Document:

NEITHER
      THE SECURITIES REPRESENTED BY THIS WARRANT NOR THE SECURITIES
      INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
      STATE SECURITIES AND BLUE SKY LAWS. THE SECURITIES MAY NOT
      BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (1) IN THE
ABSENCE
      OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”) OR FOREIGN SECURITIES LAW, OR (B) IF REASONABLY REQUESTED
      BY THE COMPANY, AN OPINION OF COUNSEL REASONABLY ACCEPTABLE
      TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER
      SAID ACT OR FOREIGN SECURITIES LAW AND (2) IF SUCH SALE, TRANSFER
      OR ASSIGNMENT VIOLATES APPLICABLE STATE SECURITIES AND BLUE
      SKY LAWS.

     

    THIS
      WARRANT
      AND THE UNDERLYING SECURITIES ISSUABLE UPON EXERCISE
      OF THIS WARRANT ARE SUBJECT TO THE PROVISIONS OF A CERTAIN
      SECURITIES PURCHASE AGREEMENT, DATED AS
      OF JULY 30, 2007, INCLUDING CERTAIN RESTRICTIONS ON TRANSFER SET FORTH THEREIN,
      AND
      AN AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT, DATED AS
      OF JULY 30, 2007. COMPLETE
      AND CORRECT COPIES OF SUCH AGREEMENTS
      ARE AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF
      THE COMPANY AND WILL BE FURNISHED TO ANY HOLDER OF THIS WARRANT
      OR ANY UNDERLYING SECURITIES ISSUABLE UPON EXERCISE OF THIS
      WARRANT UPON WRITTEN REQUEST AND WITHOUT CHARGE.

     

    TWISTBOX
      ENTERTAINMENT, INC.

    

    CLASS
      A WARRANT

     

    
      	Warrant No. WR-1	
              Dated:
                July 30, 2007

            

    

    

      Twistbox
        Entertainment, Inc., a Delaware corporation (the “Company”),
        hereby
        certifies that,
        for
        value received, ValueAct SmallCap Master Fund, L.P. (together with its
        transferees permitted
        hereby, the “Holder”),
        is
        entitled to purchase from the Company up to a total of TWO MILLION
        FOUR
        HUNDRED ONE THOUSAND SEVEN HUNDRED FORTY SEVEN (2,401,747)
        shares of common stock, $0.001 par value per share (the “Common
        Stock”),
        of
        the
Company
        (each such share, a “Warrant
        Share” and
        all
        such shares, the “Warrant
        Shares”) at
        an
        exercise price equal to $6.87 per share (as adjusted from time to time as
        provided in Section
        9,
        the
        “Exercise
        Price”),at
        any
        time and from the date hereof and through and including 6:30 p.m. New
        York
        City Time on July 30, 2011 (the “Expiration
        Date”), and
        subject to the following terms
        and
        conditions. This Class A Warrant (this “Warrant”) is
        issued
        pursuant to that certain Securities Purchase Agreement, dated as of the date
        hereof, by and among the Company and the Investors
        identified therein (the “Securities
        Purchase Agreement”) and
        in
        connection with the issuance
        of certain of the Company's Senior Secured Notes. All such warrants are referred
        to herein,
        collectively, as the “Warrants.”

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.
      Definitions.
      In
addition
      to
      the
      terms
      defined
      elsewhere
      in
      this
      Warrant,
      capitalized
      terms that are not otherwise defined herein have the meanings given to such
      terms in the
      Securities Purchase Agreement.

     

    2.
      Registration
      of Warrant.
      The
      Company shall register this Warrant, upon records to
      be
      maintained by the Company for that purpose (the
“Warrant
      Register”),
      in the
      name of the record
      Holder hereof from time to time. The Company may deem and treat the registered
      Holder of
      this
      Warrant as the absolute owner hereof for the purpose of any exercise hereof
      or
      any distribution
      to the Holder, and for all other purposes, absent actual notice to the
      contrary.

    

    3. Registration
      of Transfers.

     

    (a)
      The
      Company shall register the transfer of any portion of this Warrant in the
      Warrant Register, upon surrender of this Warrant, with the Form of Assignment
      attached hereto duly completed and signed, to the transfer agent or to the
      Company at its address specified herein
      and the payment by the Holder of any tax payable in respect of any such
      transfer. Upon any
      such
      registration or transfer, a new warrant to purchase Common Stock, in
      substantially the form
      of
      this Warrant (any such new warrant, a “New
      Warrant”),
      evidencing the portion of this Warrant
      so transferred shall be issued to the transferee and a New Warrant evidencing
      the remaining
      portion of this Warrant not so transferred, if any, shall be issued to the
      transferring Holder.
      The
      acceptance of the New Warrant by the transferee thereof shall be deemed the
      acceptance
      by such transferee of all of the rights and obligations of a holder of a
      Warrant.

     

    (b)
      This
      Warrant and the Warrant Shares issued upon exercise thereof may not
      be
      offered for sale, sold, assigned, hypothecated or otherwise transferred (i)
      in
      the absence of (a)
      an
      effective registration statement for the securities under the Securities Act
      or
      Foreign Securities
      Law, or (b) if so requested by the Company, an opinion of counsel reasonably
      acceptable
      to the Company that registration is not required under said act or Foreign
      Securities Law
      and
      (ii) if such sale, assignment, hypothecation or transfer is in violation of
      applicable state securities and blue sky laws. The Holder may not sell, assign,
      hypothecate or otherwise transfer any Warrant or any Warrant Shares to any
      Person that the Board of Directors of the Company, in its
      reasonable judgment, deems to be a competitor of the Company or an affiliate
      thereof; provided, however, that
      upon
      the filing of an effective registration statement for the securities
under
      the
      Securities Act or Foreign Securities Law, such restriction shall be null and
      void. Notwithstanding
      anything contained herein to the contrary, any transferee of any Warrant or
      Warrant
      Shares shall, as a condition precedent to such Transfer, agree in writing to
      be
      subject to the
      terms
      of the Transaction Documents to the same extent as if the transferee were an
      original Investor
      under the Securities Purchase Agreement.

     

    4. Exercise
      and Duration of Warrants.

     

    (a)
      This
      Warrant shall be exercisable by the registered Holder at any time and
from
      time
      to time on or after the date hereof to and including the Expiration Date.
On
      the
Expiration
      Date, the portion of this Warrant not exercised prior thereto shall be and
      become void and of no value; provided that,
      on the Expiration Date, if the Closing Price exceeds the Exercise Price,
      this Warrant shall be deemed to have been exercised in full (to the extent
      not
      previously exercised)
      on a “cashless
      exercise” basis immediately prior to the expiration thereof.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    (b)
      A
      Holder
      may exercise this Warrant by delivering to the Company (i) an exercise notice,
      in the form attached hereto (the “Exercise
      Notice”), appropriately
      completed and
      duly
      signed along with the Warrant, and (ii) payment of the Exercise Price for the
      number of Warrant
      Shares as to which this Warrant is being exercised (which may take the form
      of
      (w) cash,
      (x)
      Senior Secured Notes having a principal amount plus accrued but unpaid interest
      equal to
      the
      Exercise Price, (y) a “cashless exercise” pursuant to Section
      10 below,
      or
      (z) any combination
      thereof, in each case as indicated in the Exercise Notice), and the date such
      items are
      delivered to the Company (as determined in accordance with the notice provisions
      hereof) is an
      “Exercise
      Date.” Execution
      and delivery of the Exercise Notice shall have the same effect as cancellation
      of the original Warrant and issuance of a New Warrant evidencing the right
      to
purchase
      the remaining number of Warrant Shares.

