Exhibit
10.1


 


		 

        U.S.
        Small Business Administration

         

        NOTE



 


	SBA
    Loan #	 53524271-07
	SBA
    Loan Name	 reed’s,
    inc. 
	Date	 April
    20, 2020
	Loan
    Amount	 Seven
    Hundred Sixty-Nine Thousand Eight Hundred Sixteen Dollars ($769,816)
	Interest
    Rate	 1.00%
    per annum
	Borrower	 Reed’s,
    Inc., a Delaware corporation 
	Operating
    Company	 N/A
	Lender	 City
    National Bank


 


	1.	PROMISE
    TO PAY:


 


In
return for the Loan, Borrower promises to pay to the order of Lender the amount of Seven Hundred Sixty-Nine Thousand Eight Hundred
Sixteen Dollars ($769,816), interest on the unpaid principal balance, and all other amounts required by this Note. Under the PPP
(as defined below), certain amounts may be forgiven by the Lender under the direction of the Administrator of the SBA so long
as the requirements of the PPP for forgiveness are satisfied. Until an amount is forgiven, the principal amount owed is as set
forth in the preceding paragraph and interest accrues thereon. Forgiveness does not occur automatically. Borrower must submit
a request for forgiveness and all required documentation, and forgiveness will not occur unless and until the request for forgiveness
is approved. Borrower should submit the request for approval timely in accordance with the rules of the PPP to avoid unnecessary
delay.


 




    	 



    	 



    

 


	2.	DEFINITIONS:


 


“Application”
shall mean the SBA Form 2483 together with all supporting documentation submitted to Lender as the application for the Loan.


 


“Disbursement
Date” means the date on which the Loan is disbursed by Lender.


 


“Loan”
means the loan evidenced by this Note.


 


“Loan
Documents” means the documents related to this loan signed by Borrower, including, without limitation, the Application.


 


“Maturity
Date” means the date that is two (2) years from the Disbursement Date.


 


“Payroll
Costs” shall have the meaning set forth in the CARES Act and Section 2(f) of the SBA’s PPP rules, as the same may
be amended, modified, supplemented or interpreted by the SBA from time to time.


 


“PPP”
means the Paycheck Protection Program set forth in the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”),
as may be amended, modified or supplemented from time to time, and the rules and regulations promulgated thereunder.


 


“SBA”
means the Small Business Administration, an Agency of the United States of America.


 


	3.	PAYMENT
    TERMS:


 


Borrower
must make all payments at the place Lender designates.


 


The
Loan shall be repaid in full no later than two (2) years from the Disbursement Date (the “Maturity Date”).
Unless earlier forgiven in whole or in part, subject to and in accordance with the Forgiveness Guidelines described (and defined)
below, the Borrower shall begin making monthly payments of principal in equal installments in an amount that would fully amortize
the Loan by the Maturity Date, plus interest, in arrears, calculated based upon the original principal amount of this Note until
the date of any forgiveness and on the remaining outstanding principal balance thereafter, and a per annum interest rate of one
percent (1.00%) beginning seven months from the month of the Disbursement Date; payments must be made on the date in the months
they are due that corresponds to the date in the month on which proceeds were initially disbursed or, if no such corresponding
date, on the next succeeding business day. Interest shall accrue, and be due and payable from, the date of initial disbursement
of the Loan. The interest rate will not be changed during the life of the loan. Borrower hereby authorizes Lender automatically
to deduct from any deposit account(s) of Borrower with Lender, the amount of any payment due under this Note. Lender will apply
each installment payment first to pay interest accrued to the day Lender receives the payment, then to bring principal current,
then to pay any late fees, and will apply any remaining balance to reduce principal.


 


	4.	Use
    of Proceeds:


 


Proceeds
of the Loan must be (1) paid or disbursed by Borrower within eight (8) weeks of the date of initial disbursement of the Loan and
(2) used solely for the following purposes (the “Permitted Purposes”):


 


	 	A.	Payroll
    Costs;
	 	 	 
	 	B.	costs
    related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance
    premiums;
	 	 	 
	 	C.	mortgage
    interest payments (but not mortgage prepayments or principal payments);
	 	 	 
	 	D.	rent
    payments;
	 	 	 
	 	E.	utility
    payments; in each case of C through E, to the extent the same were incurred in connection with agreements in effect before
    February 15, 2020;
	 	 	 
	 	F.	interest
    payments on any other debt obligations that were incurred before February 15, 2020; and/or
	 	 	 
	 	G.	refinancing
    an SBA EIDL loan made between January 31, 2020 and April 3, 2020.


 




    	 



    	 



    

 


	5.	Loan
    Forgiveness:  


 


