Unassociated Document


    
      	
              (4)(4)

            	
              Form
                of 10%
                Convertible Note

            


    

    


    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. 

    

      
        	
                Principal
                  Amount: $____________

              	
                Issue
                  Date: October ___,
                  2007

              


      

    

    


    SECURED
      CONVERTIBLE PROMISSORY NOTE

    


    FOR
      VALUE RECEIVED,
      ATTITUDE DRINKS INC., a Delaware corporation (hereinafter called “Borrower”),
      hereby promises to pay to ____________________________________,
      ___________________________________________________________, (the “Holder”) or
      its registered assigns or successors in interest or order, without demand,
      the
      sum of ____________________________ Dollars ($__________) (“Principal Amount”),
      on October ___, 2009 (the “Maturity Date”), if not sooner paid.

    


    This
      Note has been entered into pursuant to the terms of a subscription agreement
      between the Borrower, the Holder and certain other holders (the “Other Holders”)
      of convertible promissory notes (the “Other Notes”), dated of even date herewith
      (the “Subscription Agreement”), and shall be governed by the terms of such
      Subscription Agreement. Unless otherwise separately defined herein, all
      capitalized terms used in this Note shall have the same meaning as is set forth
      in the Subscription Agreement. The following terms shall apply to this
      Note:

    


    ARTICLE
      I

    


    INTEREST
      AMORTIZATION

    


    1.1.  Interest
      Rate.
      Interest on the outstanding Principal Amount shall accrue from the date of
      this
      Note and shall be payable in cash in arrears together with, at the same time
      and
      in the same manner as payment of Principal Amount and on the Maturity Date,
      whether by acceleration or otherwise. Interest on the outstanding principal
      balance of this Note shall accrue at the rate of ten percent (10%) per annum
      (the “Interest Rate”). Interest on the outstanding principal balance of the Note
      shall be computed on the basis of the actual number of days elapsed and a year
      of three hundred and sixty (360) days.

    

      1.2.  Minimum
        Monthly Principal and Interest Payments.
        Amortizing payments of the outstanding Principal Amount of this Note shall
        commence on the twelve (12) month anniversary after the Issue date and on
        the
        same day of each month thereafter (each a “Repayment Date”) until the Principal
        Amount has been repaid in full, whether by the payment of cash or by the
        conversion of such Principal Amount into Common Stock pursuant to the terms
        hereof. Subject to Section 2.1 and Article 3 below, on each Repayment Date,
        the
        Borrower shall make payments to the Holder in an amount equal to eight and
        one-third percent (8.333%) of the initial Principal Amount of this Note,
        and any
        other amounts which are then owing under this Note that have not been
paid
        (collectively, the “Monthly Amount”). Amounts of conversions made by the Holder
        or Borrower pursuant to Section 2.1 or Article III shall be applied first
        against outstanding fees and damages, then outstanding interest and then
        to
        Principal Amounts of any not yet due Monthly Amounts at the discretion of
        the
        Holder. Any Principal Amount, interest and any other sum arising under this
        Note
        and the Subscription Agreement that remains outstanding on the Maturity Date
        shall be due and payable on the Maturity Date.

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    1.3. Default
      Interest
      Rate.
      Following the
      occurrence and during the continuance of an Event of Default (as defined in
      Article IV), which, if susceptible to cure is not cured within the cure periods
      (if any) set forth in Article IV, otherwise then from the first date of such
      occurrence, the annual interest rate on this Note shall (subject to Section
      6.7)
      be fifteen percent (15%). 

