of a breach by the Company or by a Holder,
of any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement.  The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
 
(b)           Compliance.  Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable to
it in connection with sales of Registrable Securities pursuant to the
Registration Statement.
 
(c)           Discontinued Disposition.  Each Holder agrees by its acquisition
of such Registrable Securities that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in Section 3(c), such
Holder will forthwith discontinue disposition of such Registrable Securities
under the Registration Statement until such Holder’s receipt of the copies of
the supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing (the “Advice”) by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement.  The
Company may provide appropriate stop orders to enforce the provisions of this
paragraph.
 
(d)           Piggy-Back Registrations.  If at any time during the Effectiveness
Period  there is not an effective Registration Statement covering all of the
Registrable Securities and the Company shall determine to prepare and file with
the Commission a registration statement relating to an offering for its own
account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to each Holder written notice of such
determination and, if within fifteen days after receipt of such notice, any such
Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
holder requests to be registered, subject to customary underwriter cutbacks
applicable to all holders of registration rights.
 

 
13

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EXHIBIT 10.2

(e)           Amendments and Waivers.  The provisions of this Agreement,
including the provisions of this Section 6(e), may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Holders of no less than a majority in interest of the then outstanding
Registrable Securities.  Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of certain Holders and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of at
least a majority of the Registrable Securities to which such waiver or consent
relates.
 
(f)           Notices.  Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via facsimile
(provided the sender receives a machine-generated confirmation of successful
transmission) at the facsimile number specified in this Section prior to 6:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number specified in this Section on a day that is not a Trading
Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c) the
Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (d) upon actual receipt by the party to whom such
notice is required to be given.  The address for such notices and communications
shall be as follows:
 
If to the Company:
Genius Products, Inc.
3301 Exposition Blvd., Suite 100
Santa Monica, CA 90404
Facsimile:  (310) 401-2865
Attention:  Chief Executive Officer

 
 
With a copy to:
Reed Smith LLP
355 Grand Avenue, Suite 2900
Los Angeles, CA 90071
 
Attention: Allen Z. Sussman, Esq.

 
If to a Investor:
To the address set forth under such Holder’s name on the signature pages hereto.

 
If to any other Person who is then the registered Holder:
 
To the address of such Holder as it appears in the stock transfer books of the
Company
 
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
 
(g)           Successors and Assigns.  This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Holder.  The Company may not
assign its rights or obligations hereunder without the prior written consent of
each Holder.  Each Holder may assign their respective rights hereunder in the
manner and to the Persons as permitted under the Purchase Agreement.
 

 
14

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EXHIBIT 10.2

(h)           Execution and Counterparts.  This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement.  In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
 
(i)           Governing Law.  All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof.  Each
party agrees that all Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement (whether brought
against a party hereto or its respective Affiliates, employees or agents) will
be commenced in the New York Courts.  Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any New York Court, or that such
Proceeding has been commenced in an improper or inconvenient forum.  Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof.  Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law.  Each
party hereto hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any Proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby.  If
either party shall commence a Proceeding to enforce any provisions of this
Agreement, then the prevailing party in such Proceeding shall be reimbursed by
the other party for its attorney’s fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such Proceeding.
 
(j)           Cumulative Remedies.  The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
 
(k)           Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction.  It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
 
(l)           Headings.  The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
 

 
15

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EXHIBIT 10.2

(m)           Independent Nature of Investors’ Obligations and Rights.  The
obligations of each Investor under this Agreement are several and not joint with
the obligations of each other Investor, and no Investor shall be responsible in
any way for the performance of the obligations of any other Investor under this
Agreement.  Nothing contained herein or in any Transaction Document, and no
action taken by any Investor pursuant thereto, shall be deemed to constitute the
Investors as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Investors are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by this Agreement or any other Transaction Document.  Each Investor
acknowledges that no other Investor will be acting as agent of such Investor in
enforcing its rights under this Agreement.  Each Investor shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement, and it shall not be necessary for any
other Investor to be joined as an additional party in any Proceeding for such
purpose.  The Company acknowledges that each of the Investors has been provided
with the same Registration Rights Agreement for the purpose of closing a
transaction with multiple Investors and not because it was required or requested
to do so by any Investor.
 
