EXHIBIT 10.1

                  COMMON STOCK AND WARRANT PURCHASE AGREEMENT


     THIS COMMON STOCK AND WARRANT  PURCHASE  AGREEMENT (this  "AGREEMENT"),  is
made and  entered  into as of the  26th  day of  August,  2002,  by and  between
BRILLIANT DIGITAL  ENTERTAINMENT,  INC., a Delaware corporation (the "COMPANY"),
located at 6355 Topanga Canyon  Boulevard,  Suite 120, Woodland Hills, CA 91367,
and the purchasers  (each a "PURCHASER,"  and  collectively,  the  "PURCHASERS")
listed on the Schedule of Purchasers attached hereto as Exhibit A (the "SCHEDULE
OF  PURCHASERS"),  each  located at the  address  set forth on the  Schedule  of
Purchasers.

ARTICLE 1
                     AUTHORIZATION AND SALE OF COMMON STOCK

     1.1  AUTHORIZATION.  The Company has  authorized  the sale and  issuance to
investors of up to an aggregate of (i)  7,123,836  shares of Common  Stock,  par
value $0.001 per share, of the Company ("COMMON  STOCK"),  at a price of $0.1502
per share  (the  "PURCHASE  PRICE"),  which  represents  the five (5) day volume
weighted average price of the stock for the five (5) days immediately  preceding
the date of this  Agreement,  and (ii)  warrants  expiring  September 3, 2005 to
purchase Common Stock in the form attached hereto as Exhibit B (the "WARRANTS"),
each at an exercise price per share of $0.168975 (the "EXERCISE  PRICE"),  which
represents  a twelve and  one-half  percent  (12.5%)  premium  over the Purchase
Price.  The shares of Common Stock to be issued pursuant to the terms hereof are
referred to as the "COMMON  SHARES."  The shares of Common Stock  issuable  upon
exercise of the Warrants  are  referred to as the  "WARRANT  SHARES." The Common
Shares, the Warrants, and the Warrant Shares are collectively referred to as the
"SECURITIES."

     1.2  AGREEMENT TO PURCHASE AND SELL SECURITIES. The Company agrees to issue
and sell to each  Purchaser,  and each  Purchaser  agrees to  purchase  from the
Company, the number of Common Shares set forth opposite such Purchaser's name in
the applicable column of the Schedule of Purchasers (the "COMMITTED SHARES") for
the  aggregate  purchase  price,  calculated  on a per share  purchase  price of
$0.1502 per share,  set forth opposite such  Purchaser's  name in the applicable
column of the Schedule of Purchasers (the  "COMMITTED  AMOUNT") on the terms and
conditions  set forth herein.  Additionally,  in further  consideration  of each
Purchaser's purchase of the Common Shares hereunder, the Company agrees to issue
to the Purchaser, a Warrant initially exercisable for a number of Warrant Shares
equal to two  hundred  percent  (200%) of the  Committed  Amount  divided by the
Exercise Price (the "WARRANT COVERAGE"), at an exercise price per share equal to
the Exercise Price.  The number and type of shares issuable upon exercise of the
Warrant is subject to adjustment as set forth in the Warrant.

     1.3  CLOSING AND  DELIVERY.  The purchase and sale of the Common Shares and
Warrants  shall occur at 12:00 p.m.,  Los Angeles time, on September 3, 2002, or
at such other time on or before  September 3, 2002 as is mutually agreed upon by
the Company and the Purchasers.  Such purchase and sale is referred to herein as
the "CLOSING," and the date of the Closing is referred to herein as the "CLOSING
DATE." The Closing  shall be held at the offices of the Company  first set forth
above.  At the Closing,  each Purchaser shall deliver to the Company by check or
wire transfer the Committed  Amount and the Company shall deliver or cause to be
delivered  to each  Purchaser  a


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Warrant as described above.  Within five (5) business days following the Closing
Date,  the Company will deliver to each  Purchaser a certificate  evidencing the
Common Shares purchased at the Closing.

     1.4  NATURE OF OFFERING.  The investment in the Securities is being made in
reliance  upon the  provisions  of Section 4(2)  ("SECTION  4(2)") of the United
States Securities Act of 1933, as amended (the "SECURITIES ACT"), and Regulation
D ("REGULATION  D") and the other rules and  regulations  promulgated  under the
Securities  Act  and/or  upon  such  other   exemption  from  the   registration
requirements  of the  Securities  Act as may be  available  with  respect to the
investment to be made hereunder.

ARTICLE 2
                         REPRESENTATIONS AND WARRANTIES

     2.1  BY THE  COMPANY.  The Company  hereby  represents and  warrants to the
Purchaser as follows:

          (a)  STATUS.  The Company is a  corporation  duly  organized,  validly
existing and in good standing  under the laws of the State of Delaware,  and has
the corporate  power to own and operate its properties  and assets,  to carry on
its business as now conducted  and to enter into and to perform its  obligations
under  this  Agreement  and  the  Warrants   (collectively,   the   "TRANSACTION
DOCUMENTS").  The  Company  is  duly  qualified  to do  business  and is in good
standing  in  California  and in each  other  state in which a failure  to be so
qualified  would  have a  material  adverse  effect on the  Company's  financial
condition  or its  ability  to own and  operate  its  properties  and assets and
conduct its business in the manner now conducted.

          (b)  AUTHORIZATION.  The  Company  has full  legal  right,  power  and
authority to conduct its business and affairs. The Company has full legal right,
power  and  authority  to enter  into and  perform  its  obligations  under  the
Transaction Documents,  including the issuance of the Securities.  The execution
and delivery of this Agreement,  the execution and delivery of the Warrants, and
the  performance  by the Company of its  obligations  thereunder,  including the
issuance of the Securities,  are within the corporate  powers of the Company and
have been duly authorized by all necessary  corporate  action properly taken and
the Company has received all necessary governmental  approvals, if any, that are
required.  The  officer(s)  executing  this  Agreement and the Warrants are duly
authorized to act on behalf of the Company.

