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EXHIBIT 10.3    
  

CERTAIN INFORMATION HAS BEEN OMITTED FROM THIS EXHIBIT, AS INDICATED BY "***", PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT THAT HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 
 

JONES SODA COMPANY
  BOTTLE SUPPLY AGREEMENT    
  

        This bottle supply agreement is made this            day
of                        , 2001 by and between Zuckerman-Honickman, Inc. ("Z-H") and
Jones Soda Company ("Jones Soda"). In consideration of the mutual promises herein contained and intending to be legally bound, both parties agree as follows: 

        1.    Requirements:    Jones Soda agrees to purchase 100% of their 12 oz. & 20 oz.
glass bottle requirements from Z-H. Z-H will have the right of first refusal to supply existing and new business upon the terms and conditions specified hereinafter. If
Z-H is unable to fulfill the request, then Jones will have the right to seek supply or quotes from additional suppliers. 

        A.    Bottle pricing effective 1/01/02

 Owens Illinois Bottles  

	Bottle
 
	 	Annual Volume
	 	Price
	 	Ship To

	12 oz. Long Neck Soda	 	0-1.8MM Cases	 	$***/G	 	Woodbridge, ON & Elizabethtown, KY
	

12 oz. Long Neck Soda	
 	

0-1.8MM Cases	
 	

$***/G	
 	

Burnaby, BC & Southern CA
	

12 oz. Long Neck Soda	
 	

0-1.8MM Cases	
 	

$***/G	
 	

Modesto, CA
	

12 oz. Long Neck Soda	
 	

1,800,001 & Up	
 	

$***/G	
 	

Woodbridge, ON & Elizabethtown, KY
	

12 oz. Long Neck Soda	
 	

1,800,001 & Up	
 	

$***/G	
 	

Burnaby, BC & Southern CA
	

20 oz. Juice	
 	

0-75,000/G	
 	

$***	
 	

Woodbridge, ON
	

20 oz. Juice	
 	

0-66,666/G	
 	

$***	
 	

Buena Park, CA
	

20 oz. Juice	
 	

0-66,666/G	
 	

$***	
 	

Forest Grove, OR

        B.    Freight: All pricing is delivered to the locations specified above from the chosen plant of manufacture. Presently,
bottles are scheduled for production in Zanesville, OH and Portland, OR. 

        C.    Price Increases and Decreases: Year 2002 prices hereunder will be those charged by Owens Illinois effective as of the
signing of this agreement, and will remain the same for a period of 12 months. Years 2003 and 2004 prices will reflect increase or decrease with announced industry raw material changes and
announced industry general cost increases from the previous year. Any changes will be preceded by 30 days notice. During the term of this agreement, Owens and-Z-H will
provide Jones with competitive pricing, as compared to that of the other major glass manufacturers. 

Certain information has been omitted from this page, as indicated by "***", pursuant to a request for confidential treatment that has been filed separately with the
SEC.

        D.    Dunnage: All pallets, frames and tier sheets will be memo billed to Jones Soda and rectified on a quarterly basis. Jones
Soda shall be responsible for the replacement of those pallets, frames and tier sheets lost or damaged due to Jones Soda's negligence. Bulk pallets, tier sheets and frames are returnable and cost $***
each. These costs will be memo billed as they are released and reconciled on a quarterly basis. The cost of $*** will remain as it is for the effectiveness of this agreement. 

        2.    Storage:    Jones Soda will be granted six months of free storage at an Owens Illinois
warehouse. However, the storage charge for ware still remaining after six months will be $0.61 per gross per month for 12 oz. ware and $1.12 per gross per month for 20 oz. ware. Jones Soda shall be
required to purchase from Z-H all existing glass bottle inventory produced for Jones Soda at any of the Owens Illinois plants at the end of said contract term. The cost of $0.61 per gross
per month and $1.12 per gross per month for storage will remain as it is for the effectiveness of this agreement. 

        3.    Quality:    Z-H agrees to supply Jones Soda quality bottles that are
consistent with industry standards. If Z-H fails to supply Jones Soda with quality bottles, Jones Soda will give Z-H notice in writing, detailing the precise nature of the
alleged lack of quality. Z-H will then have a thirty (30) day period in which to cure the alleged lack of quality. If the bottles still fail to meet industry standards at the
conclusion of thirty (30) days, Jones Soda will be free to purchase replacement bottles from an alternative supplier for any bottles that do not meet industry standards. Jones retains the right
to receive compensation for damages incurred by lower than industry standard bottles according to the conditions described above and based on the following claim procedure: 1. All claims must be
submitted by Jones to Z-H in writing at the time the damages occurred. 2. All claims must be processed through Owens and Z-H within thirty (30) days. 3. Z-H
will issue a credit to Jones's account in which Jones will then have the right to apply the credit to the invoice in question. If the above quality problem is not cured, then the agreement will be
considered canceled and Jones will therefore not be responsible for the balance of the mold costs. 