(n)           Rights of Holders. Each Holder shall have the absolute right to
exercise or refrain from exercising any right or rights which such Holder may
have by reason of this Agreement or any Registrable Security, including, without
limitation, the right to consent to the waiver of any obligation of the Company
under this Agreement and to enter into an agreement with the Company for the
purpose of modifying this Agreement or any agreement effecting any such
modification, and such Holder shall not incur any liability to any other Holder
with respect to exercising or refraining from exercising any such right or
rights.
 
(o)           Rule 144. To the extent that the Company is subject to the filing
and reporting requirements of the Securities Act and the Exchange Act, and so
long as there are Registrable Securities outstanding, the Company will file the
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the Commission thereunder, make and
keep public information available, as those terms are understood and defined in
Rule 144 under the Securities Act, and will take such further action as any
Holder may reasonably request, all to the extent required from time to time to
enable such Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (i) Rule 144
under the Securities Act, as such Rule may be amended from time to time, or (ii)
any similar rule or regulation hereafter adopted by the Commission. Upon the
request of any Holder, the Company will deliver to such Holder a written
statement as to whether it has complied with such information and requirements
and with a copy of the most recent annual or quarterly report of the Company,
and such other reports and documents of the Company as a Holder may reasonably
request in availing itself of any rule or regulation of the Commission allowing
a Holder to sell any such securities without registration.
 
(p)           Enforcement Costs. In the event of any dispute hereunder
proceeding to litigation, the prevailing party shall be entitled to recover from
the other party, all costs and expenses incurred, including attorneys’ fees.
 

 
16

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EXHIBIT 10.2

(q)           Subsequent Closings.  One or more Investors may become party to
this agreement after the Closing Date and have all of the rights and obligations
hereunder by executing a signature page hereto; provided, however, that the
ascension of additional Investors to this Agreement shall not alter the
definition of Closing Date.
 

 

 
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES TO FOLLOW]
 
 
 
 
 
 
 
 
 
 

 
 
17

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EXHIBIT 10.2

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.
 

 

 
GENIUS PRODUCTS, INC.
 
 
   
By:        /s/ Trevor Drinkwater                    
 
Name: Trevor Drinkwater
 
Title: Chief Executive Officer

 
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES OF INVESTORS TO FOLLOW]
 

 
 
 
 
 
 
 
 
 
 
 

 
18

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EXHIBIT 10.2

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.

 
By:  /s/ George Bolton                                               
     
Name:  George Bolton                                                
     
Title:                                                               
             
         
ADDRESS FOR NOTICE
     
c/o:                                                                 
             
     
Street: 2440 Pacific Ave                                            
     
City/State/Zip: San Francisco, CA 94115              
     
Attention: George Bolton                                        
     
Tel:                                                                        
      
       
Fax:                                                            
                 
     
Email:                                                
                          

 
19

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EXHIBIT 10.2

 
IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.
 

 
J. CAIRD INVESTORS (BERMUDA), L.P.
 
By:  Wellington Management Company, LLP, as investment adviser
             
By:    /s/ Steven M. Hoffman                                        
     
Name:    Steven M. Hoffman                            
                              
     
Title:     Vice President & Counsel                               
         
ADDRESS FOR NOTICE
     
c/o: Wellington Management Company, LLP           
     
Street: 75 State Street                                                     
     
City/State/Zip: Boston MA, 02109                              
     
Attention: Legal Services – Steven M. Hoffman       
     
Tel:    (617) 790-7429                                                       
     
Fax:    (617) 289-5699                                                          
     
Email:    seclaw@wellington.com                                 

 
20

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EXHIBIT 10.2

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.
 

