Document:

EXHIBIT 10.30

                              SUBLICENSE AGREEMENT

      This SUBLICENSE AGREEMENT (this "AGREEMENT"), dated as of February 4, 2004
(the "EFFECTIVE  DATE"), is by and between  EARTHSHELL  CORPORATION,  a Delaware
corporation  ("EARTHSHELL"),  and HOOD PACKAGING  CORPORATION,  a company formed
under  the  laws of Nova  Scotia  ("HPC").  Each  of  EarthShell  and HPC may be
referred to herein individually as a "PARTY" or collectively as the "PARTIES".

                                    RECITALS

      WHEREAS, pursuant to that certain License and Services Agreement effective
as of July  29,  2002  (the  "EKI  LICENSE  Agreement"),  between  E.  Khashoggi
Industries,   LLC,  a  Delaware  limited  liability  company  ("EKI"),   bio-tec
Biologische  Naturverpackungen GmbH & Co. KG, a German limited liability company
("Biotec  KG"),  and  bio-tec  Biologische   Naturverpackungen   Forschungs  und
Entwicklungs  GmbH,  a German  limited  liability  company  ("Biotec  F&E," and,
together with Biotec KG,  "Biotec," and together with EKI, the "Biotec  Group"),
and EarthShell, EarthShell has the exclusive right to utilize, and to sublicense
to others the right to utilize,  specified  technology relating to thermoplastic
starch/synthetic bio-polymer blends to manufacture and sell certain food service
disposables; and

      WHEREAS,  EarthShell  is willing to grant,  and HPC  desires to accept,  a
sublicense of such technology for use in certain food service  disposables to be
sold in the United  States,  Canada and Mexico upon the terms and conditions set
forth herein.

                                    AGREEMENT

      NOW,  THEREFORE,  in  consideration  of the  foregoing  recitals  and  the
covenants and agreements set forth herein, together with other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:

      1.    DEFINITIONS.

            Capitalized  terms used  herein  shall have the  meanings  set forth
            below:

            (a) The term  "AGREEMENT"  shall have the  meaning  set forth in the
preamble.

            (b) The term  "BANKRUPTCY"  shall mean,  with respect to any Person,
(i) such  Person (a) admits in writing  its  inability  to pay its debts as they
come due,  (b) makes an  assignment  for the benefit of, or any  composition  or
arrangement with, its creditors, or (c) a trustee, receiver, liquidator or other
custodian is appointed for itself,  its business or all or a substantial part of
its property,  (ii) any case or proceeding  under any bankruptcy,  insolvency or
similar law of any applicable  jurisdiction,  or any dissolution,  winding up or
liquidation case or proceeding shall be commenced in respect of such Person,  or
(iii) such Person takes any action to authorize,  or in  furtherance  of, any of
the events described in clauses (i) or (ii) above.

            (c) The term  "CONFIDENTIAL  INFORMATION" shall have the meaning set
forth in Section 16.

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            (d) The term  "EARTHSHELL"  shall have the  meaning set forth in the
preamble.

            (e) The term  "EARTHSHELL  IMPROVEMENTS"  shall have the meaning set
forth in Section 6(a).

            (f) The term "EARTHSHELL INFRINGEMENT ACTION" shall have the meaning
set forth in Section 8(c).

            (g) The term "EKI  LICENSE  AGREEMENT"  shall have the  meaning  set
forth in the recitals.

            (h) The term "FOOD SERVICE  DISPOSABLES" shall have the same meaning
as is  assigned  to that  term in the EKI  License  Agreement,  as set  forth in
Exhibit "B" hereto.

            (i) The term "GROSS  SALES"  shall mean the gross  invoice  price of
Products sold by HPC to customers during the relevant fiscal period.

            (j) The term "HPC IMPROVEMENTS"  shall have the meaning set forth in
Section 6(b).

            (k) The term "IMPROVEMENT" shall mean any improvement,  enhancement,
refinement, modification or other new invention or discovery, whether patentable
or  unpatentable,  deriving from or otherwise  relating to, in whole or in part,
any of the claims of any of the Patents  described  in Exhibit A hereto,  any of
the Trade Secrets or the Products.

