Document:

Exhibit 4.2

       

      

      
        
          
            
              
                
                  
                    
                      	
                              PROMISSORY
      NOTE

                            

                    

                  

                

              

            

          

        

      

      

      Principal
amount: $250,000.00              
                       
DATE, October 1, 2009

      

      FOR VALUE
RECEIVED,Wegener Communications, Inc (Borrower) promises to pay David E. Chymiak
(Lender) the sum of Two hundred fifty thousand dollars ($250,000.00), and
interest at the yearly rate of 8.0 % on the unpaid balance as specified
below.

       

      Borrower
will pay one lump payment in lawful money of the United States on October 31,
2009.

       

       

      Payments
will be applied first to interest and then to principal.

       

       

      If the
Borrower fails to make an installment payment when due or fails to comply with
any other term of this promissory note, the loan will be considered in
default.

       

       

      This note
may be prepaid by the Borrower at any time in whole or in part without premium
or penalty.

       

       

      The
Borrower must promptly inform the Lender of any change in name or
address.

       

       

      If the
Lender prevails in a lawsuit to collect on this note, Borrower will pay Lender's
court costs, collection agency costs, and attorney's fees in an amount the court
finds to be reasonable.

       

       

      IN
WITNESS WHEREOF, I set my hand under seal this 1st day of October, 2009 and I
acknowledge receipt of a completed copy of this instrument.

       

      
      

       

      
        	Wegener
      Communications, Inc. 	 	David E.
      Chymiak
	 	 	 
	11350 Technology
      Cir  	 	/s/ David E.
      Chymiak

      

       

      
        
          	Johns Creek, Ga.
      30097	 	Witness:
	 	 	 
	/s/ C. Troy
      Woodbury, Jr.	 	 

        

         

      

      
        
          
            	By, C. Troy
      Woodbury, Jr. Treasurer and CFO	 	Date:
    10-1-09
	 	 	 
	 	 	 

          

           

        

      

      Witness:

       

       

      ___________________

       

      Date October 1,
2009Unassociated Document

     

    CONFIDENTIAL
SEVERANCE AND RELEASE AGREEMENT

     

    This
Confidential Severance and Release Agreement (the “Agreement”) is entered into
by and between Ian Aaron (hereinafter “Employee”) on the one hand, and Twistbox
Entertainment, Inc., as successor-in-interest to the WAAT Corporation and
Mandalay Media, Inc. (”Mandalay”) (collectively hereinafter the “Company”) on
the other hand.

     

    RECITALS

     

    A.           WHEREAS, Employee is currently
employed by Twistbox Entertainment, Inc. as the President and Chief Executive
Officer pursuant to an employment agreement dated May 16, 2006, as amended
December 30, 2007, February 12, 2008 and March 16, 2009 (collectively
hereinafter the “Employment Agreement”).  Employee is also currently
President and Chief Executive Officer of WAAT Media Corp.;

     

    B.           WHEREAS, Employee is currently
a Director on the Boards of Directors of Twistbox Entertainment, Inc., WAAT
Media Corp., Twistbox Entertainment Ltd., Twistbox Games Ltd., Twistbox Games
Ltd. & Co KG, Mandalay, and AMV Holding Ltd. (collectively hereinafter the
“Boards”);

     

    C.           WHEREAS, Employee seeks to
resign his position as President and Chief Executive Officer of Twistbox
Entertainment, Inc. and WAAT Media Corp.  Employee also seeks to
resign from his Director positions on the Boards;

     

    D.           WHEREAS, the Company has
accepted Employee’s resignation as President and Chief Executive Officer of
Twistbox Entertainment, Inc. and WAAT Media Corp., and his resignation from the
Boards;

     

    E.           WHEREAS, this Agreement shall
supersede Employee’s Employment Agreement and shall render the Employment
Agreement null and void; and

     

    F.           WHEREAS, it is now the desire
of the parties to compromise, settle, waive and release all claims of whatever
kind or description which Employee may have against Releasees, as defined
herein.

