LOAN AGREEMENT

Between

JONES SODA CO.

and

KEYBANK NATIONAL ASSOCIATION

1

Dated as of August 21, 2007

LOAN AGREEMENT

THIS LOAN AGREEMENT (“Agreement”) is made between Jones Soda Co. (“Borrower”),
and KeyBank National Association (“Lender”). The parties agree as follows:

ARTICLE 1
Definitions

All terms defined below shall have the meaning indicated. All references in this
Agreement to:

(a) “dollars” or “$” shall mean U.S. dollars;

(b) “Article,” “Section,” or “Subsection” shall mean articles, sections, and
subsections of this Agreement, unless otherwise indicated; and

(c) an accounting term not otherwise defined in this Agreement shall have the
meaning assigned to it under GAAP.

1.1 Advances or Advance shall mean the disbursement of loan proceeds under the
Revolving Loan.

1.2 Available Amounts shall mean at any time the amount of the Borrowing Limit
minus the unpaid balance of the Revolving Note.

1.3 Borrowing Limit shall mean the sum of $15,000,000.00.

1.4 Business Day shall mean any day other than a Saturday, Sunday, or other day
on which commercial banks in Seattle, Washington, are authorized or required by
law to close.

1.5 Commencement Date shall mean the first day of any LIBOR Interest Period as
requested by Borrower.

1.6 Default shall be as defined in Section 9.1 hereof.

1.7 ERISA shall mean the Employee Retirement Income Security Act of 1974, as
amended.

1.8 Expiration Date shall mean August 21, 2009, unless the Revolving Loan is
sooner terminated in accordance with Subsection 9.3.2.

1.9 GAAP shall mean generally accepted accounting principles as in effect from
time to time in the United States and as consistently applied by Borrower.

1.10 Interest Payment Dates shall mean the 1st day of each month as to each
Prime Rate Loan and LIBOR Rate Loan.

1.11 LIBOR Borrowing Rate shall mean the sum of (i) the LIBOR Rate; and (ii) the
LIBOR Margin.

1.12 LIBOR Business Day shall mean a Business Day on which dealings are carried
on in the London interbank Eurodollar market.

1.13 LIBOR Interest Period shall mean the period commencing on the date of any
Advance at, or conversion to, a LIBOR Rate and ending thirty (30), sixty (60) or
ninety (90) days thereafter as selected by Borrower, subject to the restrictions
of Article 3; provided that (A) any LIBOR Interest Period which would otherwise
expire on a day which is not a Business Day, shall be extended to the next
succeeding Business Day, unless the result of such extension would be to extend
such LIBOR Interest Period into another calendar month, in which event the LIBOR
Interest Period shall end on the immediately preceding Business Day; and (B) any
LIBOR Interest Period that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the calendar
month at the end of such LIBOR Interest Period) shall end on the last Business
Day of a calendar month.

1.14 LIBOR Margin shall mean 100 basis points (1.00% per annum).

1.15 LIBOR Rate shall mean, for any LIBOR Interest Period, a rate per annum
calculated by Lender in good faith, which Lender determines with reference to
the rate per annum (rounded upwards to the next higher whole multiple of 1/16 %
if such rate is not such multiple) at which deposits in United States dollars
are offered by prime banks in the London Interbank Eurodollar market on the
Business day occurring two (2) London Banking Days prior to the applicable
Commencement Date for a LIBOR Rate Loan, in an amount comparable to the
applicable Advance and with a maturity equal to the applicable LIBOR Interest
Period.

1.16 LIBOR Rate Loans or Loan shall mean those portions or portion of the
Revolving Note accruing interest at the LIBOR Borrowing Rate.

1.17 LIBOR Reserve Requirements means, for any Advance bearing interest at the
LIBOR Borrowing Rate, the maximum reserves (whether basic, supplemental,
marginal, emergency, or otherwise) prescribed by the Board of Governors of the
Federal Reserve System (or any successor) with respect to liabilities or assets
consisting of or including “Eurocurrency liabilities” (as defined in
Regulation D of the Board of Governors of the Federal Reserve System) having a
term equal to the term of such Advance.

1.18 Loan Documents shall mean collectively this Agreement, the Revolving Note,
the Security Agreement, financing statements and all other documents,
instruments, and agreements now or later executed in connection with this
Agreement. Such documents shall be referred to collectively as the “Loan
Documents” and individually as a “Loan Document.”

1.19 London Banking Day shall mean any day other than a Saturday, Sunday, or
other day on which commercial banks in Seattle, Washington, or London, England,
are authorized or required by law to close.

1.20 Obligations shall mean the amounts owing under the Revolving Note, and all
fees, costs, expenses and indemnifications due to Lender under this Agreement.

1.21 Person shall mean any individual, trust, partnership, corporation, limited
liability company, business trust, unincorporated organization, joint venture or
other entity, or any governmental entity, department, agency, or political
subdivision.

1.22 Plan shall mean any employee benefit plan or other plan maintained for
Borrower’s employees and covered by Title IV of ERISA, excluding any plan
created or operated by or for any labor union.

1.23 Prime Borrowing Rate means the (i) the Prime Rate; minus (ii) 150 basis
points (1.50% per annum).

1.24 Prime Rate shall mean the floating commercial loan reference rate of
Lender, publicly announced from time to time as its “prime rate” or “reference
rate” (calculated on the basis of actual number of days elapsed over a year of
360 days), with any change in the Prime Rate to be effective on the date the
“reference rate” or “prime rate” changes. The Prime Rate is not necessarily the
lowest rate which Lender charges any borrower or class of borrowers. Lender’s
internal records of applicable interest rates shall be determinative in the
absence of manifest error with respect to the calculation of the Prime Rate.

1.25 Prime Rate Loans or Loan shall mean those portions or portion of the
principal of the Revolving Note accruing interest at the Prime Borrowing Rate.

1.26 Revolving Loan shall mean the Revolving Loan described in Section 2.1
below.

1.27 Revolving Note shall mean that promissory note evidencing the Revolving
Loan.

ARTICLE 2

Revolving Loans

2.1 Revolving Loan Facility. Subject to the terms and conditions of this
Agreement, Lender shall make Advances to Borrower from time to time, until the
Expiration Date, with the aggregate principal amount at any one time outstanding
not to exceed the Borrowing Limit. Such loan shall be referred to herein as the
“Revolving Loan.” Borrower may use the Revolving Loan by borrowing, prepaying,
and reborrowing the Available Amounts, in whole or in part.

