Document:

COLLATERAL
      PLEDGE AND SECURITY AGREEMENT

     

    This
      COLLATERAL PLEDGE AND SECURITY AGREEMENT (this “Agreement”), dated as of May 16,
      2008, by and between GREEN SCREEN INTERACTIVE SOFTWARE, INC., a Delaware
      corporation (“Debtor”), and MANDALAY MEDIA, INC., a Delaware corporation
      (“Secured Party”).

     

    WHEREAS,
      pursuant to that certain Note Purchase Agreement, dated as of even date
      herewith, by and between the Debtor and the Secured Party (the “Purchase
      Agreement”), the Secured Party has extended credit to Debtor represented by a
      convertible secured promissory note (the “Bridge Note”) in the principal amount
      of $2,000,000; and

     

    WHEREAS,
      to induce the Secured Party to extend credit to Debtor, Debtor has agreed to
      grant a security interest in certain collateral to Secured Party;

     

    NOW,
      THEREFORE, in consideration of the foregoing premises and for other good and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, Debtor and Secured Party agree as follows:

     

    1.    Certain
      Definitions.
      The
      following terms shall have the following meanings (such meanings to be equally
      applicable to both the singular and plural forms of the terms
      defined):

     

    “Account”
shall
      have the meaning ascribed to such term in Section 9-102 of the UCC.

     

    “Bridge
      Note”
shall
      have the meaning specified in the Recitals hereto.

     

    “Chattel
      Paper”
      shall
      have the meaning ascribed to such term in Section 9-102 of the UCC.

     

     “Collateral”
shall
      have the meaning specified in Section 2 hereof. 

     

    “Commercial
      Tort Claim”
shall
      have the meaning ascribed to such term in Section 9-102 of the UCC.

     

    “Contracts”
shall
      mean, all right, title and interest of Debtor in, to and under, or derived
      from,
      any and all sale, service, performance and equipment lease contracts (whether
      written or oral), and any other contract (whether written or oral), between
      Debtor and third parties.

     

    “Deposit
      Account”
      shall
      have the meaning ascribed to such term in Section 9-102 of the UCC.

     

     “Debtor”
shall
      have the meaning specified in the preamble hereto.

     

    “Document”
shall
      have the meaning ascribed to such term in Section 9-102 of the UCC.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Equipment”
shall
      have the meaning ascribed to such term in Section 9-102 of the UCC.

     

    “Event
      of Default”
shall
      have the meaning specified in Section 8 hereof.

     

    “Goods”
shall
      have the meaning ascribed to such term in Section 9-102 of the UCC.

     

    “Governmental
      Authority”
shall
      mean any federal, state, local, foreign or other governmental or administrative
      (including self-regulatory) body, instrumentality, department or agency or
      any
      court, tribunal, administrative hearing body, arbitration panel, commission,
      or
      other similar dispute resolving panel or body and shall include any
“governmental unit” as such term is defined in Section 9-102 of the
      UCC.

     

    “Indemnitees”
shall
      have the meaning specified in Section 13(a) hereof.

     

    “Instrument”
shall
      have the meaning ascribed to such term in Section 9-102 of the UCC.

     

    “Insurance
      Policies”
shall
      mean all insurance policies held by Debtor or naming Debtor as insured,
      additional insured or loss payee (including, without limitation, casualty
      insurance, liability insurance, property insurance and business interruption
      insurance) and all such insurance policies entered into after the date
      hereof.

     

    “Intangibles”
shall
      have the meaning ascribed to the term “general intangible” in Section 9-102 of
      the UCC.

     

    “Inventory”
shall
      have the meaning ascribed to such term in Section 9-102 of the UCC.

     

    “Investment
      Property”
shall
      have the meaning ascribed to such term in Section 9-102 of the UCC.

     

    “Licenses”
shall
      mean all of Debtor’s license agreements and covenants not to sue with any other
      Person with respect to a patent, trademark, service mark or copyright (other
      than any existing license agreements or covenants not to sue which by their
      terms prohibit assignment, transfer or the grant of a security interest by
      Debtor or give the other party thereto the right to terminate the same upon
      an
      assignment, transfer, or the grant of a security interest thereto), whether
      Debtor is a licensor or licensee under any such license agreement, along with
      any and all (a) renewals, extensions, supplements and continuations thereof,
      (b)
      income, royalties, damages, claims and payments now and hereafter due and/or
      payable to Debtor with respect thereto, including, without limitation, damages
      and payments for past, present or future infringements thereof, (c) rights
      to
      sue for past, present and future infringements thereof, and (d) any other rights
      to use, exploit or practice any patent, trademark, service mark or copyright
      of
      Debtor.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    “Lien”
shall
      mean any mortgage, pledge, assignment, security interest, encumbrance, lien
      or
      charge of any kind, any conditional sale or other title retention agreement
      or
      any lease in the nature thereof (including any agreement to give any of the
      foregoing).

     

    “Line
      of Credit”
shall
      mean a $5 million line of credit which the Company may enter into after the
      date
      hereof.

     

    “Noncash
      Proceeds”
shall
      have the meaning ascribed to such term in Section 9-102 of the UCC.

     

    “Obligations”
shall
      have the meaning specified in Section 3 hereof.

     

    “Payment
      Intangible”
shall
      have the meaning ascribed to such term in Section 9-102 of the UCC.

     

    “Pension
      Plan Reversions”
shall
      mean Debtor’s right to receive the surplus funds, if any, which are payable to
      the Debtor following the termination of any employee pension plan and the
      satisfaction of all liabilities of participants and beneficiaries under such
      plan in accordance with applicable law.

     

    “Person”
shall
      have the meaning ascribed to such term in Section 9-102 of the UCC and shall
      include any individual, partnership, joint venture, firm, corporation, limited
      liability company, limited liability partnership, association, trust or other
      enterprise or any Governmental Authority.

     

    “Proceeds”
shall
      have the meaning ascribed to such term in Section 9-102 of the UCC and shall
      include, without limitation, (a) any and all payments (in any form whatsoever)
      made or due and payable to Debtor from time to time in connection with any
      condemnation, seizure or forfeiture of all or any part of the Collateral by
      any
      Governmental Authority), (b) any and all amounts paid or payable to Debtor
      for
      or in connection with any sale or other disposition of all or any part of the
      Collateral and (c) any and all other amounts from time to time paid or payable
      under or in connection with any of the Collateral. 

     

    “Purchase
      Agreement”
shall
      have the meaning specified in the Recitals hereto. 

     

    “Receivables”
shall
      mean all Accounts, Documents, Instruments and Chattel Paper.

     

    “UCC”
shall
      mean the Uniform Commercial Code as in effect in the State of New York from
      time
      to time. 

     

    “Secured
      Party”
shall
      have the meaning specified in the preamble hereto.

     

    “Third
      Party Claims”
shall
      have the meaning specified in Section 13(a) hereof. 

     

    2.    Grant
      of a Security Interest.
      As
      security for the prompt and complete payment and performance when due of all
      the
      Obligations, Debtor hereby pledges, assigns, transfers and grants to Secured
      Party, a continuing first-priority security interest in and to all of Debtor’s
      right, title and interest in, to and under the following property, wherever
      located, now existing or hereafter arising from time to time (collectively,
      “Collateral”): (a) all Receivables; (b) all Inventory; (c) all books, records,
      ledgers, print-outs, file materials and other papers containing information
      relating to Receivables and any account debtors in respect thereof, together
      with all Contracts; (d) all Equipment; (e) all Intangibles; (f) all Investment
      Property; (g) all Insurance Policies; (h) all Pension Plan Reversions; (i)
      all
      Licenses; (j) all Deposit Accounts; (k) all Commercial Tort Claims; (l) all
      Goods; (m) any and all other property of the Debtor of every name and nature
      which from time to time after the date hereof, by delivery or by writing of
      any
      kind for the purposes hereof, shall have been conveyed, mortgaged, pledged,
      assigned or transferred by Debtor or by anyone on its behalf or with its consent
      to the Secured Party, as and for additional security for the payment of the
      Obligations; and (n) all Proceeds and Noncash Proceeds of any and all of the
      foregoing. 