        4.    12 oz. Mold Costs:    Blow mold equipment cost corresponding to Owens mold
#GB-16292, 12 oz. Jones Soda, is $*** for both sets of molds, each set to be run in Zanesville, OH. and Portland, OR.,
respectively. At the end of the term of this agreement (3 years), commencing with the date of the initial shipment (or the date the molds are completed if the initial shipment is not within six
months of the mold completion date), Jones Soda has not purchased and paid for a total of a minimum of LOMM gross (6.0M cases) of this item, Jones Soda shall pay for any remaining unamortized balance.
Z-H will invoice Jones Soda for any remaining unamortized balance on a pro rata basis at $*** per gross covering the difference between the quantity actually purchased during the contract
period and the minimum purchase required. This new mold equipment and any additional or replacement equipment built under this job shall at all times be, and remain the property of Owens-Brockway
Glass. So long as the equipment is active in production or commercial quantities, we will retain it for your exclusive use. If, however, no orders for commercial quantities are received or accepted
for any 24-month period, Owens-Brockway shall have the right to scrap, sell, refuse to run, or otherwise dispose of all equipment. 

Certain information has been omitted from this page, as indicated by "***", pursuant to a request for confidential treatment that has been filed separately with the
SEC.

        5.    20 oz. Mold Costs:    Blow mold equipment cost corresponding to Owens mold
#C-9245, 20 oz. Jones Juice, is $*** for set of molds, the set of molds will run in Zanesville, OH. At the end of the term of this agreement (3 years), commencing with the date of
the initial shipment (or the date the molds are completed if the initial shipment is not within six months of the mold completion date), Jones Soda Co. has not purchased and paid for a total of a
minimum of 400,000 gross (2.4 million cases) of this item, Jones Soda Co. shall pay for any remaining unamortized balance. Z-H will invoice Jones Soda Co. for any remaining
unamortized balance on a pro rata basis at $*** per gross covering the difference between the quantity actually purchases during the contract period and the minimum purchase required. This new mold
equipment and any additional or replacement equipment built under this job shall at all times be, and remain the property of Owens-Brockway Glass. So long as the equipment is active in production or
commercial quantities, we will retain it for your exclusive use. If, however, no orders for commercial quantities are received or accepted for any 24-month period, Owens-Brockway shall
have the right to scrap, sell, refuse to run, or otherwise dispose of all equipment. Jones Soda has the option to make molds for the West Coast. All the details above remain the same if Jones Soda Co.
decides to make molds for West Coast except for the following. Blow molding equipment cost is $*** for a set of molds to be run in Portland, OR. If Jones Soda has not purchased and paid for a total of
a minimum of 200,000 gross of this item, Jones Soda shall pay for any remaining unamortized balance. Z-H will invoice Jones Soda Co. for any remaining unamortized balance on a pro rata
basis at $***/gross covering the difference between the quantity actually purchased during the contract period and the minimum purchase required. 

        6.    Service:    Jones Soda agrees to supply in writing to Z-H an annual
projection of bottle usage broken down by month. Jones Soda also agrees to supply in writing to Z-H a 90-day rolling forecast of its requirements, updated the first week of
each month. Z-H agrees to supply Jones Soda bottles on a timely basis consistent with Jones Soda's requirements as reflected in the 90-day forecast. Z-H will use
its best efforts to meet requests for additional bottles in excess of the 90-day forecast, but cannot guarantee supply of the excess bottle. Z-H will utilize any and all
locations necessary to meet Jones
Soda's needs at no additional expense to Jones Soda. Owens-Brockway will keep a minimum of 30 days of inventory in both locations including Portland, OR and Zanesville, OH. 

        7.    Effectiveness and Term:    This agreement will be effective for the purchase of bottles
for three (3) years commencing from January l, 2002. At the end of the term, Jones Soda shall give Z-H the right to match any bona fide written proposal involving Jones Soda and
their glass requirements. Z-H shall have thirty (30) days to match the bona fide written proposal. If Z-H is able to match the proposal, Z-H shall continue
to be the exclusive supplier of glass bottles, consistent with such terms. 

        8.    Payment:    Payment terms will be 1% Net 10, Net 60. Interest will be charged at Wall
Street Journal "prime rate of interest" plus two (2%) percent per annum on all invoices over sixty (60) days. Shipments from Z-H will stop on the 61st day until all
invoices are paid current, or unless it has been mutually agreed upon to extend. 

Certain information has been omitted from this page, as indicated by "***", pursuant to a request for confidential treatment that has been filed separately with the
SEC.

        9.    Confidentiality:    The parties shall use reasonable efforts to cause their respective
employees, agents and other representatives to hold, in confidence, all confidential information (as hereinafter defined), and the parties shall use their best efforts to ensure that any other person
having access to the Confidential Information shall not disclose the same to any person except in connection with this Agreement and otherwise as may be reasonably necessary to carry out this
Agreement and the transactions contemplated hereby or to comply with applicable law. For purposes hereof, "Confidential Information" means all information of any kind (including, without limitation,
sales and promotional results) obtained directly or indirectly from either party's business, except information, which constitutes readily ascertainable public information. "Confidential Information"
shall not include any information which (i) is generally available to the public as of the date of this Agreement, or (ii) becomes generally available to the public after the date of
this Agreement, provided that such public disclosure did not result, directly or indirectly, from any act, omission or fault of either of the parties to this agreement or any of their agents with
respect to such information. 

