AMENDMENT NUMBER FOUR TO LOAN AND SECURITY AGREEMENT

THIS AMENDMENT NUMBER FOUR TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as of March 27, 2009, is entered into between FIRST CAPITAL WESTERN REGION, LLC (“Lender”), and REED’S, INC ., a Delaware corporation (“Borrower”), in light of the following facts:

WHEREAS, Borrower and Lender have previously entered into certain Loan and Security Agreement, dated as of May 30, 2008, as amended by that certain Amendment Number One to Loan and Security Agreement dated July 30, 2008 , as amended by that certain Amendment Number Two to Loan and Security Agreement dated September 3, 2008, and as amended by that certain Amendment Number Three to Loan and Security Agreement dated September 24, 2008 (the “Agreement”).

WHEREAS, Borrower has requested that Lender reset the minimum tangible net worth and revise the numerator of the fixed charge coverage ratio in Item 21(a) of the Schedule to include stock option expenses and stock payments in lieu of cash payments.

WHEREAS, Lender has agreed to Borrower's request subject to the terms and conditions contained in this Amendment.

WHEREAS, Borrower and Lender wish to amend the Agreement as set forth in this Amendment.

NOW, THEREFORE, the parties agree as follows:

1.   DEFINITIONS .  All terms which are defined in the Agreement shall have the same definition when used herein unless a different definition is ascribed to such term under this Amendment, in which case, the definition contained herein shall govern.

2.   AMENDMENTS .  Effective as of the date of this Amendment, the Agreement is amended in the following respects:

(a)   Modification of Advance Rate for Eligible Inventory .   Item 1(a)(ii)(B) of the Schedule to the Agreement is deleted in its entirety and is replaced with a new Item 1(a)(ii)(B) as follows:

(B)           An amount equal to the least of:

1.           $1,000,000,

2.           For the period from June 1 through November 30 of each calendar year, an amount equal to 125% of amount calculated pursuant to Item 1(a)(ii)(A) , and for the period from December 1 through May 31 of each calendar year, an amount equal to 150% of amount calculated pursuant to Item 1(a)(ii)(A) , and

3.           An amount equal to (x) 50% of the dollar value (determined at the lower of cost or market value) of Eligible Inventory located at Borrower’s premises located at 12930 and 13000 South Spring Street, Los Angeles, California  90061, plus (y) 50% of the dollar value (determined at the lower of cost or market value) of Eligible Inventory consisting of finished goods (and not raw materials) located at Valley Distributing & Storage Company’s warehouse in Wilkes-Barre, Pennsylvania, plus (z) 50% of the dollar value (determined at the lower of cost or market value) of Eligible Inventory consisting of finished goods (and not raw materials) located at United Warehouses in Seattle, Washington,

(b)   Increase Interest Margin .   Item 8 of the Schedule to the Agreement is deleted in its entirety and is replaced with a new Item 8 as follows:

8.            Interest Margin :  7.75%

(c)   Change in Fixed Charge Coverage Ratio Covenant .   Item 21(a) of the Schedule to the Agreement is deleted in its entirety and is replaced with a new Item 21(a) as follows:

(a)           Borrower shall maintain a Fixed Charge Coverage Ratio (1) for the one month period ending April 30, 2009, (2) for each of the three-month periods ending on the last day of each calendar month from May 2009  through November 2009, and (3) for each of the