SUBSCRIPTION
      AGREEMENT

     

    THIS
      SUBSCRIPTION AGREEMENT
      (this
“Agreement”),
      is
      dated as of January 8, 2008, by and among Attitude Drinks Inc., a Delaware
      corporation
      (the
“Company”),
      and
      the subscribers identified on the signature page hereto (each a “Subscriber”
and
      collectively “Subscribers”).

     

    WHEREAS,
      the
      Company and the Subscribers are executing and delivering this Agreement in
      reliance upon an exemption from securities registration afforded by the
      provisions of Section 4(2), Section 4(6) and/or Regulation D ("Regulation
      D")
      as
      promulgated by the United States Securities and Exchange Commission (the
      "SEC"
      and/or
“Commission”)
      under
      the Securities Act of 1933, as amended (the "1933
      Act").

     

    WHEREAS,
      the
      parties desire that, upon the terms and subject to the conditions contained
      herein, the Company shall issue and sell to the Subscriber, as provided herein,
      and the Subscribers in the aggregate, shall purchase for up to $430,000 (the
      "Purchase
      Price")
      of
      principal amount promissory notes of the Company (“Note”
or
      “Notes”)
      in the
      principal amount of up to $520,000 (“Note
      Principal”),
      in
      the form annexed hereto as Exhibit
      A.
      The
      Notes and Shares of the Company’s Common Stock, $.001 par value (the
“Common
      Stock”)
      issuable upon conversion of the Notes (“Shares”)
      are
      collectively referred to herein as the “Securities”;
      and

     

    WHEREAS,
      the
      aggregate proceeds of the sale of the Notes contemplated hereby shall be held
      in
      escrow pursuant to the terms of a Funds Escrow Agreement to be executed by
      the
      parties (the "Escrow
      Agreement").

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and other agreements contained in this
      Agreement the Company and the Subscriber hereby agree as follows:

     

    1. Closing.
      Subject
      to the satisfaction or waiver of the terms and conditions of this Agreement,
      on
      the Closing Date, Subscriber shall purchase and the Company shall sell to the
      Subscribers Notes in the principal amount of up to $520,000. The “Closing
      Date”
shall
      be the date that subscriber funds representing the net amount due the Company
      from the Purchase Price is transmitted by wire transfer or otherwise to or
      for
      the benefit of the Company.

    


    2. Escrow
      Arrangements; Form of Payment.
      Upon
      execution hereof by the parties and pursuant to the terms of the Escrow
      Agreement, Subscriber agrees to make the deliveries required of such Subscriber
      as set forth in the Escrow Agreement annexed hereto as Exhibit
      B
      and the
      Company agrees to make the deliveries required of the Company as set forth
      in
      the Escrow Agreement.

    


    3. Security
      Interest.
      On or
      about October 23, 2007, certain lenders were granted a security interest in
      the
      assets of the Company, including ownership of the Subsidiaries (as defined
      in
      Section 5(a) of this Agreement) and in the assets of the Subsidiaries,
      which security interest was memorialized in a “Security
      Agreement”
and
      “Collateral
      Agent Agreement”
dated
      October 23, 2007. The Subsidiaries guaranteed the Company’s obligations under
      the Transaction Documents [as defined in Section 5(c)]. Such guaranties were
      memorialized in a “Subsidiary
      Guaranty”.
      The
      Security Agreement and Collateral Agent Agreement are hereby amended to include
      the Subscribers and the Company agrees that the Subscribers are hereby made
      parts to the Security Agreement and Collateral Agent Agreement as Lenders
      therein and their interests in the Obligations (as defined in the Security
      Agreement) are pari pasu in proportion to their specific Obligation amounts
      and
      of equal priority with each other. The Company will execute such other
      agreements, documents and financing statements reasonably requested by the
      Subscribers to memorialize and further protect the security interest described
      herein, which will be filed at the Company’s expense with the jurisdictions,
      states and counties designated by the Subscribers. The Company will also execute
      all such documents reasonably necessary in the opinion of Subscribers to
      memorialize and further protect the security interest described herein.



    
      
         

      

      
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    4. Subscriber
      Representations and Warranties.
      Each
      Subscriber hereby represents and warrants to and agrees with the Company only
      as
      to such Subscriber that:

    


    (a) Organization
      and Standing of the Subscribers.
      If such
      Subscriber is an entity, such Subscriber is a corporation, partnership or other
      entity duly incorporated or organized, validly existing and in good standing
      under the laws of the jurisdiction of its incorporation or
      organization.

    


    (b) Authorization
      and Power.
      Such
      Subscriber has the requisite power and authority to enter into and perform
      this
      Agreement and the other Transaction Documents and to purchase the Notes being
      sold to it hereunder. The execution, delivery and performance of this Agreement
      and the other Transaction Documents by such Subscriber and the consummation
      by
      it of the transactions contemplated hereby and thereby have been duly authorized
      by all necessary corporate or partnership action, and no further consent or
      authorization of such Subscriber or its Board of Directors, stockholders,
      partners, members, as the case may be, is required. This Agreement and the
      other
      Transaction Documents have been duly authorized, executed and delivered by
      such
      Subscriber and constitutes, or shall constitute when executed and delivered,
      a
      valid and binding obligation of such Subscriber enforceable against such
      Subscriber in accordance with the terms thereof.

    (c) No
      Conflicts.
      The
      execution, delivery and performance of this Agreement and the other Transaction
      Documents and the consummation by such Subscriber of the transactions
      contemplated hereby and thereby or relating hereto do not and will not (i)
      result in a violation of such Subscriber’s charter documents or bylaws or other
      organizational documents or (ii) conflict with, or constitute a default (or
      an
      event which with notice or lapse of time or both would become a default) under,
      or give to others any rights of termination, amendment, acceleration or
      cancellation of any agreement, indenture or instrument or obligation to which
      such Subscriber is a party or by which its properties or assets are bound,
      or
      result in a violation of any law, rule, or regulation, or any order, judgment
      or
      decree of any court or governmental agency applicable to such Subscriber or
      its
      properties (except for such conflicts, defaults and violations as would not,
      individually or in the aggregate, have a material adverse effect on such
      Subscriber). Such Subscriber is not required to obtain any consent,
      authorization or order of, or make any filing or registration with, any court
      or
      governmental agency in order for it to execute, deliver or perform any of its
      obligations under this Agreement and the other Transaction Documents or to
      purchase the Securities in accordance with the terms hereof, provided that
      for
      purposes of the representation made in this sentence, such Subscriber is
      assuming and relying upon the accuracy of the relevant representations and
      agreements of the Company herein.

    


    (d) Information
      on Company.
      Such
      Subscriber has been furnished with or has had access at the EDGAR Website of
      the
      Commission to the Company's audited financial statements for the period ended
      March 31, 2007 (hereinafter referred to collectively as the "Reports").
      Such
      financial statements were prepared pursuant to Generally Accepted Accounting
      Principles in the United States and fairly present in all material respects
      the
      financial position of the Company and its consolidated subsidiaries, if any,
      as
      of and for the dates thereof and the results of operations and cash flows for
      the periods then ended, subject to normal, immaterial adjustments. In addition,
      such
      Subscriber may have received in writing from the Company such other information
      concerning its operations, financial condition and other matters as such
      Subscriber has requested in writing, identified thereon as OTHER WRITTEN
      INFORMATION (such other information is collectively, the "Other
      Written Information"),
      and
      considered all factors such
      Subscriber deems material in deciding on the advisability of investing in the
      Securities. 


    
      
         

      

      
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    (e) Information
      on Subscriber.
      Such
      Subscriber is, and will be at the time of the conversion of the Notes, an
      "accredited
      investor",
      as
      such term is defined in Regulation D promulgated by the Commission under the
      1933 Act, is experienced in investments and business matters, has made
      investments of a speculative nature and has purchased securities of United
      States publicly-owned companies in private placements in the past and, with
      its
      representatives, has such knowledge and experience in financial, tax and other
      business matters as to enable such
      Subscriber to utilize the information made available by the Company to evaluate
      the merits and risks of and to make an informed investment decision with respect
      to the proposed purchase, which represents a speculative investment.
      Such
      Subscriber has the authority and is duly and legally qualified to purchase
      and
      own the Securities. Such
      Subscriber is able to bear the risk of such investment for an indefinite period
      and to afford a complete loss thereof. The information set forth on the
      signature page hereto regarding such
      Subscriber is accurate.

    (f) Purchase
      of Notes.
      On the
      Closing Date, such
      Subscriber will purchase the Notes as principal for its own account for
      investment only and not with a view toward, or for resale in connection with,
      the public sale or any distribution thereof.

    (g) Compliance
      with Securities Act.
      Such
      Subscriber understands and agrees that the Securities have not been registered
      under the 1933 Act or any applicable state securities laws, by reason of their
      issuance in a transaction that does not require registration under the 1933
      Act
      (based in part on the accuracy of the representations and warranties of
such
      Subscriber contained herein), and that such Securities must be held indefinitely
      unless a subsequent disposition is registered under the 1933 Act or any
      applicable state securities laws or is exempt from such registration.
      Such
      Subscriber will comply with all applicable rules and regulations in connection
      with the sales of the Securities including laws relating to short
      sales.

