EXHIBIT 10.45
THIS WARRANT AND THE SECURITIES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH
OTHER SECURITIES LAWS. NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE
HEREUNDER MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED,
HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO A TRANSACTION
THAT IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
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WARRANT TO PURCHASE COMMON STOCK
OF
BRILLIANT DIGITAL ENTERTAINMENT, INC.
NO. 4 December 19, 2001
THIS CERTIFIES THAT, for value received, Xxxxxx Xxxxx, or his permitted
registered assigns ("HOLDER"), is entitled, subject to the terms and conditions
of this Warrant, at any time or from time to time commencing three months after
the issuance date of this Warrant (the "EFFECTIVE DATE"), and before 5:00 p.m.
Pacific Time on May 23, 2004 (the "EXPIRATION DATE"), to purchase from Brilliant
Digital Entertainment, Inc., a Delaware corporation (the "Company"), up to a
number of shares of Common Stock of the Company obtained by dividing Seven
Hundred Thousand Dollars ($700,000.00) by the product obtained by multiplying
112.5% by the lesser of (i) $0.20 (the "FIXED PURCHASE PRICE"), or (ii) the
volume weighted average price of a share of the Common Stock on the American
Stock Exchange, or any exchange on which the Common Stock is then traded, over
any five (5) consecutive trading days commencing on December 14, 2001 and
terminating at 5:00 p.m. (Pacific Standard Time) on November 10, 2002 (the
product obtained by multiplying 112.5% by the lesser of (i) or (ii) above is
referred to herein as the "PURCHASE PRICE"), at an exercise price per share
equal to the Purchase Price. Both the number of shares of Common Stock
purchasable upon exercise of this Warrant and the Purchase Price are subject to
adjustment and change as provided herein.
1. CERTAIN DEFINITIONS. As used in this Warrant the following terms shall have
the following respective meanings:
1.1 "FAIR MARKET VALUE" of a share of Common Stock as of a particular date
shall mean:
(a) If traded on a securities exchange or the Nasdaq National Market,
the Fair Market Value shall be deemed to be the average of the
closing prices of the Common Stock of the Company on such
exchange or market over the five (5) trading days ending
immediately prior to the applicable date of valuation;
(b) If traded over-the-counter, the Fair Market Value shall be deemed
to be the average of the closing bid and asked quotations
averaged over the fifteen (15)-day period ending immediately
prior to the applicable date of valuation; and
(c) If there is no public market, the Fair Market Value shall be the
value thereof, as agreed upon in good faith by the Company and
the Holder; provided, however, that if the Company and the Holder
cannot agree on such value, such value shall be determined by an
independent valuation firm experienced in valuing businesses
jointly selected in good faith by the Company and the Holder.
Fees and expenses of the valuation firm shall be paid for by the
Company.
1.2 "REGISTERED HOLDER" shall mean any Holder in whose name this Warrant
is registered upon the books and records maintained by the Company.
1.3 "WARRANT" as used herein, shall include this Warrant and any warrant
delivered in substitution or exchange therefor as provided herein.
1.4 "COMMON STOCK" shall mean the Common Stock of the Company and any
other securities at any time receivable or issuable upon exercise of
this Warrant.
2. EXERCISE OF WARRANT
2.1 PAYMENT. Subject to compliance with the terms and conditions of this
Warrant and applicable securities laws, this Warrant may be exercised,
in whole or in part at any time or from time to time after the
Effective Date, and on or before the Expiration Date by the delivery
(including, without limitation, delivery by facsimile) of the form of
Notice of Exercise attached hereto as EXHIBIT 1 (the "NOTICE OF
EXERCISE"), duly executed by the Holder, at the principal office of
the Company, and as soon as practicable after such date, surrendering
(a) this Warrant at the principal office of the Company, and
(b) payment in cash (by check) or by wire transfer of an amount equal
to the product obtained by multiplying the number of shares of
Common Stock being purchased upon such exercise by the then
effective Purchase Price (the "EXERCISE AMOUNT").
