Document:

EXHIBIT 4.2

                                STOCK OPTION PLAN

      THIS STOCK  OPTION  PLAN (the  "Plan") is made and  adopted by  CEREPLAST,
INC., a Nevada  corporation  (the  "Company"),  for the purposes of enabling the
Company to grant stock options to its employees and others providing services to
the Company.

SECTION 1. DEFINITIONS

For purposes of this Plan, the term:

      1.1   "COMMON  STOCK"  means  shares of the  common  capital  stock of the
Company.

      1.2   "COMPANY" means CEREPLAST, INC., a Nevada corporation.

      1.3   "CODE" means the Internal Revenue Code of 1986, as amended from time
to time.

      1.4   "FAIR MARKET VALUE" means,  as of any date,  the value of the Common
Stock determined as follows:

            (a)   If the Common Stock is listed on an established national stock
exchange or the National Market System of the National Association of Securities
Dealers,  Inc. Automated Quotation ("NASDAQ") System, the Fair Market Value of a
share of Common  Stock shall be the  closing  sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system (or
the  exchange  with the greatest  volume of trading in the Common  Stock) on the
last market  trading day prior to the day of  determination,  as reported in The
Wall  Street  Journal  or such  other  source  as the Board or  Committee  deems
reliable;

            (b)   If the Common Stock is quoted on the NASDAQ System (but not on
the  National  Market  System  thereof) or is  regularly  quoted by a recognized
securities dealer but selling prices are not reported,  the Fair Market Value of
a share of Common  Stock  shall be the mean  between  the high bid and low asked
prices for the Common  Stock on the last market  trading day prior to the day of
determination,  as reported in The Wall Street  Journal or such other  source as
the Board or Committee deems reliable; and

            (c)   In the absence of an established  market for the Common Stock,
the  Fair  Market  Value  shall be  determined  in good  faith  by the  Board or
Committee.

      1.5   "HOLDER"  means each  individual  to whom an  Incentive  Option or a
Nonqualified Option is granted under this Plan.

      1.6   "INCENTIVE  OPTIONS" means  "incentive  stock options" as defined in
Section 422 of the Code.

      1.7   "NONQUALIFIED  OPTIONS" means all options granted under this Plan to
acquire stock of the Company, its Parent, or any of its Subsidiaries, other than
Incentive Options.

      1.8   "OPTION" shall mean each Incentive  Option and  Nonqualified  Option
permitted to be granted under this Plan.

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      1.9   "OPTION  SHARES" shall mean the number of shares for which an Option
is granted under this Plan.

      1.10  "PARENT" means a corporation that owns directly or indirectly 50% or
more of the total combined voting power of all classes of stock of the Company.

      1.11  "PLAN" means this Stock Option Plan of the Company,  as amended from
time to time.

      1.12  "RESTRICTED STOCK" means shares of Common Stock which either (a) are
issued  upon  exercise  of an  Option  prior  to full  vesting  therein,  or (b)
otherwise are issued by the Company pursuant to Section 7, below.

      1.13  "RESTRICTED  STOCKHOLDER"  means the employee of,  consultant to, or
director of the Company or other person to whom shares of  Restricted  Stock are
issued pursuant to this Plan.

      1.14  "RESTRICTED  STOCK  AGREEMENT"  means  an  agreement  executed  by a
Restricted  Stockholder  and the  Company as  contemplated  by Section 7, below,
which  imposes  on the  shares  of  Restricted  Stock  held  by  the  Restricted
Stockholder such restrictions as the Board or Committee deem appropriate.

      1.15  "SUBSIDIARY" means each corporation in which stock possessing 50% or
more of the  total  combined  voting  power  of all  classes  of  stock  of such
corporation or corporations is owned directly or indirectly by the Company.

SECTION 2. PURPOSE

      This Plan is  intended  to provide an  incentive  to enable  officers  and
employees  of the Company,  its Parent,  and its  Subsidiaries,  and for certain
other individuals  providing  services to or acting as directors of the Company,
its Parent, or its Subsidiaries,  to acquire or increase a proprietary  interest
in the Company, its Parent, or its Subsidiaries,  and their success. The Company
intends  that this  purpose  shall be  effected  by the  granting  of  Incentive
Options, Nonqualified Options, and Restricted Stock under the Plan.

SECTION 3. OPTIONS TO BE GRANTED AND ADMINISTRATION

      3.1   OPTIONS TO BE GRANTED.  Options granted under the Plan may be either
Incentive Options or Nonqualified Options.

      3.2   ADMINISTRATION  BY THE BOARD. This Plan shall be administered by the
Board of Directors of the Company (the "Board").

            (a)   The Board  shall  have full and final  authority  to  operate,
manage  and  administer  the  Plan on  behalf  of the  Company.  This  authority
includes, but is not limited to: (i) the power to grant Options conditionally or
unconditionally;  (ii)  the  power  to  prescribe  the  form  or  forms  of  the
instruments  evidencing  Options  granted  under this  Plan;  (iii) the power to
interpret the Plan;  (iv) the power to provide  regulations for the operation of
the incentive  features of the Plan, and otherwise to prescribe  regulations for
interpretation,  management  and  administration  of the Plan;  (v) the power to
delegate  responsibility  for Plan operation,  management and  administration on
such terms, consistent with the Plan, as the Board may establish; (vi) the power
to delegate to other persons the responsibility for performing  ministerial acts
in furtherance of the Plan's purpose; and (vii) the power to engage the services
of persons or organizations in furtherance of the Plan's purpose,  including but
not limited to banks, insurance companies, brokerage firms and consultants.

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            (b)   In addition,  as to each Option, the Board shall have full and
final authority in its discretion to determine: (i) the number of shares subject
to each Option; (ii) the time or times at which Options shall be granted;  (iii)
the Option  price for the shares  subject to each  Option,  which price shall be
subject to the applicable  requirements,  if any, of Section 6.1(c) hereof,  and
(iv) the time or times when each Option shall become exercisable, the conditions
under which  exercise  may be  accelerated,  and the  duration  of the  exercise
period.

      3.3   APPOINTMENT  AND  PROCEEDINGS OF COMMITTEE.  The Board may appoint a
Stock Option Committee or other designated  person (the  "Committee") that shall
consist of at least two  members  of the Board.  The Board may from time to time
appoint members of the Committee in  substitution  for or in addition to members
previously appointed, and may fill vacancies,  however caused, in the Committee.
The Committee shall select one of its members as its chairman and shall hold its
meetings at such times and places as it shall deem advisable.  A majority of its
members  shall  constitute  a quorum,  and all  actions of the  Committee  shall
require the  affirmative  vote of a majority of its  members.  Any action may be
taken by a written  instrument  signed by all of the members,  and any action so
taken  shall  be as  fully  effective  as if it had  been  taken  by a vote of a
majority of the members at a meeting duly called and held.

      3.4   POWERS OF COMMITTEE.  Subject to the provisions of this Plan and the
approval   of  the  Board,   the   Committee   shall  have  the  power  to  make
recommendations to the Board as to whom Options should be granted, the number of
shares to be covered by each Option, the time or times of Option grants, and the
terms and  conditions  of each Option.  In addition,  the  Committee  shall have
authority to  interpret  the Plan,  to  prescribe,  amend and rescind  rules and
regulations  relating  to the  Plan,  and to  exercise  the  administrative  and
ministerial  powers of the Board  with  regard to aspects of the Plan other than
the granting of Options. The interpretation and construction by the Committee of
any provisions of the Plan or of any Option  granted  hereunder and the exercise
of any  power  delegated  to it  hereunder  shall  be  final,  unless  otherwise
determined by the Board. No member of the Board or the Committee shall be liable
for any action or  determination  made in good faith with respect to the Plan or
any Option granted hereunder.

