Document:

FUNDS
      ESCROW AGREEMENT

     

    This
      Agreement is dated as of the 23rd
      day of
      October, 2007 among Attitude Drinks Inc., a Delaware corporation (the
      "Company"), the parties identified on Schedule A hereto (each
      a
“Subscriber”, and collectively “Subscribers”), and
      Grushko & Mittman, P.C. (the "Escrow Agent"):

     

    W I T N E S S E T H:

     

    WHEREAS,
      the Company and Subscribers have entered into Subscription Agreements calling
      for the sale by the Company to the Subscribers of Notes, Warrants and Purchase
      Shares for an Aggregate Purchase Price of up to $1,200,000; and

     

    WHEREAS,
      the parties hereto require the Company to deliver the Purchase Shares, Notes
      and
      Warrants against payment therefor, with such Purchase Shares, Notes, Warrants
      and the Escrowed Funds to be delivered to the Escrow Agent to be held in escrow
      and released by the Escrow Agent in accordance with the terms and conditions
      of
      this Agreement; and

     

    WHEREAS,
      the Escrow Agent is willing to serve as escrow agent pursuant to the terms
      and
      conditions of this Agreement;

     

    NOW
      THEREFORE, the parties agree as follows:

     

    ARTICLE
      I

     

    INTERPRETATION

     

    1.1. Definitions.
      Capitalized terms used and not otherwise defined herein that are defined in
      the
      Subscription Agreement shall have the meanings given to such terms in the
      Subscription Agreement. Whenever used in this Agreement, the following terms
      shall have the following respective meanings:

     

    § "Agreement"
      means this Agreement and all amendments made hereto and thereto by written
      agreement between the parties;

     

    § “Collateral
      Agent Agreement” shall have the meaning set forth in Section 3 of the
      Subscription Agreement;

     

    § “Due
      Diligence Fee” shall have the meaning set forth in Section 8(b) and on Schedule
      8(b) of the Subscription Agreement;

     

    § “Due
      Diligence Warrants” shall have the meaning set forth in Section 8(b) and on
      Schedule 8(b) of the Subscription Agreement;

     

    § "Escrowed
      Payment" means an aggregate cash payment of up to $1,200,000 which is,
      collectively, the Initial Closing Purchase Price and Second Closing Purchase
      Price;

     

    § “Initial
      Closing Date” shall have the meaning set forth in Section 1(b) of the
      Subscription Agreement;

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    § “Initial
      Closing Legal Opinion” means the original signed legal opinion referred to in
      Section 6 of the Subscription Agreement;

     

    § “Initial
      Closing Notes” shall have the meaning set forth in Section 1(b) of the
      Subscription Agreement;

     

    § “Initial
      Closing Purchase Price” shall mean up to $600,000;

     

    § “Initial
      Closing Warrants” shall have the meaning set forth in Section 1(b) of the
      Subscription Agreement;

     

    § “Legal
      Fees” shall have the meaning set forth in Section 8(c) of the Subscription
      Agreement;

     

    § “Legal
      Fee Shares” shall have the meaning set forth in Section 8(c) of the Subscription
      Agreement;

     

    § “Lockup
      Agreements” shall have the meaning set forth in Section 9(u) of the Subscription
      Agreement;

     

    § “Purchase
      Shares” shall have the meaning set forth in the Subscription
      Agreement;

     

    § “Second
      Closing Certificate” shall have the meaning set forth in Section 1(e) of the
      Subscription Agreement;

     

    § “Second
      Closing Date” shall have the meaning set forth in Section 1(c) of the
      Subscription Agreement;

     

    § “Second
      Closing Legal Opinion” shall have the meaning set forth in Section 1(e) of the
      Subscription Agreement;

     

    § “Second
      Closing Notes” shall have the meaning set forth in Section 1(c) of the
      Subscription Agreement;

     

    § “Second
      Closing Purchase Price” shall mean up to $600,000;

     

    § “Security
      Agreement” shall have the meaning set forth in Section 3 of the Subscription
      Agreement and shall refer to the Security Agreements to be executed by the
      Company and include the certificates evidencing ownership of the Subsidiaries
      as
      described on Annex 1 to the Security Agreement;

     

    § “Subscription
      Agreement" means the Subscription Agreement (and the exhibits thereto) entered
      into or to be entered into by the parties in reference to the sale and purchase
      of the Purchase Shares, Initial Closing Notes, Second Closing Notes, and
      Warrants;

     

    § “Subsidiary
      Guaranty” shall have the meaning set forth in Section 3 of the Subscription
      Agreement;

     

    § “Warrants”
      ” shall have the meaning set forth in Section 2 of the Subscription
      Agreement;

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    § Collectively,
      the executed Subscription Agreement, Purchase Shares, Initial Closing Notes,
      Initial Closing Warrants, Initial Closing Legal Opinion, Second Closing Notes,
      Second Closing Legal Opinion, Second Closing Certificates, Security Agreement,
      Subsidiary Guaranty, Collateral Agent Agreement, Due Diligence Fee, Due
      Diligence Warrants, and Legal Fee Shares are referred to as "Company Documents";
      and

     

    § Collectively,
      the Escrowed Payment, executed Subscription Agreement, Security Agreement,
      Subsidiary Guaranty and Collateral Agent Agreement are referred to as
      "Subscriber Documents".

     

    1.2. Entire
      Agreement.
      This
      Agreement along with the Company Documents and the Subscriber Documents
      constitute the entire agreement between the parties hereto pertaining to the
      Company Documents and Subscriber Documents and supersede all prior agreements,
      understandings, negotiations and discussions, whether oral or written, of the
      parties. There are no warranties, representations and other agreements made
      by
      the parties in connection with the subject matter hereof except as specifically
      set forth in this Agreement, the Company Documents and the Subscriber
      Documents.

     

    1.3. Extended
      Meanings.
      In this
      Agreement words importing the singular number include the plural and vice versa;
      words importing the masculine gender include the feminine and neuter genders.
      The word "person" includes an individual, body corporate, partnership, trustee
      or trust or unincorporated association, executor, administrator or legal
      representative.

     

    1.4. Waivers
      and Amendments.
      This
      Agreement may be amended, modified, superseded, cancelled, renewed or extended,
      and the terms and conditions hereof may be waived, only by a written instrument
      signed by all parties, or, in the case of a waiver, by the party waiving
      compliance. Except as expressly stated herein, no delay on the part of any
      party
      in exercising any right, power or privilege hereunder shall operate as a waiver
      thereof, nor shall any waiver on the part of any party of any right, power
      or
      privilege hereunder preclude any other or future exercise of any other right,
      power or privilege hereunder.

     

    1.5. Headings.
      The
      division of this Agreement into articles, sections, subsections and paragraphs
      and the insertion of headings are for convenience of reference only and shall
      not affect the construction or interpretation of this Agreement.

     

    1.6. Law
      Governing this Agreement.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York without regard to principles of conflicts of laws. Any action
      brought by either party against the other concerning the transactions
      contemplated by this Agreement shall be brought only in the state courts of
      New
      York or in the federal courts located in the state of New York. Both parties
      and
      the individuals executing this Agreement and other agreements on behalf of
      the
      Company agree to submit to the jurisdiction of such courts and waive trial
      by
      jury. The prevailing party (which shall be the party which receives an award
      most closely resembling the remedy or action sought) shall be entitled to
      recover from the other party its reasonable attorney's fees and costs. In the
      event that any provision of this Agreement or any other agreement delivered
      in
      connection herewith is invalid or unenforceable under any applicable statute
      or
      rule of law, then such provision shall be deemed inoperative to the extent
      that
      it may conflict therewith and shall be deemed modified to conform with such
      statute or rule of law. Any such provision which may prove invalid or
      unenforceable under any law shall not affect the validity or enforceability
      of
      any other provision of any agreement.

