Document:

SUBORDINATION
AGREEMENT

 

THIS
SUBORDINATION AGREEMENT, dated as of October 4, 2018, is entered into between ROSENTHAL & ROSENTHAL, INC., a New York corporation
(“Senior Lender”) and RAPTOR/HARBOR REEDS SPV LLC, a Delaware limited liability company (“Junior Lender”).
Certain capitalized terms which are used in this Agreement are defined in Section 1 of this Agreement.

 

RECITALS

 

WHEREAS,
Junior Lender has entered into certain financing agreements with REEDS, INC., a Delaware corporation (“Borrower”)
pursuant to which Junior Lender extended certain financial accommodations to Borrower;

 

WHEREAS,
as security for the obligations of Borrower owing to Junior Lender, Borrower has granted to Junior Lender a security interest
in the Collateral and IP Collateral;

 

WHEREAS,
Borrower is simultaneously entering into the Financing Agreement with Senior Lender under which Senior Lender is extending certain
financial accommodations to Borrower secured by a security interest in the Collateral and IP Collateral;

 

WHEREAS,
pursuant to the terms of the Financing Agreement, Borrower is not permitted to incur indebtedness or grant a security interest
in any of the Collateral or IP Collateral without the prior written consent of Senior Lender;

 

WHEREAS,
Senior Lender is unwilling to consent to the financing arrangement with Borrower unless Junior Lender agrees to subordinate the
indebtedness owed to it by Borrower and its security in the Collateral and, unless the Overadvance Put is consummated, the IP
Collateral, to the indebtedness owed to Senior Lender by Borrower and Senior Lender’s security interest in the Collateral
and, unless the Overadvance Put is consummated, the IP Collateral;

 

WHEREAS,
Junior Lender has agreed to the required subordinations as requested by Senior Lender, subject to the terms and conditions of
this Agreement;

 

NOW,
THEREFORE, in order to clarify and confirm the relative priorities between Junior Lender and Senior Lender, Junior Lender and
Senior Lender hereby agree as follows:

 

1.
Definitions.

 

1.1
In addition to the definitions contained in the
first paragraph and Recitals to this Agreement, the following capitalized terms shall have the following definitions for all purposes
in this Agreement:

 

“Accounts”
shall mean all of Borrower’s presently existing and hereafter arising accounts, contract rights, chattel paper, security
agreements and debts secured thereby, documents, notes, drafts and instruments, and the proceeds of any of the foregoing, including
cash and non-cash proceeds and returned and repossessed goods arising therefrom and all of the rights of an unpaid seller of such
goods, and all of Borrower’s books and records relating to any of the foregoing.

 

    	 

    	 

    

 

“Affiliate”
means, with respect to a Person, (a) any family member, officer, director, employee or managing agent of such Person, and (b)
any other Person (i) that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under
common control with, such given Person, (ii) that, directly or indirectly beneficially owns or holds 10% or more of any class
of voting stock or partnership or other interest of such Person or any subsidiary of such Person, or (iii) 10% or more of the
voting stock, membership interests or partnership or other interest of which is directly or indirectly beneficially owned or held
by such Person or a subsidiary of such Person. The term “control” means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities
or partnership or other interests, by contract or otherwise.

 

“Agreement”
shall mean this Subordination Agreement and any concurrent or future extensions, supplements, amendments or modifications to this
Subordination Agreement.

 

“Bankruptcy
Code” means Title 11 of the United States Code.

 

“Code”
shall mean the Uniform Commercial Code as adopted in the State of New York with respect to the Collateral and IP Collateral securing
the Senior Lender Indebtedness and as adopted in the State of New York with respect to the Collateral and IP Collateral securing
the Junior Lender Indebtedness; provided, if by reason of mandatory provisions of law, the perfection, the effect of perfection
or non-perfection or the priority of the security interests of Senior Lender or the Junior Lender in any Collateral or IP Collateral
is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, the term “UCC” shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such
perfection, effect of perfection or non-perfection or priority.

 

“Collateral”
shall mean and collectively refer to the following, whether presently existing or hereafter arising:

 

A.
all Accounts, Equipment, Financial Assets, Goods,
General Intangibles other than the IP Collateral, Inventory and Negotiable Collateral;

 

B.
all bank and depository accounts;

 

C.
all chattel paper (whether tangible or electronic)
and contract rights;

 

D.
all guaranties, collateral, any Lien on real
or personal property, leases, letters of credit, letter-of-credit rights, supporting obligations, and all other rights, agreements,
and property securing or relating to payment of Accounts or any other Collateral;

 

E.
all documents, books and records relating to
any Collateral or to Borrower’s business;

 

F.
all other property of Borrower’s now or
hereafter in the possession or control of Senior Lender, the Junior Lender or any of their respective Affiliates (including cash,
money, credits and balances of Borrower held by or on deposit with Senior Lender, the Junior Lender or any of their respective
Affiliates);

 

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G.
all of Borrower’s present and future commercial
tort claims; and

 

H.
all proceeds and products of all of the foregoing
in any form, including amounts payable under any policies of insurance insuring all or any of the foregoing against loss or damage,
all parts, accessories, attachments, special tools, additions, replacements, substitutions and accessions to or for all or any
of the foregoing, all condemnation or requisition payments with respect to all or any of the foregoing and all increases and profits
received from all or any of the foregoing.

 

For
the avoidance of doubt, Collateral shall not include IP Collateral.

 

“DIP
Financing” is defined in Section 6.3.

 

“Equipment”
shall mean and refer to all of Borrower’s present and hereafter acquired machinery, equipment, furniture, fixtures, goods
(other than Inventory), vehicles, and rolling stock, wherever located, together with any and all parts, additions, replacements,
accessions, and substitutions thereto or therefor, all maintenance and warranty records relating thereto, and the proceeds and
products of any of the foregoing.

 

“Financing
Agreement” means that certain Financing Agreement, of even date between Borrower and Senior Lender, as it may be amended,
modified, supplemented, and restated from time to time.

 

“Financial
Assets” shall mean all of Borrower’s present and future investment property, financial assets, securities, security
entitlements, securities accounts, commodity accounts and commodity contracts.

 

“First
Amendment” means that certain First Amendment to Securities Purchase Agreement dated as of the date hereof executed by Borrower
and Junior Lender.

 

“Full
Payment of the Senior Lender Indebtedness” means the payment in full in cash of all of the outstanding Senior Lender Indebtedness
and the termination of all Loan Documents.

 

“General
Intangibles” shall mean and refer to all of Borrower’s present and future general intangibles and all other presently
owned or hereafter acquired intangible personal property of Borrower (including, without limitation, any and all franchise rights,
choses or things in action, goodwill, purchase orders, customer lists, monies due or recoverable from pension funds, route lists,
deposit accounts, tax refunds and tax refund claims) other than goods and Accounts, as well as Borrower’s books and records,
computer programs, computer discs, computer tapes and reports relating to any of the foregoing. For purposes of this Agreement,
General Intangibles shall not include any IP Collateral.

