SECURITIES
      PURCHASE AGREEMENT

    


    This
      Securities Purchase Agreement, dated as of October 23, 2008 (this “Agreement”),
      is
      entered into by and among Mandalay Media, Inc., a Delaware corporation with
      headquarters located at c/o Trinad Capital, L.P., 2121 Avenue of the Stars,
      Suite 2550, Los Angeles, California 90067 (the “Company”),
      and
      the investors listed on the Schedule of Investors attached hereto as
Exhibit A
      (each
      individually, an “Investor”
and
      collectively, the “Investors”).

    


    BACKGROUND

     

    WHEREAS,
      the Company is offering in a private placement (the “Offering”)
      to
“accredited investors” (as such term is defined in Regulation D (“Regulation
      D”)
      promulgated under the Securities Act of 1933, as amended (the “Securities
      Act”)),
      the
      opportunity to purchase a minimum of 1,685,393 shares (the “Minimum
      Shares”)
      and a
      maximum of up to an aggregate of 3,370,786 shares (the “Maximum
      Shares”)
      of its
      common stock, $0.0001 par value per share (the “Common
      Stock”),
      at a
      purchase price of $2.67 per share (the “Purchase
      Price”)
      and,
      in connection therewith and in consideration thereof, warrants to purchase
      Common Stock in the form attached hereto as Exhibit
      B
      (the
“Warrants”);
      

    


    WHEREAS,
      the Investors desire to purchase that number of shares of Common Stock (the
      “Shares”)
      and
      Warrants to purchase that number of shares of Common Stock (the “Warrant
      Shares”)
      (the
      Shares and Warrants together, the “Securities”)
      as are
      set forth on Exhibit
      A
      hereto,
      subject to the terms and conditions set forth herein;

     

    NOW,
      THEREFORE, in consideration of the premises and the mutual representations
      and
      covenants hereinafter set forth, the parties hereto agree as
      follows:

    


    1. Sale
      of Securities.

    


    1.1 Sale
      of Securities; Subscription for Securities.
      Subject
      to the terms and conditions of this Agreement, at the applicable Closing (as
      hereinafter defined), the Company will sell and issue to each of the Investors,
      and each of the Investors will purchase, that number of Shares and Warrants
      to
      purchase that number of Warrant Shares as set forth opposite such Investor’s
      name on Exhibit A
      in
      exchange for the “Aggregate Purchase Price” set forth opposite such Investor’s
      name on Exhibit
      A
      (the
“Aggregate
      Purchase Price”).

    


    To
      purchase the Securities, this Agreement must be duly executed by each Investor
      and the Aggregate Purchase Price delivered by each Investor in the form of
      wire
      transfer to (i) the account designated in the escrow agreement entered into
      by
      and among the Company, the Initial Closing Investors (as hereinafter defined)
      and American Stock Transfer Company, LLC as escrow agent (the “Escrow
      Agent”),
      attached hereto as Exhibit
      K
      (the
“Escrow
      Agreement”),
      provided,
      that
      the
      amount to be delivered by VAC (as hereinafter defined) shall be net of any
      reasonable legal expenses of VAC incurred in the negotiation and preparation
      of
      this Agreement and the transactions contemplated hereby, in any event not to
      exceed $100,000, or (ii) the account designated in writing to each Investor
      by
      the Company at any Closing subsequent to the Initial Closing. The Investors
      participating in the Initial Closing are referred to herein as the “Initial
      Closing Investors.”


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.2 Use
      of
      Proceeds.
      The
      Company will use the net proceeds from the sale of the Securities to fund the
      business of the Company and for working capital and general corporate purposes,
      including potential acquisitions.

    


    2. The
      Closing.
      The
      initial closing hereunder shall occur upon the delivery by each of the Initial
      Closing Investors of the Aggregate Purchase Price sufficient to purchase the
      Minimum Shares and Warrants issued in connection therewith to the account
      designated in the Escrow Agreement, and shall take place at such time and place
      as the Company may designate which shall be no later than the first business
      day
      following the satisfaction or waiver of all the conditions set forth in Section
      5 and Section 6 of this Agreement (the “Initial Closing,”
and
      the date on which the Initial Closing occurs, the “Initial
      Closing Date”).
      Following the Initial Closing Date, the Company may hold additional closings
      (each, with the Initial Closing, a “Closing,”
and
      each such date, with the Initial Closing Date, a “Closing
      Date”)
      at
      such places and times as designated by the Company, until the earlier of (i)
      such time as the Company has sold up to the Maximum Shares and the Warrants
      issued in connection therewith or (ii) forty-five (45) days after the Initial
      Closing Date.

    


    Within
      three business days following the release by the Escrow Agent to the Company
      of
      the Aggregate Purchase Price sufficient to purchase the Minimum Shares, the
      Company shall deliver to each Initial Closing Investor (i) a certificate for
      the
      Shares being purchased by such Initial Closing Investor and (ii) Warrants for
      the Warrant Shares being purchased by such Initial Closing Investor, registered
      in the name of such Initial Closing Investor.