     

    1.7. Specific
      Enforcement, Consent to Jurisdiction.
      The
      Company and Subscriber acknowledge and agree that irreparable damage would
      occur
      in the event that any of the provisions of this Agreement were not performed
      in
      accordance with their specific terms or were otherwise breached. It is
      accordingly agreed that the parties shall be entitled to an injuction or
      injunctions to prevent or cure breaches of the provisions of this Agreement
      and
      to enforce specifically the terms and provisions hereof or thereof, this being
      in addition to any other remedy to which any of them may be entitled by law
      or
      equity. Subject to Section 1.6 hereof, each of the Company and Subscriber hereby
      waives, and agrees not to assert in any such suit, action or proceeding, any
      claim that it is not personally subject to the jurisdiction of such court,
      that
      the suit, action or proceeding is brought in an inconvenient forum or that
      the
      venue of the suit, action or proceeding is improper. Nothing in this Section
      shall affect or limit any right to serve process in any other manner permitted
      by law.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      II

     

    DELIVERIES
      TO THE ESCROW AGENT

     

    2.1. Initial
      Closing Company Deliveries.
      On or
      about the date hereof, the Company shall deliver to the Escrow Agent the
      executed Subscription Agreement, the Purchase Shares, Legal Fee Shares, Initial
      Closing Notes, Initial Closing Warrants, Initial Closing Legal Opinion, Security
      Agreement, Subsidiary Guaranty, Collateral Agent Agreement, Due Diligence Fee
      and Due Diligence Warrants (collectively, the “Initial Closing Company
      Documents”).

     

    2.2. Second
      Closing Company Deliveries.
      On or
      prior to the Second Closing Date, the Company will deliver to the Escrow Agent
      the Second Closing Notes, Second Closing Warrants, Second Closing Certificate,
      Second Closing Legal Opinion, and Due Diligence Fee (collectively, the “Second
      Closing Company Documents”).

     

    2.3. Subscriber
      Deliveries.
      On or
      before the Initial Closing Date, each Subscriber shall deliver to the Escrow
      Agent such Subscriber’s portion of the Initial Closing Purchase Price and the
      executed Subscription Agreement and Security Agreement. On or before the Second
      Closing Date, each Subscriber will deliver such Subscriber’s portion of the
      Second Closing Purchase Price to the Escrow Agent. The Escrowed Payment will
      be
      delivered pursuant to the following wire transfer instructions:

     

    Citibank,
      N.A.

    1155
      6th
      Avenue

    New
      York,
      NY 10036, USA

    ABA
      Number: 0210-00089

    For
      Credit to: Grushko & Mittman, IOLA Trust Account

    Account
      Number: 45208884

     

    2.4. Intention
      to Create Escrow Over Company Documents and Subscriber Documents.
      The
      Subscriber and Company intend that the Company Documents and Subscriber
      Documents shall be held in escrow by the Escrow Agent pursuant to this Agreement
      for their benefit as set forth herein.

     

    2.5. Escrow
      Agent to Deliver Company Documents and Subscriber Documents.
      The
      Escrow Agent shall hold and release the Company Documents and Subscriber
      Documents only in accordance with the terms and conditions of this
      Agreement.

     

    ARTICLE
      III

     

    RELEASE
      OF COMPANY DOCUMENTS AND SUBSCRIBER DOCUMENTS

     

    3.1. Release
      of Escrow.
      Subject
      to the provisions of Section 4.2, the Escrow Agent shall release the Company
      Documents and Subscriber Documents as follows:

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (a) On
      the
      Initial Closing Date, the Escrow Agent will simultaneously release the Initial
      Closing Company Documents to the Subscriber and release the Subscription
      Agreement and the Initial Closing Purchase Price to the Company except that
      (i)
      the Due Diligence Fee and Due Diligence Warrants will be released to the
      recipient identified on Schedule 8(b) to the Subscription Agreement; (ii) the
      Legal Fees (less any amounts paid prior to the Initial Closing Date) and Legal
      Fee Shares in connection with the Initial Closing will be released to the
      Subscribers’ attorneys; and (iii) the original Security Agreement, Subsidiary
      Guaranty and Collateral Agent Agreement will be released to the Collateral
      Agent.

     

    (b) On
      the
      Second Closing Date, the Escrow Agent will simultaneously release the Second
      Closing Company Documents to the Subscriber and release the Second Closing
      Purchase Price to the Company.

     

    (c) All
      funds
      to be delivered to the Company shall be delivered pursuant to the wire
      instructions to be provided in writing by the Company to the Escrow Agent.
      

     

    (d) Notwithstanding
      the above, upon receipt by the Escrow Agent of joint written instructions
      ("Joint Instructions") signed by the Company and the Subscriber, it shall
      deliver the Company Documents and Subscriber Documents in accordance with the
      terms of the Joint Instructions.

     

    (e) Notwithstanding
      the above, upon receipt by the Escrow Agent of a final and non-appealable
      judgment, order, decree or award of a court of competent jurisdiction (a "Court
      Order"), the Escrow Agent shall deliver the Company Documents and Subscriber
      Documents in accordance with the Court Order. Any Court Order shall be
      accompanied by an opinion of counsel for the party presenting the Court Order
      to
      the Escrow Agent (which opinion shall be satisfactory to the Escrow Agent)
      to
      the effect that the court issuing the Court Order has competent jurisdiction
      and
      that the Court Order is final and non-appealable.

     

    3.2. Acknowledgement
      of Company and Subscriber; Disputes.
      The
      Company and the Subscriber acknowledge that the only terms and conditions upon
      which the Company Documents and Subscriber Documents are to be released are
      set
      forth in Sections 3 and 4 of this Agreement. The Company and the Subscriber
      reaffirm their agreement to abide by the terms and conditions of this Agreement
      with respect to the release of the Company Documents and Subscriber Documents.
      Any dispute with respect to the release of the Company Documents and Subscriber
      Documents shall be resolved pursuant to Section 4.2 or by agreement between
      the
      Company and Subscriber.

     

    ARTICLE
      IV

     

    CONCERNING
      THE ESCROW AGENT

     

    4.1. Duties
      and Responsibilities of the Escrow Agent.
      The
      Escrow Agent's duties and responsibilities shall be subject to the following
      terms and conditions:

     

    (a) The
      Subscriber and Company acknowledge and agree that the Escrow Agent (i) shall
      not
      be responsible for or bound by, and shall not be required to inquire into
      whether either the Subscriber or Company is entitled to receipt of the Company
      Documents and Subscriber Documents pursuant to, any other agreement or
      otherwise; (ii) shall be obligated only for the performance of such duties
      as
      are specifically assumed by the Escrow Agent pursuant to this Agreement; (iii)
      may rely on and shall be protected in acting or refraining from acting upon
      any
      written notice, instruction, instrument, statement, request or document
      furnished to it hereunder and believed by the Escrow Agent in good faith to
      be
      genuine and to have been signed or presented by the proper person or party,
      without being required to determine the authenticity or correctness of any
      fact
      stated therein or the propriety or validity or the service thereof; (iv) may
      assume that any person believed by the Escrow Agent in good faith to be
      authorized to give notice or make any statement or execute any document in
      connection with the provisions hereof is so authorized; (v) shall not be under
      any duty to give the property held by Escrow Agent hereunder any greater degree
      of care than Escrow Agent gives its own similar property; and (vi) may consult
      counsel satisfactory to Escrow Agent, the opinion of such counsel to be full
      and
      complete authorization and protection in respect of any action taken, suffered
      or omitted by Escrow Agent hereunder in good faith and in accordance with the
      opinion of such counsel.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    (b) The
      Subscriber and Company acknowledge that the Escrow Agent is acting solely as
      a
      stakeholder at their request and that the Escrow Agent shall not be liable
      for
      any action taken by Escrow Agent in good faith and believed by Escrow Agent
      to
      be authorized or within the rights or powers conferred upon Escrow Agent by
      this
      Agreement. The Subscriber and Company, jointly and severally, agree to indemnify
      and hold harmless the Escrow Agent and any of Escrow Agent's partners,
      employees, agents and representatives for any action taken or omitted to be
      taken by Escrow Agent or any of them hereunder, including the fees of outside
      counsel and other costs and expenses of defending itself against any claim
      or
      liability under this Agreement, except in the case of gross negligence or
      willful misconduct on Escrow Agent's part committed in its capacity as Escrow
      Agent under this Agreement. The Escrow Agent shall owe a duty only to the
      Subscriber and Company under this Agreement and to no other person.