SECTION 4. STOCK

      4.1   SHARES SUBJECT TO PLAN.  The Company hereby  reserves and sets aside
for the granting of Options under the plan Twenty Million (25,000,000) shares of
Common  Stock.  Such  number of shares is subject to  adjustment  as provided in
Section 9, below.

      4.2   LAPSED OR UNEXERCISED OPTIONS. Whenever any outstanding Option under
the  Plan  expires,  is  canceled  or is  otherwise  terminated  (other  than by
exercise),  the shares of Common Stock allocable to the  unexercised  portion of
such  Option  automatically  shall be  restored  to the Plan and again  shall be
available for the granting of other Options under the Plan.

SECTION 5. ELIGIBILITY

      5.1   ELIGIBLE  OPTIONEES.  Incentive  Options  may  be  granted  only  to
officers  and other  employees  of the  Company or its  Parent or  Subsidiaries,
including members of the Board who are also employees of the Company or a Parent
or  Subsidiary.  Nonqualified  Options  may be  granted  to  officers  or  other
employees of the Company or its Parent or Subsidiaries,  to members of the Board
or the board of directors of a Parent or any Subsidiary whether or not employees
of the Company or such Parent or  Subsidiary,  and to certain other  individuals
providing services to the Company or its Parent or Subsidiaries.

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      5.2   LIMITATIONS  ON 10%  STOCKHOLDERS.  No  Incentive  Option  shall  be
granted to an individual who, at the time the Incentive Option is granted,  owns
(including  ownership  attributed  pursuant to Section  424(d) of the Code) more
than 10% of the  total  combined  voting  power of all  classes  of stock of the
Company  or  a  Parent  or  Subsidiary  of  the  Company  (a   "greater-than-10%
stockholder"), unless such Incentive Option provides that (i) the purchase price
per share  shall not be less than 110% of the Fair  Market  Value of the  Common
Stock at the time such  Incentive  Option is  granted,  and (ii) such  Incentive
Option shall not be  exercisable  to any extent after the expiration of five (5)
years from the date on which it is granted.

      5.3   LIMITATION ON EXERCISABLE  OPTIONS.  The aggregate Fair Market Value
(determined  at the time the  Incentive  Option is granted) of the Common  Stock
with respect to which  Incentive  Options are  exercisable for the first time by
any person  during any  calendar  year under the Plan and under any other Option
plan of the Company (or a parent or  subsidiary as defined in Section 424 of the
Code) shall not exceed  $100,000.  Any Option granted in excess of the foregoing
limitation shall be specifically  designated as being a Nonqualified Option. The
first  sentence of this  Section 5.3 shall be applied by  reference  to the Fair
Market Value of Common Stock as of the time the Option is granted.

SECTION 6. TERMS OF OPTION AGREEMENTS

      6.1   MANDATORY TERMS. Each Option agreement shall contain such provisions
as the Board or the Committee  from time to time  determines to be  appropriate.
Option  agreements  need  not  be  identical,   but  each  Option  agreement  by
appropriate  language  shall  include  the  substance  of all  of the  following
provisions:

            (a)   EXPIRATION. Notwithstanding any other provision of the Plan or
of any Option  agreement,  each Option shall expire on the date specified in the
Option  agreement,  which date shall not be later than the tenth  anniversary of
the date on which the Option was granted  (fifth  anniversary  in the case of an
Incentive Option granted to a greater-than-10% stockholder).

            (b)   EXERCISE.  Each  Option  shall  be  exercisable  in full or in
installments  (which need not be equal) and at such times as  designated  by the
Board  or the  Committee.  To  the  extent  not  exercised,  installments  shall
accumulate and be  exercisable,  in whole or in part, at any time after becoming
exercisable, but not later than the date the Option expires.

            (c)   PURCHASE  PRICE.  The  purchase  price per share of the Common
Stock under each  Incentive  Option shall be not less than the Fair Market Value
of the Common  Stock on the date the Option is granted  (110% of the Fair Market
Value in the case of a greater-than-10%  stockholder). The price at which shares
may be  purchased  pursuant to  Nonqualified  Options  shall be specified by the
Board or the Committee at the time the Option is granted,  and may be less than,
equal to or greater  than the Fair Market Value of the shares of Common Stock on
the date such Nonqualified Option is granted, but shall not be less than the par
value of shares of Common Stock.

            (d)   TRANSFERABILITY OF OPTIONS. Options granted under the Plan and
the rights and privileges  conferred  thereby may not be transferred,  assigned,
pledged or hypothecated in any manner (whether by operation of law or otherwise)
other than by will or by applicable laws of descent and distribution,  and shall
not be subject to execution,  attachment or similar process. Upon any attempt to
so transfer,  assign,  pledge,  hypothecate  or otherwise  dispose of any Option
under the Plan (or any right or  privilege  conferred  hereby),  contrary to the
provisions of the Plan, or upon any attempted  levy or any attachment or similar
process  upon the rights and  privileges  conferred  hereby,  such Option  shall
thereupon terminate and become null and void.

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            (e)   TERMINATION  OF  EMPLOYMENT  OR DEATH OF  OPTIONEE.  Except as
otherwise  expressly  provided in the terms and conditions of the Option granted
to an Optionee,  Options  granted  hereunder  shall terminate on the earliest to
occur of (i) the date of expiration  thereof;  (ii) if the Holder is employed by
the Company  and such  employment  is  terminated  by the Company for cause,  as
hereinafter defined, on the date of such termination;  or (iii) if the Holder is
employed by the Company and such  employment is terminated  for any reason other
than death or for cause as  aforesaid,  on the earlier of the date of expiration
thereof or ninety (90) days following the date of such termination.

                  (i)   Until  the date on which  the  Option  so  expires,  the
Holder may exercise that portion of his Option which is  exercisable at the time
of  termination of such  relationship.  An employment  relationship  between the
Company and the Holder shall be deemed to exist  during any period  during which
the Holder is employed by the Company or by a Parent or any Subsidiary.  Whether
authorized  leave of absence or absence on  military  government  service  shall
constitute  termination of the employment  relationship  between the Company and
the  Holder  shall  be  determined  by the  Board or the  Committee  at the time
thereof.  For purposes of this Section  6.1(e),  the term "cause" shall mean (a)
any material  breach by the Holder of any  agreement to which the Holder and the
Company are both parties, (b) any act (other than retirement) or omission to act
by the Holder  which may have a material  and  adverse  effect on the  Company's
business  or on the  Optionee's  ability to perform  services  for the  Company,
including,  without  limitation,  the  commission of any crime (other than minor
traffic violations),(c) any material misconduct or material neglect of duties by
the Holder in  connection  with the  business  or affairs of the  Company or any
Subsidiary  or  affiliate  of  the  Company,   or  any  other  act  or  omission
constituting "cause" for termination of Holder's employment by the Company under
any employment agreement between such Holder and the Company.

                  (ii)  In the  event  of the  death of any  Holder  while in an
employment  or  other  relationship  with the  Company  and  before  the date of
expiration  of such Option,  such Option shall  terminate on the earlier of such
date of expiration or one hundred  eighty (180) days  following the date of such
death. After the death of the Optionee, his executor,  Board or Committee or any
person or persons to whom his  Option may be  transferred  by will or by laws of
descent  and  distribution,  shall  have the  right,  at any time  prior to such
termination,  to  exercise  the Option to the extent the Holder was  entitled to
exercise such Option as of the date of his death.

