EXHIBIT 10.3

 

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED, AS INDICATED BY [***], AND
FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT UNDER RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

 

Intellectual Property Security Agreement

 

 

This Intellectual Property Security Agreement,  together with all addenda,
exhibits and schedules hereto, as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated, or replaced, (this
“Agreement”) is made as of this 27th day of December, 2013 by and between JONES
SODA CO., a Washington corporation ("Pledgor") and BFI Business Finance
("Lender"), a California corporation, at Campbell, California.

A. Lender has lent or agreed to lend to Jones Soda Co. (USA) Inc. (“Jones USA”)
a  Washington corporation and JONES SODA (CANADA) INC.  a Canadian corporation
(“Jones Canada”)  (Jones USA and Jones Canada, each individually and
collectively, the “Borrower”) , certain funds (the “Loan”) and Borrower desires
to borrow such funds from Lender pursuant to a Loan and Security Agreement
and/or Secured Promissory Note executed or to be executed in connection herewith
(either, as amended, the "Loan Agreement").  All capitalized terms not otherwise
defined herein shall have the meanings set forth in the Loan Agreement.

B. In order to induce Lender to make or continue to make the Loan, Pledgor has
signed or will sign a General Continuing Guaranty (the “Guaranty”) guaranteeing
the Obligations owed by Borrower to Lender.

C. In addition, in order to induce Lender to make the Loan, Pledgor has agreed
to grant a security interest in certain intangible property to Lender for
purposes of securing the Obligations of Pledgor to Lender.

RECITALS

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:

1. Definitions.  All terms used herein which are defined in Division 1 or
Division 9 of the Uniform Commercial Code of the State of California (“UCC”)
shall have the meanings set forth therein; provided, however, that if a term is
defined in Division 9 of the UCC differently than in another Article of the UCC,
the term has the meaning specified in Division 9.

2. Grant of Security Interest.  As collateral security for the prompt and
complete payment and performance of all of Pledgor's present or future
Obligations to Lender under the Guaranty, Pledgor hereby transfers, conveys and
grants to Lender, as security, Pledgor's entire right, title and interest in, to
and under the following (collectively, the "Intellectual Property Collateral"):

a. Any and all present and future copyright rights, copyright application,
copyright registrations and like protections in each work or authorship and
derivative work thereof, whether published or unpublished and whether or not the
same also constitutes a trade secret, now or hereafter existing, created,
acquired or held, including without limitation those set forth on Exhibit A
attached hereto (collectively, the "Copyrights");

b. Any and all present and future trade secrets, proprietary information,
customer lists, manufacturing techniques, formulas, product formulations, and
any and all intellectual property rights in computer software and computer
software products now or hereafter existing, created, or acquired or held;

c. Any and all present and future design rights which may be available to
Pledgor now or hereafter existing, created, acquired or held;

 

Page 1Initial Here JC

--------------------------------------------------------------------------------

 

 

d. Any and all patents, patent licenses, patent applications and like
protections including, without limitation, improvements, divisions,
continuations, renewals, reissues, extensions and continuations-in-part of the
same, including without limitation the patents and patent applications set forth
on Exhibit B attached hereto (collectively, the "Patents");

e. Any and all present and future trademark license, trademark, and service mark
rights, whether registered or not, applications to register and registrations of
the same and like protections, and the entire goodwill of the business of
Pledgor connected with and symbolized by such trademarks, including, without
limitation, those set forth on Exhibit C attached hereto (collectively, the
"Trademarks”).

f. Any and all present and future rights in and to domain names in whatever
form, and all derivative URLs, including without limitation those set forth on
Exhibit D attached hereto (collectively, the “Domain Names”);

g. Any and all claims for damages by way of past, present and future
infringement of any of the rights included above, with the right, but not the
obligation, to sue for and collect such damages for said use or infringement of
the intellectual property rights identified above;

h. Any and all present and future licenses or other rights to use any of the
Copyrights, Patents, Trademarks, or Domain Names, and all license fees and
royalties arising from such use to the extent permitted by such license or
rights;

i. All amendments, extensions, renewals and extensions of any of the Copyrights,
Patents, Trademarks, or Domain Names; and

j. Any and all proceeds and products of any of the foregoing, including, without
limitation, all payments under insurance or any indemnity or warranty payable in
respect of any of the foregoing.

