Unassociated Document


    (4)(3)
      Form of Class A and B Common Stock Purchase Warrant

    


    NEITHER
      THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
      THE
      SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE 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.

    


    
      	
               

            	
              Right
                to Purchase ____________ shares of Common Stock of Attitude Drinks
                Inc.
                (subject to adjustment as provided
                herein)

            


    

    


    FORM
      OF CLASS A AND CLASS B COMMON STOCK PURCHASE WARRANT

     

    
      	
              No. 2007-A/B-001

            	
              Issue
                Date: October ___, 2007

            


    

    


    ATTITUDE
      DRINKS INC., a corporation organized under the laws of the State of Delaware
      (the “Company”), hereby certifies that, for value received,
      __________________________,
      _____________________________________________________________, or its assigns
      (the “Holder”), is entitled, subject to the terms set forth below, to purchase
      from the Company at any time after the Issue Date until 5:00 p.m., E.S.T on
      the
      fifth anniversary of the Issue Date (the “Expiration Date”), up to ____________
      fully paid and nonassessable shares of Common Stock at a per share purchase
      price of $_____ [$.50
      for
      the Class A Warrants, and 150% of the exercise price of the Class A Warrant
      in
      effect at the time of such exercise for the Class B Warrants, subject to
      adjustment on the Second Closing Date].
      The
      aforedescribed purchase price per share, as adjusted from time to time as herein
      provided, is referred to herein as the "Purchase Price." The number and
      character of such shares of Common Stock and the Purchase Price are subject
      to
      adjustment as provided herein. The Company may reduce the Purchase Price for
      some or all of the Warrants, temporarily or permanently. Capitalized terms
      used
      and not otherwise defined herein shall have the meanings set forth in that
      certain Subscription Agreement (the “Subscription
      Agreement”),
      dated
      as of October ___, 2007, entered into by the Company and the
      Holder.

    


    As
      used
      herein the following terms, unless the context otherwise requires, have the
      following respective meanings: 

     

    (a) The
      term
“Company” shall include Attitude Drinks Inc. and any corporation which shall
      succeed or assume the obligations of Attitude Drinks Inc. hereunder.


     

    (b) The
      term
“Common Stock” includes (a) the Company's Common Stock, $0.001 par value
      per share, as authorized on the date of the Subscription Agreement, and (b)
      any
      other securities into which or for which any of the securities described in
      (a) may be converted or exchanged pursuant to a plan of recapitalization,
      reorganization, merger, sale of assets or otherwise.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c) The
      term
“Other Securities” refers to any stock (other than Common Stock) and other
      securities of the Company or any other person (corporate or otherwise) which
      the
      holder of the Warrant at any time shall be entitled to receive, or shall have
      received, on the exercise of the Warrant, in lieu of or in addition to Common
      Stock, or which at any time shall be issuable or shall have been issued in
      exchange for or in replacement of Common Stock or Other Securities pursuant
      to
      Section 4 or otherwise. 

     

    (d) The
      term
“Warrant Shares” shall mean the Common Stock issuable upon exercise of this
      Warrant.

     

    1. Exercise
      of Warrant.

     

    1.1. Number
      of Shares Issuable upon Exercise.
      From
      and after the Issue Date through and including the Expiration Date, the Holder
      hereof shall be entitled to receive, upon exercise of this Warrant in whole
      in
      accordance with the terms of subsection 1.2 or upon exercise of this
      Warrant in part in accordance with subsection 1.3, shares of Common Stock
      of the Company, subject to adjustment pursuant to Section 4.

     

    1.2. Full
      Exercise.
      This
      Warrant may be exercised in full by the Holder hereof by delivery of an original
      or facsimile copy of the form of subscription attached as Exhibit A hereto
      (the “Subscription Form”) duly executed by such Holder and delivery within two
      days thereafter of payment, in cash, wire transfer or by certified or official
      bank check payable to the order of the Company, in the amount obtained by
      multiplying the number of shares of Common Stock for which this Warrant is
      then
      exercisable by the Purchase Price then in effect. The original Warrant is not
      required to be surrendered to the Company until it has been fully exercised.
      

     

    1.3. Partial
      Exercise.
      This
      Warrant may be exercised in part (but not for a fractional share) by delivery
      of
      a Subscription Form in the manner and at the place provided in
      subsection 1.2 except that the amount payable by the Holder on such partial
      exercise shall be the amount obtained by multiplying (a) the number of
      whole shares of Common Stock designated by the Holder in the Subscription Form
      by (b) the Purchase Price then in effect. On any such partial exercise
      provided the Holder has surrendered the original Warrant, the Company, at its
      expense, will forthwith issue and deliver to or upon the order of the Holder
      hereof a new Warrant of like tenor, in the name of the Holder hereof or as
      such
      Holder (upon payment by such Holder of any applicable transfer taxes) may
      request, the whole number of shares of Common Stock for which such Warrant
      may
      still be exercised for the balance of.

