EXECUTION
VERSION


 


Rosenthal
& Rosenthal, Inc.


1370
Broadway


New
York, NY 10018





 





October
4, 2018


 





Reed’s
Inc.


201
Merritt 7 Corporate Park


Norwalk,
Connecticut 06851


 


Re:
Intellectual Property Security Agreement 


 


We
have entered into a Financing Agreement as amended and/or supplemented effective as of October 4, 2018 among Rosenthal &
Rosenthal, Inc., as Lender, and Reed’s Inc. (hereinafter referred to as “you”) pursuant to which you
have incurred Obligations (as defined in the Financing Agreement).


 


As
part of the inducement for us to extend additional credit to you under the Financing Agreement, you have agreed to execute this
Intellectual Property Security Agreement covering the U.S. Trademarks and Domain Name listed on Schedule A, the U.S. Patents listed
on Schedule B, the U.S. copyrights listed on Schedule C, the license agreements listed on Schedule D (the “Licenses”)
and any future intellectual property registrations, applications, licenses you may enter into authorizing third parties to use
your intellectual property and all Proceeds (as hereinafter defined) of such Licenses and any other intellectual property rights
you now have or may obtain in the future.


 


1.
DEFINED TERMS


 


As
used in this Intellectual Property Security Agreement, terms defined in the Financing Agreement shall have their defined meanings
and the following terms shall have the following meanings, unless the context otherwise requires:


 


“Code”
shall mean the Uniform Commercial Code as the same may from time to time be in effect in the State of New York.


 


“Collateral”
shall have the meaning assigned to it in Section 2 of this Intellectual Property Security Agreement.


 


“Copyrights”
shall mean all copyrights in published and unpublished works, now or hereafter existing, all right, title and interest therein
anywhere in the world, and all applications, registrations and recordings relating thereto filed in the United States Copyright
Office or in any other government office or agency anywhere in the world, all whether now owned or hereafter created or acquired
by you. “Copyrights” as used herein includes, without limitation, the right to print, reprint, publish, reproduce,
sell, distribute, perform, display and make derivative works based on works presently or hereafter owned by or licensed to you,
in whole or in part, and all other rights which you presently have or hereafter acquire pursuant to any contract that enables
you to conduct its business anywhere in the world, including, without limitation, copyright assignments, exclusive and non-exclusive
licenses; publishing agreements; printing agreements; distribution agreements; and agreements relating to translation rights,
first and second serial rights, book club, paperback and secondary publishing rights, and stage, motion picture, television, home
video, phonograph record, merchandising and all other entertainment or communication-related rights. “Copyrights”
as used herein also includes, without limitation, all of your right, title and interest in all physical materials embodying works
with respect to which you own any Copyrights, including, without limitation, plates, films, color separations, mechanical art,
and original art and manuscripts.


 


“Default”
shall mean, for purposes of this Intellectual Property Security Agreement, any event of default as defined in the Financing Agreement.


 






    	 



    	 



    




 


“General
Intangibles” shall have the meaning assigned to it under Section 9-102 of the Code.


 


“Intellectual
Property Security Agreement” shall mean this Intellectual Property Security Agreement, as the same may from time to
time be amended or supplemented.


 


“Obligations”
shall have the meaning assigned to that term in the Financing Agreement. The term “Obligations” shall also include
any and all reasonable attorney’s fees, costs and other expenses incurred by us or on our behalf in the collection or enforcement
of any of the Obligations and the perfection, presentation and enforcement of our rights and remedies hereunder and our security
interest in the Collateral.


 


“Patents”
shall mean any patent or patent application listed on Schedule B annexed hereto, all other U.S. patents, U.S. patent applications,
foreign patents, foreign patent applications (including utility models) and international (PCT) patent applications owned by you,
all parents, divisions, continuations, continuations-in-part, substitutions and changes of applications of any of the foregoing
U.S., foreign or international patents or patent applications, whether related thereto directly or through one or more intervening
U.S., foreign or international applications, all U.S. and foreign patents and patent applications (including utility models) corresponding
to or claiming priority from the aforesaid patents and patent applications, including all patents of addition, issuing on or registered
from any of the foregoing applications, and all reissues, reexaminations, renewals and extensions of any of the foregoing U.S.
and foreign patents, all whether now owned or hereafter acquired by you, including, but not limited to, those described in Schedule
B annexed hereto.


 


“Proceeds”
shall include, but not be limited to, (i) any and all proceeds of any insurance, indemnity, warranty or guarantee payable to you
from time to time with respect to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable
to you from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part
of the Collateral by any governmental body, authority, bureau or agency (or any person acting under color of governmental authority),
and (iii) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.