    


    Within
      three business days following each Closing subsequent to the Initial Closing,
      the Company shall deliver to each Investor (i) a certificate for the Shares
      being purchased by such Investor and (ii) Warrants for the Warrant Shares being
      purchased by such Investor, registered in the name of such Investor, against
      payment of the Aggregate Purchase Price therefor in accordance with Section
      1.1
      above. 

    


    Each
      Investor hereby authorizes and directs the Company to deliver the Securities
      to
      be issued to such Investor pursuant to this Agreement directly to the
      residential or business address indicated on such Investor’s signature page
      hereto.

    


    3. Representations
      of the Company.
      A
      Schedule of Exceptions, attached hereto as Exhibit
      C
      (each, a
“Schedule
      of Exceptions”),
      shall
      be delivered to the Investors in connection with each Closing. The Schedule
      of
      Exceptions shall be arranged in sections corresponding to the numbered and
      lettered sections and subsections contained in this Section 3, and the
      disclosures in any section or subsection of the Schedule of Exceptions shall
      qualify other sections and subsections in this Section 3 to the extent it is
      reasonably apparent from a reading of the disclosure that such disclosure is
      applicable to such other sections and subsections. Except as set forth in the
      Schedule of Exceptions delivered to the Investors at the applicable Closing,
      the
      Company hereby represents and warrants to the Investors as
      follows:



    
      
        
        

      

      
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    3.1 Organization,
      Good Standing and Qualification.
      Each of
      the Company and its subsidiaries has been duly incorporated and organized,
      and
      is validly existing in good standing, under the laws of its state of
      incorporation and qualified to do business in any state or other jurisdiction
      in
      which the nature of the business conducted or property owned by it makes such
      qualification necessary except where the failure to be so qualified or in good
      standing, as the case may be, would not reasonably be expected to individually
      or in the aggregate, (i) materially and adversely affect the legality, validity
      or enforceability of any Transaction Document (as hereinafter defined), (ii)
      have or result in a material adverse effect on the results of operations,
      assets, business, prospects or financial condition of the Company or any Company
      subsidiary or (iii) materially and adversely impair the Company’s ability
      to perform its obligations under any of the Transaction Documents (any of (i),
      (ii) or (iii), a “Material
      Adverse Effect”).

    


    3.2 Corporate
      Power and Authority.
      The
      Company has all requisite corporate power and authority to execute, deliver,
      and
      perform, this Agreement, the Escrow Agreement and the Warrants (together, the
      “Transaction
      Documents”),
      to
      sell and issue the Securities (including the underlying Warrant Shares)
      hereunder, and to own and operate its properties and assets and to carry on
      its
      business as currently conducted and as presently proposed to be
      conducted.

    


    3.3 Authorization
      and Enforcement.
      The
      execution and delivery of the Transaction Documents and the consummation of
      the
      transactions contemplated hereby and thereby have been duly authorized by all
      necessary corporate action on the part of the Company, its officers, directors
      and stockholders. Each of the Transaction Documents has been duly executed
      and
      delivered by the Company and, assuming that this Agreement constitutes a valid
      and binding agreement of the other parties hereto, each such Transaction
      Document constitutes a legal, valid and binding obligation of the Company,
      enforceable against the Company in accordance with its terms, subject to
      applicable bankruptcy, insolvency, reorganization, moratorium or other similar
      laws now or hereafter in effect relating to creditors’ rights and remedies
      generally and subject, as to enforceability, to general principles of equity,
      regardless of whether enforceability is considered in a proceeding at law or
      in
      equity.

    


    3.4 Subsidiaries.
      The
      Company does not presently own or control, directly or indirectly, any interest
      in any other corporation, partnership, trust, joint venture, association, or
      other entity other than the subsidiaries scheduled on Section 3.4 of the
      Schedule of Exceptions. Except as set forth in Section 3.4 of the Schedule
      of
      Exceptions, the Company owns, directly or indirectly, all of the capital stock
      or comparable equity interests of each subsidiary free and clear of any liens
      and all the issued and outstanding shares of capital stock or comparable equity
      interest of each subsidiary are, to the extent applicable, validly issued,
      fully
      paid, non-assessable and free of preemptive and similar rights.

    


    3.5 No
      Conflicts.
      The
      execution, delivery and performance of the Transaction Documents, and the
      consummation of the transactions contemplated hereby and thereby will not result
      in any violation or default under, or result in a violation or breach of, with
      or without the passage of time or the giving of notice or both, (i) the
      Company’s or any Company subsidiary’s certificate or articles of incorporation,
      bylaws or other organizational or charter documents, (ii) any judgment, order
      or
      decree of any court or arbitrator to which the Company or any Company subsidiary
      is a party or is subject, (iii) any agreement or contract of the Company or
      any
      Company subsidiary, or (iv) to the Company’s knowledge, a violation of any
      statute, law, regulation or order, or an event which results in the creation
      of
      any lien upon any asset of the Company or any Company subsidiary, in any such
      case which would have a Material Adverse Effect.


