Document:

exv10w24

Exhibit 10.24

PHARMA GABA SALES CONTRACT

AMONG

Pharma Foods International Co., Ltd. 

AND

Jones Soda Co. 

AND

Mitsubishi International Food Ingredients, Inc.

AND

Mitsubishi Corporation

 

 

Contract

This Contract is made and entered into this 20th day of June, 2007 by and among:

Pharma Foods International Co., Ltd., a corporation organized and existing under the laws of
Japan, having its principal place of business at 1-49, Goryo-Ohara, Nishikyo-ku, Kyoto, 615-8245,
Japan (hereinafter called “PFI”),

Jones Soda Co., a corporation organized and existing under the laws of the State of Washington,
USA, having its principal place of business at 234 Ninth Ave N Seattle, WA 98109 (hereinafter
called “JONES”),

Mitsubishi International Food Ingredients, Inc., a corporation organized and existing under the
laws of the State of Delaware, USA, having its principal place of business at 5080 Tuttle Crossing
Blvd., Suite 400, Dublin, OH 43016 (hereinafter called “MIFI”), and

Mitsubishi Corporation, a corporation organized and existing under the laws of Japan, having its
principal place of business at 2-3-1, Marunouchi, Chiyoda-ku, Tokyo, 100-8086, Japan (hereinafter
called “MC”),

WITNESSETH:

WHEREAS, PFI is engaged in the business, among other things, of manufacturing (including
subcontracting a third person or entity to manufacture) and selling PHARMA GABA (hereinafter
called the “Product”) (as specifically described in Exhibit A, attached hereto and made an
integral part hereof), and has obtained Self Affirmed generally recognized as safe (GRAS) on May
18th, 2007, and desires to supply the Product to JONES through MC and MIFI.

WHEREAS, JONES requires a stable supply of the Product for the production of final products listed
in Exhibit B (hereinafter called the “Final Products”) and desires to purchase the Product from PFI
through MC and MIFI; and

WHEREAS, MC and MIFI are engaged in the business, among other things, of dealing the Product in the
international market and desire to purchase the Product from PFI in order to supply the Product to
JONES;

NOW, THEREFORE, in consideration of the mutual covenants and agreements, the parties hereby

 

 

agree as follows:

1. SALES AND PURCHASE

1.1. PFI shall manufacture (including subcontracting to a third person or entity to manufacture),
sell,
and deliver the Product to MC, and MC shall sell and deliver the Product to MIFI, and MIFI shall
sell
and deliver the Product to JONES, and JONES shall purchase and receive the Product from MIFI, and
MIFI shall purchase and receive the Product from MC, and MC shall purchase and receive the
Product from PFI, in accordance with and subject to the terms and conditions contained herein.

1.2. PFI hereby grants to JONES the exclusive right to use the Product for manufacturing the Final
Products in the United States of America, Canada and Mexico (hereinafter collectively called the
“Territory”). PFI represents and warrants that is has all necessary rights and authority to grant
to
JONES the exclusive rights granted in this Section 1.2, and has not granted any conflicting or
superior
rights to any other person or entity. JONES may sell the Final Products outside of the Territory
on a
non-exclusive basis.

1.3. JONES shall not, without the prior written consent of PFI, which consent will not be
unreasonably withheld, use nor sell the Products other than for manufacturing the Final Products.
JONES shall not, without prior written consent of PFI, which shall not be unreasonably withheld,
knowingly sell the Products to any third person or entity for use of the Products other than for
manufacturing the Final Products.

1.4. JONES shall print and is hereby granted a license to print and use the trademark of the Product,
“PHARMA GABA” on the back label of the Final Products to be manufactured by JONES in the
Territory. JONES shall not, without prior written consent of PFI, use the trademark other than for
printing on the Final Products to be manufactured by JONES and JONES shall not, without prior
written consent, use the trademark or distribute any products that the trademark is printed on, other
than in the Territory

1.5. The exclusive right granted to JONES under this Section 1 shall be terminated in case JONES
fails to purchase at least nine (9) metric tons of the Product from August 1st, 2008 to
July 31st, 2009 on
delivery basis.

1.6 In the event JONES desires to expand categories of the Final Products, JONES and PFI will
discuss such expansion.

1.7 Jones will avoid any sales and marketing activities that are likely to devalue the brand of the
Product. Jones will not take any action that is likely damage the integrity of the brand of the
Product.

1.8 All of the formulas, specifications, trademarks, and other rights in and to the Final Products
shall
be the sole and exclusive property of JONES, and nothing in this Contract will give any of the
other
parties any interest in or to such rights, except with respect to PFI’s ownership of all rights
with
respect to the Product.

