THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AS SET FORTH HEREIN. NEITHER THIS
NOTE NOR THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE SOLD,
TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS UNDER SUCH ACT.

GREEN SCREEN INTERACTIVE SOFTWARE, INC.
Convertible Secured Promissory Note

$2,000,000
May 16, 2008
New York, New York

GREEN SCREEN INTERACTIVE SOFTWARE, INC., a Delaware corporation (the “Company”),
for value received, hereby promises to pay to Mandalay Media, Inc., a Delaware
corporation (“Mandalay,” together with its successors or permitted assigns, the
“Holder”), the principal amount of Two Million Dollars ($2,000,000) in lawful
money of the United States, with interest thereon to be computed from the date
hereof on the unpaid principal balance at the rate and as herein provided.
 
This convertible promissory note (the “Note”) is issued pursuant to and is
subject to the terms of that certain Note Purchase Agreement, dated of even date
herewith, by and between the Company and Mandalay (as the same may be amended
from time to time, the “Purchase Agreement”).
 
All agreements herein made are expressly limited so that in no event whatsoever,
whether by reason of advancement of proceeds hereof, acceleration of maturity of
the unpaid balance hereof or otherwise, shall the amount paid or agreed to be
paid to the Holder for the use of the money advanced or to be advanced hereunder
exceed the maximum rate permitted by law (the “Maximum Rate”). If, for any
circumstances whatsoever, the fulfillment of any provision of this Note or any
other agreement or instrument now or hereafter evidencing, securing or in any
way relating to the debt evidenced hereby shall involve the payment of interest
in excess of the Maximum Rate, then, ipso facto, the obligation to pay interest
hereunder shall be reduced to the Maximum Rate; and if for any circumstance
whatsoever, the Holder shall ever receive interest, the amount of which would
exceed the amount collectible at the Maximum Rate, such amount as would be
excessive interest shall be applied to the reduction of the principal balance
remaining unpaid hereunder and not to the payment of interest. This provision
shall control every other provision in any and all other agreements and
instruments existing or hereafter arising between the Company and the Holder
with respect to the debt evidenced hereby.
 
1. Security. This Note and Company’s obligations hereunder are collateralized by
a security interest in Company’s assets, pursuant to a Collateral Pledge and
Security Agreement, dated as of even date herewith, by the Company, in favor of
Mandalay (the “Security Agreement”). If an Event of Default (as hereinafter
defined) shall have occurred and be continuing and the principal amount of this
Note shall become due and payable, the Holder shall be entitled to exercise, in
addition to any right, power or remedy permitted in law or equity, all its
remedies under the Security Agreement.
 

--------------------------------------------------------------------------------

2.    Interest; Payments.
 
(a) Principal of, and any accrued and unpaid interest on, this Note shall be due
and payable on any date and time on or after October 15, 2008 within five
Business Days (as defined below) of written demand by the Holder (such date and
time hereinafter referred to as the “Maturity Date”), unless it has been prepaid
or converted in accordance with the terms hereof.
 
(b) Until this Note is converted or paid in full, interest on this Note shall
accrue from the date hereof (the “Issue Date”) at the Applicable Rate
(calculated on the basis of a 360-day year consisting of twelve 30 day months).
For purposes of this Note, the “Applicable Rate” shall mean 10% until August 16,
2008 and increasing to 15% from and after August 16, 2008, except in the event
that the Company fails to pay the Holder any portion of the principal and/or
interest due on the Maturity Date in which case the Applicable Rate shall
thereafter be 20%.
 
(c) If the Maturity Date would fall on a day that is not a Business Day (as
defined below), the payment due on the Maturity Date will be made on the next
succeeding Business Day with the same force and effect as if made on the
Maturity Date. “Business Day” means any day which is not a Saturday or Sunday
and is not a day on which banking institutions are generally authorized or
obligated to close in the city of New York, New York.
 
(d) Payment of principal and interest on this Note shall be made by wire
transfer of immediately available funds to an account designated by the Holder
or by check sent to the Holder’s address set forth above or to such other
address as the Holder may designate for such purpose from time to time by
written notice to the Company, in such coin or currency of the United States as
at the time of payment shall be legal tender for the payment of public and
private debts.
 
(e) The obligations to make the payments provided for in this Note are absolute
and unconditional and not subject to any defense, set-off, counterclaim,
rescission, recoupment or adjustment whatsoever. The Company hereby expressly
waives demand and presentment for payment, notice of non-payment, notice of
dishonor, protest, notice of protest and diligence in taking any action to
collect any amount called for hereunder, and shall be directly and primarily
liable for the payment of all sums owing and to be owing hereon, regardless of
and without any notice, diligence, act or omission with respect to the
collection of any amount called for hereunder.
 