        10.    Assignment:    This Agreement and all of the provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party shall assign this Agreement without the prior written consent of the other party,
assign to anyone including a subsidiary or affiliate, or such party's rights, but not obligations, to any lender of such party. Subject to obtaining the written consent of Z-H, Jones Soda
agrees that in the event Jones Soda conveys the bulk of its business to a third party (whether pursuant to an asset sale, stock sale or otherwise) during the term of this Agreement, Jones Soda shall
cause the purchaser of such assets, stock or otherwise, as the case may be, to assume the obligations of Jones Soda under this Agreement. 

        11.    Notices:    Any notice or written communication regarding this agreement should be sent
by certified mail, returned receipt requested to: Jones Soda Company 234 - 9th Ave. North, Seattle, WA 98109, Attention: Peter van Stolk, or Zuckerman-Honickman, Inc.,
191 South Gulph Road, King of Prussia, PA 19406, Attention: Ben Zuckerman, or to such other locations as the parties subsequently direct. All notices shall be deemed to have been received three
(3) business days after mailing. 

        12.    Entire Understanding Amendment:    This Agreement contains the entire understanding
between the parties with respect to the subject matter hereof, superseding all prior written oral understandings or agreements. A writing signed by both parties may only amend this Agreement. 

        13.    Arbitration:    All parties to this Agreement agree to attempt to resolve any dispute,
controversy or claim arising out of or relating to this Agreement by mediation. The contents of all discussions of such mediation shall be privileged, confidential and inadmissible in any later
proceeding unless such information was obtained independent of the mediation. If mediation fails to resolve such dispute, any controversy or dispute arising relating to this Agreement or the breach,
termination, enforcement, interpretation or validity of any provision hereof, shall be settled by binding arbitration in Seattle, Washington. Either party to this Agreement can initiate arbitration
pursuant to this Agreement by serving notice on the other party of the intent to arbitrate. The notice shall specify with particularity the claims or issues that are to be arbitrated. Within ten
(10) days of receipt of the notice, the parties shall obtain a list of at least five (5) available arbitrators from the local office of Judicial Dispute Resolution, LLC ("JDR") and
select a mutually acceptable arbitrator. If the parties are unable to agree on an arbitrator within ten (10) days, either party may petition the Presiding Judge of the Superior Court of King
County to select a single arbitrator from the JDR list. The parties shall have the discovery rights available under Washington's Civil Rules, subject to the limitation that each side shall be limited
to no more than twenty five (25) interrogatories and five (5) depositions unless, upon a showing of good cause, the party can convince the arbitrator that more interrogatories or
depositions should be permitted. All discoveries must be concluded within sixty (60) days of the selection of an arbitrator. The arbitration hearing must be concluded within thirty
(30) days of the close of discovery and it will be conducted in accordance with Washington Rules of Evidence. The arbitrator's final decision shall be rendered within ten (10) days of
the final hearing day. Judgment upon the arbitrator's final award may be entered in any court having jurisdiction thereof. Each party shall bear in equal shares the arbitrator's fees and costs. The
prevailing party in the arbitration shall be awarded its reasonable attorneys' fees and all costs, other than the arbitrator's fees and costs. For the purposes of 

determining who is the prevailing party, each party shall submit to the other a single written offer of settlement ten (10) days prior to the start of the arbitration hearing and the party
whose offer most closely approximates the arbitrator's award shall be deemed the prevailing party for the purpose of awarding attorneys' fees. An arbitrator shall decide any disputes about attorney's
fees. 

        IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day and year first above written. 

	ZUCKERMAN-HONICKMAN, INC.	 	JONES SODA COMPANY
	

/s/ Benjamin R. Zuckerman
 Benjamin R. Zuckerman	
 	

/s/ Jennifer Cue
 Jennifer Cue
	

President
 Title	
 	

Chief Financial Officer
 Title
	

December 20, 2001
 Date	
 	

January 11, 2002
 Date

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EXHIBIT 10.3

JONES SODA COMPANY BOTTLE SUPPLY AGREEMENTQuickLinks
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EXHIBIT 10.4    
  

CERTAIN INFORMATION HAS BEEN OMITTED FROM THIS EXHIBIT, AS INDICATED BY "***", PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT THAT HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

 
 

DISTRIBUTION AGREEMENT    
  

        (1)  Parties, Appointment and Purpose:    This Agreement is between Jones Soda Co., its
successors and assigns, 234 9th Avenue North, Seattle, WA 98109 [TEL: (206) 624-3357; FAX (206) 624-6857; EMAIL:
mail@jonessoda.com] ["Supplier"] and Jones Soda of Michigan LLC, 4124 Manchester Road, Kalamazoo, Michigan, USA, 49001 [TEL:
(616) 382-4200; FAX: (616) 382-1109] ["Distributor"]. Supplier is appointing Distributor to sell Supplier's Products within
Distributor's Territory. Exhibit A describes the "Products," "Territory" and contains the terms of sale. The Territory shall be Exclusive except as set forth on Exhibit A. Both parties
know that their individual success will be determined by how effectively and efficiently they cooperate with each other. Both parties agree that the goal of this Agreement is to sell as much of the
Products as possible while maintaining quality control, and preserving the image of Supplier's brand and Distributor's goodwill with its customers while at all times dealing with each other fairly and
in good faith. 

