THE SECURITIES EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, HAVE BEEN TAKEN FOR INVESTMENT AND MAY
NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF EXCEPT IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
REDEEMABLE WARRANT AGREEMENT
This Warrant Agreement (the "Agreement") is made and entered into this
1st day of September, 1997 by and between Brilliant Digital Entertainment, Inc.,
a Delaware corporation (the "Company"), and Packard Xxxx NEC, Inc. , or
permitted transferee pursuant to Section 8.2 below (the "Holder").
In consideration of the premises and mutual covenants contained herein, the
Holder and the Company hereby agree as follows:
1. GRANT OF WARRANT. In consideration of the sum of $200.00 and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Company hereby grants to the Holder the right and
option (the "Warrant") to purchase at any time during the "Exercise Period"
(as defined in Section 2 below), upon the terms and subject to the conditions
set forth in this Agreement, an aggregate of 200,000 shares of Common Stock,
par value $0.001 per share, of the Company (the "Common Stock"), for an
exercise price per share (the "Exercise Price"), equal to $10.00, subject to
adjustment as provided in Section 5 below. The shares of Common Stock
issuable upon exercise of the Warrant are referred to as the "Warrant
Shares," and the Warrant Shares and the Warrant are together referred to as
the "Securities."
2. EXERCISE PERIOD. The Warrant shall be immediately exercisable and
terminate and expire at 5:00 p.m. (Los Angeles Time) on February 28, 1999 .
3. EXERCISE OF WARRANT. There is no obligation to exercise all or any
portion of the Warrant. The Warrant may be exercised, in whole or in part,
at any time after the date hereof only by delivery to the Company of:
3.1 Written notice of exercise in form and substance identical to
and containing the representations set forth in Exhibit "A" attached to this
Agreement; and
3.2 Payment of the Exercise Price for the Warrant Shares being
acquired upon exercise of the Warrant, by wire transfer in immediately
available Federal funds. Upon receipt of the foregoing, the Company shall
promptly issue in the name of the Holder a certificate
evidencing the Warrant Shares being purchased by such exercise and deliver
such certificate to the address requested in the notice of exercise.
4. REDEMPTION.
(a) On or after the first anniversary of the date of this Agreement
(the "Initial Warrant Redemption Date"), the Company may redeem and cancel
all, and not less than all, the unexercised rights to purchase Warrant Shares
evidenced by the Warrant for an aggregate redemption price (the "Redemption
Price") of $0.001 multiplied by the number of Warrant Shares then issuable
under the Warrant, provided, however, that before any such call for
redemption of the Warrant can take place, (i) the resale of the Warrant
Shares issuable upon exercise of the Warrant shall have been registered
pursuant to the provisions of the Securities Act of 1933, or be eligible for
sale by the Holder at any time without restriction or pursuant to the
provisions of Rule 144(k), and (ii) the (A) high closing bid price for the
Common Stock in the over-the-counter market as reported by the NASD Automated
Quotation System or (B) the closing sale price on the primary exchange on
which the Common Stock is traded, if the Common Stock is traded on a national
securities exchange, shall have for fifteen (15) consecutive trading days
subsequent to the Initial Warrant Redemption Date equaled or exceeded 125% of
the Exercise Price.
(b) In case the Company shall exercise its right to redeem all, and
not less than all, the unexercised rights to purchase Warrant Shares
evidenced by the Warrant, it shall give or cause to be given notice to the
Holder by mailing to the Holder a notice of redemption, first class, postage
prepaid, to the address of the Holder set forth in Section 11.2 below, within
twenty (20) calendar days of the aforementioned fifteen (15) consecutive
trading days and not later than the thirtieth (30th) day before the date
fixed for redemption. Any notice mailed in the manner provided herein shall
be conclusively presumed to have been duly given whether or not the Holder
receives such notice.
(c) The notice of redemption shall specify (i) the Redemption
Price, (ii) the date fixed for redemption (the "Redemption Date"), and (iii)
that the right to exercise the Warrant shall terminate at the close of the
market upon which the Common Stock is then traded on the business day
immediately preceding the date fixed for redemption.
