Document:

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EXHIBIT 10.1

                              GENIUS PRODUCTS, INC.

                        HOMEVIDEO DISTRIBUTION AGREEMENT

AGREEMENT made as of February 6, 2002 between WARNER HOME VIDEO, a Division of
Time Warner Entertainment Company, L.P. ("WHV"), whose address is 4000 Warner
Boulevard, Burbank, California 91522, and GENIUS PRODUCTS, INC. ("Grantor"),
whose address is 11250 El Camino Real, Suite 100, San Diego, CA 92130.

The Parties hereby agree as follows:

         1. PICTURE(S): The "Picture(s)" shall mean and refer to the following
pre-recorded audio-visual programs intended primarily for linear playback
produced for or by, or which are under the control of, Grantor: (a) "Catalog
Titles" (as defined in Paragraph 4 below), and (b) "New Releases" (as defined in
Paragraph 5 below). Notwithstanding, and in addition to, the requirements
contained herein, each Picture shall conform to the following specifications:

                           (i) TECHNICAL SPECIFICATIONS: The Pictures are
                  audiovisual programs originally produced, recorded and
                  delivered in the English language.

                           (ii) RELEASE QUALITY: The Pictures shall be delivered
                  to WHV completely finished, fully edited, titled and
                  synchronized with language, dialogue, sound and music so each
                  are, in all respects, of a first-class technical quality ready
                  for exhibition on homevideo "Devices" (as hereinafter defined)
                  in the "Territory" (as hereinafter defined).

         2. GRANT OF RIGHTS: Grantor hereby grants to WHV during the Term and in
the Territory the sole and exclusive "Homevideo Rights" (as set forth in
Paragraph 3 below) and "Incidental Rights" (as set forth in Paragraph 18 below)
in and to the Pictures, including, but not limited to, the necessary literary,
artistic, musical, technological, and intellectual property rights (including
without limitation copyrights, rental and lending rights, rights related to
copyright and/or neighboring rights recognized under the law of any foreign
jurisdiction).

         3. HOMEVIDEO RIGHTS:

                  (a) The term "Homevideo Rights" as used herein shall mean the
         right to manufacture and/or authorize the creation of Devices
         containing copies of the Pictures and to exploit and distribute such
         Devices for the intended purpose of noncommercial viewing by consumers
         on Video Playback Systems (as defined below) in such manner that
         viewing schedules, viewing frequency and interactive multimedia
         functions inherent to such Devices (i.e., chaptering, bookmarking and
         other similar user-programmable playback features) may be freely
         controlled by the consumers.

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                  (b) The term "Devices" as used herein shall mean any and all
         forms and types of electronic, mechanical, magnetic, optical and/or
         digital devices now known or hereafter devised (in all formats and
         sizes) including, but not limited to, videocassettes, digital video
         discs, DVDs, optical discs, semi-conductor chips, computer hard drives,
         and/or personal digital video recorders ("PVRs")(e.g., Replay or Tivo)
         upon which are encoded or stored an audiovisual duplication of the
         Pictures for future retrieval by Video Playback Systems.

                  (c) The term "Video Playback Systems" as used herein shall
         mean any electronic, mechanical, magnetic or optical apparatus now
         known or hereafter devised which is capable of being operated by
         consumers (i) directly in their places of dwelling, including, but not
         limited to, videocassette players and optical disc players, (including,
         but not limited to, all forms and types of DVD players) (ii) indirectly
         from their places of dwelling through instant access direct delivery
         transmission systems (including, without limitation, through any and
         all "downloading" or "streaming" technologies whereby the Pictures are
         digitally transmitted online, or via cable, satellite, or otherwise,
         and stored on a Device for future retrieval and viewing by an end
         consumer, which distribution of the Pictures shall be included in the
         Homevideo Rights, or (iii) elsewhere on any such apparatus that is
         designed to be portable and intended for personal use, such as laptop
         computers and portable DVD players, and which can cause the Pictures to
         be displayed on associated reproduction equipment including, but not
         limited to, television receivers, television monitors and computer-type
         displays in such manner as to be perceivable by, and visible and/or
         audible to, the consumers.

                  (d) The term "Homevideo Rights" shall not include: (i) the
         right to make public exhibitions of the Pictures, and (ii) the right to
         broadcast, cablecast or otherwise telecast the Picture(s) on pay,
         pay-per-view, free or other television systems in which viewing
         schedules and viewing frequency (i.e., programming) are controlled in
         whole or in part by television companies.

         4. CATALOG TITLES: "Catalog Titles" shall include all releases on
Devices in the Territory of the Pictures set forth in EXHIBIT "G" attached
hereto and incorporated by reference herein, which Pictures have been released
in retail distribution channels prior to the date of this Agreement. All of the
Catalog Titles will be available for exploitation by WHV from the commencement
of the Term.

         5. NEW RELEASES:

                  (a) "New Releases" shall include all children's videos
         developed and/or produced by Grantor and that are not listed in EXHIBIT
         G. Such Pictures are intended for family, children and/or adult
         viewing, are intended to be released on standard or non-standard
         television or directly to homevideo, and include (i) new Pictures to be
         produced as set forth in this Paragraph 5, and (ii) existing Pictures
         that have not been released in retail distribution channels prior to
         the date of this Agreement.

                  (b) Grantor shall only be required to effect Delivery for
         those New Releases that WHV elects in its sole discretion to release.
         In connection with Grantor's production of New Releases during each
         year of the Term, WHV shall have concept and script approval and
         Grantor agrees to provide WHV monthly with an updated list of all such
         proposed programming (along with a status report with respect to

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         programming development, production and delivery of all such proposed
         programming) (together, the "New Releases Production Status Report")
         and, in addition, Grantor shall update the New Releases Production
         Status Report more frequently as necessary to keep WHV informed of any
         changes thereto. From the New Releases Production Status Report, WHV
         shall select, in its sole and absolute discretion, which such
         programming shall be released as New Releases. After production of each
         New Release, Grantor shall deliver to WHV a screening copy thereof for
         WHV's review and evaluation with respect to WHV's potential release of
         such New Release. Following such review and evaluation, WHV may, in its
         sole discretion, elect not to release such New Release. Each New
         Release shall be of the same standard and quality as the Catalog
         Titles, and, if rated by the MPAA, would receive a "G" or "PG" rating.
         In the event that WHV elects not to release such New Release, Grantor
         shall refund to WHV any New Release Recoupable Advance relating to that
         New Release within ten (10) business days of WHV's notification that it
         has elected not to release said title.

                  (c) BABY GENIUS RELEASE: WHV will make reasonable commercial
         efforts to release a Baby Genius-branded title in the United States and
         Canada in the second quarter of 2002; however, WHV's failure to do so
         will not be a breach of this Agreement.

         6. NEW PRODUCTIONS:

                  (a) BABY GENIUS BRAND: Grantor shall provide WHV with a
         minimum of five (5) proposals for New Releases per year. Said proposals
         shall be provided one at a time and shall include, but not be limited
         to, the following: the concept, estimated budget and timeline, script
         treatment, and support for developmental positioning. WHV shall have
         sixty (60) days to determine whether to accept or reject such proposal
         and WHV shall accept at least two (2) proposals in each twelve (12)
         month period. Acceptance of a proposal in no way limits any of WHV's
         rights under Paragraph 5.(b) of this Agreement. In the event WHV fails
         to accept any of Grantor's proposals within a twelve (12) month period,
         Grantor shall have the right to give WHV ninety (90) days' written
         notice of its intent to terminate this Agreement with respect to future
         Pictures only. In the event of termination under this provision, WHV
         shall have the right to continue distributing, under the terms of this
         Agreement, all Baby Genius and Kid Genius product in existence or
         development as of the date of such termination. Notwithstanding the
         foregoing, if WHV gives Grantor sales data that indicates the market
         will not support two (2) titles annually, the parties agree to
         renegotiate the obligations set forth in this Paragraph 6.(a).

                  (b) KID GENIUS BRAND:

                           (i) Grantor shall provide WHV with a minimum of five
                  (5) proposals for New Releases per year beginning in the year
                  in which WHV and Grantor mutually agree that the Kid Genius
                  product should be launched. Said proposals shall be provided
                  one at a time and shall include, but not be limited to, the
                  following: the concept, positioning statement, estimated
                  budget and timeline, script treatment, and support for
                  developmental positioning. WHV shall have sixty (60) days to

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                  determine whether to accept or reject such proposal and WHV
                  shall accept at least two (2) proposals in each twelve (12)
                  month period. Acceptance of a proposal in no way limits any of
                  WHV's rights under Paragraph 5.(b) of this Agreement.

                           (ii) WHV agrees to launch the Kid Genius line within
                  nine (9) months of acceptable Delivery fully complying with
                  Paragraph 12 of this Agreement of final video materials,
                  provided that said final materials are of the same standard
                  and quality as the Catalog Titles and other then-existing
                  Pictures. WHV also agrees to develop a marketing plan by the
                  end of 2002 that contemplates a Kid Genius video release in
                  2003.

                           (iii) In the event WHV fails to accept any of
                  Grantor's proposals within a twelve (12) month period, Grantor
                  shall have the right to give WHV ninety (90) days' written
                  notice of its intent to terminate this Agreement with respect
                  to future Pictures only. In the event of termination under
                  this provision, WHV shall have the right to continue
                  distributing, under the terms of this Agreement, all Baby
                  Genius and Kid Genius product in existence or development as
                  of the date of such termination. Notwithstanding the
                  foregoing, if WHV gives Grantor sales data that indicates the
                  market will not support two (2) titles annually, the parties
                  agree to renegotiate the obligations set forth in this
                  Paragraph 6.(b).

                           (iv) If WHV fails to release a Kid Genius video in
                  the United States and Canada in the timeframe set forth above
                  in Paragraph 6.(b)(ii) or if at any time during the Term of
                  this Agreement WHV decides to entirely discontinue the
                  distribution and production of Kid Genius-branded videos, then
                  Grantor shall have the right to elect to reclaim all rights,
                  title and interest in and to the Kid Genius videos (including
                  but not limited to the right of Grantor to self-distribute the
                  same), provided that (a) upon making such election, Grantor
                  promptly refunds to WHV any unrecouped portions of the New
                  Release Recoupable Advances related to the Kid Genius videos;
                  (b) Grantor agrees to develop new and different packaging for
                  the Kid Genius videos that is not confusingly similar to the
                  packaging developed by WHV, if any; (c) Grantor agrees to pay
                  WHV the product cost for any existing inventory of Kid Genius
                  videos that WHV turns over to Grantor; and (d) if, after
                  making such election, Grantor proposes at any time during the
                  Term, or any extension thereof, to enter into a distribution
                  agreement for the Kid Genius videos with a third party, then
                  Grantor must give WHV the first right to negotiate in
                  connection therewith and Grantor and WHV shall so negotiate in
                  good faith for a period extending for no less than thirty (30)
                  days unless agreement is earlier reached. In the event that no
                  agreement is reached within said thirty (30) days following
                  commencement of said negotiations, Grantor may negotiate
                  elsewhere; provided that if Grantor is thereafter prepared to
                  enter into an agreement with a third party for the license of
                  the homevideo rights for these titles, Grantor shall, before
                  entering into such agreement, give WHV notice of the proposed
                  terms thereof (and all modifications of such terms) and the
                  name of the party involved. In each instance, WHV shall then
                  have ten (10) business days in which to elect to acquire said
                  homevideo rights on the terms contained in the notice.

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         7. SAN DIEGO ZOO AND WILD ANIMAL PARK VIDEOS:

                  (a) WHV shall release the San Diego Zoo and Wild Animal Park
         Videos (the "Zoo Videos") in the United States and Canada within six
         (6) months after acceptable Delivery in accordance with Paragraph 12 of
         this Agreement of final materials.

                  (b) If WHV fails to release the Zoo Videos in the United
         States and Canada within six (6) months after acceptable Delivery of
         final materials fully complying with Paragraph 12 of this Agreement, or
         if at any time during the Term WHV fails to include the Zoo Videos in
         its normal solicitation process, then Grantor shall have the right to
         elect to reclaim all rights, title and interest in and to the Zoo
         Videos (including but not limited to the right of Grantor to
         self-distribute the same), provided that (i) upon making such election,
         Grantor promptly refunds to WHV any unrecouped portions of the New
         Release Recoupable Advances related to the Zoo Videos; (ii) Grantor
         agrees to develop new and different packaging for the Zoo Videos that
         is not confusingly similar to the packaging developed by WHV, if any;
         (iii) Grantor agrees to pay WHV the product cost for any existing
         inventory of Zoo Videos that WHV turns over to Grantor; and (iv) if,
         after making such election, Grantor proposes at any time during the
         Term, or any extension thereof, to enter into a distribution agreement
         for the Zoo Videos with a third party, then Grantor must give WHV the
         first right to negotiate in connection therewith and Grantor and WHV
         shall so negotiate in good faith for a period extending for no less
         than thirty (30) days unless agreement is earlier reached. In the event
         that no agreement is reached within said thirty (30) days following
         commencement of said negotiations, Grantor may negotiate elsewhere;
         provided that if Grantor is thereafter prepared to enter into an
         agreement with a third party for the license of the homevideo rights
         for these titles, Grantor shall, before entering into such agreement,
         give WHV notice of the proposed terms thereof (and all modifications of
         such terms) and the name of the party involved. In each instance, WHV
         shall then have ten (10) business days in which to elect to acquire
         said homevideo rights on the terms contained in the notice.

         8. TERM: The "Term" of this Agreement shall commence upon the date of
this Agreement first set forth above and shall continue for a period of seven
(7) years following initial availability of Devices to consumers in each country
in the Territory. Notwithstanding the foregoing, in the event that the
Recoupable Advance set forth in Subparagraph 14.(d) hereof and the Additional
Recoupable Advance(s), if any, set forth in Paragraph 13 hereof have not been
fully recouped by WHV on the date upon which the "Term" would otherwise expire,
the "Term" shall be extended for a period equal to the length of time necessary
for WHV to recoup said Recoupable Advance(s) and Additional Recoupable
Advance(s), if any. If at any time after the expiration of the "Term" Grantor
desires to grant Homevideo Rights in the Pictures, Grantor shall afford WHV the
first right to negotiate in connection therewith, and Grantor and WHV shall so
negotiate in good faith for a period extending for no less than thirty (30) days
unless agreement is earlier reached. In the event that no agreement is reached
within said thirty (30) days following commencement of said negotiations,
Grantor may negotiate elsewhere; provided that if Grantor is thereafter prepared
to enter into an agreement with a third party for the license of Homevideo
Rights in the Pictures, Grantor shall, before entering into such agreement, give
WHV notice of the proposed terms thereof (and all modifications of such terms)
and the name of the party involved. In each instance, WHV shall then have ten
(10) business days in which to elect to acquire said Homevideo Rights on the
terms contained in the notice.

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         9. TERMINATION FOR FAILURE TO DISTRIBUTE: In the event WHV elects to
release a New Release title but fails to announce said New Release to the retail
market in the United States and Canada within twelve (12) months of acceptable
Delivery fully complying with Paragraph 12 hereof of said New Release to WHV,
Grantor shall have the right to terminate this Agreement with respect to that
particular New Release only. Grantor must give WHV ninety (90) days' written
notice of its intent to terminate WHV's rights to a particular New Release
Picture under this provision and WHV shall have the right to cure. In the event
of termination of WHV's rights with respect to a particular New Release under
this Paragraph 9, Grantor agrees to promptly refund to WHV the Recoupable
Advance related to that New Release.

         10. SELL OFF: Upon the date of expiration of the Term or any extension
thereof, WHV shall have the right to continue to distribute all previously
manufactured Devices which may be remaining in inventory during a "sell-off"
period of six (6) months duration following such date of expiration of the Term.

         11. TERRITORY: "Territory" means the entire universe, provided,
however, that WHV shall not have distribution rights to the following titles in
the following countries: (a) Argentina (with respect to "Mozart & Friends" and
"Mozart & Friends: Sleepytime" only; (b) Australia (with respect to "Mozart &
Friends" and "Mozart & Friends: Sleepytime" only; (c) Chili (with respect to
"Mozart & Friends" and "Mozart & Friends: Sleepytime" only; (d) Hong Kong (with
respect to "Mozart & Friends," "Mozart & Friends: Sleepytime" and "Four Seasons"
only; (e) New Zealand (with respect to "Mozart & Friends" and "Mozart & Friends:
Sleepytime" only; (f) Philippines (with respect to "Mozart & Friends," "Mozart &
Friends: Sleepytime" and "Four Seasons" only; and (g) Singapore (with respect to
"Mozart & Friends," "Mozart & Friends: Sleepytime" and "Four Seasons" only)
(collectively, the "Excluded Rights"). Notwithstanding the foregoing, in the
event that any of the Excluded Rights revert to Grantor or otherwise become
available at any time during the Term of this Agreement or any extension
thereof, such Excluded Rights shall automatically become part of the Grant of
Rights under this Agreement without the payment of any additional monies.
Grantor shall immediately notify WHV in writing as soon as any of the Excluded
Rights revert to Grantor or otherwise become available.

         12. DELIVERY:

                  (a) Within ten (10) days of execution of this Agreement
         Grantor shall make delivery of all items specified in Exhibit "B"
         attached hereto and by this reference made a part hereof for the
         Catalog Titles. Each New Release shall be delivered to WHV pursuant to
         schedules to be provided to Grantor by WHV. Time of delivery is of the
         essence to this Agreement. The Pictures as delivered shall be of
         first-class technical quality in conformity with WHV standards for
         programs of this type. Delivery shall not be deemed completed until WHV
         has examined and approved in writing the film elements or video
         elements (as the case may be) for the Pictures as submitted by Grantor.

                  (b) On a regular basis during all phases of preproduction,
         production and post-production of the Pictures Grantor shall confer
         with Ned Price, or with any other representatives of WHV who may be
         designated by WHV from time to time, in connection with quality control
         and other technical matters pertaining to acceptable delivery of the
         Pictures.

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[Confidential treatment has been requested with respect to the omitted portions
of this exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as **. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.]

               (c) For all New Production proposals accepted by WHV, Grantor
         shall obtain and deliver to WHV, in form and substance satisfactory to
         WHV, and at Grantor's sole cost and expense, a completion guarantee
         furnished by a party satisfactory to WHV guaranteeing delivery of the
         Picture(s) to WHV in accordance with the requirements of this
         Agreement. Said completion guarantee shall be delivered no later than
         ten (10) days following WHV's acceptance of such New Production
         proposal.