2.2 Procedure for Advances. Borrower may request Advances under the Revolving
Loan on any Business Day but no later than the Expiration Date, provided that
(i) as a result of the Advance, the Borrowing Limit is not exceeded, and
(ii) with regard to an Advance regarding a LIBOR Rate Loan only, the amount of
the requested LIBOR Advance shall be no less than $1,000,000.00, and any
additional LIBOR Advances must be in increments of $250,000.00, and (iii) the
conditions to borrowing set forth in Article 4 are met as of the time of the
request. Borrower shall give Lender irrevocable notice either orally or in
writing, but Lender may require that all oral requests be confirmed in writing,
and the notice shall specify the amount to be borrowed and the requested
borrowing date. Lender must receive such notice on or before 2:00 p.m., Seattle
time, on the day borrowing is requested. All Advances shall be discretionary to
the extent notification by Borrower is given subsequent to that time. The
following persons (each authorized to do so without consent or authorization of
any of the others) are authorized to request Advances under the Revolving Loans
until Lender receives from Borrower written notice of the revocation of their
authority:

Peter Van Stolk

Hassan Natha

Additional authorized persons may be added upon receipt by Lender of evidence
satisfying Lender of their appointment. Borrower agrees to be liable to Lender
for all sums either (i) advanced, or (ii) credited to any of Borrower’s accounts
with Lender, in either case in accordance with instructions by an authorized
person.

2.3 Revolving Loan Fee. The Revolving Loan fee (the “Revolving Loan Fee”) shall
be $15,000.00, payable by Borrower on or before the closing of the Revolving
Loan.

2.4 Repayment of Revolving Loan. The Revolving Loan shall be repaid by Borrower
in accordance with the terms of and shall be evidenced by a promissory note in
the form attached hereto as Exhibit A and incorporated herein by this reference
(the “Revolving Note”). Interest on the amounts outstanding on the Revolving
Loan from time to time shall accrue and be payable at (i) the Prime Borrowing
Rate as defined in Section 1.23; or (ii) the LIBOR Borrowing Rate, as defined in
Section 1.11 if elected by Borrower, subject to the fulfillment of the
conditions set forth in Article 4 and the terms in the Revolving Note, and so
long as the amount outstanding under any Revolving Loan does not exceed the
Borrowing Limit, Borrower may borrow and reborrow sums under the Revolving Loan
through the Expiration Date. Subject to Subsection 3.4.3, the individual
Advances made under the Revolving Note may be repaid by Borrower at any time in
whole without penalty, provided, that no partial payments of Advances shall be
allowed hereunder. Advances under the Revolving Note shall bear interest at the
Prime Borrowing Rate or a fixed rate of interest equal to the LIBOR Borrowing
Rate for the duration of the LIBOR Interest Period, at Borrower’s election, but
subject to Sections 3.4 and 3.5. Interest shall be payable on the Interest
Payment Dates.

ARTICLE 3

Interest Rate Options

3.1 Interest Rate. The Revolving Note shall bear interest at the Prime Borrowing
Rate unless a LIBOR Borrowing Rate is specifically selected by Borrower in the
manner provided herein and as additionally provided in Section 3.3.

3.2 Procedure For Selecting a LIBOR Rate. Borrower may, before 11:00 a.m.
Seattle time on any Business Day occurring two London Banking Days before a
Commencement Date, request Lender to give a LIBOR Rate quote for a specified
loan amount and LIBOR Interest Period. Lender will then quote to Borrower the
available LIBOR Rate. Borrower shall have two hours from the time of the quote
to elect a LIBOR Rate by giving Lender irrevocable notice of such election, in
which case the Advance requested by Borrower shall accrue interest at the LIBOR
Rate quoted by Lender plus the LIBOR Margin from the Commencement Date through
and including the last day of the LIBOR Interest Period. Lender reserves the
right to reject such election, and offer an updated quote, in the case of a
significant move in the Eurodollar market occurring after the Lender makes its
initial quote.

3.3 Selection of Interest Rates. Advances under the Revolving Loans shall bear
interest at the LIBOR Borrowing Rate for the duration of a LIBOR Interest
Period, at Borrower’s election; provided that (i) the LIBOR Borrowing Rate may
only be selected for a minimum principal amount of no less than $1,000,000.00
and thereafter in integral multiples of $250,000; (ii) no more than three
(3) LIBOR Borrowing Rates may be outstanding at any one time on the Revolving
Loan, and each LIBOR Interest Period for a LIBOR Rate Loan shall be for 30, 60
or 90 days; and (iii) no LIBOR Interest Period on a Revolving Loan may extend
beyond the Expiration Date. Before the expiration of a LIBOR Interest Period,
Borrower may elect a new LIBOR Borrowing Rate to be applied to an Advance in the
manner described in Section 3.2, or Borrower may notify Lender (in writing, if
required by Lender), on or before the time and date Borrower is required to
request a LIBOR Rate quote from Lender as described in Section 3.2, that
Borrower elects to convert an Advance to a Prime Rate Loan after the termination
of the LIBOR Interest Period (in which case the Advance shall commence accruing
interest at the Prime Borrowing Rate after the expiration of the LIBOR Interest
Period). If Borrower fails to make a timely LIBOR Borrowing Rate or Prime
Borrowing Rate election, Advances that previously bore interest at a LIBOR
Borrowing Rate will bear interest at the LIBOR Borrowing Rate for consecutive,
identical LIBOR Interest Periods until a further election is made, with the
LIBOR Borrowing Rate to be determined by Lender for each LIBOR Interest Period
in the manner described in Section 3.2 above; provided that if the LIBOR
Interest Period relating to any such Advance would end later than the Expiration
Date, such Advance will bear interest at the LIBOR Borrowing Rate for the period
ending most closely on or before such Expiration Date.

3.4 Increased Costs, Illegality and Prepayment. The following shall apply in the
event any Advances are made herein at the LIBOR Borrowing Rate.

3.4.1 Increased Costs. If, because of the introduction of or any change in, or
because of a judicial, administrative, or other governmental interpretation of,
any law or regulation, there shall be an increase in the cost to Lender of
making, funding, maintaining or allocating capital to any Advance bearing
interest at the LIBOR Borrowing Rate, including a change in LIBOR Reserve
Requirements, then Borrower shall, from time to time upon demand by Lender, pay
to Lender additional amounts sufficient to compensate Lender for such increased
cost.

3.4.2 Illegality. If, because of the introduction of or any change in, or
because of any judicial, administrative, or other governmental interpretation
of, any law or regulation, it becomes unlawful for any Lender to make, fund, or
maintain any advance at the LIBOR Borrowing Rate, then Lender’s obligation to
make, fund, or maintain any such Advance shall terminate and each affected
outstanding Advance shall be converted to the Prime Borrowing Rate on the
earlier of the termination date for each LIBOR Interest Period or the date the
making, funding, or maintaining of each such Advance becomes unlawful.