     

    (c) The
      Subscriber and Company jointly and severally agree to reimburse the Escrow
      Agent
      for outside counsel fees, to the extent authorized hereunder and incurred in
      connection with the performance of its duties and responsibilities
      hereunder.  

     

    (d) The
      Escrow Agent may at any time resign as Escrow Agent hereunder by giving five
      (5)
      days prior written notice of resignation to the Subscriber and the Company.
      Prior to the effective date of the resignation as specified in such notice,
      the
      Subscriber and Company will issue to the Escrow Agent a Joint Instruction
      authorizing delivery of the Company Documents and Subscriber Documents to a
      substitute Escrow Agent selected by the Subscriber and Company. If no successor
      Escrow Agent is named by the Subscriber and Company, the Escrow Agent may apply
      to a court of competent jurisdiction in the State of New York for appointment
      of
      a successor Escrow Agent, and to deposit the Company Documents and Subscriber
      Documents with the clerk of any such court.

     

    (e) The
      Escrow Agent does not have and will not have any interest in the Company
      Documents and Subscriber Documents, but is serving only as escrow agent, having
      only possession thereof. The Escrow Agent shall not be liable for any loss
      resulting from the making or retention of any investment in accordance with
      this
      Escrow Agreement.

     

    (f) This
      Agreement sets forth exclusively the duties of the Escrow Agent with respect
      to
      any and all matters pertinent thereto and no implied duties or obligations
      shall
      be read into this Agreement.

     

    (g) The
      Escrow Agent shall be permitted to act as counsel for the Subscriber in any
      dispute as to the disposition of the Company Documents and Subscriber Documents,
      or in any other dispute between the Subscriber and Company, whether or not
      the
      Escrow Agent is then holding the Company Documents and Subscriber Documents
      and
      continues to act as the Escrow Agent hereunder.

     

    (h) The
      provisions of this Section 4.1 shall survive the resignation of the Escrow
      Agent
      or the termination of this Agreement.

     

    4.2. Dispute
      Resolution: Judgments.
      Resolution of disputes arising under this Agreement shall be subject to the
      following terms and conditions:

     

    (a) If
      any
      dispute shall arise with respect to the delivery, ownership, right of possession
      or disposition of the Company Documents and Subscriber Documents, or if the
      Escrow Agent shall in good faith be uncertain as to its duties or rights
      hereunder, the Escrow Agent shall be authorized, without liability to anyone,
      to
      (i) refrain from taking any action other than to continue to hold the Company
      Documents and Subscriber Documents pending receipt of a Joint Instruction from
      the Subscriber and Company, or (ii) deposit the Company Documents and Subscriber
      Documents with any court of competent jurisdiction in the State of New York,
      in
      which event the Escrow Agent shall give written notice thereof to the Subscriber
      and the Company and shall thereupon be relieved and discharged from all further
      obligations pursuant to this Agreement. The Escrow Agent may, but shall be
      under
      no duty to, institute or defend any legal proceedings which relate to the
      Company Documents and Subscriber Documents. The Escrow Agent shall have the
      right to retain counsel if it becomes involved in any disagreement, dispute
      or
      litigation on account of this Agreement or otherwise determines that it is
      necessary to consult counsel.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (b) The
      Escrow Agent is hereby expressly authorized to comply with and obey any Court
      Order. In case the Escrow Agent obeys or complies with a Court Order, the Escrow
      Agent shall not be liable to the Subscriber and Company or to any other person,
      firm, corporation or entity by reason of such compliance.

     

    ARTICLE
      V

     

    GENERAL
      MATTERS

     

    5.1. Termination.
      This
      escrow shall terminate upon the release of all of the Company Documents and
      Subscriber Documents or at any time upon the agreement in writing of the
      Subscriber and Company.

     

    5.2. 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: 

     

    (a) 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

    Fax:
      (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.

    Fax:
      (949) 475-9087

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (b) If
      to the
      Subscriber, to: the addresses and fax numbers listed on Schedule A
      hereto.

     

    (c) If
      to the
      Escrow Agent, to:

     

    Grushko
      & Mittman, P.C.

    551
      Fifth
      Avenue, Suite 1601

    New
      York,
      New York 10176

    Fax:
      212-697-3575

     

    or
      to
      such other address as any of them shall give to the others by notice made
      pursuant to this Section 5.2.

     

    5.3. Interest.
      The
      Escrowed Payment shall not be held in an interest bearing account nor will
      interest be payable in connection therewith. In the event the Escrowed Payment
      is deposited in an interest bearing account, the Subscriber shall be entitled
      to
      receive any accrued interest thereon, but only if the Escrow Agent receives
      from
      the Subscriber the Subscriber’s United States taxpayer identification number and
      other requested information and forms.

     

    5.4. Assignment;
      Binding Agreement.
      Neither
      this Agreement nor any right or obligation hereunder shall be assignable by
      any
      party without the prior written consent of the other parties hereto. This
      Agreement shall enure to the benefit of and be binding upon the parties hereto
      and their respective legal representatives, successors and assigns.

     

    5.5. Invalidity.
      In the
      event that any one or more of the provisions contained herein, or the
      application thereof in any circumstance, is held invalid, illegal, or
      unenforceable in any respect for any reason, the validity, legality and
      enforceability of any such provision in every other respect and of the remaining
      provisions contained herein shall not be in any way impaired thereby, it being
      intended that all of the rights and privileges of the parties hereto shall
      be
      enforceable to the fullest extent permitted by law.

     

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

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    5.7. Agreement.
      Each of
      the undersigned states that he has read the foregoing Funds Escrow Agreement
      and
      understands and agrees to it.

    

    
      	
              ATTITUDE
                DRINKS INC.

            
	
              the
                “Company”

            
	 	 
	
              By

            	 

    

    

    “SUBSCRIBERS”

    

    
      	 
	 	 

	
              ROY
                WARREN

            	 	
              ALPHA
                CAPITAL ANSTALT

            
	 	 	 
	 
	 	 

	
              WHALEHAVEN
                CAPITAL FUND LIMITED

            	 	
              MONARCH
                CAPITAL FUND LTD.

            
	 	 	 
	 	 	 

	 	 	
              ESCROW
                AGENT:

            
	 	 	 
	 	 	
                

            
	 	 	
              GRUSHKO
                & MITTMAN, P.C.

            

    

    

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    SCHEDULE
      A TO FUNDS ESCROW AGREEMENT

    

    
      	
              SUBSCRIBER

            	 	
              INITIAL CLOSING 

              DATE ESCROWED 

              PAYMENT 

              (PURCHASE PRICE)

            	
               

            	
              SECOND CLOSING 

              DATE ESCROWED 

              PAYMENT

              (PURCHASE PRICE)

            	 
	
              ROY
                WARREN

              11300
                U.S. Highway
                1, Suite 207

              North
                Palm Beach, Florida 33408

              Fax:
                (561) 799-5039

            	 	
              $

            	
              50,000.00

            	 	
              $

            	
              50,000.00

            	 
	 	 	 	 	 	 	 	 
	
              ALPHA
                CAPITAL ANSTALT

              Pradafant
                7

              9490
                Furstentums

              Vaduz,
                Lichtenstein

              Fax:
                011-42-32323196

            	 	
              $

            	
              300,000.00

            	 	
              $

            	
              300,000.00

            	 
	 	 	 	 	 	 	 	 
	
              WHALEHAVEN
                CAPITAL FUND LIMITED

              3rd
                Fl., 14 Par-La-Ville Rd.

              Hamilton,
                Bermuda HM08

              Fax:
                (201) 782-9327

            	 	
              $

            	
              150,000.00

            	 	
              $

            	
              150,000.00

            	 
	 	 	 	 	 	 	 	 
	
              MONARCH
                CAPITAL FUND LTD.