         13. DVD DEVICES:

                  (a) ENHANCED CONTENT: Grantor and WHV shall mutually agree on
         any content added to or created for inclusion on DVD Devices of each
         Picture (the "Enhanced Content"), with WHV's decision final. WHV shall
         also consult with Grantor regarding the costs to be incurred by WHV in
         connection with the Enhanced Content. WHV shall be responsible for the
         creation and production of the Enhanced Content. Grantor shall make
         available free of charge any additional material required for the
         creation of such Enhanced Content and shall be responsible for clearing
         and obtaining all approvals for such material. All costs incurred by
         WHV in connection with the Enhanced Content shall be treated as an
         Additional Recoupable Advance, which WHV shall recoup from sums
         otherwise payable as Grantor's Royalty.

                  (b) AUTHORING, ENCODING AND COMPRESSION: WHV shall be one
         hundred percent (100%) responsible for all steps in the process leading
         to and including the production of the masters which are made to serve
         as prototypes for the duplication of the Pictures in the form of DVD
         Devices of the Pictures, including, without limitation, authoring,
         encoding and compression (the "Mastering Process"). All costs incurred
         by WHV in the Mastering Process shall be treated as an Additional
         Recoupable Advance, which WHV shall recoup from sums otherwise payable
         as Grantor's Royalty.

                  (c) ACCESS TO MASTERS: Upon Grantor's request for access to
         the master of DVD Devices for any Picture during or after the end of
         the Term, WHV shall invoice Grantor for any unrecouped portion of the
         costs incurred for the Enhanced Content and Mastering Process for such
         Picture, which shall be paid by Grantor within thirty (30) days of such
         invoice. Upon receipt of payment of such invoiced amounts, WHV shall
         provide Grantor access to the master of DVD Devices for such Picture.

         14. ROYALTY:

                  (a) GRANTOR'S ROYALTY: In full consideration of all rights
         granted herein and all services to be performed hereunder, WHV will pay
         to Grantor a royalty ("Grantor's Royalty") equal to ** of "Accountable
         Receipts" (as defined in Exhibit A). Grantor's Royalty and Accountable
         Receipts shall be computed, determined and payable in accordance with
         and subject to the provisions of Exhibit "A" attached hereto and by
         this reference made a part hereof.

                  (b) Notwithstanding the foregoing, WHV shall pay to Grantor a
         Royalty equal to ** of "Accountable Receipts" (as defined in Exhibit
         "A") for the following two (2) New Releases only, in the event WHV
         elects to release said New Releases: (i) "Baby Genius at the Wild
         Animal Park" and (ii) "Baby Genius at the San Diego Zoo" (collectively,
         the "Zoo Videos").

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[Confidential treatment has been requested with respect to the omitted portions
of this exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as **. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.]

                  (c)      In the event sales of any Picture distributed by WHV
                   under this Agreement exceed ** net units, WHV agrees to pay
                   Grantor a Royalty equal to ** of "Accountable Receipts" (as
                   defined in Exhibit "A") for that Picture only and only in
                   connection with sales from the ** net unit forward.

                  (d)      RECOUPABLE ADVANCE:

                           (i) CATALOG TITLES: WHV shall advance to Grantor an
                  amount totaling ** for the "Catalog Titles" (the "Catalog
                  Title Recoupable Advance"), which WHV shall recoup from sums
                  otherwise payable as Amounts Payable on a fully
                  cross-collateralized basis from all homevideo distribution by
                  WHV throughout the Territory, and which Catalog Title
                  Recoupable Advance shall be payable in installments as
                  follows:

                                    (a) ** thereof within ten (10) business days
                           following full execution of this Agreement; and

                                    (b) ** thereof within ten (10) business days
                           following completion of acceptable Delivery of the
                           Catalog Titles fully complying with Paragraph 12 of
                           this Agreement, and provided that this Agreement has
                           been fully executed.

                           (ii) NEW RELEASES: For each New Release that WHV
                  elects to distribute, WHV shall advance to Grantor an amount
                  between ** and ** based upon a mutually agreed upon production
                  budget (the "New Release Recoupable Advance"), which WHV shall
                  recoup from sums otherwise payable as Amounts Payable on a
                  fully cross-collateralized basis from all homevideo
                  distribution by WHV throughout the Territory. In no event
                  shall WHV's additional advance for any New Release exceed **,
                  regardless of Grantor's proposed budget for the New Release.
                  The parties agree that all costs exceeding or in addition to
                  the mutually agreed-upon production budget (and New Release
                  Recoupable Advance) shall be paid by Grantor. In the event
                  that the actual production costs are less than the amount set
                  forth in the mutually agreed-upon production budget, Grantor
                  and WHV shall share such underages on a ** basis. The New
                  Release Recoupable Advance shall be payable in installments as
                  follows:

                                    (a) ** thereof within ten (10) business days
                           of WHV's approval of the script;

                                    (b) ** thereof within ten (10) business days
                           of WHV's receipt of the rough cut; and

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[Confidential treatment has been requested with respect to the omitted portions
of this exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as **. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.]

                                    (c) ** thereof within ten (10) business days
                           of completion of delivery of the New Release title
                           fully complying with Paragraph 12 of this Agreement.

                           (iii) The Catalog Title Recoupable Advance and the
                  New Release Recoupable Advance will be collectively referred
                  to as the "Recoupable Advance(s)".

         15. WARRANTIES: Grantor hereby agrees, warrants and represents as
follows:

                  (a) Grantor has the right to grant to WHV the Homevideo Rights
         and all Incidental Rights, including but not limited to the necessary
         literary, artistic, musical, technological, intellectual property
         rights (including without limitation copyrights, rental and lending
         rights, and rights related to copyright and/or neighboring rights
         recognized under the law of any foreign jurisdiction), and there are no
         restrictions which could or would prevent WHV from exercising any
         rights granted to WHV hereunder;

                  (b) Grantor has not and will not take any action that could or
         would prevent the transfer to WHV of any newly created rights in the
         Picture(s);

                  (c) Grantor is free to enter into and fully perform this
         Agreement;

                  (d) Grantor has paid or will pay all charges, taxes, fees and
         other amounts which have been or may become owed in connection with the
         Picture(s) or the exploitation of Homevideo Rights or Incidental
         Rights, and there are no pending claims, liens, charges, restrictions
         or encumbrances on the Picture(s) or on the Homevideo Rights or
         Incidental Rights;

                  (e) Grantor has paid or will pay all wages, gross or profit
         participations, residuals, equitable or other remuneration for rental
         and/or lending rights, reuse fees, synchronization/mechanical
         royalties, and any and all other payments which must be made in
         connection with the Picture(s) or the Devices and in connection with
         exploitation of Homevideo Rights and Incidental Rights, to any third
         parties including, but not limited to, musicians, directors, writers,
         producers, announcers, publishers, composers, on-camera and off-camera
         performers and other persons who participated in production of the
         Picture(s), and to any performing rights societies, collection
         societies, unions, guilds or other labor organizations;

                  (f) The main and end titles of the film and/or video elements
         of the Picture(s) and all publicity, promotion, advertising and
         packaging information and materials supplied by Grantor will:

                           (i) Contain all necessary and proper credits for the
                  actors, directors, writers and all other persons appearing in
                  or connected with the production of the Picture(s) who are
                  entitled to receive the same, and

                           (ii) Comply with all applicable contractual, guild,
                  union and statutory requirements and agreements.

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                  (g) Exercise of the Homevideo Rights and Incidental Rights
         hereunder will not infringe on any rights of any third party,
         including, but not limited to, rights affecting copyright, rental and
         lending rights, rights related to copyright and/or neighboring rights
         recognized under the law of any foreign jurisdiction, patent,
         trademark, unfair competition, contract, property, defamation, privacy,
         publicity or "moral rights;"

                  (h) Grantor has not granted and will not grant any Homevideo
         Rights, Incidental Rights or any other rights in the Picture(s) or
         other audiovisual works which might derogate or interfere with the
         Homevideo Rights or Incidental Rights granted to WHV herein, and
         Grantor has not granted and will not grant to any third party the right
         to broadcast, cablecast or otherwise telecast the Picture(s) on basic
         cable, pay or pay-per-view television in any country in the Territory
         prior to twelve (12) months following availability of Devices to
         consumers in each such country in the Territory, and on free or other
         television systems prior to twenty-four (24) months following
         availability of Devices to consumers in each such country in the
         Territory;

                  (i) Each Picture is currently registered for copyright with
         the United States Copyright Office, and Grantor shall maintain such
         registration and any other existing copyright registrations in full
         force and effect during the Term; provided, however, that Grantor
         agrees to register for copyright in each country not party to the Berne
         Convention upon notice from WHV of intent to distribute one or more
         Pictures in any such country;

                  (j) Grantor has secured or will secure all necessary written
         consents, permissions and approvals for incorporation into the
         Picture(s) of the names, trademarks, likenesses and/or biographies of
         all persons, firms, products, companies and organizations depicted or
         displayed in the Picture(s), and Grantor has secured or will secure all
         necessary written consents, permissions and approvals for incorporation
         into the Picture(s) of any pre-existing film or video footage produced
         by third parties;

                  (k) WHV shall have the right to quiet and peaceful enjoyment
         of the Homevideo Rights and Incidental Rights;

                  (l) Grantor agrees to maintain a policy of Errors and
         Omissions insurance in connection with the Picture(s), with limits of
         no less than One Million Dollars ($1,000,000) per Picture, and to name
         WHV as an additional insured thereon; and

                  (m) Grantor will not grant any security interest in the Rights
         Granted that places any party in a priority position to WHV in the
         Rights Granted. Grantor will obtain inter-creditor and/or
         non-disturbance agreements to protect WHV's security interest (as set
         forth in Paragraph 19 below) and/or its distribution rights hereunder,
         as necessary.

                  (n) Each and every one of the representations and warranties
         made by Grantor herein shall survive the Term and any extension thereof
         and shall continue in full force and effect after expiration or
         termination of this Agreement whether by operation of law or otherwise.

                                       10

<PAGE>

         16. INDEMNITY: Grantor shall at all times indemnify and hold harmless
WHV, its distributors, licensees, assignees and Affiliates (as defined in
Exhibit "A" hereto), and the officers, directors, employees and agents of all of
the foregoing, against and from any and all claims, damages, liabilities, costs
and expenses, including reasonable attorneys' fees and expert witness fees,
herein collectively called "claims," arising out of the exercise pursuant hereto
of Homevideo Rights, Incidental Rights or any other rights hereunder, the
contents of the Picture(s), any illegal act committed by Grantor in connection
with the Picture(s), or arising out of any breach by Grantor of any
representation, warranty or other provision hereof. Upon notice from WHV of any
such claim, or related demand or action being advanced or commenced, Grantor
agrees to adjust, settle, or defend same at the sole cost of Grantor, and WHV
shall have the right to approve any settlement or disposition thereof to the
extent that any rights or obligations of WHV may be concerned. If Grantor shall
fail promptly so to do, WHV shall have the right and is hereby authorized and
empowered by Grantor to adjust, settle, compromise, litigate, contest, satisfy
judgments and take any other action necessary or desirable for the disposition
of such claim, demand or action, and, if necessary, to appear by WHV's attorneys
in any action, all without affecting Grantor's indemnity; provided, that if
Grantor makes bonding arrangements reasonably satisfactory to WHV assuring WHV
of reimbursement for all payments and expenses in connection with such claims,
demands and causes of action (including, without limitation, reasonable
attorneys' fees and expert witness fees), WHV shall not settle such claim,
demand or cause of action without Grantor's consent, which shall not be
unreasonably withheld. The foregoing sentence shall not apply and WHV's right to
settle any claim, demand or cause of action and Grantor's indemnity obligation
shall remain unlimited where WHV deems advisable a settlement of a lawsuit in
which a claim, demand or cause of action for an injunction is made against the
exploitation of the Picture(s). Grantor shall fully reimburse WHV for all
payments and expenses incurred or made thereby by WHV, including attorneys' fees
and expert witness fees, within fifteen (15) days after demand therefor by WHV.
If Grantor shall fail so to reimburse WHV then, without waiving any of its
rights or remedies otherwise to enforce such reimbursement, WHV shall have the
right to deduct the amount of such payments and expenses from any sums accruing
to or for the account of Grantor under this Agreement or any other agreement.

         17. COPYRIGHT PROTECTION: In the event Grantor shall fail to maintain
copyright protection for the Picture(s) pursuant to Subparagraph 15.(i) hereof,
WHV shall have the right as attorney-in-fact for Grantor to renew or obtain and
register the copyright therein in Grantor's name, and to execute and record such
documents as WHV may deem necessary to evidence WHV's rights hereunder. WHV
shall also have the right to bring, prosecute, defend and appear in suits,
actions and proceedings of any nature regarding any and all (a) copyrights in
and to the Picture(s) and all renewals thereof, and (b) any infringement or
interference with any of the rights hereby granted under said copyrights or
renewals thereof. Any such action may be brought in WHV's own name or in the
name of the copyright proprietor, but at the expense of Grantor, and, at WHV's
sole election, WHV may join such copyright proprietor (and/or Grantor if
copyright proprietor is a person or entity other than Grantor) as a party
plaintiff or defendant in any such suit, action or proceeding. Without limiting
any of its rights to otherwise enforce the terms of this Agreement, in the event
Grantor shall breach any other representations and warranties contained in this
Agreement, WHV shall have the right as attorney-in-fact for Grantor to take all
reasonable and necessary steps to preserve the Homevideo Rights, Incidental
Rights and other rights herein granted, including but not limited to making
payments due to third parties, and having done so WHV may thereafter deduct from
Grantor's Royalty otherwise payable any and all payments so made, as well as any
and all costs incurred in connection therewith.

                                       11

<PAGE>

         18. INCIDENTAL RIGHTS: WHV shall have usual and customary incidental
rights ("Incidental Rights") in connection with the Picture(s) including, but
not limited to, the following:

                  (a) VERSIONS: The right to dub or add subtitles to the
         Picture(s) in any language;

                  (b) CLOSED CAPTIONING: The right to prepare closed caption
         versions of the Picture(s) for the benefit of the hearing-impaired;

                  (c) TITLES: The right to change the title of the Picture(s);

                  (d) ALTERATION OF PICTURE(S): The right to edit or modify the
         Picture(s) in order to meet the requirements of censorship, community
         standards, statute or ordinance; however, WHV shall not materially
         alter the Picture(s) or make any change in the credits contained in the
         Picture(s) without Grantor's approval, except that WHV may add to the
         Picture(s) or Devices, or include on the packaging material thereof,
         the names and logos of WHV and its licensees;

                  (e) SUBLICENSING: The right to sublicense or subdistribute any
         of the Homevideo Rights and Incidental Rights on WHV's behalf upon such
         terms and conditions as WHV, in its sole discretion, may deem proper or
         expedient;

                  (f) RENTAL/LENDING: The right to authorize or prohibit the
         rental and/or lending of Devices of the Picture(s), wherever the law of
         any country of the Territory provides for such right;

                  (g) ADDITIONAL MATERIAL: The right to include in the
         audiovisual encoding of Devices, placed either prior to or following
         the Picture(s) (but not as part of the Picture(s) and not interrupting
         the Picture(s)), other programs or motion pictures including, without
         limitation, the Picture(s), trailers announcing homevideo availability
         of other motion pictures and video programs contained in WHV's catalog,
         trailers announcing theatrical availability of upcoming or current
         Warner Bros. releases, promotions and contests, and advertising
         relating to products and services;

                  (h) PROMOTION: The right to advertise, promote and publicize
         the Picture(s) and Devices in any media, or authorize others to do so,
         and such advertising, promotion and publicity may include synopses of
         or excerpts from the Picture(s) or pre-existing advertisements,
         publicity pieces and promotional materials, in whole or in part, for
         the Picture(s);

                  (i) NAME AND LIKENESS: The right, subject to any pre-existing
         contractual restrictions thereon of which Grantor shall give WHV timely
         written notice, to use and authorize others to use on the packaging of
         any Device the name and likeness of any person who rendered services in
         connection with the Picture(s), and WHV may use and authorize others to
         use said name and likeness (and the voice of such person) for the
         purpose of advertising, promoting or publicizing the Picture(s) or
         Devices.

                                       12

<PAGE>

         19. SECURITY INTEREST: With respect to each Picture, as security for
Grantor's representation, warranties, obligations and agreements hereunder and
for the rights granted to WHV hereunder, including, without limitation, the
Homevideo Rights and Incidental Rights in and to each Picture and WHV's rights
to recoup all monies due to it hereunder, Grantor hereby pledges, conveys,
hypothecates, mortgages, assigns, sets over, delivers and grants to WHV a
continuing first priority security interest in all of the right, title and
interest of every kind or nature whatsoever of Grantor in and to, but none of
its obligations with respect to, the following described items, whether now
owned or existing or hereafter created, acquired or arising, and wheresoever
located (hereinafter collectively referred to as "Collateral"):

                  (a) All of the right, title, and interest of Grantor of every
         kind (including, without limitation, copyrights and any extensions and
         renewals thereof and any rights related to copyright and/or neighboring
         rights recognized under the law of any foreign jurisdiction with
         respect to each Picture), in and to all Homevideo Rights and Incidental
         Rights granted to WHV under the Agreement and all like or similar
         rights that may now or hereafter be retained or recovered by Grantor;

                  (b) All rights to possession held by or on behalf of Grantor
         to all physical properties described in Exhibit "B" attached hereto,
         necessary or desirable to WHV to exercise the Homevideo Rights or
         Incidental Rights granted to WHV under the Agreement;

                  (c) All proceeds and products relating to or arising from any
         of the foregoing, including accounts, contract rights, chattel paper,
         all money and claims for money (whether or not such claims to money
         have been earned by performance), general intangibles, documents and
         instruments, including, but not limited to, all Gross Receipts,
         Accountable Receipts (whether or not due, earned or payable to Grantor
         under the Agreement) and any insurance now or hereafter payable by
         reason of any loss or damage to any Collateral and any proceeds thereof
         and all replacements, additions, accessions, substitutions, proceeds
         and products relating to or arising from any of the Collateral;

                  (d) All of Grantor's rights under production, financing and
         acquisition agreements in and to the exploitation of the rights granted
         to WHV under the Agreement relating to motion pictures which if
         completed would constitute the Picture(s); and

                  (e) All of Grantor's rights to all literary, dramatic, musical
         and other material created for the Picture(s) or upon which the
         Picture(s) are based or to be based, in whole or in part, or which are
         used in connection with the Picture(s), including, without limitation,
         screenplays and any underlying materials upon which screenplays are
         based, and all common law and statutory domestic and foreign
         copyrights, any rights related to copyright and/or neighboring rights
         recognized under the law of any foreign jurisdiction, and rights and
         interests in copyrights and renewals and extensions of copyrights, in
         and to said literary, dramatic, musical and other written material; but

                                       13

<PAGE>

         only to the extent necessary to protect WHV's ability to exercise the
         Homevideo Rights and Incidental Rights in the Picture(s) during the
         Term and in the Territory in the manner and to the extent provided for
         in the Agreement.