     

    1.4. Fair
      Market Value.
      Fair
      Market Value of a share of Common Stock as of a particular date (the
      "Determination Date") shall mean: 

     

    (a) If
      the
      Company's Common Stock is traded on an exchange or is quoted on the NASDAQ
      Global Market, Nasdaq Global Select Market, the NASDAQ Capital Market, the
      New
      York Stock Exchange or the American Stock Exchange, LLC, then the average of
      the
      closing or last sale prices, respectively, reported for the ten trading days
      immediately preceding the Determination Date;

     

    (b) If
      the
      Company's Common Stock is not traded on an exchange or on the NASDAQ Global
      Market, Nasdaq Global Select Market, the NASDAQ Capital Market, the New York
      Stock Exchange or the American Stock Exchange, LLC, but is traded in the
      over-the-counter market, then the average of the closing bid and ask prices
      reported for the ten trading days immediately preceding the Determination
      Date;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c) Except
      as
      provided in clause (d) below and Section 3.1, if the Company's Common Stock
      is not publicly traded, then as the Holder and the Company agree, or in the
      absence of such an agreement, by arbitration in accordance with the rules then
      standing of the American Arbitration Association, before a single arbitrator
      to
      be chosen from a panel of persons qualified by education and training to pass
      on
      the matter to be decided; or

     

    (d) If
      the
      Determination Date is the date of a liquidation, dissolution or winding up,
      or
      any event deemed to be a liquidation, dissolution or winding up pursuant to
      the
      Company's charter, then all amounts to be payable per share to holders of the
      Common Stock pursuant to the charter in the event of such liquidation,
      dissolution or winding up, plus all other amounts to be payable per share in
      respect of the Common Stock in liquidation under the charter, assuming for
      the
      purposes of this clause (d) that all of the shares of Common Stock then
      issuable upon exercise of all of the Warrants are outstanding at the
      Determination Date.

     

    1.5. Company
      Acknowledgment.
      The
      Company will, at the time of the exercise of the Warrant, upon the request
      of
      the Holder hereof acknowledge in writing its continuing obligation to afford
      to
      such Holder any rights to which such Holder shall continue to be entitled after
      such exercise in accordance with the provisions of this Warrant. If the Holder
      shall fail to make any such request, such failure shall not affect the
      continuing obligation of the Company to afford to such Holder any such
      rights.

     

    1.6. Trustee
      for Warrant Holders.
      In the
      event that a bank or trust company shall have been appointed as trustee for
      the
      Holder of the Warrants pursuant to Subsection 3.2, such bank or trust
      company shall have all the powers and duties of a warrant agent (as hereinafter
      described) and shall accept, in its own name for the account of the Company
      or
      such successor person as may be entitled thereto, all amounts otherwise payable
      to the Company or such successor, as the case may be, on exercise of this
      Warrant pursuant to this Section 1. 

     