              Harbour
                House, 2nd
                Floor

              Waterfront
                Drive, Road Town

              Tortola,
                BVI

              Fax
                (284) 494-4771

            	 	
              $

            	
              100,000.00

            	 	
              $

            	
              100,000.00

            	 
	
              TOTALS

            	 	
              $

            	
              600,000.00

            	 	
              $

            	
              600,000.00

            	 

    

     

    
      
        
        

      

      
        10SECURITY
      AGREEMENT

    1. Identification.

    

    This
      Security Agreement (the "Agreement"), dated as of October 23, 2007, is entered
      into by and between Attitude Drinks Inc., a Delaware corporation ("Parent"),
      Attitude Drink Company, Inc., a Delaware corporation ("Guarantor" and together
      with Parent, each a “Debtor” and collectively the "Debtors"), and Barbara R.
      Mittman, as collateral agent acting in the manner and to the extent described
      in
      the Collateral Agent Agreement defined below (the "Collateral Agent"), for
      the
      benefit of the parties identified on Schedule
      A
      hereto
      (collectively, the "Lenders").

    

    2. Recitals.

    

    2.1 The
      Lenders have made, are making and will be making loans to Parent (the "Loans").
      It is beneficial to each Debtor that the Loans were made and are being
      made.

    

    2.2 The
      Loans
      are and will be evidenced by certain promissory notes (each a “Note”) issued by
      Parent on or about the date of and after the date of this Agreement pursuant
      to
      subscription agreements (each a “Subscription Agreement”) to which Parent and
      Lenders are parties. The Notes are further identified on Schedule A hereto
      and
      were and will be executed by Parent as “Borrower” or “Debtor” for the benefit of
      each Lender as the “Holder” or “Lender” thereof.

    

    2.3 In
      consideration of the Loans made and to be made by Lenders to Parent and for
      other good and valuable consideration, and as security for the performance
      by
      Parent of its obligations under the Notes and as security for the repayment
      of
      the Loans and all other sums due from Debtors to Lenders arising under the
      Transaction Documents (as defined in the Subscription Agreement), and any other
      agreement between or among them (collectively, the "Obligations"), each Debtor,
      for good and valuable consideration, receipt of which is acknowledged, has
      agreed to grant to the Collateral Agent, for the benefit of the Lenders, a
      security interest in the Collateral (as such term is hereinafter defined),
      on
      the terms and conditions hereinafter set forth. Obligations include all future
      advances by Lenders to Debtor made pursuant to the Subscription
      Agreement.

    

    2.4 The
      Lenders have appointed the Collateral Agent pursuant to that certain Collateral
      Agent Agreement dated at or about the date of this Agreement (“Collateral Agent
      Agreement”), among the Lenders and Collateral Agent.

    

    2.5 The
      following defined terms which are defined in the Uniform Commercial Code in
      effect in the State of New York on the date hereof are used herein as so
      defined: Accounts, Chattel Paper, Documents, Equipment, General Intangibles,
      Instruments, Inventory and Proceeds. Other capitalized terms employed herein
      shall have the meanings attributed to them in the Subscription
      Agreement.

    

    3. Grant
      of General Security Interest in Collateral.

    

    3.1 As
      security for the Obligations of Debtors, each Debtor hereby grants the
      Collateral Agent, for the benefit of the Lenders, a security interest in the
      Collateral.

    

    3.2 “Collateral”
      shall mean all of the following property of Debtors:

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    (A) All
      now
      owned and hereafter acquired right, title and interest of Debtors in, to and
      in
      respect of all Accounts, Goods, real or personal property, all present and
      future books and records relating to the foregoing and all products and Proceeds
      of the foregoing, and as set forth below:

    

    (i) All
      now
      owned and hereafter acquired right, title and interest of Debtors in, to and
      in
      respect of all: Accounts, interests in goods represented by Accounts, returned,
      reclaimed or repossessed goods with respect thereto and rights as an unpaid
      vendor; contract rights; Chattel Paper; investment property; General Intangibles
      (including but not limited to, tax and duty claims and refunds, registered
      and
      unregistered patents (including but not limited to the patents, patents pending
      and applications set forth on Schedule
      B
      hereto),
      trademarks, service marks, certificates, copyrights trade names, applications
      for the foregoing, trade secrets, goodwill, processes, drawings, blueprints,
      customer lists, licenses, whether as licensor or licensee, chooses in action
      and
      other claims, and existing and future leasehold interests in equipment, real
      estate and fixtures); Documents; Instruments; letters of credit, bankers’
acceptances or guaranties; cash moneys, deposits; securities, bank accounts,
      deposit accounts, credits and other property now or hereafter owned or held
      in
      any capacity by Debtors, as well as agreements or property securing or relating
      to any of the items referred to above;

    

    (ii) Goods:
      All now
      owned and hereafter acquired right, title and interest of Debtors in, to and
      in
      respect of goods, including, but not limited to:

    

    (a) All
      Inventory, wherever located, whether now owned or hereafter acquired, of
      whatever kind, nature or description, including all raw materials,
      work-in-process, finished goods, and materials to be used or consumed in
      Debtors’ business; finished goods, timber cut or to be cut, oil, gas,
      hydrocarbons, and minerals extracted or to be extracted, and all names or marks
      affixed to or to be affixed thereto for purposes of selling same by the seller,
      manufacturer, lessor or licensor thereof and all Inventory which may be returned
      to any Debtor by its customers or repossessed by any Debtor and all of Debtors’
right, title and interest in and to the foregoing (including all of a Debtor’s
      rights as a seller of goods);

    

    (b) All
      Equipment and fixtures, wherever located, whether now owned or hereafter
      acquired, including, without limitation, all machinery, furniture and fixtures,
      and any and all additions, substitutions, replacements (including spare parts),
      and accessions thereof and thereto (including, but not limited to Debtors’
rights to acquire any of the foregoing, whether by exercise of a purchase option
      or otherwise);

    

    (iii) Property:
      All now
      owned and hereafter acquired right, title and interests of Debtors in, to and
      in
      respect of any other personal property in or upon which a Debtor has or may
      hereafter have a security interest, lien or right of setoff; 

    

    (iv) Books
      and Records:
      All
      present and future books and records relating to any of the above including,
      without limitation, all computer programs, printed output and computer readable
      data in the possession or control of the Debtors, any computer service bureau
      or
      other third party; and

    

    (v) Products
      and Proceeds:
      All
      products and Proceeds of the foregoing in whatever form and wherever located,
      including, without limitation, all insurance proceeds and all claims against
      third parties for loss or destruction of or damage to any of the
      foregoing.

    

    (B) All
      now
      owned and hereafter acquired right, title and interest of Debtors in, to and
      in
      respect of the following:

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (i) the
      shares of stock of the Guarantor, which the Debtor represents constitute 100%
      of
      the equity ownership interest in the Guarantor, the certificates representing
      such shares together with an executed stock power, and other rights, contractual
      or otherwise, in respect thereof and all dividends, distributions, cash,
      instruments, investment property and other property from time to time received,
      receivable or otherwise distributed in respect of or in exchange for any or
      all
      of such shares;

     

    (ii) all
      additional shares of stock, partnership interests, member interests or other
      equity interests from time to time acquired by Debtor, in any Subsidiary (as
      defined in the Subscription Agreement) not a Subsidiary of the Debtor on the
      date hereof (“Future Subsidiaries”), the certificates representing such
      additional shares, and other rights, contractual or otherwise, in respect
      thereof and all dividends, distributions, cash, instruments, investment property
      and other property from time to time received, receivable or otherwise
      distributed in respect of or in exchange for any or all of such additional
      shares, interests or equity; and 

     

    (iii) all
      security entitlements of Debtor in, and all Proceeds of any and all of the
      foregoing in each case, whether now owned or hereafter acquired by Debtor and
      howsoever its interest therein may arise or appear (whether by ownership,
      security interest, lien, claim or otherwise).

    

    3.3 The
      Collateral Agent is hereby specifically authorized, after the Maturity Date
      (defined in the Notes) accelerated, or after the occurrence of an Event of
      Default (as defined herein) and the expiration of any applicable cure period,
      to
      transfer any Collateral into the name of the Collateral Agent and to take any
      and all action deemed advisable to the Collateral Agent to remove any transfer
      restrictions affecting the Collateral.