          (c)  VALIDITY AND BINDING  EFFECT. This Agreement and the Warrants are
the  legal,  valid  and  binding  obligations  of the  Company,  enforceable  in
accordance  with  their  respective  terms,  subject to  limitations  imposed by
bankruptcy, insolvency, moratorium or other similar laws affecting the rights of
creditors generally or the application of general equitable principles.

          (d)  NO CONFLICTS.   Consummation  of  the  transactions  contemplated
hereby and the performance of the obligations of the Company under and by virtue
of the Transaction Documents,  including the issuance of the Securities,  do not
conflict  with, and will not result in any breach of, or constitute a default or
trigger a lien under, any mortgage,  security deed or agreement,  deed of trust,
lease, bank loan or credit agreement,  corporate charter or bylaws, agreement or
certificate of limited partnership, partnership agreement, license, franchise or
any other  instrument  or  agreement to which the Company is a party or by which
the Company or its  respective  properties  may be bound or affected or to which
the Company has not obtained an effective waiver.


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          (e)  EXEMPTION  FROM  REGISTRATION;  VALID  ISSUANCES.  Subject to the
accuracy of the Purchasers' representations in Section 2.2(d), (e), (g) and (h),
the sale of the Securities  will not require  registration  under the Securities
Act or any applicable state securities law. The Common Shares, when issued, sold
and delivered in accordance with the terms of this Agreement,  shall be duly and
validly issued,  fully-paid and  non-assessable  shares of Common Stock, free of
all liens, claims, encumbrances,  preemptive rights, rights of first refusal and
restrictions on transfer,  except as imposed by applicable  securities laws. The
Warrant Shares issuable by the Company upon the exercise of the Warrants, shall,
if and when the Warrants are exercised in accordance with their respective terms
and the consideration  therefore is received by the Company, be duly and validly
issued, fully-paid and non-assessable shares of Common Stock, free of all liens,
claims,   encumbrances,   preemptive   rights,   rights  of  first  refusal  and
restrictions on transfer, except as imposed by applicable securities laws.

          (f)  SEC DOCUMENTS.  The Company has made  available to the Purchasers
true and complete  copies of the Company's  Annual Report on Form 10-KSB for the
fiscal  year  ended  December  31,  2000 and each  report,  proxy  statement  or
registration  statement  filed by the Company with the  Securities  and Exchange
Commission  (the "SEC")  pursuant to the  Securities  Exchange  Act of 1934,  as
amended  (the  "EXCHANGE  ACT") or the  Securities  Act since the filing of such
Annual Report through the date hereof  (collectively such documents are referred
to as the "SEC  DOCUMENTS").  As of their  respective  dates,  the SEC Documents
complied in all material respects with the requirements of the Exchange Act, and
rules and  regulations of the SEC  promulgated  thereunder and the SEC Documents
did not  contain  any untrue  statement  of a  material  fact or omit to state a
material  fact  required to be stated  therein or necessary in order to make the
statements  therein,  in light of the circumstances  under which they were made,
not  misleading.  The financial  statements  of the Company  included in the SEC
Documents   complied  in  all  material  respects  with  applicable   accounting
requirements  and the  published  rules  and  regulations  of the  SEC or  other
applicable  rules  and  regulations  with  respect  thereto  at the time of such
inclusion.  Such  financial  statements  have been prepared in  accordance  with
generally accepted accounting  principles ("GAAP") applied on a consistent basis
during the periods  involved  (except (i) as may be otherwise  indicated in such
financial  statements  or the  notes  thereto  or (ii) in the case of  unaudited
interim statements,  to the extent they exclude footnotes or may be condensed or
summary  statements)  and fairly present in all material  respects the financial
position  of the Company as of the dates  thereof and the results of  operations
and cash flows for the periods  then ended  (subject,  in the case of  unaudited
interim  statements,   to  normal  year-end  audit   adjustments).   Except  for
indebtedness  incurred in that certain  financing  transaction that closed on or
around  December 10, 2001, by and among the Company,  Harris Toibb,  and certain
other  Purchasers,  neither  the  Company  nor any of its  subsidiaries  has any
material indebtedness,  obligations or liabilities of any kind (whether accrued,
absolute,  contingent or otherwise, and whether due or to become due) that would
have been required to be reflected in, reserved  against or otherwise  described
in the financial  statements  or in the notes  thereto in accordance  with GAAP,
which was not fully reflected in, reserved against or otherwise described in the
financial  statements or the notes thereto  included in the SEC Documents or was
not incurred in the ordinary  course of business  consistent  with the Company's
past practices since the last date of such financial statements.

          (g)  NO  GENERAL   SOLICITATION  OR  ADVERTISING  IN  REGARD  TO  THIS
TRANSACTION. Neither the Company nor any of its affiliates nor any person acting
on  its  or  their  behalf  (i)  has  conducted  or  will  conduct  any  general
solicitation  (as that term is used in Rule 502(c) of  Regulation  D) or general
advertising  with respect to the  Securities or (ii) made any offers or sales of
any security


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or solicited any offers to buy any security under any  circumstances  that would
require registration of the Securities under the Securities Act; provided,  that
the Company makes no representation or warranty with respect to the Purchasers.