    1.7 Delivery
      of Stock Certificates, etc. on Exercise.
      The
      Company agrees that the shares of Common Stock purchased upon exercise of this
      Warrant shall be deemed to be issued to the Holder hereof as the record owner
      of
      such shares as of the close of business on the date on which delivery of a
      Subscription Form shall have occurred and payment made for such shares as
      aforesaid. As soon as practicable after the exercise of this Warrant in full
      or
      in part, and in any event within three (3) business days thereafter (“Warrant
      Share Delivery Date”), the Company at its expense (including the payment by it
      of any applicable issue taxes) will cause to be issued in the name of and
      delivered to the Holder hereof, or as such Holder (upon payment by such Holder
      of any applicable transfer taxes) may direct in compliance with applicable
      securities laws, a certificate or certificates for the number of duly and
      validly issued, fully paid and non-assessable shares of Common Stock (or Other
      Securities) to which such Holder shall be entitled on such exercise, plus,
      in
      lieu of any fractional share to which such Holder would otherwise be entitled,
      cash equal to such fraction multiplied by the then Fair Market Value of one
      full
      share of Common Stock, together with any other stock or other securities and
      property (including cash, where applicable) to which such Holder is entitled
      upon such exercise pursuant to Section 1 or otherwise. The Company
      understands that a delay in the delivery of the Warrant Shares after the Warrant
      Share Delivery Date could result in economic loss to the Holder. As compensation
      to the Holder for such loss, the Company agrees to pay (as liquidated damages
      and not as a penalty) to the Holder for late issuance of Warrant Shares upon
      exercise of this Warrant the proportionate amount of $100 per business day
      after
      the Warrant Share Delivery Date for each $10,000 of Purchase Price of Warrant
      Shares for which this Warrant is exercised which are not timely delivered.
      The
      Company shall pay any payments incurred under this Section in immediately
      available funds upon demand. Furthermore, in addition to any other remedies
      which may be available to the Holder, in the event that the Company fails for
      any reason to effect delivery of the Warrant Shares by the Warrant Share
      Delivery Date, the Holder may revoke all or part of the relevant Warrant
      exercise by delivery of a notice to such effect to the Company, whereupon the
      Company and the Holder shall each be restored to their respective positions
      immediately prior to the exercise of the relevant portion of this Warrant,
      except that the liquidated damages described above shall be payable through
      the
      date notice of revocation or rescission is given to the Company. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.8 Buy-In.
      In
      addition to any other rights available to the Holder, if the Company fails
      to
      deliver to a Holder the Warrant Shares as required pursuant to this Warrant,
      within seven (7) business days after the Warrant Share Delivery Date and the
      Holder or a broker on the Holder’s behalf, purchases (in an open market
      transaction or otherwise) shares of common stock to deliver in satisfaction
      of a
      sale by such Holder of the Warrant Shares which the Holder was entitled to
      receive from the Company (a "Buy-In"),
      then
      the Company shall pay in cash to the Holder (in addition to any remedies
      available to or elected by the Holder) the amount by which (A) the Holder'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
      Warrant Shares required to have been delivered 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 Holder 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
      Warrant Shares to have been received upon exercise of this Warrant, the Company
      shall be required to pay the Holder $1,000, plus interest. The Holder shall
      provide the Company written notice indicating the amounts payable to the Holder
      in respect of the Buy-In.

     

    [FOR
      CLASS A WARRANTS ONLY]

     

    1.9 Additional
      Warrant.
      In
      addition to Warrant Shares, upon exercise of this Warrant, the Company will
      deliver to the Holder, one Class B Warrant for each Warrant Share that would
      be
      delivered upon exercise of this Warrant. The terms of the Class B Warrant are
      described in the Subscription Agreement and form of Class B Warrant annexed
      thereto. The delivery date of such Class B Warrants shall be deemed the “Issue
      Date” of such Class B Warrants. In the event of a cashless exercise pursuant to
      Section 2 below, the number of Class B Warrants to be delivered upon exercise
      shall be determined based upon the number of Warrant Shares which would be
      deliverable had such exercise been on a “cashless” basis. The Class B Warrants
      must be delivered not later than five business days after the exercise date
      of
      this Class A Warrant. Failure to timely deliver the Class B Warrants is a
      material default of the Company’s obligations.

     

    2. Cashless
      Exercise.

     

    (a) Except
      as
      described below, if a registration statement (as described in the Subscription
      Agreement) (“Registration Statement”) is effective and the Holder may sell its
      shares of Common Stock upon exercise hereof pursuant to the Registration
      Statement, this Warrant may be exercisable in whole or in part for cash only
      as
      set forth in Section 1 above. If no such registration statement is available
      during the time that such Registration Statement is required to be effective
      pursuant to the terms of the Subscription Agreement, then commencing one year
      after the Initial Closing Date, payment upon exercise may be made at the option
      of the Holder either in (i) cash, wire transfer or by certified or official
      bank check payable to the order of the Company equal to the applicable aggregate
      Purchase Price, (ii) by delivery of Common Stock issuable upon exercise of
      the
      Warrants in accordance with Section (b) below or (iii) by a
      combination of any of the foregoing methods, for the number of Common Stock
      specified in such form (as such exercise number shall be adjusted to reflect
      any
      adjustment in the total number of shares of Common Stock issuable to the holder
      per the terms of this Warrant) and the holder shall thereupon be entitled to
      receive the number of duly authorized, validly issued, fully-paid and
      non-assessable shares of Common Stock (or Other Securities) determined as
      provided herein.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) Subject
      to the provisions herein to the contrary, if the Fair Market Value of one share
      of Common Stock is greater than the Purchase Price (at the date of calculation
      as set forth below), in lieu of exercising this Warrant for cash, the holder
      may
      elect to receive shares equal to the value (as determined below) of this Warrant
      (or the portion thereof being cancelled) by surrender of this Warrant at the
      principal office of the Company together with the properly endorsed Subscription
      Form in which event the Company shall issue to the holder a number of shares
      of
      Common Stock computed using the following formula:

     

    X=Y
      (A-B)

             
      A

     

    
      	    Where	
              X=

            	
              
                the
                  number of shares of Common Stock to be issued to the
                  holder

              

            


    

    


    
      	 	
              Y=

            	
              
                the
                  number of shares of Common Stock purchasable under the Warrant
                  or, if only
                  a portion of the Warrant is being exercised, the portion of the
                  Warrant
                  being exercised (at the date of such
                  calculation)

              

            


    

     

    
      	 	
              A=

            	
              the
                average of the closing sale prices of the Common Stock for the five
                (5)
                Trading Days immediately prior to (but not including) the Exercise
                Date,
                or Fair Market Value, whichever is
                less

            


    

     

    
      	 	
              B=

            	
              Purchase
                Price (as adjusted to the date of such
                calculation)

            


    

     

    (c) The
      Holder may employ the cashless exercise feature described in Section (b) above
      only during the pendency of a Non-Registration Event as described in Section
      11
      of the Subscription Agreement.

     

    For
      purposes of Rule 144 promulgated under the 1933 Act, it is intended, understood
      and acknowledged that the Warrant Shares issued in a cashless exercise
      transaction shall be deemed to have been acquired by the Holder, and the holding
      period for the Warrant Shares shall be deemed to have commenced, on the date
      this Warrant was originally issued pursuant to the Subscription
      Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3. Adjustment
      for Reorganization, Consolidation, Merger, etc.

     

    3.1. Fundamental Transaction. 
      If, at any time while this Warrant is outstanding, (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"), then, upon
      any subsequent exercise of this Warrant, the Holder shall have the
      right to receive, for each Warrant Share that would have been issuable upon
      such
      exercise immediately prior to the occurrence of such
      Fundamental Transaction, at the option of the Holder, (a) upon
      exercise of this Warrant, the number of shares of Common Stock of
      the successor or acquiring corporation or of the
      Company, if it is the surviving corporation, and any additional
      consideration (the "Alternate Consideration") receivable upon or as
      a result of such reorganization,
      reclassification, merger, consolidation or disposition of assets
      by a Holder of the number of shares of Common Stock for
      which this Warrant is exercisable immediately prior to such
      event or (b) if the Company is acquired in (1) a transaction
      where the consideration paid to the holders of the Common Stock consists solely
      of cash, (2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the 1934
      Act, or (3) a transaction involving a person or entity not traded on a national
      securities exchange, the Nasdaq Global Select Market, the Nasdaq Global Market
      or the Nasdaq Capital Market, cash equal to the Black-Scholes
      Value.  For purposes of any such exercise, the
      determination of the Purchase Price shall
      be appropriately adjusted to apply to such Alternate
      Consideration based on the amount of
      Alternate Consideration issuable in respect of one share of Common
      Stock in such Fundamental Transaction, and
      the Company shall apportion the Purchase Price
      among the Alternate Consideration in a
      reasonable manner reflecting the relative value of any different
      components of the Alternate Consideration.  If holders of Common Stock
      are given any choice as to the securities, cash or property to be
      received in a Fundamental Transaction, then the Holder shall be given
      the same choice as to the Alternate Consideration it receives upon any exercise
      of this Warrant following such Fundamental Transaction.  To the extent
      necessary to effectuate the foregoing provisions, any
      successor to the Company or surviving entity in such
      Fundamental Transaction shall issue to the Holder a
      new warrant consistent with
      the foregoing provisions and evidencing the
      Holder's right to exercise such warrant into Alternate
      Consideration.  The terms of any agreement pursuant to which a
      Fundamental Transaction is effected shall include terms requiring any such
      successor or surviving entity to comply with the provisions of
      this Section 3.1 and insuring that this Warrant (or any such
      replacement security) will be
      similarly adjusted upon any subsequent transaction analogous to a
      Fundamental Transaction. “Black-Scholes Value” shall be determined in accordance
      with the Black-Scholes Option Pricing Model obtained from the “OV” function on
      Bloomberg L.P. using (i) a price per share of Common Stock equal to the VWAP
      of
      the Common Stock for the Trading Day immediately preceding the date of
      consummation of the applicable Fundamental Transaction, (ii) a risk-free
      interest rate corresponding to the U.S. Treasury rate for a period equal to
      the
      remaining term of this Warrant as of the date of such request and (iii) an
      expected volatility equal to the 100 day volatility obtained from the HVT
      function on Bloomberg L.P. determined as of the Trading Day immediately
      following the public announcement of the applicable Fundamental
      Transaction.