3. Authorization and Request.  Pledgor authorizes and requests that the Register
of Copyrights and the Commissioner of Patents and Trademarks record this
Agreement.

4. Covenants and Warranties.  Pledgor represents, warrants, covenants and agrees
as follows:

a. Pledgor is now the sole owner of the Intellectual Property Collateral (with
the exception of other shared or non-ownership rights of Pledgor in the
Intellectual Property Collateral as described in Exhibit E attached hereto),
except for non-exclusive licenses granted by Pledgor to its customers in the
ordinary course of business and except for those liens, encumbrances or security
interests described in Exhibit E attached hereto;

b. Performance of this Agreement does not conflict with or result in a breach of
any agreement to which Pledgor is party or by which Pledgor is bound;

c. During the term of this Agreement, Pledgor shall not transfer or otherwise
encumber any interest in the Intellectual Property Collateral, except for liens,
encumbrances, or security interests described in Exhibit E attached hereto and
non-exclusive licenses granted by Pledgor, copies of which Pledgor will provide
from time to time to Lender at the request of Lender;

d. Each of the Patents is valid and enforceable, and no part of the Intellectual
Property Collateral has been judged invalid or unenforceable (provided that,
notwithstanding the foregoing, Pledgor makes no such representation or warranty
with respect to the Patents existing as of the date of first execution of this
Agreement), in whole or in part, and no claim has been made that any part of the
Intellectual Property Collateral violates the rights of any third party;

e. Pledgor shall deliver to Bank within thirty  (30) days of the last day of
each month, a report signed by Pledgor, in form reasonably acceptable to Bank,
listing any applications or registrations that Pledgor has made or filed in
respect of any patents, copyrights or trademarks and the status of any
outstanding applications or registrations.  Pledgor shall promptly advise Lender
of any material change in the composition of the

 

Page 2Initial Here JC

--------------------------------------------------------------------------------

 

 

Intellectual Property Collateral, including but not limited to, any subsequent
ownership right of the Pledgor in or to any Trademark, Patent or Copyright not
specified in this Agreement;

f. Pledgor shall exercise commercially reasonable best efforts to  protect,
defend and maintain the validity and enforceability of the Copyrights, Patents,
Trademarks, or Domain Names, detect infringements of the Copyrights, Patents,
Trademarks, or Domain Names and promptly advise Lender in writing of material
infringements detected and not allow any Copyrights, Patents, Trademarks, or
Domain Names to be abandoned, forfeited or dedicated to the public without the
written consent of Lender, which consent shall not be unreasonably withheld,
unless Pledgor determines that reasonable business practices suggest that
abandonment is appropriate and so advises Lender;

g. Pledgor shall not register any maskworks, software, computer programs or
other works of authorship subject to United States copyright protection with the
United States Copyright Office without first complying with the following: 
providing Lender with at least fifteen (15) days’ prior written notice thereof;
providing Lender with a copy of the application for any such registration; and
executing and filing such other instruments, and taking such further actions as
Lender may reasonably request from time to time to perfect or continue the
perfection of Lender's interest in the Intellectual Property Collateral,
including without limitation the filing with the United States Copyright Office,
simultaneously with the filing by Pledgor of the application for any such
registration, of a copy of this Agreement or a Supplement hereto in form
acceptable to Lender identifying the maskworks, software, computer programs or
other works of authorship being registered and confirming the grant of a
security interest therein in favor of Lender;

h. This Agreement creates, and in the case of after acquired Intellectual
Property Collateral, this Agreement will create at the time Pledgor first has
rights in such after acquired Intellectual Property Collateral, in favor of
Lender a valid and perfected first priority security interest in the
Intellectual Property Collateral in the United States securing the payment and
performance of the Obligations evidenced by the Guaranty upon making the filings
referred to in clause 4.i below;

i. Except for, and upon, the filing of a UCC financing statement with the
appropriate filing office in the appropriate state; a notice of security
interest with the United States Patent and Trademark office with respect to the
Patents and Trademarks; and a notice of security interest with the United States
Copyright Office with respect to the Copyrights, and or such other action as
Lender may deem necessary to perfect the security interests created hereunder,
and, except as has been already made or obtained, no authorization, approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required either for the grant by Pledgor of the security
interest granted hereby or for the execution, delivery or performance of this
Agreement by Pledgor; or for the perfection in the United States in the
Intellectual Property Collateral or the exercise by Lender of its rights and
remedies hereunder;