    


    ARTICLE
      II

    


    CONVERSION
      AND REPAYMENT

    

      2.1. Payment
        of Monthly Amount in Cash or Common Stock.
        Subject to Section 3.2 hereof, the Borrower shall pay the Monthly Amount
        on the
        applicable Repayment Date, at the Borrower’s election, in either of the
        following manners: (i) in cash equal to 110% of the principal portion of
        the
        Monthly Amount together with all other amounts payable with such principal,
        or
        (ii) in registered Common Stock at an applied conversion rate equal to the
        lesser of (A) the Fixed Conversion Price (as defined in section 3.1 hereof),
        or
        (B) 80% of the average of the five lowest closing bid prices for the Common
        Stock as reported by Bloomberg L.P. for the Principal Market for the twenty
        trading days preceding such Repayment Date (“Lookback Period”) (“Minimum
        Conversion Price”), as such amount may be adjusted as described herein. In the
        event the closing price of the Common Stock as reported by Bloomberg L.P.
        for
        the ten trading days preceding the Repayment Date is equal to or greater
        than
        200% of the Fixed Conversion Price, then the Company may not elect to pay
        the
        corresponding Monthly Amount with cash but must instead pay with shares of
        Common Stock valued at the Fixed Conversion Price. Amounts paid with shares
        of
        Common Stock must be delivered to the Holder not later than three business
        days
        after the applicable Repayment Date. The Borrower must send notice to the
        Holder
        by confirmed telecopier not later than 6:00 PM, New York City time on the
        thirtieth trading day preceding a Repayment Date notifying Holder of Borrower’s
        election to pay the Monthly Amount in cash or Common Stock. The Notice must
        state the amount of the Monthly Amount including a description of the components
        of such Monthly Amount and include supporting calculations. Elections by
        the
        Borrower must be made to all Other Holders in proportion to the initial relative
        Note principal held by the Holder and the Other Holders. If such notice is
        not
        given, or is not timely sent or if the Monthly Redemption Amount is not timely
        delivered or if the Borrower elects to pay the Monthly Amount with Common
        Stock,
        then Holder shall have the right, instead of the Company, to elect in writing
        prior to three trading days before the applicable Repayment Date, whether
        to be
        paid in cash or Common Stock or defer the payment of the relevant Monthly
        Amount
        until three business days after demand therefore by the Holder. If notice
        by the
        Company is not given, or is not timely given, then, unless notice is given
        by
        the Holder pursuant to the preceding sentence, the relevant Monthly Amount
        must
        be paid in cash. The conversion price in connection with such deferred Monthly
        Amount, if the Holder elects to convert such deferred Monthly Amount, shall
        be
        the lowest Conversion Price or Minimum Conversion Price that could be calculated
        for any Repayment Date from the Repayment Date for such deferred Monthly
        Amount
        until such Monthly Amount is actually paid. Such Holder’s election shall not be
        construed to be a waiver of any default by Borrower relating to non-timely
        compliance by Borrower with any of its obligations under this Note.

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      2.2. Effective
        Registration Statement.
        Notwithstanding anything to the contrary herein, no amount payable hereunder
        may
        be
        paid in
        shares of Common
        Stock by the Borrower nor may the Borrower exercise its right to give a Notice
        of Mandatory Conversion without the Holder’s consent unless (a) either (i) an
        effective current Registration Statement covering the shares of Common Stock
        to
        be issued in satisfaction of such obligations exists, or (ii) an exemption
        from
        registration of the resale of shares of Common Stock to be issued in
        satisfaction of such obligations is available pursuant to Rule 144(k) of
        the
        1933 Act, (b) an Event of Default hereunder (or an event that with the passage
        of time or the giving of notice could become an Event of Default), is pending
        or
        is otherwise waived in writing by the Holder in whole or in part at the Holder’s
        option, and (c) the Principal Market is either the OTC Bulletin Board, American
        Stock Exchange, Nasdaq Capital Market, Nasdaq Global Market, or New York
        Stock
        Exchange (“Listing Condition”) from and after thirty (30) days prior to the
        relevant Repayment Date.

    

    ARTICLE
      III

    


    CONVERSION
      RIGHTS

    


    3.1. Holder’s
      Conversion Rights.
      Subject to Section 3.2, the Holder shall have the right, but not the obligation,
      to convert all or any portion of the then aggregate outstanding Principal Amount
      of this Note, together with interest, if any, and fees due hereon, and any
      sum
      arising under the Subscription Agreement, and the Transaction Documents,
      including but not limited to Liquidated Damages, into shares of Common Stock,
      subject to the terms and conditions set forth in this Article III, at the rate
      of $0.33 per
      share of Common Stock (“Fixed Conversion Price”), as the same may be adjusted
      pursuant to this Note and the Subscription Agreement. The Holder may exercise
      such right by delivery to the Borrower of a written Notice of Conversion
      pursuant to Section 3.3.