    

    4. Perfection
      of Security Interest.

    

    4.1 Each
      Debtor shall prepare, execute and deliver to the Collateral Agent UCC-1
      Financing Statements. The Collateral Agent is instructed to prepare and file
      at
      each Debtor’s cost and expense, financing statements in such jurisdictions
      deemed advisable to the Collateral Agent, including but not limited to the
      State
      of Delaware. The Financing Statements are deemed to have been filed for the
      benefit of the Collateral Agent and Lenders identified on Schedule A
      hereto.

    

    4.2 Upon
      the
      execution of this Agreement, Parent shall deliver to Collateral Agent stock
      certificates representing all of the shares of outstanding capital stock of
      the
      Guarantor (the "Securities"). All such certificates shall be held by or on
      behalf of Collateral Agent pursuant hereto and shall be delivered in suitable
      form for transfer by delivery, or shall be accompanied by duly executed
      instruments of transfer or assignment or undated stock powers executed in blank,
      all in form and substance satisfactory to Collateral Agent. 

     

    4.3 
      All
      other certificates and instruments constituting Collateral from time to time
      required to be pledged to Collateral Agent pursuant to the terms hereof (the
      "Additional Collateral") shall be delivered to Collateral Agent promptly upon
      receipt thereof by or on behalf of Debtors. All such certificates and
      instruments shall be held by or on behalf of Collateral Agent pursuant hereto
      and shall be delivered in suitable form for transfer by delivery, or shall
      be
      accompanied by duly executed instruments of transfer or assignment or undated
      stock powers executed in blank, all in form and substance satisfactory to
      Collateral Agent. If any Collateral consists of uncertificated securities,
      unless the immediately following sentence is applicable thereto, Debtors shall
      cause Collateral Agent (or its custodian, nominee or other designee) to become
      the registered holder thereof, or cause each issuer of such securities to agree
      that it will comply with instructions originated by Collateral Agent with
      respect to such securities without further consent by Debtors. If any Collateral
      consists of security entitlements, Debtors shall transfer such security
      entitlements to Collateral Agent (or its custodian, nominee or other designee)
      or cause the applicable securities intermediary to agree that it will comply
      with entitlement orders by Collateral Agent without further consent by Debtors.
      

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    4.4 Within
      five (5) days after the receipt by a Debtor of any Additional Collateral, a
      Pledge Amendment, duly executed by such Debtor, in substantially the form of
      Annex I hereto (a "Pledge Amendment"), shall be delivered to Collateral Agent
      in
      respect of the Additional Collateral to be pledged pursuant to this Agreement.
      Each Debtor hereby authorizes Collateral Agent to attach each Pledge Amendment
      to this Agreement and agrees that all certificates or instruments listed on
      any
      Pledge Amendment delivered to Collateral Agent shall for all purposes hereunder
      constitute Collateral.

     

    4.5 If
      Debtor
      shall receive, by virtue of Debtor being or having been an owner of any
      Collateral, any (i) stock certificate (including, without limitation, any
      certificate representing a stock dividend or distribution in connection with
      any
      increase or reduction of capital, reclassification, merger, consolidation,
      sale
      of assets, combination of shares, stock split, spin-off or split-off),
      promissory note or other instrument, (ii) option or right, whether as an
      addition to, substitution for, or in exchange for, any Collateral, or otherwise,
      (iii) dividends payable in cash (except such dividends permitted to be retained
      by Debtor pursuant to Section 5.2 hereof) or in securities or other property
      or
      (iv) dividends or other distributions in connection with a partial or total
      liquidation or dissolution or in connection with a reduction of capital, capital
      surplus or paid-in surplus, Debtor shall receive such stock certificate,
      promissory note, instrument, option, right, payment or distribution in trust
      for
      the benefit of Collateral Agent, shall segregate it from Debtor's other property
      and shall deliver it forthwith to Collateral Agent, in the exact form received,
      with any necessary endorsement and/or appropriate stock powers duly executed
      in
      blank, to be held by Collateral Agent as Collateral and as further collateral
      security for the Obligations.

    

    5. Distribution.

    

    5.1 So
      long
      as an Event of Default does not exist, Debtors shall be entitled to exercise
      all
      voting power pertaining to any of the Collateral, provided such exercise is
      not
      contrary to the interests of the Lenders and does not impair the
      Collateral.

    

    5.2. At
      any
      time an Event of Default exists or has occurred and is continuing, all rights
      of
      Debtors, upon notice given by Collateral Agent, to exercise the voting power
      and
      receive payments, which it would otherwise be entitled to pursuant to Section
      5.1, shall cease and all such rights shall thereupon become vested in Collateral
      Agent, which shall thereupon have the sole right to exercise such voting power
      and receive such payments.

    

    5.3 All
      dividends, distributions, interest and other payments which are received by
      Debtors contrary to the provisions of Section 5.2 shall be received in trust
      for
      the benefit of Collateral Agent as security and Collateral for payment of the
      Obligations shall be segregated from other funds of Debtors, and shall be
      forthwith paid over to Collateral Agent as Collateral in the exact form received
      with any necessary endorsement and/or appropriate stock powers duly executed
      in
      blank, to be held by Collateral Agent as Collateral and as further collateral
      security for the Obligations.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    6. Further
      Action By Debtors; Covenants and Warranties.

    6.1 Collateral
      Agent at all times shall have a perfected security interest in the Collateral.
      Each Debtor represents that it has and will continue to have full title to
      the
      Collateral free from any liens, leases, encumbrances, judgments or other claims.
      The Collateral Agent's security interest in the Collateral constitutes and
      will
      continue to constitute a first, prior and indefeasible security interest in
      favor of Collateral Agent, subject only to the security interests described
      on
Schedule
      6.1.
      Each
      Debtor will do all acts and things, and will execute and file all instruments
      (including, but not limited to, security agreements, financing statements,
      continuation statements, etc.) reasonably requested by Collateral Agent to
      establish, maintain and continue the perfected security interest of Collateral
      Agent in the perfected Collateral, and will promptly on demand, pay all costs
      and expenses of filing and recording, including the costs of any searches
      reasonably deemed necessary by Collateral Agent from time to time to establish
      and determine the validity and the continuing priority of the security interest
      of Collateral Agent, and also pay all other claims and charges that, in the
      opinion of Collateral Agent, exercised in good faith, are reasonably likely
      to
      materially prejudice, imperil or otherwise affect the Collateral or Collateral
      Agent’s or Lenders’ security interests therein.

    

    6.2 Except
      in
      connection with sales of Collateral, in the ordinary course of business, for
      fair value and in cash, and except for Collateral which is substituted by assets
      of identical or greater value (with the consent of the Collateral Agent) or
      which is inconsequential in value, each Debtor will not sell, transfer, assign
      or pledge those items of Collateral (or allow any such items to be sold,
      transferred, assigned or pledged), without the prior written consent of
      Collateral Agent other than a transfer of the Collateral to a wholly-owned
      United States formed and located subsidiary or to another Debtor on prior notice
      to Collateral Agent, and provided the Collateral remains subject to the security
      interest herein described. Although Proceeds of Collateral are covered by this
      Agreement, this shall not be construed to mean that Collateral Agent consents
      to
      any sale of the Collateral, except as provided herein. Sales of Collateral
      in
      the ordinary course of business shall be free of the security interest of
      Lenders and Collateral Agent and Lenders and Collateral Agent shall promptly
      execute such documents (including without limitation releases and termination
      statements) as may be required by Debtors to evidence or effectuate the
      same.

    

    6.3 Each
      Debtor will, at all reasonable times during regular business hours and upon
      reasonable notice, allow Collateral Agent or its representatives free and
      complete access to the Collateral and all of such Debtor's records which in
      any
      way relate to the Collateral, for such inspection and examination as Collateral
      Agent reasonably deems necessary.

    

    6.4 Each
      Debtor, at its sole cost and expense, will protect and defend this Security
      Agreement, all of the rights of Collateral Agent and Lenders hereunder, and
      the
      Collateral against the claims and demands of all other persons.

    

    6.5 Debtors
      will promptly notify Collateral Agent of any levy, distraint or other seizure
      by
      legal process or otherwise of any part of the Collateral, and of any threatened
      or filed claims or proceedings that are reasonably likely to affect or impair
      any of the rights of Collateral Agent under this Security Agreement in any
      material respect.

