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Exhibit 4.1  


 
 

COMMON STOCK PURCHASE AGREEMENT    
  


        This Common Stock Purchase Agreement (this "Agreement") is made and effective as of April 5, 2002 by and
among EarthShell Corporation, a Delaware corporation (the "Company"), and the Purchasers identified in the signature pages attached hereto (each, a
"Purchaser" and, collectively, the "Purchasers"). 


        WHEREAS,
subject to the terms and conditions set forth in this Agreement, the Company desires to sell to the Purchasers and the Purchasers severally desire to purchase from the Company
certain shares of the Company's common stock, $0.01 par value per share (the "Common Stock"), as more fully set forth in this Agreement. 


        NOW,
THEREFORE, in consideration of the mutual covenants contained in this Agreement and for other good and valuable consideration the receipt and adequacy of which are hereby
acknowledged, the Company and the Purchasers agree as follows: 


        1.    Closing. 


        (a)  The
closing of the sale of the securities contemplated hereby (the "Closing") shall take place at the offices of
Proskauer Rose LLP ("Purchaser Counsel"), 1585 Broadway, New York, New York 10036, on April 5, 2002 or on such other date or at such other
location as the parties shall otherwise agree. The date of the Closing is hereinafter referred to as the "Closing Date." At the Closing: (x) the
Company shall issue and deliver to each Purchaser (i) a stock certificate, registered in the name of such Purchaser and free of all restrictive legends, representing the number of shares of
Common Stock (the shares of Common Stock issued and sold to the Purchasers hereunder are collectively, the "Shares") equal to the quotient obtained by
dividing (a) the purchase price set forth below such Purchaser's signature to this Agreement by (b) $1.15, or, for Purchasers who provide the necessary account information to the
Company, the Company shall issue and deliver such Shares in a balance account with The Depository Trust Company through its Deposit Withdrawal Agent Commission System, (ii) a warrant in the
form of Exhibit A hereto, registered in the name of such Purchaser, pursuant to which such Purchaser shall have the right to acquire the number
of shares of Common Stock indicated below such Purchaser's name on
the signature page of this Agreement, on the terms set forth in Section 1(b) herein (the warrants issued and sold to the Purchasers hereunder are collectively, the
"Warrants"), (iii) a prospectus supplement with respect to the Registration Statement (as defined in Section 2(e)) reflecting the sale of
the Securities (the "Supplement"), and (iv) the legal opinion of the Company's outside counsel in the form of  Exhibit B; and (y) each
Purchaser shall deliver to the Company the purchase price set forth below such Purchaser's signature to this
Agreement, in immediately available funds by wire transfer to an account designated in writing by the Company for such purpose. 


        (b)  For
the purposes of this Agreement, the following definitions shall apply: 


        "Closing Price" means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common
Stock is then listed or quoted on an Eligible Market or any other national securities exchange, the closing bid price per share of the Common Stock for such date (or the nearest preceding date) on the
primary Eligible Market or exchange on which the Common Stock is then listed or quoted; (b) if prices for the Common Stock are then quoted on the OTC Bulletin Board, the closing bid price per
share of the Common Stock for such date (or the nearest preceding date) so quoted; (c) if prices for the Common Stock are then reported in the "Pink Sheets" published by the National Quotation
Bureau Incorporated (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (d) in all
other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by a majority-in-interest of the Purchasers. 


        "Eligible Market" means the New York Stock Exchange, the American Stock Exchange, the Nasdaq National Market or the Nasdaq SmallCap
Market. 





 



        "Securities" means the Shares and Warrants (including the Common Stock issuable upon exercise of the Warrants) issued or issuable pursuant
to this Agreement, together with any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing. 


        "Trading Day" means (a) any day on which the Common Stock is listed or quoted and traded on its primary Trading Market or
(b) if the Common Stock is not then listed or quoted and traded on any Eligible Market, then a day on which trading occurs on the Nasdaq National Market (or any successor thereto). 


        "Volume Weighted Average Price" means, with respect to a Trading Day, the volume weighted average trading prices (the total dollar amount
traded on each day divided by trading volume for such day) of the Common Stock for the regular Trading Day session as reported at 4:15 (New York time) as reported by Bloomberg, LP function key HP by
using W to calculate the daily weighted average. 



        (c)  The
obligation of the Purchasers to purchase and acquire the Securities under this Agreement is subject to the fulfillment (or waiver by such Purchaser) of each of the
following conditions: 



        (i)    The
Company shall have filed the Supplement with the Securities and Exchange Commission (the "Commission"). 


        (ii)  The
Registration Statement (as defined in Section 2(g) below) shall be effective on the Closing Date as to all Securities, not subject to any threatened or
actual stop order and will not on the Closing Date contain any untrue statement of material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein not misleading. 


        (iii)  The
Company shall have provided a certificate from a duly authorized officer certifying on behalf of the Company that each of the conditions set forth in this
Section 1(c) shall have been satisfied. 




        2.    Representations and Warranties of the Company. The Company hereby makes the following
representations and warranties to each of the Purchasers: 


        (a)  Subsidiaries. The Company does not directly or indirectly control or own any interest in any other corporation,
partnership, joint venture or other business association or entity (a "Subsidiary"), other than those listed in Schedule 2(a). Except as
disclosed in Schedule 2(a), the Company owns, directly or indirectly, all of the capital stock of each Subsidiary free and clear of any lien, charge, claim, security interest, encumbrance,
right of first refusal or other restriction (collectively, "Liens"), and all the issued and outstanding shares of capital stock of each Subsidiary are
validly issued and are fully paid, non-assessable and free of preemptive and similar rights. 


        (b)  Organization and Qualification. Each of the Company and the Subsidiaries is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to do business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or property owned by it
makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not, individually or in the aggregate, (i) adversely affect the
legality, validity or enforceability of this Agreement, (ii) have or result in a material adverse effect on the results of operations, assets, business or condition (financial or otherwise) of
the Company and the Subsidiaries, taken as a whole, or (iii) adversely impair the Company's ability to perform fully on a timely basis its obligations under this Agreement (any of (i),
(ii) or (iii), a "Material Adverse Effect"). 