    


    3.2. Conversion
      Limitation.
      Neither Holder
      nor the
      Borrower may convert (including a Mandatory Conversion) on any date that amount
      of the Note Principal or interest in connection with that number of shares
      of
      Common Stock which would be in excess of the sum of (i) the number of shares
      of
      Common Stock beneficially owned by the Holder and its affiliates on a Conversion
      Date, Repayment Date, or interest payment date, as the case may be, (ii) any
      Common Stock issuable in connection with the unconverted portion of the Note,
      and (iii) the number of shares of Common Stock issuable upon the conversion
      of
      the Note with respect to which the determination of this provision is being
      made, which would result in beneficial ownership by the Holder and its
      affiliates of more than 4.99% of the outstanding shares of Common Stock of
      the
      Borrower on such Conversion Date. For the purposes of the provision to the
      immediately preceding sentence, beneficial ownership shall be determined in
      accordance with Section 13(d) of the Securities Exchange Act of 1934, as
      amended, and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder
      shall not be limited to aggregate conversions of only 4.99% and aggregate
      conversion by the Holder may exceed 4.99%. The Holder shall have the authority
      and obligation to determine whether the restriction contained in this Section
      3.2 will limit any conversion hereunder and to the extent that the Holder
      determines that the limitation contained in this Section applies, the
      determination of which portion of the Notes are convertible shall be the
      responsibility and obligation of the Holder. The Holder may waive the conversion
      limitation described in this Section 3.2, in whole or in part, upon and
      effective after 61 days prior written notice to the Borrower to increase such
      percentage to up to 9.99%.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    3.3. Mechanics
      of Holder’s Conversion.
      

    


    (a) In
      the event that the Holder elects to convert any amounts outstanding under this
      Note into Common Stock, the Holder shall give notice of such election by
      delivering an executed and completed notice of conversion (a “Notice of
      Conversion”) to the Borrower, which Notice of Conversion shall provide a
      breakdown in reasonable detail of the Principal Amount, accrued interest and
      amounts being converted. The original Note is not
      required
      to be surrendered to the Borrower until all sums due under the Note have been
      paid. On each Conversion Date (as hereinafter defined) and in accordance with
      its Notice of Conversion, the Holder shall make the appropriate reduction to
      the
      Principal Amount, accrued interest and fees as entered in its records.
      Each
      date on which a Notice of Conversion is delivered or telecopied to the Borrower
      in accordance with the provisions hereof shall be deemed a “Conversion Date.” A
      form of Notice of Conversion
      to be
      employed by the Holder is annexed hereto as Exhibit A.

    


    (b) Pursuant
      to the terms of a Notice of
      Conversion, the Borrower will issue instructions to the transfer agent
      accompanied by an opinion of counsel (if so required by the Borrower’s transfer
      agent), and, except as otherwise provided below, shall cause the transfer agent
      to transmit the certificates representing the Conversion Shares to the Holder
      by
      crediting the account of the Holder’s designated broker with the Depository
      Trust Corporation (“DTC”) through its Deposit Withdrawal Agent Commission
      (“DWAC”) system within three (3) business days after receipt by the Borrower of
      the Notice of Conversion (the “Delivery Date”). In the case of the exercise of
      the conversion rights set forth herein, the conversion privilege shall be deemed
      to have been exercised and the Conversion Shares issuable upon such conversion
      shall be deemed to have been issued upon the date of receipt by the Borrower
      of
      the Notice of Conversion. The Holder shall be treated for all purposes as the
      beneficial holder of such shares of Common Stock, or, in the case that Borrower
      delivers physical certificates as set forth below, the record holder of such
      shares of Common Stock, unless the Holder provides the Borrower written
      instructions to the contrary.  Notwithstanding the foregoing to the
      contrary, the Borrower or its transfer agent shall only be obligated to issue
      and deliver the shares to the DTC on the Holder’s behalf via DWAC (or
      certificates free of restrictive legends) if the registration statement
      providing for the resale of the shares of Common Stock issuable upon the
      conversion of this Note is effective and the Holder has complied with all
      applicable securities laws in connection with the sale of the Common Stock,
      including, without limitation, the prospectus delivery requirements and has
      provided representations accordingly. In the event that Conversion Shares cannot
      be delivered to the Holder via DWAC, the Borrower shall deliver physical
      certificates representing the Conversion Shares by the Delivery Date to an
      address designated by Holder in the U.S.