    
      
        
        

      

      
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    3.6 Valid
      Issuance of Securities.

    


    (a) The
      Shares, if and when issued and delivered in accordance with the terms of this
      Agreement for the consideration expressed herein, will be duly and validly
      issued and outstanding, fully paid, and non-assessable and will be free of
      restrictions on transfer other than restrictions on transfer under applicable
      state and federal securities laws.

    


    (b) The
      Warrants have been duly and validly authorized by the Company and, if and when
      paid for and then issued in accordance with the terms of this Agreement for
      the
      consideration expressed herein, will be validly executed and delivered by the
      Company. The Warrant Shares have been duly and validly authorized and reserved
      for issuance upon exercise of the Warrants and when issued upon such exercise
      in
      accordance with the Warrants, will be duly and validly issued and outstanding,
      fully paid and non-assessable and will be free of restrictions on transfer
      other
      than restrictions on transfer under applicable state and federal securities
      laws.

    


    (c) Assuming
      the truth and accuracy of the representations made by each Investor in Section
      4
      hereof, the offer and sale of the Securities solely to each Investor in
      accordance with this Agreement and (assuming no change in currently applicable
      law, no transfer of Securities by any holder thereof and no commission or other
      remuneration is paid or given, directly or indirectly, for soliciting the
      issuance of Warrant Shares upon exercise of the Warrants) the issuance of the
      Warrant Shares on a cashless basis are exempt from the registration and
      prospectus delivery requirements of the Securities Act and the securities
      registration and qualification requirements of the currently effective
      provisions of the securities laws of the State of California and the states
      in
      which the Investor is a resident based upon its address set forth on the
      Schedule of Investors attached hereto as Exhibit
      A.

    


    3.7 Capitalization.
      The
      capitalization of the Company immediately prior to the Initial Closing consists
      of the following:

    


    (a) Common
      Stock. A total of 100,000,000 shares of Common Stock are authorized, of which
      37,338,554 shares are issued and outstanding.

    


    (b) Preferred
      Stock. A total of 1,000,000 shares of preferred stock, par value $0.0001 per
      share (the “Preferred
      Stock”),
      are
      authorized, of which 100,000 shares are designated as Series A Convertible
      Preferred Stock, par value $0.0001 per share, all of which are issued and
      outstanding. 



    
      
        
        

      

      
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    (c) Options.
      A total of 7,000,000 shares of Common Stock are reserved for issuance to
      employees, consultants and directors pursuant to the Company’s 2007 Employee
      Director and Consultant Stock Plan (the “Plan”),
      of
      which options to purchase 6,201,864 Common Stock are issued and outstanding,
      and
      an additional 2,463,422 shares of Common Stock are reserved for issuance under
      the Twistbox Entertainment, Inc. 2006 Stock Incentive Plan. 798,136 shares
      of
      Common Stock remain available for future issuance under the Plan.

    


    (d) Warrants.
      A total of 2,495,243 shares of Common Stock are reserved for issuance pursuant
      to outstanding warrants.

    


    (e) Senior
      Secured Note. A portion of the principal amount due under the $16.5 million
      senior secured note issued by Twistbox Entertainment, Inc. to
      ValueAct Smallcap Master Fund, L.P., due January 30, 2010, as amended, may
      be repaid by the Company in shares of Common Stock. 

    


    (f) Except
      as
      set forth in this Section 3.7, there are no outstanding options, warrants,
      rights (including conversion or preemptive rights) or agreements for the
      purchase or acquisition from the Company of any shares of its capital stock
      or
      any securities convertible into or ultimately exchangeable or exercisable for
      any shares of the Company’s capital stock. Apart from the exceptions noted
      herein or in the Schedule of Exceptions, no shares of the Company’s outstanding
      capital stock, or stock issuable upon exercise or exchange of any outstanding
      options, warrants or rights, or other stock issuable by the Company, are subject
      to any preemptive rights, rights of first refusal or other rights to purchase
      such stock (whether in favor of the Company or any other person), pursuant
      to
      any agreement or commitment of the Company. The Company has not made any
      representations regarding equity incentives to any officer, employee, director
      or consultant that are inconsistent with the share amounts and terms set forth
      in the Company’s board or director meeting minutes and/or actions by written
      consent of the Company’s board of directors.

    


    (g) The
      outstanding shares of the capital stock of the Company (i) are duly authorized
      and validly issued, fully paid and nonassessable, and have been approved by
      all
      requisite stockholder action, and (ii) assuming the accuracy of the
      representations and warranties and the compliance with the covenants made by
      the
      original purchasers of such shares, were issued in compliance with all
      applicable state and federal laws concerning the issuance of
      securities.