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        (c)  Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by the Company and the consummation by it of the
transactions contemplated hereunder have been duly authorized by all necessary action on the part of the Company and no further consent or action is required by the Company, its Board of Directors or
its stockholders. This Agreement has been (or upon delivery will be) duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its terms. 


        (d)  No Conflicts. The execution, delivery and performance of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby do not and will not (i) conflict with or violate any provision of the Company's or any Subsidiary's certificate or articles of incorporation,
bylaws or other organizational or charter documents, or (ii) subject to obtaining the Required Approvals (as defined below), conflict with, or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any
agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations) and the rules and regulations of any
self-regulatory organization to which the Company or its securities are subject, or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case
of each of clauses (ii) and (iii), such as could not, individually or in the aggregate, have or result in a Material Adverse Effect. 


        (e)  Filings, Consents and Approvals. Neither the Company nor any Subsidiary is required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of this Agreement, other than (i) the required filing of the Supplement, (ii) applicable Blue Sky filings, and
(iii) in all other cases where the failure to obtain such consent, waiver, authorization or order, or to give such notice or make such filing or registration could not have or result in,
individually or in the aggregate, a Material Adverse Effect (collectively, the "Required Approvals"). 


        (f)    Issuance of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the terms
hereof, will be duly and validly issued, fully paid and nonassessable, free and clear of all liens, encumbrances and rights of first refusal. The Company has reserved a sufficient number of duly
authorized shares of Common Stock to issue all of the Securities. At the Closing, the Shares and the shares of Common Stock issuable upon conversion of the Warrants (such shares, collectively with the
Shares, the "Total Shares") shall have been listed for trading on the Nasdaq National Market (the "Trading
Market"). 


        (g)  Registration Statement. The Company's Registration Statement on Form S-3
(No. 333-76092) (the "Registration Statement") was declared effective by the Commission on January 7, 2002. The Registration
Statement is effective on the date hereof and the Company has not received notice that the Commission has issued or intends to issue a stop order with respect to the Registration Statement or that the
Commission otherwise has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, or intends or has threatened in writing to do so. The Registration
Statement (including the information or documents incorporated by reference therein), as of the time it was declared effective, and any amendments or supplements thereto, each as of the time of
filing, did not contain any untrue statement of material fact or omit to state any material fact 


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required to be stated therein or necessary to make the statements therein not misleading. The issuance of the Securities to the Purchasers is registered by the Registration Statement. 


        (h)  Listing and Maintenance Requirements Except as specified in the SEC Reports, the Company has not, in the two years
preceding the date hereof, received notice from the Trading Market to the effect that the Company is not in compliance with the listing or maintenance requirements thereof. The Company is, and has no
reason to believe that it will not in the foreseeable future continue to be, in compliance with the listing and maintenance requirements for continued trading of the Common Stock on the Trading
Market. 


        (i)    Certain Fees. Except for listing fees to be paid by the Company to the Trading Market and the placement fee payable to
Clifden Equities, LLC in connection with the transactions contemplated by this Agreement, no fees or commissions 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 this Agreement. The Purchasers shall have no obligation with respect to any fees incurred by
the Company or any other Person (other than the Purchasers, if the Purchasers have agreed in writing to pay such 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 this Agreement. The Company shall indemnify and hold harmless the Purchasers, their employees,
officers, directors, agents, and partners, and their affiliates, from and against all claims, losses, damages, costs (including the reasonable costs of preparation and reasonable attorney's fees) and
expenses suffered in respect of any such claimed or existing fees incurred by the Company or any other Person (other than the Purchasers, if the Purchasers have agreed in writing to pay such fees), as
such fees and expenses are incurred. "Person" means any court or other federal, state, local or other governmental authority or other individual or
corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other
entity of any kind. 


        (j)    Disclosure. The Company confirms that neither it nor any other Person acting on its behalf has provided any of the
Purchasers or their agents or counsel with any information that constitutes or might constitute material, nonpublic information. The Company understands and confirms that each of the Purchasers will
rely on the foregoing representations in effecting transactions in securities of the Company. All disclosure provided to the Purchasers regarding the Company, its business and the transactions
contemplated hereby, including the Schedules to this Agreement, the Registration Statement and the Supplement, furnished by or on behalf of the Company are true and correct and do not contain any
untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.
No event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or financial conditions,
which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed (assuming for this purpose that the
Company's reports filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act") are being incorporated into an effective registration
statement filed by the Company under the Securities Act of 1933, as amended (the "Securities Act")). The Company acknowledges and agrees that no
Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3. 


        (k)  No Violation. The issuance and sale of the Securities hereunder does not conflict with or violate any rules or
regulations of the Trading Market. 


        (l)    SEC Reports; Financial Statements. The Company has filed all reports required to be filed by it under 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 to file such 


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material) (the foregoing materials being collectively referred to herein as the "SEC Reports" and, together with this Agreement and the Schedules to
this Agreement, the "Disclosure Materials") 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. The Company has delivered to the Purchasers a copy of all SEC Reports filed within the 20 days preceding the date hereof. As of their
respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated
thereunder, 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 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 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 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. All
material agreements to which the Company or any Subsidiary is a party or to which the property or assets of the
Company or any Subsidiary are subject are included as part of or specifically identified in the SEC Reports. 



        (m)  Capitalization. The number of shares and type of all authorized, issued and outstanding capital stock, options and other
securities of the Company (whether or not presently convertible or exchangeable for shares of capital stock of the Company) is set forth in Schedule 2(m). All outstanding shares of capital
stock are duly authorized, validly issued, fully paid and nonassessable and have been issued in compliance with all applicable securities laws. Except as disclosed in Schedule 2(m), there are
no outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exchangeable
for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock. Except as disclosed in Schedule 2(m), there are no
anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) and the issue and sale of the
Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person and will not result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities. To the knowledge of the Company, except as specifically disclosed in Schedule 2(m), no Person or group of related Persons beneficially
owns (as determined pursuant to Rule 13d-3 under the Exchange Act), or has the right to acquire, by agreement with or by obligation binding upon the Company, beneficial ownership of
in excess of 5% of the outstanding Common Stock, ignoring for such purposes any limitation on the number of shares of Common Stock that may be owned at any single time. 