 


“Trademarks”
shall mean any trademark or domain name listed on Schedule A annexed hereto, prints and labels on which said trademark has appeared
or appear, and all designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all right title
and interest therein and thereto, and all registrations and recordings thereof, including, without limitation, applications, registrations
and recordings in the United States Patent and Trademark Office or with any domain name registrar or in any country’s Patent
and Trademark Office or in any similar office or agency of the United States or any other country, any State thereof, or any political
subdivision thereof, all whether now owned or hereafter acquired by you, including, but not limited to, those described in Schedule
A annexed hereto.


 


2.
GRANT OF SECURITY INTEREST


 


As
collateral security for your prompt and complete payment and performance of all Obligations under the Financing Agreement , you
hereby pledge and hypothecate in favor of us, and grant to us a security interest in all of your right, title and interest (a)
in and to the Trademarks and the good will of the business symbolized by the Trademarks, including, without limitation, all of
your licenses, customer lists and other business records and that of your subsidiaries and affiliates relating to the Trademarks
listed on Schedule A; and any and all proceeds of the foregoing, including, without limitation, any claims by you against third
parties for infringement of the Trademarks; (b) in and to the Patents and the good will of the business symbolized by the Patents,
including, without limitation, all of your licenses, lists of licensees and other business records and that of your subsidiaries
and affiliates relating to the Patents; the patents and patent applications listed in Schedule B and all other patents and patent
applications owned by you; and any and all proceeds of the foregoing, including, without limitation, any claims by you against
third parties for infringement of the Patents; (c) in and to the Copyrights and the good will of the business symbolized by the
copyrights including without limitation all of your licenses and other business records and that of your subsidiaries and affiliates
relating to the Copyrights, the copyrights and copyright applications listed in Schedule C and all other copyrights and copyright
applications owned by you; and any and all proceeds of the foregoing, including, without limitation, any claims by you against
third parties for infringement of the Copyrights and (d) all of your right, title and interest in, to and under the following:


 






    	IP Security Agreement, pg. 2	 	 



    	 



    




 


(i)
all Licenses;


 


(ii)
all Accounts, General Intangibles and contract rights arising under or relating to each and every License (including, without
limitation, (A) all monies due and to become due under any License, (B) any damages arising out of or for breach or default in
respect of any such License, (C) all other amounts from time to time paid or payable under or in connection with any such License,
and (D) your right to terminate any such License or to perform and to exercise all remedies thereunder);


 


(iii)
to the extent not otherwise included, all Proceeds and products of any or all of the foregoing.


 


All
of the property referred to in this paragraph 2 is hereinafter collectively called the “Collateral.”


 


3.
OUR RIGHTS; LIMITATIONS ON OUR OBLIGATIONS


 


(a)
It is expressly agreed by you that, anything herein to the contrary notwithstanding, you shall remain liable under each
License to observe and perform all the conditions and obligations to be observed and performed by you thereunder, all in
accordance with and pursuant to the terms and provisions of each such License. We shall not have any obligation or liability
under any License by reason of or arising out of this Intellectual Property Security Agreement or its assignment to us or the
receipt by us of any payment relating to any License, pursuant thereto, nor shall we be required or obligated in any manner
to perform or fulfill any of your obligations under or pursuant to any License, or to make any payment, or to make any
inquiry as to the nature or the sufficiency of any payment received by us or the sufficiency of any performance by any party
under any License, or to present or file any claim, or to take any action to collect or enforce any performance or the
payment of any amounts which may have been assigned to us or to which we may be entitled at any time or times.


 


(b)
Upon Default, we may at any time notify parties to the Licenses that we have a security interest in one or more of the
Licenses and notify said parties that payments shall be made directly to us thereafter. Upon our request at any time, you
will so notify such parties to the Licenses. We may in our own name or in the name of others communicate with parties to the
Licenses in order to verify with them to our satisfaction the existence, amount and terms of any Licenses.


 


 4. REPRESENTATIONS AND WARRANTIES




 


(a)
Schedule A to this Intellectual Property Security Agreement contains a schedule of all the trade names, trademarks and
service marks, and their registrations and pending applications, domain names owned by you or in which you have any rights
and licenses for Trademarks. To the best of your knowledge, in the use of the Trademarks, domain names or otherwise, you and
your affiliates and subsidiaries have not infringed, and are not now infringing on any trade name, trademark, service mark,
domain name, copyright, patent, right of privacy or publicity, and are not competing unfairly with, or otherwise violating
the rights of any other party. Except as set forth in Schedule D, you are not a party to any license, agreement or
arrangement, whether as licensor, licensee or otherwise, with respect to any trademarks, service marks, trade names, or
domain names, trade secrets, know-how, or confidential information.