j. All information heretofore, herein or hereafter supplied to Lender by or on
behalf of Pledgor with respect to the Intellectual Property Collateral is
accurate and complete in all material respects;

k. Pledgor shall not enter into any agreement that would materially impair or
conflict with Pledgor's obligations hereunder without Lender's prior written
consent, which consent will not be unreasonably withheld.  Pledgor shall not
permit the inclusion in any contract to which it becomes a party of any
provisions that could or might in any way impair or prevent the creation of a
security interest in Pledgor's rights and interests in any property included
within the definition of the Intellectual Property Collateral acquired under
such contracts; and

l. Upon any officer of Pledgor obtaining knowledge thereof, Pledgor shall
promptly notify Lender in writing of any event that materially adversely affects
the value of any of the Intellectual Property Collateral, the ability of Pledgor
or Lender to dispose of any of the Intellectual Property Collateral or the
rights and remedies of Lender in relation thereto, including, without
limitation, the levy of any legal process against any of the Intellectual
Property Collateral.

5. Infringement.  Pledgor agrees that if any Person shall do or perform any acts
which Lender reasonably believes constitutes an infringement of any Intellectual
Property Collateral, or violate or infringe any right of Pledgor or Lender
therein or if any Person shall do or perform any acts which Lender believes
constitutes an

 

Page 3Initial Here JC

--------------------------------------------------------------------------------

 

 

unauthorized or unlawful use thereof, then and in any such event, Lender may and
shall have the right to  (provided that Pledgor has failed to undertake
reasonable steps to protect Lender’s interest within five (5) days following
Lender’s written request to do so) take reasonable steps to protect its
interests; and while an Event of Default is continuing, to take such steps and
institute such suits or proceedings as Lender may deem advisable or necessary to
prevent such acts and conduct and to secure damages and other relief by reason
thereof, and to generally take such steps as may be advisable or necessary or
proper for the full protection of the rights of the parties.  Lender may take
such steps or institute such suits or proceedings in its own name or in the name
of Pledgor or in the names of the parties jointly.  Lender hereby agrees to give
Pledgor notice of any steps taken, or any suits or proceedings instituted, by
Lender pursuant to this paragraph.

6. Security Interest.  This security interest is granted in conjunction with the
security interests granted to Lender pursuant to the Guaranty.  Pledgor does
hereby further acknowledge and affirm that the rights and remedies of Lender
with respect to the security interest in the Intellectual Property Collateral
made and granted hereby are subject to, and more fully set forth in, the
Guaranty, the terms and provisions of which are incorporated by reference herein
as if fully set forth herein.

7. Lender's Rights.  Lender shall have the right, but not the obligation, to
take, at Pledgor's sole expense, any actions that Pledgor is required under this
Agreement to take but which Pledgor fails to take, after five (5) days' written
notice to Pledgor.  Pledgor shall reimburse and indemnify Lender for all costs
and expenses incurred in the reasonable exercise of its rights under this
Section 7.

8. Inspection Rights.  Pledgor hereby grants to Lender and its employees,
representatives and agents the right to visit, during reasonable hours upon
prior reasonable notice to Pledgor, and to the extent Pledgor can legally grant
that right, any of Pledgor's and its subcontractors' plants and facilities that
manufacture, install or store products (or that have done so during the prior
six-month period) that are sold under any of the Intellectual Property
Collateral, and to inspect the products and quality control records relating
thereto upon reasonable notice to Pledgor and as often as may be reasonably
requested; provided, however, nothing herein shall entitle Lender to access to
Pledgor's trade secrets and other proprietary information.

9. Further Assurances; Attorney in Fact.

a. On a continuing basis, Pledgor will, subject to any prior licenses,
encumbrances and restrictions and prospective licenses, make, execute,
acknowledge and deliver, and file and record in the proper filing and recording
places in the United States, all such instruments, including, appropriate
financing and continuation statements and collateral agreements and filings with
the United States Patent and Trademark Office or the United States Copyright
Office, and take all such action as may reasonably be deemed necessary or
advisable, or as requested by Lender to perfect Lender’s security interest in
all Intellectual Property and otherwise to carry out the intent and purposes of
this Agreement, or for assuring and confirming to Lender the grant or perfection
of a security interest in all Intellectual Property Collateral.

