Document:

201401 8-K BFI Ex 102

		

			 

		

		
			Exhibit 10.2
		

		
			General Continuing Guaranty
		

		
			 
		

		
			 
		

		
			December 27, 2013 
		

		
			BFI Business Finance
		

		
			851 East Hamilton Avenue, 2nd Floor
		

		
			Campbell, California 95008
		

		
			 
		

		
			 
		

		
			To: BFI Business Finance
		

		
			For good and valuable consideration, and in order to induce BFI Business Finance, a California corporation ("Lender"), to extend and/or continue to extend financial accommodations to Jones Soda Co. (USA) Inc., a(n) Washington corporation (“Jones USA”) and JONES SODA (CANADA) INC., a(n) Canadian corporation (“Jones Canada”) (Jones USA and Jones Canada, each individually and collectively, the "Borrower"), pursuant to the terms and conditions of that certain Loan and Security Agreement and/or promissory note (individually and collectively, the "Agreement"), executed or to be executed in connection herewith, evidencing and otherwise relating to loans by Lender to Borrower in the principal amount of up to Two Million and 00/100 Dollars ($2,000,000.00)  (the "Loan"), or pursuant to any other present or future agreement between Lender and Borrower, and in consideration thereof, and in consideration of any loans, advances, or financial accommodations heretofore or hereafter granted by Lender to or for the account of Borrower, whether pursuant to the Agreement, or otherwise, JONES SODA CO. , a(n) Washington corporation ("Guarantor"), whose address is 1000 1st Avenue South, Suite 100,  Seattle,  Washington 98134, hereby, jointly and severally, guarantees, promises and undertakes as follows:
		

			
	
			
				 1.
			Guarantor unconditionally, absolutely and irrevocably guarantees and promises to pay to Lender, or order, on demand, in lawful money of the United States, any and all indebtedness and/or obligations of Borrower to Lender and the payment to Lender of all sums which may be presently due and owing and of all sums which shall in the future become due and owing to Lender from Borrower whether under the Agreement or otherwise.  The terms "indebtedness" and "obligations" (hereinafter collectively referred to as the "Obligations") are used herein in their most comprehensive sense and include, without limitation, the Loan and any and all advances, debts, obligations, and liabilities of Borrower, heretofore, now, or hereafter made, incurred, or created, whether voluntarily or involuntarily, and however arising, including, without limitation,  indebtedness owing by Borrower to third parties who have granted Lender a security interest in the accounts, chattel paper and/or general intangibles of said third party;  any and all attorneys' fees, expenses, costs, premiums, charges and/or interest owed by Borrower to Lender, whether under the Agreement, or otherwise, whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, whether Borrower may be liable individually or jointly with others, whether recovery upon such indebtedness may be or hereafter becomes barred by any statute of limitations or whether such indebtedness may be or hereafter becomes otherwise unenforceable, and includes Borrower's prompt, full and faithful performance, observance and discharge or each and every term, condition, agreement, representation, warranty undertaking and provision to be performed by Borrower under the Agreement;  any and all obligations or liabilities of Borrower to Lender arising out of any other agreement by Borrower including without limitation any agreement to indemnify Lender for environmental liability or to clean up hazardous waste;  any and all indebtedness, obligations or liabilities for which Borrower would otherwise be liable to Lender were it not for the invalidity, irregularity or unenforceability of them by reason of any bankruptcy, insolvency or other law or order of any kind, including from and after the filing by or against Borrower of a bankruptcy petition, whether an involuntary or voluntary bankruptcy case, and all attorneys' fees related thereto; and  any and all amendments, modifications, renewals and/or extensions of any of the above, including without limit amendments, modifications, renewals and/or extensions which are evidenced by new or additional instruments, documents or agreements.

			
	
			
				 2.
			This General Continuing Guaranty,  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 "Guaranty") is a continuing guaranty that shall remain effective until all of the Obligations and all of the indebtedness and obligations evidenced by the Agreement have been fully and finally paid and are not longer subject to Borrower as a debtor-in-possession, and/or any trustee or receiver in bankruptcy, seeking to set aside such payments or seek to recoup the amount of such payments, or any part thereof or disgorgement on the part of the Lender, and relates to any Obligations, including those which arise under successive transactions which shall either continue the Obligations from time to time or renew them after they have been satisfied until this Guaranty has been expressly terminated in writing by Lender.  Any such termination  shall be applicable only with respect to Obligations incurred at least thirty (30) days after written notice to Lender specifying such termination,  shall be effective only with respect to transactions having their inception after the effective date of termination, and  shall not affect the Loan or any rights or obligations arising out of transactions having their inception prior to such date.  No termination shall be effective until such time as Lender is no longer committed or otherwise obligated to make the Loan or any other loans or advances, or to grant any credit whatsoever to Borrower.  In the absence of any termination of this Guaranty, Guarantor agrees that nothing shall discharge or satisfy its obligations created hereunder except for the full payment and performance of the Obligations with interest.

