Document:

Exhibit 10.1

PLACEMENT AGENT AGREEMENT

 

	
 

	
Dated January 25, 2006

Newbridge Securities Corporation

1451 West Cypress Creek Road, Suite 204

Fort Lauderdale, FL 33309

 

Gentlemen:

 

	
1.

	
Offering.

A.           Handheld Entertainment Inc. Corporation, a California corporation (the “Company”), hereby engages Newbridge Securities Corporation (“Newbridge”) as “Placement Agent” to act as its non-exclusive placement agent in connection with the issuance and sale of securities as described in the Hand Held Private Placement Memorandum dated January 24, 2006 (the “Offering”) of up to 100 Units, at $50,000 per Unit, payable upon subscription (“Maximum Offering”)/$ 5,000,000 each Unit consisting of 25,000 shares of the Company's common stock par value $0.000/1 per share. The Placement Agent is hereby authorized to engage, at its option, the services of other broker-dealers who are members of the National Association of Securities Dealers, Inc. (“NASD”)
to assist it in soliciting subscribers and to remit to such broker-dealers the commissions payable to the Placement Agent hereunder as it shall determine.

The Offering is subject to (i) the terms and conditions set forth in the Company’s Confidential Private Offering Memorandum dated January 24, 2006 (such memorandum with all amendments and exhibits thereto (the “Memorandum”)). The Offering is also subject to a subscription agreement and questionnaire, both of which are attached as Exhibits to the Memorandum (collectively, the “Subscription Agreements”) (The Subscription Agreement and the Memorandum are collectively referred to as the “Offering Documents”). The Company shall issue and sell to Placement Agent or its designee(s), for nominal consideration, three-year Warrants equal to 5% of the shares sold by Newbridge in the Offering at an exercise price of $2.00 per share, and an additional amount of warrants equal to 5% of the shares sold by Newbridge in the Offering at an exercise price of$4.00 per share (the
“Placement Agent Warrants”).

The Common Stock of the Company, the Placement Agent Warrants, and the Common Stock included in the Placement Agent Warrants (“Placement Agent Shares”) are hereinafter sometimes collectively referred to as the “Securities.” 

The Common Stock will be offered to investors (“Purchasers”) without registration under the Securities Act of 1933, as amended (the “Securities Act”). Purchasers of the Common Stock will be granted certain registration rights with respect to the Common Stock as more fully set forth in the Registration Right Agreements attached to the Memorandum. The 

 

 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

 

 

Placement Agent will be granted similar registration rights with respect to the Placement Agent Warrants on terms no less favorable than those offered to any Purchaser.

B.           The Common Stock will be offered by the Placement Agent on a “best efforts” basis. The Company will issue the certificates representing the Common Stock at one or more closings (the “Closing”) after subscriptions have been received and accepted by the Company and when funds from investors have cleared the banking system in the normal course of business. 

C.           The Offering shall terminate on the earliest of (i) February 10, 2006 or (ii) unless the Company extends the Offering at its sole discretion without notice to the investors (the “Offering Period”). With respect to any subscriptions that are received by the Placement Agent or accepted by the Company subsequent to the Offering Period, all funds received by investors will be returned thereto, without interest thereon or deduction therefrom. The Company and Placement Agent reserve the right to reject any and all subscription agreements in excess of the Minimum Offering.

	
2.

	
Information.

A.           The Common Stock shall have the terms set forth in and shall be offered by the Company by means of the Offering Documents. Payment for the Common Stock shall be made by check, money order or wire transfer as more fully described in the Subscription Agreement. The minimum purchase by any Purchaser shall be $50,000 per Units sold in the Offering, unless subscriptions for lesser amounts are accepted at the discretion of the Company and the Placement Agent. The Placement Agent and the Company agree that the Common Stock will be offered solely to “accredited investors” within the meaning of Rule 501 of Regulation D (“Accredited Investors”) promulgated by the Securities and Exchange Commission (the “Commission”) under the Securities Act and Rule 506 of Regulation D under
the Securities Act. 

B.           All funds received from subscriptions arranged will be promptly transmitted to the escrow account maintained at Bank of America and designated as “for the benefit of Olshan Grundman From Rosenzweg & Wolosky LLP.” In the event that a Closing occurs, the funds received in respect of the Unit closed on will be forwarded to the Company, against delivery of the appropriate amount of the Common Stock, net of (i) the placement agent commission equal to cash in an amount equal to six percent (6%) of the gross proceeds of the Units sold by Newbridge in the Offering, and (ii) the Placement Agent Warrants. 