b. Pledgor hereby irrevocably appoints Lender as Pledgor's attorney-in-fact,
with full authority in the place and stead of Pledgor and in the name of
Pledgor, Lender or otherwise, from time to time in Lender's Sole Discretion, to
take any action and to execute any instrument which Lender may deem necessary or
advisable to accomplish the purposes of this Agreement, including:

i. to modify in its Sole Discretion without first obtaining Pledgor's approval
of or signature to such modification Exhibit A,  Exhibit B,  Exhibit C, and
Exhibit D hereof as appropriate, to include reference to any right title or
interest in any Copyrights, Patents, Trademarks, or Domain Names acquired by
Pledgor after the execution hereof or to delete any reference to any right,
title, or interest in any Copyrights, Patents, Trademarks, or Domain Names in
which Pledgor no longer has or claims any right, title or interest; and,

ii. to file, in its Sole Discretion, one or more UCC financing or continuation
statements and amendments thereto, relative to any of the Intellectual Property
Collateral without the signature of Pledgor where permitted by law;

 

Page 4Initial Here JC

--------------------------------------------------------------------------------

 

 

iii. after the occurrence and during the continuance of an Event of Default, to
qualify Pledgor to do business in any state if Pledgor shall fail to do so
following request by Lender; and

iv. after the occurrence of an Event of Default, to transfer the Intellectual
Property Collateral into the name of Lender or a third party to the extent
permitted under the UCC.

10. Events of Default.  The occurrence of any of the following events shall
constitute an Event of Default under this Agreement:

a. An Event of Default occurs under the Guaranty, the Loan Agreement, or any
other agreement between Pledgor, Borrower, and Lender; or

b. Pledgor breaches any warranty or agreement made by Pledgor in this Agreement.

11. Remedies.  Upon the occurrence of an Event of Default, Lender shall have the
right to exercise all of the remedies of a Lender under the UCC, including
without limitation, the right to require Pledgor to assemble the Intellectual
Property Collateral and to make it available to Lender at a place designated by
Lender.  Pledgor will pay any expenses (including reasonable attorneys’ fees and
legal and other costs and the reasonable estimate of the allocated costs and
expenses of in-house legal counsel and staff) incurred by Lender in connection
with the exercise of any of Lender's rights hereunder, including without
limitation any reasonable expense incurred in disposing of the Intellectual
Property Collateral.  All of Lender's rights and remedies with respect to the
Intellectual Property Collateral shall be cumulative.

12. Lender’s Duties.  Beyond the safe custody thereof, Lender shall have no duty
with respect to any Intellectual Property Collateral in its possession or
control (or in the possession or control of any agent or bailee) or with respect
to any income thereon or the preservation of rights against prior parties or any
other rights pertaining thereto.  Lender shall be deemed to have exercised
reasonable care in the custody and preservation of the Intellectual Property
Collateral in its possession if the Intellectual Property Collateral is accorded
treatment substantially equal to that which it accords its own property.  Lender
shall not be liable or responsible for any loss or damage to any of the
Intellectual Property Collateral, or for any diminution in the value thereof, by
reason of the act or omission of any warehouseman, carrier, forwarding agency,
consignee or other agent or bailee selected by Lender in good faith.

13. Costs and Expenses; Indemnification; Other Charges.

a. Costs and Expenses.  Pledgor agrees to pay on demand:

i. reasonable costs or expenses (including without limitation taxes,
photocopying, notarization, telecommunication, insurance premiums, and postage)
paid by Lender in connection with Lender’s transactions with Pledgor;

ii. reasonable costs and expenses required to be paid by Pledgor under any of
the Loan Documents that are paid or advanced by Lender in connection with
Lender’s transactions with Pledgor;

iii. reasonable legal fees and expenses paid or incurred by Lender in connection
with the due diligence, negotiation and preparation of this Agreement, the Loan
Documents executed in connection herewith and other documents executed in
connection herewith now and in the future (whether for legal services and
expenses from outside counsel or from in-house counsel);

iv. reasonable documentation, filing, recording, publication, appraisal
(including periodic Collateral appraisals) and search fees assessed, paid, or
incurred by Lender in connection with Lender’s transactions with Pledgor;

v. reasonable costs and expenses of third party claims or any other suit paid or
incurred by Lender in enforcing or defending the Loan Documents and adjusting or
settling disputes and claims with Account Debtors with respect to Pledgor’s
Accounts; and Lender’s costs and expenses and reasonable Attorneys’ Fees and
expenses (whether for legal services incurred by and expenses from outside
counsel and/or from in-house

