Exhibit 10.37

 

SEPARATION, SETTLEMENT AND RELEASE OF CLAIMS AGREEMENT

 

This Separation, Settlement and Release of Claims Agreement (“Agreement”) is
entered into by and between Reed’s Inc., a Delaware corporation, (the
“Employer”) and Stefan Freeman (the “Employee”) (the Employer and the Employee
are collectively referred to herein as the “Parties”) as of November 22, 2019
(the “Execution Date”). Employee and Employer are parties to that certain
Employment Agreement effective October 4, 2017 (“Employment Agreement”). This
Agreement amends, supersedes and replaces in its entirety the Employment
Agreement.

 

The Employee’s last day of employment with the Employer is November 30, 2019
(the “Separation Date”). Prior to the Separation Date, Employee will provide a
list of open projects to complete and provide a timeline for completion.
Employee will make work diligently to complete open project work prior to
November 30, 2019. After the Separation Date, the Employee will not represent
himself as being an employee, officer, agent or representative of the Employer
for any purpose. Except as otherwise set forth in this Agreement, the Separation
Date will be the employment termination date for the Employee for all purposes,
meaning the Employee will no longer be entitled to any further compensation,
monies, bonuses, equity awards, or other benefits from the Employer, including
coverage under any benefits plans or programs sponsored by the Employer, except
as specifically provided in this Agreement.

 

1. Return of Property. Except as specifically provided in this Section 1, by the
Separation Date, the Employee shall promptly return to Reed’s any car, or other
property provided to the Employee by Employer, and any other confidential or
proprietary information of Employer that remains in the Employee’s possession
(“Reed’s Property”); provided, however, that nothing in this Agreement or
elsewhere shall prevent the Employee from retaining and utilizing documents and
information relating to his personal benefits, entitlements and obligations,
documents relating to his personal tax obligations. If the Employee discovers
Reed’s Property in his possession after the Separation Date, he will notify
Employer and promptly either deliver the same to Employer or destroy it as
directed by Employer. Employee may retain Employer issued laptop, provided
Employer may confirm deletion of Reed’s Property by inspection performed within
a reasonable time following the Effective Date.

 

2. Employer’s Waiver and Release and Employee Representations.

 

(a) The Employer expressly waives and releases any and all claims, demands,
actions, causes of actions, obligations, judgments, rights, fees, damages,
debts, obligations, liabilities and expenses (inclusive of attorneys’ fees) of
any kind whatsoever (collectively, “Claims”), whether known or unknown, that the
Employer may have or have ever had against the Employee by reason of any actual
or alleged act, omission, transaction, practice, conduct, occurrence, or other
matter that may be waived and released by law with the exception of claims
arising out of or attributable to (a) events, acts or omissions taking place
after the Parties’ execution of the Agreement and (b) the Employee’s breach of
any terms and conditions of the Agreement.

 

 

 

 

(b) Waiver of California Civil Code Section 1542

 

Employer understands that it may later discover Claims or facts that may be
different than, or in addition to, those which Employer now knows or believes to
exist with regards to the subject matter of this Agreement, and which, if known
at the time of signing this Agreement, may have materially affected this
Agreement or Employer’s decision to enter into it. Nevertheless, the Employer
Releasors hereby waive any right or Claim that might arise as a result of such
different or additional Claims or facts. The Employer Releasors have been made
aware of, and understand, the provisions of California Civil Code Section 1542
and hereby expressly waive any and all rights, benefits and protections of the
statute and the protection of any other state statutes that may be applicable,
which provides,

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

 