2.2 NET ISSUE EXERCISE. In lieu of the payment methods set forth in
SECTION 2.1(b) above, the Holder may elect to exchange all or some of
this Warrant for shares of Common Stock equal to the value of the
amount of the Warrant being exchanged on the date of exchange. If
Holder elects to exchange this Warrant as provided in this SECTION
2.2, Holder shall tender to the Company the Warrant for the amount
being exchanged, along with written notice of Holder's election to
exchange some or all of the Warrant, and the Company shall issue to
Holder the number of shares of the Common Stock computed using the
following formula:
Page 2
X = Y (A-B)
-----------
A
Where: X = the number of shares of Common Stock to be issued
to Holder.
Y = the number of shares of Common Stock purchasable
under the amount of the Warrant being exchanged
(as adjusted to the date of such calculation).
A = the Fair Market Value of one share of the Common
Stock.
B = Purchase Price (as adjusted to the date of such
calculation).
2.3 STOCK CERTIFICATES; FRACTIONAL SHARES. As soon as practicable on or
after the date of any exercise of this Warrant but in any event within
5 business days after its receipt of the Exercise Amount, the Company
shall issue and deliver to the person or persons designated by the
Holder a certificate or certificates for the aggregate number of whole
shares of Common Stock issuable upon such exercise, together with cash
in lieu of any fraction of a share equal to such fraction of the
current Fair Market Value of one whole share of Common Stock as of
such date of exercise. No fractional shares or scrip representing
fractional shares shall be issued upon an exercise of this Warrant.
2.4 PARTIAL EXERCISE; EFFECTIVE DATE OF EXERCISE. In case of any partial
exercise of this Warrant, the Company shall cancel this Warrant upon
surrender hereof and shall execute and deliver a new Warrant of like
tenor and date for the balance of the shares of Common Stock
purchasable hereunder. This Warrant shall be deemed to have been
exercised immediately prior to the close of business on the date of
its surrender for exercise as provided above. The person entitled to
receive the shares of Common Stock issuable upon exercise of this
Warrant shall be treated for all purposes as the holder of record of
such shares as of the close of business on the date the Company
receives the Notice of Exercise, subject to receipt of the Exercise
Amount.
2.5 VESTING. The warrants shall vest fully upon issuance.
3. VALID ISSUANCE: TAXES. All shares of Common Stock issued upon the exercise
of this Warrant shall be validly issued, fully paid and non-assessable. The
Company shall not be required to pay any tax or other charge imposed in
connection with any transfer involved in the issuance of any certificate
for shares of Common Stock in any name other than that of the Registered
Holder of this Warrant, and in such case the Company shall not be required
to issue or deliver any stock certificate or security until such tax or
other charge has been paid, or it has been established to the Company's
reasonable satisfaction that no tax or other charge is due.
4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The number of shares of
Common Stock issuable upon exercise of this Warrant (or any shares of
Page 3
stock or other securities or property receivable or issuable upon exercise
of this Warrant) and the Purchase Price are subject to adjustment upon
occurrence of the following events:
4.1 ADJUSTMENT FOR STOCK SPLITS, STOCK SUBDIVISIONS OR COMBINATIONS OF
SHARES. The Purchase Price of this Warrant shall be proportionally
decreased and the number of shares of Common Stock issuable upon
exercise of this Warrant (or any shares of stock or other securities
at the time issuable upon exercise of this Warrant) shall be
proportionally increased to reflect any stock split or other
subdivision of the Company's Common Stock. The Purchase Price of this
Warrant shall be proportionally increased and the number of shares of
Common Stock issuable upon exercise of this Warrant (or any shares of
stock or other securities at the time issuable upon exercise of this
Warrant) shall be proportionally decreased to reflect any reverse
stock split, consolidation or combination of the Company's Common
Stock.