     

    3.2. Dissolution.
      In the
      event of any dissolution of the Company following the transfer of all or
      substantially all of its properties or assets, the Company, prior to such
      dissolution, shall at its expense deliver or cause to be delivered the stock
      and
      other securities and property (including cash, where applicable) receivable
      by
      the Holder of the Warrants after the effective date of such dissolution pursuant
      to this Section 3 to a bank or trust company (a "Trustee") having its
      principal office in New York, NY, as trustee for the Holder of the
      Warrants. Such property shall be delivered only upon payment of the Warrant
      exercise price. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.3. Continuation
      of Terms.
      Upon
      any reorganization, consolidation, merger or transfer (and any dissolution
      following any transfer) referred to in this Section 3, this Warrant shall
      continue in full force and effect and the terms hereof shall be applicable
      to
      the Other Securities and property receivable on the exercise of this Warrant
      after the consummation of such reorganization, consolidation or merger or the
      effective date of dissolution following any such transfer, as the case may
      be,
      and shall be binding upon the issuer of any Other Securities, including, in
      the
      case of any such transfer, the person acquiring all or substantially all of
      the
      properties or assets of the Company, whether or not such person shall have
      expressly assumed the terms of this Warrant as provided in Section 4. In
      the event this Warrant does not continue in full force and effect after the
      consummation of the transaction described in this Section 3, then only in
      such event will the Company's securities and property (including cash, where
      applicable) receivable by the Holder of the Warrants be delivered to the Trustee
      as contemplated by Section 3.2.

     

    3.4 Share
      Issuance.
      Until
      the Expiration Date, if the Company shall issue any Common Stock except for
      the
      Excepted Issuances (as defined in the Subscription Agreement), prior to the
      complete exercise of this Warrant for a consideration less than the Purchase
      Price that would be in effect at the time of such issue, then, and thereafter
      successively upon each such issue, the Purchase Price shall be reduced to such
      other lower price for then outstanding Warrants. For purposes of this
      adjustment, the issuance of any security or debt instrument of the Company
      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 Purchase Price upon the issuance of the above-described
      security, debt instrument, warrant, right, or option if such issuance is at
      a
      price lower than the Purchase Price in effect upon such issuance and again
      at
      any time upon any subsequent issuances of shares of Common Stock upon exercise
      of such conversion or purchase rights if such issuance is at a price lower
      than
      the Purchase Price in effect upon such issuance. The reduction of the Purchase
      Price described in this Section 3.4 is subject to the provisions of, and in
      addition to the other rights of the Holder described in, the Subscription
      Agreement. The
      number of shares of Common Stock that the Holder of this Warrant shall
      thereafter, on the exercise hereof, be entitled to receive shall be adjusted
      to
      a number determined by multiplying the number of shares of Common Stock that
      would otherwise (but for the provisions of this Section 3.4 be issuable on
      such
      exercise by a fraction of which (a) the numerator is the Purchase Price that
      would otherwise (but for the provisions of this Section 3.4 be in effect, and
      (b) the denominator is the Purchase Price in effect on the date of such
      exercise.

     