C.           The Company and Placement Agent reserve the right to reject any subscriber, in whole or in part, in their sole reasonable discretion. Funds received by the Company from any subscriber whose subscription is rejected will be returned to such subscriber, without deduction therefrom or interest thereon, but no sooner than such funds have cleared the banking system in the normal course of business.

	
3.

	
Representations, Warranties and Covenants of Placement Agent.

The Placement Agent represents, warrants and covenants as follows:

 

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(i)           It has the necessary power to enter into this Agreement and to consummate the transactions contemplated hereby.

(ii)          The execution and delivery by the Placement Agent of this Agreement and the consummation of the transactions contemplated herein will not result in any violation of, or be in conflict with, or constitute a default under, any agreement or instrument to which a Placement Agent is a party or by which a Placement Agent or its properties are bound, or any judgment, decree, order or, to a Placement Agent’s knowledge, any statute, rule or regulation applicable to a Placement Agent. This Agreement constitutes the legal, valid and binding obligation of the Placement Agent, enforceable against the Placement Agent in accordance with its terms, except to the extent that (a) the enforceability hereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws from time to time in
effect and affecting the rights of creditors generally, (b) the enforceability hereof is subject to general principles of equity, or (c) the indemnification provisions hereof may be held to be violative of public policy.

(iii)        The Placement Agent will deliver to each Purchaser, prior to any submission by such person of a written offer relating to the purchase of the Common Stock, a copy of the Offering Documents, as they may have been most recently amended or supplemented by the Company.

(iv)         Upon receipt of an executed Subscription Agreement, the Placement Agent will promptly forward copies of the subscription documents to the Company.

(v)          The Placement Agent will not deliver the Offering Documents to any person they do not reasonably believe to be an Accredited Investor or to any person in a state where it does not reasonably believe that the Offering is exempt from the applicable state “Blue Sky” laws.

(vi)         The Placement Agent will not intentionally take any action which it reasonably believes would cause the Offering to violate the provisions of the Securities Act, the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or the respective rules and regulations promulgated thereunder (the “Rules and Regulations”).

(vii)       The Placement Agent shall have no obligation to insure that (a) any check, note, draft or other means of payment for the Units will be honored, paid or enforceable against the subscriber in accordance with its terms; or (b) subject to the performance of the Placement Agent’s obligations and the accuracy of the Placement Agent’s representations and warranties hereunder, (i) the Offering is exempt from the registration requirements of the Securities Act or any applicable state “Blue Sky” law; or (ii) any prospective Purchaser is an Accredited Investor; provided that Placement Agent will not deliver the Offering Documents to any person they do not reasonably believe to be an Accredited Investor.

(viii)      The Placement Agent is a member in good standing of the NASD and is a broker-dealer registered as such under the Exchange Act and under the securities laws of the states in which the Securities will be offered or sold by the Placement Agent, unless an exemption for such state registration is available to the Placement Agent. The Placement Agent 

 

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is in compliance with all material rules and regulations applicable to the Placement Agent generally and to the Placement Agent’s participation in the Offering.

	
4.

	
Representations and Warranties of the Company.

The Company represents and warrants as follows:

(i)           The execution, delivery and performance of each of this Agreement, the Subscription Agreements and the Registration Rights Agreement (as defined below) has been duly and validly authorized by the Company and is, or with respect to the Subscription Agreements, will be, a valid and binding obligation of the Company, enforceable in accordance with its respective terms, except to the extent that (a) the enforceability hereof or thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws from time to time in effect and affecting the rights of creditors generally, (b) the enforceability hereof or thereof is subject to general principles of equity; or (c) the indemnification provisions hereof or thereof may be held to be violative of public policy. 

(ii)          The issuance, sale and delivery by the Company of the Securities have been or will be prior to the Closing duly authorized by all requisite corporate action of the Company. The Placement Agent Shares will, prior to the Closing, be duly reserved for issuance upon exercise of the Placement Agent Warrants.

(iii)        All issued and outstanding securities of the Company have been duly authorized and validly issued, fully paid and non-assessable and were issued in compliance with all applicable federal and state securities laws; the holders thereof have no rights of rescission or preemptive rights with respect thereto and are not subject to personal liability solely by reason of being security holders; and none of such securities was issued in violation of the preemptive rights of any holders of any security of the Company. 