    

    6.6 Each
      Debtor, at its own expense, will obtain and maintain in force insurance policies
      covering losses or damage to those items of Collateral which constitute physical
      personal property, which insurance shall be of the types customarily insured
      against by companies in the same or similar business, similarly situated, in
      such amounts (with such deductible amounts) as is customary for such companies
      under the same or similar circumstances, similarly situated. Debtors shall
      make
      the Collateral Agent a loss payee thereon to the extent of its interest in
      the
      Collateral. Collateral Agent is hereby irrevocably (until the Obligations are
      paid in full) appointed each Debtor’s attorney-in-fact to endorse any check or
      draft that may be payable to such Debtor so that Collateral Agent may collect
      the proceeds payable for any loss under such insurance. The proceeds of such
      insurance, less any costs and expenses incurred or paid by Collateral Agent
      in
      the collection thereof, shall be applied either toward the cost of the repair
      or
      replacement of the items damaged or destroyed, or on account of any sums secured
      hereby, whether or not then due or payable.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    6.7 Collateral
      Agent may, at its option, and without any obligation to do so, pay, perform
      and
      discharge any and all amounts, costs, expenses and liabilities herein agreed
      to
      be paid or performed by Debtor upon
      Debtor’s
      failure
      to do so. All
      amounts expended by Collateral Agent in so doing shall become part of the
      Obligations secured hereby, and shall be immediately due and payable by Debtor
      to Collateral Agent upon demand
      and
      shall
      bear interest at the lesser of 15% per annum or the highest legal amount from
      the dates of such expenditures until paid.

    

    6.8 Upon
      the
      request of Collateral Agent, Debtors will furnish to Collateral Agent within
      five (5) business days thereafter, or to any proposed assignee of this Security
      Agreement, a written statement in form reasonably satisfactory to Collateral
      Agent, duly acknowledged, certifying the amount of the principal and interest
      and any other sum then owing under the Obligations, whether to its knowledge
      any
      claims, offsets or defenses exist against the Obligations or against this
      Security Agreement, or any of the terms and provisions of any other agreement
      of
      Debtors securing the Obligations. In connection with any assignment by
      Collateral Agent of this Security Agreement, each Debtor hereby agrees to cause
      the insurance policies required hereby to be carried by such Debtor, if any,
      to
      be endorsed in form satisfactory to Collateral Agent or to such assignee, with
      loss payable clauses in favor of such assignee, and to cause such endorsements
      to be delivered to Collateral Agent within ten (10) calendar days after request
      therefor by Collateral Agent.

    

    6.9 Each
      Debtor will, at its own expense, make, execute, endorse, acknowledge, file
      and/or deliver to the Collateral Agent from time to time such vouchers,
      invoices, schedules, confirmatory assignments, conveyances, financing
      statements, transfer endorsements, powers of attorney, certificates, reports
      and
      other reasonable assurances or instruments and take further steps relating
      to
      the Collateral and other property or rights covered by the security interest
      hereby granted, as the Collateral Agent may reasonably require to perfect its
      security interest hereunder.

    

    6.10 Debtors
      represent and warrant that they are the true and lawful exclusive owners of
      the
      Collateral, free and clear of any liens and encumbrances other than Permitted
      Liens.

    

    6.11 Each
      Debtor hereby agrees not to divest itself of any right under the Collateral
      except as permitted herein absent prior written approval of the Collateral
      Agent, except to a subsidiary organized and located in the United States on
      prior notice to Collateral Agent provided the Collateral remains subject to
      the
      security interest herein described.

     

    6.12 Each
      Debtor shall cause each Subsidiary of such Debtor in existence on the date
      hereof and each Subsidiary not in existence on the date hereof to execute and
      deliver to Collateral Agent promptly and in any event within 10 days after
      the
      formation, acquisition or change in status thereof (A) a guaranty guaranteeing
      the Obligations and (B) if requested by Collateral Agent, a security and pledge
      agreement substantially in the form of this Agreement together with (x)
      certificates evidencing all of the capital stock of each Subsidiary of and
      any
      entity owned by such Subsidiary, (y) undated stock powers executed in blank
      with
      signatures guaranteed, and (z) such opinion of counsel and such approving
      certificate of such Subsidiary as Collateral Agent may reasonably request in
      respect of complying with any legend on any such certificate or any other matter
      relating to such shares and (C) such other agreements, instruments, approvals,
      legal opinions or other documents reasonably requested by Collateral Agent
      in
      order to create, perfect, establish the first priority of or otherwise protect
      any lien purported to be covered by any such pledge and security agreement
      or
      otherwise to effect the intent that all property and assets of such Subsidiary
      shall become Collateral for the Obligations. For purposes of this Agreement,
      “Subsidiary”
means,
      with respect to any entity at any date, any corporation, limited or general
      partnership, limited liability company, trust, estate, association, joint
      venture or other business entity) of which more than 30% of (A) the
      outstanding capital stock having (in the absence of contingencies) ordinary
      voting power to elect a majority of the board of directors or other managing
      body of such entity, (B) in the case of a partnership or limited liability
      company, the interest in the capital or profits of such partnership or limited
      liability company or (C) in the case of a trust, estate, association, joint
      venture or other entity, the beneficial interest in such trust, estate,
      association or other entity business is, at the time of determination, owned
      or
      controlled directly or indirectly through one or more intermediaries, by such
      entity. Annex
      I annexed hereto contains a list of all Subsidiaries of the Debtors as of the
      date of this Agreement.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    7. Power
      of Attorney.

    

    At
      any
      time an Event of Default has occurred and is continuing, each Debtor hereby
      irrevocably constitutes and appoints the Collateral Agent as the true and lawful
      attorney of such Debtor, with full power of substitution, in the place and
      stead
      of such Debtor and in the name of such Debtor or otherwise, at any time or
      times, in the discretion of the Collateral Agent, to take any action and to
      execute any instrument or document which the Collateral Agent may deem necessary
      or advisable to accomplish the purposes of this Agreement. This power of
      attorney is coupled with an interest and is irrevocable until the Obligations
      are satisfied.

    

    8. Performance
      By The Collateral Agent.

    

    If
      a
      Debtor fails to perform any material covenant, agreement, duty or obligation
      of
      such Debtor under this Agreement, the Collateral Agent may, after any applicable
      cure period, at any time or times in its discretion, take action to effect
      performance of such obligation. All reasonable expenses of the Collateral Agent
      incurred in connection with the foregoing authorization shall be payable by
      Debtors as provided in Paragraph 12.1 hereof. No discretionary right, remedy
      or
      power granted to the Collateral Agent under any part of this Agreement shall
      be
      deemed to impose any obligation whatsoever on the Collateral Agent with respect
      thereto, such rights, remedies and powers being solely for the protection of
      the
      Collateral Agent.

    

    9. Event
      of Default.

    

    An
      event
      of default ("Event of Default") shall be deemed to have occurred hereunder
      upon
      the occurrence of any event of default as defined and described in this
      Agreement, in the Notes, the Subscription Agreement, and any other agreement
      to
      which one or more Debtors and a Lender are parties relating to the Offering.
      Upon and after any Event of Default, after the applicable cure period, if any,
      any or all of the Obligations shall become immediately due and payable at the
      option of the Collateral Agent, for the benefit of the Lenders, and the
      Collateral Agent may dispose of Collateral as provided below. A default by
      Debtor of any of its material obligations pursuant to this Agreement and any
      of
      the Transaction Documents (as defined in the Subscription Agreement) shall
      be an
      Event of Default hereunder and an “Event of Default” as defined in the Notes,
      and Subscription Agreement.

    

    10. Disposition
      of Collateral.

    

    Upon
      and
      after any Event of Default which is then continuing,

    

    10.1 The
      Collateral Agent may exercise its rights with respect to each and every
      component of the Collateral, without regard to the existence of any other
      security or source of payment for the Obligations. In addition to other rights
      and remedies provided for herein or otherwise available to it, the Collateral
      Agent shall have all of the rights and remedies of a lender on default under
      the
      Uniform Commercial Code then in effect in the State of New
      York.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    10.2 If
      any
      notice to Debtors of the sale or other disposition of Collateral is required
      by
      then applicable law, five business (5) days prior written notice (which Debtors
      agree is reasonable notice within the meaning of Section 9.612(a) of the Uniform
      Commercial Code) shall be given to Debtors of the time and place of any sale
      of
      Collateral which Debtors hereby agree may be by private sale. The rights granted
      in this Section are in addition to any and all rights available to Collateral
      Agent under the Uniform Commercial Code.