     

    NOW, THEREFORE,  in
consideration of the recitals which are incorporated into this Agreement and the
mutual promises and covenants set forth herein, the parties do hereby agree as
follows:

     

    AGREEMENT

     

    1.      Separation of
Employment. Employee’s last day of employment with the Company will be
October 7, 2009 (the “Separation Date”).  On the Separation Date and
thereafter, Employee will have no authority to act on behalf of the Company or
any of its subsidiary, related or affiliated entities in any
capacity.

     

    2.      Board of
Directors.  By executing this Agreement, Employee hereby
resigns from the Boards, and each of them, effective on the Separation
Date.  On the Separation Date and thereafter, Employee will have no
authority to act on or behalf of the Boards, or any of them, in any
capacity.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.      Outstanding
Expenses.  Employee shall receive, in cash, any outstanding
business-related reimbursements which shall be paid promptly in accordance with
Company policy, including provision by Employee of supporting documentation as
required by Company policy.

     

    4.      Separation Pay, Accrued
Vacation and Benefits.  The Company agrees that provided
Employee signs this Agreement and does not revoke this Agreement as set forth in
Paragraph 11, below, the Company shall:

     

    (a)           Extend
the time period in which Employee may exercise (i) 400,000 shares which
represents the vested portion of the option to purchase 600,000 shares of the
common stock of Mandalay issued pursuant to an option agreement dated February
12, 2008  and (ii) 54,725 fully vested options issued under an option
agreement dated December 6, 2006 (collectively, the “Vested Options”), to a
period commencing on the date hereof and terminating on the earlier of (x)
September 30, 2010 and (y) ninety (90) days following the date that Employee
shall first be eligible to sell shares of Mandalay’s common stock under a
registration statement with respect shares of common stock of Mandalay issuable
under the Employee’s Vested Options filed with the Securities Exchange
Commission (“Commission”) under the Securities Act of 1933, as amended (the
“Securities Act”), shall have been declared effective by the Commission,
provided that in any event the Vested Options shall expire on the latest option
expiration date set forth in the foregoing option agreements.  Except
as set forth herein, the Vested Options shall continue in force and effect
pursuant to the terms of the option agreements and the stock plan referenced
therein. The Employee hereby acknowledges that as of the Separation Date,
Employee shall no longer continue to vest with regard to any other outstanding,
unvested stock options provided by the Company, all of which shall be
cancelled.

     

    (b)           Provide
severance to Employee by hereby modifying that certain Restricted Stock
Agreement dated March 16, 2009 (the "Restricted Stock Agreement") so that,
notwithstanding anything to the contrary contained in the Restricted Stock
Agreement, the Lapsing Forfeiture Right of Mandalay shall be deemed to have
terminated on the Separation Date and, except for the Vested Shares (as defined
below), all shares of restricted stock that are subject to the Restricted Stock
Agreement shall vest in full and shall be delivered to Employee on the earlier
of the following dates (such date being referred to as the "Vesting Date"): (i)
March 31, 2010 and (ii) the occurrence of a Change in Control (as defined in the
Restricted Stock Agreement).  For the avoidance of doubt, the parties
make the following acknowledgments with respect to the Restricted Stock
Agreement: (i) the Restricted Stock Agreement provided for the issuance to
Employee of 504,218 shares of common stock of Mandalay at a price per share of
$0.0001; (ii) 153,858 shares vested on March 16, 2009 of which (x) 62,011 of
these shares were retained by the Company, pursuant to Section 7 of the
Restricted Stock Agreement, as payment of applicable income and withholding
taxes related to issuance of such common stock, and (y) 91,847 of which are
being held in escrow pursuant to the provisions of Section 2.1(e) of the
Restricted Stock Agreement, (iii) 192,938 additional shares vested through the
Separation Date of which (x) 69,700 of these shares were retained by the
Company, pursuant to Section 7 of the Restricted Stock Agreement, as payment of
applicable income and withholding taxes related to issuance of such common stock
and (y) 123,238 of which are being held in escrow pursuant to the provisions of
Section 2.1(e) of the Restricted Stock Agreement (together with the shares
referenced in clause (b)(ii)(y) above, the "Vested Shares") and (iv) 157,422
shares (the "Un-Vested Shares") will vest in full and shall be delivered to
Employee effective as of the Vesting Date, and (iv) certificates representing
all Vested Shares and Un-Vested Shares (less any shares withheld as payment of
withholding taxes as provided in Section 7 of the Restricted Stock Agreement)
will be delivered to Employee or a designated brokerage account, without legend
(to the extent permissible under applicable securities law) as soon as
reasonably possible but in no event later than April 10,
2010.  Without limiting any remedy that the Company may have for
breach by Employee of any provision of this Agreement or any surviving provision
of the Employment Agreement, the Company shall have the right to cancel all or
part of the Un-Vested Shares, if prior to the Vesting Date, Employee materially
breaches the provisions of Sections 9(c) (Non-Solicitation of Customers) or 9(d)
(Non-Solicitation of Employees) of the Employment Agreement, and such breach is
continuing for fifteen days following delivery by the Company of written notice
thereof to Employee.

