Document:

Separation Agreement, dated October 18, 2012

 Exhibit 10.1 

 
 

 
 700 Anderson Hill Road, Purchase, New York, 10577www.pepsico.com 

October 18, 2012 

Ms. Maura A. Smith 
 Dear
Ms. Smith: 
 This letter separation agreement (this “Agreement”) relates to the arrangements concerning
the separation of your employment from PepsiCo, Inc. (“PepsiCo” together with its parent, subsidiaries, divisions, affiliates, predecessors and successors, agents, employees, directors, or assigns, the “Company”).
You will not be entitled to receive any further payments or benefits from the Company, except as specifically set forth by the terms and conditions of this Agreement, or except as provided under the indemnity provisions of PepsiCo’s By-Laws,
and director and officer and professional liability insurance policies. 
  

	1.	Status and Responsibilities. 

 (a) Status. On, June 15, 2012 (your “Separation Date”) your position as Executive Vice President, Government Affairs, General Counsel and Corporate Secretary, any other
appointments and offices you held with the Company, and any position with any third-party organizations in which you represented the Company, ended. Except as otherwise provided in this Agreement, contingent upon your timely signing and not revoking
this Agreement, and for valuable consideration, you will be eligible for the payments and benefits described in Section 2. 

(b) Responsibilities. From October 1, 2012 until April 15, 2013 you agree to be available to the Company as a
consultant (the “Consultancy Period”). During this time, you agree to consult with the Company in response to inquiries or reasonable requests from the Company for assistance and to cooperate with the Company as needed. Your
consultancy will automatically cease at the end of the Consultancy Period, or when you notify the Company that you have accepted employment elsewhere, whichever is sooner. Notwithstanding the end of the Consultancy Period, you will remain available
to respond to inquiries or reasonable requests from the Company for assistance and to cooperate with the Company as needed. During the Consultancy Period, you will be reimbursed for pre-approved reasonable and appropriate business expenses
incurred by you during your Consultancy Period in connection with such services as specifically requested in writing by the General Counsel of the Company, subject to the submission by you of appropriate documentation in accordance with Company
policy. Nothing in this Section shall preclude you from providing legal or other consulting services to other clients, subject to the restrictions set forth in Section 4 below. 

  

			
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		  	Smith            

	2.	Payments and Benefits. 

 (a) Consideration. In consideration of the covenants and promises contained in this Agreement, including but not limited to your status as a consultant, you will receive, less applicable
withholdings and according to normal payroll procedures, from the Company six (6) biweekly payments equal to $157,150.00 each, commencing on October 19, 2012 through December 28, 2012, and a payment of $2,478,550.00 to be paid on or
about January 15, 2013, and three payments of $826,183.33 (each) to be paid on or about February 15, 2013, March 15, 2013, and April 15, 2013 respectively. The parties agree that the payments made pursuant to
Section 2(a) and Section 2(b) of this Agreement are payments to which you would not otherwise be entitled to if you did not sign this Agreement. 
 (b) Continued Welfare Benefits. You have elected to purchase continued medical coverage for you and your eligible dependents under the Company’s insurance plans pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). Pursuant to COBRA you may continue such coverage for a period up to eighteen (18) months, commencing June 15, 2012. The Company will reimburse you monthly for
premiums paid for such continued coverage at the rate of 160% of your cost of such continued coverage; provided, however, that any continued coverage pursuant to this Section 2(b) shall cease upon your becoming eligible for comparable
coverage from a subsequent employer. You agree to notify the Chief Human Resources Officer of the Company in writing of such eligibility as soon as you become aware of such eligibility, and before the commencement of other coverage. If you fail to
do so, you agree to immediately reimburse the Company for any payment made after the commencement of any other coverage for medical for you or your eligible dependents. Any such payment will be sent to the Chief Human Resources Officer of the
Company. Any period of continued coverage pursuant to this Section 2(b) shall be recognized for purposes of satisfying the Company’s obligations under COBRA. If your COBRA coverage expires, and you have not been able to secure employment,
the Company will reimburse you three months of additional medical coverage that you secure independently of the Company, up to the same rate that was paid for COBRA. 
 (c) Retirement Plans. Because you did not achieve three (3) years of service with the Company, your Company automatic retirement contributions and matching contributions to the PepsiCo
Savings Plan and the PepsiCo Automatic Retirement Contribution Equalization Plan did not vest and were forfeited on your Separation Date. 
 (d) Equity Awards. The Company has provided you with a schedule of your outstanding awards under the PepsiCo long-term incentive plans (collectively, the “LTIP”), and you
and the Company have confirmed the accuracy of that schedule. In accordance with the original terms and conditions of your LTIP agreements, your outstanding LTIP awards will not vest and as a result were forfeited and cancelled on your Separation
Date. You will not receive any future LTIP awards after your Separation Date. 

  

			
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 (e) Personal Common Stock Holdings. As of the date of the full execution of
this Agreement, you are permitted to sell your personal holdings of PepsiCo common stock should you decide to do so. 
 (f)
Vacation Pay. One week of vacation pay, less applicable withholdings, will be paid to you by October 31, 2012. You will not accrue any additional vacation pay after your Separation Date. 

(g) No Other Payments. Other than as specifically provided by the terms and conditions of this Agreement, you will not be
entitled to any other payments or benefits from the Company. 
  

	3.	Non-Disclosure and Effect of Previous Obligations. 

 (a) Confidential Information. In the course of your employment with the Company, you have been provided access to and have received Confidential Information. As used herein,
“Confidential Information” consists of all information relating to the Company that is not generally known to the public, including, but not limited to, proprietary information, attorney-client privileged communications, attorney
work product, trade secrets as defined in the Uniform Trade Secrets Act (“UTSA”), which includes, but is not limited to, information that derives economic value, actual or potential, from not being generally known to others, such as
technical or non-technical data, formulae (including cost and/or pricing formulae), patterns (including pricing and discount history), compilations, programs, devices, methods (including cost and/or pricing methods, marketing programs and operating
methods), techniques, drawings, processes, financial data, or a list of actual or potential customers or suppliers. 
 (b) You
acknowledge that you have read, understood, and executed, on or about March 16, 2011, the Company’s Employee Confidentiality and Intellectual Property Agreement (the “Confidentiality Agreement”), a true and complete copy
of which you agree is attached as Exhibit A to this Agreement. 
 (c) Effect of Previous Obligations. You
understand that this Agreement relating to your separation of employment is not intended to supersede, limit, or affect any obligation, contractual, ethically, or otherwise, which you have with respect to the disclosure, use or protection of any
proprietary or privileged, confidential, work product or trade secret information of the Company. All previous written agreements, including but not limited to the Confidentiality Agreement, and responsibilities imposed by law and/or by contract,
relating to the Company’s intellectual property, proprietary information, confidential, privileged, work product or trade secrets, including but not limited to obligations as to disclosure and assignment of inventions, shall remain in full
force and effect and shall survive the execution of this Agreement except that any dispute involving Confidential Information shall be governed by the provisions of Section 14 of this Agreement. 

