EXHIBIT 10.34

                      BRILLIANT DIGITAL ENTERTAINMENT, INC.
                    6355 Topanga Canyon Boulevard, Suite 120
                            Woodland Hills, CA 91367

                                December 31, 2003



To the Holders of Secured Convertible Promissory Notes
of Brilliant Digital Entertainment, Inc. Set
Forth on the Schedule 1 Attached Hereto

         Re:      Extension of Maturity Date

Gentlemen:

         Reference is made to those certain (i) Secured  Convertible  Promissory
Notes, dated May 23, 2001, issued by the Brilliant Digital Entertainment,  Inc.,
a  Delaware  corporation  (the  "COMPANY"),  in favor of each of  Harris  Toibb,
Europlay 1, LLC and  Preston  Ford,  Inc.,  each as  previously  amended by that
certain  Amendment No. One to Secured  Convertible  Promissory Note, dated as of
December 19, 2001,  and that certain  Amendment  No. Two to Secured  Convertible
Promissory  Note,  dated  as of  October  4,  2002  (as  amended,  each  a  "MAY
CONVERTIBLE  NOTE" and  collectively,  the "MAY  CONVERTIBLE  NOTES"),  and (ii)
Secured  Convertible  Promissory  Notes,  dated December 19, 2001, issued by the
Company  in favor of each of Harris  Toibb and  Chapel  Capital,  Ltd.,  each as
previously  amended by that  certain  Amendment  No. One to Secured  Convertible
Promissory Note, dated as of October 4, 2002 (each a "DECEMBER CONVERTIBLE NOTE"
and collectively, the "DECEMBER CONVERTIBLE NOTES").

         The  May  Convertible   Notes  and  the  December   Convertible   Notes
(collectively,  the "NOTES")  have a stated  maturity  date of December 31, 2003
(the "MATURITY  DATE") and the Company has notified each of you that it will not
be able to pay the amounts  outstanding  under the May Convertible Notes and the
December  Convertible Notes on the Maturity Date. The Company has requested that
each of you agree to an extension of the Maturity Date to March 1, 2004.

         This letter agreement (this "LETTER AGREEMENT") constitutes the binding
agreement of the Company and each of you (each,  a "HOLDER"),  pursuant to which
each  Holder  and the  Company  shall  amend the May  Convertible  Notes and the
December Convertible Notes on the terms and conditions set forth herein.

         For good  and  valuable  consideration,  receipt  of  which  is  hereby
acknowledged, the Company and each Holder agree as follows:

         1.       AMENDMENTS  TO  CONVERTIBLE   NOTES.   Concurrently  with  the
execution  and delivery of this  Agreement  by each Holder and the Company,  the
Company and such Holder shall execute and deliver,  to the extent  applicable to
such Holder, (i) that certain Amendment No. Three to


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Secured   Convertible   Promissory   Note,   dated  as  of  December  31,  2003,
substantially  in  the  form  attached  hereto  as  EXHIBIT  A  (the  "MAY  NOTE
AMENDMENT"),  which May Note Amendment  shall amend the Holder's  respective May
Convertible  Note to change the Maturity Date (as defined therein) from December
31, 2003 to March 1, 2004,  and (ii) that certain  Amendment  No. Two to Secured
Convertible Promissory Note, dated as of December 31, 2003, substantially in the
form  attached   hereto  as  EXHIBIT  B  (the  "DECEMBER  NOTE   AMENDMENT"  and
collectively with the May Note Amendment, the "NOTE AMENDMENTS"), which December
Note Amendment shall amend the Holder's respective December  Convertible Note to
change the Maturity Date (as defined therein) from December 31, 2003 to March 1,
2004.

         2.       EXTENSION FEE. In consideration of each Holder agreeing to the
extension of the  Maturity  Date of the Notes,  the Company  shall pay a $15,000
extension fee (the "EXTENSION FEE"). The Extension Fee shall be divided pro rata
among each of the Holders based upon the principal  amounts of their  respective
May  Convertible  Notes  and/or  December  Convertible  Notes,  as  shown on the
Schedule 1 attached  hereto,  and shall be due and payable on the Maturity  Date
(as extended  hereby) or on such earlier date when the principal  amounts of the
May Convertible Notes and/or December Convertible Notes are due and payable.

