LICENSING AND DISTRIBUTION AGREEMENT

EXHIBIT 10.12

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.

LICENSING AND DISTRIBUTION AGREEMENT

This Licensing and Distribution Agreement (“Agreement”) is dated effective this first day of April, 2005 by and between Jones Soda Co., a Washington corporation (“Jones”) and The Kroger Co., an Ohio corporation, on behalf of itself and its Jackson Ice Cream division (“Kroger”).

RECITALS

AGREEMENT

Now, therefore, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree:

“Concentrate” means flavor only concentrate to be provided by Jones to Kroger (whether made by Jones or a third party) for use in manufacturing Novelties.

“Design Work” means all artwork, photographs, designs, drawings, and sketches produced by or for Jones in connection with the Products, and all writings or other documentation produced by or for Jones in connection with such artwork, photographs, designs, drawings, and sketches.

“Effective Date” means April 1, 2005.

“Novelty” or “Novelties” means the frozen, consumable novelty (such as a frozen pop or like product, but not including ice cream, sorbet or similar frozen confection) licensed, manufactured and sold under the terms of this Agreement.

“Pack” means a package containing twelve (12) Novelties.

“Packaging” means any wrapper or other package used to surround an individual Novelty or any carton, enclosure or other package used to segregate the Novelties into Packs or other assemblage of Novelties, together with any appurtenant wraps, promotions or advertising.

“Products” means the Novelties (individually and in Packs) and Packaging.

“Samples” means the Novelties and Packaging purchased by Jones from Kroger in order to promote the sale of the Products, as more fully set forth in Section 7(e) below.

“Term” has the meaning set forth in Section 11 below.

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(a) Grant . Jones is the owner of certain trade names, trademarks and service marks (collectively, “Marks”) which constitute valuable intellectual property of Jones and through substantial investments by Jones have attached to them substantial goodwill and consumer recognition. The Marks that are the subject of this Agreement are shown in the attached Exhibit A, which may be amended from time to time as agreed by the parties. Jones hereby grants to Kroger an exclusive right and license to use the Marks and Design Work in connection with the manufacturing of Novelties for the Term of this Agreement and in accordance with the terms and conditions set forth in this Agreement.

(b) Scope . Kroger agrees that it shall use the Marks and Design Work only for the purposes contemplated by this Agreement, including the promotion and sale of the Products. The Marks will not be used by Kroger as the name, or any part of any name, of any corporation, partnership or other entity or proprietorship under which Kroger transacts any business. Jones shall not use the Kroger name or any of its trade names or trademarks without the prior written consent of Kroger; provided, however, that Kroger will provide Jones with a standard logo that Jones can use solely to identify Kroger as a customer and supplier of Jones.

(c) Jones’ control . Kroger’s use of the Marks and Design Work is subject to the control and approval of Jones in every respect, and any unauthorized use shall constitute an infringement of Jones’ rights.

(d) Advertisements . All advertisements, promotional and sales materials, or other use of the Marks, whether in written, electronic or other form, shall be approved in writing by an authorized representative of Jones before release to members of the public. For the purpose of providing such approval, Jones shall designate an authorized representative to whom Kroger shall forward such items, and Jones shall be obligated to respond to any request for approval within three (3) business days, including the day upon which notice is delivered via e-mail, fax or hand-delivery if before 12:00 p.m. at the location of Jones’ designee. In the event no response is received from Jones by 5:00 p.m. on the third business day, the materials shall be deemed approved. Notwithstanding the above, Jones shall provide Kroger with a standard logo that Kroger can use without prior approval from Jones.

(e) No disparagement . Kroger will not take any action that will impugn the reputation of Jones or in any way denigrate or adversely affect the Marks, Design Work, or associated goodwill. By way of illustration and without limitation, Kroger shall not knowingly sell Products where the Packaging has been torn or noticeably damaged, or any aspect of the Novelty is found to be defective.

(f) Claims . If Kroger receives notice of a threatened or actual claim asserted by any third party with respect to a prior use or other infringement of any of the Marks or Design Work, Kroger shall promptly give notice to Jones of such claim. In such event, Jones shall defend such claim and otherwise take such action as it deems appropriate in its sole discretion subject to its obligations in Section 9.

(g) Sole property of Jones . Kroger expressly understands and acknowledges that the Marks and Design Work are the sole property of Jones, along with the goodwill associated with and symbolized by the Marks and Design Work, and are used for the benefit of Kroger under license. Kroger shall not directly or indirectly contest the validity of Jones’ ownership of the Marks or Design Work. Kroger’s use of the Marks and Design Work pursuant to this Agreement does not give Kroger any ownership interest or any other interest in the Marks or Design Work, beyond the license granted by this Agreement, and upon expiration or termination of this Agreement, no monetary value shall be assigned as attributable to any goodwill associated with Kroger’s use of the Marks or Design Work.