3.4.3 Reimbursement of Costs. If Borrower repays any Advance bearing interest at
the LIBOR Borrowing Rate prior to the end of the applicable LIBOR Interest
Period, including, without limitation, a prepayment under Subsections 3.4.1 or
3.4.2 above, Borrower shall reimburse Lender on demand for any resulting loss or
expense incurred by Lender, including, without limitation, any loss or expense
incurred in obtaining, liquidating or re-employing deposits from third parties.
A statement as to the amount of such loss or expense, prepared in good faith and
in reasonable detail by Lender and submitted by Lender to Borrower, shall be
conclusive and binding for all purposes absent manifest error in computation.
Calculation of all amounts payable to Lender under this Subsection shall be made
as though Lender shall have actually funded the relevant Advance through
deposits or other funds acquired from third parties for such purpose, provided,
however, that Lender may fund any Advance bearing interest at the LIBOR
Borrowing Rate in any manner it sees fit and the foregoing assumption shall be
utilized only for purposes of calculation of amounts payable under this
Subsection. Lender will be entitled to receive the reimbursement provided for
herein regardless of whether the prepayment is voluntary (including demand or
acceleration of the Revolving Loans upon Borrower’s default).

3.5 Inability to Participate in Market. If Lender in good faith cannot
participate in the Eurodollar market for legal or practical reasons, the LIBOR
Borrowing Rate shall cease to be an option hereunder. Lender shall notify
Borrower if and when it again becomes legal or practical to participate in the
Eurodollar market, at which time the LIBOR Borrowing Rate shall resume being an
option.

ARTICLE 4

Conditions of Lending

Lender’s obligations to make the Revolving Loan and make each Advance are
subject to the following conditions precedent, unless waived by Lender in
writing:

4.1 Authorization. Borrower shall have delivered to Lender (i) a certified copy
of the resolution of Borrower’s board of directors authorizing the transactions
contemplated by this Agreement and the execution, delivery, and performance of
all the Loan Documents; (ii) a Certificate of Existence or similar certificate
from the Washington Secretary of State certifying that Borrower is in existence
and in good standing under the laws of the state of Washington, dated at least
thirty (30) or less days before the date of Borrower’s execution of this
Agreement; (iii) a copy of the current Articles of Incorporation of Borrower;
and (iv) if requested by Lender, an opinion of Borrower’s legal counsel in a
form satisfactory to Lender and Lender’s counsel opining that, among other
things, Borrower has the proper authority to enter into this Agreement and
consummate the transaction described herein.

4.2 Representations and Warranties. The representations and warranties made by
Borrower in the Loan Documents and in any certificate, document, or financial
statement furnished at any time shall continue to be true and correct, except to
the extent that such representations and warranties expressly relate to an
earlier date.

4.3 Compliance. No Default or other event which, upon notice or lapse of time or
both would constitute a Default, shall have occurred and be continuing.

4.4 Documentation. Borrower shall have executed and delivered to Lender all
documents to reflect the existence of the Obligations, including, without
limitation, the Loan Documents.

4.5 Proof of Insurance. Proof of insurance as required by Section 7.11 has been
provided to Lender.

4.6 Payment of Fees. Borrower shall have paid Lender all fees and costs required
to be paid to Lender by Borrower before any Advance pursuant to this Agreement,
including, without limitation, the Revolving Loan Fee.

ARTICLE 5
Collateral

5.1 Collateral. To secure payment of the Revolving Loan and performance of all
other obligations and duties owed by Borrower to Lender, Borrower (and others,
if required) shall grant to Lender first priority security interests in all of
Borrower’s property and assets (collectively the “Collateral”), including,
without limitation, all of Borrower’s present and future tangible and intangible
property, including, without limitation, all accounts, inventory, equipment,
general intangibles, patents, trademarks, trade names, copyrights and
intellectual property and the other property which shall be described in the
Security Agreement referenced in this section below. Borrower shall execute a
commercial security agreement (the “Security Agreement”) in favor of Lender,
which Security Agreement shall be in form and substance acceptable to Lender,
and pursuant to which Borrower shall grant Lender a security interest in the
Collateral. Lender’s security interest in the Collateral shall be a continuing
lien and shall include the proceeds and products of the Collateral, including
without limitation, the proceeds of any insurance. With respect to the
Collateral, Borrower agrees and represents and warrants to Lender and shall
comply with the provision of Sections 5.2 and 5.3 below.

5.2 Perfection of Security Interest. Borrower grants Lender the authority to
file financing statements with the appropriate filing offices to perfect
Lender’s security interests in the Collateral. At Lender’s request, Borrower
agrees to take whatever other actions are requested by Lender to perfect and
continue Lender’s security interest in the Collateral. Upon request of Lender,
Borrower will deliver to Lender any and all of the documents evidencing or
constituting the Collateral, and Borrower will note Lender’s interest upon any
and all chattel paper if not delivered to Lender for possession by Lender.
Contemporaneous with the execution of this Agreement, Borrower will file one or
more UCC financing statements and any and all similar statements in the
appropriate location or locations as may be required by applicable law. Borrower
hereby appoints Lender as its irrevocable attorney-in-fact for the purpose of
executing or filing any documents necessary to perfect or to continue any
security interest. Lender may at any time, and without further authorization
from Borrower, file a carbon, photograph, facsimile, or other reproduction of
any financing statement for use as a financing statement. Borrower will
reimburse Lender for all expenses for the perfection, termination, and the
continuation of the perfection of Lender’s security interest in the Collateral.
Borrower will promptly notify Lender of any change in Borrower’s name including
any change to the assumed business names of Borrower. Borrower also will
promptly notify Lender of any change in Borrower’s Employer Identification
Number. Borrower further agrees to notify Lender in writing prior to any change
in address or location of Borrower’s state of incorporation and/or principal
governance office or should Borrower merge or consolidate with any other entity.

5.3 Collateral Records. Borrower does now, and at all times hereafter shall,
keep correct and accurate records of the Collateral, all of which records shall
be available to Lender or Lender’s representative upon demand for inspection and
copying at any reasonable time. With respect to Borrower’s accounts, Borrower
agrees to keep and maintain such records as Lender may require regarding the
Collateral, including, without limitation, information concerning Borrower’s
accounts, including account balances and agings.