    4. Extraordinary
      Events Regarding Common Stock.
      In the
      event that the Company shall (a) issue additional shares of the Common
      Stock as a dividend or other distribution on outstanding Common Stock,
      (b) subdivide its outstanding shares of Common Stock, or (c) combine
      its outstanding shares of the Common Stock into a smaller number of shares
      of
      the Common Stock, then, in each such event, the Purchase Price shall,
      simultaneously with the happening of such event, be adjusted by multiplying
      the
      then Purchase Price by a fraction, the numerator of which shall be the number
      of
      shares of Common Stock outstanding immediately prior to such event and the
      denominator of which shall be the number of shares of Common Stock outstanding
      immediately after such event, and the product so obtained shall thereafter
      be
      the Purchase Price then in effect. The Purchase Price, as so adjusted, shall
      be
      readjusted in the same manner upon the happening of any successive event or
      events described herein in this Section 4. The number of shares of Common
      Stock that the Holder of this Warrant shall thereafter, on the exercise hereof,
      be entitled to receive shall be adjusted to a number determined by multiplying
      the number of shares of Common Stock that would otherwise (but for the
      provisions of this Section 4 be issuable on such exercise by a fraction of
      which
      (a) the numerator is the Purchase Price that would otherwise (but for the
      provisions of this Section 4 be in effect, and (b) the denominator is the
      Purchase Price in effect on the date of such exercise.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5. Certificate
      as to Adjustments.
      In each
      case of any adjustment or readjustment in the shares of Common Stock (or Other
      Securities) issuable on the exercise of the Warrants, the Company at its expense
      will promptly cause its Chief Financial Officer or other appropriate designee
      to
      compute such adjustment or readjustment in accordance with the terms of the
      Warrant and prepare a certificate setting forth such adjustment or readjustment
      and showing in detail the facts upon which such adjustment or readjustment
      is
      based, including a statement of (a) the consideration received or
      receivable by the Company for any additional shares of Common Stock (or Other
      Securities) issued or sold or deemed to have been issued or sold, (b) the
      number of shares of Common Stock (or Other Securities) outstanding or deemed
      to
      be outstanding, and (c) the Purchase Price and the number of shares of
      Common Stock to be received upon exercise of this Warrant, in effect immediately
      prior to such adjustment or readjustment and as adjusted or readjusted as
      provided in this Warrant. The Company will forthwith mail a copy of each such
      certificate to the Holder of the Warrant and any Warrant Agent of the Company
      (appointed pursuant to Section 11 hereof).

     

    6. Reservation
      of Stock, etc. Issuable on Exercise of Warrant; Financial
      Statements.
      The
      Company will at all times reserve and keep available, solely for issuance and
      delivery on the exercise of the Warrants, all shares of Common Stock (or Other
      Securities) from time to time issuable on the exercise of the Warrant. This
      Warrant entitles the Holder hereof to receive copies of all financial and other
      information distributed or required to be distributed to the holders of the
      Company's Common Stock. 

     

    7. Assignment;
      Exchange of Warrant.
      Subject
      to compliance with applicable securities laws, this Warrant, and the rights
      evidenced hereby, may be transferred by any registered holder hereof (a
      "Transferor"). On the surrender for exchange of this Warrant, with the
      Transferor's endorsement in the form of Exhibit B attached hereto (the
“Transferor Endorsement Form") and together with an opinion of counsel
      reasonably satisfactory to the Company that the transfer of this Warrant will
      be
      in compliance with applicable securities laws, the Company will issue and
      deliver to or on the order of the Transferor thereof a new Warrant or Warrants
      of like tenor, in the name of the Transferor and/or the transferee(s) specified
      in such Transferor Endorsement Form (each a "Transferee"), calling in the
      aggregate on the face or faces thereof for the number of shares of Common Stock
      called for on the face or faces of the Warrant so surrendered by the
      Transferor.

     

    8. Replacement
      of Warrant.
      On
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction or mutilation of this Warrant and, in the case of any such loss,
      theft or destruction of this Warrant, on delivery of an indemnity agreement
      or
      security reasonably satisfactory in form and amount to the Company or, in the
      case of any such mutilation, on surrender and cancellation of this Warrant,
      the
      Company at its expense, twice only, will execute and deliver, in lieu thereof,
      a
      new Warrant of like tenor.

     

    9. Registration
      Rights.
      The
      Holder of this Warrant has been granted certain registration rights by the
      Company. These registration rights are set forth in the Subscription Agreement.
      The terms of the Subscription Agreement are incorporated herein by this
      reference.

     

    10. Maximum
      Exercise.
      The
      Holder shall not be entitled to exercise this Warrant on an exercise date nor
      may the Company exercise its right to give a Call Notice (as defined in Section
      11) in connection with that number 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 an exercise date or Call Date, and
      (ii) the number of Common Stock issuable upon the exercise of this Warrant
      with respect to which the determination of this limitation is being made on
      an
      exercise date or Call Date, which would result in beneficial ownership by the
      Holder and its affiliates of more than 4.99% of the outstanding Common Stock
      on
      such date. For the purposes of 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 exercises which
      would result in the issuance of more than 4.99%. The
      restriction described in this paragraph may be waived, in whole or in part,
      upon sixty-one (61) days prior notice from the Holder to the Company to increase
      such percentage to up to 9.99%, but not in excess of 9.99%. The Holder may
      decide whether to convert a Convertible Note or exercise this Warrant to achieve
      an actual 4.99% or up to 9.99% ownership position as described above, but not
      in
      excess of 9.99%.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    11. Call.
      The
      Company shall have the option to "call" the exercise of up to 50% of the shares
      issuable upon exercise of this Warrant (the "Warrant Call") in accordance with
      and governed by the following:

     

    (a) The
      Company shall exercise the Warrant Call by giving to the Warrant Holder a
      written notice of call (the "Call Notice") during the period in which the
      Warrant Call may be exercised. The effective date of each Call Notice (the
“Call
      Date”) is the date on which notice is effective under the notice provision of
      Section 14 of this Warrant.