     

    
      
        
        

      

      
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    3.    Debtor’s
      Obligations Secured Hereby.
      This
      Agreement secures, and the Collateral is collateral security for, the prompt
      payment and performance in full when due, whether at stated maturity, by
      acceleration or otherwise (including, without limitation, the payment of
      interest and other amounts which would accrue and become due but for the filing
      of a petition in bankruptcy or the operation of the automatic stay under the
      Bankruptcy and Insolvency Act (R.S. 1985, c. B-3)) of all obligations of Debtor
      now or hereafter arising under or in respect of the Bridge Note, this Agreement
      or Paragraph 15 of that certain Letter of Intent, by and between Secured Party
      and Debtor, dated as of the date hereof (the “Letter of Intent”) (including,
      without limitation, Debtor’s obligations to pay principal and interest and all
      other charges, fees, expenses, commissions, reimbursements, indemnities and
      other payments related to or in respect of the obligations contained in the
      Bridge Note, this Agreement or the Letter of Intent) (collectively, the
“Obligations”).

     

    4.    No
      Release.
      Nothing
      set forth in this Agreement shall relieve Debtor from the performance of any
      term, covenant, condition or agreement on Debtor’s part to be performed or
      observed under or in respect of any of the Collateral or from any liability
      to
      any Person under or in respect of any of the Collateral or impose any obligation
      on the Secured Party to perform or observe any such term, covenant, condition
      or
      agreement on Debtor’s part to be so performed or observed or shall impose any
      liability on the Secured Party for any act or omission on the part of Debtor
      relating thereto or for any breach of any representation or warranty on the
      part
      of Debtor contained in the Bridge Note, the Purchase Agreement or this
      Agreement, or in respect of the Collateral or made in connection herewith or
      therewith. 

     

    5.    Debtor’s
      Representations and Warranties.
      Debtor
      represents and warrants and, so long as this Agreement is in effect, shall
      be
      deemed continuously to represent and warrant, that:

     

    (a) No
      Liens.
      Debtor
      is and will be the owner of all Collateral free from any Lien or other right,
      title or interest of any Person, other than Secured Party or the Lender with
      respect to the Line of Credit and except as disclosed in Schedule
      A
      annexed
      hereto. 

     

    (b) Authority;
      Enforceability.
      Debtor
      has full organizational power and authority and has taken all organizational
      action necessary to execute, deliver and perform this Agreement and the Bridge
      Note and to encumber and grant a security interest in the Collateral. This
      Agreement constitutes legal, valid and binding obligations of Debtor,
      enforceable against Debtor in accordance with its terms. 

     

    
      
        
        

      

      
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    (c) Other
      Financing Statements.
      Except
      as disclosed in Schedule
      A
      annexed
      hereto, there is no financing statement (or similar statement or instrument
      of
      registration under any jurisdiction) or any notice filed with any Governmental
      Authority covering or purporting to cover any interest of any kind in the
      Collateral. So long as any of the Obligations remain unpaid, Debtor shall not
      execute or authorize to be filed in any public office any financing statement
      (or similar statement or instrument of registration under the law of any
      jurisdiction) or statements relating to the Collateral, except financing
      statements filed or to be filed in respect of and covering the security interest
      granted hereby by Debtor or as may be required by the Lender with respect to
      the
      Line of Credit.

     

    (d) Security
      Interest; Necessary Filings.
      This
      Agreement creates a valid security interest of Secured Party in the Collateral
      securing payment of the Obligations. The security interest granted to Secured
      Party pursuant to this Agreement in and to the Collateral constitutes and
      hereafter will constitute a perfected security interest therein to the extent
      that perfection can be achieved by the filing of a financing statement, superior
      and prior to the rights of all other persons therein and subject to no other
      Liens, except as disclosed in Schedule
      A
      annexed
      hereto except as may be required by the Lender with respect to the Line of
      Credit. 

     

    (e) No
      Consents, etc.
      No
      other consent of any other Person (including, without limitation, members or
      creditors of Debtor) and no consent, authorization, approval, or other action
      by, and no notice to or filing with, any Governmental Authority (other than
      a
      court in connection with the exercise of judicial remedies by Secured Party)
      or
      regulatory body is required either (i) for the pledge by Debtor of the
      Collateral pursuant to this Agreement, or for the execution, delivery or
      performance of this Agreement by Debtor, or (ii) for the exercise by
      Secured Party of the rights provided for in this Agreement or the remedies
      in
      respect of the Collateral pursuant to this Agreement.

     

    (f) Organization;
      Chief Executive Office; Name.
      The
      chief executive office of Debtor is located at 575 Broadway, New York, New
      York
      10012. The Debtor’s legal name, as it appears in the records of the jurisdiction
      in which the Debtor is organized, is “Green Screen Interactive Software, Inc.”
Debtor has not done business during the past three years or since inception
      (whichever period is shorter) under any name other than Green Screen LLC, or
      Green Screen Interactive Software, LLC. Debtor shall not change its name or
      move
      its chief executive office, except to such new location as Debtor may establish
      in accordance with the last sentence of this Section 5(f). All tangible evidence
      of all Collateral and the only original books of account and records of Debtor
      relating thereto are, and will continue to be, kept at such chief executive
      office, or at such new location for such chief executive office as Debtor may
      establish in accordance with the last sentence of this Section 5(f). All
      Collateral are, and will continue to be, controlled and monitored (including,
      without limitation, for general accounting purposes) from, such chief executive
      office location shown above, or such new location as Debtor may establish in
      accordance with the last sentence of this Section 5(f). Debtor shall not
      establish a new location for its chief executive office nor shall it change
      its
      name until it shall have given to Secured Party not less than 45 days’ prior
      written notice of its intention so to do, clearly describing such new location
      or name and providing such other information and taking such action in
      connection therewith as Secured Party may request. 

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    (g) Debtor’s
      Structure.
      The
      Debtor is a corporation duly organized under the laws of the State of Delaware.
      The Debtor shall not change its organizational structure or the state in which
      it is organized without the prior written consent of the Secured Party and
      shall, in any such connection, take all action satisfactory to Secured Party
      to
      maintain the perfection and proof of the security interest of Secured Party
      in
      the Collateral intended to be granted hereby.

     

    (h) Debtor’s
      Tax and Organizational Identification Numbers.
      Debtor’s tax identification number is 33-1215749. 

     

    (i) Collateral.
      All
      information set forth herein relating to the Collateral is accurate and complete
      in all material respects.

     

    (j) Additional
      Representations, Warranties and Covenants of Debtor.
      Debtor
      hereby repeats each of the representations and warranties made by Debtor and
      contained or incorporated by reference in the Bridge Note and the Purchase
      Agreement as fully as if each such representation and warranty were expressly
      set forth herein and expressly made herein by Debtor on and as of the date
      hereof, each such representation and warranty being incorporated in this
      Agreement by reference mutatis mutandis.
      

     

    6.    Debtor’s
      Covenants.
      Debtor
      agrees and covenants for itself, its successors and permitted assigns
      that:

     

    (a) Business
      Use; Protection of Secured Party’s Security.
      The
      Collateral will be used solely for business purposes of Debtor and will remain
      in the possession or under the control of Debtor and will not be used for any
      unlawful purpose. The Collateral will not be misused, abused, wasted or allowed
      to deteriorate. Debtor shall not take any action that impairs the rights of
      Secured Party in the Collateral. Debtor will defend the Collateral against
      the
      claims and demands of all other parties against Debtor or Secured Party other
      than the Lender with respect to the Line of Credit.; will keep the Collateral
      free from all Liens (except as disclosed in Schedule
      A
      annexed
      hereto); and (except with respect to Inventory which is addressed in Section
      6(q) below) will not sell, transfer, lease, license, sublicense, assign, deliver
      or otherwise dispose of any Collateral or any interest therein without the
      prior
      written consent of Secured Party. Debtor will not sell, license, amend or permit
      the amendment of any License, Instrument, Contract or Chattel Paper in any
      manner adverse to the interests of the Secured Party without the prior written
      consent of the Secured Party. 

     

    (b) Financing
      Statements.
      As
      promptly as practicable after the execution and delivery of this Agreement,
      Debtor shall perfect and evidence the perfection of the first-priority security
      interest granted herein, by the completion, signing and filing of UCC-1
      Financing Statements. Debtor hereby irrevocably appoints the Secured Party
      as
      the Debtor’s attorney-in-fact to execute and deliver any and all UCC-1 Financing
      Statements, notices and other documents in furtherance of the foregoing, which
      power-of-attorney the parties hereto acknowledge and agree is coupled with
      an
      interest. Debtor authorizes the Secured Party (i) to file financing statements
      against the Collateral and (ii) at the election of the Secured Party, to
      describe the Collateral as “all assets,” “all personal property,” or words of
      similar import.