            (f)   RIGHTS OF OPTIONEES. No Holder shall be deemed for any purpose
to be the owner of any shares of Common Stock  subject to any Option  unless and
until (i) the  Option  shall have been  exercised  with  respect to such  shares
pursuant  to the terms  thereof,  and (ii) the  Company  shall  have  issued and
delivered a certificate  representing such shares.  Thereupon,  the Holder shall
have full  voting,  dividend  and other  ownership  rights with  respect to such
shares of Common Stock,  subject to any agreements entered into by the Holder in
connection  with the  Optionee's  exercise of the Option and  acquisition of the
stock.

      6.2   CERTAIN  OPTIONAL  TERMS.  The  Board  or the  Committee  may in its
discretion provide, upon the grant of any Option hereunder, that the stock shall
be subject to the terms of a repurchase or shareholders' agreement including any
and all commercially  reasonable  terms, such as, without  limitation,  that the
Company shall have the right from time to time to  repurchase  all or any number
of shares purchased upon exercise of such Option.

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            (a)   The repurchase price per share payable by the Company shall be
such amount or be  determined  in such a manner as is fixed or determined by the
Board  or the  Committee  at the time  the  Option  for the  shares  subject  to
repurchase  was granted.  The Board or the  Committee  may also provide that the
Company  shall have a right of first  refusal  with  respect to the  transfer or
proposed  transfer of any shares  purchased  upon exercise of an Option  granted
hereunder.  In the event the Board or the Committee  shall grant Options subject
to the Company's  repurchase rights or rights of first refusal,  the certificate
or certificates  representing the shares  purchased  pursuant to the exercise of
such  Option  shall  carry a legend  satisfactory  to  counsel  for the  Company
referring to such rights.

            (b)   Notwithstanding  the  foregoing,  the form of  Stock  Transfer
Agreement  attached to this Plan as Exhibit A is hereby approved and may be used
by the Board or  Committee  without any further  approval  from the Board of the
Committee.

SECTION 7. AWARD OF RESTRICTED STOCK

      7.1   AWARD OF RESTRICTED STOCK. The Board or Committee from time to time,
in its absolute  discretion,  may (a) award  Restricted  Stock to employees  of,
consultants  to, and  directors  of the Company,  and such other  persons as the
Board or  Committee  may select,  and (b) permit  Holders of Options to exercise
such Options prior to full vesting therein and hold the Common Stock issued upon
exercise of the Option as Restricted  Stock. In either such event,  the owner of
such Restricted  Stock shall hold such stock subject to such vesting schedule as
the Board or Committee  may impose or such vesting  schedule to which the Option
was subject, as determined in the discretion of the Board or Committee.

      7.2   RESTRICTED  STOCK  AGREEMENT.  Restricted Stock shall be issued only
pursuant  to a  Restricted  Stock  Agreement,  which  shall be  executed  by the
Restricted  Stockholder  and the Company and which shall  contain such terms and
conditions as the Board or Committee shall determine  consistent with this Plan,
including  such  restrictions  on transfer as are imposed by the Stock  Transfer
Agreement.

      7.3   RIGHTS AS  STOCKHOLDERS.  Upon  delivery of the shares of Restricted
Stock to the Restricted  Stockholder or to the escrow holder pursuant to Section
7.8, below, the Restricted  Stockholder shall have, unless otherwise provided by
the Board or  Committee,  all the rights of a  stockholder  with respect to said
shares, subject to the restrictions in the Restricted Stock Agreement, including
the right to receive all  dividends  and other  distributions  (other than stock
dividends,  which  shall be paid to the  escrow  holder  for the  benefit of the
Restricted Stockholder) paid or made with respect to the Restricted Stock.

      7.4   RESTRICTION  ON TRANSFER.  Notwithstanding  anything in this Plan or
any Restricted Stock Agreement to the contrary,  no Restricted  Stockholders may
sell or  otherwise  transfer,  whether or not for value,  any of the  Restricted
Stock prior to the date on which the Restricted Stockholder is vested therein.

      7.5   RESTRICTION.  All shares of Restricted  Stock issued under this Plan
(including any shares of Common Stock and other  securities  issued with respect
to the shares of Restricted Stock as a result of stock  dividends,  stock splits
or similar changes in the capital  structure of the Company) shall be subject to
such  restrictions as the Board or Committee shall provide,  which  restrictions
may  include,   without  limitation,   restrictions  concerning  voting  rights,
transferability  of the Restricted Stock and  restrictions  based on duration of
employment with the Company,  Company  performance  and individual  performance;
provided that the Board or Committee may, on such terms and conditions as it may
determine to be appropriate, remove any or all of such restrictions.  Restricted
Stock may not be sold or  encumbered  until  all  applicable  restrictions  have
terminated  or  expire.  The  restrictions,  if any,  imposed  by the  Board  or
Committee  or the  Board  under  this  Section 7 need not be  identical  for all
Restricted  Stock and the  imposition  of any  restrictions  with respect to any
Restricted  Stock  shall not  require  the  imposition  of the same or any other
restrictions with respect to any other Restricted Stock.

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      7.6   REPURCHASE  OF UNVESTED  RESTRICTED  STOCK.  Each  Restricted  Stock
Agreement shall provide that the Company shall have the right to repurchase from
the Restricted  Stockholder the unvested  Restricted Stock upon a termination of
employment,   termination  of  directorship  or  termination  of  a  consultancy
arrangement,  as  applicable,  at a cash price per share  equal to the  purchase
price paid by the Restricted Stockholder for such Restricted Stock.

      7.7   REPURCHASE  OF VESTED  RESTRICTED  STOCK.  In the  discretion of the
Board or Committee,  the Restricted Stock Agreement may provide that the Company
shall have the a right of first refusal with respect to the Restricted Stock and
a right to repurchase  the vested  Restricted  Stock upon a  termination  of the
Restricted  Stockholder's  employment  with the Company,  the termination of the
Restricted   Stockholder's   consulting   arrangement  with  the  Company,   the
termination of the Restricted  Stockholder's  service on the Company's Board, or
such other events as the Board or Committee may deem appropriate.

      7.8   ESCROW.  The Secretary of the Company or such other escrow holder as
the Board or  Committee  may  appoint  shall  retain  physical  custody  of each
certificate  representing Restricted Stock until all of the restrictions imposed
on the Restricted Stock expire or have been removed.

      7.9   LEGEND. The Board or Committee shall cause a legend or legends to be
placed on certificates  representing shares of Restricted Stock that are subject
to restrictions under Restricted Stock Agreements, which legend or legends shall
make appropriate reference to the applicable restrictions.

SECTION 8. METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE

      8.1   MEANS  OF  EXERCISE.  Any  Option  granted  under  the  Plan  may be
exercised  by the Holder by  delivering  to the  Company on any  business  day a
written  notice  specifying the number of shares of Common Stock the Holder then
desires to purchase and  specifying  the address to which the  certificates  for
such shares are to be mailed (the "Notice").  The Notice shall be accompanied by
payment for such shares,  any required  payment of withholding  taxes,  and such
documents, including without limitation an investment letter and a repurchase or
shareholder's  agreement  duly  executed  by the Holder  relating,  among  other
things, to restrictions on transfer rights of first refusal and Company buy-back
rights (if  applicable),  as may  reasonably  be  required or  requested  by the
Company. The consideration for such shares shall be paid either:

            (a)   In cash, certified or bank check or postal money order payable
to the order of the Company for an amount  equal to the sum of (x) the  Exercise
Price of such shares,  plus (y) the amount, if any, required to fund withholding
taxes due with respect to such exercise,  as  contemplated by Section 11, below.
If as of the  date of  Holder's  exercise  of the  Option  the  Company  then is
sponsoring a cashless  exercise  program  through one or more approved  brokers,
then upon  notification by Holder the Company will tender to a  Company-approved
broker any cash to be delivered under the foregoing clause "(x)" may be provided
with the proceeds of any Option  Shares which Holder  elects to cause to be sold
in  connection  with the  exercise of the Option,  the date on which the Company
receives  the  proceeds  from the sale of those shares shall be deemed to be the
date on which the Option is exercised,  and any applicable  income,  withholding
and other taxes shall be  calculated  based upon the selling price of the Option
Shares sold by the Company-approved broker pursuant to such cashless exercise.