        (n)  Material Changes. Since the date of the latest audited financial statements included within the SEC Reports, except as
specifically disclosed in the SEC Reports, (i) there has been no event, occurrence or development that has had or that could result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and
(B) liabilities not required to be reflected in the Company's financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) the Company has
not altered its method of accounting or the identity of its auditors, (iv) the Company has not declared or made any 


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dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, and (v) the Company
has not issued any equity securities to any officer, director or affiliate, except pursuant to existing Company stock option plans. 



        (o)  Litigation. 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, any Subsidiary or any of their respective properties 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 this Agreement or the Securities or (ii) could, if there were an unfavorable decision, individually or in the aggregate, have or result in a Material
Adverse Effect. Schedule 2(o) of the Disclosure Schedule contains a complete list
and summary description of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard to whether it would have a
Material Adverse Effect. Neither the Company nor any Subsidiary, 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. The Company does not have pending before the Commission any request for confidential treatment of information. 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.
The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities
Act. No strike, work stoppage, slow down or other material labor problem exists or, to the knowledge of the Company, is threatened or imminent with respect to any of the employees of the Company or
the Subsidiaries. 


        (p)  Compliance. Neither the Company nor any Subsidiary (i) is in default under or in violation of (and no event has
occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice
of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its
properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is or has been
in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection,
occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not, individually or in the aggregate, have or result in a Material Adverse
Effect. 


        (q)  Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits
could not, individually or in the aggregate, have or result in a Material Adverse Effect ("Material Permits"), and neither the Company nor any
Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit. 



        (r)  Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned
by them that is material to the business of the Company and the Subsidiaries and good and marketable title in all personal property owned by them that is material to the business of the Company and
the Subsidiaries, in each case free and clear of all Liens, except for Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be
made of such property by the Company and the Subsidiaries. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and
enforceable leases of which the Company and the Subsidiaries are in compliance. 


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        (s)  Patents and Trademarks. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights, licenses and other similar rights that are necessary or material for use in connection with their respective businesses as
described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the "Intellectual Property Rights").
Neither the Company nor any Subsidiary has received a written notice that the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights of any Person. To
the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. 


        (t)    Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. Neither the Company nor any Subsidiary has any reason to
believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its
business without a significant increase in cost. 


        (u)  Transactions With Affiliates and Employees. Except as set forth in SEC Reports filed at least ten days prior to the date
hereof, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any
Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer, director, trustee or partner. 


        (v)  Internal Accounting Controls. The Company and the Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management's general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. 


        (w)  Solvency. Based on the financial condition of the Company as of the Closing Date, (i) the Company's fair saleable
value of its assets exceeds the amount that will be required to be paid on or in respect of the Company's existing debts and other liabilities (including known contingent liabilities) as they mature;
and (ii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts
as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). 


        (x)  Acknowledgment Regarding Purchasers' Purchase of Securities. The Company acknowledges and agrees that each of the
Purchasers is acting solely in the capacity of an arm's length purchaser with respect to this Agreement and the transactions contemplated hereby. The Company further acknowledges that no Purchaser is
acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any advice given by any Purchaser or
any of their respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is merely incidental to the Purchasers' 


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purchase of the Securities. The Company further represents to each Purchaser that the Company's decision to enter into this Agreement has been based solely on the independent evaluation of the
Company and its representatives. 


        3.    Representations and Warranties of the Purchasers. Each Purchaser hereby
for itself and for no other Purchaser, represents, warrants and covenants to the Company that each such Purchaser is an entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation. Such Purchaser has full right, power, authority and capacity to enter into this Agreement and to consummate the transactions contemplated hereby and has taken
all necessary action to authorize the execution, delivery and performance of this Agreement. Upon the execution and delivery of this Agreement and assuming the valid execution hereof by the Company,
this Agreement shall constitute the valid and binding obligation of such Purchaser enforceable in accordance with its terms. 



        The
Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those
specifically set forth in this Section 3. 


        4.    Other Agreements of the Parties. 


        4.1  Subsequent Placements.


        (a)  Until
90 Business Days following the Closing Date, the Company will not, directly or indirectly, effect any, offer, sell, grant any option to purchase, or otherwise
dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of its or the Subsidiaries' equity or equity equivalent securities, including, without limitation,
any debt, preferred stock or other instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable for Common Stock (any such offer, sale,
grant, disposition or announcement being referred to as a "Subsequent Placement") unless the Company shall have first complied with this
Section 4.1(a). 



        (i)    The
Company shall deliver to each Purchaser a written notice (the "Offer") of any proposed or intended issuance or sale
or exchange of the securities being offered (the "Offered Securities") in a
Subsequent Placement, which Offer shall (w) identify and describe the Offered Securities, (x) describe the price and other terms upon which they are to be issued, sold or exchanged, and
the number or amount of the Offered Securities to be issued, sold or exchanged, (y) identify the persons or entities (if known) to which or with which the Offered Securities are to be offered,
issued, sold or exchanged and (z) offer to issue and sell to or exchange with each Purchaser (A) a pro rata portion of fifty percent (50%) of the Offered Securities, based on such
Purchaser's pro rata portion of the aggregate purchase price paid by the Purchasers for all of the Securities purchased hereunder (the "Basic Amount"),
and (B) with respect to each Purchaser that elects to purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of other Purchasers as such
Purchaser shall indicate it will purchase or acquire should the other Purchasers subscribe for less than their Basic Amounts (the "Undersubscription
Amount"). 


        (ii)  To
accept an Offer, in whole or in part, a Purchaser must deliver a written notice to the Company prior to the end of the five (5) Business Day period of the
Offer, setting forth the portion of the Purchaser's Basic Amount that such Purchaser elects to purchase and, if such Purchaser shall elect to purchase all of its Basic Amount, the Undersubscription
Amount, if any, that such Purchaser elects to purchase (in either case, the "Notice of Acceptance"). If the Basic Amounts subscribed for by all Purchasers are less than the total of all of the Basic
Amounts, then each Purchaser who has set forth an Undersubcription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts subscribed for, the
Undersubscription Amount it has subscribed for; provided, however, that if the Undersubscription Amounts
subscribed for exceed the difference between the total of all the Basic Amounts and the Basic Amounts 



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subscribed for (the "Available Undersubscription Amount"), each Purchaser who has subscribed for any Undersubscription Amount shall be entitled to
purchase on that portion of the Available Undersubscription Amount as the Basic Amount of such Purchaser bears to the total Basic Amounts of all Purchasers that have subscribed for Undersubscription
Amounts, subject to rounding by the Board of Directors to the extent its deems reasonably necessary. 