          (h)  NO MATERIAL  ADVERSE  EFFECT.  Since June 30,  2002,  no Material
Adverse  Effect (as defined  herein) has  occurred or exists with respect to the
Company,  except  as  disclosed  in the  SEC  Documents.  For  purposes  hereof,
"MATERIAL  ADVERSE  EFFECT" shall mean any effect on the  business,  operations,
properties, prospects, material agreements or financial condition of the Company
that is material and adverse to the Company and its subsidiaries and affiliates,
taken as a whole,  and/or any condition,  circumstance,  or situation that would
prohibit or  otherwise  interfere  with the ability of the Company to enter into
and  perform  any of its  obligations  under the  Transaction  Documents  in any
material respect.

          (i)  NO UNDISCLOSED  EVENTS OR  CIRCUMSTANCES. Since June 30, 2002, no
event or circumstance  has occurred or exists with respect to the Company or its
businesses,  properties,  prospects,  operations or financial  condition,  that,
under  applicable  law,  rule  or  regulation,  requires  public  disclosure  or
announcement  prior to the date  hereof by the Company but which has not been so
publicly announced or disclosed in the SEC Documents.

          (j)  NO INTEGRATED  OFFERING.  Other  than  as  described  in the  SEC
Documents  or  pursuant  to  an  effective   registration  statement  under  the
Securities  Act,  or pursuant  to the  issuance  or  exercise of employee  stock
options,  or pursuant to its discussion with the Purchasers of the Common Shares
in connection with the  transactions  contemplated  hereby,  the Company has not
issued,  offered or sold the Common  Shares or any other  shares of Common Stock
(including for this purpose any securities of the same or a similar class as the
Common Stock or any securities convertible into, exchangeable or exercisable for
the Common Stock or any such other securities)  within the six-month period next
preceding the date hereof in a manner that would make  unavailable the exemption
from Securities Act registration  being relied upon by the Company for the offer
and  sale to the  Purchaser  and  the  other  purchasers  of the  Securities  as
contemplated  by this  Agreement,  and the  Company  shall not permit any of its
directors,  officers or  affiliates  directly or  indirectly  to take any action
(including,  without limitation, any offering or sale to any person or entity of
the Common Shares or other shares of Common  Stock),  so as to make  unavailable
the exemption from Securities Act registration  being relied upon by the Company
for  the  offer  and  sale to the  Purchaser  and the  other  purchasers  of the
Securities as contemplated by this Agreement.

          (k)  LITIGATION AND OTHER  PROCEEDINGS. Except as disclosed in the SEC
Documents,  there are no lawsuits or proceedings pending or, to the knowledge of
the Company,  threatened,  against the Company, nor has the Company received any
written or oral notice of any such action,  suit,  proceeding or  investigation,
which could  reasonably be expected to either have a Material  Adverse Effect or
result in a judgment  against  the  Company  in an amount in excess of  $75,000.
Except as set forth in the SEC Documents,  no judgment,  order, writ, injunction
or decree or award has been  issued  by or,  to the  knowledge  of the  Company,
requested of any court,  arbitrator or governmental agency which could result in
a Material Adverse Effect.

          (l)  NO MISLEADING  OR UNTRUE  COMMUNICATION.  The Company and, to the
knowledge  of the Company,  any person  representing  the Company,  or any other
person  selling or offering to sell the Common  Shares or Warrants in connection
with the  transactions  contemplated  by this  Agreement,  have not made, at any
time, any oral  communication  in connection  with the offer


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or sale of the same which  contained any untrue  statement of a material fact or
omitted to state any material fact necessary in order to make the statements, in
the light of the circumstances under which they were made, not misleading.

          (m)  SUBSIDIARIES.  The Company does not have any subsidiaries  except
for  Brilliant  Studios,  Inc., a Delaware  corporation,  B3D,  Inc., a Delaware
corporation,  and Brilliant Digital  Entertainment  Pty. Limited,  an Australian
corporation. The Company also owns seventy-five percent (75%) of the outstanding
shares of Digital Hip Hop, Inc., a Delaware  corporation,  and fifty-one percent
(51%) of the outstanding shares of Altnet, Inc., a Delaware corporation.

          (n)  SOLVENCY OF THE COMPANY.  The Company will be solvent  under GAAP
immediately following the Closing.

     2.2  BY  THE PURCHASERS.  Each Purchaser hereby  represents and warrants to
the Company with respect to itself as follows:

          (a)  STATUS. If the Purchaser is a  corporation,  partnership,  trust,
limited  liability  company,  or other  legal  entity,  such  Purchaser  is duly
organized,  validly  existing and in good  standing  (to the extent  applicable)
under  the laws of the  state  of its  formation,  and has the  power to own and
operate its  properties,  to carry on its business as now conducted and to enter
into and to perform its obligations under this Agreement.

          (b)  AUTHORIZATION.  The Purchaser has the full legal right, power and
authority to enter into and perform its obligations  under this  Agreement.  The
execution and delivery of this Agreement and the performance by the Purchaser of
its  obligations  hereunder are within the powers of the Purchaser and have been
duly  authorized by all necessary  action  properly  taken and the Purchaser has
received all necessary  governmental  approvals,  if any, that are required. The
person  executing this Agreement and the respective  Warrants is duly authorized
to act on behalf of the Purchaser.

          (c)  VALIDITY AND BINDING  EFFECT. This  Agreement and the  respective
Warrants  are  the  legal,  valid  and  binding  obligations  of the  Purchaser,
enforceable in accordance with their  respective  terms,  subject to limitations
imposed by  bankruptcy,  insolvency,  moratorium or other similar laws affecting
the rights of  creditors  generally  or the  application  of  general  equitable
principles.

          (d)  INVESTMENT REPRESENTATIONS.