            (l) The term  "LICENSED  PATENTS"  shall mean the  Patents  that are
licensed to EarthShell by Biotec pursuant to the EKI License  Agreement and that
are  described on Exhibit A hereto and all Patents  covering  Improvements  that
hereafter  are  acquired  by or  licensed  to  EarthShell  under the EKI License
Agreement  (in the  case of any such  Patents  that are  hereafter  licensed  to
EarthShell,  subject  to  EarthShell  having  the  right  to  grant  sublicenses
thereunder  and HPC  agreeing to pay any royalty  that is payable in  connection
with exercising rights under any such sublicense).

            (m) The term "NET SALES" shall mean,  with respect to the  Products,
the Gross Sales for the relevant  fiscal period,  reduced by (i) cash,  trade or
quantity  discounts  actually given by HPC; and (ii) credits actually allowed by
HPC.

            (n) The term "PATENTS" shall mean unexpired patents, utility models,
industrial designs,  certificates of invention or similar grants of intellectual
property rights that are filed, registered,  issued or granted in the Territory,
including  without  limitation,   any  divisionals,   reissues,   continuations,
continuations-in-part,  renewals,  reexaminations,  and extensions of any of the
foregoing,  and any  applications  therefor (and patents which may issue on such
applications).

            (o)  The  term  "PERSON"  shall  mean  an  individual,  partnership,
corporation,   limited  liability  company,  trust,  governmental  or  political
subdivision  and any other entity that has legal capacity to own property in its
own name and to sue or be sued.

            (p) The term  "PRODUCTS"  shall  mean the Food  Service  Disposables
specified  in  Exhibit  C.  Upon  mutual  agreement  the  Parties  may add to or
otherwise change the types of Products covered by this Agreement by amending the

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relevant  Exhibit(s) in accordance with Section 20 hereof. Upon mutual agreement
the Parties may add to or otherwise change the types of Products covered by this
Agreement by amending the Exhibit C in accordance with Section 20 hereof.

            (q) The term  "REPRESENTATIVE"  shall have the  meaning set forth in
Section 5(a).

            (r) The term  "ROYALTY"  shall have the meaning set forth in Section
3.

            (s) The term  "ROYALTY  REPORT"  shall have the meaning set forth in
Section 4(a).

            (t) The term  "SUBLICENSE"  shall  have  the  meaning  set  forth in
Section 2(a).

            (u) The term  "TECHNOLOGY"  shall mean the Licensed  Patents and the
Trade Secrets.

            (v) The term  "TERRITORY"  shall mean the United States,  Canada and
Mexico.

            (w) The term  "TRADE  SECRETS"  shall mean (i)  know-how,  formulas,
methods,   processes,   systems  and  other  proprietary  information  owned  by
EarthShell or licensed to EarthShell  pursuant to the EKI License Agreement that
are or  may be  useful  or  necessary  in  the  production,  distribution,  use,
marketing  or sale of any of the  Products,  and (ii)  subject to Section 6, any
non-patented Improvement or other proprietary information now or hereafter owned
by or  licensed  to  EarthShell  that is or may be  useful or  necessary  in the
production, distribution, use, marketing or sale of any of the Products.

            (x) The term  "TRADEMARKS"  shall  have  the  meaning  set  forth in
Section 2(d).

      2.    THE SUBLICENSE.

            (a)  Subject  to  the  terms  and  conditions  of  this   Agreement,
EarthShell hereby grants to HPC an exclusive (except as provided in, and subject
to,  Section   2(e)),   royalty-bearing   sublicense  to  the  Technology   (the
"SUBLICENSE")  to make,  have made,  use, sell,  offer to sell,  import into and
otherwise dispose of Products solely within the Territory.

            (b) HPC shall not otherwise have the right to sublicense or transfer
the Technology, or any interest in or rights under the Sublicense; provided that
the  rights  and  obligations  of HPC in, to and  under  this  Agreement  may be
assigned  to the extent  provided  by Section 23. Any  purported  sublicense  or
transfer by HPC without such consent shall be null and void and shall constitute
a material  breach for purposes of Section  13(b)  hereof.  Notwithstanding  the
foregoing,  HPC may grant a  sublicense  hereunder  (without  any consent  being
required from EarthShell) to Hood Flexible Packaging Corporation,  a Mississippi
corporation, and Hood Packaging Corporation, a Mississippi corporation; provided
any such sublicense shall continue in effect only so long as such HPC remains an
affiliate of the applicable sublicensee.

            (c) HPC shall not, directly or indirectly,  market, distribute, sell
or attempt to dispose of any Product to any Person outside the Territory,  or to
any Person within the  Territory,  if HPC has actual  knowledge that such Person

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intends to use the Product in question  outside the  Territory.  A breach of the
foregoing  shall  constitute  a material  breach for  purposes of Section  13(b)
hereof.