ARTICLE 6

Representations and Warranties

To induce Lender to enter into this Agreement, Borrower represents, warrants,
and covenants to Lender as follows:

6.1 Corporate Existence. Borrower is in good standing as a corporation under the
laws of the state of Washington, has the corporate power, authority, and legal
right to own and operate its property or lease the property it operates and to
conduct its current business; and is qualified to do business and is in good
standing in all other jurisdictions where the ownership, lease, or operation of
its property or the conduct of its business requires such qualification.

6.2 Enforceability. The Loan Documents, when executed and delivered by Borrower,
shall be enforceable against Borrower in accordance with their respective terms.

6.3 No Legal Bar. The execution, delivery, and performance by Borrower of the
Loan Documents, and the use of the loan proceeds, shall not violate any existing
law or regulation applicable to Borrower; any ruling applicable to Borrower of
any court, arbitrator, or governmental agency or body of any kind, Borrower’s
articles of incorporation or bylaws, any security issued by Borrower, or any
mortgage, indenture, lease, contract, undertaking, or other agreement to which
Borrower is a party or by which Borrower or any of its property may be bound.

6.4 Financial Information. By submitting each of the financial statements
required by Subsection 7.2, Borrower is deemed to represent and warrant that:
(a) such statement is complete and correct and fairly presents its financial
condition as of the date of such statement; (b) such statement discloses all
liabilities that are required to be reflected or reserved against under GAAP,
whether liquidated or unliquidated, fixed or contingent; and (c) such statement
has been prepared in accordance with GAAP. As of the date submitted, there has
been no adverse change in Borrower’s financial condition, since the date of
preparation of such financial statements which would materially impair
Borrower’s ability to repay the obligations.

6.5 Liens and Encumbrances. As of this date, Borrower has good and marketable
title to its property free and clear of all security interests, liens,
encumbrances, or rights of others, except as disclosed in writing to Lender, and
except for taxes which are not yet delinquent and conditions, restrictions,
easements, and rights of way of record which do not materially affect the use of
any of Borrower’s property.

6.6 Litigation. Except as disclosed in writing to Lender, there is no threatened
(to Borrower’s knowledge) or pending litigation, investigation, arbitration, or
administrative action which may materially adversely affect Borrower’s business,
property, operations, or financial condition.

6.7 Payment of Taxes. Borrower has filed or caused to be filed all tax returns
when required to be filed; and has paid all taxes, assessments, fees, licenses,
excise taxes, franchise taxes, governmental liens, penalties, and other charges
levied or assessed against Borrower or any of its property imposed on it by any
governmental authority, agency, or instrumentality that are due and payable
(other than those returns or payments of which the amount, enforceability, or
validity are contested in good faith by appropriate proceedings and with respect
to which reserves in conformity with GAAP are provided on Borrower’s books).

6.8 Employee Benefit Plan. Borrower is in compliance in all respects with the
provisions of ERISA and the regulations and published interpretations
thereunder. Borrower has not engaged in any acts or omissions which would make
Borrower liable to the Plan, to any of its participants, or to the Internal
Revenue Service, under ERISA.

6.9 Misrepresentations. No information, exhibits, data, or reports furnished by
Borrower or delivered to Lender in connection with Borrower’s application for
credit misstates any material fact or omits any fact necessary to make such
information, exhibits, data, or reports not misleading.

6.10 No Default. Borrower is not in default under any Loan Document, or in any
material contract, agreement, or instrument to which it is a party.

6.11 No Burdensome Restrictions. No contract or other instrument to which
Borrower is a party, or order, award, or decree of any court, arbitrator, or
governmental agency, materially impairs Borrower’s ability to repay the
obligations.

6.12 Margin Stock. Borrower is not engaged, nor shall it engage, principally or
as one of its important activities, in the business of extending credit for the
purpose of “purchasing” or “carrying” margin stock under Regulation U of the
Board of Governors of the Federal Reserve System. Borrower shall not use any
part of the proceeds of any Advance for any purpose which violates or is
inconsistent with the provisions of Regulation T, U, or X of such Board of
Governors, as the same may be amended, supplemented, or modified from time to
time.

6.13 Hazardous Substances. The terms “hazardous waste,” “hazardous substance,”
“disposal,” “release,” and “threatened release,” as used in this Agreement,
shall have the same meanings as set forth in the “CERCLA,” “SARA,” the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservation and Recovery Act, 49 U.S.C. Section 6901, et seq., and/or other
applicable state or Federal laws, rules or regulations adopted pursuant to any
of the foregoing or governing hazardous substances or hazardous waste, including
all Washington State laws and regulations. Except as disclosed to and
acknowledged by Lender in writing, Borrower represents and warrants that:
(a) during the period of Borrower’s ownership of its properties, there has been
no use, generation, manufacture, storage, treatment, disposal, release or
threatened release of any hazardous waste or substance by any person on, under,
or about any of the properties; (b) Borrower has no knowledge of, or reason to
believe that there has been (i) any use, generation, manufacture, storage,
treatment, disposal, release, or threatened release of any hazardous waste or
substance by any prior owners or occupants of any of the properties, or (ii) any
actual or threatened litigation or claims of any kind by any person relating to
such matters; and (c) neither Borrower nor any tenant, contractor, agent or
other authorized user of any of its properties shall use, generate, manufacture,
store, treat, dispose of, or release any hazardous waste or substance on, under
or about any of its properties; and any such activity shall be conducted in
compliance with all applicable federal, state and local laws, regulations, and
ordinances, including, without limitation, those laws, regulations and
ordinances described above. Borrower authorizes Lender and its agents to enter
upon the properties to make such inspections and tests as Lender may deem
appropriate to determine compliance of the properties with this section of the
Agreement. Any inspections or tests made by Lender shall be at Borrower’s
expense and for Lender’s purposes only and shall not be construed to create any
responsibility or liability on the part of Lender to Borrower or to any other
person. The representations and warranties contained herein are based on
Borrower’s due diligence in investigating its properties for hazardous waste.
Borrower hereby (a) releases and waives any future claims against Lender for
indemnity or contribution in the event Borrower becomes liable for clean up or
other costs under any such laws, and (b) agrees to indemnify and hold harmless
Lender against any and all claims, losses, liabilities, damages, penalties, and
expenses which Lender may directly or indirectly sustain or suffer resulting
from a breach of this subsection of the Agreement or as a consequence of any
use, generation, manufacture, storage, disposal, release or threatened release
occurring prior to Borrower’s ownership or interest in its properties, whether
or not the same was or should have been known to Borrower. The provisions of
this subsection of the Agreement, including the obligation to indemnify, shall
survive the payment of the Revolving Loan and the termination or expiration of
this Agreement and shall not be affected by Lenders’ acquisition of any interest
in any of Borrower’s properties, whether by foreclosure or otherwise.