     

    
      
        
        

      

      
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    (c) Further
      Actions.
      Debtor
      shall at any time and from time to time take such steps as Secured Party may
      reasonably request to insure the continued perfection and priority of Secured
      Party’s security interest in any of the Collateral and of the preservation of
      its rights therein in any jurisdiction except as otherwise provided herein.
      

     

    (d) After
      Acquired Collateral.
      Any and
      all Collateral described or referred to in the granting clauses hereof which
      is
      hereafter acquired shall, and without any further conveyance, assignment or
      act
      on the part of Debtor or Secured Party, become and be subject to the security
      interests herein granted as fully and completely as though specifically
      described herein.

     

    (e) Maintenance
      of Records.
      Debtor
      shall keep and maintain at its own cost and expense satisfactory and complete
      records of each Receivable, in a manner consistent with prudent business
      practices, for at least seven years from the date on which such Receivable
      comes
      into existence, including, without limitation, records of all payments received,
      all credits granted thereon, all merchandise returned and all other
      documentation relating thereto, and Debtor shall make the same available to
      Secured Party for inspection, at Debtor’s own cost and expense, at any and all
      reasonable times upon demand. Upon the occurrence and during the continuance
      of
      an Event of Default, Debtor shall, at its own cost and expense, deliver all
      tangible evidence of Receivables (including, without limitation, all documents
      evidencing Receivables) and such books and records to Secured Party or to its
      representatives (copies of which evidence and books and records may be retained
      by Debtor) at any time upon Secured Party’s demand. Upon the occurrence and
      during the continuance of an Event of Default, Secured Party may transfer a
      full
      and complete copy of Debtor’s books, records, credit information, reports,
      memoranda and all other writings relating to the Receivables to and for the
      use
      by any Person that has acquired or is contemplating acquisition of an interest
      in the Receivables or Secured Party’s security interest therein without the
      consent of Debtor.

     

    (f) Modification
      of Terms, etc.
      Subject
      to the provisions of Section 6(h), Debtor shall not rescind or cancel any
      indebtedness evidenced by any Receivable or modify any term thereof or make
      any
      adjustment with respect thereto, or extend or renew any such indebtedness,
      or
      compromise or settle any dispute, claim, suit or legal proceeding relating
      thereto, or sell any Receivable or interest therein, without the prior written
      consent of the Secured Party. Debtor shall timely fulfill in all material
      respects all obligations on its part to be fulfilled under or in connection
      with
      the Receivables.

     

    (g) Collection.
      Debtor
      shall take all commercially reasonable actions to cause to be collected from
      the
      account debtor of each of the Receivables, as and when due (including, without
      limitation, Receivables that are delinquent), any and all amounts owing under
      or
      on account of such Receivable, and apply forthwith upon receipt thereof all
      such
      amounts as are so collected to the outstanding balance of such Receivable,
      except that Debtor may allow in the ordinary course of business (i) a refund
      or
      credit due as a result of returned or damaged or defective merchandise, and
      (ii)
      so long as no Event of Default shall exist and be continuing, such extensions
      of
      time to pay amounts due in respect of Receivables and such other modifications
      or payment terms or settlements in respect of Receivables as shall be
      commercially reasonable in the circumstances, all in accordance with Debtor’s
      ordinary course of business consistent with its collection practices as in
      effect from time to time. The costs and expenses (including, without limitation,
      attorneys’ fees and the allocated costs of internal counsel) of collection,
      whether incurred by Debtor or Secured Party, shall be paid by Debtor. The
      Secured Party shall have the right at any time to notify an account debtor
      or
      the obligor on any insurance with respect to a Receivable of the security
      interest herein and to make payment directly to the Secured Party.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    (h) [Intentionally
      Deleted.]
      

     

    (i) Protection
      of Secured Party’s Security.
      Debtor
      shall not take any action that impairs the rights of Secured Party in the
      Collateral. Debtor shall at all times keep the Inventory and Equipment insured
      by financially sound and reputable insurers in favor of Secured Party as an
      additional insured, at the Debtors’ own expense, to Secured Party’s reasonable
      satisfaction against fire, theft and all other risks to which the Collateral
      may
      be subject, in such amounts (but in no event less than the replacement cost
      thereof) and with such deductibles as would be maintained by operators of
      businesses similar to the business of Debtor or as Secured Party may otherwise
      require. At least 30 days prior to the expiration of any such policy of
      insurance, Debtor shall deliver to Secured Party an extension or renewal policy
      or an insurance certificate evidencing renewal or extension of such policy.
      

     

    (j) Commercial
      Tort Claims.
      If the
      Debtor shall at any time acquire a Commercial Tort Claim, the Debtor shall
      immediately notify the Secured Party in a writing signed by the Debtor of the
      details of such claim and grant to the Secured Party in such writing an express
      security interest therein and in the proceeds thereof, all upon the terms of
      this Security Agreement, with such writing to be in the form and substance
      satisfactory to the Secured Party.

     

    (k) Payment
      of Taxes: Claims.
      Debtor
      shall pay promptly when due all property and other taxes, assessments and
      governmental charges or levies (other than those the Company is contesting
      in
      good faith and with respect to which it has made sufficient reserves on its
      financial statements) imposed upon, and all claims (including claims for labor,
      materials and supplies) against, the Collateral.

     

    (l) Ordinary
      Course of Business.
      Subject
      to any limitation contained in the Bridge Note, nothing in this Section 6 shall
      be deemed to prohibit (i) the sale of Inventory and the collection of
      Receivables by Debtor in the ordinary course of business, or (ii) the
      disposition and replacement of obsolete assets as necessary in the ordinary
      course of Debtor’s business.

     

    (m) No
      Impairment.
      Debtor
      shall not enter into any agreement that would materially impair or conflict
      with
      Debtor’s obligations hereunder or under the Bridge Note without the prior
      written consent of the Secured Party. 

     

    (n) No
      Additional Indebtedness.
      Except
      for the Line of Credit, Debtor agrees that it shall not incur any additional
      Indebtedness (as such term is defined in the Bridge Note) without the prior
      written consent of the Secured Party, which consent shall not be unreasonably
      withheld so long as such additional Indebtedness is Junior Debt (as such term
      is
      defined in the Bridge Note).

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    7.    Reasonable
      Care.
      Secured
      Party shall be deemed to have exercised reasonable care in the custody and
      preservation of Collateral in its possession if such Collateral is accorded
      treatment substantially equivalent to that which Secured Party, in its
      individual capacity, accords its own property, it being understood that Secured
      Party shall not have responsibility for taking any necessary steps to preserve
      rights against any Person with respect to any Collateral.

     

    8.    Events
      of Default.
      The
      occurrence of any “Event of Default” under the Bridge Note shall constitute an
“Event of Default” under this Agreement.

     

    9.    Remedies.

     

    (a) Acceleration
      of Bridge Notes.
      Upon
      the occurrence of an Event of Default, Secured Party may, by notice to Debtor,
      or automatically in the case of an Event of Default pursuant to
      Section 7(a)(v) of the Bridge Note, declare the aggregate unpaid principal
      balance of all the Bridge Note, together with all unpaid accrued interest
      thereon, to be immediately due and payable and thereupon all such amounts shall
      be and become immediately due and payable to Secured Party. 