     

    
      
        
        

      

      
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    (c)           In
full satisfaction of Employee’s accrued, unused vacation pay, the Company shall
issue 79,938 shares of common stock of Mandalay to Employee on March 31, 2010
and deliver a certificate representing all such shares to Employee or his
designated brokerage account as soon as reasonably possible but in no event
later than April 10, 2010.  The issuance of these shares have not been
effectively registered under the Securities Act.  The Employee hereby
represents and warrants that he is acquiring the shares for his own account, for
investment, and not with a view to, or for sale in connection with, the
distribution of any such shares. The Employee understands that because the
shares have not been registered under the Securities Act, the Employee must
continue to bear the economic risk of the investment for an indefinite period of
time. The Employee represents and warrants that the Employee (1) has been
furnished with all information which it deems necessary to evaluate the merits
and risks of the receipt of the shares, (2) has had the opportunity to ask
questions concerning the shares and the Company and all questions posed have
been answered to its satisfaction, (3) has been given the opportunity to obtain
any additional information it deems necessary to verify the accuracy of any
information obtained concerning the shares and the Company, (4) has such
knowledge and experience in financial and business matters that the Employee is
able to evaluate the merits and risks of investing in the shares and to make an
informed investment decision relating thereto and (5) is an “accredited
investor” as such term is defined in Rule 501 of Regulation D promulgated under
the Securities Act.  The Employee specifically acknowledges and agrees
that any sales of the shares shall be made in accordance with the requirements
of the Securities Act, in a transaction as to which the Company shall have
received an opinion of counsel satisfactory to it confirming such
compliance.

    

    (d)           The
Employee shall be bound by the provisions of the following legends which shall
be endorsed upon the certificate evidencing the shares issued:

    

    “The
shares represented by this certificate have been taken for investment and they
may not be sold or otherwise transferred by any person, including a pledgee,
unless (1) either (a) a Registration Statement with respect to such shares shall
be effective under the Securities Act of 1933, as amended, or (b) the Company
shall have received an opinion of counsel satisfactory to it that an exemption
from registration under such Act is then available, and (2) there shall have
been compliance with all applicable state securities laws.”

    

    “THESE
SECURITIES HAVE NOT BEEN QUALIFIED UNDER THE CALIFORNIA CORPORATE SECURITIES LAW
OF 1968, AS AMENDED (“CSL”), AND ARE ALSO RESTRICTED UNDER THE PROVISIONS OF
THAT LAW.  THESE SECURITIES MUST BE HELD INDEFINITELY UNLESS THEY ARE
SUBSEQUENTLY QUALIFIED UNDER THE CSL OR ARE OTHERWISE EXEMPT FROM QUALIFICATION
UNDER THAT LAW.”

     

    
      
        
        

      

      
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    (e)           The
Company shall reasonably cooperate with Employee, at the request of Employee, in
connection with removing restrictive legends from shares of common stock of
Mandalay now held or hereafter acquired by Employee under this Agreement, as
permitted by law or agreement, and shall, at the Company’s sole cost, arrange
for one or more opinions of counsel if necessary to remove the
legends.