    (h) Note
      Legend.
      The
      Note shall bear the following legend:

     

    "NEITHER
      THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
      THE
      SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
      LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
      (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
      UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL
      (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE
      FORM,
      THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT
      TO
      RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE
      SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
      OTHER
      LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
      "

     

    (i) Communication
      of Offer.
      The
      offer to sell the Securities was directly communicated to such Subscriber by
      the
      Company. At no time was such Subscriber presented with or solicited by any
      leaflet, newspaper or magazine article, radio or television advertisement,
      or
      any other form of general advertising or solicited or invited to attend a
      promotional meeting otherwise than in connection and concurrently with such
      communicated offer.


    
      
         

      

      
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    (j) Authority;
      Enforceability.
      This
      Agreement and other agreements delivered together with this Agreement or in
      connection herewith have been duly authorized, executed and delivered by such
      Subscriber and are valid and binding agreements enforceable in accordance with
      their terms, subject to bankruptcy, insolvency, fraudulent transfer,
      reorganization, moratorium and similar laws of general applicability relating
      to
      or affecting creditors’ rights generally and to general principles of equity;
      and such Subscriber has full power and authority necessary to enter into this
      Agreement and such other agreements and to perform its obligations hereunder
      and
      under all other agreements entered into by such Subscriber relating
      hereto.

    


    (k) Restricted
      Securities.
      Such
      Subscriber understands that the Securities have not been registered under the
      1933 Act and such Subscriber will not sell, offer to sell, assign, pledge,
      hypothecate or otherwise transfer any of the Securities unless pursuant to
      an
      effective registration statement under the 1933 Act, or unless an exemption
      from
      registration is available. Notwithstanding anything to the contrary contained
      in
      this Agreement, such Subscriber may transfer (without restriction and without
      the need for an opinion of counsel) the Securities to its Affiliates (as defined
      below) provided that each such Affiliate is an “accredited investor” under
      Regulation D and such Affiliate agrees to be bound by the terms and conditions
      of this Agreement. For the purposes of this Agreement, an “Affiliate”
of
      any
      person or entity means any other person or entity directly or indirectly
      controlling, controlled by or under direct or indirect common control with
      such
      person or entity. Affiliate includes each Subsidiary of the Company. For
      purposes of this definition, “control”
means
      the power to direct the management and policies of such person or firm, directly
      or indirectly, whether through the ownership of voting securities, by contract
      or otherwise.

    


    (l) No
      Governmental Review.
      Such
      Subscriber understands that no United States federal or state agency or any
      other governmental or state agency has passed on or made recommendations or
      endorsement of the Securities or the suitability of the investment in the
      Securities nor have such authorities passed upon or endorsed the merits of
      the
      offering of the Securities.

    


    (m) Correctness
      of Representations.
      Each
      Subscriber represents only as to such Subscriber that the foregoing
      representations and warranties are true and correct as of the date hereof and,
      unless such Subscriber otherwise notifies the Company prior to the Closing
      Date
      shall be true and correct as of the Closing Date.

    


    (n) Survival.
      The
      foregoing representations and warranties shall survive the Closing
      Date.

     

    (o) Mandatory
      Conversion Representations.
      In
      connection with Section 2.1 of the Note, Subscriber makes all of the customary
      Subscriber representations to the Company.

     

    5. Company
      Representations and Warranties.
      The
      Company represents and warrants to and agrees with each Subscriber
      that:

     

    (a) Due
      Incorporation.
      The
      Company is a corporation or other entity duly incorporated or organized, validly
      existing and in good standing under the laws of the jurisdiction of its
      incorporation or organization and has the requisite corporate power to own
      its
      properties and to carry on its business as presently
      conducted. The Company is duly qualified as a foreign corporation to do business
      and is in good standing in each jurisdiction where the nature of the business
      conducted or property owned by it makes such qualification necessary, other
      than
      those jurisdictions in which the failure to so qualify would not have a Material
      Adverse Effect. For purposes of this Agreement, a “Material
      Adverse Effect”
shall
      mean a material adverse effect on the financial condition, results of
      operations, prospects, properties or business of the Company and its
      Subsidiaries taken as a whole. For purposes of this Agreement, “Subsidiary”
means,
      with respect to any entity at any date, any corporation, limited or general
      partnership, limited liability company, trust, estate, association, joint
      venture or other business entity of which more than 30% of (i) the
      outstanding capital stock having (in the absence of contingencies) ordinary
      voting power to elect a majority of the board of directors or other managing
      body of such entity, (ii) in the case of a partnership or limited liability
      company, the interest in the capital or profits of such partnership or limited
      liability company or (iii) in the case of a trust, estate, association,
      joint venture or other entity, the beneficial interest in such trust, estate,
      association or other entity business is, at the time of determination, owned
      or
      controlled directly or indirectly through one or more intermediaries, by such
      entity. The Company’s Subsidiaries as of the Closing Date are set forth on
Schedule
      5(a).


    
      
         

      

      
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    (b) Outstanding
      Stock.
      All
      issued and outstanding shares of capital stock of the Company and each
      Subsidiary have been duly authorized and validly issued and are fully paid
      and
      non-assessable.

     

    (c) Authority;
      Enforceability.
      This
      Agreement, the Note, Escrow Agreement, and any other agreements delivered
      together with this Agreement or in connection herewith (collectively
“Transaction
      Documents”)
      have
      been duly authorized, executed and delivered by the Company, and Subsidiaries
      (as applicable) and are valid and binding agreements of the Company and
      Subsidiaries, and are enforceable in accordance with their terms, subject to
      bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
      similar laws of general applicability relating to or affecting creditors' rights
      generally and to general principles of equity. The Company has full corporate
      power and authority necessary to enter into and deliver the Transaction
      Documents and to perform its obligations thereunder.

     

    (d) Additional
      Issuances.
      There
      are
      no outstanding agreements or preemptive or similar rights affecting the
      Company's Common Stock or equity and no outstanding rights, warrants or options
      to acquire, or instruments convertible into or exchangeable for, or agreements
      or understandings with respect to the sale or issuance of any shares of Common
      Stock or equity of the Company or Subsidiaries or other equity interest in
      the
      Company except as described on Schedule
      5(d).
      The
      Common Stock of the Company on a fully diluted basis outstanding as of the
      last
      Business Day preceding the Closing Date is set forth on Schedule
      5(d).

     

    (e) Consents.
      No
      consent, approval, authorization or order of any court, governmental agency
      or
      body or arbitrator having jurisdiction over the Company, or any of its
      Affiliates, or the Company's shareholders is required for the execution by
      the
      Company of the Transaction Documents and compliance and performance by the
      Company of its obligations under the Transaction Documents, including, without
      limitation, the issuance and sale of the Securities. The Transaction Documents
      and the Company’s performance of its obligations thereunder has been unanimously
      approved by the Company’s Board of Directors.

     

    (f) No
      Violation or Conflict.
      Assuming the representations and warranties of the Subscribers in Section 4
      are
      true and correct, neither the issuance and sale of the Securities nor the
      performance of the Company’s obligations under this Agreement and all other
      agreements entered into by the Company relating thereto by the Company
      will:

     

    (i) violate,
      conflict with, result in a breach of, or constitute a default (or an event
      which
      with the giving of notice or the lapse of time or both would be reasonably
      likely to constitute a default) under (A) the articles or certificate of
      incorporation, charter or bylaws of the Company, (B) to the Company's knowledge,
      any decree, judgment, order, law, treaty, rule, regulation or determination
      applicable to the Company of any court, governmental agency or body, or
      arbitrator having jurisdiction over the Company or over the properties or assets
      of the Company or any of its Affiliates, (C) the terms of any bond, debenture,
      note or any other evidence of indebtedness, or any agreement, stock option
      or
      other similar plan, indenture, lease, mortgage, deed of trust or other
      instrument to which the Company or any of its Affiliates is a party, by which
      the Company or any of its Affiliates is bound, or to which any of the properties
      of the Company or any of its Affiliates is subject, or (D) the terms of any
      "lock-up" or similar provision of any underwriting or similar agreement to
      which
      the Company, or any of its Affiliates is a party except the violation, conflict,
      breach, or default of which would not have a Material Adverse Effect;
      or


    
      
         

      

      
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    (ii) result
      in
      the creation or imposition of any lien, charge or encumbrance upon the
      Securities or any of the assets of the Company or any of its Affiliates except
      as described herein; or

     

    (iii) except
      as
      described in Schedule
      5(d),
      result
      in the activation of any anti-dilution rights or a reset or repricing of any
      debt or security instrument of any other creditor or equity holder of the
      Company, nor result in the acceleration of the due date of any obligation of
      the
      Company; or

     

    (iv) will
      result in the triggering of any piggy-back registration rights of any person
      or
      entity holding securities of the Company or having the right to receive
      securities of the Company.