 


(b)
To the best of your knowledge, you and your affiliates and subsidiaries have not infringed, and are not now infringing on any
patent or otherwise violating the patent rights of any other party, and have not misappropriated, and are not now
misappropriating on any trade secret or otherwise violating the trade secrets rights of any other party. Except as set forth
in Schedule D, you are not a party to any patent or trade secret license, agreement or arrangement, whether as licensor,
licensee or otherwise.


 


(c)
To the best of your knowledge, you and your affiliates and subsidiaries have not infringed, and are not now infringing on any
copyright or otherwise violating the copyright rights of any other party. Except as set forth in Schedule D, you are not a
party to any copyright license, agreement or arrangement, whether as licensor, licensee or otherwise.


 


(d)
You own all the Trademarks, Patents and Copyrights listed on Schedules A, B and C for your business as now conducted by you
and such use does not, to the best of your knowledge, and will not, conflict with, infringe on, or otherwise violate any
rights of others and the Trademarks, Patents and Copyrights are valid and enforceable.


 






    	IP Security Agreement, pg. 3	 	 



    	 



    




 


(e)
You are the owner of all the Trademarks, Patents and Copyrights listed on Schedules A, B and C for the goods and descriptions
set forth on said Schedules throughout the United States, and no persons, other than the licensees identified in Schedule D,
have the right to use the Trademarks, Patents or Copyrights in the United States.


 


(f)
Other than as specifically noted on the Schedules, none of the Trademarks, Patents or Copyrights listed on Schedules A, B and
C have been abandoned.


 


(g)
Each License referred to in Schedule D is a bona fide, valid and legally enforceable obligation by you and the licensees
thereto. All consents, approvals or authorizations required to be obtained, effected or given in connection with the
execution, delivery and performance of each License by each party thereto and you have been duly obtained, effected or given,
are in full force and effect and do not subject the scope of such License to any materially adverse limitation, either
specific or general in nature. The rights and obligations of you as Licensor, shall also be for the benefit of us, as a
secured lender, to you and to any subsequent purchaser of such Licenses from us.


 


(h)
With respect to each License referred to in Schedule D, neither you nor any other party to such License is in default or, to
the best of your knowledge, is likely to become in default in the performance or observance of any of the terms thereof. You
have fully performed all of your material obligations under each License and your right, title and interest in any License is
not subject to any defense, offset, counterclaim or claim, nor have any of the foregoing been asserted or alleged against you
or your predecessor(s) as to any License.


 


(i)
The Collateral now owned by you is valid and subsisting and in full force and effect and you have the sole, full and clear
title thereto. You have the right and power to grant the security interest herein granted and the Collateral is not subject
to any liens, claims, mortgages, assignments, licenses (other than the licensees set forth on Schedule D hereto) or security
interests.


 


(j)
No security agreement, financing statement, equivalent security or lien instrument or continuation statement covering all or
any part of the Collateral is on file or of record in any public office, except such as may have been filed by you in favor
of us pursuant to this Intellectual Property Security Agreement or to the Financing Agreement. Notwithstanding the foregoing,
the parties hereto acknowledge the subordinate security interest of Raptor/Harbor Reeds SPV LLC which is subject to the terms
of the Subordination Agreement executed contemporaneously herewith.


 


(k)
This Intellectual Property Security Agreement constitutes a valid and continuing first lien on and first security interest in
the Collateral in our favor, prior to all other liens, encumbrances, security interests and rights of others and is
enforceable as such as against your creditors and customers. All action necessary or desirable to protect and perfect such
security interest in each item of the Collateral has been duly taken.


 


(l)
Your principal place of business and the place where your records concerning the Collateral are kept is the address set forth
above and you will not change such principal place of business or remove such records without our express written
consent.


 


(m)
Except as set forth is Schedule D, you are not a party to any license, agreement or arrangement with respect to the
Trademarks, Patents or Copyrights.


 


(n)
You will promptly notify us of all license agreements covering the Trademarks, Patents and Copyrights executed after the date
of this Intellectual Property Security Agreement.


 






    	IP Security Agreement, pg. 4	 	 



    	 



    







 


5.
COVENANTS


 


You
covenant and agree with us that from and after the date of this Intellectual Property Security Agreement and until the Obligations
are fully satisfied:


 


(a) Further
Documentation; Pledge of Instruments. At any time and from time to time, upon our written request, and at your sole
expense, you will promptly and duly execute and deliver any and all such further instruments and documents and take such
further action as we may reasonably deem desirable in obtaining the full benefits of this Intellectual Property Security
Agreement and of the rights and powers herein granted, including, without limitation, the filing of any financing or
continuation statements under the Uniform Commercial Code in effect in any jurisdiction with respect to the liens and
security interest granted thereby. You also hereby authorize us to file any such financing or continuation statement
pertaining to the Collateral without your signature to the extent permitted by applicable law. If any amount payable under or
in connection with any of the Collateral shall be or become evidenced by any promissory note or other instrument, such note
or instrument shall be immediately pledged to us hereunder, duly endorsed in a manner satisfactory to us.