     

    5. Delivery
      of Warrant Shares.

     

    (a)
      Upon
      exercise of this Warrant, the Company shall promptly issue or cause to be issued
      and cause to be delivered to or upon the written order of the Holder a
      certificate for the Warrant Shares issuable upon such exercise.

     

    (b)
      This
      Warrant is exercisable, either in its entirety or, from time to time, in
part.
      Upon surrender of this Warrant following one or more partial exercises, the
      Company shall issue
      or
      cause to be issued, at its expense, a New Warrant evidencing the right to
      purchase the remaining
      number of Warrant Shares.

    

    (c)
      The
      Company's obligations to issue and deliver Warrant Shares in accordance
      with the terms hereof are absolute and unconditional, irrespective of any action
      or inaction
      by the Holder to enforce the same, any waiver or consent with respect to any
      provision hereof,
      the recovery of any judgment against any Person or any action to enforce the
      same, or any
      setoff, counterclaim, recoupment, limitation or termination, or any breach
      or
      alleged breach by
      the
      Holder or any other Person of any obligation to the Company (other than a
      failure to comply
      with the provisions of this Warrant related to the exercise thereof). Nothing
      herein shall limit
      a
      Holder's right to pursue any other remedies available to it hereunder, at law
      or
      in equity including,
      without limitation, a decree of specific performance and/or injunctive relief
      with respect
      to the Company's failure to timely deliver certificates representing shares
      of
      Common Stock
      upon exercise of the Warrant as required pursuant to the terms
      hereof.

     

    6.
      Charges,
      Taxes and Expenses.
      Initial
      issuance and delivery of certificates for shares
      of
      Common Stock to the Holder upon exercise of this Warrant shall be made without
      charge
      to
      the Holder for any issue or transfer tax, withholding tax, transfer agent fee
      or
      other incidental
      tax or expense in respect of the issuance of such certificates, all of which
      taxes and expenses
      shall be paid by the Company; provided, however, that
      the
      Company shall not be required
      to pay any tax which may be payable in respect of any transfer involved in
      the
registration
      of any certificates for Warrant Shares or Warrants in a name other than that
      of
      the Holder
      and the Holder shall be responsible therefor. The Holder shall be responsible
      for all other tax
      liability that may arise as a result of holding or transferring this Warrant
      or
      receiving Warrant Shares upon exercise hereof.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

      7.
        Replacement
        of Warrant. If
        this
        Warrant is mutilated, lost, stolen or destroyed, the
        Company shall issue or cause to be issued in exchange and substitution for
        and
        upon cancellation
        hereof, or in lieu of and substitution for this Warrant, a New Warrant, but
        only
        upon receipt
        of evidence reasonably satisfactory to the Company of such loss, theft or
        destruction and customary and reasonable bond or indemnity, if requested.
        Applicants for a New Warrant under such circumstances shall also comply with
        such other reasonable regulations and procedures and pay
        such
        other reasonable third-party costs as the Company may prescribe.

       

      8.
        Reservation
        of Warrant Shares. The
        Company covenants that it will at all times reserve
        and keep available out of the aggregate of its authorized but unissued and
        otherwise unreserved
        Common Stock, solely for the purpose of enabling it to issue Warrant Shares
        upon
exercise
        of this Warrant as herein provided, the number of Warrant Shares which are
        then
issuable
        and deliverable upon the exercise of this entire Warrant, free from preemptive
        rights or any other contingent purchase rights of persons other than the
        Holder
        (after giving effect to the adjustments
        and restrictions of Section
        9, if
        any).
        The Company covenants that all Warrant Shares
        so
        issuable and deliverable shall, upon issuance and the payment of the applicable
        Exercise
        Price in accordance with the terms hereof, be duly and validly authorized,
        issued and fully
        paid and nonassessable.

       

      9.
        Certain
        Adjustments. The
        Exercise Price and number of Warrant Shares issuable upon
        exercise of this Warrant are subject to adjustment from time to time as set
        forth in this Section
        9.

       

      (a)
        Adjustments
        for Split, Subdivision or Combination of Shares. If
        the
Company
        at any time while this Warrant, or any portion hereof, remains outstanding
        and
unexpired
        shall split, subdivide or combine the Common Stock as to which purchase rights
        under this
        Warrant exist, into a different number of shares of Common Stock, the Exercise
        Price for such
        shares shall be proportionately decreased in the case of a split or subdivision
        or proportionately
        increased in the case of a combination or reverse split and the shares of
        Common
Stock
        as
        to which purchase rights under this Warrant exist shall be proportionately
        increased in the
        case
        of a split or subdivision or proportionately decreased in the case of a
        combination or reverse
        split.

       

      (b)
        Adjustments
        for Dividends in Stock or Other Securities or Property. If
        while
        this Warrant, or any portion hereof, remains outstanding and unexpired, the
        holders of the Common
        Shares as to which purchase rights under this Warrant exist at the time shall
        have received,
        or, on or after the record date fixed for the determination of eligible
        stockholders, shall have
        become entitled to receive, without payment therefor, other or additional
        stock
        or other securities
        or property (other than cash) of the Company by way of dividend, then and
        in
        each case,
        this Warrant shall represent the right to acquire, in addition to the number
        of
        Warrant Shares
        receivable upon exercise of this Warrant, and without payment of any additional
        consideration
        therefor, the amount of such other or additional stock or other securities
        or
property
        (other than cash) of the Company that such holder would have received on
        the
        date of such
        exercise had it been the holder of record of the security receivable upon
        exercise of this Warrant
        on the record date for such dividend or distribution.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      

      (c)
        Adjustment
        of Exercise Price Upon Issuance of Additional Shares of Common
        Stock. In
        the
        event that any shares of Common Stock or any options to purchase shares
        of
        Common Stock or any stock or security convertible into or exercisable or
        exchangeable for
        Common Stock are issued following the date hereof (the “Additional
        Shares”)
        for a
        price per
        share
        less than the Exercise Price (the “Additional
        Share Price”),
        then
        the Exercise Price shall
        be
        reduced to the consideration per share of Common Stock (as calculated on
        an as
converted
        basis for the issuance of convertible securities and on an as exercised basis
        assuming the payment in full of the exercise price for warrants or options
        in
        addition to any consideration paid
        in
        connection with the issuance of such option, warrant or other convertible
        security), if any, received
        or receivable by the Company upon such issuance or sale, the value of which,
        if
        not cash,
        shall
        be
        as determined by the Company's Board of Directors in good faith. Notwithstanding
        the foregoing, no adjustment shall be made pursuant to this Section 9(c)
        in
connection
        with any Additional Shares issued, issuable or deemed issued: (i) to officers,
        directors
        and employees of, and consultants to, the Company pursuant to any incentive
        plans or arrangements
        approved by the Company's Board of Directors; (ii) upon conversion of shares
        of
Company
        preferred stock outstanding on the date hereof; (iii) pursuant to any bona
        fide
        business acquisition;
        provided, however, that
        for
        so long as the Senior Secured Notes are outstanding, the maximum
        aggregate value (as determined by the Company's Board, in good faith) of
        all
        such Additional
        Shares issued in connection with such bona fide business acquisitions for
        consideration
        that is less than the Exercise Price then in effect shall not exceed
        $30,000,000; or (iv)
        pursuant to any event for which adjustment has already been made pursuant
        to
        this Section 9.

       

      (d)
        Adjustment
        of Exercise Price Upon an Event of Default. Upon
        the
occurrence
        of an Event of Default, as such term is defined in the Senior Secured Note,
        the
Exercise
        Price shall be permanently reduced to $4.41 per share, as the same may
        thereafter be adjusted
        from time to time as provided under this Section 9.