    


    3.4. Conversion
      Mechanics.

    


    (a) The
      number of shares of Common Stock to be issued upon each conversion of this
      Note
      pursuant to this Article III shall be determined by dividing that portion of
      the
      Principal Amount and interest and fees to be converted, if any, by the then
      applicable Fixed Conversion Price.

    


    (b) The
      Fixed Conversion Price and number and kind of shares or other securities to
      be
      issued upon conversion shall be subject to adjustment from time to time upon
      the
      happening of certain events while this conversion right remains outstanding,
      as
      follows:

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    A. Merger,
      Sale of Assets, etc.
      If (A) the Company effects any merger or consolidation of the Company with
      or
      into another entity, (B) the Company effects any sale of all or substantially
      all of its assets in one or a series of related transactions, (C) any tender
      offer or exchange offer (whether by the Company or another entity) is completed
      pursuant to which holders of Common Stock are permitted to tender or exchange
      their shares for other securities, cash or property, (D) the Company consummates
      a stock purchase agreement or other business combination (including, without
      limitation, a reorganization, recapitalization, spin-off or scheme of
      arrangement) with one or more persons or entities whereby such other persons
      or
      entities acquire more than the 50% of the outstanding shares of Common Stock
      (not including any shares of Common Stock held by such other persons or entities
      making or party to, or associated or affiliated with the other persons or
      entities making or party to, such stock purchase agreement or other business
      combination), (E) any "person" or "group" (as these terms are used for purposes
      of Sections 13(d) and 14(d) of the 1934 Act) is or shall become the "beneficial
      owner" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly,
      of
      50% of the aggregate Common Stock of the Company, or (F) the Company effects
      any
      reclassification of the Common Stock or any compulsory share exchange pursuant
      to which the Common Stock is effectively converted into or exchanged for other
      securities, cash or property (in any such case, a "Fundamental Transaction"),
      this Note, as to the unpaid principal portion thereof and accrued interest
      thereon, shall thereafter be deemed to evidence the right to convert into such
      number and kind of shares or other securities and property as would have been
      issuable or distributable on account of such Fundamental Transaction, upon
      or
      with respect to the securities subject to the conversion right immediately
      prior
      to such Fundamental Transaction. The foregoing provision shall similarly apply
      to successive Fundamental Transactions of a similar nature by any such successor
      or purchaser. Without limiting the generality of the foregoing, the
      anti-dilution provisions of this Section shall apply to such securities of
      such
      successor or purchaser after any such Fundamental Transaction.

    


    B. Reclassification,
      etc.
      If the Borrower at any time shall, by reclassification or otherwise, change
      the
      Common Stock into the same or a different number of securities of any class
      or
      classes, this Note, as to the unpaid principal portion hereof and accrued
      interest hereon, shall thereafter be deemed to evidence the right to convert
      into an adjusted number of such securities and kind of securities as would
      have
      been issuable as the result of such change with respect to the Common Stock
      immediately prior to such reclassification or other change.

    


    C. Stock
      Splits, Combinations and Dividends.
      If the shares of Common Stock are subdivided or combined into a greater or
      smaller number of shares of Common Stock, or if a dividend is paid on the Common
      Stock in shares of Common Stock, the Conversion Price shall be proportionately
      reduced in case of subdivision of shares or stock dividend or proportionately
      increased in the case of combination of shares, in each such case by the ratio
      which the total number of shares of Common Stock outstanding immediately after
      such event bears to the total number of shares of Common Stock outstanding
      immediately prior to such event.