               (i) The Purchaser has such  knowledge and experience in financial
and business  matters,  including  investments  of the type  represented by this
Agreement  and the  Warrants,  as to be  capable  of  evaluating  the  merits of
investment in the Company and can bear the economic risk of an investment in the
Securities;

               (ii) The  Purchaser is an  "accredited  investor" as such term is
defined in Rule 501 of Regulation D under the Securities Act; and

               (iii) The  Purchaser  is  acquiring  the  Common  Shares  and the
Warrant and, to the extent exercised,  will be acquiring the Warrant Shares, for
investment  purposes  only,  for its


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own  account  and not with a view to, or for  resale  in  connection  with,  the
distribution or other disposition thereof in contravention of the Securities Act
or any state securities law.

          (e)  TRANSFER RESTRICTIONS. The Purchaser acknowledges and agrees that
the Securities are subject to the following transfer restrictions:

               (i) The Securities have not been registered  under the Securities
Act,  and  Purchaser  agrees not to sell,  pledge,  distribute,  offer for sale,
transfer or otherwise dispose of the Securities,  as applicable,  in the absence
of (i) an  effective  registration  statement  under  the  Securities  Act as to
Securities,  as applicable,  and registration or qualification of the 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.  Each  of the  certificates
evidencing  the Common  Shares,  and upon exercise of the Warrants,  each of the
certificates  evidencing the Warrant Shares, shall bear a legend in the form set
forth in Article 4 hereof.

               (ii) In the reasonable discretion of the Company, the Company may
condition  any  transfer of all or any portion of the  Securities  (other than a
disposition  satisfying  the  conditions  set  forth in  clause  (i) of  Section
2.2(e)(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  (i) makes such  representations  and  warranties to and for the
benefit of the Company as are comparable to the  representations  and warranties
of  the  Purchaser  hereto,  as and to the  extent  applicable  to the  proposed
disposition,  and (ii) agrees to be bound by the transfer restrictions set forth
in this Section 2.2(e).

          (f)  ABSENCE  OF  CONFLICTS.    The  execution  and  delivery  of this
Agreement  and  the  Warrants  to  which  the  Purchaser  is a  party,  and  the
consummation of the transactions  contemplated  thereby, and compliance with the
requirements thereof, will not violate any law, rule,  regulation,  order, writ,
judgment,  injunction,  decree or award  binding on the Purchaser or (a) violate
any provision of any  indenture,  instrument or agreement to which the Purchaser
is a party or is  subject,  or by which the  Purchaser  or any of its  assets is
bound; (b) conflict with or constitute a material default thereunder; (c) result
in the  creation  or  imposition  of any lien  pursuant to the terms of any such
indenture, instrument or agreement, or constitute a breach of any fiduciary duty
owed by the  Purchaser  to any third  party;  or (d) require the approval of any
third-party  (which has not been  obtained)  pursuant to any material  contract,
agreement,  instrument,  relationship or legal obligation to which the Purchaser
is  subject  or to which any of its  assets,  operations  or  management  may be
subject.

          (g)  DISCLOSURE; ACCESS TO INFORMATION. The Purchaser has received all
documents, records, books and other publicly available information pertaining to
the  Purchaser's  investment  in the  Company  that have been  requested  by the
Purchaser.  The Company is subject to the periodic reporting requirements of the
Exchange  Act,  and the  Purchaser  has  reviewed or received  copies of all SEC
Documents that have been requested by it.

          (h)  MANNER OF SALE. At no time was the  Purchaser  presented  with or
solicited  by or through any leaflet,  public  promotional  meeting,  television
advertisement or any other form of general solicitation or advertising.


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ARTICLE 3
                            COVENANTS AND AGREEMENTS

     3.1  LISTING OF COMMON  STOCK.  The Company  hereby  agrees to use its best
efforts to maintain the listing of the Common Stock on any of the American Stock
Exchange, the New York Stock Exchange, the NASDAQ National Market, or the NASDAQ
Small-Cap  Market,  whichever is at the time the principal  trading  exchange or
market for the Common Stock (the "PRINCIPAL MARKET"),  and as soon as reasonably
practicable  following  the  Closing to list the Common  Shares and the  Warrant
Shares on the  Principal  Market.  The Company  further  agrees,  if the Company
applies to have the Common Stock traded on any other Principal  Market,  it will
include in such application the Common Shares and the Warrant Shares.

     3.2  ISSUANCE OF COMMON SHARES AND WARRANT.  The sale of the Common  Shares
and the  Warrants and the  issuance of the Warrant  Shares upon  exercise of the
Warrants,  as the case may be, shall be made in accordance  with the  provisions
and  requirements of Section 4(2) and Regulation D under the Securities Act, and
any applicable  state  securities  law. The Company shall make all necessary SEC
and "blue sky" filings required to be made by the Company in connection with the
sale of the Securities to the Purchaser as required by all applicable laws.

     3.3  AUTHORIZED  SHARES.  At all times from and after the Closing Date, the
Company shall maintain a sufficient  number of authorized shares of Common Stock
reserved for issuance upon exercise of the Warrants in accordance with the terms
thereof.

     3.4  REGISTRATION  RIGHTS.  All of the Common Shares issued pursuant to the
terms of this  Agreement  and the Warrant  Shares  issuable upon exercise of the
Warrants  shall  be  "Registrable   Securities"  or  such  other  definition  of
securities  entitled  to  registration  rights  pursuant  to  Exhibit  C to this
Agreement. The Purchasers shall be entitled to the registration rights set forth
in Exhibit C with respect to such Common Shares and Warrant Shares.