        (iii)  The
Company shall have five (5) days from the expiration of the period set forth in Section 4.1(a)(ii) above to issue, sell or exchange all or any
part of such Offered Securities as to which a Notice of Acceptance has not been given by the Purchasers (the "Refused Securities"), but only to the
offerees described in the Offer (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the
acquiring person or persons or less favorable to the Company than those set forth in the Offer. 


        (iv)  In
the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in
Section 4.1(a)(iii) above), then each Purchaser may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of
Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that the Purchaser elected to purchase pursuant to Section 4.1(a)(ii) above multiplied
by a fraction, (i) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued
or sold to Purchasers pursuant to Section 4.1(a)(ii) above prior to such reduction) and (ii) the denominator of which shall be the original amount of the Offered Securities. In
the event that any Purchaser so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the
Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Purchasers in accordance with
Section 4.5(b)(i) above. 


        (v)  Upon
the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, the Purchasers shall acquire from the Company, and the Company
shall issue to the Purchasers, the number or amount of Offered Securities specified in the Notices of Acceptance, as reduced pursuant to Section 4.5(b)(iv) above if the Purchasers have
so elected, upon the terms and conditions specified in the Offer. The purchase by the Purchasers of any Offered Securities is subject in all cases to the preparation, execution and delivery by the
Company and the Purchasers of a purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to the Purchasers, the Company and their respective counsel. 


        (vi)  Any
Offered Securities not acquired by the Purchasers or other persons in accordance with Section 4.5(b)(iii) above may not be issued, sold or exchanged
until they are again offered to the Purchasers under the procedures specified in this Agreement. 




        (b)  The
restrictions contained in paragraph (a) of this Section shall not apply to (i) the granting of options to employees, officers and directors of the
Company pursuant to any stock option plan duly adopted by the Company or to the issuance of Common Stock upon exercise of such options, or (ii) strategic transactions not significantly for the
purpose of raising capital. 


        4.2  Disclosure of Material Non-Public Information. The Company shall not and shall cause each of its Affiliates
(as defined in Rule 405 under the Securities Act) and other Persons acting on behalf of the Company not to divulge to any Purchaser any information that it believes to be material
non-public information unless such Purchaser has agreed in writing to receive such information prior to such divulgence. 


9





 



        4.3  Reservation and Listing of Securities. The Company shall maintain a reserve from its duly
authorized shares of Common Stock for issuance pursuant to this Agreement in such amount as may be required to fulfill its obligations in full under this Agreement and upon exercise of the Warrants.
In the event that at any time the then authorized shares of Common Stock are insufficient for the Company to satisfy its obligations in full under this Agreement and the Warrants, the Company shall
promptly take such actions as may be required to increase the number of authorized shares. The Company shall take such steps as may be required to cause and maintain the listing of the Total Shares on
the Trading Market and such other exchange, market or quotation facility on which the Common Stock is traded. 


        4.4  Indemnification


        (a)  The
Company will indemnify and hold harmless each Purchaser and any of its affiliates or any officer, director, partner, controlling person, employee or agent of a
Purchaser or any of its affiliates (a "Related Person") for its reasonable legal and other expenses (including the costs of any investigation,
preparation and travel) and for any Losses incurred in connection with any action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such
as a disposition), whether commenced or threatened (each, a "Proceeding"), insofar as such Losses arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration Statement or the Supplement, or any amendment or supplement thereto, and all other documents filed as a part thereof, as
amended at the time of effectiveness of the Registration Statement, including any information deemed to be a part thereof as of the time of effectiveness pursuant to paragraph (b) of
Rule 430A, or pursuant to Rule 434, under the Securities Act, or arise out of or are based upon the omission or alleged omission to state in any of them a material fact required to be
stated therein or necessary to make the statements in any of them, in light of the circumstances under which they were made, not misleading, as such expenses or Losses are incurred. In addition, the
Company shall indemnify and hold harmless each Purchaser and Related Person from and against any and all Losses, as incurred, arising out of or relating to any breach by the Company of any of the
representations, warranties or covenants made by the Company in this Agreement, or any allegation by a third party that, if true, would constitute such a breach. The conduct of any Proceeding for
which indemnification is available under this paragraph shall be governed by Section 4.4(b). The indemnification obligations of the Company under this paragraph shall be in addition to any
liability that the Company may otherwise have and shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Purchasers and any such Related
Persons. The Company also agrees that neither the Purchasers nor any Related Persons shall have any liability to the Company or any Person asserting claims on behalf of or in right of the Company in
connection with or as a result of the transactions contemplated by this Agreement, except to the extent that any losses, claims, damages, liabilities or expenses incurred by the Company result from
the gross negligence or willful misconduct of the applicable Purchaser or Related Person in connection with such transactions. If the Company breaches its obligations under this Agreement, then, in
addition to any other liabilities the Company may have under this Agreement or applicable law, the Company shall pay or reimburse the Purchasers on demand for all costs of collection and enforcement
(including reasonable attorneys fees and expenses). Without limiting the generality of the foregoing, the Company specifically agrees to reimburse the Purchasers on demand for all costs of enforcing
the indemnification obligations in this paragraph. For the purposes of this Section 4.4, "Losses" shall mean any and all losses, claims, damages,
liabilities, settlement costs and expenses, including without limitation costs of preparation of legal action and reasonable attorneys' fees. 



        (b)  Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to
indemnity hereunder (an "Indemnified Party"), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the
"Indemnifying Party") in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses 


10





 




incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review)
that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party. 


        An
Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be
at the expense of such Indemnified Party or Parties unless: (i) the Indemnifying Party has agreed in writing to pay such fees and expenses; or (ii) the Indemnifying Party shall have
failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (iii) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it
elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld. No
Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. 


        All
fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a
manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten Business Days of written notice thereof to the Indemnifying Party (regardless of whether it
is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse all
such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder). 


