Document:

[FORM
OF SUBSCRIPTION RIGHTS CERTIFICATE TO

    PURCHASE
RIGHTS FOR COMMON STOCK]

    

    
      	 
      	 
      	 
      
	
              RIGHTS
      CERTIFICATE #:

            	 
      	
              NUMBER
      OF RIGHTS

            

    

     

    THE TERMS
AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE

    COMPANY’S
PROSPECTUS

    DATED
            ,
2009 (THE “PROSPECTUS”) AND ARE INCORPORATED HEREIN BY

    REFERENCE.
COPIES OF

    THE
PROSPECTUS ARE AVAILABLE UPON REQUEST FROM

    MACKENZIE
PARTNERS, INC.,

    THE
INFORMATION AGENT.

     

    REED’S,
INC.

    Incorporated
under the laws of the State of Delaware

     

    SUBSCRIPTION
RIGHTS CERTIFICATE

     

    Evidencing
Subscription Rights to Purchase Shares of Common Stock of Reed’s,
Inc.

     

    Subscription
Price: $[       ] per Share

     

    THE
SUBSCRIPTION RIGHTS WILL EXPIRE IF NOT EXERCISED ON OR BEFORE 5:00 P.M., NEW
YORK CITY TIME, ON
[                    ],
2009, UNLESS EXTENDED BY THE COMPANY

     

    REGISTERED

            OWNER:

     

    
      
        
          
            
              
                	
                        THIS
      CERTIFIES THAT the registered owner whose name is inscribed hereon is the
      owner of the number of subscription rights (“Rights”) set forth
      above. Each whole Right entitles the holder thereof to subscribe for and
      purchase one share of common stock, with a par value of $0.0001 per share
      (“Common Stock”),
      of Reed’s, Inc., a Delaware corporation at a subscription price of
      $[        ] per share (the “Basic Subscription
      Right”), pursuant to a rights offering (the “Rights Offering”), on
      the terms and subject to the conditions set forth in the Prospectus.
      Holders who fully exercise their Basic Subscription Right are entitled to
      subscribe for additional
      shares of Common Stock that remain unsubscribed for as a result of any
      unexercised Basic Subscription Right pursuant to the terms and conditions
      of the Rights Offering, subject to proration, as described in the
      Prospectus (the “Over-Subscription
      Right”). The Rights represented by this Subscription Rights
      Certificate may be exercised by completing Form 1 and any other
      appropriate forms on the reverse side hereof and by returning the full
      payment of the subscription price for each share of Common
      Stock.

                      

              

            

          

        

      

    

     

    This
Subscription Rights Certificate is not valid unless countersigned by the
subscription agent and registered by the registrar.

    Witness
the seal of Reed’s, Inc. and the signatures of its duly authorized
officers.

     

    Date:

    
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              [Chief
      Executive Officer

              and
      Principal Executive Officer]

            	 
      	 
      	 
      	
              [Executive
      Vice President]

            

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    DELIVERY
OPTIONS FOR SUBSCRIPTION RIGHTS CERTIFICATE

     

    Delivery
other than in the manner or to the addresses listed below will not constitute
valid delivery.

     

    If delivering by
Hand/Mail/Overnight Courier:

    Continental
Stock Transfer & Trust Company

    17
Battery Place, 8th Floor

    New York,
NY 10004

    (212)
509-4000, x 536

     

    PLEASE
PRINT ALL INFORMATION CLEARLY AND LEGIBLY.

    
      
        
          
            
              
                	 
      	 
      	 
      
	
                        FORM 1-EXERCISE OF SUBSCRIPTION RIGHTS

                      
	 
      
	
                        To
      subscribe for shares pursuant to your Basic Subscription Right, please
      complete lines (a) and (c) and sign under Form 4 below. To
      subscribe for shares pursuant to your Over-Subscription Right, please also
      complete line (b) and sign under Form 4 below. To the extent you
      subscribe for more shares than you are entitled under either the Basic
      Subscription Right or the Over-Subscription Right, you will be deemed to
      have elected to purchase the maximum number of shares for which you are
      entitled to subscribe under the Basic Subscription Right or
      Over-Subscription Right, as applicable.