2 INDIVIDUAL CONTRACT

2.1 JONES shall order the Product from MIFI, and MIFI shall order the Product from MC, and MC shall
order the Product from PFI, by sending a purchase order via fax or overnight courier stating

 

 

delivery schedule, delivery place, required date of arrival and quantity of the Product. When MC
receives PFI’s notice of acceptance of MC’s purchase order each such purchase order shall be
deemed an individual sale and purchase contract for the Product sold and purchased hereunder
(each, hereinafter called an “IC”) on the terms and conditions of this Contract, and shall be
deemed binding upon JONES and MIFI, MIFI and MC, and MC and PFI. In the event that the
hand-written or typed terms and conditions of an IC conflict with the terms and conditions of
this Contract, then the IC shall prevail, unless otherwise mutually agreed between the parties
to the relevant IC in writing. In the event that the preprinted terms and conditions on the
reverse side or front of an IC conflict with the terms and conditions of this Contract, then this
Contract shall prevail, unless otherwise mutually agreed between the parties to the relevant IC
in writing. 2.2. JONES shall issue a purchase order to MIFI at least ninety (90) days prior to
JONES’ required date of arrival of the Product to the delivery place as set forth below in
Section 5.

3 TERM

3.1. This Contract shall be effective from the date first written above to the 31st of
July, 2010 (the “Term”).

3.2. In the event of expiration or early termination of this Contract, whatsoever the reason, JONES
shall have a ten (10) month period from the date of such expiration or such termination to sell the
remaining Final Products in stock at the time of expiration or termination of this Contract.

3.3. After the above-mentioned ten-month period, all the parties shall discuss in good faith to
find a
solution for the remaining Final Products, including the destruction of the Final Products
remaining in
stock or the authorization to JONES to sell such Final Products. None of PFI, MC nor MIFI have
the obligation to purchase the remaining inventory of the Final Products.

3.4 The above Sections 3.2 and 3.3 will be applied in case of expiration or early termination of
the Contract, whereas it will not be applied in the case when the Contract is effective but JONES
is not entitled to have the exclusivity stated in Section 1.2.

4 QUANTITY

4.1. JONES shall use its commercially reasonable best efforts to purchase a target quantity of 27.5
metric tons of the Product (hereinafter called the “Contract Quantity”) from MIFI during the Term
of
this Contract. The Contract Quantity shall be calculated by ordered amount as of the expected date
of
delivery of the Product to JONES. JONES shall use its commercially reasonable best efforts to order
the Product as follows:

(i) By July 31st, 2008: target quantity 5 metric tons

(ii) By July 31st, 2009: target quantity 9 metric tons

(iii) By July 31st, 2010: target quantity 13.5 metric tons

4.2. Notwithstanding the provisions of Section 4.1 above, for the period from the effective date of
this Contract to July 31st, 2008, JONES shall be obligated to purchase such target quantity as stated in
Section 4.1(i). In the event JONES does not order such target quantity, JONES shall pay to MIFI
( MIFI shall pay to MC, and MC shall pay to PFI the corresponding amount) an amount equal to the
difference between the price for five (5) metric tons of the Product, constituting the target
quantity and

 

 

the amount actually ordered by JONES on or before July 31, 2008.

4.3. JONES shall inform MIFI (which shall inform MC, and MC shall inform PFI) of ordering
forecast which shall have no legally binding effect (hereinafter called the “Forecast”) for each
calendar quarter one month prior to such quarter.

4.4. Notwithstanding stipulated hereinabove, none of PFI, MC or MIFI shall have obligation to
supply any Product, unless the IC is established in respect of the Product; provided, however, that so long as
the purchase order provided by JONES complies with the provisions of this Contract and the terms
and conditions including price and delivery terms are agreed among the parties, the purchase shall be
accepted and become an IC and PFI, MC, and MIFI shall supply the Product ordered.

5 DELIVERY

PFI shall deliver the Product to MC at a place in Japan to be designated by MC in each IC for each
delivery, and MC shall deliver the Product to MIFI on the basis of CIF, a port in U.S.A. to be
designated by MIFI (as defined in INCOTERMS 2000, as amended) in each IC for each delivery, and
MIFI shall deliver the Product to JONES on the basis of DDP (as defined in INCOTERMS 2000, as
amended), a place in U.S.A. as determined by JONES in each IC for each delivery.

6 TITLE AND RISK

Title to and all risks of loss of or damage to the Product shall pass from PFI to MC upon MC’s
receipt of the Product at the place hereinabove mentioned. Titles to and all risk of loss of or
damage to the Product shall pass from MC to MIFI and from MIFI to JONES when the risk of loss of
the Product passes in accordance with each relevant delivery term as defined in INCOTERMS 2000, as
amended.

