Document:

EXHIBIT
      B

    
      	 	
               

              FORM
                OF

              WARRANT

            	
            
	
              NO.
                ________

            	
              HANDHELD
                ENTERTAINMENT, INC. 

            	
              ______
                Shares

            
	 	 	 

    

    WARRANT
      TO PURCHASE COMMON STOCK

     

    VOID
      AFTER 5:00 P.M., NEW YORK

    TIME,
      ON THE EXPIRATION DATE

     

    THIS
      WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
      BEEN
      REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
      “ACT”), OR ANY STATE SECURITIES LAWS. THIS WARRANT AND SUCH SECURITIES MAY NOT
      BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED OR OTHERWISE TRANSFERRED
      IN
      THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO SUCH
      SECURITIES UNDER THE ACT OR AN AVAILABLE EXEMPTION FROM THE REGISTRATION
      REQUIREMENTS OF THE ACT. ANY SUCH TRANSFER MAY ALSO BE SUBJECT TO COMPLIANCE
      WITH APPLICABLE STATE SECURITIES LAWS.

     

    FOR
      VALUE
      RECEIVED, HANDHELD ENTERTAINMENT, INC., a Delaware corporation (the “Company”),
      hereby agrees to sell upon the terms and on the conditions hereinafter set
      forth, but no later than 5:00 p.m., New York Time, on the Expiration Date (as
      hereinafter defined), to [_____________________],
      or
      registered assigns (the “Holder”), under the terms as hereinafter set forth,
[___________________]
      fully
      paid and non-assessable shares of the Company’s Common Stock, par value $0.0001
      per share (the “Warrant Stock”), at a purchase price of $1.90 per
      share
      (the “Warrant Price”), pursuant to this warrant (this “Warrant”). The number of
      shares of Warrant Stock to be so issued and the Warrant Price are subject to
      adjustment in certain events as hereinafter set forth. The term “Common Stock”
shall mean, when used herein, unless the context otherwise requires, the stock
      and other securities and property at the time receivable upon the exercise
      of
      this Warrant.

     

    1. Exercise
      of Warrant.

     

    a. The
      Holder may exercise this Warrant according to its terms by surrendering this
      Warrant to the Company at the address set forth in Section 10, together with
      the
      form of exercise attached hereto duly executed by the Holder, accompanied by
      cash, certified check or bank draft in payment of the Warrant Price, in lawful
      money of the United States of America, for the number of shares of the Warrant
      Stock specified in such form of exercise, or as otherwise provided in this
      Warrant, prior to 5:00 p.m., New York Time, on June __, 2012 (the
      “Expiration Date”).

     

    b. This
      Warrant may be exercised in whole or in part so long as any exercise in part
      hereof would not involve the issuance of fractional shares of Warrant Stock.
      If
      exercised in part, the Company shall deliver to the Holder a new Warrant,
      identical in form, in the name of the Holder, evidencing the right to purchase
      the number of shares of Warrant Stock as to which this Warrant has not been
      exercised, which new Warrant shall be signed by the Chairman, Chief Executive
      Officer, President or any Vice President of the Company. The term Warrant as
      used herein shall include any subsequent Warrant issued as provided
      herein.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    c. No
      fractional shares or scrip representing fractional shares shall be issued upon
      the exercise of this Warrant. The Company shall pay cash in lieu of fractions
      with respect to the Warrants based upon the fair market value of such fractional
      shares of Common Stock (which shall be the closing price of such shares on
      the
      exchange or market on which the Common Stock is then traded) at the time of
      exercise of this Warrant.

     

    d. In
      the
      event of any exercise of the rights represented by this Warrant, a certificate
      or certificates for the Warrant Stock so purchased, registered in the name
      of
      the Holder, shall be delivered to the Holder within a reasonable time after
      such
      rights shall have been so exercised. Upon exercise of the rights represented
      by
      this Warrant, the Holder shall for all purposes be deemed to have become the
      holder of record of the shares of Warrant Stock issued upon such exercise
      immediately prior to the close of business on the date on which the Warrant
      was
      surrendered and payment of the Warrant Price and any applicable taxes was made,
      irrespective of the date of delivery of such certificate, except that, if the
      date of such surrender and payment is a date when the stock transfer books
      of
      the Company are closed, such person shall be deemed to have become the holder
      of
      such shares at the opening of business on the next succeeding date on which
      the
      stock transfer books are open. Except as provided in Section 4 hereof, the
      Company shall pay any and all documentary stamp or similar issue or transfer
      taxes payable in respect of the issue or delivery of shares of Common Stock
      on
      exercise of this Warrant; provided, however, that the Company shall not be
      required to pay any tax that may be payable in respect of any issuance and
      delivery of shares of Warrant Stock to any Person other than the Holder or
      with
      respect to any income tax due by the Holder with respect to any shares of
      Warrant Stock. “Person” shall mean any natural person, corporation, division of
      a corporation, partnership, limited liability company, trust, joint venture,
      association, company, estate, unincorporated organization or government or
      any
      agency or political subdivision thereof.