(d) Any right to exercise the Warrant shall terminate on close of
the market upon which the Common Stock is then traded on the business day
immediately preceding the Redemption Date. The Redemption Price payable to
the Holder shall be mailed to the Holder at its address set forth in Section
11.2 below.
5. ADJUSTMENTS TO EXERCISE PRICE, REDEMPTION PRICE AND NUMBER OF
SHARES. The Exercise Price, Redemption Price and number of Shares shall be
subject to adjustment from time to time as follows:
5.1 In the event the Company should at any time or from time to time
after the date of this Warrant (the "Issuance Date") fix a record date for the
effectuation of a split or
2
subdivision of the outstanding shares of Common Stock or the determination of
holders of Common Stock entitled to receive a dividend or other distribution
payable in additional shares of Common Stock or other securities or rights
convertible into, or entitling the holder thereof to receive, directly or
indirectly, additional shares of Common Stock (hereinafter referred to as
"Common Stock Equivalents") without payment of any consideration by such
holder for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of
such dividend distribution, split or subdivision if no record date is fixed),
the Exercise Price and the Redemption Price shall be appropriately decreased
(i.e., the per share Exercise Price and the Redemption Price shall be
adjusted such that the aggregate exercise price and for all Warrant Shares
issuable upon exercise of the Warrant in full and the Redemption Price for
the entire Warrant, as adjusted, shall remain the same) and the number of
Warrant Shares shall be increased in proportion to such increase in the
aggregate number of shares of Common Stock outstanding and those issuable
with respect to such Common Stock Equivalents.
5.2 If the number of shares of Common Stock outstanding at any time
after the Issuance Date is decreased by a combination of the outstanding
shares of Common Stock, then, following the record date of such combination,
the Exercise Price and Redemption Price shall each be appropriately increased
(i.e., the per share Exercise Price and the Redemption Price shall be
adjusted such that the aggregate exercise price for all Warrant Shares
issuable upon exercise of the Warrant in full and the aggregate redemption
price for the entire Warrant, as adjusted, shall remain the same) and the
number of Shares shall be decreased in proportion to such decrease in the
aggregate number of shares of Common Stock outstanding and those issuable
with respect to such Common Stock Equivalents.
5.3 In case of any capital reorganization, any reclassification of
the Common Stock (other than a change in par value or a recapitalization
described in Section 5.1 or 5.2 of this Agreement), or the consolidation of
the Company with, or a sale of substantially all of the assets of the Company
to (which sale is followed by a liquidation or dissolution of the Company),
or merger of the Company with, another person, the Holder shall thereafter be
entitled upon exercise of the Warrant to purchase the kind and number of
shares of stock or other securities or the amount or value of any cash,
assets or other property receivable upon such event by a holder of the number
of shares of the Common Stock which the Warrant entitles the holder of the
Warrant to purchase from the Company immediately prior to such event; and in
any such case, appropriate adjustment shall be made in the application of the
provisions set forth in this Agreement with respect to the Holder's rights
and interests thereafter, to the end that the provisions set forth in this
Agreement (including the specified changes and other adjustments to the
Exercise Price and Redemption Price) shall thereafter be applicable in
relation to any shares or other property thereafter purchasable upon exercise
of the Warrant.
5.4 If it is expected that there will occur any event described in
Section 5.3 hereof, the Company shall give the holder of the Warrants notice
thereof, which notice shall be given at such time or times as notice is given
to the holders of the Company's Common Stock.
3
5.5 The provisions of this Section 5 are intended to be exclusive,
and the holder of the Warrant shall have no rights other than as set forth in
this Agreement (and the rights of a stockholder upon exercise of the Warrant)
upon the occurrence of any of the events described in this Section 5.
5.6 The grant of the Warrant shall not affect in any way the right
or power of the Company to make adjustments, reclassifications,
reorganizations or changes in its capital or business structure, or to merge,
consolidate, dissolve or liquidate, or to sell or transfer all or any part of
its business or assets.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF HOLDER. The Holder
makes the following representations, warranties and covenants:
6.1 The Holder is acquiring the Securities for its own account with
the present intention of holding such Securities for investment purposes only
and not with a view to, or for sale in connection with, any distribution of
such Securities (other than a distribution in compliance with all applicable
federal and state securities laws).