(iv)         The Common Stock and Placement Agent Shares, when issued in accordance with the terms of the Subscription Agreement and the Placement Agent Warrants, as the case may be, will be validly issued, fully-paid and non-assessable. The holders of the Securities will not be subject to personal liability under the Company’s Certificate of Incorporation or Bylaws or, any state law, solely by reason of being such holders; the Securities are not and will not be subject to the preemptive rights of any holder of any security of the Company.

(v)          The Company has good and marketable title to, or valid and enforceable leasehold estates in, all items of real and personal property necessary to conduct its business (including, without limitation, any real or personal property stated in the Offering Documents to be owned or leased by the Company), free and clear of all liens, encumbrances, claims, security interests and defects of any nature whatsoever, other than those set forth in the Offering Documents and liens for taxes not yet due and payable. All of the leases and subleases under which the Company is the lessor or sublessor of properties or assets or under which the Company holds properties or assets as lessee or sublessee are in full force and effect, and the Company is not in default with respect to any of the terms or provisions of any of
such leases or subleases, and no claim has been asserted by anyone adverse to rights of the Company as lessor, sublessor, 

 

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lessee or sublessee under any of the leases or subleases mentioned above, or affecting or questioning the right of the Company to continued possession of the leased or subleased premises or assets under any such lease or sublease.

(vi)         Except as set forth in the Offering Documents, there is no litigation or governmental proceeding pending or, to the best of the Company’s knowledge, threatened against, or involving the Company or its properties or business. The Company is not a party to any order, writ, injunction, judgment or decree of any court.

(vii)       The Company has been duly organized and is validly existing as a corporation in good standing under the State of California. The Company does not own or control, directly or indirectly, an interest in any other corporation, partnership, trust, joint venture or other business entity. The Company has no subsidiaries. The Company has all requisite corporate power and authority, and all material and necessary authorizations, approvals, orders, licenses, certificates and permits of and from all governmental regulatory officials and bodies (domestic and foreign) to conduct its businesses (and proposed business), and the Company is doing business in compliance with all such authorizations, approvals, orders, licenses, certificates and permits and all foreign, federal, state and local laws, rules and regulations concerning
the business in which it is engaged, except where failure to so comply would not have a material adverse effect on the Company (“MAE”). The Company has all corporate power and authority to enter into this Agreement, the Subscription Agreements, the Registration Rights Agreement, the Placement Agent Warrants, and Escrow Agreement and to carry out the provisions and conditions hereof and thereof and to issue, sell and deliver the Securities. No consents, authorizations, approvals, or orders of, or registration, qualification, declaration or filing with, any federal, state or local governmental authority on the part of the Company is required in connection herewith and therewith or to issue, sell and deliver the Securities, other than registration or qualification, or taking such action to secure exemption from such registration or qualification of the Securities under applicable state, federal or foreign securities laws, which actions have been taken or will be taken prior to the Closing.

(viii)      The Company is not in breach of, or in default under, any term or provision of any indenture, mortgage, deed of trust, lease, note, loan or credit agreement or any other agreement or instrument evidencing an obligation for borrowed money, or any other agreement or instrument to which it is a party or by which it or any of its properties may be bound. The Company is not in violation of any provision of its charter or Bylaws or in violation of any franchise, license, permit, judgment, decree or order, or in violation of any statute, rule or regulation, except for the violation of statutes, rules or regulations would not have a MAE. Neither the execution and delivery of this Agreement and the Subscription Agreements, nor the issuance and sale or delivery of the Securities, nor the consummation of any of the transactions
contemplated herein or in the Subscription Agreements, nor the compliance by the Company with the terms and provisions hereof or thereof, has conflicted with or will conflict with, or has resulted in or will result in a breach of, any of the terms and provisions of, or has constituted or will constitute a default under, or has resulted in or will result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company pursuant to the terms of any indenture, mortgage, deed of trust, note, loan or credit agreement or any other agreement or instrument evidencing an obligation for borrowed money, or any other agreement or instrument to which the Company may be bound or to which any of the property or assets of 

 

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the Company is subject except where such default, lien, charge or encumbrance would not have a MAE; nor will such action result in any violation of the provisions of the charter or the Bylaws of the Company or, assuming the due performance by the Placement Agent of its obligations hereunder, any statute, order, rule or regulation applicable to the Company of any court or of any foreign, federal, state or other regulatory authority or other government body having jurisdiction over the Company.