     

    (b) Obtaining
      the Collateral Upon Event of Default.
      If any
      Event of Default shall have occurred and be continuing, then and in every such
      case, Secured Party may, at any time or from time to time during the continuance
      of such Event of Default take any or all of the following actions, all if which
      shall be at Debtor’s expense, which expenses shall constitute Obligations
      secured by the Collateral:

     

    (i) Personally,
      or by agents or attorneys, immediately take possession of the Collateral or
      any
      part thereof from Debtor or any other Person who then has possession of any
      part
      thereof, with or without notice or process of law, and for that purpose may
      enter upon Debtor’s premises where any of the Collateral is located and remove
      such Collateral, and use in connection with such removal any and all services,
      supplies, aids and other facilities of Debtor;

     

    (ii) Instruct
      the obligor or obligors on any agreement, instrument or other obligation
      constituting the Collateral, to make any payment required by the terms of such
      agreement, instrument or other obligation directly to Secured Party;
provided,
      however,
      in the
      event that any such payments are made directly to Debtor, Debtor shall hold
      such
      payments in trust and shall segregate all amounts received pursuant thereto
      in a
      separate account and pay the same promptly to Secured Party; 

     

    (iii) Sell,
      assign or otherwise liquidate, or direct Debtor to sell, assign or otherwise
      liquidate, the Collateral, or any part thereof, and take possession of the
      proceeds of any such sale, assignment or liquidation; and/or

     

    (iv) Take
      possession of the Collateral, or any part thereof, by directing Debtor in
      writing to deliver the same to Secured Party at any place or places designated
      by Secured Party, in which event Debtor shall at its own expense: (A) forthwith
      cause the same to be moved to the place or places so designated by Secured
      Party
      and there delivered to Secured Party; (B) store and keep any Collateral so
      delivered to Secured Party at such place or places pending further action by
      Secured Party; and (C) while the Collateral shall be so stored and kept, provide
      such guards and maintenance services as shall be necessary to protect the same
      and to preserve and maintain them in good condition. Debtor’s obligation to
      deliver the Collateral is of the essence of this Agreement. Upon application
      to
      a court of equity having jurisdiction, Secured Party shall be entitled to a
      decree requiring specific performance by the Debtor of such
      obligation.

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    (c) Other
      Rights and Remedies.
      Upon
      the occurrence and during the continuance of an Event of Default, Secured Party
      may from time to time exercise in respect of the Collateral, in addition to
      other rights and remedies provided for herein or otherwise available to it,
      all
      the rights and remedies of a secured party under the UCC at the time of an
      Event
      of Default.

     

    (d) Waiver
      of Claims.
      Except
      as otherwise provided herein, Debtor hereby waives, to the fullest extent
      permitted by applicable law, notice or judicial hearing in connection with
      Secured Party’s taking possession, or Secured Party’s disposition of any of the
      Collateral, including, without limitation, any and all prior notice and hearing
      for any prejudgment remedy or remedies and any such right which Debtor would
      otherwise have under law, and Debtor hereby further waives to the extent
      permitted by applicable law: (i) all damages occasioned by such taking of
      possession, (ii) all other requirements as to the time, place and terms of
      sale or other requirements with respect to the enforcement of Secured Party’s
      rights hereunder, and (iii) all rights of redemption, appraisal, valuation,
      stay, extension or moratorium now or hereafter in force under any applicable
      law. Any sale of, or the grant of options to purchase, or any other realization
      upon, any Collateral shall operate to divest all rights, title, interest, claim
      and demand, either at law or in equity, of Debtor therein and thereto, and
      shall
      be a perpetual bar both at law and in equity against Debtor and against any
      and
      all Persons claiming or attempting to claim the Collateral so sold, optioned
      or
      realized upon, from, through or under Debtor.

     

    (e) Notice.
      Without
      in any way requiring notice to be given in the following time and manner, Debtor
      agrees that any notice by Secured Party of sale, disposition or other intended
      action hereunder or in connection herewith, whether required by the UCC or
      otherwise, shall constitute reasonable notice to Debtor if such notice is
      delivered in accordance with Section 16(h) hereof and is given at least ten
      days prior to the intended action which is the subject matter thereof.

     

    10.    Payments
      After an Event of Default.
      All
      payments received and amounts realized by Secured Party pursuant to
      Section 9, including all such payments and amounts received after the
      entire unpaid principal and interest amount of the Bridge Note has been declared
      due and payable, as well as all payments or amounts then held or thereafter
      received by Secured Party as part of the Collateral while an Event of Default
      shall be continuing, shall be promptly applied and distributed by Secured Party
      in the following order of priority:

     

    (a) first,
      to the
      payment of all costs and expenses, including reasonable legal expenses and
      attorneys’ fees for one counsel in each jurisdiction in which counsel may be
      required, incurred or made hereunder or under the Bridge Note by Secured Party,
      whether or not constituting Obligations, including, without limitation, any
      such
      costs and expenses of foreclosure or suit, if any, and of any sale or the
      exercise of any other remedy under Section 9, and of all taxes, assessments
      or liens superior to the lien granted under this Agreement, except any taxes,
      assessments or other superior lien subject to which any said sale under
      Section 9 hereof may have been made; and

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    (b) second,
      to the
      payment to Secured Party of the amount then owing or unpaid on the Bridge Note;
      and

     

    (c) third,
      to the
      payment of the balance or surplus, if any, to Debtor, its successors and
      assigns, or to whomsoever may be lawfully entitled to receive the
      same.

     

    11.    Secured
      Party’s Right to Cure; Reimbursement.
      In the
      event Debtor should fail to do any act as herein provided, Secured Party may,
      but without obligation to do so, without notice to Debtor, and without releasing
      Debtor from any obligation hereof, make or do the same in such manner and to
      such extent as Secured Party may deem necessary to protect the Collateral,
      including, without limitation, the defense of any action purporting to affect
      the Collateral or the rights or powers of Secured Party hereunder, at Debtor’s
      expense. Debtor shall reimburse Secured Party for expenses reasonably incurred
      under this Section 11 and any such expenses not reimbursed will constitute
      Obligations secured by the Collateral.

     

    12.    Expenses.
      Debtor
      will upon demand pay to Secured Party the amount of any and all reasonable
      expenses, including the fees and expenses of its counsel and the allocated
      fees
      and expenses of staff counsel and the fees and expenses of any experts and
      agents, which Secured Party may incur in connection with (a) the collection
      of the Obligations, (b) the administration of this Agreement, (c) the
      custody or preservation of, or the sale of, collection from, or other
      realization upon, any of the Collateral, (d) the exercise or enforcement of
      any of the rights of Secured Party hereunder, or (e) the failure by Debtor
      to perform or observe any of the provisions hereof. All amounts payable by
      Debtor under this Section 12 shall be due upon demand and shall be part of
      the Obligations. Debtor’s obligations under this Section 12 shall survive the
      termination of this Agreement and the discharge of Debtor’s other obligations
      hereunder. 

     

    13.    Indemnity.

     

    (a) Indemnity.
      Debtor
      agrees to indemnify, reimburse and hold Secured Party and its successors,
      assigns, officers, directors, stockholders, members, managers, employees,
      agents, representatives, heirs, attorneys and servants (collectively,
“Indemnitees”) harmless from and against any and all liabilities, obligations,
      damages, injuries, penalties, claims, demands, actions, suits, judgments and
      any
      and all costs and expenses (including, without limitation, attorneys’ fees and
      expenses and the allocated costs of internal counsel) of whatsoever kind and
      nature imposed on, asserted against or incurred by any of the Indemnitees in
      any
      way relating to or arising out of this Agreement, the Purchase Agreement or
      the
      Bridge Note or in any other way connected with the administration of the
      transactions contemplated hereby or the enforcement of any of the terms hereof,
      or the preservation of any rights hereunder, or in any way relating to or
      arising out of the manufacture, processing, ownership, ordering, purchase,
      delivery, control, acceptance, lease, financing, possession, operation,
      condition, sale, return or other disposition, or use of the Collateral
      (including, without limitation, latent or other defects, whether or not
      discoverable), the violation of the laws of any Governmental Authority, any
      tort
      (including, without limitation, claims arising or imposed under the doctrine
      of
      strict liability, or for or on account of injury to or the death of any Person
      (including any Indemnitee)), or property damage, or contract claim; provided,
      that
      Debtor shall have no obligation to an Indemnitee hereunder to the extent it
      is
      judicially determined by a final order or decree that such indemnified
      liabilities arise solely from the gross negligence or willful misconduct of
      that
      Indemnitee. Any Indemnitee shall provide Debtor with prompt notice of all third
      party actions, suits, proceedings, claims, demands or assessments subject to
      the
      indemnification provisions of this Section 13(a) (collectively, “Third
      Party Claims”), and provide Debtor with notice of all other claims or demands
      for indemnification pursuant to this Section 13(a); provided, however, that
      the failure to provide timely notice shall not affect Debtor’s indemnification
      obligations except to the extent Debtor shall have been materially prejudiced
      by
      such failure. Debtor shall, if requested by such Indemnitee, resist and defend
      any Third Party Claim or cause the same to be resisted and defended by counsel
      reasonably satisfactory to such Indemnitee. Each Indemnitee shall, unless any
      other Indemnitee has made the request described in the preceding sentence and
      such request has been complied with, have the right to employ its own counsel
      (or internal counsel) to investigate and control the defense of any matter
      covered by the indemnity set forth in this Section 13, and the fees and
      expenses of such counsel shall be paid by Debtor; provided
      that,
      only to the extent no conflict exists between or among the Indemnitees as
      reasonably determined by the Indemnitees, Debtor shall not be obligated to
      pay
      the fees and expenses of more than one counsel for all Indemnitees as a group
      with respect to any such matter, action, suit or proceeding.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    (b) Misrepresentations.
      Without
      limiting the application of subsection 13(a), Debtor agrees to pay,
      indemnify and hold each Indemnitee harmless from and against any loss, costs,
      damages and expenses which such Indemnitee may suffer, expend or incur in
      consequence of or growing out of any misrepresentation by Debtor in this
      Agreement, the Purchase Agreement or the Bridge Note or in any statement or
      writing contemplated by or made or delivered pursuant to or in connection with
      this Agreement, the Purchase Agreement or the Bridge Note.