     3.5  HOLDBACK AGREEMENT.  Notwithstanding registration of the Common Shares
and Warrant  Shares,  prior to January 23, 2003,  each  Purchaser  agrees not to
affect any  private or public  sale of,  make any short sale of,  loan,  pledge,
grant any option with respect to, or otherwise dispose of or transfer for value,
any of the Common Shares or Warrant Shares acquired by such Purchaser  hereunder
or upon exercise of the Warrant issued hereunder.

ARTICLE 4
                                     LEGEND

     Each certificate representing the Common Shares and the Warrant Shares will
bear a legend in substantially the following form (the "LEGEND"):

     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 EXEMPTION FROM THE  REGISTRATION  REQUIREMENTS OF THE
     SECURITIES ACT AND SUCH OTHER SECURITIES  LAWS.  NEITHER THIS SECURITY
     NOR ANY INTEREST OR PARTICIPATION HEREIN MAY


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     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.

ARTICLE 5
                              CONDITIONS TO CLOSING

     5.1  CONDITIONS TO THE  OBLIGATIONS OF PURCHASER.  The  obligations of each
Purchaser  to purchase the Common  Shares and Warrants  pursuant to the terms of
this Agreement at the Closing and the other  obligations of each Purchaser under
this  Agreement  are  subject  to  the  satisfaction  as of the  Closing  of the
following conditions,  any of which may be waived in writing in whole or in part
by Purchaser:

          (a)  REPRESENTATIONS  AND   WARRANTIES.    The   representations   and
warranties of the Company  contained in this Agreement shall be true and correct
as of the date hereof and as of the Closing  Date with the same force and effect
as though such  representations  and  warranties had been made at and as of such
date (i.e., with respect to a representation  that a state of facts exists on or
as of the date hereof,  it is a condition  that such state of facts exists on or
as of the Closing  Date,  and with respect to a  representation  that a state of
facts has or has not  changed  between a date  prior to the date  hereof and the
date hereof,  it is a condition  that such state of facts has or has not changed
between  such  prior  date  and  the  Closing  Date),   except  as  affected  by
transactions  contemplated  hereby and except  that any such  representation  or
warranty  made as of a specified  date  (other than the date of this  Agreement)
shall only need to have been true on and as of such date.

          (b)  FAIRNESS  OPINION.  The  Company  shall  have  delivered  to  the
Purchaser  an  opinion  from The  Mentor  Group  stating  that the  transactions
contemplated by this Agreement are fair to the Company and its shareholders from
a financial point of view.

          (c)  BOARD APPROVAL. The Company shall have delivered to the Purchaser
a resolution of a majority of the Board of Directors of the Company,  consisting
solely of members of the Board of  Directors  of the  Company who do not have an
interest in the  transactions  contemplated  by this  Agreement,  approving  the
transactions contemplated by this Agreement.

ARTICLE 6
                                  MISCELLANEOUS

     6.1  SUCCESSORS AND ASSIGNS INCLUDED IN PARTIES. Whenever in this Agreement
one  of  the  parties  hereto  is  named  or  referred  to,  the  heirs,   legal
representatives,  successors,  successors-in-title  and assigns of such  parties
shall be included,  and all covenants and agreements contained in this Agreement
by or on behalf of the Company or by or on behalf of a Purchaser  shall bind and
inure  to  the  benefit  of  their  respective  heirs,  legal   representatives,
successors-in-title and assigns, whether so expressed or not.

     6.2  SEVERABILITY. Wherever possible each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this  Agreement  shall be prohibited by or invalid under
such law, such provision shall be ineffective


                                       8


<PAGE>


to the  extent of such  prohibition  or  invalidity,  without  invalidating  the
remainder of such  provision or the remaining  provisions of this  Agreement and
shall be interpreted so as to be effective and valid.

     6.3  ARTICLE AND  SECTION  HEADINGS,  DEFINED  TERMS.  Numbered  and titled
article and section  headings  and defined  terms are for  convenience  only and
shall not be construed as amplifying  or limiting any of the  provisions of this
Agreement.

     6.4  NOTICES.  Any and all  notices,  elections  or  demands  permitted  or
required  to be made under this  Agreement  shall be in  writing,  signed by the
party giving such notice,  election or demand and shall be delivered personally,
telecopied,  or sent by certified  mail or overnight via  nationally  recognized
courier service (such as Federal Express), to the other party at the address set
forth in the  introductory  paragraph  to this  Agreement,  in the  Schedule  of
Purchasers  or at such other  address as may be supplied in writing and of which
receipt  has been  acknowledged  in writing.  The date of  personal  delivery or
telecopy  or two (2)  business  days  after  the  date of  mailing  (or the next
business day after delivery to such courier service),  as the case may be, shall
be the date of such notice, election or demand.

     6.5  ENTIRE AGREEMENT.  This  Agreement  and the other  written  agreements
between the Company and the Purchasers,  represent the entire agreement  between
the parties  concerning the subject matter hereof,  and all oral discussions and
prior  agreements are merged herein;  provided,  if there is a conflict  between
this Agreement and any other document executed  contemporaneously  herewith with
respect to the  obligations  described  herein,  the provision of this Agreement
shall control.

     6.6  GOVERNING  LAW; JURISDICTION.  This  Agreement  shall be construed and
enforced in accordance  with, and shall be governed by, the laws of the State of
California,  without  regard to the  conflict  of law  principles  thereof.  Any
dispute  arising under or in relation to this Agreement shall be resolved in any
competent court located in Los Angeles County, State of California,  and each of
the Company and the Purchasers hereby  irrevocably submit to the jurisdiction of
any such court.

     6.7  AMENDMENT.  Neither this Agreement nor any term hereof may be amended,
waived,  discharged or terminated other than by a written  instrument  signed by
the party against whom enforcement of any such amendment,  waiver,  discharge or
termination is sought.