(ix)         Neither the Company nor any of its officers, directors, employees or stockholders has employed any broker or finder in connection with the transactions contemplated by this Agreement other than Placement Agent and there are no claims for services in the nature of a finder’s or origination fee with respect to the sale of the Securities.

(x)          The Company owns or possesses, free and clear of all liens or encumbrances and rights thereto or therein by third parties, the requisite licenses or other rights to use all trademarks, service marks, copyrights, service names, trade names, patents, patent applications and licenses necessary to conduct its business (including, without limitation, any such license, patent or rights described in the Offering Documents as being owned or possessed by the Company and there is no claim or action by any person pertaining to, or proceeding, pending or to the Company’s knowledge, threatened, which challenges the rights of the Company with respect to any trademarks, service marks, copyrights, service names, trade names, patents, patent applications and licenses used in the conduct of the Company’s
business (including, without limitation, any such licenses or rights described in the Offering Documents as being owned or possessed by the Company); of the Company’s current products, services or processes do not infringe or will not infringe on the patents currently held by any third party.

(xi)         The Company is not under any obligation to pay royalties or fees of any kind whatsoever to any third party with respect to any trademarks, service marks, copyrights, service names, trade names, patents, patent applications, licenses or technology it has developed, uses, employs or intends to use or employ.

(xii)       Subject to the performance by the Placement Agent of its obligations hereunder, and the accuracy of the representations and warranties made by the respective investors in the Subscription Agreements, the Offering Documents and the offer and sale of the Securities comply, and will continue to comply, through the Offering Period with the requirements of Rule 506 of Regulation D promulgated by the Commission pursuant to the Securities Act and any other applicable federal and state laws, rules, regulations and executive orders. Neither the Offering Documents nor any amendment or supplement thereto, nor any other documents prepared by the Company in connection with the Offering contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading. All statements of material facts in the Offering Documents are true and correct as of the date of the Offering Documents and will be true and correct in all material respects on the date of each Closing except with respect to the number of shares of common stock outstanding, which may change between the date hereof and the date of each Closing due to the conversion of outstanding securities as described in the Offering Documents. If at any time prior to the completion of the Offering or other termination of this Agreement any event shall occur as a result of which it might, in the Company’s opinion, become necessary to amend 

 

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or supplement the Offering Documents so that they do not include any untrue statement of any material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances then existing, not misleading, the Company will promptly notify Placement Agent and will supply Placement Agent with amendments or supplements correcting such statement or omission.

(xiii)      Neither the Company nor any of its officers, directors, employees or agents, nor any other person acting on behalf of the Company has, directly or indirectly, given or agreed to give any money, gift or similar benefit to any customer, supplier, employee or agent of a customer or supplier, or official or employee of any governmental agency or instrumentality of any government (domestic or foreign) or any political party or candidate for office (domestic or foreign) or other person who is or may be in a position to help or hinder the business of the Company (or assist it in connection with any actual or proposed transaction) which (A) might subject the Company to any damage or penalty in any civil, criminal or governmental litigation or proceeding, or (B) if not given in the past, might have had a MAE on the assets, business
or operations of the Company as reflected in any of the financial statements contained in the Offering Documents or on Schedule 4(xvi), or (C) if not continued in the future, might adversely affect the assets, business or operations of the Company.

(xiv)      Assuming (i) the accuracy of the information provided by the respective investors in the Subscription Agreements and (ii) that Placement Agent has complied in all material respects with its obligations under this Agreement, the offer and sale of the Units pursuant to the terms of the Offering Documents are exempt from the registration requirements of the Securities Act and the rules and regulations promulgated thereunder.

(xv)        When the Common Stock and the Placement Agent Shares shall have been duly delivered to the Purchasers and Placement Agent, respectively, and payment shall have been made therefore, the Purchasers and Placement Agent, respectively, shall have good and marketable title to the Common Stock and Placement Agent Shares, as the case may be, free and clear of all liens, encumbrances and claims whatsoever and the Company shall have paid all taxes, if any, in respect of the original issuance thereof.

(xvi)      The Company understands that the foregoing representations and warranties shall be deemed material and to have been relied upon by Placement Agent. No representation or warranty by the Company in this Agreement, and no written statement contained in any document, certificate or other writing delivered by the Company to Placement Agent contains any untrue statement of material fact or omits to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading.