 

“Goods”
means all of Borrower’s present and hereafter acquired goods, as defined in the Code, wherever located, including imbedded
software to the extent included in “goods” as defined in the Code, manufactured homes, and standing timber that is
cut and removed for sale.

 

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“Insolvency
Law” means the Bankruptcy Code and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws.

 

“Insolvency
Proceeding” means a case under any chapter of the Bankruptcy Code and any other case or proceeding arising under any Insolvency
Law.

 

“Inventory”
shall mean and refer to all of Borrower’s presently existing and hereafter acquired inventory and goods held for sale or
lease or to be furnished under a contract of service, including, without limitation, all raw materials, work in process, and finished
goods, wherever located, together with all containers, packing, packaging, shipping and similar materials, and the products and
proceeds of any of the foregoing.

 

“IP
Collateral” means:

 

(a)
all United States, and foreign copyrights, including but not limited to copyrights in software and all rights in and to databases,
and all Mask Works (as defined under 17 U.S.C. §901 of the U.S. Copyright Act), whether registered or unregistered, moral
rights, reversionary interests, termination rights, including, without limitation, artwork, industrial designs, websites, social
media identifiers and pages, proprietary computer software, designs, patterns, drawings, technology, know-how, processes and techniques,
specifications, formulas, ideas, work product, work-in-process, advertising and promotional materials, any government approvals,
permits, authorizations and applications for any of the foregoing, owned, held, licensed, or used by Borrower in connection with
the Borrower’s business operations, including, without limitation, all rights of Borrower in respect of the name “Reed’s”
and any other brand name or fanciful name produced and/or sold by or on behalf of Borrower, and, with respect to any and all of
the foregoing: (i) all registrations and applications therefor; (ii) all extensions and renewals thereof; (iii) all rights corresponding
thereto throughout the world; (iv) all rights in any material which is copyrightable or which is protected by common law, United
States or foreign laws, or the law of any State; (v) all rights to sue for past, present and future infringements thereof; (vi)
all Proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit; and (vii)
all tangible property embodying the copyrights or such copyrighted materials;

 

(b)
all United States and foreign patents and certificates of invention, or similar industrial property, design or plant rights, for
any of the foregoing, including, but not limited to: (i) all registrations, provisional and applications in connection therewith;
(ii) all reissues, divisions, continuations, continuations-in-part, extensions, renewals, and reexaminations therefor; (iii) all
rights corresponding thereto throughout the world; (iv) all inventions and improvements described therein; (v) all rights to sue
for past, present and future infringements thereof; (vi) all licenses, claims, damages, and proceeds of suit arising therefrom;
and (vii) all proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages, and proceeds of suit
(collectively, the “Patents”);

 

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(c)
all United States, and foreign trademarks, trade names, corporate names, company names, business names, fictitious business names,
Internet domain names, service marks, certification marks, collective marks, logos, other source or business identifiers, designs
and general intangibles of a like nature, all registrations and applications for any of the foregoing including, but not limited
to (i) all registrations and applications in connection therewith, (ii) all extensions or renewals of any of the foregoing, (iii)
all of the goodwill of the business associated with the use of and symbolized by the foregoing, (iv) the right to sue for past,
present and future infringement or dilution of any of the foregoing or for any injury to goodwill, and (v) all proceeds of the
foregoing, including licenses, royalties, income, payments, claims, damages, and proceeds of suit (collectively, the “Trademarks”);

 

(d)
all trade secrets and all other confidential or proprietary information and know-how regardless of whether such trade secret has
been reduced to a writing or other tangible form, including all documents and things embodying, incorporating, or referring in
any way to such Trade Secret, including but not limited to: (i) the right to sue for past, present and future misappropriation
or other violation of any Trade Secret and to enjoin or collect damages for the actual or threatened misappropriation of any Trade
Secret; and (ii) all proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages, and proceeds
of suit (collectively, the “Trade Secrets”); and

 

(e)
All licenses or agreements, whether written or oral, providing for the grant by or to the Borrower of: (A) any right to use any
Trademark or Trade Secret, (B) any right to manufacture, use, import, export, distribute, offer for sale or sell any invention
covered in whole or in part by a Patent, and (C) any right under any Copyright including, without limitation, (i) the grant of
rights to manufacture, distribute, exploit and sell materials derived from any Copyright, (ii) the right to sue or otherwise recover
for any and all past, present and future infringements and misappropriations of any of the foregoing, (iii) all income, royalties,
damages and other payments now and hereafter due and/or payable with respect thereto (including, without limitation, payments
under all licenses entered into in connection therewith, and damages and payments for past, present or future infringements thereof),
(iv) all other rights of any kind whatsoever of the Borrower accruing thereunder or pertaining thereto, and (v) any and all proceeds
of the foregoing.

 

“Junior
Lender Indebtedness” shall mean all present Obligations owing to Junior Lender, including the Obligations under the Subordinated
Note, Note Purchase Agreement and Second Lien Security Agreement.

 

“Lien”
means any security interest, security title, mortgage, deed to secure debt, deed of trust, lien, pledge, charge, conditional sale
or other title retention agreement, or other encumbrance of any kind in respect of any property, including the interest of each
lessor under any capitalized lease and the interest of any bondsman under any payment or performance bond, in, of or on any assets
or properties of a Person, whether now owned or hereafter acquired and whether arising by agreement or operation of law.

 

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“Loan
Documents” means the Financing Agreement and all other agreements, documents and instruments entered into between Senior
Lender and Borrower from time to time in connection with the Financing Agreement.

 

“Negotiable
Collateral” means all of Borrower’s present and future letters of credit, advises of credit, notes, drafts, instruments,
and documents, including, without limitation, bills of lading, leases, and chattel paper, and Borrower’s books and records
relating to any of the foregoing.

 

“Note
Purchase Agreement” means that certain Securities Purchase Agreement, dated April 21, 2017, between Borrower and Junior
Lender as amended by the First Amendment.

 

“Obligations”
in its broadest and most comprehensive sense shall mean all present and future indebtedness of Borrower which may be, from time
to time, directly or indirectly, incurred by Borrower, including, but not limited to, any negotiable instruments evidencing the
same, and all guarantees, debts, demands, monies, indebtedness, liabilities and obligations owed or to become owing, including
interest (including interest accruing after the commencement of an Insolvency Proceeding), principal, costs, fees (including attorneys’
fees) and other charges, and all claims, rights, causes of action, judgments, decrees, remedies, security interests, or other
obligations of any kind whatsoever and howsoever arising, whether voluntary, involuntary, absolute, contingent, or by operation
of law.

 

“Overadvance
Put” has the meaning ascribed to such term in Section 7.4.

 

“Overadvance
Put Rejection” has the meaning ascribed to such term in Section 7.4.