(d) Non-Disclosure. You agree that, you will not use Confidential Information or disclose any Confidential
Information to any third party except: 
  

	 	(i)	with the prior written consent of the General Counsel of the Company; or 

  

			
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	 	(ii)	as legally required by a lawful subpoena or by court order and then only after immediate written notice by you via facsimile, email and by overnight mail to the General
Counsel of the Company of the existence of such subpoena or court order, with a copy of any such document and the allowance of no less than five business days after receipt by the Company of such written notice with copy of subpoena or court order
for the Company to object to or move to quash any subpoena, court order or potential disclosure. So long as the Company has taken action to object within the time period provided for herein, you agree that there will be no disclosure until final
resolution, including on any appeal, of any objections or motion to quash, whether filed with a court or otherwise and without regard to the form of the objection. You also agree to protect, to actively object to and to cooperate in objecting and
resisting disclosure of any request of any kind for Confidential Information. 

 (e) Condition
Precedent. You understand and agree that the Company requested, as condition precedent to the execution of this Agreement, the immediate retrieval and return of any and all Company Confidential Information , including copies, in your
possession, custody or control (including Confidential Information disclosed to third parties by you and your agents). You understand and agree that no benefit contemplated by this Agreement is conferred except upon the express condition precedent
of return and retrieval, non-disclosure and no misuse of Company Confidential Information. You hereby attest that you have searched for, collected, and returned to the Company or destroyed, pursuant to instructions from the Company, all Confidential
Information and all Company documents and property of any kind or nature whatsoever, including all copies, in your possession, custody, and control, including Confidential Information disclosed to third parties, and, including, but not limited to,
proprietary, trade secret, privileged or work product information and/or documents, or copies of same, whether in hard copy, electronic, or any other format, as well as any Company computer, building access cards, keys, or other Company property in
your possession, custody, or control. 
 (f) All other rights and remedies available to the Company at law and in equity with
respect to its Confidential Information, Exhibit A, and any and all issues related to Company Confidential Information are expressly preserved and reserved. 
 (g) Penalties for Breach. You further understand and agree that any disclosure or misuse of Confidential Information or breach of any other pre-existing contract or legal obligation relating
to Confidential Information and property of the Company will constitute a material breach of this Agreement and will subject you to potential legal penalties at law and in equity. Specifically, you understand and agree that breach of this
Section 3 this Agreement by you or any person to whom you disclosed Confidential Information will constitute irreparable harm and will provide the Company the right to immediate injunctive relief, and will immediately terminate any right that
you may have to receive any payment whatsoever which may be contemplated by this Agreement. Repayment by you to the Company will be required of the total lump sum of any payments already made under this Agreement upon an arbitrator’s

  

			
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determination of a breach of Section 3 of this Agreement. Any repayment by you will include interest running from the date of the breach or misuse computed at 120% of the Applicable Federal
Rate published by the Internal Revenue Service from time to time. 
  

	4.	Non-Competition and Non-Solicitation. 

 (a) Non-Competition. Subject to the provisions of Section 4 (e), you agree that, during the Consultancy Period and for a period of twelve (12) months following the end of the
Consultancy Period, you will not, without the prior written consent of the Company, through its Chief Human Resources Officer, either directly or indirectly: 
  

	 	(i)	participate or have any interest in, own, manage, operate, control, be connected with as a stockholder, director, officer, employee, partner or consultant, or otherwise
engage, invest or participate (collectively, “Participate”) in any Competing Entity (as such term is defined below in Section 4(c)(i)); 

 

	 	(ii)	participate in any bottling entity with which the Company does business as of the date of this Agreement; or 

 

	 	(iii)	engage in any act injurious to the reputation of the Company or that diverts, or is intended to divert, customers or suppliers from the Company.

 (b) Non-Solicitation. Subject to the provisions of Section 4 (e), you agree that, during the
Consultancy Period and for a period of twelve (12) months following the end of the Consultancy Period, you will not, without the prior written consent of the Company, through its Chief Human Resources Officer, either directly or indirectly
engage in any act that diverts, or is intended to divert, employees from the Company. 
 (c) Definitions. For
purposes of this Section 4, in addition to the other terms defined under this Agreement, the following capitalized terms have the following meanings: 
  

	 	(i)	“Competing Entity” means any firm, corporation or other entity that markets, sells in a wholesale capacity, distributes, develops, or produces Covered
Products. Competing Entities include but are not limited to, The Coca-Cola Company, Coca-Cola Enterprises, Inc., Nestle S.A., Dr Pepper Snapple Group, Inc., Cott Corporation, Citrus World, Inc., Groupe Danone, The Arizona Beverage Company, Sunkist,
Red Bull GmbH, Hanson Natural Corporation, Starbucks Corporation, Unilever Group NV & PLC, Kraft Foods Group, Inc., Mondelēz International, Inc., Kellogg Company, General Mills, Inc., Utz Quality Foods, Inc., Snyders of Hanover, Inc.,
The Procter & Gamble Company, Diamond Foods, Inc., Bahlsen, Wise Foods, Inc. or any subsidiary, affiliate, franchisee, division or other entity associated or affiliated with the foregoing entities or any successor to any such entity.