 

Page 5Initial Here JC

--------------------------------------------------------------------------------

 

 

counsel and staff) incurred in advising, structuring, drafting, reviewing,
administering, amending, terminating, or enforcing, or in any other way relating
to, this Agreement or the other Loan Documents (including reasonable Attorneys’
Fees and expenses incurred in such adjusted or settled disputes and claims, and
in connection with a “workout,” a “restructuring,” or an Insolvency Proceeding
concerning Pledgor or any Guarantor of the Obligations, irrespective of whether
suit is brought).  The Attorneys’ Fees incurred by Lender in any Insolvency
Proceeding shall include, without limitation, those incurred in connection with
debtor-in-possession financing, motions for relief from automatic stay, and
actions to determine dischargeability, and defending, or concerning the Loan
Documents.

b. Indemnification.  Pledgor hereby agrees to indemnify Lender, any Affiliate
thereof, and its directors, officers, employees, agents, counsel, and other
advisors (each an “Indemnified Person”) against, and hold each of them harmless
from, any and all liabilities, obligations, losses, claims, damages, penalties,
actions, judgments, suits, costs, expenses, or disbursements of any kind or
nature whatsoever, including Attorneys’ Fees, Lender Expenses, the reasonable
fees and disbursements of counsel to an Indemnified Person (including allocated
costs of internal counsel), which may be imposed on, incurred by, or asserted
against any Indemnified Person, in any way relating to or arising out of this
Agreement or the transactions contemplated hereby or any action taken or omitted
to be taken by it hereunder (the “Indemnified Liabilities”); provided that
Pledgor shall not be liable to any Indemnified Person for any portion of such
Indemnified Liabilities to the extent they are found by a final decision of a
court of competent jurisdiction to have resulted from such Indemnified Person’s
gross negligence or willful misconduct.  If and to the extent that the foregoing
indemnification is for any reason held unenforceable, Pledgor agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.

c. Other Charges.  Pledgor agrees to indemnify Lender against and hold it
harmless from any and all present and future stamp, transfer, documentary, and
other such taxes, levies, fees, assessments, and other charges made by any
jurisdiction by reason of the execution, delivery, performance, and enforcement
of this Agreement.

14. Notices.  Unless otherwise provided in this Agreement or hereinbelow, all
notices or demands by any party relating to this Agreement or any of the other
Loan Documents shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) may be made, and deemed to be given, as follows: a) if delivered in
person or by courier (overnight or otherwise), on the date when it is delivered;
b) if by facsimile, when received at the correct number (proof of which shall be
an original facsimile transmission confirmation slip or equivalent); or c) if
sent by certified or registered mail or the equivalent, on the earlier of the
date such mail is actually delivered or three (3) days after deposit thereof in
the mail, unless the date of actual delivery or such date 3 days after deposit
thereof in the mail (as applicable) is not a Business Day in which case such
communication shall be deemed given and effective on the first following
Business Day.  Any such notice or communication given pursuant to this Agreement
or any of the Loan Documents shall be addressed to the intended recipient at its
address or number specified as follows:

 

 

 

 

If to Pledgor:

JONES SODA CO.

 

 

1000 1st Avenue South, Suite 100,  Seattle,  Washington 98134

 

Attn:

Jennifer Cue,  President

 

Telephone No.:

(206) 624-3357

 

Facsimile No.:

(206) 624-6857

 

 

 

 

If to Lender:

BFI Business Finance

 

851 East Hamilton Avenue, 2nd Floor, Campbell, California 95008

 

Attn:

David Drogos, President

 

Telephone No.:

(408) 369-4000

 

Facsimile No.:

(408) 369-4018 / (408) 369-4056

 

The parties hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the
other.  Notwithstanding anything to the contrary in the foregoing, Borrower
acknowledges and agrees that notices sent by Lender in connection with §§ 9610,
9611, 9612, 9613, 9614, 9615, 9617, 9618, 9620, 9621, or 9624 of the Code and
any other references to the disposition of collateral under the

 

Page 6Initial Here JC

--------------------------------------------------------------------------------

 

 

Code, all as such sections may be amended and/or re-numbered from time to time,
shall be deemed sent when: (a) delivered in person or by courier (overnight or
otherwise), (b) deposited in the mail, or (c) transmitted by facsimile.