     

    (c) Contribution.
      If and
      to the extent that the obligations of Debtor under this Section 13 are
      unenforceable for any reason, Debtor hereby agrees to make the maximum
      contribution to the payment and satisfaction of such obligations that is
      permissible under applicable law.

     

    (d) Survival.
      The
      obligations of Debtor contained in this Section 13 shall survive the
      termination of this Agreement and the discharge of Debtor’s other obligations
      hereunder and under the Bridge Note.

     

    (e) Reimbursement.
      Any
      amounts paid by an Indemnitee as to which such Indemnitee has the right to
      reimbursement shall constitute Obligations secured by the
      Collateral.

     

    14.    Termination;
      Release.
      This
      Agreement shall terminate on the satisfaction in full of all of the Obligations
      and, on such termination, Secured Party shall release to Debtor the security
      interest granted in the Collateral hereunder and, upon the request and at the
      expense of Debtor, forthwith assign, transfer and deliver to Debtor, against
      receipt and without recourse to or warranty by Secured Party, such of the
      Collateral to be released as may then be in the possession of Secured Party
      and
      proper instruments acknowledging the termination of this Agreement or the
      release of such Collateral, as the case may be; provided, that if, after receipt
      of any payment of all or any part of the Obligations, Secured Party is for
      any
      reason compelled to surrender such payment to any person or entity because
      such
      payment is determined to be void or voidable as a preference, impermissible
      setoff, or a diversion of trust funds, or for any other reason, this Agreement
      shall continue in full force notwithstanding any contrary action which may
      have
      been taken by Secured Party in reliance upon such payment, and any such contrary
      action so taken shall be without prejudice to Secured Party’s rights under this
      Agreement and shall be deemed to have been conditioned upon such payment having
      become final and irrevocable.

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    15.    Miscellaneous.

     

    (a) Entire
      Agreement; Amendment.
      This
      Agreement, the Purchase Agreement and the Bridge Note set forth the entire
      understanding of the parties with respect to the subject matter hereof and
      supersede all existing agreements among them concerning such subject matter.
      This Agreement may only be amended or modified by a written instrument duly
      executed by Debtor and Secured Party.

     

    (b) Successors
      and Assigns.
      This
      Agreement, together with the covenants and warranties contained in it, shall
      inure to the benefit of Secured Party and its successors, assigns, heirs and
      personal representatives, and shall be binding upon Debtor, its successors
      and
      permitted assigns; provided, that Debtor may not assign this Agreement without
      the prior written consent of Secured Party. No other Persons (including, without
      limitation, any other creditor of Debtor) shall have any interest herein or
      any
      right or benefit with respect hereto. Without limiting the generality of the
      foregoing, Secured Party may assign or otherwise transfer any indebtedness
      held
      by it and secured by this Agreement to any other Person, and such other Person
      shall thereupon become vested with all the benefits in respect thereof granted
      to such Secured Party, herein or otherwise, subject, however, to the provisions
      of the Bridge Note.

     

    (c) No
      Waiver; Cumulative Remedies.
      No
      failure on the part of Secured Party to exercise, no course of dealing with
      respect to, and no delay on the part of Secured Party in exercising, any right,
      power or remedy hereunder shall operate as a waiver thereof; nor shall any
      single or partial exercise of any such right, power or remedy hereunder preclude
      any other or further exercise thereof or the exercise of any other right, power
      or remedy. The remedies herein provided are cumulative and are not exclusive
      of
      any remedies provided by law. In the event Secured Party shall have instituted
      any proceeding to enforce any right, power or remedy under this Agreement by
      foreclosure, sale, entry or otherwise, and such proceeding shall have been
      discontinued or abandoned for any reason or shall have been determined adversely
      to Secured Party, then and in every such case, Debtor and Secured Party shall
      be
      restored to their respective former positions and rights hereunder with respect
      to the Collateral, and all rights, remedies and powers of Secured Party shall
      continue as if no such proceeding had been instituted.

     

    (d) Governing
      Law.
      This
      Agreement shall be governed by, and shall be construed and enforced in
      accordance with, the laws of the State of New York.

     

    (e) Consent
      to Jurisdiction and Service of Process.
      Debtor
      irrevocably consents to the jurisdiction of the courts of New York County,
      New
      York in connection with any action or proceeding arising out of or relating
      to
      this Agreement, any document or instrument delivered pursuant to, in connection
      with or simultaneously with this Agreement, or a breach of this Agreement or
      any
      such document or instrument. 

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    (f) WAIVER
      OF JURY TRIAL.
      DEBTOR
      HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH IT IS A PARTY
      INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
      CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
      WITH
      THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER.

     

    (g) Severability
      of Provisions.
      If any
      provision of this Agreement is invalid, illegal or unenforceable, the balance
      of
      this Agreement shall remain in effect, and if any provision is inapplicable
      to
      any person, party or circumstance, it shall nevertheless remain applicable
      to
      all other persons, parties and circumstances.

     

    (h) Notices.
      All
      notices and other communications required or permitted under this Agreement
      shall be sent by registered or certified mail, postage prepaid, overnight
      courier, confirmed telex or facsimile transmission (provided, that a copy is
      also set by registered or certified mail), or delivered by hand or by messenger,
      addressed (a) if to Secured Party, at its office at 2121 Avenue of the
      Stars, Suite 2550, Los Angeles, CA 90067, Fax (310) 277-2741, marked to the
      attention to Bruce L. Stein, CEO, or at such other address as Secured Party
      shall have furnished to Debtor in writing, or (b) if to Debtor, at its
      office at 575 Broadway, New York, NY 10012, marked to the attention to Ron
      Chaimowitz, CEO, or at such other address as Debtor shall have furnished to
      the
      Secured Party in writing. Each such notice or other communication shall for
      all
      purposes of this Agreement be treated as effective or having been given
      (i) when delivered if delivered personally, (ii) if sent by registered
      or certified mail, at the earlier of its receipt or three business days after
      registration or certification thereof, (iii) if sent by overnight courier,
      on the next business day after the same has been deposited with a nationally
      recognized courier service, or (iv) when sent by confirmed telex or
      facsimile, on the day sent (if a business day) if sent during normal business
      hours of the recipient, and if not, then on the next business day.

     

    (i) Execution
      in Counterparts.
      This
      Agreement and any amendments, waivers, consents or supplements hereby may be
      executed in any number of counterparts and by different parties hereto in
      separate counterparts, each of which when so executed and delivered shall be
      deemed to be an original, but all such counterparts together shall constitute
      one and the same agreement. Facsimile signatures shall be deemed originals
      for
      all purposes hereunder. 

     

    (j) Headings.
      The
      Section headings used in this Agreement are for convenience of reference only
      and shall not affect the construction or interpretation of this
      Agreement.

     

    [Remainder
      of page left intentionally blank. Signature page follows]

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      the
      parties have executed this Collateral Pledge and Security Agreement on the
      date
      set forth above.

     

    
      	 	
              GREEN
                SCREEN INTERACTIVE SOFTWARE, INC.