  

			
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	 	(ii)	“Covered Products” means any product that was produced, marketed, sold, licensed or, to your knowledge, under development by a business of the Company.
Covered Products include but are not limited to products that fall into one or more of the following categories: (1) beverages, including without limitation carbonated soft drinks, tea, water, juices, juice drinks, juice products, sports
drinks, energy drinks and coffee drinks; (2) dairy products; (3) snacks, including salty snacks, sweet snacks, meat snacks, granola and cereal bars, and cookies; (4) hot cereals and ready-to-eat cereals; (5) pancake mixes and
pancake syrup; (6) value-added rice products; or (7) value-added pasta products and dry pasta products. 

(d) You understand, acknowledge and agree that the Company markets, sells and distributes the Covered Products worldwide. 

(e) The provisions of this Section 4 shall not prevent you and/or your immediate family from: 

 

	 	(i)	collectively being holders of up to five percent (5%) in the aggregate of any class of securities of any Competing Entity or in any said bottling entity (as is
referred to in Section 4(a)(ii)), provided that such securities are listed on a national securities exchange or registered under securities laws of Canada or the United States. 

 

	 	(ii)	joining a law firm that represents a Competing Entity, so long as you do not provide any services to said Competing Entity, or consult with lawyers in the firm who do.

  

	5.	Non-Disparagement. 

(a) You agree not to make any derogatory, disparaging or negative remarks, written or verbal, regarding the Company or any of its
officers, directors, employees, stockholders, representatives, vendors, suppliers, customers, clients, products or services to any third person or otherwise make any comment or communication casting the covered parties in a negative light. This
paragraph is not intended to bar you from giving testimony pursuant to a compulsory legal process pursuant to subpoena or court order. You however agree to notify the General Counsel of the Company in writing immediately by facsimile, email, or by
overnight mail of any such subpoena or court order or legal compulsion and to allow the Company five business days from receipt of notification by you of the legal process in question to make objection or move to quash. You agree to provide all
particulars needed for a timely objection, including a copy of any subpoena or court order. It is understood and agreed that, in the event that you are required to give testimony, the Company is the holder of attorney client privilege and work
product protections, that the Company does not intend to waive, expressly or impliedly, said privileges and protections, and that you agree to vigorously protect and resist disclosure of Confidential Information, as herein defined, including but not
limited to attorney client privileged, work product protected information, at all times. Once any objection is lodged, you agree that you will not disclose any information until such time as the objection is finally ruled upon, including by any
court of appeal. 

  

			
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 (b) The parties have agreed to certain limited Company non-disparagement obligations.

  

	6.	Irreparable Harm, Reasonableness, Other Agreements. 

 (a) You acknowledge that a breach or threatened breach by you of the terms of Sections 3, 4 or 5 of this Agreement would result in material and irreparable injury to the Company, and that it would be
difficult or impossible to establish the full monetary value of such damage. Therefore, you agree that, in addition to any monetary damages to which the Company may be entitled, the Company shall be entitled to injunctive relief, without notice to
you, in the event of any such breach or threatened breach from any court of competent jurisdiction without the need to post any bond or undertaking. In the event of any breach or threatened breach, you also agree to pay liquidated damages in the
minimum amount of $500,000.00 upon an arbitrator’s determination of a breach, in addition to any monetary damage and/or injunctive relief. The undertakings and obligations contained in Sections 3, 4, 5 and 6 shall survive the termination of
this Agreement. 
 (b) You agree that the covenants you have made in Sections 3, 4 and 5 are reasonable with respect to their
duration and description. 
 (c) You acknowledge that Sections 3, 4 and 5 are not intended to supersede or limit your
obligations under other agreements, which may be different from those contained in such sections. Other such agreements may include confidentiality, non-disclosure, trade secret or assignment-of-invention agreements previously executed by you in
favor of the Company. Any such agreement(s), including but not limited to Exhibit A, shall remain in full force and effect and any action relating in any way to the failure to honor or to the breach of that agreement is not released by this
Agreement; however, any dispute involving Confidential Information shall be governed by the provisions of Section 14 of this Agreement. 
  

	7.	Future Cooperation. 

You agree that you will provide information or testimony or both in connection with any legal matters, if so requested by the Company. You
further agree to make yourself available upon request to provide information and/or testimony, in a formal and/or informal setting in accordance with the Company’s request, subject to reasonable accommodation of your schedule and reimbursement
of reasonable pre-approved documented expenses incurred by you. Notwithstanding the foregoing, the Company’s agreement and obligations pursuant to the foregoing sentence shall be subject to the provisions and limitations set forth in
Section 10 of this Agreement. 
  

	8.	Releases. 

 (a) You
agree to release and discharge the Company, and all of its respective past and present officers, directors, employees, agents, plans, trusts, administrators, stockholders and trustees (collectively, the “Released Parties”) from any
and all claims, losses or expenses you 

  

			
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may have or have had or may later claim to have had against them, whether known or unknown, arising out of anything that has occurred up through the date you sign this Agreement, including
without limitation, any claims, losses or expenses arising out of your employment with or separation from the Company; provided, however, that you expressly do not release or discharge the Company from any claims, losses or expenses you may have for
(i) workers’ compensation benefits, or (ii) the indemnification or insurance described in Section 10 below. 

