PURCHASE ANDSALE AGREEMENT

     **THISPURCHASE AND SALE AGREEMENT** (this “Agreement”), dated as ofJanuary 18, 2001 (the “Execution Date”), but made effective as ofDecember 31, 2000 (the “Effective Date”), is entered into betweenE. Khashoggi Industries, LLC, a Delaware limited liability company(“Seller”), and EarthShell Corporation, a Delaware corporation(“Buyer”), with reference to the following facts: 

RECITALS:

     A.     Seller owns certain items of equipment, machinery,tools,  supplies,  computer  equipment  and  furniture  that are  listed  on theattached Exhibit A (the "Owned Property").

     B.     Seller  also leases  certain  items of  equipment,computer  equipment and machinery that are listed on the attached Exhibit B (the“Leased   Property,”   and  together  with  the  Owned  Property,  the“Tangible Personal Property”). 

     C.     Pursuant  to the  terms and  conditions  set forthherein,  Seller  desires  to sell,  and Buyer  desires  to  purchase,  the OwnedProperty,  and Seller also desires to assign to Buyer all of Seller’s rightand  interest in and to the Leased  Property,  and Buyer  desires to accept suchassignment, and to assume all of Seller’s obligations under the leases withrespect to the Leased Property (the  “Leases”),  as more  particularlyidentified on the attached Exhibit B. 

     D.     Seller  has  utilized and  currently  utilizes theTangible  Personal  Property to perform  technical  services  for the benefit ofBuyer,  and  Buyer  is  therefore   familiar  with  the  value,   condition  andfunctionality of the Tangible Personal Property. 

     Inconsideration of the mutual promises set forth herein and for other good andvaluable consideration, the receipt and legal sufficiency of which are herebyacknowledged, the parties hereto agree as follows: 

AGREEMENT:

     **1.**     **Sale   of  Owned  Property.**Sellerhereby  sells,  transfers,  conveys and  quitclaims  to Buyer,  and Buyer herebypurchases,  accepts and assumes,  all of Seller’s right, title and interestin and to all of the Owned Property.  In consideration for the sale of the OwnedProperty,  Buyer shall pay $900,000 to Seller upon the execution and delivery ofthis Agreement by Seller. Such sum shall be paid by wire transfer of immediatelyavailable funds to Seller’s  account (as shall be separately  designated inwriting by Seller) within three days following the Execution  Date. The purchaseand sale of the Owned  Property  shall be deemed  effective as of the  EffectiveDate. The transfer of the Owned Property shall be evidenced by the parties’concurrent  execution of a Bill of Sale, the form of which is attached hereto asExhibit C. All risk of loss with respect to the Tangible Personal Property shallbe deemed transferred to Seller as of the Effective Date. 

     **2.**     **Assignment  and  Assumption  of  Leases.**Seller  hereby  assigns  to Buyer  all of  Sellers’  right,  title  andinterest in, to and under the Leases and the Leased  Property,  and Buyer herebyaccepts such  assignment  and agrees to assume and timely perform and discharge,and indemnify  Seller against and hold it harmless  from,  all of  Seller’sliabilities and obligations  under the Leases which are incurred during or whicharise or which relate to any period commencing on or after January 1, 2001. Suchassignment and  assumption  shall be evidenced by the  parties’  concurrentexecution and delivery of an Assignment  and Assumption  Agreement,  the form ofwhich is attached  hereto as Exhibit D. The  assignment  and  assumption  of theLeases and the Leased  Property  shall be  effective as of the  Effective  Date.Seller  further  assigns  to  Buyer,  without  additional   consideration,   allmanufacturer  warranties  and guaranties  with respect to the Tangible  PersonalProperty. 

     **3.**     **Status   of  the  Property  –  “AsIs”;  No  Representations  or  Warranties.**Seller  represents  andwarrants that it has good and  marketable  title to the Owned  Property and thatthe Owned Property is sold and transferred to Buyer free and clear of all liens,claims  and/or  encumbrances  of whatever  kind or nature,  other than usual andcustomary  liens for  property  taxes not yet due and payable  and for  transfertaxes that may arise upon the sale of the Owned Property. Buyer acknowledges andagrees  that the Leased  Property is being  assigned  and  transferred  to Buyersubject  to the  terms and  conditions  of the  Leases.  Seller  has  previouslydelivered  to Buyer true and correct  copies of all Leases  with  respect to theLeased  Property,  as amended through the Effective Date.  Seller makes no otherrepresentations  or warranties  concerning the Tangible Personal  Property.  TheTangible  Personal  Property  is being  sold  and  assigned  “as  is,”“where  is” and with “all  faults,”  and Buyer shall have norecourse  against Seller for the Tangible  Personal  Property (other than as setforth in Section  4(a)).  Seller  expressly  disclaims  any  representations  orwarranties as to the value,  condition or functionality of the Tangible PersonalProperty or its suitability  for any particular  purpose.  Buyer  represents andwarrants  that  it  is  familiar   with,   and  has  made  such   inquiries  andinvestigations  as it deems  necessary  with respect to, the  Tangible  PersonalProperty and its current value, condition and functionality. 