     

    2. Disposition
      of Warrant Stock and Warrant.

     

    a. The
      Holder hereby acknowledges that this Warrant and any Warrant Stock purchased
      pursuant hereto are, as of the date hereof, not registered: (i) under the Act
      on
      the ground that the issuance of this Warrant is exempt from registration under
      Section 4(2) of the Act as not involving any public offering or (ii) under
      any
      applicable state securities law because the issuance of this Warrant does not
      involve any public offering; and that the Company’s reliance on the Section 4(2)
      exemption of the Act and under applicable state securities laws is predicated
      in
      part on the representations hereby made to the Company by the Holder that it
      is
      acquiring this Warrant and will acquire the Warrant Stock for investment for
      its
      own account, with no present intention of dividing its participation with others
      or reselling or otherwise distributing the same, subject, nevertheless, to
      any
      requirement of law that the disposition of its property shall at all times
      be
      within its control.

     

    
      
        
        

      

      
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    The
      Holder hereby agrees that it will not sell or transfer all or any part of this
      Warrant and/or Warrant Stock, except pursuant to an effective registration
      statement under the Act, unless and until it shall first have given notice
      to
      the Company describing such sale or transfer and furnished to the Company either
      (i) an opinion of counsel for the Company, which the Company shall obtain at
      its
      own expense, to the effect that the proposed sale or transfer may be made
      without registration under the Act and without registration or qualification
      under any state law, or (ii) an interpretative letter from the Securities and
      Exchange Commission to the effect that no enforcement action will be recommended
      if the proposed sale or transfer is made without registration under the
      Act.

     

    b. If,
      at
      the time of issuance of the shares issuable upon exercise of this Warrant,
      no
      registration statement is in effect with respect to such shares under applicable
      provisions of the Act, the Company may at its election require that the Holder
      provide the Company with written reconfirmation of the Holder’s investment
      intent and that any stock certificate delivered to the Holder of a surrendered
      Warrant shall bear a legend reading substantially as follows:

     

    “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE
      SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
      OR
      HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT
      IN EFFECT WITH RESPECT TO SUCH SECURITIES UNDER THE ACT OR AN AVAILABLE
      EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT. ANY SUCH TRANSFER
      MAY
      ALSO BE SUBJECT TO COMPLIANCE WITH APPLICABLE STATE SECURITIES
      LAWS.”

     

    In
      addition, so long as the foregoing legend may remain on any stock certificate
      delivered to the Holder, the Company may maintain appropriate “stop transfer”
orders with respect to such certificates and the shares represented thereby
      on
      its books and records and with those to whom it may delegate registrar and
      transfer functions.

     

    3. Reservation
      of Shares.
      The
      Company hereby agrees that at all times there shall be reserved for issuance
      upon the exercise of this Warrant such number of shares of its Common Stock
      as
      shall be required for issuance upon exercise of this Warrant. The Company
      further agrees that all shares which may be issued upon the exercise of the
      rights represented by this Warrant will be duly authorized and will, upon
      issuance and against payment of the Warrant Price therefor, be validly issued,
      fully paid and non-assessable, free from all taxes, liens, charges and
      preemptive rights with respect to the issuance thereof, other than taxes, if
      any, in respect of any transfer occurring contemporaneously with such issuance
      and other than transfer restrictions imposed by federal and state securities
      laws.

     

    4. Exchange,
      Transfer or Assignment of Warrant.
      

     

    a. This
      Warrant is exchangeable, without expense, at the option of the Holder, upon
      presentation and surrender hereof to the Company or at the office of its stock
      transfer agent, if any, for other Warrants of different denominations, entitling
      the Holder or Holders thereof to purchase in the aggregate the same number
      of
      shares of Common Stock purchasable hereunder. Upon surrender of this Warrant
      to
      the Company or at the office of its stock transfer agent, if any, with an
      appropriate instrument of assignment duly executed and funds sufficient to
      pay
      any transfer tax, the Company shall, without charge, execute and deliver a
      new
      Warrant in the name of the assignee named in such instrument of assignment
      and
      this Warrant shall promptly be canceled. This Warrant may be divided or combined
      with other Warrants that carry the same rights upon presentation hereof at
      the
      office of the Company or at the office of its stock transfer agent, if any,
      together with a written notice specifying the names and denominations in which
      new Warrants are to be issued and signed by the Holder hereof.