(b) You understand and agree that, except for any claims expressly excluded from this release, you will not be entitled hereafter to
pursue any claims arising out of any alleged violation of your rights or any other alleged violation of any kind or nature whatsoever while employed by the Company or claims which relate in any way whatsoever to information you learned while
employed by the Company. For example, you understand that you are releasing all common law contract, tort, retaliation, whistleblower, or other claims you may have, as well as all claims you might have under the Worker Adjustment &
Retraining Notification Act (“WARN Act”), Title VII of the Civil Rights Act of 1964, Sections 1981 and 1983 of the Civil Rights Act of 1866, the Americans With Disabilities Act (“ADA”), the Employee Retirement
Income Security Act of 1974 (“ERISA”), the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and/or any rules, regulations or binding guidance thereunder, of whatever nature whatsoever pertaining in any way to or
under the Sarbanes-Oxley Act of 2002, and any other domestic or foreign laws, such as the New York State and City Human Rights Laws, the New York Labor Law and the Westchester County Human Rights Law; claims for reinstatement, back pay, front pay,
losses or other damages to you or your property resulting from any alleged violations of state or federal law; the Age Discrimination in Employment Act; the Family and Medical Leave Act; the Equal Pay Act; all claims for attorneys’ fees of
whatever nature or kind; and any other federal, state or local law, rule, regulation, administrative guidance or common law doctrine claim relating directly or indirectly to your employment or information gained during the course of your employment
or at any time thereafter as it relates to the Company. 
 (c) By signing this Agreement and accepting the benefits provided,
you agree that, except for any claims expressly excluded from this release, you will not pursue any individual claims (whether brought by you, an administrative agency, or any other person on your behalf or which includes you in any class) and will
not initiate or participate in any kind of action whatsoever which is against or in any way harms or has the tendency to harm the Released Parties, by means of a lawsuit, complaint, charge or otherwise, in any state or federal court or before any
state or federal agency or in any venue or forum for or on account of anything, whether known or unknown, foreseen or unforeseen, which has occurred up to the date you sign this Agreement and which relates in any way to your employment with the
Company. You acknowledge that you have not taken any action to seek or to accept, and you agree not to seek or accept, any equitable or monetary relief in any action, suit, proceeding or charge filed by you or on your behalf, whether with any
government agency or otherwise against the Company or implicating the Company in any way whatsoever, and agree to opt out of any class action filed against the Company with respect to any period during which you were employed by the Company. This
release does not include any claims for breach of this Agreement. You further represent and warrant that you have not filed and do not intend to file any claim or action against any released party for any violation of any law or a violation of
PepsiCo’s Code of Conduct, its corporate policies or on account of any facts or circumstances surrounding your 

  

			
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employment, including any privileged and confidential information learned while employed, whether directly or indirectly, including but not limited to any kind of claim against the
Company/Released Parties under the Sarbanes-Oxley Act of 2002 and/or the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and/or any rules, regulations or binding guidance thereunder. You further represent and warrant that from
your Separation Date until the date hereof, you have not become aware of any facts or circumstances which you know constitute either a violation of law or a violation of PepsiCo’s Code of Conduct, its corporate policies or any facts or
circumstances that you believe justifies any kind of claim against the Company , including but not limited to any claim under the Sarbanes-Oxley Act of 2002 and/or the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and/or any
rules, regulations or binding guidance thereunder. 
 (d) You agree that you shall forfeit, and, to the extent already paid, the
Company shall be entitled to repayment, with interest computed at 120% of the long-term Applicable Federal Rate published by the Internal Revenue Service from time to time, of the payments referenced in Sections 2(a) and (b) payable to you
pursuant to this Agreement, and you and/or your dependents (as applicable) shall no longer be eligible for the payments related to continued welfare benefits coverage referenced in Section 2(b), in the event that you: 

 

	 	(i)	breach any of the terms of this Agreement, including but not limited to disclosure to any source any of the Company’s Confidential Information; or

  

	 	(ii)	file or assert any claim related to or concerning your employment with, or separation from, the Company, including but not limited to any information learned during the
course of your employment with the Company or through your knowledge of or about its Confidential Information, against the Released Parties for any reason other than claims for workers compensation benefits, health care benefits, life, or disability
benefits as determined through the Separation Date under the Company’s applicable and governing plans and programs or for violation of the terms of this Agreement. In addition, you agree to hold harmless and to reimburse the Released Parties
any expense in connection with any claim, loss or expense (including attorneys’ fees) incurred by them arising out of your breach of any portion of this Agreement. 

(e) Subject to your full satisfaction of relevant conditions precedent, and the Company’s agreement that all such conditions
precedent have been fully satisfied, the Company agrees to release and discharge you from any and all claims about which the Company has actual knowledge as of the date of execution of this Agreement. This release does not include and specifically
excludes any and all claims for breach of this Agreement, or any claims that may arise after the date of execution of this Agreement, including but not limited to any violation of your ongoing obligations with respect to Confidential Information. As
set forth in this Agreement, Exhibit A and all obligations to protect and hold inviolate PepsiCo’s Confidential Information and/or to insure against disclosure or misuse thereof survive this Agreement. In the event that the Company initiates
legal action against you on the basis of any claim about which the Company did not have actual knowledge as of the date of execution of this Agreement, 

  

			
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except those related to breach of this Agreement, the Company and you agree that the prevailing party will be entitled to an award that includes all reasonable costs and attorneys’ fees of
the prevailing party. 
  

	9.	Review and Revocation. 

 This Agreement affects important rights and obligations, and the Company advises you to consult with an attorney before you sign this Agreement. In order to give you time to review and consider these
arrangements, you will have twenty-one (21) calendar days from the day you receive this Agreement to sign and return the Agreement. For a period of up to and including seven (7) calendar days after the date you sign this
Agreement, you may revoke this Agreement. The Company shall have no obligation to make any payments under this Agreement before the end of the seven-day revocation period. If you decide to revoke this Agreement, you must deliver to the undersigned a
signed notice of revocation on or before the end of this seven-day period. 
  

	10.	Indemnification and Insurance. 

 The Company shall maintain customary director and officer liability insurance covering you for acts and omissions during the time of your employment with the Company to the same extent as it does so for
similarly situated executives. Such indemnification and insurance coverage shall also apply to any service you perform as a Consultant in accordance with Section 1(b) of this Agreement. 

 

	11.	Reemployment. 

 You
promise not to seek employment with the Company or any Released Party unless the Company Chief Human Resources Officer asks you to do so in writing. 
  

	12.	No Wrongdoing. 

This Agreement is not an admission of wrongdoing by the Company or you, and neither it nor any drafts shall be admissible evidence of
wrongdoing or for any other purpose except as needed to establish breach of any provision of this Agreement; 
  

	13.	Effect of Void Provision. 

 If the Company or you successfully assert that any provision in this Agreement is void, the rest of the Agreement shall remain valid and enforceable. 