        (2)  Distributor's Promises:    Distributor's primary job is to sell Supplier's products to
eligible wholesale and retail accounts in the Territory as described in the mutually agreed-upon "Sales and Distribution Goals" standards on Exhibit B. Distributor promises that it:
(a) has the state, federal and local licenses and permits necessary for it to do its job; (b) will keep these licenses and permits current; (c) will obey all relevant laws and
regulations; (d) will help Supplier protect its trademarked brands, intellectual property and trade dress from infringement, at Supplier's expense; (e) will transport, store and insure
Supplier's products as required by the "Transportation, Storage, Insurance and Quality Control" guidelines on Exhibit D; (f) will sell only Products of merchantable quality as set forth
on Exhibit D; (g) will exchange important market information with Supplier as described on Exhibit C; (h) will pay Supplier for Products
as called for by Exhibit A; (i) will not transfer its rights under this Agreement unless it has obtained Supplier's permission to do so; (j) will be responsible for any
subdistributors; (k) will indemnify and hold Supplier harmless from all third party claims, losses and expenses (however arising), including reasonable attorneys fees and costs, connected in
any manner with negligent acts (including misfeasance or nonfeasance) by Distributor in connection with the Products; (l) will provide reasonable access to Distributor's sales people to "ride
with" and to communicate and follow up on specific account information; (m) will provide access to Distributor's warehouse to inspect inventory and point of sale merchandise; (n) agrees
to develop an annual sales and distribution plan with mutually agreed upon goals, recognizing that goals in future periods will be based upon previous years sales and distribution performance plus a
reasonable increase or decrease taking into consideration previous years trends, market conditions, new opportunities and sales and distribution performance of like distributors in like markets; and
(o) will provide "Promotions, Point-of-Sale Materials, Samples and Services" as set forth on Exhibit E. 

        (3)  Supplier's Promises:    Supplier's primary job is to assure that Distributor is
furnished with Products and included in marketing decisions that affect the Territory. Supplier promises that it: (a) has the state, federal and local licenses and permits necessary for it to
do its job; (b) will keep these licenses and permits current; (c) will obey all relevant laws and regulations; (d) will allocate its Products, if necessary, as Supplier in its
sole discretion determines; (e) will assure that all Products are of merchantable quality and will deal with unmerchantable Products as set forth on Exhibit D; (f) will exchange
important information with Distributor as described on Exhibit C; (g) will be responsible for producing, bottling, packaging and labeling the Products as required by state and federal
law; (h) will provide "Promotions, Point-of-Sale Materials, Samples and Services" as set forth on Exhibit E; (i) will 

1

 

take such reasonable and lawful actions as are necessary to protect Distributor's Exclusive Territory including, but not limited to, not selling the Products to any person or entity whom the Supplier
knows (or has reason to know) may directly or indirectly sell or distribute the Products in the Territory except for "National, Regional or Promotional Accounts" as described on Exhibit A; and
(j) will indemnify and hold Distributor harmless from all third party claims, losses and expenses (however arising), including reasonable attorneys fees and costs, connected in any manner with
Distributor's or a consumer's use of the Products, defective manufacture or processing of the Products, negligent acts (including misfeasance or nonfeasance) by Supplier in connection with the
Products, any claim related to Supplier's advertising of the Products or claims relating to Supplier's trademarks, trade dress or intellectual property. 

        (4)  Term and Termination:    This Agreement shall be effective on July 1, 2001 and
shall remain in force for a three year period until June 30, 2004. Commencing on July 1, 2004, and on each anniversary date thereafter, the Agreement shall be automatically extended for
successive one-year terms unless Supplier gives notice to Distributor of its intention not to renew the Agreement, based upon good cause, as defined in Exhibit F. Both parties agree
that the promises made in this Agreement (and in the exhibits) are reasonable, material and important and the breach by either party of any promise made to the other is agreed to be "good cause" for
termination or non-renewal of this Agreement. Exhibit F describes the standards to be applied to a determination of breach. 

        (5)  General Legal Matters:    (a) Governing Law, Amendments
and Merger: This Agreement shall be governed by the law of the State of Washington, may not be amended except by a writing signed by both parties and shall supersede any and
all prior discussions between the parties concerning the
subject matter. (b) Waiver: No waiver by either party of a right on any one occasion shall constitute a waiver of such right on another occasion,
and all such claimed waivers must be in writing signed by the party against whom the waiver is claimed. (c) Enforceability of Clauses: If any
provision of this Agreement violates any law, it shall be severed from this Agreement without affecting the rest of the Agreement. (d) Consent
Required: Neither party is the agent or franchisee of the other party, and neither party, under any circumstances, may bind the other party to any agreement or obligation to
any third person without the written consent of the party being bound. (e) Warranty of Authority: Both parties represent and warrant that they
have the full right and authority to enter into this Agreement without violating the rights of any third party. (f) Notices: All notices shall be
effective as of the date mailed or telecopied to the address and telecopier number set forth above. (g) Disputes: The parties shall first attempt
to resolve any dispute related to this Agreement in an amicable manner by mediation with a mutually acceptable mediator. If unable to agree upon an acceptable mediator, either party may ask the
American Arbitration Association ("AAA") to appoint a neutral mediator, and the mediation shall be conducted under the Commercial Mediation Rules of the AAA. Any disputes remaining unresolved after
mediation shall be settled by binding arbitration conducted in Seattle, Washington under the Commercial Arbitration Rules of the AAA. Notwithstanding the foregoing, either party may apply to any court
of competent jurisdiction for such equitable, extraordinary or injunctive relief as may be necessary to enforce the respective rights of the parties under this Agreement. The prevailing party in
arbitration or litigation shall be entitled to recover its costs and reasonable attorney's fees, as determined by the arbitrator or other judge. 