     6.8  COUNTERPARTS.  This  Agreement  may  be  executed  in  any  number  of
counterparts   and  by   different   parties  to  this   Agreement  in  separate
counterparts,  each of which when so executed  shall be deemed to be an original
and all of which taken together shall constitute one and the same Agreement.


                                       9


<PAGE>


     IN WITNESS  WHEREOF,  the parties hereto have executed this  Agreement,  or
have caused this Agreement to be executed by their duly authorized officers,  as
of the day and year first above written.

                                          COMPANY:

                                          BRILLIANT DIGITAL ENTERTAINMENT, INC.,
                                          a Delaware corporation


                                          By:      /s/ Kevin Bermeister
                                                   ---------------------------
                                                   Kevin Bermeister
                                          Title:   Chief Executive Officer and
                                                     President








                                SIGNATURE PAGE TO
                   COMMON STOCK AND WARRANT PURCHASE AGREEMENT

                {Purchaser signature page continued on next page}


                                       10


<PAGE>


PURCHASERS:


Markev Services, LLC                               Harris Toibb
---------------------------                        ---------------------------
(Print Name of Purchaser)                          (Print Name of Purchaser)


/s/ Mark Dyne                                      /s/ Harris Toibb
---------------------------                        ---------------------------
(Signature)                                        (Signature)


  Manager
---------------------------                        ---------------------------
(Title, if applicable)                             (Title, if applicable)





Ronald Lachman                                     Bob Haya
---------------------------                        ---------------------------
(Print Name of Purchaser)                          (Print Name of Purchaser)


/s/ Ronald Lachman                                 /s/ Bob Haya
---------------------------                        ---------------------------
(Signature)                                        (Signature)


---------------------------                        ---------------------------
(Title, if applicable)                             (Title, if applicable)





David Wilson                                       Scott Hergott
---------------------------                        ---------------------------
(Print Name of Purchaser)                          (Print Name of Purchaser)


/s/ David Wilson                                   /s/ Scott Hergott
---------------------------                        ---------------------------
(Signature)                                        (Signature)


---------------------------                        ---------------------------
(Title, if applicable)                             (Title, if applicable)



                                SIGNATURE PAGE TO
                   COMMON STOCK AND WARRANT PURCHASE AGREEMENT


<PAGE>


                                    EXHIBIT A

                             SCHEDULE OF PURCHASERS

PURCHASER                                  COMMITTED AMOUNT     COMMITTED SHARES
----------------------------------         ----------------     ----------------

                                                   $
Ronald Lachman                                 $200,000             1,331,558
3140 Whisperwoods Court
Northbrook, IL  60062

Markev Services, LLC                           $350,000             2,330,226
15821 Ventura Boulevard, Suite 525
Encino, California  91436

Harris Toibb                                   $400,000             2,663,116
6355 Topanga Canyon Blvd., Suite 230
Woodland Hills, California  91367

Bob Haya                                        $20,000              133,156
204 E. 2nd Ave #104
San Mateo, CA  94401

David Wilson                                    $50,000              332,890
P.O. Box 98
Preston, MD 21655

Scott Hergott                                   $50,000              332,890
209 Satin Mist Court
Las Vegas, Nevada 89114

                                           -------------------  ----------------
TOTAL                                         $1,070,000            7,123,836
                                           ===================  ================




<PAGE>


                                    EXHIBIT B

                                     WARRANT

                                    [OMITTED]



<PAGE>


                                    EXHIBIT C

                               REGISTRATION RIGHTS

1.   REGISTRATION RIGHTS.

     1.1  Definitions. For purposes of this Exhibit C to the Agreement:

          "AFFILIATE"  means,  with respect to a Person,  any other Person that,
     directly or  indirectly,  controls,  is  controlled  by or is under  common
     control with, such Person in question. For the purposes of this definition,
     "CONTROL" (including,  with correlative meanings, the terms "CONTROLLED BY"
     and "UNDER COMMON CONTROL WITH"), as used with respect to any Person, shall
     mean the  possession,  directly  or  indirectly,  of the power to direct or
     cause the direction of the management and policies of such Person,  whether
     through the ownership of voting securities or by contract or otherwise.

          "AGREEMENT"  means that  certain  Common  Stock and  Warrant  Purchase
     Agreement  dated as of August 26,  2002,  by and among the  Company and the
     Purchasers named therein.

          "BOARD OF  DIRECTORS"  means the Board of  Directors of the Company or
     any duly  constituted  committee of that Board which has been delegated the
     authority to take the specific action in question.

          "COMMON STOCK" means the Company's  common stock, par value $0.001 per
     share.

          "COMPANY"  means  Brilliant  Digital  Entertainment,  Inc., a Delaware
     corporation.

          "ELIGIBLE  OFFERING"  means any public offering of Common Stock by the
     Company other than:  (i) any  registration  relating  solely to the sale of
     securities to participants  in a Company stock plan, (ii) any  registration
     relating to corporate reorganization or other transaction under Rule 145 of
     the Act,  (iii) any  registration  on any form (other than Form S-1, S-2 or
     S-3) which does not include  substantially the same information as would be
     required to be included in a  registration  statement  covering the sale of
     the  Registrable  Securities,  and (iv) any  registration in which the only
     Common Stock being  registered is Common Stock issuable upon  conversion of
     debt securities which are also being registered.

          "EXCHANGE ACT" means the Securities  Exchange Act of 1934, as amended,
     and the rules and  regulations  of the SEC (or any other federal  agency at
     the time  administering  the  Securities  Exchange Act of 1934, as amended)
     promulgated thereunder.

