HOLYLEMON.COM ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement ( “Agreement”)   is entered into as of April __, 2007 by and between Dorks LLC, a Washington limited liability company (“ Purchaser ”) and Kieran O’Neill, an individual (“ Seller ”).

RECITALS

WHEREAS, Seller owns all of the assets and business of Holylemon.com, an internet website (“ Holylemon.com ” or “ Business ”); and

WHEREAS, Purchaser desires to purchase from Seller, and Seller desires to sell to Purchaser, the Business, upon the terms and subject to the conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the premises, the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.1.    Agreement to Sell and to Purchase. 

On the terms and subject to the conditions set forth in this Agreement, Purchaser agrees to purchase from Seller, and Seller agrees to sell, transfer, assign, convey and deliver to Purchaser, on the Closing Date (as defined in Section 6.1 hereof), free and clear of all Liens (as such term is defined in Section 2.4), all of Seller’s right, title and interest in, to and under all of the assets, properties, privileges, claims, rights and business of the Business, whether real, personal and mixed, tangible and intangible, absolute or contingent, wherever located and whether or not reflected on the books and records of Seller, relating to or used in connection with, the Business (the “ Purchased Assets ”), except for the Excluded Assets. The Purchased Assets include but are not limited to the following items:

(a)    the Business, its good will, its name (and any derivatives or combinations thereof) and any other tangible or intangible assets owned by Seller and used in the operation of the Business);

(b)    all contracts, licenses, sales orders, commitments, pricing and marketing arrangements with customers, users or suppliers, and other arrangements, agreements or understandings, whether in written or oral form, related to the Business as set forth on Schedule 1.1(b ) hereto (the “ Assumed   Contracts ”);

(c)    all internet domain names and URLs of the Business, inventions, art works, product plans, logos, trademarks, trademark applications, service marks, copyrights, trade names, trade secrets, customer lists, patents, patent rights and applications, trade name, trademark and copyright registrations and applications, source and object codes, whether owned or possessed by Seller and used in or related to the Business as set forth on Schedule 1.1(c) hereto (the “ Intellectual Property ”);

(d)    all books and records of Seller related to the Business, including without limitation, accounting records, sales data, logs and other documents, customer and vendor lists, mailing lists, and other records and files related to the Business;

(e)    information systems and computer hardware and software and other equipment of the Business;

(f)    all other assets, properties and rights of Seller of every kind and nature owned or held by Seller which are used in the Business, or in which Seller has an interest, known or unknown, fixed or unfixed, choate or inchoate, accrued, absolute, contingent or otherwise as set forth on Schedule 1.1(f) hereof.

Section 1.2.    Excluded Assets

The assets that constitute the Excluded Assets shall include only those assets set forth on Schedule 1.2 hereto (the “ Excluded Assets ”).

Section 1.3.    No Assumption of Liabilities.

Purchaser shall not assume, shall not take subject to, and shall not in any way be liable for, any liabilities or obligations of any kind or nature, whether absolute, contingent, accrued, known or unknown, of Seller.

Section 1.4.    Purchase Price.

The total purchase price (the “ Purchase Price ”) for the Purchased Assets to be paid to Seller by Purchaser shall be paid as follows: 

(a)    $25,000 payable on the Closing Date by wire transfer to an account designated in writing by Seller at least three (3) business days prior to the Closing Date;

(b)    $225,000 payable in twenty-four equal monthly installments of $9,375 on the first day of each calendar month commencing on May 1, 2007 (the “ Payment Period ”), by wire transfer to an account designated in writing by Seller at least three (3) business days prior to the Closing Date, and

(c)    that number of shares of common stock of Handheld Entertainment, Inc., a Delaware corporation and the corporate parent of Purchaser (“ Handheld ”), as shall equal (A) $650,000 divided by (B) the average closing price of Handheld’s common stock as quoted on The NASDAQ Capital Market, for the five (5) trading days immediately preceding the Closing Date (the “ Shares ”), to be issued within ten (10) business days of the Closing Date.

Section 1.5.    Earn-Out

If Holylemon.com generates in excess of 1.7 million unique visitors derived from organic sources per month, not including any traffic that is purchased by Holylemon.com, for two (2) consecutive months (the “ Threshold ”) during the twelve (12) month period commencing on May 1, 2007 (the “ Earn-Out Period ”), then the Purchase Price shall be increased by the following amounts:

(a)    $50,000 in cash payable on the date that Holylemon.com reaches the Threshold (the “ Trigger Date ”);

(b)    that number of shares of common stock of Handheld, as shall equal (A) $162,500 divided by (B) the average closing price of Handheld’s common stock as listed on The NASDAQ Capital Market or on such other market as Handheld’s common stock is then listed or quoted, for the five (5) trading days immediately preceding the Trigger Date (the “ Earn-Out   Shares ”), to be issued within 10 days of the Trigger Date; and

(c)    $5,730 in cash payable on the first day of each month following the Trigger Date until the expiration of the Payment Period.

If Holylemon.com does not reach the Threshold during the Earn-Out Period, then no payments shall be due under this Section 1.5.

Section 1.6.    Registration Provisions

(a)    The Shares and the Earn-Out Shares, if any, (collectively, the “ Securities ”) shall be registered pursuant to the terms of the registration rights agreement substantially in the form attached hereto as Exhibit A (the “Registration Rights Agreement” ).

(b)    Notwithstanding anything to the contrary in this Agreement, and subject to Section 2.13 hereof, at any time prior to the one (1) year anniversary of the Closing Date, Seller agrees not to, directly or indirectly, sell more than one-twelfth (1/12) of the aggregate number of Securities payable under Section 1.4(b) or Section 1.5(b), as the case may be, in any given thirty-day period.