6.2 The Holder is an experienced and sophisticated investor and has
such knowledge and experience in financial and business matters that it is
capable of evaluating the relative merits and the risks of an investment in
the Securities and of protecting its own interests in connection with this
transaction.
6.3 The Holder is willing to bear and is capable of bearing the
economic risk of an investment in the Securities.
6.4 The Company has made available, prior to the date of this
Agreement, to the Holder the opportunity to ask questions of the Company and
its officers, and to receive from the Company and its officers information
concerning the terms and conditions of the Securities and this Agreement and
to obtain any additional information with respect to the Company, its
business, operations and prospects, as reasonably requested by the Holder.
6.5 The Holder is an "accredited investor" as that term is defined
under Rule 501(a)(8) of Regulation D promulgated by the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the
"Securities Act").
6.6 For purposes of the application of federal and state securities
laws, Holder acknowledges that the offer and sale of the Warrants to such
Holder occurred in the State of California and that such Holder is a resident
of the State of California.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The
Company makes the following representations, warranties and covenants:
4
7.1 The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. The Company
has the requisite corporate power and authority to carry on its business as
now being conducted and to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby.
7.2 All corporate action on the part of the Company, its directors
and shareholders necessary for the authorization, execution, delivery and
performance by the Company of this Agreement and the consummation of the
transactions contemplated hereby has been taken. This Agreement constitutes
the valid and binding obligation of the Company, enforceable in accordance
with its terms, subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors and rules of law governing
specific performance, injunctive relief or other equitable remedies.
7.3 The execution and delivery of this Agreement by the Company
does not, and the consummation by the Company of the transactions
contemplated by this Agreement will not constitute or result in (a) a breach
or violation of, or (with or without the giving of notice or the lapse of
time) a default under, (a) the Certificate of Incorporation or By-laws of the
Company or (b) any law to which the Company is subject.
7.4 The Warrant Shares, when issued in accordance with the terms of
this Warrant, will be duly authorized, issued and nonassessable shares of the
Common Stock of the Company, free and clear of any liens, claims or
restrictions imposed by or through the Company other than as set forth in
this Agreement.
7.5 The Company covenants that it will at all times reserve and
keep available out of its authorized but unissued shares of Common Stock,
solely for the purpose of effecting the issuance of the Warrant Shares upon
exercise of all or part of the Warrant, such number of shares of Common Stock
as shall then be issuable upon the exercise of all of the Warrants.
8. RESTRICTIONS ON TRANSFER OR EXERCISE OF THE WARRANTS AND SHARES.
8.1 Each certificate for Warrant Shares initially issued upon the
exercise of the Warrants, shall be stamped or otherwise imprinted with a
legend in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
THE CONDITIONS SPECIFIED IN A CERTAIN WARRANT AGREEMENT
DATED SEPTEMBER 22, 1997. NO TRANSFER, SALE, PLEDGE,
HYPOTHECATION, ENCUMBRANCE OR OTHER DISPOSITION OF THE
SHARES REPRESENTED BY THIS CERTIFICATE SHALL BE VALID OR
EFFECTIVE UNTIL REGISTERED OR THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL, SATISFACTORY TO IT, THAT THE TRANSACTION
IS EXEMPT FROM REGISTRATION, AND UNTIL SUCH CONDITIONS AS
ARE CONTAINED IN THE WARRANT AGREEMENT HAVE BEEN FULFILLED.
A COPY OF THE FORM OF THE WARRANT AGREEMENT
5
IS ON FILE AT THE OFFICES OF BRILLIANT DIGITAL
ENTERTAINMENT, INC. THE HOLDER OF THIS CERTIFICATE, BY
ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY THE
PROVISIONS OF THE WARRANT AGREEMENT."