 


(b) Maintenance
of Records. You will keep and maintain at your own cost and expense satisfactory and complete records of the Collateral
including, without limitation, a record of all payments received and all credits granted with respect to the Collateral and
all other dealings with the Collateral. You will mark your books and records pertaining to the Collateral to evidence this
Intellectual Property Security Agreement and the security interests granted hereby. For our further security, you agree that
we shall have an interest in all of your books and records pertaining to the Collateral and you shall deliver and turn over
copies of any such books and records to us or to our representatives at any time after the occurrence and during the
continuation of a Default on our demand, along with a certificate from a duly authorized officer that the copies accurately
reflect the originals.


 


(c) Maintenance
of Trademarks, Patents and Copyrights. You will not do any act, or omit to do any act, whereby the Trademarks, Patents
or Copyrights or their registrations thereof may become abandoned, invalidated, unenforceable, expired or will otherwise
diminish the value of the Trademarks, Patents or Copyrights, and shall notify us immediately if you know of any reason or
have reason to know of any ground under which this result may occur. Without in any way limiting the foregoing, you shall
take appropriate action at your expense to halt the infringement of the Trademarks, Patents and Copyrights and shall properly
exercise your duty to control the nature and quality of the goods and/or services offered by Licensees in connection with the
Trademarks, Patents and Copyrights listed on Schedules A, B and C.


 


(d) Indemnification.


 


(A)
You assume all responsibility and liability arising from the use of the Trademarks, Patents and Copyrights and you hereby
agree to indemnify and hold us harmless from and against any claim, suit, loss, damage or expense (including reasonable
attorneys’ fees) arising out of your business operations.


 


(B)
Upon Default, in any suit, proceedings or action brought by us under any License for any sum owing thereunder, or to enforce
any provisions of such License you will indemnify and keep us harmless from and against all expense, loss or damage suffered
by reason of any defense, set off, counterclaim, recoupment or reduction or liability whatsoever of the obligee thereunder,
arising out of a breach by you of any obligation thereunder or arising out of any other agreement, indebtedness or liability
at any time owing to or in favor of such obligee or its successors from you, and all of your such obligations shall be and
remain enforceable against and only against you and shall not be enforceable against us.


 


(e) Compliance
with Laws, etc. You will comply, in all material respects, with all acts, rules, regulations, orders, decrees, and
directions of any governmental authority applicable to the Collateral or any part thereof or to the operation of your
business; provided, however, that you may contest any act, regulation, order, decree or direction in any
reasonable manner which shall not in our sole opinion exercised in good faith adversely affect our rights or the first
priority of our security interest in the Collateral.


 


(f) Payment
of Obligations. You will pay when due all taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of its income or profits therefrom, as well as all claims of any kind (including claims for labor,
materials and supplies), except that no such charge need be paid if (i) the validity thereof is being contested in good faith
by appropriate proceedings, (ii) such proceedings do not involve any danger of the sale, forfeiture or loss of any of the
Collateral or any interest therein and (iii) such charge is adequately reserved against in accordance with generally accepted
accounting principles.


 






    	IP Security Agreement, pg. 5	 	 



    	 



    




 


(g) Compliance
with Terms of Licenses, etc. You will perform and comply in all material respects with all obligations under the
Licenses and all other agreements to which you are a party or by which you are bound relating to the Collateral.


 


(h) Limitation
of Liens on Collateral. You will not create, permit or suffer to exist, and will defend the Collateral against and take
such other action as is necessary to remove, any lien, security interest, encumbrance, claim or right, in or to the
Collateral and will defend our right, title and interest in and to any of your rights under the Licenses and to the Proceeds
thereof against the claims and demands of all persons whomsoever.


 


(i) Limitations
on Modifications of Licenses. You will not (i) amend, modify, terminate or waive any provision of any License in any
manner which could reasonably be expected to materially adversely affect the value of such License as Collateral without our
prior written consent which consent will not be unreasonably withheld, (ii) fail to exercise promptly and diligently each and
every material right which you may have under each License (other than any right of termination) or (iii) fail to deliver to
us a copy of each material demand, notice or document sent or received by you relating in any way to any License.


 


(j) Further
Identification of Collateral. You will furnish to us such reports in connection with the Collateral as we may reasonably
request, all in reasonable detail.


 


(k) Notices.
You will advise us promptly, in reasonable detail, (i) of any lien, or claim made or asserted against any of the Collateral,
(ii) of any material change in the composition of the Collateral, and (iii) of the occurrence of any other event which would
have a material effect on the aggregate value of the Collateral or on the security interest created hereunder.