			
	
			
				 3.
			Guarantor agrees that it is directly and primarily liable to Lender, that the obligations hereunder are independent of the obligations of Borrower, and that a separate action or actions may be brought and prosecuted against Guarantor irrespective of whether Borrower or any other party liable for the Obligations, whether directly or as a guarantor, is joined in any such action or actions.  Guarantor agrees that any releases which may be given by Lender to Borrower or any other guarantor or endorser shall not release it from this Guaranty.

		 

		

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				 4.
			In the event that any bankruptcy, insolvency, receivership or similar proceeding is instituted by or against Guarantor and/or Borrower or in the event that either Guarantor or Borrower become insolvent, make an assignment for the benefit of creditors, or attempt to effect a composition with creditors, or if there be any Event of Default under the Agreement (whether declared or not), then, at Lender's election, without notice or demand, the obligations of Guarantor created hereunder shall become due, payable and enforceable against Guarantor whether or not the Obligations are then due and payable.

			
	
			
				 5.
			Guarantor agrees to indemnify Lender and hold Lender harmless against all obligations, demands, claims, liens, damages, actions, suits, judgments, costs and expenses, including, without limitation, attorneys’ fees (including, without limitation, estimated legal fees imputed to in-house counsel and staff), and legal costs, and liabilities, by whomsoever asserted and against all losses in any way suffered, incurred, or paid by Lender as a result of or in any way arising out of, following, or consequential to transactions with Borrower whether under the Agreement, or otherwise, and also agrees that this Guaranty shall not be impaired by any modification, supplement, extension, or amendment of any contract or agreement to which Lender and Borrower may hereafter agree, nor by any modification, release, or other alteration of any of the Obligations hereby guaranteed or of any security therefor, nor by any agreements or arrangements whatsoever with Borrower or anyone else.

			
	
			
				 6.
			Guarantor hereby authorizes Lender, without notice or demand and without affecting its liability hereunder, from time to time to:   (subject to specified rights Borrower may have, if any, to approve any of the following pursuant to the terms of the Agreement) renew, compromise, extend, accelerate, or otherwise change the interest rate, time for payment, or the other terms of any of the Obligations guaranteed hereby, and exchange, enforce, waive, and release any security therefor;  apply such security and direct the order or manner of sale thereof as Lender in its discretion may determine;  run such further credit reports and other reports as it may deem necessary to continue to keep itself apprised regarding the continued financial condition of Guarantor during the term of this Guaranty and hereby authorizes Lender to run such credit and other reports from time to time as Lender deems appropriate;   release or substitute any one or more endorser(s) or guarantor(s); and  assign, without notice, this Guaranty in whole or in part and/or Lender's rights hereunder to anyone at any time.  Guarantor agrees that Lender may do any or all of the foregoing in such manner, upon such terms, and at such times as Lender, in its discretion, deems advisable, without, in any way or respect, impairing, affecting, reducing or releasing Guarantor from its undertakings hereunder and Guarantor hereby consents to each and all of the foregoing acts, events and/or occurrences.  Guarantor hereby agrees to be bound by any terms and conditions set forth in the Agreement, which are specifically applicable to Guarantor.

			
	
			
				 7.
			Guarantor hereby waives any right to assert against Lender as a defense, counterclaim, set-off or crossclaim, any defense (legal or equitable), set-off, counterclaim, and/or claim which Guarantor may now or at any time hereafter have against Borrower and/or any other party liable to Lender for the Obligations in any way or manner.

			
	
			
				 8.
			Guarantor hereby waives all defenses, counterclaims and/off-sets of any kind or nature, arising directly or indirectly from the present or future lack of perfection, sufficiency, validity and/or enforceability of the Agreement, or any security interest.