    


    3.8 Consents.
      No
      consent, approval, order or authorization of, or registration, qualification,
      designation, declaration or filing with, (i) any federal, state or local
      governmental authority having jurisdiction over the Company or any Company
      subsidiary, or (ii) any other person or entity, is required on the part of
      the
      Company or any Company subsidiary in order to enable the Company or any Company
      subsidiary to execute, deliver and perform its obligations under this Agreement
      and the other Transaction Documents to which it is a party except (A) where
      the
      failure to obtain the same would not have a Material Adverse Effect, (B) for
      such qualifications or filings under applicable securities laws as may be
      required in connection with the transactions contemplated by this Agreement
      and
      (C) for such board of director and stockholder consents that have been obtained
      prior to the Closing. All such qualifications and filings will, in the case
      of
      qualifications, be effective on the Closing and will, in the case of filings,
      be
      made within the time prescribed by law.


    
      
        
        

      

      
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    3.9 Absence
      of Litigation.
      There
      is no action, suit, proceeding, claim, arbitration or investigation pending
      (or,
      to the Company’s knowledge, currently threatened) against the Company or any
      Company subsidiary, its respective activities or its respective properties
      before any court or governmental agency. There is no action, suit, proceeding
      or
      investigation by the Company or any Company subsidiary currently pending or
      which the Company or any Company subsidiary intends to initiate.

    


    3.10 Compliance.
      Neither
      the Company nor any Company subsidiary (i) is in violation of any term of its
      certificate or articles of incorporation, bylaws or other organizational or
      charter documents, (ii) is in violation of any material term or provision of
      any
      indebtedness, instrument, judgment or decree or any material agreement and
      (iii)
      to its knowledge, is in violation of any order, statute, rule or regulation
      applicable to the Company where such violation would have a Material Adverse
      Effect.

    


    3.11 Title
      to Assets.
      The
      Company and each Company subsidiary owns and has good and marketable title
      to
      its respective tangible properties and assets, free and clear of all mortgages,
      deeds of trust, liens, encumbrances and security interests except for statutory
      liens for the payment of current taxes that are not yet delinquent and liens,
      encumbrances and security interests which arise in the ordinary course of
      business and which do not affect material properties and assets of the Company
      or any Company subsidiary. All facilities, machinery, equipment, fixtures,
      vehicles and other properties owned, leased or used by the Company or any
      Company subsidiary are in good operating condition and repair, ordinary wear
      and
      tear excepted.

    


    3.12 Indebtedness.
      Except
      as scheduled on Section 3.12 of the Schedule of Exceptions, neither the Company
      nor any Company subsidiary has (i) any indebtedness for borrowed money or for
      the deferred purchase price of property or services (other than current trade
      liabilities incurred in the ordinary course of business consistent with past
      practice and payable in accordance with customary practices), (ii) any other
      indebtedness that is evidenced by a note, bond, debenture or similar instrument,
      (iii) any obligations under financing leases, (iv) any obligations in respect
      of
      acceptances issued or created, (v) any liabilities secured by any lien on any
      property or (vi) any guarantee obligations.

    


    3.13 No
      General Solicitation; Brokers or Finders.
      Except
      as provided in Section 10 of this Agreement, neither the Company, nor any of
      its
      affiliates, nor any person or entity acting on its or their behalf, has (i)
      engaged in any form of general solicitation or general advertising (within
      the
      meaning of Regulation D) in connection with the offer or sale of the Securities
      or (ii) any liability to pay any fees or commissions to any broker, finder
      or
      agent with respect to the transactions contemplated by this Agreement or any
      of
      the other Transaction Documents.

    


    3.14 Private
      Placement.
      None of
      the Company, the Company subsidiaries, any of their affiliates, or any person
      or
      entity acting on their behalf has, directly or indirectly, at any time within
      the past six (6) months, made any offer or sale of any security or solicitation
      of any offer to buy any security under circumstances that would (i) eliminate
      the availability of the exemption from registration under Regulation D under
      the
      Securities Act in connection with the offer and sale by the Company of the
      Securities as contemplated hereby or (ii) cause the offering of the Securities
      pursuant to the Transaction Documents to be integrated with prior offerings
      by
      the Company for purposes of any applicable law, regulation or stockholder
      approval provisions, including, without limitation, under the rules and
      regulations of any securities exchange, market or trading or quotation facility
      on which the Common Stock is listed or quoted.


    
      
        
        

      

      
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    3.15 Registration
      Rights.
      Except
      as contemplated by this Agreement, the Company is not under any obligation
      to
      register under the Securities Act any of its currently outstanding securities
      or
      any securities issuable upon exercise or conversion of its currently outstanding
      securities nor is the Company obligated to register or qualify any such
      securities under any state securities or blue sky laws.

    


    3.16 Disclosure.
      This
      Agreement, the exhibits hereto, the other Transaction Documents and any
      certificate expressly delivered by the Company or any Company subsidiary to
      the
      Investors or their attorneys or agents in connection herewith or therewith
      or
      with the transactions contemplated hereby or thereby, taken as a whole, neither
      contain any untrue statement of a material fact nor, to the Company’s knowledge,
      omit to state a material fact necessary in order to make the statements
      contained herein or therein not misleading.