         3.       ACKNOWLEDGEMENT  AND  AFFIRMATION  OF THE NOTES,  THE PURCHASE
AGREEMENTS AND THE WARRANTS.  The Company,  and each of Brilliant Studios,  Inc.
and B3D, Inc (each a  "SUBSIDIARY"),  acknowledge and agree that (i) the Company
is  indebted  to each  Holder in the  principal  amount set forth on  Schedule 1
hereto, plus accrued and unpaid interest and other fees and costs,  including an
aggregate  agreed upon amount of legal fees and costs  through  March 1, 2004 of
$300,000,  (ii) the Notes, the Purchase Agreements (as such terms are defined in
the Notes) and the Warrants delivered in connection with the Notes, the Purchase
Agreements and the amendments thereof are legal,  valid and binding  obligations
of the  Company  and are and shall  continue,  after the  amendments  to the May
Convertible Notes and December  Convertible Notes  contemplated  herein, in full
force and effect and are hereby confirmed in all respects and the Company hereby
reaffirms  each and every  obligation  thereunder  and each of the  waivers  and
consents made  therein,  and (iii) the amounts set forth in clause (i) above and
the  obligation of the Company to repay the Notes and perform under the Purchase
Agreements  and the Warrants are absolute and  unconditional  and not subject to
any offset, defenses, claims,  counterclaims or disputes. The Company represents
and  warrants  that it has reread the Notes,  the  Purchase  Agreements  and the
Warrants and each of the obligations, waivers and consents set forth therein and
that its execution of this Letter Agreement and the agreements, acknowledgements
and  affirmations  made  herein  have been done  after  consultation  with legal
counsel and with full knowledge of its significance and consequences.

         4.       ACKNOWLEDGEMENT AND REAFFIRMATION OF SECURITY AGREEMENTS.  The
Company, and each Subsidiary, hereby acknowledge and agree that (a) the Security
and Pledge  Agreement,  dated as of May 23,  2001,  as amended,  executed by the
Company and each Subsidiary (the "May Security  Agreement") and (b) the Security
and Pledge Agreement, dated as of December 19, 2001, as amended, executed by the
Company and each Subsidiary (the "December  Security  Agreement") (i) are legal,
valid and binding  obligations  of the Company and each  Subsidiary  and that no
defenses to or claims against the  enforcement of the May Security  Agreement or
the  December  Security  Agreement  or the  exercise  by the Agent of its rights
thereunder  exist,  (ii) grant to the Agent (as such term is defined  therein) a
valid, enforceable and perfected security


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interest  in and lien  against  all of the  assets  of the  Company  and of each
Subsidiary  as of such dates and as of the date of this  Letter  Agreement,  and
(iii) are and shall continue,  after the amendments to the May Convertible Notes
and December Convertible Notes contemplated herein, in full force and effect and
are hereby confirmed in all respects and the Company and each Subsidiary  hereby
reaffirms  each and every  obligation  thereunder  and each of the  waivers  and
consents made therein. The Company and each Subsidiary agree that all references
in the May  Security  Agreement  to the  Convertible  Notes  shall mean and be a
reference to the Convertible Notes as amended by the May Note Amendments and the
Company and each Subsidiary  agree that all references in the December  Security
Agreement  to  the  Convertible  Notes  shall  mean  and be a  reference  to the
Convertible  Notes as amended by the December Note  Amendments.  The Company and
each  Subsidiary  represents  and  warrants  that it has reread the May Security
Agreement  and the  December  Security  Agreement  and each of the  obligations,
waivers and  consents  set forth  therein and that its  execution of this Letter
Agreement and the agreements, acknowledgements and affirmations made herein have
been done after  consultation  with legal counsel and with full knowledge of its
significance and consequences.