     

    (g) The
      Securities.
      The
      Securities upon issuance:

     

    (i) are,
      or
      will be, free and clear of any security interests, liens, claims or other
      encumbrances, subject to restrictions upon transfer under the 1933 Act and any
      applicable state securities laws;

    


    (ii) have
      been, or will be, duly and validly authorized, fully paid and
      non-assessable;

     

    (iii) will
      not
      have been issued or sold in violation of any preemptive or other similar rights
      of the holders of any securities of the Company;

     

    (iv) will
      not
      subject the holders thereof to personal liability by reason of being such
      holders; and

     

    (v) assuming
      the representations warranties of the Subscribers as set forth in Section 4
      hereof are true and correct, will not result in a violation of Section 5 under
      the 1933 Act.

     

    (h) Litigation.
      There
      is no pending or, to the best knowledge of the Company, threatened action,
      suit,
      proceeding or investigation before any court, governmental agency or body,
      or
      arbitrator having jurisdiction over the Company, or any of its Affiliates that
      would affect the execution by the Company or the performance by the Company
      of
      its obligations under the Transaction Documents. Except as disclosed in the
      Reports, there is no pending or, to the best knowledge of the Company, basis
      for
      or threatened action, suit, proceeding or investigation before any court,
      governmental agency or body, or arbitrator having jurisdiction over the Company,
      or any of its Affiliates which litigation if adversely determined would have
      a
      Material Adverse Effect.

     

    (i) No
      Market Manipulation.
      The
      Company and its Affiliates have not taken, and will not take, directly or
      indirectly, any action designed to, or that might reasonably be expected to,
      cause or result in stabilization or manipulation of the price of the Common
      Stock to
      facilitate the sale or resale of the Securities or affect the price at which
      the
      Securities may be issued or resold.

     

    (j) Information
      Concerning Company.
      The
      Reports and Other Written Information contain all material information relating
      to the Company and its operations and financial condition as of their respective
      dates which information is required to be disclosed therein. Since the date
      of
      the financial statements included in the Reports, and except as modified in
      the
      Other Written Information or in the Schedules hereto, there has been no Material
      Adverse Event relating to the Company's business, financial condition or affairs
      not disclosed in the Reports. The Reports and Other Written Information do
      not
      contain any untrue statement of a material fact or omit to state a material
      fact
      required to be stated therein or necessary to make the statements therein,
      taken
      as a whole, not misleading in light of the circumstances when
      made.


    
      
         

      

      
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    (k) Stop
      Transfer.
      The
      Company will not issue any stop transfer order or other order impeding the
      sale,
      resale or delivery of any of the Securities, except as may be required by any
      applicable federal or state securities laws and if so required only if
      contemporaneous notice of such instruction is given to the
      Subscriber.

     

    (l) Defaults.
      The
      Company is not in violation of its articles of incorporation or bylaws. The
      Company is (i) not in default under or in violation of any other material
      agreement or instrument to which it is a party or by which it or any of its
      properties are bound or affected, which default or violation would have a
      Material Adverse Effect,
      (ii)
      not in default with respect to any order of any court, arbitrator or
      governmental body or subject to or party to any order of any court or
      governmental authority arising out of any action, suit or proceeding under
      any
      statute or other law respecting antitrust, monopoly, restraint of trade, unfair
      competition or similar matters, or (iii) not in violation of any statute, rule
      or regulation of any governmental authority which violation would have a
      Material Adverse Effect.

     

    (m) No
      Integrated Offering.
      Neither
      the Company, nor any of its Affiliates, nor any person acting on its or their
      behalf, has directly or indirectly made any offers or sales of any security
      or
      solicited any offers to buy any security under circumstances that would cause
      the offer of the Securities pursuant to this Agreement to be integrated with
      prior offerings by the Company for purposes of the 1933 Act or any applicable
      stockholder approval provisions, including, without limitation, under the rules
      and regulations of the OTC Bulletin Board (“Bulletin
      Board”)
      which
      would impair the exemptions relied upon in this Offering or the Company’s
      ability to timely comply with its obligations hereunder. Neither the Company
      nor
      any of its Affiliates will take any action or steps that would cause the offer
      or issuance of the Securities to be integrated with other offerings or issuances
      which would impair the exemptions relied upon in this Offering or the Company’s
      ability to timely comply with its obligations hereunder. The Company will not
      conduct any offering other than the transactions contemplated hereby that will
      be integrated with the offer or issuance of the Securities that would impair
      the
      exemptions relied upon in this Offering or the Company’s ability to timely
      comply with its obligations hereunder.

     

    (n) No
      General Solicitation.
      Neither
      the Company, nor any of its Affiliates, nor to its knowledge, any person acting
      on its or their behalf, has engaged in any form of general solicitation or
      general advertising (within the meaning of Regulation D under the 1933 Act)
      in
      connection with the offer or sale of the Securities.

     

    (o) No
      Undisclosed Liabilities.
      The
      Company has no liabilities or obligations which are material, individually
      or in
      the aggregate, other than those incurred in the ordinary course of the Company
      businesses since September 30, 2007 and which, individually or in the aggregate,
      would reasonably be expected to have a Material Adverse Effect,
      except
      as disclosed in the Reports or on Schedule
      5(o).

     

    (p) No
      Undisclosed Events or Circumstances.
      Since
      September 30, 2007, no event or circumstance has occurred or exists with respect
      to the Company or its businesses, properties, operations or financial condition,
      that, under applicable law, rule or regulation, requires public disclosure
      or
      announcement prior to the date hereof by the Company but which has not been
      so
      publicly announced or disclosed in the Reports.

     

    (q) Capitalization.
      The
      authorized and outstanding capital stock of the Company and Subsidiaries as
      of
      the date of this Agreement and the Closing Date (not including the Securities)
      are set forth in the Reports or on Schedule
      5(d).
      Except
      as set forth on Schedule
      5(d),
      there
      are no options, warrants, or rights to subscribe to, securities, rights or
      obligations convertible into or exchangeable for or giving any right to
      subscribe for any shares of capital stock of the Company or any of its
      Subsidiaries.


    
      
         

      

      
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    (r) Dilution.
      The
      Company's executive officers and directors understand the nature of the
      Securities being sold hereby and recognize that the issuance of the Securities
      will have a potential dilutive effect on the equity holdings of other holders
      of
      the Company’s equity or rights to receive equity of the Company. The board of
      directors of the Company has concluded, in its good faith business judgment
      that
      the issuance of the Securities is in the best interests of the
      Company.

     

    (s) No
      Disagreements with Accountants and Lawyers.
      There
      are no material disagreements of any kind presently existing, or reasonably
      anticipated by the Company to arise between the Company and the accountants
      and
      lawyers presently employed by the Company, including but not limited to disputes
      or conflicts over payment owed to such accountants and lawyers, nor have there
      been any such disagreements during the two years prior to the Closing
      Date.

    


    (t) Investment
      Company.
      Neither
      the Company nor any Affiliate of the Company is an “investment company” within
      the meaning of the Investment Company Act of 1940, as amended.

     

    (u) Foreign
      Corrupt Practices.
      Neither
      the Company, nor to the knowledge of the Company, any agent or other person
      acting on behalf of the Company, has (i) directly or indirectly, used any funds
      for unlawful contributions, gifts, entertainment or other unlawful expenses
      related to foreign or domestic political activity, (ii) made any unlawful
      payment to foreign or domestic government officials or employees or to any
      foreign or domestic political parties or campaigns from corporate funds, (iii)
      failed to disclose fully any contribution made by the Company (or made by any
      person acting on its behalf of which the Company is aware) which is in violation
      of law, or (iv) violated in any material respect any provision of the Foreign
      Corrupt Practices Act of 1977, as amended.

    


    (v) DTC
      Status.
      The
      Company’s transfer agent is NOT a participant in, and the Common Stock is NOT
      eligible for transfer pursuant to, the Depository Trust Company Automated
      Securities Transfer Program. The name, address, telephone number, fax number,
      contact person and email address of the Company transfer agent is set forth
      on
Schedule
      5(v)
      hereto.

    


    (w) Reporting
      Company.
      The
      Company is a publicly-held company subject to reporting obligations pursuant
      to
      Section 13 of the Securities Exchange Act of 1934, as amended (the "1934
      Act")
      and
      has a class of Common Stock registered pursuant to Section 12(g) of the 1934
      Act. The Company is not a “shell company” as that term is employed in the 1933
      Act.

    


    (x) Solvency.
      Based
      on the financial condition of the Company as of the Closing Date after giving
      effect to the receipt by the Company of the proceeds from the sale of the Notes
      hereunder, (i) the Company’s fair saleable value of its assets exceeds the
      amount that will be required to be paid on or in respect of the Company’s
      existing debts and other liabilities (including known contingent liabilities)
      as
      they mature; (ii) the Company’s assets do not constitute unreasonably small
      capital to carry on its business for the current fiscal year as now conducted
      and as proposed to be conducted including its capital needs taking into account
      the particular capital requirements of the business conducted by the Company,
      and projected capital requirements and capital availability thereof; and (iii)
      the current cash flow of the Company, together with the proceeds the Company
      would receive, were it to liquidate all of its assets, after taking into account
      all anticipated uses of the cash, would be sufficient to pay all amounts on
      or
      in respect of its debt when such amounts are required to be paid. The Company
      does not intend to incur debts beyond its ability to pay such debts as they
      mature (taking into account the timing and amounts of cash to be payable on
      or
      in respect of its debt).