(xvii)     Upon receipt of an executed Subscription Agreement, Company will promptly forward copies of the subscription documents to Placement Agent.

(xviii)    The Company will not deliver the Offering Documents to any person it does not reasonably believe to be an Accredited Investor.

 

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(xix)      The Company will not take any action which it reasonably believes would cause the Offering to violate the provisions of the Securities Act, Exchange Act, or the Rules and Regulations.

(xx)        The Company shall use all reasonable best efforts to determine (a) whether any prospective Purchaser is an Accredited Investor and (b) that any information furnished by a prospective investor is true and accurate.

	
5.

	
Certain Covenants and Agreements of the Company.

The Company covenants and agrees at its expense and without any expense to Placement Agent as follows:

A.           To advise Placement Agent of any adverse change in the Company’s financial condition, prospects or business or of any development materially affecting the Company or rendering untrue or misleading any material statement in the Offering Documents occurring at any time prior to a Closing as soon as reasonably practicable after the Company is either informed or becomes aware thereof.

B.           To use its best efforts to cause the Securities to be qualified or registered for sale, or to obtain exemptions from such qualification or registration requirements, on terms consistent with those stated in the Offering Documents, the Common Stock and the Placement Agent Warrants under the securities laws of such jurisdictions as Placement Agent shall reasonably request, provided that such states and jurisdictions do not require the Company to qualify as a foreign corporation. Qualification, registration and exemption charges and fees shall be at the sole cost and expense of the Company. Company’s counsel shall perform the required “Blue Sky” services, and all reasonable expenses and disbursements of Company’s counsel relating to such “Blue Sky” matters and relating
to the Offering shall be paid by the Company.

	
 

	
C.

	
To apply the net proceeds of the Offering as described in the Offering Documents. 

D.           To comply with the terms of the Subscription Agreements, Common Stock and Placement Agent Warrants including, without limitation, the registration rights provisions thereof.

E.           To issue to Placement Agent or its designees, at the Closing, the Placement Agent Warrants and provide for registration by the Company of the Placement Agent Shares issuable upon the exercise thereof as set forth in the Placement Agent Warrants. 

F.            To keep available out of its authorized and designated common stock, solely for the purpose of issuance and exercise of the Placement Agent Warrants, such number of Placement Agent Shares.

G.           For a period of three years from the date hereof in the event the Company shall undertake any private or public offering of the Company's securities, the Company will grant the Placement Agent a right to participate the next offering(s) on a pro rata basis equal to the percentage of securities sold by the Placement Agent in this Offering. The Company shall notify the Placement Agent at least 30 days in advance, in writing, of any proposed offering and the 

 

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terms thereof. Failure of the Placement Agent to participate in any future offering shall not waive the Placement Agent's right to participate in any future offering(s).

	
6.

	
Indemnification.

The Company agrees to indemnify and hold harmless the Placement Agent, its affiliates, the directors, officers and employees of the Placement Agent and its affiliates and subagents and selected dealers, and each other person or entity, if any, controlling the Placement Agent or any of its affiliates (collectively, “Indemnified Persons”), from and against, and the Company agrees that no Indemnified Person shall have any liability to the Company or its owners, parents, affiliates, securityholders or creditors for, any losses, claims, damages, liabilities or expenses (including actions, claims or proceedings in respect thereof (collectively, “Actions”) brought by or against any person, including stockholders of the Company, and the cost of any investigation and preparation therefore and defense thereof) (collectively, “Losses”) (A) related to or arising out of any statements
or omissions made in the Offering Documents or any exhibit thereto or the services, commitment or other obligations undertaken or being considered by the Placement Agent in this Agreement in connection with the sale of the Securities in the Offering (collectively, “Placement Agent’s Role”), and claims relating to any finders or origination fees, except that the indemnification shall not apply to the Losses of an Indemnified Person that are determined by a court of competent jurisdiction in a final judgment not subject to appeal to have resulted from the bad faith or gross negligence of such Indemnified Person or to Losses arising out of a claim under subsection (A) under this section as to an alleged omission from or misstatement in, the Offering Documents or any exhibit thereto if either (i) at or prior to the execution of a Subscription Agreement the copy of the Memorandum and exhibits were not sent or delivered to the subscriber or (ii) the alleged untrue statement was corrected or
the omission of a material fact alleged was contained in a supplement or amendment to the Memorandum was delivered to the subscriber prior to the written acceptance of the subscriber’s Subscription Agreement by the Company.