    


    D. Share
      Issuance.
      So long as this Note is outstanding, if the Borrower shall issue any Common
      Stock except for the Excepted Issuances (as defined in the Subscription
      Agreement), prior to the complete conversion or payment of this Note, for a
      consideration less than the Fixed Conversion Price that would be in effect
      at
      the time of such issue, then, and thereafter successively upon each such
      issuance, the Fixed Conversion Price shall be reduced to such other lower issue
      price. For purposes of this adjustment, the issuance of any security or debt
      instrument of the Borrower carrying the right to convert such security or debt
      instrument into Common Stock or of any warrant, right or option to purchase
      Common Stock shall result in an adjustment to the Fixed Conversion Price upon
      the issuance of the above-described security, debt instrument, warrant, right,
      or option and again upon the issuance of shares of Common Stock upon exercise
      of
      such conversion or purchase rights if such issuance is at a price lower than
      the
      then applicable Fixed Conversion Price. The reduction of the Fixed Conversion
      Price described in this paragraph is in addition to the other rights of the
      Holder described in the Subscription Agreement.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (c) Whenever
      the Conversion Price is adjusted pursuant to Section 3.4(b) above, the Borrower
      shall promptly mail to the Holder a notice setting forth the Conversion Price
      after such adjustment and setting forth a statement of the facts requiring
      such
      adjustment.

    


    3.5. Reservation.
      During the period
      the conversion right exists, Borrower will reserve from its authorized and
      unissued Common Stock not less than one hundred and seventy-five percent (175%)
      of the number of shares to provide for the issuance of Common Stock upon the
      full conversion of this Note. Borrower represents that upon issuance, such
      shares will be duly and validly issued, fully paid and non-assessable. Borrower
      agrees that its issuance of this Note shall constitute full authority to its
      officers, agents, and transfer agents who are charged with the duty of executing
      and issuing stock certificates to execute and issue the necessary certificates
      for shares of Common Stock upon the conversion of this Note.

    


    3.6 Issuance
      of Replacement Note.
      Upon any partial conversion of this Note, a replacement Note containing the
      same
      date and provisions of this Note shall, at the written request of the Holder,
      be
      issued by the Borrower to the Holder for the outstanding Principal Amount of
      this Note and accrued interest which shall not have been converted or paid,
      provided Holder has surrendered an original Note to the Borrower. In the event
      that the Holder elects not to surrender a Note for reissuance upon partial
      payment or conversion, the Holder hereby indemnifies the Borrower against any
      and all loss or damage attributable to a third-party claim in an amount in
      excess of the actual amount then due under the Note, and the
      Borrower is
      hereby expressly authorized to offset any such amounts mutually agreed upon
      by
      Borrower and Holder or pursuant to a judgment in Borrower’s favor against
      amounts then due under the Note.

    


    ARTICLE
      IV

    


    EVENTS
      OF DEFAULT

    


    The
      occurrence of any of the following events of default (“Event of Default”) shall,
      at the option of the Holder hereof, make all sums of principal and interest
      then
      remaining unpaid hereon and all other amounts payable hereunder immediately
      due
      and payable, upon demand, without presentment, or grace period, all of which
      hereby are expressly waived, except as set forth below:

    


    4.1 Failure
      to Pay Principal or Interest.
      The Borrower fails to pay any installment of Principal Amount, interest or
      other
      sum due under this Note or any Transaction Document when due and such failure
      continues for a period of five (5) business days after the due
      date.

    


    4.2 Breach
      of Covenant.
      The Borrower breaches any material covenant or other term or condition of the
      Subscription Agreement, this Note or Transaction Document in any material
      respect and such breach, if subject to cure, continues for a period of ten
      (10)
      business days after written notice to the Borrower from the Holder.

    


    4.3 Breach
      of Representations and Warranties.
      Any material representation or warranty of the Borrower made herein, in the
      Subscription Agreement, Transaction Document or in any agreement, statement
      or
      certificate given in writing pursuant hereto or in connection herewith or
      therewith shall be false or misleading in any material respect as of the date
      made and the Closing Date.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    4.4 Receiver
      or Trustee.
      The Borrower or any Subsidiary of Borrower shall make an assignment for the
      benefit of creditors, or apply for or consent to the appointment of a receiver
      or trustee for them or for a substantial part of their property or business;
      or
      such a receiver or trustee shall otherwise be appointed.