7 PRICE

The price of the Product under the IC between JONES and MIFI, MIFI and MC, MC and PFI,
(hereinafter called the “Price”) shall be discussed and shall be agreed upon separately by each
relevant parties; provided, however, that prior to the effective date of this Agreement JONES and
MIFI shall have agreed in writing upon pricing for the Product during the Term, which pricing
shall be set forth in Exhibit D to this Agreement and made a part of this Agreement. This
Agreement shall not become valid or enforceable until the terms of Exhibit D have been agreed
upon.

8 PAYMENT

MIFI shall send an invoice for the Product to JONES no later than 10 days after bill of lading
date. So long as MIFI sends the invoice within the 10-day time period after the bill of lading
date, JONES shall pay MIFI for the Product to a bank account designated by MIFI no later than
forty-five (45) days after bill of lading date. MIFI shall pay MC and MC shall pay PFI for the
Product subject to the terms and conditions to be separately agreed upon between MIFI and MC and
MC and PFI respectively.

9 INSPECTION

9.1. JONES shall make and guarantee that the Final Products contain at least the amount of the
Product mutually agreed upon between PFI and JONES. (See Exhibit C for details of the amount of

 

 

the Product included in the Final Products.) Notwithstanding the foregoing, if for any reason
beyond JONES’ control it is not lawful or practical to include the amounts set forth in Exhibit C
in any Final Product, the parties agree to meet and discuss in good faith a new minimum amount for
such Final Product.

9.2. PFI shall inspect the quantity and quality of the Product before the Product passes through
PFI’s manufacturing facility gate for delivery to MC. Upon receipt of the Product, JONES shall
analyze the Product, and if the Product quantity does not conform to JONES’ purchase order or the
IC, or if the Product quality does not conform to the specifications stated in Exhibit A or
otherwise meet the standards set forth in Section 10.1 below or elsewhere in this Agreement, JONES
shall inform MIFI of such deficiency together with Jones’ analytical test details within fourteen
(14) days from receipt of the Product. JONES, MIFI, MC and PFI shall discuss in good faith how to
solve the problem, but without limiting the foregoing, JONES shall have all of the rights provided
under the Uniform Commercial Code as adopted in the State of New York, USA. JONES shall conduct
the Product analysis in accordance with the analytical method that PFI defines in its product
specifications (See Exhibit A),

10 WARRANTIES

10.1 PFI hereby represents and warrants to JONES that:

     10.1. the Product supplied to JONES hereunder shall conform to the specifications stated
in Exhibit A attached hereto;

     10.2 the Product shall be free from material defects, of good and merchantable quality
suitable for human consumption in the manner in which such Product is normally or reasonable
foreseeably consumed;

     10.3 the Product shall comply with all applicable U.S. federal, state, and local laws and
regulations, including, without limitation, those relating to food standards, food safety, and
food labeling as promulgated by the U.S. Food and Drug Administration;

     10.4 it will use commercially reasonable efforts to furnish, operate, and maintain in
good working condition and suitable appearance adequate equipment, devices, and facilities for
the manufacture, storage, and loading of the Product;

     10.5 it will reserve sufficient production capacity to meet reasonably anticipated needs
of JONES as determined by the then current Forecast.

UNLESS OTHERWISE EXPRESSLY STIPULATED HEREIN, MIFI, MC AND PFI MAKES NO WARRANTY OF FITNESS OR
SUITABILITY OF THE GOODS FOR ANY PARTICULAR PURPOSE OR SPECIAL CIRCUMSTANCE.

10.2 MIFI and MC shall not be responsible or liable for any defect of the Product, except to the
extent
such defect is caused by the acts or omissions of MIFI or MC, or their respective, employees,
agents,
or contractors. PFI shall indemnify and hold MC and MIFI harmless from any claims, causes of
actions, liabilities, cost or expenses of any nature whatsoever (including, without limitation
attorney’s
fees and disbursements) arising from any action by JONES or any third person due to any defect of
the Product.

10.3 PFI shall have no liability for defective Product to the extent that any such defect is the
result of

 

 

the failure of JONES, MIFI or MC to follow the storage conditions printed on the Product label
(for example, “Keep cool and dry place.”).

10.4. PFI hereby represents and warrants that PFI is presently registering the trademark of
“PHARMA GABA” in Japan and in the Territory and shall continue to be the legal and beneficial
owner of the trademark once “PHARMA GABA” is authorized as the trademark of the Product.

10.5 Either before or after such registration is completed, PFI shall defend, indemnify and hold
harmless, at its own costs, JONES, MIFI and MC from claims, causes of actions, liabilities, cost or
expenses of any nature whatsoever (including, without limitation attorney’s fees and disbursements)
arising from any action by third parties on grounds of the infringement or alleged infringement of
rights in relation to their use of the trademark in the Territory.