            
	 	 
	 	 
	 	
              By:
                /s/ Ron Chaimowitz

            
	 	
              Name:
                Ron Chaimowitz

            
	 	
              Title
                CEO

            
	 	 
	 	
              MANDALAY
                MEDIA, INC.

            
	 	 
	 	 
	 	
              By:
                /s/ James Lefkowitz

            
	 	
              Name:
                James Lefkowitz

            
	 	
              Title
                President

            

    

    

     

    

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      A

     

    

    
      
        
        

      

      
        -16-THIS
      NOTE
      AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
      AND
      ARE
      SUBJECT
      TO RESTRICTIONS ON TRANSFERABILITY AS SET FORTH HEREIN. NEITHER THIS NOTE NOR
      THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE SOLD, TRANSFERRED, OR
      OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
      UNDER THE ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER SUCH
      ACT.

    

    GREEN
      SCREEN INTERACTIVE SOFTWARE, INC.

    Convertible
      Secured Promissory Note

    

    $2,000,000

    May
      16, 2008

    New
      York,
      New York

    

    GREEN
      SCREEN INTERACTIVE SOFTWARE, INC., a Delaware corporation (the “Company”),
      for
      value received, hereby promises to pay to Mandalay Media, Inc., a Delaware
      corporation (“Mandalay,”
      together with its successors or permitted assigns, the “Holder”),
      the
      principal amount of Two Million Dollars ($2,000,000) in lawful money of the
      United States, with interest thereon to be computed from the date hereof on
      the
      unpaid principal balance at the rate and as herein provided.

     

    This
      convertible promissory note (the “Note”)
      is
      issued pursuant to and is subject to the terms of that certain Note Purchase
      Agreement, dated of even date herewith, by and between the Company and Mandalay
      (as the same may be amended from time to time, the “Purchase
      Agreement”).
      

     

    All
      agreements herein made are expressly limited so that in no event whatsoever,
      whether by reason of advancement of proceeds hereof, acceleration of maturity
      of
      the unpaid balance hereof or otherwise, shall the amount paid or agreed to
      be
      paid to the Holder for the use of the money advanced or to be advanced hereunder
      exceed the maximum rate permitted by law (the “Maximum
      Rate”).
      If,
      for any circumstances whatsoever, the fulfillment of any provision of this
      Note
      or any other agreement or instrument now or hereafter evidencing, securing
      or in
      any way relating to the debt evidenced hereby shall involve the payment of
      interest in excess of the Maximum Rate, then,
      ipso
      facto,
      the
      obligation to pay interest hereunder shall be reduced to the Maximum Rate;
      and
      if for any circumstance whatsoever, the Holder shall ever receive interest,
      the
      amount of which would exceed the amount collectible at the Maximum Rate, such
      amount as would be excessive interest shall be applied to the reduction of
      the
      principal balance remaining unpaid hereunder and not to the payment of interest.
      This provision shall control every other provision in any and all other
      agreements and instruments existing or hereafter arising between the Company
      and
      the Holder with respect to the debt evidenced hereby.

     

    1. Security.
      This
      Note
      and Company’s obligations hereunder are collateralized by a security interest in
      Company’s assets, pursuant to a Collateral Pledge and Security Agreement, dated
      as of even date herewith, by the Company, in favor of Mandalay (the “Security
      Agreement”).
      If an
      Event of Default (as hereinafter defined) shall have occurred and be continuing
      and the principal amount of this Note shall become due and payable, the Holder
      shall be entitled to exercise, in addition to any right, power or remedy
      permitted in law or equity, all its remedies under the Security
      Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.    Interest;
      Payments.

     

    (a) Principal
      of, and any accrued and unpaid interest on, this Note shall be due and payable
      on any date and time on or after October 15, 2008 within five Business Days
      (as
      defined below) of written demand by the Holder (such date and time hereinafter
      referred to as the “Maturity
      Date”),
      unless
      it has been prepaid or converted in accordance with the terms hereof.

     

    (b) Until
      this Note is converted or paid in full, interest on this Note shall accrue
      from
      the date hereof (the “Issue
      Date”)
      at the
      Applicable Rate (calculated on the basis of a 360-day year consisting of twelve
      30 day months). For purposes of this Note, the “Applicable Rate”
shall
      mean 10% until August 16, 2008 and increasing to 15% from and after August
      16,
      2008, except in the event that the Company fails to pay the Holder any portion
      of the principal and/or interest due on the Maturity Date in which case the
      Applicable Rate shall thereafter be 20%. 

     

    (c) If
      the
      Maturity Date would fall on a day that is not a Business Day (as defined below),
      the payment due on the Maturity Date will be made on the next succeeding
      Business Day with the same force and effect as if made on the Maturity Date.
      “Business
      Day”
      means
      any day which is not a Saturday or Sunday and is not a day on which banking
      institutions are generally authorized or obligated to close in the city of
      New
      York, New York.

     

    (d) Payment
      of principal and interest on this Note shall be made by wire transfer of
      immediately available funds to an account designated by the Holder or by check
      sent to the Holder’s address set forth above or to such other address as the
      Holder may designate for such purpose from time to time by written notice to
      the
      Company, in such coin or currency of the United States as at the time of payment
      shall be legal tender for the payment of public and private debts.

     

    (e) The
      obligations to make the payments provided for in this Note are absolute and
      unconditional and not subject to any defense, set-off, counterclaim, rescission,
      recoupment or adjustment whatsoever. The Company hereby expressly waives demand
      and presentment for payment, notice of non-payment, notice of dishonor, protest,
      notice of protest and diligence in taking any action to collect any amount
      called for hereunder, and shall be directly and primarily liable for the payment
      of all sums owing and to be owing hereon, regardless of and without any notice,
      diligence, act or omission with respect to the collection of any amount called
      for hereunder.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (f) The
      Company may prepay this Note in whole (and not in part) without
      penalty.

     

    (g) Unless
      this Note has been prepaid or converted in accordance with the terms hereof,
      in
      the event of the Company’s liquidation, the Company shall, at the Holder’s
      option, pay the principal of, and any accrued and unpaid interest on, this
      Note
      or convert this Note in accordance with Section 4(a) below. 

     

    3.    Ranking
      of Note.

     

    (a) The
      Company, for itself, its successors and assigns, covenants and agrees, that
      the
      payment of the principal of and interest on this Note is senior in right of
      payment to the payment of all existing and future Junior Debt (as hereinafter
      defined). “Junior
      Debt”
      shall
      mean all existing and future Indebtedness (as hereinafter defined) other than
      (i) the Indebtedness represented by this Note, (ii) the Line of Credit (as
      defined below) and (iii) as otherwise agreed to by the Holder in writing.
“Indebtedness”
      shall
      mean (A) any liability of the Company for borrowed money, (x) evidenced by
      a
      note, debenture, bond or other instrument of indebtedness (including, without
      limitation, a purchase money obligation), including any given in connection
      with
      the acquisition of property, assets or service, or (y) for the payment of rent
      or other amounts relating to capitalized lease obligations; (B) any liability
      of
      others of the nature described in clause (A) which the Company has guaranteed
      or
      which is otherwise its legal liability; and (C) any modification, renewal,
      extension, replacement or refunding of any such liability described in clause
      (A) or (B); provided, that Indebtedness does not include unsecured trade
      credit.

     

    (b) The
      Company covenants and agrees to use its commercially reasonable efforts to
      cause
      any current holder of Junior Debt and to cause any future holder of Junior
      Debt
      permitted to be incurred pursuant to this Note to execute such subordination
      agreements, instruments or waivers as may be necessary to reflect the terms
      set
      forth herein. 

     

    (c) Mandalay
      acknowledges and agrees that the Company may seek to obtain a $5 million line
      of
      credit (the “Line
      of Credit”),
      and
      if the Company obtains such Line of Credit, the payment of principal and
      interest on this Note will be junior in right of payment to the payment of
      any
      Indebtedness represented by the Line of Credit. Mandalay shall execute such
      subordination agreements as may be reasonably required by the lender of such
      Line of Credit to reflect the foregoing.

     

    (d) Until
      the
      payment in full of all amounts of principal of, and interest on, this Note,
      and
      all other amounts owing under this Note, no payment may be made with respect
      to
      the principal of or other amounts owing with respect to any Junior Debt, or
      in
      respect of any redemption, retirement, purchase or other acquisition thereof;
      provided, that the Company may pay scheduled interest thereon so long as no
      Event of Default shall have occurred and be continuing.