ARTICLE 7

Affirmative Covenants

So long as this Agreement shall remain in effect, or any liability exists under
the Loan Documents, Borrower shall:

7.1 Use of Proceeds. The proceeds of the Revolving Loan shall be used
exclusively for general corporate purposes.

7.2 Financial Information. Maintain a standard system of accounting in
accordance with GAAP and furnish to Lender the following:

7.2.1 Quarterly Financial Statements. As soon as available and, in any event,
within forty-five (45) days after the end of each fiscal quarter, a copy of
Borrower’s 10-Q report filed with the Security and Exchange Commission (“SEC”).

7.2.2 Annual Financial Statements. As soon as available and, in any event,
within one hundred twenty (120) days after the end of each fiscal year, a copy
of Borrower’s 10-K report filed with the SEC.

7.2.3 Additional Financial Information. As soon as available and, in any event,
within ten (10) days after request, such other data, information, or
documentation as Lender may reasonably request.

7.3 Current Ratio. Borrower shall attain a ratio of Current Assets (less prepaid
expenses) to Current Liabilities of 2.00 to 1.00 or greater, tested at the end
of each fiscal quarter. “Current Assets” and “Current Liabilities” shall have
the meanings defined by GAAP.

7.4 Total Debt/Tangible Net Worth Ratio. Borrower shall attain a Total Debt to
Tangible Net Worth of not greater than 1.00 to 1.00, tested at the end of each
fiscal quarter. “Total Debt” shall mean all of Borrower’s liabilities including
Subordinated Debt. “Subordinated Debt” shall mean indebtedness and liabilities
of Borrower which have been subordinated by written agreement to indebtedness
owed by Borrower to Lender in form and substance acceptable to Lender. “Tangible
Net Worth” shall mean Borrower’s total assets, excluding all intangible assets
(i.e. goodwill, trademarks, patents, copyrights, organizational expenses and
similar intangible items, but including leaseholds and leasehold improvements)
less Total Debt.

7.5 Location of Deposit Accounts. Borrower shall keep and maintain all of its
operating deposit accounts at Lender until the Revolving Loan has been fully
paid and is terminated (Borrower’s investment accounts may be maintained at
other institutions).

7.6 Maintenance of Existence. Preserve and maintain its corporate existence,
powers, and privileges in the jurisdiction of its incorporation, and qualify and
remain qualified in each jurisdiction in which its presence is necessary or
desirable in view of its business, operations or ownership of its property.
Borrower shall also maintain and preserve all of its property which is necessary
or useful in the proper course of its business, in good working order and
condition, ordinary wear and tear excepted.

7.7 Books and Records. Keep accurate and complete books, accounts, and records
in which complete entries shall be made in accordance with GAAP, reflecting all
financial transactions of Borrower.

7.8 Access to Premises and Records. At all reasonable times and as often as
Lender may reasonably request, permit any authorized representative designated
by Lender to have access to the premises, property, and financial records of
Borrower, including all records relating to the finances, operations, and
procedures of Borrower, and to make copies of or abstracts from such records.

7.9 Notice of Events. Furnish Lender prompt written notice of:

7.9.1 Proceedings. Any proceeding instituted by or against Borrower in any court
or before any commission or regulatory body, or any proceeding threatened
against it in writing by any governmental agency which if adversely determined
would have a material adverse effect on Borrower’s business, property, or
financial condition, or where the amount involved is $1,000,000.00 or more and
not covered by insurance;

7.9.2 Material Development. Any material development in any such proceeding
referred to in Subsection 7.9.1;

7.9.3 Defaults. Any accident, event, or condition which is or, with notice or
lapse of time or both, would constitute a Default, or a default under any other
agreement to which Borrower is a party; and

7.9.4 Adverse Effect. Any other action, event, or condition of any nature which
could result in a material adverse effect on the business, property, or
financial condition of Borrower.

7.10 Payment of Debts and Taxes. Pay all of its liabilities as they come due and
perform all obligations promptly and in accordance with their terms, and pay and
discharge promptly all taxes, assessments, and governmental charges or levies
imposed upon Borrower, its property, or revenues prior to the date on which
penalties attach thereto, as well as all lawful claims for labor, material,
supplies, or otherwise which, if unpaid, might become a lien or charge upon
Borrower’s property. Borrower shall not, however, be required to pay or
discharge any such tax, assessment, charge, levy, or claim so long as its
enforceability, amount, or validity is contested in good faith by appropriate
proceedings.

7.11 Insurance. Maintain commercially adequate levels of insurance coverage with
financially sound and reputable insurers as approved by Lender, including,
without limitation:

7.11.1 Property Insurance. Insurance on all the Collateral and property of a
character usually insured by organizations engaged in the same or similar type
of business as Borrower against all risks, casualties, and losses through
extended coverage or otherwise and of the kind customarily insured against by
such organizations, with such policy or policies naming Lender as loss payee, as
its interests may appear;

7.11.2 Liability Insurance. Public liability insurance against tort claims which
may be asserted against Borrower; and

7.11.3 Additional Insurance. Such other insurance as may be required by law.

ARTICLE 8

Negative Covenants

So long as this Agreement shall remain in effect, or any liability shall exist
under the Loan Documents, Borrower shall not, without prior written consent of
Lender:

8.1 Merger. Become a party to any merger, consolidation, or like corporate
change, or make any substantial transfer or contribution to, or material
investment in, stock, shares, or licenses of any Person.

8.2 Capital Structure. Issue, purchase, retire, or redeem any of its capital
stock or take any other action which would effect a substantial change in
Borrower’s capital structure.

8.3 Laws. Violate any laws, including, without limitation, the federal Fair
Labor Standards Act or any comparable state wage and hour law.

8.4 ERISA. Engage in any act or omission which would make Borrower liable under
ERISA to the Plan, to any of its participants, or to the Internal Revenue
Service.

8.5 Dissolution. Adopt any agreement or resolution for dissolving, terminating,
or substantially altering Borrower’s present business activities.