     **4.**     **Indemnification Obligations.**

          a.     Seller  indemnifies Buyer against, and holds Buyerharmless from, any and all losses, claims, expenses,  costs, causes of action orobligations  (including  reasonable attorneys fees) incurred in connection with,or arising  from (i)  Seller's  ownership,  possession,  use or operation of theTangible Personal Property during any period ending on or prior to the EffectiveDate,  or (ii)  Seller's  breach of any of its  representations,  warranties  orcovenants under this Agreement.

          b.     Buyer indemnifies Seller against, and holds Sellerharmless  from,  any  losses,  claims,  expenses,  costs,  causes  of  action orobligations  (including  reasonable attorneys fees) incurred in connection with,or arising from (i) Buyer's ownership, possession, use, operation or dispositionof the  Tangible  Personal  Property  during any period  commencing  on or afterJanuary  1,  2001,  or  (ii)  Buyer's  breach  of any  of  its  representations,warranties or covenants under this Agreement.

     **5.**     **Governing  Law.** This Agreement shallbe governed  by, and  construed  in  accordance  with,  the laws of the State ofCalifornia  applicable to contracts made and to be performed  wholly within suchState, without giving effect to the conflict of laws principles thereof.

     **6.**     **Taxes   and  Transfer  Costs.**Buyershall be  responsible  for  filing  all  required  sales and use tax  returns inconnection with the transfer of the Tangible Personal Property. Buyer shall alsopay, and indemnify  Seller  against,  all required sales and use taxes and othertransfer  costs  and  expenses  that  arise as a result of the  transfer  of theTangible  Personal  Property.  Seller  shall  pay all  personal  property  taxesassociated  with the  ownership  or use of the  Tangible  Personal  Property andaccrued  for the period  ending  December  31, 2000 and Buyer shall pay all suchpersonal property taxes that accrue thereafter. 

     **7.**     **Multiple      Counterparts.**     ThisAgreement  may be  executed  in any number of  counterparts  and the  signaturesdelivered by telecopy,  each of which shall be an original, with the same effectas if the signatures thereto and hereto were upon the same instrument.

     **8.**     **Further   Assurances.**The  partiesagree to cooperate with each other and to execute, deliver and record such otheragreements  and  documents  and to take such  other  actions  as are  reasonablynecessary  or  helpful  to  more   effectively   consummate   the   transactionscontemplated under this Agreement and to carry out its purpose and intent.  Uponreasonable  notice,  Seller shall provide Buyer with  reasonable  access to, andallow it to copy,  any  books  and  records  concerning  the  Tangible  PersonalProperty as are in Seller’s possession or control. 

IN WITNESS WHEREOF, theparties hereto have caused this Agreement to be duly executed as of the day andyear first above written. 

```

SELLER:                        E. KHASHOGGI INDUSTRIES, LLC,
                               a Delaware limited liability company

                               By: _______________________________
                               Print Name: ________________________
                               Title: ______________________________

BUYER:                         EARTHSHELL CORPORATION,
                               a Delaware corporation

                               By: ______________________________
                               Print Name: _______________________
                               Title: _____________________________
```

EXHIBIT A

LIST OF OWNED PROPERTY

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                           General Description         Manufacturer         Identification No.
        Quantityof Items(if any)(if any)
```

EXHIBIT B

LIST OF LEASED PROPERTY AND

IDENTIFICATION OF PERSONAL PROPERTY LEASES

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I.      LIST OF LEASED PROPERTY
------------------------- ----------------------- ----------------------- -----------------------

     Name of LessorItemCommencement DateTermination Date
```

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II.     IDENTIFICATION OF PERSONAL PROPERTY LEASES
------------------------- ----------------------- ----------------------- -----------------------