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            (b)   With one or more share  certificates for a number of shares of
Company  Common  Stock having a Fair Market Value on the date of tender equal to
the sum of (w) the Exercise Price of such shares,  plus (x) the amount,  if any,
required  to fund  withholding  taxes  due with  respect  to such  exercise,  as
contemplated  by Section  11,  below;  provided  that the  Company  shall not be
obligated to accept the transfer of any shares of Common Stock in payment of the
exercise  price unless such  transfer  satisfies  all of the  provisions of Rule
16b-3 then applicable to the Company.

      8.2   MEANS OF PAYMENT AND DELIVERY

            (a)   Payment for the shares of Common Stock  purchased  pursuant to
the exercise of an Option shall be made either:

                  (i)   In cash  equal to the  Option  price  for the  number of
shares specified in the Notice (the "Total Option Price"); or

                  (ii)  If authorized by the  applicable  Option  agreement,  in
shares of Common  Stock of the Company  having a Fair  Market  Value equal to or
less than the Total Option Price, plus cash in an amount equal to the excess, if
any,  of the Total  Option  Price over the Fair  Market  Value of such shares of
Common Stock.

            (b)   Promptly  after  receipt  of  such  written  notification  and
payment,  the Company  shall deliver to the Holder or other  appropriate  person
certificates for the number of shares with respect to which such Option has been
so  exercised,  issued in the  Optionee's  name;  provided,  however,  that such
delivery  shall be deemed  effected for all purposes when the Company or a stock
transfer  agent of the Company shall have  deposited  such  certificates  in the
United States mail,  addressed to the Holder or other appropriate person, at the
address  specified  pursuant  to  Section  8.1 or  another  appropriate  address
designated by the Holder.

SECTION 9. ADJUSTMENT UPON CHANGES IN CAPITALIZATION

      9.1   NO  EFFECT OF  OPTIONS  UPON  CERTAIN  CORPORATE  TRANSACTIONS.  The
existence of outstanding  Options shall not affect in any way the right or power
of the Company or its  stockholders to make or authorize any or all adjustments,
recapitalizations,  reorganizations  or other changes in the  Company's  capital
structure or its business, or any merger or consolidation of the Company, or any
issue of Common  Stock,  or any issue of bonds,  debentures,  preferred or prior
preference  stock ahead of or affecting the Common Stock or the rights  thereof,
or the dissolution or liquidation of the Company, or any sale or transfer of all
or any part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.

      9.2   STOCK  DIVIDENDS,  RECAPITALIZATIONS,  ETC. If the Company effects a
subdivision  or  consolidation  of shares  or other  capital  readjustment,  the
payment of a stock  dividend,  or other  increase or  reduction of the number of
shares of the Common Stock outstanding,  without receiving compensation therefor
in money, services or property,  then: (a) the number, class and per share price
of  shares  of  stock  subject  to  outstanding   Options   hereunder  shall  be
appropriately  adjusted in such a manner as to entitle a Holder to receive  upon
exercise of an Option, for the same aggregate cash consideration, the same total
number  and class of shares  that the  owner of an equal  number of  outstanding
shares  of  Common  Stock  would  own as a result  of the  event  requiring  the
adjustment; and (b) the number and class of shares with respect to which Options
may be granted  under the Plan shall be adjusted by  substituting  for the total
number of shares of Common Stock then reserved for issuance  under the Plan that
number  and  class of  shares  of stock  that the  owner of an equal  number  of
outstanding  shares of Common Stock would own as a result of the event requiring
the adjustment.

                                      -8-
<PAGE>

      9.3   DETERMINATION OF ADJUSTMENTS. Adjustments under this Section 9 shall
be determined by the Board or the  Committee  and such  determinations  shall be
conclusive.  The Board or the Committee  shall have the  discretion and power in
any such event to determine and to make effective  provision for acceleration of
the  time or  times  at  which  any  Option  or  portion  thereof  shall  become
exercisable. No fractional shares of Common Stock shall be issued under the Plan
on account of any adjustment specified above.

      9.4   NO ADJUSTMENT IN CERTAIN  CASES.  Except as  hereinbefore  expressly
provided,  the  issue  by the  Company  of  shares  of stock  of any  class,  or
securities  convertible  into shares of stock of any class, for cash or property
or for labor or services, either upon direct sale or upon the exercise of rights
or warrants to subscribe  therefor,  or upon conversion of shares or obligations
of the  Company  convertible  into such  shares or other  securities,  shall not
affect,  and no adjustment by reason  thereof shall be made with respect to, the
number or price of shares of Common Stock then subject to outstanding Options.

SECTION 10. EFFECT OF CERTAIN TRANSACTIONS.

      If, while  unexercised  Options  remain  outstanding  under the Plan,  the
Company  is a party  to a  reorganization  or  merger  with  one or  more  other
corporations,  whether  or  not  the  Company  is  the  surviving  or  resulting
corporation,  or if the  Company  consolidates  with or into  one or more  other
corporations,  or if the Company is  liquidated,  or if there is a sale or other
disposition of substantially  all of the Company's  capital stock or assets to a
third party or parties (each hereinafter referred to as a "Transaction"), then:

      10.1  OPTION  OUTSTANDING.  Subject to the  provisions  of  Section  10.2,
below,  after the effective date of such Transaction  unexercised  Options shall
remain  outstanding  and shall be  exercisable  in shares of Common Stock or, if
applicable,  shares of such stock or other  securities,  cash or property as the
holders  of  shares  of  Common  Stock  received  pursuant  to the terms of such
Transaction; or

      10.2  PERMISSIVE  ACCELERATION.  The  Board  may  accelerate  the time for
exercise of all unexercised and unexpired Options,  effective as of a date prior
to the  effective  date  of  such  Transaction;  provided  that  (a)  notice  of
acceleration  shall be given to each holder of an Option,  (b) each holder of an
Option shall have the right to exercise  such Option in part or in full prior to
the effective date of such Transaction,  and (c) to the extent not so exercised,
all of such Options shall be canceled prior to or as of such effective date; and
provided further, the Board may not accelerate unexercised and unexpired Options
pursuant to this  Section  10.2 if to do so would  adversely  affect  pooling of
interests treatment intended to be effected in connection with a Transaction.

SECTION 11. NON-EXCLUSIVITY OF THE PLAN; NON-UNIFORM DETERMINATIONS.

      Neither the adoption of the Plan by the Board nor the approval of the Plan
by  the  stockholders  of  the  Company  shall  be  construed  as  creating  any
limitations on the power of the Board to adopt such other incentive arrangements
as it may deem  desirable,  including  without  limitation the granting of stock
Options  otherwise  than  under the Plan,  and such  arrangements  may be either
applicable  generally  or only in specific  cases.  The  Board's or  Committee's
determinations  under  the  Plan  need  not be  uniform  and  may be  made by it
selectively  among persons who receive or are eligible to receive  Options under
the Plan (whether or not such persons are similarly situated).  Without limiting
the generality of the foregoing,  the Board or the Committee  shall be entitled,
among other things,  to make  non-uniform and selective  determinations,  and to
enter into non-uniform and selective Option agreements, as to (i) the persons to
receive Options under the Plan, (ii) the terms and provisions of Options,  (iii)
the exercise by the Board or the  Committee of its  discretion in respect of the
exercise of Options pursuant to the terms of the Plan, and (iv) the treatment of
leaves of absence pursuant to Section 6.1(e), above.