2

--------------------------------------------------------------------------------

(f) The Company may prepay this Note in whole (and not in part) without penalty.
 
(g) Unless this Note has been prepaid or converted in accordance with the terms
hereof, in the event of the Company’s liquidation, the Company shall, at the
Holder’s option, pay the principal of, and any accrued and unpaid interest on,
this Note or convert this Note in accordance with Section 4(a) below.
 
3.    Ranking of Note.
 
(a) The Company, for itself, its successors and assigns, covenants and agrees,
that the payment of the principal of and interest on this Note is senior in
right of payment to the payment of all existing and future Junior Debt (as
hereinafter defined). “Junior Debt” shall mean all existing and future
Indebtedness (as hereinafter defined) other than (i) the Indebtedness
represented by this Note, (ii) the Line of Credit (as defined below) and (iii)
as otherwise agreed to by the Holder in writing. “Indebtedness” shall mean (A)
any liability of the Company for borrowed money, (x) evidenced by a note,
debenture, bond or other instrument of indebtedness (including, without
limitation, a purchase money obligation), including any given in connection with
the acquisition of property, assets or service, or (y) for the payment of rent
or other amounts relating to capitalized lease obligations; (B) any liability of
others of the nature described in clause (A) which the Company has guaranteed or
which is otherwise its legal liability; and (C) any modification, renewal,
extension, replacement or refunding of any such liability described in clause
(A) or (B); provided, that Indebtedness does not include unsecured trade credit.
 
(b) The Company covenants and agrees to use its commercially reasonable efforts
to cause any current holder of Junior Debt and to cause any future holder of
Junior Debt permitted to be incurred pursuant to this Note to execute such
subordination agreements, instruments or waivers as may be necessary to reflect
the terms set forth herein.
 
(c) Mandalay acknowledges and agrees that the Company may seek to obtain a $5
million line of credit (the “Line of Credit”), and if the Company obtains such
Line of Credit, the payment of principal and interest on this Note will be
junior in right of payment to the payment of any Indebtedness represented by the
Line of Credit. Mandalay shall execute such subordination agreements as may be
reasonably required by the lender of such Line of Credit to reflect the
foregoing.
 
(d) Until the payment in full of all amounts of principal of, and interest on,
this Note, and all other amounts owing under this Note, no payment may be made
with respect to the principal of or other amounts owing with respect to any
Junior Debt, or in respect of any redemption, retirement, purchase or other
acquisition thereof; provided, that the Company may pay scheduled interest
thereon so long as no Event of Default shall have occurred and be continuing.
 
(e) Upon any payment or distribution of the assets of the Company, to creditors
upon dissolution, total or partial liquidation or reorganization of, or similar
proceeding relating to the Company, the Holder of the Note will be entitled to
receive payment in full before any holder of Junior Debt is entitled to receive
any payment.
 

3

--------------------------------------------------------------------------------

4.    Conversion.
 
(a) Unless previously paid or converted in full, at the Holder’s option at any
time, this Note shall convert, in whole or in part, into shares of common stock
of the Company, par value $0.0001 (the “Common Stock”) or other Equity
Securities (as defined below) as applicable. In the event the Holder elects to
convert all or a portion of this Note as aforesaid, it shall deliver to the
Company written notice of such election (a “Conversion Notice”), which
Conversion Notice shall state the portion of this Note which the Holder has
elected to convert. The conversion of this Note into shares of Equity Securities
shall take place on the next Business Day following the Company’s receipt of the
Holder’s Conversion Notice or on such other date and at such other time as may
be mutually agreed to by the Company and the Holder (such date hereinafter
referred to as the “Optional Conversion Date”). The number of shares of Equity
Securities into which this Note (or portion of this Note) shall be convertible
shall be determined by dividing (i) that portion of the principal and accrued
interest of this Note being converted, by (ii) the lower of $20.00 or the price
per share at which the Equity Securities (as hereinafter defined) are sold in
the Qualified Financing (as hereinafter defined); provided that, if a Qualified
Financing consists of two or more capital raises, the price per share shall be
deemed to be the weighted average purchase price for such capital raises
computed on a fully-converted basis.
 
(b) For purposes hereof, a “Qualified Financing” shall mean the sale of Common
Stock or other Equity Securities, the gross proceeds of which, in the aggregate,
equal or exceed $10,000,000 (or such other amount as shall be agreed upon by the
Company and Holder); “Equity Securities” shall mean the Common Stock or other
equity securities issued in connection with such Qualified Financing.
 