2

 

Both
parties have negotiated this Agreement freely and in good faith with the assistance of their counsel, acknowledge having read all of the terms of the Agreement and the Exhibits, and fully
understand that they are each obligated to fulfill the promises they have made to each other. 

	SUPPLIER:	 	DISTRIBUTOR:
	

By:	
 	

/s/	
 	

By:	
 	

/s/
	 	 	
	 	 	 	

	Dated:	 	September 12, 2001	 	Dated:	 	September 5, 2001
	 	 	
	 	 	 	

3

 
 
 

EXHIBIT A    
    
    PRODUCTS, TERRITORY, EXCLUSIVITY AND TERMS OF SALE    
  

	1.
	Products: Jones Sodas, Whoop Ass, Slim Jones and Jones Juice. 

All
new products that Jones Soda Co. develops will be offered to distribute to the Distributor and the Distributor shall have a 30 day first right of refusal to distribute such products. 

	2.
	Prices: Attached is Supplier's current price list for the Products. Supplier may amend this price list upon 30 days' written
notice to Distributor. 

	3.	Territory:	 	State: Michigan	 	Counties: All
	

 	

 	
 	

State: Indiana	
 	

Counties: Dekalb, Steaben, Elkhart, LaGrange, Allen, Marshall, Noble, Whitten, Wabash, St. Joe, Porter, Kosciusko, Lake LaPorte, Starke
	

 	

 	
 	

State: Ohio	
 	

Counties: Lucas, Wood, Fulton, Defiance, Williams, Henry

	4.
	Exclusivity: The territory shall be exclusive. The Supplier has included in this Agreement and shall include in every distribution
agreement that it executes with new distributors, or any renewals with existing distributors, the following provision (which is expressly included in this Agreement): The
Distributor designated herein agrees that it will not violate the territorial integrity of any other distributor having an exclusive Territory granted to it by the Supplier and further agrees that in
the event of a violation of this provision, the Supplier may take such action as it deems appropriate.

	5.
	National, Regional and Promotional Accounts:

If
the Supplier wishes to sell Product to a National Account, the Distributor shall give the Supplier its fullest cooperation to assist the Supplier or its designated supplier to supply Product to the
National Account in question and to support any marketing or promotional activities initiated or endorsed by the Supplier for that National Account. The Supplier and Distributor shall: 

At
any time during the term of this Agreement, the Supplier may wish to sell products to certain inaccessible accounts categorized as either Promotional or Non-DSD accounts and described
below, located within the Territory. The Supplier and the Distributor shall mutually agree to the distribution of these accounts and which shall be treated as below: 

	a)
	Promotional
Accounts. Promotional Accounts shall be accounts targeted primarily for their strong market presence. All future Promotional Accounts shall be mutually agreed to by the
parties to this Agreement in writing. The Distributor shall not be entitled to any commission for any sales to Promotional Accounts located within the Territory.

	b)
	Non-DSD
Accounts. Non-DSD Accounts are national or regional accounts in the Territory that (i) require warehouse deliveries and do not permit their
stores the option of receiving direct-store-delivery for any single-serve beverage products or (ii) only permit deliveries of single-serve beverage products from designated distributors.
Provided these accounts do not re-sell on a wholesale basis, the Supplier will service these accounts exclusively and directly. The Supplier shall pay the Distributor *** ($***) per case
sold to any of these accounts in the Territory. 

All
future Non-DSD Accounts must be mutually agreed to in writing by the parties to this Agreement. In the events these accounts are acquired by the Supplier, the Supplier shall allocate a
specified amount, based on these sales to the funding of regional advertising promotions in an effort to aid and support all local distributors. 

4

 

	6.
	Inventory Levels and Ordering Cycles: Distributor shall at all times: (a) maintain an inventory level of the Products sufficient
to satisfy anticipated or projected sales within the Territory for a 30-day period taking into account anticipated consumer demand on a seasonal basis and its forecast for the following
quarter; and (b) notify Supplier within a reasonable period of any event within the Territory that could result in monthly projections varying more than 10% during any particular period.

	7.
	Terms of Sale: Distributor's orders are subject to acceptance by Supplier at its office address set forth in this agreement. Supplier
may accept or reject orders and may require Distributor to use Supplier's forms and procedures. Distributor shall pay Supplier for Products shipped at the price stipulated on each invoice. Payments
shall be due and payable in cleared funds by check or electronic funds transfer (or as otherwise agreed to by Supplier in writing) received by Supplier not later than *** days from the date of
invoice. Invoices may be transmitted to Distributor by facsimile machine or by mail. If cleared funds are not received by Supplier for any invoice within *** days, Distributor shall pay a late charge
of 1.5% of the price set forth on the invoice for each ***-day period, or part thereof, that such invoice shall remain unpaid. Supplier may, from time to time, set forth credit limits
applicable to Distributor's purchases. If, in Supplier's judgment, Distributor should not be granted or continue to receive credit, whether because of an arrearage in its payments or otherwise, then
Supplier has the unqualified right to reduce or withdraw entirely Distributor's credit limit (if any) or only to sell to Distributor on a cash basis, without prior notice. 