    

                                               (f)           Pay
Employee’s and his eligible covered dependents’ COBRA continuation insurance
coverage premiums for six (6) months following the Separation Date (the
“Benefits”).

     

    5.      Six Month
Holdback.  Employee understands and agrees that, for a period
ending on the Vesting Date, Employee may not transfer by gift, sale, operation
of law, or otherwise, any of Employee’s shares in the Company, including but not
limited to Employee’s shares of restricted common stock in Mandalay as
referenced herein in Paragraph 4, without the prior written consent of the
Company. The
Company shall not be required to transfer any of the Employee’s shares on its
books which shall have been sold, assigned or otherwise transferred in violation
of this Paragraph 5, or to treat as the owner of such shares, or to accord the
right to vote as such owner or to pay dividends to, any person or organization
to which any such shares shall have been so sold, assigned or otherwise
transferred, in violation of this Paragraph 5.

     

    6.      Representations and
Warranties.

     

    (a)           Employee
makes the following representations and warranties: (a) Employee acknowledges
that the Separation Pay and Benefits set forth in Paragraph 4 are things to
which Employee would not be entitled except for Employee’s decision to sign this
Agreement and to abide by the terms of this Agreement; (b) Employee represents
and warrants that, other than what is provided for in this Agreement, the
Company has paid to Employee all wages owing and due to him by the Company as a
result of Employee’s employment with and separation from the Company, including
but not limited to all salary, bonuses, commissions, incentive pay, management
fees, director fees, grants of stock, stock options, vacation pay, or any other
remuneration in any type or form.

     

    (b)           Company
makes the following representation and warranty:  The members of the
Board of Directors of the Company have no present actual knowledge of any
material facts regarding the Employee or his conduct prior to the date of this
Agreement that would support legal action by the Company against Employee for
damages.

     

    7.      Waiver and Release of Known
and Unknown Claims By Employee.  In exchange for the agreements
contained in this Agreement, Employee agrees unconditionally and forever to
waive, release and discharge the Company and the Company’s past and present
affiliated, related, parent and subsidiary entities, as well as their respective
past and present owners, investors, lenders, members, managers, partners,
officers, directors, employees, agents, representatives, successors and assigns,
past and present (hereinafter the “Releasees”) from any and all claims, actions,
causes of action, demands, rights, or damages of any kind or nature which
Employee may now have, or ever have, whether known or unknown, including but not
limited to any claims, causes of action or demands of any nature arising out of
or in any way relating to Employee’s employment with, or separation from the
Company; provided, however, nothing herein shall be deemed a release or waiver
of (i) Employee’s rights of indemnification and directors and officers liability
insurance coverage to which Employee was entitled immediately prior to the
Separation Date under the Company’s Bylaws, organizational documents, the
Employment Agreement, or otherwise, (ii) Employee’s rights under any
tax-qualified pension plan maintained by the Company or claims for accrued,
vested benefits under any other employee benefit plan or COBRA, (iii) Employee’s
rights as a stockholder of the Company and (iv) any rights under this
Agreement.

     

    
      
        
        

      

      
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    This
release specifically includes, but is not limited to, any claims for fraud;
breach of contract; breach of implied covenant of good faith and fair dealing;
inducement of breach; interference with contract; wrongful or unlawful discharge
or demotion; violation of public policy; assault and battery (sexual or
otherwise); invasion of privacy; intentional or negligent infliction of
emotional distress; intentional or negligent misrepresentation; conspiracy;
failure to pay wages, benefits, vacation pay, bonuses, commissions, salary,
severance pay, stock, stock options, attorneys’ fees, or other compensation of
any sort; retaliation; discrimination or harassment on the basis of age, race,
color, sex, gender, national origin, ancestry, religion, disability, handicap,
medical condition, marital status, sexual orientation or any other protected
category under federal, state or local law; any claim under Title VII of the
Civil Rights Act of 1964, as amended, the Americans with Disabilities Act, the
Age Discrimination in Employment Act, the Older Workers Benefit Protection Act,
the California Fair Employment and Housing Act, the California Labor Code, the
Family and Medical Leave Act, the California Family Rights Act, or Section 1981
of Title 42 of the United States Code; violation of COBRA; violation of any
safety and health laws, statutes or regulations; violation of ERISA; violation
of the Internal Revenue Code; or any other wrongful conduct of any kind, based
upon events occurring prior to the date of execution of this
Agreement.