 

	14.	Arbitration of Disputes. 

 The Company and you agree to resolve any disputes you and the Company may have with each other through final and binding arbitration in accordance with the details agreed to and

  

			
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memorialized by the parties at the time of the execution of this Agreement. For example, you are agreeing to arbitrate any dispute about the validity of this Agreement, any claim or controversy
arising out of or relating to this Agreement, or the breach, termination, enforcement, interpretation or validity thereof. Arbitrations shall be conducted by JAMS in accordance with its Comprehensive Arbitration Rules & Procedures, unless other
arbitration terms and conditions are mutually agreed upon by you and the Company. You agree that Federal Rules of Evidence and Title V of the Federal Rules of Civil Procedure concerning Disclosure and Discovery will apply to any arbitration. You
acknowledge that you understand this section’s requirements and that arbitration will be in lieu of a jury trial. 
  

	15.	Miscellaneous. 

(a) This Agreement shall be deemed a contract made under, and for all purposes to be governed by and construed in accordance with, the
laws of the State of New York, without reference to principles of conflicts of laws. 
 (b) No rights or obligations under this
Agreement can be assigned or transferred by you, except as they may be transferred by will or by operation of law. This Agreement shall be binding upon and shall be for the benefit of the Company, its successors and assigns and you and, in the event
of your death, your heirs, estate or legal representative. 
 (c) Non-Applicability of 409A. The parties intend
that this Agreement will be interpreted so that (i) each payment payable pursuant to Section 2(a) shall be deemed a separate payment for purposes of Section 409A, (ii) each such transition payment that is paid by March 15,
2013 shall be exempt from Section 409A as a short-term deferral, (iii) each such transition payment that is paid after March 15, 2013 shall be exempt from Section 409A to the maximum extent possible under the exemption for
separation pay in Treas. Reg. Sec. 1.409A-1(b)(9)(v), (iv) any remaining such transition payments shall comply with the Section 409A payment rules and (v) any remaining benefits provided hereunder will be exempt from
Section 409A. Notwithstanding the foregoing, you acknowledge and agree that the Company does not guarantee any particular tax treatment and that you are solely responsible for any taxes that you owe as a result of this Agreement. 

(d) Captions. The captions are utilized for convenience only, and do not operate to explain or limit the provisions of this
Agreement. 
 [remainder of page intentionally left blank] 

  

			
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 By signing below, you acknowledge that you understand and voluntarily accept the
arrangements described herein. You acknowledge and agree that you have had the opportunity to review this Agreement with an attorney, that you fully understand this Agreement, that you were not coerced into signing it, and that you signed it
knowingly and voluntarily. You also acknowledge that you have not received any promise or inducement to sign this Agreement except as expressly set forth herein. 

 

					
	Very truly yours,
	
	PepsiCo, Inc.
		
	By:	 	 /s/ Cynthia Trudell

		 	Name:	 	Cynthia Trudell
		 	Title:	 	 Executive Vice President and
 Chief Human Resources Officer

  

			
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 The undersigned agrees to and accepts the terms and provisions of the foregoing Agreement: 

 

					
	 /s/ Maura Smith
	    	 October 18, 2012
	  	
	Maura A. Smith	    	DATE	  	

  

			
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		  	SmithEX-10.1

 Exhibit 10.1 
 NOTE PURCHASE AGREEMENT 
 NOTE PURCHASE AGREEMENT (this
“Agreement”), dated as of October 15, 2012 (the “Effective Date”), by and between Cereplast, Inc., a Nevada corporation (the “Company”), and Hanover Holdings I, LLC, a New
York limited liability company (the “Lender”). 

W  I  T  N  E  S  S 
 E  T  H: 
 WHEREAS, the Company wishes to sell to Lender, and Lender wishes to
purchase, upon the terms and subject to the conditions set forth in this Agreement, unsecured convertible promissory notes, substantially in the form attached hereto as Exhibit A (each a “Note” and collectively
the “Notes”) in tranches (each a “Tranche” and collectively “Tranches”) in consideration for an aggregate purchase price of $800,000 (“Purchase Price”).

 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties to this Agreement hereby agree as follows: 
 1. Certain Definitions. 

(a) When used herein, the following terms shall have the respective meanings indicated: 

“Business Day” means any day other than a Saturday, a Sunday or a day on which the New York Stock
Exchange is closed or on which banks in the City of New York are required or authorized by law to be closed. 

“Closing” and “Closing Date” have the respective meanings specified in
Section 2 of this Agreement. 
 “Commission” means the Securities and
Exchange Commission, and any successor regulatory agency. 
 “Common Stock” means the
common stock of the Company, outstanding on the date hereof. 
 “Event of Default” has
the meaning specified in the Notes. 
 “Exchange Act” means the Securities Exchange Act
of 1934, as amended. 
 “Governmental Authority” means any nation or government, any
state, provincial or political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including, without limitation, any stock exchange, securities
market or self-regulatory organization. 
 “Material Adverse Effect” means an effect that
is material and adverse to (i) the consolidated business, properties, assets, operations, results of operations, financial condition, credit worthiness or prospects of the Company taken as a whole, (ii) the ability of the Company to
perform its material obligations under this Agreement or the other Transaction Documents or (iii) the rights and benefits to which an Lender is entitled under this Agreement or any of the other Transaction Documents. 

 “Purchase Price” means, with respect to the Notes
purchased at the Closing, the original principal amount of the Notes purchased at the Closing. 

“Securities Act” means the Securities Act of 1933 Act, as amended, and the rules and regulations
promulgated thereunder. 
 “Trading Market” means whichever of the New York Stock
Exchange, the American Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question. 

“Transaction Documents” means (i) this Agreement, (ii) the Notes, and (iii) all
other agreements, documents and other instruments executed and delivered by or on behalf of the Company or any of its officers at the Closing. 
 (b) Other Definitional Provisions. All definitions contained in this Agreement are equally applicable to the singular and plural forms of the terms defined. The words “hereof”,
“herein” and “hereunder” and words of similar import contained in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. 