Failure
by Distributor to pay any sum by the due date shall entitle Supplier to suspend any further performance under this Agreement (without prejudice to any right Supplier may have to terminate this
Agreement). Supplier reserves the right at any time in its absolute discretion to demand immediate payment of any account whether due or not. Distributor may deduct from amounts it owes Supplier any
amount owed by Supplier to Distributor for Supplier authorized and approved billbacks (i.e., samples, discount and incentive programs, etc.) if such amounts remain unpaid or uncredited 90 or more days
after the date of Distributor's invoice. There shall be no right of off-set by Distributor for any billback invoice that is being contested in good faith by Supplier, or for which billback
invoice Supplier has requested supporting documentation and such documentation has not been furnished by Distributor. 

Title
to Products and risk of loss pass to Distributor when the Products have been delivered to the Distributor's premises, unless the Distributor elects to pick-up product from the
Supplier wherein title and risk will pass when the product is loaded upon the Distributor's carrier at Supplier's premises. 

initialed:                /s/
[Supplier]                /s/ [Distributor] 

Dated:
September 12, 2001 

Certain information has been omitted from this page, as indicated by "***", pursuant to a request for confidential treatment that has been filed separately with the
SEC.

5

 
 
 

EXHIBIT B    
    
    SALES AND DISTRIBUTION GOALS    
  

(1)  SALES GOALS  

	All Jones Soda Products*	 	July 1, 2001—June 30, 2002	 	650,850 cases**

*  All
Jones Soda Products include Jones Soda, Jones Whoopass and Jones Juice

**Jones Soda in 24 packs; Jones Whoopass in 24 packs; Jones Juice in 12 packs 

For
subsequent years, the parties agree to meet prior to July 1, 2002 and July 1, 2003 to establish sales goals for the upcoming year. Sales goals will be determined based on current
market conditions and investment spending by both parties. For the second and third years of the agreement, the sales goal will be the greater of the new objective established, or 15% greater than the
previous year. Failure to meet at least 80% of the sales goals as outlined above for the period indicated is indicative of an unsuccessful effort to distribute the Product in the Territory and the
Distributor shall not be entitled to the compensation set out in Exhibit F upon such termination. 

(2)    DISTRIBUTION GOALS:    Distributor shall use its commercially reasonable best efforts to place, within nine months of the
date of the Agreement, at least *** (***) SKU's of Jones Soda, Whoopass Energy Drink and *** (***) SKU's of Jones Juice in not less than ***% of Distributor's accounts that carry
non-alcoholic new age/alternative beverage products. 

NO DUMPING:    No one retail account (consisting of one retail location or a group of affiliated retail locations considered to be one
"account"), other than those identified and pre-approved by Supplier, may account for more than 10% of Distributors sales during any calendar year. In the event that more than 10% of
Distributors total sales during any one calendar year are made to one or more affiliated retail account, Supplier shall consider Distributor to be "dumping" product on the market, which adversely
affects Supplier's brand image in contravention of the purpose of this Agreement. In the event that sales in excess of 10% are made to one retail account (as defined herein), not previously approved,
during any calendar year, the amount of such sales in excess of 10% shall not be counted towards satisfaction of Distributor's sales obligations in accordance with this Agreement 

initialed:                /s/
[Supplier]                /s/ [Distributor] 

Dated:
September 12, 2001 

Certain information has been omitted from this page, as indicated by "***", pursuant to a request for confidential treatment that has been filed separately with the
SEC.

6

 
 
 

EXHIBIT C    
    
    INFORMATION EXCHANGE    
  

	(1)
	REPORTS: Distributor shall report the following information on Supplier's forms on the schedule set forth below: 

	Depletions	 	30 days after month end
	Forecast of Quarterly Sales	 	30 days before quarter begins
	Annual Sales/Distribution Plan Objective Review:	 	Quarterly
	Sales by Chain	 	30 days after quarter end
	Number of Accounts	 	30 days after quarter end
	Promotional Program Results	 	30 days after quarter end

	(2)
	MEETINGS: Supplier, and the person designated by Distributor as the brand manager for Supplier's products, agrees to meet at least once
every quarter for the purpose of joint planning. The primary objective of such meetings shall be to review Distributor's performance during the preceding period, to develop subplans to achieve annual
sales and distribution plans and to negotiate the sales and distribution projections to be applied to this Agreement for future periods. Neither Distributor nor Supplier shall be required to bear any
costs of travel, room and board, etc., associated with the other party's time or travel to attend such meetings.

	(3)
	PROTECTION OF INFORMATION EXCHANGED: Distributor and Supplier agree that each needs accurate and timely information from the other on a
regular basis to do its job properly. Each promises that it will protect and safeguard the information that it receives from the other and will not share it with any person outside of Supplier's or
Distributor's organization unless (a) the party furnishing the information has given prior written permission for such information to be shared; (b) it is required to do so by a
competent authority; or (c) for the purposes of enforcing the terms of this Agreement. Distributor acknowledges that certain information it receives from Supplier would be useful to Supplier's
competitors, and if furnished to such competitors, would cause Supplier great harm in the marketplace. 