       

      (e)
        Fundamental
        Transaction. If
        at any
        time while this Warrant, or any portion
        hereof, is outstanding and unexpired there shall be (i) a reorganization
        (other
        than a combination,
        reclassification, exchange or subdivision of shares otherwise provided for
        herein), (ii)
        a
        merger or consolidation of the Company with or into another corporation in
        which
        the Company
        is not the surviving entity, or a reverse triangular merger in which the
        Company
        is the surviving
        entity but the shares of the Company's capital stock outstanding immediately
        prior to the
        merger are converted by virtue of the merger into other property, whether
        in the
        form of securities,
        cash, or otherwise, or (iii) a sale or transfer of all or substantially all
        the
        Company's properties
        and assets to another person (each of (i)-(iii)
        a
        “Fundamental
        Transaction”),
        then,
        as a
        part of
        such reorganization, merger, consolidation, sale, or transfer, lawful provision
        shall be made
        so
        that the holder of this Warrant shall thereafter be entitled to receive upon
        exercise of this
        Warrant, during the period specified herein and upon payment of the Exercise
        Price then in effect,
        the number of shares of stock or other securities or property of the successor
        corporation resulting
        from a Fundamental Transaction that a holder of the shares deliverable upon
        exercise of this
        Warrant would have been entitled to receive in such Fundamental Transaction
        if
        this Warrant
        had been exercised immediately before such Fundamental Transaction, all subject
        to further
        adjustment as provided in this Section 9. The foregoing provisions of this
        Section 9(e) shall similarly apply to successive reorganizations,
        consolidations, mergers, sales and transfers and
        to
        the stock or securities of any other corporation that are at the time receivable
        upon the exercise
        of this Warrant. If the per share consideration payable to the Holder for
        shares
        in connection
        with any such transaction is in a form other than cash or marketable securities,
        then the
        value
        of such consideration shall be determined in good faith by the Company's
        Board
        of Directors.
        If the per share consideration payable to the Holder for shares in connection
        with any such transaction is in a form other than cash or marketable securities,
        appropriate adjustment (as determined
        in good faith by the Company's Board of Directors) shall be made in the
        application of
        the
        provisions of this Warrant with respect to the rights and interests of the
        Holder after the transaction
        (including provisions for adjustment to the Exercise Price), to the end that
        the
provisions
        of this Warrant shall be applicable after that event, as near as reasonably
        may
        be, in relation
        to any shares or other property deliverable after that event upon exercise
        of
        this Warrant.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      (f)
        Reclassifications,
        etc. If
        the
        Company, at any time while this Warrant, or any
        portion hereof, remains outstanding and unexpired by reclassification of
        securities or otherwise,
        shall change any of the securities as to which purchase rights under this
        Warrant exist into
        the
        same or a different number of securities of any other class or classes, this
        Warrant shall thereafter represent the right to acquire such number and kind
        of
        securities as would have been issuable
        as the result of such change with respect to the securities that were subject
        to
        the purchase
        rights under this Warrant immediately prior to such reclassification or other
        change and the
        Exercise Price therefore shall be appropriately adjusted, all subject to
        further
        adjustment as provided
        for in this Section 9.

       

      (g)
        Calculations. All
        calculations under this Section 9 shall be made to the nearest
        cent or the nearest 1/100th of a share, as applicable. The disposition of
        any
        shares owned or
        held
        by or for the account of the Company shall be considered an issue or sale
        of
        Common Stock.

       

      (h)
        Notice
        of Adjustments. Upon
        the
        occurrence of each adjustment pursuant to
        this
        Section 9, the Company at its expense will promptly compute such adjustment
        in
accordance
        with the terms of this Warrant and prepare a certificate setting forth such
        adjustment, including
        a statement of the adjusted Exercise Price and adjusted number or type of
        Warrant Shares or other securities issuable upon exercise of this Warrant
        (as
        applicable), describing the transactions
        giving rise to such adjustments and showing in detail the facts upon which
        such
        adjustment is based. Upon written request, the Company will promptly deliver
        a
        copy of each such
        certificate to the Holder and to the Company's transfer agent.

       

      (i)
        Notice
        of Corporate Events.
        If the
        Company (i) declares a dividend or any other distribution of cash, securities
        or
        other property in respect of its Common Stock, including without
        limitation any granting of rights or warrants to subscribe for or purchase
        any
        capital stock
        of
        the Company or any Subsidiary, (ii) authorizes or approves, enters into any
        agreement contemplating
        or solicits stockholder approval for (x) any Fundamental Transaction, (y)
        any
tender
        offer or exchange offer (whether by the Company or another Person) pursuant
        to
        which holders of Common Stock are permitted to tender or exchange their shares
        for other securities, cash
        or
        property, or (z) any reclassification of the Common Stock or any compulsory
        share exchange
        pursuant to which the Common Stock is effectively converted into or exchanged
        for other
        securities, cash or property or (iii) authorizes the voluntary dissolution,
        liquidation or winding
        up of the affairs of the Company, then the Company shall deliver to the Holder
        a
        notice describing the material terms and conditions of such transaction,
        at
        least fifteen days prior to the applicable
        record or effective date on which a Person would need to hold Common Stock
        in
order
        to
        participate in or vote with respect to such transaction.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

    

    
       

      10.
        Payment
        of Exercise Price. The
        Holder shall pay the Exercise Price which may take
        the
        form of (i) cash, (ii) Senior Secured Notes having a principal amount plus
        accrued but unpaid
        interest equal to the Exercise Price, (iv) a “cashless exercise” or (iv) any
        combination thereof.
        If the Holder elects to satisfy its obligation to pay the Exercise Price
        through
        a "cashless exercise,"
        the Company shall issue to the Holder the number of Warrant Shares determined
        as
follows:

      

      X=Y
        (A-B)

        
        A

      where:

      X
        = the
        number of Warrant Shares to be issued to the Holder.

      

      Y
        = the
        number of Warrant Shares with respect to which this Warrant is being
        exercised.

      

      A
        = the
        Closing Price. 

       

      B
        = the
        Exercise Price.

      

      For
        purposes of the above calculation, “Closing
        Price” shall
        be
        determined by the Company's Board of Directors in good faith; provided, however, that
        where there exists a public market
        for the Common Stock at the time of such exercise, the fair market value
        per
        share shall be
        the
        average of the closing bid and asked prices of the Common Stock quoted in
        the
        Over-The-Counter
        Market Summary or the last reported sale price of the Common Stock or the
        closing price
        quoted on the Nasdaq National Market or any exchange on which the Common
        Stock
        is listed,
        whichever is applicable, for the five (5) trading days prior to the date
        of
        determination of fair
        market value. Notwithstanding the foregoing, in the event the Warrant is
        exercised in connection
        with the Company's initial public offering of Common Stock, the fair market
        value per
        share
        shall be the per share offering price to the public of the Company's initial
        public offering.