(c) In exchange for the Employer’s waiver and release and the consideration
described in Section 3, which the Employee acknowledges to be good and valuable
consideration for his obligations hereunder, the Employee hereby represents that
he intends to irrevocably and unconditionally fully and forever release and
discharge any and all Claims he may have or have ever had against the Employer
that may lawfully be waived and released arising out of or in any way related to
his hire, benefits, employment or separation from employment with the Employer
with the exception of claims arising out of or attributable to (a) events, acts
or omissions taking place after the Parties’ execution of the Agreement and (b)
the Employer’s breach of any terms and conditions of the Agreement. The Employee
specifically represents, warrants and confirms that: (a) he has no claims,
complaints or actions of any kind filed against the Employer with any court of
law, or local, state or federal government or agency; (b) that upon receipt of
the accrued obligations set forth in Section 3(a), he has been properly paid his
salary for period worked for the Employer, and that all commissions, bonuses and
other compensation due to him has been paid, including his final payroll check
for his salary and any accrued but unused vacation/paid time off through and
including the Separation Date above; and (c) has reported all injuries he has
incurred during or as a result of his employment with Employer to human
resources. The Employee specifically represents, warrants and confirms that he
has not engaged in, and is not aware of, any unlawful conduct in relation to the
business of the Employer. If any of these statements are not true, the Employee
cannot sign this Agreement and must notify the Employer immediately, in writing,
of the statements that are not true. Such notice will not automatically
disqualify the Employee from receiving these benefits but will require the
Employer’s review and consideration.

 

3. Separation Benefits. In consideration for the Employee’s execution,
non-revocation of, and compliance with this Agreement, including the waiver and
release of claims in Section 4, the Employer agrees to provide the following:

 

(a) Accrued Obligations. On the Separation Date, Employer shall pay Employee (1)
the gross amount of $12,836.54, representing base salary earned but unpaid as of
the Separation Date, before deduction of standard payroll taxes and deductions
and (2) the gross amount of $35,936.18, representing vacation and sick days
earned but not taken prior to the Separation Date, before deduction of standard
payroll taxes and deductions. The Employer acknowledges and agrees that as of
the date hereof it has reconciled and paid all outstanding charges on Employee’s
Company credit card. The Employee acknowledges and agrees that as of the date
hereof, he has made all requests for reimbursement of business expenses to which
he may be entitled pursuant to the Employer’s reimbursement policy, and provided
such substantiation as may be required thereunder, and shall hereafter not have
any right to request reimbursement of any additional amounts.

 

 

 

 

(b) Severance. Installment payments equal to the Employee’s current salary for
the period commencing on the Separation Date and terminating on June 30, 2020
(“Severance Period”), equaling a total of $131,250, before deduction of standard
payroll taxes and deductions, to be paid in bi-monthly increments starting on
the first pay period following the Effective Date.

 

(c) No Additional Restricted Stock Awards. It is understood 37,037 restricted
stock awards were previously issued to Employee on June 10, 2018 and transferred
to his brokerage account. No additional restricted stock awards will be issued
to Employee pursuant to this Agreement.

 

(d) Stock Options. On the Effective Date, Employer will provide the Employee
with a written option award agreement, reflecting aggregate of 218,438 incentive
stock options (“ISOs”) vested through the Separation Date. Employee’s vested
ISOs consist of (i) incentive stock options to purchase 30,000 shares of common
stock of Reed’s Inc. at the exercise price of $3.74 per share and (ii) incentive
stock options to purchase 188,438 shares of common stock at the exercise price
of $1.60 per share. All ISOs will expire 90 days after the Separation Date.

 

(e) If Employee timely and properly elects COBRA continuation coverage under
Employer’s group health plan, the Employer will pay 100% of Employee’s COBRA
premiums until the earlier of final day of the Severance Period or commencement
of coverage sponsored by subsequent employer, including employer of spouse. If
Employee’s COBRA coverage continues for the entire Severance Period at the
conclusion of the Severance Period, the Employee shall be eligible to continue
his coverage, pursuant to COBRA, and shall be responsible for the entire COBRA
premium for the remainder of the applicable COBRA continuation period.

 

(f) Upon the Employee’s signed request, the Employer will provide the Employee
and/or a prospective employer written confirmation of the Employee’s employment
with the Employer, including his dates of employment and salary information.