     

    
      
        
        

      

      
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    b. Notwithstanding
      anything to the contrary contained herein, at such time as this Warrant shall
      be
      registered by the Company under the Act, Holder shall deliver this Warrant
      to
      the Company in exchange for a warrant certificate representing the registered
      warrant, which shall entitle Holder to purchase the same number of shares of
      Warrant Stock and at the same Warrant Price as exists at the time of the
      surrender. 

     

    5. Capital
      Adjustments.
      This
      Warrant is subject to the following further provisions:

     

    a. Recapitalization,
      Reclassification and Succession.
      If any
      recapitalization of the Company or reclassification of its Common Stock or
      any merger or consolidation of the Company into or with a Person, or the sale
      or
      transfer of all or substantially all of the Company’s assets or of any successor
      corporation’s assets to any Person (any such Person being included within the
      meaning of the term “successor corporation”) shall be effected, at any time
      while this Warrant remains outstanding and unexpired, then, as a condition
      of
      such recapitalization, reclassification, merger, consolidation, sale or
      transfer, lawful and adequate provision shall be made whereby the Holder of
      this
      Warrant thereafter shall have the right to receive upon the exercise hereof
      as
      provided in Section 1 and in lieu of the shares of Common Stock immediately
      theretofore issuable upon the exercise of this Warrant, such shares of capital
      stock, securities or other property as may be issued or payable with respect
      to
      or in exchange for a number of outstanding shares of Common Stock equal to
      the
      number of shares of Common Stock immediately theretofore issuable upon the
      exercise of this Warrant had such recapitalization, reclassification, merger,
      consolidation, sale or transfer not taken place, and in each such case, the
      terms of this Warrant shall be applicable to the shares of stock or other
      securities or property receivable upon the exercise of this Warrant after such
      consummation.

     

    b. Subdivision
      or Combination of Shares.
      If the
      Company at any time while this Warrant remains outstanding and unexpired shall
      subdivide or combine its Common Stock, the number of shares of Warrant Stock
      purchasable upon exercise of this Warrant and the Warrant Price shall be
      proportionately adjusted.

     

    c. Stock
      Dividends and Distributions.
      If the
      Company at any time while this Warrant is outstanding and unexpired shall issue
      or pay the holders of its Common Stock, or take a record of the holders of
      its
      Common Stock for the purpose of entitling them to receive, a dividend payable
      in, or other distribution of, Common Stock, then (i) the Warrant Price shall
      be
      adjusted in accordance with Section 5(e) and (ii) the number of shares of
      Warrant Stock purchasable upon exercise of this Warrant shall be adjusted to
      the
      number of shares of Common Stock that the Holder would have owned immediately
      following such action had this Warrant been exercised immediately prior
      thereto.

     

    
      
        
        

      

      
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    d. Stock
      and Rights Offering to Stockholders.
      If the
      Company shall at any time after the date of issuance of this Warrant distribute
      to all holders of its Common Stock any shares of capital stock of the Company
      (other than Common Stock) or evidences of its indebtedness or assets (excluding
      cash dividends or distributions paid from retained earnings or current year’s or
      prior year’s earnings of the Company) or rights or warrants to subscribe for or
      purchase any of its securities (excluding those referred to in the immediately
      preceding paragraph) (any of the foregoing being hereinafter in this paragraph
      called the “Securities”), then in each such case, the Company shall reserve
      shares or other units of such Securities for distribution to the Holder upon
      exercise of this Warrant so that, in addition to the shares of the Common Stock
      to which such Holder is entitled, such Holder will receive upon such exercise
      the amount and kind of such Securities which such Holder would have received
      if
      the Holder had, immediately prior to the record date for the distribution of
      the
      Securities, exercised this Warrant.

     

    e. Warrant
      Price Adjustment.
      Whenever the number of shares of Warrant Stock purchasable upon exercise of
      this
      Warrant is adjusted, as provided in Sections 5(a), 5(b), 5(c) or 5(d), the
      Warrant Price payable upon the exercise of this Warrant shall be adjusted to
      that price determined by multiplying the Warrant Price immediately prior to
      such
      adjustment by a fraction (i) the numerator of which shall be the number of
      shares of Warrant Stock purchasable upon exercise of this Warrant immediately
      prior to such adjustment, and (ii) the denominator of which shall be the number
      of shares of Warrant Stock purchasable upon exercise of this Warrant immediately
      thereafter.

