exv10w1



 





Exhibit 10.1




AGREEMENT FOR THE PURCHASE AND SALE OF

BIODEGRADABLE RESINS




     This AGREEMENT FOR THE PURCHASE AND SALE OF BIODEGRADABLE RESINS (this “Agreement”) is made as
of December 1, 2006 by and between Alcoa Kama, Inc, a Delaware corporation (“Buyer”), and
Cereplast, Inc., a Nevada corporation (“Seller”).



BACKGROUND




     Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, Biodegradable
Resins (“Product”) meeting the Specifications set forth in Exhibit A attached hereto (the
“Specifications”), pursuant to the following terms and conditions.



     In consideration of the premises and the mutual covenants hereinafter contained and intending
to be legally bound hereby, the parties hereto agree as follows:



     1. Term. This Agreement will have XXXXXXXX”term (the “XXXXXXXX”) commencing December
1, 2006 (the “Commencement Date”) and expiring December 31, XXXXXX. Unless terminated upon written
notice by Buyer on or before the date which is sixty (60) days prior to the expiration of the
then-current term, this Agreement will thereafter automatically renew for additional XXXXXX terms
(each, an “Additional Term” and, together with the XXXXXXXXXXX).



     2. Purchase and Sale Commitments.



     (a) Each calendar year during the Term of this Agreement, Seller will sell and deliver to
Buyer, and Buyer will purchase and accept from Seller, in conformance with (i) the Specifications,
and (ii) the other provisions of this Agreement, a maximum of
XXXXXXXXXXXX(million) pounds of Product per calendar year (the
“Annual Quantity”). The parties acknowledge and agree that, notwithstanding the foregoing, Buyer
shall not be obligated to purchase any minimum quantity of Product hereunder.



     (b) XXXXXXXXXXXXXXXXXXXXXXXXXX



     3. Price; Payment.



     (a) Price. The price, per pound, for Product, delivered in accordance with Article
4(a) below, shall be as set forth in Exhibit B attached hereto.



     (b) Payment Terms. Unless otherwise expressly set forth in this Agreement, the terms
of payment are XXXXXXXXXXXXXXXXXXXXXXX



     4. Delivery; Title; Risk of Loss; Loading.



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     (a) Unless otherwise agreed between the parties for any individual shipment, all Product
shipped hereunder shall be delivered XXXXXXXXXXXXXXXXXXXXX



     (b) Buyer will bear the cost of transportation of the Product to such destination. Seller
will utilize Buyer’s designated Transportation Management System (TMS) to determine the method,
agency and routing of transportation will be designated by Seller. Excess packing, shipping and
transportation charges resulting from compliance with respect to the use of any agency or method of
transportation or any routing other than that which would be designated by Buyer’s TMS shall paid
by the Seller, unless Seller obtains Buyer’s advance written approval prior to incurring any such
additional costs. Title to the product, and risk of loss or damage of the Product, will pass to
Buyer upon unloading of the Product at Buyer’s facility.



     5. Warranty. Seller warrants that all Product delivered hereunder will conform to
applicable Specifications, drawings, instructions, data, samples, standards and regulations, and
will be merchantable, free from defects in design, material and workmanship, will be as described
and advertised, of good quality, fit for the intended purposes, and will be free from all liens and
encumbrances. These warranties are in addition to all other warranties, express, implied or
statutory, which may be applicable. Seller shall indemnify, defend and hold Buyer harmless from
any breach of these warranties without prejudice to any other rights or remedies of Buyer.
Limitations on Buyer’s remedies (or disclaimers of warranties), whether contained in documents of
Seller, or otherwise, shall not be effective and are hereby objected to and rejected. All
warranties and other provisions of this paragraph shall survive inspection or acceptance of,
payment for, and use of the Product and completion, termination, or cancellation of this Agreement,
and shall run to Buyer, its customers, successors, and assigns, and to users of the Product.