			
	
			
				 9.
			Guarantor hereby waives any defense arising by reason of any claim or defense based upon an election of remedies by Lender, which, in any manner impairs, affects, reduces, releases, destroys and/or extinguishes Guarantor's subrogation rights, rights to proceed against Borrower for reimbursement, and/or any rights of Guarantor to proceed against Borrower or against any other person or security, including, but not limited to, any defense based upon an election of remedies by Lender under the provisions of Section 580d of the California Code of Civil Procedure, and/or any similar law of California or of any other State or of the United States.  Guarantor waives all presentments, demands for performance, notices of non-performance, protests, notices of protest, notices of dishonor, notices of default, notices of acceptance of this Guaranty, and notices of the existence, creation, or incurring of new or additional indebtedness, and all other notices or formalities to which Guarantor may be entitled.  Guarantor waives any right to a jury trial in any action hereunder or arising out of Lender's transactions with Borrower.  Guarantor also hereby waives any right of subrogation it may have or assert, or any other right of reimbursement from Borrower or any other party, unless Lender expressly consents to Guarantor's assertion of such rights.  Without limiting the foregoing, Guarantor expressly waives all benefits which might otherwise be available to Guarantor under California Civil Code Sections 2809, 2810, 2815, 2819, 2822, 2839, 2845, 2847, 2848, 2849, 2850, 2899 and 3433 and California Code of Civil Procedure Sections 580a, 580b, 580d and 726, and/or any similar law of California or of any other State or of the United States, as those statutory provisions are now in effect and hereafter amended, and under any other similar statutes now and hereafter in effect deemed applicable to this Guaranty and its enforcement.

			
	
			
				 10.
			Guarantor waives all presentments, demands for performance, notices of non-performance, protests, notices of protest, notices of dishonor, notices of default, notices of intent to accelerate or demand payment of any kind, diligence in collecting any Obligations, notices of acceptance of this Guaranty, notices of the existence, creation, or incurring of new or additional indebtedness, notices respecting the terms, time and place of any public or private sale of personal property security held from Borrower or any other person, and all other notices or formalities to which Guarantor may be entitled.  Each Guarantor hereby waives any claim, right or remedy now existing or hereafter acquired against the Borrower, which claims arise from the performance of such Guarantor's obligations under the respective guaranties, including without limitation, any right of subrogation, reimbursement, exoneration, contribution, indemnification or participation in any claim, right or remedy against Borrower for any security which Lender now has or hereafter acquires, whether or not such claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise.  Lender may modify the terms of any Obligations, compromise, extend, increase, accelerate, renew or forbear to enforce payment of any or all Obligations, or permit Borrower to incur additional Obligations, all without notice to Guarantor and without affecting in any manner the unconditional obligation of Guarantor under this Guaranty.  Guarantor further waives any and all other notices to 
		

		 

		

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			which Guarantor might otherwise be entitled.  Guarantor acknowledges and agrees that the liabilities created by this Guaranty are direct and are not conditioned upon pursuit by Lender of any remedy Lender may have against Borrower or any other person or any security.  No invalidity, irregularity or unenforceability of any part or all of the Obligations or any documents evidencing the same, by reason of any bankruptcy, insolvency or other law or order of any kind or for any other reason, and no defense or setoff available at any time to Borrower, shall impair, affect or be a defense or setoff to the obligations of Guarantor under this Guaranty.

			
	
			
				 11.
			Any and all present and future debts and obligations of Borrower to Guarantor are hereby postponed in favor of and subordinated to the full payment and performance of all present and future debts and obligations of Borrower to Lender.  All monies or other property of Guarantor at any time in Lender's possession may be held by Lender as security for any and all obligations of Guarantor to Lender no matter how or when arising, whether absolute or contingent, whether due or to become due, and whether under this Guaranty or otherwise.  Guarantor also agrees that Lender's books and records showing the account between Lender and Borrower shall be admissible in any action or proceeding and shall be binding upon Guarantor for the purpose of establishing the terms set forth therein and shall constitute prima facie proof thereof.