 

“Person”
means an individual, corporation, partnership, limited liability company, association, trust, unincorporated organization, government
or any agency or political subdivision thereof, or any other entity.

 

“Senior
Lender Indebtedness” shall mean all present and future Obligations owing by Borrowers to Senior Lender, in connection with
or in any way related to (including any DIP Financing) any of the Loan Documents (including, without limitation, any interest
accruing thereon after maturity or after the filing of any Insolvency Proceeding relating to Borrower, whether or not a claim
for post-filing or post-petition interest is allowed in such proceeding.

 

“Second
Lien Security Agreement” means a certain Second Lien Security Agreement dated April 21, 2017 executed by Borrower as security
for the Subordinated Note.

 

“Subordinated
Note” means that certain Amended and Restated Subordinated Convertible Non-Redeemable Secured Note, dated as of the date
hereof, in the maximum principal amount of Seven Million Four Hundred Thousand and 00/100 Dollars ($7,400,000.00), issued by Borrower
to the order of Junior Lender.

 

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1.2
Other Definitional Provisions. Terms which
are defined in Division 8 or Division 9 of the Code, or Article 8 or Article 9 of the Code, as applicable, shall have the same
definition when used in this Agreement unless specifically defined herein. References to “Sections” shall be to Sections
of this Agreement unless otherwise specifically provided. Any of the terms defined in Section 1.1 may, unless the context otherwise
requires, be used in the singular or the plural depending on the reference. In this Agreement, words importing any gender include
the other genders; the words “including,” “includes” and “include” shall be deemed to be followed
by the words “without limitation”; references to agreements and other contractual instruments shall be deemed to include
subsequent amendments, assignments, and other modifications thereto, but only to the extent such amendments, assignments and other
modifications are not prohibited by the terms of this Agreement; references to any person includes their respective permitted
successors and assigns or people succeeding to the relevant functions of such persons; and all references to statutes and related
regulations shall include any amendments of same and any successor statutes and regulations.

 

2.
Parties Intended to be Benefitted. All of the
understandings, covenants and agreements contained herein are solely for the benefit of Junior Lender and Senior Lender, and there
are no other parties (including Borrower) which are intended to be benefitted, in any way, by this Agreement.

 

3.
No Limitation Intended. Nothing contained in
this Agreement is intended to affect or limit, in any way, the security interests, liens and other interests that each of the
parties hereto has or hereafter acquires in any and all of the assets, whether tangible or intangible, of Borrower insofar as
the rights of Borrower and third parties are involved. Junior Lender and Senior Lender specifically reserve all of their respective
rights, security interests, rights to assert security interests, and other interests against Borrower and third parties.

 

4.
Consent to and Subordination of Obligations.

 

4.1
Senior Lender hereby consents to the transactions
contemplated by the First Amendment and the granting by Borrower to Junior Lender of a security interest in the Collateral and
IP Collateral of Borrower.

 

4.2
Any and all Junior Lender Indebtedness are hereby
subordinated and subject to any and all Senior Lender Indebtedness, until Full Payment of the Senior Lender Indebtedness.

 

4.3
Until Full Payment of the Senior Lender Indebtedness,
Junior Lender agrees: (i) except as permitted in Section 4.4 of this Agreement, not to collect, or to receive payment upon, by
setoff or in any other manner, all or any portion of the Junior Lender Indebtedness now or hereafter existing and notwithstanding
the fact that the Junior Lender Indebtedness may mature by its terms prior to the Senior Lender Indebtedness if such Senior Lender
Indebtedness is extended; (ii) not to sell, assign, transfer, pledge, or give a security interest in the Junior Lender Indebtedness
(except subject expressly to this Agreement, including, without limitation, Section 13); (iii) not to join in any petition for
bankruptcy, assignment for the benefit of creditors, or creditors’ agreement; or (iv) not to incur any obligation to or
receive any loans, advances or gifts from Borrower. Subject to the foregoing, Junior Lender may accelerate the amount of the Junior
Lender Indebtedness upon the occurrence of (a) the acceleration of all of the Senior Lender Indebtedness; or (b) an Insolvency
Proceeding with respect to the Borrower.

 

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4.4
All of the Senior Lender Indebtedness now or
hereafter existing shall be first paid by Borrower before any payment shall be made by Borrower on the Junior Lender Indebtedness
notwithstanding the fact that the Junior Lender Indebtedness will mature by its terms prior to the Senior Lender Indebtedness.
This priority of payment shall apply at all times until Full Payment of the Senior Lender Indebtedness, and in the event of any
assignment by Borrower for the benefit of Borrower’s creditors, of any bankruptcy proceedings instituted by or against Borrower,
of the appointment of any receiver for Borrower or Borrower’s business or assets, or of any dissolution or other winding
up of the affairs of Borrower or of Borrower’s business, and in all such cases respectively, the officers of Borrower and
any assignee, trustee in bankruptcy, receiver, and other person or persons in charge, are hereby directed to pay to Senior Lender
the full amount of the Senior Lender Indebtedness before making any payments to Junior Lender on account of the Junior Lender
Indebtedness, including at maturity of the Junior Lender Indebtedness. Notwithstanding anything in the foregoing to the contrary,
nothing contained in this Agreement shall prevent the accrual of payments and distributions that would, but for the provisions
of this Agreement, be payable or deliverable in respect of the Junior Lender Indebtedness; provided, that no such accrued payments
or distributions shall actually be paid or delivered until otherwise permitted by this Section 4.4 and further provided that,
on the maturity date of the Junior Lender Indebtedness, the provisions of this Section shall continue to apply.

 

4.5
Junior Lender agrees that if part or all of the
Junior Lender Indebtedness shall be evidenced by a promissory note or other instrument, Junior Lender shall place or cause to
be placed on its face a legend stating that the payment thereof is subject to the terms of this Agreement and is subordinate to
the payment of all of the Senior Lender Indebtedness. Junior Lender agrees to mark all books of account in such manner as to indicate
that payment thereof is subordinated pursuant to the terms of this Agreement.

 

4.6
Junior Lender agrees that, subject to Section
7.1, Senior Lender shall have absolute power and discretion, without notice to Junior Lender, to deal in any manner with the Senior
Lender Indebtedness, including, interests, costs and expenses payable by Borrower to Senior Lender, and any security and guarantees
therefor including, but not by way of limitation, release, surrender, extension, renewal, acceleration, compromise or substitution.

 

4.7
Senior Lender shall have the right to discontinue
the extension of credit to or on behalf of Borrower in accordance with the Loan Documents, including, without limitation, the
right to discontinue extensions of credit as a result of any discretionary lending provisions.