 

(g) The Employee understands, acknowledges and agrees that these benefits are in
exchange for executing this Agreement. The Employee further acknowledges no
entitlement to any additional payment or consideration not specifically
referenced herein.

 

4. Release.

 

(a) General Release and Waiver of Claims by Employee

 

The Employee and his heirs, executors, representatives, agents, insurers,
administrators, successors and assigns (collectively the “Employee Releasors”)
irrevocably and unconditionally fully and forever waive, release and discharge
the Employer, including the Employer’s affiliates, predecessors, successors and
assigns, and all of their respective officers, directors, employees,
shareholders, in their corporate and individual capacities (collectively, the
“Employer Releasees”) from any and all Claims, whether known or unknown, from
the beginning of time to the Effective Date of this Agreement, including,
without limitation, any Claims under any federal, state, local or foreign law,
that Employee Releasors may have or have ever had arising out of, or in any way
related to the Employee’s hire, benefits, employment, termination or separation
from employment with the Employer and any actual or alleged act, omission,
transaction, practice, conduct, occurrence or other matter, including, but not
limited to (i) any and all claims under Title VII of the Civil Rights Act, as
amended, the Americans with Disabilities Act, as amended, the Family and Medical
Leave Act, as amended, the Fair Labor Standards Act, the Equal Pay Act, as
amended, the Employee Retirement Income Security Act, as amended (with respect
to unvested benefits), the Civil Rights Act of 1991, as amended, Section 1981 of
U.S.C. Title 42, the Sarbanes-Oxley Act of 2002, as amended, the Worker
Adjustment and Retraining Notification Act, as amended, the National Labor
Relations Act, as amended, the Age Discrimination in Employment Act, as amended,
the Genetic Information Nondiscrimination Act of 2008, the California Fair
Employment and Housing Act, as amended, and/or any other Federal, state, local
or foreign law (statutory, regulatory or otherwise) that may be legally waived
and released; and (ii) any tort, contract and/or quasi-contract law, including
but not limited to claims of wrongful discharge, defamation, emotional distress,
tortious interference with contract, invasion of privacy, nonphysical injury,
personal injury or sickness or any other harm. However, this general release of
claims excludes, and the Employee does not waive, release or discharge (i) any
right to file an administrative charge or complaint with the Equal Employment
Opportunity Commission or other administrative agency; (ii) claims under state
workers’ compensation or unemployment laws; or (iii) indemnification rights the
Employee has against the Employer, including without limitation under Employer’s
Articles of Incorporation, Bylaws or directors and officers insurance policies,
and/or any other claims that cannot be waived by law.

 

 

 

 

If the Employee applies for unemployment benefits, the Employer shall not
contest it. When so required, the Employer will answer any inquiries by the
Department of Labor concerning the termination of the Employee’s employment in a
truthful manner.

 

(b) Waiver of California Civil Code Section 1542

 

Employee understands that he may later discover Claims or facts that may be
different than, or in addition to, those which Employee now knows or believes to
exist with regards to the subject matter of this Agreement, and which, if known
at the time of signing this release, may have materially affected this Agreement
or Employee’s decision to enter into it. Nevertheless, the Employee Releasors
hereby waive any right or Claim that might arise as a result of such different
or additional Claims or facts. The Employee Releasors have been made aware of,
and understand, the provisions of California Civil Code Section 1542 and hereby
expressly waive any and all rights, benefits and protections of the statute and
the protection of any other state statutes that may be applicable, which
provides,

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

 

(c) Specific Release of ADEA Claims

 

The Employee Releasors hereby irrevocably and unconditionally fully and forever
waive, release and discharge the Employer Releasees from any and all Claims,
whether known or unknown, from the beginning of time to the date of the
Employee’s execution of this Agreement arising under the Age Discrimination in
Employment Act (ADEA), as amended, and its implementing regulations. By signing
this Agreement, the Employee hereby acknowledges and confirms that: (i) the
Employee has read this Agreement in its entirety and understands all of its
terms; (ii) the Employee has been advised of and has availed himself of hid
right to consult with his attorney prior to executing this Agreement; (iii) the
Employee knowingly, freely and voluntarily assents to all of the terms and
conditions set out in this Agreement including, without limitation, the waiver,
release and covenants contained herein; (iv) the Employee is executing this
Agreement, including the waiver and release, in exchange for good and valuable
consideration in addition to anything of value to which he is otherwise
entitled; and (v) the Employee understands that the release contained in this
paragraph does not apply to rights and claims that may arise after the date on
which the Employee signs this Agreement.