                                      -9-
<PAGE>

SECTION 12. GOVERNMENT AND OTHER REGULATIONS AND WITHHOLDING.

      12.1  SECTION 260.141.46. Notwithstanding any other provision of this Plan
to the contrary,  the Company shall deliver to each Holder  annually  within one
hundred  and  twenty  (120) days after the end of the  Company's  fiscal  year a
statement of income and expenses for the Company for the  immediately  preceding
year  and a  balance  sheet  for the  Company  dated  as of the  last day of the
immediately preceding fiscal year.

      12.2  GOVERNMENT AND OTHER  REGULATIONS.  The obligation of the Company to
sell and deliver  shares of Common Stock with respect to Options  granted  under
the Plan  shall be  subject  to all  applicable  laws,  rules  and  regulations,
including all applicable federal and state securities laws, and the obtaining of
all  such  approvals  by  government  agencies  as may be  deemed  necessary  or
appropriate by the Board or the Committee.  All shares sold under the Plan shall
bear  appropriate  legends.  The Company may, but shall in no event be obligated
to, register or qualify any shares covered by Options under  applicable  federal
and state securities laws; and in the event that any shares are so registered or
qualified the Company may remove any legend on  certificates  representing  such
shares.  The Company shall not be obligated to take any other affirmative action
in order to cause the exercise of an Option or the  issuance of shares  pursuant
thereto to comply with any law or regulation of any governmental authority.

      12.3  WITHHOLDING. Whenever under the Plan shares are to be delivered upon
exercise of an Option,  the Company  shall be entitled to require as a condition
of delivery  that the Holder remit an amount  sufficient to satisfy all federal,
state and other governmental withholding tax requirements related thereto.

SECTION 13. "LOCKUP" AGREEMENT.

      The Board or the Committee in its  discretion may specify upon granting an
Option  that the  Holder  shall  agree,  for a period of time (not to exceed 180
days) from the effective date of any  registration of securities of the Company,
upon  request of the Company or the  underwriter  or  underwriters  managing any
underwritten offering of the Company's  securities,  not to sell, make any short
sale of, loan, grant any Option for the purchase of, or otherwise dispose of any
shares issued pursuant to the exercise of such Option, without the prior written
consent of the Company or such underwriter or underwriters, as the case may be.

SECTION 14. MISCELLANEOUS.

      14.1  GOVERNING  LAW.  The Plan  shall be  governed  by and  construed  in
accordance with the laws of the State of California.

      14.2  TERMINATION  AND AMENDMENT OF PLAN. The Board may terminate the Plan
at any time,  and may amend the Plan at any time and from time to time,  subject
to the  limitation  that,  except as provided  in  Sections 9 and 10 hereof,  no
amendment shall be effective  unless approved by the stockholders of the Company
in  accordance  with  applicable  law and  regulations,  at an annual or special
meeting held within  twelve  months before or after the date of adoption of such
amendment, in any instance in which such amendment would (a) increase the number
of shares of Common Stock as to which  Options may be granted under the Plan; or
(b)  change  in  substance  the  provisions  of  Section  5 hereof  relating  to
eligibility to participate in the Plan.  Except as provided in Sections 9 and 10
hereof,  rights and obligations  under any Option granted before  termination or
amendment  of the Plan shall not be altered or impaired by such  termination  or
amendment except with the consent of the Optionee.

                                      -10-
<PAGE>

      14.3  NO ASSURANCES OF EMPLOYMENT.  Neither the adoption of this Plan, the
granting of any Option hereunder,  nor the execution of an Option agreement with
any Holder is intended or shall be  construed  as either (a)  conferring  on any
individual any right to remain  employed by the Company for any specified  term,
or (b)  limiting  in any way the right,  power and  authority  of the Company to
terminate the employment or other service  engagement of such person at any time
either with or without cause.

      14.4  EFFECTIVE  DATE.  The effective date of the Plan is April 4th, 2005.
No Option may be granted  under the Plan after the tenth (10th)  anniversary  of
such effective date.

      IN WITNESS WHEREOF,  the undersigned has executed this Plan,  effective as
of the date set forth above.

CEREPLAST, INC., a Nevada corporation

By:___________________________________
  Frederic Scheer, CEO

                                      -11-
<PAGE>

                                    EXHIBIT A

                        FORM OF STOCK TRANSFER AGREEMENTExhibit 10.1

                             AGREEMENT OF SETTLEMENT

      This Agreement of Settlement  (the  "Agreement") is entered into this 19th
day of August 2005,  by and between,  Atlantic  Wine  Agencies,  Inc., a Florida
corporation  with  its  principal  place  of  business  formerly  located  at 64
Knightsbridge,  London UK SWIX but now with its  principal  place of business at
Golden Cross House, 8 Duncannon  Street  Strand,  London,  WC24JF  ("Atlantic");
Dominion Wines Ltd, ACN 087183739 an Australian  corporation  with its principal
place of business at Level 4, 973 Nepean Highway, Moorabbin, Victoria, Australia
("Wines ");  Dominion  Estates Pty Ltd, ACN 072221375 an Australian  corporation
with its principal place of business at Level 4, 973 Nepean Highway,  Moorabbin,
Victoria,  Australia  ("Estates");  and Global Realty Development Corp (formerly
known as Australian  Agriculture and Property Development  Corporation) with its
principal  place of  business  at 11555 Heron Bay  Boulevard,  Suite 200,  Coral
Springs,  Florida 33076, USA ("Global").  Collectively,  Wines and Estates shall
sometimes be referred to as the "Dominion Estates Group".

W I T N E S S E T H:

      WHEREAS,  Atlantic and the  Dominion  Estates  Group  entered into a Share
Exchange  Agreement,  effective as of September 4, 2004 ( "Exchange  Agreement")
pursuant to which Atlantic acquired from A1 Financial  Planners Pty Ltd (ACN 006
942 598)  ("A1")  all the  shares  in  Estates  and  Estates  acquired  from the
shareholders  as set out in Schedule 1 ("Dominion  Estates Group  Shareholders")
their shares in Wines ("Wines Shares");

      WHEREAS, pursuant to the terms of the Exchange Agreement,  Atlantic agreed
to, among other things, (i) deliver 20,000,000 restricted shares of common stock
of Atlantic  to the  shareholders  of Wines and  Estates;  (ii)  transfer to the
National Australia Bank the amount of AUD$3,097,677.91 to discharge the loans to
Wines specified in the Exchange Agreement  ("National Loans"),  (iii) assume the
Commonwealth Bank of Australia loan to Estates in the amount of AUD$4,081,387.11
("Commonwealth Loan"); and (iv) transfer  AUD$262,322.09 to the Dominion Estates
Group's  bank  accounts  as  assurance  of  its  good  faith  in  servicing  the
Commonwealth Loan;

<PAGE>

      WHEREAS,  in part  satisfaction  of its  obligations  under  the  Exchange
Agreement,  Atlantic  has (i) issued and  delivered  to the  parties  set out in
Schedule 2 ("Atlantic  Shareholders")  shares in Atlantic  ("Atlantic  Shares"),
(ii) paid the National Australia Bank the amount of AUD$3,136,202.87,  and (iii)
transferred  the said sum of  AUD$262,322.09  at the  direction  of the Dominion
Estates Group;