       

      11. Compliance
        with Securities Laws.

       

      (a)
        The
        Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant
        and
        the Warrant Shares are being acquired solely for the Holder's own account
        and
        not as
        a
        nominee for any other party, and for investment, and that the Holder will
        not
        offer, sell or otherwise
        dispose of this Warrant or any Warrant Shares except under circumstances
        that
        will not
        result in a violation of the Securities Act or any state securities or blue
        sky
        laws. Upon exercise
        of this Warrant, the Holder shall, if so requested by the Company, confirm
        in
        writing, in a
        form
        satisfactory to the Company, that the Warrant Shares so purchased are being
        acquired solely
        for Holder's own account and not as a nominee for the any other party, for
        investment and not
        with
        a view toward distribution or sale.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      (b)
        This
        Warrant may not be transferred or assigned in whole or in part without
        compliance with all applicable federal and state securities laws by the
        transferor and the transferee
        (including the delivery of investment representation letters and legal opinions
        reasonably satisfactory to the Company, if such are requested by the Company).
        Subject to the provisions
        of this Warrant with respect to compliance with the Securities Act or Foreign
        Securities
        Law and the provisions of the Transaction Documents with respect to the
        restrictions on
        transfer (including, without limitation, the requirement that any transferee
        agree in writing to be subject to the terms of the Transaction Documents
        to the
        same extent as if the transferee were an
        original Investor under the Securities Purchase Agreement), title to this
        Warrant may be transferred
        by endorsement (by the Holder executing the assignment form annexed hereto)
        and
delivery
        in the same manner as a negotiable instrument transferable by endorsement
        and
delivery.

       

      (c)
        For
        purposes of Rule 144 promulgated under the Securities Act, it is intended,
        understood and acknowledged that the Warrant Shares issued in a cashless
        exercise transaction
        shall be deemed to have been acquired by the Holder, and the holding period
        for
        the Warrant
        Shares shall be deemed to have commenced, on the date this Warrant was
        originally issued
        pursuant to the Securities Purchase Agreement.

       

      (d) The
        Warrant Shares shall be stamped or imprinted with a legend in substantially
        the following form (in addition to any legend required by state securities
        laws):

      

      THE
        SECURITIES
        REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
        ACT OF
        1933, AS AMENDED, OR APPLICABLE
        STATE
SECURITIES
        AND
        BLUE
        SKY LAWS. THE SECURITIES
        MAY NOT
        BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
        ASSIGNED (1) IN THE ABSENCE OF (A) AN EFFECTIVE
        REGISTRATION
        STATEMENT FOR THE SECURITIES
        UNDER THE
        SECURITIES ACT
        OF 1933,
        AS
        AMENDED
        (THE
“SECURITIES ACT”)
        OR
FOREIGN
        SECURITIES
        LAW, OR
(B)
        IF
        REASONABLY REQUESTED BY THE
        COMPANY, AN OPINION OF COUNSEL REASONABLY ACCEPTABLE
        TO THE COMPANY THAT REGISTRATION
        IS NOT
REQUIRED
        UNDER SAID
        ACT OR
        FOREIGN SECURITIES
        LAW AND
        (2) IF SUCH
        SALE, TRANSFER OR ASSIGNMENT VIOLATES APPLICABLE STATE
        SECURITIES
        AND
        BLUE SKY LAWS.

      

      THE
        SECURITIES REPRESENTED HEREBY
        ARE
        SUBJECT TO THE PROVISIONS
        OF A CERTAIN SECURITIES PURCHASE AGREEMENT, DATED
        AS OF
        JULY
        30, 2007, INCLUDING CERTAIN RESTRICTIONS ON TRANSFER
        SET FORTH THEREIN AND AN
        AMENDED
        AND RESTATED INVESTORS'
        RIGHTS AGREEMENT, DATED AS OF JULY 30, 2007. COMPLETE
        AND CORRECT COPIES OF
        SUCH
        AGREEMENTS ARE AVAILABLE
        FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE COMPANY AND
        WILL
        BE FURNISHED TO ANY HOLDER OF THE SECURITIES
        UPON
        WRITTEN REQUEST WITHOUT CHARGE.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      12.
        Fractional
        Shares.
        The
        Company shall not be required to issue or cause to be issued
        fractional Warrant Shares on the exercise of this Warrant. If any fraction
        of a
        Warrant Share
        would, except for the provisions of this Section, be issuable upon exercise
        of
        this Warrant, the
        Company shall pay the Holder an amount in cash equal to the product of (i)
        such
        fraction of a Warrant
        Share and (ii) the excess of the Closing Price over the Exercise
        Price.

       

      13.
        Notices. Any
        and
        all notices or other communications or deliveries hereunder (including
        without limitation any Exercise Notice) shall be in writing and shall be
        deemed
        given and
        effective on the earliest of (i) the date of transmission, if such notice
        or
        communication is delivered
        via facsimile at the facsimile number specified in the Securities Purchase
        Agreement prior
        to
        6:30 p.m. (New York City time) on a Business Day, (ii) the next Business
        Day
        after the date
        of
        transmission, if such notice or communication is delivered via facsimile
        at the
        facsimile number
        specified in the Securities Purchase Agreement on a day that is not a Business
        Day or later
        than 6:30 p.m. (New York City time) on any Business Day, (iii) the Business
        Day
        following the
        date
        of mailing, if sent by nationally recognized overnight courier service or
        (iv)
        upon actual receipt
        by the party to whom such notice is required to be given. The address for
        such
        notices or communications
        shall be as set forth in the Securities Purchase Agreement.

       

      14.
        Registration
        Rights.
        The
        Common Shares for which this Warrant is exercisable are
        entitled to the benefits of registration rights as set forth in the Amended
        and
        Restated Investors'
        Rights Agreement and subject to the limitations therein.

       

      15. Governing
        Law; Venue; Waiver Of Jury Trial.

       

      (A)
        ALL
        QUESTIONS
        CONCERNING
        THE
        CONSTRUCTION,
        VALIDITY,
        ENFORCEMENT AND INTERPRETATION OF THIS WARRANT 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.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      16. Miscellaneous.

       

      (a)
        Subject
        to the restrictions on transfer set forth herein, this Warrant may be
assigned
        by the Holder. This Warrant may not be assigned by the Company except to
        a
successor
        in the event of a Fundamental Transaction. This Warrant shall be binding
        on and
        inure to
        the
        benefit of the parties hereto and their respective successors and assigns.
        Subject to the preceding
        sentences, nothing in this Warrant shall be construed to give to any Person
        other than the
        Company and the Holder any legal or equitable right, remedy or cause of action
        under this Warrant.
        This Warrant may be amended only in writing signed by the Company and the
        Holder
and
        their
        successors and assigns.

       

      (b)
        The
        Company will not, by amendment of its governing documents or through
        any reorganization, transfer of assets, consolidation, merger, dissolution,
        issue or sale of securities or any other voluntary action, avoid or seek
        to
        avoid the observance or performance of any of the terms of this Warrant,
        but
        will at all times in good faith assist in the carrying out of all such
        terms. Without limiting the generality of the foregoing, the Company (i)
        will
        not increase the
        par
        value of any Warrant Shares above the amount payable therefor on such exercise,
        (ii) will take
        all
        such action as may be reasonably necessary or appropriate in order that the
        Company may
        issue
        fully paid and nonassessable Warrant Shares on the exercise of this Warrant,
        and
        (iii) will
        not
        close its stockholder books or records in any manner which interferes with
        the
        timely exercise
        of this Warrant.

       

      (c) Nothing
        contained in this Warrant shall be construed as conferring upon the
        Holder any rights as a stockholder of the Company.

       

      (d) The
        headings herein are for convenience only, do not constitute a part of
this
        Warrant and shall not be deemed to limit or affect any of the provisions
        hereof.

       

      (e)
        In
        case
        any one or more of the provisions of this Warrant shall be invalid or
        unenforceable in any respect, the validity and enforceability of the remaining
        terms and provisions
        of this Warrant shall not in any way be affected or impaired thereby and
        the
        parties will
        attempt in good faith to agree upon a valid and enforceable provision which
        shall be a commercially
        reasonable substitute therefor, and upon so agreeing, shall incorporate such
        substitute
        provision in this Warrant.