     

    f. Price
      Protection.
      Except
      as provided below in this Section 5(f), if at any time from June 27, 2007 to
      December 27, 2007 the Company issues any shares of Common Stock, or securities
      exercisable for, or convertible into, shares of Common Stock (any “Convertible
      Securities”) at a price per share that is less than the Warrant Price (a “Cheap
      Price”) in effect at such time, then the Warrant Price shall be adjusted
      effective immediately upon such issuance to equal the Cheap Price. Upon any
      adjustment to the Warrant Price pursuant to this Section 5(f), the number of
      shares of Common Stock issuable upon exercise of the Warrants shall not be
      adjusted and shall remain the same immediately after such issuance as it was
      immediately prior to such issuance. Notwithstanding anything herein to the
      contrary, no adjustment to the Warrant Price will be made: (i) upon the issuance
      or exercise of any options, stock or other awards granted pursuant to a stock
      incentive plan or similar plan of the Company that was approved by the
      stockholders of the Company or otherwise issued as compensation or inducement
      to
      employment or engagement; (ii) upon exercise or conversion of any Convertible
      Securities that are outstanding as of the date hereof, or upon the issuance,
      conversion, or exercise of any Warrants.

     

    g. Certain
      Shares Excluded.
      The
      number of shares of Common Stock outstanding at any given time for purposes
      of
      the adjustments set forth in this Section 5 shall exclude any shares then
      directly or indirectly held in the treasury of the Company.

     

    h. Deferral
      and Cumulation of De Minimis Adjustments.
      The
      Company shall not be required to make any adjustment pursuant to this Section
      5
      if the amount of such adjustment would be less than one percent (1%) of the
      Warrant Price in effect immediately before the event that would otherwise have
      given rise to such adjustment. In such case, however, any adjustment that would
      otherwise have been required to be made shall be made at the time of and
      together with the next subsequent adjustment which, together with any adjustment
      or adjustments so carried forward, shall amount to not less than one percent
      (1%) of the Warrant Price in effect immediately before the event giving rise
      to
      such next subsequent adjustment.

     

    
      
        
        

      

      
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    i. Duration
      of Adjustment.
      Following each computation or readjustment as provided in this Section 5, the
      new adjusted Warrant Price and number of shares of Warrant Stock purchasable
      upon exercise of this Warrant shall remain in effect until a further computation
      or readjustment thereof is required.

     

    6. Notice
      to Holders.

     

    a. Notice
      of Record Date.
      In
      case:

     

    (i) 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 (other than a cash dividend
      payable out of earned surplus of the Company) 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;

     

    (ii) of
      any
      capital reorganization of the Company, any reclassification of the capital
      stock
      of the Company, any consolidation with or merger of the Company into another
      Person, or any conveyance of all or substantially all of the assets of the
      Company to another Person; or

     

    (iii) of
      any
      voluntary dissolution, liquidation or winding-up of the Company;

     

    then,
      and
      in each such case, the Company will mail or cause to be mailed to the Holder
      hereof at the time outstanding 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, and stating the amount and character of such dividend,
      distribution or right, or (ii) the date on which such reorganization,
      reclassification, consolidation, merger, conveyance, dissolution, liquidation
      or
      winding-up 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 at the
      time 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.
      Such
      notice shall be mailed at least twenty (20) days prior to the record date
      therein specified, or if no record date shall have been specified therein,
      at
      least twenty (20) days prior to the date of such action, provided, however,
      failure to provide any such notice shall not affect the validity of such
      transaction.

     

    b. Certificate
      of Adjustment.
      Whenever any adjustment shall be made pursuant to Section 5 hereof, the Company
      shall promptly make a certificate signed by its Chairman, Chief Executive
      Officer, President, Vice President, Chief Financial Officer or Treasurer,
      setting forth in reasonable detail the event requiring the adjustment, the
      amount of the adjustment, the method by which such adjustment was calculated
      and
      the Warrant Price and number of shares of Warrant Stock purchasable upon
      exercise of this Warrant after giving effect to such adjustment, and shall
      promptly cause copies of such certificate to be mailed (by first class mail,
      postage prepaid) to the Holder of this Warrant.