If the Warrant Shares are no longer subject to the transfer restrictions
imposed by applicable state and Federal securities law because either (i) the
Warrant Shares or the resale of the Warrant Shares has been registered on a
registration statement declared effective by the Commission, or (ii) in the
reasonable opinion of counsel for the Company, or the opinion of counsel for
the Holder, which opinion is reasonably satisfactory to counsel for the
Company, all future dispositions of any of the Warrant Shares by the
contemplated transferee would be exempt from or would satisfy the
registration and prospectus delivery requirements of the Securities Act and
the qualification requirements of the applicable state securities laws, then
the restrictions on transfer of such securities contained in this Section 8.1
shall not apply to any subsequent transfer thereof and the Company shall,
promptly upon request by the Holder, remove the legend set forth above and
shall promptly issue, in exchange for the certificate bearing such legend, a
certificate without such legend to the Holder.
8.2 Holder agrees that the Warrant may not be transferred, sold,
assigned or hypoth ecated except (i) to its successors in a merger or
consolidation or other business combination; (ii) to purchasers of all or
substantially all of its assets; or (iii) by operation of law. Holder
further agrees that the Company shall have no obligation to effect any
transfer of the Warrants during the time period referred to above, unless the
transferee, purchaser, assignee or pledgee, as the case may be, shall have
executed an agreement obligating the transferee to comply with all terms and
conditions of this Agreement applicable to the transferor.
8.3 Prior to any exercise of the Warrants or any transfer or
attempted transfer of any of the Warrants or Warrant Shares, the Holder shall
give the Company written notice of his intention so to do, describing briefly
the manner of any such proposed exercise, sale or transfer. The Holder may
effect such exercise or transfer, provided that such exercise or transfer is
not prohibited by this Section 8 and such exercise or transfer complies with
all applicable federal and state securities laws and regulations.
8.4 If in the reasonable opinion of counsel for the Company,
notwithstanding the opinion of counsel to a Holder to the contrary, if any,
the proposed transfer of such Warrant Shares or the Warrant may not be
effected without registration thereof under the Securities Act and such
registration has not been accomplished pursuant to Section 9.1 below or
otherwise, the Company shall, as promptly as practicable, so notify the
Holder and the Holder shall not consummate the proposed transfer.
8.5 The Holder agrees to enter into a lock-up agreement with the
underwriters of the IPO whereby Holder agrees not to sell the Warrant Shares
for such period of time from and after the effective date of such public
offering as may be requested by such underwriters;
6
provided that the term of the lock-up agreement shall not exceed the term of
similar lock-up agreements executed in favor of the underwriter by the senior
officers of the Company.
9. COVENANTS OF HOLDER AND THE COMPANY.
9.1 PIGGYBACK REGISTRATION OF WARRANT SHARES. If, at any time
during the period commencing on the date hereof and on or before September
22, 2002, the Company shall propose to register any shares of Common Stock
(but excluding any shares or securities being registered pursuant to Form S-8
or Form S-4 or any successor form thereto), the Company shall (i) give the
Holder written notice, or telegraphic, telecopy or telephonic notice followed
as soon as practicable by written confirmation thereof, of such proposed
registration at least 20 business days prior to the filing of such
registration statement and, (ii) upon written notice, or telegraphic or
telephonic notice followed as soon as practicable by written confirmation
thereof, given to the Company by the Holder within 15 days after the giving
of such written confirmation or written notice by the Company, the Company
shall include or cause to be included in any such registration statement all
or such portion of the Warrant Shares as the Holder may request; PROVIDED,
HOWEVER, that the Company may at any time withdraw or cease proceeding with
any such registration if it shall at the same time withdraw or cease
proceeding with the registration of the Common Stock originally proposed to
be registered; and PROVIDED FURTHER, that in connection with any registered
public offering involving an underwriting, the managing underwriter may (if
in its reasonable opinion marketing factors so require) limit the number of
securities (including any Warrant Shares) included in such offering (other
than securities of the Company). In the event of any such limitation, the
total number of Warrant Shares to be offered for the account of the Holder in
the registration shall be reduced in proportion to the respective number of
shares requested to be included therein by all holders of the Company's
Common Stock (other than the Company) entitled to include shares of Common
Stock in the registration to the extent necessary to reduce the total number
of shares proposed to be registered to the number of shares recommended by
the managing underwriter.