       

      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK, SIGNATURE
        PAGE FOLLOWS]

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      

      IN
        WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
        by its
        authorized officer as of the date first indicated above.

       

      
        	 	 	 
	 	
                TWISTBOX
                  ENTERTAINMENT, INC.

              
	 
 	 
 	 
 
	
              	By:  	/s/ IAN AARON
	 	
                

                Name:
                  IAN AARON

              
	 	
                
                  

                

                Title:
                  PRES./CEO

                
                  
 

              

      

    

    
      

        
          	
                  ACCEPTED
                    AND AGREED TO BY:

                
	 
	
                  VALUEACT
                    SMALLCAP MASTER FUND, L.P.

                
	
                  By
                    Its General Partner, VA SmallCap Partners, LLC

                
	 
	
                  By:

                	
                  /s/
                    DAVID LOCKWOOD

                	 
	 	 
	
                  Name:

                	
                  DAVID
                    LOCKWOOD

                	 
	 	 
	
                  Title:

                	
                  MANAGING
                    MEMBER

                	 

        

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

       

      FORM
        OF EXERCISE NOTICE

       

      To
        be
        executed by the Holder to exercise the right to purchase shares of Common
        Stock
        under the
        foregoing Warrant.

       

      To:
        TWISTBOX ENTERTAINMENT, INC.

       

      The
        undersigned is the Holder of Warrant No. ____________ (the
        “Warrant”) issued
        by
        Twistbox Entertainment,
        Inc., a Delaware corporation (the “Company”).
        Capitalized
        terms used herein and
        not
        otherwise defined have the respective meanings set forth in the
        Warrant.

       

      
        	1.	
                The
                  Warrant is currently exercisable to purchase a total of
                  _____________  Warrant
                  Shares.

              

      

       

      
        	2.	
                The
                  undersigned Holder hereby exercises its right to purchase
                  ___________ Warrant
                  Shares pursuant to the Warrant.

              

      

       

      
        	3.	
                The
                  Holder intends that payment of the Exercise Price shall be made
                  as (check
                  one): 

              

      

       

      ____
        “Cash
        Exercise”
        under Section 10 

       

      ____
        “Cashless Exercise” under Section 10

       

      ____
        “Senior Secured Note Due January 30, 2010” having a principal
        amount plus accrued but unpaid interest equal to the Exercise
        Price

       

      
        	4.	
                If
                  the Holder has elected a Cash Exercise, the holder shall pay the
                  sum of
                  $________ to
                  the Company in accordance with the terms of the
                  Warrant.

              

      

      

      
        	
                5.

              	
                Pursuant
                  to this exercise, the Company shall deliver to the holder
                  __________ 
                  Warrant Shares in accordance with the terms of the
                  Warrant.

              

      

       

      
        
          	6.	
                  Following
                    this exercise, the Warrant shall be exercisable to purchase a
                    total of
                    _____________ Warrant
                    Shares.

                

        

      

       

      
        	 	 	 
	
                Dated: _______________,
                  ________

              	Name
                of Holder:
                 

                (Print) 

                
                  

                

              
	
              	By:  	
              
	 	Name:	
                
 
	 	
                Title:

              	
                
                  

                

              
	 	 	
                
                  

                

              
	 	
                (Signature
                  must conform in all respects to name of holder 

                as
                  specified on the face of the Warrant)

              

      

      
         

        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      FORM
        OF ASSIGNMENT 

       

      To
        be
        completed and signed only upon transfer of Warrant.

       

      FOR
        VALUE
        RECEIVED, the undersigned hereby sells, assigns and transfers unto
        _______________________ the
        right
        represented by the within Warrant to purchase ______________
        shares of Common Stock of Twistbox Entertainment, Inc. to which the within
        Warrant
        relates and appoints ______________ attorney
        to transfer said right on the books of Twistbox
        Entertainment, Inc. with full power of substitution in the
        premises.

       

      
        	 	 	 
	
                Dated:
                  _____________,_____

                 

              	
              
	
              	
              	
              
	 	
                

                (Signature
                  must conform in all respects to name of holder 

                as
                  specified on the face of the Warrant)

              
	 	
              
	 	
                

                Address
                  of Transferee

              
	 	
                 

                
                  

                

                 

                
                  

                

                
                

              
	 	
                
Security
                or Taxpayer Identification Number
	 	 
	In the presence of:NEITHER
      THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES
      HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
      SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
      ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
      TO
      SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
      COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
      SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED
      BY SUCH SECURITIES.

     

     

    MANDALAY
      MEDIA, INC.

     

    WARRANT

     

    Date
      of
      Original Issuance: February 12, 2008

     

    Mandalay
      Media, Inc.,
      a
      Delaware corporation (the "Company"),
      hereby
      certifies that, for value received, VALUEACT SMALLCAP MASTER FUND, L.P. or
      its
      registered assigns (the "Holder"),
      is
      entitled to purchase from the Company up to a total of 1,092,622 shares
      of
      common stock, $0.0001 par value per share (the "Common
      Stock"),
      of the
      Company (each such share, a "Warrant
      Share"
      and all
      such shares, the "Warrant
      Shares"),
      at an
      exercise price equal to $7.55 per share (as adjusted from time to time as
      provided in Section 9,
      the
"Exercise
      Price"),
      at any
      time and from time to time from and after the date hereof and through and
      including July 30, 2011 (the "Expiration
      Date"),
      and
      subject to the following terms and conditions:

     

    1.  Registration
      of Warrant.
      The
      Company shall register this Warrant, upon records to be maintained by the
      Company for that purpose (the "Warrant
      Register"),
      in the
      name of the record Holder hereof from time to time. The Company may deem and
      treat the registered Holder of this Warrant as the absolute owner hereof for
      the
      purpose of any exercise hereof or any distribution to the Holder, and for all
      other purposes, absent written notice to the contrary.

     

    2.  Registration
      of Transfers.
      The
      Company shall register the transfer of any portion of this Warrant in the
      Warrant Register, upon surrender of this Warrant, with the Form of Assignment
      attached hereto duly completed and signed, to the Company at its address
      specified herein. Upon any such registration or transfer, a new Warrant to
      purchase Common Stock, in substantially the form of this Warrant (any such
      new
      Warrant, a "New
      Warrant"),
      evidencing the portion of this Warrant so transferred shall be issued to the
      transferee and a New Warrant evidencing the remaining portion of this Warrant
      not so transferred, if any, shall be issued to the transferring Holder. The
      acceptance of the New Warrant by the transferee thereof shall be deemed the
      acceptance by such transferee of all of the rights and obligations of a holder
      of a Warrant.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.  Lock-Up.
      Holder
      agrees with the Company that, during a period of one (1) year from the date
      of
      the Effective Time (as such term is defined in the Agreement and Plan of Merger
      by and among the Company, Twistbox Acquisition, Inc., Twistbox Entertainment,
      Inc. ("Twistbox")
      and
      Adi McAbian and Spark Capital L.P. as representatives of the stockholders of
      Twistbox), Holder will not, directly or indirectly, (i) offer, pledge, sell,
      contract to sell, sell any option or contract to purchase, purchase any option
      or contract to sell, grant any option, right or warrant for the sale of, or
      otherwise dispose of or transfer any Common Stock or any securities convertible
      into or exchangeable or exercisable for Common Stock, whether now owned or
      hereafter acquired by the Holder or with respect to which the Holder has or
      hereafter acquires the power of disposition, or file, or cause to be filed,
      any
      registration statement under the Securities Act with respect to any of the
      foregoing (collectively, the "Lock-Up
      Securities")
      or
      (ii) enter into any swap or any other agreement or any transaction that
      transfers, in whole or in part, directly or indirectly, the economic consequence
      of ownership of the Lock-Up Securities, whether any such swap or transaction
      is
      to be settled by delivery of Common Stock or other securities, in cash or
      otherwise. The Holder also agrees and consents to the entry of stop transfer
      instructions with the Company's transfer agent and registrar against the
      transfer of the Holder's shares of Common Stock except in compliance with the
      foregoing restrictions.