2. Closing. 
 Upon the terms and subject to the satisfaction or waiver of the conditions set forth herein, the Company agrees to sell and Lender agrees to purchase the Notes in eight (8) Tranches, each Tranche
consisting of a $100,000 Note for an aggregate principal amount equal to the Purchase Price. The date on which the closing of each Tranche for such purchase and sale occurs (the “Closing”) is hereinafter referred to as the
“Closing Date”. The first closing shall take place simultaneously with the execution of this Agreement or such later date as the parties shall agree. Subsequent closings on additional tranches shall occur at the sole
discretion of the Lender and subject to the satisfaction of the terms and conditions of this Agreement set forth herein as follows: 
  

	 	(i)	$100,000 on or about October 15, 2012; 

  

	 	(ii)	$100,000 on or about October 30, 2012; 

  

	 	(iii)	$100,000 on or about November 30, 2012; 

  

	 	(iv)	$100,000 on or about December 14, 2012; 

  

	 	(v)	$100,000 on or about December 28, 2012; 

  

	 	(vi)	$100,000 on or about January 15, 2013; 

  

	 	(vii)	$100,000 on or about January 30, 2013; 

  

	 	(viii)	$100,000 on or about February 15, 2013; 

  
 2 

 Each Closing will be deemed to occur at the offices of Sichenzia Ross Friedman Ference LLP,
or such other place as the parties mutually agree upon, when (A) this Agreement and the other Transaction Documents have been executed and delivered by the Company and Lender, (B) each of the conditions to the Closing described in this
Agreement has been satisfied or waived as specified therein and (C) payment of Lender’s Purchase Price payable with respect to the Notes being purchased by Lender at the Closing has been made by wire transfer of immediately available
funds. At the Closing, the Company shall deliver to Lender a duly executed instrument representing the Note purchased by Lender. 
 3. Representations and Warranties of the Company. The Company represents and warrants to Lender as follows, as of the date hereof: 

(a) The Company is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full
power and authority to own, lease, license and use its properties and assets and to carry out the business in which it proposes to engage. 
 (b) The Company has the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and to issue and sell the Notes. All necessary proceedings of the
Company have been duly taken to authorize the execution, delivery, and performance of the Transaction Documents. The Transaction Documents have been duly authorized by the Company and, when executed and delivered by the Company, will constitute the
legal, valid and binding obligation of the Company enforceable against the Company in accordance with their terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies. 
 (c) No consent of any party to any contract, agreement, instrument, lease or license to which the Company is a party or to which any of its properties or assets are subject is required for the execution,
delivery or performance by the Company of any of the Transaction Documents or the issuance and sale of the Notes. 
 (d) The
execution, delivery and performance by Company of the Transaction Documents to which it is a party have been duly authorized, and do not (i) conflict with any of its organizational documents, (ii) contravene, conflict with, constitute a
default under or violate any material statute, law, rule, regulation or court decree binding upon or applicable to the Company, or its assets or properties, (iii) contravene, conflict or violate any applicable order, writ, judgment, injunction,
decree, determination or award of any Governmental Authority by which the Company or any of its Subsidiaries or any of their property or assets may be bound or affected, (iv) require any action by, filing, registration, or qualification with,
or governmental approval from, any Governmental Authority (except such governmental approvals which have already been obtained and are in full force and effect) or (v) constitute an event of default or give rise to a right to terminate under
any material agreement by which the Company or any of its Subsidiaries is bound. The Company is not in default under any agreement to which it is a party or by which it is bound in which the default could reasonably be expected to have a material
adverse effect on Company’s business. 

  
 3 

 (e) The Notes have been duly authorized and, when issued and paid for in accordance with
the terms of the applicable Transaction Documents, will be duly and validly issued, fully paid and non-assessable, and free and clear of all liens other than restrictions on transfer provided for in the Transaction Documents. The shares of Common
Stock issuable upon conversion of the Notes have been duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and non-assessable, free and clear of all liens
other than restrictions on transfer provided for in the Transaction Documents. The Company has reserved from its duly authorized capital stock such number of shares of Common Stock for issuance upon conversion of the Notes. 

(f) There are no outstanding agreements or preemptive or similar rights affecting the Common Stock. Except as set forth on Schedule 3(f),
there are no outstanding rights, warrants or options to acquire, or instruments convertible into or exchangeable for, or agreements or understandings with respect to the sale or issuance of, the Common Stock. 

(g) The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the
Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the
foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of
filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable,
and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position
of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit
adjustments. 
 (h) Except as set forth in the SEC Reports, the Company has not, in the twelve months preceding the date hereof,
received notice (written or oral) from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company
is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. 

  
 4 

 (g) There is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the Company before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an
“Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the issuance of the Notes or the Common Stock issuable upon conversion of the Notes or
(ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any director or officer thereof, is or has been the subject of any action involving a claim of
violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the
Company or any current or former director or officer of the Company. 
 (h) The Company possesses all certificates,
authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct its businesses as currently conducted or as contemplated to be conducted, except where the failure to possess such
permits could not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and the Company has not received any notice of proceedings relating to the revocation or modification of any Material Permit. 

(i) Assuming the accuracy of Lender’s representations and warranties set forth herein, no registration under the Securities Act is
required for the offer and sale of the Notes by the Company to Lender as contemplated hereby. 
 (j) Neither the Company nor any
person acting on behalf of the Company has offered or sold the Notes by any form of general solicitation or general advertising. The Company has offered the Notes for sale only to Lender. 

(k) The Company acknowledges and agrees that Lender is acting solely in the capacity of an arm’s length purchaser with respect to
the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that Lender is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents
and the transactions contemplated thereby and any advice given by Lender or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Lender’s
purchase of the Notes. The Company further represents to Lender that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its
representatives. 
 (l) The Company: (i) is not in violation of any order of any court, arbitrator or governmental body or
(ii) is not or has not been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business, except in each case as could not have
or reasonably be expected to result in a Material Adverse Effect. 

  
 5 

 (m) No brokerage or finder’s fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other person with respect to the transactions contemplated by the Transaction Documents. Lender shall have no obligation with respect to any fees or
with respect to any claims made by or on behalf of other persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents. 

(n) The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Notes, will not be or be an
affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. 
 (o)
Neither the Company, or to the knowledge of the Company, any agent or other person acting on behalf of the Company, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses
related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to
disclose fully any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect any provision of the Foreign Corrupt Practices
Act of 1977, as amended. 
 4. Representations, Warranties and Covenants of Lender. Lender hereby represents and warrants
to, and agrees with, the Company as follows: 
 (a) Lender is an “Accredited Investor” as such term is defined in
Rule 501(a) promulgated under the Securities Act. 
 (b) Each of the Transaction Documents to which Lender is party has been
duly executed and delivered by Lender and constitutes the legal, valid and binding obligation of Lender, enforceable against Lender in accordance with its terms except as such enforceability may be limited by general principles of equity or to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies. 