     6. Competitive Pricing. XXXXXXXXXXXXXXXXXXXXXXX



     7. Taxes. If Seller is required by law to collect sales and use tax (including any
gross receipts tax imposed similar to a sales and use tax) from Buyer on behalf of any taxing
jurisdiction, Seller shall provide to Buyer invoices which separately state and clearly indicate
the amount of tax and Buyer shall remit any such tax to Seller. Seller shall have the
responsibility of complying with all applicable foreign, national, state or local laws regarding
value added tax and sales and use tax or substitutes therefore including registration, collection
of taxes and the filing of returns where applicable. Notwithstanding whether Seller must collect
sales and use tax from Buyer, Seller shall state on every invoice the taxing jurisdiction (e.g.
country, state and local jurisdiction) in which Product was provided. If applicable, in lieu of
payment for any sales and use tax, Seller shall accept a properly executed exemption or direct pay
certificate from Buyer. The determination of whether an exemption or direct pay certificate will
be submitted to Seller in lieu of payment for any sales and use tax shall be made by Buyer on a
location by location basis. With the exception of sales and use tax as described above, all other
taxes, however denominated or measured, imposed upon the Seller, or the price or compensation under
this contract, or upon the product provided hereunder, shall be the responsibility and liability of
Seller.



     8. Inspection; Rejection; Quality Assurance; Manufacturing Method.



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     (a) All Product shall, before delivery, be subject to inspection, tests, and audits by Buyer
or its agent, at reasonable times and places. Seller agrees to provide access for Buyer to its
facilities at all reasonable times for such inspection, tests, and audits, and, at no additional
cost, to provide all assistance and facilities reasonably necessary to perform the same. Neither
the inspection, testing, or auditing of any Product, nor the failure to do so, before delivery to
Buyer shall constitute acceptance of any Product, or relieve Seller from exclusive responsibility
for furnishing Product in strict conformance with the Specifications. Buyer understands that
Seller, at its discretion, may not give access to sensitive documents covered by proprietary “Know
How”. Buyer also understands that all information divulged during the audit will be covered by
Section 20, below.



     (b) Seller warrants that it has and will maintain an adequate quality control/assurance
program with respect to the production and delivery of Product and that it creates and maintains
adequate quality control/assurance reports, certificates, affidavits, and other such records
relating to such Product. Seller agrees that, upon request and at no additional charge, it will
promptly furnish authenticated copies thereof, as well as applicable certificates of conformance
and/or compliance acceptable to Buyer, at the time of, or promptly after, delivery.



     I Product shall be received subject to inspection and approval by Buyer after delivery. Upon
inspection, Buyer may give Seller notice of rejection or revocation of acceptance, notwithstanding
any payment, passage of title, approval, prior test or inspection. No inspection, approval, test,
delay or failure to inspect or test, or failure to discover any defect or other nonconformance,
shall relieve Seller of any obligations under this Agreement or impair or waive any right or remedy
of Buyer with respect to Seller’s performance hereunder. If, in Buyer’s judgment, any Product
delivered hereunder does not conform with the requirements of this Agreement, Buyer shall have the
right to reject such Product and, in addition to any other rights and remedies it may have, Buyer
may, in its sole discretion: (1) return any or all nonconforming Product to Seller for
reimbursement, credit, replacement, or repair as Buyer may direct; (2) correct, rework, and/or
repair the Product with all costs associated therewith to be charged to and paid by Seller; or (3)
hold any or all nonconforming Product, at Seller’s risk and expense, for disposal or correction
according to Seller’s instructions. Any Product rejected by Buyer and returned to Seller shall be
returned, at Seller’s risk and expense, with the cost of packaging, handling, inspection,
examination, transportation and any other costs incidental thereto to be charged to and paid by
Seller. Such Product shall not thereafter be tendered to Buyer for acceptance unless the previous
rejection and requirement of correction are disclosed to Buyer in writing. All such nonconforming
Product that is so remedied will have the same warranty as stated in Article 5 from the date of
re-delivery. Inspection and rights to reject in any event will not be more than 60 days from
receipt of material by Buyer.