 
J. CAIRD PARTNERS, L.P.
 
By:  Wellington Management Company, LLP, as investment adviser
             
By:   /s/ Steven M. Hoffman                                     
     
Name:     Steven M. Hoffman                                   
     
Title:     Vice President & Counsel                          
         
ADDRESS FOR NOTICE
     
c/o: Wellington Management Company, LLP       
     
Street: 75 State Street                                                
     
City/State/Zip: Boston MA, 02109                                     
     
Attention: Legal Services – Steven M. Hoffman  
     
Tel:    (617) 790-7429                                                  
     
Fax:    (617) 289-5699                                                  
     
Email:    seclaw@wellington.com                             

 
21

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EXHIBIT 10.2

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.
 

 
JANUS INVESTMENT FUND
 
On Behalf of its Participating Series
             
By:    /s/ William Bales                                             
     
Name:     William Bales                                             
     
Title:     Portfolio Manager                                      
             
ADDRESS FOR NOTICE
     
c/o: Janus Capital Management LLC                      
     
Street:     151 Detroit Street                                      
     
City/State/Zip: Denver, CO 80206                           
     
Attention:     Angela Morton                                   
     
Tel:    (303) 336-4358                                                  
     
Fax:    (303) 316-5728                                                 
     
Email:    angela.morton@janus.com                       

 
22

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EXHIBIT 10.2

Annex A
Plan of Distribution
 
The Selling Stockholders and any of their pledgees, donees, transferees,
assignees and successors-in-interest may, from time to time, sell any or all of
their shares of Common Stock on any stock exchange, market or trading facility
on which the shares are traded or in private transactions.  These sales may be
at fixed or negotiated prices.  The Selling Stockholders may use any one or more
of the following methods when selling shares:
 
 
·
ordinary brokerage transactions and transactions in which the broker-dealer
solicits Investors;

 
 
·
block trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to facilitate
the transaction;

 
 
·
purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;

 
 
·
an exchange distribution in accordance with the rules of the applicable
exchange;

 
 
·
an underwritten offering;

 
 
·
privately negotiated transactions;

 
 
·
to cover short sales made after the date that this Registration Statement is
declared effective by the Commission;

 
 
·
broker-dealers may agree with the Selling Stockholders to sell a specified
number of such shares at a stipulated price per share;

 
 
·
a combination of any such methods of sale; and

 
 
·
any other method permitted pursuant to applicable law.

 
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
 
Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales.  Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated.  The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
 
The Selling Stockholders may from time to time pledge or grant a security
interest in some or all of the shares owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may
offer and sell shares of Common Stock from time to time under this prospectus,
or under an amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933 amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus.
 

 
23

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EXHIBIT 10.2

Upon the Company being notified in writing by a Selling Stockholder that any
material arrangement has been entered into with a broker-dealer for the sale of
Common Stock through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such Selling Stockholder and of
the participating broker-dealer(s), (ii) the number of shares involved, (iii)
the price at which such the shares of Common Stock were sold, (iv)the
commissions paid or discounts or concessions allowed to such broker-dealer(s),
where applicable, (v) that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated by reference in
this prospectus, and (vi) other facts material to the transaction.  In addition,
upon the Company being notified in writing by a Selling Stockholder that a donee
or pledgee intends to sell more than 500 shares of Common Stock, a supplement to
this prospectus will be filed if then required in accordance with applicable
securities law.
 
The Selling Stockholders also may transfer the shares of Common Stock in other
circumstances, in which case the transferees, pledgees or other successors in
interest will be the selling beneficial owners for purposes of this prospectus.
 
The Selling Stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales.  In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.  Discounts, concessions, commissions and
similar selling expenses, if any, that can be attributed to the sale of
Securities will be paid by the Selling Stockholder and/or the purchasers.  Each
Selling Stockholder has represented and warranted to the Company that it
acquired the securities subject to this registration statement in the ordinary
course of such Selling Stockholder’s business and, at the time of its purchase
of such securities such Selling Stockholder had no agreements or understandings,
directly or indirectly, with any person to distribute any such securities.
 