            (d) Subject to Section 10(e) hereof,  HPC is authorized and required
to use, in connection with the marketing,  distribution  and sale of Products in
the Territory, the trademarks and service marks (collectively, the "TRADEMARKS")
owned by or licensed to  EarthShell  that are  designated  to HPC by  EarthShell
prior to  commercial  production  of the  Products  by HPC or from  time to time
thereafter.

            (e) HPC will use its best  efforts  to  commercialize  the  Products
during the twelve (12) month period  commencing on the Effective  Date. In order
for HPC to maintain its exclusive license hereunder, HPC must pay EarthShell the
following  Royalties:  (i)  commencing  with May of 2004,  minimum  Royalties of
$65,000 per month for each calendar month through May of 2005, and (ii) for each
three month period  commencing with the three-month  period beginning on June 1,
2005 and ending with the three month period commencing on March 1, 2006, minimum
Royalties of $375,000. Commencing with the twelve-month period beginning on June
1,  2006  and  for  each  twelve-month  period  commencing  on  each  successive
anniversary  thereof,  the minimum Royalties that will be required to be paid by
HPC to maintain its  exclusive  license  hereunder  will be calculated on annual
basis and will be negotiated in good faith and agreed to by the parties prior to
the  commencement  of the  twelve-month  period to which such minimum  Royalties
relate;  provided that in no event will such minimum  Royalties be less than the
minimum Royalties required to be paid by HPC in the prior twelve-month period in
order to maintain HPC's exclusive rights. hereunder. If HPC fails to achieve any
such minimum Royalty  requirement during the applicable  period,  EarthShell may
elect to terminate  this  Agreement upon written notice to HPC or to convert the
license granted hereunder to HPC to a non-exclusive  license.  If, following any
such  election  by  EarthShell   to  convert  HPC's   exclusive   license  to  a
non-exclusive  license,  HPC fails to pay EarthShell  Royalties of not less than
$300,000 in any three- month period commencing on June 1, 2005, EarthShell shall
have the right to terminate  this Agreement upon written notice to HPC. If HPC's
license is so converted to a non-exclusive licensee,  EarthShell agrees that the
Royalty rate payable  hereunder  thereafter  will be no greater than the royalty
rate payable by any other EarthShell licensee in respect to the sale of Products
in the Territory.  Notwithstanding  anything to the contrary stated herein,  the
sole remedy of EarthShell by reason of any failure by HPC to achieve the minimum
Royalty  requirements  of this Section 2(e) will be  conversion of the exclusive
license to a non-exclusive license or termination of this Agreement, as provided
above in this Section 2(e).

            (f) Notwithstanding  the anything herein to the contrary,  if HPC is
unable to satisfy fully the requirements of any customer for Products because of
insufficient plant capacity within nine (9) months after such customer has given
HPC notice of such  requirements  in  writing  (the  amount of such  unsatisfied
requirements  being referred to as  "UNFULFILLED  CUSTOMER  REQUIREMENTS"),  HPC
agrees that the Unfulfilled Customer  Requirements for Products may be satisfied
by another  EarthShell  sublicensee  that is designated  by  EarthShell  without
violating the exclusive  rights granted by EarthShell  hereunder;  provided that
HPC shall in such  event  retain its  exclusivity  with  respect to all  Product
requirements that HPC has sufficient capacity to fulfill on a timely basis.

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      3.    PLANT FACILITY

            (a) Upon reasonable  notice and during normal  business  hours,  HPC
will permit  EarthShell  personnel or  consultants  access to any plant facility
that is used to manufacture  Products (each a "PLANT FACILITY") as is reasonably
necessary in order for them to fulfill  EarthShell's  obligations or protect its
rights under this Agreement.

            (b) HPC  shall  pay all costs and  expenses  of  whatever  nature in
connection  with the  start-up  and  operation  of any  Plant  Facility  and the
manufacture,   use,   sale,   offering  for  sale  and   importation   into  and
commercialization of the Products in the Territory.

      4.    ROYALTY.

            (a) In consideration for the grant of the Sublicense,  HPC shall pay
to EarthShell a sliding-scale  royalty (the "ROYALTY") each calendar  quarter as
set forth on Exhibit D hereto.