     

    Employee
further agrees knowingly to waive the provisions and protections of Section 1542
of the California Civil Code, which reads:

     

    A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN
BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.

     

    The Employee intends this release to be
a full and comprehensive general release, waiving all claims, demands and causes
of action, known and unknown, to the fullest extent permitted by
law.  Nothing in this Agreement is intended to nor shall it be
interpreted to release any claim which, by law, may not be
released.

     

    8.      Cooperation with Government
Agencies.  Nothing in the release of claims set forth herein
shall be construed as prohibiting Employee from bringing and/or participating in
a future claim with the Equal Employment Opportunity Commission, the California
Department of Fair Employment and Housing, or any other government agency;
provided, however, that should Employee pursue and/or be involved with such an
administrative action against the Releasees, or any of them, Employee agrees
that he will not seek, nor shall he be entitled to recover, any monetary damages
from any such proceeding.

     

    9.      Knowing and
Voluntary.  Employee represents and agrees that Employee is
entering into this Agreement knowingly and voluntarily and that he is
represented by counsel of his own choosing in connection with the negotiation
and drafting of this Agreement. Employee affirms that no promise or inducement
was made to cause him to enter into this Agreement, other than the Separation
Pay and Benefits promised to Employee herein.  Employee further
confirms that he has not relied upon any other statement or representation by
anyone other than what is in this Agreement as a basis for his decision to sign
this Agreement.

     

    
      
        
        

      

      
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    10.           Execution of
Agreement.  Employee expressly acknowledges that he has been
provided twenty-one (21) days to consider this Agreement and that he was
informed that he has the right to consult with counsel regarding this Agreement,
and that he has had the opportunity to consult with counsel.  To the
extent that Employee has taken fewer than twenty-one (21) days to consider this
Agreement, Employee acknowledges that he had sufficient time to consider the
Agreement and to consult with counsel and that he does not desire additional
time.

     

    11.           Revocation. This Agreement is
revocable by Employee for a period of seven calendar days following his
execution of this Agreement.  The revocation must be in writing, must
specifically revoke this Agreement, and must be received by the Company pursuant
to Paragraph 17 prior to the eighth calendar day following the execution of this
Agreement.  This Agreement becomes effective, enforceable and
irrevocable on the eighth calendar day following Employee’s execution of this
Agreement.

     

    12.           No
Disparagement.  The parties hereto agree that they will not
criticize or disparage each other, or issue any communication, written or
otherwise, that reflects adversely upon each other.  Employee further
agrees not to communicate with the Company’s lenders or investors regarding the
Company after the Separation Date.

     

    13.           Protection of Confidential
Information.  Employee acknowledges that during his employment
with the Company, he had access to and became informed of confidential and
proprietary and/or trade secret information concerning the Company and/or the
Releasees that is not generally known to the public or competitors (collectively
referred to as “Confidential Information”), including but not limited to:
financial information; business plans and strategy; marketing plans and
strategy; methods of operation; volume of business and profit margins; and lists
of customers, suppliers, subscribers, or employees.  Employee agrees
not to directly or indirectly make known, divulge, reveal, furnish, make
available, disclose, or use any Confidential Information, except as compelled by
an order of a court of competent jurisdiction or a subpoena issued under the
authority thereof.  If Employee receives a court order or subpoena
seeking any Confidential Information, Employee or his legal representative or
attorney will notify the Company of such court order or subpoena within two (2)
business days of receiving it, pursuant to the notice provision in Paragraph 17,
below.  