Promptly after receipt by an Indemnified Person (each an “indemnified party”) under this Section 6 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 6, notify in writing the indemnifying party of the commencement thereof, however, that no delay on the part of the indemnified party in notifying the indemnifying party shall relieve the indemnifying party from any obligation hereunder unless the indemnifying party is prejudiced by such delay. In case any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein, and to the extent that it may wish, jointly with any other indemnifying party, similarly notified, to assume the defense thereof, with counsel
who shall be to the reasonable satisfaction of such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section 6 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that if, in the reasonable judgment of the indemnified party, it is advisable for the indemnified party to be represented by separate counsel, the indemnified party shall have the right to employ a single counsel to represent the indemnified parties who may be subject to liability arising out of any claim in respect of which indemnity may be sought 

 

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by the indemnified parties thereof against the indemnifying party, in which event the fees and expenses of such separate counsel shall be borne by the indemnifying party. Any such indemnifying party shall not be liable to any such indemnified party on account of any settlement of any claim or action effected without the consent of such indemnifying party which consent shall not be unreasonably withheld.

If such an indemnity provided for in this Agreement is unavailable or insufficient for any Indemnified Person with respect to any Losses, then the indemnifying party, in lieu of indemnifying such Indemnified Person, will contribute to the amount paid or payable by such Indemnified Person as a result of such Losses (i) in such proportion as it is appropriate to reflect the relative benefits received by the Company on the one hand, and the Placement Agent, on the other hand, from the Transactions, or (ii) if the allocation provided by (i) above is not permitted by applicable law in such proportion as is appropriate to reflect not only the relative benefits referred to in (i) above, but also the relative fault of the Company, on the one hand, and of the Placement Agent on the other hand in connection with statements or omissions that resulted in Losses as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand, and the Placement Agent, on the other hand shall be deemed to be in the same proportion as the total proceeds from the Transactions (net of sales commissions, but before deducting other expenses) received by the Company bear to the commissions received by the Placement Agent. The relative fault of the Company, on the one hand, and the Placement Agent, on the other hand, will be determined with reference to, among other things, whether the untrue or alleged untrue statement of material fact or the omission to state a material fact relates to the information supplied by the Company, on the one hand, and the Placement Agent, on the other hand, and their relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

The Company and the Placement Agent agree that it would not be just and equitable if contribution pursuant to this section were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph.

 

THE PLACEMENT AGENT HEREBY AGREE AND THE COMPANY HEREBY AGREES, ON ITS OWN BEHALF AND ON BEHALF OF ITS SECURITYHOLDERS, TO WAIVE ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM, COUNTER-CLAIM OR ACTION ARISING OUT OF PLACEMENT AGENT’S ROLE OR THIS PLACEMENT AGENT AGREEMENT.

	
7.

	
Payment of Expenses.

Whether or not the Offering is successfully completed, the Company hereby agrees to bear all of its expenses in connection with the Offering, including, but not limited to the following: due diligence, travel, lodging, filing fees, printing and duplicating costs, advertisements, postage and mailing expenses with respect to the transmission of offering material, registrar and transfer agent fees, escrow agent fees and expenses, fees of the Company’s counsel and accountants, issue and transfer taxes, if any, “Blue Sky” counsel fees and. It is agreed that the Company’s counsel shall perform the required Blue Sky legal services. 

 

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8.

	
Conditions of the Closing

Provided the Offering shall have been subscribed for and funds representing such amount thereof shall have cleared, each Closing shall be held at the offices of a Placement Agent’s counsel or such other place as mutually agreed upon by the parties. The obligations of the Placement Agent hereunder shall be subject to the continuing accuracy of the representations and warranties, in all material respects, of the Company herein as of the date hereof and as of the date of the Closing as if such representations and warranties had been made on and as of such Closing; the accuracy on and as of the date of each Closing of the statements of the officers of the Company made pursuant to the provisions hereof; and the performance by the Company on and as of each Closing of its covenants and obligations hereunder and to the following further conditions:

A.           The Company shall have completed the "Reverse Merger" as described in the Memorandum.

B.           At or prior to each Closing, counsel for Placement Agent shall have been furnished such documents and certificates as it may reasonably require for the purpose of enabling it to review or pass upon the matters referred to in this Agreement and the Offering Documents, or in order to evidence the accuracy, completeness or satisfaction of any of the representations, warranties or conditions herein contained.

