REGISTRATION RIGHTS AGREEMENT
EXHIBIT
10.1
This
REGISTRATION RIGHTS AGREEMENT (this “Agreement”),
is
entered as of February 5, 2007, by and between HandHeld Entertainment, Inc.,
a
Delaware corporation (the “Company”),
Xxxxxx Page, an individual (“Xxxxxx
Page”)
and
Xxxxxx Xxxx, an individual (“Xxxxxx
Xxxx”
and,
together with Xxxxxx Page, the “Sellers”).
WHEREAS,
pursuant to the terms of the Stock Purchase Agreement, dated as of February
5,
2007 (the “Purchase
Agreement”),
entered into by and among the Company, the Sellers and Putfile Limited, the
Company has agreed, as partial consideration for the acquisition by the Company
from the Sellers of the Interest (as defined in the Purchase Agreement) to
issue
to the Sellers the Stock Consideration (as also defined in the Purchase
Agreement);
WHEREAS,
to induce the Sellers to execute and deliver the Purchase Agreement, the Company
has agreed to provide certain registration rights under the Securities Act
of
1933, as amended, and the rules and regulations thereunder, or any similar
successor statute (collectively, the “1933
Act”),
and
applicable state securities laws:
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the Company and the Sellers hereby agree as
follows:
1. DEFINITIONS.
As
used
in this Agreement, the following terms shall have the following
meanings:
(a) “Register,”
“registered,”
and
“registration”
refer
to a registration effected by preparing and filing one or more Registration
Statements in compliance with the 1933 Act and pursuant to Rule 415 under the
1933 Act or any successor rule providing for offering securities on a continuous
basis (“Rule
415”),
and
the declaration or ordering of effectiveness of such Registration Statement(s)
by the United States Securities and Exchange Commission (the “SEC”).
(b) “Registrable
Securities”
means
(i) the Stock Consideration; and (ii) any shares of capital stock issued or
issuable with respect to the Stock Consideration as a result of any stock split,
stock dividend, recapitalization, exchange or similar event.
(c) “Registration
Expenses”
shall
mean all expenses incurred by the Company in compliance with its obligations
hereunder, whether or not any registration statement is filed or becomes
effective and whether or not any Registrable Securities are sold pursuant to
such registration statement, including, without limitation, all registration
and
filing fees, printing expenses, fees and disbursements of counsel for the
Company, and the expense of any special audits incident to or required by such
registration (but excluding the compensation of regular employees of the
Company, which shall be paid in any event by the Company);
(d) “Registration
Statement”
means
a
registration statement of the Company filed under the 1933 Act.
1
(e) “Selling
Expenses”
shall
mean all underwriting discounts and selling commissions applicable to the sale
of Registrable Securities and all fees and disbursements of counsel for the
Sellers, if any, relating to the sale or disposition of the Registrable
Securities pursuant to any registration statement filed pursuant to this
Agreement.
Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Purchase Agreement.
2. REGISTRATION.
2.1 Mandatory
Registration.
On or
prior to March 31, 2007 (the “Registration
Date”),
the
Company shall prepare and file with the SEC a Registration Statement covering
for resale all of the Registrable Securities on Form SB-2, or such other Form
as
may be available to the Company for such Registration, and shall indicate on
the
cover of such form that such securities are being offered on a delayed or
continuous basis pursuant to Rule 415 under the 1933 Act. Company shall also
use
its best efforts to have the Registration Statement become effective within
one
hundred and twenty (120) days after the Registration Date.
2.2 Underwriting.
If the
registration involves an underwriting, the right of the Sellers to registration
pursuant to this Section shall be conditioned upon the Sellers’ participation
in such underwriting. The Sellers shall (together with the Company and any
other
stockholders distributing their securities through such underwriting) enter
into
an underwriting agreement in customary form with the representative of the
underwriter or underwriters selected by the Company.
3. Company
Registration
3.1 Inclusion
in Registration.