            (b)  Within  fourteen  (14)  days of the last  day of each  calendar
quarter,  HPC shall pay to  EarthShell  the  Royalty  payable  in respect of all
Products shipped and invoiced by HPC during such calendar quarter.  Each Royalty
payment shall be accompanied by a written report (the "ROYALTY REPORT") prepared
by HPC and certified as accurate by the Chief Financial Officer or Controller of
HPC. Each Royalty Report shall set forth,  for the calendar  quarter  covered by
the Royalty Report,  (i) the number of each of the Products shipped by HPC, (ii)
the gross invoice price for each of such  Products,  and (iii) any reductions to
the gross invoice price for purposes of calculating Net Sales.

            (c) All Royalty  payments due under this Agreement  shall be paid by
HPC in United States dollars.

            (d) If HPC fails to make a timely  payment due under this Section 4,
interest at an annual  rate equal to twelve  percent  (12%) shall  accrue on the
amount of payment for each day such payment is overdue; provided,  however, that
such  interest  rate shall in no event  exceed the  maximum  rate  permitted  by
applicable law.

            (e)  Any  failure  to  make  timely  payment  of any  Royalty  shall
constitute a material  breach for purposes of Section  13(b) hereof  unless such
failure relates to any amount as to which there is a bona fide dispute; provided
that HPC in all events will be in material  breach of this Agreement if it fails
to pay any  amount  within 60 days of the date when due,  whether  or not HPC is
then contesting  whether such payment is then due and payable under the terms of
this Agreement (it being  understood that HPC will not be in breach by reason of
any failure to pay amounts that EarthShell  later agrees are not due and payable
hereunder or that are determined pursuant to any arbitration  initiated pursuant
to Section 21 not have been due and  payable  hereunder).  In the event that HPC
disputes  in  good  faith a good  faith  written  claim  for  Royalties  made by
EarthShell (the "Disputed Royalties"),  and HPC deposits such Disputed Royalties
into an  interest-bearing  escrow account for the benefit of EarthShell with its
primary  banking  institution  within  thirty (30) days of such claim,  then HPC
shall not be deemed to be in material  breach of this  Agreement  if it is later
found that the Disputed Royalties were due. The Parties shall effect the dispute
resolution  procedures  set forth in Section 21 to determine  how to  distribute
such Disputed  Royalties.  Any expenses associated with the escrow account shall

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be borne  entirely by the  non-prevailing  Party,  or split  accordingly if both
Parties receive a portion of the Disputed Royalties.

            (f)  EarthShell  acknowledges  that the Royalties  payable by HPC to
EarthShell under this Agreement may be subject to withholding  taxes that may be
assessed under  applicable law by any  jurisdiction in the Territory and, if HPC
is required to so withhold  any tax on  Royalties,  then the amount of Royalties
actually  remitted  to  EarthShell  will be net of such  withholding.  HPC  will
promptly furnish  EarthShell with the official receipt of payment of these taxes
to the appropriate taxing authority.  Subject to any lender consent that HPC may
be required to obtain in connection  therewith  (which consent HPC agrees to use
reasonable  efforts to obtain)  following the Effective Date and at EarthShell's
option,  the Parties  agree to cooperate  to  restructure  the Royalty  payments
payable  hereunder  in a manner that will  optimize  the tax  treatment  of such
payments, including by possibly converting the Royalty obligation into a profits
participation by EarthShell in HPC (it being agreed that any such  restructuring
would not be intended to adversely affect the net economic  benefits intended to
be conferred on HPC hereby).

      5.    RIGHT TO AUDIT.

            (a) HPC  shall  keep and  maintain  complete  and  accurate  records
concerning  the sale of the Products at its  principal  executive  offices or at
such other  locations as the Parties shall agree.  EarthShell or its  designated
representative (the "REPRESENTATIVE")  shall have the right at EarthShell's cost
and expense to review the financial and other records of HPC concerning the sale
of the Products on a quarterly  basis during the term of this  Agreement  during
normal business hours and upon reasonable prior notice to HPC.

            (b)  If  HPC is  ultimately  determined  to  have  failed  to pay to
EarthShell  the full amount of a Royalty  payment  actually due  hereunder,  HPC
shall  promptly  pay the full amount of such  discrepancy  to  EarthShell,  with
interest  thereon,  at an annual rate equal to twelve percent  (12%);  provided,
however,  that such  interest  rate shall in no event  exceed the  maximum  rate
permitted by applicable law. Furthermore,  should the results of an audit reveal
an  underpayment  of a Royalty  payment due  hereunder in excess of five percent
(5%),  then all costs and expenses  related to such audit shall be reimbursed to
EarthShell by HPC within thirty (30) days of the completion of such credit.