        5.    Miscellaneous


        (a)  Fees and Expenses. At the Closing, the Company shall pay to Pine Ridge Financial Inc. an aggregate of $25,000 for
their legal fees and expenses incurred in connection with the preparation and negotiation of this Agreement. In lieu of the foregoing payment, to Pine Ridge Financial Inc. may retain such
amount at the Closing or require the Company to pay such amount directly to Purchaser Counsel. Except as expressly set forth in this Agreement to the contrary, each party shall pay the fees and
expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of
this Agreement. The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with the issuance of the Securities. 


        (b)  Publicity. Neither the Company nor the Purchasers shall issue any press release or make any other public announcement
relating to this Agreement unless (i) the content thereof is mutually agreed to by the Company and the Purchasers, or (ii) such party is advised by its counsel that such press release or
public announcement is required by law; except that no press release issued to disclose the issuance and sale of the Securities to the Purchasers will refer to the Purchasers by name. The Company
shall (i) within one Business Day following the Closing Date, issue a press release mutually agreed to by the
Company and the Purchasers, disclosing the transactions contemplated hereby and (ii) make such other filings and notices in the manner and time required by the Commission. 


11





 



        (c)  Entire Agreement; Amendments. This Agreement contains the entire understanding of the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into this Agreement and its exhibits
and schedules. This Agreement may not be modified or amended except pursuant to an instrument in writing signed by the Company and Purchasers then holding a majority of the voting power represented by
the Securities purchased hereunder, assuming the conversion in full of all of the Warrants. The waiver by either party hereto of any right hereunder or the failure to perform or of a breach by the
other party shall not be deemed a waiver of any other right hereunder or of any other breach or failure by said other party whether of a similar nature or otherwise. 


        (d)  Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall
be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number
specified in this Section prior to 6:30 p.m. (New York City time) on a Business Day, (ii) the Business Day after the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number specified in this Agreement later than 6:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date,
(iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required
to be given. The address for such notices and communications shall be as follows: 



	If to the Company:	 	EarthShell Corporation

800 Miramonte Drive

Santa Barbara, California 93109

Attn: Chief Financial Officer	 	 
	

With a copy to:	
 	

Gibson, Dunn & Crutcher LLP

2029 Century Park East

Los Angeles, California 90067

Facsimile No.: (310) 551-8741

Attn: Robert K. Montgomery, Esq.	
 	

 
	

If to the Purchasers:	
 	

To the address set forth under such Purchaser's name on the signature pages attached hereto.	
 	

 





        or
such other address as may be designated in writing hereafter, in the same manner, by such Person. "Business Day" shall mean any day
except Saturday, Sunday and any day which shall be a federal legal holiday in the United States or a day on which banking institutions in the State of New York are authorized or required by law or
other governmental action to close. 


        (e)  Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all
legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan. Each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein (including 


12





 




with respect to the enforcement of any of this Agreement), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is improper. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in
any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to
it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of this Agreement,
then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorneys fees and other reasonable costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding. 


        (f)    Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign
the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such facsimile signature page were an original thereof. 



        (g)  Independent Nature of Purchasers. The obligations of each Purchaser under this Agreement are several and not joint with
the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under this Agreement. The decision of each
Purchaser to purchase Securities pursuant to this Agreement has been made by such
Purchaser independently of any other Purchaser and independently of any information, materials, statements or opinions as to the business, affairs, operations, assets, properties, liabilities, results
of operations, condition (financial or otherwise) or prospects of the Company or of the Subsidiary which may have been made or given by any other Purchaser or by any agent or employee of any other
Purchaser, and no Purchaser or any of its agents or employees shall have any liability to any other Purchaser (or any other person) relating to or arising from any such information, materials,
statements or opinions. Nothing contained herein, and no action taken by any Purchaser pursuant hereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this
Agreement. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for
any other Purchaser to be joined as an additional party in any proceeding for such purpose. 



        (h)  Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but
only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new certificate or
instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Securities. 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGES FOLLOW] 


13





 

        IN
WITNESS WHEREOF, the parties hereto have caused this Common Stock Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated
above. 



	 	 	EARTHSHELL CORPORATION
	

 	
 	

By:	
 	

/s/  SCOTT HOUSTON      
 Name: Scott Houston

Title: CFO




[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGES OF PURCHASERS FOLLOWS] 


14





 

        IN
WITNESS WHEREOF, the parties hereto have caused this Common Stock Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated
above. 



	 	 	PINE RIDGE FINANCIAL INC.	 	 
	

 	
 	

By:	
 	

/s/  KENNETH L. HENDERSON      
 Name: Kenneth L. Henderson

Title: Attorney-in-Fact	
 	

 
	

 	
 	

Purchase Price:	
 	

$1,760,937.50
	

 	
 	

Number of Shares to be acquired:	
 	

1,531,250
	

 	
 	

Underlying shares of Common Stock subject to Warrant:	
 	

765,625
	

 	
 	

Address for Notice:

c/o Cavallo Capital Corp.

600 Madison Avenue

New York, NY 10022

Telephone No.: (212) 651-9000

Facsimile No.: (212) 651-9010

Attn: Avi Vigder	
 	

 
	

With copies to:	
 	

Proskauer Rose LLP

1585 Broadway

New York, NY 10036-8299

Facsimile No.: (212) 969-2900

Attn: Adam J. Kansler, Esq.	
 	

 




15





 


	 	 	ZLP MASTER FUND, LTD.	 	 
	

 	
 	

By:	
 	

/s/  STUART J. ZIMMER      
 Name: Stuart J. Zimmer

Title: Director	
 	

 
	

 	
 	

Purchase Price:	
 	

$1,509,375.00
	

 	
 	

Number of Shares to be acquired:	
 	

1,312,500
	

 	
 	

Underlying shares of Common Stock subject to Warrant:	
 	

656,250
	

 	
 	

Address for Notice:

c/o Zimmer Lucas Partners, LLC

45 Broadway, 28th Floor

New York, NY 10006

Telephone No.:

Facsimile No.: (212) 440-0750

Attn: Rita Patel	
 	

 




16





 


	 	 	CLEVELAND OVERSEAS LTD.	 	 
	

 	
 	

Primeway S.A.