    

    10.3 The
      Collateral Agent is authorized, at any such sale, if the Collateral Agent deems
      it advisable to do so, in order to comply with any applicable securities laws,
      to restrict the prospective bidders or purchasers to persons who will represent
      and agree, among other things, that they are purchasing the Collateral for
      their
      own account for investment, and not with a view to the distribution or resale
      thereof, or otherwise to restrict such sale in such other manner as the
      Collateral Agent deems advisable to ensure such compliance. Sales made subject
      to such restrictions shall be deemed to have been made in a commercially
      reasonable manner.

    

    10.4 All
      proceeds received by the Collateral Agent for the benefit of the Lenders in
      respect of any sale, collection or other enforcement or disposition of
      Collateral, shall be applied (after deduction of any amounts payable to the
      Collateral Agent pursuant to Paragraph 12.1 hereof) against the Obligations
      pro
      rata among the Lenders in proportion to their interests in the Obligations.
      Upon
      payment in full of all Obligations, Debtors shall be entitled to the return
      of
      all Collateral, including cash, which has not been used or applied toward the
      payment of Obligations or used or applied to any and all costs or expenses
      of
      the Collateral Agent incurred in connection with the liquidation of the
      Collateral (unless another person is legally entitled thereto). Any assignment
      of Collateral by the Collateral Agent to Debtors shall be without representation
      or warranty of any nature whatsoever and wholly without recourse. To the extent
      allowed by law, each Lender may purchase the Collateral and pay for such
      purchase by offsetting up to such Lender’s pro rata portion of the purchase
      price with sums owed to such Lender by Debtors arising under the Obligations
      or
      any other source.

    

    11. Waiver
      of Automatic Stay.
      Debtor
      acknowledges and agrees that should a proceeding under any bankruptcy or
      insolvency law be commenced by or against Debtor, or if any of the Collateral
      should become the subject of any bankruptcy or insolvency proceeding, then
      the
      Collateral Agent should be entitled to, among other relief to which the
      Collateral Agent or Lenders may be entitled under the Note, Subscription
      Agreement and any other agreement to which the Debtor, Lenders or Collateral
      Agent 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 Collateral Agent to exercise all of
      its
      rights and remedies pursuant to the Loan Documents and/or applicable law. Debtor
      EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY IMPOSED BY 11 U.S.C. SECTION
      362. FURTHERMORE, Debtor 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 COLLATERAL
      AGENT TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES UNDER THE LOAN DOCUMENTS AND/OR
      APPLICABLE LAW. Debtor hereby consents to any motion for relief from stay which
      may be filed by the Collateral Agent in any bankruptcy or insolvency proceeding
      initiated by or against Debtor, and further agrees not to file any opposition
      to
      any motion for relief from stay filed by the Collateral Agent. Debtor
      represents, acknowledges and agrees that this provision is a specific and
      material aspect of this Agreement, and that the Collateral Agent would not
      agree
      to the terms of this Agreement if this waiver were not a part of this Agreement.
      Debtor further represents, acknowledges and agrees that this waiver is
      knowingly, intelligently and voluntarily made, that neither the Collateral
      Agent
      nor any person acting on behalf of the Collateral Agent has made any
      representations to induce this waiver, that Debtor has been represented (or
      has
      had the opportunity to be represented) in the signing of this Agreement and
      in
      the making of this waiver by independent legal counsel selected by Debtor and
      that Debtor has had the opportunity to discuss this waiver with counsel. Debtor
      further agrees that any bankruptcy or insolvency proceeding initiated by Debtor
      will only be brought in the Federal Court within the Southern District of New
      York.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    12. Miscellaneous.

    

    12.1 Expenses.
      Debtors
      shall pay to the Collateral Agent, on demand, the amount of any and all
      reasonable expenses, including, without limitation, attorneys' fees, legal
      expenses and brokers' fees, which the Collateral Agent may incur in connection
      with (a) sale, collection or other enforcement or disposition of Collateral;
      (b)
      exercise or enforcement of any the rights, remedies or powers of the Collateral
      Agent hereunder or with respect to any or all of the Obligations upon breach
      or
      threatened breach; or (c) failure by Debtors to perform and observe any
      agreements of Debtors contained herein which are performed by the Collateral
      Agent.

    

    12.2 Waivers,
      Amendment and Remedies.
      No
      course of dealing by the Collateral Agent and no failure by the Collateral
      Agent
      to exercise, or delay by the Collateral Agent in exercising, any right, remedy
      or power hereunder shall operate as a waiver thereof, and no single or partial
      exercise thereof shall preclude any other or further exercise thereof or the
      exercise of any other right, remedy or power of the Collateral Agent. No
      amendment, modification or waiver of any provision of this Agreement and no
      consent to any departure by Debtors therefrom, shall, in any event, be effective
      unless contained in a writing signed by the Collateral Agent, and then such
      waiver or consent shall be effective only in the specific instance and for
      the
      specific purpose for which given. The rights, remedies and powers of the
      Collateral Agent, not only hereunder, but also under any instruments and
      agreements evidencing or securing the Obligations and under applicable law
      are
      cumulative, and may be exercised by the Collateral Agent from time to time
      in
      such order as the Collateral Agent may elect.

    

    12.3 Notices.
      All
      notices or other communications given or made hereunder shall be in writing
      and
      shall be personally delivered or deemed delivered the first business day after
      being faxed (provided that a copy is delivered by first class mail) to the
      party
      to receive the same at its address set forth below or to such other address
      as
      either party shall hereafter give to the other by notice duly made under this
      Section:

     

    
      	
              To
                Debtors:

            	
              Attitude
                Drinks Inc.

            
	 	
              11300
                U.S. Highway 1, Suite 207

            
	 	
              North
                Palm Beach, Florida 33408

            
	 	
              Attn:
                Roy Warren, CEO and President

            
	 	
              Fax:
                (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.

            
	 	
              Fax:
                (949) 475-9087

            
	 	 
	
              To
                Lenders:

            	
              To
                the addresses and telecopier numbers set forth on Schedule
                A

            

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    
      	
              To
                the Collateral Agent:

            	
              Barbara
                R. Mittman, Esq.

            
	 	
              551
                Fifth Avenue, Suite 1601

            
	 	
              New
                York, New York 10176

            
	 	
              Fax:
                (212) 697-3575

            
	 	 
	
              If
                to Debtor, Lender or Collateral Agent,

              with
                a copy by telecopier only to:

            
	 	 
	 	
              Grushko
                & Mittman, P.C.

            
	 	
              551
                Fifth Avenue, Suite 1601

            
	 	
              New
                York, New York 10176

            
	 	
              Fax:
                (212) 697-3575

            

    

    

    Any
      party
      may change its address by written notice in accordance with this
      paragraph.

    

    12.4 Term;
      Binding Effect.
      This
      Agreement shall (a) remain in full force and effect until payment and
      satisfaction in full of all of the Obligations; (b) be binding upon each Debtor,
      and its successors and permitted assigns; and (c) inure to the benefit of the
      Collateral Agent, for the benefit of the Lenders and their respective successors
      and assigns. 

    

    12.5 Captions.
      The
      captions of Paragraphs, Articles and Sections in this Agreement have been
      included for convenience of reference only, and shall not define or limit the
      provisions hereof and have no legal or other significance
      whatsoever.