4.2 ADJUSTMENT FOR DIVIDENDS OR DISTRIBUTIONS OF STOCK OR OTHER SECURITIES
OR PROPERTY. In case the Company shall make or issue, or shall fix a
record date for the determination of eligible holders entitled to
receive, a dividend or other distribution with respect to the Common
Stock (or any shares of stock or other securities at the time issuable
upon exercise of the Warrant) payable in (a) securities of the Company
(including debt instruments) or (b) assets (excluding cash dividends
paid or payable solely out of retained earnings), then, in each such
case, the Holder of this Warrant on exercise hereof at any time after
the consummation, effective date or record date of such dividend or
other distribution, shall receive, in addition to the shares of Common
Stock (or such other stock or securities) issuable on such exercise
prior to such date, and without the payment of additional
consideration therefor, the securities or such other assets of the
Company to which such Holder would have been entitled upon such date
if such Holder had exercised this Warrant on the date hereof and had
thereafter, during the period from the date hereof to and including
the date of such exercise, retained such shares and all such
additional securities or other assets distributed with respect to such
shares as aforesaid during such period giving effect to all
adjustments called for by this SECTION 4.
4.3 RECLASSIFICATION. If the Company, by reclassification of securities or
otherwise, shall change any of the securities as to which purchase
rights under this Warrant exist into the same or a different number of
securities of any other class or classes, this Warrant shall
thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change
with respect to the securities that were subject to the purchase
rights under this Warrant immediately prior to such reclassification
or other change, and the Purchase Price therefore shall be
appropriately adjusted, all subject to further adjustment as provided
in this SECTION 4. No adjustment shall be made pursuant to this
SECTION 4.3 upon any conversion or redemption of the Common Stock
which is the subject of SECTION 4.5.
4.4 ADJUSTMENT FOR CAPITAL REORGANIZATION, MERGER OR CONSOLIDATION. In
case of any capital reorganization of the capital stock of the Company
(other than a combination, reclassification, exchange or subdivision
of shares otherwise provided for herein), or any merger or
consolidation of the Company with or into another
Page 4
corporation, or the sale of all or substantially all the assets of the
Company then, and in each such case, as a part of such reorganization,
merger, consolidation, sale or transfer, lawful provision shall be
made so that the Holder of this Warrant shall thereafter be entitled
to receive upon exercise of this Warrant, during the period specified
herein and upon payment of the Purchase Price then in effect, the
number of shares of stock or other securities or property (including
cash) to which the holder of the shares deliverable upon exercise of
this Warrant would have been entitled to receive in such
reorganization, consolidation, merger, sale or transfer if this
Warrant had been exercised immediately before such reorganization,
merger, consolidation, sale or transfer, all subject to further
adjustment as provided in this SECTION 4. The foregoing provisions of
this SECTION 4.4 shall similarly apply to successive reorganizations,
consolidations, mergers, sales and transfers and to the stock or
securities of any other corporation that are at the time receivable
upon the exercise of this Warrant. If the per-share consideration
payable to the Holder hereof for shares in connection with any such
transaction is in a form other than cash or marketable securities,
then the value of such consideration shall be the value as agreed upon
in good faith by the Company and the Holder; provided, however, that
if the Company and the Holder cannot agree on such value, such value
shall be determined by an independent valuation firm experienced in
valuing such property jointly selected in good faith by the Company
and the Holder. All Fees and expenses of the valuation firm shall be
paid for by the Company. In all events, appropriate adjustment (as
determined in good faith by the Company's Board of Directors) shall be
made in the application of the provisions of this Warrant with respect
to the rights and interests of the Holder after the transaction, to
the end that the provisions of this Warrant shall be applicable after
that event, as near as reasonably may be, in relation to any shares or
other property deliverable after that event upon exercise of this
Warrant.