                      
	 
      
	
                        (a)
      EXERCISE OF BASIC SUBSCRIPTION RIGHT:

                      
	 
      
	
                        I
      apply for             
      shares x $ [            ]        = $            

                      
	
                          (no. of new shares)    (subscription price)    (amount enclosed)

                      
	 
      
	
                        (b)
      EXERCISE OF OVER-SUBSCRIPTION RIGHT

                      
	 
      
	
                        If
      you have exercised your Basic Subscription Right in full and wish to
      subscribe for additional shares in an amount equal to up to 400% of the
      shares of Common Stock for which you are otherwise entitled to subscribe
      pursuant to your Over-Subscription Right:

                      
	 
      
	
                        I
      apply for             shares
      x $ [            ]        = $            

                      
	
                          (no. of new shares)    (subscription price)    (amount enclosed)

                      
	 
      
	
                        (c)
      Total Amount of Payment Enclosed = $            

                      
	 
      
	
                        METHOD
      OF PAYMENT (CHECK ONE)

                      
	 
      	 
      
	
                         ̈

                      	
                          

                      	
                        Check
      or bank draft drawn on a U.S. bank, or postal telegraphic or
      express.

                      
	 
      	 
      
	
                         ̈

                      	
                          

                      	
                        Money
      order payable to
      “                                                         ,
      as Subscription Agent.” Funds paid by an uncertified check may take at
      least five business days to clear.

                      
	 
      	 
      
	
                         ̈

                      	
                          

                      	
                        Wire
      transfer of immediately available funds directly to the account maintained
      by                                     
      Continental Stock Transfer & Trust Company, as Subscription Agent, for
      purposes of accepting subscriptions in this Rights Offering at [            Bank],
      [Address], ABA #[            ],
      Account # [            ]
      [                ]
      FBO Reed’s, Inc.], with reference to the rights holder’s
    name.

                      
	 
      	 
      	 
      
	
                        FORM
      2-DELIVERY TO DIFFERENT ADDRESS

                      
	 
      
	
                        If
      you wish for the Common Stock underlying your subscription rights, a
      certificate representing unexercised subscription rights or the proceeds
      of any sale of subscription rights to be delivered to an address different
      from that shown on the face of this Subscription Rights Certificate,
      please enter the alternate address below, sign under Form 3 and have your
      signature guaranteed under Form 4.

                      
	 
      
	 
      
	 

              

            

          

        

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      
        
          
            	
                    FORM
      3-SIGNATURE

                  
	 
      
	
                    TO
      SUBSCRIBE: I acknowledge that I have received the Prospectus for this
      Rights Offering and I hereby irrevocably subscribe for the number of
      shares of Common Stock  indicated above on the terms and
      conditions specified in the Prospectus.

                  
	 
      	 
      
	
                    Signature(s):

                  	 
      

          

        

      

    

    

    
      
        
          
            
              	
                      IMPORTANT:
      The signature(s) must correspond with the name(s) as printed on the
      reverse of this Subscription Rights Certificate in every particular,
      without alteration or enlargement, or any other change
      whatsoever.

                    
	 
      
	
                      FORM
      4-SIGNATURE GUARANTEE

                    
	 
      
	
                      This
      form must be completed if you have completed any portion of Form
      2.

                    
	 
      
	
                      Signature Guaranteed:

                    	 
      
	
                      (Name
      of Bank or
Firm)

                    

            

          

        

      

    

    

    
      
        
          
            	
                    By:

                  	 
      
	
                    (Signature
      of Officer)

                  
	 
      
	
                    IMPORTANT:
      The signature(s) should be guaranteed by an eligible guarantor institution
      (bank, stock broker, savings & loan association or credit union)
      with membership in an approved signature guarantee medallion program
      pursuant to Securities and Exchange Commission Rule
    17Ad-15.

                  

          

        

      

    

     

    FOR
INSTRUCTIONS ON THE USE OF REED’S, INC. SUBSCRIPTION RIGHTS CERTIFICATES,
CONSULT MACKENZIE PARTNERS, INC., THE INFORMATION AGENT, AT (800)
322-2885.[FORM
OF NOTICE TO STOCKHOLDERS WHO ARE RECORD HOLDERS]

     

    REED’S,
INC.