      WHEREAS  Atlantic  did not  acquire the shares in Wines owned by P.L.S Pty
Ltd (ACN 006 449 485) ("PLS") but Atlantic  incorrectly  issued to PLS shares in
Atlantic in the mistaken belief that PLS had delivered its shareholding in Wines
to Atlantic;

      WHEREAS,  Atlantic has not assumed the Commonwealth  Loan as a dispute had
arisen between the parties to the Exchange Agreement;

      WHEREAS,  pursuant to the terms of the  Exchange  Agreement,  the Dominion
Estates  Group  Shareholders  delivered to Atlantic all of their shares in Wines
and Estates,  and Atlantic caused to be transferred all those shares in Wines to
Estates and all those shares in Estates to Atlantic;

      WHEREAS,  each of the boards of directors of Atlantic,  Wines and Estates,
have each determined that it would be in the best interests of each of Atlantic,
Wines and Estates,  and their  respective  stockholders and the Dominion Estates
Group Shareholders to unwind the transactions consummated in connection with the
Exchange Agreement;

      WHEREAS, on February 28, 2005, Mount Rozier Estates Pty Ltd, ("Mt Rozier")
a wholly-owned  subsidiary of Atlantic  borrowed  AUD$465,000 from Estates ( "Mt
Rozier Loan");
<PAGE>

      WHEREAS, as additional consideration for this Agreement, Global has agreed
to  assume  Mt  Rozier's  obligation  under  the Mt  Rozier  Loan and to issue a
promissory  note to Estates as security for the repayment of the Mt Rozier Loan,
and Estates has agreed to  substitute  Global for Mt Rozier as the debtor of the
Mt Rozier Loan as evidenced by a novation agreement;

      WHEREAS, on April 4 2005, the board of directors of Estates placed Estates
into  voluntary  administration  under  Section  436A  of the  Corporations  Act
(Commonwealth)  2001 ("the  Act") and as a result,  the  transfer  of any of its
shares is subject to approval of the Federal  Court  pursuant to Section 437F of
the Act.

      WHEREAS,  each of the boards of directors  of Atlantic,  Wines and Estates
have  determined  that it would be in the best  interests  of  Atlantic,  Wines,
Estates,  A1 and the Dominion Estates Group  Shareholders to have A1 acquire all
the  issued  shares  in  Estates   ("the  Estates   Shares")  from  Atlantic  in
consideration of A1 returning its shares in Atlantic to Atlantic;

      WHEREAS Atlantic warrants that all the Estates Shares are unencumbered and
represents that,  except for the appointment of the  Administrators  to Estates,
Atlantic  has not  created  or  caused  any  party  to  obtain  or  possess  any
encumbrance,  lien, charge or claim with respect to either the Estates Shares or
to the best of its  knowledge  and belief the Wines  Shares and that  subject to
paragraph  1.1 of Section 1 of this  Agreement,  it is entitled to transfer  the
Estates Shares to Global in accordance with this Agreement;

      WHEREAS  this  Agreement  is  conditional  upon and will have no force and
affect unless  either (a) the approval of the Federal Court  pursuant to Section
437F of the Act  ("Court  Approval")  to the  transfer  by Atlantic to A1 of the
Estates Shares is obtained or (b) the Deed of Company Arrangement (as defined in
the   following   recital)   has  come  into  force  and  effect  and  the  Deed
Administrators  (as defined in the next following recital) have consented to the
transfer by Atlantic to A1 of all right title and interest in and to the Estates
Shares;
<PAGE>

      WHEREAS,  following a meeting of creditors of Estates held on 29 July 2005
it was resolved that Estates execute a Deed of Company Arrangement which will be
executed pursuant to Section 444A of the Act ("Deed of Company Arrangement");

      WHEREAS,  if the Deed of Company  Arrangement  comes into force and effect
the  requirement  to obtain Court  Approval to the transfer by Atlantic to A1 of
the Estates Shares will not be necessary, in which event and with the consent of
those  parties  defined  in  the  Deed  of  Company   Arrangement  as  the  Deed
Administrators  ("Deed  Administrators"),  the transfer by Atlantic to A1 of the
Estates  Shares can proceed in the manner set out in paragraph  1.6 of Section 1
of the Agreement;

      WHEREAS,  as additional  consideration  for this Agreement  Global has, at
Atlantic's request, agreed to issue to Sapphire Developments Ltd a duly executed
promissory  note for  AUD$3.2  Millio  together  with a duly  executed  security
agreement in relation thereto;

      WHEREAS in consideration of the Agreement  Atlantic  releases the Dominion
Estates Group from each and every obligation which Wines and/or Estates may have
to repay any  monies  which may be owing by Wines  and/or  Estates  to  Atlantic
including  any monies  which  Atlantic  may have  advanced  or  provided  to, or
provided  for the benefit of,  either or both of the  companies  comprising  the
Dominion Estates Group (including  without  limitation the amount transferred to
discharge  the National  Loans and the amount of  AUD$262,322.09  herein  before
referred  to as being  transferred  at the  direction  of the  Dominion  Estates
Group);
<PAGE>

      WHEREAS Atlantic  warrants that to the best of its knowledge and belief it
has not caused Wines to become liable to or indebted to any third party and that
Estates is not liable or indebted to any party  other than as  disclosed  to the
Administrators of Estates;

      WHEREAS, the parties acknowledge that certain of the Atlantic Shares noted
with an asterisk in Schedule 2 ("DPP  Controlled  Shares")  are the subject of a
restraint  order  obtained  by  the  Director  of  Public  Prosecutions  of  the
Commonwealth  of Australia  ("DPP")  under  proceedings  in the Supreme Court of
Victoria (Australia) No. 1530 of 2004 and have been placed under the custody and
control of the Official Trustee at the Insolvency and Trustee Service  Australia
("Official  Trustee")  and that any  transfer  of the DPP  Controlled  Shares is
subject to the approval of the Official Trustee;

      WHEREAS Global and the Dominion  Estates Group agree that once the Estates
Shares  have  been   transferred   to  A1,   Estates   comes  out  of  voluntary
administration and control is returned to its directors they shall cause all the
shares  in  Wines  which  were  formerly  held  by the  Dominion  Estates  Group
Shareholders   to  be  transferred  to  each  of  the  Dominion   Estates  Group
Shareholders  upon each of the Atlantic  Shareholders at the time of transfer of
the Estate  Shares  returning  its Atlantic  Shares to Atlantic  (save for those
shareholdings marked with an asterisks in Schedule 1 which shall, subject to the
Official  Trustee's  approval,  be transferred to the Official  Trustee upon the
Official Trustee returning the relevant Atlantic Shares to Atlantic);

      WHEREAS  Atlantic has agreed  subject to paragraph 1.1 of Section 1 of the
Agreement  to (i)  transfer to A1 all rights,  title and  interest to and in the
Estates  Shares,  (ii) deliver the  resignations  of  directors  appointed by it
namely Adam  Mauerberger,  Andrew  Bayley and Chris  Kopitkke  from the board of
Estates; and (iii) deliver to the Dominion Estates Group a general release;
<PAGE>

      WHEREAS  Global has agreed  subject to paragraph  1.1 of Section 1 to: (a)
assume  the  obligations  under the Mt Rozier  Loan (by way of  entering  into a
novation  agreement  and issuing a promissory  note to  Estates);  (b) deliver a
promissory note to Sapphire  Developments Limited and execute a related security
agreement;  (c) use its best  endeavours to cause the Atlantic  Shareholders  to
return the Atlantic Shares other than the DPP Controlled Shares to Atlantic; (d)
use its  best  endeavours  to cause  the  Official  Trustee  to  return  the DPP
Controlled Shares to Atlantic;