 

 

 

 

(d) General Release and Waiver of Claims by Employer

 

The Employer and its representatives, agents, insurers, successors and assigns
(collectively the “Employer Releasors”) irrevocably and unconditionally fully
and forever waive, release and discharge the Employee and the Employee’s heirs,
executors, representatives, agents, insurers, administrators, successors and
assigns from any and all Claims, whether known or unknown, from the beginning of
time to the Effective Date of this Agreement, including, without limitation, any
Claims under any federal, state, local or foreign law, that Employer Releasors
may have or have ever had arising out of, or in any way related to the
Employee’s hire, benefits, employment, termination or separation from employment
with the Employer and any actual or alleged act, omission, transaction,
practice, conduct, occurrence or other matter, including, but not limited to
claims under the Employment Agreement, claims of defamation, breach of an
express or implied contract, tortious interference with a contract or
prospective business advantage, breach of the covenant of good faith and fair
dealing, promissory estoppel, detrimental reliance, or any other harm.

 

5. Knowing and Voluntary Acknowledgement. The Employee specifically agrees and
acknowledges that: (i) the Employee has read this Agreement in its entirety and
understands all of its terms; (ii) the Employee has been advised of and has
availed himself of his right to consult with his attorney prior to executing
this Agreement; (iii) the Employee knowingly, freely and voluntarily assents to
all of its terms and conditions including, without limitation, the waiver,
release and covenants contained herein; (iv) the Employee is executing this
Agreement, including the waiver and release, in exchange for good and valuable
consideration in addition to anything of value to which he is otherwise
entitled; (v) the Employee is not waiving or releasing rights or claims that may
arise after his execution of this Agreement; and (vi) the Employee understands
that the waiver and release in this Agreement is being requested in connection
with the cessation of his employment with the Employer.

 

The Employee further acknowledges that he has twenty-one (21) days to consider
the terms of this Agreement and consult with an attorney of his choice, although
he may sign it sooner if desired. Further, the Employee acknowledges that he
shall have an additional seven (7) days from the date on which he signs this
Agreement to revoke consent to his release of claims under the ADEA by
delivering notice of revocation to Sarah Yancy, HR Manager, at the Employer,
syancy@reedsinc.com, by e-mail, fax or overnight delivery before the end of such
seven-day period. In the event of such revocation by the Employee, the Employer
shall have the option of treating this Agreement as null and void in its
entirety.

 

This Agreement shall not become effective, until November 30, 2019 (“Effective
Date”). Such date shall be the Effective Date of this Agreement. No payments due
to the Employee hereunder shall be made or begin before the Effective Date.

 

 

 

 

6. Post-termination Obligations and Restrictive Covenants.

 

(a) Acknowledgment

 

The Employee understands and acknowledges that by virtue of his employment with
the Employer, he had access to and knowledge of Confidential Information, was in
a position of trust and confidence with the Employer and benefitted from the
Employer’s goodwill. The Employee understands and acknowledges that the Employer
invested significant time and expense in developing the Confidential Information
and goodwill. The Employee further understands and acknowledges that the
services he provided to the Employer are unique, special or extraordinary.

 

The Employee further understands and acknowledges that the restrictive covenants
below are necessary to protect the Employer’s legitimate business interests in
its Confidential Information and goodwill and in the Employee’s unique, special
or extraordinary services. The Employee further understands and acknowledges
that the Employer’s ability to reserve these for the exclusive knowledge and use
of the Employer is of great competitive importance and commercial value to the
Employer and that the Employer would be irreparably harmed if the Employee
violates the restrictive covenants below.