(c) The execution, delivery and performance by Lender of the Transaction Documents to which it is a party have been duly authorized, and
do not (i) conflict with any of Lender’s organizational documents, (ii) contravene, conflict with, constitute a default under or violate any material statute, law, rule, regulation or court decree binding upon or applicable to Lender
or its assets or properties, (iii) contravene, conflict or violate any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which Lender or any of its property or assets may be bound or
affected, (iv) require any action by, filing, registration, or qualification with, or governmental approval from, any Governmental Authority (except such governmental approvals which have already been obtained and are in full force and effect)
or (v) constitute an event of default or give rise to a right to terminate under any material agreement by which Lender is bound. 

  
 6 

 (d) Lender is familiar with the business, plans and financial condition of the Company;
Lender has received all materials that have been requested by Lender; Lender has had a reasonable opportunity to ask questions of the Company and its representatives, and the Company has answered to the satisfaction of Lender all inquiries that
Lender or Lender’s representatives have put to it. Lender has had access to all additional information that Lender has deemed necessary to verify the accuracy of the information set forth in this Agreement, and has taken all the steps necessary
to evaluate the merits and risks of an investment as proposed under this Agreement. 
 (e) Lender hereby acknowledges and
represents that Lender is able to bear the economic risk which Lender hereby assumes. 
 (f) Lender understands the various
risks of an investment in the Company as proposed herein and can afford to bear such risks, including, without limitation, the risks of losing the entire investment. 
 (g) Lender acknowledges that Lender has been informed by the Company of, or is otherwise familiar with, the nature of the limitations imposed by the Securities Act and the rules and regulations thereunder
on the transfer of the Notes. In particular, Lender agrees that no sale, assignment or transfer of any of the Notes acquired by Lender shall be valid or effective, and the Company shall not be required to give any effect to such a sale, assignment
or transfer, unless (a) the sale, assignment or transfer of such Notes is registered under the Securities Act, it being understood that the Notes are not currently registered for sale and that the Company has no obligation to so register the
Notes; or (b) the Notes are sold, assigned or transferred in accordance with all the requirements and limitations of an exemption from registration under the Securities Act. Lender further understands that an opinion of counsel satisfactory to
the Company and other documents may be required to transfer the Notes. 
 (h) Lender acknowledges that the Notes to be acquired
will be subject to a stop transfer order and any certificate or certificates evidencing the Notes and the shares of Common Stock issuable upon conversion of the Notes shall bear the following or a substantially similar legend and such other legends
as may be required by state blue sky laws: 
 “THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT
IN EFFECT WITH RESPECT TO SUCH SECURITIES UNDER THE SECURITIES ACT OR AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. ANY SUCH TRANSFER MAY ALSO BE SUBJECT TO COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS.”

  
 7 

 (i) Lender will acquire the Notes and the shares of Common Stock issued upon conversion of
the Notes for Lender’s own account for investment and not with a view to the sale or distribution thereof or the granting of any participation therein in violation of the securities laws, and has no present intention of distributing or selling
to others any of such interest or granting any participation therein in violation of the securities laws. 
 (j) Lender is not
entering into this Agreement or purchasing the Notes as a result of or subsequent to any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or presented
at any seminar or meeting, or any solicitation by a person other than a representative of the Company with which Lender had a pre-existing relationship. 
 5. Covenants of the Company. 
 (a) Further Assurances. At any time
or from time to time after the execution hereof, the Company will promptly execute, deliver, verify, acknowledge, record and/or file any and all further documents and instruments (including financing statements and continuation statements), and
promptly take any and all such other and further actions, as Lender may request in order to evidence or more fully effectuate the transactions contemplated hereby and to otherwise carry out the terms hereof. 

(b) Reservation of Shares. The Company shall at all times reserve and keep available out of its authorized and unissued capital
stock, such number of shares of Common Stock issuable upon conversion of the Notes. 
 (c) Notice of Event of Default.
Upon the occurrence of an Event of Default, the Company shall notify Lender of the nature of such Event of Default as soon as practicable (but in no event later than five (5) Business Day after the Company becomes aware of such Event of
Default). 
 (d) Additional Indebtedness. As long as the Notes shall remain outstanding and until such time as the Notes
issued by the Company pursuant to that certain Venture Loan and Security Agreement dated as of December 21, 2010 (as the same has been amended, supplemented or otherwise modified from time to time) between the Company and Horizon have been
repaid, unless the Holder shall have otherwise given prior written consent, the Company shall not, and shall not directly or indirectly create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind, which shall
be senior in right of payment, whether with respect to interest or upon liquidation or dissolution, or otherwise. 
 6.
Conditions to Lender’s Obligations at the Closing. Lender’s obligations to effect the Closing, including without limitation its obligation to purchase the Notes at each Closing, are conditioned upon the fulfillment (or waiver by
Lender in its sole and absolute discretion) of each of the following events as of each Closing Date, and the Company shall use commercially reasonable efforts to cause each of such conditions to be satisfied: 

  
 8 

 (a) the representations and warranties of the Company set forth in this Agreement and in
the other Transaction Documents shall be true and correct in all material respects as of such date as if made on such date (except that to the extent that any such representation or warranty relates to a particular date, such representation or
warranty shall be true and correct in all material respects as of that particular date); 
 (b) the Company shall have complied
with or performed in all material respects all of the agreements, obligations and conditions set forth in this Agreement and in the other Transaction Documents that are required to be complied with or performed by the Company on or before the
Closing; 
 (c) there shall be no existing Event of Default under the Notes; 

(d) the Company shall have executed and delivered to Lender the Note being purchased by Lender at the Closing; 