9.2 COMPANY'S OBLIGATIONS IN PIGGYBACK REGISTRATION. The following
provisions shall also be applicable at the sole cost and expense of the
Company in the case of registrations under Section 9.1:
(i) Following the effective date of such registration statement,
the Company shall, upon the request of the Holder, forthwith
supply such number of prospectuses meeting the requirements
of the Securities Act as shall be requested by the Holder to
permit it to make a public distribution of all of its
Warrant Shares, provided that the Holder shall from time to
time furnish the Company with such appropriate information
(relating to the intentions of the Holder) in connection
therewith as the Company shall request in writing.
7
(ii) the Company shall bear the entire cost and expense of the
registration of securities provided for in this Section (but
not the selling expenses of the Holder).
(iii) the Company shall indemnify and hold harmless the Holder
from and against any and all losses, claims, damages and
liabilities (including reasonable fees and expenses of
counsel) arising out of or based upon any untrue statement
or alleged untrue statement of a material fact contained in
any registration statement or any prospectus included
therein required to be filed or furnished by reason of this
Section or otherwise or in any application or other filing
under, the Securities Act or any other applicable Federal or
state securities law, or arising out of or based upon any
omission or alleged omission to state therein a material
fact required to be stated therein (i.e., in any such
registration statement, prospectus, application or other
filing) or necessary to make the statements therein not
misleading, to which such person may become subject, or any
violation or alleged violation by the Company to which such
Person may become subject, under the Securities Act, the
Exchange Act, or other Federal or state laws or regulations,
at common law or otherwise, except to the extent that such
losses, claims, damages or liabilities are caused by any
such untrue statement or alleged untrue statement or
omission or alleged omission based upon and in strict
conformity with written information furnished to the Company
by such person expressly for use therein; PROVIDED HOWEVER,
that the Holder shall at the same time indemnify the
Company, its directors, each officer signing the related
registration statement, and each person, if any, who
controls the Company within the meaning of the Securities
Act, from and against any and all losses, claims, damages
and liabilities (including reasonable fees and expenses of
counsel) arising out of or based upon any untrue statement
or alleged untrue statement of a material fact contained in
any registration statement or any prospectus included
therein required to be filed or furnished by reason of this
Section, or otherwise or in any application or other filing
under, the Securities Act or any other applicable Federal or
state securities law, or arising out of or based upon any
omission or alleged omission to state therein a material
fact required to be stated therein (i.e., in any such
registration statement, prospectus, application or other
filing) or necessary to make the statements therein not
misleading, to which such person may become subject, or any
violation or alleged violation by the Holder to which the
Company, its directors, each officer signing the related
registration statement, and each person, if any, who
controls the Company within the meaning
8
of the Securities Act, may become subject, under the
Securities Act, the Exchange Act, or other Federal or state
laws or regulations, at common law or otherwise, to the
extent that such losses, claims, damages or liabilities are
caused by any such untrue statement or alleged untrue
statement or omission or alleged omission based upon and in
strict conformity with written information furnished to the
Company by the Holder or Permitted Transferee expressly for
use therein.
(iv) In the event any person entitled to indemnification
hereunder receives in writing a complaint, claim or other
written notice of any loss, claim, damage, liability or
action giving rise to a claim for indemnification under
Section 9.2(iii), the person claiming indemnification under
Section 9.2(iii) shall promptly notify the person or persons
against whom indemnification is sought (the "Indemnitor") of
such complaint, notice, claim or action, and the Indemnitor
shall have the right to investigate and defend any such
loss, claim, damage, liability or action. The person
claiming indemnification shall have the right to employ
separate counsel in any such action and to participate in
the defense thereof but the fees and expenses of such
counsel shall not be at the expense of the Indemnitor. In
no event shall the Indemnitor be obligated to indemnify any
person for any settlement of any claim or action effected
without the Indemnitor's consent, which consent shall not be
unreasonably withheld.