 

(b) Confidential Information.

 

(1) Confidential Information. Employer’s “Confidential Information” is all
confidential and/or proprietary knowledge, trade secrets, data or information of
the Employer entrusted to Employee, whether in writing, in computer form, or
conveyed orally, that is not generally available to others in the form in which
such information is used by Employer and that gives Employer a competitive
advantage over other companies who do not have access to this information. By
way of illustration but not limitation, Confidential Information includes
tangible and intangible information relating to formulations, products,
processes, know-how, designs, formulas, methods, developmental or experimental
work; clinical data; improvements; discoveries; plans for research; new
products; marketing and selling; business plans; budgets; unpublished financial
statements; licenses; prices and costs; suppliers; customers; customer needs and
preferences (such as typical order quantities and composition, delivery
requirements or schedules, particular pricing needs or discount arrangements,
advertising allowances and methods of doing business); customer contracts,
credit procedures and terms; supplier identities, key decision makers at each
supplier, and supplier specialties; pricing strategies and rationale; contact
information and information about compensation, specific capabilities, and
performance evaluations of Employer personnel; and any information described
above that the Employer obtains from its clients or any other third party and
that the Employer treats as confidential, whether or not owned or developed by
the Employer.

 

(2) Employee understands that the above are simply examples of Employer’s
Confidential Information, and not a complete list. Employee further understands
that as part of his duties Employee may have participated in developing
Confidential Information for Employer, which then became Employer’s Confidential
Information.

 

 

 

 

(3) Employee agrees that he will not appropriate for his own use, use, disclose,
divulge, furnish, or make available to any person any of the Employer’s
Confidential Information; provided, that the term “Confidential Information”
shall not include such (A) information which is or becomes generally available
to the public other than as a result of unauthorized or improper disclosure by
Employee, (B) information which was in the possession of Employee prior to the
time of disclosure by Employer, (C) information obtained from a third party who,
to Employee’s knowledge, had the right to disclosure such information without
any confidentiality restrictions, or (D) information independently developed by
Employee without the use of information disclosed by Employer. Notwithstanding
the foregoing, Employee may disclose Confidential Information to the extent he
is compelled to do so by lawful service of process, subpoena, court order, or as
he is otherwise compelled to do by law or the rules or regulations of any
regulatory body to which he is subject, including full and complete disclosure
in response thereto, in which event he agrees (unless prohibited by law) to
provide Employer with a copy of the documents seeking disclosure of such
information promptly upon receipt of such documents and prior to their
disclosure of any such information, so that Employer may, upon notice to
Employee, take such action as Employer deems appropriate in relation to such
subpoena or request and Employee (unless otherwise compelled to do so by lawful
service of process, subpoena, court order, or by law or the rules or regulations
of any regulatory body or governmental agency or instrumentality) may not
disclose any such information until Employer has had the opportunity to take
such action.

 

(c) Intellectual Property. Employee agrees that all right, title, and interest
to all works of whatever nature generated in the course of his employment with
the Employer resides with the Employer. Employee agrees that he will return to
Employer or delete or destroy, not later than the Effective Date, all property,
in whatever form (including computer files and other electronic data), of the
Employer in his possession, including without limitation, all copies (in
whatever form) of all files or other information pertaining to the Employer, its
officers, employees, directors, shareholders, customers, suppliers, vendors, or
distributors and any business or business opportunity of the Employer.

 

(d) Mutual Non-Disparagement. The Parties each agree that they, and in the case
of Employer, its executive officers and directors, shall not make any
disparaging statements or representations, whether orally or in writing, by word
or gesture, to any person whatsoever, about the other Party or the other Party’s
directors, officers, employees, attorneys, agents, or representatives, as
applicable. For purposes of this paragraph, a disparaging statement or
representation is any communication which, if publicized to another, would cause
or tend to cause the recipient of the communication to question the business
condition, integrity, competence, good character, or product or service quality
of the person or entity to whom the communication relates.