     (d) Seller shall give Buyer at least sixty (60) days’ prior written notice of any intention to
change any aspect of the manufacturing process for Products to be delivered hereunder, including,
but not limited to, changes in raw materials, product specifications or product quality levels or
any significant change in formulation or methods of manufacturing. Seller agrees that it will
provide Buyer with all reasonable assurances requested by Buyer to demonstrate that such intended
changes will not have an effect upon Buyer’s operations. If



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Buyer objects to any such change, Buyer shall give Seller written notice thereof prior to the
effective date of such change, and, if Seller nevertheless proceeds with such change, and without
limiting any other remedy Buyer may have pursuant to this Agreement or otherwise, Buyer shall be
entitled to discontinue the purchase of any Products affected by such change hereunder without
liability or other obligation to Seller.




     9. Compliance with Laws. Seller warrants that it will comply with all applicable
foreign, federal, state and local laws and regulations in producing and delivering Products
hereunder. Upon request, Seller will furnish Buyer with certificates of compliance therewith.
Unless this Agreement is otherwise exempted by law, Seller will comply with Executive Order 11246,
as amended by Executive Order 11375 (Equal Employment Opportunity) the Rehabilitation Action of
1973, the Vietnam Era Veteran’s Readjustment Assistance Act of 1974, the Americans with
Disabilities Act, as they have been or may be amended from time to time, and regulations
implementing such statutes; and any similar state and local laws and ordinances and the regulations
implementing such statutes. If requested by Buyer, Seller will furnish to Buyer an executed
Certificate of Nonsegregated Facilities. Seller warrants that Product delivered hereunder will be
produced at Seller facilities complying with all applicable provisions of the Occupational Safety
and Health Act and applicable regulations under that Act and agrees to, upon request, provide Buyer
with all explanatory and factual information needed to verify such compliance and to enable Buyer
to comply therewith, and with any other laws and regulations applicable hereto. Seller further
warrants that it will comply, where applicable, and without limitation, with all orders, standards,
and regulations of the National Highway & Transportation Safety Administration, Federal Aviation
Administration, Environmental Protection Administration, Food and Drug Administration, Consumer
Product Commission, and Occupational Safety & Health Act Administration.



     10. Hazardous and Dangerous Goods and Materials: Seller warrants: (i) that any
chemical substance or mixture delivered to Buyer pursuant to this Agreement is on the Toxic
Substance Control Act inventory or that the premanufacture notice requirements thereof have been
satisfied and such chemical substance or mixture is lawfully available for sale and use; (ii) that
chemical substances or mixtures delivered hereunder will be properly packaged with all appropriate
warning labels, instructions for use, and notices, and that, if such chemical substances or
mixtures are supplied in bulk, Seller will provide Buyer with an adequate supply of such warning
labels, instructions, and notices for use in Buyer’s facilities; (iii) that Seller will supply
with, or before, delivery, and at any other time upon Buyer’s request, all information known to
Seller with respect to potential hazards, including possible toxic or harmful effects, related to
the handling, use, storage, disposal, or transportation of any chemical substances or mixtures
delivered hereunder, and any precautions that should be taken to eliminate or reduce to a minimum
such hazards; and (4) that Seller will ascertain and furnish all information about Product
delivered hereunder required by Buyer to comply with all safety-related laws and regulations
(including, without limitation, those relating to applicable right-to-know laws and occupational
safety and health acts), and with laws and regulations regarding composition, ingredients, or
otherwise, including promptly furnishing to Buyer upon written request a list of all ingredients
therein and the amounts thereof and information concerning any changes in such ingredients
thereafter. Seller agrees that it will, upon Buyer’s request, accept the return of



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unused toxic or hazardous chemical substances or mixtures delivered to Buyer pursuant to this
Agreement.




     11. Environment, Health, Safety & Security. If Seller, either as principal or by
agent or employee, enters upon the property of Buyer, Seller agrees to comply with Buyer’s rules
and regulations, including its environmental, health, safety and security rules and regulations.



     12. Import/Export Matters. 



     (a) If any Product delivered hereunder is to be delivered into any other country, Seller will
be responsible for strict compliance with all legal, regulatory and administrative requirements
associated with any importation or exportation of such Product, including obtaining any required
licenses or approvals and, unless otherwise agreed between the parties elsewhere in this Agreement,
the payment of all associated duties, taxes and fees.