     

    
      
        
        

      

      
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    7. No
      Rights as Stockholder.
      A
      Warrant does not entitle the Holder thereof to any of the rights of a
      stockholder of the Company, including, without limitation, the right to receive
      dividends, or other distributions, exercise any preemptive rights to vote or
      to
      consent or to receive notice as stockholders in respect of the meetings of
      stockholders or the election of directors of the Company or any other
      matter.

     

    8. Maximum
      Exercise.
      The
      Holder shall not be entitled to exercise this Warrant on an exercise date,
      if
      and to the extent that the number of shares of Common Stock issuable upon the
      exercise of this Warrant on such exercise date, together with the number of
      shares of Common Stock beneficially owned by the Holder and its affiliates
      otherwise than on account of ownership of this Warrant on such exercise date,
      would result in beneficial ownership by the Holder and its affiliates of more
      than 4.99% (the “Held Maximum”) of the outstanding shares of Common Stock on
      such date. For the purposes of the immediately preceding sentence, beneficial
      ownership shall be determined in accordance with Section 13(d) of the
      Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder.
      Subject to the foregoing, the Holder shall not be limited to aggregate exercises
      which would result in the issuance of more than 4.99%. The Company shall waive
      the restriction described in this Section 8 with respect to any Holder to the
      extent requested by such Holder, if and only if the Company receives sixty-one
      (61) days prior written notice from such Holder requesting such waiver;
provided,
      however,
      that
      the Held Maximum shall in no event be increased to more than 9.99%.

     

    9. Loss,
      Theft, Destruction or Mutilation.
      Upon
      receipt by the Company of evidence satisfactory to it, in the exercise of its
      reasonable discretion, of the ownership and the loss, theft, destruction or
      mutilation of this Warrant and, in the case of loss, theft or destruction,
      of
      indemnity reasonably satisfactory to the Company (which may include a bond)
      and,
      in the case of mutilation, upon surrender and cancellation hereof, the Company
      will execute and deliver in lieu hereof, without expense to the Holder, a new
      Warrant of like tenor dated the date hereof.

     

    
      
        
        

      

      
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    10. Notices.
      Any
      notice required or contemplated by this Warrant shall be deemed to have been
      duly given if transmitted by registered or certified mail, return receipt
      requested, postage prepaid, or nationally recognized overnight delivery
      service,
      to
      the
      Company at its principal executive offices: 539 Bryant Street, Suite 403, San
      Francisco, CA 94107, Attention: Chief Executive Officer, or to the Holder at
      the
      name and address set forth in the Warrant Register maintained by the
      Company.

     

    11. Choice
      of Law.
      THIS
      WARRANT IS ISSUED UNDER AND SHALL FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED
      IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
      EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.

     

    12. Jurisdiction
      and Venue.
      The
      Company and the Holder, by its acceptance hereof, hereby agree that any dispute
      which may arise between them arising out of or in connection with this Warrant
      shall be adjudicated before a court located in New York City, New York, and
      they
      hereby submit to the exclusive jurisdiction of the federal and state courts
      of
      the State of New York located in New York City with respect to any action or
      legal proceeding commenced by any party, and irrevocably waive any objection
      they now or hereafter may have respecting the venue of any such action or
      proceeding brought in such a court or respecting the fact that such court is
      an
      inconvenient forum, relating to or arising out of this Warrant or any acts
      or
      omissions relating to the sale of the securities hereunder, and consent to
      the
      service of process in any such action or legal proceeding by means of registered
      or certified mail, return receipt requested, postage prepaid, in care of the
      address set forth herein or such other address as either party shall furnish
      in
      writing to the other.

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the Company has duly caused this Warrant to be signed on its
      behalf, in its corporate name and by its duly authorized officer, as of this
      __
      day of ____, 2007.

     

    
      	 	 	 
	 	
              HANDHELD
                ENTERTAINMENT, INC.

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name:

	 	Title:

    

     

    
      
        
        

      

      
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    FORM
      OF
      EXERCISE

     

    (to
      be
      executed by the registered holder hereof)

     

    The
      undersigned hereby exercises the right to purchase _________ shares of common
      stock, par value $0.0001 per share (“Common Stock”), of Handheld Entertainment,
      Inc. pursuant to the provisions of the within Warrant for a Warrant Price of
      $_____ per share and herewith makes payment of the Warrant Price in full of
      $__________.