 

(e) Non-Solicitation. To the full extent permitted by law, the Employee will not
directly or indirectly, individually or on behalf of any person, company,
enterprise or entity, or as a sole proprietor, partner, stockholder, director,
officer, principal, agent, executive, or in any other capacity or relationship,
for a period of six (6) months from the Effective Date:

 

(1) encourage, solicit, induce, cause, or in any manner attempt to encourage,
solicit, induce or cause any person, firm, corporation, or other entity or
organization which is a client, customer, account, vendor, supplier,
distributor, licensee of, or has any business relationship with, Employer’s or
any of its subsidiaries to terminate such relationship with, reduce the amount
of business conducted with, or change in a manner adverse to Employer or its
subsidiaries; or

 

 

 

 

(2) encourage, solicit, induce, cause, or in any manner attempt to encourage,
solicit, induce or cause, any person employed by or providing services to
Employer’s or its subsidiaries to leave, curtail, or change in a manner adverse
to Employer, such employment or service relationship.

 

(f) Acknowledgements Respecting Restrictive Covenants. With respect to the
restrictive covenants set forth in this Section 6, the Parties acknowledge and
agree that:

 

(1) (A) Each of the restrictive covenants contained in this Section 6 shall be
construed as a separate covenant with respect to each activity to which it
applies, (B) if, in any judicial proceeding, a court shall deem any of the
restrictive covenants invalid, illegal, or unenforceable because its scope is
considered excessive, such restrictive covenant shall be modified so that the
scope of the restrictive covenant is reduced only to the minimum extent
necessary to render the modified covenant valid, legal, and enforceable, and (C)
if any restrictive covenant (or portion thereof) is deemed invalid, illegal, or
unenforceable in any jurisdiction, as to that jurisdiction such restrictive
covenant (or portion thereof) shall be ineffective to the extent of such
invalidity, illegality, or unenforceability, without affecting in any way the
remaining restrictive covenants (or portion thereof) in such jurisdiction or
rendering that or any other restrictive covenant (or portion thereof) invalid,
illegal, or unenforceable in any other jurisdiction.

 

(2) The Parties hereto hereby declare that it is impossible to measure in money
the damages that will accrue to a Party in the event the other Party breaches
any of the restrictive covenants provided in this Section 6. In the event that a
Party breaches any such restrictive covenant, the nonbreaching Party shall be
entitled to an injunction, a restraining order or such other equitable relief,
including, but not limited to, specific performance (without the requirement to
post bond) restraining such Party from violating such restrictive covenant. If
the nonbreaching Party shall institute any action or proceeding to enforce the
restrictive covenant, the breaching Party hereby waives the claim or defense
that the breaching Party has an adequate remedy at law and agrees not to assert
in any such action or proceeding the claim or defense that the nonbreaching
Party has an adequate remedy at law.

 

(3) The remedies provided for in this Section 6 are cumulative and in addition
to any other rights and remedies the Parties may have under law or in equity.

 

 

 

 