The Company has advised each Selling Stockholder that it may not use shares
registered on this Registration Statement to cover short sales of Common Stock
made prior to the date on which this Registration Statement shall have been
declared effective by the Commission.  If a Selling Stockholder uses this
prospectus for any sale of the Common Stock, it will be subject to the
prospectus delivery requirements of the Securities Act.  The Selling
Stockholders will be responsible to comply with the applicable provisions of the
Securities Act and Exchange Act, and the rules and regulations thereunder
promulgated, including, without limitation, Regulation M, as applicable to such
Selling Stockholders in connection with resales of their respective shares under
this Registration Statement.
 
The Company is required to pay all fees and expenses incident to the
registration of the shares, but the Company will not receive any proceeds from
the sale of the Common Stock.  The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.
 

 
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EXHIBIT 10.2

Annex B
 
GENIUS PRODUCTS, INC.
 
Selling Securityholder Notice and Questionnaire
 
The undersigned beneficial owner of common stock (the “Common Stock”), of GENIUS
PRODUCTS, INC. (the “Company”) understands that the Company has filed or intends
to file with the Securities and Exchange Commission (the “Commission”) a
Registration Statement for the registration and resale of the Registrable
Securities, in accordance with the terms of the Registration Rights Agreement,
dated as of February 17, 2009 (the “Registration Rights Agreement”), among the
Company and the Investors named therein.  A copy of the Registration Rights
Agreement is available from the Company upon request at the address set forth
below.  All capitalized terms used and not otherwise defined herein shall have
the meanings ascribed thereto in the Registration Rights Agreement.
 
The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:
 
QUESTIONNAIRE
 
 
1.
Name.

 
 
(a)
Full Legal Name of Selling Securityholder
     

 

 
(b)
Full Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are held:
     

 

 
(c)
Full Legal Name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose of the
securities covered by the questionnaire):
     

 
 
 
2.  Address for Notices to Selling Securityholder:
 

     
Telephone: ______________________________________
Fax:____________________________________________
Contact Person:_____________________________________

 
 
 
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EXHIBIT 10.2

 
 
3.  Beneficial Ownership of Registrable Securities:

 
 
Type and Principal Amount of Registrable Securities beneficially owned:
 
 
 
       

 
 

 
 
4.  Broker-Dealer Status:

 
 
(a)
Are you a broker-dealer?

 
Yes   ¨                      No   ¨
 
Note:
If yes, the Commission’s staff has indicated that you should be identified as an
underwriter in the Registration Statement.

 
 
(b)
Are you an affiliate of a broker-dealer?

 
Yes   ¨                      No   ¨
 
 
(c)
If you are an affiliate of a broker-dealer, do you certify that you bought the
Registrable Securities in the ordinary course of business, and at the time of
the purchase of the Registrable Securities to be resold, you had no agreements
or understandings, directly or indirectly, with any person to distribute the
Registrable Securities?

 
Yes   ¨                      No   ¨
 
Note:
If no, the Commission’s staff has indicated that you should be identified as an
underwriter in the Registration Statement.

 
 
5.  Beneficial Ownership of Other Securities of the Company Owned by the Selling
Securityholder.

 
Except as set forth below in this Item 5, the undersigned is not the beneficial
or registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.
 
 
Type and Amount of Other Securities beneficially owned by the Selling
Securityholder:
       

 
 

 
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EXHIBIT 10.2

 
6.  Relationships with the Company:

 
Except as set forth below, neither the undersigned nor any of its affiliates,
officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had
any other material relationship with the Company (or its predecessors or
affiliates) during the past three years.
 
 
State any exceptions here:
       

 

 
 
The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof and prior to the Effective Date for the Registration Statement.
 
By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related prospectus.  The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Registration Statement
and the related prospectus.
 
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.
 
 
 

Dated: __________________________________
Beneficial Owner:                                                       

By:                                                         
                      
Name: 
Title:

 
 

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

Reed Smith LLP
355 South Grand Ave., Suite 2900
Los Angeles, CA  90071
Attention: Allen Z. Sussman, Esq.
Facsimile:  (213) 457-8080

 
 
 
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