15. Certain Waivers.  Pledgor waives, to the fullest extent permitted by law,
any right of redemption with respect to the Intellectual Property Collateral,
whether before or after sale hereunder; all rights, if any, of marshalling of
the Intellectual Property Collateral or other collateral or security for the
Obligations whether such rights arise under California Civil Code §§2899 and
3433 or otherwise; any right to require Lender to proceed against any Person; to
exhaust any other collateral or security for any of the Obligations; to pursue
any remedy in Lender’s power; or to make or give any presentments, demands for
performance, notices of nonperformance, protests, notices of protests, or
notices of dishonor in connection with any of the Intellectual Property
Collateral; all claims, damages, and demands against Lender arising out of the
repossession, retention, sale, or application of the proceeds of any sale of the
Intellectual Property Collateral; and demand, protest, notice of protest, notice
of default or dishonor, notice of payment and nonpayment, notice of any default,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of accounts, documents, instruments, chattel paper, and guarantees at any time
held by Lender on which Pledgor may in any way be liable.

16. Release upon Satisfaction of Pledgor’s Obligations.  At such time as Pledgor
shall completely satisfy all of the Obligations secured hereunder (other than
inchoate indemnity obligations), Lender shall execute and deliver to Pledgor all
terminations, releases and other instruments as may be necessary or proper to
evidence the termination of the security interests granted hereunder, subject to
any disposition thereof which may have been made by Lender pursuant hereto.

17. General Terms.

a. Survival of Representations and Warranties.  All representations and
warranties of Pledgor contained in this Agreement shall survive the execution
and delivery of this Agreement.

b. “Sole Discretion” means the exercise by Lender of its reasonable (from the
perspective of a secured asset based lender) business judgment in light of all
of the facts and circumstances existing with respect to the issue then under
consideration by Lender.

c. California Law; Venue.  This Agreement and all transactions contemplated
hereunder and/or evidenced hereby shall be governed by, construed under, and
enforced in accordance with the internal laws of the State of California,
without giving effect to conflicts of law principles.    The parties hereby
agree that  this Agreement is entered into and that Pledgor’s performance to
Lender occurs at Campbell, California; and  all actions or proceedings arising
in connection with this Agreement and/or the Loan Documents shall be tried and
litigated only in the State and Federal courts located in the County of Santa
Clara, State of California or, at the sole option of Lender, in any other court
in which Lender shall initiate legal or equitable proceedings and which has
subject matter jurisdiction over the matter in controversy.  Each of Pledgor and
Lender waives, to the extent permitted under applicable law, any right each may
have to assert the doctrine of forum non conveniens or to object to venue to the
extent any proceeding is brought in accordance with this section.

d. JURY TRIAL WAIVER.  PLEDGOR AND LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY
OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  PLEDGOR AND LENDER
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE
EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.

WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY, if the above waiver of the right to a
trial by jury is not enforceable, the parties hereto agree that any and all
disputes or controversies of any nature between them arising at any time shall
be decided by a reference to a private judge, mutually selected by the parties
(or, if they cannot agree,

 

Page 7Initial Here JC

--------------------------------------------------------------------------------

 

 

by the Presiding Judge of the Santa Clara County, California Superior Court)
appointed in accordance with California Code of Civil Procedure § 638 as such
sections may be amended and/or re-numbered from time to time (or pursuant to
comparable provisions of federal law if the dispute falls within the exclusive
jurisdiction of the federal courts), sitting without a jury, in Santa Clara
County, California; and the parties hereby submit to the jurisdiction of such
court.  The reference proceedings shall be conducted pursuant to and in
accordance with the provisions of California Code of Civil Procedure §§ 638
through 645.1, inclusive as such sections may be amended and/or re-numbered from
time to time.  The private judge shall have the power, among others, to grant
provisional relief, including without limitation, entering temporary restraining
orders, issuing preliminary and permanent injunctions and appointing
receivers.  All such proceedings shall be closed to the public and confidential
and all records relating thereto shall be permanently sealed.  If during the
course of any dispute, a party desires to seek provisional relief, but a judge
has not been appointed at that point pursuant to the judicial reference
procedures, then such party may apply to the Santa Clara County, California
Superior Court for such relief.  The proceeding before the private judge shall
be conducted in the same manner as it would be before a court under the rules of
evidence applicable to judicial proceedings.  The parties shall be entitled to
discovery that shall be conducted in the same manner as it would be before a
court under the rules of discovery applicable to judicial proceedings.  The
private judge shall oversee discovery and may enforce all discovery rules and
order applicable to judicial proceedings in the same manner as a trial court
judge.  The parties agree that the selected or appointed private judge shall
have the power to decide all issues in the action or proceeding, whether of fact
or of law, and shall report a statement of decision thereon pursuant to the
California Code of Civil Procedure § 644(a).  Nothing in this section shall
limit the right of any party at any time to exercise self-help remedies,
foreclose against collateral, or obtain provisional remedies.  The private judge
shall also determine all issues relating to the applicability, interpretation,
and enforceability of this paragraph.