10. DISPUTES.
10.1 ARBITRATION.
(a) Except as otherwise expressly provided for in Section 10.3
below, all disputes arising in connection with this Agreement shall be finally
settled by arbitration in Los Angeles, California, in accordance with the rules
of the American Arbitration Association (the "Rules of Arbitration") and
judgment on the award rendered by the arbitration panel (the "Arbitration
Panel") may be entered in any court or tribunal of competent jurisdiction.
(b) Any party which desires to initiate arbitration proceedings
as provided in Section 10.1(a) above may do so by delivering written notice to
the other party (the "Arbitration Notice") specifying (A) the nature of the
dispute or controversy to be arbitrated, (B) the name and address of the
arbitrator appointed by the party initiating such arbitration and (C) such other
matters as may be required by the Rules of Arbitration.
(c) The party who receives an Arbitration Notice shall appoint
an arbitrator and notify the initiating party of such arbitrator's name and
address within 30 days after
9
delivery of the Arbitration Notice; otherwise, a second arbitrator shall be
appointed at the request of the party who delivered the Arbitration Notice as
provided in the Rules of Arbitration. The two arbitrators so appointed shall
appoint a third arbitrator who shall be the chairman or the Arbitration Panel
and who shall be of American nationality. Should the arbitrators appointed by
the parties not agree upon the appointment of the third arbitrator within 30
days of their appointment, the third shall be appointed in accordance with
the Rules of Arbitration.
(d) In any arbitration proceeding conducted pursuant to the
provisions of this Section 10, both parties shall have the right to discovery,
to call witnesses and to cross-examine the opposing party's witnesses, either
through legal counsel, expert witnesses or both, and such proceedings shall be
conducted in the English language.
10.2 FINALITY OF DECISION. All decisions of the Arbitration
Panel shall be final, conclusive and binding on all parties and shall not be
subject to judicial review. The arbitrator shall divide all costs (other than
fees of counsel) incurred in conducting the arbitration proceeding and the final
award in accordance with what they deem just and equitable under the
circumstances.
10.3 LIMITATIONS. Notwithstanding anything to the contrary
contained in Sections 10.1 and 10.2 above, any claim by either party for
injunctive or other equitable relief, including specific performance, may be
brought in any court of competent jurisdiction and any judgment, order or decree
relating thereto shall have precedence over any arbitral award or proceeding.
11. MISCELLANEOUS PROVISIONS.
11.1 FURTHER ASSURANCES. The Company and the Holder agree to
execute such further documents or instruments and to take such other actions as
are necessary to carry out the transactions contemplated by this Agreement and
the other agreements referred to herein.
11.2 NOTICES. Any and all notices and other communications to be
served hereunder shall be either delivered (i) by hand; (ii) by prepaid
overnight delivery service; or (iii) by certified or registered mail, postage
pre-paid, in each case, addressed as follows:
If to the Holder:
Xxx Xxxxxxx Xxxx Xxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
10
With a copy to:
0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxxx Xxxxxxx
Xxxxxxxxxx, 00000
General Counsel's Office
If to the Company:
Brilliant Digital Entertainment, Inc.
0000 Xxxxxxx Xxxxxx Xxxx., Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000
Attn: Chairman
or at such other address and to the attention of such other person as any party
hereto may designate by written notice to the other in accordance with the terms
hereof.
Any such notice shall be effective (i) if delivered by hand, when
personally delivered; (ii) if given by overnight delivery service, on the
business day following deposit with such service addressed as aforesaid; or
(iii) if given by registered or certified mail, 72 hours after deposit in the
mail postage pre-paid, addressed as aforesaid.
11.3 AMENDMENT; WAIVER. This Agreement shall be binding upon and
inure to the benefit of the parties to this Agreement and their respective
successors, heirs and personal representatives. No provision of this Agreement
may be amended or waived unless in writing signed by all of the parties to this
Agreement. Waiver of any one provision of this Agreement shall not be deemed to
be a waiver of any other provision.