    


    (y) Company
      Predecessor and Subsidiaries.
      The
      Company makes each of the representations contained in Sections 5(a), (b),
      (c),
      (d), (e), (f), (h), (j), (l), (o), (p), (q), (s), (t), and (u) of this
      Agreement, as same relate to the Subsidiary of the Company. All representations
      made by or relating to the Company of a historical or prospective nature and
      all
      undertakings described in Sections 9(g) through 9(l) shall relate, apply and
      refer to the Company and its predecessors. The Company represents that it owns
      100% of the outstanding equity of the Subsidiaries and rights to receive equity
      of the Subsidiaries free and clear of all liens, encumbrances and claims, except
      as set forth on Schedule
      5(d).
      No
      person or entity other than the Company has the right to receive any equity
      interest in the Subsidiaries.


    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    (z) Correctness
      of Representations.
      The
      Company represents that the foregoing representations and warranties are true
      and correct as of the date hereof in all material respects, and, unless the
      Company otherwise notifies the Subscribers prior to the Closing Date, shall
      be
      true and correct in all material respects as of the Closing Date.

     

    (AA) Survival.
      The
      foregoing representations and warranties shall survive the Closing
      Date.

     

    6. Regulation
      D Offering/Legal Opinion.
      The
      offer and issuance of the Securities to the Subscribers is being made pursuant
      to the exemption from the registration provisions of the 1933 Act afforded
      by
      Section 4(2) or Section 4(6) of the 1933 Act and/or Rule 506 of Regulation
      D
      promulgated thereunder. On the Closing Date, the Company will provide an opinion
      reasonably acceptable to the Subscribers from the Company's legal counsel
      opining on the availability of an exemption from registration under the 1933
      Act
      as it relates to the offer and issuance of the Securities and other matters
      reasonably requested by Subscribers. A form of the legal opinion is annexed
      hereto as Exhibit
      C.

     

    7. Redemption.
      The
      Notes shall not be redeemable or callable by the Company except as described
      in
      the Note. 

    


    8. Commissions/Due
      Diligence Fee/Legal Fees.

    


    (a)  Commissions.
      The
      Company on the one hand, and each Subscriber (for himself only) on the other
      hand, agrees to indemnify the other against and hold the other harmless from
      any
      and all liabilities to any persons claiming brokerage commissions or similar
      fees except as described on Schedule
      8(a)
      on
      account of services purported to have been rendered on behalf of the
      indemnifying party in connection with this Agreement or the transactions
      contemplated hereby and arising out of such party’s actions. Anything in this
      Agreement to the contrary notwithstanding, each Subscriber is providing
      indemnification only for such Subscriber’s own actions and not for any action of
      any other Subscriber. The Company represents that there are no parties entitled
      to receive fees, commissions, or similar payments in connection with the
      offering described in this Agreement except as described on Schedule
      8(a)
      hereto.

     

    (b) Due
      Diligence Fee.
      The
      Company will pay a due diligence fee (“Due
      Diligence Fee”)
      to the
      lead investor or its designees (each a “Due
      Diligence Fee Recipient”)
      as
      described on Schedule
      8(b).
      The
      aggregate Due Diligence Fee shall be equal to five percent (5%) of the Purchase
      Price. The Due Diligence Fee will be payable on the Closing Date out of funds
      held pursuant to the Escrow Agreement.

     

    (c) Subscriber’s
      Legal Fees.
      The
      Company shall pay to Grushko & Mittman, P.C., a cash fee of $15,000
      (“Cash
      Legal Fees”)
      as
      reimbursement for services rendered to the Subscribers in connection with this
      Agreement and the purchase and sale of the Notes (the “Offering”).
      The
      Subscribers’ Legal Fees and expenses will be payable out of funds held pursuant
      to the Escrow Agreement on the Closing Date. Grushko & Mittman, P.C. will be
      reimbursed on the Closing Date for all lien searches, filing fees, and printing
      and shipping costs for the closing statements to be delivered to
      Subscribers.


    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    9. Covenants
      of the Company.
      The
      Company covenants and agrees with the Subscribers as follows:

     

    (a) Stop
      Orders.
      The
      Company will advise the Subscribers, within twenty-four hours after it receives
      notice of issuance by the Commission, any state securities commission or any
      other regulatory authority of any stop order or of any order preventing or
      suspending any offering of any securities of the Company, or of the suspension
      of the qualification of the Common Stock of the Company for offering or sale
      in
      any jurisdiction, or the initiation of any proceeding for any such
      purpose.

     

    (b) Listing.
      Not
      later
      than April 10, 2008, the Company shall secure the listing of its Common Stock
      upon the OTC Bulletin Board, American Stock Exchange or a NASDAQ domestic market
      or exchange, any of which is a “Principal
      Market”

     

    (c) Market
      Regulations.
      The
      Company shall notify the Commission, the Principal Market and applicable state
      authorities, in accordance with their requirements, of the transactions
      contemplated by this Agreement, and shall take all other necessary action and
      proceedings as may be required and permitted by applicable law, rule and
      regulation, for the legal and valid issuance of the Securities to the
      Subscribers and promptly provide copies thereof to the Subscribers.

     

    (d) Filing
      Requirements.
      From
      the
      date of this Agreement and until the last to occur of (i) two (2) years after
      the Closing Date, (ii) until all the Shares have been resold or transferred
      by
      all the Subscribers pursuant to a registration statement or pursuant to Rule
      144(k), or (iii) the Notes are no longer outstanding (the date of occurrence
      of
      the last such event being the “End
      Date”),
      the
      Company will (A) cause its Common Stock to be registered under Section 12(b)
      or
      12(g) of the 1934 Act, (B) comply in all respects with its reporting and filing
      obligations under the 1934 Act, and (C) voluntarily comply with all reporting
      requirements that are applicable to an issuer with a class of shares registered
      pursuant to Section 12(g) of the 1934 Act, if Company is not subject to such
      reporting requirements. The Company will not take any action or file any
      document (whether or not permitted by the 1933 Act or the 1934 Act or the rules
      thereunder) to terminate or suspend its reporting and filing obligations under
      said acts until the End Date. Until the End Date, the Company will continue
      the
      listing or quotation of the Common Stock on a Principal Market and will comply
      in all respects with the Company's reporting, filing and other obligations
      under
      the bylaws or rules of the Principal Market. The Company agrees to timely file
      a
      Form D with respect to the Securities if required under Regulation D and to
      provide a copy thereof to each Subscriber promptly after such
      filing.

     

    (e) Reporting
      Requirements.
      Until
      the time the Company becomes subject to the reporting provisions of the Exchange
      Act, the Company shall furnish to each Subscriber that holds Notes and/or
      underlying Shares, the following:

    


    (i) As
      soon
      as available and in any event within ninety (90) days after the end of each
      fiscal year of the Company, audited financial statements of the Company as
      at
      the end of such fiscal year and related statements of income and expenses for
      such fiscal year, all in reasonable detail and in scope to the Subscriber,
      prepared in accordance with GAAP, with the opinion of an independent certified
      public accountant reasonably acceptable to the Subscriber as evidenced by the
      prior written consent of the Subscriber;

    


    (ii) As
      soon
      as available and in any event within forth-five (45) days after the end of
      the
      sixth (6th) month of the Company’s fiscal year, reviewed financial statements of
      the Company as at the end of such six month period and related statements of
      income and expenses for such period, all in reasonable detail and scope to
      Subscriber, prepared in accordance with GAAP, and prepared by an independent
      certified public accountant reasonably acceptable to the Subscriber as evidenced
      by the prior written consent of the Subscriber; 


    
      
         

      

      
        10

        
          

        

      

      
         

      

    


    


    (iii) As
      soon
      as available and in any event within thirty (30) days after the end of each
      fiscal quarter, quarterly financial statements prepared by the Company and
      other
      information reasonably requested by the Subscriber;

    


    (iv) As
      soon
      as available and in any event within fifteen (15) days after the end of each
      month, monthly reports containing information on the Company's sales and other
      information reasonably requested by the Subscriber;

    


    (v) As
      soon
      as available and in any event not less than thirty (30) days prior to the
      commencement of each fiscal year, a detailed annual budget and strategic plan
      for the Company's business for such fiscal year, which shall have been approved
      by the Company's Board of Directors;

    


    (vi) As
      soon
      as possible and in any event within five (5) days after the Subscribers notify
      the Company of the occurrence of each Event of Default, a statement of an
      authorized officer of the Company setting forth the nature and period of
      existence of such Event of Default and the action which the Company has taken
      and proposes to take with respect thereto;

    


    (vii) Promptly
      after the sending or filing thereof, copies of all reports, if any, which the
      Company sends to any of its shareholders, and copies of all reports and
      registration statements, if any, which the Company files with the Commission
      or
      any Trading Market;

    


    (viii) Promptly
      after the filing or receiving thereof, copies of all reports and notices, if
      any, which the Company files under ERISA, with the Internal Revenue Service
      or
      the Pension Benefit Guaranty Corporation or the U.S. Department of Labor or
      which the Company receives from any of such Persons;

    


    (ix) Promptly
      upon determination by the Company’s Chief Executive Officer of the need for the
      Company or Board of Directors to obtain additional financing, all information
      concerning such determination if, as and when available;

    


    (x) Information
      concerning offers or solicitations, and the terms and conditions thereof, for
      additional equity financing, given to the Subscriber not less than 30 days
      prior
      to the entering into of such financial arrangement; and

    


    (xi) Such
      other information respecting the condition or operations, financial or
      otherwise, of the Company as the Subscribers may from time to time reasonably
      request.