 

5.
Subordination of Security Interests. Subject
to the conditions set forth in this Agreement:

 

5.1
Junior Lender hereby subordinates any and all
security interests, including purchase money security interests, which Junior Lender now has or hereafter acquires in the Collateral
and, unless and until the Overadvance Put is consummated, the IP Collateral to the security interests which Senior Lender has
or may hereafter acquire in the Collateral and the IP Collateral. In this regard, Junior Lender agrees that it will not enforce
or apply its security interests in any of the Collateral or, unless and until the Overadvance Put is consummated, the IP Collateral,
unless and until Full Payment of the Senior Lender Indebtedness. To the extent the Overadvance Put is consummated, Senior Lender
agrees that it shall release any and all Liens it has on the IP Collateral concurrently with the consummation of the Overadvance
Put. If, notwithstanding the terms of this Agreement, the Senior Lender does not release such IP Collateral, the Senior Lender
hereby irrevocably appoints Junior Lender as its attorney-in-fact with full authority in the place and stead of the Senior Lender
and in the name of the Senior Lender or otherwise to execute and deliver any document or instrument that the Senior Lender may
be required to deliver to release its Lien on the IP Collateral as required in this Section 5.1.

 

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5.2
Junior Lender hereby subordinates any and all
security interests it has or may hereafter acquire in any and all of the proceeds of the Collateral and, unless and until the
Overadvance Put is consummated, the IP Collateral, to the security interests of Senior Lender in any and all of the proceeds of
the Collateral and, unless and until the Overadvance Put is consummated, the IP Collateral. In this regard, Junior Lender agrees
that it will not seek to notify account debtors or other obligors of its subordinated security interests in the proceeds of the
Collateral, nor will Junior Lender collect such proceeds or otherwise enforce or apply its security interest in the proceeds of
the Collateral and, unless and until the Overadvance Put is consummated, the IP Collateral, unless and until Full Payment of the
Senior Lender Indebtedness.

 

5.3
Junior Lender agrees that upon the request of
Senior Lender it will release its Lien in Collateral and, to the extent an Overadvance Put Rejection has occurred, the IP Collateral,
in connection with and in order to facilitate any orderly liquidation sale of Collateral and, if applicable, the IP Collateral,
or any portion thereof, by Borrower or any representative for Borrower, and upon the request of Senior Lender, Junior Lender will,
at Borrower’s expense, promptly execute and deliver such documents, instruments and agreements as are necessary to effectuate
such release and to evidence such release in the appropriate public records, in each case, provided that (i) Senior Lender releases
any of its liens in Collateral or, to the extent applicable, the IP Collateral, in connection with such sale, (ii) such sale occurs
during the existence of an Event of Default (as defined in the Financing Agreement), or (iii) the cash proceeds thereof are applied
to permanently reduce and pay in full the Senior Lender Indebtedness, and then applied on account of the Junior Lender Indebtedness
in accordance with this Agreement.

 

5.4
Subject to the exception relating to IP Collateral
set forth below, Junior Lender hereby agrees that until Full Payment of the Senior Lender Indebtedness it will not (A) commence,
prosecute or participate in any lawsuit, action or proceeding, including but not limited to remedies under the Second Lien Security
Agreement whether private, judicial equitable, administrative or otherwise (including any Insolvency Proceedings against Borrower,
any guarantor or any grantor or their assets) restrain, hinder, limit delay for any material period or otherwise interfere with
any sale, lease, exchange, transfer, or other disposition of the Collateral, whether by foreclosure or otherwise (B) contest,
protest or object to the manner in which Senior Lender seeks to enforce or collect the Senior Lender Indebtedness or the liens
granted in any of the Collateral, regardless of whether any action or failure to act by or on behalf of Senior Lender is adverse
to the interest of the Junior Lender, including with respect to any foreclosure proceeding or action brought by Senior Lender,
or the exercise of any right under any lockbox agreement, control agreement, landlord waiver or bailee’s letter or similar
agreement or arrangement to which Junior Lender or any other junior lender is a party, or any other exercise by any such party,
of any rights and remedies relating to the Collateral or otherwise, or (C) contest, protest or object to the forbearance by Senior
Lender from bringing or pursuing any foreclosure proceeding or action or any other exercise of any rights or remedies relating
to any of the Collateral; provided, that, the liens of the Junior Lender attach to the remaining proceeds of the
Collateral upon any disposition. Notwithstanding anything in this Section 5.4 to the contrary, the Junior Lender shall not be
prohibited from exercising remedies available to it under the Note Purchase Agreement, the Subordinated Note, the Second Lien
Security Agreement or any other document evidencing the Junior Indebtedness to the extent such remedies are in connection with
disposition of IP Collateral following the consummation of the Overadvance Put.

 

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6.
Insolvency Proceeding. This Agreement
shall be applicable both before and after the commencement of any Insolvency Proceeding and all converted or succeeding cases
in respect thereof. Accordingly, the provisions of this Agreement are intended to be and shall be enforceable as a subordination
agreement within the meaning of Section 510(a) of the Bankruptcy Code and all references herein to Borrower shall be deemed to
apply to such Person as debtor-in-possession and to any trustee in bankruptcy for the estate of such Person. If Borrower becomes
a party to an Insolvency Proceeding:

 

6.1
Filing of Claim. Junior Lender agrees
to timely file a proof of claim for the amount of the Junior Lender Indebtedness, in form and substance reasonably approved by
Senior Lender, and Senior Lender may file such a proof of claim on Junior Lender’s behalf if Junior Lender has not so filed
as of the fifth (5th) day before the proof of claim may finally be submitted.

 

6.2
Adequate Protection. Junior Lender shall
not object to Senior Lender’s request for adequate protection, or to Senior Lender’s objection to any proposed action
based upon Senior Lender not having adequate protection.

 

6.3
Cash Collateral. Junior Lender shall not
object to, and shall be deemed to have consented to, the use of cash collateral and to any debtor-in-possession financing (“DIP
Financing”) supported by Senior Lender. Senior Lender agrees that it shall not object to the grant to Junior Lender of a
Lien on all Collateral of Borrower (including proceeds thereof arising after the commencement of an Insolvency Proceeding) junior
in priority to Senior Lender as existed prior to the commencement of the Insolvency Proceeding and junior in priority to any liens
securing DIP Financing and Junior Lender may seek, without objection from Senior Lender, a replacement Lien on post-petition assets
to the same extent as granted to secure DIP Financing, junior in priority to Senior Lender as existed prior to the commencement
of the Insolvency Proceeding and junior in priority to any Liens securing DIP Financing. Junior Lender shall not provide or participate
in any DIP Financing. Nothing herein shall limit Senior Lender’s right to consent to the use of cash collateral or to provide
DIP Financing on terms that are not set forth herein. Senior Lender agrees that it shall not object to the grant to Junior Lender
of a Lien on all IP Collateral of Borrower (including proceeds thereof arising after the commencement of an Insolvency Proceeding)
which, (i) to the extent the Overadvance Put has not been consummated, shall be junior in priority to Senior Lender as existed
prior to the commencement of the Insolvency Proceeding and junior in priority to any liens securing DIP Financing and (ii) to
the extent the Overadvance Put has been consummated, shall be senior in priority to any Lien the Senior Lender may have on the
IP Collateral.