(c) Upon conversion of this Note pursuant to Section 4(a) or (b), the Holder
shall be deemed to be the holder of record of the Common Stock, issuable upon
such conversion (in either case, the “Conversion Shares”), notwithstanding that
the transfer books of the Company shall then be closed or certificates (if
applicable) representing such Conversion Shares shall not then have been
actually delivered to the Holder. If requested by the Holder and with the
consent of the Company, as soon as practicable after the Optional Conversion
Date or the closing of the Qualified Financing, as applicable, the Company shall
issue and deliver to the Holder a certificate or certificates for the Conversion
Shares registered in the name of the Holder or its designee(s); provided, that
the Company, by notice given to the Holder promptly after the Optional
Conversion Date or the closing of the Qualified Financing, as applicable, may
require the Holder, as a condition to the delivery of such certificate or
certificates, to present this Note to the Company.
 
(d) The issuance of any Conversion Shares, and the delivery of certificates (if
applicable) or other instruments representing the same, shall be made without
charge to the Holder for any tax or other charge in respect of such issuance.
The Company shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery of any certificate
in a name other than that of the Holder, and the Company shall not be required
to issue or deliver any such certificate unless and until the person or persons
requesting the issue thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that such tax
has been paid.
 

4

--------------------------------------------------------------------------------

(e) The Holder shall not have, solely on account of such status as a holder of
this Note, any rights of a stockholder of the Company, either at law or in
equity, or any right to any notice of meetings of stockholders or of any other
proceedings of the Company, except as provided in this Note.
 
(f) The Company shall at all times reserve and keep available out of its
authorized and unissued shares of Common Stock, solely for the purpose of
providing for the exercise of the conversion rights provided for under this
Section 4, such number of shares of Common Stock as shall, from time to time, be
sufficient for issuance upon conversion of this Note in full. The Company
covenants that all shares of Common Stock issuable upon conversion hereof shall
be validly issued and free of preemptive rights (and, to the extent applicable,
fully paid and nonassessable).
 
(g) Upon conversion of this Note, if not already a party thereto, the Holder
shall enter into the Company’s then current shareholders’ agreement, the form
and substance of which shall be reasonably satisfactory to the Holder and its
counsel.
 
5.    Negative Covenants. The Company covenants and agrees with the Holder that,
so long as any amount remains unpaid on this Note, unless the consent of the
Holder is obtained, the Company shall not:
 
(a) increase the number of authorized shares of Common Stock or other class or
series of equity securities;
 
(b) redeem or repurchase any of the Company’s outstanding shares of Common Stock
or other equity securities;
 
(c) consummate a merger, corporate reorganization or sale of Common Stock or
other equity securities constituting 51% or more of the Company’s outstanding
voting securities, voluntarily dissolve or liquidate, sell or exclusively
license all or substantially all of the Company’s intellectual property, or
consummate any transaction in which all or substantially all of the assets of
the Company are sold;
 
(d) pay or declare any distribution or dividend with respect to the Company’s
Common Stock or other equity securities;
 
(e) except for the Line of Credit, take any action that relates to or would
result in the incurrence by the Company of Indebtedness;
 

5

--------------------------------------------------------------------------------

(f) draw down any amounts under the Line of Credit that would leave the Company
with less than $2,000,000 of committed availability under the Line of Credit;
 
(g) if the Line of Credit is obtained, permit the Line of Credit to expire or be
terminated prior to repayment of this Note;
 
(h) acquire any material business;
 
(i) create any subsidiary, unless such subsidiary shall be a wholly-owned
subsidiary and such subsidiary guarantees the Company’s obligations under this
Note;
 
(j) permit any subsidiary to authorize or issue any capital stock, membership
units, partnership interests or other equity securities, or any option, warrant,
put, call, note, debenture or other right exercisable, convertible or
exchangeable for such subsidiary’s equity securities, to any person or entity
other than to the Company; and
 
(k) agree to, or permit any subsidiary to agree to, take any actions set forth
above, except those actions contemplated by the letter of intent between the
Company and Mandalay dated the date hereof.
 