     

    (f) Use
      of
      Proceeds.
      The
      proceeds of the Offering will be employed by the Company as described on
Schedule
      9(f).
      Except
      as described on Schedule
      9(f),
      the
      Purchase Price may not and will not be used for accrued and unpaid officer
      and
      director salaries, payment of financing related debt, redemption of outstanding
      notes or equity instruments of the Company nor non-trade obligations outstanding
      on a Closing Date. For so long as any Notes are outstanding, the Company will
      not prepay any financing related debt obligations nor redeem any equity
      instruments of the Company.

     

    (g) DTC
      Program.
      No
      later than March 31, 2008 and thereafter at all times that Notes are
      outstanding, the Company will employ as the transfer agent for the Common Stock
      a participant in the Depository Trust Company Automated Securities Transfer
      Program.


    
      
         

      

      
        11

        
          

        

      

      
         

      

    


     

    


     

    (h) Taxes.
      From
      the date of this Agreement and until the End Date, the Company will promptly
      pay
      and discharge, or cause to be paid and discharged, when due and payable, all
      lawful taxes, assessments and governmental charges or levies imposed upon the
      income, profits, property or business of the Company; provided, however, that
      any such tax, assessment, charge or levy need not be paid if the validity
      thereof shall currently be contested in good faith by appropriate proceedings
      and if the Company shall have set aside on its books adequate reserves with
      respect thereto, and provided, further, that the Company will pay all such
      taxes, assessments, charges or levies forthwith upon the commencement of
      proceedings to foreclose any lien which may have attached as security
      therefore.

     

    (i) Insurance.
      From
      the date of this Agreement and until the End Date, the Company will keep its
      assets which are of an insurable character insured by financially sound and
      reputable insurers against loss or damage by fire, explosion and other risks
      customarily insured against by companies in the Company’s line of business, in
      amounts sufficient to prevent the Company from becoming a co-insurer and not
      in
      any event less than one hundred percent (100%) of the insurable value of the
      property insured less reasonable deductible amounts; and the Company will
      maintain, with financially sound and reputable insurers, insurance against
      other
      hazards and risks and liability to persons and property to the extent and in
      the
      manner customary for companies in similar businesses similarly situated and
      to
      the extent available on commercially reasonable terms.

     

    (j) Books
      and Records.
      From the
      date of this Agreement and until the End Date, the Company will keep true
      records and books of account in which full, true and correct entries will be
      made of all dealings or transactions in relation to its business and affairs
      in
      accordance with generally accepted accounting principles applied on a consistent
      basis.

     

    (k) Governmental
      Authorities.
      From the
      date of this Agreement and until the End Date, the Company shall duly observe
      and conform in all material respects to all valid requirements of governmental
      authorities relating to the conduct of its business or to its properties or
      assets.

     

    (l) Intellectual
      Property.
      From
      the date of this Agreement and until the End Date, the Company shall maintain
      in
      full force and effect its corporate existence, rights and franchises and all
      licenses and other rights to use intellectual property owned or possessed by
      it
      and reasonably deemed to be necessary to the conduct of its business, unless
      it
      is sold for value.

     

    (m) Properties.
      From the
      date of this Agreement and until the End Date, the Company will keep its
      properties in good repair, working order and condition, reasonable wear and
      tear
      excepted, and from time to time make all necessary and proper repairs, renewals,
      replacements, additions and improvements thereto; and the Company will at all
      times comply with each provision of all leases to which it is a party or under
      which it occupies property if the breach of such provision could reasonably
      be
      expected to have a Material Adverse Effect.

     

    (n) Confidentiality/Public
      Announcement.
      From the
      date of this Agreement and until the End Date, the Company agrees that except
      in
      connection with a Form 8-K and the registration statement or statements
      regarding the Subscribers’ securities or in correspondence with the SEC
      regarding same, it will not disclose publicly or privately the identity of
      the
      Subscribers unless expressly agreed to in writing by a Subscriber or only to
      the
      extent required by law and then only upon five days prior notice to Subscriber.
      In any event and subject to the foregoing, the Company undertakes to file a
      Form
      10-SB, Form 8-K or make a public announcement describing the Offering not later
      than the business day after the Closing Date. Prior to filing or announcement,
      such Form 10-SB, Form 8-K or public announcement will be provided to Subscribers
      for their review and approval. In the Form 10-SB, Form 8-K or public
      announcement, the Company will specifically disclose the amount of Common Stock
      outstanding immediately after the Closing. Upon  delivery by the
      Company to the Subscribers after the Closing Date of any notice or information,
      in writing, electronically or otherwise, and while a Note is held by such
      Subscribers, unless the  Company has in good faith determined that the
      matters relating to such notice do not constitute material, nonpublic
      information relating to the Company or
      Subsidiaries, the Company  shall within one business day after
      any such delivery publicly disclose such  material,  nonpublic 
information on a Report on Form 10-SB, Form 8-K or
      otherwise. In
      the event that the Company believes that a
      notice or communication to a Subscriber contains material, nonpublic
      information, relating to the Company or Subsidiaries, the Company shall so
      indicate to such Subscriber contemporaneously with delivery of such notice
      or
      information. In the absence of any such indication, such Subscriber shall
      be allowed to presume that all matters relating to such notice and information
      do not constitute material, nonpublic information relating to the Company
      or its Subsidiaries.


    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    (o) Non-Public
      Information.
      The
      Company covenants and agrees that except for the Reports, Other Written
      Information and schedules and exhibits to this Agreement, neither it nor any
      other person acting on its behalf will at any time provide any Subscriber or
      its
      agents or counsel with any information that the Company believes constitutes
      material non-public information, unless prior thereto such Subscriber shall
      have
      agreed in writing to keep such information in confidence. The Company
      understands and confirms that each Subscriber shall be relying on the foregoing
      representations in effecting transactions in securities of the
      Company.

     

    (p) Negative
      Covenants.
      So long
      as a Note is outstanding, without the consent of the Subscribers, the Company
      will not and will not permit any of its Subsidiaries to directly or
      indirectly:

    


    (i) create,
      incur, assume or suffer to exist any pledge, hypothecation, assignment, deposit
      arrangement, lien, charge, claim, security interest, security title, mortgage,
      security deed or deed of trust, easement or encumbrance, or preference, priority
      or other security agreement or preferential arrangement of any kind or nature
      whatsoever (including any lease or title retention agreement, any financing
      lease having substantially the same economic effect as any of the foregoing,
      and
      the filing of, or agreement to give, any financing statement perfecting a
      security interest under the Uniform Commercial Code or comparable law of any
      jurisdiction) (each, a “Lien”)
      upon
      any of its property, whether now owned or hereafter acquired except for: (A)
      the
      Excepted Issuances (as defined in Section 12 hereof), and (B) (a) Liens imposed
      by law for taxes that are not yet due or are being contested in good faith
      and
      for which adequate reserves have been established in accordance with generally
      accepted accounting principles; (b) carriers’, warehousemen’s, mechanics’,
      material men’s, repairmen’s and other like Liens imposed by law, arising in the
      ordinary course of business and securing obligations that are not overdue by
      more than 30 days or that are being contested in good faith and by appropriate
      proceedings; (c) pledges and deposits made in the ordinary course of business
      in
      compliance with workers’ compensation, unemployment insurance and other social
      security laws or regulations; (d) deposits to secure the performance of bids,
      trade contracts, leases, statutory obligations, surety and appeal bonds,
      performance bonds and other obligations of a like nature, in each case in the
      ordinary course of business; (e) Liens created with respect to the financing
      of
      the purchase of new property in the ordinary course of the Company’s business up
      to the amount of the purchase price of such property; and (f) easements, zoning
      restrictions, rights-of-way and similar encumbrances on real property imposed
      by
      law or arising in the ordinary course of business that do not secure any
      monetary obligations and do not materially detract from the value of the
      affected property (each of (a) through (f), a “Permitted
      Lien”);

     

    (ii) amend
      its
      certificate of incorporation, bylaws or its charter documents so as to
      materially and adversely affect any rights of the Subscriber;

    


    (iii) repay,
      repurchase or offer to repay, repurchase or otherwise acquire or make any
      dividend or distribution in respect of any of its Common Stock, preferred stock,
      or other equity securities other than to the extent permitted or required under
      the Transaction Documents.


    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    (iv) engage
      in
      any transactions with any officer, director, employee or any Affiliate of the
      Company, including any contract, agreement or other arrangement providing for
      the furnishing of services to or by, providing for rental of real or personal
      property to or from, or otherwise requiring payments to or from any officer,
      director or such employee or, to the knowledge of the Company, any entity in
      which any officer, director, or any such employee has a substantial interest
      or
      is an officer, director, trustee or partner, in each case in excess of $100,000
      other than (i) for payment of salary or consulting fees for services rendered,
      (ii) reimbursement for expenses incurred on behalf of the Company, and (iii)
      for
      other employee benefits, including stock option agreements under any stock
      option plan of the Company; or

     

    (v) prepay
      or
      redeem any financing related debt or past due obligations outstanding as of
      the
      Closing Date.     

