Exhibit 10.2

           CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
           THE SECURITIES AND EXCHANGE COMMISSION / BRILLIANT DIGITAL
                        ENTERTAINMENT, INC. CONFIDENTIAL

                                     WARRANT
                                     -------

THE WARRANT  EVIDENCED  OR  CONSTITUTED  HEREBY,  AND ALL SHARES OF COMMON STOCK
ISSUABLE HEREUNDER,  HAVE BEEN AND WILL BE ISSUED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT") AND MAY NOT BE SOLD,
OFFERED FOR SALE,  TRANSFERRED,  PLEDGED OR  HYPOTHECATED  WITHOUT  REGISTRATION
UNDER THE ACT UNLESS  EITHER (i) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL,
IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT
REGISTRATION  IS NOT REQUIRED IN CONNECTION  WITH SUCH  DISPOSITION  OR (ii) THE
SALE OF SUCH  SECURITIES IS MADE PURSUANT TO SECURITIES AND EXCHANGE  COMMISSION
RULE 144.

WARRANT  TO  PURCHASE  COMMON  STOCK OF  BRILLIANT  DIGITAL ENTERTAINMENT, INC.

                             (Subject to Adjustment)

NO. __                                                             July 16, 1998

THIS  CERTIFIES  THAT, for value  received by Brilliant  Digital  Entertainment,
Inc.,  a Delaware  corporation  (the  "Company")  under clause 8 of the Software
Development  Agreement entered into by the Company and CONFIDENTIAL  INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION on July
14,  1998,  CONFIDENTIAL  INFORMATION  OMITTED  AND  FILED  SEPARATELY  WITH THE
SECURITIES  AND  EXCHANGE  COMMISSION,   or  its  permitted  registered  assigns
("Holder"), is entitled, subject to the terms and conditions of this Warrant, at
any time or from  time to time  after the  issuance  date of this  Warrant  (the
"Effective Date"), and before 5:00 p.m. Pacific Time on the third anniversary of
the Effective Date (the "Expiration Date"), to purchase from the Company,  three
hundred thousand  (300,000) shares of Common Stock of the Company at a price per
share of $4.00 (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. This Warrant Agreement confirms,  sets
forth in long term and in its entirety,  and supersedes an agreement between the
Company  and  CONFIDENTIAL  INFORMATION  OMITTED AND FILED  SEPARATELY  WITH THE
SECURITIES AND EXCHANGE  COMMISSION reached on CONFIDENTIAL  INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

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

PAGE 1
<PAGE>

               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 actively traded over-the-counter,  the Fair Market Value shall
               be deemed to be the  average of the  closing  bid prices over the
               thirty (30)-day period ending immediately prior to the applicable
               date of valuation; and

          (c)  If there is no active public market,  the Fair Market Value shall
               be the value  thereof,  as  agreed  upon 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 such
               as the Company and 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. "HSR ACT" shall mean the Hart-Scott-Rodino  Antitrust Improvements Act
          of 1976, as amended.

     1.3. "Registered  Holder"  shall mean any Holder in whose name this Warrant
          is registered upon the books and records maintained by the Company.

     1.4. "WARRANT" as used herein,  shall  include this Warrant and any warrant
          delivered in substitution or exchange therefor as provided herein.

     1.5. "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, 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,  (i) in cash (by  check)  or by wire  transfer,  (ii) by
               cancellation  by the Holder of indebtedness of the Company to the
               Holder;  or (iii) by a combination  of (i) and (ii), 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"),  except that if
               Holder is subject to HSR Act  Restrictions (as defined in Section
               2.4  below),  the  Exercise  Amount  shall be paid to the Company
               within five (5) business days of the  termination  of all HSR Act
               Restrictions.

<PAGE>


     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:

                           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. "EASY  SALE"  EXERCISE.  In lieu of the  payment  methods set forth in
          Section 2.1(b) above, when permitted by law and applicable regulations
          (including  Nasdaq and NASD  rules),  the Holder may pay the  Purchase
          Price  through a "same day sale"  commitment  from the Holder  (and if
          applicable  a   broker-dealer   that  is  a  member  of  the  National
          Association  of Securities  Dealers (an "NASD  Dealer")),  whereby the
          Holder  irrevocably  elects to  exercise  this  Warrant  and to sell a
          portion of the shares so purchased  to pay the Purchase  Price and the
          Holder (or, if applicable,  the NASD Dealer) commits upon sale (or, in
          the case of the NASD Dealer,  upon  receipt) of such shares to forward
          the Purchase Price directly to the Company.

     2.4. STOCK  CERTIFICATES;  FRACTIONAL  SHARES. As soon as practicable on or
          after the date of any  exercise of this  Warrant,  the  Company  shall
          issue and  deliver to the person or persons  entitled  to receive  the
          same a certificate or  certificates  for the 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.

     2.5. HSR ACT. The Company hereby acknowledges that exercise of this Warrant
          by Holder  may  subject  the  Company  and/or the Holder to the filing
          requirements  of the HSR Act and that  Holder  may be  prevented  from
          exercising  this Warrant until the expiration or early  termination of
          all waiting periods  imposed by the HSR Act ("HSR Act  Restrictions").
          If on or before  the  Expiration  Date  Holder  has sent the Notice of
          Exercise  to  Company  and Holder  has not been able to  complete  the
          exercise of this Warrant prior to the  Expiration  Date because of HSR
          Act Restrictions, the Holder shall be entitled to complete the process
          of exercising this

<PAGE>

          Warrant  in   accordance   with  the   procedures   contained   herein
          notwithstanding  the fact  that  completion  of the  exercise  of this
          Warrant would take place after the Expiration Date.

     2.6. 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.  However,  if Holder is
          subject to HSR Act filing requirements this Warrant shall be deemed to
          have been exercised on the date immediately  following the date of the
          expiration of all HSR Act Restrictions. 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 Holder is deemed to
          have exercised this Warrant.

     2.7. 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, and
     the Company shall pay all taxes and other governmental  charges that may be
     imposed in respect of the issue or delivery thereof.  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 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 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  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)

<PAGE>

          securities of the Company 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   therefor   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 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  of the
          successor  corporation  resulting  from such  reorganization,  merger,
          consolidation,   sale  or  transfer   that  a  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 determined
          in good faith by the  Company's  Board of  Directors.  In all  events,
          appropriate  adjustment  (as determined in good faith by the Company's
          Board of Directors) shall be made in

<PAGE>

          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 to equal the  quotient  obtained by dividing (x)
          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 by (y) the  number of shares of Common  Stock of the
          Company for which this Warrant is  exercisable  immediately  after the
          Termination  Date,  all  subject to  further  adjustment  as  provided
          herein.