          "PERSON"  means  any  individual,  corporation,  partnership,  limited
     liability company, trust, incorporated or unincorporated association, joint
     venture,  joint  stock  company,  government  bureau  or  agency  or  other
     subdivision thereof or other entity of any kind or nature.

          "PURCHASERS" means the Purchasers named in the Agreement.


<PAGE>


          "REGISTER,"  "REGISTERED," and "REGISTRATION"  refer to a registration
     effected  by  preparing  and  filing a  registration  statement  or similar
     document in  compliance  with the Act, and the  declaration  or ordering of
     effectiveness of such registration statement or document by the SEC.

          "REGISTRABLE  SECURITIES"  means (i) the Common Stock purchased by the
     Purchasers  pursuant to the terms of the  Agreement,  (ii) any Common Stock
     issuable upon exercise of the Warrants, as defined in the Agreement,  (iii)
     any 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 the shares  referenced  in (i) or (ii) above,  and (iv) any
     Common  Stock of the  Company  issued by way of a stock split of the shares
     referenced in (i), (ii) or (iii) above.

          "SEC" means the Securities and Exchange Commission.

          "SECURITIES ACT" means the Securities Act of 1933, as amended, and the
     rules and  regulations  of the SEC (or any other federal agency at the time
     administering   the  Securities  Act  of  1933,  as  amended)   promulgated
     thereunder.

     1.2  PIGGYBACK REGISTRATIONS. From and after the date of the Agreement, the
Company  shall notify the  Purchasers in writing at least twenty (20) days prior
to filing any  registration  statement  under the Securities Act for purposes of
effecting an Eligible Offering, and will afford the Purchasers an opportunity to
include  in such  registration  statement  all or any  part  of the  Registrable
Securities  then held by any Purchaser.  If the Purchasers  desire to include in
any such  registration  statement all or any part of the Registrable  Securities
they hold,  such  Purchasers  shall,  within ten (10) 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  Purchaser  wishes  to  include  in  such  registration  statement.  If any
Purchaser  decides  not to  include  all of its  Registrable  Securities  in any
registration  statement  thereafter  filed by the Company,  such Purchaser 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 1.2 is for an underwritten  offering,  then
     the Company shall so advise the Purchasers. In such event, the right of the
     Purchasers'  Registrable  Securities  to  be  included  in  a  registration
     pursuant to this  Section  1.2 shall be  conditioned  upon the  Purchasers'
     participation  in such  underwriting  and the inclusion of the  Purchasers'
     Registrable  Securities in the  underwriting to the extent provided herein.
     If the Purchasers are proposing to distribute their Registrable  Securities
     through such underwriting, such Purchasers shall enter into an underwriting
     agreement in customary form with the managing underwriter or underwriter(s)
     selected for such underwriting. 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  managing   underwriter(s)   may  exclude  shares
     (including   Registrable   Securities)   from  the   registration  and  the
     underwriting,  and  the  number  of  shares  that


                                       2


<PAGE>


     may  be  included  in  the  registration  and  the  underwriting  shall  be
     allocated,  first,  to the  Company,  second  to the  holders  of any other
     registration  rights  granted  by the  Company  prior  to the  date of this
     Agreement,  and third, to the Purchasers,  on a pro rata basis based on the
     total number of Registrable Securities then held by each Purchaser.  If any
     Purchaser disapproves of the terms of any such underwriting, such Purchaser
     may elect to withdraw  therefrom  by written  notice to the Company and the
     underwriter,  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.

          b. EXPENSES. The Company shall pay all expenses incurred in connection
     with a registration  pursuant to this Section 1.2 (excluding  underwriters'
     or brokers' discounts and commissions),  including,  without limitation all
     federal and "blue sky" registration and qualification  fees,  printers' and
     accounting fees, and fees and  disbursements of counsel for the Company and
     the fees and disbursements of special counsel for the Purchasers.

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

          a. prepare and file with the SEC a registration statement with respect
     to such Registrable Securities and use its commercially  reasonable 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. 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 necessary to comply with the provisions of
     the  Securities  Act with  respect  to the  disposition  of all  securities
     covered by such registration statement;

          c. furnish to the  Purchasers  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 the Purchasers that are included in such registration;

          d. use all  reasonable  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 a
     majority in interest of the Purchasers, 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;


                                       3


<PAGE>


          e. 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; and

          f. at such time as the Purchasers'  Registrable Securities are covered
     by such  registration  statement,  notify the Purchasers 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,  and at the request of a majority  in interest of the  Purchasers
     prepare and file an amendment to any such prospectus as may be necessary.

          g. cause all Registrable  Securities registered hereunder to be listed
     on each  securities  exchange  on which  similar  securities  issued by the
     Company are then listed;

          h. provide a transfer  agent and  registrar  for all such  Registrable
     Securities not later than the effective date of the Registration Statement;
     and

          i. in the  event of the  issuance  of any stop  order  suspending  the
     effectiveness  of a registration  statement,  or of any order suspending or
     preventing   the  use  of  any  related   prospectus  or   suspending   the
     qualification of any securities included in the registration  statement for
     sale in any jurisdiction,  use its commercially reasonable efforts promptly
     to obtain the withdrawal of such order.