    


    4.5 Judgments.
      Any money judgment, writ or similar final process shall be entered or filed
      against Borrower or any subsidiary of Borrower or any of their property or
      other
      assets for more than $100,000,
      and shall remain unvacated, unbonded, unappealed, unsatisfied, or unstayed
      for a
      period of forty-five (45) days.

    


    4.6 Non-Payment.
      A
      default by the Borrower under any one or more obligations in an aggregate
      monetary amount in excess of $100,000 for more than twenty (20) days after
      the
      due date, unless the Borrower is contesting the validity of such obligation
      in
      good faith and has segregated cash funds equal to the contested
      amount.

    


    4.7 Listing
      and Filing Defaults.
      Failure by Borrower to timely comply with the listing and filing requirements
      set forth in Sections 9(b) and 9(d) of the Subscription Agreement.

    


    4.8 Bankruptcy.
      Bankruptcy, insolvency, reorganization, or liquidation proceedings or other
      proceedings or relief under any bankruptcy law or any law, or the issuance
      of
      any notice in relation to such event, for the relief of debtors shall be
      instituted by or against the Borrower or any Subsidiary of
      Borrower.

    


    4.9 Delisting.
      Delisting of the Common Stock from any Principal Market for a period of seven
      consecutive trading days; or notification from a Principal Market that the
      Borrower is not in compliance with the conditions for such continued listing
      on
      such Principal Market.

    


    4.10 Stop
      Trade.
      An SEC or judicial stop trade order or Principal Market trading suspension
      with
      respect to Borrower’s Common Stock that lasts for five or more consecutive
      trading days.

    


    4.11 Failure
      to
      Deliver Common Stock or Replacement Note.
      Borrower’s
      failure to timely deliver Common Stock to the Holder pursuant to and in the
      form
      required by this Note or the Subscription Agreement,
      or if required, a
      replacement Note.

    


    4.12 Non-Registration
      Event.
      The occurrence of a Non-Registration Event as described in Section 11.4 of
      the
      Subscription Agreement.

    


    4.13 Reverse
      Splits.
      The Borrower effectuates a reverse split of its Common Stock without twenty
      days
      prior written notice to the Holder.

     

    4.14 Cross
      Default.
      A
      default by the Borrower of a material term, covenant, warranty or undertaking
      of
      any Transaction Document or other agreement to which the Borrower and Holder
      are
      parties, or the occurrence of a material event of default under any such other
      agreement which is not cured after any required notice and/or cure
      period.

    


    4.15 Reservation
      Default.
      Failure by the Borrower to have reserved for issuance upon conversion of the
      Note the amount of Common Stock as set forth in this Note and the Subscription
      Agreement.

    


    4.16 Financial
      Statement Restatement.  
      The restatement of any financial statements filed by the Borrower for any date
      or period from two years prior to the Issue Date of this Note and until this
      Note is no longer outstanding, if the result of such restatement would, by
      comparison to the unrestated financial statements, have constituted a Material
      Adverse Effect.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    4.17 Other
      Note Default.
      The occurrence of any Event of Default under any Other Note.

    


    ARTICLE
      V

    


    SECURITY
      INTEREST

    