6.    Affirmative Covenants. The Company covenants and agrees with the Holder
that, so long as any amount remains unpaid on this Note, the Company shall:
 
(a) deliver to the Holder quarterly financial statements within 45 days after
quarter-end, and annual financial statements within 90 days of year-end. In
addition, Holder shall receive monthly statements of cash flow for the
immediately preceding month and projections of cash flow for the next month
within 10 days of the end of each calendar month;
 
(b) promptly after the Company shall obtain knowledge of the occurrence of any
Event of Default (as hereinafter defined) or any event which with notice or
lapse of time or both would become an Event of Default (an Event of Default or
such other event being a “Default”), a notice specifying that such notice is a
“Notice of Default” and describing such Default in reasonable detail, and, in
such Notice of Default or as soon thereafter as practicable, a description of
the action the Company has taken or proposes to take with respect thereto; and
 
(c) permit the Holder to visit and inspect its properties and its books and
records at reasonable times during normal business hours and on reasonable
notice.
 
7.    Events of Default.
 
(a) The occurrence of any of the following events shall constitute an event of
default (an “Event of Default”):
 

6

--------------------------------------------------------------------------------

(i) A default in the payment of the principal or interest on this Note, when and
as the same shall become due and payable (a “Payment Default”);
 
(ii) A default in the performance, or a breach, of any covenant or agreement of
the Company contained in this Note (other than a Payment Default) or in the
Purchase Agreement or Security Agreement and continuance of such default or
breach of for a period of 10 days after receipt of notice from the Holder as to
such breach;
 
(iii) Any material breach of a representation, warranty or certification made by
the Company in or pursuant to this Note, the Purchase Agreement or the Security
Agreement;
 
(iv) A final judgment or judgments for the payment of money in excess of
$250,000 in the aggregate shall be rendered by one or more courts,
administrative or arbitral tribunals or other bodies having jurisdiction against
the Company and the same shall not be discharged (or provision shall not be made
for such discharge), or a stay of execution thereof shall not be procured,
within 60 days from the date of entry thereof and the Company shall not, within
such 60-day period, or such longer period during which execution of the same
shall have been stayed, appeal therefrom and cause the execution thereof to be
stayed during such appeal; and
 
(v) The entry of a decree or order by a court having jurisdiction adjudging the
Company as bankrupt or insolvent, or approving a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of the
Company, under federal bankruptcy law, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or other similar law,
and the continuance of any such decree or order unstayed and in effect for a
period of 60 days; or the commencement by the Company of a voluntary case under
federal bankruptcy law, as now or hereafter constituted, or any other applicable
federal or state bankruptcy, insolvency, or other similar law, or the consent by
the Company to the institution of bankruptcy or insolvency proceedings against
it, or the filing by the Company of a petition or answer or consent seeking
reorganization or relief under federal bankruptcy law or any other applicable
federal or state law, or the consent by the Company to the filing of such
petition or to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or of any substantial part of
the property of the Company, or the making by the Company of an assignment for
the benefit of creditors, or the admission by the Company in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any such action.
 
(b) Nothing contained in Section 7(a) hereof shall in any way limit or be
construed as limiting the right of the Holder to demand payment of the principal
of, and any accrued and unpaid interest on, this Note at any time or after
October 15, 2008 pursuant to Section 2(a) of this Note.
 

7

--------------------------------------------------------------------------------

8.    Remedies Upon Default. Upon the occurrence of an Event of Default referred
to in Section 7(a)(v), the principal amount then outstanding of, and the accrued
interest on, this Note shall automatically become immediately due and payable
without presentment, demand, protest or other formalities of any kind, all of
which are hereby expressly waived by the Company. Upon the occurrence of an
Event of Default referred to in Sections 7(a)(i) through (iv), the Holder, by
notice in writing given to the Company, may declare the entire principal amount
then outstanding of, and the accrued interest on, this Note to be due and
payable immediately, and upon any such declaration the same shall become and be
due and payable immediately, without presentation, demand, protest or other
formalities of any kind, all of which are expressly waived by the Company. The
Holder may institute such actions or proceedings in law or equity as it shall
deem expedient for the protection of its rights and may prosecute and enforce
its claims against all assets of the Company, and in connection with any such
action or proceeding shall be entitled to receive from the Company payment of
the principal amount of this Note plus accrued interest to the date of payment
plus reasonable expenses of collection, including, without limitation,
reasonable attorneys' fees and expenses actually incurred. For the avoidance of
doubt, the foregoing is not intended as an exclusive remedy and Holder may
enforce any other rights granted under this Note, the Security Agreement, any
other agreement or otherwise under applicable law.
 