4.5 CONVERSION OF COMMON STOCK. In case all or any portion of the
authorized and outstanding shares of Common Stock of the Company are
redeemed or converted or reclassified into other securities or
property pursuant to the Company's Certificate of Incorporation or
otherwise, or the Common Stock otherwise ceases to exist, then, in
such case, the Holder of this Warrant, upon exercise hereof at any
time after the date on which the Common Stock is so redeemed or
converted, reclassified or ceases to exist (the "TERMINATION DATE"),
shall receive, in lieu of the number of shares of Common Stock that
would have been issuable upon such exercise immediately prior to the
Termination Date, the securities or property that would have been
received if this Warrant had been exercised in full and the Common
Stock received thereupon had been simultaneously converted immediately
prior to the Termination Date, all subject to further adjustment as
provided in this Warrant. Additionally, the Purchase Price shall be
immediately adjusted such that the aggregate Purchase Price of the
maximum number of securities or other property for which this Warrant
is exercisable immediately after the Termination Date is equal to the
aggregate Purchase Price of the maximum number of shares of Common
Stock for which this Warrant was exercisable immediately prior to the
Termination Date, all subject to further adjustment as provided
herein.
Page 5
4.6 FULL RATCHET ADJUSTMENT FOR ISSUANCE OF ADDITIONAL STOCK. If the
Company shall issue any Additional Stock (as defined below) without
consideration or for a consideration per share less than the Fixed
Purchase Price in effect immediately prior to the issuance of such
Additional Stock, the Fixed Purchase Price in effect immediately prior
to each such issuance shall automatically be adjusted on a full
ratchet basis such that the new Fixed Purchase Price of the shares
subject to exercise under this Warrant shall be equal to the value of
the consideration paid per each share of Additional Stock issued. For
purposes of this SECTION 4.6, "ADDITIONAL STOCK" shall mean any shares
of Common Stock issued or issuable by the Company, other than (i)
shares of Common Stock issued pursuant to any stock split, stock
subdivision, stock dividend, redemption, conversion or other
reclassification of securities, or recapitalization, each as may be
contemplated in SECTIONS 4.1 through 4.3 and SECTION 4.5 above, (ii)
shares of Common Stock, or options or warrants to purchase Common
Stock, issued or issuable to employees, consultants or directors of
the Company for the primary purpose of soliciting or retaining their
employment or services directly or pursuant to a stock option plan or
restricted stock plan approved by the Board of Directors of the
Company, (iii) shares of Common Stock, or options or warrants to
purchase Common Stock, issued to financial institutions or lessors in
connection with commercial credit arrangements, equipment financings
or similar transactions, provided such issuances are primarily for
other than equity financing purposes and are approved by the Board of
Directors of the Company, (iv) shares of Common Stock, or options or
warrants to purchase Common Stock, issued to any corporate or other
strategic partners of the Company, provided such issuances are
primarily for other than equity financing purposes and are approved by
the Board of Directors of the Company, (v) shares of Common Stock of
the Company issuable upon exercise of warrants, options, notes or
other rights to acquire securities of the corporation outstanding as
of December 3, 2001, and (vi) shares of Common Stock, or warrants or
options to purchase shares of Common Stock issued in connection with
bona fide acquisitions, mergers or similar transactions, as may be
contemplated in SECTION 4.4 above; PROVIDED, HOWEVER, that the
exceptions to the definition of Additional Stock provided for in
clauses (ii), (iii), (iv) and (vi) above shall apply only with respect
to an aggregate number of shares of Common Stock issued or issuable by
the Company thereunder equal to 1.5% of the number of shares of Common
Stock outstanding as of December 3, 2001.
5. CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment in the
Purchase Price, or number or type of shares issuable upon exercise of this
Warrant, the Chief Financial Officer or Controller of the Company shall
compute such adjustment in accordance with the terms of this Warrant and
prepare a certificate setting forth such adjustment and showing in detail
the facts upon which such adjustment is based, including a statement of the
adjusted Purchase Price. The Company shall promptly send (by facsimile and
by either first class mail, postage prepaid or overnight delivery) a copy
of each such certificate to the Holder. In addition, if at any time prior
to the Expiration Date:
5.1 the Company shall declare any dividend payable in any securities or
make any distribution to its stockholders;
Page 6
5.2 the Company shall offer to its stockholders as a class any additional
shares of Common Stock or securities convertible into Common Stock or
any right to subscribe to Common Stock or securities convertible or
exchangeable into Common Stock; or
5.3 a dissolution or winding up of the Company (other than in connection
with a consolidation, merger or sale of all or substantially all of
its property, assets and business as an entirety) shall be proposed;
then in any one or more of such events, the Company shall give notice in
writing of such event to the Holder at least 10 days prior to the date
fixed as a record date or the date of closing the transfer books for the
determination of the stockholders entitled to such dividend, distribution
or subscription rights, or for the determination of stockholders entitled
to vote on such proposed dissolution, liquidation or winding up. Such
notice shall specify such record date or date of the closing of the
transfer books, as the case may be.
6. LOSS OR MUTILATION. Upon receipt of evidence reasonably satisfactory to the
Company of the ownership of and the loss, theft, destruction or mutilation
of this Warrant, and of indemnity reasonably satisfactory to it, and (in
the case of mutilation) upon surrender and cancellation of this Warrant,
the Company will execute and deliver in lieu thereof a new Warrant of like
tenor as the lost, stolen, destroyed or mutilated Warrant.
7. RESERVATION OF COMMON STOCK. The Company hereby covenants that at all times
there shall be reserved for issuance and delivery upon exercise of this
Warrant such number of shares of Common Stock or other shares of capital
stock of the Company as are from time to time issuable upon exercise of
this Warrant and, from time to time, will take all steps necessary to amend
its Certificate of Incorporation to provide sufficient reserves of shares
of Common Stock issuable upon exercise of this Warrant. All such shares
shall be duly authorized, and when issued upon such exercise, shall be
validly issued, fully paid and non-assessable, free and clear of all liens,
security interests, charges and other encumbrances or restrictions on sale
and free and clear of all preemptive rights, except encumbrances or
restrictions arising under federal or state securities laws. Issuance of
this Warrant shall constitute full authority to the Company's Officers who
are charged with the duty of executing stock certificates to execute and
issue the necessary certificates for shares of Common Stock upon the
exercise of this Warrant.
8. TRANSFER AND EXCHANGE. Subject to the terms and conditions of this Warrant
and compliance with all applicable securities laws, this Warrant and all
rights hereunder may be transferred to any Registered Holder's parent,
subsidiary or affiliate or to any officer, director, partner or member of
any such parent, subsidiary or affiliate, in whole or in part, on the books
of the Company maintained for such purpose at the principal office of the
Company referred to above, by the Registered Holder hereof in person, or by
duly authorized attorney, upon surrender of this Warrant properly endorsed
and upon payment of any necessary transfer tax or other governmental charge
imposed upon such transfer. Upon any permitted partial transfer, the
Company will issue and deliver to the Registered Holder a new Warrant or
Warrants with respect to the shares of Common Stock not so transferred.
Each taker and holder of this Warrant, by taking or holding the same,
consents and agrees that when this Warrant shall have been so endorsed, the
person in possession of
Page 7
this Warrant may be treated by the Company, and all other persons dealing
with this Warrant, as the absolute owner hereof for any purpose and as the
person entitled to exercise the rights represented hereby, any notice to
the contrary notwithstanding; provided, however that until a transfer of
this Warrant is duly registered on the books of the Company, the Company
may treat the Registered Holder hereof as the owner for all purposes.