         20. EXCLUSIVITY: As of the date of this Agreement, Larry Balaban is the
Senior Vice President Marketing and Production of Grantor and is directly
involved in the creative concepts/proposals of the Pictures and execution of
those proposals. Larry Balaban specifically agrees that he will not produce any
video product outside of this Agreement during the Term and any extension
thereof so long as he is an employee of Grantor. It is further agreed by the
parties hereto that any children's video concepts developed by Grantor or Larry
Balaban (so long as he is an employee of Grantor) whether or not for Grantor or
the Baby Genius or Kid Genius label shall fall under Paragraph 5 of this
Agreement. It is additionally agreed that in the event Larry Balaban leaves
Grantor's employ during the first three (3) years of the Term of this Agreement,
he shall not create or develop any children's videos that would compete with the
Pictures. It is also agreed that WHV shall have the first right to negotiate in
connection with any other video concepts developed by Grantor or Larry Balaban,
and Grantor and WHV shall so negotiate in good faith for a period extending for
no less than thirty (30) days unless agreement is earlier reached. In the event
that no agreement is reached within said thirty (30) days following commencement
of said negotiations, Grantor may negotiate elsewhere; provided that if Grantor
is thereafter prepared to enter into an agreement with a third party for the
license of homevideo rights for these other video concepts, Grantor shall,
before entering into such agreement, give WHV notice of the proposed terms
thereof (and all modifications of such terms) and the name of the party
involved. In each instance, WHV shall then have ten (10) business days in which
to elect to acquire said homevideo rights on the terms contained in the notice.

         21. ADDITIONAL DOCUMENTS: Grantor shall promptly execute, acknowledge
and deliver to WHV all financing statements and other documents which WHV may
reasonably require to perfect, protect, evidence, renew and/or continue the
security interest in the Collateral granted hereunder or to effectuate any of
the purposes and intents of this Agreement. If Grantor fails to execute any such
document promptly upon request, Grantor hereby appoints WHV its irrevocable
attorney-in-fact to execute any such document on Grantor's behalf and Grantor
agrees that such appointment constitutes a power coupled with an interest and is
irrevocable throughout the Term or any renewal thereof. WHV shall have the right
to file and/or record this Agreement or any appropriate statement or document
with any relevant authority and, where permitted by applicable law, to do any of
the foregoing with or without execution by or on behalf of Grantor.

         22. RELATIONSHIP OF PARTIES:

                  (a) NO PARTNERSHIP OR JOINT VENTURE: WHV shall not be deemed a
         fiduciary, partner, or joint venturer of Grantor.

                  (b) ASSIGNMENT:

                           (i) BY WHV: WHV may not assign this Agreement without
                  Grantor's consent, provided that an assignment to any of WHV's
                  respective subsidiaries, parents, related or affiliated

                                       14

<PAGE>

                  companies or to any successor entity or other party acquiring
                  all or substantially all of the business or assets of WHV or
                  into which WHV may be merged or consolidated shall not require
                  Grantor's consent.

                           (ii) BY GRANTOR: Any pledge, hypothecation, mortgage,
                  or other encumbrance of the Picture(s), or any assignment,
                  sale or transfer of rights herein, purported to be made by or
                  on behalf of Grantor, shall be void; provided, however, that
                  after the completion of Grantor's delivery of each Picture in
                  accordance with the terms of this Agreement any assignment,
                  sale or transfer of Grantor's right to receive Recoupable
                  Advances and Grantor's Royalty under this Agreement shall be
                  valid if it shall be made specifically subject to WHV's rights
                  herein, and WHV's payment of Recoupable Advances and Grantor's
                  Royalty to the assignee, buyer or transferee shall be subject
                  to the execution of WHV's standard form of payment
                  authorization.

                  (c) REMEDIES: Grantor waives any right to purport to terminate
         the Homevideo Rights or Incidental Rights granted hereunder or to
         pursue any remedies in connection with this Agreement other than a suit
         for money damages.

                  (d) WHV AFFILIATES: No Affiliate shall be considered as an
         agent for or as the same entity as WHV.

                  (e) DISTRIBUTION AND EXPLOITATION: WHV shall have sole
         discretion: (i) to determine the parties, sale price, and all other
         terms of each agreement, if any, entered into by WHV for the
         exploitation of Homevideo Rights and Incidental Rights; (ii) to settle
         any claim with respect to any such agreement, any Devices, or the
         Homevideo Rights and Incidental Rights; (iii) to distribute free or
         promotional Devices; and (iv) to destroy or erase Devices. WHV shall
         consult with Grantor regarding the marketing of the Pictures, with
         WHV's decisions as to marketing final. WHV makes no representation or
         warranty with respect to WHV's efforts in connection with the
         exploitation of Homevideo Rights and Incidental Rights or that such
         exploitation will result in any minimum amount of Amounts Payable.

                  (f) RECOUPMENT OF ADVANCE: At any time during the Term, if the
         Recoupable Advance is not recouped from Grantor's Royalty WHV may, in
         its sole discretion and upon ten (10) business days prior written
         notice to Grantor, recoup such Advance from any other monies due
         Grantor or any of its related or affiliated entities under this or any
         other agreement between WHV and Grantor and/or any of their related or
         affiliated entities.

         23. CONFIDENTIALITY: All of the terms and conditions of this Agreement
shall remain confidential, and no public statement or other public announcement
regarding this Agreement in whole or in part shall be released, issued or made
without prior written approval of WHV.

         24. MISCELLANEOUS:

                                       15

<PAGE>

                  (a) NOTICES: All notices to be given to WHV hereunder shall be
         addressed to WARNER HOME VIDEO, a Division of Time Warner Entertainment
         Company, L.P., 4000 Warner Boulevard, Burbank, California 91522,
         attention: Senior Vice President Business Affairs and General Counsel.
         All notices to be given to Grantor hereunder shall be addressed to
         Grantor at the address for Grantor first above written, or such other
         address as Grantor may indicate.

                  (b) UNENFORCEABILITY: If there is any conflict between any
         provision of this Agreement and any present or future statute, law,
         ordinance, regulation or collective bargaining agreement, the latter
         shall prevail; provided, that the provision hereof so affected shall be
         limited only to the extent necessary and no other provision shall be
         affected.

                  (c) LIMITATIONS ON EXERCISE OF RIGHTS GRANTED: Notwithstanding
         anything herein contained to the contrary, in the event that WHV is
         prohibited (for reason of censorship or any other reason) by any
         authority of the government of any country of the Territory (or of any
         political Division of such country, such as a state or province) from
         exercising Homevideo Rights in such country (or in such political
         Division, as the case may be), the amount of said Recoupable Advance
         otherwise payable to Grantor hereunder shall be reduced (and if already
         paid, shall be proportionately refunded) by an amount calculated by
         multiplying said Recoupable Advance by a fraction, the numerator of
         which is the number of Video Playback Systems in use by consumers in
         their places of dwelling in such country (or in such political
         Division, as the case may be), and the denominator of which is the
         number of Video Playback Systems in use by consumers in their places of
         dwelling in the aggregate of all of those countries included in the
         Territory in which Devices are or will be made available to consumers
         by WHV, Affiliates, or their licensees. For purposes of making this
         calculation, data with respect to the number of Video Playback Systems
         in use shall be drawn by WHV from then current Worldwide VCR Population
         Reports (or its equivalent) published by the Motion Picture Association
         of America.

                  (d) FORCE MAJEURE: Notwithstanding any other provision of this
         Agreement, the Term herein provided for, and any extension thereto, may
         be suspended upon notice in any country of the Territory during all
         periods in which manufacture, sales, distribution and/or marketing of
         Devices in such country is prevented, hampered or interrupted because
         of force majeure events (e.g. any labor dispute, industrial accident,
         major fire, major theft, act of God, war, governmental action,
         injunction, third party breach of contract, or other material
         interference with WHV's business activities, or any other event beyond
         WHV's control); thereafter, upon cessation of such event, the Term
         shall resume running in such country and shall be extended therein by a
         period of time equal to the number of days during which it was
         suspended.

                  (e) EMU CONTINUITY PROVISION: The parties hereto confirm that
         none of the following events shall either have the effect of
         discharging or excusing performance under this Agreement, or give a
         party to this Agreement the right to unilaterally alter or terminate
         this Agreement: (i) the introduction of, changeover to or operation of
         the euro; (ii) the substitution or replacement by the euro of the
         currency or currencies originally designated in this Agreement; (iii)
         the use of the euro in determining the value of the currency or
         currencies originally designated in this Agreement; (iv) the tendering
         of euros, in each case at the conversion rates specified in, and

                                       16

<PAGE>

         otherwise calculated in accordance with, the regulations adopted by the
         council of the European Union; or (v) the withdrawal from legal tender
         of the currency or currencies originally designated in this Agreement
         and the substitution of such currency or currencies by the euro as
         lawful currency. The parties hereto further confirm that performance of
         any of the pecuniary obligations described or set forth under this
         Agreement (including the payment of interest hereunder) may be made in
         the currency or currencies originally designated in this Agreement (so
         long as such currency or currencies remain legal tender) or in euro, it
         being expressly understood that performance of any of such obligations
         shall be made in euro as of such time where the currency or currencies
         originally designated in this Agreement are withdrawn from legal
         tender.

                  (f) CEASE AND DESIST: In the event Grantor receives a cease
         and desist letter or any threatened or actual claim with respect to the
         use of the "Baby Genius" name, the "Kid Genius" name or the name of any
         of the Pictures, Grantor shall immediately notify WHV of the same in
         writing, and in the event WHV has to stop distributing any of the
         Pictures as a result, Grantor shall refund any of the unrecouped
         Advances (including the Additional Recoupable Advances), plus interest,
         to WHV within ten (10) days of WHV's request therefor.

                  (g) FURTHER DOCUMENTATION: Grantor will, upon WHV's request,
         promptly furnish to WHV copies of such agreements or other documents as
         WHV may desire in connection with any provisions of this Agreement.

                  (h) AMENDMENTS: This Agreement cannot be amended, modified or
         changed in any way except by a written instrument executed by both
         parties.

                  (i) NO WAIVER: No delay in enforcing any right under this
         Agreement shall constitute a waiver of such right. No waiver of any
         default hereunder shall be effective unless executed in writing by the
         party charged therewith, nor shall any waiver operate as a waiver of
         any other default or of the same default on a future occasion.

                  (j) APPLICABLE LAW: This Agreement and all matters or issues
         collateral thereto shall be governed by the laws of the State of
         California applicable to contracts executed and performed entirely
         therein without regard to principles of conflict of laws. The parties
         herein agree that all actions, proceedings or litigation relating to
         this Agreement shall be instituted and prosecuted solely within the
         county of Los Angeles, State of California and each party hereby
         consents to the jurisdiction of the state courts of California and the
         federal courts located within the State of California with respect to
         any matter arising out of or relating to this Agreement. If for any
         reason a party to this Agreement may not be validly served at the
         address first set forth above, then such party (other than WHV)
         appoints the Secretary of State of the State of California to accept
         service of process on such party's behalf. WHV designates and appoints
         Beth Baier, at the address herein specified, as its agent in the State
         of California, or such other person as WHV may designate and appoint to
         act as its agent. If for any reason said person may not be validly
         served, then WHV appoints WHV's corporate secretary to accept service
         of process on WHV's behalf.

                                       17

<PAGE>

                  (k) SIGNATURE IN COUNTERPART: This Agreement may be signed in
         counterpart, each of which shall be deemed an original, but all of
         which together shall constitute the Agreement.

                  (l) CAPTIONS: The captions herein are inserted for reference
         and convenience only and in no way define, limit or describe the scope
         of this Agreement or intent of the provisions.

                  (m) ENTIRE AGREEMENT: This Agreement contains the entire
         understanding and supersedes all prior oral and written understandings
         of the parties hereto relating to the subject matter herein.

IN WITNESS WHEREOF the parties hereto hereby execute this Agreement as of the
date first written above.

WARNER HOME VIDEO, a Division
of Time Warner Entertainment
Company, L.P. ("WHV")

By:  /s/ illegible
     -----------------------------

Its:
     -----------------------------

GENIUS PRODUCTS, INC.
("Grantor")

By:  /s/ Klaus Moeller
     -----------------------------

Its: CEO
     -----------------------------

I, Larry Balaban, specifically acknowledge and agree to the provisions of
Paragraph 20 of this Agreement.

/s/ Larry Balaban
-----------------------------
Larry Balaban

                                       18

<PAGE>

                                   Exhibit "A"
                                   -----------

                       COMPUTATION OF ACCOUNTABLE RECEIPTS
                       -----------------------------------
                         AND AMOUNT OF GRANTOR'S ROYALTY
                         -------------------------------

         1. GENERAL DEFINITIONS: As used in this Exhibit and in the Agreement,
the following terms shall have the following meanings:

         "AGREEMENT" shall mean the Homevideo Distribution Agreement to which
         this Exhibit is attached and made a part, inclusive also of this
         Exhibit and all other Exhibits thereto.

         "AFFILIATE" shall mean any entity which owns or controls, is owned or
         controlled by, is under common ownership or control with, or is
         otherwise related in whole or in part by way of ownership or control
         with, WHV, including but not limited to parent companies, subsidiary
         companies and sister companies of WHV. The word "control" (including
         "controlled by" and "controls") as used in the preceding sentence shall
         be deemed to mean possession, directly or indirectly, of the power to
         command the course of management, policy making and business activity
         of the entity or of WHV, as the case may be, through ownership of 50%
         or more of voting securities.

         "DIRECT MARKETING AFFILIATE" shall mean an Affiliate engaged in the
         exploitation of Homevideo Rights through distribution of Devices
         directly to consumers for homevideo exhibition (other than through
         retail or wholesale outlets) through any direct marketing distribution
         method, including direct mail, mail order, telephone order, club
         membership, television and/or radio solicitations, continuity series
         offerings or single title offerings ("Direct Mail Distribution"). Any
         agreement between WHV and a Direct Marketing Affiliate shall be
         negotiated at arms' length.

         "UNRELATED THIRD PARTIES" shall mean any and all entities other than
         WHV, Affiliates and Direct Marketing Affiliates.

         2. GROSS RECEIPTS:

                  (a) "Gross Receipts" means the aggregate of the following:

                           (i) 100% of all sums actually received by WHV and
                  Affiliates from Unrelated Third Parties in U.S. Dollars in the
                  United States from the exploitation of Homevideo Rights other
                  than sums received pursuant to Subparagraph 2.(a)(ii) below.

                           (ii) 100% of all royalties actually received by or
                  credited to the account of WHV and WHV Affiliates (excluding
                  sums received by Direct Marketing Affiliates) in U.S. Dollars
                  in the United States from the exploitation of Homevideo Rights
                  through Direct Marketing Distribution which is conducted by

                                       -1-

<PAGE>

                  Unrelated Third Parties or Direct Marketing Affiliates to
                  which WHV or Affiliates supply ready-manufactured units of the
                  Devices. WHV shall not be obligated to pay to Grantor any
                  portion of any sums received by WHV which constitute
                  reimbursement to WHV for the cost of the ready-manufactured
                  units.

                  (b) 100% of all sums actually received by WHV in U.S. Dollars
         in the United States from exploitation of Incidental Rights.

                  (c) Gross Receipts shall be deemed to exclude sums received by
         WHV and/or Affiliates which represent sales taxes, value added taxes,
         excise taxes, and similar taxes which are collected by WHV and
         Affiliates as required by any requisite taxing authorities of any
         government. Gross Receipts shall also be deemed to exclude foreign
         currencies to the extent any foreign licensing society or organization
         collects or withholds any portion thereof on behalf of or for the
         benefit of Grantor.

                  (d) With respect to foreign currencies received by WHV and
         Affiliates in connection herewith, it is agreed and understood that no
         sums received shall be included in Gross Receipts hereunder unless and
         until such sums (i) have been received in U.S. Dollars in the United
         States, or (ii) such sums received which are capable of being remitted
         to the United States have not been remitted within ninety (90) days
         from the day such sums were capable of being remitted, in which latter
         case these sums shall be included in Gross Receipts at the official or
         unofficial rate of exchange, as WHV may elect, on the day such sums
         were capable of being remitted. WHV's reasonable judgment with respect
         to the rate of exchange applied for computation of conversion shall be
         binding and conclusive upon Grantor provided WHV determines such
         conversion rate in the same manner as WHV determines conversion rates
         for other grantors to WHV of Homevideo Rights. WHV and Affiliates shall
         not be liable in any way for any losses caused by fluctuation in the
         rate of exchange or because of any failure by any person or entity to
         convert or remit at any particular time or at a more favorable cost or
         rate of exchange than the cost or rate of exchange at which such
         conversion and remittance was accomplished.

                  (e) Gross Receipts are at all times subject to retroactive
         adjustments for returns, refunds, credits, settlements, rebates and
         discounts.