 


(l) Right
of Inspection. We shall at all times have full and free access during normal business hours to all of your books,
correspondence and records, and we or our representatives, upon twenty four hours prior notice, may examine the same, take
extracts therefrom and make photocopies thereof, and you agree to render to us, at your cost and expense, such clerical and
other assistance as may be reasonably requested with regard thereto.


 


(m) Additional
Trademarks, Patents and Copyrights and Future Trademark, Patent and Copyright Applications. In no event shall you adopt
or use any Trademark, Patent or Copyright or register or file an application for the registration of any Trademark, Patent or
Copyright with the United States Patent and Trademark Office or Copyright Office, Domain Name Registrar or any other
country’s Patent, Trademark or Copyright Office or Domain Name Registrar or any similar office or agency unless you
promptly inform us, and, upon our request, you will execute and deliver any and all agreements, instruments, documents and
papers as we may request to evidence our interest in your Trademarks, Patents and Copyrights and the goodwill and general
intangibles relating thereto or represented thereby.


 


(n) Limitation
on Further Uses of Trademarks, Patents and Copyrights. You will not assign, sell, mortgage, lease, transfer, pledge,
hypothecate, grant a security interest in or lien upon, encumber, grant an exclusive or non-exclusive license, or otherwise
dispose of any of the Collateral, without our prior written consent, and nothing in this Agreement shall be deemed a consent
by us to any such action. Without in any way limiting the foregoing, we must approve any future license or use by you of the
Trademarks, Patents, and Copyrights which consent will not be unreasonably withheld.


 


6.
OUR APPOINTMENT AS ATTORNEY-IN-FACT


 


(a)
You hereby irrevocably constitute and appoint us and any of our officers or agents, with full power of substitution, as your
true and lawful attorney-in-fact with full irrevocable power and authority in your place and stead and in your name or in our
own name, from time to time in our discretion, for the purpose of carrying out the terms of this Intellectual Property
Security Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Intellectual Property Security Agreement and, without limiting the
generality of the foregoing, hereby give us the power and right, on your behalf, without notice to or assent by you to do the
following:


 


 (i) Upon the occurrence and during the continuance of a Default, to ask, demand, collect, receive and give acquittance and receipts for any and all moneys due and to become due under any Licenses and, in your name or our own name or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Licenses and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by us for the purpose of collecting any and all such moneys due under any Licenses whenever payable;




 






    	IP Security Agreement, pg. 6	 	 



    	 



    




 


 (ii) To pay or discharge taxes, liens, security interests or other encumbrances levied or placed on or threatened against the Collateral; and




 


(iii)
Upon the occurrence and during the continuance of any Default, (A) to direct any party liable for any payment under any of the
Licenses to make payment of any and all moneys due and to become due thereunder directly to us or as we shall direct; (B) to receive
payment of and receipt for any and all moneys, claims and other amounts due and to become due at any time in respect of or arising
out of any Collateral; (C) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and to enforce any other right in respect of any Collateral; (D) to
defend any suit, action or proceeding brought against you with respect to any Collateral; (E) to settle, compromise, or adjust
any suit, action or proceeding described above and, in connection therewith, to give such discharges or release as we may deem
appropriate; (F) to cause your corporate names and domain names and those of your affiliates and subsidiaries to be changed to
names which do not include the Trademark or any term similar thereto, and neither you nor any of your affiliates or subsidiaries
shall thereafter make any use of the Trademark or any mark similar thereto for any purpose; and (G) generally to sell, transfer,
pledge, make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though we were
the absolute owner thereof for all purposes, and to do, at our option and your expense, at any time, or from time to time, all
acts and things which we deem necessary to protect, preserve or realize upon the Collateral and our security interest therein,
in order to effect the intent of this Intellectual Property Security Agreement, all as fully and effectively as you might do.


 


You
hereby ratify all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power
coupled with an interest and shall be irrevocable. Notwithstanding the foregoing, youfurther agree to execute any additional
documents which we may require in order to confirm this power of attorney, or which we may deem necessary to enforce any of our
rights contained in this Intellectual Property Security Agreement.


 


(b)
The powers conferred on us hereunder are solely to protect our interests in the Collateral and shall not impose any duty upon
us to exercise any such powers. We shall be accountable only for amounts that we actually receive as a result of the exercise
of such powers and neither we nor any of our officers, directors, employees or agents shall be responsible to you for any act
or failure to act, except for our own gross negligence or willful misconduct.


 


(c)
You also authorize us, at any time and from time to time to execute, in connection with the sale provided for in Section 9 of
this Intellectual Property Security Agreement, any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral.


