Re: Employment Agreement

1.1.

You are employed as a joint managing director of the Company and you shall serve the Company in this, or an equivalent position, and in such other position or positions with the Company and its subsidiaries and affiliates consistent with your position as a joint managing director of the Company and shall perform such duties as the Chief Executive Officer of Twistbox Entertainment, Inc. (the “CEO”) or the Board of Directors of Mandalay Media, Inc. shall reasonably assign you from time to time. You shall report directly to the CEO or such other person as the Company shall determine from time to time.

1.2.

You shall devote substantially all of your business time and attention to the services required of you hereunder, and shall perform such services in a manner consistent with the duties of your position, provided the foregoing shall not prevent you from (i) serving on the board of directors of non-profit organizations and, with the prior written approval of the Board, other companies, (ii) participating in charitable, civic, educational, professional, community or industry affairs and (iii) managing your and your family’s passive personal investments; provided such activities in the aggregate do not interfere or conflict with your duties hereunder or create a potential business conflict. You shall be subject to the terms and conditions of any applicable policy of the Company regarding service on behalf of any other organization.

1.3.

During the Employment, you shall not become associated with any entity, whether as a principal, partner, employee, director, consultant, joint venturer, lender, investor, individual proprietor, shareholder or otherwise (other than as a holder of not in excess of 2% of the outstanding voting shares of any publicly held company), that is actively engaged or preparing to be actively engaged in any geographic area in any business which is in competition with a business conducted by the Company or any of its subsidiaries or affiliates at the time of the alleged competition. During the Employment, you shall not engage in any activity or activities preparatory to competing with the Company.

3.1.

Your base salary during the first Earn-Out Period (as defined in the Stock Purchase Agreement, by and among Mandalay Media, Inc., Nathaniel MacLeitch, Jack Cresswell and the shareholders of the Company signatories thereto, dated as of October 8, 2008 (the “Stock Purchase Agreement”), which will accrue from day to day, will be at the rate of £60,000 per annum payable monthly in arrears direct into your bank account on or before the last day of each calendar month. Where this falls on a weekend or public holiday, payment will be made on the last working day before that day. Within ten (10) days of the beginning of the second Earn-Out Period and the third Earn-Out Period, as applicable, you may provide the Company with a notice setting forth the base salary you wish to receive for such period, which shall be no greater than £100,000 per annum. In the event that you fail to provide the Company with such a notice within such ten day period, your base salary for such period shall be £60,000 per annum. After the expiration of the Earn-Out Term (as defined in the Stock Purchase Agreement), your base salary will be reviewed on an annual basis in March of each year. There is no obligation on the Company to increase the level of your base salary at a review. An increase awarded in one year will not influence or set a precedent in relation to future years.

3.2.

Following the expiration of the Earn-Out Term, you may then be eligible to receive a performance/merit bonus as determined by Company’s Board based upon several factors including the profitability of the Company, your performance and the achievement of the goals set by the Company’s Board during each fiscal year. Any bonus paid to you is entirely discretionary and there is no contractual entitlement to receive it nor shall it be deemed to become part of your contractual remuneration or salary for pension purposes or otherwise. In the event your employment is terminated or you are under notice of termination prior to the payment date (whether such notice is given by the Company or you) you will forfeit all and any rights and entitlements to a bonus and will not have any rights against the Company in respect of the loss of such entitlement. The Company reserves in its absolute discretion the right to terminate or amend any bonus scheme without notice to you. Receipt of a discretionary bonus one year creates neither right to nor expectation of any bonus in the next year.

3.3.

You authorise the Company at any time during your employment, or in any event on the termination of your employment, howsoever arising, to deduct from your salary and from any other sums reimbursable to you by the Company, any monies from time to time due from you to the Company including, but not limited to any outstanding loans, advances, payment for excess holiday, overpayment of wages and any other monies owed by you to the Company.

3.4.

You shall be entitled to participate in all bonus and benefit programs that the Company establishes and makes available to its executive employees, if any, to the extent that your position, tenure, salary, age, health and other qualifications make you eligible to participate, including, but not limited to, health care plans, life insurance plans, disability insurance, retirement plans, and all other benefit plans from time to time in effect. The Company shall pay for your participation in the health care plan that it currently has in place. The Company shall also reimburse you up to £500 per month for the lease of an automobile to be used in connection with your employment with the Company.

5.1.

Your normal hours of work are from 8:00 a.m. to 5:00 p.m. or 9.00 a.m. to 6.00 p.m. Monday through Friday, inclusive. You are entitled to a one (1) hour lunch break. You may be required to work additional hours either, as and when requested by the Company, or when the proper performance of your work requires. You will not be entitled to be paid extra remuneration for any such additional hours worked in excess of your basic weekly hours.

5.2.