         5.       ACKNOWLEDGEMENT  AND  REAFFIRMATION  OF  GUARANTEES.  (a) Each
Subsidiary hereby acknowledges and agrees that (i) the Guaranty, dated as of May
23,  2001,  executed  by each  Subsidiary  (the  "May  Guaranty")  and  (ii) the
Guaranty,  dated as of  December  19,  2001,  executed by each  Subsidiary  (the
"December  Guaranty"),  (X) are legal,  valid and  binding  obligations  of each
Subsidiary and that no defenses to or claims against the  enforcement of the May
Guaranty or the  December  Guaranty  or the  exercise by the Agent of its rights
thereunder  exist,  and (Y) are and shall continue,  after the amendments to the
May Convertible  Notes and December  Convertible Notes  contemplated  herein, in
full  force  and  effect  and are  hereby  confirmed  in all  respects  and each
Subsidiary hereby reaffirms each and every obligation thereunder and each of the
waivers and consents made therein. Each Subsidiary agrees that all references in
the May Guaranty to the Convertible  Notes,  or words of similar  import,  shall
mean and be a  reference  to the  Convertible  Notes as  amended by the May Note
Amendments  and each  Subsidiary  agrees  that all  references  in the  December
Guaranty to the Convertible Notes, or words of similar import, shall mean and be
a reference to the Convertible Notes as amended by the December Note Amendments.
Any reference in the May Guaranty to Secured  Obligations  or  Convertible  Note
Loans shall include, to the extent applicable,  the Convertible Notes as amended
by the May Note Amendments and any reference in the December Guaranty to Secured
Obligations or Convertible Note Loans shall include,  to the extent  applicable,
the Convertible Notes as amended by the December Note Amendments.

         (b)      Each Subsidiary represents and warrants that it has reread the
May Guaranty and the December Guaranty and each of the obligations,  waivers and
consents set forth therein and that its affirmation of such obligations, waivers
and consents  herein have been made after  consultation  with legal  counsel and
with  full  knowledge  of  their   significance  and   consequences,   with  the
understanding that events giving rise to any defense or right waived or released
may diminish, destroy, or otherwise adversely affect rights that each Subsidiary
otherwise  may have against the Company,  the Holders,  the Agent or against any
collateral  pledged  to the  Holders,  and that,  under the  circumstances,  the
waivers,  releases and consents  herein given are reasonable and not contrary to
public policy or law.


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         (c)      Each  Subsidiary  acknowledges  that the amendments to the May
Convertible  Notes  and  the  December  Convertible  Notes  contemplated  herein
directly  benefit  each  Subsidiary  and that  such  amendments  provide  for an
extension of the  maturity  date of the May  Convertible  Notes and the December
Convertible Notes to March 1, 2004.

         6.       AUTHORIZATION.  The Company and each  Subsidiary  has the full
legal right,  power and  authority  to conduct its  business  and  affairs.  The
Company has the full legal right,  power and authority to enter into and perform
its  obligations  under  this  Letter  Agreement  and the Note  Amendments.  The
execution and delivery of this Letter Agreement and the Note Amendments, and the
performance  by the Company of its  obligations  hereunder and  thereunder,  are
within the corporate powers of the Company, and have been duly authorized by all
necessary corporate action properly taken. The officer(s)  executing this Letter
Agreement and the Note  Amendments  are duly  authorized to act on behalf of the
Company.  Each Subsidiary has the full legal right, power and authority to enter
into and perform its obligations under this Letter Agreement.  The execution and
delivery of this Letter Agreement, and the performance by each Subsidiary of its
obligations hereunder,  are within the corporate powers of each Subsidiary,  and
have been duly authorized by all necessary  corporate action properly taken. The
officer(s)  executing this Letter Agreement are duly authorized to act on behalf
of each Subsidiary.