     1.4  PURCHASER'S OBLIGATIONS.

          a. It shall be a condition precedent to the obligations of the Company
     to take any  action  pursuant  to  Section  1.2 that the  Purchasers  shall
     furnish to the Company such  information  regarding  such  Purchasers,  the
     Registrable  Securities  held by the Purchasers and the intended  method of
     disposition of such  securities,  as shall be required to timely effect the
     registration of its Registrable Securities.

          b. Purchasers  agree that upon receipt of written notice of a Blackout
     Period  from the  Chief  Executive  Officer  or  Chairman  of the  Board of
     Directors,  the Purchasers will not offer or sell Registrable Securities or
     engage in any transaction  involving or relating to Registrable  Securities
     during the time period set forth in such notice (such  Blackout  Period not
     to exceed 30 days) and will not  disclose the contents of such notice until
     the Blackout Period has ended. For purposes of this Section 1.4:  "BLACKOUT
     PERIOD": shall mean the occurrence of a material event which may be, in the
     good faith  opinion of the Board of  Directors,  materially  adverse to the
     Company's  financial  condition,  business or  operations  or may require a
     disclosure  which is not in the  Company's  best  interest  in light of the
     existence of (A) any material  acquisition or financing  activity involving
     the  Company,  including  a  proposed  public  offering  of debt or  equity
     securities,  (B) an undisclosed  material event,  the public  disclosure of
     which  would  have a  material  adverse  effect on the


                                       4


<PAGE>


     Company, and (C) a proposed material transaction  involving the Company and
     a material portion of its assets.

     1.5  DELAY OF REGISTRATION.  Purchasers shall not  have any right to obtain
or seek an injunction restraining or otherwise delaying any such registration as
the  result  of  any   controversy   that  might  arise  with   respect  to  the
interpretation or implementation of this Section 1.

     1.6  INDEMNIFICATION.  In the event any Registrable Securities are included
in a registration statement under Section 1:

          a. BY THE  COMPANY.  To the extent  permitted by law, the Company will
     indemnify and hold harmless the Purchasers,  any underwriter (as defined in
     the  Securities  Act) for the  Purchasers  and  each  person,  if any,  who
     controls a Purchaser or a Purchaser's underwriter within the meaning of the
     Securities Act or the Exchange Act, against any losses, claims, damages, or
     liabilities  (joint or several) to which they may become  subject under the
     Securities Act, the Exchange 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.  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. violation  or   alleged   violation  by  the  Company  of  the
          Securities Act, the Exchange Act, any federal or state  securities law
          or any rule or regulation  promulgated  under the Securities  Act, the
          Exchange Act or any federal or state securities law in connection with
          the offering covered by such registration statement;

          and the Company will reimburse  each  Purchaser or its  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 1.6.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 a  Purchaser,  his
          underwriter or any controlling person of a Purchaser.


                                       5


<PAGE>


          b. BY THE PURCHASERS.  To the extent  permitted by law, the Purchasers
     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, or
     any underwriter,  against any losses, claims, damages or liabilities (joint
     or several) to which the Company or any such director, officer, controlling
     person,  or underwriter  may become  subject under the Securities  Act, the
     Exchange 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 the  Purchasers  expressly  for  use in
     connection  with such  registration;  and the Purchasers will reimburse any
     legal or other  expenses  reasonably  incurred  by the  Company or any such
     director,  officer,  controlling  person, or underwriter in connection with
     investigating  or  defending  any such loss,  claim,  damage,  liability or
     action;  provided,  however, that the indemnity agreement contained in this
     subsection 1.6.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  Purchasers,  which  consent  shall  not  be
     unreasonably withheld; and provided further, that the total amounts payable
     in indemnity by the Purchasers  under this subsection  1.6.b. in respect of
     any Violation shall not exceed the net proceeds  received by the Purchasers
     in the registered offering out of which such Violation arises.

          c. NOTICE.  Promptly after receipt by an indemnified  party under this
     Section  1.6 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
     1.6, 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,  if  prejudicial to its ability to defend
     such action,  shall relieve such indemnifying party of any liability to the
     indemnified  party under this  Section  1.6, but the omission so to deliver
     written  notice  to the  indemnifying  party  will  not  relieve  it of any
     liability that it may have to any  indemnified  party  otherwise than under
     this Section 1.6.

          d. DEFECT  ELIMINATED IN FINAL  PROSPECTUS.  The  foregoing  indemnity
     agreements of the Company and the  Purchasers  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


                                       6


<PAGE>


     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 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. SURVIVAL.  The obligations of the Company and the Purchasers  under
     this  Section  1.6  shall  survive  the   completion  of  any  offering  of
     Registrable Securities in a registration statement.

          f. SETTLEMENT.  No indemnified party, in the defense of any such claim
     or litigation,  shall,  except with the consent of each indemnified  party,
     consent to entry of any  judgment or enter into any  settlement  which does
     not include as an unconditional  term thereof the giving by the claimant or
     plaintiff  to such  indemnified  party of a release  from all  liability in
     respect to such claim or litigation.

     1.7  ASSIGNMENT OF REGISTRATION  RIGHTS. The rights to cause the Company to
register  Registrable  Securities pursuant to Section 1.2 may not be assigned by
the Purchasers.

     1.8  HOLDBACK  AGREEMENTS.  Purchasers  shall not effect any public sale or
distribution  (including sales pursuant to Rule 144) of equity securities of the
Company,  or any securities  convertible into or exchangeable or exercisable for
equity  securities  of the  Company,  during  the  thirty  days prior to and the
120-day  period  beginning on the effective date of any  registration  or any in
which  Registrable  Securities are included (except as part of such underwritten
offering),  unless the  underwriters  managing the  registered  public  offering
otherwise agree.

     1.9  TERMINATION OF REGISTRATION RIGHTS.  Purchasers shall not  be entitled
to exercise  any right  provided in Section 1 hereof  subsequent  to the time at
which all  Registrable  Securities held by the Purchasers (and any Affiliates of
the Purchasers  with whom the Purchasers  must aggregate  their sales under Rule
144) can be sold in any three month period  without  registration  in compliance
with Rule 144 of the Act.


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