The
principal amount of the Loan may be forgiven, in whole or in part, in accordance with the CARES Act, as may be amended from time
to time and modified or supplemented pursuant to any regulatory or administrative regulations, guidance, or interpretations issued
by the SBA from time to time (collectively, the “Forgiveness Guidelines”). Any such forgiveness shall be conditioned
upon Borrower providing to Lender in a timely manner all documentation required under the Forgiveness Guidelines or otherwise
requested by Lender supporting Borrower’s request for loan forgiveness, including documentation to determine whether the
forgiven amount must be reduced in accordance with the Forgiveness Guidelines. The final amount of loan forgiveness, if any, shall
be determined by Lender in Lender’s discretion in accordance with, and to the extent not expressly prohibited by, the Forgiveness
Guidelines. Not more than twenty-five percent (25%) of the amount forgiven shall be attributable to non-Payroll Costs. Borrower
has received an EIDL (Economic Injury Disaster Loan) advance in the amount of $0.00. That amount will be subtracted from the loan
forgiveness amount.


 


	6.	Other
    Indebtedness:  


 


This
Note is considered permitted indebtedness, howsoever defined, under any other loan evidenced by any promissory note or credit
agreement solely between Borrower and Lender (whether currently in effect or hereafter entered into; each, a “Credit Agreement”).
Notwithstanding any provision in any other Credit Agreement solely between Borrower and Lender or this Note, any collateral or
guarantees for other obligations of Borrower to Lender shall not apply to the indebtedness evidenced by this Note.


 


	7.	Borrower’s
    Agreements:  


 


Borrower
acknowledges and agrees that (1) Borrower has and shall maintain in full force and effect through the Maturity Date or prior satisfaction
in full of this Loan, and shall provide evidence of the same to Lender upon Lender’s request therefor, the following: liability
insurance; other insurance of the type typically maintained by companies in the same or similar lines of business as Borrower;
and worker’s compensation insurance; in each case, with an insurance company satisfactory to Lender and, with respect to
worker’s compensation insurance, in an amount meeting state law requirements; (2) Borrower’s ownership and management
have not changed without Lender’s approval since the application for this Loan was submitted; and (3) Borrower will keep
books and records in a manner satisfactory to Lender, furnish financial statements as requested by Lender and allow Lender and
SBA to inspect and audit books, records and papers relating to Borrower’s financial or business condition.


 


	8.	Further
    Assurances:  


 


At
any time and from time to time Borrower shall execute and deliver such further instruments and take such further action as may
reasonably be requested by Lender to effect the purposes of this Note and in the event the SBA requires additional, supplemental
or replacement documents to, and/or of, this Note.


 


	9.	Loan
    Prepayment:  


 


Notwithstanding
any provision in this Note to the contrary, Borrower may prepay this Note at any time without penalty. Borrower may prepay 20
percent or less of the unpaid principal balance at any time without notice. If Borrower prepays more than 20 percent and the Loan
has been sold on the secondary market, Borrower must:


 


	 	A.	Give
    Lender written notice;
	 	 	 
	 	B.	Pay
    all accrued interest then unpaid; and
	 	 	 
	 	C.	If
    the prepayment is received less than 21 days from the date Lender receives the written notice from Borrower, pay an amount
    equal to 21 days’ interest from the date Lender receives the notice, less any interest accrued during the 21 days and
    paid under subparagraph b., above.


 




    	 



    	 



    

 


If
Borrower does not prepay the amount specified in its notice within 30 days from the date Lender receives the notice, Borrower
must give Lender a new written notice and comply with subparagraphs b and c above.


 


	10.	DEFAULT:


 


Borrower
is in default under this Note if Borrower does not make a payment when due under this Note, or if Borrower or Operating Company:


 


	 	A.	Fails
    to do anything required by this Note and other Loan Documents;
	 	 	 
	 	B.	Defaults
    on any other loan with Lender;
	 	 	 
	 	C.	Is
    not eligible to receive a loan under the PPP when the Loan is made;
	 	 	 
	 	D.	Does
    not disclose, or anyone acting on their behalf does not disclose, any material fact to Lender or SBA;
	 	 	 
	 	E.	Makes,
    or anyone acting on their behalf makes, a materially false or misleading representation to Lender or SBA;
	 	 	 
	 	F.	Defaults
    on any loan or agreement with another creditor, if Lender believes the default may materially affect Borrower’s ability
    to pay this Note;
	 	 	 
	 	G.	Fails
    to pay any taxes when due;
	 	 	 
	 	H.	Becomes
    the subject of a proceeding under any bankruptcy or insolvency law;
	 	 	 
	 	I.	Has
    a receiver or liquidator appointed for any part of their business or property;
	 	 	 
	 	J.	Makes
    an assignment for the benefit of creditors;
	 	 	 
	 	K.	Has
    any adverse change in financial condition or business operation that Lender believes may materially affect Borrower’s
    ability to pay this Note, provided that this provision shall not apply to adverse changes or conditions resulting from the
    Covid-19 pandemic and the circumstances giving rise to the CARES Act;
	 	 	 
	 	L.	(1)
    Reorganizes, merges, consolidates, or otherwise changes ownership or business structure, (2) makes any distribution of Borrower’s
    assets that would adversely affect its financial condition, or (3) transfers (including by pledge) or disposes of any assets
    except in the ordinary course of business, in each case without Lender’s prior written consent; or
	 	 	 
	 	M.	Becomes
    the subject of a civil or criminal action that Lender believes may materially affect Borrower’s ability to pay this
    Note.