     (b) Upon request of Buyer, Seller shall cooperate with Buyer in seeking any duty drawback
available to Buyer in connection with export by Buyer of any Product imported by Seller and
provided to Buyer under this Agreement, or incorporating, or manufactured by Buyer from, such
Product. Without limitation, Seller shall (i) provide all information with respect to such
imported Product necessary to complete any such drawback claims to be filed by Buyer, including
U.S. Customs Service entry numbers, dates of entry, quantities and description of goods, customs
values, and rates and amounts of customs duties paid by Seller, and (ii) execute applicable
certificates of delivery and other documents as necessary in connection with Company’s drawback
claims.



     13. Shipping Weights; Tolerances; Packaging.



     (a) Seller’s certified weights will govern for each shipment or partial shipment made by
Seller hereunder. Should Buyer dispute the shipping weight of any shipment or partial shipment
hereunder, Buyer will promptly notify Seller in writing of the reasons for such dispute and provide
to Seller all necessary documents to substantiate the difference. In the event of such a dispute,
the parties shall meet and negotiate an agreeable resolution prior to the commencement of any
formal legal proceeding arising from such matter.



     14. Seller’s Liability and Indemnification. XXXXXXXXXXXXXXXXXXX



     15. Patents. Seller will indemnify, protect, defend and hold harmless Buyer, its
successors and assigns, its customers and the users of Product deliver by Seller hereunder from all
claims, demands, judgments, settlements, costs, losses, damages and attorney fees incurred as a
result of actual or alleged infringement of any patent, copyright, trademark, trade secret, or
other actual or alleged intellectual property right of any third party arising from Buyer’s
purchase, use or sale of such Product, and to defend at Seller’s expense, including reasonable
attorney’s fees, any and all suits or actions, based on such claims. All such obligations of
Seller to indemnify, hold harmless, protect and defend Buyer are in addition to Seller’s warranty
obligations and all other rights or remedies of Buyer and shall survive acceptance and use of, and
payment for, Product, and completion, termination, or cancellation of this Agreement.



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     16. Insurance. Seller agrees to maintain the following types of insurance coverage:
(a) Workers’ Compensation Insurance or qualification as a self-insurer to satisfy the laws of the
states in which Product will be produced and delivered; (b) Employers’ Liability Insurance for
Bodily Injury per accident with limits of not less than $500,000 and Bodily Injury by Disease with
limits of not less than $500,000 per policy; and (c) Commercial General Liability Insurance for
bodily injury, personal injury and property damage, including coverage for products/completed
operations and contractual liability, with combined limits of not less than $5,000,000 per
occurrence. Upon Buyer’s request, Seller will provide Buyer with written certification, reasonably
acceptable to Buyer, of Seller’s compliance with the requirements listed in this paragraph. The
insurance requirements in this paragraph are separate and distinct from any other obligations of
Seller contained herein, and neither the issuance of any insurance policy nor the minimum limits
specified herein shall be deemed to limit or restrict in any way Seller’s liability arising under
this Agreement.



     17. Limitation on Buyer’s Liability. In no event shall Buyer be liable for
consequential, incidental, special or punitive damages, or for damages of any kind in excess of the
price set forth in this Agreement for the Product on which any such claim is based. Any action on
any claim against Buyer must commence within one year after the cause of action has accrued or the
right to bring such action will be deemed to have been waived by Seller.



     18. Seller’s Default. Buyer shall have the right to cancel this Agreement, in whole or
in part, if the Products are, in Buyer’s judgment, non-conforming or defective or not delivered as
scheduled, or if Seller fails to comply with or fulfill any of the terms and conditions of this
Agreement, or with Buyer’s shipping and billing instructions, or if, in Buyer’s opinion, the credit
or ability of Seller to perform this Agreement becomes impaired, whereupon Buyer shall have the
continuing right to obtain Products from another source with any resulting increase in cost thereof
charged to and paid by Seller, all without prejudice to any other rights or remedies of Buyer and
in addition thereto.