     Name of LessorItemCommencement DateTermination Date
```

EXHIBIT C

BILL OF SALE

        Forvaluable consideration, the receipt of which is acknowledged, E. KhashoggiIndustries, LLC, a Delaware limited liability company (“Seller”),hereby sells, conveys, transfers and quitclaims to EarthShell Corporation, aDelaware corporation (“Buyer”), all of Seller’s right, title andinterest in and to all that tangible personal property described in theExhibit A attached hereto (the “Owned Property”). Suchsale, conveyance, transfer and quitclaim shall be deemed effective as ofDecember 31, 2000. 

        TheOwned Property are being transferred “as is,” “where is” andwith “all faults,” and Buyer shall have no recourse against Seller.The Owned Property are being delivered free and clear of all liens, claimsand/or encumbrances of whatever kind other than usual and customary liens forpersonal property taxes not yet due and payable and all transfer taxes due andowing as a result of the transfer of ownership of the Owned Property. Sellerexpressly disclaims any representations or warranties as to the value, conditionor functionality of the Owned Property or its suitability for any particularpurpose. 

        ThisBill of Sale shall be governed by, and construed in accordance with, the laws ofthe State of California applicable to contracts made and to be performed whollywithin such State, without giving effect to the conflict of laws principlesthereof. 

        ThisBill of Sale may be executed in any number of counterparts and the signaturesdelivered by telecopy, each of which shall be an original, with the same effectas if the signatures thereto and hereto were upon the same instrument. 

```

SELLER:                          E. KHASHOGGI INDUSTRIES, LLC,
                                 a Delaware limited liability company

                                 By: _______________________________
                                 Print Name: ________________________
                                 Title: ______________________________

BUYER:                           EARTHSHELL CORPORATION,
                                 a Delaware corporation

                                 By: ______________________________
                                 Print Name: _______________________
                                 Title: _____________________________
```

EXHIBIT D

ASSIGNMENTAND ASSUMPTION OF PERSONAL PROPERTY LEASES

        **THISASSIGNMENT AND ASSUMPTION OF PERSONAL PROPERTY LEASES**(this“**Assignment**”) is made effective as of the December 31, 2000 byand between E. KHASHOGGI INDUSTRIES, LLC, a Delaware limited liabilitycompany, having an office at 800 Miramonte Drive, Santa Barbara, California93109 (“**Assignor**”) and EARTHSHELL CORPORATION, a Delawarecorporation, having an office at 800 Miramonte Drive, Santa Barbara,California 93109 (“**Assignee**”). 

RECITALS:

        A.     Assignor  is  the  lessee  of  certain  equipment,machinery and computer  equipment  more  particularly  described in the attachedExhibit A. In connection therewith,  Assignor is a party to those certainlease agreements more  particularly  described in the attached  Exhibit A(the “Leases”). 

        B.     Assignor has agreed with Assignee to assign all ofAssignor’s  right,  title and  interest in, to and under the Leases and theLeased  Property  to  Assignee  and  Assignee  has  agreed to assume  all of theliabilities and obligations of Assignor thereunder,  all as more fully set forthherein. 

        Inconsideration of the foregoing and other good and valuable consideration, thesufficiency and receipt of which , prior to the execution hereof, is herebyacknowledged, the parties hereto, intending to be legally bound, do hereby agreeas follows: 

AGREEMENT:

        1.     Assignor   hereby   assigns  to  Assignee  all  ofAssignor's right,  title and interest in, to and under the Leases and the LeasedProperty.

        2.     Assignee  hereby accepts the foregoing  assignmentand agrees to timely  perform and discharge all of  Assignor’s  liabilitiesand  obligations  under the Leases which are incurred,  or which arise or relateto, any period commencing on or after January 1, 2001. 

        3.     Assignee  further  agrees to be bound  by,  and tocomply with, all of the terms, covenants and conditions of the Leases to be keptand performed by Assignor as lessee thereunder.

        **INWITNESS WHEREOF**, the parties hereto have executed and delivered thisAssignment as of the day and year first written above. 

```

                             ASSIGNOR:

                             E. KHASHOGGI INDUSTRIES, LLC

                             By:    /s/ John Daoud                      
                             Name:  John Daoud                          
                             Title: CFO                                 

                             ASSIGNEE:

                             EARTHSHELL CORPORATION

                             By:    /s/ Scott Houston            4/23/01
                             Name:  Scott Houston                       
                             Title: CFO
```