         3. DEDUCTIBLE AMOUNTS: "Deductible Amounts" means the sum of the
following:

                  (a) PROTOTYPE COSTS: All direct, actual costs and expenses
         incurred by WHV and Affiliates (including but not limited to costs of
         development, facilities, materials, services, use of equipment, foreign
         version dubbing, editing, sub-titling and closed captioning) in
         connection with all steps in the process leading to and including the
         production of the masters which are made to serve as prototypes for the
         duplication of the Picture(s) in the form of Devices and the

                                      -2-

<PAGE>

         development and production of domestic and foreign prototype packaging
         and advertising for Devices. Each such cost shall be included as a
         Deductible Amount when the obligation to pay for it is incurred or
         contracted for, even if payment has not yet been made. If in connection
         with such process WHV furnishes any of its own facilities, materials,
         services or equipment for which WHV has a standard rate, then the
         amount of such standard rate shall be deemed the amount of the
         applicable cost;

                  (b) TAXES: All taxes which are levied upon or payable by WHV
         and Affiliates with respect to all or part of the revenues derived from
         the exploitation of Homevideo Rights, or upon remittance of all or part
         of such revenues, but specifically excluding corporate income taxes
         levied on net profits of WHV and Affiliates. In no event shall the
         deductible amount of any such taxes (however denominated) imposed upon
         WHV or Affiliates be decreased (nor the Gross Receipts increased)
         because of the manner in which such taxes are elected by WHV to be
         treated in filing net income, corporate franchise, excess profits or
         other tax returns;

                  (c) REMITTANCE COSTS: All costs of transmitting or remitting
         to the United States any funds accruing pursuant hereto to WHV or
         Affiliates in foreign countries, such as cable expenses, bank charges,
         and similar charges; and

                  (d) RESERVES: The amount of the reserves established by WHV
         and Affiliates against Gross Receipts for future returns of Devices.
         Said reserves shall be maintained at reasonable levels for a reasonable
         amount of time consistent with WHV policies for its own product. It is
         understood between the parties that one-half of such reserves shall be
         liquidated no later than one (1) year following the Accounting Period
         (as hereinafter defined) for which such reserves were set up and the
         balance of such reserves shall be liquidated no later than two (2)
         years following the Accounting Period for which such reserves were set
         up; provided, however, that if WHV estimates that future returns will
         exceed reserves as established at the end of any Accounting Period then
         WHV shall have the right, after notice to Grantor, to establish
         sufficient reserves to cover such estimated future returns.

         4. ACCOUNTABLE RECEIPTS: "Accountable Receipts" means Gross Receipts
less Deductible Amounts.

         5. AMOUNTS PAYABLE: "Grantor's Royalty" is defined in the Agreement.
The amount payable at the end of any Accounting Period is the net amount of
Grantor's Royalty earned from commencement of the Term of the Agreement through
the end of such Accounting Period, less the sum of the following:

                  (a) Any and all costs, expenses, and payments made or incurred
         by WHV and Affiliates which were occasioned by Grantor's breach of any
         of Grantor's representations and warranties contained in the Agreement;

                                      -3-

<PAGE>

[Confidential treatment has been requested with respect to the omitted portions
of this exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as **. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.]

                  (b) All interest charges computed on the unrecouped balances,
         if any, for previous Accounting Periods; and

                  (c) All Recoupable Advances and Additional Recoupable
         Advances, if any, plus Grantor's Royalty previously paid as of the end
         of such Accounting Period.

         Interest will be calculated on Recoupable Advances and Additional
Recoupable Advances, if any, at a rate per annum equal to 125% of the rate
announced from time to time by the First National Bank of Boston as its prime
rate on unsecured loans to its preferred customers. Said interest shall be
calculated from the date on which such Recoupable Advances and Additional
Recoupable Advances, if any, are paid until the date on which such Recoupable
Advances and Additional Recoupable Advances, if any, are recouped under this
Paragraph 5.

         6. STATEMENTS AND PAYMENTS: WHV shall account to Grantor on a ** basis
for the Term commencing at any time designated by WHV, and if WHV does not
designate a time then on January 1 and July 1 of the applicable year (except
that the initial Accounting Period shall commence on the date of this Agreement
and shall continue only until the commencement of the next Accounting Period),
so long as the amounts due to Grantor exceed **. In the event the amounts due to
Grantor are less than **, then WHV shall account to Grantor on a ** basis (each
of the foregoing an "Accounting Period"). Within sixty (60) days after the end
of an Accounting Period, Grantor shall be sent a statement showing the
computation of Accountable Receipts and Grantor's Royalty for such Accounting
Period on a cumulative basis and Grantor shall be paid any balance due of any
amounts payable based thereon for such Accounting Period; except that Grantor
shall be sent statements only in the event that such statements will reflect a
payment due of Grantor's Royalty earned for the Accounting Period to which such
statement applies. Notwithstanding the foregoing, in the event that there are no
Royalties due to Grantor, WHV shall provide Grantor with quarterly statements
for the first three (3) years of the Term and then semi-annually for the
remainder of the Term, including any extension thereof. WHV's failure to send
any statement when due hereunder shall not be deemed a breach of this Agreement
unless Grantor shall have first given WHV written notice of such failure, and
WHV shall not have cured such failure within thirty (30) days after WHV's
receipt of such written notice.

         7. CONCLUSIVENESS OF STATEMENTS: WHV shall keep all of WHV's books and
records directly relating to the Agreement in accordance with accepted
accounting principles. Grantor may, at WHV's offices and for and during
reasonable times within the regular course of business activities, but not more
than once per calendar year, have a certified public accountant inspect and make
copies of any such books and records not previously inspected, all at Grantor's
sole expense. Each such inspection shall be completed within thirty (30)
consecutive days. Each statement rendered shall be deemed conclusive unless
Grantor shall object in writing to WHV within 18 months after receipt thereof
and shall state in detail in such writing the basis for the objection. Grantor

                                      -4-

<PAGE>

shall be barred from bringing any legal proceeding on the subject matter of such
objections later than twelve (12) months after making such objections. If any
figures on a statement re-appear on, or are included in cumulative amounts on,
any later statement, the later statement shall be disregarded in computing
Grantor's time to object or bring such legal proceedings.

                                      -5-

<PAGE>

                                   Exhibit "B"
                                   -----------

                              DELIVERY REQUIREMENTS
                              ---------------------

IT IS CONTEMPLATED AS OF THE DATE OF THIS AGREEMENT THAT GRANTOR SHALL DELIVER
THE PICTURES IN THE DIGITAL BETACAM FORMAT.

GRANTOR SHALL, AT GRANTOR'S COST, DELIVER THE ELEMENTS FOR THE PICTURE(S) LISTED
IN ITEMS 1 AND 2, BELOW, AS APPLICABLE, TO THE FOLLOWING ADDRESS OR TO ANY SUCH
OTHER ADDRESS AS WHV MAY INDICATE:

                           Warner Bros. Acquisitions Department
                           4000 Warner Blvd.
                           Bldg. 180, Room 421
                           Burbank, CA 91522

Grantor shall, at Grantor's cost, deliver the materials and documents for the
Picture(s) listed in items 3 and 4, below, to the following address, or to any
such other address as WHV may indicate:

                           Warner Home Video Business and Legal Affairs
                           4000 Warner Blvd.
                           Bldg. 170, Room 4018 Burbank, CA 91522
                           ATTN: Director of Legal Administration

1. FILM PROPERTIES, IF APPLICABLE:

         Subject to WHV's examination and technical approval, a digital
component original video signal, and any additional footage for value-added
supplemental elements for DVD, all of which may be delivered on DCT or digital
Betacam format ("Video Elements"). Video that has originated in digital
composite form is not acceptable. If international distribution rights have been
granted, digital component original video signals of both NTSC and PAL standards
(as applicable to the Territory) are required.

         In the event the Video Elements set forth above are not approved by
WHV, WHV may elect in its sole discretion to accept "Access" to the elements
("Film Elements") set forth below. The word "Access" as used in this Exhibit
shall mean the ability to use the Film Elements designated and to cause them to
be transferred at a lab selected by Warner Bros. Technical Operations, at
Grantor's cost. In addition, Access to Film Elements shall include all dubbed
and/or subtitled versions in all applicable foreign languages in accordance with

                                      -1-

<PAGE>

WHV's distribution rights as set forth in the Agreement to the extent that such
versions may exist or be produced for the Territory. All Film Elements shall be
of the highest quality, free from scratches, patches or other physical blemishes
and shall conform to the final edited version of the Picture(s) and shall be in
the same ratio of camera picture images in which the Picture(s) was
photographed.

         (a) BLACK AND WHITE FILMS

                  Delivery of a 35mm fine grain. In the event this element is
         unavailable, Grantor shall guarantee Access to the original camera
         negative to allow WHV to create a new fine grain element from the
         original negative at a lab of WHV's choice, at Grantor's cost.

                  Delivery of a 35mm magnetic sound master (stereo where
         applicable). Dolby SR encoded with start marks. Audio track must be in
         perfect synchronization with picture elements supplied. In the event a
         35mm magnetic sound master is unavailable, Access to the optical sound
         track negative is required. Data reduced audio source material is not
         acceptable for delivery.

         (b) COLOR FILMS

                  Delivery of a 35mm interpositive and a 35mm "screening" print
         to be used for time comparison purposes. In the event that the 35mm
         interpositive is unavailable, Grantor shall guarantee Access to the
         original camera negative to allow WHV to create a new interpositive at
         a lab of WHV's choice, at Grantor's cost.

                  Delivery of a 35mm magnetic sound master (stereo where
         applicable), Dolby SR encoded with start marks. Audio track must be in
         perfect synchronization with picture elements supplied. If the original
         audio source is unavailable, Access to the optical sound track negative
         is required.

         (c) AUDIO FOR BOTH BLACK AND WHITE FILMS AND COLOR FILMS

                  If the Picture was recorded in six-track for digital
         theatrical release, WHV will require Access to the six-track "SR"
         encoded English mag master.

                  Delivery of an optical magneto disc is required for digital
         theatrical features (where applicable) for theatrical distribution.

                  Delivery of a fully filled music and effects track is
         required. This track must be 35mm "SR" encoded magnetic track in the
         format of the original sound mix (either six-track or two-track).

                  Data reduced original audio source material is not acceptable
         for delivery for any 35mm magnetic audio source materials.

                                      -2-

<PAGE>

         (d)      INTERNATIONAL DISTRIBUTION RIGHTS

                  When international distribution rights are granted, the
         following Film Elements are also required for delivery to WHV:

                  A foreign textless background negative of any main, end or
         narrative sections and all descriptive titles WITHOUT the
         English-language text, but with the background action conforming in all
         respects to the English version. In addition, title overlays must be
         provided on a separate 35mm element.

                  A detailed combined dialogue continuity script.

                  If the original soundtrack of the Picture is nonaural, a mono
         magnetic sound master conformed in all respect on a 35mm magnetic full
         coat tape, with separate dialogue, music and sound effects tracks.

                  If the original soundtrack is six-track for digital theatrical
         distribution, a six-track 35mm full cost magnetic English masters is
         required in addition to a two track "SR" 35mm full coat magnetic
         English master.

                  If the Picture is filmed in Dolby stereo, a two-track Dolby
         35mm full coat magnetic English stereo master and a 35mm "SR" encoded
         music and effects tracks are also required for delivery to WHV. Such
         tracks must be matrixed to two-track Dolby configuration.

2. VIDEO PROPERTIES:

         (a) SHOWS PRODUCED ON VIDEO. As stated above, WHV requires that the
         Picture(s) originate in 35mm film. Notwithstanding the foregoing, in
         the event that WHV elects, in its sole and absolute discretion, to
         accept a picture produced on video, then Grantor shall deliver the
         following:

                  One digital component original video signal, which may be
         delivered on DCT or digital Betacam format.

                  NTSC submasters must be time coded with S.M.P.T.E. code. PAL
         submasters must be time coded with E.B.U. code. Time codes are to be
         identical to and regenerated from the original master (drop frame time
         code preferred). The audio soundtrack on the video master must be in
         perfect synchronization with the visual image. The Picture(s) must be
         fully color corrected with proper color, shading and density as is
         customarily required for network television exhibition.

                                      -3-

<PAGE>

                  A separate 24-track "SR" copy of the original sound master
         with supplied tracks is required for delivery to WHV with time code in
         complete synchronization to the original master.

         (b) TAPE STANDARDS FOR 525/625 DIGITAL COMPONENT FORMAT

                  The component digital master (whether 525 NTSC and/or 625 PAL)
         must be recorded in accordance with the following specifications:

Recording Format: Sony Digital Betacam format
                  Ampex DCT format

Tracks:           A. Digital video
                  B. Digital Audio, Channels 1, 2, 3, 4
                  C. Analog audio (cue channel)
                  D. LTC continuous, matching VITC, DFTC or EBU with PGM start
                     at 01:00:00:00
                  E. Continuous control track

Cassette:                            DCT                   DIGITAL BETACAM
                          L          208 minutes           124 minutes
                          M          94 minutes            n/a
                          S          32 minutes            40 minutes

                  Cassette must not show any physical signs of stress (cracks,
                  debris). Stock must not show any physical signs of stress
                  (edge damage, debris, etc.). Cassette should be transported in
                  shipping case.

Reference Tape:   Sony current Digital Betacam.
                  Ampex current DCT.

Digital Video:    RS-125M, 13.5(Y)/6.75(R-Y, B-Y), 8-bit.
                  Picture should be centered in the digital active line.
                  Peak white (100 ire) will be at digital 235 base 10.
                  Video shall not exceed 100 ire, at digital 235 base 10.
                  Black shall be at digital 16 base 10.
                  Color difference blanking is at digital 128, peaks at 16 and
                  240 (base 10).

Digital Audio:    48 kHz sampled, synchronized to video, 20 bits/sample
                  Channels 1, 2, 3, 4:  AES/EBU format.
                  1 kHz tone at 0 VU shall reproduce at 0 dB in unity on all
                  channels.
                  Levels shall be maintained such that the headroom of the
                  system is not exceeded.
                  NO DIGITAL CLIPPING.
                  Audio shall not be Dolby encoded.

                                      -4-

<PAGE>

RF:   RF envelope maximum/minimum points shall not vary by more than 10%.
          Audio RF level shall be less than or equal to 1/4RF level of video.
          Video and Audio RF and CTL shall be recorded continuously on the tape.

Errors:  Errors shall not exceed the capability of error correction circuitry.
         At NO TIME shall concealment be necessary.

Audio format:              Ch 1 & 2    Stereo Composite Left & Right, in phase
                           Ch 3 & 4    Stereo M & E Left & Right, in phase
                                       w/Ch 1 & 2
                           Cue:        Mono Composite
                           Time Code:  DFTC/EBU with matching LTC/VITC

         (c) INTERNATIONAL DISTRIBUTION RIGHTS

         When international distribution rights are granted, the following video
         elements are also required:

                  One digital component video signal of the dubbed and subtitled
         version in each applicable foreign language in accordance with WHV's
         distribution rights as set forth in the Agreement, to the extent that
         such versions may exist or be produced for the Territory.

                  A first generation digital submaster from the final 100%
         completed original of both NTSC and PAL standards (as applicable to the
         territory).

                  A separate magnetic audio element conformed in all respects
         with the final digital edited master videotape, with separate dialogue,
         music and effects tracks (mono and/or stereo).

                  A digital component original format first generation copy of
         the background action of any main, end or narrative sections and all
         descriptive titles, without the English-language text, but with the
         background action conforming in all respects to the English version. A
         digital component original textless reel must be fully color corrected
         to match existing program material included in the feature submaster.

                  A detailed dialogue continuity script representing the digital
         format NTSC (and/or PAL) first generation copy of the final edited
         master.

3. MISCELLANEOUS:

         (a) A reasonable quantity of pre-existing advertisements, publicity
pieces and promotion materials, including as a minimum but not limited to:

                                      -5-

<PAGE>

                  (i) A sufficient amount of color artwork (whether in the form
         of slides, chromes, posters or otherwise) to enable WHV to produce
         satisfactory packaging of the Devices, including "key" art or "poster"
         art as used in the theatrical advertising campaigns;

                  (ii) a reasonable quantity of black-and-white and color stills
         (with descriptions and data regarding the persons and subject matter
         appearing in such stills);

                  (iii) samples of company logos and film title logos suitable
         for reproduction;

                  (iv) theatrical trailers, television spots or similar
         promotional materials;

                  (v) a pressbook or, if no pressbook exists, a quantity of
         clippings and photographs such as would appear in a pressbook;

                  (vi) a detailed synopsis of the final screenplay, teleplay or
         videoscript, as applicable (unless included in the pressbook); and

                  (vii) a reasonable number of copies of critics' reviews of the
         Picture(s).

         (b) A synopsis of the advertising credits which were used for
theatrical or television distribution, including billing percentages and
performer likeness restrictions.

         (c) A list of the players in the cast identifying each player by the
roles he or she portrayed.

         (d) A music cue sheet in customary form containing titles, composers,
timings, copyright owners and publishers.

         (e) A copy of the proper copyright notice.

         (f) A schedule of theatrical release dates listed by territory and
country, and a schedule of pay and free television availability dates listed by
territory and country.

4. LEGAL DOCUMENTS:

         (a) A fully executed Laboratory Access Letter in the form attached.

         (b) A Power-of-Attorney in the form attached.

         (c) A fully-executed Instrument of Transfer in the form attached.

                                      -6-

<PAGE>

         (d) A fully-executed Collateral Assignment of Copyrights in the form
attached.

         (e) A clear, complete and accurate photocopy of each certain
Certificate of Copyright which indicates that the Picture(s) has been duly
registered for copyright with the United States Copyright Office and, upon
notice from WHV of its intent to distribute in a non-Berne Convention country,
in each other country in the Territory which has a registration procedure, and
any and all documentation pertaining to renewals of such registrations.

         (f) Documentation in form reasonably acceptable to WHV indicating that
all rights in and to all music contained in the audio portion of the Picture(s)
have been cleared for use in the Picture(s) and Devices in the Territory for the
entire Term of the Agreement.

         (g) A certificate of Errors and Omissions insurance naming WHV as an
additional insured.

         (h) All other documents related to the Homevideo Rights and Incidental
Rights granted herein (including documents evidencing chain of title and
Grantor's unencumbered legal, valid and indefeasible title to the Picture(s)).

                                      -7-

<PAGE>

                                   Exhibit "C"
                                   -----------

                            LABORATORY ACCESS LETTER

From:             GENIUS PRODUCTS, INC.
                  11250 EL CAMINO REAL, SUITE 100
                  SAN DIEGO, CA  92130

Dated:            FEBRUARY 6, 2002

To:               ______________________________
                  ______________________________
                  ______________________________

Gentlemen:

         We have on deposit with your laboratory certain negative, pre-print
and/or video materials relating to the motion picture or video program now
tentatively titled ________________ (herein called the "Picture(s)").

         Please be advised that we have granted a license to WARNER HOME VIDEO,
a Division of Time Warner Entertainment Company, L.P. (herein called "WHV") and
its successors, assigns and licensees, to distribute and exhibit the Picture(s).
Accordingly, you are hereby authorized and directed to honor all orders of WHV
and its successors, assigns and licensees, for 35mm, 16mm and/or any other size
of dupe negatives, color reversible internegatives, interpositives and positive
release prints of the Picture(s), and/or access to video masters, video copies
and soundtrack elements, upon the following understandings:

               1. All laboratory services and materials ordered by WHV or its
        successors, assigns and licensees, with respect to the Picture(s), shall
        be at the sole cost and expense of the party ordering the same, and you
        agree to look solely to such party for payment of such charges as may be
        incurred. All laboratory services and materials which may be ordered by
        us with respect to the Picture(s) (including all items which we are
        required to deliver to WHV under our agreement with WHV) shall be at our
        sole cost and expense, and you agree to look solely to us for payment of
        such charges. Neither WHV, nor its successors, assigns or licensees, nor
        we, shall be responsible for any laboratory services or materials
        ordered by any other party with respect to the Picture(s).