9.    Reclassifications and Reorganizations. In case of any reclassification or
reorganization of the Common Stock, or, in the case of any merger or
consolidation of the Company with or into another entity (excluding a
consolidation or merger in which the Company is the continuing entity that does
not result in any reclassification or reorganization of the Common Stock), or,
in the case of any sale or conveyance to another corporation or entity of the
assets or other property of the Company as an entirety or substantially as an
entirety, in connection with which the Company is dissolved, subject to the
terms and provisions of Section 4 of this Note, the Holder shall thereafter have
the right to convert this Note into the kind and amount of shares of stock or
other securities or property (including cash) receivable upon such
reclassification, reorganization, merger or consolidation, or upon a dissolution
following any such sale or transfer, that the Holder would have received if the
Holder had converted this Note pursuant to Section 4(a) hereof immediately prior
to such event. The provisions of this Section 9 shall similarly apply to
successive reclassifications, reorganizations, mergers or consolidations, sales
or other transfers.
 
10.   Miscellaneous.
 
(a) The terms and conditions of this Note shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties; provided,
however, that neither party may assign any of its rights or obligations
hereunder without the prior written consent of the other, except that the Holder
may assign all or any portion of its rights hereunder to an affiliate of the
Holder upon notice to the Company of same but without such consent. Assignment
of all or any portion of this Note in violation of this Section 10(a) shall be
null and void. Nothing in this Note, expressed or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
permitted assigns any rights, remedies, obligations, or liabilities under or by
reason of this Note, except as expressly provided in this Note.
 

8

--------------------------------------------------------------------------------

(b) All notices and other communications required or permitted under this Note
shall be in writing and shall be deemed delivered (i) when received, if
delivered by hand delivery, (ii) three Business Days after being sent, certified
or registered mail, return receipt requested, first class postage prepaid, or
(iii) one Business Day after being sent by nationally recognized overnight
courier, addressed (A) if to the Company, to 575 Broadway, New York, New York
10012, marked for the attention of Ron Chaimowitz, CEO; (B) if to Mandalay, to
2121 Avenue of the Stars, Suite 2550, Los Angeles, California 90067, marked for
the attention of Bruce L. Stein, CEO; or (C) if to any subsequent Holder, at the
address of such Holder as provided to the Company. All written notices delivered
by means other than as set forth above shall be deemed effective upon receipt.
Any party may change the address to which notices, requests, consents or other
communications hereunder are to be delivered by giving the other parties notice
in the manner set forth in this Section 10(b).
 
(c) Upon receipt of evidence satisfactory to the Company, of the loss, theft,
destruction or mutilation of this Note (and upon surrender of this Note if
mutilated), including an affidavit of the Holder thereof that this Note has been
lost, stolen, destroyed or mutilated together with an indemnity against any
claim that may be made against the Company on account of such lost, stolen,
destroyed or mutilated Note, and upon reimbursement of the Company's reasonable
incidental expenses, the Company shall execute and deliver to the Holder a new
Note of like date, tenor and denomination.
 
(d) No course of dealing and no delay or omission on the part of the Holder or
the Company in exercising any right or remedy shall operate as a waiver thereof
or otherwise prejudice the Holder's or the Company’s rights, powers or remedies,
as the case may be. No right, power or remedy conferred by this Note upon the
Holder or the Company shall be exclusive of any other right, power or remedy
referred to herein or now or hereafter available at law, in equity, by statute
or otherwise, and all such remedies may be exercised singly or concurrently.
 
(e) If one or more provisions of this Note are held to be unenforceable under
applicable law, such provision shall be excluded from this Note and the balance
of this Note shall be interpreted as if such provision were so excluded and
shall be enforceable in accordance with its terms. This Note may be amended only
by a written instrument executed by the Company and the Holder hereof. Any
amendment shall be endorsed upon this Note, and all future Holders shall be
bound thereby.
 
(f) This Note shall be governed by and construed in accordance with the laws of
the State of New York, without giving effect to principles governing conflicts
of law.
 

9

--------------------------------------------------------------------------------

 
(g) The Company irrevocably consents to the exclusive jurisdiction of any
federal court located in the State of New York sitting in New York County, New
York (provided that, if any such court does not have or does not accept
jurisdiction, the Company consents to the jurisdiction of any state court in the
State of New York sitting in New York County, New York) in connection with any
action or proceeding arising out of or relating to this Note, any document or
instrument delivered pursuant to, in connection with or simultaneously with this
Note, or a breach of this Note or any such document or instrument.
 

* * * * *

10

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the Company has caused this Note to be executed and dated
the day and year first above written.

GREEN SCREEN INTERACTIVE SOFTWARE, INC.

By: /s/ Ron Chaimowitz
Name: Ron Chaimowitz
Title: CEO

 

11

--------------------------------------------------------------------------------