8.6 Business Activities. Engage or enter into any activity which is unusual to
Borrower’s existing business.

ARTICLE 9

Events and Consequences of Default

9.1 Events of Default. Any of the following events shall, at the option of
Lender and at any time without regard to any previous knowledge on the part of
Lender, constitute a default by Borrower under the terms of this Agreement, the
Revolving Note, and all other Loan Documents (“Default”):

9.1.1 Nonpayment. Any payment or reimbursement due or demanded under this
Agreement or any Loan Document is not made when due or within three (3) days
thereafter;

9.1.2 Breach of Warranty. Any representation or warranty made in connection with
this Agreement or any other Loan Document, or any certificate, notice, or report
furnished pursuant hereto, is determined by Lender to be materially false in any
respect when made;

9.1.3 Failure to Perform. Any other term, covenant, or agreement contained in
any Loan Document is not performed or satisfied (including any failure to adhere
to an affirmative covenant set forth in Article 7 hereof), and, if remediable,
such failure continues unremedied for ten (10) days after written notice thereof
has been given to Borrower by Lender;

9.1.4 Borrowing Limit. If the aggregate amount of the outstanding Advances under
the Revolving Note shall exceed the Borrowing Limit, and Borrower upon written
or oral notice from Lender does not immediately pay Lender an amount equal to
the difference between the outstanding balance of such Advances due under the
Revolving Note and the Borrowing Limit;

9.1.5 Defaults to Third Parties. Should Borrower default under any loan,
extension or credit, security agreement, purchase or sales agreement, or any
other agreement, in favor of any other creditor or person that may materially
affect any of Borrower’s property or Borrower’s ability to repay the Revolving
Loan or perform its obligations under this Agreement or any of the Loan
Documents;

9.1.6 Loss, Destruction, or Condemnation. A portion of Borrower’s property is
affected by any uninsured loss, damage, destruction, theft, sale, or encumbrance
other than created herein or is condemned, seized, or appropriated, the effect
of which materially impairs Borrower’s financial condition or its ability to pay
its debts as they come due;

9.1.7 Attachment Proceedings and Insolvency. Borrower or any of Borrower’s
property is affected by any:

(a) Judgment lien, execution, attachment, garnishment, general assignment for
the benefit of, creditors, sequestration, or forfeiture, to the extent
Borrower’s financial condition or its ability to pay its debts as they come due
is thereby materially impaired; or

(b) Proceeding under the laws of any jurisdiction relating to receivership,
insolvency, or bankruptcy, whether brought voluntarily or involuntarily by or
against Borrower, including, without limitation, any reorganization of assets,
deferment or arrangement of debts, or any similar proceeding, and, if such
proceeding is involuntarily brought against Borrower, it is not dismissed within
sixty (60) days;

9.1.8 Judgments. Final judgment on claims not covered by insurance which,
together with other outstanding final judgments against Borrower, exceeds
$1,000,000.00, is rendered against Borrower and is not discharged, vacated, or
reversed, or its execution stayed pending appeal, within sixty (60) days after
entry, or is not discharged within sixty (60) days after the expiration of such
stay;

9.1.9 Government Approvals. Any governmental approval, registration, or filing
with any governmental authority, now or later required in connection with the
performance by Borrower of its obligations under the Loan Documents, is revoked,
withdrawn, or withheld, or fails to remain in full force and effect, except
Borrower shall have sixty (60) days after notice of any such event to take
whatever action is necessary to obtain all necessary approvals, registration,
and filings;

9.1.10 Defective Collateralization. This Agreement or any of the Loan Documents
ceases to be in full force and effect (including, without limitation, the
failure of the Security Agreement to create a valid and perfected security
interest in any of the Collateral);

9.1.11 Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help, repossession
or any other method, by any creditor of Borrower, or any creditor of any
grantor, against the Collateral or any portion thereof, securing the Revolving
Loan, or by any governmental entity or agency. This includes, without
limitation, garnishment, attachment or levy on or of any of Borrower’s deposit
accounts with Lender. However, this Default shall not apply if there is a good
faith dispute by Borrower or any grantor, as the case may be, as to the validity
or reasonableness of the claim which is the basis of the creditor or forfeiture
proceeding, and if Borrower or the grantor gives Lender written notice of the
creditor or forfeiture proceeding and furnishes to Lender reserves or a surety
bond for the creditor or forfeiture proceeding satisfactory to Lender; and/or

9.1.12 Adverse Change. In Lender’s reasonable opinion, a material adverse change
occurs in the financial condition of Borrower.

9.2 Notification of Default. Lender shall promptly furnish Borrower with written
notice of the nature and extent of any Default after Lender has actual knowledge
thereof.

9.3 Remedies Upon Default. If any Default occurs and is continuing, Lender may
at its option, by notice to Borrower:

9.3.1 Terminate Commitments. Refuse to make further Advances;

9.3.2 Accelerate. Declare all principal, accrued interest and other charges
under the Revolving Note to be immediately due and payable without presentment,
demand, protest, or notice of any kind, all of which are hereby expressly waived
by Borrower, and Lender may immediately exercise all rights granted to Lender
upon default by Borrower under the Revolving Note, the Security Agreement and
the other Loan Documents;

9.3.3 Setoff. Exercise its right of setoff, assert its banker’s lien, or
counterclaim against any interest of Borrower in each deposit account which
Borrower may now or later have with Lender, or any property which is now or
later shall be in Lender’s possession; and/or

9.3.4 All Remedies. Pursue all available legal and equitable remedies. All of
Lender’s rights and remedies in all Loan Documents shall be cumulative and can
be exercised separately or concurrently.

9.4 Default Interest. Upon Default, whether or not acceleration has occurred,
all unpaid principal under the Revolving Note shall, at Lender’s option, accrue
interest at a fluctuating rate per annum of 5% above the Prime Rate.

9.5 Alleged Default by Lender. In the event that Borrower at any time concludes
that Lender has defaulted in any respect under this Agreement or any of the Loan
Documents, Borrower shall promptly give notice thereof to Lender and provide
Lender with a period of not less than thirty (30) days in which to cure such
alleged default; provided, however, that in no event shall this Section 9.5 or
Borrower’s giving such notice to Lender extend the time period(s) granted to
Borrower to cure any Default under this Agreement or any Loan Document. Failure
of Borrower to provide such notice to Lender shall waive Borrower’s right to
assert a claim against Lender for such alleged default.

ARTICLE 10

Miscellaneous

10.1 Manner of Payments.

10.1.1 Payments on Nonbusiness Days. Whenever any event is to occur or any
payment is to be made under any Loan Document on any day other than a Business
Day, such event may occur or such payment may be made on the next succeeding
Business Day and such extension of time shall be included in computation of
interest in connection with any such payment.

10.1.2 Payments. All payments and prepayments to be made by Borrower shall be
made to Lender when due, at Lender’s office as may be designated by Lender,
without offsets or counterclaims for any amounts claimed by Borrower to be due
from Lender, in U.S. dollars and in immediately available funds.

10.1.3 Application of Payments. All payments made by Borrower shall be applied
first against fees, expenses, and indemnities due; second, against interest due;
and third, against principal.