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.

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

<PAGE>

     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,  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 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.  The Holder, by acceptance  hereof,  agrees that,
     absent an effective  registration  statement  filed with the Securities and
     Exchange  Commission  (the "SEC")  under the  Securities  Act  covering the
     disposition  or sale of this Warrant or the Common Stock issued or issuable
     upon exercise hereof, as the case may be, and registration or qualification
     under  applicable  state  securities  laws,  such  Holder  will  not  sell,
     transfer,  pledge, or hypothecate any or all of this Warrant or such Common
     Stock,  as the case may be,  unless  either (i) the Company has received an
     opinion of counsel,  in form and substance  reasonably  satisfactory to the
     Company, to the effect that such registration is not required in connection
     with such  disposition or (ii) the sale of such securities is made pursuant
     to SEC Rule 144.

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

<PAGE>

     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  REPRESENTED  HEREBY  HAVE NOT BEEN  REGISTERED  UNDER  THE
     SECURITIES  ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT"),  OR UNDER THE
     SECURITIES LAWS OF ANY STATE.  THESE SECURITIES ARE SUBJECT TO RESTRICTIONS
     ON  TRANSFERABILITY  AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
     AS  PERMITTED  UNDER  THE ACT AND THE  APPLICABLE  STATE  SECURITIES  LAWS,
     PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.  INVESTORS SHOULD BE AWARE
     THAT THEY MAY BE REQUIRED TO BEAR THE  FINANCIAL  RISKS OF THIS  INVESTMENT
     FOR AN  INDEFINITE  PERIOD  OF TIME.  THE  ISSUER OF THESE  SECURITIES  MAY
     REQUIRE AN OPINION OF  COUNSEL IN FORM AND  SUBSTANCE  SATISFACTORY  TO THE
     ISSUER TO THE EFFECT THAT ANY PROPOSED  TRANSFER OR RESALE IS IN COMPLIANCE
     WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

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.  REGISTRATION  RIGHTS.  All shares of Common Stock issuable upon exercise of
     this Warrant shall be "Registrable  Securities" or such other definition of
     securities  entitled to  registration  rights pursuant to Exhibit 3 to this
     Warrant.

13.  REPRESENTATIONS   AND  WARRANTIES  OF  THE  COMPANY.   The  Company  hereby
     represents and warrants to Holder that:

     13.1.DUE AUTHORIZATION;  CONSENTS.  All corporate action on the part of the
          Company,  its officers,  directors and shareholders  necessary for (a)
          the  authorization,  execution and delivery of, and the performance of
          all  obligations  of the  Company  under,  this  Warrant,  and (b) the
          authorization,  issuance, reservation for issuance and delivery of all
          of the Common Stock  issuable upon exercise of this Warrant,  has been
          duly taken. This Warrant constitutes a valid and binding obligation of
          the Company  enforceable in accordance with its terms,  subject, as to
          enforcement  of  remedies,  to  applicable   bankruptcy,   insolvency,
          moratorium,  reorganization  and  similar  laws  affecting  creditors'
          rights generally and to general  equitable  principles.  All consents,
          approvals and authorizations of, and registrations, qualifications and
          filings with, any federal or state governmental  agency,  authority or
          body, or any third party,  required in connection  with the execution,
          delivery and  performance of this Warrant and the  consummation of the
          transactions contemplated hereby and thereby have been obtained.

<PAGE>


     13.2.ORGANIZATION.  The Company is a corporation  duly  organized,  validly
          existing and in good standing  under the laws of the State of Delaware
          and has all requisite  corporate  power to own,  lease and operate its
          property  and to carry on its business as now being  conducted  and as
          currently proposed to be conducted.

     13.3.SEC REPORTS; FINANCIAL STATEMENTS.

          (a)  The  Company  has duly  filed with the SEC the  Company's  annual
               report on Form 10-K for the year  ended  December  31,  1998 (the
               "Brilliant Digital Entertainment, Inc. SEC Reports"). As of their
               respective  filing dates,  the Brilliant  Digital  Entertainment,
               Inc.  SEC Reports  complied  in all  material  respects  with the
               requirements of the Securities  Exchange Act of 1934, as amended,
               and none of the SEC Documents contained any untrue statement of a
               material  fact or omitted to state a material fact required to be
               stated therein or necessary to make the statements  made therein,
               in light  of the  circumstances  in which  they  were  made,  not
               misleading,  except to the  extent  corrected  by a  subsequently
               filed document with the SEC.

          (b)  Each of the consolidated financial statements (including, in each
               case,  any related  notes)  contained  in the  Brilliant  Digital
               Entertainment,  Inc.  SEC  Reports  complied  as to  form  in all
               material  respects  with  the  applicable   published  rules  and
               regulations  of the SEC with  respect  thereto,  was  prepared in
               accordance with generally accepted accounting  principles applied
               on a consistent  basis throughout the periods involved (except as
               may be indicated in the notes to such financial statements or, in
               the case of unaudited statements,  as permitted for by Form 10-Q)
               and presented fairly, in all material respects,  the consolidated
               financial  position of the Company and its subsidiaries as at the
               respective dates and the  consolidated  results of its operations
               and  cash  flows  for the  periods  indicated,  except  that  the
               unaudited interim financial  statements are subject to normal and
               recurring  year-end  adjustments  which  are not  expected  to be
               material in amount.

          13.4.VALID ISSUANCE OF STOCK.  The  outstanding  shares of the capital
               stock of the Company are duly and validly issued,  fully paid and
               non-assessable,  and such shares, and all outstanding options and
               other  securities  of the  Company,  have  been  issued  in  full
               compliance  with  the   registration   and  prospectus   delivery
               requirements  of the  Securities  Act  and the  registration  and
               qualification  requirements  of all applicable  state  securities
               laws, or in compliance with applicable exemptions therefrom,  and
               all other  provisions of applicable  federal and state securities
               laws, including without limitation, anti-fraud provisions.