 


7.
EXECUTION OF POWER OF ATTORNEY


 


Concurrently
with the execution and delivery hereof, you are executing and delivering to us, in the form of Exhibit E hereto, five (5) originals
of a Power of Attorney for the implementation of the assignment, sale or other disposal of the Trademarks, Patents and Copyrights
pursuant to paragraph 6 hereof.


 


8.
PERFORMANCE BY US OF YOUR OBLIGATIONS


 


If
you fail to perform or comply with any of your agreements contained herein and we, as provided for by the terms of this Intellectual
Property Security Agreement, shall ourselves perform or comply, or otherwise cause performance or compliance, with such agreement,
our expenses incurred in connection with such performance or compliance shall be payable by you to us on demand and shall constitute
Obligations secured by.


 






    	IP Security Agreement, pg. 7	 	 



    	 



    







 


9.
REMEDIES, RIGHTS UPON DEFAULT


 


(a)
If a Default shall occur and be continuing:


 


 (i) All payments received by you under or in connection with any of the Collateral shall be held by you in trust for us, shall be segregated from other funds of yours, and shall forthwith upon receipt by you, be turned over to us, in the same form as received by you (duly indorsed by you to us, if required); and




 


 (ii) any and all such payments so received by us (whether from you or otherwise) may, in our sole discretion, be held by us as collateral security for, and/or then or at any time thereafter applied in whole or in part by us against all or any part of the Obligations in such order as we shall elect. Any balance of such payments held by us and remaining after payment in full of all the Obligations shall be paid over to you or to whomsoever may be lawfully entitled to receive the same.




 


(b)
If any Default shall occur and be continuing, you agree and consent that we may succeed to the position of either Licensee or
Licensor under the License Agreement, and receive all rights and benefits of such party under the License Agreement,
including, without limitation, the right to enforce the Licenses and the right to sublicense the Trademarks and
Patents.


 


(c)
If any Default shall occur and be continuing, we may exercise in addition to all other rights and remedies granted to us in
this Intellectual Property Security Agreement and in any other instrument or agreement securing, evidencing or relating to
the Obligations, all rights and remedies of a secured party under the Uniform Commercial Code. You shall remain liable for
any deficiency if the proceeds of any sale or disposition of the Collateral are insufficient to pay all amounts to which we
are entitled, and you will be liable for the fees of any attorneys employed by us to collect such deficiency.


 


(d)
You also agree to pay all of our costs, including attorneys’ fees, incurred with respect to the collection of any of
the Obligations and the enforcement of any of our rights hereunder.


 


(e)
You hereby waive presentment, demand, protest or any notice (to the extent permitted by applicable law and except as set
forth in the Loan Agreement) of any kind in connection with this Intellectual Property Security Agreement or any
Collateral.


 


10.
LIMITATION ON OUR DUTY IN RESPECT OF COLLATERAL


 


Beyond
the safe custody thereof, we shall not have any duty as to any Collateral in our possession or control or in the possession or
control of any of our agents or nominees or any income thereon or as to the preservation of rights against prior parties or any
other rights pertaining thereto.


 


11.
NOTICES


 


Any
notice to either party shall be deemed to have been validly served (a) upon the earlier of actual receipt or four (4) days after
deposit in the United States Mail, registered or certified mail, return receipt requested, with proper postage prepaid, (b) upon
transmission, when sent by telecopy or other similar facsimile transmission (with such telecopy or facsimile promptly confirmed
by delivery of a copy by personal delivery or United States mail as set forth in subsection (a) above; (b) one (1) business day
after deposit with a reputable overnight courier with all charges prepaid; or (d) when hand-delivered and received by the party
to be notified.


 






    	IP Security Agreement, pg. 8	 	 



    	 



    













 


	 	Any notice shall be addressed as follows:
	 	 	 
	 	To:	Rosenthal
    & Rosenthal, Inc.
	 	 	1370
    Broadway
	 	 	New
    York, NY 10018
	 	 	Attn:
    Robert Miller, EVP
	 	 	 
	 	 	Facsimile
    No. (212) 356-0910
	 	With
    a copy to:	 
	 	 	 
	 	 	Paul
    H. Shur, Esq.
	 	 	Wilentz,
    Goldman & Spitzer, P.A.
	 	 	110
    William Street
	 	 	26th
    Floor
	 	 	New
    York, New York 10038-3927
	 	 	 
	 	 	Facsimile
    No. (212) 267-3828
	 	 	 
	 	To:	Reed’s
    Inc.
	 	 	201
    Merritt 7 Corporate Park
	 	 	Norwalk,
    Connecticut 06851
	 	 	Attn:
    Valentin Stalowir
	 	 	 
	 	 	Facsimile
    No. [xxx-xxx-xxxx]


 


12.
SEVERABILITY


 


Any
provision of this Intellectual Property Security Agreement which is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.