               2. You will neither assert against WHV, its successors, assigns
        or licensees, nor us, any lien at common law or under any statute
        against any material relating to the Picture(s) by reason of any unpaid
        charges incurred by any other party.

                                      -1-

<PAGE>

               3. You will not refuse to honor any of our orders or the orders
        of WHV, or its successors, assigns or licensees, for positive prints or
        video copies of the Picture(s) by reason of any unpaid charges incurred
        by the other party.

               4. None of the above-mentioned existing pre-print and/or video
        materials shall be removed from your possession without the written
        consent of WHV and the undersigned, except that WHV shall be entitled to
        remove materials purchased by WHV at any time without the further
        consent of the undersigned.

        The instructions contained herein are irrevocable during the term of
said license granted to WHV and may not be altered or modified during such term
except by an instrument in writing signed by us and by WHV, or our or its
respective successors, assigns and licensees.

        Please confirm your understanding and agreement of the foregoing by
affixing your signature in the space provided below.

GENIUS PRODUCTS, INC.

By:  /s/ Klaus Moeller
     -----------------

Its:    CEO
     -----------------

AGREED TO AND ACCEPTED BY:

(Laboratory)

By:

Its:

                                      -2-

<PAGE>

                                   Exhibit "D"
                                   -----------

                          P O W E R  O F  A T T O R N E Y
                          -------------------------------

                                    (SPECIAL)

         KNOW ALL MEN BY THESE PRESENTS: That GENIUS PRODUCTS, INC. (herein
known as "Grantor"), the undersigned, whose address is 11250 El Camino Real,
Suite 100, San Diego, CA 92130, hereby irrevocably makes, constitutes and
appoints WARNER HOME VIDEO, a Division of Time Warner Entertainment Company,
L.P., 4000 Warner Blvd., Burbank, California 91522 ("WHV") and its successors
and assigns, in connection only with all matters referred to in that certain
Agreement dated as of February 6, 2002 between WHV and Grantor by which Grantor
has granted to WHV certain Homevideo Rights and Incidental Rights in and to a
Picture described therein titled _____________________, true and lawful attorney
for Grantor and in Grantor's name, place and stead and for Grantor's use and
benefit:

               (a) To appear by WHV's attorneys and adjust, settle, compromise,
        litigate, contest, satisfy judgments pertaining to, or defend any and
        all claims, demands or actions arising out of the exercise of the
        Homevideo Rights, Incidental Rights or any other rights granted pursuant
        to the Agreement;

               (b) To adjust, settle or defend any and all claims arising out of
        the breach by Grantor of any representation, warranty or other provision
        contained in the Agreement;

               (c) To approve any settlement or disposition of any action
        brought by, or defended by, Grantor as to any third person which could
        or would affect the rights of WHV under the Agreement;

               (d) To renew, obtain and register copyright in the Picture(s) in
        Grantor's name, and to execute and record such documents as WHV may deem
        necessary to evidence WHV's rights under the Agreement as a matter of
        record;

               (e) To bring, prosecute, defend and appear in suits, actions and
        proceedings of any nature under or concerning all copyrights in and to
        the Picture(s) and all renewals thereof, or concerning any infringement
        thereof, or interference with any of the rights granted by the Agreement
        regarding said copyrights or renewals thereof, in WHV's own name or in
        the name of, or as a co-party with, the copyright proprietor;

               (f) To take all reasonable and necessary steps to preserve the
        Homevideo Rights, Incidental Rights and all other rights granted to WHV
        by the Agreement by doing all acts, executing all documents, and making
        any and all necessary arrangements with, and payments to, third parties
        on behalf of Grantor; and

                                      -1-

<PAGE>

               (g) To execute, file and record any and all financing statements
        and other documents and to take any other steps as are reasonable and
        necessary to perfect, protect, evidence, renew and/or continue the
        security interest in the Collateral granted to WHV under the Agreement.

        GRANTOR GIVES/GRANTS unto WHV, as the attorney of Grantor, full power
and authority to do and perform each and every act and thing whatsoever
requisite, necessary, or appropriate to be done in and about the premises as
fully to all intents and purposes as Grantor might or could do, hereby ratifying
all that said attorney shall lawfully do or cause to be done by virtue of these
presents. Upon termination or expiration of this Agreement and upon full payment
of all amounts due to WHV, WHV will take any necessary action to terminate this
Power of Attorney.

        Wherever the context so requires, the singular number includes the
plural.

                      Dated as of February 6, 2002.

                                                       GENIUS PRODUCTS, INC.

                                                       By: /s/ Klaus Moeller
                                                           ---------------------

                                                       Its:   CEO
                                                           ---------------------

STATE OF       California                          )
         ------------------------------------------
                                                    )ss
COUNTY OF       Los Angeles                        )
         ------------------------------------------

On this the 6th day of February, 2002, before me,

        Sherri L. Bogard                          ,
--------------------------------------------------
the undersigned Notary Public, personally appeared

        Klaus Moeller                             ,
--------------------------------------------------
               [ ]  personally known to me

               [X] proved to me on the basis of satisfactory evidence, to be the
person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

Witness my hand and official seal.        [SEAL] SHERRI L. BOGARD
                                                 Commission # 1242932
    /s/ Sherri L. Bogard                         Notary Public - California
------------------------------------             Los Angeles County
                       Notary Public             My Comm. Expires Nov 22, 2003

                                      -2-

<PAGE>

                                   Exhibit "E"
                                   -----------

                             INSTRUMENT OF TRANSFER

         KNOW ALL MEN BY THESE PRESENTS that for One Dollar ($1.00) and for
other good and valuable consideration, receipt of which is hereby acknowledged,
the undersigned GENIUS PRODUCTS, INC. (referred to herein as "Grantor"), hereby
grants and assigns to WARNER HOME VIDEO, a Division of Time Warner Entertainment
Company, L.P. ("WHV") and its successors and assigns, all of Grantor's rights,
titles and interests of every kind and nature in and to the sole and exclusive
right (including, without limitation, such rights under all copyrights and any
extensions and renewals thereof that may be in existence with respect to any of
the Pictures subject to the Agreement described below, including, without
limitation, in and to the underlying screenplay and all other literary, musical
and dramatic materials based upon, incorporated in, derived from, incorporating
or related to such Picture(s) or upon which such Picture(s) may be based (the
"Picture(s)")), (a) to exploit the Homevideo Rights during the Term and in the
Territory (as such terms are defined in the Agreement described below)
including, without limitation, to sell Devices (as such term is defined in the
Agreement described below) containing copies of the Picture(s) and to exploit
the Devices for the intended purpose of home video viewing by consumers in their
places of dwelling in such manner that viewing schedules and viewing frequency
may be freely controlled by the consumers, as such rights relate to the
Picture(s) and to the copyright and rights and interests of every kind or nature
in and to all works based upon, incorporated in, derived from, incorporating or
relating to the Picture(s).

         Reference is made to that certain Homevideo Distribution Agreement
dated as of February 6, 2002 by and between Grantor and WHV (such agreement, as
it may be amended, modified, supplemented, renewed, extended, replaced, or
superseded from time to time, is herein referred to as the "Agreement") relating
INTER ALIA to the grant and assignment of the aforesaid rights and this
Instrument of Transfer is expressly made subject to the terms and conditions
contained in the Agreement, and to the extent of any inconsistency between this
Instrument of Transfer and the Agreement, the terms of the Agreement shall
prevail to the minimum extent necessary to rectify any such inconsistency.

         Grantor hereby agrees to register or cause to be registered each of the
Picture(s) with the United States Copyright Office and agrees to obtain or cause
to be obtained renewals of all copyrights in and to said Picture(s), whether or
not referred to herein, and hereby assigns said rights to WHV; and should
Grantor fail or be unavailable to do any of the foregoing, Grantor hereby
irrevocably appoints WHV as attorney-in-fact, with full and irrevocable power
and authority to do all such acts and things, and to execute, acknowledge,
deliver, file, register and record all such documents, in the name and on behalf
of the Grantor, as WHV may deem necessary or proper in the premises to
accomplish the same, which power and authority shall be deemed coupled with an
interest and irrevocable.

                                      -1-

<PAGE>

         WHV is also hereby empowered to bring, prosecute, defend and appear in
suits, actions and proceedings of any nature under or concerning all copyrights
in and to said Picture(s) and all renewals thereof, to the extent that the
rights granted to WHV are affected, or concerning any infringement thereof, or
interference with any of the rights hereby granted under said copyrights or
renewals thereof, in its own name or in the name of the copyright proprietor
and, at its option, WHV may join such copyright proprietor and/or the
undersigned as a party plaintiff or defendant in any such suit, action or
proceeding.

Dated as of February 6, 2002.
                                                       GENIUS PRODUCTS, INC.

                                                       By: /s/ Klaus Moeller
                                                           ---------------------

                                                       Its:   CEO
                                                           ---------------------

STATE OF       California                          )
         ------------------------------------------
                                                    )ss
COUNTY OF       Los Angeles                        )
         ------------------------------------------

On this the 6th day of February, 2002, before me,

        Sherri L. Bogard                          ,
--------------------------------------------------
the undersigned Notary Public, personally appeared

        Klaus Moeller                             ,
--------------------------------------------------
               [ ]  personally known to me

               [X] proved to me on the basis of satisfactory evidence, to be the
person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

Witness my hand and official seal.        [SEAL] SHERRI L. BOGARD
                                                 Commission # 1242932
    /s/ Sherri L. Bogard                         Notary Public - California
------------------------------------             Los Angeles County
                       Notary Public             My Comm. Expires Nov 22, 2003

                                      -2-

<PAGE>

                                   Exhibit "F"
                                   -----------

                       COLLATERAL ASSIGNMENT OF COPYRIGHTS
                       -----------------------------------

         KNOW ALL MEN BY THESE PRESENTS that for good and valuable
consideration, receipt of which is hereby acknowledged, the undersigned, GENIUS
PRODUCTS, INC., referred to herein as ("Grantor") hereby assigns, grants,
conveys and transfers for security to WARNER HOME VIDEO ("WHV") and its
successors and assigns throughout the Territory (as such term is defined in that
certain Homevideo Distribution Agreement dated as of February 6, 2002 between
Grantor and WHV, as the same may hereinafter be amended, modified, supplemented,
renewed, extended, replaced, or superceded from time to time, the "Agreement"),
all of Grantor's rights, titles and interests of every kind and nature, without
limitation, in and to the collateral described on Schedule A attached hereto and
incorporated by reference herein (the "Collateral"). Grantor hereby irrevocably
constitutes and appoints WHV its lawful attorney-in-fact to do all acts and
things permitted pursuant to the Agreement, which power and authority shall be
deemed coupled with an interest and irrevocable.

                                      -1-

<PAGE>

         This Collateral Assignment of Copyright is expressly made subject to
the terms and conditions contained in the Agreement and to the extent of any
inconsistency between the terms of this Collateral Assignment of Copyright and
the Agreement, the terms of the Agreement shall prevail to the minimum extent
necessary to rectify such inconsistency. Upon termination or expiration of this
Agreement and upon full payment of all amounts due to WHV, WHV will take any
necessary action to terminate its security interest in the collateral.

Dated as of February 6, 2002.
                                                       GENIUS PRODUCTS, INC.

                                                       By: /s/ Klaus Moeller
                                                           ---------------------

                                                       Its:   CEO
                                                           ---------------------

STATE OF       California                          )
         ------------------------------------------
                                                    )ss
COUNTY OF       Los Angeles                        )
         ------------------------------------------

On this the 6th day of February, 2002, before me,

        Sherri L. Bogard                          ,
--------------------------------------------------
the undersigned Notary Public, personally appeared

        Klaus Moeller                             ,
--------------------------------------------------
               [ ]  personally known to me

               [X] proved to me on the basis of satisfactory evidence, to be the
person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

Witness my hand and official seal.        [SEAL] SHERRI L. BOGARD
                                                 Commission # 1242932
    /s/ Sherri L. Bogard                         Notary Public - California
------------------------------------             Los Angeles County
                       Notary Public             My Comm. Expires Nov 22, 2003

                                      -2-

<PAGE>

                             Schedule A to Exhibit F
                             -----------------------

                            DESCRIPTION OF COLLATERAL
                            -------------------------

         Capitalized terms used herein without definition have the respective
meanings assigned such terms in the Homevideo Distribution Agreement dated as of
February 6, 2002 among Grantor and WHV (as it may be amended, modified,
supplemented, renewed, extended, replaced or superseded from time to time, the
"Agreement").

         The Collateral shall mean all of the rights, titles and interests of
every kind or nature whatsoever of Grantor in and to, but none of its
obligations with respect to, the following described items, whether now owned or
existing or hereafter created, acquired or arising, and wheresoever located:

                  (a) All of the right, title, and interest of Grantor of every
         kind (including, without limitation, copyrights and any extensions and
         renewals thereof and any rights related to copyright and/or neighboring
         rights recognized under the law of any foreign jurisdiction with
         respect to each of the Pictures subject to the above-referenced
         Homevideo Distribution Agreement (the "Pictures"), in and to all
         Homevideo Rights and Incidental Rights granted to WHV under the
         Agreement and all like or similar rights that may now or hereafter be
         retained or recovered by Grantor;

                  (b) All rights to possession held by or on behalf of Grantor
         to all physical properties described in Schedule B annexed hereto,
         necessary or desirable to WHV to exercise the Homevideo Rights and/or
         Incidental Rights granted to WHV under the Agreement;

                  (c) All proceeds and products relating to or arising from any
         of the foregoing, including accounts, contract rights, chattel paper,
         all money and claims for money (whether or not such claims to money
         have been earned by performance) general intangibles, documents and
         instruments, including, but not limited to, all Gross Receipts,
         Accountable Receipts (whether or not due, earned or payable to Grantor
         under the Agreement) and any insurance now or hereafter payable by
         reason of any loss or damage to any Collateral and any proceeds thereof
         and all replacements, additions, accessions, substitutions, proceeds
         and products relating to or arising from any of the Collateral;

                  (d) All of Grantor's rights under production, financing and
         acquisition agreements in and to the exploitation of the rights granted
         to WHV under the Agreement relating to motion pictures which if
         completed would constitute Picture(s); and

                                      -1-

<PAGE>

                  (e) All of Grantor's rights to all literary, dramatic, musical
         and other material created for the Picture(s) or upon which the
         Picture(s) is based or to be based, in whole or in part, or which are
         used in connection with the Picture(s), including, without limitation,
         screenplays and any underlying materials upon which screenplays are
         based, and all common law and statutory domestic and foreign
         copyrights, and any rights related to copyright and/or neighboring
         rights recognized under the law of any foreign jurisdiction, and rights
         and interests in copyrights and renewals and extensions of copyrights,
         in and to said literary, dramatic, musical and other written material;
         but only to the extent necessary to protect WHV's ability to exercise
         the Homevideo Rights and Incidental Rights in the Picture(s) during the
         Term and in the Territory in the manner and to the extent provided for
         in the Agreement.

                                      -2-

<PAGE>

                             Schedule B to Exhibit F
                             -----------------------

IT IS CONTEMPLATED AS OF THE DATE OF THIS AGREEMENT THAT GRANTOR SHALL DELIVER
THE PICTURES IN THE DIGITAL BETACAM FORMAT.

GRANTOR SHALL, AT GRANTOR'S COST, DELIVER THE ELEMENTS FOR THE PICTURE(S) LISTED
IN ITEMS 1 AND 2, BELOW, AS APPLICABLE, TO THE FOLLOWING ADDRESS OR TO ANY SUCH
OTHER ADDRESS AS WHV MAY INDICATE:

                           Warner Bros. Acquisitions Department
                           4000 Warner Blvd.
                           Bldg. 180, Room 421
                           Burbank, CA 91522

Grantor shall, at Grantor's cost, deliver the materials and documents for the
Picture(s) listed in items 3 and 4, below, to the following address, or to any
such other address as WHV may indicate:

                           Warner Home Video Business and Legal Affairs
                           4000 Warner Blvd.
                           Bldg. 170, Room 4018
                           Burbank, CA 91522
                           ATTN: Director of Legal Administration

1. FILM PROPERTIES, IF APPLICABLE:

         Subject to WHV's examination and technical approval, a digital
component original video signal, and any additional footage for value-added
supplemental elements for DVD, all of which may be delivered on DCT or digital
Betacam format ("Video Elements"). Video that has originated in digital
composite form is not acceptable. If international distribution rights have been
granted, digital component original video signals of both NTSC and PAL standards
(as applicable to the Territory) are required.

         In the event the Video Elements set forth above are not approved by
WHV, WHV may elect in its sole discretion to accept "Access" to the elements
("Film Elements") set forth below. The word "Access" as used in this Exhibit
shall mean the ability to use the Film Elements designated and to cause them to
be transferred at a lab selected by Warner Bros. Technical Operations, at
Grantor's cost. In addition, Access to Film Elements shall include all dubbed
and/or subtitled versions in all applicable foreign languages in accordance with
WHV's distribution rights as set forth in the Agreement to the extent that such
versions may exist or be produced for the Territory. All Film Elements shall be
of the highest quality, free from scratches, patches or other physical blemishes
and shall conform to the final edited version of the Picture(s) and shall be in
the same ratio of camera picture images in which the Picture(s) was
photographed.

                                      -3-

<PAGE>

         (a) BLACK AND WHITE FILMS

                  Delivery of a 35mm fine grain. In the event this element is
         unavailable, Grantor shall guarantee Access to the original camera
         negative to allow WHV to create a new fine grain element from the
         original negative at a lab of WHV's choice, at Grantor's cost.

                  Delivery of a 35mm magnetic sound master (stereo where
         applicable). Dolby SR encoded with start marks. Audio track must be in
         perfect synchronization with picture elements supplied. In the event a
         35mm magnetic sound master is unavailable, Access to the optical sound
         track negative is required. Data reduced audio source material is not
         acceptable for delivery.

         (b) COLOR FILMS

                  Delivery of a 35mm interpositive and a 35mm "screening" print
         to be used for time comparison purposes. In the event that the 35mm
         interpositive is unavailable, Grantor shall guarantee Access to the
         original camera negative to allow WHV to create a new interpositive at
         a lab of WHV's choice, at Grantor's cost.