 

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6.4
363 Sales. Junior Lender shall not object
to a sale, or the procedures for conducting a sale, under Section 363 of the Bankruptcy Code which are supported by Senior Lender.
Senior Lender shall not object to the grant to Junior Lender of a junior Lien on the proceeds of such sale subordinate to the
Lien of Senior Lender on such proceeds (and to the liens securing any DIP Financing Described in Section 6.3), in accordance with,
or on the same terms as, this Agreement.

 

6.5
Voting in Other Matters. Junior Lender
shall not (i) propose or support any plan of reorganization involving Borrower that is inconsistent with the priorities of this
Agreement or contravenes the other provisions of this Agreement or that does not provide for the full payment of the Senior Lender
Indebtedness (except, in either case, any plan that is supported by Senior Lender), or (ii) vote in favor of any plan of reorganization
involving Borrower that (A) provides for the invalidation, limitation, restriction, or subordination of any of the liens of Senior
Lender in and to the Collateral, (B) provides for the invalidation, limitation, or disallowance of any of the claims of Senior
Lender, (C) provides for the equitable subordination of all of any portion of the Senior Lender Indebtedness, or (D) results in
the transfer to the estate of Borrower of any Lien securing all or any portion of the claims of Senior Lender.

 

6.6
Section 1111(b) of the Bankruptcy Code.
Junior Lender shall not object to, oppose, support any objection, or take any other action to impede, the right of Senior Lender
to make an election under Section 1111(b)(2) of the Bankruptcy Code. Junior Lender waives any claim it may hereafter have against
any Senior Lender arising out of the election by Senior Lender of the application of Section 1111(b)(2) of the Bankruptcy Code.

 

6.7
Relief from the Automatic Stay. Until
Full Payment of the Senior Lender Indebtedness, Junior Lender agrees not to (a) seek (or support any other third party seeking)
relief from the automatic stay, without the prior written consent of Senior Lender, or (b) oppose any request by Senior Lender
to seek relief from the automatic stay or any other stay in any Insolvency Proceeding in respect of the Collateral.

 

7.
Amendments to the Loan Documents and the Subordinated
Note; Purchase Right. 

 

7.1
Amendments to the Loan Documents. Any
of the Loan Documents may be amended, supplemented or otherwise modified in accordance with its terms, in each case, without notice
to, or the consent of the Junior Lender, all without affecting the terms of this Agreement; provided, however, that any
such amendment, supplement, modification shall not, without the consent of the Junior Lender: (i) increase the sum of (without
duplication) the then outstanding aggregate principal amount of the Financing Agreement by more than One Million Three Hundred
Thousand Dollars ($1,300,000); provided, however, that any DIP Financing supported by Senior Lender shall not be subject to this
clause (i), or (ii) increase the interest rate, including by increasing the margin or similar component
of the interest rate or by modifying the method of computing interest, by more than five percent (5%) above the greatest applicable
rate therein provided (excluding increases resulting from the accrual of interest at the default rate); provided, that
in no event shall the interest rate, together with the margin or similar component, exceed a usurious rate per annum.

 

    	11

    	 

    

 

7.2
Amendments to the Subordinated Note. The
Subordinated Note may be amended, supplemented or otherwise modified in accordance with its terms, in each case, without notice
to, or the consent of Senior Lender, all without affecting the terms of this Agreement; provided that the amendments do not contravene
the provisions of this Agreement; provided further, however, that any such amendment, supplement, modification shall not,
without the consent of Senior Lender: (i) increase the sum of (without duplication) the then outstanding aggregate principal amount
of the Subordinated Note by more by more than Seven Hundred Thousand Dollars ($700,000), (ii) increase
the interest rate, including by increasing the margin or similar component of the interest rate or by modifying the method of
computing interest, by more than five percent (5%) above the greatest applicable rate therein provided (excluding increases resulting
from the accrual of interest at the default rate); provided, that in no event shall the interest rate, together with the
margin or similar component, exceed a usurious rate per annum, (iii) change (to earlier dates) any dates upon which payments
of principal or interest are due thereon, or (iv) contravene the provisions of this Agreement.

 

7.3
Purchase Right. Without prejudice to the
enforcement of Senior Lender’s remedies, Senior Lender agrees at any time following an acceleration of the Senior Lender
Indebtedness in accordance with the terms of the Loan Documents, Senior Lender will offer the Junior Lender the option to purchase
the entire aggregate amount of outstanding Senior Lender Indebtedness at par plus accrued interest (without regard to any prepayment
penalty or premium), without warranty or representation or recourse. The Junior Lender shall irrevocably accept or reject such
offer within ten (10) business days of the receipt thereof and, if the offer is accepted, the parties shall close within ten (10)
business days following the date Junior Lender issues to Senior Lender its acceptance. If the Junior Lender accepts such offer,
it shall be exercised pursuant to documentation mutually acceptable to each of Senior Lender and the Junior Lender. If the Junior
Lender rejects such offer (or does not so irrevocably accept such offer within the required timeframe), Senior Lender shall have
no further obligations pursuant to this Section 7.3 and may take any further actions in their sole discretion in accordance with
the Loan Documents and this Agreement. Nothing herein shall require Senior Lender to forbear or refrain from any of its rights
and remedies set forth in the Loan Documents while awaiting the response of Junior Lender under this paragraph.

 

7.4
Overadvance Put. Without prejudice to
the enforcement of Senior Lender’s remedies, Senior Lender agrees that, prior to (i) providing notice to the Borrower of
its intention to terminate the Financing Agreement under Section 10.1 (or any successor provision) thereof; (ii) accelerating
any of the Senior Lender Indebtedness; (iii) exercising any remedies available to the Senior Lender under the Financing Agreement,
any other document delivered in connection with the Senior Lender Indebtedness or under applicable law; or (iv) making any claims
upon the LC (as defined in the Financing Agreement) or presenting the LC for payment, Senior Lender will offer the Junior Lender
the option to purchase the entire aggregate amount of the Permitted Overadvance (as defined in the Financing Agreement) outstanding
under the Senior Lender Indebtedness at par plus accrued interest (without regard to any prepayment penalty or premium), without
warranty or representation or recourse (such transaction, the “Overadvance Put”). The Junior Lender shall irrevocably
accept or reject such offer within ten (10) business days of the receipt thereof and, if the offer is accepted, the parties shall
close within ten (10) business days following the date Junior Lender issues to Senior Lender its acceptance. If the Junior Lender
accepts such offer, it shall be exercised pursuant to documentation mutually acceptable to each of Senior Lender and the Junior
Lender; provided, however, that such documentation shall include (i) the release of any Liens the Senior Lender has on the IP
Collateral, (ii) an obligation on the part of the Senior Lender to cause the LC to be terminated concurrently therewith, and (iii)
a grant to Senior Lender of a worldwide royalty-free license of all IP Collateral to the extent required by it to liquidate any
Collateral or enforce its rights and remedies as to the Obligations until Full Payment of the Senior Lender Indebtedness. If the
Junior Lender rejects such offer (or does not so irrevocably accept such offer within the required timeframe) (an “Overadvance
Put Rejection”), Senior Lender shall have no further obligations pursuant to this Section 7.4 and may take any further actions
in its sole discretion in accordance with the Loan Documents and this Agreement, including, without limitation, making claims
upon the LC or presenting the LC for payment. The Senior Lender agrees that, while awaiting the response of Junior Lender under
this paragraph, it shall refrain from exercising any remedies against the IP Collateral and the LC (including any presentment
for payment thereof) without prejudice to any other rights and remedies against the Borrower or Collateral pursuant to the Financing
Agreement, Loan Documents or applicable law.