 


13.
NO WAIVER; CUMULATIVE REMEDIES


 


We
shall not by any act, delay, omission or otherwise be deemed to have waived any of our rights or remedies hereunder and no waiver
shall be valid unless in writing, signed by us, and then only to the extent therein set forth. A waiver by us of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which we would otherwise have had
on any future occasion. No failure to exercise nor any delay in exercising on our part, any right, power or privilege hereunder,
shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude
any other or future exercise thereof or the exercise of any other right, power or privilege. The rights and remedies hereunder
provided are cumulative and may be exercised singly or concurrently, and are not exclusive of any rights and remedies provided
by law. None of the terms or provisions of this Intellectual Property Security Agreement may be waived, altered, modified or amended
except by an instrument in writing, duly executed by us.


 


14.
SUCCESSORS AND ASSIGNS; GOVERNING LAW


 


This
Intellectual Property Security Agreement and all of your obligations hereunder shall be binding upon your successors and assigns,
and shall, together with our rights and remedies hereunder, inure to our benefit and our successors and assigns. However, none
of your rights or obligations under this Intellectual Property Security Agreement may be assigned without our prior written permission.
This Intellectual Property Security Agreement shall be governed by, and be construed and interpreted in accordance with the laws
of the State of New York.


 






    	IP Security Agreement, pg. 9	 	 



    	 



    




 








15.
WAIVER OF TRIAL BY JURY; EXCLUSIVE JURISDICTION; SUBMISSION TO JURISDICTION; ANSWER TO SUMMONS TRIAL BY JURY IS HEREBY WAIVED
BY EACH OF US IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF US AGAINST THE OTHER ON ANY MATTERS WHATSOEVER
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT OR THE RELATIONSHIP CREATED HEREBY. YOU HEREBY CONSENT TO THE
JURISDICTION OF THE STATE COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, AND OF ANY FEDERAL COURT IN SUCH
COUNTY AND STATE, FOR A DETERMINATION OF ANY DISPUTE AS TO ANY SUCH MATTERS. IN CONNECTION THEREWITH, YOU HEREBY WAIVE
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS AND AGREE THAT SERVICE THEREOF MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL DIRECTED TO YOU AT YOUR ADDRESS SET FORTH ABOVE, OR SUCH OTHER ADDRESS AS SHALL HAVE PREVIOUSLY BEEN
COMMUNICATED OT US BY REGISTERED OR CERTIFIED MAIL DIRECTED TO YOU AT YOUR ADDRESS SET FORTH ABOVE, OR SUCH OTHER ADDRESS AS
SHALL HAVE PREVIOUSLY BEEN COMMUNICATED TO US BY REGISTERED OR CERTIFIED MAIL.


 


16.
FURTHER INDEMNIFICATION


 


You
agree to pay, and to save us harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any
and all excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or
in connection with any of the transactions contemplated by this Intellectual Property Security Agreement.


 


17.
CONSTRUCTION WITH RESPECT TO MULTIPLE PARTIES


 


In
construing this Agreement, references to “you” or “your” in this Agreement shall mean each of you singly,
both of you jointly and either of you in the disjunctive, and shall be interpreted in each instance most favorably to us.


 








[REMAINDER
OF PAGE LEFT INTENTIONALLY BLANK – SIGNATURE PAGE FOLLOWS]


 






    	IP Security Agreement, pg. 10	 	 



    	 



    




 





IN
WITNESS WHEREOF, you have caused this Intellectual Property Security Agreement to be executed by one of your duly authorized officers
on the date first set forth above.


 


	 	ROSENTHAL
    & ROSENTHAL, INC.
	 	 	 
	 	By:	/s/
    Robert L. Martucci 
	 	Name:
    	Robert
    L. Martucci
	 	Title:	Senior
    Vice President


 


The
foregoing is acknowledged,


accepted
and agreed to:


 


	REED’S INC.	 
	 	 	 
	By:	/s/
    Valentin Stalowir	 
	Name:	Valentin
    Stalowir	 
	Title:	Chief
    Executive Officer	 


 





STATE
OF CONNECTICUT )


:SS.


COUNTY
OF _____________)


 





BE
IT REMEMBERED, that on this ____________ day of October, 2018, before me the subscriber, an officer duly authorized to take
acknowledgments for use in the State of Connecticut, personally appeared Valentin Stalowir, who I am satisfied is the person
who executed the within document as Chief Executive Officer of Reed’s, Inc., and I having first made known to him the contents
thereof, he did thereupon acknowledge that said document is the voluntary act and deed of Reed’s, Inc., made by virtue of
authority from Reed’s, Inc.’s By-Laws for the uses and purposes therein expressed.