                  Delivery of a 35mm magnetic sound master (stereo where
         applicable), Dolby SR encoded with start marks. Audio track must be in
         perfect synchronization with picture elements supplied. If the original
         audio source is unavailable, Access to the optical sound track negative
         is required.

         (c) AUDIO FOR BOTH BLACK AND WHITE FILMS AND COLOR FILMS

                  If the Picture was recorded in six-track for digital
         theatrical release, WHV will require Access to the six-track "SR"
         encoded English mag master.

                  Delivery of an optical magneto disc is required for digital
         theatrical features (where applicable) for theatrical distribution.

                  Delivery of a fully filled music and effects track is
         required. This track must be 35mm "SR" encoded magnetic track in the
         format of the original sound mix (either six-track or two-track).

                  Data reduced original audio source material is not acceptable
         for delivery for any 35mm magnetic audio source materials.

         (d) INTERNATIONAL DISTRIBUTION RIGHTS

                  When international distribution rights are granted, the
         following Film Elements are also required for delivery to WHV:

                                      -4-

<PAGE>

                  A foreign textless background negative of any main, end or
         narrative sections and all descriptive titles WITHOUT the
         English-language text, but with the background action conforming in all
         respects to the English version. In addition, title overlays must be
         provided on a separate 35mm element.

                  A detailed combined dialogue continuity script.

                  If the original soundtrack of the Picture is nonaural, a mono
         magnetic sound master conformed in all respect on a 35mm magnetic full
         coat tape, with separate dialogue, music and sound effects tracks.

                  If the original soundtrack is six-track for digital theatrical
         distribution, a six-track 35mm full cost magnetic English masters is
         required in addition to a two track "SR" 35mm full coat magnetic
         English master.

                  If the Picture is filmed in Dolby stereo, a two-track Dolby
         35mm full coat magnetic English stereo master and a 35mm "SR" encoded
         music and effects tracks are also required for delivery to WHV. Such
         tracks must be matrixed to two-track Dolby configuration.

2. VIDEO PROPERTIES:

         (a) SHOWS PRODUCED ON VIDEO. As stated above, WHV requires that the
Picture(s) originate in 35mm film. Notwithstanding the foregoing, in the event
that WHV elects, in its sole and absolute discretion, to accept a picture
produced on video, then Grantor shall deliver the following:

         One digital component original video signal, which may be delivered on
DCT or digital Betacam format.

         NTSC submasters must be time coded with S.M.P.T.E. code. PAL submasters
must be time coded with E.B.U. code. Time codes are to be identical to and
regenerated from the original master (drop frame time code preferred). The audio
soundtrack on the video master must be in perfect synchronization with the
visual image. The Picture(s) must be fully color corrected with proper color,
shading and density as is customarily required for network television
exhibition.

         A separate 24-track "SR" copy of the original sound master with
SUPPLIED tracks is required for delivery to WHV with time code in complete
synchronization to the original master.

         (b) TAPE STANDARDS FOR 525/625 DIGITAL COMPONENT FORMAT

         The component digital master (whether 525 NTSC and/or 625 PAL) must be
recorded in accordance with the following specifications:

                                      -5-

<PAGE>

Recording Format: Sony Digital Betacam format
                  Ampex DCT format

Tracks:           A.   Digital video
                  B.   Digital Audio, Channels 1, 2, 3, 4
                  C.   Analog audio (cue channel)
                  D.   LTC continuous, matching VITC, DFTC or EBU
                       with PGM start at 01:00:00:00
                  E.   Continuous control track

Cassette:                                DCT                  DIGITAL BETACAM
                              L          208 minutes          124 minutes
                              M          94 minutes           n/a
                              S          32 minutes           40 minutes

Cassette must not show any physical signs of stress (cracks, debris). Stock must
not show any physical signs of stress (edge damage, debris, etc.). Cassette
should be transported in shipping case.

Reference Tape:   Sony current Digital Betacam.
                  Ampex current DCT.

Digital Video:    RS-125M, 13.5(Y)/6.75(R-Y, B-Y), 8-bit.
                  Picture should be centered in the digital active line.
                  Peak white (100 ire) will be at digital 235 base 10.
                  Video shall not exceed 100 ire, at digital 235 base 10.
                  Black shall be at digital 16 base 10.
                  Color difference blanking is at digital 128, peaks at 16 and
                  240 (base 10).

Digital Audio:    48 kHz sampled, synchronized to video, 20 bits/sample
                  Channels 1, 2, 3, 4:  AES/EBU format.
                  1 kHz tone at 0 VU shall reproduce at 0 dB in unity on all
                  channels.
                  Levels shall be maintained such that the headroom of the
                  system is not exceeded.
                  NO DIGITAL CLIPPING.
                  Audio shall not be Dolby encoded.

RF:   RF envelope maximum/minimum points shall not vary by more than 10%.
          Audio RF level shall be less than or equal to 1/4RF level of video.
          Video and Audio RF and CTL shall be recorded continuously on the tape.

Errors: Errors shall not exceed the capability of error correction circuitry. At
                    NO TIME shall concealment be necessary.

                                      -6-

<PAGE>

Audio format:     Ch 1 & 2         Stereo Composite Left & Right, in phase
                  Ch 3 & 4         Stereo M & E Left & Right, in phase
                                   w/Ch 1 & 2
                  Cue:             Mono Composite
                  Time Code:       DFTC/EBU with matching LTC/VITC

         (c) INTERNATIONAL DISTRIBUTION RIGHTS

         When international distribution rights are granted, the following video
elements are also required:

         One digital component video signal of the dubbed and subtitled version
in each applicable foreign language in accordance with WHV's distribution rights
as set forth in the Agreement, to the extent that such versions may exist or be
produced for the Territory.

         A first generation digital submaster from the final 100% completed
original of both NTSC and PAL standards (as applicable to the territory).

         A separate magnetic audio element conformed in all respects with the
final digital edited master videotape, with separate dialogue, music and effects
tracks (mono and/or stereo).

         A digital component original format first generation copy of the
background action of any main, end or narrative sections and all descriptive
titles, without the English-language text, but with the background action
conforming in all respects to the English version. A digital component original
textless reel must be fully color corrected to match existing program material
included in the feature submaster.

         A detailed dialogue continuity script representing the digital format
NTSC (and/or PAL) first generation copy of the final edited master.

3. MISCELLANEOUS:

         (a) A reasonable quantity of pre-existing advertisements, publicity
pieces and promotion materials, including as a minimum but not limited to:

                  (i) A sufficient amount of color artwork (whether in the form
         of slides, chromes, posters or otherwise) to enable WHV to produce
         satisfactory packaging of the Devices, including "key" art or "poster"
         art as used in the theatrical advertising campaigns;

                  (ii) a reasonable quantity of black-and-white and color stills
         (with descriptions and data regarding the persons and subject matter
         appearing in such stills);

                                      -7-

<PAGE>

                  (iii) samples of company logos and film title logos suitable
         for reproduction;

                  (iv) theatrical trailers, television spots or similar
         promotional materials;

                  (v) a pressbook or, if no pressbook exists, a quantity of
         clippings and photographs such as would appear in a pressbook;

                  (vi) a detailed synopsis of the final screenplay, teleplay or
         videoscript, as applicable (unless included in the pressbook); and

                  (vii) a reasonable number of copies of critics' reviews of the
         Picture(s).

         (b) A synopsis of the advertising credits which were used for
theatrical or television distribution, including billing percentages and
performer likeness restrictions.

         (c) A list of the players in the cast identifying each player by the
roles he or she portrayed.

         (d) A music cue sheet in customary form containing titles, composers,
timings, copyright owners and publishers.

         (e) A copy of the proper copyright notice.

         (f) A schedule of theatrical release dates listed by territory and
country, and a schedule of pay and free television availability dates listed by
territory and country.

4. LEGAL DOCUMENTS:

         (a) A fully executed Laboratory Access Letter in the form attached.

         (b) A Power-of-Attorney in the form attached.

         (c) A fully-executed Instrument of Transfer in the form attached.

         (d) A fully-executed Collateral Assignment of Copyrights in the form
attached.

         (e) A clear, complete and accurate photocopy of each certain
Certificate of Copyright which indicates that the Picture(s) has been duly
registered for copyright with the United States Copyright Office and, upon
notice from WHV of its intent to distribute in a non-Berne Convention country,
in each other country in the Territory which has a registration procedure, and
any and all documentation pertaining to renewals of such registrations.

         (f) Documentation in form reasonably acceptable to WHV indicating that
all rights in and to all music contained in the audio portion of the Picture(s)
have been cleared for use in the Picture(s) and Devices in the Territory for the
entire Term of the Agreement.

                                      -8-

<PAGE>

         (g) A certificate of Errors and Omissions insurance naming WHV as an
additional insured.

         (h) All other documents related to the Homevideo Rights and Incidental
Rights granted herein (including documents evidencing chain of title and
Grantor's unencumbered legal, valid and indefeasible title to the Picture(s)).

                                      -9-

<PAGE>

                                   Exhibit "G"
                                   -----------

                                 CATALOG TITLES
                                 --------------

1. "Mozart and Friends"

2. "Mozart and Friends: Sleepytime"

3. "Four Seasons"

                                      -10-<PAGE>
EXHIBIT 10.2

                    DISTRIBUTION AND MANUFACTURING AGREEMENT
                    ----------------------------------------

         THIS DISTRIBUTION AND MANUFACTURING AGREEMENT (this "Agreement") is
made this 12 day of November 2002 between FALCON PICTURE GROUP, LLC (hereinafter
referred to as "Falcon") and GENIUS PRODUCTS, INC. (hereinafter referred to as
"Distributor").

                                    RECITALS:
                                    ---------

         A. Falcon and Larry Harmon Pictures Corporation (hereinafter referred
to as "Licensor") are parties to that certain License Agreement dated May 15,
2002, a copy of which is attached hereto as EXHIBIT A (the "License Agreement").
All capitalized words and phrases that are used, but not otherwise defined, in
this Agreement shall have the meanings ascribed to such terms in this License
Agreement.

         B. Falcon now desires to appoint Distributor as its exclusive
distributor for the Licensed Article(s) for the Territory and Distributor
desires to accept such appointment, all upon the terms and conditions set forth
herein.

         C. Licensor consents to the appointment of Distributor as Falcon's
exclusive distributor for the Licensed Article(s) in accordance with the terms
and conditions set forth herein.

         IN CONSIDERATION of the above recitals, which are hereby incorporated
in their entirety and made a part of this Agreement, and the representations,
warranties, covenants and agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

         1. LICENSE AGREEMENT: This Agreement shall, at all times, be subject to
the terms, conditions, covenants and restrictions contained in the License
Agreement, which is hereby incorporated in its entirety and made a part of this
Agreement. Distributor shall (a) not take any action which would violate or
cause Falcon to violate any of the terms of the License Agreement, and (b) take
any and all action which is reasonably calculated to comply or cause Falcon to
comply with Falcon's covenants under the License Agreement, including but not
limited to seeking the necessary approvals of Licensor. All capitalized terms
used in this Agreement that are not otherwise defined herein shall have the
meanings ascribed to them in the License Agreement.

         2. EXCLUSIVE DISTRIBUTOR: Except as otherwise provided herein, Falcon
hereby appoints Distributor as Falcon's exclusive distributor for the Licensed
Article(s) in VHS videocassette ("Video Tape") and Digital Video Discs ("DVD")
in the Territory for sales made through wholesale, retail, direct-to-consumer
and e-commerce channels of trade. Provided that Distributor (a) is not in
material default of the terms of this Agreement and (b) has not taken or omitted
to take any action, or caused or permitted any occurrence, event, or
circumstance, that constitutes, creates, results in or contributes to any breach
or default of the License Agreement (which breach or default has not been fully
and completely remedied within ten (10) days after receiving notice of the
same), Falcon agrees that it shall not, at any time during the Term, directly or

<PAGE>

indirectly manufacture or produce any of the Licensed Article(s) or sell or
offer to sell any of the Licensed Articles to any person or entity (other than
Distributor) located within the Territory, except as otherwise permitted herein.
Distributor acknowledges that it may only sell, distribute, market and promote
the Licensed Article(s) in Collections and may not sell, distribute, market and
promote the Licensed Article(s) as single DVDs or Video Tapes or in any other
format or packaging without the prior written consent of both Falcon and
Licensor.

         3. REPRESENTATIONS BY LICENSEE: Falcon is entering into this Agreement
in reliance upon Distributor's representations (a) that Distributor (including,
but not limited to, its vendors, service providers, suppliers, outside sales
representatives and independent contractors) has ample manufacturing, sales and
distribution facilities to enable Distributor to exploit fully the rights
granted to Distributor throughout the Territory, and (b) that Distributor does
not have and shall not undertake or have any commitments, obligations or
agreements inconsistent with the obligations undertaken by Distributor pursuant
to this Agreement.

         4. TERM: The term ("Term") of the rights granted to Distributor under
this Agreement shall commence on November 12, 2002 and shall continue and
include any Option Terms under the License Agreement and shall terminate
immediately upon the earlier of (a) the termination or expiration of the rights
granted to Falcon under the License Agreement for any reason whatsoever, with
(i) Distributor to receive notice of any such termination or expiration of
rights from Falcon promptly upon Falcon's knowledge of same, and (ii)
Distributor being granted the opportunity to cure any default giving rise to a
potential termination of the License Agreement and recoup from Falcon any
payments made to cure any such default, or (b) the termination of this Agreement
pursuant to Article 27. Distributor acknowledges and understands that (i) under
no circumstances will any of the rights granted to Distributor hereunder outlive
or outlast the underlying grant of rights to Falcon, and (ii) in the event that
the rights granted to Distributor hereunder are terminated or otherwise expire,
the parties shall continue thereafter to perform their respective obligations
hereunder to the extent those obligations survive such termination or
expiration, as provided in Article 29 below.

         5. TERRITORY: The rights granted to Distributor hereunder shall be
exercised solely in the following Territory(s): the World.

         6. APPROVALS: Within thirty (30) business days after the execution of
this Agreement, Distributor shall submit to Falcon (and Falcon shall in turn
submit to Licensor) designs, drawings, layouts and art-related artwork and
materials (hereinafter collectively referred to as "Artwork") showing in detail
the method or manner of the proposed use of the Characters (as defined in the in
License Agreement) in connection with the initial Collection of Licensed
Article(s), their packaging (I.E., including, but not limited to labels, video
jackets and DVD covers), proposed advertising and promotional materials, or any
other materials of any kind or nature. Falcon and Licensor shall have the right
to approve or disapprove each such method or manner of use. Falcon's and
Licensor's approval or disapproval of each such item so submitted shall be given
in writing within twenty-five (25) business days following their actual receipt
of the respective submitted item. Failure of either Falcon or Licensor to give
written disapproval of each such submitted item within said twenty-five (25)
business days shall constitute approval. Written disapproval shall be deemed
timely given within said twenty-five (25) business days, when the same is
deposited in the mail as certified mail, return receipt requested, or sent by
overnight courier, return receipt, or personally delivered to Distributor at its

                                       2

<PAGE>

address as set forth in Article 33 or by telefax or express carrier. Distributor
shall have the right to use for all purposes hereunder only the specific Artwork
which has been approved by Falcon and Licensor as herein set forth. All Artwork
(including all elements created by Distributor for and in connection with the
Licensed Article(s)) and the copyright in such Artwork used by Distributor in
connection with the exploitation of Distributor's rights hereunder shall be the
sole and exclusive property of Licensor. Any and all original Artwork shall be
sent to Licensor at no cost and prepaid at Falcon's or Licensor's request (as
may be applicable), but in no event later than twenty-five (25 days) following
the termination or expiration of this Agreement.

         7. QUALITY AND INSPECTION. The Licensed Article(s) shall be of good
quality. Prior to beginning full-scale production of any Licensed Article(s),
Distributor shall submit samples of each such Licensed Article(s) to Falcon and
Licensor for approval. Either Falcon or Licensor may withhold its approval in
its absolute discretion. Distributor shall not sell any Licensed Article(s)
unless and until Falcon notifies Distributor in writing that the sample of that
Licensed Article has been approved by both Falcon and Licensor; PROVIDED,
HOWEVER, if written notice of disapproval is not given to Distributor within
fifteen (15) business days after Falcon's and Licensor's actual receipt of same
by Distributor of any Licensed Article(s) for approval, then Falcon and Licensor
will be deemed to have approved of same. Distributor shall, at its own expense,
submit to Falcon and Licensor, on June 15 of each year, or more frequently at
Falcon's or Licensor's reasonable request, representative production samples of
the Licensed Article(s) manufactured by or for Distributor to which any
Character or related mark (hereinafter referred to as a "Mark") is applied, in
their usual packaging, for inspection by Falcon and Licensor. The Licensed
Article(s) shall conform in all respects to the samples approved by Falcon and
Licensor. Distributor shall also periodically send to Falcon upon Falcon's
request (but not more than two times during each calendar year of this
Agreement), an inventory list outlining and identifying all inventory of the
Licensed Article(s) currently in Distributor's possession and in the process of
manufacture. Upon Falcon's or Licensor's request, Distributor shall remove from
sale under the Marks any product which does not meet the quality standards
required under this Article 7. Distributor shall also permit representatives of
Falcon and Licensor to inspect the place of manufacture of the Licensed
Article(s) a minimum of one time per year during the Term of this Agreement,
including but not limited to the laboratory(ies) in which the Licensed
Article(s) are copied and/or produced, during ordinary business hours. In
addition, each of Falcon and Licensor shall have the continuous right, at their
reasonable discretion, to approve of the manufacturer(s) of the Licensed
Article(s) for quality control purposes.

         8. DELIVERY OF MASTERS: Within forty-five (45) days after the execution
of this Agreement, Falcon shall deliver to Distributor, at Falcon's sole cost,
digitized pre-restored cleaned and remastered masters (the "Masters") of twelve
(12) half-hour episodes of the Bozo's Big Top television show (as described in
Article 2 of the License Agreement) in the following format: DVD-R. Distributor
shall use the Masters solely for the production/manufacture of the Licensed
Article(s). Within one hundred twenty (120) days after the execution of this
Agreement, Falcon shall deliver to Distributor, at Falcon's sole cost, Masters
of an additional twelve (12) half-hour episodes of the Bozo's Big Top television
show. Notwithstanding anything to the contrary stated herein, the Masters shall
remain the sole property of Falcon and shall be returned immediately by
Distributor to Falcon upon the termination of this Agreement for any reason.