(h) Exclusivity . The license granted herein shall be exclusive for the Term of this Agreement with respect to the manufacture of Novelties in the United States, but shall not be exclusive with respect to any other Jones product or territory. Except as expressly provided in the preceding sentence, the license granted to Kroger is non-exclusive, and Jones retains the right to use the Marks and Design Work on its own behalf, grant others licenses to use the Marks and Design Work, develop and establish other products using the same or similar Marks and Design Work, and grant licenses without providing any rights in such licenses to Kroger. Furthermore, for one (1) year from the Effective Date, Jones agrees that Kroger shall be the exclusive seller of Products.

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(i) Substitution of Marks . Jones reserves the right to substitute different Marks for use in connection with the Products if Jones’ currently owned Marks no longer can be used, or if Jones determines that substitution of different Marks is otherwise necessary under the circumstances.

(k) Royalty . Kroger shall pay a license fee for the license granted herein (“License Fee”) pursuant to the terms of the attached Exhibit B.

(a) Manufacturer . Kroger shall manufacture, package and arrange for delivery of the Products through its wholly owned or controlled manufacturing facility. Kroger shall be responsible for production of all Products (with the exception of the Concentrate, Marks and the Design Work) sold in the United States. No third party co-packer or manufacturer shall be used to manufacture the Products without the prior written consent of Jones in its sole discretion.

(b) Specifications . Jones will have the right and opportunity to review and approve the standards and specifications for manufacture and storage of the Novelties and Packaging.

(c) Packages . The Novelties shall be packaged and sold in Packs unless otherwise agreed upon in writing by the parties.

(d) Requirements from Jones . In order to ensure that the Products sold by Kroger are of consistent and high quality, and to preserve the reputation and goodwill associated with Jones, the Marks, and the Design Work, Kroger agrees that its entire requirements of Concentrate shall be purchased from Jones on the following terms and conditions:

(e) Forecast; Inventory . Commencing on the Effective Date, Kroger will provide to Jones ninety (90) day rolling forecasts, to be updated on a monthly basis, of its requirements of (i) Products, and (ii) units (gallons) of Concentrate. Kroger shall maintain sufficient inventory to meet its requirements of Products as set forth in such forecasts. Kroger shall not be bound by the forecasts and shall have no minimum purchase obligation hereunder.

(f) Quality . All Products will be of good and merchantable quality, manufactured to food industry standards using best quality ingredients. Jones will have the right to inspect Kroger’s production facility

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during normal hours of operation on reasonable notice without interruption to operations, and Kroger will supply Novelties as reasonably requested by Jones at no cost to Jones where such Novelties are used solely for quality control testing.

(g) Ingredients; Packaging . Kroger will be responsible for procuring at its cost and expense all ingredients necessary to manufacture the Novelties, other than Concentrate supplied by Jones as provided for above. Kroger will also provide at its cost and expense all Packaging other than the Design Work (including, by way of illustration, shipping cartons, boxes, wrappers, and sticks) and all pallets.

(h) Flavors . Kroger will initially manufacture Products in the flavors described in Exhibit C. Additional flavors may be added upon further agreement of the parties. Such flavors may or may not be offered in connection with other products sold by Jones.

(i) Third Party Sales . Not later than six (6) months after the Effective Date, the parties will negotiate in good faith and agree upon procedures (e.g., forecast and inventory requirements) and pricing (which shall be consistent with industry pricing for frozen pops of like quality) with respect to Kroger’s production and handling of Products for sale by Jones to third party wholesalers and retailers after expiration of Kroger’s exclusive right to sell Products as forth in Section 2(h) above. In the event the parties cannot agree on such procedures and pricing, they will adhere to the dispute resolution process as set forth in Section 15(a) below.

Jones will be responsible for and have final approval rights with respect to all creative design in connection with the Products and Packaging. Without limiting the foregoing, Jones shall (a) design all Packaging, and (b) collect, sort, and select all photographs submitted for use on or used in connection with the Packaging, provided that Kroger shall have the right to approve such photographs before their use on the Products to ensure that they are not likely to be regarded as offensive or in poor taste by Kroger’s customers, and such approval shall not be unreasonably withheld. For the purpose of providing such approval, Kroger shall designate an authorized representative to whom Jones shall forward photographs, and Kroger shall be obligated to respond to any request for approval within three (3) business days, including the day upon which notice is delivered via e-mail, fax or hand-delivery if before 12:00 p.m. at the location of Kroger’s designee. In the event no response is received from Kroger by 5:00 p.m. on the third business day, the photographs shall be deemed approved.

(a) Promotions . Kroger agrees to use its commercially reasonable efforts to market and promote the Products to the public in areas where Kroger operates its retail stores which sell the Products.

(b) Jones’ Assistance . Kroger agrees to consult with Jones, and Jones agrees to provide reasonable assistance (i.e., advice and consultation) to Kroger in connection with all marketing activities promoting the Products, including all in-store promotions, media advertising, and public relations events and press releases.

(c) [XXX]. Kroger and Jones will [XXX] will be to [XXX] and [XXX] to [XXX] and [XXX] the [XXX] and [XXX] of [XXX]. The [XXX] will also [XXX] regarding [XXX], and will [XXX] at [XXX] in [XXX].

(a) Promotion by Jones . Jones will use its commercially reasonable efforts to promote the Products to cons