(g) Cooperation. Employee agrees to cooperate with the Employer to the extent
reasonably requested by the Employer for the purpose of transitioning his duties
and responsibilities. Employee will use his best efforts to make himself
available as a consultant to Employer as may be reasonably requested by Employer
from time to time, on an as needed basis. Employee further agrees to cooperate
with Employer with regard to any litigation relating to Employee’s period of
employment for which Employer reasonably requests Employee’s participation.
Employee’s agreement to consult respecting such litigation shall continue for
the duration of any such litigation. If requested by Employer, such cooperation
shall include, without limitation, (1) responding reasonably promptly to
requests for information and documents in Employee’s possession concerning
matters pertinent to any of the foregoing, (2) making himself reasonably
available as a witness and testifying at trial, depositions, hearings, or other
proceedings, as well as being reasonably available for adequate preparation for
such testimony, and (3) participating at reasonable times in interviews and
meetings with representatives of the Employer, representatives of governments or
regulatory authorities, or others designated by Employer. The Employee agrees
that, following the Effective Date, the Employee will continue to provide
reasonable cooperation to Employer and/or any of its subsidiaries and its or
their respective counsel in connection with any investigation, administrative
proceeding, or litigation relating to any matter that occurred during the
Employee’s employment in which the Employee was involved or of which the
Employee has knowledge. As a condition of such cooperation, Employer shall
reimburse the Employee for reasonable out-of-pocket expenses incurred at the
request of Employer and shall compensate Employee at a daily rate equal to his
daily rate of compensation at the time of termination of his employment. The
Employee also agrees that, in the event that the Employee is subpoenaed by any
person or entity (including, but not limited to, any government agency) to give
testimony or provide documents (in a deposition, court proceeding, or otherwise)
that in any way relates to the Employee’s employment by Employer, the Employee
will, if legally permitted, give prompt notice of such request to Employer and,
unless legally required to do so, will make no disclosure until Employer or
Employer’s subsidiaries has had a reasonable opportunity to contest the right of
the requesting person or entity to such disclosure.

 

(h) Remedies. In the event of a breach or threatened breach by either Party of
any of the provisions of this Agreement, such Party hereby consents and agrees
that the other Party shall be entitled to seek, in addition to other available
remedies, a temporary or permanent injunction or other equitable relief against
such breach or threatened breach from any court of competent jurisdiction,
without the necessity of showing any actual damages or that money damages would
not afford an adequate remedy, and without the necessity of posting any bond or
other security. The aforementioned equitable relief shall be in addition to, not
in lieu of, legal remedies, monetary damages or other available forms of relief.

 

7. Heirs and Assigns. This Agreement is binding on and is for the benefit of the
Parties hereto and their respective successors (whether by merger, sale of
assets, reorganization or other form of business acquisition, disposition or
business reorganization), assigns, heirs, executors, administrators, and other
legal representatives. Neither this Agreement nor any right or obligation
hereunder may be assigned by Employee.

 

8. Integration. This Agreement constitutes the complete agreement between the
Employer and Employee regarding the issues addressed in this Agreement. The
terms of this Agreement may be changed, modified, or discharged only by an
instrument in writing signed by the Parties hereto. A failure of the Employer or
Employee to insist on strict compliance with any provision of this Agreement
shall not be deemed a waiver of such provision or any other provision hereof. In
the event that any provision of this Agreement is determined to be so broad as
to be unenforceable, such provision shall be interpreted to be only so broad as
is enforceable.

 

 

 

 

9. Choice of Law. This Agreement shall be construed, enforced, and interpreted
in accordance with and governed by the laws of the State of California, without
regard to its choice of law provisions.

 

10. Withholding. The Employer may withhold from any and all amounts payable
under this Agreement such federal, state, and local taxes or other withholdings
as may be required to be withheld pursuant to any applicable law or regulation.

 

11. Construction of Agreement. The Parties hereto acknowledge and agree that
each Party has reviewed and negotiated the terms and provisions of this
Agreement and has had the opportunity to contribute to its revision.
Accordingly, the rule of construction to the effect that ambiguities are
resolved against the drafting Party shall not be employed in the interpretation
of this Agreement. Rather, the terms of this Agreement shall be construed fairly
as to both Parties hereto and not in favor or against either Party.

 

12. Notice. Any notice or other communication required or permitted under this
Agreement shall be effective only if it is in writing and shall be deemed to be
given when delivered personally or four days after it is mailed by registered or
certified mail, postage prepaid, return receipt requested or one day after it is
sent by a reputable overnight courier service and, in each case, addressed to
the Employer, to its principal place of business and to Employee, to his address
set forth on the signature page hereof, or to such other address as any Party
hereto may designate by notice to the other.

 

13. Severability. The Parties hereto intend that the validity and enforceability
of any provision of this Agreement shall not affect or render invalid any other
provision of this Agreement.