          13.5.GOVERNMENTAL   CONSENTS.   All   consents,   approvals,   orders,
               authorizations or registrations,  qualifications, declarations or
               filings with any federal or state  governmental  authority on the
               part of the Company  required in connection with the consummation
               of the transactions  contemplated herein shall have been obtained
               prior to and be effective as of the Effective Date.

14.  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

<PAGE>

     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:
     CONFIDENTIAL INFORMATION OMITTED      Brilliant Digital Entertainment, Inc.
     AND FILED SEPARATELY WITH THE         6355 Topanga Canyon Blvd.  Suite 120
     SECURITIES AND EXCHANGE COMMISSION    Woodland Hills, CA  91367
     Attn:  Treasurer                      Attn: Chief Financial Officer
     Fax Number: CONFIDENTIAL INFORMATION  Fax Number:   (818) 615-0995
     OMITTED AND FILED SEPARATELY WITH THE
     SECURITIES AND EXCHANGE COMMISSION

     With copies to:                       With copies to:
     CONFIDENTIAL INFORMATION OMITTED      Brilliant Digital Entertainment, Inc.
     AND FILED SEPARATELY WITH THE         6355 Topanga Canyon Blvd.  Suite 120
     SECURITIES AND EXCHANGE COMMISSION    Woodland Hills, CA  91367
     Attn:  General Counsel                Attn: Chief Executive Officer
     Fax Number: CONFIDENTIAL INFORMATION  Fax Number:   (818) 615-0995
     OMITTED AND FILED SEPARATELY WITH THE
     SECURITIES AND EXCHANGE COMMISSION

     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 but the absence
     of  such   confirmation   shall  not  affect  the   validity  of  any  such
     communication.  A party may change or supplement the addresses given above,
     or  designate  additional  addresses,  for  purposes of this  Section 14 by
     giving the other party written  notice of the new address in the manner set
     forth above.

15.  HEADINGS.  The headings in this Warrant are for purposes of  convenience in
     reference only, and shall not be deemed to constitute a part hereof.

16.  LAW  GOVERNING.  This Warrant shall be construed and enforced in accordance
     with, and governed by, the laws of the State of California.

17.  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

<PAGE>

     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 therefor 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.

18. NOTICES OF RECORD DATE. In case:

     18.1.the Company shall take a record of the holders of its Common Stock (or
          other stock or securities at the time  receivable upon the exercise of
          this  Warrant),  for the  purpose of  entitling  them to  receive  any
          dividend  or other  distribution,  or any  right to  subscribe  for or
          purchase any shares of stock of any class or any other  securities  or
          to receive any other right; or

     18.2.of any  consolidation  or merger of the Company  with or into  another
          corporation,   any  capital   reorganization   of  the  Company,   any
          reclassification   of  the  Capital  Stock  of  the  Company,  or  any
          conveyance of all or substantially all of the assets of the Company to
          another  corporation  in which holders of the  Company's  stock are to
          receive stock, securities or property of another corporation; or

     18.3.of  any  voluntary  dissolution,  liquidation  or  winding-up  of  the
          Company; or

     18.4. of any redemption or conversion of all outstanding Common Stock;

     then,and in each such case,  the Company will mail or cause to be mailed to
     the Registered Holder of this Warrant a notice specifying,  as the case may
     be,  (i) the date on which a record is to be taken for the  purpose of such
     dividend,   distribution   or  right,  or  (ii)  the  date  on  which  such
     reorganization,   reclassification,   consolidation,   merger,  conveyance,
     dissolution,  liquidation,  winding-up, redemption or conversion is to take
     place,  and the time,  if any is to be fixed,  as of which the  holders  of
     record  of Common  Stock or (such  stock or  securities  as at the time are
     receivable  upon  the  exercise  of this  Warrant),  shall be  entitled  to
     exchange their shares of Common Stock (or such other stock or  securities),
     for  securities or other  property  deliverable  upon such  reorganization,
     reclassification,    consolidation,    merger,   conveyance,   dissolution,
     liquidation or winding-up.  The Company shall use all reasonable efforts to
     ensure such notice  shall be  delivered  at least thirty (30) days prior to
     the date therein specified.

19.  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.

20.  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.

21.  NO  INCONSISTENT  AGREEMENTS.  The Company will not on or after the date of
     this Warrant enter into any agreement with respect to its securities  which
     is  inconsistent  with the rights granted to the Holders of this Warrant or
     otherwise conflicts with the


<PAGE>

     provisions  hereof.  The rights granted to the Holders  hereunder do not in
     any way conflict with and are not  inconsistent  with the rights granted to
     holders of the  Company's  securities  under any other  agreements,  except
     rights that have been waived.

22.  SATURDAYS,  SUNDAYS  AND  HOLIDAYS.  If  the  Expiration  Date  falls  on a
     Saturday,  Sunday or legal holiday, the Expiration Date shall automatically
     be extended until 5:00 p.m. the next business day.

23.  CONFIDENTIALITY.  Confidential  or  proprietary  information  disclosed  by
     either party under this  Agreement,  as well as the terms of this Agreement
     and Holder's investment in the Company (subject to Section 24 below), shall
     be considered confidential information (the "CONFIDENTIAL INFORMATION") and
     shall not be  disclosed  by the Company or Holder to any third  party.  The
     Company  or  Holder  shall  immediately  notify  the  other  party  of  any
     information that comes to its attention which might indicate that there has
     been  a  loss  of   confidentiality   with  respect  to  the   Confidential
     Information.  In the event  that the  Company  or Holder  is  requested  or
     becomes  legally  compelled (by statute or regulation or by oral questions,
     interrogatories,  request for information or documents,  subpoena, criminal
     or  civil  investigative  demand  or  similar  process,  including  without
     limitation,  in  connection  with any  public or  private  offering  of the
     Company's  capital stock) to disclose any of the Confidential  Information,
     such party (the  "DISCLOSING PARTY")  shall  provide  the other party (the
     "NON-DISCLOSING PARTY") with prompt written notice of that fact so that the
     other party may seek (with the  cooperation  and reasonable  efforts of the
     Disclosing  Party) a  protective  order,  confidential  treatment  or other
     appropriate  remedy. In such event, the Disclosing Party shall furnish only
     that portion of the Confidential  Information which is legally required and
     shall  exercise  reasonable  efforts  to  obtain  reliable  assurance  that
     confidential treatment will be accorded the Confidential Information to the
     extent reasonably requested by the Non-Disclosing  Party. The provisions of
     this Section 23 shall be in addition to, and not in  substitution  for, the
     provisions of any separate nondisclosure  agreement executed by the parties
     hereto with respect to the  transaction  contemplated  hereby.