 

    	12

    	 

    

 

8.
Effectiveness. The subordinations, agreements
and priorities set forth hereinabove shall remain in full force and effect regardless of whether any party hereto in the future
seeks to rescind, amend, terminate or reform, by litigation or otherwise, its respective agreements with Borrower. This Agreement,
and the rights of Senior Lender hereunder shall terminate upon Full Payment of the Senior Lender Indebtedness.

 

9.
Order of Attachment or Perfection. The subordinations
and priorities specified herein are applicable, irrespective of the time or order of attachment or perfection of the security
interests referred to herein, the time or order of filing of financing statements, or the acquisition of or time of giving or
failing to give notice of the acquisition or expected acquisition of purchase money or other security interests.

 

10.
Waiver of Marshaling. Each of the parties hereto
hereby specifically waive and renounce any rights which they may have, whether at law or in equity, to require the other party
hereto to marshal the Borrower’s assets, or any portion thereof, or to otherwise seek satisfaction from any particular assets
of Borrower or from any third party. In this regard, each of the parties hereto expressly waives its rights, if any, under New
York law or under any other similar provisions of the laws of any other jurisdiction deemed applicable to this Agreement, and
agree that no party hereto shall derive any benefit therefrom.

 

11.
Notice. Unless otherwise specifically provided
herein, all notices and service of any process shall be in writing addressed to the respective party as set forth below and may
be personally served, telecopied or sent by overnight courier service or United States mail and shall be deemed to have been given:
(a) if delivered in person, when delivered; (b) if delivered by overnight courier, two days after delivery to such courier properly
addressed; or (c) if by U.S. Mail, four Business Days after depositing in the United States mail, with postage prepaid and properly
addressed.

 

    	13

    	 

    

 

	 	To
    Junior Lender:	 	RAPTOR/HARBOR
    REEDS SPV LLC

    280 Congress Street, 12th Floor

    Boston, MA 02210
	 	 	 	 
	 	 	 	Attention:
    Legal Department

    Fax Number: 617.737.0993
	 	 	 	 
	 	To
    Senior Lender:	 	ROSENTHAL
    & ROSENTHAL, INC.

    1370 Broadway

    New York, NY 10018

    Attention: Robert Martucci, Senior Vice President

    Fax Number: 212.356.3354

 

The
parties hereto may change the address at which they are to receive notices and the fax number at which they are to receive faxes
hereunder, by notice in writing in the foregoing manner given to the other.

 

12.
Choice of Law, Venue and Attorneys’ Fees.
The validity of this Agreement, its construction, interpretation and enforcement, and the rights of the parties hereunder shall
be determined under, governed by, and construed in accordance with the laws of the State of New York. If suit is filed to enforce
any rights under this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees and court costs. Any
such suit may only be filed in a court of competent jurisdiction located in the State of New York.

 

13.
Successors and Assigns. This Agreement shall
be binding upon, and inure to the benefit of, the successors and assigns of each of the parties hereto, respectively. Junior Lender
and Senior Lender each agree that this Agreement is enforceable in a case commenced under the Bankruptcy Code to the same extent
that it is enforceable under applicable non-bankruptcy law. Notwithstanding any provision contained herein to the contrary, the
Junior Lender may sell, assign, pledge, dispose of or otherwise transfer all or any portion of the Junior Lender Indebtedness
or the Subordinated Note upon the satisfaction of the following conditions: (i) the Junior Lender shall provide prior written
notice of such action to Senior Lender; and (ii) the transferee thereof shall execute and deliver to Senior Lender an agreement
substantially identical to this Agreement.

 

14.
WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE.

 

[Signatures
on Next Page]

 

    	14

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date hereinabove first set forth.

 

	 	ROSENTHAL
    & ROSENTHAL, INC
	 	 
	 	By:	/s/
    Robert Martucci
	 	Name:	Robert
    Martucci
	 	Title:	Senior
    Vice President
	 	 	 
	 	RAPTOR/HARBOR
    REEDS SPV LLC 
	 	 	 
	 	By:	/s/
    Daniel J. Doherty III
	 	Name:	 
	 	Title:	 

 

    	S-1
	Subordination Agreement

    	 

    

 

CONSENT
AND ACKNOWLEDGMENT

 

REEDS,
INC., a Delaware corporation, referred to as “Borrower” in the foregoing Subordination Agreement (the “Agreement”),
hereby acknowledges that it has received a copy of the Agreement and consents thereto, and agrees to recognize all priorities
and other rights granted thereby to the parties thereto, and will do no act or perform no obligation which is not in accordance
with the priorities and agreements set forth in the Agreement.

 

	 	REEDS, INC.,
 a Delaware corporation
	 	 
	DATED:
    October 4, 2018	 	 
	 	 	 
	 	By:	/s/
    Valentin Stalowir
	 	Name:	Valentin
    Stalowir
	 	Title:	Chief
    Executive OfficerFIRST
AMENDMENT TO SECURITIES PURCHASE AGREEMENT

AND
TRANSACTION DOCUMENTS

 

THIS
FIRST AMENDMENT TO SECURITIES PURCHASE AGREEMENT AND TRANSACTION DOCUMENTS (this “Amendment”), dated as
of October 4, 2018, is entered into by and between Reeds, Inc., a Delaware corporation (the “Company”) and
Raptor/Harbor Reeds SPV LLC, a Delaware limited liability company (the “Purchaser”).