     

    14.           Return of Confidential
Information and Company Property.  To the extent that Employee
had any Confidential Information in Employee’s possession, Employee represents
and warrants that he has returned all such Confidential Information (whether
maintained in hard copy or electronically) to the Company prior to signing this
Agreement and that he has made no copies of any such Confidential Information
for himself or for any other person or entity prior to returning the
Confidential Information to the Company.  Employee further confirms
that Employee has delivered to the Company any and all property and equipment of
the Company, including laptop computers, electronic communication devices (e.g.,
cell phone, BlackBerry, etc.), identification cards, keys or key cards, and/or
any other company property or equipment which may have been in Employee’s
possession.

     

    
      
        
        

      

      
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    15.           Non-Disclosure of this
Agreement.  Employee agrees not to disclose the terms of this
Agreement, any claims he has or might have against the Company, or any of the
facts and circumstances which gave rise to Employee’s resignation or which led
to the execution of this Agreement, except in the following
circumstances:

     

    (a)           Employee
may disclose the terms of this Agreement to Employee’s immediate family, so long
as such family member agrees to be bound by the confidential nature of this
Agreement;

     

    (b)           As
long as they are advised in writing of the confidential nature of this
Agreement, Employee may disclose the terms of this Agreement to: (i) Employee’s
tax advisors; (ii) taxing authorities if requested by such authorities; and
(iii) Employee’s legal counsel.

     

    (c)           Pursuant
to the order of a court or governmental agency of competent jurisdiction, or for
purposes of securing enforcement of the terms and conditions of this Agreement
should that ever be necessary.

     

    Notwithstanding
anything to the contrary set forth in this Section 15, the non-disclosure
provisions describe above shall not apply to any information that is publicly
disclosed by the Company.

     

    16.           Right to Injunctive
Relief.  Employee acknowledges and agrees that if he violates
any of the provisions in Paragraphs 13, 14 or 15, the Company shall be entitled
to a restraining order or injunction against Employee, in addition to any other
rights or remedies the Company may have.  Employee agrees to waive any
requirement that the Company post a bond to obtain injunctive relief under this
Paragraph.  The prevailing party in an action to enforce Paragraphs
13, 14 or 15 shall be entitled to recover from the other party its reasonable
attorneys’ fees and costs.

     

    17.           Notices.  Except
where otherwise provided for in this Agreement, all notices and other
communications under this Agreement shall be in writing and shall be given by
first-class mail, certified or registered with return receipt requested or hand
delivery acknowledged in writing by an authorized recipient and shall be deemed
to have been duly given three (3) days after mailing or immediately upon duly
acknowledged hand delivery to the
respective persons named below:

     

    
      	For
      Employee: 	 	

              Ian
      Aaron

              345
      S. Crescent Drive

              Beverly
      Hills, California, 90212

            
	 	 	 
	For
    Company:	 	

              Twistbox
      Entertainment, Inc.

              14242
      Ventura Blvd., 4th Floor

              Sherman
      Oaks, California, 91423

              Attention:
      General Counsel

            

    

     

    18.           Taxes/Withholdings.  All
payments under this Agreement are subject to any applicable employment or tax
withholdings or deductions.  In addition, the parties hereby agree
that it is their intention that all payments or benefits provided under this
Agreement comply with Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) and this Agreement shall be interpreted
accordingly.  Employee hereby is advised to seek independent advice
from Employee’s tax advisor(s) with respect to the application of Section 409A
of the Code to any payments under this Agreement.  Notwithstanding the
foregoing, the Company does not guarantee the tax treatment of any payments or
benefits under this Agreement, including without limitation under the Code,
federal, state or local laws.  The parties confirm and acknowledge
that Employee shall have the right under the Restricted Stock Agreement and
option agreements to remit all taxes due on option shares and restricted stock
held by Employee as a result of lapse of repurchase rights prior to the date of
this Agreement and as result of this Agreement, at Employee’s option either in
cash or in kind by delivery of common stock of Mandalay.  The Company
will timely remit to applicable taxing authorities all withholding taxes or
other taxes it is required by law to remit in connection with the option shares
and restricted stock held by Employee (including the amount of any withholding
made pursuant to Section 7 of the Restricted Stock Agreement).