Director	
 	

 
	

 	
 	

By:	
 	

/s/  PHILLIPE ROBADIN      
 Name: Phillipe Robadin

Title: Authorized Signatory	
 	

 
	

 	
 	

Purchase Price:	
 	

$754,687.50
	

 	
 	

Number of Shares to be acquired:	
 	

656,250
	

 	
 	

Underlying shares of Common Stock subject to Warrant:	
 	

328,125
	

 	
 	

Address for Notice:

c/o Vertical Ventures, LLC

900 Third Avenue, 26th Floor

New York, NY 10022

Telephone No.: (212) 974-3070

Facsimile No.: (646) 274-1728

Attn: Joshua Silverman	
 	

 




17







 
 

EXHIBIT A    
  


EARTHSHELL CORPORATION

WARRANT 



	 
	 	 

	Warrant No.    	 	Dated: April 5, 2002





        EarthShell
Corporation, a Delaware corporation (the "Company"), hereby certifies that, for value received,
                        , or its
registered assigns (the "Holder"), is entitled to purchase from the Company up to a total of            shares of common stock, $0.01 par value
per
share (the "Common Stock"), of the Company (each such share, a "Warrant Share" and all such shares, the
"Warrant Shares") at an exercise price equal to $1.15 (as adjusted from time to time as provided in  Section 8, the "Exercise
Price"), at any time and from time to time from and after the date
hereof through and including the 30th Trading Day following the Closing Date (the "Expiration Date"), and subject to the following terms and conditions.
This Warrant (this "Warrant") is one of a series of similar warrants issued pursuant to that certain Common Stock Purchase Agreement, dated as of the
date hereof, by and among the Company and the Purchasers identified therein (the "Purchase Agreement"). All such warrants are referred to herein,
collectively, as the "Warrants." 


        1.    Definitions. In addition to the terms defined elsewhere in this Warrant, capitalized terms that are not otherwise defined
herein have the meanings given to such terms in the Purchase Agreement. 


        2.    Registration of Warrant. The Company shall register this Warrant, upon records to be maintained by the Company for that
purpose (the "Warrant Register"), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of
this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary. 


        3.    Registration of Transfers. The Company shall register the transfer of any portion of this Warrant in the Warrant Register,
upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Transfer Agent or to the Company at its address specified herein. Upon any such
registration or transfer, a new warrant to purchase Common Stock, in substantially the form of this Warrant (any such new warrant, a "New Warrant"),
evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued
to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant. 


        4.    Exercise and Duration of Warrants. 



        (a)  This
Warrant shall be exercisable by the registered Holder at any time and from time to time on or after the date hereof to and including the Expiration Date; provided,
however, that the Expiration Date shall be extended for each day (i) the Registration Statement is not effective, or (ii) the Company fails to have a sufficient number of authorized but
unissued and otherwise unreserved shares of Common Stock available to issue Warrant Shares upon exercise of the Warrants. At 6:30 P.M., New York City time on the Expiration Date, the portion of
this Warrant not exercised prior thereto shall be and become void and of no value. 


        (b)  A
Holder may exercise this Warrant by delivering to the Company (i) an Exercise Notice, in the form attached hereto, appropriately completed and duly signed, and
(ii) payment of the Exercise Price for the number of Warrant Shares as to which this Warrant is being exercised, and the date such items are delivered to the Company (as determined in
accordance with the notice provisions hereof) is an "Exercise Date." The Holder shall not be required to deliver the original Warrant in order to effect
an exercise hereunder. Execution and delivery of the Exercise Notice shall have the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase
the remaining number of Warrant Shares. 






 




        (c)  From
and including the 27th Trading Day following the Closing Date through and including the 30th Trading Day following the Closing Date
(each, a "Mandatory Exercise Date"), if the average of the daily Volume Weighted Average Price of Common Stock for the ten consecutive Trading Day
period ending on the day preceding such Mandatory Exercise Date is greater than $1.28 (as adjusted for stock splits, stock dividends, stock combinations and similar events) (the
"Threshold Price"), the Company may require that the Holder and all holders of other Warrants exercise this Warrant and all other Warrants in full at
the Exercise Price; provided that the Company has fully satisfied its obligations in Section 4(d) below. The Company may exercise its rights pursuant to this paragraph only by delivering
written notice (the "Mandatory Exercise Notice") of such election to the Holder by 6:30 p.m. (EST) on the date preceding such Mandatory Exercise
Date. The Holder shall pay the Exercise Price within three (3) Trading Days following receipt of the Mandatory Exercise Notice. Notwithstanding the foregoing, the Company may not require any
exercise of this Warrant under this paragraph (and any notice thereof will be void), if the Closing Price of the Common Stock on the Mandatory Exercise Date is less than or equal to the Threshold
Price. 


        (d)  The
Company shall (i) keep the Registration Statement continuously effective until the Expiration Date (including such day), and (ii) have a sufficient
number of authorized but unissued and otherwise unreserved shares of Common Stock available to issue Warrant Shares upon exercise of the Warrants. 




        5.    Delivery of Warrant Shares. 



        (a)  Upon
exercise of this Warrant, the Company shall promptly (but in no event later than three Trading Days after the Exercise Date) issue or cause to be issued and cause
to be delivered to or upon the written order of the Holder and in such name or names as the Holder may designate, a certificate for the Warrant Shares issuable upon such exercise, free of restrictive
legends. If the Holder provides or previously provided the necessary account information to the Company, the Company shall issue and deliver such Warrant Shares in a balance account of the Holder with
the Depository Trust Company through its Deposit Withdrawal Agent Commission System. The Holder, or any Person so designated by the Holder to receive Warrant Shares, shall be deemed to have become
holder of record of such Warrant Shares as of the Exercise Date. The Company shall, upon request of the Holder, use commercially reasonable efforts to deliver Warrant Shares hereunder electronically
through the Depository Trust Corporation or another established clearing corporation performing similar functions. 



        (b)  This
Warrant is exercisable, either in its entirety or, from time to time, for a portion of the number of Warrant Shares. Upon surrender of this Warrant following one or
more partial exercises, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing the right to purchase the remaining number of Warrant Shares. 


        (c)  The
Company's obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction
by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by
the Holder or any other Person, and
irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. 