If the
Company shall determine to register any of its equity securities either for
its
own account or for the account of any other security holder, other than a
registration relating solely to employee benefit plans, or a registration
relating solely to an SEC Rule 145 transaction, or a registration on any
registration form which does not permit secondary sales, the Company
will:
(a) Promptly,
and in no event later than fifteen (15) days prior to the anticipated filing
date of the registration statement effecting such registration, give to the
Sellers a written notice thereof (which shall include a list of the
jurisdictions in which the Company intends to qualify such securities under
the
applicable blue sky or other state securities laws); and
(b) include
in such registration (and any related qualification under blue sky laws or
other
compliance), and in any underwriting involved therein, all the Registrable
Securities specified in a written request made by the Sellers within fifteen
(15) days after receipt of the written notice from the Company described in
clause (a) above, except as otherwise provided in Section 8 below. Such written
request may specify all or a part of the Sellers’ Registrable
Securities.
3.2 Underwriting.
If the
registration of which the Company gives notice is for a registered public
offering involving an underwriting, the Company shall so advise the Sellers
in
the written notice given pursuant to Section (a). In such event, the right
of
the Sellers to registration pursuant to this Section 3 shall be conditioned
upon
the Sellers’ participation
in such underwriting. The Sellers shall (together with the Company and any
other
stockholders distributing their securities through such underwriting) enter
into
an underwriting agreement in customary form with the representative of the
underwriter or underwriters selected by the Company.
2
4. Expenses
of Registration
All
Registration Expenses incurred in connection with any registration or compliance
pursuant to this Agreement shall be borne by the Company, and any and all
Selling Expenses shall be borne by the Sellers.
5. Registration
Procedures
In
connection with the Company’s registration obligations hereunder, the Company
shall:
(a) prepare
and file with the Commission, within the time frame specified in paragraph
2.1,
above, the Registration Statement (such date of filing, the “Filing
Date”)
covering the resale of the Registrable Securities in accordance with the method
or methods of distribution specified by the Seller, and cause the Registration
Statement to become effective and remain effective as provided
herein;
(b) prepare
and file with the Commission such amendments, including post-effective
amendments, and supplements to the Registration Statement as may be necessary
to
keep the Registration Statement continuously effective as to the Registrable
Securities for at least twelve (12) months following the date it first becomes
effective or until such time the Registrable Securities are no longer subject
to
the restrictions imposed by Regulation S of the 1993 Act (the “Effectiveness
Period”);
provided,
however,
that
the Effectiveness Period shall be extended for a period of time equal to the
period during which the Sellers refrain from selling any securities included
in
such registration in accordance with the provisions set forth in Section 8
hereof;
(c) cause
the prospectus forming a part of the Registration Statement to be amended or
supplemented by any required prospectus supplement, and as so supplemented
or
amended to be filed pursuant to Rule 424 (or any successor rule) under the
Securities Act;
(d) respond
promptly to any comments received from the Commission with respect to the
Registration Statement or any amendment thereto and promptly provide the Sellers
and the Sellers’ counsel true and correct copies of all correspondence from and
to the Commission relating to the Registration Statement;
(e) promptly
to take such action as may be reasonably necessary so that (i) each of the
Registration Statement and any amendment thereto and the prospectus forming
part
thereof and any amendment or supplement thereto (and each report or other
document incorporated therein by reference in each case), when it becomes
effective, complies in all material respects with the Securities Act and the
Exchange Act and the respective rules and regulations thereunder, (ii) each
of
the Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state
a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances in which they were made, not
misleading and (iii) each of the prospectus forming part of the Registration
Statement, and any amendment or supplement thereto, does not at any time during
the Effectiveness Period include an untrue statement of a material fact or
omit
to state a material fact required to be stated therein or necessary to make
the
statements therein, in the light of the circumstances in which they were made,
not misleading.
