EXHIBIT 10.4
$__________ June 11, 2003
Woodland Hills, California
BRILLIANT DIGITAL ENTERTAINMENT, INC.
PROMISSORY NOTE
FOR VALUE RECEIVED, Brilliant Digital Entertainment, Inc., a Delaware
corporation ("BORROWER"), located at 0000 Xxxxxxx Xxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxxx Xxxxx, XX 00000, hereby unconditionally promises to pay to the order of
_____________ ("LENDER"), and his successors, endorsees, transferees and assigns
(together with Lender, "HOLDER"), the principal sum of ___________________, and
any unpaid accrued interest thereon, as set forth below. The principal amount of
this Note, and any unpaid interest accrued thereon, shall be due and payable in
full on August 10, 2003 (the "MATURITY DATE") in the manner provided for in
SECTION 2 below.
1. INTEREST. Xxxxxxxx agrees to pay simple interest on the unpaid
principal amount hereof. Interest shall accrue from the date hereof until this
Note is paid in full at a rate equal to ten percent (10%) per annum. Interest
shall be computed on the basis of a 360-day year of twelve 30-day months and the
actual number of days elapsed in the period during which it accrues. In no event
shall the interest paid hereunder, together with any other consideration paid or
agreed to be paid for the use, forbearance or detention of money advanced
hereunder, exceed the highest lawful rate permissible under any law which a
court of competent jurisdiction may deem applicable hereto. In the event that
such a court determines that the Holder has charged, received or contracted to
receive interest hereunder in excess of the highest lawful rate permissible, the
interest payable hereunder shall automatically be reduced to the maximum rate
permitted by law, and the Holder shall promptly refund to Borrower any interest
received by it in excess of the maximum lawful rate (with such reduction and
refund being made first with respect to cash interest amounts paid or payable
under this Note, and thereafter with respect to any other consideration received
by the Holder). It is the intent hereof that Borrower not pay or contract to
pay, and that the Holder not receive or contract to receive, directly or
indirectly in any manner whatsoever, interest in excess of that which may
lawfully be paid by Borrower under applicable law.
2. PAYMENT. All payments of principal, interest and all other
amounts payable in respect of this Note shall be made by wire transfer in lawful
money of the United States of America in immediately available Federal funds, to
an account furnished to Borrower in writing for that purpose at least two (2)
business days prior to the Maturity Date. Holder shall, before disposing of this
Note or any part hereof, make a notation hereon of all principal and interest
payments previously made hereunder and of the date to which interest hereon has
been paid; PROVIDED, HOWEVER, that the failure to correctly make a notation of
any payment made on this Note shall not limit or otherwise affect the obligation
of Borrower under this Note with respect to the loan evidenced hereby or
payments of principal or interest on this Note.
3. PREPAYMENT. Borrower may not prepay this Note, in whole or in
part, without the prior written consent of the Holder. Any partial prepayment,
to the extent permitted by Xxxxxx, shall not affect the obligation to continue
to pay in full the amount of the payments hereunder until the entire unpaid
principal balance hereof and all accrued interest hereon has been paid in full.
Any such prepayment shall be applied first to interest and then to principal.
4. TRANSFERS.
(a) This Note and all rights hereunder are transferable,
in whole or in part, upon surrender of the Note with a properly executed
assignment, in the form prescribed by Xxxxxxxx, at the principal office of
Xxxxxxxx; PROVIDED, HOWEVER, that, except for transfers by Holder of all or any
portion of this Note to any parent, subsidiary or affiliate of Holder or to any
officer, director, partner or member of any such parent, subsidiary or
affiliate, this Note may not be transferred in whole or in part without the
prior written consent of Xxxxxxxx.
(b) Until any transfer of this Note is made in the Note
register, Borrower may treat the registered Holder as the absolute owner hereof
for all purposes; PROVIDED, HOWEVER, that if and when this Note is properly
assigned in blank, Borrower may (but shall not be required to) treat the bearer
hereof as the absolute owner hereof for all purposes, notwithstanding any notice
to the contrary.
(c) Borrower will maintain a register containing the
names and addresses of the registered Holders of this Note. Any registered
Holder may change such registered Holder's address as shown on the Note register
by written notice to Borrower requesting such change.
5. TRANSFER BY XXXXXXXX. Borrower may not assign, and no person
may assume, any of the obligations of Borrower under this Note without the prior
written consent of Holder, which consent may be granted or withheld in Holder's
sole discretion, and any attempt to do so without such consent shall be void.