(e) there shall be no injunction, restraining order or decree of any nature of any court or Governmental Authority of competent
jurisdiction that is in effect that restrains or prohibits the consummation of the transactions contemplated hereby and by the other Transaction Documents; 
 7. Conditions to Company’s Obligations at the Closing. The Company’s obligations to affect the Closing with Lender are conditioned upon the fulfillment (or waiver by the Company in its
sole and absolute discretion) of each of the following events as of each Closing Date: 
 (a) the representations and
warranties of Lender set forth in this Agreement and in the other Transaction Documents to which it is a party shall be true and correct in all material respects as of such date as if made on such date (except that to the extent that any such
representation or warranty relates to a particular date, such representation or warranty shall be true and correct in all material respects as of that date); 
 (b) Lender shall have complied with or performed all of the agreements, obligations and conditions set forth in this Agreement that are required to be complied with or performed by Lender on or before the
Closing; 
 (c) there shall be no injunction, restraining order or decree of any nature of any court or Governmental Authority
of competent jurisdiction that is in effect that restrains or prohibits the consummation of the transactions contemplated hereby and by the other Transaction Documents; 
 (d) Lender shall have executed each Transaction Document to which it is a party and shall have delivered the same to the Company; and 

(e) Lender shall have tendered the Purchase Price for the Note being purchased by it at the Closing by wire transfer of immediately
available funds pursuant to the wiring instructions provided by the Company. 

  
 9 

 8. Right of Participation. So long as any one of the Notes, issued pursuant to this
Agreement, shall be outstanding, the Lender shall be given not less than five (5) days prior written notice of any proposed sale by the Company of its Common stock or other securities or equity linked debt obligations, except in connection with
an Exempt Issuance, as such term is defined in the Note. If Lender elects to exercise its rights pursuant to this Section 8(a), the Lender shall have the right during the five (5) days following receipt of the notice, to purchase in the
aggregate up to all of such offered common stock, debt or other securities in accordance with the terms and conditions set forth in the notice of sale. In the event such terms and conditions are modified during the notice period, the Lender
shall be given prompt notice of such modification and shall have the right during the five (5) days following the notice of modification to exercise such right. 
 9. Additional Considerations.  
 (a) Notwithstanding anything to the
contrary in this Agreement, during such time as the Company’s shares are listed for trading on Nasdaq Capital Market, the Lender shall have no right to receive from the Company, more than 19.999% of the amount of Common Stock of the Company
issued and outstanding on the Effective Date, unless the Company’s shareholders shall have approved the transactions contemplated hereby, including the issuance of shares upon conversion of this Note, in excess of 20% of the amount of Common
Stock of the Company issued and outstanding on the Effective Date. In the event the Company shall have not obtained such shareholder approval at its upcoming 2012 annual meeting of shareholders, Lender shall have the right to terminate this
Agreement and its obligation to purchase additional Notes pursuant to this Agreement. 
 (b) The Lender shall have no
obligation to purchase any of the Notes in the event the average trading volume in the Company’s common stock as reported on the Trading Market on which the Common Stock is then listed or quoted, for the ten (10) day period (the
“Measurement Period”) prior to a scheduled closing multiplied by the VWAP during the Measurement Period is less than Fifty Thousand ($50,000) Dollars (the “VWAP Threshold”). Further, in the event the VWAP Threshold is not met for
a period of forty five (45) consecutive Trading Days, the Lender shall have the right to terminate this Agreement and its obligation to purchase additional Notes pursuant to this Agreement. 

10. General Provisions. 
 a. Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAWS. THE COMPANY
CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL OR STATE COURT LOCATED IN NEW YORK, NEW YORK, WITH RESPECT TO ANY CLAIM OR CONTROVERSY RELATED TO THE ENFORCEMENT OR INTERPRETATION OF THIS NOTES. 

  
 10 

 b. Notices. Any notice or other communication required or permitted to be given
hereunder shall be in writing by mail, facsimile or personal delivery and shall be effective upon actual receipt of such notice. The addresses for such communications shall be as set forth below until notice is received that any such address or
contact information has been changed: 
  

			
	 To the Company:
	  	 Cereplast, Inc.
 300 N.
Continental, Suite 100
 El Segundo, CA 90245
 Attn: Frederic Scheer
 F:310.615.9800

		
	 With a copy to:
	  	 Sichenzia Ross Friedman Ference LLP
 61 Broadway, 32nd Floor
 New York, NY 10006
 Attn: Gregory Sichenzia, Esq.
 F: 212.930.9725

		
	 To Lender:
	  	 To the address on the signature page attached
 hereto.

 c. Entire Agreement. Except as otherwise provided herein, this Agreement, the Notes and the other
documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof. 
 d. Amendment. This Agreement may only be amended, waived, discharged or terminated by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or
termination is sought. 
 e. Successors and Assigns. This Agreement and the Notes may be transferred or assigned by
Lender in whole or in part, in Lender’s sole and absolute discretion. Except as otherwise expressly provided in this Agreement, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto. 
 f. Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 
 g. Titles and Subtitles. The titles of the Sections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. 

  
 11 

 h. Expenses. The Company and Lender shall bear their own expenses incurred with
respect to this transaction. 
 i. Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall be deemed to constitute one instrument. 
 j. Counsel. All
parties hereto have been represented by counsel, and no inference shall be drawn in favor of or against any party by virtue of the fact that such party’s counsel was or was not the principal draftsman of this Agreement. Each of the parties has
been provided the opportunity to be represented by counsel of its choice and has been encouraged to seek separate representation to the extent that it deems such desirable, but the absence of such shall not be asserted as a basis for the
enforceability or interpretation of any of the terms or provisions of this Agreement, or as a reason to seek disqualification of the Company’s counsel in any controversy or proceeding. 

[SIGNATURE PAGE TO FOLLOW] 

  
 12 

 IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first-above
written. 
  

			
	CEREPLAST, INC.
		
	By:  	 	/s/ Frederic Scheer
		 	Name: Frederic Scheer
		 	Title: Chief Executive Officer

  
 13 

 [SIGNATURE PAGE FOR NOTE PURCHASE AGREEMENT] 

 

									
	HANOVER HOLDINGS I, LLC	 		 	
				
	By:  	 	 /s/ Joshua Sason
	 		 	Dated: October 15, 2012
		 	Name: Joshua Sason	 		 	
		 	Title: CEO	 		 	

 ADDRESS: 5 Hanover Square 
                         New York, NY 10004 

  
 14 

 Schedule 3(f) 

  
 15 

 Exhibit A 

Form of Promissory Note 

  
 16

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