      WHEREAS, the Dominion Estates Group has agreed subject to paragraph 1.1 of
Section 1 to deliver to Atlantic a general release;

      WHEREAS,  the parties have agreed that  entering  into this  Agreement and
related  Releases,  as referred to below, is the best manner to ensure that each
of Atlantic,  Wines, Estates, A1 and the Dominion Estates Group Shareholders are
returned  the  consideration  they  exchanged  in  connection  with the Exchange
Agreement; and

      NOW,  THEREFORE,  in  consideration  of the covenants,  and agreements set
forth in this Agreement,  Atlantic,  Wines,  Estates and Global  intending to be
legally bound thereby,  and hereby  warranting  that they each have the capacity
and  authority  to  execute  this  Agreement,  it is  agreed  by and  among  the
undersigned  parties,  that all of the claims asserted (or which could have been
asserted)  by Atlantic  against  Wines or Estates  and Wines or Estates  against
Atlantic  will,  subject to  paragraph  1.1 of Section 1 of this  Agreement,  be
settled and compromised on the following terms and conditions, to wit:

1.    Compromise

1.1   This Agreement and the documents executed pursuant thereto are conditional
      upon  and  will  have no force  and  affect  unless  either  of  following
      conditions precedent have been satisfied ("Conditions  Precedent") (a) the
      Court Approval to the transfer by Atlantic to A1 of the Estates Shares has
      been obtained or (b) the Deed of Company  Arrangement  has come into force
      and effect and the Deed  Administrators  have consented to the transfer by
      Atlantic to A1 of the Estates Shares;
<PAGE>

1.2   Atlantic  agrees  that  subject  to  paragraph  1.1  of  Section  1 of the
      Agreement  to (i)  transfer to A1 all right,  title and interest to and in
      the Estates Shares,  (ii) deliver the resignations of directors  appointed
      by it namely Adam  Mauerberger,  Andrew Bayley and Chris Kopitkke from the
      board of Estates and (iii) deliver to Wines and Estates a general release;
      and (iv)  deliver  to Global a  novation  agreement  in  respect of the Mt
      Rozier Loan duly executed by Global;

1.3   Global  agrees  subject to paragraph 1.1 of Section 1 of the Agreement to:
      (a) assume the  obligations  under the Mt Rozier  Loan (by way of entering
      into a novation  agreement and issuing a promissory note to Estates);  (b)
      deliver a promissory note to Sapphire  Developments  Limited and execute a
      related  security  agreement;  (c) use its best  endeavours  to cause  the
      Atlantic  Shareholders  to return the  Atlantic  Shares other than the DPP
      Controlled  Shares to Atlantic;  and (d) use its best  endeavours to cause
      the Official Trustee to return the DPP Controlled Shares to Atlantic.

1.4   The  Dominion  Estates  Group  agrees to  deliver  to  Atlantic  a general
      release;

1.5   In  order  to  facilitate  the  carrying  out  of the  respective  parties
      obligations  under  paragraphs  1.2,  1.3 and 1.4 of  Section 1 as soon as
      practicable after the signing of the Agreement:

      Global and the  Dominion  Estates  Group  shall cause to be  delivered  to
      Atlantic's  counsel,  Rubin,  Bailan,  Ortoli,  Mayer & Baker  LLP 45 Park
      Avenue, New York, New York 110022 or its appointed agent;

      i.    a duly executed  Novation  Agreement  ("Novation")  duly executed by
            Global and Estates in the form attached hereto as Exhibit A;

      ii.   a duly executed  promissory  note to AUD$3.2  Million from Global to
            Sapphire Developments Limited in the form attached hereto as Exhibit
            B ("Global Promissory Note");
<PAGE>

      iii.  a  duly  executed   promissory  note  from  Global  to  Estates  for
            AUD$465,000.00  in the form  attached  hereto as  Exhibit C together
            with a legal  certification from counsel for Global,  Sichenzia Ross
            Freidman Ference LLP (collectively, "Estates Promissory Note");

      iv.   a duly executed Security Agreement ("Global Security  Agreement") in
            the form attached hereto as Exhibit D;

      v.    the share  certificates  for the Atlantic Shares (other than the DPP
            Controlled  Shares)  with duly  executed  stock powers in blank with
            customary signature guarantees; and

      vi.   a general release duly executed by the Dominion Estates Group in the
            form  annexed  hereto as Exhibit E in favour of Atlantic  ("Dominion
            Estates Group Release");

      Atlantic shall deliver to Global and the Dominion  Estates Group's counsel
      Sichenzia Ross Freidman Ference LLP or its appointed agent:

      (a)   the share  certificate  for the Estates  Shares  together  with duly
            executed share transfer  pursuant to which Atlantic  transfers to A1
            all of its right title and  interest  in and to the  Estates  Shares
            (collectively the "Estates Shares Transfer Documents");

      (b)   the  Novation  duly  executed by Mt Rozier or  confirmation  from Mt
            Rozier's  counsel that they are holding the Novation  executed by Mt
            Rozier  and  will  deliver  the  original  executed  of the  same to
            Global's counsel when requested;

      (c)   the written  resignations  of Adam  Mauerberger,  Andrew  Bayley and
            Chris Kopitkke from the board of Estates respectively; and

      (d)   a general  release  duly  executed by  Atlantic in the form  annexed
            hereto as Exhibit E in favour of the Dominion Estates Group.
<PAGE>

1.6   Pending  the  satisfaction  of one of the  Conditions  Precedent  and  the
      receipt  by Rigby  Cooke of the  Estates  Shares  Transfer  Documents  the
      respective counsel referred to in paragraph 1.5 of Section 1shall hold the
      documents  referred  to  therein in escrow and they shall have no force or
      effect.

      If neither of the Conditions  Precedents are satisfied within 90 days from
      the date of the  Agreement  then the  respective  counsel  will return the
      documents  referred  to in  paragraph  1.5 of Section 1 to the counsel who
      provided them and the Agreement and those documents shall have no force or
      effect.

      Upon either of the Conditions Precedent being satisfied Atlantic's counsel
      will then forward to Rigby Cooke the Estates Shares Transfer Documents.

      Upon Rigby Cooke receiving the Estates Shares Transfer Documents,

      i.    Global's counsel shall promptly  forward (a) the Estates  Promissory
            Note  and   Novation   to   Estates'   Administrators:   C/-   Simon
            Wallace-Smith,  Deloittes,  180  Lonsdale  Street,  Melbourne,  VIC,
            Australia  3000,  (b) to  Atlantic's  counsel  the  Atlantic  Shares
            (including the DPP  Controlled  Shares to the extent it has physical
            possession  of such, if at all),  the Global  Promissory  Note,  the
            Global Security Agreement and the Dominion Estates Group Release;

      ii.   Atlantic's  counsel  will  forward to  Monahan + Rowell,  Atlantic's
            Australian counsel (a) the resignations of Adam Mauerberger,  Andrew
            Bayley and Chris  Kopitkke from Estates;  (b) the Atlantic  Release;
            and (c) the Novation  executed by Mt Rozier.  Monahan + Rowell shall
            promptly  forward the  documents  referred to in (a), (b) and (c) of
            this subparagraph to Rigby Cooke, Global's counsel in Australia.