     

    (e) Upon
      any
      payment or distribution of the assets of the Company, to creditors upon
      dissolution, total or partial liquidation or reorganization of, or similar
      proceeding relating to the Company, the Holder of the Note will be entitled
      to
      receive payment in full before any holder of Junior Debt is entitled to receive
      any payment.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    4.    Conversion.

     

    (a) Unless
      previously paid or converted in full, at the Holder’s option at any time, this
      Note shall convert, in whole or in part, into shares of common stock of the
      Company, par value $0.0001 (the “Common
      Stock”)
      or
      other Equity Securities (as defined below) as applicable. In the event the
      Holder elects to convert all or a portion of this Note as aforesaid, it shall
      deliver to the Company written notice of such election (a “Conversion
      Notice”),
      which
      Conversion Notice shall state the portion of this Note which the Holder has
      elected to convert. The conversion of this Note into shares of Equity Securities
      shall take place on the next Business Day following the Company’s receipt of the
      Holder’s Conversion Notice or on such other date and at such other time as may
      be mutually agreed to by the Company and the Holder (such date hereinafter
      referred to as the “Optional
      Conversion Date”).
      The
      number of shares of Equity Securities into which this Note (or portion of this
      Note) shall be convertible shall be determined by dividing (i) that portion
      of
      the principal and accrued interest of this Note being converted, by (ii) the
      lower of $20.00 or the price per share at which the Equity Securities (as
      hereinafter defined) are sold in the Qualified Financing (as hereinafter
      defined); provided
      that, if a Qualified Financing consists of two or more capital raises, the
      price
      per share shall be deemed to be the weighted average purchase price for such
      capital raises computed on a fully-converted basis.

     

    (b) For
      purposes hereof, a “Qualified
      Financing”
      shall
      mean the sale of Common Stock or other Equity Securities, the gross proceeds
      of
      which, in the aggregate, equal or exceed $10,000,000 (or such other amount
      as
      shall be agreed upon by the Company and Holder); “Equity
      Securities”
      shall
      mean the Common Stock or other equity securities issued in connection with
      such
      Qualified Financing. 

     

    (c) Upon
      conversion of this Note pursuant to Section 4(a) or (b), the Holder shall be
      deemed to be the holder of record of the Common Stock, issuable upon such
      conversion (in either case, the “Conversion
      Shares”),
      notwithstanding that the transfer books of the Company shall then be closed
      or
      certificates (if applicable) representing such Conversion Shares shall not
      then
      have been actually delivered to the Holder. If requested by the Holder and
      with
      the consent of the Company, as soon as practicable after the Optional Conversion
      Date or the closing of the Qualified Financing, as applicable, the Company
      shall
      issue and deliver to the Holder a certificate or certificates for the Conversion
      Shares registered in the name of the Holder or its designee(s); provided, that
      the Company, by notice given to the Holder promptly after the Optional
      Conversion Date or the closing of the Qualified Financing, as applicable, may
      require the Holder, as a condition to the delivery of such certificate or
      certificates, to present this Note to the Company.

     

    (d) The
      issuance of any Conversion Shares, and the delivery of certificates (if
      applicable) or other instruments representing the same, shall be made without
      charge to the Holder for any tax or other charge in respect of such issuance.
      The Company shall not, however, be required to pay any tax which may be payable
      in respect of any transfer involved in the issue and delivery of any certificate
      in a name other than that of the Holder, and the Company shall not be required
      to issue or deliver any such certificate unless and until the person or persons
      requesting the issue thereof shall have paid to the Company the amount of such
      tax or shall have established to the satisfaction of the Company that such
      tax
      has been paid.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (e) The
      Holder shall not have, solely on account of such status as a holder of this
      Note, any rights of a stockholder of the Company, either at law or in equity,
      or
      any right to any notice of meetings of stockholders or of any other proceedings
      of the Company, except as provided in this Note.

     

    (f) The
      Company shall at all times reserve and keep available out of its authorized
      and
      unissued shares of Common Stock, solely for the purpose of providing for the
      exercise of the conversion rights provided for under this Section 4, such number
      of shares of Common Stock as shall, from time to time, be sufficient for
      issuance upon conversion of this Note in full. The Company covenants that all
      shares of Common Stock issuable upon conversion hereof shall be validly issued
      and free of preemptive rights (and, to the extent applicable, fully paid and
      nonassessable).

     

    (g) Upon
      conversion of this Note, if not already a party thereto, the Holder shall enter
      into the Company’s then current shareholders’ agreement, the form and substance
      of which shall be reasonably satisfactory to the Holder and its counsel.

     

    5.    Negative
      Covenants. The
      Company covenants and agrees with the Holder that, so long as any amount remains
      unpaid on this Note, unless the consent of the Holder is obtained, the Company
      shall not:

     

    (a) increase
      the number of authorized shares of Common Stock or other class or series of
      equity securities; 

     

    (b) redeem
      or
      repurchase any of the Company’s outstanding shares of Common Stock or other
      equity securities;

     

    (c) consummate
      a merger, corporate reorganization or sale of Common Stock or other equity
      securities constituting 51% or more of the Company’s outstanding voting
      securities, voluntarily dissolve or liquidate, sell or exclusively license
      all
      or substantially all of the Company’s intellectual property, or consummate any
      transaction in which all or substantially all of the assets of the Company
      are
      sold;

     

    (d) pay
      or
      declare any distribution or dividend with respect to the Company’s Common Stock
      or other equity securities; 

     

    (e) except
      for the Line of Credit, take any action that relates to or would result in
      the
      incurrence by the Company of Indebtedness; 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (f) draw
      down
      any amounts under the Line of Credit that would leave the Company with less
      than
      $2,000,000 of committed availability under the Line of Credit;

     

    (g) if
      the
      Line of Credit is obtained, permit the Line of Credit to expire or be terminated
      prior to repayment of this Note; 

     

    (h) acquire
      any material business; 

     

    (i) create
      any subsidiary, unless such subsidiary shall be a wholly-owned subsidiary and
      such subsidiary guarantees the Company’s obligations under this Note;

     

    (j) permit
      any subsidiary to authorize or issue any capital stock, membership units,
      partnership interests or other equity securities, or any option, warrant, put,
      call, note, debenture or other right exercisable, convertible or exchangeable
      for such subsidiary’s equity securities, to any person or entity other than to
      the Company; and

     

    (k) agree
      to,
      or permit any subsidiary to agree to, take any actions set forth above, except
      those actions contemplated by the letter of intent between the Company and
      Mandalay dated the date hereof. 

     

    6.    Affirmative
      Covenants. The
      Company covenants and agrees with the Holder that, so long as any amount remains
      unpaid on this Note, the Company shall:

     

    (a) deliver
      to the Holder quarterly financial statements within 45 days after quarter-end,
      and annual financial statements within 90 days of year-end. In addition, Holder
      shall receive monthly statements of cash flow for the immediately preceding
      month and projections of cash flow for the next month within 10 days of the
      end
      of each calendar month; 

     

    (b) promptly
      after the Company shall obtain knowledge of the occurrence of any Event of
      Default (as hereinafter defined) or any event which with notice or lapse of
      time
      or both would become an Event of Default (an Event of Default or such other
      event being a “Default”),
      a
      notice specifying that such notice is a “Notice
      of Default”
      and
      describing such Default in reasonable detail, and, in such Notice of Default
      or
      as soon thereafter as practicable, a description of the action the Company
      has
      taken or proposes to take with respect thereto; and

     

    (c) permit
      the Holder to visit and inspect its properties and its books and records at
      reasonable times during normal business hours and on reasonable notice.