    


    4. Representations
      of the Investors.
      Each of
      the Investors severally represents and warrants to the Company as
      follows:

    


    4.1 Authorization.
      This
      Agreement constitutes the Investor’s valid and legally binding obligation,
      enforceable against the Investor in accordance with its terms except as may
      be
      limited by (i) applicable bankruptcy, insolvency, reorganization or other laws
      of general application relating to or affecting the enforcement of creditors’
rights generally and (ii) the effect of rules of law governing the availability
      of equitable remedies. The Investor represents that it has full power and
      authority to execute and deliver the Transaction Documents to which it is a
      party and perform its obligations thereunder.

    


    4.2 Regulation D.

    


    (a) The
      Investor understands and acknowledges that (i) the Securities acquired pursuant
      to this Agreement have not been registered under the Securities Act and are
      being sold in reliance upon an exemption from registration afforded by
      Regulation D and that such Securities have not been registered with any
      state securities commission or authority, (ii) pursuant to the requirements
      of
      Regulation D, the Securities may not be transferred, sold or otherwise
      exchanged unless in compliance with the provisions of Regulation D and/or
      pursuant to registration under the Securities Act, or pursuant to an available
      exemption thereunder and (iii) other than as set forth in Section 7 of this
      Agreement, the Company is under no obligation to register the Securities under
      the Securities Act or any state securities law, or to take any action to make
      any exemption from any such registration provisions available.

    


    (b) The
      Investor is an “accredited investor” within the meaning of Rule 501 of
      Regulation D, is knowledgeable, sophisticated and experienced in making, and
      is
      qualified to make, decisions with respect to investment shares representing
      an
      investment decision like that involved in the purchase of the
      Securities.


    
      
        
        

      

      
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    (c) The
      Securities to be purchased by the Investor hereunder will be acquired for
      investment for the Investor’s own account, not as a nominee or agent, and not
      with a view to the public resale or distribution thereof with the meaning of
      the
      Securities Act, and the Investor has no present intention of selling, granting
      any participation in, or otherwise distributing the same. If not an individual,
      the Investor also represents that the Investor has not been formed for the
      specific purpose of acquiring the Securities. The Investor recognizes that
      an
      investment in the Securities involves a high degree of risk, including a risk
      of
      total loss of the Investor. The Investor understands, acknowledges and agrees
      that it must bear the economic risk of its investment in the Securities for
      an
      indefinite period of time and has knowledge and experience in financial and
      business matters such that it is capable of evaluating the risks of the
      investment in the Securities and the Investor understands, acknowledges and
      agrees that prior to any such offer or sale, the Company may require, subject
      to
      the fulfillment of the Company’s obligations under Section 7 of this Agreement,
      as a condition to effecting a transfer of the Securities, an opinion of counsel,
      acceptable to the Company, as to the registration or exemption therefrom under
      the Securities Act and any state securities acts, if applicable.

    


    (d) At
      no
      time was the Investor presented with or solicited by any publicly issued or
      circulated newspaper, mail, radio, television or other form of general
      advertising or solicitation in connection with the offer, sale and purchase
      of
      the Securities. To the knowledge of such Investor, such Investor has received
      or
      has had full access to all the information it requested in connection with
      its
      investment decision with respect to the Securities to be purchased by such
      Investor under this Agreement, including without limitation, the Company’s
      filings with the United States Securities and Exchange Commission. Investor
      further has had a reasonable opportunity to ask questions of and receive answers
      from the directors, officers and management of the Company concerning the
      Company and the transactions contemplated by this Agreement and the Company’s
      business, management and financial affairs.

    


    (e) The
      Investor acknowledges that the Securities will bear a legend in substantially
      the following form:

    


    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
      OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
      DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
      STATE SECURITIES LAWS OR MANDALAY MEDIA, INC. SHALL HAVE RECEIVED AN OPINION
      OF
      ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
      UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT
      REQUIRED.


    
      
        
        

      

      
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    (f) Neither
      the Investor, nor
      any
      affiliate of the Investor or any person acting on his, her or its behalf, has
      recently sold shares of unregistered Common Stock of the Company.

    


    5. Conditions
      to the Closing.

    


    5.1 Conditions
      to the Obligations of the Company.
      The
      obligations of the Company under Section 1 of this Agreement are subject to
      the fulfillment, or waiver, of the following conditions on or before the
      Closing:

    


    (a) The
      representations and warranties of the Investors contained in Section 4
      shall be true on and as of the date hereof and the Closing Date with the same
      effect as though such representations and warranties had been made on and as
      of
      such date (except that any representation or warranty expressly stated to have
      been made or given as of a specific date need be true only as of such
      date).

    


    (b) The
      Investors shall have delivered payment to the Company for the Securities
      pursuant to this Agreement.