9. RESTRICTIONS ON TRANSFER. By acceptance hereof, the Holder acknowledges
that this Warrant and the capital stock of the Company that may be issued
upon its exercise have not been registered under the Securities Act, and
Holder agrees not to sell, pledge, distribute, offer for sale, transfer or
otherwise dispose of this Warrant or any capital stock issued upon its
exercise in the absence of (i) an effective registration statement under
the Securities Act as to this Warrant or such securities and registration
or qualification of this Warrant or such securities under any applicable
Blue Sky or state securities laws then in effect, or (ii) an opinion of
counsel, reasonably satisfactory to the Company, that such registration and
qualification are not required. In the reasonable discretion of the
Company, the Company may condition any transfer of all or any portion of
this Warrant or the capital stock of the Company that may be issued upon
its exercise (other than a disposition satisfying the conditions set forth
in clause (i) of SECTION 9(i) above) upon the transferee's delivery to the
Company of a written agreement, in form and substance reasonably
satisfactory to the Company, whereby the transferee makes such
representations and warranties to and for the benefit of the Company as are
comparable to the representations and warranties of the Holder set forth in
SECTION 10 below.
10. COMPLIANCE WITH SECURITIES LAWS. By acceptance of this Warrant, the Holder
hereby represents, warrants and covenants that any shares of stock
purchased upon exercise of this Warrant shall be acquired for investment
only and not with a view to, or for sale in connection with, any
distribution thereof; that the Holder has had such opportunity as such
Holder has deemed adequate to obtain from representatives of the Company
such information as is necessary to permit the Holder to evaluate the
merits and risks of its investment in the Company; that the Holder is able
to bear the economic risk of holding such shares as may be acquired
pursuant to the exercise of this Warrant for an indefinite period; that the
Holder understands that the shares of stock acquired pursuant to the
exercise of this Warrant will not be registered under the 1933 Act (unless
otherwise required pursuant to exercise by the Holder of the registration
rights, if any, granted to the Registered Holder) and will be "restricted
securities" within the meaning of Rule 144 under the 1933 Act and that the
exemption from registration under Rule 144 will not be available for at
least one (1) year from the date of exercise of this Warrant, subject to
any special treatment by the SEC for exercise of this Warrant pursuant to
SECTION 2.2, and even then will not be available unless a public market
then exists for the stock, adequate information concerning the Company is
then available to the public, and other terms and conditions of Rule 144
are complied with; and that all stock certificates representing shares of
stock issued to the Holder upon exercise of this Warrant or upon conversion
of such shares may have affixed thereto a legend substantially in the
following form:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN
Page 8
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH
OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED, HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
TO A TRANSACTION THAT IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
11. NO RIGHTS OR LIABILITIES AS STOCKHOLDERS. This Warrant shall not entitle
the Holder to any voting rights or other rights as a stockholder of the
Company. In the absence of affirmative action by such Holder to purchase
Common Stock by exercise of this Warrant or Common Stock upon conversion
thereof, no provisions of this Warrant, and no enumeration herein of the
rights or privileges of the Holder hereof shall cause such Holder hereof to
be a stockholder of the Company for any purpose.
12. NOTICES. Except as may be otherwise provided herein, all notices, requests,
waivers and other communications made pursuant to this Agreement shall be
in writing and shall be conclusively deemed to have been duly given (a)
when hand delivered to the other party; (b) when received when sent by
facsimile at the address and number set forth below; (c) three business
days after deposit in the U.S. mail with first class or certified mail
receipt requested postage prepaid and addressed to the other party as set
forth below; or (d) the next business day after deposit with a national
overnight delivery service, postage prepaid, addressed to the parties as
set forth below with next-business-day delivery guaranteed, provided that
the sending party receives a confirmation of delivery from the delivery
service provider.
To Holder: To the Company:
XXXXXX XXXXX BRILLIANT DIGITAL ENTERTAINMENT, INC.
0000 Xxxxxxx Xxxxxx Xxxx., 6355 Topanga Canyon Blvd., Suite 120
Suite 411 Woodland Hills, CA 91367
Xxxxxxxx Xxxxx, XX 00000 Attn: Chief Financial Officer
Fax Number: (000) 000-0000 Fax Number: (000) 000-0000
Each person making a communication hereunder by facsimile shall promptly
confirm by telephone to the person to whom such communication was addressed
each communication made by it by facsimile pursuant hereto. A party may
change or supplement the addresses given above, or designate additional
addresses, for purposes of this SECTION 12 by giving the other party
written notice of the new address in the manner set forth above.