e. Successors and Assigns.  This Agreement shall bind and inure to the benefit
of the respective successors and permitted assigns of each of the parties;
provided, however, that neither this Agreement nor any rights hereunder may be
assigned by Pledgor without Lender’s prior written consent, which consent may be
granted or withheld in Lender’s Sole Discretion.  Lender shall have the right
without the consent of or notice to Pledgor to sell, transfer, negotiate, or
grant participation in all or any part of, or any interest in, Lender’s
obligations, rights and benefits hereunder.    In connection therewith, Lender
may disclose all documents and information that Lender now has or may hereafter
acquire relating to any credit extended by Lender to Borrower, Borrower or its
business, any Pledgor or Obligor or the business of any Pledgor or Obligor, or
any Collateral.

f. Severability of Provisions.  In the event any one or more of the provisions
contained in this Agreement is held to be invalid, illegal or unenforceable in
any respect, then such provision shall be ineffective only to the extent of such
prohibition or invalidity, and the validity, legality, and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.

g. Amendments.  Neither this Agreement nor any provisions hereof may be changed,
waived, discharged or terminated, nor may any consent to the departure from the
terms hereof be given, orally (even if supported by new consideration), but only
by an instrument in writing signed by all parties to this Agreement.  Any waiver
or consent so given shall be effective only in the specific instance and for the
specific purpose for which given.

h. Entire Agreement.  This Agreement, together with the Guaranty and the Loan
Agreement embodies the entire agreement and understanding among and between the
parties hereto, and supersedes all prior or contemporaneous agreements and
understandings between said parties, verbal or written, express or implied,
relating to the subject matter hereof.  No promises of any kind have been made
by Lender or any third party to induce Pledgor to execute this Agreement.  No
course of dealing, course of performance or trade usage, and no parol evidence
of any nature, shall be used to supplement or modify any terms of this
Agreement.

i. Waiver.  No failure to exercise and no delay in exercising any right, power,
or remedy hereunder shall impair any right, power, or remedy which Lender may
have, nor shall any such delay be construed to be a waiver of any of such
rights, powers, or remedies, or any acquiescence in any breach or default
hereunder; nor shall any waiver by Lender of any breach or default by Pledgor
hereunder be deemed a waiver of any default or breach subsequently
occurring.  All rights and remedies granted to Lender hereunder shall remain in
full force and effect notwithstanding any single or partial exercise of, or any
discontinuance of action begun to enforce, any such

 

Page 8Initial Here JC

--------------------------------------------------------------------------------

 

 

right or remedy.  The rights and remedies specified herein are cumulative and
not exclusive of each other or of any rights or remedies which Lender would
otherwise have.

j. Interpretation.  This Agreement and all agreements relating to the subject
matter hereof are the product of negotiation and preparation by and among each
party and its respective attorneys, and shall be construed accordingly.  The
parties waive the provisions of California Civil Code §1654.

k. Information.  Pledgor agrees that Lender may provide information relating to
this Agreement or relating to Pledgor to Lender’s parent, affiliates, and
subsidiaries.

l. Counterparts.  This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if all signatures
were upon the same instrument.  This Agreement, or a signature page thereto
intended to be attached to a copy of this Agreement, signed and transmitted by
facsimile machine, telecopier, or other electronic means (including via
transmittal of a “pdf” file) shall be deemed and treated as an original
document.  The signature of any person thereon, for purposes hereof, is to be
considered as an original signature, and the document transmitted is to be
considered to have the same binding effect as an original signature on an
original document.  At the request of any party hereto, any facsimile, telecopy
or other electronic document is to be re-executed in original form by the
persons who executed the facsimile, telecopy of other electronic document.  No
party hereto may raise the use of a facsimile machine, telecopier, or other
electronic means or the fact that any signature was transmitted through the use
of a facsimile machine, telecopier, or other electronic means as a defense to
the enforcement of this Agreement.

m. Satisfaction Requirement.  If any agreement, certificate or other writing, or
any action taken or to be taken, is by the terms of this Agreement required to
be satisfactory to Lender, the determination of such satisfaction shall be made
by the Lender in its Sole Discretion.

n. Course of Dealing.  No course of dealing, nor any failure to exercise, nor
any delay in exercising any right, power, or privilege hereunder shall operate
as a waiver thereof.