10.6 MIFI and MC represent and warrant that they will comply with all applicable export-import laws
and regulations of Japan and the U.S.A., and supply documentation as reasonably requested by
JONES. JONES agrees to provide all reasonable and necessary assistance to MIFI and MC, as
requested, to comply with such laws and regulations.

11 CLAIM

No claim may be raised by JONES against MIFI, MC and/or PFI with regard to the Product sold and
purchased hereunder unless JONES notifies MIFI, MC and PFI of its claim by registered airmail,
e-mail or fax, containing full particulars of the claim and accompanied by reasonable evidence
thereof within sixty (60) days after the arrival of the Product at the delivery place from MIFI to
JONES; provided, however, that this sentence applies only to first party claims by JONES based
upon defective Product, and shall not apply to third party claims. With respect to third party
claims, each party to this Agreement shall indemnify and hold harmless the other parties with
respect to any and all claims arising out of or resulting from the negligence or willful
misconduct of such party, or such party’s employees, agents, and contractors, or the breach by
such party of the terms of this Contract; provided, however, that as to MC and MIFI, such
indemnity obligation shall not exceed the amount of insurance proceeds (i.e., for each of MC and
MIFI, One Million Dollars (US$1,000,000.00) of primary coverage and Five Million Dollars
(US$5,000,000.00) of umbrella coverage). No party shall be liable to any other party for loss of
profit, incidental, consequential or special damages and/or any indirect damages; provided,
however, that the foregoing limitation shall not apply with respect to third party claims (but MC
and MIFI shall not be liable in an amount that exceeds the amount of insurance proceeds — i.e.,
for each of MC and MIFI, One Million Dollars (US$1,000,000.00) of primary coverage and Five
Million Dollars (US$5,000,000.00) of umbrella coverage) or in the event of willful misconduct or
gross negligence on the part of any party.

12 FORCE MAJEURE

In the event the performance by JONES, MIFI, MC and/or PFI of their obligations hereunder is
prevented by force majeure (as defined herein), directly or indirectly affecting the activities of
JONES, MIFI, MC and/or PFI or any other person, firm or corporation connected with the sale,
manufacture, supply, shipment or delivery of the Product but beyond each of their respective
control, including, but not limited to, act of God, flood, typhoon, earthquake, tidal wave,
landslide, fire, plague, epidemic,

 

 

quarantine restriction, perils of the sea, war or serious threat of the same, civil commotion,
blockade, arrest or restraint of government, rules or people, requisition of vessel or aircraft;
strike, lockout, sabotage, other labor dispute; explosion, accident or breakdown, in whole or in
part of machinery, plant, transportation or loading facility; governmental order or regulation;
unavailability of transportation; curtailment, shortage or failure in the supply of fuel, water,
electric current, other public utility, or raw material including crude oil, petroleum or petroleum
products; or any other causes or circumstances whatsoever beyond the reasonable control of JONES,
MIFI, MC and/or PFI, JONES, MIFI, MC and/or PFI shall not be liable for loss or damage, or failure
or delay in performing its obligations under this Contract and may, at its option, extend the time
of shipment or delivery of the Product or cancel unconditionally and without liability the
unfulfilled portion of this Contract to the extent so affected. Any party claiming excuse from
performance under this Contract due to a force majeure event shall promptly notify the other
parties to this Contract and describe the nature of such force majeure event, the anticipated
delays or other consequences, and an estimate of the duration of such delays or other consequences.
Additionally, any party claiming excuse from performance under this Contract shall use its
commercially reasonable best efforts to minimize any delays or other consequences.

13 NOTICE

Any notice or other communication to be given under this Contract and/or any IC shall be in writing
and shall be deemed to have been duly given (a) on the day of delivery if delivered in person or if
delivered by e-mail or facsimile upon confirmation of receipt, (b) on the second day following the
date of dispatch if delivered by a recognized international express courier service, or (c) on the
tenth day (if international) or third day (if domestic U.S.A.) following the date of mailing if
delivered by registered or certified mail, return receipt requested, postage prepaid. All notices
hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be
designated by notice given in accordance with this provision by the party receiving such notice:

	 	 	 	 	 	 	 
	(a)

	 	To
	 	:
	 	Pharma Foods International Co., Ltd.
	 

	 	Address
	 	:
	 	1-49 Goryo-Ohara, Nishikyo-Ku, Kyoto 615-8245, Japan
	 

	 	Attention
	 	:
	 	Noriko Iwaki, Executive Managing Director
	 

	 	Facsimile
	 	:
	 	+81-75-394-8610
	 

	 	E-mail
	 	:
	 	iwaki@pharmafoods.co.jp
	 
	 	 	 	 	 	 
	(b)

	 	To
	 	:
	 	Jones Soda Co.
	 