            (c) If HPC is ultimately  determined  to have overpaid  EarthShell a
Royalty payment  actually due hereunder,  EarthShell shall promptly pay the full
amount of the overpayment to HPC, with interest thereon, at an annual rate equal
to twelve percent (12%); provided,  however, that such interest rate shall in no
event exceed the maximum rate permitted by applicable law.

      6.    IMPROVEMENTS TO TECHNOLOGY.

            (a)  As  between  EarthShell  and  HPC,   EarthShell  will  own  all
Improvements  made in  connection  with this  Agreement,  whether made by or for
EarthShell or by or for HPC (in each case, whether  individually or jointly with
others),  that relate to materials  composition  and  commercial  products  (the
"EARTHSHELL  IMPROVEMENTS").  Subject  to  EarthShell's  right  to  do  so,  all
EarthShell  Improvements shall be included in the Technology  licensed hereunder
to HPC without additional royalty or other obligation being imposed on HPC.

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            (b) As between  EarthShell  and HPC,  HPC will own all  Improvements
made in connection with this Agreement,  whether made by or for EarthShell or by
or for HPC (in each case,  whether  individually  or jointly with others),  that
relate to manufacturing processes (the "HPC IMPROVEMENTS"). All HPC Improvements
will be licensed to EarthShell on a  non-exclusive,  worldwide and  royalty-free
basis,  with the right to grant  sublicenses.  EarthShell  acknowledges that HPC
shall have the right to license HPC  Improvements to third parties on such terms
and  conditions  as it shall  determine  which  shall  not  conflict  with  this
Agreement.

            (c) Any  material  Improvements  developed by or for any third party
(including an EarthShell  sublicensee other than HPC) and licensed to EarthShell
shall,  if  requested  by HPC and  subject  to  EarthShell's  right to do so, be
sublicensed to HPC hereunder,  subject to the applicable terms and conditions of
such sublicense.

            (d) Each  Party that  develops  or  acquires a material  Improvement
during the term hereof will  disclose such  Improvement  in writing to the other
Party promptly after the development or acquisition of such  Improvement by such
Party.

            (e) Any  Improvement  made by or for EarthShell or by or for HPC (in
each case, whether individually or jointly with others) that does not constitute
an HPC Improvement shall be deemed to be an EarthShell Improvement.

      7.    PATENT MATTERS.

            (a) EarthShell shall have the right, in its sole discretion,  to (i)
affirmatively seek patent protection for any EarthShell  Improvement at its sole
cost and expense or (ii) maintain any EarthShell  Improvement as a trade secret;
provided that such EarthShell  Improvement shall be maintained as a trade secret
during the pendency of any patent application.

            (b) HPC  shall  have  the  right,  in its  sole  discretion,  to (i)
affirmatively  seek patent  protection for any HPC  Improvement at its sole cost
and expense or (ii) maintain any HPC  Improvement  as a trade  secret;  provided
that such HPC  Improvement  shall be  maintained  as a trade  secret  during the
pendency of any patent application.

            (c) Each Party shall  provide the other Party,  at the other Party's
expense, with such assistance as may be reasonably requested, from time to time,
in connection  with efforts to seek patent  protection  for any  Improvement  in
accordance  with Section 7(a) or (b),  including  the execution of any documents
necessary to obtain and maintain such patent protection.

      8.    INFRINGEMENT MATTERS.

            (a) In the event that either  Party  becomes  aware of any actual or
threatened   infringement,   misappropriation,   or   other   unauthorized   use
("Infringement")  of the  Licensed  Patents  or  any  Licensed  Technology  (the
"Enforceable  Rights") in connection  with  Products,  such Party shall promptly
notify the other Party, and the Parties shall confer in good faith regarding the
most  appropriate  actions to be taken with respect to such  Infringement.  Both
Parties shall use  reasonable  efforts to cooperate with each other to terminate
such  Infringement  without  litigation.  So long as the licenses granted to HPC
under Section 2 are exclusive,  EarthShell shall have the initial right, but not
the obligation,  to enforce the Enforceable Rights against third parties who are
suspected of infringing the Enforceable  Rights in connection with Products.  If

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EarthShell  does not  bring any  legal  action  against  third  parties  who are
suspected of  infringing  the  Enforceable  Rights in  connection  with Products
within  ninety  (90) days  after  notice  has been given by a Party to the other
Party hereunder with respect thereto, HPC shall have the sole right, but not the
obligation, to enforce Enforceable Rights against such third parties. EarthShell
shall have the sole right, but not the obligation, to enforce Enforceable Rights
against third parties who are suspected of  infringing  the  Enforceable  Rights
other than in connection with Products and the sole right to enforce Enforceable
Rights after the conversion of HPC's license under Section 2 to a  non-exclusive
license pursuant to Section 2(e).