     

    NOTICE
TO STOCKHOLDERS WHO ARE RECORD HOLDERS

    

    Up to
[           ] Shares of
Common Stock a Issuable Upon Exercise of Rights to Subscribe for

    Such
Shares at $[      ] per Share

     

    Enclosed for your consideration is a
prospectus, dated
[                ],
2009 (the “Prospectus”),
relating to the offering by Reed’s, Inc., a Delaware corporation (the “Company”) of subscription
rights (the “Rights
Offering”) to purchase shares of the Company’s common stock, par value
$0.001 per share (“Common
Stock”) by stockholders of record (“Record Date Stockholders”) as
of 5:00 p.m., New York City time, on
[              ],
2009 (the “Record
Date”).

     

    Pursuant to the offering, the Company
is issuing Rights to subscribe for up to
[            ]
shares of the Company’s Common Stock, on the terms and subject to the conditions
described in the Prospectus. The Rights may be exercised at any time during the
subscription period, which commences on
[                        ],
2009 and ends at 5:00 p.m., New York City time, on
[             ],
2009, unless extended by the Company in its sole discretion (as it may be
extended, the “Expiration
Date”). The Common Stock is presently traded on the NASDAQ Capital Market
under the symbol “REED”. The Rights are transferable and will be listed for
trading under the symbol “REEDR” during the course of this
offering.

     

    As described in the Prospectus,
Record Date Stockholders will receive one (1) Right for each share of Common
Stock owned on the Record Date.

     

    Each Right entitles the holder (the
“Rights Holders”) to
purchase one share of Common Stock at the subscription price of
$[    ] per share (the “Basic Subscription
Right”).

    

    Rights Holders who fully exercise
their Basic Subscription Right will be entitled to subscribe for additional
shares that remain unsubscribed as a result of any unexercised Basic
Subscription Right (the “Over-Subscription Right” and
together with the Basic Subscription Right, the “Rights”). Each
Over-Subscription Right entitles the holder to subscribe for an additional
amount equal to up to 400% of the shares of Common Stock for which such holder
was otherwise entitled to subscribe (calculated prior to the exercise of any
rights). If sufficient remaining shares of Common Stock are available, all
over-subscription requests will be honored in full. If requests for shares of
Common Stock pursuant to the Over-Subscription Right exceed the remaining shares
of Common Stock available, the remaining shares of Common Stock will be
allocated pro-rata among Rights Holders who over-subscribe based on the number
of Rights then held. Rights may only be exercised for whole numbers of shares;
no fractional shares of Common Stock will be issued in the Rights
Offering.

     

    The rights will be evidenced by
subscription rights certificates (the “Subscription
Certificates”).

     

    Enclosed are copies of the following
documents:

    

    
      	 
      	
              1.

            	
              Prospectus,
      dated
      [                  ],
      2009;

            

    

    

    
      	 
      	
              2.

            	
              Subscription
      Certificate; and

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 
      	
              3.

            	
              A
      return envelope, addressed to
      [                                ]
      (the “Subscription
      Agent”).

            

    

     

    Your prompt attention is requested.
To exercise your Rights, you should properly complete and sign the Subscription
Certificate and forward it, with payment of the subscription price in full for
each share of Common Stock subscribed for pursuant to the Basic Subscription
Right and the Over-Subscription Right to the Subscription Agent, as indicated on
the Subscription Certificate. The Subscription Agent must receive the properly
completed and duly executed Subscription Certificate and full payment at or
prior to 5:00 p.m., New York City time, on the Expiration Date.

     

    You will have no right to rescind
your subscription after receipt of your payment of the subscription price,
except as described in the Prospectus. Rights not exercised at or prior to 5:00
p.m., New York City time, on the Expiration Date will expire.

     

    ANY QUESTIONS OR REQUESTS FOR
ASSISTANCE CONCERNING THE RIGHTS OFFERING SHOULD BE DIRECTED TO MACKENZIE
PARTNERS, INC., THE INFORMATION AGENT, TOLL-FREE AT THE FOLLOWING TELEPHONE
NUMBER: (800) 322-2885.

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