     

    
      	 	 	 	 
	Dated:____________________
              , 20__ .	 	Signature:	 
	
            	 	
              
                

              

            
	 	 	Name:	 
	
            	 	Address:
              	
            
	 	 	
              
                

              

              
                

              

              

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ASSIGNMENT

     

    FOR
      VALUE
      RECEIVED _______________________________________ hereby sells, assigns and
      transfers unto _____________________________________ the foregoing Warrant
      and
      all rights evidenced thereby, and does irrevocably constitute and appoint
      _____________________________, attorney, to transfer said Warrant on the books
      of Handheld Entertainment, Inc.

     

    
      	 	 	 	 
	Dated:_______________	 	Signature: 	 
	
            	 	
              
                

              

            
	 	 	Address:	
            
	 	 	 	
              
 

    

     

    PARTIAL
      ASSIGNMENT

     

    FOR
      VALUE
      RECEIVED __________________________ hereby assigns and transfers unto
      _________________________ the right to purchase __________ shares of the Common
      Stock, $0.0001 par value per share, of Handheld Entertainment, Inc. covered
      by
      the foregoing Warrant, and a proportionate part of said Warrant and the rights
      evidenced thereby, and does irrevocably constitute and appoint
      __________________________, attorney, to transfer that part of said Warrant
      on
      the books of Handheld Entertainment, Inc.

     

    
      	 	 	 	 
	Dated:_______________	 	Signature:	 
	
            	 	 	
              

            
	
            	 	Address:AMENDMENT
      NO. 1 TO CREDIT AGREEMENT

     

    This
      AMENDMENT NO. 1 TO CREDIT AGREEMENT (this “Amendment”)
      dated
      as of June 29, 2007 is by and among WMS INDUSTRIES INC., a Delaware corporation
      (the “Borrower”),
      the
      other Loan Parties (as defined in the Credit Agreement referred to below) set
      forth on the signature page hereto, the financial institutions that are or
      may
      from time to time become parties hereto (together with their respective
      successors and assigns, the “Lenders”)
      and
      JPMORGAN CHASE BANK, N.A., as agent for the Lenders (in such capacity,
“Agent”).

     

    RECITALS:

     

    WHEREAS,
      Borrower, the other Loan Parties, the Agent and the Lenders are parties to
      a
      Credit Agreement dated as of May 1, 2006 (as from time to time amended,
      restated, supplemented or otherwise modified, the “Credit
      Agreement”),
      pursuant to which the Lenders have agreed to make loans and other extensions
      of
      credit to Borrower in accordance with the terms thereof;

     

    WHEREAS,
      Borrower and the other Loan Parties have requested that Agent and the Lenders
      make certain amendments to the Credit Agreement all as set forth more fully
      herein;

     

    WHEREAS,
      Agent and Lenders are willing to amend the Credit Agreement, subject to the
      terms and conditions of this Amendment; and

     

    WHEREAS,
      this Amendment shall constitute a Loan Document, these Recitals shall be
      construed as part of this Amendment and capitalized terms used but not otherwise
      defined in this Amendment shall have the meanings described to them in the
      Credit Agreement.

     

    NOW,
      THEREFORE, in consideration of the foregoing and the agreements, promises and
      covenants set forth below, and for other good and valuable consideration the
      receipt and sufficiency of which are hereby acknowledged, the parties hereto
      agree as follows:

     

    SECTION 1  Amendments
      to Credit Agreement.

     

    (a)  Section 5.01(e)
      (Financial Statements and Other Information).
      Section 5.01(e) of the Credit Agreement is hereby amended and restated to
      read as follows:

     

    “(e) promptly
      following approval by Borrower’s board of directors (but in any event not later
      than the first day of the second quarter of each fiscal year) a three year
      financial plan for Borrower and its Subsidiaries, on a consolidated basis,
      for
      such fiscal year and the next two fiscal years (including quarterly balance
      sheet and related statements of operations and cash flows) prepared in a manner
      consistent with the financial plan delivered by Borrower to the Lenders prior
      to
      the date hereof or otherwise in a manner reasonably satisfactory to the
      Administrative Agent; and”

     

    (b)  Section
      6.11(a) (Capital Expenditures).
      Section
      6.11(a) of the Credit Agreement is hereby amended and restated to read as
      follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    “(a) Capital
      Expenditures.
      No Loan
      Party will, nor will it permit any Subsidiary to, incur or make Capital
      Expenditures (excluding expenditures for gaming operations equipment) in an
      aggregate amount for the Borrower and its Subsidiaries in excess of (i)
      $30,000,000 for fiscal year 2006 and (ii) $35,000,000 any fiscal year
      thereafter.”

