Exh. 10.2

SEPARATION AGREEMENT AND RELEASE

THIS SEPARATION AGREEMENT AND RELEASE (the “Agreement”) is entered into by
Hassan N. Natha (hereinafter referred to as “Executive”) and Jones Soda Co.
(hereinafter referred to as “Employer”).

RECITALS

A. Executive has been employed by Employer, and Executive’s employment at
Employer will terminate on September 14, 2008 (the “Termination Date”).

B. Employer wishes to offer Executive a separation package setting forth the
terms of Executive’s separation and any continuing obligations of the parties to
one another following the end of the employment relationship.

C. Each of the undersigned parties to this Agreement has had ample opportunity
to review the facts and law relevant to this issue, has consulted fully and
freely with competent counsel of its choice if desired, and has entered this
Agreement knowingly and intelligently without duress or coercion from any
source. Executive has had a reasonable time in which to consider whether he
wished to sign this Agreement.

AGREEMENTS

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises contained below, the parties agree as follows:

 

  1. EMPLOYMENT: ENDING DATE AND RESPONSIBILITIES

Executive’s employment with Employer will end on the Termination Date. Through
the Termination Date, Executive shall assist, as reasonably required, in
transition to Employer’s new Chief Financial Officer. After the Termination
Date, Executive will have no further employment duties to Employer.

 

  2. PAYMENTS AND OTHER BENEFITS TO BE PROVIDED BY EMPLOYER

In exchange for the promises contained in paragraphs three, four and six, below,
Employer will provide Executive with the following separation benefits:

 

  2.1

One Hundred, Ninety Nine Thousand, Seven Hundred, Ninety One Dollars and
Sixty-Six Cents ($199,791.66), representing 13.7 months of

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base salary continuation, payable in 26 equal installments, twice per month, of
Seven Thousand Six Hundred Eighty Four Dollars and Twenty Nine Cents,
($7,684.29) minus required withholdings, payments to be made monthly in
accordance with Employer’s regular payroll schedule and beginning on
September 30, 2008;

 

  2.2 Twenty Four Thousand, Eight Hundred, Thirty-Five Dollars and Sixty-Two
Cents ($24,835.62), representing Executive’s 2007 Incentive Compensation pro
rated to the percentage of calendar days in 2008 Executive was employed with
Employer (70.9%), minus required withholdings, payment to be made in a lump sum
on September 15, 2008;

 

  2.3 Twelve Thousand, One Hundred, Fourteen Dollars and Seventy-Two Cents
($12,114.72), minus required withholdings, for accrued and unused vacation pay,
payment to be made in a lump sum on or prior to the Termination Date;

 

  2.4 Outplacement services of up to Two Thousand, Five Hundred Dollars
($2,500.00) with a vendor of Employer’s choice with the payment to be made
directly to the vendor by Employer;

 

  2.5 Four Thousand, Six Hundred, Fourteen Dollars and Fifty Seven Cents
($4,614.57), representing Executive’s monthly COBRA premium multiplied by 13.7,
payment to be made in a lump sum on October 15, 2008;

 

  2.6 Fifty-Percent of Executive’s restricted stock and stock options that are
unvested as of the Termination Date, shall be accelerated and vest on the
Termination Date. This will result in 4,857 of 9,714 unvested shares of
restricted stock and 26,072 of 52,143 shares subject to unvested stock options
accelerating and becoming vested and exercisable, as applicable. The remaining
unvested portion of Executive’s stock options shall expire on the Termination
Date, and Executive’s remaining unvested restricted stock shall be subject to
the repurchase option set forth in the restricted stock purchase agreement under
which such restricted stock was granted. Except as provided herein, Executive’s
restricted stock and stock options shall remain subject to the terms of their
respective plans and any granting documents.

 

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  2.7 In the event Employer requires the assistance of Executive following the
Termination Date with respect to any legal or investigative proceedings,
Employer shall reimburse Executive for reasonable expenses and will also
reimburse Executive for his lost time from any future employment at Executive’s
then daily rate of pay.

 

  2.8 Employer shall pay any outstanding expense reports submitted by Executive
in the usual course of business.

 

  3. REAFFIRMATION OF CONFIDENTIALITY AND INVENTIONS COVENANTS

Executive is party to certain confidentiality, intellectual property and
non-solicitation obligations pursuant to the Employment Agreement between
Executive and Employer (“Employment Agreement), dated January 1, 2007. Executive
expressly reaffirms and incorporates herein as part of this Agreement Sections
9, 10, 11, 12 and 13 of the Employment Agreement (the “Post-Employment
Restrictions”) and these Post-Employment Restrictions will remain in full force
and effect. If Executive breaches any part of his Post-Employment Restrictions,
all payments and benefits still due and owing under Section 2 will be canceled
and Executive shall upon demand by Employer immediately return any payments
already made pursuant to Section 2.