     

    (q) Seniority.
      Except
      for Permitted Liens and as otherwise provided for herein, until the Notes are
      fully satisfied or converted, the Company shall not grant nor allow any security
      interest to be taken in the assets of the Company or any Subsidiary; nor issue
      any debt, equity or other instrument which would give the holder thereof
      directly or indirectly, a right in any assets of the Company or any Subsidiary,
      superior to any right of the holder of a Note in or to such assets.

     

    (r) Notices.
      For so
      long as the Subscribers hold any Securities, the Company will maintain as United
      States address and United States fax number for notices purposes under the
      Transaction Documents.

     

    10. Covenants
      of the Company Regarding Indemnification.
      The
      Company agrees to indemnify, hold harmless, reimburse and defend the
      Subscribers, the Subscribers' officers, directors, agents, Affiliates, members,
      managers, control persons, and principal shareholders, against any claim, cost,
      expense, liability, obligation, loss or damage (including reasonable legal
      fees)
      of any nature, incurred by or imposed upon the Subscriber or any such person
      which results, arises out of or is based upon (i) any material misrepresentation
      by Company or breach of any representation or warranty by Company in this
      Agreement or in any Exhibits or Schedules attached hereto, or other agreement
      delivered pursuant hereto; or (ii) after any applicable notice and/or cure
      periods, any breach or default in performance by the Company of any covenant
      or
      undertaking to be performed by the Company hereunder, or any other agreement
      entered into by the Company and Subscriber relating hereto.

     

    11.1. Delivery
      of Unlegended Shares.

     

    (a) Within
      seven business days (such seventh business day being the “Unlegended
      Shares Delivery Date”)
      after
      the business day on which the Company has received (i) a notice that Shares
      or
      any other Common Stock held by a Subscriber have been sold pursuant to a
      registration statement, if any, or Rule 144, (ii) a representation that the
      prospectus delivery requirements, or the requirements of Rule 144, as applicable
      and if required, have been satisfied, (iii) the original share certificates
      representing the shares of Common Stock that have been sold, and (iv) in the
      case of sales under Rule 144, customary representation letters of the Subscriber
      and/or a Subscriber’s broker regarding compliance with the requirements of Rule
      144, the Company at its expense, (y) shall deliver, and shall cause legal
      counsel selected by the Company to deliver to its transfer agent (with copies
      to
      Subscriber) an appropriate instruction and opinion of such counsel, directing
      the delivery of shares of Common Stock without any legends including the legend
      set forth in Section 4(i) above (the “Unlegended
      Shares”);
      and
      (z) cause the transmission of the certificates representing the Unlegended
      Shares together with a legended certificate representing the balance of the
      submitted certificate, if any, to the Subscriber at the address specified in
      the
      notice of sale, via express courier, by electronic transfer or otherwise on
      or
      before the Unlegended Shares Delivery Date. In the event that the Shares are
      sold in a manner that complies with an exemption from registration, the Company
      will promptly instruct its counsel to issue to the Company’s transfer agent an
      opinion permitting removal of the legend indefinitely if pursuant to Rule
      144(k).


    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    (b) In
      lieu
      of delivering physical certificates representing the Unlegended Shares, upon
      request of a Subscriber, so long as the certificates therefor do not bear a
      legend and the Subscriber is not obligated to return such certificate for the
      placement of a legend thereon, the Company will cause its transfer agent to
      electronically transmit the Unlegended Shares by crediting the account of
      Subscriber’s prime broker with the Depository Trust Company through its Deposit
      Withdrawal Agent Commission system, if such transfer agent participates in
      such
      DWAC system. Such delivery must be made on or before the Unlegended Shares
      Delivery Date.

    


    (c) The
      Company understands that a delay in the delivery of the Unlegended Shares
      pursuant to Section 11 hereof later than the Unlegended Shares Delivery Date
      could result in economic loss to a Subscriber. As compensation to a Subscriber
      for such loss, the Company agrees to pay late payment fees (as liquidated
      damages and not as a penalty) to the Subscriber for late delivery of Unlegended
      Shares in the amount of $100 per business day after the Delivery Date for each
      $10,000 of purchase price of the Unlegended Shares subject to the delivery
      default. In the event damages are payable pursuant to the foregoing sentence,
      then the Subscriber may elect to receive liquidated damages under this Section
      11.1(c) or Section 12(g) below. If during any 360 day period, the Company fails
      to deliver Unlegended Shares as required by this Section 11.1 for an aggregate
      of 30 days, then each Subscriber or assignee holding Securities subject to
      such
      default may, at its option, require the Company to redeem all or any portion
      of
      the Shares subject to such default at a price per share equal to the greater
      of
      (i) 120% of the purchase price of such Shares, or (ii) a fraction in which
      the
      numerator is the highest closing price of the Common Stock during the
      aforedescribed 30 day period and the denominator of which is the purchase price
      of the Shares during such 30 day period, multiplied by the purchase price of
      the
      Shares (“Unlegended
      Redemption Amount”).
      The
      Company shall pay any payments incurred under this Section in immediately
      available funds upon demand.

    


    (d) 
      In
      addition to any other rights available to a Subscriber, if the Company fails
      to
      deliver to a Subscriber Unlegended Shares as required pursuant to this
      Agreement, within three business days after the Unlegended Shares Delivery
      Date
      and the Subscriber or a broker on the Subscriber’s behalf, purchases (in an open
      market transaction or otherwise) shares of common stock to deliver in
      satisfaction of a sale by such Subscriber of the shares of Common Stock which
      the Subscriber was entitled to receive from the Company (a "Buy-In"),
      then
      the Company shall pay in cash to the Subscriber (in addition to any remedies
      available to or elected by the Subscriber) the amount by which (A) the
      Subscriber's total purchase price (including brokerage commissions, if any)
      for
      the shares of Common Stock so purchased exceeds (B) the aggregate purchase
      price
      of the shares of Common Stock delivered to the Company for reissuance as
      Unlegended Shares together
      with interest thereon at a rate of 15% per annum accruing until such amount
      and
      any accrued interest thereon is paid in full (which amount shall be paid as
      liquidated damages and not as a penalty). For
      example, if a Subscriber purchases shares of Common Stock having a total
      purchase price of $11,000 to cover a Buy-In with respect to $10,000 of purchase
      price of shares of Common Stock delivered to the Company for reissuance as
      Unlegended Shares, the Company shall be required to pay the Subscriber $1,000,
      plus interest. The Subscriber shall provide the Company written notice
      indicating the amounts payable to the Subscriber in respect of the
      Buy-In.

    


    (e) In
      the
      event a Subscriber shall request delivery of Unlegended Shares as described
      in
      Section 11.1 and the Company is required to deliver such Unlegended Shares
      pursuant to Section 11.1, the Company may not refuse to deliver Unlegended
      Shares based on any claim that such Subscriber or any one associated or
      affiliated with such Subscriber has been engaged in any violation of law, or
      for
      any other reason, unless, an injunction or temporary restraining order from
      a
      court, on notice, restraining and or enjoining delivery of such Unlegended
      Shares shall have been sought and obtained by the Company or at the Company’s
      request or with the Company’s assistance,
      and the
      Company has posted a surety bond for the benefit of such Subscriber in the
      amount of 120% of the amount of the aggregate purchase price of the Shares
      which
      are subject to the injunction or temporary restraining order, which bond shall
      remain in effect until the final unappealable disposition of the litigation
      of
      the dispute and the proceeds of which shall be payable to such Subscriber to
      the
      extent Subscriber obtains judgment in Subscriber’s favor.


    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    11.2. In
      the
      event commencing one hundred and eighty-one (181) days after the Closing Date
      and ending five years thereafter, the Subscriber is not permitted to resell
      any
      of the Shares without any restrictive legend or if such sales are permitted
      but
      subject to volume limitations or further restrictions on resale as a result
      of
      the unavailability to Subscriber of Rule 144(k) under the 1933 Act or any
      successor rule (a “144
      Default”),
      for
      any reason except for Subscriber’s status as an Affiliate or “control person” of
      the Company, then the Company shall pay such Subscriber as liquidated damages
      (“Liquidated
      Damages”)
      and
      not as a penalty an amount equal to one percent (1%) for the first day of such
      occurrence and one percent (1%) for each thirty (30) days (or such lesser
      pro-rata amount for any period less than thirty (30) days) thereafter of the
      purchase price of the Shares owned by the Subscriber during the pendency of
      the
      144 Default.