     

    (c)  Section
      6.11(b) (Gaming Operations Equipment Expenditures).
      Section
      6.11(b) of the Credit Agreement is hereby amended and restated to read as
      follows:

     

    “(b) Gaming
      Operations Equipment Expenditures.
      No Loan
      Party will, nor will it permit any Subsidiary to, incur or make expenditures
      for
      gaming operations equipment in an aggregate amount for the Borrower and its
      Subsidiaries in excess of $250,000,000 for the period from the date of this
      Agreement to and including the Maturity Date.”

     

    SECTION 2  Representations
      and Warranties.
      To
      induce the Agent and the Lenders to enter into this Amendment, Borrower and
      each
      Loan Party jointly and severally represent and warrant that:

     

    (a)  No
      Default.
      After
      giving effect to this Amendment, no Default or Event of Default shall have
      occurred and be continuing as of the date hereof;

     

    (b)  Representations
      and Warranties.
      As of
      the date hereof, the representations and warranties of Borrower and each Loan
      Party contained in the Loan Documents are true, accurate and complete in all
      material respects on and as of the date hereof to the same extent as though
      made
      on and as of such date except to the extent such representations and warranties
      specifically relate to an earlier date; and

     

    (c)  Organizational
      Authority.
      (i) The execution, delivery and performance by each of Borrower and each
      other Loan Party to this Amendment, are within such Person’s organizational
      powers and have been duly authorized by all necessary organizational action
      on
      the part of such Person, (ii) this Amendment represents the legal, valid
      and binding obligation of each of Borrower and each other Loan Party enforceable
      against such Person in accordance with its terms, subject to bankruptcy,
      insolvency and similar laws affecting creditors’ rights generally and subject to
      general principles of equity regardless of whether considered in a proceeding
      in
      equity or at law and (iii) none of the execution, delivery or performance
      by Borrower or any other Loan Party of this Amendment (1) violates any
      applicable law or regulation, or any decree of any governmental body,
      (2) violates, results in a default under any indenture, material agreement
      or other material instrument to which such Person is a party or by which such
      Person or any of its property is bound or gives rise to a right thereunder
      to
      require any payment to be made by such Person, (3) results in the creation
      or imposition of any Lien (other than Permitted Encumbrances) upon any assets
      or
      properties of any Loan Party, (4) violates the charter, bylaws or other
      organizational documents of such Person, or (5) requires the consent,
      approval or authorization of, or declaration or filing with, any other Person,
      except for those already duly obtained.

     

    
      
        
        

      

      
        2
          

        
          

        

      

      
        
        

      

    

    
      SECTION 3  Conditions
        Precedent.
        The
        effectiveness of this Amendment is subject to the following conditions
        precedent:

       

      (a)  No
        Default.
        After
        giving effect to this Amendment, no Default or Event of Default under the
        Credit
        Agreement, as amended hereby, shall have occurred and be continuing as of
        the
        date hereof.

       

      (b)  Warranties
        and Representations.
        After
        giving effect to this Amendment and the transactions contemplated hereby,
        the
        warranties and representations of each Loan Party contained in the Loan
        Documents shall be true and correct in all material respects as of the effective
        date hereof, with the same effect as though made on such date, except to
        the
        extent that such warranties and representations expressly relate to an earlier
        date, and all of such representations and warranties (except those relating
        to
        an earlier date) are hereby remade by each Loan Party as of the date
        hereof.

       

      (c)  Executed
        Amendment.
        Agent
        shall have received four (4) original executed copies of this
        Amendment.

       

      (d)  Payment
        of Fees and Expenses.
        Payment
        by the Borrower of the all accrued and unpaid fees, costs and expenses referred
        to in Section 5(c) below.

    

     

    SECTION 4  Reference
      to and Effect on Loan Documents.

     

    (a)  Ratification.
      Except
      as specifically amended above, the Credit Agreement and the other Loan Documents
      shall remain in full force and effect. Notwithstanding anything contained
      herein, the terms of this Amendment are not intended to and do not effect a
      novation of the Credit Agreement or any other Loan Document. Borrower and each
      other Loan Party hereby ratifies and reaffirms each of the terms and conditions
      of the Loan Documents to which it is a party and all of its obligations
      thereunder.

     

    (b)  No
      Waiver.
      The
      execution, delivery and effectiveness of this Amendment shall not operate as
      a
      waiver of any right, power or remedy of the Lenders or the Agent under the
      Credit Agreement or any of the other Loan Documents.