3
(f) notify
the Sellers as promptly as possible (and, in the case of (i)(A) below, not
less
than five (5) Business Days prior to such filing) and (if requested by the
Sellers) confirm such notice in writing no later than one (1) Business Day
following the day: (i)(A) when a prospectus or any prospectus supplement or
post-effective amendment to the Registration Statement is proposed to be filed;
(B) when the Commission notifies the Company whether there will be a “review” of
such Registration Statement and whenever the Commission comments in writing
on
such Registration Statement and (C) with respect to the Registration Statement
or any post-effective amendment, when the same has become effective; (ii) of
any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to the Registration Statement or prospectus or
for
additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement covering any
or
all of the Registrable Securities or the initiation of any proceedings for
that
purpose; (iv) if at any time any of the representations and warranties of the
Company contained in any agreement contemplated hereby cease to be true and
correct in all material respects; (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any proceeding for such
purpose; and (vi) of the occurrence of any event that makes any statement made
in the Registration Statement or prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect
or
that requires any revisions to the Registration Statement, prospectus or other
documents so that, in the case of the Registration Statement or the prospectus,
as the case may be, it will not 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 the light of the circumstances under which
they
were made, not misleading;
(g) cooperate
with the Sellers to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold pursuant to a
Registration Statement, which certificates shall be free of all restrictive
legends, except as required pursuant to the Purchase Agreement, and to enable
such Registrable Securities to be in such denominations and registered in such
names as the Sellers may request at least two (2) Business Days prior to any
sale of Registrable Securities; and
(h) furnish
such number of prospectuses and other documents incident thereto as the Sellers
from time to time may reasonably request.
6. Indemnification
6.1 The
Company will indemnify the Sellers to the fullest extent permitted by applicable
law with respect to each registration which has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who controls any
underwriter, against all claims, losses, damages and liabilities (or actions
in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to such registration, qualification or
compliance, or based on any omission (or alleged omission) to state therein
a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of the Securities Act,
the Exchange Act or the respective rules or regulations thereunder applicable
to
the Company and relating to action or inaction required of the Company in
connection with such registration, qualification or compliance, and will
reimburse the Sellers for any legal or other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action; provided
that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission based upon written information furnished to the Company
by
the Sellers or underwriter. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of an Indemnified Party
(as
defined in Section 6.3 hereof) and shall survive the transfer of the Registrable
Securities by the Sellers.
4
6.2 The
Sellers will, if Registrable Securities held by them are included in the
securities as to which such registration, qualification or compliance is being
effected, indemnify the Company, each of its directors and officers and each
underwriter, if any, of the Company’s securities covered by such registration
statement, each person who controls the Company or such underwriter, each other
stockholder of the Company participating in such registration, and each of
their
respective officers, directors, and partners, and each person controlling such
other stockholder, in each case, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained
in
such registration statement, prospectus, offering circular or other document
made by the Sellers, or any omission (or alleged omission) to state therein
a
material fact required to be stated therein or necessary to make the statements
by the Sellers therein not misleading, and will reimburse the Company and such
other stockholders, directors, officers, members, partners, persons,
underwriters or control persons for any legal or other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by the Sellers; provided,
that
the liability of such Sellers pursuant to Section 6.2 and Section 6.4 hereof
shall in no event exceed the net proceeds received by such Sellers from the
sale
of the Registrable Securities sold by the Sellers pursuant to the Registration
Statement.
6.3 Each
party entitled to indemnification under this Section 6 (the “Indemnified
Party”)
shall
give notice to the party required to provide indemnification (the “Indemnifying
Party”)
promptly after such Indemnified Party has actual knowledge of any claim as
to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom;
provided
that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or any litigation resulting therefrom, shall be approved by the Indemnified
Party (whose approval shall not unreasonably be withheld or delayed) and the
Indemnified Party may participate in such defense at such party’s expense
(unless the Indemnified Party shall have reasonably concluded that there may
be
a conflict of interest between the Indemnifying Party and the Indemnified Party
in such action, in which case the fees and expenses of counsel shall be at
the
expense of the Indemnifying Party), and provided further
that the
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Agreement unless
the Indemnifying Party is materially prejudiced thereby. No Indemnifying Party,
in the defense of any such claim or litigation shall, except with the consent
of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving
by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.