     19. Termination. XXXXXXXXXXXXXXXXXXXXXXXXXX



     20. Confidentiality.



     (a) Confidential Information. “Confidential Information” means (a) any information disclosed
by or on behalf of a party (the “Disclosing Party”) to the other party (the “Receiving Party”),
including, without limitation, (i) any materials, trade secrets, know-how, formula, processes,
algorithms, ideas, strategies, inventions, data, network configurations, system architecture,
designs, flow charts, drawings, proprietary information, business and marketing plans, financial
and operational information, and all other non-public information, material, or data relating to
the past, current, or future business or operations of the Disclosing Party and (ii) any
information, material, or data provided by third party vendors of the Disclosing Party, and (b) any
analyses, compilations, studies, summaries, extracts, or other documentation prepared by the
Receiving Party based on the Information disclosed by the Disclosing Party.



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     (b) Permitted Use and Disclosure of Confidential Information. The Receiving Party will not
utilize any Confidential Information received from the Disclosing Party for any purpose other than
in order to facilitate the transactions in which the parties are involved by mutual written
agreement. The Receiving Party will not utilize the Confidential Information provided to it by the
Disclosing Party to compete with the Disclosing Party, nor will the Receiving Party engage in
reverse engineering of the Disclosing Party’s Confidential Information. The Receiving Party will
not disclose the Confidential Information to any third party, including but not limited to
consultants, counsel, accountants, and professional advisors unless (i) the Receiving Party
receives the express prior written consent of the Disclosing Party, except for employees of the
Receiving Party strictly on a “need-to-know” basis, and (ii) such third party is bound by a
nondisclosure agreement or confidentiality obligations consistent with and at least as protective
as this Agreement. The Receiving Party will maintain the confidentiality of such Confidential
Information using at least the same degree of care customarily used by the Receiving Party to
protect its own Confidential Information, but under no circumstances will the Receiving Party use
less than a reasonable degree of care. Upon request by the Disclosing Party, the Receiving Party
will return all Confidential Information provided by the Disclosing Party to the Receiving Party.
Neither party is obligated to disclose any Information to the other party by virtue of this
Agreement. The Disclosing Party will retain ownership of all its Information, whether or not
disclosed to the Receiving Party.



          I General Exceptions. Notwithstanding any other provision of this Agreement, information will
not be or will cease to be Confidential Information (a) if such information was already public
knowledge at the time it was learned by the Receiving Party, or if such information subsequently
came into the public domain through no fault of the Receiving Party, (b) if such information was
lawfully received by the Receiving Party from a third party free of an obligation of confidence to
such third party, (c) if such information was already in the possession of the Receiving Party
prior to the receipt thereof, directly or indirectly, from the Disclosing Party, (d) if such
information is subsequently and independently developed by employees, consultants, or agents of the
Receiving Party without reference to the Confidential Information disclosed under this Agreement,
or (e) if disclosure is required pursuant to Section 6.2(c) of this Agreement.




          (d) Legal Exceptions. Notwithstanding any other provision of this Agreement, the Receiving
Party may disclose any information which is necessary or appropriate to disclose in order to comply
with applicable laws, rules, and regulations or enable a party to comply with this Agreement or
which is required to be disclosed in a judicial or administrative proceeding after all reasonable
legal remedies for maintaining such information in confidence have been exhausted, including, but
not limited to, giving the Disclosing Party as much advance notice of the possibility of such
disclosure as practicable so the Disclosing Party may attempt to obtain a protective order
concerning such disclosure.




          (e) Ownership. The Disclosing Party retains all right, title, and interest in and to its
Confidential Information, including any intellectual property rights, and the Receiving Party will
have no rights, by license or otherwise, to use or disclose the Confidential Information except as
expressly provided in this Agreement. For purposes of this Agreement, intellectual property rights
mean all those rights and interests, whether by statute or under common law,




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relating to copyrights, patents, trademarks, trade secrets or any similar rights. Seller will
retain the ownership of all formulas to biodegradable resins owned by it whether or not sold to
Buyer for its packaging solutions.




     21. Force Majeure.



     (a) If the performance of this Agreement by either party (other than the payment of monies
owing or becoming due hereunder) is delayed, curtailed, interrupted or prevented for reasons
reasonably beyond such party’s direct control, such as strikes, lockouts, accidents, fires,
explosions, inundations, volcanic activity, rebellion, revolution, blockade, embargo,
environmental directives, or any other act of any government or governments, or any subdivision
or agency of the same, acts of public enemies, acts of God, inability in obtaining
transportation, or any other cause, whether or not of the nature enumerated above, which is
reasonably beyond the control of such party (“Force Majeure Events”), such party will be excused
from the performance of its obligations under this Agreement for so long as the Force Majeure
Event continues. The excused party’s performance under this Agreement will resume as soon as
practicable after the Force Majeure Event is remedied or removed.