            (b) If one  Party  brings  an  enforcement  action  relating  to the
Enforceable Rights as described above (the "Initiating  Party"), the other Party
(the  "Non-Initiating  Party") hereby agrees to cooperate reasonably in any such
effort,  and the  Parties  shall  reasonably  cooperate  to address new facts or
circumstances that come to light during the course of any action relating to the
Enforceable  Rights  which may affect the need for the  Non-Initiating  Party to
participate in such action.  If necessary for HPC bring an action to enforce the
Enforceable  Rights in circumstances in which HPC authorized to do so hereunder,
EarthShell  agrees  to be  named  as a  party  plaintiff  in  such  action.  The
Initiating  Party may not settle any action  brought under this Section 8(b), or
take any  other  action  in the  course  thereof,  that  adversely  affects  the
Non-Initiating  Party's  interest in the Enforceable  Rights without the written
consent  of the  Non-Initiating  Party,  such  consent  not  to be  unreasonably
withheld,  conditioned, or delayed. If both Parties participate in the action to
enforce Enforceable Rights (by joining as plaintiffs), the expenses and costs of
any such  action and any  damages or  monetary  award  shall be shared  equally.
Unless  otherwise  agreed,  if only one  Party  brings  the  action  to  enforce
Enforceable  Rights,  the  costs  and  expenses  shall  be borne  solely  by the
Initiating  Party and any damages or monetary award relating to an  Infringement
shall belong solely to the Initiating Party..

            (c) HPC shall promptly notify EarthShell in writing of (i) any claim
or  threatened  claim by any  Person  that the use of the  Technology  by HPC in
connection  with the  manufacture,  use or sale of any Product by HPC within the
scope of the license granted to HPC hereunder  infringes or violates the patent,
trade secret or other  intellectual  property rights of such Person and (ii) the
commencement  of any lawsuit  against HPC, or any of its  respective  customers,
asserting any such claim (an "EARTHSHELL INFRINGEMENT ACTION"). EarthShell shall
assume and control the defense of any  EarthShell  Infringement  Action,  at its
sole  cost  and  expense,  irrespective  of  whether  EarthShell  is  named as a
defendant  therein.  HPC will assist EarthShell in the defense of any EarthShell
Infringement  Action by providing  such  information,  fact  witnesses and other
cooperation  as  EarthShell  may  request  from  time  to  time;  provided  that
EarthShell shall reimburse HPC for any out-of-pocket expenses incurred by HPC in
connection  therewith.  HPC shall have the right to be represented in connection
with an  EarthShell  Infringement  Action by its own legal  counsel,  at its own
expense, provided that such legal counsel will act only in an advisory capacity.
If EarthShell does not assume the defense of any EarthShell Infringement Action,
HPC shall have the right, but not the obligation,  to assume the defense of such
lawsuit,  utilizing  legal  counsel  of its  choice.  EarthShell  shall bear the
reasonable  costs and  expenses  of such legal  counsel.  If HPC so assumes  the
defense of an EarthShell  Infringement Action, HPC shall have no right to settle
such  EarthShell  Infringement  Action  unless HPC shall have received the prior
written  consent of  EarthShell  which  shall not be  unreasonably  withheld  or
delayed.

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            (d) If the court, in any EarthShell  Infringement  Action,  enters a
final  and  non-appealable  order  finding  that  the  Technology  infringes  or
violates,  in whole or in part,  the  intellectual  property  rights of  another
Person in any of the  Territory  and requiring HPC (i) to obtain a license under
any third  party's  patent not licensed  hereunder in order to continue make and
sell in the Territory any Products  incorporating  Technology as contemplated by
this  Agreement,  and to pay a  royalty  or fee  under  such  license,  and  the
infringement of such patent cannot  reasonably be avoided by HPC, or (ii) to pay
any damages on account of such  infringement or violation,  EarthShell shall pay
the amount of any such fee or royalty payable and any such damages to the extent
that the  infringement  or violation found by such court resulted from HPC's use
of  Technology  in the  Territory  within  the scope of the  Sublicense  granted
hereunder;  provided that, in no event shall  EarthShell's  liability under this
Section 8(d) exceed the specified amount in Section 12(b) hereof.