24.  PUBLIC  ANNOUNCEMENTS.  Notwithstanding the provisions of Section 23 above,
     from and after the Closing,  the Company may disclose the existence of this
     Agreement and Holder's  investment  in the Company  solely to the Company's
     investors,   investment  bankers,  lenders,  accountants,   legal  counsel,
     business partners, and bona fide prospective investors,  employees, lenders
     and  business  partners,  in each case only where such  persons or entities
     have executed  appropriate  nondisclosure  agreements with the Company. The
     Company shall not issue any press release or make any other announcement to
     the general public or in any  professional or trade  publication  regarding
     Holder, this Agreement or any of the terms hereof without the prior written
     consent of Holder,  which consent may be withheld at the sole discretion of
     Holder.  Notwithstanding the foregoing,  Holder may disclose its investment
     in the Company and the terms  thereof to third  parties or to the public at
     its  discretion,  and the Company shall have the right to disclose to third
     parties  any such  information  disclosed  by Holder in a press  release or
     other public  announcement.  If the Company or Holder  determines  that any
     disclosure not otherwise authorized by this Agreement is required by law or
     regulation,  then the  provisions  of Section 23  regarding  disclosure  of
     Confidential Information by a Disclosing Party shall govern.

<PAGE>

25.  DISPUTE RESOLUTION. The parties agree to negotiate in good faith to resolve
     any dispute between them regarding this Warrant. If the negotiations do not
     resolve the dispute to the reasonable  satisfaction  of both parties,  then
     each party shall  nominate one senior officer of the rank of Vice President
     or higher as its representative. These representatives shall, within thirty
     (30) days of a written request by either party to call such a meeting, meet
     in person and alone  (except  for one  assistant  for each party) and shall
     attempt in good faith to resolve the  dispute.  If the  disputes  cannot be
     resolved by such senior  managers in such  meeting,  the parties agree that
     they shall,  if requested in writing by either  party,  meet within  thirty
     (30) days after such  written  notification  for one day with an  impartial
     mediator  and  consider   dispute   resolution   alternatives   other  than
     litigation.  If an alternative  method of dispute  resolution is not agreed
     upon within thirty (30) days after the one day mediation,  either party may
     begin litigation proceedings. This procedure shall be a prerequisite before
     taking any additional action hereunder.


<PAGE>




IN WITNESS  WHEREOF,  the parties  hereto have  executed  this Warrant as of the
Effective Date.

CONFIDENTIAL INFORMATION OMITTED          Brilliant Digital Entertainment, Inc.
AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION


/s/                                       /s/ Michael Ozen
-----------------------------------       -------------------------------------
By                                        By


                                          Michael Ozen
-----------------------------------       -------------------------------------
Printed Name                              Printed Name


                                          Chief Financial Officer
-----------------------------------       -------------------------------------
Title                                     Title







               SIGNATURE PAGE TO WARRANT TO PURCHASE COMMON STOCK



<PAGE>


                                    EXHIBIT 1
                                    ---------

                               NOTICE OF EXERCISE
                    (To be executed upon exercise of Warrant)

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 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 in same-day  funds in the amount of
     $____________ for _________ such securities.

__   Elects the [Net Issue  Exercise][Easy  Sale  Exercise]  option  pursuant to
     Section 2.2 or 2.3 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 or with the name of the assignee  appearing in
the assignment form below.

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.



<PAGE>



                                    EXHIBIT 2
                                    ---------
                                    ASSIGNMENT

          (To be executed only upon assignment of Warrant Certificate)

For value received,  hereby sells, assigns and transfers unto
                                                              ------------------
the within  Warrant  Certificate,  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:
          ---------------------------------------------------------------------

Signature:
          ---------------------------------------------------------------------

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;  signature(s)  must  be  guaranteed  by an  eligible
guarantor  institution (banks, stock brokers,  savings and loan associations and
credit  unions with  membership  in an approved  signature  guarantee  medallion
program) pursuant to Securities and Exchange Commission Rule 17Ad-15.



<PAGE>

         CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
             SECURITIES AND EXCHANGE COMMISSION / BRILLIANT DIGITAL
                        ENTERTAINMENT, INC. CONFIDENTIAL

                                    EXHIBIT 3
                                    ---------

1.   REGISTRATION RIGHTS.

     1.1 DEFINITIONS. For purposes of this Section 1:

          (a)  REGISTRATION.    The   terms   "REGISTER,"    "REGISTERED,"   and
               "REGISTRATION" refer to a registration  effected by preparing and
               filing a registration statement in compliance with the Securities
               Act  of  1933,  as  amended,  (the  "SECURITIES  ACT"),  and  the
               declaration  or ordering of  effectiveness  of such  registration
               statement

          (b)  REGISTRABLE SECURITIES.  The term "REGISTRABLE SECURITIES" means:
               (1) any Common  Stock of the Company  issued or to be issued upon
               exercise of the Warrant and (2) any shares of Common Stock of the
               Company issued as (or issuable upon the conversion or exercise of
               any  warrant,  right or other  security  which  is  issued  as) a
               dividend or other  distribution  with  respect to, or in exchange
               for or in replacement of, any shares of Common Stock described in
               clause (1) of this subsection (b). Notwithstanding the foregoing,
               "Registrable Securities" shall exclude any Registrable Securities
               sold by a person in a  transaction  in which  rights  under  this
               Section 1 are not assigned in accordance  with this  Agreement or
               any  Registrable  Securities sold in a public  offering,  whether
               sold pursuant to Rule 144  promulgated  under the Securities Act,
               or in a registered offering, or otherwise.

          (c)  REGISTRABLE SECURITIES THEN OUTSTANDING.  The number of shares of
               "REGISTRBLE SECURITIES then outstanding" shall mean the number of
               shares  of  Common  Stock of the  Company  that  are  Registrable
               Securities  and (l) are then  issued and  outstanding  or (2) are
               then issuable  pursuant to an exercise of the Warrant or pursuant
               to conversion of securities  issuable  pursuant to an exercise of
               the Warrant.