     (b) XXXXXXXXXXXXXXXXXXXXXX



     I The party invoking the remedy provided in this Article 21 must give written notice to the
other party within two (2) days of the occurrence of the Force Majeure Event, stating, insofar as
known, the probable extent to which it will be unable to perform or be delayed in performing its
obligations hereunder. The party giving such notice must exercise due diligence to eliminate or
remedy the Force Majeure Event and must notify the other party when the Force Majeure Event is
remedied or removed.



     (d) At either Party’s option, the Term of this Agreement may be extended to the extent that
either party has invoked the provisions of this Article 21.



     (e) XXXXXXXXXXXXXXXXXXXXX



     22. Notices.



     (a) Seller agrees to immediately notify Buyer of any actual or possible safety problems
related to Product delivered hereunder. Seller also agrees to give Buyer reasonable advance notice
of potential material shortages, labor disputes, insolvency or other matters that might delay or
interfere with its performance of this Agreement.



     (b) Any communication or notice required or permitted hereunder must be in writing and will
be considered delivered and effective as of; (i) the date it was actually delivered, if hand
delivered, (ii) the date of confirmed answerback, if sent by telecopier or facsimile, or (iii) on
the date on which it was received or 5 days after being placed in the post, whichever first
occurs, if mailed, in a sealed envelope, postage prepaid, by certified or registered mail or
international courier service. All communications and notices must be addressed to the
appropriate party at the following address, telex number or telecopy number



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(or such other address or number as any party may subsequently add or substitute by proper
notice hereunder to the other party):




	 	 	 	 	 
	 

	 	If to Buyer:
	 	Alcoa Kama, Inc
	 

	 	 	 	XXXXXX
	 

	 	 	 	XXXXXXX
	 

	 	 	 	Attn:  XXXXXXXXXXXXXXXXXXXXXXX
	 
	 	 	 	 
	 

	 	If to Seller:
	 	Cereplast, Inc.
	 

	 	 	 	3421 West El Segundo Boulevard
	 

	 	 	 	Hawthorne, California 90250
	 

	 	 	 	Attention: Frederic Scheer, President






     23. XXXXXXXXXXXXXXXXXXXXXXX



     (a) XXXXXXXXXXXXXXXXXXXXXX



     24. Miscellaneous.



     (a) Complete Agreement. This Agreement and the Exhibits attached hereto set forth the
complete understanding of the parties with respect to the subject matter hereof and supersede all
other prior negotiations, commitments and writings between the parties with respect hereto. All
Product supplied pursuant to this Agreement will be provided pursuant to the terms and conditions
hereof, which will supersede and override any and all preprinted terms and conditions contained on
any documents exchanged by the parties in connection with orders or releases made hereunder,
including but not limited to purchase order forms, sales order acknowledgment forms, packing slips,
bills of lading and invoices. Each of the Exhibits referred to in this Agreement is incorporated
herein by this reference and made a part of this Agreement.



     (b) Relationship of the Parties. Seller is and shall remain an independent contractor
of Buyer. No employee, agent, or representative of Seller or its subcontractors shall be deemed to
be an employee of Buyer. Seller shall provide all safeguards, and take all precautions, necessary
in connection with the production and delivery of Product sold hereunder to prevent the occurrence
of any accident, injury, death, loss, or damage to any person or property, and shall be solely
responsible therefore. Seller warrants that all Product delivered hereunder will be produced and
delivered in a safe, proper, and workmanlike manner and in compliance with all applicable codes,
regulations, laws, standards, specifications and Buyer requirements concerning safety, performance
and otherwise,.



     I Time is of the Essence. Time is of the essence with respect to Seller’s performance
hereunder.