     

    (b) The
      Company's right to exercise the Warrant Call shall commence thirty trading
      days
      after the actual effective date of a Registration Statement described in Section
      11.1(iv) of the Subscription Agreement and end thirty trading days prior to
      the
      Expiration Date.

     

    (c) The
      number of shares of Common Stock to be issued upon exercise of the Warrant
      which
      are subject to a Call Notice must be registered in a Registration Statement
      effective from twenty (20) trading days prior to the Call Date and through
      the
      date such Common Stock is actually delivered to the Warrant Holder (“Delivery
      Date”).

    


    (d) A
      Call
      Notice may be given not sooner than fifteen trading days after the prior Call
      Date.

    


    (e) A
      Call
      Notice may be given by the Company in connection with shares of Common Stock
      issuable upon exercise of the Warrant only within ten days after the Common
      Stock has had a closing price as reported for the Principal Market (as defined
      in the Subscription Agreement) of two hundred percent (200%) of the Purchase
      Price for thirty (30) consecutive trading days (“Lookback Period”), and average
      daily trading volume during the Lookback Period of not less than 40,000 shares
      of Common Stock. 

    


    (f) The
      Common Stock must be listed on the Principal Market for the Lookback Period
      and
      through the Delivery Date.

     

    (g) The
      Company shall not have received a notice from the Principal Market during the
      ninety calendar days prior to the Call Date that the Company or its Common
      Stock
      does not meet the requirements for continued quotation, listing or trading
      on
      the Principal Market.

     

    (h) The
      Company and the Common Stock shall meet the requirements for continued
      quotation, listing or trading on the Principal Market for the Lookback Period
      and through the Delivery Date.

     

    (i) Unless
      otherwise agreed to by the Holder of this Warrant, a Call Notice must be given
      to all Warrant Holders who receive Warrants similar to this Warrant (in terms
      of
      exercise price and other principal terms) issued on or about the same Issue
      Date
      as this Warrant, in proportion to the amounts of Common Stock which may be
      purchased by the respective Warrant Holders in accordance with the respective
      Warrants held by each.

     

    (j) The
      Warrant Holder shall exercise his Warrant rights and purchase the Called Warrant
      Shares and pay for same within fourteen trading days after the Call Date. If
      the
      Warrant Holder fails to timely pay the amount required by the Warrant Call,
      the
      Company’s sole remedy shall be to cancel a corresponding amount of this
      Warrant.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (k) The
      Company may not exercise the right to Call this Warrant after the occurrence
      of
      a default by the Company of a material term of this Warrant or the Subscription
      Agreement or the Notes referred to in the Subscription Agreement.

     

    12. Warrant
      Agent.
      The
      Company may, by written notice to the Holder of the Warrant, appoint an agent
      (a
“Warrant Agent”) for the purpose of issuing Common Stock (or Other Securities)
      on the exercise of this Warrant pursuant to Section 1, exchanging this
      Warrant pursuant to Section 7, and replacing this Warrant pursuant to
      Section 8, or any of the foregoing, and thereafter any such issuance,
      exchange or replacement, as the case may be, shall be made at such office by
      such Warrant Agent. 

     

    13. Transfer
      on the Company's Books.
      Until
      this Warrant is transferred on the books of the Company, the Company may treat
      the registered holder hereof as the absolute owner hereof for all purposes,
      notwithstanding any notice to the contrary. 

     

    14. 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: 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 Holder,
      to the address and telecopier number listed on the first paragraph of this
      Warrant, 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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    15. Law
      Governing This Warrant.
      This
      Warrant 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 Warrant 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 Warrant 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
      Company and Holder 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 Warrant 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.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the Company has executed this Warrant as of the date first
      written above. 

     

    
      	 	
              ATTITUDE
                DRINKS INC. 

               

               

               

              By:
                /s/ Roy Warren 

              Name:
                Roy Warren

              Title:
                President

               

            
	 	 	 


    

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Exhibit A

    


    FORM
      OF
      SUBSCRIPTION

    (to
      be
      signed only on exercise of Warrant)

     

    TO:
      ATTITUDE DRINKS INC. 