10.1.4 Recording of Payments. Lender is authorized to record on a schedule or
computer-generated statement the date and amount of each Advance, all
conversions between interest rate options, and all payments of principal and
interest. All such schedules or statements shall constitute prima facie evidence
of the accuracy of the information so recorded.

10.2 Notices. Lender may make Advances and make conversions between interest
rates, based on telephonic, telex, and oral requests made by the Persons
described in Section 2.2 above. All other notices, demands, and other
communications to be given pursuant to any of the Loan Documents shall be in
writing and shall be deemed received on the earlier of when actually received,
or two (2) days after being mailed, postage prepaid and addressed as follows, or
as later designated in writing:

     
Lender:
 

KEYBANK NATIONAL ASSOCIATION
1301 Fifth Avenue, Suite 2400
 
Borrower:
WA-31-13-2474
P.O. Box 90
Seattle, WA 98111-0090
Attention: Jason R. Gill
  JONES SODA CO.
234 Ninth Avenue North
Seattle, WA 98109
Attention: Peter Van Stolk

10.3 Costs and Expenses. Borrower shall pay, reimburse, and indemnify Lender
for:

10.3.1 Out-of-Pocket Expenses. All Lender’s costs and expenses, including,
without limitation, all accounting, appraisal, and report preparation fees or
expenses, all attorneys’ fees, legal expenses, and recording or filing fees,
incurred in connection with the negotiation, preparation, execution, and
administration of this Agreement and all other Loan Documents, and all
amendments, supplements, or modifications thereto; and

10.3.2 Collection Expenses. All Lender’s costs, expenses, and reasonable
attorneys’ fees (including the reasonable value of the services of staff
counsel) incurred in connection with the enforcement or preservation of any
right under this Agreement or any other Loan Document, whether or not suit is
brought. This subsection shall survive the termination of this Agreement.

10.4 Waiver. No failure to exercise and no delay in exercising, on the part of
Lender, any right, power, or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power, or
privilege hereunder preclude any other or further exercise thereof, or the
exercise of any other right, power, or privilege. Further, no waiver or
indulgence by Lender of any Default shall constitute a waiver of Lender’s right
to declare a subsequent similar failure or event to be a Default.

10.5 Assignment. This Agreement is made expressly for the sole benefit of
Borrower and for the protection of Lender and its successors and assigns. The
rights of Borrower hereunder shall not be assignable by operation of law or
otherwise, without the prior written consent of Lender, which consent may be
denied or given in Lender’s sole discretion. Lender may at any time sell,
assign, grant participations in, or otherwise transfer to any other financial
institution (a “Participant”) all or any part of its obligations under the
Revolving Note, and its rights under this Agreement, without notice to Borrower.
Lender acknowledges and agrees that any such disposition will not alter or
affect Lender’s direct obligations under this Agreement. Borrower acknowledges
that any such Participant will become an owner pro rata of the Obligations, and
Borrower waives any right it may have to setoff the Obligations against any
claims or counterclaims it may have against Lender.

10.6 Merger. The rights and obligations set forth in this Agreement shall not
merge into or be extinguished by any of the Loan Documents, but shall continue
and remain valid and enforceable. This Agreement and the other Loan Documents
constitute Lender’s entire agreement with Borrower, and supersede all prior
writings and oral negotiations. No oral or written representation, covenant,
commitment, waiver, or promise of either Lender or Borrower shall have any
effect, whether made before or after the date of this Agreement, unless
contained in this Agreement or another Loan Document, or in an amendment
complying with Section 10.7. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY,
TO EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW.

10.7 Amendments. Any amendment or waiver of, or consent to any departure by
Borrower from any provision of, this Agreement shall be in writing signed by
each party to be bound thereby, and shall be effective only in the specific
instance and for the specific purpose for which given.

10.8 Jurisdiction and Venue. Borrower irrevocably consents to the personal
jurisdiction of the state and federal courts located in the State of Washington
in any action brought under this Agreement or any other Loan Document, and any
action based upon the transactions encompassed by this Agreement, whether or not
based in contract. Venue of any such action shall be laid in King County,
Washington, unless some other venue is required for Lender to fully realize upon
any collateral or guaranties.

10.9 Construction. Each term of this Agreement and each Loan Document shall be
binding to the extent permitted by law and shall be governed by the laws of the
State of Washington, excluding its conflict of laws rules. If one or more of the
provisions of this Agreement should be invalid, illegal, or unenforceable in any
respect, the remaining provisions of this Agreement shall remain effective and
enforceable. If there is a conflict among the provisions of any Loan Documents,
the provisions of this Agreement shall be controlling. The captions and
organization of this Agreement are for convenience only, and shall not be
construed to affect any provision of this Agreement.

10.11 Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original and together shall be deemed one
document.

10.12 Jury Trial Waiver. Lender and Borrower hereby waive the right to a jury
trial in any action, proceeding or counterclaim brought by any party against the
other party.

10.13 Time is of the Essence. Time is of the essence of this Agreement.

2

     
Dated August 21, 2007
  Borrower:
 
  JONES SODA CO.
By: /s/ Hassan N. Natha
 
   
 
  Its: Chief Financial Officer
 
  Lender:
Dated August 22, 2007
  KEYBANK NATIONAL ASSOCIATION
By: /s/ James Waters
—
Its: Assistant V.P.

3

EXHIBIT A

REVOLVING NOTE

         
Date:
  August 21, 2007

Principal Amount:
  $ 15,000,000.00
Interest Rate:
  Prime Rate Minus 1.5% per annum or LIBOR Rate Plus Margin

Final Payment Date:
  August 21, 2009

Borrower:
  Jones Soda Co.

Promise To Pay. Jones Soda Co. (“Borrower”), promises to pay to KeyBank National
Association, located at 1301 Fifth Avenue, Suite 2400, WA-31-13-2474, PO BOX 90
Seattle, WA 98111-0090 (“Lender”), or order, in lawful money of the United
States of America, the principal amount set forth above, or so much as has been
advanced and not repaid, together with interest on the unpaid outstanding
principal balance from the date funds are actually advanced until paid in full
all in accordance with the terms set forth below. This Note is the “Revolving
Note” referred to in that certain Loan Agreement of even date herewith (the
“Loan Agreement”), entered into by and between Borrower and Lender. All
capitalized terms that are used in this Note but are not otherwise defined
herein are intended to have the meanings assigned to such terms in the Loan
Agreement.