     

    7.    Events
      of Default.

     

    (a) The
      occurrence of any of the following events shall constitute an event of default
      (an “Event
      of Default”):

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (i) A
      default
      in the payment of the principal or interest on this Note, when and as the same
      shall become due and payable (a “Payment
      Default”);
      

     

    (ii) A
      default
      in the performance, or a breach, of any covenant or agreement of the Company
      contained in this Note (other than a Payment Default) or in the Purchase
      Agreement or Security Agreement and continuance of such default or breach of
      for
      a period of 10 days after receipt of notice from the Holder as to such
      breach;

     

    (iii) Any
      material breach of a representation, warranty or certification made by the
      Company in or pursuant to this Note, the Purchase Agreement or the Security
      Agreement;

     

    (iv) A
      final
      judgment or judgments for the payment of money in excess of $250,000 in the
      aggregate shall be rendered by one or more courts, administrative or arbitral
      tribunals or other bodies having jurisdiction against the Company and the same
      shall not be discharged (or provision shall not be made for such discharge),
      or
      a stay of execution thereof shall not be procured, within 60 days from the
      date
      of entry thereof and the Company shall not, within such 60-day period, or such
      longer period during which execution of the same shall have been stayed, appeal
      therefrom and cause the execution thereof to be stayed during such appeal;
      and

     

    (v) The
      entry
      of a decree or order by a court having jurisdiction adjudging the Company as
      bankrupt or insolvent, or approving a petition seeking reorganization,
      arrangement, adjustment or composition of or in respect of the Company, under
      federal bankruptcy law, as now or hereafter constituted, or any other applicable
      federal or state bankruptcy, insolvency or other similar law, and the
      continuance of any such decree or order unstayed and in effect for a period
      of
      60 days; or the commencement by the Company of a voluntary case under federal
      bankruptcy law, as now or hereafter constituted, or any other applicable federal
      or state bankruptcy, insolvency, or other similar law, or the consent by the
      Company to the institution of bankruptcy or insolvency proceedings against
      it,
      or the filing by the Company of a petition or answer or consent seeking
      reorganization or relief under federal bankruptcy law or any other applicable
      federal or state law, or the consent by the Company to the filing of such
      petition or to the appointment of a receiver, liquidator, assignee, trustee,
      sequestrator or similar official of the Company or of any substantial part
      of
      the property of the Company, or the making by the Company of an assignment
      for
      the benefit of creditors, or the admission by the Company in writing of its
      inability to pay its debts generally as they become due, or the taking of
      corporate action by the Company in furtherance of any such action.

     

    (b) Nothing
      contained in Section 7(a) hereof shall in any way limit or be construed as
      limiting the right of the Holder to demand payment of the principal of, and
      any
      accrued and unpaid interest on, this Note at any time or after October 15,
      2008
      pursuant to Section 2(a) of this Note.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    8.    Remedies
      Upon Default. Upon
      the
      occurrence of an Event of Default referred to in Section 7(a)(v), the principal
      amount then outstanding of, and the accrued interest on, this Note shall
      automatically become immediately due and payable without presentment, demand,
      protest or other formalities of any kind, all of which are hereby expressly
      waived by the Company. Upon the occurrence of an Event of Default referred
      to in
      Sections 7(a)(i) through (iv), the Holder, by notice in writing given to the
      Company, may declare the entire principal amount then outstanding of, and the
      accrued interest on, this Note to be due and payable immediately, and upon
      any
      such declaration the same shall become and be due and payable immediately,
      without presentation, demand, protest or other formalities of any kind, all
      of
      which are expressly waived by the Company. The Holder may institute such actions
      or proceedings in law or equity as it shall deem expedient for the protection
      of
      its rights and may prosecute and enforce its claims against all assets of the
      Company, and in connection with any such action or proceeding shall be entitled
      to receive from the Company payment of the principal amount of this Note plus
      accrued interest to the date of payment plus reasonable expenses of collection,
      including, without limitation, reasonable attorneys' fees and expenses actually
      incurred. For the avoidance of doubt, the foregoing is not intended as an
      exclusive remedy and Holder may enforce any other rights granted under this
      Note, the Security Agreement, any other agreement or otherwise under applicable
      law. 

     

    9.    Reclassifications
      and Reorganizations. In
      case
      of any reclassification or reorganization of the Common Stock, or, in the case
      of any merger or consolidation of the Company with or into another entity
      (excluding a consolidation or merger in which the Company is the continuing
      entity that does not result in any reclassification or reorganization of the
      Common Stock), or, in the case of any sale or conveyance to another corporation
      or entity of the assets or other property of the Company as an entirety or
      substantially as an entirety, in connection with which the Company is dissolved,
      subject to the terms and provisions of Section 4 of this Note, the Holder shall
      thereafter have the right to convert this Note into the kind and amount of
      shares of stock or other securities or property (including cash) receivable
      upon
      such reclassification, reorganization, merger or consolidation, or upon a
      dissolution following any such sale or transfer, that the Holder would have
      received if the Holder had converted this Note pursuant to Section 4(a) hereof
      immediately prior to such event. The provisions of this Section 9 shall
      similarly apply to successive reclassifications, reorganizations, mergers or
      consolidations, sales or other transfers.

     

    10.   Miscellaneous.

     

    (a) The
      terms
      and conditions of this Note shall inure to the benefit of and be binding upon
      the respective successors and assigns of the parties; provided, however, that
      neither party may assign any of its rights or obligations hereunder without
      the
      prior written consent of the other, except that the Holder may assign all or
      any
      portion of its rights hereunder to an affiliate of the Holder upon notice to
      the
      Company of same but without such consent. Assignment of all or any portion
      of
      this Note in violation of this Section 10(a) shall be null and void. Nothing
      in
      this Note, expressed or implied, is intended to confer upon any party other
      than
      the parties hereto or their respective successors and permitted assigns any
      rights, remedies, obligations, or liabilities under or by reason of this Note,
      except as expressly provided in this Note. 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (b) All
      notices and other communications required or permitted under this Note shall
      be
      in writing and shall be deemed delivered (i) when received, if delivered by
      hand
      delivery, (ii) three Business Days after being sent, certified or registered
      mail, return receipt requested, first class postage prepaid, or (iii) one
      Business Day after being sent by nationally recognized overnight courier,
      addressed (A) if to the Company, to 575 Broadway, New York, New York 10012,
      marked for the attention of Ron Chaimowitz, CEO; (B) if to Mandalay, to 2121
      Avenue of the Stars, Suite 2550, Los Angeles, California 90067, marked for
      the
      attention of Bruce L. Stein, CEO; or (C) if to any subsequent Holder, at the
      address of such Holder as provided to the Company. All written notices delivered
      by means other than as set forth above shall be deemed effective upon receipt.
      Any party may change the address to which notices, requests, consents or other
      communications hereunder are to be delivered by giving the other parties notice
      in the manner set forth in this Section 10(b). 

     

    (c) Upon
      receipt of evidence satisfactory to the Company, of the loss, theft, destruction
      or mutilation of this Note (and upon surrender of this Note if mutilated),
      including an affidavit of the Holder thereof that this Note has been lost,
      stolen, destroyed or mutilated together with an indemnity against any claim
      that
      may be made against the Company on account of such lost, stolen, destroyed
      or
      mutilated Note, and upon reimbursement of the Company's reasonable incidental
      expenses, the Company shall execute and deliver to the Holder a new Note of
      like
      date, tenor and denomination.

     

    (d) No
      course
      of dealing and no delay or omission on the part of the Holder or the Company
      in
      exercising any right or remedy shall operate as a waiver thereof or otherwise
      prejudice the Holder's or the Company’s rights, powers or remedies, as the case
      may be. No right, power or remedy conferred by this Note upon the Holder or
      the
      Company shall be exclusive of any other right, power or remedy referred to
      herein or now or hereafter available at law, in equity, by statute or otherwise,
      and all such remedies may be exercised singly or concurrently.

     

    (e) If
      one or
      more provisions of this Note are held to be unenforceable under applicable
      law,
      such provision shall be excluded from this Note and the balance of this Note
      shall be interpreted as if such provision were so excluded and shall be
      enforceable in accordance with its terms. This Note may be amended only by
      a
      written instrument executed by the Company and the Holder hereof. Any amendment
      shall be endorsed upon this Note, and all future Holders shall be bound
      thereby.

     

    (f) This
      Note
      shall be governed by and construed in accordance with the laws of the State
      of
      New York, without giving effect to principles governing conflicts of
      law.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

     

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

     

    

    

    *
      * * *
      *

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

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

    

    

    

    GREEN
      SCREEN INTERACTIVE SOFTWARE, INC.

    

    

    By:
      /s/ Ron Chaimowitz

    Name:
      Ron
      Chaimowitz

    Title:
      CEO

    

    
       

    

    
      
        
        

      

      
        11

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