            (e) Any amounts  owing from  EarthShell to HPC under Section 8(c) or
(d) that have not been  timely paid by  EarthShell  may be offset by HPC against
future   Royalty   payments   owing  from  HPC   hereunder.   If  an  EarthShell
Indemnification  Action  has  been  brought  and HPC has not  received  adequate
assurances of future performance by EarthShell of its obligations under Sections
8(c) and (d) and HPC, in good  faith,  reasonably  deems  itself  insecure  with
respect  to  EarthShell's  performance  of such  obligations,  HPC  may  deposit
Royalties that thereafter accrue ("RETAINED ROYALTIES") into an interest-bearing
escrow  account  for  the  benefit  of  EarthShell   with  its  primary  banking
institution, which Retained Royalties will be disbursed upon final resolution of
such EarthShell  Indemnification  Action (i) to EarthShell,  if EarthShell shall
not theretofore have breached its obligations under Sections 8(c) or (d) or (ii)
to HPC,  to the  extent  HPC has  incurred  amounts  as to which  EarthShell  is
obligated to reimburse  HPC pursuant to Sections 8(c) or (d), with any remaining
balance  distributable  to EarthShell.  Any expenses  associated with the escrow
account shall be borne entirely by HPC.

      9.    DUTIES AND OBLIGATIONS OF EARTHSHELL.

      In addition to, and not in limitation of, the other duties and obligations
of  EarthShell,  as set  forth  in this  Agreement,  EarthShell  shall  have the
following obligations hereunder:

            (a)  Within  30 days  after the  Effective  Date,  EarthShell  shall
provide to HPC copies of written  materials in which all Trade Secrets necessary
for HPC  effectively  to exercise the rights  granted to it under the Sublicense
are disclosed, including without limitation the following:

                  (i) technical specifications for the Products;

                  (ii)   detailed   specifications   for   raw   materials   and
formulations  required for the  manufacture  of the Products and cost lists from
approved vendors thereof;

            (b) Subject to the  availability  of  EarthShell  staff,  EarthShell
shall,  at HPC's  reasonable  request and at  EarthShell's  then standard hourly
rates,  provide to HPC technical  support  including  assisting HPC in debugging
services in connection with the start-up and operation of any Plant Facility and
modifying the Products to meet the performance requirements of customers.

                                       9
<PAGE>

            (c) HPC  acknowledges  that the Board of Directors of EarthShell has
not approved and  authorized  the  execution  and delivery of this  Agreement by
EarthShell and the performance by EarthShell of its obligations hereunder.  Such
approval and authorization,  if required, shall be obtained by EarthShell within
ten (10) days after the Effective  Date. In the absence of EarthShell  providing
written  notice to HPC within  such ten (10) day period that such  approval  and
authorization  is  required  and has not been  obtained,  any  condition  to the
effectiveness  of  this  Agreement  relating  to  obtaining  such  approval  and
authorization shall be deemed to have been fulfilled.

      10.   OTHER DUTIES AND OBLIGATIONS OF HPC.

      In addition to, and not in limitation of, the other duties and obligations
of HPC, as set forth in this Agreement, HPC shall have the following obligations
hereunder:

            (a) HPC  shall  prominently  display  and  utilize  such  Trademarks
(whether  owned by or licensed to EarthShell) as may be designated by EarthShell
from time to time in connection with the advertisement,  marketing, distribution
and sale of the Products.  The right to use such  Trademarks is included  within
the Sublicense  herein granted.  Except as otherwise  agreed by EarthShell,  HPC
shall use its reasonable  efforts to cause each Product  manufactured  by HPC to
bear at least one of the  Trademarks  designated  by  EarthShell.  The  specific
placement, size, and detail of any Trademark on each Product must be approved by
EarthShell (which approval shall not be unreasonably  withheld or delayed).  HPC
shall not in any manner  represent  that it has any  ownership  interest  in any
Trademarks licensed hereunder. HPC acknowledges that use of the Trademarks shall
not  create  in its  own  favor  any  right,  title,  or  interest  in or to the
Trademarks,  and that all uses  thereof  by HPC shall  inure to the  benefit  of
EarthShell.  HPC  shall  cooperate  with  EarthShell  in  the  execution  of any
appropriate and necessary  documents in connection with the  registration of any
Trademarks.