    5. Security
      Interest/Waiver of Automatic Stay.
      This Note is secured by a security interest granted to the Collateral Agent
      for
      the benefit of the Holder pursuant to a Security Agreement, as delivered by
      Borrower to Holder. The Borrower acknowledges and agrees that should a
      proceeding under any bankruptcy or insolvency law be commenced by or against
      the
      Borrower, or if any of the Collateral (as defined in the Security Agreement)
      should become the subject of any bankruptcy or insolvency proceeding, then
      the
      Holder should be entitled to, among other relief to which the Holder may be
      entitled under the Transaction Documents and any other agreement to which the
      Borrower and Holder are parties (collectively, "Loan Documents") and/or
      applicable law, an order from the court granting immediate relief from the
      automatic stay pursuant to 11 U.S.C. Section 362 to permit the Holder to
      exercise all of its rights and remedies pursuant to the Loan Documents and/or
      applicable law. THE BORROWER EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC
      STAY
      IMPOSED BY 11 U.S.C. SECTION 362. FURTHERMORE, THE BORROWER EXPRESSLY
      ACKNOWLEDGES AND AGREES THAT NEITHER 11 U.S.C. SECTION 362 NOR ANY OTHER SECTION
      OF THE BANKRUPTCY CODE OR OTHER STATUTE OR RULE (INCLUDING, WITHOUT LIMITATION,
      11 U.S.C. SECTION 105) SHALL STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT
      IN
      ANY WAY THE ABILITY OF THE HOLDER TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES
      UNDER THE LOAN DOCUMENTS AND/OR APPLICABLE LAW. The Borrower hereby consents
      to
      any motion for relief from stay that may be filed by the Holder in any
      bankruptcy or insolvency proceeding initiated by or against the Borrower and,
      further, agrees not to file any opposition to any motion for relief from stay
      filed by the Holder. The Borrower represents, acknowledges and agrees that
      this
      provision is a specific and material aspect of the Loan Documents, and that
      the
      Holder would not agree to the terms of the Loan Documents if this waiver were
      not a part of this Note. The Borrower further represents, acknowledges and
      agrees that this waiver is knowingly, intelligently and voluntarily made, that
      neither the Holder nor any person acting on behalf of the Holder has made any
      representations to induce this waiver, that the Borrower has been represented
      (or has had the opportunity to he represented) in the signing of this Note
      and
      the Loan Documents and in the making of this waiver by independent legal counsel
      selected by the Borrower and that the Borrower has discussed this waiver with
      counsel.

    


    ARTICLE
      VI

    


    MISCELLANEOUS

    


    6.1 Failure
      or Indulgence Not Waiver.
      No failure or delay on the part of Holder hereof in the exercise of any power,
      right or privilege hereunder shall operate as a waiver thereof, nor shall any
      single or partial exercise of any such power, right or privilege preclude other
      or further exercise thereof or of any other right, power or privilege. All
      rights and remedies existing hereunder are cumulative to, and not exclusive
      of,
      any rights or remedies otherwise available.

    


    6.2 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 Borrower 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 Holder, to the
      name,
      address and telecopy number set forth on the front page of this Note, with
      a
      copy by telecopier
      only to Grushko & Mittman, P.C., 551 Fifth Avenue, Suite 1601, New York, New
      York 10176, telecopier number: (212) 697-3575.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    6.3 Amendment
      Provision.
      The term “Note” and all reference thereto, as used throughout this instrument,
      shall mean this instrument as originally executed, or if later amended or
      supplemented, then as so amended or supplemented.

    


    6.4 Assignability.
      This Note shall be binding upon the Borrower and its successors and assigns,
      and
      shall inure to the benefit of the Holder and its successors and
      assigns.

    


    6.5 Cost
      of Collection.
      If default is made in the payment of this Note, Borrower shall pay the Holder
      hereof reasonable costs of collection, including reasonable attorneys’
fees.

    


    6.6 Governing
      Law.
      This Note shall
      be governed by and construed in accordance with the laws of the State of New
      York, including,
      but not limited to, New York statutes of limitations.
      Any action
      brought by either party against the other concerning the transactions
      contemplated by this Agreement shall be brought only in the civil or state
      courts of New York or in the federal courts located in the State and county
      of
      New York. Both parties and the individual signing this Agreement on behalf
      of
      the Borrower agree to submit to the jurisdiction of such courts. 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 Note 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 unenforceability of any other provision of this Note. Nothing contained
      herein shall be deemed or operate to preclude the Holder from bringing suit
      or
      taking other legal action against the Borrower in any other jurisdiction to
      collect on the Borrower's obligations to Holder, to realize on any collateral
      or
      any other security for such obligations, or to enforce a judgment or other
      decision in favor of the Holder. This
      Note
      shall be deemed an unconditional obligation of Borrower for the payment of
      money
      and, without limitation to any other remedies of Holder, may be enforced against
      Borrower by summary proceeding pursuant to New York Civil Procedure Law and
      Rules Section 3213 or any similar rule or statute in the jurisdiction where
      enforcement is sought. For purposes of such rule or statute, any other document
      or agreement to which Holder and Borrower are parties or which Borrower
      delivered to Holder, which may be convenient or necessary to determine Holder’s
      rights hereunder or Borrower’s obligations to Holder are deemed a part of this
      Note, whether or not such other document or agreement was delivered together
      herewith or was executed apart from this Note.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    6.7 Maximum
      Payments.
      Nothing contained herein 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 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 Borrower
      to the Holder and thus refunded to the Borrower.