 

14. Modification and Waiver. No provision of this Agreement may be amended or
modified unless such amendment or modification is agreed to in writing and
signed by the Employee and by Chief Executive Officer of the Employer. No waiver
by either of the Parties of any breach by the other Party hereto of any
condition or provision of this Agreement to be performed by the other Party
hereto shall be deemed a waiver of any similar or dissimilar provision or
condition at the same or any prior or subsequent time, nor shall the failure of
or delay by either of the Parties in exercising any right, power or privilege
hereunder operate as a waiver thereof to preclude any other or further exercise
thereof or the exercise of any other such right, power or privilege.

 

15. Captions. Captions and headings of the sections and paragraphs of this
Agreement are intended solely for convenience and no provision of this Agreement
is to be construed by reference to the caption or heading of any section or
paragraph.

 

16. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument. Delivery of an executed counterpart of this
Agreement, by facsimile, electronic mail in portable document format (.pdf), or
by any other electronic means intended to preserve the original graphic and
pictorial appearance of a document, has the same effect as delivery of an
executed original of this Agreement.

 

 

 

 

17. No Admission. Nothing in this Agreement shall be construed as an admission
of wrongdoing or liability on the part of either Party.

 

18. Attorneys’ Fees. Should either Party breach any of the terms of this
Agreement or the post- termination obligations herein, to the extent authorized
by state law, the breaching Party will be responsible for payment of all
reasonable attorneys’ fees and costs that the other Party incurred in the course
of enforcing the terms of the Agreement, including demonstrating the existence
of a breach and any other contract enforcement efforts.

 

19. Section 409A. This Agreement is intended to comply with Section 409A of the
Internal Revenue Code of 1986, as amended (“Section 409A”) or an exemption
thereunder and shall be construed and administered in accordance with Section
409A. Notwithstanding any other provision of this Agreement, payments provided
under this Agreement may only be made upon an event and in a manner that
complies with Section 409A or an applicable exemption. Any payments under this
Agreement that may be excluded from Section 409A either as separation pay due to
an involuntary separation from service or as a short-term deferral shall be
excluded from Section 409A to the maximum extent possible. For purposes of
Section 409A, each installment payment provided under this Agreement shall be
treated as a separate payment. Any payments to be made under this Agreement upon
a termination of employment shall only be made upon a “separation from service”
under Section 409A. Notwithstanding the foregoing, the Employer makes no
representations that the payments and benefits provided under this Agreement
comply with Section 409A and in no event shall the Employer be liable for all or
any portion of any taxes, penalties, interest or other expenses that may be
incurred by the Employee on account of non-compliance with Section 409A.

 

20. Acknowledgment of Full Understanding. THE EMPLOYEE ACKNOWLEDGES AND AGREES
THAT HE HAS FULLY READ, UNDERSTANDS AND VOLUNTARILY ENTERS INTO THIS AGREEMENT.
THE EMPLOYEE ACKNOWLEDGES AND AGREES THAT HE HAS HAD AN OPPORTUNITY TO ASK
QUESTIONS AND CONSULT WITH AN ATTORNEY OF HIS CHOICE BEFORE SIGNING THIS
AGREEMENT. THE EMPLOYEE FURTHER ACKNOWLEDGES THAT HIS SIGNATURE BELOW IS AN
AGREEMENT TO RELEASE EMPLOYER FROM ANY AND ALL CLAIMS RELATED TO THE SUBJECT
MATTER OF THIS AGREEMENT.

 

21. Entire Agreement. This Agreement constitutes the entire agreement between
the Parties with respect to its subject matter and supersedes any prior
understandings, agreements or representations between the Parties, written or
oral, with respect to the subject matter of this Agreement. For clarity, all the
terms of the Employment Agreement are amended, replaced and superseded by this
Agreement.

 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Execution
Date above.

 

  REED’S INC.         By /s/ Joann Tinnelly   Name: Joann Tinnelly   Title:
Interim Chief Executive Officer

 

EMPLOYEE         Signature: /s/ Stefan Freeman   Name: Stefan Freeman