          (d)  HOLDER.  For purposes of this Section 1, the term "HOLDER"  means
               any person owning of record Registrable  Securities that have not
               been sold to the public or pursuant to Rule 144 promulgated under
               the  Securities  Act or any permitted  assignee of record of such
               Registrable  Securities  to whom rights under this Section 1 have
               been duly assigned in accordance with this Agreement.

          (e)  FORM  S-3.  The  term  "FORM  S-3"  means  such  form  under  the
               Securities  Act  as is in  effect  on  the  date  hereof  or  any
               successor registration form under the Securities Act subsequently
               adopted by the SEC which permits

PAGE 17
<PAGE>

         CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
             SECURITIES AND EXCHANGE COMMISSION / BRILLIANT DIGITAL
                        ENTERTAINMENT, INC. CONFIDENTIAL

               inclusion  or   incorporation   of  substantial   information  by
               reference to other documents filed by the Company with the SEC.

          (f)  SEC. The term "SEC" or "COMMISSION" means the U.S. Securities and
               Exchange Commission.

     1.2  [Intentionally Omitted].

     1.3  PIGGYBACK  REGISTRATIONS.  The  Company  shall  notify all  Holders of
          Registrable  Securities  in writing at least thirty (30) days prior to
          filing  any  registration  statement  under  the  Securities  Act  for
          purposes of effecting a public  offering of  securities of the Company
          (including,  but not limited to,  registration  statements relating to
          secondary  offerings  of  securities  of the  Company,  but  EXCLUDING
          registration statements relating to any registration under Section 1.4
          of this  Agreement  or to any  employee  benefit  plan or a  corporate
          reorganization)  and will afford each such  Holder an  opportunity  to
          include  in  such  registration  statement  all  or  any  part  of the
          Registrable  Securities then held by such Holder. Each Holder desiring
          to include in any such  registration  statement all or any part of the
          Registrable  Securities  held by such Holder shall within  twenty (20)
          days after receipt of the above-described  notice from the Company, so
          notify the Company in writing,  and in such  notice  shall  inform the
          Company of the number of Registrable  Securities such Holder wishes to
          include in such  registration  statement.  If a Holder  decides not to
          include  all  of  its  Registrable   Securities  in  any  registration
          statement   thereafter  filed  by  the  Company,   such  Holder  shall
          nevertheless  continue  to have the right to include  any  Registrable
          Securities in any subsequent  registration  statement or  registration
          statements as may be filed by the Company with respect to offerings of
          its securities, all upon the terms and conditions set forth herein.

          (a)  UNDERWRITING. If a registration statement under which the Company
               gives  notice  under  this  Section  1.3 is  for an  underwritten
               offering,  then  the  Company  shall so  advise  the  Holders  of
               Registrable  Securities.  In such  event,  the  right of any such
               Holder's Registrable  Securities to be included in a registration
               pursuant  to this  Section  1.3  shall be  conditioned  upon such
               Holder's  participation in such underwriting and the inclusion of
               such Holder's  Registrable  Securities in the underwriting to the
               extent provided herein. All Holders proposing to distribute their
               Registrable Securities through such underwriting shall enter into
               an  underwriting  agreement in  customary  form with the managing
               underwriter  or  underwriters   selected  for  such  underwriting
               (including  a  market  stand-off  agreement  of up to 180 days if
               required  by  such   underwriters).   Notwithstanding  any  other
               provision  of  this  Agreement,  if the  managing  underwriter(s)
               determine(s)  in good  faith  that  marketing  factors  require a
               limitation of the number of shares to be  underwritten,  then the
               Company  shall  include  in  such  offering  (i)  first,  all the
               securities the Company proposes to register for its own

PAGE 18
<PAGE>

         CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
             SECURITIES AND EXCHANGE COMMISSION / BRILLIANT DIGITAL
                        ENTERTAINMENT, INC. CONFIDENTIAL

               account and (ii)  second,  Holder's  Registrable  Securities  and
               other  shares  of Common  Stock of the  Company  requested  to be
               included by other investors  having written  registration  rights
               agreements  with  the  Company  respecting  such  shares  ("Other
               Registrable  Securities"),  with  Holder  and each such  investor
               proposing to sell such shares  participating in such registration
               on a pro rata  basis,  such  participation  to be based  upon the
               number of shares of Registrable  Securities and Other Registrable
               Securities  then  held by the  Holder  and  each  such  investor,
               respectively;   PROVIDED,   HOWEVER,   that  the   right  of  the
               underwriters to exclude shares (including Registrable Securities)
               from the  registration  and underwriting as described above shall
               be  restricted  so that  all  shares  that  are  not  Registrable
               Securities or Other  Registrable  Securities  and are held by any
               other person, including, without limitation, any person who is an
               employee,  officer or director of the Company (or any  subsidiary
               of the Company)  shall first be excluded  from such  registration
               and  underwriting  before any  Registrable  Securities  and Other
               Registrable Securities are so excluded. If any Holder disapproves
               of the terms of any such  underwriting,  such Holder may elect to
               withdraw  therefrom  by  written  notice to the  Company  and the
               underwriter(s),  delivered at least ten (10)  business days prior
               to  the  effective  date  of  the  registration  statement.   Any
               Registrable   Securities   excluded   or   withdrawn   from  such
               underwriting   shall  be   excluded   and   withdrawn   from  the
               registration.  For any Holder that is a  partnership,  the Holder
               and the  partners  and retired  partners of such  Holder,  or the
               estates  and family  members  of any such  partners  and  retired
               partners  and any trusts for the benefit of any of the  foregoing
               persons, and for any Holder that is a corporation, the Holder and
               all  corporations  that are  affiliates of such Holder,  shall be
               deemed to be a single  "Holder," and any pro rata  reduction with
               respect to such "Holder" shall be based upon the aggregate amount
               of shares carrying  registration rights owned by all entities and
               individuals  included  in  such  "Holder,"  as  defined  in  this
               sentence.

          (b)  EXPENSES. All expenses incurred in connection with a registration
               pursuant  to  this  Section  1.3  (excluding   underwriters'  and
               brokers' discounts and commissions relating to shares sold by the
               Holders  and legal fees of counsel for the  Holders),  including,
               without  limitation  all  federal  and "blue  sky"  registration,
               filing and qualification fees, printers' and accounting fees, and
               fees and disbursements of counsel for the Company, shall be borne
               by the Company.