     

    12. Miscellaneous.

     

    (a) Notices.
      All
      notices, demands, requests, consents, approvals, and other communications
      required or permitted hereunder shall be in writing and, unless otherwise
      specified herein, shall be (i) personally served, (ii) deposited in the mail,
      registered or certified, return receipt requested, postage prepaid, (iii)
      delivered by reputable air courier service with charges prepaid, or (iv)
      transmitted by hand delivery, telegram, or facsimile, addressed as set forth
      below or to such other address as such party shall have specified most recently
      by written notice. Any notice or other communication required or permitted
      to be
      given hereunder shall be deemed effective (a) upon hand delivery or delivery
      by
      facsimile, with accurate confirmation generated by the transmitting facsimile
      machine, at the address or number designated below (if delivered on a business
      day during normal business hours where such notice is to be received), or the
      first business day following such delivery (if delivered other than on a
      business day during normal business hours where such notice is to be received)
      or (b) on the second business day following the date of mailing by express
      courier service, fully prepaid, addressed to such address, or upon actual
      receipt of such mailing, whichever shall first occur. The addresses for such
      communications shall be: (i) if to the Company, to: Attitude Drinks Inc., 11300
      U.S. Highway
      1, Suite 207, North Palm Beach, Florida 33408, Attn: Roy Warren, CEO and
      President, telecopier: (561) 799-5039, with a copy by telecopier only to: Weed
      & Co., LLP, 4695 MacArthur Court, Suite 1430, Newport Beach, CA 92660, Attn:
      Rick Weed, Esq., telecopier number: (949) 475-9087, and (ii) if to the
      Subscriber, to: the one or more addresses and telecopier numbers indicated
      on
      the signature pages hereto, with an additional copy by telecopier only to:
      Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New York
      10176, telecopier: (212) 697-3575.

     

    (b) Entire
      Agreement; Assignment.
      This
      Agreement and other documents delivered in connection herewith represent the
      entire agreement between the parties hereto with respect to the subject matter
      hereof and may be amended only by a writing executed by both parties. Neither
      the Company nor the Subscribers have relied on any representations not contained
      or referred to in this Agreement and the documents delivered herewith. No right
      or obligation of the Company shall be assigned without prior notice to and
      the
      written consent of the Subscribers. 

     

    (c) Counterparts/Execution.
      This
      Agreement may be executed in any number of counterparts and by the different
      signatories hereto on separate counterparts, each of which, when so executed,
      shall be deemed an original, but all such counterparts shall constitute but
      one
      and the same instrument. This Agreement may be executed by facsimile signature
      and delivered by facsimile transmission.

     

    (d) Law
      Governing this Agreement.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York without regard to principles of conflicts of laws. Any action
      brought by either party against the other concerning the transactions
      contemplated by this Agreement shall be brought only in the state courts of
      New
      York or in the federal courts located in the state and county of New York.
      The
      parties to this Agreement hereby irrevocably waive any objection to jurisdiction
      and venue of any action instituted hereunder and shall not assert any defense
      based on lack of jurisdiction or venue or based upon forum
      non conveniens.
      The
      parties executing this Agreement and other agreements referred to herein or
      delivered in connection herewith on behalf of the Company agree to submit to
      the
      in personam jurisdiction of such courts and hereby irrevocably waive trial
      by
      jury. The
      prevailing party shall be entitled to recover from the other party its
      reasonable attorney's fees and costs. In the event that any provision of this
      Agreement or any other agreement delivered in connection herewith is invalid
      or
      unenforceable under any applicable statute or rule of law, then such provision
      shall be deemed inoperative to the extent that it may conflict therewith and
      shall be deemed modified to conform with such statute or rule of law. Any such
      provision which may prove invalid or unenforceable under any law shall not
      affect the validity or enforceability of any other provision of any agreement.
      Each party hereby irrevocably waives personal service of process and consents
      to
      process being served in any suit, action or proceeding in connection with this
      Agreement or any other Transaction Document by mailing a copy thereof via
      registered or certified mail or overnight delivery (with evidence of delivery)
      to such party at the address in effect for notices to it under this Agreement
      and agrees that such service shall constitute good and sufficient service of
      process and notice thereof. Nothing contained herein shall be deemed to limit
      in
      any way any right to serve process in any other manner permitted by
      law.


    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    (e) Specific
      Enforcement, Consent to Jurisdiction.
      The
      Company and Subscriber acknowledge and agree that irreparable damage would
      occur
      in the event that any of the provisions of this Agreement were not performed
      in
      accordance with their specific terms or were otherwise breached. It is
      accordingly agreed that the parties shall be entitled to seek an injunction
      or
      injunctions to prevent or cure breaches of the provisions of this Agreement
      and
      to enforce specifically the terms and provisions hereof, this being in addition
      to any other remedy to which any of them may be entitled by law or equity.
      Subject to Section 12(d) hereof, the Company hereby irrevocably waives, and
      agrees not to assert in any such suit, action or proceeding, any claim that
      it
      is not personally subject to the jurisdiction in New York of such court, that
      the suit, action or proceeding is brought in an inconvenient forum or that
      the
      venue of the suit, action or proceeding is improper. Nothing in this Section
      shall affect or limit any right to serve process in any other manner permitted
      by law.

     

    (f) Independent
      Nature of Subscribers.  
        The
      Company acknowledges that the obligations of each Subscriber under the
      Transaction Documents are several and not joint with the obligations of any
      other Subscriber, and no Subscriber shall be responsible in any way for the
      performance of the obligations of any other Subscriber under the Transaction
      Documents. The
      Company acknowledges that each Subscriber has represented that the decision
      of
      each Subscriber to purchase Securities has been made by such Subscriber
      independently of any other Subscriber and independently of any information,
      materials, statements or opinions as to the business, affairs, operations,
      assets, properties, liabilities, results of operations, condition (financial
      or
      otherwise) or prospects of the Company which may have been made or given by
      any
      other Subscriber or by any agent or employee of any other Subscriber, and no
      Subscriber or any of its agents or employees shall have any liability to any
      Subscriber (or any other person) relating to or arising from any such
      information, materials, statements or opinions.  The
      Company acknowledges that nothing contained in any Transaction Document, and
      no
      action taken by any Subscriber pursuant hereto or thereto shall be deemed to
      constitute the Subscribers as a partnership, an association, a joint venture
      or
      any other kind of entity, or create a presumption that the Subscribers are
      in
      any way acting in concert or as a group with respect to such obligations or
      the
      transactions contemplated by the Transaction Documents.  The Company
      acknowledges that each Subscriber shall be entitled to independently protect
      and
      enforce its rights, including without limitation, the rights arising out
      of the Transaction Documents, and it shall not be necessary for any
      other Subscriber to be joined as an additional party in any proceeding for
      such
      purpose.  The Company acknowledges that it has elected to provide all
      Subscribers with the same terms and Transaction Documents for the convenience
      of
      the Company and not because Company was required or requested to do so by the
      Subscribers.  The Company acknowledges that such procedure with respect to
      the Transaction Documents in no way creates a presumption that the Subscribers
      are in any way acting in concert or as a group with respect to the Transaction
      Documents or the transactions contemplated thereby.


    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    (g) Damages.
      In the
      event the Subscriber is entitled to receive any liquidated damages pursuant
      to
      the Transactions, the Subscriber may elect to receive the greater of actual
      damages or such liquidated damages.

     

    (h) Consent.
      As used
      in the Agreement, “consent of the Subscribers” or similar language means the
      consent of holders of not less than 75% of the total of the Shares issued and
      issuable upon conversion of outstanding Notes owned by Subscribers on the date
      consent is requested.

     

    (i) Limit
      on Liability.
      In
      no
      event shall the liability of any Subscriber or permitted successor hereunder
      or
      under any Transaction Document or other agreement delivered in connection
      herewith be greater in amount than the dollar amount of the net proceeds
      actually received by such Subscriber upon the sale of Shares.

     

    (j) Equal
      Treatment.
      No
      consideration shall be offered or paid to any person to amend or consent to
      a
      waiver or modification of any provision of the Transaction Documents unless
      the
      same consideration is also offered and paid to all the Subscribers and their
      permitted successors and assigns.

     

    (k) Maximum
      Payments.
      Nothing
      contained herein or in any document referred to herein or delivered in
      connection herewith shall be deemed to establish or require the payment of
      a
      rate of interest or other charges in excess of the maximum permitted by
      applicable law. In the event that the rate of interest or dividends required
      to
      be paid or other charges hereunder exceed the maximum permitted by such law,
      any
      payments in excess of such maximum shall be credited against amounts owed by
      the
      Company to the Subscriber and thus refunded to the Company.

     

    (l) Calendar
      Days.
      All
      references to “days” in the Transaction Documents shall mean calendar days
      unless otherwise stated. The terms “business days” and “trading days” shall mean
      days that the New York Stock Exchange is open for trading for three or more
      hours. Time periods shall be determined as if the relevant action, calculation
      or time period were occurring in New York City. Any deadline that falls on
      a
      non-business day in any of the Transaction Documents shall be automatically
      extended to the next business day and interest, if any, shall be calculated
      and
      payable through such extended period. 

     

    


     

    


     

    [THIS
      SPACE INTENTIONALLY LEFT BLANK]


    
      
         

      

      
        18

        
          

        

      

      
         

      

    


     

    SIGNATURE
      PAGE TO SUBSCRIPTION AGREEMENT (A)

     

    


    Please
      acknowledge your acceptance of the foregoing Subscription Agreement by signing
      and returning a copy to the undersigned whereupon it shall become a binding
      agreement between us.

    


    
      	 	
              ATTITUDE
                DRINKS INC.