    

    12.6 Governing
      Law; Venue; Severability.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York without
      regard to conflicts
      of laws principles
      that
      would result in the application of the substantive laws of another
      jurisdiction,
      except
      to the extent that the perfection of the security interest granted hereby in
      respect of any item of Collateral may be governed by the law of another
      jurisdiction. Any legal action or proceeding against a Debtor with respect
      to
      this Agreement may be brought in the courts in the State of New York or of
      the
      United
      States for the Southern District of New York, and, by execution and delivery
      of
      this Agreement, each Debtor hereby irrevocably accepts for itself and in respect
      of its property, generally and unconditionally, the jurisdiction of the
      aforesaid courts. Each Debtor hereby irrevocably waives any objection which
      they
      may now or hereafter have to the laying of venue of any of the aforesaid actions
      or proceedings arising out of or in connection with this Agreement brought
      in
      the aforesaid courts and hereby further irrevocably waives and agrees not to
      plead or claim in any such court that any such action or proceeding brought
      in
      any such court has been brought in an inconvenient forum. If any provision
      of
      this Agreement, or the application thereof to any person or circumstance, is
      held invalid, such invalidity shall not affect any other provisions which can
      be
      given effect without the invalid provision or application, and to this end
      the
      provisions hereof shall be severable and the remaining, valid provisions shall
      remain of full force and effect.

    

    12.7 Entire
      Agreement.
      This
      Agreement contains the entire agreement of the parties and supersedes all other
      agreements and understandings, oral or written, with respect to the matters
      contained herein.

    

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

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    13. Intercreditor
      Terms. As between the Lenders, any distribution under paragraph 10.4 shall
      be made proportionately based upon the remaining principal amount (plus accrued
      and unpaid interest) to each as to the total amount then owed to the Lenders
      as
      a whole. The rights of each Lender hereunder are pari passu to the rights of
      the
      other Lenders hereunder. Any recovery hereunder shall be shared ratably among
      the Lenders according to the then remaining principal amount owed to each (plus
      accrued and unpaid interest) as to the total amount then owed to the Lenders
      as
      a whole. 

    

    14. Termination;
      Release.
      When
      the Obligations have been indefeasibly paid and performed in full or
      all
      outstanding Convertible Notes have been converted to common stock pursuant
      to
      the terms of the Convertible Notes and the Subscription Agreements,
      this
      Agreement shall terminated, and the Collateral Agent, at the request and sole
      expense of the Debtors, will execute and deliver to the Debtors the proper
      instruments (including UCC termination statements) acknowledging the termination
      of the Security Agreement, and duly assign, transfer and deliver to the Debtors,
      without recourse, representation or warranty of any kind whatsoever, such of
      the
      Collateral, including, without limitation, Securities and any Additional
      Collateral, as may be in the possession of the Collateral Agent.

    

    15. Collateral
      Agent.

    

    15.1 Collateral
      Agent Powers.
      The
      powers conferred on the Collateral Agent hereunder are solely to protect its
      interest (on behalf of the Lenders) in the Collateral and shall not impose
      any
      duty on it to exercise any such powers.

    

    15.2 Reasonable
      Care.
      The
      Collateral Agent is required to exercise reasonable care in the custody and
      preservation of any Collateral in its possession; provided, however, that the
      Collateral Agent shall be deemed to have exercised reasonable care in the
      custody and preservation of any of the Collateral if it takes such action for
      that purposes as any owner thereof reasonably requests in writing at times
      other
      than upon the occurrence and during the continuance of any Event of Default,
      but
      failure of the Collateral Agent, to comply with any such request at any time
      shall not in itself be deemed a failure to exercise reasonable
      care.

     

    [THIS
      SPACE INTENTIONALLY LEFT BLANK]

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the
      undersigned have executed and delivered this Security Agreement, as of the
      date
      first written above.

    

    
      	
              "DEBTOR"

            	 	
              “SUBSIDIARY”

            
	
              ATTITUDE
                DRINKS INC.

            	 	
              ATTITUDE
                DRINK COMPANY, INC.

            
	
              a
                Delaware corporation

            	 	
              a
                Delaware corporation

            

    

    

    
      	
              By:

            	 	 	
              By:

            	 
	 	 	 	 	 
	
              Its:

            	 	 	
              Its:

            	 

    

    

    
      	
              “THE
                COLLATERAL AGENT”

            
	
              BARBARA
                R. MITTMAN

            
	 
	 

    

    

    This
      Security Agreement may be signed by facsimile signature
      and

    delivered
      by confirmed facsimile transmission.

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    APPROVAL
      OF “LENDERS”:

    

    The
      undersigned Lenders instruct the Collateral Agent to enter into the foregoing
      Security Agreement among Attitude Drinks Inc., ______________________,
      and Collateral Agent.

    

     

    

    

    
      	ROY
              WARREN	 	ALPHA
              CAPITAL
              ANSTALT
	 	 	 	 	 
	
              By:

            	 	 	
              By:

            	 

    

    

    
      	
              Print Name of Signator:  

            	 	 	
              Print Name of Signator:  

            	 

    

     

    
      	
              WHALEHAVEN CAPITAL
                FUND LIMITED

            	 	
              MONARCH
                CAPITAL FUND LTD.

            
	 	 	 	 	 
	
              By:

            	 	 	
              By:

            	 

    

    

    
      	
              Print Name of Signator: 

            	 	 	
              Print Name of Signator: 

            	 

    

    

    This
      Security Agreement may be signed by facsimile signature
      and

    delivered
      by confirmed facsimile transmission.

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    SCHEDULE
      A TO SECURITY AGREEMENT

     

    
      	
              LENDER

            	 	
              INITIAL CLOSING

              DATE ESCROWED

              PAYMENT

              (PURCHASE PRICE)

            	
               

            	
              SECOND CLOSING

              DATE ESCROWED

              PAYMENT

              (PURCHASE PRICE)

            	 
	
              ROY
                WARREN

              11300
                U.S. Highway
                1, Suite 207

              North
                Palm Beach, Florida 33408

              Fax:
                (561) 799-5039

            	 	
              $

            	
              50,000.00

            	 	
              $

            	
              50,000.00

            	 
	 	 	 	 	 	 	 	 
	
              ALPHA
                CAPITAL ANSTALT

              Pradafant
                7

              9490
                Furstentums

              Vaduz,
                Lichtenstein

              Fax:
                011-42-32323196

            	 	
              $

            	
              300,000.00

            	 	
              $

            	
              300,000.00

            	 
	 	 	 	 	 	 	 	 
	
              WHALEHAVEN
                CAPITAL FUND LIMITED

              3rd
                Fl., 14 Par-La-Ville Rd.

              Hamilton,
                Bermuda HM08

              Fax:
                (201) 782-9327

            	 	
              $

            	
              150,000.00

            	 	
              $

            	
              150,000.00

            	 
	 	 	 	 	 	 	 	 
	
              MONARCH
                CAPITAL FUND LTD.

              Harbour
                House, 2nd
                Floor

              Waterfront
                Drive, Road Town

              Tortola,
                BVI

              Fax
                (284) 494-4771

            	 	
              $

            	
              100,000.00

            	 	
              $

            	
              100,000.00

            	 
	 	 	 	 	 	 	 	 
	
              TOTALS

            	 	
              $

            	
              600,000.00

            	 	
              $

            	
              600,000.00

            	 

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    SCHEDULE
      B TO SECURITY AGREEMENT

    

    PATENTS,
      PATENTS PENDING, APPLICATIONS

    

    None.

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    SCHEDULE
      6.1 TO SECURITY AGREEMENT

     

    

    There
      are
      no other security interests against the Collateral.

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    ANNEX
      I

    

    TO

     

    SECURITY
      AGREEMENT

     

    PLEDGE
      AMENDMENT

     

    This
      Pledge Amendment, dated _________ __ 200_, is delivered pursuant to Section
      4.3
      of the Security Agreement referred to below. The undersigned hereby agrees
      that
      this Pledge Amendment may be attached to the Security Agreement, dated October
      23, 2007, as it may heretofore have been or hereafter may be amended, restated,
      supplemented or otherwise modified from time to time and that the shares listed
      on this Pledge Amendment shall be hereby pledged and assigned to Collateral
      Agent and become part of the Collateral referred to in such Security Agreement
      and shall secure all of the Obligations referred to in such Security
      Agreement.

    

    
      	
              Name
                of Issuer

            	 	
              Number

              of Shares

            	 	
              Class

            	 	
              Certificate

              Number(s)

            	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 

    

    

    
      	
              ATTITUDE
                DRINKS INC.

            
	 	 
	
              By:

            	 

    

    
      
        
        

      

      
        17

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