     (d) Electronic Commerce. Upon Buyer’s request, Buyer and Seller will facilitate
business transactions by electronically transmitting data. Any data electronically transmitted
pursuant to this section will be as legally sufficient, binding and enforceable upon the parties as
a



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written, signed, paper document exchanged between the parties, notwithstanding any legal
requirement that the data be in writing or signed. To the extent required by Buyer, each
authorized representative of a party will adopt a unique, verifiable digital identification
consisting of symbols or codes to be transmitted with each electronic transmission, and use of such
digital identification will be deemed for all purposes to constitute a “signature” and will have
the same effect as a signature on a written document.




     (e) Buyer’s Property and Parts. All property of any kind supplied to Seller by Buyer,
or paid for, by Buyer shall be and remain Buyer’s property, and Seller will maintain such property
in good condition and repair, except to the extent that such property is integrated into Product
delivered hereunder. Materials or parts provided by, or on behalf of, Buyer which have been, or
are to be, processed by Seller are consigned to Seller solely for purposes of such processing and
remain Buyer’s property. All Buyer property, while in Seller’s custody or control, shall be held
at Seller’s risk, free of all liens, encumbrances or security interests of Seller or third parties,
and shall be kept insured by Seller at Seller’s expense in an amount equal to replacement cost with
loss payable to Buyer. Seller will indemnify, protect, defend and hold harmless Buyer, its
successors and assigns from and against all loss or damage to such property occurring while in
Seller’s custody or control. All property of Buyer is subject to removal by Buyer at any time, and
to return upon Buyer’s request. Similarly, the same covenants apply to Buyer with respect to all
property supplied to Buyer by Seller or paid for by Seller.



     (f) Waiver; Remedies. No waiver by either party of any breach of, or failure to
comply with any provision of, this Agreement by the other party, will be construed as, or
constitute, a continuing waiver by said party of such provision or a waiver by said party of any
other breach of, or failure to comply with, any other provision of this Agreement by the other
party. Any remedies provided herein to either party are cumulative and in addition to any other
remedies provided in law or equity or by statute.



     (g) Counterparts. This Agreement may be signed in counterparts, each of which will be
deemed an original but all of which together will constitute one and the same instrument.



     (h) Headings. The section headings contained in this Agreement are for convenience of
reference only and will not affect in any way the meaning or interpretation of this Agreement.



     (i) Successors and Assigns. This Agreement will be binding on the successors and
permitted assigns of the parties. This Agreement, and the rights, remedies, duties and obligations
arising hereunder, may not be assigned or delegated, in whole or in part, by Seller without the
prior written consent of Buyer. No such consent or assignment shall release Seller or change
Seller’s liability to perform all of its obligations under this Agreement.



     (j) Amendments. This Agreement may be amended or modified only by an instrument in
writing duly executed by an authorized signatory of each of the parties hereto.



     (k) Severability of Provisions. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction and which is not material to implementing the intentions of
the parties will, as to such jurisdiction, be ineffective only to the extent of such prohibition or



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unenforceability, without invalidating the remaining provisions or affecting the validity or
enforceability of any provision in any other jurisdiction.




     (l) Governing Law. This order will be governed by, and interpreted in accordance
with, the laws of the Commonwealth of Pennsylvania, excluding its rules relating to conflict of
laws. The United Nations Convention on Contracts for the International Sale of Goods is expressly
disclaimed and does not apply.




	 	(m)	 	Dispute Resolution. Any and all disputes between the parties that may
arise pursuant to this Agreement will be heard and determined before an appropriate
arbitrator, federal, or state court located in New York, NY. The Seller acknowledges
and agrees that any such court shall have the jurisdiction to interpret and enforce the
provisions hereof and/or an arbitrator’s judgment, and the Seller waives any and all
objections that it might otherwise have as to personal jurisdiction or venue in any of
the above tribunals.





     The parties hereto have executed this Agreement by their duly authorized representatives as
of the day and year first above written.



	 	 	 	 	 	 	 	 	 	 	 
	SELLER:	 	 	 	BUYER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	CEREPLAST, INC.	 	 	 	ALCOA KAMA, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	dated 12/19/2006	 	 	 	dated 12/19/2006	 	 






Strategic Materials — Resins




 









 





SCHEDULE A




PRODUCT SPECIFICATIONS




Strategic Materials — Resins




 









 





SCHEDULE B




PRICING




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Strategic Materials — Resins