You agree that the limit in regulation 4(1), Working Time Regulations 1998 (“the Regulations”) does not apply during your employment and that if necessary for the proper performance of your duties you will work more than an average of 48 hours in each seven day period (as defined by and calculated in accordance with the Regulations). You can withdraw your agreement to the terms of this clause by giving to the Company three months’ written notice.

6.1.

Your annual holiday entitlement is twenty-five (25) days in the Company’s holiday year which runs from January to December, plus Bank Holidays in England and Wales. Your entitlement for a part year will be pro-rated according to your annual entitlement. You are entitled to your full remuneration and benefits during days taken as holiday.

6.2.

You are required to give at least two weeks’ notice of a proposed holiday. No more than 10 consecutive days’ holiday (plus weekends falling in between) may be taken at any one time. The provisions of regulations 15(1) to (4) of the Regulations do not apply to your employment. Unused holiday entitlement may not be carried over from one calendar year to the next without the prior written consent of the Company.

6.3.

Upon termination of employment, you will receive payment in respect of any days’ holiday which has accrued but has not been taken by the date your employment terminates. A pro-rated sum will be deducted in respect of any days you have taken in excess of your holiday entitlement from your last salary payment. For these purposes a day’s pay is calculated as 1/260 of your annual salary.

6.4.

During any period of notice (whether given by the Company or by you), no contractual holiday entitlement shall accrue, save that your entitlement to annual leave pursuant to regulation 13 of the Regulations shall continue to accrue during such period.

6.5.

The Company reserves the right, at its sole discretion, to require you to take or not to take all or part of any outstanding holiday during any notice period or period of Garden Leave.

7.1.

The Company shall not be liable to pay or provide any pension to or for your benefit (without prejudice to the Company’s obligation (if any) pursuant to the Welfare Reform and Pensions Act 1999, the Finance Act 2000 and the Stakeholder Pension Schemes Regulations 2000 to facilitate access to a stakeholder pension scheme) and you are encouraged to make your own pension arrangements.

7.2.

The Company has not opted to treat your employment as contracted-out employment by reference to an occupational pension scheme and a contracting-out certificate issued in accordance with the Pension Schemes Act 1993 is not in force in respect of your employment.

8.1.

Any unauthorized absence requires you to notify the CEO (or his designated deputy) by 10.00 a.m. on the first day of any such unauthorized absence. If you are still off work on the third day you must contact the CEO to report on your progress. You must keep the CEO regularly informed of your absence and of the expected duration of your absence. Failure to notify the Company of your absence may render you subject to disciplinary action and may also bar you from receiving sick pay.

8.2.

Absence through sickness or injury must be covered by a medical certificate. For the first seven days a self-certificate form (available from Human Resources) must be completed on your return to work and submitted to Human Resources For illness of more than seven days, a doctor’s certificate must be produced on the eighth day and should be submitted regularly for any period of sickness thereafter. On each occasion a medical certificate expires and you do not anticipate returning to work, you must notify the Head of Worldwide Sales on the first working day following the expiry of the medical certificate.

8.3.

Provided that you comply with your obligations under this clause 8, the Company may at its absolute discretion make full payment of salary while you are absent for sickness or injury for a maximum period of thirty (30) days in any twelve-month period and for any subsequent such absence in the same calendar year you will receive such pay (if any) as the Company may in its sole discretion deem appropriate. The foregoing is without prejudice to any entitlement to statutory sick pay (“SSP”) under the Social Security Contributions and Benefits Act 1992 (for which purpose Monday to Friday (inclusive) in each week shall be qualifying days). Any payment made in respect of a day of sickness shall count towards any entitlement to SSP and any other sickness or other benefit obtainable by you under any social security, national insurance or other legislation for the time being in force or any benefit received by you as a result of contributions paid by the Company to any health insurance scheme. Only SSP will be paid for any period of absence due to sickness during your probationary period and/or your notice period. The Company at all times reserves the right to withhold, discontinue or request repayment of any contractual sick pay:

8.3.1.

if it is satisfied that you have misrepresented your state of health or are in any way abusing the sickness scheme; or

8.3.2.

if an injury from an accident at work was caused by your misconduct at work; or

8.3.3.

if you fail to follow the Company’s absence rules; or

8.3.4.

if, in the opinion of a doctor nominated by the Company, you are well enough to work; or

8.3.5.

if you behave in a manner likely to impede your recovery.

8.4.

You agree to be examined by a medical practitioner nominated by the Company on the Company’s request, the cost of which will be borne by the Company. You shall authorise the medical practitioner carrying out the examination to disclose to or discuss with the Company and its advisers any matters arising from such examination.

9.

PERIOD OF NOTICE AND TERMINATION OF EMPLOYMENT

9.1.