                                       3

<PAGE>

         9. EDITING: Distributor shall not edit or cut any of the half-hour
episodes of "Bozo's Big Top" television show (as described in Article 2 of the
License Agreement) in any manner whatsoever, unless it receives Falcon's and
Licensor's prior specific written approval to do so. Each DVD, Video Tape and/or
Collection shall contain Licensor's and Falcon's written trademarks and
copyright notices (which shall be pre-approved by Falcon and Licensor). Falcon
shall select the opening and closing to be used on each DVD, Video Tape and/or
Collection. Distributor shall not change or cut the titles of the episodes or
add new titles to the episodes. Distributor warrants and guarantees that each
DVD, Video Tape and/or Collection shall contain Licensor's and Falcon's written
pre-approved trademark and copyright notices in the opening and closing credits
and in such language and sized lettering as is pre-approved by Licensor in
writing, Distributor shall not remove, edit, cut and/or reproduce any Bozo
cartoons that appear on any and all of the half-hour episodes of "Bozo's Big
Top" television show (as described in Article 2 of the License Agreement), nor
shall any such Bozo cartoons be shown and/or utilized in any manner whatsoever
by themselves (I.E., Bozo cartoons must be shown and/or utilized in the Licensed
Article(s) in their original form as part of the half-hour episodes of "Bozo's
Big Top" television show exactly as they were originally televised and as
delivered to Distributor by Falcon).

         10. COPY PROTECTION: Distributor shall produce the DVDs and Video Tapes
with all regional codes incorporated into them so that all DVDs and Video Tapes
may be played anywhere in the world. Distributor shall also incorporate a bug
into the Licensed Article(s) (I.E., a logo of some type, the content of which
shall be provided by Falcon and/or Licensor to Distributor prior to the
manufacturing of the Licensed Article(s)) which is permanently displayed in a
corner on the actual DVDs and Video Tapes so as to evidence bootlegging of the
Licensed Article(s) and in an effort to prevent the unauthorized
duplication/copying of the Licensed Article(s). Distributor shall also utilize a
Content Scrambling System (CSS) (a data encryption and authentication scheme
which is intended to prevent the unauthorized copying of video files directly
from DVD-Video discs) and/or an analog protection system such as Macrovision
which is utilized to prevent the unauthorized copying of Video Tapes at such
time as such copy protection efforts become financially feasible for Distributor
to implement.

         11. COPYRIGHT/TRADEMARK NOTICE: The parties hereto acknowledge that the
Characters are protected under the copyright, trademark and unfair competition
laws of the United States and of other countries. Distributor warrants and
covenants to do nothing, by way of omission or commission, which might in any
way impair, dilute or destroy Licensor's rights in and to the Characters.
Accordingly, Distributor shall imprint on each of the Licensed Article(s) in
such a manner that it may easily be read by the naked eye for no less than five
(5) seconds (I.E., on the film or negative of the actual footage which is
incorporated into each of the Licensed Article(s)) and shall reproduce on all
packaging, labeling, advertising and promotional materials used in connection
therewith, the "BOZO" TM seal set forth in EXHIBIT 1, attached to the License
Agreement, plus the phrases:

         a) (C) (insert year of first distribution of item(s) concerned) Larry
             Harmon Pictures Corporation.

         b) "BOZO" is a trademark of Larry Harmon Pictures Corporation,
            Hollywood, California, 90028, U.S.A. and is used under license.

                                       4

<PAGE>

[Confidential treatment has been requested with respect to the omitted portions
of this exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as **. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.]

Whenever the phrase "BOZO" is used on any packaging, advertising, and
promotional materials as the name or title of any of the Licensed Article(s),
then Distributor shall insert the phrase: "Larry Harmon's" before the phrase:
"BOZO TM THE WORLD'S MOST FAMOUS CLOWN," to wit:

                                "LARRY HARMON'S"
                                    "BOZO" TM
                         "THE WORLD'S MOST FAMOUS CLOWN"

In addition, Distributor shall also immediately incorporate and use any
different or any additional legal notices as Falcon or Licensor may direct in
the future on any and all Licensed Article(s), packaging, advertising and
promotional materials that have not been manufactured as of the date of such
direction/notification by Falcon or Licensor. Distributor shall also include
Licensor's "Bozo.com" and Falcon's "falconpicturegroup.com" logos on all of the
Licensed Article(s) and on all packaging, advertising and promotional materials
manufactured for and in connection with the Licensed Article(s) and shall
guarantee that the "Bozo.com" and "falconpicturegroup.com" logos shall always be
easily legible to the naked eye.

         12. COPYRIGHT OWNERSHIP: The parties acknowledge that the copyright in
the Licensed Article(s) (including, without limitation, each Collection, each
episode within a Collection, all other content, all related labeling and
packaging, in all forms, including without limitation, audio, visual or
audio/visual content in analog form and digital form, source code, object code
and binary ones and zeros) shall be the sole and exclusive property of Licensor
(subject to the rights granted to Falcon in the License Agreement). Distributor
agrees to sign any assignments or other documents upon request of Falcon and/or
Licensor to establish or confirm Licensor's rights in the aforesaid copyrights
and trademarks. Should Distributor fail to execute any such documents for any
reason Distributor hereby appoints each of Falcon and Licensor as Distributor's
attorney-in-fact for the purpose of executing such documents. These appointments
are irrevocable and coupled with an interest.

         13. DISTRIBUTION FEES AND ROYALTIES:

                  (a) INITIAL ADVANCE: Concurrently with the execution of this
         Agreement, Distributor shall deliver and pay to Falcon a
         non-refundable, recoupable advance against the Distribution Fees
         (defined below) in the amount of **. The payment of such advance shall
         entitle Distributor to produce, manufacture, market and sell, on the
         terms set forth herein (and subject to the terms of the License
         Agreement) initially two (2) Collections (or a maximum of twenty-four
         one-half hour episodes) during the Term of this Agreement.

                  (b) ADDITIONAL ADVANCES: Distributor shall pay to Falcon
         additional non-refundable, recoupable advances against the Distribution
         Fees (each an "Additional Advance") in the following amounts and within
         the following deadlines:

                                       5

<PAGE>

[Confidential treatment has been requested with respect to the omitted portions
of this exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as **. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.]

------------------------------- ------------------------------------------------
       AMOUNT OF ADVANCE                       PAYMENT DEADLINE
------------------------------- ------------------------------------------------
              **                        On or before November 1, 2003
------------------------------- ------------------------------------------------
              **                        On or before November 1, 2004
------------------------------- ------------------------------------------------
              **                        On or before November 1, 2005
------------------------------- ------------------------------------------------
              **                        On or before November 1, 2006
------------------------------- ------------------------------------------------

         For each Additional Advance paid by Distributor to Falcon, Distributor
         shall have the right to make an additional Collection of twelve (12)
         half-hour episodes of "Bozo's Big Top" television show (as described in
         Article 2 of the License Agreement), to be produced, manufactured,
         sold, marketed and promoted in accordance with this Agreement.

                  (c) DISTRIBUTION FEES: During the period commencing on the
         date hereof and continuing until the earlier of (i) the date that is
         eighteen (18) months after the date hereof, or (ii) the date that
         Distributor reaches ** in sales (I.E., gross billings) of Licensed
         Article(s) (the "Initial Period"), Distributor shall pay to Falcon a
         fee ("Distribution Fee") in a sum equal to ** of the net wholesale
         price of the Licensed Article(s) (I.E., in the case of Collections sold
         hereunder, ** of the net wholesale price of each Collection), as such
         net wholesale price is defined below. Following the expiration of the
         Initial Period, and continuing throughout the remainder of the Term,
         the Distribution Fee shall increase to ** of the net wholesale price of
         the Licensed Article(s) for all Licensed Article(s) sold by Distributor
         after the Initial Period. The Distribution Fees shall be payable along
         with each Sales Report required to be delivered under Article 16 below
         and shall be based upon all sales shown in such Sales Report.

                  (d) ROYALTIES:

                           (i) ADVANCES. Falcon has paid to Licensor the initial
                  guaranteed advance against royalties required under the
                  License Agreement. Falcon shall be permitted to recoup from
                  those royalty payments the full amount of such advance. All
                  future royalty advances called for under the License Agreement
                  shall be paid, when due, by Distributor to Falcon (and then
                  remitted by Falcon to Licensor). Distributor shall be
                  permitted to recoup from future royalty payments otherwise
                  becoming due hereunder any recoupable advances hereafter paid
                  by Distributor pursuant to this Agreement.

                           (ii) ROYALTY FEES. In addition to the Distribution
                  Fees throughout the Term, Distributor shall pay to Falcon a
                  royalty fee ("Royalty Fee") in a sum equal to ** of the net
                  wholesale price of the Licensed Article(s), but in no event
                  less than (i) ** per Collection sold under normal/customary
                  circumstances, (ii) ** per Collection sold during a special
                  promotion and/or under any other circumstances (I.E., under
                  all circumstances other than normal/customary circumstances),

                                        6

<PAGE>

[Confidential treatment has been requested with respect to the omitted portions
of this exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as **. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.]

                  and (iii) ** per each single DVD or Video Tape containing the
                  Licensed Article(s) sold by Distributor subject to
                  Distributor's obtaining the necessary permission to sell
                  single DVDs and Video Tapes pursuant to Article 2 above. The
                  Royalty Fees shall be payable along with each Sales Report
                  required to be delivered under Article 16 below and shall be
                  based upon all sales shown in such Sales Report.

                  (e) NET WHOLESALE PRICE: As used in this Article 13, the term
         "net wholesale price" shall mean the Distributor's total gross billings
         (not including taxes or shipping charges) for the Licensed Article(s)
         (I.E., for each of the Collections), reduced only by normal trade
         discounts actually taken and credits or refunds actually issued for
         returned or damaged merchandise, reserves for returns by customers,
         chargebacks, and/or bad debt. Any reductions for reserves shall be
         offset by the actual credits or refunds made and paid through to Falcon
         by Distributor within 30 days upon receipt of reserves payment to
         Distributor.

         14. COSTS OF DISTRIBUTOR: Notwithstanding anything to the contrary
stated herein, Distributor shall bear all costs and expenses of reproducing,
packaging, selling, advertising and promoting the Collections and Licensed
Article(s) and all costs and expenses of accepting, filling and shipping orders
for Collections and Licensed Article(s).

         15. SALES BY LICENSOR AND/OR FALCON: Distributor acknowledges that
Licensor and/or Falcon may assist Distributor in the exploitation of the
Licensed Article(s) (which may include, but which shall not be limited to, the
talent and time contributed by Licensor and/or Larry Harmon in granting
interviews to various media to enhance the awareness and sales of the Licensed
Article(s) as well as Licensor's assistance and and/or Larry Harmon's assistance
in helping to market and promote the Licensed Article(s) through such efforts as
co-marketing opportunities between Falcon and Licensor's other licensees and
tie-ins for cross promotions).

         16. ACCOUNTING: Distributor shall submit to Falcon a separate
accounting for each separate country and/or foreign Territory quarterly, as soon
as possible and in any event not later than the tenth (10th) day of the month
following the end of the preceding calendar quarter and each statement of
account so rendered ("Sales Report") shall be accompanied by payment of the
amount then shown due to Falcon thereon. Such Sales Reports shall be complete in
all respects and shall reflect all sales and shipments as to each of the
Licensed Article(s) (including but not limited to the names/locations of any and
all purchasers (I.E., all retailers) and the dates of their respective purchases
of the Licensed Article(s)) and all returns and all discounts. Distributor shall
keep and maintain full and accurate books and records at its office located at
11250 El Camino Real, Suite 100, San Diego, CA, which books and records shall be
available at all times during business hours for inspection and audit by Falcon
and Licensor or its/their authorized representatives with reasonable notice of
any contemplated inspection or audit being provided to Distributor. All
information reflected in said statements or obtained by Falcon and Licensor from
any such inspection or audit shall be treated as confidential, except to the
extent that the same is necessarily disclosed in the enforcement or defense of
any claim hereunder. If there is any discrepancy between the amount due to
Falcon and the amount reported by Distributor which exceeds five percent (5%),
then Distributor shall bear the full and complete cost of the audit and shall
remit forthwith the difference due Falcon.

                                       7

<PAGE>

[Confidential treatment has been requested with respect to the omitted portions
of this exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as **. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.]

         17. UNION FEES: Distributor shall be responsible for the payment of
half of any and all fees (up to a maximum fee of ** per Collection or ** per
single DVD or Video Tape) that are due and payable to any and all applicable
Union(s) (I.E., including, but not limited to, SAG and/or AFTRA) which are
related to the release of the half-hour episodes of the "Bozo's Big Top"
television show (as outlined in Article 2 of the License Agreement). Such fees
shall include, but may not be limited to, any and all residual fees and fees for
health and retirement/pension and welfare funds. Falcon and/or Licensor shall
pay directly to said respective Union(s) all such fees as per said respective
Union's requirements and shall notify Distributor in writing of the amount of
such fees paid to said respective Union(s) and shall invoice Distributor in the
amount of half of such fees. Distributor shall remit payment to Falcon and/or
Licensor for said half of such fees no later than ten (10) calendar days from
the date on the invoice from Falcon and/or Licensor.

         18. SAMPLES: Distributor shall furnish to Falcon prior to the
marketing, sales and distribution of the Licensed Article(s), at no cost to
Falcon and freight prepaid, ** of the DVDs and ** samples of the Video Tapes
included in each Collection of the Licensed Article(s) and shall furnish **
samples of the DVDs and ** samples of the Video Tapes included in each
Collection to Falcon thereafter during each year of the Term of this Agreement.
The ** samples of the DVDs and ** samples of the Video Tapes shall be
accompanied by a statement from Distributor as to when and where the subject
Licensed Article(s) was first marketed (I.E., placed on sale). This information
may be used by Licensor in filing copyright claims and trademark applications,
in its name, for each Licensed Article(s), and for enforcement and trademark
maintenance. At Falcon's specific request, Distributor agrees to furnish to
Falcon, at the **, a reasonable number of additional samples of the DVDs and
Video Tapes in excess of those referred to hereinabove in this Article for
promotional, marketing and/or sales purposes. Distributor shall further reduce
the price at which it sells the Licensed Article(s) to Licensor and/or Falcon by
an additional **, in which case Distributor shall not pay to Falcon a ** royalty
as is required in Article 13 hereinabove.

         19. INDEMNIFICATION: Distributor hereby indemnifies each of Falcon and
Licensor from and against any and all claims, demands and causes of action
arising out of (i) the unauthorized use of any patent, process, method, device
or other intellectual property by Distributor in connection with the
manufacture, distribution, promotion or sale of the Licensed Article(s), (ii)
actual and alleged defects in the Licensed Article(s), and (iii) any accident,
injury, damage or product liability claim of any kind involving the Licensed
Article(s), and Distributor agrees to defend Falcon and Licensor and hold each
of Falcon and Licensor harmless at no cost or expense to Falcon or Licensor
whatsoever, including, without limitation, damages, attorneys fees, court costs
and expenses of investigation and defense. As used in the preceding sentence,
the terms "Falcon" and "Licensor" shall include each of their respective
subsidiaries, affiliated companies, successors or assigns and all officers,
authorized agents, directors, and employees thereof.

                                       8

<PAGE>

         Falcon warrants and represents that it has entered into the License
Agreement and has the exclusive right and authority to enter into this Agreement
and to grant the rights granted herein. Falcon hereby indemnifies and holds
Distributor, which shall include Genius Products, Inc., its subsidiaries,
affiliated companies, successors or assigns and all officers, authorized agents,
directors and employees, from and against any and all claims, demands and causes
of action arising out of any claims in connection with Distributor's use of the
Licensed Article(s) to the extent (and only to the extent) such use is pursuant
to and in accordance with all of the terms and conditions of this Agreement.

         20. INSURANCE: Distributor shall obtain and maintain, throughout the
term of this Agreement, and for the longer of ten (10) years following the
expiration or termination of this Agreement or the expected useful life of the
Licensed Article(s), Product Liability Insurance and General Liability Insurance
providing protection for Falcon and Licensor, as those terms are defined in
Article 19, against any and all claims, demands, suits, and causes of action
named in Article 19. Such insurance shall be underwritten by insurers
satisfactory to Falcon and shall be written within the limit of not less than
One Million U.S. Dollars ($1,000,000.00) in the aggregate. Distributor shall
furnish Falcon and Licensor within fifty (50) days after the execution of this
Agreement with a certificate of the insurer(s) with respect to such insurance,
stating thereon the limits of liability, the period of coverage, the parties
insured, including an endorsement naming each of Licensor and Falcon as
additional insureds and containing an agreement by the insurer(s) not to
terminate or materially modify such insurance without first notifying Falcon and
Licensor in writing at least thirty (30) business days in advance of such
termination or modification. The existence of the aforesaid insurance shall not
mitigate, alter or waive the indemnity provisions hereof, nor shall either
Falcon or Licensor be responsible for the payment of premiums, or for the
payment of any charges, taxes, assessments or other costs for such insurance.

         21. GOODWILL: Distributor acknowledges that the Characters enjoy a
world-wide reputation, that there is great value in the publicity and goodwill
associated with the names and likenesses of the Characters, and in such
connection, Distributor acknowledges that such goodwill exclusively belongs to
Licensor and that the Characters have acquired secondary meaning in the eyes of
the public. All use of the Characters in any format, as approved by Licensor,
shall inure to the benefit of Licensor. Distributor agrees that it will not,
directly or indirectly, during the term of this Agreement or at any time
thereafter, contest, attack or challenge any right, title or interest of
Licensor or Falcon in and to their respective trademarks, service marks or
copyrights, or harm, misuse or bring into disrepute the Characters and shall
protect and defend the Characters, and will not attack the validity of this
Agreement in respect to all of the foregoing. Distributor agrees that it will
not now or at anytime thereafter make any claim or assert any rights, title or
interest in and to Licensor's or Falcon's trademarks, service marks or
copyrights. Distributor agrees that it will not use or authorize the use of a
trademark, service mark, trade name or other designation identical with or
confusingly similar to any of the Characters' trademarks, and shall not use,
create or authorize others to use or create characters or character
representation similar to the Characters except as permitted in this Agreement.
Distributor further agrees that its use of the Characters is limited to that
which is specifically provided in this Agreement and the License Agreement.
Distributor agrees that it will not use any representation of the Characters
whatsoever, under any conditions or circumstances, without written approval from
Falcon and Licensor.