 

WHEREAS,
the Purchaser and the Company are parties to (i) that certain Securities Purchase Agreement dated as of April 21, 2017 (the “Existing
Purchase Agreement” and as the Existing Purchase Agreement is amended and modified by this Amendment, the “Amended
Purchase Agreement”) and (ii) that certain Second Lien Security Agreement dated as of April 21, 2017 (the “Existing
Security Agreement” and as the Existing Security Agreement is amended and modified by this Amendment, the “Amended
Security Agreement” and together with the Amended Purchase Agreement, the “Amended Transaction Documents”);

 

WHEREAS,
the Purchaser is entering a Financing Agreement (the “Financing Agreement”) with Rosenthal and Rosenthal, Inc.,
a New York corporation (the “New Lender”) pursuant to which the New Lender will make certain loans and other
financial accommodations available to the Company for the purpose of, among other things, refinancing the indebtedness owing by
the Company to PMC;

 

WHEREAS,
as a condition to the New Lender’s agreement to make available the loans and other financial accommodations under the Financing
Agreement, the New Lender is requiring that the Purchaser (i) cause a letter of credit to be issued for the benefit of the New
Lender in the face amount of $1,500,000 (the “LOC”) and (ii) enter into a Subordination Agreement dated as
of the date hereof between the New Lender and Purchaser (the “Subordination Agreement”) pursuant to which the
Purchaser is granting the New Lender a put right on the Permitted Overadvance (as defined in the Financing Agreement) subject
to the terms and conditions set forth therein (the “Overadvance Put”);

 

WHEREAS,
the Purchaser and the Company have agreed that, to the extent the New Lender makes a draw on the LOC (an “LOC Draw”)
or, without duplication, the Purchaser makes any payments in respect of the Overdavance Put (an “Overadvance Put Payment”
and together with any LOC Draw, a “Credit Support Advance”) the amount of each such Credit Support Advance
shall be added to the principal amount evidenced by the Note;

 

WHEREAS,
the Purchaser and the Company have agreed to amend the Existing Purchase Agreement and other Transaction Documents in certain
respects to reflect the foregoing on the terms, conditions, and provisions contained in this Waiver and Amendment.

 

NOW,
THEREFORE, in consideration of the premises and mutual agreements herein contained, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

 

    	 

     

    

 

SECTION
1

INCORPORATION
OF RECITALS; DEFINED TERMS

 

The
Company acknowledge that the Whereas clauses set forth above are true and correct. The defined terms in the Whereas clauses set
forth above are hereby incorporated into this Amendment by reference. All other capitalized terms used herein without definition
shall have the same meanings herein ascribed to such terms have in the Existing Purchase Agreement.

 

SECTION
2

AMENDMENT
TO EXISTING PURCHASE AGREEMENT

 

2.1 Amendment
to Definitions.

 

(a) Additional
Definitions. Section 1.1 of the Existing Purchase Agreement is hereby amended by adding the following definitions in
proper alphabetical order:

 

“Credit
Support Advance” means, without duplication, any amounts drawn on the LOC and/or all payments made in respect of the
Overadvance Put.

 

“First
Amendment Date” means September 28, 2018, the date on which the Company and the Purchaser entered into that certain
First Amendment to Securities Purchase Agreement and other Transaction Documents.

 

“LOC”
means a letter of credit issued in favor of the Senior Lender in the face amount of $1,500,000 as security for the Permitted Overadvance
(as defined in the Intercreditor Agreement), as the same may be amended, extended, supplemented or otherwise modified from time
to time.

 

“Overadvance
Put” has the meaning ascribed to such term in the Intercreditor Agreement.

 

“Senior
Lender” shall mean Rosenthal and Rosenthal, Inc., a New York corporation.

 

(b) Amended
Definitions. The following definitions set forth in Section 1.1 of the Existing Purchase Agreement are hereby amended
and restated in their entirety as follows:

 

“Intercreditor
Agreement” means the Subordination Agreement among the Purchaser and Senior Lender to be dated as of the First Amendment
Date, as amended, restated, supplemented or otherwise modified from time to time.

 

“Note”
means the Amended and Restated Subordinated Convertible Non-Redeemable Secured Promissory Note in the Form attached hereto as
Exhibit A.

 

(c) Deleted
Definitions. The following definitions set forth in Section 1.1 of the Existing Purchase Agreement is hereby deleted in
its entirety.

 

    	 	2	 

    	 

    

 

“PMC”;

“PMC
Consent”.

 

2.2 Addition
of Credit Support Advances. Section 2.1 of the Existing Purchase Agreement is hereby amended by deleting the Section
in its entirety and substituting the following therefor:

 

“2.1 Initial
Closing; Subsequent Credit Support Advances. On April 21, 2017 (the “Closing Date”) the Company sold
and the Purchaser purchased, in exchange for the Subscription Amount, the Prior Note (as defined in the Note) and Warrants.
The Company acknowledges receipt of the purchase price for such Prior Note and Warrants equal to the Purchaser’s
Subscription Amount on the Closing Date, and the Company has delivered to Purchaser an originally executed Prior Note and the
Warrants, as determined pursuant to Section 2.2(a). The the Company and Purchaser have also delivered the other items set
forth in Section 2.2 deliverable at the Closing. On the First Amendment Date, the Company has issued the Note (which shall
not be deemed a novation of the Prior Note) to evidence any Credit Support Advances which may occur on or after the First
Amendment Date. The Company agrees that any Credit Support Advance shall be treated as “Principal” under the Note
as and when such Credit Support Advance occurs and all such Credit Support Advances shall be an obligation of the Company
payable to the Purchaser under the terms of the Note which shall be secured by the Lien granted under the Security
Agreement.”

 

2.3 Replacement
Exhibit. Exhibit A to the Existing Purchase Agreement is hereby amended by deleting the Exhibit in its entirety and
substituting the replacement Exhibit A attached to this Amendment as Attachment I therefor.

 

SECTION
3

AMENDMENT
TO EXISTING SECURITY AGREEMENT

 

3.1 Amendment
to Definitions. The following definition set forth in Section 1(c) of the Existing Security Agreement is
hereby amended and restated in its entirety as follows:

 

“Second
Priority” means, with respect to any lien and security interest purported to be created in any Collateral pursuant to
this Agreement, such lien and security interest is the most senior lien to which such Collateral is subject (subject to the subordination
of Secured Party’s lien and security interest only to Senior Lender’s lien and security interest under the Financing
Agreement as provided in the Subordination Agreement (“Senior Lender’s First Priority”)).

 

3.2 Replacement
of Senior Lender. All references to the terms “PMC” and “PMC’s First Priority” are
hereby replaced with the terms “Senior Lender” and “Senior Lender’s First Priority”,
respectively.

 

    	 	3	 

    	 

    

 

SECTION
4

REPRESENTATIONS
AND WARRANTIES

 

4.1 Due
Authorization, etc. The execution and delivery of this Amendment and each of the documents required to be delivered
under Section 4.1 to which the Company is a party, and the performance of the Company’s obligations under the Amended
Transaction Documents and the other Transaction Documents are duly authorized by all necessary corporate action, do not
require any filing or registration with or approval or consent of any governmental agency or authority, do not and will not
conflict with, result in any violation of or constitute any default under any provision of the articles of incorporation or
by-laws of the Company or any material agreement or other document binding upon or applicable to the Company (or any of its
respective properties) or any material law or governmental regulation or court decree or order applicable to the Company, and
will not result in or require the creation or imposition of any Lien in any of the Company’s properties pursuant to the
provisions of any agreement binding upon or applicable to the Company.

