CO-PACKER AND DISTRIBUTION AGREEMENT

EXHIBIT 10.1

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

CO-PACKER AND DISTRIBUTION AGREEMENT

This Co-Packer And Distribution Agreement is entered into by and among Jones Soda Co. (“Jones”), National Retail Brands, Inc. (“National”) and Shasta Beverages, Inc. (“Shasta” and, collectively with National, “Producer”).

WHEREAS the parties intend that the nature of the relationship is that Jones will identify and negotiate with large retailers in the U.S. for the products described below. National Retail Brands, Inc. / Shasta Beverages, Inc. will manufacture the products using concentrate supplied by Jones Soda Co (“Jones”), and then sell the Jones branded finished products directly to the retailer pursuant to orders or commitments secured by Jones.

In consideration for the mutual agreements, representations and covenants of the parties set forth herein, and subject to the conditions set forth herein, the parties hereby agree as follows:

1. Jones hereby grants National Retail Brands, Inc./Shasta Beverages, Inc. (collectively, “Producer”), the exclusive right in the United States to (i) manufacture Jones Soda in 8 ounce and 12 ounce cans and 1 liter PET bottles of carbonated soda and Jones Energy in 16 ounce cans (collectively, “Products”) with formulas supplied by Jones and utilizing trademarks owned or used by Jones (“Trademarks”), and (ii) sell the Products to all accounts [XXX] purchasing through warehouse distribution. Jones will be responsible for obtaining retail authorization for the sale of the Products and upon obtaining authorization, will authorize Producer in writing to sell Products to such accounts. Currently, Producer is authorized to sell 8 ounce and 12 ounce cans of Jones Soda carbonated soda to Target and 16 ounce cans of Jones Energy to Costco. [XXX] . Producer will have the right to audit the calculation [XXX] . Jones can manufacture the Products at Producer or any other co-packer for distribution outside of the United States [XXX] .

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2. The Products will incorporate the Trademarks and design work as supplied by Jones and all such Trademarks and design work for Products will remain the exclusive property of Jones. Jones represents that it has the right to use the Trademarks, design work and product formula in the manner contemplated herein. Jones will be responsible for the development and related development costs of all graphic designs, artwork, plate charges and the ingredients/formula of all Products.

3. Jones will supply to Producer concentrate necessary for the Products at the prices currently established for packages as set forth on EXHIBIT A . [XXX] . All amounts not paid within thirty (30) days shall bear interest at the lesser of one percent per month (12% per annum) or the highest rate allowed by applicable law. Producer will pay all invoices on a net thirty (30) day basis. Producer will not have the right to offset against such invoiced amounts any sums allegedly owed by Jones to Producer; except that Producer may withhold payments solely for deductions taken by retailers related to marketing/promotional obligations of Jones that have previously been agreed upon in writing between Jones and Producer. Producer and Jones will coordinate to mitigate losses relative to aged Products. [XXX] . Producer will be responsible for the manufacture, storage, inventory, delivery, invoicing, customer credit review and approval, and receivables collection with respect to sales of Products to Jones’ authorized accounts. All credit terms granted to retailers by Producer, if any, will be determined by Producer in its sole discretion. [XXX] . The maximum sku’s per package size at any one time (unless otherwise agreed) are as follows:

4. Jones will provide Producer with a ninety (90) day written rolling forecast of anticipated purchases by retailers of the Products, updated monthly. Producer agrees to produce sufficient Product to meet the requirements for Product as set forth in such rolling forecasts with the intention that annual case volume for all Products is not expected to exceed the number of cases set forth on EXHIBIT A . If case volume is expected to exceed this amount in any calendar year, the parties will mutually agree on a plan to satisfy the requirements for production of Product. Additionally, in the event Producer is unable to meet Jones’ requirements, and in order to avoid Product shortages, Jones shall have the right to use an alternate co-packer to meet the excess demand. Jones shall use its commercially reasonable best efforts to secure the lowest possible minimum commitment in such event, and as soon as commercially reasonable, will resume its full requirements for Product pursuant to the terms of this Agreement by agreement with Producer. Jones agrees to maintain, and make available to Producer, sufficient concentrate to cover the quantities contained in its forecasts. Producer will be responsible for maintaining concentrate inventory for upcoming thirty (30) day forecasted requirements. Producer will provide to Jones sufficient information on a monthly basis to ensure accuracy of rolling forecasts, including monthly and cumulative sales of Products to all customers and finished goods inventory on hand at month end by Product sku by location.

5. Jones will be solely and exclusively responsible for all sales efforts, marketing, advertising and promotion, including all slotting payments, if any. Jones intends to position its 12 oz. soft drink product as a premium priced soft drink product. Producer may elect, at its sole and absolute discretion, to participate in marketing and other promotional activities at its sole cost provided that (i) all marketing, advertising, and promotional materials using any of the Trademarks or design work of Jones shall be approved in writing by Jones in its sole discretion, and (ii) all other sales and marketing efforts shall be coordinated with Jones and the terms of all orders for Products shall be subject to approval by Jones.

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6. All Products will be of good and merchantable quality, manufactured, stored, and shipped in all material respects in accordance with beverage industry standards, and according to the specifications set forth in the Co-Packer Manual as previously agreed to by the parties in connection with product for sales to Target and Costco. All concentrate will be in all material respects of good and merchantable quality and meet the specifications set out in the Co-Packer Manual. All specifications for concentrate and formula shall remain the sole and exclusive property of Jones, and Producer will keep such specifications strictly confidential. Subject to execution of a standard visitor confidentiality agreement, Jones will have the right to inspect that portion of Producer’s production facility used to manufacture Jones Products on reasonable notice and only at such times that Jones Product is manufactured. Producer will supply samples, at Jones expense, as reasonably requested by Jones for quality control testing. Producer will also supply Product to Jones for promotional purposes (and not for resale) at a cost to be agreed upon by Jones and Producer. Jones will have no responsibility for deposits or returns of empty cans under any “bottle bill” or similar federal, state, or local law or regulation; provided that if Jones elects to sell any Product through other channels, and Producer remains responsible for payment of all deposits or similar amounts on such Products, then in such event, Jones shall be required to collect all deposits and similar amounts, where applicable, and remit such collections to Producer promptly following receipt as reimbursement to Producer.

7. Each party shall maintain in force at all times during the term of this Agreement a comprehensive commercial general liability and products liability insurance policy in an amount not less than Ten Millio