You will be required to give six (6) months notice in writing to terminate your employment. Notwithstanding anything to the contrary set forth herein or in the Stock Purchase Agreement, if you terminate your employment with the Company under this clause 9.1 prior to the expiration of the Earn-Out Term, you acknowledge and agree that neither the Company nor Mandalay Media, Inc. shall be obligated to pay you any portion of any Earn-Out Payment (as defined in the Stock Purchase Agreement) that might otherwise be payable for the Earn-Out Period (and any subsequent Earn-Out Periods) in which you are not fully employed by the Company during such Earn-Out Period.

9.2.

Should the Company wish to terminate your employment prior to the second anniversary of the Commencement Date, other than for the reasons set out in clause 9.4 below, you will be entitled to receive payments in the amount of your base salary then in effect up to the second anniversary of the Commencement Date, and you shall be entitled to six (6) months notice of such termination.

9.3.

The Company shall be entitled at its sole discretion at any time to terminate your employment forthwith without notice in accordance with this clause 9.3 and to make a payment of basic salary to you as set forth above in lieu of any notice period and to deduct tax and national insurance from any such payment, provided that if the Company shall decide not to make a payment to you under this clause, you shall not be entitled to enforce the payment as a contractual debt or as liquidated damages and your sole remedy will be in the form of damages in respect of any unexpired period of notice. Where you have received a payment in lieu of notice, you will not be entitled to any additional compensation in respect of holiday which would otherwise have accrued during your notice period. For the avoidance of doubt, you shall be entitled to receive your pro-rata share of any Earn-Out Payment made by Mandalay Media, Inc. unless you terminate your employment with the Company pursuant to clause 9.1.

9.4.

Notwithstanding the other provisions of this clause 9, your employment may be terminated by the Company by written notice having immediate effect and without notice or payment in lieu of notice or payment of any compensation or liquidated damages if you are guilty of gross misconduct or in any way fundamentally breach your employment contract with the Company. The following are examples of conduct that would entitle the Company to terminate your employment summarily:

9.4.1.

theft, fraud, intentionally providing false or misleading information or any act of dishonesty;

9.4.2.

any act or attempted act of violence or abusive behaviour towards people or property including causing deliberate damage to the Company’s property;

9.4.3.

indecent behaviour towards or harassment or bullying of fellow employees, suppliers, customers or clients;

9.4.4.

incapability through alcohol, non-prescribed drugs or other substances,

9.4.5.

wilful and persistent breach of health and safety regulations;

9.4.6.

a serious act of insubordination or wilful refusal to carry out reasonable requests;

9.4.7.

serious or persistent neglect of duties or a series of persistent breaches of the terms and conditions of your employment, other than a breach which is capable of remedy and is remedied forthwith by you at the Company’s request to the reasonable satisfaction of the Company;

9.4.8.

failure to comply in any material respect with any policy, procedures or rules of any professional or regulatory body governing the business carried out by the Company including, without limitation, any policy in respect of equal opportunities and harassment, data protection and use of email and the internet;

9.4.9.

unauthorized use of or disclosure of confidential information;

9.4.10.

serious breach of the Company’s policies, procedures or rules contained in the Employee Handbook, which may be amended from time to time;

9.4.11.

falsifying records or expense claims;

9.4.12.

conviction of a criminal offence, other than a minor offence, arising from or related to your work for the Company;

9.4.13.

conviction of a criminal offence committed outside working hours which in the opinion of the Company acting reasonably adversely affects the Company’s business or reputation, or affects your suitability for the type of work which you perform or affects your acceptability to other employees;

9.4.14.

any act of gross misconduct or any other act or omission (whether or not during or in the context of your employment) which, in the opinion of the Company acting reasonably, brings or is likely or calculated to bring the name or reputation of the Company into disrepute or to materially prejudice the interests of the business of the Company;

9.4.15.

unauthorized signing of documentation committing the Company to any financial obligation or exceeding your authority in any other way; or

9.4.16.

misuse of the Company’s computer system or any other Company owned equipment.

9.5.

The Company shall have the right to suspend you (subject to the continued payment of salary and benefits) pending any investigation into any potential dishonesty, gross misconduct or any other circumstances which may give rise to a right to the Company to terminate your employment for such period as it thinks fit.

10.1.

After notice of termination has been given by either party you may be required by the Company in its absolute discretion not to attend at your place of work or other offices of the Company at any time and not to perform any duties for the Company or to perform only such specific duties, projects or tasks as are expressly assigned to you by the Company, in any case for such period and at such place or places (including, without limitation your home) as the Company in its absolute discretion may decide. You will continue to receive your full pay and contractual benefits during any such period. Any period of Garden Leave will not exceed the period of notice the Company is required to give you pursuant to clause 9.2 of this agreement.

10.2.

During any such period you shall:

10.2.1.

if requested by the Company resign from any office which you may ho