Initialed:                /s/
[Supplier]                /s/ [Distributor] 

Dated:
September 12, 2001 

7

 
 
 

EXHIBIT D    
    
    TRANSPORTATION, STORAGE, INSURANCE AND QUALITY CONTROL GUIDELINES    
  

        Distributor shall ensure that only products of merchantable quality are sold. Unmerchantable product is defined to be Product that (a) is spoiled, putrid
or foul, (b) does not conform to Supplier's manufacturing specifications for such Product, or (c) has sustained damage to its primary or secondary packaging and is no longer commercially
marketable. 

        Supplier
shall replace, at its own expense, all unmerchantable Products, including transportation costs of getting replacement Product to Distributor. Supplier shall reimburse
Distributor for its reasonable costs of collecting any Product (including any Product subject to a product recall ordered by any government agency having jurisdiction over the Product or either of the
parties) found to be spoiled (or unfit, for any reason, for human consumption) and either destroying such Product or returning Product to Supplier (at Supplier's option) at the greater of $*** per
case or Distributor's reasonable costs incurred. Supplier guarantees that the freshness of the Product from one year following the date of production. 

        Distributor
shall promptly notify Supplier of any complaints and/or proceedings in the Territory relating to the Products. Distributor shall provide Supplier with all reasonable
cooperation and assistance to investigate the same and shall comply with any reasonable requests made by Supplier in the course of dealing with such complaints or proceedings. 

        Each
party warrants that it has, and shall continue to maintain at all times during the term of this Agreement, at its expense, commercial general liability insurance covering Products
and complete operations in an amount not less than $5 million per occurrence in respect to bodily injury and property damage. Each party agrees to provide the other with a certificate of
insurance that shall name the other as an additional insured. Such certificate shall provide that insurance coverage may only by terminated or materially modified upon at least 30 days prior
written notice by the insurance company to the party affected. 

initialed:                /s/
[Supplier]                /s/ [Distributor] 

Dated:
September 12, 2001 

Certain information has been omitted from this page, as indicated by "***", pursuant to a request for confidential treatment that has been filed separately with the
SEC.

8

 
 
 

EXHIBIT E    
    
    PROMOTIONS, POINT OF SALE MATERIALS, SAMPLES AND SERVICES    
  

        Distributor and Supplier shall share equally the costs of all Product samples used in the Territory, at Distributor's laid-in cost. Distributor and
Supplier shall share equally the cost of Discount and Incentive programs. Distributor and Supplier will share equally the cost of all promotional merchandise including wearables, permanent signage,
and display furniture; such items to be valued at Supplier's actual cost. 

        All
paper point-of-sale and promotional materials produced by Supplier shall be made available to Distributor at no cost to Distributor in such amounts and at
such times as Supplier determines, in its sole discretion. 

        Distributor
may not, without Supplier's prior written consent, create or procure the creation of any advertising or promotional materials for the Products, and Distributor shall at
Supplier's request assign or procure the assignment of copyright and other intellectual property rights in any such material. 

        Distributor's
and Supplier's marketing activity, which includes incentive programs, local event participation, promotional merchandise, samples, advertising or special promotional
programs, will be the subject of separate agreements between Supplier and Distributor made from time to time. 

        Distributor
will, prior to incurring an expense for which it expects reimbursement from Supplier, in whole or in part, obtain Supplier's prior written approval. 

        Distributor
shall provide no less a service to its customers who purchase the Products than it does for other products which it sells and shall maintain an appropriate sales force,
delivery system and take other appropriate measures to increase sales and distribution of the Products in the Territory. 

        Supplier
will provide the following marketing credits for each of the Jones Soda products: 

	Jones Soda	 	—	 	$*** per case
	Jones Whoopass	 	—	 	$*** per case
	Jones Juice	 	—	 	$*** per case

initialed:                /s/
[Supplier]                /s/ [Distributor] 

Dated:
September 12, 2001 

Certain information has been omitted from this page, as indicated by "***", pursuant to a request for confidential treatment that has been filed separately with the
SEC.

9

 
 
 

EXHIBIT F    
    
    TERMINATION PROVISIONS    
  

Termination  

        It is the express intention of the parties that each party has the right to terminate or not to renew the annual term of this Agreement, for the reasons stated in
the notice of termination and/or non-renewal, without incurring any liability to the other party except as expressly set forth herein. 

        Supplier
may cancel or otherwise terminate this Agreement immediately and without notice if Distributor (i) is insolvent, (ii) has given an assignment for the benefit of
Distributor's creditors, (iii) has filed for bankruptcy, or (iv) has intentionally defrauded Supplier. If Supplier terminates this Agreement for any of the above stated reasons, Supplier
shall not be liable to Distributor for damages and/or liquidated damages in any sum whatsoever. 