 


	11.	LENDER’S
    RIGHTS IF THERE IS A DEFAULT:


 


Without
notice or demand and without giving up any of its rights, Lender may:


 


	 	A.	Require
    immediate payment of all amounts owing under this Note;
	 	 	 
	 	B.	Collect
    all amounts owing from any Borrower or Guarantor; or
	 	 	 
	 	C.	File
    suit and obtain judgment.


 


Borrower
acknowledges that if Borrower defaults on the Loan, SBA may be required to pay Lender under the SBA guarantee, and SBA may then
seek recovery on the Loan (to the extent any balance remains after loan forgiveness in accordance with the Forgiveness Guidelines
above).


 




    	 



    	 



    

 


	12.	LENDER’S
    GENERAL POWERS:


 


Without
notice and without Borrower’s consent, Lender may:


 


	 	A.	Incur
    expenses to collect amounts due under this Note, enforce the terms of this Note or any other Loan Document. Among other things,
    the expenses may include reasonable attorney’s fees and costs. If Lender incurs such expenses, it may demand immediate
    repayment from Borrower or add the expenses to the principal balance;
	 	 	 
	 	B.	Release
    anyone obligated to pay this Note; and
	 	 	 
	 	C.	Take
    any action necessary to collect amounts owing on this Note or comply with the PPP.


 


	13.	WHEN
    FEDERAL LAW APPLIES:


 


When
SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations. Lender or SBA may
use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and other purposes. By
using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or liability. As to
this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat any claim of SBA,
or preempt federal law.


 


	14.	SUCCESSORS
    AND ASSIGNS:


 


Under
this Note, “Borrower” include any successor, and “Lender” includes its successors and assigns. Lender
may assign all or any portion of this Note without notice to, or consent of, Borrower.


 


	15.	GENERAL
    PROVISIONS:


 


	 	A.	To
    the extent there is more than one Borrower on this Note, all such Borrowers are jointly and severally liable.
	 	 	 
	 	B.	Borrower
    waives all suretyship defenses.
	 	 	 
	 	C.	Borrower
    must sign all documents necessary at any time to comply with the Loan Documents or the statutes and regulations applicable
    to the PPP.
	 	 	 
	 	D.	Lender
    may exercise any of its rights separately or together, as many times and in any order it chooses. Lender may delay or forgo
    enforcing any of its rights without giving up any of them.
	 	 	 
	 	E.	Borrower
    may not use an oral statement of Lender or SBA to contradict or alter the written terms of this Note.
	 	 	 
	 	F.	If
    any part of this Note is unenforceable, all other parts remain in effect.
	 	 	 
	 	G.	To
    the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including presentment, demand,
    protest, and notice of dishonor.
	 	 	 
	 	H.	Borrower
    shall initial one of the boxes below and a failure to initial one of the boxes shall be interpreted and construed as Borrower’s
    representation that no agent or broker was involved in arranging the Loan, preparing an application for the Loan or referring
    Borrower to Lender.


 


Borrower
acknowledges and agrees [initial one]:


 


____X______ No
agent or broker was involved in arranging the Loan, preparing an application for the Loan or referring Borrower to Lender; OR


 


__________ An
agent or broker arranged the Loan, assisted in the preparation of the Loan or referred Borrower to Lender and Borrower has
caused such agent or broker to execute and deliver the Agent Fee Agreement required by Lender.


 


Borrower
shall not be charged for any fee of agent or broker, nor shall Borrower or Lender pay any such fee out of proceeds of the Loan.
Borrower shall indemnify and hold harmless Lender for any loss, costs or expenses Lender incurs as a result of any misrepresentation
by Borrower under this Section 15.


 


Lender
will pay a flat fee to qualifying agents assisting applicants under the PPP not to exceed: $600.*


 


*Additional
terms and conditions apply, contact a City National SBA specialist for details.


 




    	 



    	 



    

 


	16.	BORROWER’S
    NAME(S) AND SIGNATURE(S):


 


By
signing below, the Borrower evidences that it is obligated under this Note.


 


Reed’s,
Inc., a Delaware corporation


 


	By:
    	/s/
    Tom Spisak	 
	Name:	Tom
    Spisak	 
	Its:
    	Authorized
    Person	 


 


Dated
as of the date first set forth above.