	 	Address
	 	:
	 	234 Ninth Ave N Seattle, WA 98109, USA
	 

	 	Attention
	 	:
	 	Peter van Stolk, President and CEO
	 

	 	Facsimile
	 	:
	 	+1-206-624-6857
	 

	 	E-mail
	 	:
	 	pvs@jonessoda.com
	 
	 	 	 	 	 	 
	(c)

	 	To
	 	:
	 	Mitsubishi Corporation
	 

	 	Address
	 	:
	 	3-1, Marunouchi 2-Chome, Chiyoda-ku, Tokyo 100-8086, Japan

 

 

	 	 	 	 	 	 	 
	 

	 	Attention
	 	:
	 	Hiroshi Kojima, Business Manager, Life Science Products Unit
	 

	 	Facsimile
	 	:
	 	+81-3-3210-5219
	 

	 	E-mail
	 	:
	 	hiroshi.kojima@mitsubishicorp.com
	 
	 	 	 	 	 	 
	(d)

	 	To
	 	:
	 	Mitsubishi International Food Ingredients, Inc.
	 

	 	Address
	 	:
	 	5080 Tuttle Crossing Blvd., Suite 400, Dublin, OH 43016, USA
	 

	 	Attention
	 	:
	 	Blair Collins
	 

	 	Facsimile
	 	:
	 	+1-866-245-9095
	 

	 	E-mail
	 	:
	 	bcollins@mitsubishiingredients.com

14 ARBITRATION

Any controversy or claim arising out of or relating to this Contract and any IC, or the breach
thereof shall be settled by arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association, (provided, however, that the parties may agree to use an
arbitrator other than an arbitrator on the American Arbitration Association panel), and judgment
upon the award rendered by the Arbitrator(s) may be entered in any Court having jurisdiction
thereof. Arbitration shall be held in a mutually agreed upon venue in the U.S.A., but if the
parties cannot agree, then the arbitration shall be held in New York City, New York.

15 GOVERNING LAW

This Contract and any IC shall be governed by and construed and interpreted under the laws of
New York without reference to its principles governing conflicts of laws.

16 TERMINATION

Without prejudice to any other remedy, either party hereto shall be entitled to terminate this
Contract and/or any IC forthwith by notice to the other three parties, at any time if any party
defaults in performing any of its obligations hereunder and fails to correct such default within
one (1) month after notice of default or if proceedings in insolvency or bankruptcy or winding up
or any other similar proceedings are instituted by or against any party and such proceedings are
not dismissed within a period of thirty (30) days. In any case, no party may cause a default on
purpose with the intention to terminate this Contract.

17 ASSIGNMENT

No party shall assign, transfer or otherwise dispose of this Contract and/or any IC or any of its
rights, interest or obligations hereunder and/or under any IC without the prior written consent of
the other parties; provided, however, that in the case of any assignment to an affiliate of a
party, or the sale of all or substantially all of the assets or securities of a party, such consent
shall not be unreasonably withheld, so long as the assignee or transferee is bound by the same
obligations of the assignor or transferor.

18 NON-WAIVER

Except as otherwise specifically provided for in this Contract and/or any IC:

 

 

	(a)	 	No failure or delay on the part of MC, MIFI, JONES, or PFI in exercising any right or
power
under this Contract and/or any IC shall operate as a waiver thereof, nor shall any single or
partial
exercise of any such right or power preclude any other or further exercise thereof or the
exercise of
any other right or power hereunder; and
	 
	(b)	 	No waiver of any provision of this Contract and/or any IC shall be effective unless the
same shall
be made in writing and signed by the party against whom such waiver is sought to be enforced.

19 ENTIRE AGREEMENT

This Contract, together with any and all ICs, constitutes the entire and only agreement
between the parties with respect to the subject matter hereof and supersedes, cancels and
annuls all prior or contemporaneous negotiations or communications.

20 AMENDMENT

This Contract and any IC can only be modified by a written agreement signed by the
representatives of all parties hereto.

21 PARTIAL INVALIDITY

If any provision of this Contract and/or any IC is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:

	(a)	 	The validity or enforceability in that justification of any other provision of this
Contract and any IC; or
	 
	(b)	 	The validity or enforceability in other jurisdiction of that or any other provision of
the Contract and any IC.

22 SECRECY

During the term of this Contract, no party shall, without the other parties’ prior written
consent, disclose the existence or contents of this Contract and any IC (hereinafter called
the “Confidential Information”) to third parties, provided, however, that the existence and
contents of this Agreement may be disclosed as required by applicable securities laws and
regulations. Notwithstanding the foregoing, the Confidential Information shall not include
the information which:

	(a)	 	is or becomes generally available to the public through no act or failure to act by the
receiving party;
	 
	(b)	 	was already in the receiving party’s possession at the time of its disclosure as shown
by the receiving party’s prior written records;
	 
	(c)	 	is subsequently disclosed to the receiving party on a non-confidential basis by a third
party without violating any obligation of secrecy relating to the information disclosed; or
	 
	(d)	 	is subsequently independently developed by an employee or agent of the receiving party
who did not have access to the Confidential Information.