    


    6.8. Construction.
      Each party acknowledges that its legal counsel participated in the preparation
      of this Note and, therefore, stipulates that the rule of construction that
      ambiguities are to be resolved against the drafting party shall not be applied
      in the interpretation of this Note to favor any party

    against
      the other.

    


    6.9 Redemption.
      This Note may not be redeemed or called without the consent of the Holder except
      as described in this Note or the Subscription Agreement.

    


    6.10 Shareholder
      Status.
      The Holder shall not have rights as a shareholder of the Borrower with respect
      to unconverted portions of this Note. However, the Holder will have the rights
      of a shareholder of the Borrower with respect to the Shares of Common Stock
      to
      be received after delivery by the Holder of a Conversion Notice to the
      Borrower.

    


    6.11 Non-Business
      Days.
      Whenever any payment or any action to be made shall be due on a Saturday, Sunday
      or a public holiday under the laws of the State of New York, such payment may
      be
      due or action shall be required on the next succeeding business day and, for
      such payment, such next succeeding day shall be included in the calculation
      of
      the amount of accrued interest payable on such date.

    


    IN
      WITNESS WHEREOF,
      Borrower has caused this Note to be signed in its name by an authorized officer
      as of the ____ day of October, 2007.

     

    
      	 	 	 
	 	ATTITUDE
              DRINKS INC.
	 
 	 
 	 
 
	
            	By:  	/s/ 
	 	
              
Name:

	 	Title:
              

WITNESS:

    


    


    


    ______________________________________


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    NOTICE
      OF CONVERSION

    


    (To
      be executed by the Registered Holder in order to convert the Note)

     

    The
      undersigned hereby elects to convert $_________ of the principal and $_________
      of the interest due on the Note issued by Attitude Drinks Inc. on October ___,
      2007 into Shares of Common Stock of Attitude Drinks Inc. (the “Borrower”)
      according to the conditions set forth in such Note, as of the date written
      below.

     

    


    Date
      of
      Conversion:____________________________________________________________________

    


    


    Conversion
      Price:______________________________________________________________________

    


    


    Number
      of Shares of
      Common Stock Beneficially Owned on the Conversion Date:
      Less than 5% of
      the outstanding Common Stock of Attitude Drinks Inc.

    


    


    Shares
      To Be
      Delivered:_________________________________________________________________

    


    


    Signature:____________________________________________________________________________

    


    


    Print
      Name:__________________________________________________________________________

    


    


    Address:_____________________________________________________________________________

    


    ____________________________________________________________________________

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

      
        Schedule
          of other documents omitted

        [(4)(4)
           Form
          of
          Convertible Note]

        


        $50,000
          Convertible Note dated October 23, 2007 issued to Roy G. Warren

        


        $300,000
          Convertible Note dated October 23, 2007 issued to Alpha Capital
          Anstalt

        


        $150,000
          Convertible Note dated October 23, 2007 issued to Whalehaven Capital Fund
          Limited

        


        $100,000
          Convertible Note dated October 23, 2007 issued to Monarch Capital Fund
          Ltd.

        


        $50,000
          Convertible Note dated February 15, 2008 issued to Roy G. Warren

        


        $300,000
          Convertible Note dated February 15, 2008 issued to Alpha Capital
          Anstalt

        


        $150,000
          Convertible Note dated February 15, 2008 issued to Whalehaven Capital Fund
          Limited