            
	 	
              a
                Delaware corporation

            
	 	 	 	 
	 	 	 	 
	 	
              By:

            	
               

            	 
	 	 	
              Name:
                

            
	 	 	
              Title:
                

            
	 	 	 	 
	 	
              Dated:
                January ____, 2008

            


    

    


    


    
      	
              SUBSCRIBER

            	
              NOTE
                PRINCIPAL AMOUNT

            	
              PURCHASE
                PRICE

            
	
              MAHONEY
                ASSOCIATES

              Address:

              _______________________________________________

               

              _______________________________________________

               

              Fax
                No.:

              _______________________________________________

               

              Taxpayer
                ID# (if applicable): ______________________

               

               

               

              _______________________________________________

              (Signature)

              By:
                

            	
              $362,790.00

            	
              $300,000.00

            


    

    



    
      
         

      

      
        19

        
          

        

      

      
         

      

    


     

    SIGNATURE
      PAGE TO SUBSCRIPTION AGREEMENT (B)

     

    


    Please
      acknowledge your acceptance of the foregoing Subscription Agreement by signing
      and returning a copy to the undersigned whereupon it shall become a binding
      agreement between us.

    


    
      	 	
              ATTITUDE
                DRINKS INC.

            
	 	
              a
                Delaware corporation

            
	 	 	 	 
	 	 	 	 
	 	
              By:

            	
               

            	 
	 	 	
              Name:
                

            
	 	 	
              Title:
                

            
	 	 	 	 
	 	
              Dated:
                January ____, 2008

            


    

    


    


    
      	
              SUBSCRIBER

            	
              NOTE
                PRINCIPAL AMOUNT

            	
              PURCHASE
                PRICE

            
	
              CMS
                CAPITAL

              9612
                Van Nuys Blvd. #108

              Panorama
                City, CA 91402

              Fax:
                (818) 907-3372

               

               

               

               

              _______________________________________________

              (Signature)

              By:
                

            	
              $120,930.00

            	
              $100,000.00

            


    

    



    
      
         

      

      
        20

        
          

        

      

      
         

      

    


     

    SIGNATURE
      PAGE TO SUBSCRIPTION AGREEMENT (C)

     

    


    Please
      acknowledge your acceptance of the foregoing Subscription Agreement by signing
      and returning a copy to the undersigned whereupon it shall become a binding
      agreement between us.

    


    
      	 	
              ATTITUDE
                DRINKS INC.

            
	 	
              a
                Delaware corporation

            
	 	 	 	 
	 	 	 	 
	 	
              By:

            	
               

            	 
	 	 	
              Name:
                

            
	 	 	
              Title:
                

            
	 	 	 	 
	 	
              Dated:
                January ____, 2008

            


    

    


    


    
      	
              SUBSCRIBER

            	
              NOTE
                PRINCIPAL AMOUNT

            	
              PURCHASE
                PRICE

            
	
              MOMONA
                CAPITAL LLC

              150
                Central Park South, 2nd
                Floor

              New
                York, NY 10019

              Fax:
                (212) 586-8244

               

               

               

               

              _______________________________________________

              (Signature)

              By:
                

            	
              $36,280.00

            	
              $30,000.00

            


    

    



    
      
         

      

      
        21

        
          

        

      

      
         

      

    


    LIST
      OF EXHIBITS AND SCHEDULES

     

    
      	
               

              Exhibit
                A

            	
               

              Form
                of Note (see Exhibit 4.5 to Registration Statement)

            
	
               

              Exhibit
                B

            	
               

              Escrow
                Agreement (see Exhibit 10.9 to Registration Statement0

            
	
               

              Exhibit
                C

            	
               

              Form
                of Legal Opinion (omitted)

            
	
               

              Schedule
                5(a)

            	
               

              Subsidiaries

            
	
               

              Schedule
                5(d)

            	
               

              Additional
                Issuances / Capitalization / Reset Rights

            
	
               

              Schedule
                5(o)

            	
               

              Undisclosed
                Liabilities

            
	
               

              Schedule
                5(v)

            	
               

              Transfer
                Agent

            
	
               

              Schedule
                8(a)

            	
               

              Placement
                Fees

            
	
               

              Schedule
                8(b)

            	
               

              Due
                Diligence Fee

            
	
               

              Schedule
                9(f)

            	
               

              Use
                of Proceeds

            


    

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    


     

    SCHEDULE
      5(a) Subsidiaries

     

    


    Consistent
      with the Agreement and Plan of Merger among the Company, MH 09122007, Inc.
      and
      Attitude Drink Company, Inc. following completion of the merger that occurred
      on
      September 19, 2007, Attitude
      Drink Company, Inc.,
      a
      Delaware corporation, is a wholly owned subsidiary and has 50,000,000 shares
      of
      common stock, $.001 par value, of which 100,000 shares are issued and
      outstanding and held of record by the Company.

     

    


     

    SCHEDULE
      5(d) Additional Issuances / Capitalization / Reset Rights

     

    There
      are
      no outstanding agreements or preemptive or similar rights affecting the
      Company's Common Stock or equity and no outstanding rights, warrants or options
      to acquire, or instruments convertible into or exchangeable for, or agreements
      or understandings with respect to the sale or issuance of any shares of Common
      Stock or equity of the Company or Subsidiaries or other equity interest in
      the
      Company except as described on Schedule
      5(d).
      The
      Common Stock of the Company on a fully diluted basis outstanding as of the
      last
      Business Day preceding the Closing Date is set forth on Schedule
      5(d).

    


    As
      of
      January 6, 2008, the Company has 120,000,000 shares consisting of 100,000,000
      shares of common stock, $.001 par value, of which 6,560,600 shares are issued
      and outstanding and 20,000,000 shares of preferred stock, $.001 par value,
      of
      which 75,000 shares are issued and outstanding.

    The
      Company has designated 2,000,000 shares of its preferred stock as Series A
      Convertible Preferred Stock, $.001 par value, (the “Series A”) of which 75,000
      shares of Series A are issued and outstanding. The Series A has 6:1 voting
      rights, converts into 6 shares of common stock and is subject to redemption
      by
      the Company under certain circumstances. [450,000 shares of common stock]


    


    The
      Company has
      created the 2007 Stock Compensation and Incentive Plan and has reserved
      1,000,000 shares of its common stock for issuance in the form of stock options
      or shares to employees, consultants and advisors that perform services for
      the
      Company.

     

    The
      Company has filed a registration statement for the resale by the Selling
      Security Holders of up to 17,396,964 shares of common stock of Attitude Drinks
      Incorporated comprised of 1,760,600 shares of Common Stock, 9,272,722 shares
      of
      Common Stock underlying Class A and Class B Common Stock Purchase Warrants,
      and
      6,363,642 shares of common stock for resale following conversion of $1,200,000
      in Secured Convertible Promissory Notes. 

    


    The
      Selling Security Holders are Alpha Capital Anstalt, EFCOR, Grushko
      & Mittman, P.C., Monarch Capital Fund Limited, Momona
      Capital, Whalehaven Capital Fund Limited, SMIVEL LLC, and Roy G.
      Warren.

    


    The
      registration rights agreement with the investors from the October 23, 2007
      transaction requires the registration of 175% of the shares needed for
      conversion of the $1,200,000 notes (i.e., an extra 2,045,455 shares). The fully
      diluted outstanding shares of common stock is 21,601,509 as of January 6, 2008
      calculated as follows:

    


    
      	
              6,560,600

            	
              Issued
                and outstanding per the transfer agent 

            
	
              450,000

            	
              Reserved
                for Conversion of the 75,000 shares of Preferred Stock

            
	
              1,000,000

            	
              Reserved
                for the 2007 Stock Compensation and Incentive Plan

            
	
              9,272,722
                

            	
              Reserved
                as shares of Common Stock underlying Class A and Class B
                Warrants

            
	
              4,318,187

            	
              Reserved
                for conversion of the $1,200,000 notes per Agreement from October
                23,
                2007

            


    

    



    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    


    SCHEDULE
      5(o) Undisclosed Liabilities

    None

     

    SCHEDULE
      5(v) Transfer Agent

    


    The
      current transfer agent is 

    


    Florida
      Atlantic Stock Transfer

    Attention:
      Mr. Rene Garcia, President

    7130
      Nob
      Hill Road

    Tamarac,
      FL 33321

    


    Telephone
      954-726-4954

    Facsimile
      954-726-6305

    


    On
      or
      before March 31, 2008, the Company will employ as the transfer agent for the
      Common Stock, Shares and Warrant Shares a participant in the Depository Trust
      Company Automated Securities Transfer Program.

     

     

    SCHEDULE
      9(f) Use of Proceeds

     

    


    
      	
              Gross
                Amount

            	
              $430,000

            	 
	 	 	 
	
              less
                Due Diligence Fee

            	
              $21,500

            	 
	
              less
                Subscriber’s Legal Fees

            	
              $15,000

            	 
	 	 	 
	
              Net
                to Company

            	
              $393,500

            	 
	
              Professional
                Services

            	
              $120,000

            	 
	
              Other

            	
              $136,750

            	 
	
              Purchase
                of Assets

            	
              $136,750

            	 


    

     

    
      
         

      

      
        24