     

    4.  Exercise
      and Duration of Warrants.
      

     

    (a)  This
      Warrant shall be exercisable by the registered Holder at any time and from
      time
      to time on or after the date hereof to and including the Expiration Date. At
      5:30 p.m., New York City time on the Expiration Date, the portion of this
      Warrant not exercised prior thereto shall be and become void and of no value;
      provided that,
      on the
      Expiration Date, if the Closing Price exceeds the Exercise Price, this Warrant
      shall be deemed to have been exercised in full (to the extent not previously
      exercised) on a "cashless exercise" basis immediately prior to expiration
      thereof.

     

    (b)  A
      Holder
      may exercise this Warrant by delivering to the Company (i) an exercise notice,
      in the form attached hereto (the "Exercise
      Notice")
      (with
      the attached Warrant Shares Exercise Log), appropriately completed and duly
      signed along with the Warrant, and (ii) payment of the Exercise Price for
      the number of Warrant Shares as to which this Warrant is being exercised (which
      may take the form of (w) cash, (x) surrender of Senior Secured Notes issued
      by
      Twistbox due January 30, 2010 ("Senior
      Secured Notes")
      having
      a principal amount plus accrued but unpaid interest equal to the Exercise Price,
      (y) a "cashless exercise" pursuant to Section
      10
      below,
      or (z) any combination thereof, in each case as indicated in the Exercise
      Notice), and the date such items are delivered to the Company (as determined
      in
      accordance with the notice provisions hereof) is a "Date
      of Exercise."
      Execution and delivery of the Exercise Notice shall have the same effect as
      cancellation of the original Warrant and issuance of a New Warrant evidencing
      the right to purchase the remaining number of Warrant Shares.

     

    5.  Delivery
      of Warrant Shares.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (a)  Upon
      exercise of this Warrant, the Company shall promptly issue or cause to be issued
      and cause to be delivered to or upon the written order of the Holder a
      certificate for the Warrant Shares issuable upon such exercise.

     

    (b)  This
      Warrant is exercisable, either in its entirety or, from time to time, in part.
      Upon surrender of this Warrant following one or more partial exercises, the
      Company shall issue or cause to be issued, at its expense, a New Warrant
      evidencing the right to purchase the remaining number of Warrant
      Shares.

     

    (c)  The
      Company's obligations to issue and deliver Warrant Shares in accordance with
      the
      terms hereof are absolute and unconditional, irrespective of any action or
      inaction by the Holder to enforce the same, any waiver or consent with respect
      to any provision hereof, the recovery of any judgment against any Person (as
      defined herein) or any action to enforce the same, or any setoff, counterclaim,
      recoupment, limitation or termination, or any breach or alleged breach by the
      Holder or any other Person of any obligation to the Company or any violation
      or
      alleged violation of law by the Holder or any other Person, and irrespective
      of
      any other circumstance which might otherwise limit such obligation of the
      Company to the Holder in connection with the issuance of Warrant Shares. Nothing
      herein shall limit a Holder's right to pursue any other remedies available
      to it
      hereunder, at law or in equity including, without limitation, a decree of
      specific performance and/or injunctive relief with respect to the Company's
      failure to timely deliver certificates representing shares of Common Stock
      upon
      exercise of the Warrant as required pursuant to the terms hereof. "Person"
      shall
      mean any individual, corporation (including any non-profit corporation), general
      partnership, limited partnership, limited liability partnership, joint venture,
      estate, trust, company (including any limited liability company or joint stock
      company), firm
      or
      other enterprise, association, organization, entity or governmental
      entity

     

    6.  Charges,
      Taxes and Expenses.
      Issuance and delivery of certificates for shares of Common Stock upon exercise
      of this Warrant shall be made without charge to the Holder for any issue or
      transfer tax, withholding tax, transfer agent fee or other incidental tax or
      expense in respect of the issuance of such certificates, all of which taxes
      and
      expenses shall be paid by the Company; provided,
      however,
      that
      the Company shall not be required to pay any tax which may be payable in respect
      of any transfer involved in the registration of any certificates for Warrant
      Shares or Warrants in a name other than that of the Holder. The Holder shall
      be
      responsible for all other tax liability that may arise as a result of holding
      or
      transferring this Warrant or receiving Warrant Shares upon exercise
      hereof.

     

    7.  Replacement
      of Warrant.
      If this
      Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or
      cause to be issued in exchange and substitution for and upon cancellation
      hereof, or in lieu of and substitution for this Warrant, a New Warrant, but
      only
      upon receipt of evidence reasonably satisfactory to the Company of such loss,
      theft or destruction and customary and reasonable indemnity (which shall not
      include a surety bond), if requested. Applicants for a New Warrant under such
      circumstances shall also comply with such other reasonable regulations and
      procedures and pay such other reasonable third-party costs as the Company may
      prescribe. If a New Warrant is requested as a result of a mutilation of this
      Warrant, then the Holder shall deliver such mutilated Warrant to the Company
      as
      a condition precedent to the Company's obligation to issue the New
      Warrant.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    8.  Reservation
      of Warrant Shares.
      The
      Company covenants that it will at all times reserve and keep available out
      of
      the aggregate of its authorized but unissued and otherwise unreserved Common
      Stock, solely for the purpose of enabling it to issue Warrant Shares upon
      exercise of this Warrant as herein provided, the number of Warrant Shares which
      are then issuable and deliverable upon the exercise of this entire Warrant,
      free
      from preemptive rights or any other contingent purchase rights of persons other
      than the Holder (taking into account the adjustments and restrictions of
Section
      9).
      The
      Company covenants that all Warrant Shares so issuable and deliverable shall,
      upon issuance and the payment of the applicable Exercise Price in accordance
      with the terms hereof, be duly and validly authorized, issued and fully paid
      and
      nonassessable. The Company will take all such action as may be necessary to
      assure that such Warrant Shares may be issued as provided herein without
      violation of any applicable law or regulation, or of any requirements of any
      securities exchange, over-the-counter bulletin board or automated quotation
      system upon which the Common Stock may be listed.

     

    9.  Certain
      Adjustments.
      The
      Exercise Price and number of Warrant Shares issuable upon exercise of this
      Warrant are subject to adjustment from time to time as set forth in this
Section
      9.

     

    (a)  Stock
      Dividends and Splits.
      If the
      Company, at any time while this Warrant is outstanding, (i) pays a stock
      dividend on its Common Stock or otherwise makes a distribution on any class
      of
      capital stock that is payable in shares of Common Stock, (ii) subdivides
      outstanding shares of Common Stock into a larger number of shares, or (iii)
      combines outstanding shares of Common Stock into a smaller number of shares,
      then in each such case the Exercise Price shall be multiplied by a fraction
      of
      which the numerator shall be the number of shares of Common Stock outstanding
      immediately before such event and of which the denominator shall be the number
      of shares of Common Stock outstanding immediately after such event. Any
      adjustment made pursuant to clause (i) of this paragraph shall become effective
      immediately after the record date for the determination of stockholders entitled
      to receive such dividend or distribution, and any adjustment pursuant to clause
      (ii) or (iii) of this paragraph shall become effective immediately after the
      effective date of such subdivision or combination. 