23 MISCELLANEOUS

23.1. JONES, MIFI, MC and PFI shall hold face-to-face meetings twice a year and make its

 

 

reasonable efforts to maintain smooth communications among themselves. In this meeting, all the
parties shall discuss the probability of achieving the target quantities and if necessary review
the exclusivity rights granted to Jones as referred to in Section 1.2, for the periods stated in
(ii) and (iii) in Section 4.1,

23.2. JONES shall not, without prior notice to MIFI, MC and PFI and good consultation among the
parties, release or publicize the fact of execution of this Contract and business relationship
with the other parties hereto; provided, however, that the existence and contents of this
Agreement may be disclosed as required by applicable securities laws and regulations.

24 INSURANCE

Each party shall obtain and maintain commercial general liability (CGL) insurance, bodily injury
and property damage combined, including product liability and contractual liability, totaling not
less than One Million Dollars (US$1,000,000.00) of primary coverage and not less than Five Million
Dollars (US$5,000,000.00) of umbrella coverage for the Product and the Finished Products. Upon
written request by any party, such insurance policy shall name the other party as an additional
insured and include an endorsement that such other party shall be provided with at least thirty
(30) calendar days prior written notice of any nonrenewal, cancellation, termination or amendment
of such insurance.

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed by their duly
authorized representatives in quadruplicate, each quadruplicate to be considered an original and
each party to retain one quadruplicate, as of the day and year first above written.

	 	 	 
	
Pharma Foods International Co., Ltd.

	 	 
	Executive Managing Director
	 	 
	 
	/s/
Noriko Iwaki
 

	 	 
	 
	 	 
	
Jones Soda Co.

	 	 
	President & CEO
	 	 
	 
	/s/ Peter Von Stolk
 

	 	 
	 
	 	 
	Mitsubishi International Food Ingredients, Inc.

	 	 
	 President & CEO
	 	 
	 
	/s/ Dai Soejima
 

	 	 
	 
	 	 
	
Mitsubishi Corporation

	 	 
	General Manager
	 	 
	 
	/s/
Nobuhiro Shirasu
 

	 	 

 

 

EXHIBIT A  SPECIFICATION

22-Mar-07

	 	 	 
	 

	 	Pharma Foods International Co., Ltd
	 

	 	1-49 Goryo-Ohara, Nishilcyo-kn,
	 

	 	Kyoto 615-8245, Japan
	 

	 	Phone: +81-75-394-8605
	 

	 	FAX  : +81-75-394-8889

SPECIFICATION

Commodity: PHARMA GABA

Shelf Life   : 2 years

	 	 	 	 	 
	 	 	Specification	 	methods
	 
	 	 	 	 
	Appearance

	 	white to light yellow
powder
	 	Visual appearance
	 
	 	 	 	 
	GABA

	 	more than 80%
	 	Amino acid analysis with HPLC
	 
	 	 	 	 
	Moisture

	 	less than 5%
	 	Hearted-air drying at normal

pressure method

(105°C, 5hrs)
	 
	 	 	 	 
	Ash

	 	less than 15%
	 	550-600°C, 5hrs (Dry ash method)
	 
	 	 	 	 
	Arsenic

	 	less than 2μg/g
	 	DDTC-Ag luminocity absorbance

(Method 3, Apparatus A)
	 
	 	 	 	 
	Heavy Metals

	 	less than 10μg/g
	 	Sodium sulfide colorimetry

(Method 2)
	 
	 	 	 	 
	Total Aerobic Counts

	 	less than 1000 CFU/g
	 	Methods established by Japan’s
Specification and Standards for Food
Additives (Edited by Japan Food
Additives Assosiation,
Total Viable Aerobic Count)
	 
	 	 	 	 
	Yeast and Mold

	 	less than 300 CFU/g
	 	Methods established by Japan’s
Specification and Standards for Food
Additives (Edited by Japan Food
Additives Assosiation,
Pour Plate Method)
	 
	 	 	 	 
	Coliform / E. coli

	 	negative
	 	Methods established by Japan’s
Specification and Standards for Food
Additives (Edited by Japan Food
Additives Assosiation)

   Technical Development Dept.   