13. HEADINGS. The headings in this Warrant are for purposes of convenience in
reference only, and shall not be deemed to constitute a part hereof.
14. LAW GOVERNING. This Warrant shall be construed and enforced in accordance
with, and governed by, the laws of the State of California.
15. WAIVER OF JURY TRIAL. The Company and, by acceptance of this Warrant, the
Holder each waive all right to trial by jury in any action or proceeding to
enforce or defend any rights or remedies hereunder or relating hereto.
Page 9
16. NO IMPAIRMENT. The Company will not, by amendment of its Certificate of
Incorporation or bylaws, or through reorganization, consolidation, merger,
dissolution, issue or sale of securities, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Warrant, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of
the Registered Holder of this Warrant against impairment. Without limiting
the generality of the foregoing, the Company (a) will not increase the par
value of any shares of stock issuable upon the exercise of this Warrant
above the amount payable therefore upon such exercise, and (b) will take
all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and non-assessable shares
of Common Stock upon exercise of this Warrant.
17. SEVERABILITY. If any term, provision, covenant or restriction of this
Warrant is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Warrant shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
18. COUNTERPARTS. For the convenience of the parties, any number of
counterparts of this Warrant may be executed by the parties hereto and each
such executed counterpart shall be, and shall be deemed to be, an original
instrument.
Page 10
IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of the
date first set forth above.
Brilliant Digital Entertainment, Inc.
/S/ XXXXXX XXXXX /S/ XXXXXX XXXXXX
------------------------------------ -------------------------------------
By By
Xxxxxx Xxxxx Xxxxxx Xxxxxx
------------------------------------ -------------------------------------
Printed Name Printed Name
Chief Operating Officer and
N/A Chief Financial Officer
------------------------------------ -------------------------------------
Title Title
SIGNATURE PAGE TO
WARRANT TO PURCHASE COMMON STOCK
Page 11
EXHIBIT 1
NOTICE OF EXERCISE
(To be executed upon exercise of Warrant)
To: Brilliant Digital Entertainment, Inc.
The undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
the securities of Brilliant Digital Entertainment, Inc., as provided for
therein, and (check the applicable box):
[ ] tenders herewith payment of the exercise price in full in the form of
cash or a certified or official bank check or wire transfer in same-day
funds in the amount of $____________ for _________ such securities.
[ ] Elects the Net Issue Exercise option pursuant to Section 2.2 of the
Warrant, and accordingly requests delivery of a net of ______________ of
such securities.
Please issue a certificate or certificates for such securities in the name of,
and pay any cash for any fractional share to (please print name, address and
social security number):
Name:
-------------------------------------------------------------------
Address:
-------------------------------------------------------------------
Signature:
-------------------------------------------------------------------
Note: The above signature should correspond exactly with the name on the first
page of this Warrant Certificate.
If said number of shares shall not be all the shares purchasable under the
within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder rounded up to the next higher whole number of shares.
EXHIBIT 2
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, the undersigned hereby sells, assigns and transfers unto the
parties set forth below all or such portion of the Warrants represented by the
within Warrant Certificate set forth below, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
____________________________ attorney, to transfer said Warrant Certificate on
the books of the within-named Company with respect to the number of Warrants set
forth below, with full power of substitution in the premises:
NAME(S) OF ASSIGNEE(S) ADDRESS # OF WARRANTS
---------------------- ------------------------- ----------------------
And if said number of Warrants shall not be all the Warrants represented by the
Warrant Certificate, a new Warrant Certificate is to be issued in the name of
said undersigned for the balance remaining of the Warrants registered by said
Warrant Certificate.
Dated:
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Signature:
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Notice: The signature to the foregoing Assignment must correspond to the name as
written upon the face of this security in every particular, without alteration
or any change whatsoever.