1. Repayment. Beginning on the first day of the first month after an Advance is
made hereof, and continuing on or before the first day of each month during the
term hereof, Borrower shall pay to Lender all accrued interest outstanding
hereon, subject to any grace period set forth in the Loan Agreement.
Notwithstanding any other term hereof, each Advance and all principal, interest,
fees and other sums outstanding hereunder shall be repaid no later than the
Final Payment Date, which is August 21, 2009; provided that the Final Payment
Date may be hereafter extended by Lender in its sole discretion, subject to such
terms as Lender shall require. Additionally, if at any time the aggregate amount
of the outstanding Advances under the revolving loan evidenced by this Note (the
“Revolving Loan”) shall exceed the applicable Borrowing Limit as described in
the Loan Agreement, Borrower, upon written or oral notice from Lender, shall
immediately pay to Lender an amount equal to the difference between the
outstanding balance of such Advances and the Borrowing Limit. Borrower shall pay
Lender at Lender’s address described above or at such other place as Lender may
designate in writing, or, at the election of Lender, Lender may directly debit
Borrower’s operating or other accounts with Lender. Unless otherwise agreed or
required by applicable law, payments will be applied by Lender first to all
legal and collection costs and charges; next to late charges; next to accrued
interest; and the remainder to principal.

2. Variable Interest Rate. The interest rate on this Note is subject to change
from time to time based on changes in an index which is Lender’s Prime Rate (the
“Prime Rate”) as announced by Lender. The interest rate will change
automatically and correspondingly on the date of each announced change of the
Prime Rate by Lender with regard to Advances under the Loan accruing interest
based on the Prime Rate. The Prime Rate is not necessarily the lowest rate
charged by Lender on its loans and is set by Lender in its sole discretion. If
the Prime Rate becomes unavailable during the term of this Loan, the Lender may
designate a similar substitute index after notifying Borrower. Lender will
inform Borrower of the current Prime Rate upon Borrower’s request. Borrower
understands that Lender may make loans, as applicable, based on other rates as
well. The interest rate change will not occur more often than each day that the
Prime Rate changes. The Prime Rate currently is 8.25% per annum. The interest
rate to be applied to the unpaid principal balance of this Note will be at a
rate equal to the Prime Rate, minus 1.5% per annum (the “Prime Borrowing Rate”).
As more fully set forth in the Loan Agreement, Borrower may elect to have
Advances under the Loan bear interest based on the LIBOR Rate defined in the
Loan Agreement plus the LIBOR Margin of 1.00% per annum (the “Libor Borrowing
Rate”) for 30, 60 or 90 days at the time and in the manner described in the Loan
Agreement. In such case, such Advances shall thereafter accrue interest at the
LIBOR Borrowing Rate in accordance with the Loan Agreement. NOTICE: Under no
circumstances will the interest rate on this Note be more than the maximum rate
allowed by applicable law.

3. Prepayment. Borrower agrees that all Loan fees and other prepaid finance
charges are earned fully as of the date of the Loan and will not be subject to
refund upon early payment (whether voluntary or as a result of default), except
as otherwise required by law. Except for the foregoing and as provided under the
Loan Agreement (including in Section 3.4.3), Borrower may pay without penalty
any individual Advance made hereunder in full earlier than it is due, provided
that no partial payment of any Advance shall be allowed hereunder. Early
payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower’s obligation to continue to make payments of accrued and unpaid
interest. Rather, they will reduce the principal balance due.

4. Loan Advances. Lender agrees to make Advances to Borrower hereunder from time
to time from the date of this Note to the Expiration Date as set forth in the
Loan Agreement; provided that the aggregate amount of such Advances outstanding
at any time does not exceed the Borrowing Limit. However, Advances hereunder may
be borrowed, repaid and reborrowed, and the aggregate Advances loaned hereunder
from time to time may exceed such maximum amount.

5. Late Charge. If a payment owing hereon is ten (10) days or more late,
Borrower will be charged 5.000% of the regularly scheduled payment.

6. Default. Defaults hereunder and under other Loan Documents and Lender’s
rights upon an Event of Default by Borrower shall be those set forth in the Loan
Agreement.

7. Remedies. Including the remedies described in the Loan Agreement, upon the
occurrence of an Event of Default, Lender may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest and other sums
owing hereon immediately due, without notice, and then Borrower must pay that
amount. Upon the occurrence of an Event of Default, including, without
limitation, Borrower’s failure to fully pay this Note when due, Lender, at its
option, may also increase the variable interest rate of this Note to five
percentage points (5%) over the Prime Rate, which rate shall thereafter accrue
on all Advances under this Note. Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. Borrower also will pay Lender that
amount. This includes, subject to any limits under applicable law, court costs,
Lender’s attorneys’ fees and legal expenses whether or not there is a lawsuit,
including attorneys’ fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. This Note has
been delivered to and accepted by Lender in the State of Washington. If there is
a lawsuit, Borrower agrees upon Lender’s request to submit to the jurisdiction
of the courts of King County, State of Washington. Lender and Borrower hereby
waive the right to any jury trial in any action, proceeding, or counterclaim
brought by either Lender or Borrower against the other. This Note shall be
governed by and construed in accordance with the laws of the State of
Washington.

8. Right of Setoff. Borrower grants to Lender a contractual security interest
in, and hereby assigns, conveys, delivers, pledges and transfers to the Lender
all Borrower’s right, title and interest in and to Borrower’s accounts with
Lender (whether checking, savings or some other account), including, without
limitation, all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all IRA, Keogh, and trust
accounts. Borrower authorizes Lender, to the extent permitted by applicable law,
to charge or setoff all sums owing on this Note against any and all such
accounts.

9. General Provisions. Time is of the essence of this Note. Lender may delay or
forgo enforcing any of its rights and remedies under this Note without losing
them. Borrower and any other person who signs, guarantees or endorses this Note,
to the extent allowed by law, each waive presentment, demand for payment,
protest and notice of dishonor. Upon any change in the terms of this Note, and
unless otherwise expressly stated in writing, no party who signs this Note,
whether as maker, guarantor, accommodation maker or endorser, shall be released
from liability. All such parties agree that Lender may renew or extend
(repeatedly and for any length of time) this Note, or release any party, and
take any other action deemed necessary by Lender without the consent of or
notice to anyone. All such parties also agree that Lender may modify this Note
without the consent of or notice to anyone other than the party with whom the
modification is made.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL PROVISIONS OF THIS
NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE
TERMS OF THIS NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS NOTE.

NOTICE CONCERNING ORAL AGREEMENTS

ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR
FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW

BORROWER:

JONES SODA CO.

By: /s/ Hassan N. Natha
Its: Chief Financial Officer

4