 

4.2 Validity.
This Amendment has been duly executed and delivered by the Company and, together with the Amended Transaction Documents and
the other Transaction Documents, constitutes a legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms subject, as to enforcement only, to bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforceability of the rights of creditors generally.

 

4.3 Existing
Representations and Warranties. The Company hereby represents and warrants to the Purchaser that, as of the date of
this Amendment, the representations and warranties contained in the Amended Transaction Documents and the other Transaction
Documents are true and correct on the date of this Amendment, except to the extent that such representations and warranties
solely relate to an earlier date.

 

4.4 Absence
of Defaults. The Company hereby represents and warrants to the Purchaser that, as of the date of this Amendment no
Event of Default (as defined in the Note) has occurred and is continuing.

 

SECTION
5

CONDITIONS
PRECEDENT

 

This
Amendment shall become effective upon satisfaction of all of the following conditions precedent:

 

5.1
Receipt of Documents: The Purchaser shall have received all of the following, each in form and substance satisfactory
to Purchaser:

 

(a) Amendment.
A counterpart original of this Amendment duly executed by the parties hereto.

 

    	 	4	 

    	 

    

 

(b) Financing
Agreement. An executed copy of the Financing Agreement and evidence that the loans made available thereunder have been
advanced by the New Lender to the Company.

 

(c) Warrant
Amendment. An executed copy of an Amendment to Warrant Agreement executed by all parties thereto.

 

(d) Other.
Such other documents as the Purchaser may reasonably request.

 

5.2 Other Conditions. No Event of Default shall have occurred and be continuing.

 

SECTION
6

 MISCELLANEOUS

 

6.1 Documents
Remain in Effect. The Existing Purchase Agreement, the Existing Security Agreement and the other Transaction
Documents, as any of the foregoing have been amended hereby, and the other documents executed pursuant to such documents
remain in full force and effect and the Company hereby ratifies, adopts and confirms its representations, warranties,
agreements and covenants contained in, and obligations and liabilities thereunder.

 

6.2 Headings.
Headings used in this Amendment are for convenience of reference only, and shall not affect the construction of this
Amendment.

 

6.3 Counterparts.
This Agreement may be executed in any number of counterparts, and by the parties hereto on the same or separate
counterparts, and each such counterpart, when executed and delivered, shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement.

 

6.4 Expenses.
The Company agrees to pay on demand all costs and expenses of the Purchaser (including reasonable fees, charges and
disbursements of the Purchaser’s attorneys) in connection with the preparation, negotiation, execution, delivery and
administration of this Amendment and all other instruments or documents provided for herein or delivered or to be delivered
hereunder or in connection herewith. All obligations provided in this Section 6.4 shall survive any termination of this
Amendment or the Amended Transaction Documents.

 

6.5 Release.

 

(a)
The Company further acknowledges and agrees that as of the date hereof, it has no claim, defense or set-off right against the
Purchaser of any nature whatsoever, whether sounding in tort, contract or otherwise, and has no claim, defense or set-off of
any nature whatsoever to the enforcement of the full amount obligations of the Company under the Amended Transaction
Documents and the other Transaction Documents.

 

    	 	5	 

    	 

    

 

(b)
Notwithstanding the foregoing, to the extent that any claim, cause of action, defense or set-off against the Purchaser or its
enforcement of the Amended Transaction Documents or any other Transaction Document, of any nature whatsoever, known or
unknown, fixed or contingent, does nonetheless exist or may exist on the date hereof, in consideration of the
Purchaser’s entering into this Amendment, the Company hereby irrevocably and unconditionally waives and releases fully
each and every such claim, cause of action, defense and set-off which exists or may exist on the date hereof.

 

(c)
All obligations provided in this Section 6.5 shall survive any termination of this Amendment or the Amended Transaction
Documents or the other Transaction Documents.

 

6.6 Governing
Law; Certain Other Matters.

 

(a)
This Amendment shall be a contract made under and governed by the internal laws of the State of Illinois. Wherever possible,
each provision of this Amendment shall be interpreted in such manner as to be effective and valid under applicable laws, but
if any provision of this Amendment shall be prohibited by or invalid under such laws, such provisions shall be ineffective
only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining
provisions of this Amendment.

 

(b)
This Amendment and all other agreements and documents executed in connection herewith have been prepared through the joint
efforts of all of the parties. Neither the provisions of this Amendment or any such other agreements and documents nor any
alleged ambiguity shall be interpreted or resolved against any party on the ground that such party’s counsel drafted
this Amendment or such other agreements and documents, or based on any other rule of strict construction. Each of the parties
hereto represents and declares that such party has carefully read this Amendment and all other agreements and documents
executed in connection herewith and therewith and that such party knows the contents thereof and signs the same freely and
voluntarily. The parties hereby acknowledge that they have been represented by legal counsel of their own choosing in
negotiations for and preparation of this Amendment and all other agreements and documents executed in connection therewith
and that each of them has read the same and had their contents fully explained by such counsel and is fully aware of their
contents and legal effect.

 

6.7 Successors.
This Amendment shall be binding upon the Company, the Purchaser and their respective successors and assigns, and shall inure
to the benefit of the Company, the Purchaser and the successors and assigns of the Purchaser.

 

6.8 Waiver
of Jury Trial. EACH OF THE PARTIES TO THIS WAIVER AND AMENDMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING
TO THIS AMENDMENT, THE OTHER TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO
HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS WAIVER AND AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATION IN THIS SECTION.

 

6.8 Conflict
of Terms. In the event of a conflict between or among the terms, covenants, conditions or provisions of this
Amendment, the Amended Transaction Documents, or the other Transaction Documents, the Purchaser may elect to enforce from
time to time those provisions that would afford the Purchaser the maximum financial benefits and security for such
obligations and liabilities thereunder and/or provide the Purchaser the maximum assurance of payment of such liabilities and
obligations in full.

 

[signature
page attached]

 

    	 	6	 

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly
authorized and delivered as of the date first written above.

 

	 	“Company”
	 	 	 
	 	REED’S,
    INC.
	 	 	 
	 	By
    :	/s/
    Valentin Stalowir      
	 	Name
    :	Valentin
    Stalowir
	 	Title:	Chief
    Executive Officer
	 	 	 
	 	“Purchaser”
	 	 	
	 	Raptor/Harbor
    Reeds SPV LLC
	 	 	 
	 	By:	/s/
    Daniel J. Doherty III
	 	Name:	
	 	Title:	

 

First
Amendment to Securities Purchase Agreement and Transaction Documents

 

    	 	 	 

    	 

    

 

Attachment
I

 

Replacement
Exhibit A

 

[see
attached]

 

First
Amendment to Securities Purchase Agreement and Transaction Documents

 

    	 	 	 

    	 

    

 

Exhibit
A

 

Amended
and Restated Subordinated Convertible Non-Redeemable Secured Note

 

[see
attached]

 

First
Amendment to Securities Purchase Agreement and Transaction Documents

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