 

 

EXHIBIT B

FINAL PRODUCTS

Energy Sport and Isotonic Drinks

	 	 	 
	Code of Federal Regulations	 	Product Category

	11631000

	 	High Calorie beverage, canned
	92553000

	 	Fruit-flavored thirst quencher beverage, low calorie
	92560000

	 	Fruit-flavored thirst quencher beverage,
	92570100

	 	Fluid replacement, electrolyte
	92570500

	 	Fluid replacement, 5% glucose in water
	92650000

	 	Red Bull Energy Drink
	92651000

	 	Energy drink

A GRAS determination has not been made for the following Final Products, but they are part of the
exclusive license granted to JONES:

Beverages, Nonalcoholic; Carbonated,

Beverages, Nonalcoholic; Noncarbonated,

Bottled and canned soft drinks,

Iced Tea & Fruit Drinks, Bottled & Canned,

Fruit Drinks, Less Than 100% Juice, Canned

Lemonade, Bottled & Canned,

Tea, Iced, Bottled & Canned

Carbonated, Canned & Bottled

Soft Drinks, Canned & Bottled

Flavoring extracts & syrups

Fruit Juices, Concentrated, For Fountain Use,

Fruits, Crushed, For Fountain Use,

Cider,

Coffee.

 

 

EXHIBIT C

12oz Carbonated Drink: 200 mg of Product (160 mg of pure GABA)

 

 

EXHIBIT D

PRICE of Product : US$375/kgexv10w25

Exhibit 10.25

Amendment Agreement

This Amendment Agreement (“Agreement”) is made and entered into retroactively effective
as of this 31st day of July, 2008 by and among:

Pharma
Foods International Co., Ltd., a corporation organized and existing
under the laws
of Japan, having its principal place of business at 1-49,
Goryo-Ohara, Nishikyo-ku, Kyoto,
615.8245, Japan (hereinafter called “PFI”),

Jones
Soda Co., a corporation organized and existing under the laws of the State of
Washington, USA, having its principal place of business at 234 Ninth Ave N Seattle, WA
98109 (hereinafter called  “JONES”),

Mitsubishi
International Food Ingredients, Inc., a corporation organized and existing under the
laws of the State of Delaware, USA, having its principal place of
business at 5080 Tuttle
Crossing Blvd., Suite 400, Dublin, OH 43016 (hereinafter called “MIFI”), and

Mitsubishi
Corporation, a corporation organized and existing under the laws of Japan, having its
principal place of business at 2-3-1, Marunouchi, Chiyoda-ku, Tokyo, 100-8086, Japan
(hereinafter called “MC”),

WITNESSETH:

WHEREAS,
PFI, JONES, MIFI, and MC have entered into that certain Contract on
20th of June, 2007
(the “Original Agreement”), by which PFI agreed to sell to JONES, through MC, and MIFI, and
JONES agreed to purchase from PFI, through MC and MIFI, PHARMA GABA, and

WHEREAS,
PFI, JONES, MIFI and MC desire to amend certain terms of the Original Agreement,
including changes to reflect a delay in orders of Products (as defined in the Original
Agreement), and corresponding changes to the exclusivity period and Product specifications,
which such changes are set forth herein.

NOW,
THEREFORE, the parties hereby agree as follows:

Clause 1

Article 1.5 of the Original Agreement is hereby amended to read in its entirety as follows:

“The
rights of exclusivity granted by PFI to JONES under Section 1.2 shall terminate on
December 31, 2008.”

Clause 2

Article 4.1 of the Original Agreement is hereby amended to read in its entirety as follows:

“4.1, JONES shall submit a purchase order for 5 metric tons of the Product prior to
December 31st, 2008 (the “Committed Quantity”), and shall use its commercially reasonable
best efforts to purchase a target quantity of 22.5 metric tons of the Product (together
with the Committed Quantity, the “Contract Quantity”) from MIFI during

 

the Term of this Contract. The Contract Quantity shall be calculated by ordered amount as of
the expected date of delivery of the Product to JONES. In addition to the Committed Quantity
for which JONES must submit a purchase order by December 31st (the “Order Date”),
JONES shall use its commercially reasonable  best efforts to order the remainder
of the Contract Quantity as follows:

	 	(i)	 	By July 31st, 2009: target quantity of 9 metric tons
	 
	 	(ii)	 	By July 31st, 2010: target quantity of 13.5 metric tons.”

Clause 3

Article 4.2
of the Original Agreement is hereby amended to read in its entirety as follows:

“4.2 JONES shall be obligated to submit a purchase order for the Committed Quantity
by no later than the Order Date. Notwithstanding anything to the contrary set forth in
this Agreement or in any purchase order or similar document, Jones shall pay for the
Committed Quantity as follows:

(i) On or before January 31, 2009, (“Payment Date”) Jones Soda shall pay fifty
percent (50%) of the purchase price of the balance quantity of five (5) metric tons (the “Balance Quantity” is equivalent to four point seven five {4.75) metric tons), such amount
being US$890,625, which shall be paid in cash by wire transfer of immediately available
funds into an account designated by MIFI, such wire transfer to be confirmed as received in
MIFI’s designated account no later than the first business day after the Payment Date.