11.4 GOVERNING LAW. This Agreement shall be governed by and
construed both as to validity and performance and enforced in accordance with
the laws of the State of California without giving effect to the choice of law
principles thereof. Each of the parties hereto hereby waive their right to a
jury trial with respect to any such legal actions.
11.5 ATTORNEYS' FEES. If any action, suit or other proceeding is
instituted to remedy, prevent or obtain relief from a default in the performance
by any party of its obligations under this Agreement, the prevailing party shall
recover all of such party's costs and reasonable attorneys' fees incurred in
each and every such action, suit or other proceeding, including any and all
appeals or petitions therefrom.
11.6 NO FINDERS. The parties each agree to indemnify and hold
harmless the other against any expense incurred by reason of any consulting,
brokerage commission or finder's fee alleged to be payable to any person in
connection with the transactions contemplated hereby because of any act,
omission or statement of indemnifying party or any dealings by the indemnifying
party with any consultant, broker or finder.
11
11.7 EXPENSES. Each of the parties shall pay its own expenses
incurred in connection with the preparation of this agreement and the
consummation of the transactions contemplated hereby.
11.8 SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be or become
prohibited or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
11.9 HEADINGS. The section and subsection headings contained in
this Agreement are included for convenience only and form no part of the
agreement between the parties.
11.10 COUNTERPARTS. This Agreement may be executed in several
counterparts, all of which together shall constitute one agreement binding on
all parties hereto, notwithstanding that all of the parties have not signed the
same counterpart.
11.11 SURVIVAL. The provisions of Section 9.2(iii), Section
9.2(vi), Section 10 and Section 11 shall survive termination of this Agreement.
11.12 INTERPRETATION. In all matters of interpretation, whenever
necessary to give effect to any provision of this Agreement, each gender shall
include the others, the singular shall include the plural, and the plural shall
include the singular. The titles of the paragraphs of this Agreement are for
convenience only and shall not in any way affect the interpretation of any
provision or condition of this Agreement. Each party and its counsel have
reviewed and revised this Agreement. As a result, the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments or exhibits thereto.
11.13 ENTIRE AGREEMENT. This Agreement constitutes and embodies
the entire understanding and agreement of the parties hereto relating to the
subject matter hereof and there are no other agreements or understandings,
written or oral, in effect between the parties relating to such subject matter
except as expressly referred to herein.
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IN WITNESS WHEREOF, the parties have entered into and executed this Warrant
Agreement as of the date first above written.
BRILLIANT DIGITAL ENTERTAINMENT, INC.
By: /s/ XXXX XXXX
-----------------------------------------
Name: Xxxx Xxxx
Title: Chief Executive Officer
PACKARD XXXX NEC, INC.
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
13
EXHIBIT "A"
NOTICE OF EXERCISE
(TO BE SIGNED ONLY UPON EXERCISE OF THE WARRANT)
TO: Brilliant Digital Entertainment, Inc.
The undersigned hereby irrevocably elects (to the extent indicated
herein) to exercise the Warrant granted to the undersigned pursuant to that
certain Redeemable Warrant Agreement dated September 22, 1997 between the
undersigned and Brilliant Digital Entertainment, Inc., a Delaware corporation
(the "Company") and to purchase ___________ shares of Common Stock (the
"Securities") of the Company. The closing of the exercise of the Warrants
shall take place at _____ on _________________, ________ at the principal
executive office of the Company located at Brilliant Digital Entertainment,
Inc., 0000 Xxxxxxx Xxxxxx Xxxx., Xxxxx 000, Xxxxxxxx Xxxxx, XX 00000.
The undersigned represents, warrants and agrees that the undersigned (a)
is acquiring the Securities for its own account with the present intention of
holding such Securities for investment purposes only and not with a view to,
or for sale in connection with, any distribution of such Securities (other
than a distribution in compliance with all applicable federal and state
securities laws and the provisions of the Agreement), (b) is an "accredited
investor" as that term is defined under Rule 501(a)(8) of Regulation D
promulgated by the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the "Securities Act").
By:
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Name:
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Title:
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