 





_______________________________________


(Signature
and Office of Individual taking acknowledgment)


 


[NOTARY
STAMP]





 


STATE
OF New York)


ss:


COUNTY
OF New York)


 


On
the ____ day of ___________, in the year ____________, before me, the undersigned, personally appeared ___________________________________
personally known to me or proved to me on the basis of satisfactory evidence to the individual(s) whose name(s) is (are) subscribed
to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity (ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed
the instrument.


 





_______________________________________


(Signature
and Office of Individual taking acknowledgment)


 


[NOTARY
STAMP]


 






    	IP Security Agreement, pg. 11	 	 



    	 



    

 








SCHEDULE
A


 





(Trademarks
and Domain Names in the United States)





 


	 	Trademark	 	Serial/Reg.
    No.	 	Filing
    Date
	 	REED’S ORIGINAL GINGER BREW

                                                                                ALL-NATURAL JAMAICAN

                                                                                STYLE GINGER ALE
	 	86035664/4513979	 	August
    12, 2013
	 	VIRGIL’S	 	78867175/3213043	 	April
    21, 2006
	 	DR.
    BETTER	 	85892888/4432318	 	April
    2, 2013
	 	BELIEVE
    THE UNBELIEVABLE!	 	87836349	 	March
    15, 2018
	 	REED’S	 	87721630	 	December
    14, 2017





 


Domain
Names


 






    	IP Security Agreement, pg. 12	 	 



    	 



    




 


SCHEDULE
B


 





(Patents
in United States)


 


	Patent	 	Serial
    No.	 	Reg.
    No.	 	Date
    Issued	 	Expires

        

	 	 	 	 	 	 	 	 	 


 





NONE


 






    	IP Security Agreement, pg. 13	 	 



    	 



    




 


SCHEDULE
C


 





(Copyrights
in United States)


 








NONE


 






    	IP Security Agreement, pg. 14	 	 



    	 



    




 


SCHEDULE
D





 


Licenses


 






    	IP Security Agreement, pg. 15	 	 



    	 



    




 


SCHEDULE
E


 





SPECIAL
POWER OF ATTORNEY


 





	STATE
    OF 	 	)	 
	 	 	)	ss.:
	COUNTY
    OF 	 	)	 


 


KNOW
ALL MEN BY THESE PRESENTS, that Reed’s Inc., a corporation formed under the laws of the State of Delaware, with its principal
office at 201 Merritt 7 Corporate Park, Norwalk, Connecticut 06851 (hereinafter called the “Company”), hereby appoints
and constitutes Rosenthal & Rosenthal, Inc., a New York corporation with offices at 1370 Broadway, New York, NY 10018 (hereafter
called the “Lender”), its true and lawful attorney, with full power of substitution, and with full power and authority
to perform the following acts on behalf of the Company:


 


1.
To execute, endorse, register and record any and all documents, statements, certificates or other paper in the
Company’s name that are necessary or advisable to properly and completely effect the transfer to Lender of all right,
title and interest of the Company in and to any trademarks, service marks, trade names, licenses, copyrights, patents and
domain names wherever located, and all applications and registrations thereof filed in any government or other office
anywhere in the world (hereinafter, the “Intellectual Property Security Agreement”); and


 


2.
To execute, endorse, register and record any and all documents, statements, certificates or other papers necessary or
advisable in order to obtain the purposes described above as the Lender may in its sole discretion determine.


 


This
Power of Attorney is made pursuant to an Intellectual Property Security Agreement, effective as of October 4, 2018 executed by
the Company and may not be revoked until the payment in full of all Obligations as defined in such Intellectual Property Security
Agreement.


 


	 	REED’S
    INC.
	 	 	 
	 	By:	/s/
Valentin Stalowir
	 	Name:	Valentin
Stalowir
	 	Title:	Chief
    Executive Officer


 


STATE
OF CONNECTICUT )


:SS.


COUNTY
OF _____________)





 


BE
IT REMEMBERED, that on this ____________ day of October, 2018, before me the subscriber, an officer duly authorized to take
acknowledgments for use in the State of Connecticut, personally appeared Valentin Stalowir, who I am satisfied is the person
who executed the within document as Chief Executive Officer of Reed’s, Inc., and I having first made known to him the contents
thereof, he did thereupon acknowledge that said document is the voluntary act and deed of Reed’s, Inc., made by virtue of
authority from Reed’s, Inc.’s By-Laws for the uses and purposes therein expressed.





 


_______________________________________


(Signature
and Office of Individual taking acknowledgment)


 


[NOTARY
STAMP]


 








    	IP Security Agreement, pg. 16