6. EVENTS OF DEFAULT; REMEDIES.
(a) EVENTS OF DEFAULT. The occurrence of any of the
following shall constitute an Event of Default hereunder:
(i) Default in the payment of the principal of
or interest on the indebtedness evidenced by this Note in accordance
with the terms of this Note;
(ii) A default or event of default shall occur in
respect of any of the other indebtedness of Borrower that exceeds, in
the aggregate, $75,000 and, if subject to a cure right, such default or
event of default shall not be cured within the applicable cure period;
(iii) Borrower shall be liquidated, dissolved,
partitioned or terminated, or the charter thereof shall expire or be
revoked; or
(iv) Borrower (i) shall generally not pay or
shall be unable to pay its debts as such debts become due, or (ii)
shall make an assignment for the benefit of
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creditors or petition or apply to any tribunal for the appointment of a
custodian, receiver or trustee for it or a substantial part of its
assets, or (iii) shall commence any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or
hereafter in effect, or (iv) shall have had any such petition or
application filed or any such proceeding commenced against it that is
not dismissed within thirty (30) days, or (v) shall indicate, by any
act or intentional and purposeful omission, its consent to, approval of
or acquiescence in any such petition, application, proceeding or order
for relief or the appointment of a custodian, receiver or trustee for
it or a substantial part of its assets, or (vi) shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for
a period of thirty (30) days or more.
With respect to any Event of Default described above in
SUBSECTION 6(A)(V) that is capable of being cured and that does not already
provide its own cure procedure (a "CURABLE DEFAULT"), the occurrence of such
Curable Default shall not constitute an Event of Default hereunder if Borrower
provides notice to Holder of such Curable Default in accordance with the
provisions hereof within three (3) business days of Borrower learning of such
default and such Curable Default is fully cured and/or corrected within fifteen
(15) days of Borrower's notice thereof to Holder.
(b) ACCELERATION OF MATURITY; REMEDIES. Upon the
occurrence of any Event of Default described in SUBSECTION 6(A)(IV), the
indebtedness evidenced by this Note shall be immediately due and payable in
full; and upon the occurrence of any other Event of Default described above,
Holder at any time thereafter may at its option accelerate the maturity of the
indebtedness evidenced by this Note without notice of any kind. Upon the
occurrence of any such Event of Default and the acceleration of the maturity of
the indebtedness evidenced by the Note:
(i) Holder shall be immediately entitled to
exercise any and all rights and remedies possessed by Holder pursuant
to the terms of this Note; and
(ii) Holder shall have any and all other rights
and remedies that Holder may now or hereafter possess at law, in equity
or by statute.
(c) REMEDIES CUMULATIVE; NO WAIVER. No right, power or
remedy conferred upon or reserved to Holder by this Note is intended to be
exclusive of any other right, power or remedy, but each and every such right,
power and remedy shall be cumulative and concurrent and shall be in addition to
any other right, power and remedy given hereunder or now or hereafter existing
at law, in equity or by statute. No delay or omission by Holder to exercise any
right, power or remedy accruing upon the occurrence of any Event of Default
shall exhaust or impair any such right, power or remedy or shall be construed to
be a waiver of any such Event of Default or an acquiescence therein, and every
right, power and remedy given by this Note to Holder may be exercised from time
to time and as often as may be deemed expedient by Holder.
7. NOTICES. Any notice required by the provisions of this Note to
be given to Holder shall be delivered personally, telecopied, or sent by
certified mail or overnight via nationally recognized courier service (such as
Federal Express), addressed to Holder at the address
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appearing on the books of Borrower. 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.
8. GOVERNING LAW. THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF CALIFORNIA,
WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THEREOF.
9. WAIVER OF JURY TRIAL. Xxxxxxxx and Xxxxxx each waive all right
to trial by jury in any action or proceeding to enforce or defend any rights or
remedies hereunder or relating hereto.
10. WAIVERS. Borrower waives presentment for payment, demand,
notice of demand, notice of nonpayment or dishonor, protest and notice of
protest of this Note, and all other notices in connection with the delivery,
acceptance, performance, default or enforcement of the payment of this Note, and
Borrower agrees that its liability shall be unconditional, without regard to the
liability of any other party, and shall not be affected in any manner by any
indulgence, extension of time, renewal, waiver or modification granted or
consented to by Holder.
11. ATTORNEYS FEES. Xxxxxxxx promises to pay all reasonable costs
and expenses, including attorneys' fees, incurred in the collection and
enforcement of this Note, including, without limitation, enforcement before any
court and including all appellate proceedings.
12. SEVERABILITY. Wherever possible each provision of this Note
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Note shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Note and shall be interpreted so
as to be effective and valid.
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IN WITNESS WHEREOF, Xxxxxxxx has executed and delivered this Note as of
the day and year and at the place first written above.
BRILLIANT DIGITAL ENTERTAINMENT, INC.,
a Delaware corporation
By:
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Xxxxx Xxxx
Title: Chief Financial Officer
SIGNATURE PAGE TO
PROMISSORY NOTE
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