			
	
			
				 12.
			Based solely on its own independent investigation and not upon any information provided by Lender, Guarantor acknowledges that it is presently informed of the financial condition of Borrower and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations.  Guarantor hereby covenants that it will continue to keep itself informed of Borrower's financial condition and of all other circumstances which bear upon the risk of nonpayment.  Absent a written request for such information by Guarantor to Lender, Guarantor hereby waives its rights, if any, to require the disclosure of, and Lender is relieved of any obligation or duty to disclose to Guarantor, any information which Lender may now or hereafter acquire concerning such condition or circumstances.  Guarantor agrees that it is not relying upon nor expecting Lender to disclose to Guarantor any fact now or later known by Lender, whether relating to the operations or condition of Borrower, the existence, liabilities or financial condition of any co‐guarantor of the Obligations, the occurrence of any default with respect to the Obligations, or otherwise, notwithstanding any effect these facts may have upon Guarantor's risk under this Guaranty or Guarantor's rights against Borrower.  Guarantor knowingly accepts the full range of risk encompassed in this Guaranty, which risk includes without limit the possibility that Borrower may incur Obligations to Lender after the financial condition of Borrower, or its ability to pay its debts as they mature, has deteriorated.

			
	
			
				 13.
			Notwithstanding any prior revocation, termination, surrender or discharge of this Guaranty (or of any lien, pledge or security interest securing this Guaranty) in whole or part, and of all liens, pledges and security interests securing this Guaranty, this Guaranty shall continue in full force and effect until Borrower's Obligations are fully paid, performed and discharged and Lender gives Guarantor written notice of that fact.  Borrower's Obligations shall not be considered fully paid, performed and discharged unless and until all payments by Borrower to Lender are no longer subject to any right on the part of any person whomsoever including but not limited to Borrower, Borrower as a debtor-in-possession, and/or any trustee or receiver in bankruptcy, to set aside such payments or seek to recoup the amount of such payments, or any part thereof.  In the event that any such payments by Borrower to Lender are set aside after the making thereof, in whole or in part, or settled without litigation, to the extent of such settlement, all of which is within Lender's discretion, Guarantor shall be liable for the full amount Lender is required to repay plus costs, interest, attorneys' fees and any and all expenses which Lender paid or incurred in connection therewith.  The foregoing shall include, by way of example and not by way of limitation, all rights to recover preferences voidable under the United States Bankruptcy Code and any liability imposed, or sought to be imposed, against Lender relating to the environmental condition of, or the presence of hazardous or toxic substances on, in or about, any property given as collateral to Lender by Borrower.  For purposes of this Guaranty, "environmental condition" includes, without limitation, conditions existing with respect to the surface or ground water, drinking water supply, land surface or subsurface and the air; and "hazardous or toxic substances" shall include all substances now or subsequently determined by any federal, state or local authority to be hazardous or toxic, or otherwise regulated by any of these authorities.

			
	
			
				 14.
			This Guaranty shall be binding upon the successors and assigns of Guarantor and shall inure to the benefit of Lender's successors and assigns.  However, Borrower and Guarantor may not assign this Guaranty or any rights hereunder without Lender’s prior written consent and any prohibited assignment shall be absolutely void.  Neither an unconsented assignment nor an assignment consented to by Lender shall release Guarantor of any Obligation or indebtedness hereunder.  Lender reserves the right to sell, assign, transfer, negotiate, or grant participations in all or any part of, or any interest in, Lender’s rights and benefits under this Guaranty and each of the related documents executed herewith or hereafter with Guarantor acknowledging and agreeing to same, and with Guarantor further acknowledging and agreeing that all of its Obligations owing to Lender under this Guaranty and any related documents executed herewith or hereafter shall be owing to such purchaser, assignee, transferee, participant or other successor party.  In connection therewith, Lender may disclose all documents and information which Lender now has or may hereafter acquire relating to Guarantor or the business of Guarantor, or any Collateral required hereunder.  Any waiver of any rights under this Guaranty or under any other agreement, instrument, or paper signed by Guarantor is neither valid nor effective unless made in writing and signed by Lender.  No delay or omission on the part of the Lender in exercising any right shall operate as a waiver thereof or of any other right.  If Guarantor is a natural person, the death of Guarantor shall not terminate this Guaranty.  If Guarantor is a partnership or an unincorporated association, Guarantor's rights and liability shall not be affected by any changes in the name of the entity or its membership.

			
	
			
				 15.
			All notices, demands and other communications which Guarantor or Lender may desire, or may be required, to give to the other shall be in writing and shall be sent via registered or certified mail, nationally recognized overnight courier, or personally delivered and shall be addressed to the party at the addresses set forth in the preamble of this Guaranty.  Any such notice, demand or communication shall be deemed given when received if personally delivered or sent by overnight courier, or deposited in the United States mail, postage prepaid, if sent by 
		

		 

		

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			registered or certified mail.  The address of either Guarantor or Lender may be changed by notice given in accordance with this paragraph.