                                       9

<PAGE>

         22. RIGHTS AND OBLIGATIONS TO REPRODUCE, MARKET AND SELL: Distributor
agrees that it will do all commercially reasonable things necessary to carry on
a successful commercial operation with respect to the exploitation of the
Licensed Article(s) throughout the Territory, to the end that the maximum
receipts may be obtained therefrom. Distributor shall use commercially
reasonable efforts to sell and distribute the Licensed Article(s) to retail
outlets for sale and distribution direct to the public only, and to jobbers,
wholesalers and distributors for sale and distribution to retail outlets only.
Except as permitted by Licensor and Falcon in writing, Distributor shall not
sell to any jobber, wholesaler, distributor, retail outlet, or any other source
whatsoever if Distributor has reason to believe, or is on notice that such
purchaser intends to use the Licensed Article(s)for publicity purposes,
competition sales, premiums, giveaways or similar methods of merchandising or
marketing, nor shall Distributor have any right whatsoever to use the Licensed
Article(s) for such purposes. In no event shall Distributor sell the Licensed
Article(s) in job lots at reduced prices without the prior written consent of
Falcon and Licensor. Distributor may sell the Licensed Article(s) to mail order
outlets, provided that said mail order outlets are not of a scandalous or
disparaging nature so as to compromise the integrity and goodwill of the
Characters in any way whatsoever. Distributor shall provide Falcon with a
minimum of two (2) copies of each of the mail order catalogs in which the
Licensed Article(s) is marketed and/or sold no later than fifteen (15) business
days following the placement of the Licensed Articles in said catalog. In the
event that Distributor wishes to market and/or distribute the Licensed Articles
in a channel of commerce other than the channels of commerce as specifically
authorized in this Article, then Distributor shall provide Falcon with a written
request to market and/or distribute the Licensed Articles in such other channel
of commerce (said written request shall include all pertinent information
necessary for Falcon to provide Distributor with written approval or
disapproval) and Falcon shall provide Distributor with written approval or
disapproval by Falcon and Licensor of same, such approval not to be unreasonably
withheld or delayed.

         Distributor may also sell the Licensed Article(s) on the Internet and
may display and reproduce Bozo as part of the title of a Collection in
connection with such sale of the Licensed Article(s) on the Internet. However,
Distributor may not use, portray, display, or reproduce the names and/or
likenesses of the Characters on the Internet in any other manner, unless Falcon
and Licensor specifically approve such use in writing in accordance with the
procedures set forth elsewhere in this Agreement. Distributor agrees that it
shall not register or seek to register the names BOZO THE CLOWN, BOZO, BOZO'S
BUDDIES, or any of the names of the specific BOZO'S BUDDIES characters, or any
other names in any language that are identified with the names and/or characters
of BOZO THE CLOWN, BOZO, or BOZO'S BUDDIES, as a domain name or as part of a
domain name in any domain name registry in the world. Distributor further agrees
that to the extent it is approved by Falcon and Licensor to use the names and/or
likenesses of the Characters on the Internet, it will cease such uses forthwith
upon expiration or termination of this Agreement and will take whatever steps
are necessary to ensure that such use ceases forthwith at that time.

         Distributor agrees that each DVD, Video Tape produced hereunder shall
contain at the beginning an advertisement for "bozostore.com" and/or "bozo.com"
or such other advertisement that Licensor advises Licensee of prior to the
production/manufacturing of any group of Bozo DVDs and/or Video tapes in a form

                                       10

<PAGE>

[Confidential treatment has been requested with respect to the omitted portions
of this exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as **. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.]

supplied and approved by Licensor. Without limiting the foregoing, with regard
to any (a) DVD produced hereunder, such advertisement shall be accessible as an
option appearing on the menu screen, and (b) Video Tape produced hereunder, such
advertisement shall be inserted prior to the commencement of the first Bozo
episode contained on such Video Tape but such advertisement will not exceed 30
seconds in length.

         23. SUPPORT MATERIALS: Falcon shall deliver to Distributor copies of
all artwork, logos, written information and other materials received from
Licensor for Distributor's use in connection with the packaging, promotion,
marketing and sale of Collections of the Licensed Article(s). All such uses by
Distributor of the above mentioned items supplied by Falcon shall be subject to
Falcon's and Licensor's written approval as outlined in Articles 6 and 7 above.

         24. [INTENTIONALLY DETETED]

         25. INTERNET SALES BY FALCON AND LICENSOR: Distributor acknowledges
that Falcon and Licensor may, at their sole discretion, include the Licensed
Article(s) on their respective web sites for sale and distribution direct to the
public. In the event that Falcon and/or Licensor wish to purchase the Licensed
Article(s) from Distributor for Falcon's or Licensor's resale on their
respective web sites, then Distributor shall sell the Licensed Article(s) to
Licensor at a price equal to **. Distributor shall further reduce the price at
which it sells the Licensed Article(s) to Licensor by an additional **, in which
case Distributor shall not pay to Falcon a ** royalty as is required in Article
13 hereinabove. Otherwise, however, Licensor may forego said additional **
reduction in price, in which case Distributor shall be required to pay Falcon a
** royalty on the sale of said Licensed Article(s) to Falcon for Falcon's
placement of the Licensed Article(s) on its web site (as is required in Article
13 hereinabove). In the event that Falcon and/or Licensor wishes to sell the
Licensed Article(s) on their respective web sites, Falcon and/or Licensor may
choose to create a special collector's packaging for a respective Collection in
order to differentiate said Collection from the Collections that are being sold
at retail, in which case Distributor shall assist Falcon and/or Licensor in
creating special collector's packaging and Falcon and/or Licensor may charge, in
their sole discretion, whatever price they so wish for this special Collection,
provided that the price of said Collection is not less than **.

         26. FREE GOODS: Distributor shall have the right to give-away as free
goods a quantity of the Licensed Article(s) per year equal to a maximum of ** of
the gross Collections sold during the prior year of this Agreement. Said free
goods shall be used by Distributor to market and promote the Licensed Article(s)
to retailers and other potential purchasers of the Licensed Article(s).

         27. PUBLICITY: Distributor shall hire a public relations firm, at such
time(s) as Distributor deems most appropriate, to support the sales and
distribution of the Licensed Article(s) at retail utilizing marketing and
promotional tools such as end cap displays, countertop and point-of-purchase
displays and print advertising opportunities, to blanket media nationally for
product review (I.E., for review of the Licensed Article(s)) and to work on
specialized submissions for articles, including, but not limited to, trade
magazines, newspapers, national magazines (I.E., People Magazine, US Magazine,
TV Guide), store appearances, mall appearances, conventions, and radio and
television appearances for Larry Harmon and/or the "Bozo" Character (subject to

                                       11

<PAGE>

the availability of Larry Harmon and/or the "Bozo" Character and to the ability
of Licensor to provide Larry Harmon and/or the "Bozo" Character for any such
appearances - all such appearances shall be subject to a separate written
Personal Appearance Agreement between Licensor and Falcon, a copy of which is
attached to the License Agreement as EXHIBIT B) as part of the promotion of the
Licensed Article(s).

         28. TERMINATION: This Agreement shall be subject to termination as
follows:

                  (a) FAILURE TO DISTRIBUTE: Falcon shall have the right to
         terminate this Agreement forthwith:

                           (i) Should Distributor not have begun the bona fide
                  manufacturing, marketing and/or distribution of at least one
                  (1) of each of the Licensed Article(s) within one hundred
                  twenty (120) calendar days from the execution of this
                  Agreement, or

                           (ii) Falcon may terminate forthwith Distributor's
                  right to manufacture and distribute the Licensed Article(s) in
                  the event that Distributor has not manufactured or has
                  discontinued bona fide manufacturing, marketing, or
                  distribution for any period of one hundred twenty (120)
                  consecutive calendar days during the Term thereof.

                  (b) ACCOUNTING AND PAYMENT DEFAULTS: Should Distributor fail
         to make any payment when due or to deliver any of the statements of
         account when required, or to give full and complete access to
         Distributor's business premises and to its books and records as herein
         required, and should Distributor fail to fully and completely remedy
         the same within fifteen (15) days after said required due dates, then
         Falcon shall have the right to terminate this Agreement forthwith or at
         any time. Falcon shall grant Distributor the right to utilize said
         fifteen (15) day remedy period a maximum of two (2) times per year
         during the Term of this Agreement.

                  (c) OTHER DEFAULTS: Should Distributor fail to perform any
         other of its obligations under this Agreement, and should Distributor
         fail to fully and completely remedy the same within thirty (30) days
         after receipt of written notice thereof from Falcon, then Falcon shall
         have the right to terminate this Agreement forthwith and at any time.

                  (d) INSOLVENCY, ETC.: Should Distributor be unable to pay its
         liabilities when due or should Distributor make any assignment for the
         benefit of creditors, or file any petition under the bankruptcy or
         insolvency laws of the United States or of any State, or have, or
         suffer a receiver or trustee to be appointed for Distributor's business
         or property, whether in whole or in part, or be adjudicated a bankrupt
         or insolvent, or make a general assignment for the benefit of
         Distributor's creditors, or take or suffer any similar action, Falcon
         shall have the right to terminate this Agreement forthwith and at any
         time.

                                       12

<PAGE>

[Confidential treatment has been requested with respect to the omitted portions
of this exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as **. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.]

                  (e) TERMINATION OF LICENSE AGREEMENT: This Agreement shall
         terminate immediately and without any further action by any party
         hereto upon the termination of the License Agreement for any reason,
         subject to the terms set forth in Article 4 above.

                  (f) INSUFFICIENT SALES: Falcon may terminate this Agreement
         forthwith and at any time in the event that Distributor's sales of
         Licensed Article(s) fails to generate sufficient Distribution Fees and
         Royalty Fees for Falcon to satisfy all of its payment obligations in
         the amounts and at the times the same become due (including any payment
         obligations during all Option Terms) under Articles 10(a) and 10(b) of
         the License Agreement, with reasonable notice to be provided to
         Distributor by Falcon of any such intended termination. Distributor may
         terminate this Agreement upon thirty (30) days notice to the other
         party if insufficient sales result in the first twelve (12) months of
         the Agreement to make the continuation of the Agreement commercially
         reasonable; PROVIDED, HOWEVER, if Distributor elects to terminate the
         Agreement on such basis, Distributor shall pay to Falcon a termination
         fee equal to **.

         No expiration or termination of this Agreement shall relieve
Distributor of its obligations to pay to Falcon and Licensor those sums due to
Falcon and Licensor pursuant to the provisions of Article 13; PROVIDED, HOWEVER,
except as provided in Section 28(f) above, Distributor shall not be required to
pay the Additional Advances if the Agreement is terminated prior to the payment
deadline.

         29. SELL-OFF PERIOD: Upon the expiration or termination of this
Agreement for any reason whatsoever, other than pursuant to Article 28 hereof
and upon the express condition precedent (a) that Distributor shall promptly
furnish to Falcon a full and complete inventory showing all Licensed Article(s),
cartons, wrappers, labels, and advertising and promotional materials on hand and
in the process of manufacture and (b) that Distributor shall continue in good
faith to dispose of the Licensed Article(s), Distributor shall have and is
hereby granted a period of ** calendar days as measured from the effective date
of such termination or expiration to dispose of such Licensed Article(s).
Distributor will not, in connection with disposing of the Licensed Article(s)
under the provisions of this Article 29 offer or attempt to offer the same at
net sales prices less than those previously established by Distributor for the
Licensed Article(s) without first obtaining the written consent of Falcon and
Licensor. During the period provided for Distributor's disposal of its stock of
Licensed Article(s), Distributor is hereby granted the non-exclusive right in
connection with such disposal only, to use the names and likenesses of the
Characters, subject to all the provisions hereof, including but not limited to
specifically Falcon's and Licensor's approval rights, and shall send to Falcon a
complete and full accounting accompanied by monthly Distribution Fee and Royalty
Fee payment for all transactions occurring during each of the sell-off months as
defined hereinabove which shall be payable and sent to Falcon no later than ten
(10) days following the end of the previous sell-off month. Within ten (10)
business days after the termination of the ** day sell-off period as defined
hereinabove in this Article 29, Distributor will submit forthwith to Falcon a
full and complete inventory of all remaining Licensed Article(s), including but
not limited to any and all packaging, labels, advertising and promotional
materials, in Distributor's possession and control bearing the BOZO name or

                                       13

<PAGE>

[Confidential treatment has been requested with respect to the omitted portions
of this exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as **. A complete version of
this exhibit has been filed separately with the Securities and Exchange
Commission.]

Character and/or the BOZO'S BUDDIES' names or Characters. Within twenty (20)
business days after the termination of the ** day sell-off period as defined
hereinabove in this Article 29, Distributor further agrees to send to Falcon, at
no cost to Falcon and freight prepaid, the above mentioned full and complete
inventory of the Licensed Article(s), including but not limited to all Master
DVDs and Master Video Tapes, any underlying materials of any kind or nature
related to the Licensed Article(s), and any and all packaging, labels,
advertising and promotional materials, bearing the BOZO name or Character and/or
the BOZO'S BUDDIES' names or Characters.

         30. ASSIGNMENT OF RIGHTS: Distributor's rights hereunder are personal
to Distributor. Accordingly, Distributor shall not have the right to assign or
transfer any of its rights hereunder, nor shall any such right be assignable by
operation of law.

         31. INDEPENDENT CONTRACTOR: Distributor is an independent contractor
with respect to the rights granted to Distributor hereunder and with respect to
the exercise of said rights. Distributor has no authority to bind or commit
Falcon in any respect whatsoever, and Distributor shall not hold itself out as
Falcon's agent, principal, partner, associate or joint venturer, or as having
any power or authority to bind or commit Falcon.

         32. WAIVER. Any waiver express or implied, by any party hereto, of any
breach by any other party hereto, of any provision herein contained shall not
operate as a waiver with respect to any subsequent breach of the same or any
other provision of this Agreement.

         33. NOTICES: All notices, statements, payments and communications which
the parties may desire to transmit to each other shall be in writing and shall
be sent by both fax and either by first class mail or by overnight express
courier service, except where this Agreement expressly sets forth the specific
manner of delivery, in which case, such manner of delivery must be followed. The
effectiveness of such service or delivery shall be determined as in this
Agreement specifically set forth. The addresses of the parties are as follows:

                  DISTRIBUTOR:      GENIUS PRODUCTS, INC.
                                    11250 El Camino Real, Suite 100
                                    San Diego, CA 92127
                                    Attention:  Klaus Moeller, CEO
                                    Phone No.:        (858) 793-8840
                                    Fax No.: (858) 793-8842

                  FALCON:           FALCON PICTURE GROUP, LLC
                                    974 Estes Court
                                    Schaumburg, IL 60193
                                    Attention:  Mr. Carl P. Amari
                                    Phone No.:        (847) 923-0400
                                    Fax No.: (847) 923-0353

                                       14

<PAGE>

                                    With a copy to:

                                    William A.  Kummerer
                                    Michael Best & Friedrich LLC
                                    401 North Michigan Avenue, Suite 1900
                                    Chicago, Illinois 60611

         All changes of address shall be communicated promptly to the other
party, failing which, the addresses above set forth shall be deemed to be
correct.

         34. PERPETUAL OBLIGATIONS: Distributor's obligations under Articles 19
and 21 of this Agreement shall survive the expiration or termination of this
Agreement and shall be perpetual.

         35. NON-DISCLOSURE: During the Term of this Agreement or at any time
after the expiration or termination of this Agreement, Distributor shall not
disclose the terms, conditions, restrictions or economic details of this
Agreement to any other party not related to Distributor; the only exceptions
being, authorized agents, attorneys, auditors, accountants and representatives
of Distributor and its employees with a need to know, or under order of a court
of competent jurisdiction, or upon request from a governmental agency with the
authority to make such a request, or as required by the rules of the Securities
Exchange Commission.

         36. JURISDICTION. In the event of a dispute between the parties hereto
arising out of or concerning this Agreement, each of the parties accepts and
consents to the jurisdiction of the State or Federal courts of either: (a) the
State of California in Los Angeles County or (b) the State of Illinois in Cook
County. In such litigation, Distributor waives personal service of the summons,
complaint or other process and agrees that the service thereof may be certified,
or registered, or by telefax or express courier directed to Distributor at the
address provided in this Agreement. Within thirty (30) days after such mailing,
Distributor shall appear or answer such summons, complaint or other process.

         37. APPLICABLE LAWS: This Agreement constitutes the entire Agreement
between the parties with respect to the subject thereof and all prior oral and
written agreements, negotiations, discussions, understandings and commitments
are superseded hereby. This Agreement may be amended only by an instrument in
writing by all parties hereto. This Agreement shall be construed in accordance
with the internal laws, and not the law of conflicts, of the State of
California, United States of America.

         38. WAIVER OF CONFLICT. The parties each hereby acknowledge and agree
as follows: (a) Michael Best & Friedrich LLC ("MBF") has represented and
continues to represent Falcon with respect to this and other matters; (b) MBF
has previously represented Distributor in general business matters but is not
currently performing any legal services for Distributor; (c) MBF has been
requested to represent Falcon (and NOT Distributor) in the negotiation and
preparation of this Agreement; (d) MBF is willing to represent Falcon (and ONLY
Falcon) in such matters PROVIDED that all of the parties acknowledge their
understanding that there are potential conflicts of interest in connection with
this representation due to MBF's prior representation of Genius; (e) MBF does
not believe that its relationship with either Falcon or Distributor negatively

                                       15

<PAGE>

affects MBF's ability to effectively represent Falcon in this matter; (f)
Distributor has had the opportunity to (but has elected not to) retain its own
legal counsel to represent Distributor in connection with this Agreement; (g)
Distributor is not relying on MBF to provide legal advice, services or
representation of any kind in these matters (and hereby acknowledges that MBF is
acting adverse to Distributor, as counsel for Falcon); and (h) Distributor
hereby waives any actual or potential conflict of interest that may relate to or
arise from MBF's representation of Falcon.

         IN WITNESS WHEREOF, Distributor and Falcon have entered into this
Agreement and Licensor has consented to this Agreement on the date set forth
above.

FALCON PICTURE GROUP, INC.:

By:  ___________________________
Its:   _________________________

GENIUS PRODUCTS, INC.

By:  ___________________________
Its:   _________________________

                                       16

<PAGE>

                                    EXHIBIT A
                                    ---------

                                LICENSE AGREEMENT

                                 [Not provided]

<PAGE>

                                    EXHIBIT B
                                    ---------

                          PERSONAL APPEARANCE AGREEMENT

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