    


    (c) The
      Investors shall have duly executed and delivered the Transaction Documents
      to
      which they are parties.

    


    5.2. Conditions
      to the Obligations of Each of the Investors.
      The
      obligations of each of the Investors under Section 1 of this Agreement are
      subject to the fulfillment, or waiver, of the following conditions on or before
      each Closing:

    


    (a) The
      representations and warranties of the Company contained in Section 3 shall
      be true on and as of the date hereof and the Closing Date with the same effect
      as though such representations and warranties had been made on and as of such
      date (except that any representation or warranty expressly stated to have been
      made or given as of a specific date need be true only as of such
      date).

    


    (b) The
      Company shall have obtained all governmental, regulatory or third party consents
      and approvals, if any, necessary for the sale of the Securities.

    


    (c) The
      Company shall have performed and complied with all agreements, obligations
      and
      conditions contained in this Agreement that are required to be performed or
      complied with by it on or prior to the Closing Date.

    


    (d) The
      Company shall have duly executed and delivered to each Investor such other
      documents relating to the transaction contemplated by this Agreement as such
      Investor or its counsel may reasonably request.

    


    (e) The
      Company shall have delivered to each Investor an officer’s certificate duly
      executed by the Company’s Chief Executive Officer certifying to the fulfillment
      of the conditions specified in Sections 5.2(a) through 5.2(c).


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    


    6. Additional
      Conditions to the Initial Closing.

    


    6.1 Conditions
      to the Obligations of the Initial Closing Investors.
      In
      addition to the conditions set forth in Section 5.2, the obligations of the
      Initial Closing Investors under Section 1 of this Agreement are subject to
      the fulfillment, or the waiver, of the following conditions on or before the
      Initial Closing.

    


    (a) The
      Company shall have duly executed and delivered to ValueAct SmallCap Master
      Fund,
      L.P. (“VAC”)
      the
      allonge to the warrant to purchase 1,092,621 shares of Common Stock in the
      form
      as set forth on Exhibit
      D
      hereto.

    


    (b) The
      Company shall have duly executed and delivered to VAC the allonge to the warrant
      to purchase 1,092,622 shares of Common Stock in the form as set forth on
Exhibit
      E
      hereto.

    


    (c) The
      Company shall have delivered to VAC a duly executed copy of that certain
      promissory note issued by the Company to the shareholders of AMV Holdings
      Limited, Jack Creswell and Nathan MacLeitch in the form as set forth on
Exhibit
      F
      hereto.

    


    (d) AMV
      Holding Limited shall have duly executed and delivered to VAC that certain
      debenture in the form as set forth on Exhibit
      G
      hereto.

    


    (e) AMV
      Holding Limited shall have duly executed and delivered to VAC that certain
      guarantee in the form as set forth on Exhibit
      H
      hereto.

    


    (f) AMV
      Holding Limited, Nathaniel MacLeitch in his capacity as Junior Agent (as defined
      therein) and the Junior Lenders (as defined therein) shall have duly executed
      and delivered to VAC that certain priority deed in the form as set forth on
      Exhibit
      I
      hereto.   

    


    (g) The
      Company and Twistbox Entertainment, Inc. shall have duly executed and delivered
      to VAC that certain Second Amendment and Waiver to the Senior Secured Note
      due
      January 10, 2010 in the form as set forth on Exhibit
      J
      hereto.

    


    (h) The
      Company shall have delivered to the Initial Closing Investors an officer’s
      certificate duly executed by the Company’s Chief Executive Officer certifying to
      the completion of the acquisition by the Company of 100% of the share capital
      of
      AMV Holdings Limited and 80% of the share capital of Fierce Media
      Limited.

    


    (i) The
      Company shall have duly executed and delivered to each Initial Closing Investor
      the Escrow Agreement in the form as set forth on Exhibit
      K
      hereto.


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    7.Covenants
      of the Company.

     