5
6.4 If
the
indemnification provided for in this Section 6 is held by a court of competent
jurisdiction to be unavailable to an Indemnified Party with respect to any
loss,
liability, claim, damage or expense referred to herein, then the Indemnifying
Party, in lieu of indemnifying such Indemnified Party hereunder, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such loss, liability, claim, damage or expense in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the
one
hand and of the Indemnified Party on the other in connection with the statements
or omissions which resulted in such loss, liability, claim, damage or expense,
as well as any other relevant equitable considerations. The relative fault
of
the Indemnifying Party and of the Indemnified Party shall be determined by
reference to, among other things, whether the untrue (or alleged untrue)
statement of a material fact or the omission (or alleged omission) to state
a
material fact relates to information supplied by the Indemnifying Party or
by
the Indemnified Party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
6.5 Notwithstanding
the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection
with any underwritten public offering contemplated by this Agreement are in
conflict with the foregoing provisions, the provisions in such underwriting
agreement shall be controlling.
6.6 The
foregoing indemnity agreement of the Company and the Sellers is subject to
the
condition that, insofar as they relate to any loss, claim, liability or damage
made in a preliminary prospectus but eliminated or remedied in the amended
prospectus on file with the SEC at the time the registration statement in
question becomes effective or the amended prospectus filed with the SEC pursuant
to SEC Rule 424(b) (the “Final
Prospectus”),
such
indemnity agreement shall not inure to the benefit of any underwriter if a
copy
of the Final Prospectus was furnished to the underwriter and was not furnished
to the person asserting the loss, liability, claim or damage at or prior to
the
time such action is required by the Securities Act.
6
7. Information
by the SellerS
The
Sellers shall furnish to the Company such information regarding the Sellers
and
the distribution proposed by the Sellers as the Company may reasonably request
in writing and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this
Agreement.
8. “Market
Stand-off” Agreement
The
Sellers agree, if requested by the Company and an underwriter of common stock
(or other securities) of the Company, not to sell or otherwise transfer or
dispose of any common stock (or other securities) of the Company held by the
Sellers during the 90-day period following the effective date of a registration
statement of the Company filed under the Securities Act which relates solely
to
securities offered by or on behalf of the Company. If requested by the
underwriters, the Sellers shall execute a separate agreement to the foregoing
effect. The Company may impose stop-transfer instructions with respect to the
shares (or securities) subject to the foregoing restriction until the end of
said period. The provisions of this Section 8 shall be binding upon any
transferee who acquires Registrable Securities, whether or not such transferee
is entitled to the registration rights provided hereunder.
9. Miscellaneous
9.1 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of California applicable to contracts made and to be performed entirely
within such State without regard to principles of conflicts of law.
9.2 Paragraph
and Section Headings.
The
descriptive headings of the several sections of this Agreement are inserted
for
convenience only and shall not control or affect the meaning or construction
of
any of the provisions hereof.
9.3 Notices.
All
notices, demands or other communications to be given or delivered under or
by
reason of the provisions of this Agreement shall be in writing and shall be
deemed to have been given (a) when delivered personally to the recipient, (b)
when sent to the recipient by telecopy (receipt electronically confirmed by
sender’s telecopy machine) if during normal business hours of the recipient,
otherwise on the next Business Day, (c) one Business Day after the date when
sent to the recipient by reputable express courier service (charges prepaid),
or
(d) seven (7) Business Days after the date when mailed to the recipient by
certified or registered mail, return receipt requested and postage prepaid.