     

    (b)  Fundamental
      Transactions.
      If, at
      any time while this Warrant, or any portion hereof, is outstanding and unexpired
      there shall be (i) a reorganization (other than a combination, reclassification,
      exchange or subdivision of shares otherwise provided for herein), (ii) a merger
      or consolidation of the Company with or into another Person in which the Company
      is not the surviving entity, or a reverse triangular merger in which the Company
      is the surviving entity but the shares of the Company's capital stock
      outstanding immediately prior to the merger are converted by virtue of the
      merger into other property, whether in the form of securities, cash or
      otherwise, or (iii) a sale of all or substantially all of the Company's assets
      to another Person in one or a series of related transactions, (iv) any tender
      offer or exchange offer (whether by the Company or another Person) completed
      pursuant to which holders of Common Stock are permitted to tender or exchange
      their shares for other securities, cash or property, or (v) any reclassification
      of the Common Stock or any compulsory share exchange pursuant to which the
      Common Stock is effectively converted into or exchanged for other securities,
      cash or property (each of (i)-(v), a "Fundamental
      Transaction"),
      then,
      as a part of such Fundamental Transaction, lawful provision shall be made so
      that the Holder shall thereafter be entitled to receive upon exercise of this
      Warrant, during the period specified herein and upon payment of the Exercise
      Price then in effect, the number of shares of stock or other securities or
      property resulting from a Fundamental Transaction that a Holder upon exercise
      of
      this Warrant would have been entitled to receive in such Fundamental Transaction
      if this Warrant had been exercised immediately before such Fundamental
      Transaction, all subject to further adjustment as provided in this Section
      9.
      The
      foregoing provision of this Section
      9(b)
      shall
      similarly apply to successive reorganizations, consolidations, mergers, sales
      and transfers and to the stock or securities of any other corporation that
      are
      at the time receivable upon the exercise of this Warrant. If holders of Common
      Stock are given any choice as to the securities, cash or security to be received
      in a Fundamental Transaction, then the Holder shall be given the same choice.
      If
      the per share consideration payable to the Holder for shares in connection
      with
      any such transaction is in a form other than cash or marketable securities,
      then
      the value of such consideration shall be determined in good faith by the
      Company's Board of Directors. If the per share consideration payable to the
      Holder for shares in connection with any such transaction is in a form other
      than cash or marketable securities, appropriate adjustment (as determined in
      good faith by the Company's Board of Directors) shall be made in the application
      of the provisions of this Warrant with respect to the rights and interests
      of
      the Holder after the transaction (including provisions for adjustment to the
      Exercise Price), to the end that the provisions of this Warrant shall be
      applicable after that event, as near as reasonably may be, in relation to any
      shares or other property deliverable after that event upon exercise of this
      Warrant. The terms of any agreement pursuant to which a Fundamental Transaction
      is effected shall include terms requiring any such successor or surviving entity
      to comply with the provisions of this Section
      9(b)
      and
      insuring that the Warrant (or any such replacement security) will be similarly
      adjusted upon any subsequent transaction analogous to a Fundamental
      Transaction.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (c)  Number
      of Warrant Shares.
      Simultaneously with any adjustment to the Exercise Price pursuant to paragraph
      (a) of this Section
      9,
      the
      number of Warrant Shares that may be purchased upon exercise of this Warrant
      shall be increased or decreased proportionately, so that after such adjustment
      the aggregate Exercise Price payable hereunder for the adjusted number of
      Warrant Shares shall be the same as the aggregate Exercise Price in effect
      immediately prior to such adjustment.

     

    (d)  Calculations.
      All
      calculations under this Section
      9
      shall be
      made to the nearest cent or the nearest 1/100th
      of a
      share, as applicable. The number of shares of Common Stock outstanding at any
      given time shall not include shares owned or held by or for the account of
      the
      Company, and the disposition of any such shares shall be considered an issue
      or
      sale of Common Stock.

     

    (e)  Notice
      of Adjustments.
      Upon
      the occurrence of each adjustment pursuant to this Section
      9,
      the
      Company at its expense will promptly compute such adjustment in accordance
      with
      the terms of this Warrant and prepare a certificate setting forth such
      adjustment, including a statement of the adjusted Exercise Price and adjusted
      number or type of Warrant Shares or other securities issuable upon exercise
      of
      this Warrant (as applicable), describing the transactions giving rise to such
      adjustments and showing in detail the facts upon which such adjustment is based.
      Upon written request, the Company will promptly deliver a copy of each such
      certificate to the Holder and to the Company's transfer agent.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (f)  Notice
      of Corporate Events.
      If the
      Company (i) declares a dividend or any other distribution of cash, securities
      or
      other property in respect of its Common Stock, including without limitation
      any
      granting of rights or warrants to subscribe for or purchase any capital stock
      of
      the Company or any Subsidiary, (ii) authorizes or approves, enters into any
      agreement contemplating or solicits stockholder approval for any Fundamental
      Transaction or (iii) authorizes the voluntary dissolution, liquidation or
      winding up of the affairs of the Company, then the Company shall deliver to
      the
      Holder a notice describing the material terms and conditions of such
      transaction, at least ten business days prior to the applicable record or
      effective date on which a Person would need to hold Common Stock in order to
      participate in or vote with respect to such transaction, and the Company will
      take all steps reasonably necessary in order to insure that the Holder is given
      the practical opportunity to exercise this Warrant prior to such time so as
      to
      participate in or vote with respect to such transaction; provided,
      however,
      that
      the failure to deliver such notice or any defect therein shall not affect the
      validity of the corporate action required to be described in such
      notice.

     

    10.  Payment
      of Exercise Price.
      The
      Holder may pay the Exercise Price in one of the following manners:

     

    (a)  Cash
      Exercise.
      The
      Holder may deliver immediately available funds; 

     

    (b)  Senior
      Secured Notes Exercise.
      The
      Holder may surrender Senior Secured Notes having a principal amount plus accrued
      but unpaid interest equal to the Exercise Price; or

     

    (c)  Cashless
      Exercise.
      The
      Holder may notify the Company in an Exercise Notice of its election to utilize
      cashless exercise, in which event the Company shall issue to the Holder the
      number of Warrant Shares determined as follows:

     

    X
      = Y
      [(A-B)/A]

     

    where:

     

    X
      = the
      number of Warrant Shares to be issued to the Holder.

     

    Y
      = the
      number of Warrant Shares with respect to which this Warrant is being
      exercised.

     

    A
      = the
      average of the closing bid and asked prices of the Common Stock quoted in the
      Over-The-Counter Market Summary or the last reported sale price of Common Stock
      or the closing price quoted on the Nasdaq National Market or any exchange on
      which the Common Stock is listed, whichever is applicable, for the five trading
      days immediately prior to (but not including) the Exercise Date.

     

    B
      = the
      Exercise Price.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    For
      purposes of Rule 144 promulgated under the Securities Act, it is intended,
      understood and acknowledged that the Warrant Shares issued in a cashless
      exercise transaction shall be deemed to have been acquired by the Holder, and
      the holding period for the Warrant Shares shall be deemed to have commenced,
      on
      the date this Warrant was originally issued.

     

    11.  No
      Rights as Stockholder.
      Until
      the exercise of this Warrant, the Holder shall not have or exercise any rights
      by virtue hereof as a stockholder of the Company.