          (c)  NO LIMIT ON REGISTRATIONS.  Except as otherwise  provided herein,
               there  shall be no limit on the number of times the  Holders  may
               request registration of Registrable Securities under this Section
               1.3.

PAGE 19
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     1.4  FORM S-3 REGISTRATION. In case the Company shall at any time after the
          first  anniversary  of the date  hereof  receive  from any  Holder  or
          Holders of a majority of all Registrable Securities then outstanding a
          written  request or requests that the Company effect a registration on
          Form S-3 and any related  qualification  or compliance with respect to
          all or a part of the  Registrable  Securities  owned by such Holder or
          Holders, then the Company will:

          (a)  NOTICE. Promptly give written notice of the proposed registration
               and the Holder's or Holders'  request  therefor,  and any related
               qualification or compliance,  to all other Holders of Registrable
               Securities; and

          (b)  REGISTRATION.  As soon as practicable,  effect such  registration
               and  all  such  qualifications  and  compliances  as  may  be  so
               requested  and  as  would  permit  or  facilitate  the  sale  and
               distribution  of all or such  portion of such Holders or Holders'
               Registrable Securities as are specified in such request, together
               with all or such  portion of the  Registrable  Securities  of any
               other Holder or Holders  joining in such request as are specified
               in a written  request  given  within  twenty  (20) days after the
               Company  provides  the notice  contemplated  by  Section  1.4(a);
               PROVIDED,  HOWEVER,  that the Company  shall not be  obligated to
               effect  any  such   registration,   qualification  or  compliance
               pursuant to this Section 1.4:

               (1)  if  Form  S-3 is not  available  for  such  offering  by the
                    Holders:

               (2)  if the  Holders,  together  with the  holders  of any  other
                    securities  of the  Company  entitled to  inclusion  in such
                    registration,  propose to sell  Registrable  Securities  and
                    such other  securities (if any) at an aggregate price to the
                    public of less than $1,000,000;

               (3)  if the Company  shall  furnish to the Holders a  certificate
                    signed by the  President or Chief  Executive  Officer of the
                    Company stating that in the good faith judgment of the Board
                    of  Directors  of  the  Company,   it  would  be  materially
                    detrimental  to the  Company and its  shareholders  for such
                    Form S-3  Registration to be effected at such time, in which
                    event the  Company  shall have the right to defer the filing
                    of the Form S-3  registration  statement  no more  than once
                    during any twelve month period for a period of not more than
                    ninety (90) days after  receipt of the request of the Holder
                    or Holders under this Section 1.4;

               (4)  if  the  Company  has,  within  the  six  (6)  month  period
                    preceding  the  date of such  request,  already  effected  a
                    registration   under  the   Securities   Act  other  than  a
                    registration  from  which  the  Registrable   Securities  of
                    Holders  have  been  excluded  (with  respect  to all or any
                    portion of the Registrable  Securities the Holders requested
                    be

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                    included in such registration) pursuant to the provisions of
                    Section 1.3(a); or

               (5)  in any particular jurisdiction in which the Company would be
                    required  to qualify to do  business or to execute a general
                    consent   to  service   of   process   in   effecting   such
                    registration, qualification or compliance.

          (c)  EXPENSES.   The  Company  shall  pay  all  expenses  incurred  in
               connection  with each  registration  requested  pursuant  to this
               Section 1.4,  (excluding  underwriters' or brokers' discounts and
               commissions relating to shares sold by the Holders and legal fees
               of counsel for the Holders and excluding  expenses required to be
               paid by a Holder  pursuant to Section  1.5(g)  below),  including
               without limitation  federal and "blue sky"  registration,  filing
               and qualification  fees,  printers' and accounting fees, and fees
               and disbursements of counsel.

          (d)  DEFERRAL.  Notwithstanding  the  foregoing,  if the Company shall
               furnish  to  Holders  requesting  the  filing  of a  registration
               statement  pursuant to this Section 1.4, a certificate  signed by
               the President or Chief  Executive  Officer of the Company stating
               that in the  good  faith  judgment  of the  Board,  it  would  be
               materially  detrimental to the Company and its  stockholders  for
               such  registration  statement to be filed, then the Company shall
               have the right to defer such filing for a period of not more than
               ninety (90) days after  receipt of the request of the  initiating
               Holders; PROVIDED, HOWEVER, that the Company may not utilize this
               right more than once in any twelve (12) month period.

          (e)  NO LIMIT ON REGISTRATIONS.  Except as otherwise  provided herein,
               there  shall be no limit on the number of times the  Holders  may
               request registration of Registrable Securities under this Section
               1.4.

     1.5  OBLIGATIONS   OF  THE  COMPANY.   Whenever   required  to  effect  the
          registration  of any Registrable  Securities  under this Agreement the
          Company shall, as expeditiously as reasonably possible:

          (a)  REGISTRATION   STATEMENT.   Prepare  and  file  with  the  SEC  a
               registration   statement   with   respect  to  such   Registrable
               Securities  and use its best  efforts to cause such  registration
               statement  to  become  effective,  PROVIDED,  HOWEVER,  that  the
               Company  shall  not be  required  to keep any  such  registration
               statement effective for more than ninety (90) days.

          (b)  AMENDMENTS  AND  SUPPLEMENTS.  Prepare and file with the SEC such
               amendments and supplements to such registration statement and the
               prospectus used in connection with such registration statement as
               may be

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               necessary to comply with the  provisions  of the  Securities  Act
               with respect to the disposition of all securities covered by such
               registration statement.

          (c)  PROSPECTUSES.  Furnish to the Holders  such number of copies of a
               prospectus,  including a  preliminary  prospectus,  in conformity
               with the  requirements  of the  Securities  Act,  and such  other
               documents as they may  reasonably  request in order to facilitate
               the disposition of the Registrable  Securities owned by them that
               are included in such registration.

          (d)  BLUE SKY.  Use its best  efforts  to  register  and  qualify  the
               securities  covered  by such  registration  statement  under such
               other securities or Blue Sky laws of such  jurisdictions as shall
               be reasonably requested by the Holders, provided that the Company
               shall not be required in  connection  therewith or as a condition
               thereto to qualify to do business or to file a general consent to
               service of process in any such states or jurisdictions.