C.           At and prior to each Closing, (i) there shall have been no material adverse change nor development involving a prospective change in the financial condition or operations except where such change would not have a material adverse effect or the business activities, financial or otherwise, of the Company from the latest dates as of which such condition is set forth in the Offering Documents and (ii) there shall have been no material transaction, not in the ordinary course of business, entered into by the Company which has not been disclosed as having taken place or being contemplated in the Offering Documents or to the Placement Agent in writing.

D.           The Offering will become qualified or be exempt from qualification under the securities laws of the several states as contemplated by Section 5(B) no later than the date of the Closing and no stop order suspending the sale of the Common Stock shall have been issued, and no proceedings for that purpose shall have been initiated or threatened.

E.           At each Closing, the Placement Agent shall have received a certificate of the Company signed by its chief executive officer, dated as of the date of such Closing, to the effect that the conditions set forth in subparagraph (C) above have been satisfied and that, as of the date of such Closing, the representations and warranties of the Company set forth herein are true and correct.

F.            At each Closing, the Company shall have duly executed and delivered the appropriate amount of Common Stock to the respective holders thereof.

G.           At each Closing, the Company shall duly and validly issue the Placement Agent Warrants in accordance with the terms thereof and hereof.

 

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H.           There shall be satisfaction by the Placement Agent, in its sole discretion, with its ongoing due diligence of the Company.

	
9.

	
Termination.

This Agreement shall terminate if a Closing does not take place on or before seven (7) business days following the Offering Period. In the event that the Offering is not successfully completed, then the Company shall immediately pay to Placement Agent the amount of its out-of-pocket expenses incurred in connection with the offer of the Securities and pay all fees of counsel to Placement Agent, not to exceed $10,000. Upon any termination of the Offering, all subscription documents and payments for the Securities not previously delivered to the Purchasers thereof, shall be returned to the respective subscribers, without interest thereon or deduction therefrom, and neither party hereto shall have any further obligation to each other, except as specifically provided herein. 

	
10.

	
Miscellaneous.

A.           This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all which shall be deemed to be one and the same instrument.

B.           Any notice required or permitted to be given hereunder shall be given in writing and shall be deemed effective when deposited in the United States mail, postage prepaid, or when received if personally delivered, sent by overnight courier or faxed, addressed as follows:

To Newbridge:

Newbridge Securities Corporation

1451 West Cypress Creek Road, Suite 204

Fort Lauderdale, Florida 33309

Fax: (954) 337-2901

Attention: Douglas Aguililla

with a copy to:

Arnstein & Lehr LLP

2424 N. Federal Highway, Suite 462

Boca Raton, Florida 33431

Fax: (561) 322-6940

Attention: Joel D. Mayersohn, Esq.

to the Company:

Handheld Entertainment, Inc.

539 Bryant Street, Suite 403

San Francisco, California

Attention: Jeff Oscodar, CEO

 

 

12

	
 

	
 

	
 

	
 

	
 

	
 

 

 

 

 

with a copy to: 

	
 

	
Niesar Curls Bartling, LLP 

	
 

	
 

	
90 New Montgomery Street, Ste 900

	
 

	
San Francisco, CA 94105

	
 

	
 

	
Fax: 415-882-5400

	
 

	
 

	
Attn: Gerald V. Niesar, Esq.

	
 

						

 

or to such other address of which written notice is given to the others.

C.           This Agreement shall be governed by and construed in all respects under the laws of the State of Florida, without reference to its conflict of laws rules or principles. Any suit, action, proceeding or litigation arising out of or relating to this Agreement shall be brought and prosecuted in any Florida State court sitting in the County of Broward, Florida and any Federal court sitting in the Southern District of the State of Florida. The parties hereby irrevocably and unconditionally consent to the jurisdiction of each such court or courts located within the State of Florida and to service of process by registered or certified mail, return receipt requested, or by any other manner provided by applicable law, and hereby irrevocably and unconditionally waive any right to claim that any suit,
action, proceeding or litigation so commenced has been commenced in an inconvenient forum.

D.           This Agreement and the other agreements referenced herein contain the entire understanding between the parties hereto with respect to the subject Offering and may not be modified or amended except by a writing duly signed by the party against whom enforcement of the modification or amendment is sought. The terms and conditions of any other agreement between the Company and Placement Agent are hereby terminated, and specifically the letter of intent between the Placement Agent and the Company, as well as any other any other prior agreement or understanding not set forth herein between the Company and the Placement Agent are hereby terminated, voided and made null.