     

    
      
        
        

      

      
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    19.           Ongoing
Cooperation.  Employee agrees that Employee will assist and
cooperate with the Company in connection with the defense, prosecution or
investigation of any claim that may be made against or by any of the Releasees,
including any proceeding before any arbitral, administrative, judicial,
legislative, or other body or agency, including testifying in any proceeding to
the extent such claims, investigations or proceedings relate to services
performed or required to be performed by Employee, pertinent knowledge possessed
by Employee, or any act or omission by Employee.  Employee and the
Company further agree to perform all acts and execute and deliver any documents
that may be reasonably necessary to carry out the provisions of this Paragraph
and this Agreement.

     

    20.           Press
Release.  Employee and Company agree that the separation of
Employee’s employment from Company will be communicated to the public via the
Press Release attached hereto as Exhibit A.

     

    21.           Email Account and
Message.  The Company agrees that it will maintain in effect,
through January 15, 2010, Employee’s email account, which shall respond to
incoming emails with the following message: “As of October 7, 2009 I am no
longer employed with the Company.  If this is a personal matter, please
contact me at email: ian@gmsllc.com or tel: +1(310) 926-2000.  If this
is a Twistbox or Mandalay business matter, please contact Russell Burke at
email: rburke@twistbox.com or tel: +1(818) 301-6222.”

     

    22.           Binding Effect of this
Agreement.  This Agreement is binding upon Employee and
Employee’s successors, assigns, heirs, executors, administrators and legal
representatives.

     

    23.           No
Admission.  This Agreement may not be cited as, and does not
constitute any admission by the Company of, any violation of any law or legal
obligation with respect to any aspect of Employee’s employment or separation
from the Company or with respect to any other matter.  The Company
specifically denies that it violated any law, statute, ordinance or
regulation.

     

    24.           Severability.  If
any portion of this Agreement is found to be illegal or unenforceable, such
action shall not affect the validity or enforceability of the remaining portions
of this Agreement. Each party agrees that the restrictions and prohibitions
contained herein shall be effective to the fullest extent allowed under
applicable law.

     

    25.           Entire
Agreement.  This Agreement sets forth the entire agreement
between the parties and fully supersedes all other oral or written
understandings or agreements between the parties pertaining to Employee’s
employment with and separation from the Company, including but not limited to
the Employment Agreement.  Notwithstanding anything to the contrary
contained in the Employment Agreement, Employee and the Company acknowledge and
agree that no provisions of, or any covenants of either party contained in, the
Employment Agreement shall be deemed to survive the Separation Date other than
(i) the Company’s obligations under Section 13 (Indemnification) and 14
(Liability Insurance) of the Employment Agreement, which shall survive
indefinitely, and (ii) Employee’s obligations under Section
9(c)(Non-Solicitation of Customers) and Section 9(d) (Non-Solicitation of
Employees).  Employee and the Company agree that no promises,
representations, or inducements have been made to either of them which caused
either of them to sign this Agreement other than those which are expressly set
forth herein.

     

    
      
        
        

      

      
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    26.           Counterparts.  This
Agreement may be executed in one or more counterparts, each of which will be
deemed an original, all of which together will constitute one and the same
agreement.  A facsimile copy or pdf copy of a party’s signature on
this Agreement will be deemed as an original.

     

    27.           Modification.  This
Agreement may not be changed or altered, except by a writing signed by an
authorized representative of the Company and by Employee.

     

    28.           Governing
Law.  This Agreement is entered into in the State of
California, and the laws of the State of California will apply to any dispute
concerning it, excluding the conflict-of-law principles thereof.

     

    29.           Waiver.  The
failure to enforce any provision of this Agreement shall not be construed to be
a waiver of such provision or to affect the validity of this Agreement or the
right of any party to enforce this Agreement.

     

    30.           Ambiguities.  Both
parties have participated in the negotiation of this Agreement and, thus, it is
understood and agreed that the general rule that ambiguities are to be construed
against the drafter shall not apply to this Agreement.  In the event
that any language of this Agreement is found to be ambiguous, each party shall
have an opportunity to present evidence as to the actual intent of the parties
with respect to any such ambiguous language.