(ii) The remaining fifty percent (50%) of the purchase price for such Balance Quantity
(US$890,625) shall be paid in six (6) equal monthly installments commencing on February
24th,
2009 and ending on July 26th, 2009, each such payment being equal
to US$148,437.50 (the “Installment Payments”), according to the following schedule.

Amount and Date MIFI shall receive payment from JONES

$148,437.50 by February 24,2009

$148,437.50 by March 25, 2009

$148,437.50 by April 24, 2009

$148,437.50 by May 22, 2009

$148,437.50 by June 25, 2009

$148,437.50 by July 26, 2009

(iii) JONES shall arrange for MIFI to receive the Installment Payments by being able
to make demands on an irrevocable, standby letter of credit arranged by JONES and issued by
KeyBank National Association in the form attached hereto as Exhibit A. Such letter of
credit is to be opened in favor of MIFI by February 19, 2009. JONES shall be responsible for
all cost, expenses and charges in connection with issuing such standby letter of credit,
including but not limited to confirmation commission.

 

(iv) In the event JONES does not order the  full Committed Quantity at the time and in
the manner set forth above, or JONES does not open the letter of credit by February
19, 2009, JONES shall pay immediately to MIFI an amount equal to the difference
between the price for five (5) metric tons of the  Product constituting the Committed
Quantity and the amount actually paid by JONES for the Committed
Quantity (and
thereafter MIFI  shall pay to MC, and MC shall pay to PFI the corresponding amount), and
thereafter MIFI, MC and PFI shall each be entitled to terminate the Agreement without
observing the one-month notice period specified in Section 16 as its sole and
exclusive remedy.

(v) After
MIFI receives the US$890,625 in cash by wire transfer and the
letter of credit stated in the above article (iii), MC will ship to MIFI, and MIFI will
ship to JONES or to an entity that JONES designates, the Balance Quantity (in a single
shipment or in multiple shipments by May 31st 2009, as reasonably requested
by JONES), and JONES or its designee will accept the delivery. In the event JONES or
its designee does not accept any delivery by May 31st 2009, MC or MIFI may
dispose all or part of any portion of the Balance Quantity not yet accepted by JONES
at JONES risk and account. For the avoidance of doubt, JONES agrees that it shall be
deemed that MC and MIFI have completed any and all obligation with respect to the
delivery of such Balance Quantity upon such disposal.”

Clause 4

Subsections (a) and (b) in Article 13 of the Original Agreement are hereby amended to read in
their entirety as follows:

	 	 	 	 	 
	 

	 	“(a)
	 	To Pharma Foods International Co., Ltd.
	 

	 	Address
	 	1-49 Goryo-Ohara, Nishikyo-Ku, Kyoto 615-8245,
Japan
	 

	 	Attention
	 	Mujo Kim, President
	 

	 	Facsimile
	 	+81-75-394-0099
	 

	 	E-mail
	 	mujokim@fpharmafoods.co.jp
	 
	 	 	 	 
	 

	 	(b)
	 	To Jones Soda Co.
	 

	 	Address
	 	234 Ninth Ave N Seattle, WA 98109, USA
	 

	 	Attention
	 	Stephen C. Jones, CEO
	 

	 	Facsimile
	 	+1-206 624-6857
	 

	 	E-mail
	 	sjones@jonesoda.com”

Clause 5

The entry titled “Shelf Life” in the Specifications (set forth in Exhibit A to the  Original
Agreement) for all Products to be purchased by January 31st, 2009 is
hereby deleted in its entirety, such that the Specifications for such Product shall not
contain any reference or warranty with respect to Shelf Life.

Clause 6

This Agreement is effective as of the date hereof.

 

 

Clause 7

Except as
expressly amended hereinabove, all other terms and conditions of the Original Agreement shall
continue to be effective and remain unchanged.

Clause 8

This Agreement shall be governed by and construed and interpreted under the laws of New York
without reference to its principles governing conflicts of laws.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly
authorized representatives in separate counterparts (each counterpart to be considered an original
and each party to retain one such counterpart) as of the day and year first above written.

	 	 	 
	Pharma Foods International Co., Ltd.
	 	 
	President
	 	 
	 
	 	 
	/s/ Dr. Muju Kim
 

Date 3/12/09

	 	 
	 
	 	 
	Jones Soda Co.
	 	 
	CEO
	 	 
	 
	 	 
	/s/ Stephen C. Jones
 

Date 2/12/09

	 	 
	 
	 	 
	Mitsubishi International Food Ingredients, Inc.
	 	 
	CEO
	 	 
	 
	 	 
	/s/ Koji Shimizu
 

Date

	 	 
	 
	 	 
	Mitsubishi Corporation
	 	 
	General Manager
	 	 
	 
	 	 
	/s/ Nobuhiro Shirasu
 

Date 3/12/09

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