          (e)  UNDERWRITING.  In the event of any underwritten  public offering,
               enter into and  perform  its  obligations  under an  underwriting
               agreement  in  usual  and  customary   form,  with  the  managing
               underwriter(s)  of such offering.  Each Holder  participating  in
               such   underwriting   shall  also  enter  into  and  perform  its
               obligations under such an agreement.

          (f)  NOTIFICATION.   Notify  each  Holder  of  Registrable  Securities
               covered  by  such  registration  statement  at  any  time  when a
               prospectus relating thereto is required to be delivered under the
               Securities Act of the happening of any event as a result of which
               the prospectus included in such registration  statement,  as then
               in effect,  includes an untrue  statement  of a material  fact or
               omits to state a material fact  required to be stated  therein or
               necessary to make the  statements  therein not  misleading in the
               light of the circumstances then existing.

          (g)  OPINION AND COMFORT LETTER. Furnish, at the request of any Holder
               requesting  registration of Registrable  Securities,  on the date
               that  such   Registrable   Securities   are   delivered   to  the
               underwriters  for sale, if such securities are being sold through
               underwriters,  (i) an  opinion,  dated  as of such  date,  of the
               counsel  representing  the  Company  for  the  purposes  of  such
               registration,  in form and substance as is  customarily  given to
               underwriters  in an  underwritten  public offering and reasonably
               satisfactory to a majority in interest of the Holders  requesting
               registration,  addressed to the underwriters,  if any, and to the
               Holders  requesting  registration  of Registrable  Securities and
               (ii)  a  "comfort"  letter  dated  as  of  such  date,  from  the
               independent  certified public accountants of the Company, in form
               and substance as is customarily  given by  independent  certified
               public  accountants to  underwriters  in an  underwritten  public
               offering and reasonably satisfactory to a majority in interest of
               the   Holders   requesting   registration,   addressed   to   the
               underwriters,  if any, and to the Holders

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               requesting  registration  of  Registrable  Securities.   If  such
               securities  are not being  sold  through  underwriters,  then the
               Company shall furnish,  at the request and at the sole expense of
               any Holder requesting registration of Registrable Securities,  on
               the date that the  registration  statement  with  respect to such
               securities becomes effective,  an opinion, dated as of such date,
               of the counsel  representing the Company for the purposes of such
               registration,  in form and substance as is  customarily  given to
               underwriters  in an  underwritten  public offering and reasonably
               satisfactory to a majority in interest of the Holders  requesting
               registration,  addressed to the underwriters,  if any, and to the
               Holders requesting registration of Registrable Securities.

     1.6  FURNISH  INFORMATION.  It  shall  be  a  condition  precedent  to  the
          obligations of the Company to take any action pursuant to Sections 1.3
          or 1.4 that the selling  Holders  shall  furnish to the  Company  such
          information regarding themselves,  the Registrable  Securities held by
          them, and the intended  method of  disposition  of such  securities as
          shall  be  required  to  timely  effect  the   Registration  of  their
          Registrable Securities.

     1.7  INDEMNIFICATION.  In the event any Registrable Securities are included
          in a registration statement under Sections 1.3 or 1.4:

          (a)  BY THE COMPANY.  To the extent permitted by law; the Company will
               indemnify and hold harmless each Holder,  the partners,  officers
               and directors of each Holder,  any  underwriter (as determined in
               the Securities Act) for such Holder and each person,  if any, who
               controls  such  Holder or  underwriter  within the meaning of the
               Securities  Act or  the  Securities  Exchange  Act  of  1934,  as
               amended, (the "1934 ACT"), against any losses,  claims,  damages,
               or  Liabilities  (joint  or  several)  to which  they may  become
               subject under the  Securities  Act, the 1934 Act or other federal
               or  state  law,  insofar  as such  losses,  claims,  damages,  or
               liabilities  (or actions in respect  thereof) arise out of or are
               based  upon  any  of  the  following  statements,   omissions  or
               violations (collectively a "VIOLATION"):

               (i)  any  untrue  statement  or  alleged  untrue  statement  of a
                    material  fact  contained  in such  registration  statement,
                    including any  preliminary  prospectus  or final  prospectus
                    contained therein or any amendments or supplements thereto;

               (ii) the omission or alleged omission to state therein a material
                    fact required to be stated therein, or necessary to make the
                    statements therein not misleading, or

               (iii)any  violation  or alleged  violation  by the Company of the
                    Securities   Act,   the  1934  Act,  any  federal  or  state
                    securities law or any rule or regulation  promulgated  under
                    the Securities Act, the 1934 Act or

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                    any federal or state  securities law in connection  with the
                    offering covered by such registration statement;

               and the Company will reimburse each such Holder, partner, officer
               or director,  underwriter or controlling  person for any legal or
               other  expenses  reasonably  incurred by them,  as  incurred,  in
               connection with  investigating or defending any such loss, claim,
               damage,  liability  or  action;   PROVIDED,   HOWEVER,  that  the
               indemnity agreement contained in this subsection 1.7(a) shall not
               apply to amounts  paid in  settlement  of any such  loss,  claim,
               damage,  liability  or  action  if such  settlement  is  effected
               without the consent of the Company  (which  consent  shall not be
               unreasonably  withheld),  nor shall the  Company be liable in any
               such case for any such loss, claim,  damage,  liability or action
               to the extent  that it arises out of or is based upon a Violation
               which  occurs in reliance  upon and in  conformity  with  written
               information  furnished  expressly for use in connection with such
               registration  by  such  Holder,   partner,   officer,   director,
               underwriter or controlling person of such Holder.