     

    PLEASE
READ CAREFULLY.  THIS AGREEMENT CONTAINS A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.  THE UNDERSIGNED AGREE TO THE TERMS OF THIS AGREEMENT
AND VOLUNTARILY ENTER INTO IT WITH THE INTENT TO BE BOUND THEREBY.

    
      

       

      
        	 
      	
                Dated:   October
      7, 2009

              	
                /s/ Ian
      Aaron                                       
      

              
	 
      	 
      	
                Ian
      Aaron

              

      

       

      
        	 
      	
                Dated:   October
      7, 2009

              	
                /s/ David
      Mandell                               
      

              
	 
      	 
      	
                By:
      David Mandell

              
	 
      	 
      	
                Twistbox
      Entertainment, Inc.

              

      

      

      
        	 
      	
                Dated:  October
      7, 2009

              	
                /s/ James
      Lefkowitz                            
      

              
	 
      	 
      	
                By:
      James Lefkowitz

              
	 
      	 
      	
                Mandalay
      Media, Inc.

              

      

       

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    
 

    EXHIBIT
A

    Form
of Press Release

    

     

    Mandalay
Media Announces Management Change

     

    LOS
ANGELES--(BUSINESS WIRE)--Mandalay Media, Inc. (OTCBB: MNDL.OB) announced today
Mr. Aaron will be resigning his posts as President and CEO of Twistbox and
Director of Mandalay Media, Inc. effective October 7, 2009 to pursue other
interests. “Mr. Aaron was responsible for the successful acquisition and
integration of AMV Holding and building our mobile business into a leading
content and platform supplier for major operators globally. Ian is a dynamic
person who I have worked with for many years and wish him success in his future
endeavors”, stated Peter Guber Mandalay Co-Chairman.

     

    "With
more than 80% of our mobile business International, my departure coincides with
the transitioning of our day-to-day operations overseas. Over the years, we have
built a great management team and operations throughout Europe and I look
forward to the Company’s continued growth and success", stated Mr.
Aaron

    

     

    About
Mandalay Media, Inc.:

     

    Managed
by leading media and technology industry executives, the Company’s mission is to
build a unique combination of new media distribution and content companies
through acquisitions with domestic and foreign businesses with strong management
teams and historical financial performance. Through its wholly-owned subsidiary
Twistbox Entertainment, Inc., the Company is a leading global producer and
publisher of mobile entertainment. Twistbox has exclusive licenses with
industry-leading brands, direct distribution with more than 120 wireless
operators in over 45 countries and provides an extensive portfolio of
award-winning games, WAP sites and mobile TV channels. Its wholly-owned
subsidiary AMV Holding Limited is a European leader in direct-to-consumer mobile
Internet content and services.

     

    For more
information, please visit www.mandalaymediainc.com or
www.twistbox.com.

    

     

    Safe Harbor: This press
release contains forward-looking statements about the Company within the meaning
of the Private Securities Litigation Reform Act of 1995. Statements including
words such as “estimate”, “expect”, “anticipate” or “believe” and statements in
the future tense are forward-looking statements. These forward-looking
statements are subject to risks and uncertainties that could cause actual events
or actual future results to differ materially from the expectations set forth in
the forward-looking statements. Some of the factors which could cause the
Company’s results to differ materially from the expectations include the
following: consumer demand for the Company’s products; consumer spending trends;
fluctuations in the currencies of the countries in which the Company operates
against the US dollar; timely development and release of the Company’s products;
competition in the industry; the Company’s ability to manage expenses; the
Company’s ability to manage and sufficiently integrate acquisitions of other
companies; adverse changes in the securities markets; and other factors
described in our filings with the SEC, including our Annual Report on Form 10-K
for the fiscal year ended March 31, 2009. The Company does not undertake, and
specifically disclaim any obligation, to release publicly the results of any
revisions that may be made to any forward-looking
statements to reflect the occurrence of anticipated or unanticipated events or
circumstances after the date of such statements.

     

     

    
      
        
        

      

      
        10

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