Seller represents and warrants to Purchaser as of the date hereof and as of the Closing Date as follows:

Section 2.1.    Sole Proprietorship.

Seller is a sole proprietorship possessing full capacity, power and authority to own, operate and lease his properties and assets, to carry on the Business as now conducted, and to consummate the transactions contemplated by this Agreement.

Section 2.2.    Authorization, No Conflicts.

This Agreement and the other documents to be executed in connection with the transactions contemplated hereby, including but not limited to the Registration Rights Agreement, Consulting Agreement and Domain Name Assignment Agreement (as defined herein) (the “Transaction Documents” ) constitute the legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms. The execution, delivery and performance of this Agreement and the other Transaction Documents by Seller and the transaction contemplated hereby and thereby do not (i) conflict with or result in a breach or violation of any term or provision of, or (with or without notice or passage of time, or both) constitute a breach or default under, any Assumed Contract, or other contractual obligation of Seller (ii) result in the imposition of any Lien on any of the Purchased Assets or (iii) violate any applicable law or order of any governmental body or any arbitrator having jurisdiction over Seller. There are no preferential purchase rights of first refusal or first offer in third parties with respect to the Purchased Assets or the Business.

Section 2.3.    Assets Necessary to Business.

The Purchased Assets constitute all of the assets, properties, rights and goodwill necessary to carry on the Business in a manner consistent with current operations. No part of the Business is conducted by or through any person or entity other than Seller.

Section 2.4.    Status of Assets.

(a)    Except as set forth on Schedule 2.4 , hereto, Seller has and is conveying to Purchaser under this Agreement, good and marketable title to, each of the Purchased Assets, free and clear of all liens, security interests, pledges, mortgages, charges, adverse claims, preferential arrangements or rights, and encumbrances (each a “Lien” ). Seller owns and has all right, power and authority to sell, convey, assign, transfer and deliver the Purchased Assets to Purchaser in accordance with the terms of this Agreement. All of the Purchased Assets are adequate and fit to be used for the purposes for which they are currently used.

(b)    Purchaser acknowledges and agrees that Seller does not warrant any right(s) to user-submitted content which has or may appear on Holylemon.com. Seller has not received and there is not pending or threatened any unresolved notice of claim against him relating to a third party’s alleged rights in user-submitted content appearing on Holylemon.com. User-submitted content which appears on Holylemon.com is, and has historically been, deleted from the site as soon as reasonably practicable following receipt by Seller of any notice relating to a third party’s alleged rights in any such user-submitted content.

Section 2.5.    Liabilities.

There are no liabilities, debts or obligations of any nature (whether liquidated, unliquidated, direct, accrued, unmatured, absolute, contingent or otherwise and whether due or to become due), relating to the Purchased Assets or Business, except liabilities that were incurred in the ordinary course of business since March 15, 2007 and do not individually or in the aggregate exceed $1,000 and which are set forth on Schedule 2.5 hereto.

Section 2.6.    Taxes and Tax Returns. 

Seller has timely and properly filed all required tax returns and has paid all taxes due with respect to the Business and the Purchased Assets for all periods ending on or before the Closing Date. No unresolved claim or Lien for assessment or collection of taxes has been asserted against Seller with respect to the Business or the Purchased Assets, nor is there any basis for such a claim or Lien.

Section 2.7.    Intellectual Property Rights.

(a)    Set forth on Schedule 2.7 hereto is a true and complete list of all Intellectual Property. Seller has complete rights to and ownership of all Intellectual Property required for use in the Business, and such Intellectual Property is sufficient for Purchaser to operate the Business as currently operated. Schedule 2.7 specifies, as applicable: (i) the title of the patent, trademark, trade name, service mark, copyright or application therefore; (ii) the jurisdiction by or in which such patent, trademark, trade name, service mark or copyright exists and has been issued or registered or in which an application has been filed, including the registration or application numbers and (iii) all Licenses (copies of which have been previously delivered to Purchaser). For the purposes of this Agreement, “ Licenses ” means all licenses, sub-licenses, agreements, permits, undertakings and understandings pursuant to which any third party is licensed or authorized to use any Intellectual Property of Seller or pursuant to which Seller is authorized to use the intellectual property of any third party.

(b)    The execution, delivery and performance of this Agreement, and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby will not constitute a material breach of any instrument or agreement governing any Intellectual Property, will not cause the forfeiture or termination or give rise to a right of forfeiture or termination of any Intellectual Property nor impair the value or right of Seller to use, sell or license any Intellectual Property or portion thereof.

(c)    Neither the production, marketing, license, sale or intended use of any product or service currently licensed or sold by Seller or currently under development by Seller violates any License or agreement between Seller and any third party relating to such product or service, nor infringes upon any intellectual property rights of any other party. There are no pending or threatened claims or litigation contesting the validity and ownership by Seller or its right to use, sell, license or dispose of any Intellectual Property, nor is there any basis for such a claim. Seller has not received any notice (or is not otherwise aware) that any Intellectual Property, or its use, sale, license or disposition, conflicts or will conflict with or infringes or will infringe upon the rights of any other person or entity, nor is there any basis for such an assertion.

(d)    No current or prior employees, consultants, contractors, or agents of Seller have asserted an ownership interest or other right in or to any Intellectual Property.

Section 2.8.    Litigation; Compliance. 

No action, complaint, petition, suit, claim, order, ruling, injunction, judgment, decree, investigation or other proceeding, whether civil or criminal, in law or in equity, or before any arbitrator or governmental body, is pending or threate