          (b)  BY SELLING HOLDERS.  To the extent permitted by law, each selling
               Holder will indemnify and hold harmless the Company,  each of its
               directors,  each of its officers who have signed the registration
               statement,  each person,  if any, who controls the Company within
               the meaning of the Securities  Act, any underwriter and any other
               Holder selling  securities under such  registration  statement or
               any of such other Holder's partners, directors or officers or any
               person  who  controls  such  Holder  within  the  meaning  of the
               Securities  Act or the 1934  Act,  against  any  losses,  claims,
               damages or liabilities (joint or several) to which the Company or
               any such director,  officer,  controlling person,  underwriter or
               other such Holder,  partner or director,  officer or  controlling
               person  of  such  other  Holder  may  become  subject  under  the
               Securities  Act,  the  1934 Act or other  federal  or state  law,
               insofar  as such  losses,  claims,  damages  or  liabilities  (or
               actions  in respect  thereto)  arise out of or are based upon any
               Violation,  in each case to the extent  (and only to the  extent)
               that such  Violation  occurs in reliance  upon and in  conformity
               with written  information  furnished by such Holder expressly for
               use in connection  with such  registration;  and each such Holder
               will reimburse any legal or other expenses reasonably incurred by
               the Company or any such director,  officer,  controlling  person,
               underwriter  or  other  Holder,  partner,  officer,  director  or
               controlling  person  of such  other  Holder  in  connection  with
               investigating  or  defending  any  such  loss,   claim,   damage,
               liability  or  action:  PROVIDED,  HOWEVER,  that  the  indemnity
               agreement  contained in this subsection 1.7(b) shall not apply to
               amounts  paid in  settlement  of any such  loss,  claim,  damage,
               liability or action if such  settlement  is effected  without the
               consent of the Holder,  which consent  shall not be  unreasonably
               withheld;  and PROVIDED,  FURTHER, that the total amounts payable
               in indemnity by a Holder under this Section  1.7(b)

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               in respect  of any  Violation  shall not exceed the net  proceeds
               received by such Holder in the  registered  offering out of which
               such Violation arises.

          (c)  NOTICE. Promptly after receipt by an indemnified party under this
               Section  1.7  of  notice  of  the   commencement  of  any  action
               (including any governmental action), such indemnified party will,
               if a  claim  in  respect  thereof  is  to  be  made  against  any
               indemnifying  party  under  this  Section  1.7,  deliver  to  the
               indemnifying  party a written notice of the commencement  thereof
               and the  indemnifying  party shall have the right to  participate
               in, and, to the extent the indemnifying party so desires, jointly
               with any other indemnifying  party similarly  noticed,  to assume
               the defense  thereof with counsel  mutually  satisfactory  to the
               parties; PROVIDED,  HOWEVER, that an indemnified party shall have
               the right to retain its own  counsel,  with the fees and expenses
               to be paid by the indemnifying  party, if  representation of such
               indemnified  party by the counsel  retained  by the  indemnifying
               party would be inappropriate due to actual or potential  conflict
               of interests  between such indemnified  party and any other party
               represented  by such counsel in such  proceeding.  The failure to
               deliver  written  notice  to  the  indemnifying  party  within  a
               reasonable  time of the  commencement  of any such  action  shall
               relieve such  indemnifying  party of liability to the indemnified
               party under this Section 1.7 to the extent the indemnifying party
               is prejudiced as a result thereof, but the omission so to deliver
               written  notice to the  indemnified  party will not relieve it of
               any liability that it may have to any indemnified party otherwise
               than under this Section 1.7.

          (d)  DEFECT  ELIMINATED IN FINAL PROSPECTUS.  The foregoing  indemnity
               agreements  of  the  Company  and  Holders  are  subject  to  the
               condition that, insofar as they relate to any Violation made in a
               preliminary  prospectus but eliminated or remedied in the amended
               prospectus  on file  with the SEC at the  time  the  registration
               statement in question becomes effective or the amended prospectus
               filed  with the SEC  pursuant  to SEC  Rule  424(b)  (the  "FINAL
               PROSPECTUS"),  such  indemnity  agreement  shall not inure to the
               benefit  of any  person  if a copy of the  Final  Prospectus  was
               timely  furnished to the indemnified  party and was not furnished
               to the person asserting the loss,  liability,  claim or damage at
               or prior to the time such action is  required  by the  Securities
               Act.

          (e)  CONTRIBUTION.   In  order  to  provide  for  just  and  equitable
               contribution  to joint  liability under the Securities Act in any
               case in which either (i) any Holder  exercising rights under this
               Agreement,  or any controlling person of any such Holder, makes a
               claim for indemnification  pursuant to this Section 1.7 but it is
               judicially determined (by the entry of a final judgment or decree
               by a court of competent  jurisdiction  and the expiration of time
               to appeal or the denial of the last  right of  appeal)  that such
               indemnification

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               may not be  enforced in such case  notwithstanding  the fact that
               this Section 1.7 provides for  indemnification  in such case,  or
               (ii) contribution under the Securities Act may be required on the
               part of any such selling Holder or any such controlling person in
               circumstances  for which  indemnification  is provided under this
               Section 1.7;  then,  and in each such case,  the Company and such
               Holder will contribute to the aggregate losses,  claims,  damages
               or liabilities  to which they may be subject (after  contribution
               from  others)  in  such   proportion   so  that  such  Holder  is
               responsible  for the portion  represented by the percentage  that
               the public offering price of its Registrable  Securities  offered
               by and sold under the registration  statement bears to the public
               offering price of all  securities  offered by and sold under such
               registration statement, and the Company and other selling Holders
               are responsible  for the remaining  portion;  PROVIDED,  HOWEVER,
               that,  in any such case:  (A) no such  Holder will be required to
               contribute  any amount in excess of the public  offering price of
               all such Registrable  Securities  offered and sold by such Holder
               pursuant  to such  registration  statement;  and (B) no person or
               entity guilty of fraudulent misrepresentation (within the meaning
               of  Section  11(f) of the  Securities  Act) will be  entitled  to
               contribution from any person or entity who was not guilty of such
               fraudulent misrepresentation.

          (f)  SURVIVAL.  The  obligations of the Company and Holders under this
               Section  1.7 shall  survive  until the fifth  anniversary  of the
               completion  of  any  offering  of  Registrable  Securities  in  a
               registration  statement,  regardless  of  the  expiration  of any
               statutes of limitation or extensions of such statutes.

     1.8  TERMINATION  OF THE COMPANY'S  OBLIGATIONS.  The Company shall have no
          obligations  pursuant  to  Sections  1.3 and 1.4 with  respect  to any
          Registrable   Securities  proposed  to  be  sold  by  a  Holder  in  a
          registration  pursuant to Section 1.3 or 1.4 more than seven (7) years
          after the date of this Agreement, or, if, in the opinion of counsel to
          the Company, all such Registrable  Securities proposed to be sold by a
          Holder  may then be sold  under  Rule 144 in one  transaction  without
          exceeding the volume limitations thereunder.

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