Such
notices, demands and other communications shall be sent to the Sellers and
to
the Company at the addresses indicated below:
|
If
to Xxxxxx Page:
|
Xxxxxx
Page
00
Xxxxxxxxx Xxxxxx
Xxxxxxxxx
Xxxxxx
[postal
code]
|
7
|
With
a copy to:
(which
shall not constitute notice)
|
Xxxxxx
Xxxxxxx LLP
ATTN:
Xxxxxx Xxxxxxxxxx
The
Oriel
Xxxxxxxx
xxxx
Xxxxxxxxx
Xxxxxx
XX0
0XX
Fax:
00000 000000
And
Xxxxxxxx
Venture Counsel
ATTN:
Xxx Xxxxxxxx
0000
Xxxxxxxx Xxxx
Xxx
Xxxxxxxxx, XX 00000
Fax:
(000) 000-0000
|
|
If
to Xxxxxx Xxxx:
|
Xxxxxx
Xxxx
0
Xxxxxxxx Xxxx
Xxxxxxx
Xxxxxxxxx
Xxxxxx
XX0
0XX
|
|
With
a copy to:
(which
shall not constitute notice)
|
Xxxxxx
Xxxxxxx LLP
ATTN:
Xxxxxx Xxxxxxxxxx
The
Oriel
Xxxxxxxx
Xxxx
Xxxxxxxxx
Xxxxxx
XX0
0XX
Xxxxxx
Xxxxxxx
Fax:
00000 000000
And
Xxxxxxxx
Venture Counsel
ATTN:
Xxx Xxxxxxxx
0000
Xxxxxxxx Xxxx
Xxx
Xxxxxxxxx, XX 00000
Fax:
(000) 000-0000
|
|
If
to the Company:
|
ATTN:
Xxxxxxx Oscodar
000
Xxxxxx Xxxxxx, Xxxxx 000
Xxx
Xxxxxxxxx, XX 00000
Fax:
000-000-0000
|
8
|
With
a copy to:
(which
shall not constitute notice)
|
Xxxxxx
Curls Xxxxxxxx & Xxxxx, LLP
00
Xxx Xxxxxxxxxx Xxxxxx, 0xx
Xxxxx
Xxx
Xxxxxxxxx, XX 00000
Attn:
Xxxxxx X. Xxxxxx, Esq.
Fax:
(000) 000-0000
|
or
to
such other address as either party hereto may, from time to time, designate
in
writing delivered pursuant to the terms of this Section.
9.4 Amendments. The
terms, provisions and conditions of this Agreement may not be changed, modified
or amended in any manner except by an instrument in writing duly executed by
both of the parties hereto.
9.5 Assignment.
Neither
this Agreement nor any of the rights, duties, or obligations of any party
hereunder may be assigned or delegated (by operation of law or otherwise) by
either party hereto except with the prior written consent of the other party
hereto; provided
that all
of the terms and provisions of this Agreement shall inure to the benefit of
and
shall be enforceable by the respective legal successors and permitted assigns
of
the parties hereto and to any holder of Registrable Securities.
9.6 Counterparts.
For the
convenience of the parties, any number of counterparts of this Agreement may
be
executed by any one or more parties hereto, and each such executed counterpart
shall be, and shall be deemed to be, an original, but all of which shall
constitute, and shall be deemed to constitute, in the aggregate but one and
the
same instrument.
[SIGNATURE
PAGE FOLLOWS]
9
IN
WITNESS WHEREOF, each of the parties hereto has caused this Registration Rights
Agreement to be executed on its behalf by its officers thereunto duly
authorized, all as of the day and year first above written.
|
COMPANY
|
HANDHELD ENTERTAINMENT, INC. | |
|
By:
|
/s/
Xxxx Oscodar
|
|
| Name: Xxxxxxx Oscodar | ||
| Title: President | ||
|
XXXXXX
PAGE
|
||
| /s/ Xxxxxx Page | ||
| XXXXXX PAGE | ||
|
XXXXXX
XXXX
|
||
| /s/ Xxxxxx Xxxx | ||
| XXXXXX XXXX | ||
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