    7.1 Piggyback
      Registration Rights. If
      at any
      time the Company shall determine to register under the Securities Act any of
      its
      securities (other than on Form S-8 or Form S-4 or their then equivalents and
      other than shares to be issued solely (i) in connection with any acquisition
      of
      any entity or business, (ii) upon the exercise of stock options, or (iii)
      pursuant to employee benefit plans), it shall send to each holder of Registrable
      Shares (as defined below), including each holder who has the right to acquire
      Registrable Shares, written notice of such determination and, if within thirty
      (30) days after receipt of such notice, such holder shall so request in writing,
      the Company shall use its commercially reasonable efforts to include in such
      registration statement all or any part of the Registrable Shares such holder
      requests to be registered therein; provided that, if, in connection with any
      offering involving an underwriting of Common Stock to be issued by the Company,
      the managing underwriter shall prohibit the inclusion of shares of Common Stock
      by selling holders in such registration statement or shall impose a limitation
      on the number of shares of such Common Stock which may be included in any such
      registration statement because, in its judgment, such limitation is necessary
      to
      effect an orderly public distribution, and such limitation is imposed pro rata
      with respect to all securities whose holders have a contractual, incidental
      (“piggyback”)
      right
      to include such securities in the registration statement and as to which
      inclusion has been requested pursuant to such right and there is first excluded
      from such registration statement all shares of Common Stock sought to be
      included therein by (i) any holder thereof not having any such contractual,
      incidental registration rights, and (ii) any holder thereof having contractual,
      incidental registration rights subordinate and junior to the rights of the
      holders of Registrable Shares, the Company shall then be obligated to include
      in
      such registration statement only such limited portion (which may be none) of
      the
      Registrable Shares with respect to which such holder has requested inclusion
      hereunder. “Registrable
      Shares”
means
      the Shares and the Warrant Shares; provided, however, that any of such shares
      shall cease to be Registrable Shares upon any sale of such shares pursuant
      to
      (i) a registration statement filed under the Securities Act, or (ii) Rule 144
      promulgated under the Securities Act.

    


    7.2 Reservation
      of Common Stock.
      The
      Company shall reserve and maintain, from its duly authorized shares of Common
      Stock, a sufficient number of shares of Common Stock for issuance hereunder
      and
      upon exercise of all of the Warrants to be issued hereunder. In the event that
      at any time the then authorized shares of Common Stock are insufficient for
      the
      Company to satisfy its obligations in full under the Transaction Documents,
      the
      Company shall promptly take such actions as may be required to increase the
      number of authorized shares.

    


    8. Transfer
      of Securities.
      Each
      Investor is aware that the Company will make a notation in its appropriate
      records and issue “stop transfer” instructions to its transfer agent with
      respect to the restrictions on the transferability of such
      Securities.

    


    9. Anti-Dilution.
      The
      Shares are subject to standard anti-dilution provisions in the event of forward
      or reverse stock splits or recapitalizations. For example, if the Company
      engages in a two for one reverse stock split, a holder of 100,000 Shares will
      be
      affected as follows:

    


    Pre-Split
      Ownership:

    


    100,000
      Shares


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    


    Post-Split
      Ownership:

    


    50,000
      Shares

    


    10. Broker’s
      Fees.
      The
      Investor is aware that, in connection with the Offering, the Company may pay
      a
      broker’s fee or fees totaling cash fees of 6% of the gross proceeds received by
      the Company from the Offering above an aggregate of $4,500,000.

    


    11. Miscellaneous.
      

    


    11.1 Termination.
      This
      Agreement may be terminated by the Company or any Investor, by written notice
      to
      the other parties, if the Initial Closing has not been consummated within 60
      days from the date hereof, provided that no such termination will affect the
      right of any party to sue for any breach by the other party (or
      parties).

    


    11.2 Successors
      and Assigns.
      This
      Agreement and any rights and obligations hereunder may not be transferred or
      assigned by either party without the prior written consent of the other party.
      This Agreement shall inure to the benefit of, and be binding upon the Company
      and the Investors and their respective heirs, legal representatives and
      permitted assigns.

    


    11.3 Survival.
      All
      representations, warranties, covenants and agreements contained herein shall
      survive the Closing.

    


    11.4 Notices.
      All
      notices or other communications hereunder shall be in writing and shall be
      deemed to have been duly given if delivered personally or mailed by certified
      or
      registered mail, return receipt requested, postage prepaid, as follows:


    


    (a) If
      to the
      Company, to Mandalay Media, Inc., c/o Trinad Capital L.P., 2121 Avenue of the
      Stars, Suite 2550, Los Angeles, CA 90067, Attention: Chief Financial Officer,
      or
      to such other address as the Company shall have designated to the Investors
      in
      writing.

    


    (b) If
      to an
      Investor, at his, her or its address set forth on Exhibit A,
      or at
      such other address or addresses as may have been furnished to the Company in
      writing by such Investor. 

    


    11.5 Entire
      Agreement.
      This
      Agreement and the Warrant, together with all schedules and exhibits thereto,
      embody the entire agreement and understanding between the parties hereto with
      respect to the subject matter hereof and supersede all prior agreements and
      understandings, oral or written, relating to such subject matter, which the
      parties acknowledge have been merged into such documents, exhibits and
      schedules. At or after the Closing, and without further consideration, the
      Company and each Investor will execute and deliver such further documents as
      may
      be reasonably requested in order to give effect to the intention of the parties
      under the Transaction Documents.



    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    


    11.6 Amendments
      and Waivers.
      Any
      term of this Agreement may be amended and the observance of any term of this
      Agreement may be waived (either generally or in a particular instance and either
      retroactively or prospectively) with the written consent of (i) the Company,
      (ii) VAC and (iii) the other Investors holding a majority of the Shares and
      Warrant Shares on an as-converted basis issued hereunder. Subject to the
      preceding sentence, any amendment or waiver effected in accordance with this
      Section 11.6 shall be binding upon all parties to this Agreement including,
      without limitation, any Investor who may not have executed such amendment or
      waiver.