        6.    Charges, Taxes and Expenses. Issuance of certificates for shares of Common Stock upon exercise of this Warrant shall be
made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which
taxes and expenses shall be paid by the Company; provided, however, that the 


2





 


Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that
of the Holder or an affiliate thereof. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon
exercise hereof. 


        7.    Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the
aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the
number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of persons other than the
Holder (taking into account the adjustments and restrictions of Section 8). The Company covenants that all Warrant Shares so issuable and
deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. The
Company will take all such action as may be necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of any
requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed. 


        8.    Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to
adjustment from time to time as set forth in this Section 8. 



        (a)  Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding, (i) pays a stock
dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a
larger number of shares, or (iii) combines outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders
entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of
such subdivision or combination. 


        (b)  Pro Rata Distributions. If the Company, at any time while this Warrant is outstanding, distributes to holders of Common
Stock (i) evidences of its indebtedness, (ii) any security (other than a distribution of Common Stock covered by the preceding paragraph), (iii) rights or warrants to subscribe
for or purchase any security, or (iv) any other asset (in each case, "Distributed Property"), then in each such case the Exercise Price in effect
immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution (and the Exercise Price thereafter applicable) shall be adjusted (effective on and
after such record date) to equal the product of such Exercise Price times a fraction of which the denominator shall be the average of the Closing Prices for the five Trading Days immediately prior to
(but not including) such record date and of which the numerator shall be such average less the then fair market value of the Distributed Property distributed in respect of one outstanding share of
Common Stock, as determined by the Company's independent certified public accountants that regularly examine the financial statements of the Company (an
"Appraiser"). In such event, the Holder, after receipt of the determination by the Appraiser, shall have the right to select an additional appraiser
(which shall be a nationally recognized accounting firm), in which case such fair market value shall be deemed to equal the average of the values determined by each of the Appraiser and such
appraiser. As an alternative to the foregoing adjustment to the Exercise Price, at the request of the Holder delivered before the 90th day after such record date, the Company will deliver to such
Holder, within five Trading Days after such request (or, if later, on the effective date of such 



3





 





distribution), the Distributed Property that such Holder would have been entitled to receive in respect of the Warrant Shares for which this Warrant could have been exercised immediately prior to
such record date. 


        (c)  Fundamental Transactions. If, at any time while this Warrant is outstanding, (i) the Company effects any merger or
consolidation of the Company with or into another Person, (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions,
(iii) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property (in any such case, a "Fundamental Transaction"), then the Holder shall have the right
thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant (the
"Alternate Consideration"). The aggregate Exercise Price for this Warrant will not be affected by any such Fundamental Transaction, but the Company
shall apportion such aggregate Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If
holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. At the Holder's request, any successor to the Company or surviving entity in such Fundamental
Transaction shall issue to the Holder a new warrant consistent with the foregoing provisions and evidencing the Holder's right to purchase the Alternate Consideration for the aggregate Exercise Price
upon exercise thereof. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the
provisions of this paragraph (c) and insuring that the Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction. If any Fundamental Transaction constitutes or results in a Change of Control, then at the request of the Holder delivered before the 90th day after such
Fundamental Transaction, the Company (or any such successor or surviving entity) will purchase the Warrant from the Holder for a purchase price, payable in cash within five Trading Days after such
request (or, if later, on the effective date of the Fundamental Transaction), equal to the Black Scholes value of the remaining unexercised portion of this Warrant on the date of such request. 


        (d)  Subsequent Equity Sales. From the date hereof until the Expiration Date (including such day), the Company will not,
without the prior written consent of the Holder (which consent can be withheld for any reason), directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce
any offer, sale, grant or any option to purchase or other disposition of) any of its or the Subsidiaries' equity or equity equivalent securities, including without limitation any debt, preferred stock
or other instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable for Common Stock. 


        (e)  Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to paragraphs (a) or
(b) of this Section, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the increased or decreased number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment. 



4





 




        (f)    Calculations. All calculations under this Section 8 shall be made
to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of
the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock. 


        (g)  Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this  Section 8, the Company at its expense will promptly compute such adjustment in
accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant
(as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Company will promptly
deliver a copy of each such certificate to the Holder and to the Company's Transfer Agent. 


        (h)  Notice of Corporate Events. If the Company (i) declares a dividend or any other distribution of cash, securities
or other property in respect of its Common Stock, including without limitation any granting of rights or warrants to subscribe for or purchase any capital stock of the Company or any Subsidiary,
(ii) authorizes or approves, enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution,
liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material terms and conditions of such transaction, at least 20 calendar
days prior to the applicable
record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction, and the Company will take all steps reasonably necessary
in order to insure that the Holder is given the practical opportunity to exercise this Warrant prior to such time so as to participate in or vote with respect to such transaction; provided, however,
that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice. 




        9.    Payment of Exercise Price. The Holder shall pay the Exercise Price in immediately available funds. 


        10.  Limitation on Exercise. Notwithstanding anything to the contrary contained herein, the number of shares of Common Stock
that may be acquired by the Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by such Holder and its affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated
with the Holder's for purposes of Section 13(d) of the Exchange Act, does not exceed 4.999% (the "Maximum Percentage") of the total number of
issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise). For such purposes, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. Each delivery of an Exercise Notice hereunder will constitute a representation by the
Holder that it has evaluated the limitation set forth in this paragraph and determined that issuance of the full number of Warrant Shares requested in such Exercise Notice is permitted under this
paragraph. The Company's obligation to issue shares of Common Stock in excess of the limitation referred to in this Section shall be suspended (and shall not terminate or expire notwithstanding any
contrary provisions hereof) until such time, if any, as such shares of Common Stock may be issued in compliance with such limitation. By written notice to the Company, the Holder may waive the
provisions of this Section or increase or decrease the Maximum Percentage to any other percentage specified in such notice, but (i) any such waiver or increase will not be effective until the
61st day after such notice is delivered to the Company, and (ii) any such waiver or increase or decrease will apply only to the Holder and not to any other holder of Warrants. 