     

    (c)  References.
      Upon
      the effectiveness of this Amendment each reference in (a) the Credit
      Agreement to “this Agreement,” “hereunder,” “hereof,” or words of similar import
      and (b) any other Loan Document to “the Credit Agreement” or words of
      similar import shall, in each case and except as otherwise specifically stated
      therein, mean and be a reference to the Credit Agreement as amended
      hereby.

     

    SECTION 5  Miscellaneous.

     

    (a)  Successors
      and Assigns.
      This
      Amendment shall be binding on and shall inure to the benefit of the Loan
      Parties, Agent, the Lenders and their respective successors and
      assigns.

     

    
      
        
        

      

      
        3
          

        
          

        

      

      
        
        

      

    

    
       (b)  Entire
        Agreement.
        The
        Amendment constitutes the entire agreement of the parties hereto with respect
        to
        the subject matter hereof and supercedes all other understandings, oral or
        written, with respect to the subject matter thereof. 

       

    

     (c)  Fees
      and Expenses.
      In
      accordance with Section 9.03 of the Credit Agreement, Borrower agrees to
      pay all fees, costs and expenses, including, but not limited to, reasonable
      attorneys’ fees and expenses, incurred by the Agent in connection with the
      preparation, execution and delivery of this Amendment.

     

    (d)  Headings.
      Section headings in this Amendment are included herein for convenience of
      reference only and shall not constitute a part of this Amendment for any other
      purpose.

     

    (e)  Severability.
      Wherever possible, each provision of this Amendment shall be interpreted in
      such
      a manner as to be effective and valid under applicable law, but if any provision
      of this Amendment shall be prohibited by or invalid under applicable 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 Amendment.

     

    (f)  Counterparts.
      This
      Amendment may be executed in any number of separate original counterparts (or
      telecopied counterparts with original execution copy to follow) and by the
      different parties on separate counterparts, each of which shall be deemed to
      be
      an original, but all of such counterparts shall together constitute one
      agreement. Delivery of an executed counterpart of a signature age to this
      Amendment by telecopy shall be effective as delivery of a manually executed
      counterpart of this Amendment.

     

    [SIGNATURE
      PAGES FOLLOW]

     

    

    
      
        
           

        

        
        

      

      
        4
          

        
          

        

      

      
        
        

        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      Loan Parties, the Lenders, and the Agent have executed this Amendment as of
      the
      date first above written.

     

    
      	 	 	 
	 	
              BORROWER:

              WMS
                INDUSTRIES INC.

            
	 
 	 
 	 
 
	 	By:  	/s/ Scott
              D.
              Schweinfurth 
	 	
              

              Scott
                D. Schweinfurth

              Executive
                Vice President,

              Chief
                Financial Officer and 

              Treasurer

            

      	 	 	 
	 	
              OTHER
                LOAN PARTIES:

              WMS
                GAMING INC.

            
	 
 	 
 	 
 
	 	By:  	/s/ Scott
              D.
              Schweinfurth
	 	
              

              Scott
                D. Schweinfurth

              Executive
                Vice President,

              Chief
                Financial Officer and 

              Treasurer

            

      	 	 	 
	 	WILLIAMS
              ELECTRONICS GAMES, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Scott
              D.
              Schweinfurth
	 	
              

              Scott
                D. Schweinfurth

              Executive
                Vice President,

              Chief
                Financial Officer and 

              Treasurer

            

      	 	 	 
	 	WMS
              FINANCE INC.
	 
 	 
 	 
 
	 	By:  	/s/ Scott
              D.
              Schweinfurth
	 	
              

              Scott
                D. Schweinfurth

              Executive
                Vice President,

              Chief
                Financial Officer and 

              Treasurer

            

      	 	 	 
	 	JPMORGAN
              CHASE BANK, N.A.,
              as a Lender and as Administrative Agent
	 
 	 
 	 
 
	 	By:  	/s/ Joseph
              A.
              Luna
	 	
              

              Joseph
                A. Luna

              Vice
                President

            

    

    

    
      
        
           

           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    	 	 	 
	 	LASALLE BANK NATIONAL
            ASSOCIATION
	 
 	 
 	 
 
	 	By:  	/s/ Joseph
            G. Jacob
	 	
            

            Joseph
              G. Jacob

            Assistant
              Vice President

          

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    	 	 	 
	 	BANK
            OF
            AMERICA, N.A.
	 
 	 
 	 
 
	 	By:  	/s/ Justin
            Lien
	 	
            

            Justin
              Lien

            Vice
              President

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