        Supplier
may terminate this Agreement at any time, or not renew this Agreement at the end of any specified term, for "good cause" upon 30 days notice to Distributor. "Good cause"
shall mean (i) negligent or intentional misrepresentation of a material fact, (ii) the failure of Distributor to fulfill any of the promises made by Distributor in this Agreement, or
(iii) the failure of Distributor to meet the performance criteria established by Supplier and Distributor pursuant to the provisions of Exhibit B. In the event the termination or
non-renewal is for good cause, then during the 30-day period after written notice from Supplier, Distributor has the right to cure any default, deficiency, breach of promise or
failure of performance set forth in the notice of termination or non-renewal as a basis for termination/non-renewal for cause, if the same is curable. If Distributor fails
substantially to cure the default within the 30-day period, then Supplier may immediately thereafter terminate or not renew the Agreement without incurring any liability whatsoever to
Distributor for damages and/or liquidated damages. 

        Supplier
may elect not to renew this Agreement, in its sole discretion, by sending Distributor a notice of non-renewal no later than 30 days before the first, or any
later, anniversary date of this Agreement. If the termination or non-renewal is without good cause, then Distributor's damages shall be limited to and calculated in accordance with the
Liquidated Damages provision of this Agreement. 

Liquidated Damages  

        In the event a termination or non-renewal by Supplier is without good cause, the parties agree that the damages outlined below shall be the only
damages to which Distributor shall be entitled. In the event any law or regulation shall be construed to require payment by Supplier for any damages incurred by Distributor as a result of Supplier's
breach or termination of this Agreement in accordance with its terms, or there shall, for any reason, be a finding that Supplier is liable to Distributor for damages resulting from Supplier's breach
or termination of this Agreement, or Supplier's termination of this Agreement is without good cause, the parties agree that the damages outlined below shall be the only damages to which Distributor
shall be entitled. 

        The
parties acknowledge that because of the uncertainties inherent in the market for the Products, the tastes of the consuming public, Distributor's profit margins, the valuation of good
will, if any, and certain other factors, it would be virtually impossible to fix Distributor's actual damages, if any, that would result from Supplier's breach or termination of this Agreement in
whole or in part. The parties further acknowledge that the liquidated damages, calculated as set forth below, constitute reasonable, fair and equitable compensation to Distributor for damages, if any,
that Distributor may incur as a result of Supplier' breach or termination of this Agreement, particularly because Distributor is free to distribute the Products of suppliers other than Supplier. 

10

 

        The
parties further agree that all sums Supplier tenders under this section shall constitute the payment of valid and complete liquidated damages to the Distributor and shall be in
satisfaction of any other claims amounts and in payment and settlement of all claims and liabilities which Distributor may have against Supplier in connection with, or as a result of, any such breach
or termination, including any and all claims for incidental or consequential damages. The parties further acknowledge and agree that such liquidated damages do not constitute a penalty. The amount of
the liquidated damages to be paid shall be an amount equal to Distributor's "gross profit" for each case of Product Distributor sold for the full consecutive twelve-month period preceding notice of
termination or non-renewal of the Agreement. The term "gross profit" shall mean the difference between the cost, net of discounts, of Supplier's Product based on invoices from Supplier,
and the price received by Distributor for sale and distribution of the Product plus promotional reimbursement from Supplier for discounts. 

Return of Materials  

        Upon expiration or any termination, within thirty (30) days after the effective date of such expiration or termination, Distributor shall return to
Supplier (or shall make disposition of as directed by Supplier) all property belonging to Supplier in Distributor's possession or control. Such return (or other disposition) shall be at Supplier's
expense. 

Repurchase of Inventory  

        Upon expiration or any termination, Supplier shall have the obligation, within thirty (30) days after the effective date of such expiration or termination,
to buy Distributor's inventory of the Products, provided said Products are in good and salable condition, at Distributor's laid-in cost. 

        Balancing of Accounts:    No later than thirty (30) days after the effective date of termination
of this Agreement, each party shall submit to the other a statement of account detailing sums allegedly owing to or from the respective party to the other party. Both parties will then make a good
faith effort to negotiate with each other and to balance the accounts between themselves. Any issues left open between the parties at the completion of the negotiations shall be submitted to dispute
resolution as provided in this Agreement. 

Appointment of Replacement Distributor  

        Supplier shall be entitled, following the service of any notice of termination, to appoint a successor to Distributor as distributor in the Territory who shall be
entitled to make himself known during the notice period as Supplier's distributor able to do business in relation to the Products with effect from the day after termination of this Agreement.
Distributor shall cooperate fully with all reasonable requests made by Supplier or any such successor distributor in order to ensure the orderly transfer of the business related to the Products to
such successor. 

initialed:                /s/
[Supplier]                /s/ [Distributor] 

Dated:
September 12, 2001 

11

QuickLinks

EXHIBIT 10.4

DISTRIBUTION AGREEMENT

EXHIBIT A PRODUCTS, TERRITORY, EXCLUSIVITY AND TERMS OF SALE

EXHIBIT B SALES AND DISTRIBUTION GOALS

EXHIBIT C INFORMATION EXCHANGE

EXHIBIT D TRANSPORTATION, STORAGE, INSURANCE AND QUALITY CONTROL GUIDELINES

EXHIBIT E PROMOTIONS, POINT OF SALE MATERIALS, SAMPLES AND SERVICES

EXHIBIT F TERMINATION PROVISIONS

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