     

    12.  No
      Fractional Shares.
      No
      fractional shares of Warrant Shares will be issued in connection with any
      exercise of this Warrant. If any fraction of a Warrant Share would, except
      for
      the provisions of this Section
      12,
      be
      issuable upon exercise of this Warrant, the number of Warrant Shares to be
      issued will be rounded up to the nearest whole share.

     

    13.  Notices.
      Any and
      all notices or other communications or deliveries hereunder (including, without
      limitation, any Exercise Notice) shall be in writing and shall be deemed given
      and effective on the earliest of (i) the date of transmission, if such notice
      or
      communication is delivered via facsimile at the facsimile number specified
      in
      this Section
      13
      prior to
      5:30 p.m. (New York City time) on a business day, (ii) the next business day
      after the date of transmission, if such notice or communication is delivered
      via
      facsimile at the facsimile number specified in this Section
      13
      on a day
      that is not a business day or later than 5:30 p.m. (New York City time) on
      any
      business day, (iii) the business day following the date of mailing, if sent
      by
      nationally recognized overnight courier service, or (iv) upon actual receipt
      by
      the party to whom such notice is required to be given. The addresses for such
      communications shall be: (i) if to the Company, to Mandalay Media, Inc., 2121
      Avenue of the Stars, Suite 2550, Los Angeles, CA 90067 Attention: President,
      Facsimile No.: 310-277-2741 or such other address as the Company shall so notify
      the Holder, or (ii) if to the Holder, to the address or facsimile number
      appearing on the Warrant Register or such other address or facsimile number
      as
      the Holder may provide to the Company in accordance with this Section
      13.

     

    14.  Warrant
      Agent.
      The
      Company shall serve as warrant agent under this Warrant. Upon 10 business days'
      notice to the Holder, the Company may appoint a new warrant agent. Any
      corporation into which the Company or any new warrant agent may be merged or
      any
      corporation resulting from any consolidation to which the Company or any new
      warrant agent shall be a party or any corporation to which the Company or any
      new warrant agent transfers substantially all of its corporate trust or
      shareholders services business shall be a successor warrant agent under this
      Warrant without any further act. Any such successor warrant agent shall promptly
      cause notice of its succession as warrant agent to be mailed (by first class
      mail, postage prepaid) to the Holder at the Holder's last address as shown
      on
      the Warrant Register.

     

    15.  Miscellaneous.

     

    (a)  This
      Warrant shall be binding on and inure to the benefit of the parties hereto
      and
      their respective successors and assigns. Subject to the preceding sentence,
      nothing in this Warrant shall be construed to give to any Person other than
      the
      Company and the Holder any legal or equitable right, remedy or cause of action
      under this Warrant. This Warrant may be amended only in writing signed by the
      Company and the Holder and their successors and assigns.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (b)  ALL
      QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION
      OF THIS WARRANT 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.

     

    (c)  The
      headings herein are for convenience only, do not constitute a part of this
      Warrant and shall not be deemed to limit or affect any of the provisions
      hereof.

     

    (d)  In
      case
      any one or more of the provisions of this Warrant shall be invalid or
      unenforceable in any respect, the validity and enforceability of the remaining
      terms and provisions of this Warrant shall not in any way be affected or
      impaired thereby and the parties will attempt in good faith to agree upon a
      valid and enforceable provision which shall be a commercially reasonable
      substitute therefor, and upon so agreeing, shall incorporate such substitute
      provision in this Warrant.

     

    (e)  This
      Warrant may be executed and acknowledged in one or more counterparts by the
      different parties hereto, each of which when executed shall be deemed to be
      an
      original but all of which taken together shall constitute one and the same
      instrument.

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK,

     

    SIGNATURE
      PAGE FOLLOWS]

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

     

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
      its
      authorized officer as of the date first indicated above.

     

    
      	 	 

              MANDALAY
                MEDIA, INC.

               

              By:
                /s/ Jay Wolf

              Name:
                Jay Wolf 

              Title:
                Chief Financial Officer

            

    

     

     

    Acknowledged
      and accepted: 

     

     

    VALUEACT
      SMALLCAP MASTER FUND, L.P.

     

     

    By:
      /s/ David Lockwood

    Name:
      David Lockwood

    Title:
      Managing Member

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    FORM
      OF EXERCISE NOTICE

     

    To
      be
      executed by the Holder to exercise the right to purchase shares of Common Stock
      under the foregoing Warrant.

     

    To:
      MANDALAY MEDIA, INC.

     

    The
      undersigned is the Holder of Warrant No. _______ (the "Warrant")
      issued
      by Mandalay Media, Inc., a Delaware corporation (the "Company").
      Capitalized terms used herein and not otherwise defined have the respective
      meanings set forth in the Warrant.

     

    
      	(1)    	
              The
                Warrant is currently exercisable to purchase a total of ______________
                Warrant Shares.

            

    

     

    
      	(2)    	
              The
                undersigned Holder hereby exercises its right to purchase
                _________________ Warrant Shares pursuant to the
                Warrant.

            

    

     

    
      	(3)    	
              The
                Holder intends that payment of the Exercise Price shall be made as
                (check
                one):

            

    

     

    ____ "Cash
      Exercise" under Section 10

     

    ____ "Cashless
      Exercise" under Section 10

     

    ____ "Senior
      Secured Note Due January 30, 2010" having a principal amount plus accrued but
      unpaid interest equal to the Exercise Price

     

    
      	(4)    	
              If
                the Holder has elected a Cash Exercise, the holder shall pay the
                sum of
                $____________ to the Company in accordance with the terms of the
                Warrant.

            

    

     

    
      	(5)    	
              Pursuant
                to this exercise, the Company shall deliver to the holder _______________
                Warrant Shares in accordance with the terms of the
                Warrant.

            

    

     

    
      	(6)    	
              Following
                this exercise, the Warrant shall be exercisable to purchase a total
                of
                ______________ Warrant Shares.

            

    

     

    
      	 	 	 
	
              Dated:
                __________,
                ____ 

            	 	
              Name
                of Holder:

            
	 	 	 
	 	 	
              (Print)_________________________
                

            
	 	 	 
	 	 	
              By:___________________________

            
	 	 	
              Name:_________________________

            
	 	 	
              Title:_________________________

            
	 	 	 
	 	 	
              (Signature
                must conform in all respects to name of holder as specified on the
                face of
                the Warrant)

            

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Warrant
      Shares Exercise Log

     

    
      	
              Date

            	
              Number
                of Warrant Shares Available to be Exercised

            	
              Number
                of Warrant Shares Exercised

            	
              Number
                of Warrant Shares Remaining to be Exercised

            
	
               

               

               

               

               

               

               

               

               

               

               

            	 	 	 

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    MANDALAY
      MEDIA, INC.

     

    WARRANT
      ORIGINALLY ISSUED FEBRUARY 12, 2008

     

    FORM
      OF
      ASSIGNMENT

     

    [To
      be
      completed and signed only upon transfer of Warrant]

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sells, assigns and transfers unto
      ________________________________ the right represented by the above-captioned
      Warrant to purchase ____________ shares of Common Stock to which such Warrant
      relates and appoints ________________ attorney to transfer said right on the
      books of the Company with full power of substitution in the
      premises.

     

    Dated: _______________,
      ____

     

     

    
      	 	
              _______________________________________

              (Signature
                must conform in all respects to name of holder as specified on the
                face of
                the Warrant)

               

               

              _______________________________________

              Address
                of Transferee

               

              _______________________________________

               

              _______________________________________

            

    

     

    In
      the
      presence of:

     

    __________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}]]