1.7   Global and the Dominion  Estates Group agree that once the Estates  Shares
      have  been   transferred   to  A1  and  Estates  comes  out  of  voluntary
      administration  and control  returning  to its  directors to cause all the
      shares in Wines which were  formerly  held by the Dominion  Estates  Group
      Shareholders  to be  transferred  to each of the  Dominion  Estates  Group
      Shareholders  upon each of Atlantic  Shareholders  returning  its Atlantic
      Shares to Atlantic (save for those shareholdings  marked with an asterisks
      in Schedule 1 which shall, subject to the Official Trustee's approval,  be
      transferred to the Official  Trustee upon the Official  Trustee  returning
      the DPP Controlled Shares to Atlantic).
<PAGE>

1.8   Global and the Dominion  Estates Group agree that once the Estates  Shares
      have  been   transferred   to  A1  and  Estates  comes  out  of  voluntary
      administration  and control has been returned to its directors,  they will
      use their best  endeavors to cause the Official  Trustee to return the DPP
      Controlled  Shares to Atlantic and in return issue to the Official Trustee
      the shares in Wines marked with the asterisks in Schedule 1 in the name of
      the Official Trustee.

      In the event  that  Atlantic  reasonably  forms the view that the  matters
      referred to in the preceding paragraph are not completed to its reasonable
      satisfaction,  or Estates is placed  into  liquidation  (whichever  occurs
      first) then and if those  situations are capable of being remedied and the
      matters are not remedied to Atlantic's  satisfaction  following  notice to
      that effect given by Atlantic  and giving 14 calendar  days to remedy that
      default,  Atlantic  shall then be entitled to deal with the DPP Controlled
      Shares according to law.

1.9   Atlantic  warrants  that  all the  Estates  Shares  are  unencumbered  and
      represents  that,  except for the  appointment  of the  Administrators  to
      Estates, Atlantic has not created or caused any party to obtain or possess
      any encumbrance,  lien, charge or claim with respect to either the Estates
      Shares or to the best of its  knowledge  and belief  the Wines  Shares and
      that  subject  to  paragraph  1.1 of  Section  1 of the  Agreement,  it is
      entitled  to  transfer  the Estates  Shares to A1 in  accordance  with the
      Agreement.

1.10  Dominion  Estates Group warrants that the Atlantic  Shares (other than the
      DPP  Controlled  Shares)  are  to the  best  of its  knowledge  an  belief
      unencumbered  and that the holders of the Atlantic  Shares (other than the
      registered  holders of the DPP  Controlled  Shares) are entitled to return
      the Atlantic Shares to Atlantic.
<PAGE>

1.11  In consideration of this Agreement  Atlantic,  subject to paragraph 1.1 of
      Section  1  releases  the  Dominion  Estates  Group  from  each and  every
      obligation  which Wines and/or  Estates may have to repay any monies which
      may be owing by Wines  and/or  Estates to  Atlantic  including  any monies
      which  Atlantic  may have  advanced  or provided  to, or provided  for the
      benefit  of,  either  or both of the  companies  comprising  the  Dominion
      Estates Group  (including  without  limitation  the amount  transferred to
      discharge  the  National  Loans and the  amount of  AUD$262,322.09  herein
      before  referred to as being  transferred at the direction of the Dominion
      Estates Group).

1.12  Atlantic  warrants that to the best of its knowledge and belief it has not
      caused  Wines to become  liable to or indebted to any third party and that
      Estates is not liable or indebted to any party other than as  disclosed to
      the Administrators of Estates by the date of the Agreement.

      2.  Termination of Exchange  Agreement.  Upon execution of this Agreement,
paragraph  1.1  of  Section  1  being  satisfied  and  the  consummation  of the
aforementioned transactions, including the exchange of the releases contemplated
hereby, the Exchange Agreement and any and all obligations of any of the parties
arising from such Exchange Agreement shall, in all respects,  be deemed null and
void and of no further  force and effect and none of the parties  thereto  shall
have  any  remaining   obligations  or  liabilities  pursuant  to  the  Exchange
Agreement, including, but not limited to: (i) the Dominion Estates Group's right
to 20%  representation on the Board of Directors of Atlantic;  (ii) any Atlantic
liabilities resulting from the Commonwealth Bank of Australia loan referenced in
the Exchange Agreement; and (iii) any Atlantic liabilities resulting from the GE
Commercial  Corporation  of Australia  Pty Ltd  Facility  Agreement to which the
Dominion Estates Group is a party.

      3. Confidentiality.  The parties agree to keep the terms of this Agreement
and the matters raised herein as confidential,  and shall not disclose the terms
of this Agreement unless compelled to by court order,  subpoena, or request by a
self-regulatory organization.
<PAGE>

      4. Binding  Agreement.  The terms of this  Agreement  are binding upon and
inure to the benefit of each of the parties hereto, their respective successors,
assigns, dependents, and all other related persons, affiliates or associates.

      5. Headings. The captions of the paragraphs and sections of this Agreement
are  provided  solely for  convenience,  and shall not affect the  substance  or
meaning of this Agreement.

      6.  Representation.  Each of the parties hereto  represents  that each has
read and fully understands each of the provisions as contained  herein,  and has
been afforded the  opportunity  to review same with his attorney of choice;  and
further that each of the parties  hereto  represents  that each and every one of
the  provisions  contained in this Agreement is fair and not  unconscionable  to
either party.

      7. Counterparts.  The Agreement may be executed in facsimile counterparts,
each of which when all  parties  have  executed  at least one such  counterpart,
shall be deemed an original, with the same force and effect as if all signatures
were appended to one instrument,  but all of which together shall constitute one
and the same Agreement.

      8.  Severability.  Should any provision of the Agreement be declared or be
determined  by any court or tribunal to be illegal or invalid,  the  validity of
the remaining parts,  terms or provisions shall not be affected thereby and said
illegal or invalid part, term or provision shall be severed and deemed not to be
part of the Agreement.

      9. Choice of Laws.  The  Agreement  shall be governed by and  construed in
accordance  with the  substantive  law of the State of New York and the  parties
hereto  consent that the  jurisdiction  will lie with Courts of the State of New
York.

      10.  Further Acts.  Each party agrees to do all things as may be necessary
or desirable to give full effect to every part of the Agreement.
<PAGE>

      11. Pre-Emptive Rights. Each of the parties waives and will, to the extent
that it is within their power (respectively),  waive or ensure the waiver of any
pre-emptive  rights in  relation to the  transfer of any shares  pursuant to the
Agreement.

      12. Corporate  Steps.  Each of the parties to transfers of shares and each
of the companies in respect of which shares are being  transferred  will, to the
extent that it is within their power (respectively), take or procure to be taken
all necessary corporate steps to facilitate the transfers of shares contemplated
by the  Agreement  including,  but not limited  to, the proper  calling of board
meetings to resolve that the aforesaid  transfers of shares are  registered  and
the filing of appropriate documents at the relevant corporate regulator.
<PAGE>

      IN WITNESS  WHEREOF,  the parties have read and executed this Agreement of
Settlement as of the date and year first above written.

                                       ATLANTIC WINE AGENCIES, INC.

                                       By: /s/ Peter Spring
                                           -------------------------------------
                                           Name:  Peter Spring
                                           Title:  Vice President

                                       DOMINION ESTATES PTY LTD

                                       By: /s/ Simon Wallace-Smith
                                           -------------------------------------
                                           Name: Simon Wallace-Smith
                                           Title: Administrator Appointed

                                       DOMINION WINES LTD

                                       By /s/ Carl David Voss
                                           -------------------------------------
                                           Name: Carl David Voss
                                           Title: Director

                                       GLOBAL REALTY DEVELOPMENT CORP

                                       By: /s/ Roger Charles Davis
                                           -------------------------------------
                                           Name: Roger Charles Davis
                                           Title:

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