[Signature Page Follows]

 

 

Page 9Initial Here JC

--------------------------------------------------------------------------------

 

Signature Page to that certain

Intellectual Property Security Agreement

 

IN WITNESS WHEREOF, the parties hereto have executed this Intellectual Property
Security Agreement on the day and year first above written.

 

 

 

PLEDGOR:

 

 

 

JONES SODA CO.

 

 

 

 

 

/s/ Jennifer Cue

 

By:Jennifer Cue

 

Its:President

 

 

 

 

 

LENDER:

 

 

 

BFI Business Finance

 

 

 

 

 

/s/ Jeffrey Lizar

 

By:Jeffrey Lizar

 

Its:Executive Vice President

 

 

 

 

 

 

 

 

 

 

Page 11Initial Here JC

--------------------------------------------------------------------------------

 

 

Exhibit A

 

Copyrights

All present and future registered and unregistered copyrights

.

 

Page 12Initial Here JC

--------------------------------------------------------------------------------

 

 

Exhibit B

 

Patents

All present and future registered and unregistered patents, including but not
limited to the following:

Patent

Application Number

Date

 

 

 

 

 

 

 

Patent

Registration Number

Date

Method and apparatus for creating and ordering customized branded merchandise
over a computer network

6,845,365

01/18/2005

Method and apparatus for creating and ordering customized branded merchandise
over a computer network

6,493,677

12/10/2002

 

 

 

 

 

 

 

 

 

Page 13Initial Here JC

--------------------------------------------------------------------------------

 

 

Exhibit C

 

Trademarks

All present and future registered and unregistered trademarks, including but not
limited to the following:

 

 

 

Trademark

Serial Number

Date

+C [***]

78541400

01/03/2005

 

 

Trademark

Registration Number

Date

24C [***]

3613834

04/28/2009

24C [***]

3665045

08/04/2009

DAVE [***]

2999465

09/27/2005

URBAN JUICE & SODA CO. [***]

2115637

11/25/1997

URBAN JUICE & SODA CO. [***]

2115636

11/25/1997

 

URBAN JUICE AND SODA COMPANY LTD. (2)

 

Trademark

Serial Number

Date

JONES WHOOP ASS ENERGY BAR [***]

76068873

06/12/2000

JONES WHOOP ASS [***]

76068850

06/12/2000

WWWW.MYJONES.ORG [***]

75891045

01/07/2000

WWW.MYJONES.NET [***]

75891044

01/07/2000

MYJONES.COM [***]

75878406

12/21/1999

WWW.MYJONES.COM [***]

75804947

09/23/1999

JONES WHOOPASS [***]

75759464

07/26/1999

SPIKED JONES [***]

75235458

02/03/1997

I’VE GOT A JONES FOR A SODA [***]

75149375

08/13/1996

JONES SODA COMPANY [***]

74618243

01/05/1995

 

Legend for all tables above in Exhibit C:

 

1.

[***]

 

2.

Urban Juice & Soda Company Ltd. and Jones Soda Co. merged in August 2000.

 

CERTAIN PORTIONS OF THIS PAGE HAVE BEEN OMITTED, AS INDICATED BY [***], AND
FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT UNDER RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

 

Page 14Initial Here JC

--------------------------------------------------------------------------------

 

 

Exhibit D

 

Domain Names

All present and future registered and unregistered domain names, including but
not limited to the following:

 

Domain Name

Registrar

Expiration Date

www.jonessoda.com

Network Solutions, LLC

01/28/2014

www.jonessodastore.com

Network Solutions, LLC

02/04/2014

www.myjones.com

Network Solutions, LLC

05/07/2014

 

 

 

Page 15Initial Here JC

--------------------------------------------------------------------------------

 

 

Exhibit E

 

 

Permitted Liens

 

 

NONE

 

Page 16Initial Here JC

--------------------------------------------------------------------------------