			
	
			
				 16.
			This is an integrated agreement and is the sole and final agreement with respect to the subject matter hereof, and supersedes all prior negotiations and agreements.  No modification of this Guaranty shall be effective for any purpose unless it is in writing and executed by Guarantor and an officer of Lender authorized to do so.

			
	
			
				 17.
			Guarantor agrees to pay all attorneys' fees and all other costs and out-of-pocket expenses (including, without limitation, estimated legal fees imputed to in-house counsel and staff) which may be incurred by Lender in the enforcement of this Guaranty or in any way arising out of, following, or consequential to the enforcement of Borrower's Obligations, whether under this Guaranty, the Agreement, or otherwise, including without limitation the prosecution or defense of  motions or actions for relief from any stay under the Bankruptcy Code,  motions to deny dischargeability of any debt under the Bankruptcy Code,  motions to grant or deny use of cash collateral or extend financing,  motions to challenge or assert preference liability motions or fraudulent transfer liability motions, and  all other motions brought by Borrower, Guarantor, Lender or third parties in any way relating to Lender's rights with respect to such Borrower, Guarantor, or third party and/or affecting any collateral securing any obligation owed to Lender by Borrower, Guarantor, or any third party, or probate proceedings.

			
	
			
				 18.
			In all cases where the word "Guarantor" is used in this Guaranty, it shall mean and apply equally to each of and all of the individuals and/or entities which have executed this Guaranty.  If any Obligation is guaranteed by two or more guarantors, the obligation of Guarantor shall be several and also joint, each with all and also each with any one or more of the others, and may be enforced at the option of Lender against each severally, any two or more jointly, or some severally and some jointly.  The term "Borrower" includes any debtor‐in‐possession or trustee in bankruptcy which succeeds to the interests of Borrower.

			
	
			
				 19.
			This Guaranty or other guaranty related documents 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 Guaranty or other guaranty related documents, or a signature page thereto intended to be attached to a copy of this Guaranty or other guaranty related documents, 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 Guaranty or other guaranty related documents.

			
	
			
				 20.
			All acts and transactions hereunder and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without regard to choice of law principles.  The parties hereby agree that  this Guaranty is entered into and that Guarantor’s performance to Lender occurs at Campbell, California; and  all actions or proceedings arising in connection with this Guaranty and/or the Agreement 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 Guarantor 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.

		
			GUARANTOR ACKNOWLEDGES THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL RIGHT, BUT THAT IT MAY BE WAIVED.  AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, GUARANTOR AND LENDER KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVE ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS GUARANTY OR THE OBLIGATIONS.
		

		
			WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT 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, by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in accordance with California Code of Civil Procedure Section 638 (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.  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 which 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.  
		

		 

		

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		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 paragraph 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.
		

		
			GUARANTOR ACKNOWLEDGES THAT GUARANTOR HAS HAD THE OPPORTUNITY TO READ AND REVIEW WITH GUARANTOR'S COUNSEL THIS GUARANTY AND GUARANTOR ACKNOWLEDGES HAVING READ AND UNDERSTOOD THE MEANING AND EFFECT OF THIS DOCUMENT BEFORE SIGNING IT.
		

		
			All acts and transactions hereunder and the rights and obligations of the parties hereto shall be governed, construed, and interpreted in accordance with the laws of the State of California.
		

		
			Oral Agreements or Oral Commitments to loan money, extend credit, or forbear from enforcing repayment of a debt are not enforceable under Washington Law.
		

		
			 
		

		
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			Signature Page to that certain

		

		

			General Continuing Guaranty

		

		

			 

		

		 
		

		
			IN WITNESS WHEREOF, the undersigned has/have executed this Guaranty as of the date set forth above.
		

		
			 
		

			
					
						 

					
					
						 

				
	
					
						 

					
					
						JONES SODA CO.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						/s/ Jennifer Cue                         

				
	
					
						 

					
					
						By: Jennifer Cue

				
	
					
						 

					
					
						Title: President201401 8-K BFI Ex 103

		

			 

		

		
			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;

		 

		

			 

		

		

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				 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 
		

		 

		

			 

		

		

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			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 
		

		 

		

			 

		

		

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			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 
		

		 

		

			 

		

		

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			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 
		

		 

		

			 

		

		

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		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

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