    


    11.7 Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed to be an original, but all of which together shall be one and the same
      document. 

    


    11.8 Section
      Headings.
      The
      section headings are for the convenience of the parties and in no way alter,
      modify, amend, limit, or restrict the contractual obligations of the parties.
      

    


    11.9 Severability.
      If any
      provision of this Agreement is held to be invalid or unenforceable in any
      respect, the validity and enforceability of the remaining terms and provisions
      of this Agreement shall not in any way be affected or impaired thereby and
      the
      parties will attempt to agree upon a valid and enforceable provision that is
      a
      reasonable substitute therefor, and upon so agreeing, shall incorporate such
      substitute provision in this Agreement.

    


    11.10 Governing
      Law; Venue; Waiver of Jury Trial.
      ALL
      QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION
      OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
      WITH THE LAWS OF THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, SECTIONS
      5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL
      PRACTICE LAWS AND RULES 327(b). EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE
      EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY
      OF
      NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
      OR
      IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED
      HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION
      DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY
      SUIT,
      ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
      JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS
      IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS
      AND
      CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY
      MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY
      (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES
      TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD
      AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN
      SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER
      PERMITTED BY LAW. THE COMPANY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY
      JURY.


    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    


    


    11.11 Rescission
      and Withdrawal Right.
      Notwithstanding anything to the contrary contained in (and without limiting
      any
      similar provisions of) the Transaction Documents, whenever an Investor exercises
      a right, election, demand or option owed to such Investor by the Company under
      a
      Transaction Document and the Company does not timely perform its related
      obligations within the periods therein provided, then, prior to the performance
      by the Company of the Company’s related obligation, such Investor may rescind or
      withdraw, in its sole discretion from time to time upon written notice to the
      Company, any relevant notice, demand or election in whole or in part without
      prejudice to its future actions and rights.

    


    11.12 Replacement
      of Securities.
      If any
      certificate or instrument evidencing any Securities is mutilated, lost, stolen
      or destroyed, the Company shall issue or cause to be issued in exchange and
      substitution for and upon cancellation thereof, or in lieu of and substitution
      therefor, a new certificate or instrument, but only upon receipt of evidence
      reasonably satisfactory to the Company of such loss, theft or destruction and
      the execution by the holder thereof of a customary lost certificate affidavit
      of
      that fact and an agreement to indemnify and hold harmless the Company for any
      losses in connection therewith. The applicants for a new certificate or
      instrument under such circumstances shall also pay any reasonable third-party
      costs associated with the issuance of such replacement Securities.

    


    11.13 No
      Promotion.
      Except
      as otherwise required by law, the Company agrees that it will not, without
      the
      prior written consent of VAC in each instance, (i) use in advertising,
      publicity, press release or otherwise the name of VAC or any affiliate of VAC
      (each a “VAC
      Entity”),
      or
      any partner or employee of any VAC Entity, nor any trade name, trademark, trade
      device, service mark, symbol or any abbreviation, contraction or simulation
      thereof owned by any VAC Entity or (ii) represent, directly or indirectly,
      that
      any product or any service provided by the Company has been approved or endorsed
      by any VAC Entity. This provision shall survive termination of the Transaction
      Documents.

    


    [Signature
      page to follow]


    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
      Agreement to be duly executed by their respective authorized signatories as
      of
      the date first written above.

    


    
      	 	
              COMPANY:

            
	 	 
	 	
              MANDALAY
                MEDIA, INC.

            
	 	 
	 	
              By:

            	
              /s/
                James Lefkowitz

            
	 	 	
              Name:
                

            	
              James
                Lefkowitz

            
	 	 	
              Title:
                

            	
              President

            


    

    


    [Signature
      page to Securities Purchase Agreement]


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    


    
      	 	
              INVESTOR:

               

              VALUEACT
                SMALLCAP MASTER FUND, L.P.,

            
	 	
              By
                VA Smallcap Partners, LLC, its General Partner

            
	 	 
	 	
              By:
                

            	
              /s/
                David Lockwood

            
	 	
              Name:
                

            	
              David
                Lockwood

            
	 	
              Title:
                

            	
              Managing
                Member

            
	 	 	 
	 	
              TRINAD
                CAPITAL MASTER FUND, LTD.

            
	 	 
	 	
              By:

            	
              /s/
                Robert Ellin

            
	 	
              Name:
                

            	
              Robert
                Ellin

            
	 	
              Title:

            	
              Director

            
	 	 	 
	 	 	 
	 	
              GUBER
                FAMILY TRUST

            
	 	 
	 	
              By:
                

            	
              /s/
                Peter Guber

            
	 	
              Name:
                

            	
              Peter
                Guber

            
	 	
              Title:
                

            	
              Trustee

            


    

    


    [Signature
      page to Securities Purchase Agreement]