    The
      undersigned, pursuant to the provisions set forth in the attached Warrant
      (No.____), hereby irrevocably elects to purchase (check applicable
      box):

    


    ___ ________
      shares of the Common Stock covered by such Warrant; or

    ___ the
      maximum number of shares of Common Stock covered by such Warrant pursuant to
      the
      cashless exercise procedure set forth in Section 2.

    


    The
      undersigned herewith makes payment of the full purchase price for such shares
      at
      the price per share provided for in such Warrant, which is $___________. Such
      payment takes the form of (check applicable box or boxes):

    


    ___ $__________
      in lawful money of the United States; and/or

    ___ the
      cancellation of such portion of the attached Warrant as is exercisable for
      a
      total of _______ shares of Common Stock (using a Fair Market Value of $_______
      per share for purposes of this calculation); and/or

    


    ___ the
      cancellation of such number of shares of Common Stock as is necessary, in
      accordance with the formula set forth in Section 2, to exercise this
      Warrant with respect to the maximum number of shares of Common Stock purchasable
      pursuant to the cashless exercise procedure set forth in
      Section 2.

    


    The
      undersigned requests that the certificates for such shares be issued in the
      name
      of, and delivered to _____________________________________________________
      whose
      address is _____________________________

     

      
        

      

    

     

      
        

      

    

    


    The
      undersigned represents and warrants that all offers and sales by the undersigned
      of the securities issuable upon exercise of the within Warrant shall be made
      pursuant to registration of the Common Stock under the Securities Act of 1933,
      as amended (the "Securities Act"), or pursuant to an exemption from registration
      under the Securities Act.

    


    
      	
              Dated:___________________

            	
               

                

              

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

               

               

              
                
 

                

              

              (Address)

            


    

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    Exhibit B

    


    


    FORM
      OF
      TRANSFEROR ENDORSEMENT

    (To
      be
      signed only on transfer of Warrant)

    For
      value
      received, the undersigned hereby sells, assigns, and transfers unto the
      person(s) named below under the heading "Transferees" the right represented
      by
      the within Warrant to purchase the percentage and number of shares of Common
      Stock of ATTITUDE DRINKS INC. to which the within Warrant relates specified
      under the headings "Percentage Transferred" and "Number Transferred,"
      respectively, opposite the name(s) of such person(s) and appoints each such
      person Attorney to transfer its respective right on the books of ATTITUDE DRINKS
      INC. with full power of substitution in the premises.

     

    


    
      	
              Transferees

            	
              Percentage
                Transferred

            	
              Number
                Transferred

            
	 	 	 
	 	 	 
	 	 	 


    

    


    


    
      	
              Dated:
                ______________, ___________

               

               

               

              Signed
                in the presence of:

               

              
                

              

              (Name)

               

               

              ACCEPTED
                AND AGREED:

              [TRANSFEREE]

               

               

              
                

              

              (Name)

            	
              
                
(Signature
                must conform to name of holder as specified on the face of the
                warrant)

               

               

               

               

              
                
     (address)

               

               

              
                
 

                

              

              (address)

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    


    Schedule
      of other documents omitted

    [(4)(3)
       Form
      of
      Class A and B Common Stock Purchase Warrant]

    


    Class
      A
      Common Stock Purchase Warrant 

    


    No.
      2007-A-001 - Issue Date: October 23, 2007 - Right to Purchase 151,515 shares
      of
      Common Stock to Roy G. Warren

    


    No.
      2007-A-002 - Issue Date: October 23, 2007 - Right to Purchase 909,091 shares
      of
      Common Stock to Alpha Capital Anstalt

    


    No.
      2007-A-003 - Issue Date: October 23, 2007 - Right to Purchase 454,545 shares
      of
      Common Stock to Whalehaven Capital Fund Limited

    


    No.
      2007-A-004 - Issue Date: October 23, 2007 - Right to Purchase 303,030 shares
      of
      Common Stock to Monarch Capital Fund Ltd.

    


    No.
      2007-A-005 - Issue Date: October 23, 2007 - Right to Purchase 1,000,000 shares
      of Common Stock to Alpha Capital Anstalt

    


    No.
      2008-A-001 - Issue Date: February 15, 2008 - Right to Purchase 151,515 shares
      of
      Common Stock to Roy G. Warren

    


    No.
      2008-A-002 - Issue Date: February 15, 2008 - Right to Purchase 909,091 shares
      of
      Common Stock to Alpha Capital Anstalt

    


    No.
      2008-A-003 - Issue Date: February 15, 2008 - Right to Purchase 454,545 shares
      of
      Common Stock to Whalehaven Capital Fund Limited