E.            If any provision of this Agreement shall be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision of this Agreement.

F.            Covenants, representations, warranties, undertakings, etc. that are intended to be made by the issuer of the securities, assume the completion of the Reverse Merger as contemplated in the Memorandum.

 

13

	
 

	
 

	
 

	
 

	
 

	
 

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

 

HANDHELD ENTERTAINMENT, INC.

 

By:     /s/ Jeffrey Oscodar                              

Name:      Jeffrey Oscodar                              

Title:        Chief Executive Officer                  

NEWBRIDGE SECURITIES CORPORATION

 

By:       /s/ Douglas K. Aguililla                          

	
 

	
Name: Douglas K. Aguililla                         

	
 

	
Title: Director of Investment Banking     

	
 

 

 

 

 

 

14Exhibit 10.2

WARRANT

	
            NO. 
 	
            HANDHELD ENTERTAINMENT, INC. 
 	
            16,250 Shares
 

 

WARRANT TO PURCHASE COMMON STOCK

VOID AFTER 5:30 P.M., EASTERN 

TIME, ON THE EXPIRATION DATE

THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS THEREFROM.

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 5:30 p.m., Eastern Time, on the Expiration Date (as hereinafter defined), to Newbridge Securities Corporation, or registered assigns (the “Holder”), under the terms as hereinafter set forth, SIXTEEN THOUSAND TWO HUNDRED FIFTY (16,250) fully paid and non-assessable shares of the Company’s Common Stock, par value $0.0001 per share (the “Warrant Stock”), at a purchase price of ______ DOLLARS ($_____) 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 9, 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 5:30 p.m., Eastern Time, on February 22, 2009 (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.  The person or entity in whose name any certificate for the Warrant Stock is issued upon exercise of the rights represented by this Warrant shall for all purposes be deemed to have become the holder of record of such shares 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.

The Holder hereby agrees that it will not sell or transfer all or any part of this Warrant and/or Warrant Stock 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, reasonably satisfactory to counsel for the Company, of counsel (skilled in securities matters, selected by the 

 

2

 

 

Holder and reasonably satisfactory to the Company) 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 SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THIS CERTIFICATE THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.”

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.  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 

 

3

 

 

written notice specifying the names and denominations in which new Warrants are to be issued and signed by the Holder hereof.

	
             
  	
            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.

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 

 

4

 

 

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 herein provided, 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.             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.

g.            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.

h.            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:
 
					

 

 

5

 

 

 

(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.

 

6

 

 

 

7.            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 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.

8.            Warrant Holder Not a Stockholder.  The Holder of this Warrant, as such, shall not be entitled by reason of this Warrant to any rights whatsoever as a stockholder of the Company.

9.            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.

10.          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 DELAWARE, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.

11.          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 Kent County, Delaware and they hereby submit to the exclusive jurisdiction of the federal and state courts of the State of Delaware located in Kent County 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.

 

7

 

 

 

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 22nd day of February, 2006.

	
             
 	
            HANDHELD ENTERTAINMENT, INC.
 
	
             
 	
             
 
	
             
 	
            By:
 	
             
 
	
             
 	
             
 	
            Name: Jeffrey Oscodar
 
	
             
 	
             
 	
            Title: Chief Executive Officer
 

 

 

 

 

8

 

 

 

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. evidenced by the within Warrant Certificate for a Warrant Price of $_____ per share and herewith makes payment of the Warrant Price in full of $__________. Kindly issue certificates for shares of Common Stock (and for the unexercised balance of the Warrants evidenced by the within Warrant Certificate, if any) in accordance with the instructions given below.

 

Dated:____________________ , 20__ .

 

______________________________

 

Instructions for registration of stock

 

_____________________________

	
             
 	
            Name (Please Print)
 

 

Social Security or other identifying Number:

 

Address:__________________________________

	
             
 	
            City/State and Zip Code
 

 

 

 Instructions for registration of certificate representing 

the unexercised balance of Warrants (if any)

 

_____________________________ 

Name (Please Print)

 

Social Security or other identifying Number: ___________

 

Address:____________________________________

	
             
 	
            City, State and Zip Code
 

 

 

9

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