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        (b)  Notwithstanding
anything to the contrary contained herein, if the Trading Market is the Nasdaq National Market or any other market or exchange with similar applicable
rules, then the maximum number of shares of Common Stock that the Company may issue pursuant to the Purchase Agreement and this Warrant at an effective purchase price less than the Closing Price on
the Trading Day immediately preceding the Closing Date equals 25,495,103 shares (the "Issuable Maximum"), unless the Company obtains shareholder
approval in accordance with the rules and regulations of such Trading Market. If, at the time any Purchaser requests an exercise of any of the Warrants, the Actual Minimum (excluding any shares issued
or issuable at an effective purchase price in excess of the Closing Price on the Trading Day immediately preceding the Closing Date) exceeds the Issuable Maximum (and if the Company has not previously
obtained the required shareholder approval), then the Company shall issue to the Purchaser requesting such exercise a number of shares of Common Stock not exceeding such Purchaser's
pro-rata portion of the Issuable Maximum (based on such Purchaser's share (vis-à-vis other Purchasers) of the aggregate purchase price paid under the
Purchase Agreement and taking into account any Warrant Shares previously issued to such Purchaser), and the
remainder of the Warrant Shares issuable in connection with such exercise or conversion (if any) shall constitute "Excess Shares" pursuant to
Section 10(c) below. For the purposes hereof, "Actual Minimum" shall mean, as of any date, the maximum aggregate number of shares of Common Stock
then issued or potentially issuable in the future pursuant to the Purchase Agreement, including any Warrant Shares issuable upon exercise in full of all Warrants, ignoring any limits on the number of
shares of Common Stock that may be owned by a Purchaser at any one time. 


        (c)  In
the event that any Purchaser's receipt of shares of Common Stock upon exercise of this Warrant is restricted based on the Issuable Maximum, the Company shall either:
(i) use commercially reasonable efforts to obtain the required shareholder approval necessary to permit the issuance of such Excess Shares as soon as is reasonably possible, but in any event
not later than the 60th day after the event giving rise to such Excess Shares, or (ii) within five Trading Days after such event, pay cash to such Purchaser, as liquidated damages and not as a
penalty, in an amount equal to the difference between the Black Scholes value of this Warrant assuming the limitations in Section 10(b) were not applicable and the Black Scholes value of this
Warrant after giving effect to the limitations in Section 10(b), measured as of the date of such event or, if greater, the date of payment (such difference, the "Cash
Amount"). If the Company elects the first option under the preceding sentence and the Company fails to obtain the required shareholder approval on or prior to the
60th day after such event, then within three Trading Days after such 60th day, the Company shall pay the Cash Amount to such Purchaser, as liquidated damages and not as a
penalty. 




        11.  Fractional Shares. The Company shall not be required to issue or cause to be issued fractional Warrant Shares on the
exercise of this Warrant. If any fraction of a Warrant Share would, except for the provisions of this Section, be issuable upon exercise of this Warrant, the number of Warrant Shares to be issued will
be rounded up to the nearest whole share. 


        12.  Notices. Any and all notices or other communications or deliveries hereunder (including without limitation any Exercise
Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile
number specified in this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the
Trading Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The
address for such notices or communications shall be as set forth in the Purchase Agreement. 


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        13.  Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon 30 days' notice to the Holder,
the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or
any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or
shareholders services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant
agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder's last address as shown on the Warrant Register. 


        14.  Miscellaneous. 



        (a)  This
Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject to the preceding sentence, nothing
in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended
only in writing signed by the Company and the Holder and their successors and assigns. 


        (b)  The
Company will not, by amendment of its governing documents or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of
all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder against impairment. Without limiting the generality of the
foregoing, the Company (i) will not increase the par value of any Warrant Shares above the amount payable therefor on such exercise, (ii) will take all such action as may be reasonably
necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares on the exercise of this Warrant, and (iii) will not close its
shareholder books or records in any manner which interferes with the timely exercise of this Warrant. 


        (c)  GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL. THE CORPORATE LAWS OF THE STATE OF DELAWARE SHALL GOVERN ALL ISSUES
CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS STOCKHOLDERS. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF
NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE
ENFORCEMENT OF THE PURCHASE AGREEMENT), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF
ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR
PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT
AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY 



7





 





MANNER PERMITTED BY LAW. THE COMPANY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY. 


        (d)  The
headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof. 



        (e)  In
case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and
provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially
reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant. 



[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS] 


8





 

        IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above. 



	 	 	EARTHSHELL CORPORATION
	

 	
 	

By:	
 	


	

 	
 	

Name:	
 	


	

 	
 	

Title:	
 	






9





 
FORM OF EXERCISE NOTICE 


(To
be executed by the Holder to exercise the right to purchase shares of Common Stock under the foregoing Warrant) 



To:
EarthShell Corporation 


The
undersigned is the Holder of Warrant No.            (the "Warrant") issued by EarthShell Corporation, a Delaware corporation (the
"Company"). Capitalized terms used herein and not otherwise defined have the respective meanings set forth in the Warrant. 


	1.
	The
Warrant is currently exercisable to purchase a total of                        Warrant Shares.



	2.
	The
undersigned Holder hereby exercises its right to purchase                        Warrant Shares pursuant to the Warrant.



	3.
	The
holder shall pay the sum of $                        to the Company in accordance with the terms of the Warrant.



	4.
	Pursuant
to this exercise, the Company shall deliver to the holder                        Warrant Shares in accordance with the terms of
the Warrant.



	5.
	Following
this exercise, the Warrant shall be exercisable to purchase a total of                        Warrant Shares. 






	Dated:                        ,	 	Name of Holder:
	

 	
 	

(Print)	
 	


	

 	
 	

By:	
 	


	

 	
 	

Name:	
 	


	

 	
 	

Title:	
 	


	

 	
 	

(Signature must conform in all respects to name of holder as specified on the face of the Warrant)




10





 
FORM OF ASSIGNMENT 


        [To
be completed and signed only upon transfer of Warrant] 


        FOR
VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto                        the right represented by the
within Warrant to purchase                        shares of Common
Stock of EarthShell Corporation to which the within Warrant relates and appoints                        attorney to transfer said
right on the books of EarthShell Corporation with full power of substitution
in the premises. 



	Dated:                        ,	 	 	 	 
	

 	
 	

 (Signature must conform in all respects to name of holder as specified on the face of the Warrant)
	

 	
 	

 Address of Transferee
	

 	
 	


	

 	
 	


	

In the presence of:	
 	

 	
 	

 
	




	
 	

 	
 	

 




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