 

  4. GENERAL RELEASE OF CLAIMS

Executive expressly waives any claims against Employer (including, for purposes
of this paragraph 4, all parents, affiliates, subsidiaries, officers, directors,
stockholders, managers, Executives, agents, investors, and representatives) and
releases Employer (including its parents, affiliates, subsidiaries, officers,
directors, stockholders, managers, Executives, agents, investors, and
representatives) from any claims, whether known or unknown, which existed or may
have existed at any time up to the date of this Agreement, including claims
related in any way to Executive’s employment with Employer or the ending of that
relationship. This release includes, but is not limited to, any claims for
wages, bonuses, employment benefits, stock options, or damages of any kind
whatsoever, arising out of any common law torts, arising out of any contracts,
express or implied, any covenant of good faith and fair dealing, express or
implied, any theory of wrongful discharge, any theory of negligence, any theory
of retaliation, any theory of discrimination or harassment in any form, any
legal restriction on Employer’s right to terminate Executives, or any federal,
state, or other governmental statute, executive order, or ordinance, including,
without limitation, Title VII of the Civil Rights Act of 1964 as amended, the
Civil Rights Act of 1991, the Civil Rights Act of 1866, 42 U.S.C. § 1981, the
Americans

 

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with Disabilities Act, the Age Discrimination in Employment Act, the Older
Workers Benefit Protection Act, the Family and Medical Leave Act, the Executive
Retirement Income Security Act, the Washington Law Against Discrimination, or
any other legal limitation on or regulation of the employment relationship. This
waiver and release shall not preclude either party from filing a lawsuit for the
exclusive purpose of enforcing its rights under this Agreement.

Executive represents that Executive has not filed any complaints, charges or
lawsuits against Employer with any governmental agency or any court, and agrees
that Executive will not initiate, assist or encourage any such actions, except
as required by law. Executive further agrees that if a commission, agency, or
court assumes jurisdiction of such claim, complaint or charge against Employer
on behalf of Executive, Executive will request the commission, agency or court
to withdraw from the matter.

Executive represents and warrants that he is the sole owner of the actual or
alleged claims, rights, causes of action, and other matters which are released
herein, that the same have not been assigned, transferred, or disposed of in
fact, by operation of law, or in any manner, and that he has the full right and
power to grant, execute and deliver the releases, undertakings, and agreements
contained herein.

 

  5. NO ADMISSION OF WRONGDOING

This Agreement shall not be construed as an admission by Executive or Employer
of any wrongful act.

 

  6. MUTUAL NON-DISPARAGEMENT

Executive agrees to refrain from making any derogatory or disparaging comments
to the press or any individual or entity regarding Employer, its business or
related activities, or the relationship between the parties. Employer agrees to
refrain from making any derogatory or disparaging comments to the press or any
individual or entity regarding Executive.

 

  7. RETURN OF PROPERTY

Executive confirms that Executive has or will immediately, upon the Termination
Date, return to Employer all files, memoranda, records, credit cards, pagers,
computers, computer files, passwords and pass keys, card keys, or related
physical or electronic access devices, and any and all other property received
from Employer or any of its current or former Executives or generated by
Executive in the course of employment.

 

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  8. BREACH OR DEFAULT

Any party’s failure to enforce this Agreement in the event of one or more events
that violate this Agreement shall not constitute a waiver of any right to
enforce this Agreement against subsequent violations.

 

  9. SEVERABILITY

The provisions of this Agreement are severable, and if any part of it is found
to be unlawful or unenforceable, the other provisions of this Agreement shall
remain fully valid and enforceable to the maximum extent consistent with
applicable law.

 

  10. ENTIRE AGREEMENT

This Agreement sets forth the entire understanding between Executive and
Employer and, except as otherwise provided herein, supersedes any prior
agreements or understandings, express or implied, pertaining to the terms of
Executive’s employment with Employer and the employment relationship. Executive
acknowledges that in executing this Agreement, Executive does not rely upon any
representation or statement by any representative of Employer concerning the
subject matter of this Agreement, except as expressly set forth in the text of
the Agreement. No modification or waiver of this Agreement will be effective
unless evidenced in a writing signed by both parties.

 

  11. GOVERNING LAW

This Agreement will be governed by and construed exclusively in accordance with
the laws of the State of Washington without reference to its choice of law
principles. Any disputes arising under this Agreement shall be brought in a
court of competent jurisdiction in the State of Washington.

 

  12. KNOWING AND VOLUNTARY AGREEMENT

Executive agrees that Executive has carefully read and fully understands all
aspects of this Agreement including the fact that this Agreement releases any
claims that Executive might have against Employer. Executive agrees that
Executive has not relied upon any representations or statements not set forth
herein or made by Employer’s agents or representatives. Finally, Executive
agrees that Executive has been advised to consult with an attorney prior to
executing the Agreement, and that Executive has either done so or knowingly
waived the right to do so, and now enters into this Agreement without duress or
coercion from any source. Executive agrees that he has been provided the
opportunity to consider for twenty-one (21) days whether to enter into this

 

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Agreement, and has voluntarily chosen to enter into it on this date. Executive
may revoke this Agreement for a period of seven (7) days following the execution
of this Agreement; this Agreement shall become effective following expiration of
this seven (7) day period.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates
indicated below.

 

JONES SODA CO.     HASSAN N. NATHA By:   /s/ Jonathan J. Ricci     /s/ Hassan N.
Natha Its:   COO       Dated:   8/25/08     Dated:   Aug. 18/08

 

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