         7.       PAYMENT OF  EXPENSES.  The  Company  hereby  agrees to pay all
out-of- pocket costs and expenses,  including attorney fees, paid or incurred by
Harris Toibb in connection  with the  negotiation,  preparation and execution of
this  Letter  Agreement,  which  the  Company  agrees is  $5,000  (the  "Expense
Payment").  The  Expense  Payment  shall  be  paid  to  Harris  Toibb  upon  the
effectiveness of this Letter Agreement.

         8.       EFFECTIVENESS. This effectiveness of this Letter Agreement and
the obligations of the parties hereunder shall be conditioned upon the execution
and delivery of this Letter Agreement by each of the parties set forth below.

         9.       MISCELLANEOUS.  This  Agreement and the exhibits and schedules
attached hereto  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 Letter Agreement
and any other document executed  contemporaneously  herewith with respect to the
obligations  described  herein,  the  provision of this Letter  Agreement  shall
control.  The parties agree that any disputes of  controversies  with respect to
this  Letter  Agreement  shall  be  governed  by the  choice  of law  and  other
provisions  contained in the Notes. This Letter Agreement and the Amendments may
be  executed  in any number of  counterparts  and by  different  parties to this
Letter Agreement or the Amendments 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 Letter Agreement and Amendment.

                                     Very truly yours,

                                     BRILLIANT DIGITAL ENTERTAINMENT, INC.,
                                     a Delaware corporation


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                                     By:        /S/ KEVIN BERMEISTER
                                              -----------------------------
                                              Kevin Bermeister
                                     Its:     Chief Executive Officer

ACCEPTED:

HARRIS TOIBB, as a Holder and as Agent

/S/ HARRIS TOIBB
--------------------------------------

EUROPLAY 1, LLC

By:      /s/ Mark Dyne
         -----------------------------
         Name: Mark Dyne
Its:     Manager

PRESTON FORD INC.

By:      /s/ David Wilson
         -----------------------------
         Name: David Wilson
Its:     _____________________________

CAPEL CAPITAL LTD.

By:      /s/ Nicholas Hannah
         -----------------------------
         Name: Nicholas Hannah
Its:     Director Marlborough Nominees Limited

AGREED:


BRILLIANT DIGITAL ENTERTAINMENT, INC.,
a Delaware corporation

By:        /S/ KEVIN BERMEISTER
         -----------------------------
         Kevin Bermeister
Its:     Chief Executive Officer



BRILLIANT STUDIOS, INC.

By:           /S/ KEVIN BERMEISTER
         -----------------------------
            Kevin Bermeister
Its:        Chief Executive Officer


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B3D, INC.

By:           /S/ KEVIN BERMEISTER
         -----------------------------
            Kevin Bermeister
Its:        Chief Executive Officer


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                                   SCHEDULE 1
                                  NOTE HOLDERS

                                                      PRINCIPAL       PRINCIPAL
                                                        AMOUNT        AMOUNT OF
                                                        OF MAY        DECEMBER
                                                     CONVERTIBLE     CONVERTIBLE
NAME OF NOTE HOLDER                                      NOTE           NOTE
-------------------                                  -----------     -----------
Harris Toibb .................................       $2,000,000       $  350,000
   6355 Topanga Canyon Blvd
   Suite 411
   Woodland Hills, CA 91367

Europlay 1, LLC ..............................          214,150             --
   15821 Ventura Blvd., Suite 525
   Encino, California 91436

Preston Ford, Inc. ...........................           50,000             --
   P.O. Box 98
   Preston, MD 21655

Capel Capital, Ltd. ..........................             --            400,000
                                                     ----------       ----------
   P.O. Box 212
   Hadsley House
   St. Peter Port
   Guernsey, Channel Islands

   Total .....................................       $2,264,150       $  750,000
                                                     ==========       ==========


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                                    EXHIBIT A
                                       TO
                                LETTER AGREEMENT

                             Dated December 31, 2003


                           FORM OF MAY NOTE AMENDMENT


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                                    EXHIBIT B
                                       TO
                                LETTER AGREEMENT

                             Dated December 31, 2003


                         FORM OF DECEMBER NOTE AMENDMENT


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