            (b) Upon  termination of this Agreement,  HPC shall cease and desist
from use of the  Trademarks  in any way,  including  any word or phrase  that is
similar to or likely to be confused with any of the Trademarks.  However, in the
event of  termination  of this  Agreement,  HPC  shall  have  the  right to sell
existing  stock and  inventory of  manufactured  Products for a period of ninety
(90) days and  thereafter  shall deliver to  EarthShell  or its duly  authorized
representative all materials upon which the Trademarks appear.

            (c) HPC  acknowledges  that the  Technology in existence on the date
hereof is novel and unique in the foodservice  disposable products industry. HPC
shall not challenge or question the validity or ownership of the  Trademarks or,
subject to the  provisions of applicable  law, any Licensed  Patents.  HPC shall
continue to make all required payments under this Agreement to EarthShell during
any challenge of the validity of any of the Licensed Patents (or claims thereof)
included  in the  Technology.  In the event HPC fails to  continue  to make such
payments  based upon or in connection  with such a challenge,  EarthShell may at
its option terminate this Agreement upon written notice to HPC.

            (d) HPC  represents,  warrants and covenants to EarthShell  that (i)
the Products  manufactured  by HPC shall conform with all of the  specifications
provided by EarthShell pursuant to Section 9(a) and that (ii) HPC shall maintain
quality  standards for the Products in  conformity  with  EarthShell's  standard
quality  control  manual  or  procedures,   which  EarthShell  agrees  shall  be
commercially reasonable.

                                       10
<PAGE>

            (e) HPC shall obtain or provide,  and maintain at all times, product
liability  insurance as is  reasonable  and customary for the industry with such
insurer as shall be reasonably  satisfactory to EarthShell;  provided,  however,
any  insurer  rated by AM Best (or a  comparable  agency) at a rating of A-10 or
better  (or a  comparable  rating)  shall at all  times be  deemed a  reasonably
satisfactory  insurer.  Each such insurance policy will require that the insurer
give EarthShell at least thirty (30) days prior written notice of any alteration
in or cancellation of the terms of such policy.  HPC shall furnish to EarthShell
a certificate or other evidence reasonably  satisfactory to EarthShell that such
insurance  coverage is in effect and that  EarthShell is an  additional  insured
with respect to such policy.

            (f) HPC shall mark all of the  Products and related  documents  with
all  applicable  patent  numbers,  in accordance  with  EarthShell's  reasonable
instructions and as required by the patent laws in effect in the Territory or as
reasonably instructed by EarthShell.

            (g) HPC or its agents  shall be solely  responsible  for the payment
and discharge of any taxes, duties, or withholdings  relating to any transaction
of  HPC  or its  agents  in  connection  with  the  manufacture,  use,  sale  or
commercialization of the Technology or the Products in the Territory,  excluding
any tax or duty based on the income of EarthShell.

            (h) HPC grants  EarthShell the right of first priority to supply all
of HPC's raw materials for Products (the "RAW  MATERIALS").  HPC shall regularly
and routinely  inform  EarthShell of all of its  requirements  for Raw Materials
prior to  purchasing  any Raw Materials  from any other Person.  HPC may request
EarthShell to submit a bid or proposal  offer for the supply of  particular  Raw
Materials.  If  EarthShell  desires to supply  particular  Raw Materials to HPC,
EarthShell  may submit a bid or  proposal  for the supply of such Raw  Materials
("OFFERED RAW MATERIALS")  and, if such a bid or proposal is made by EarthShell,
EarthShell  and HPC  shall  negotiate  in good  faith  to  enter  into a  supply
agreement or purchase order with regard to such Offered Raw Materials unless HPC
has received a written offer from any third-party  (including from any supplier)
for such  Offered  Raw  Materials  at a price and on terms and  conditions  more
favorable to HPC than those offered or proposed by EarthShell.

            (i) Except  for the  license  granted  by HPC in  Section  6(c) with
respect to HPC  Improvements  and subject to HPC's agreement that all EarthShell
Improvements are owned solely by EarthShell, nothing in this Agreement grants to
EarthShell any interest, license or right to any HPC trademark, patent, or other
intellectual property right of HPC.

      11.   REPRESENTATIONS AND WARRANTIES OF EARTHSHELL.

            (a)  EarthShell  hereby  represents  and  warrants  to HPC  that (i)
EarthShell has a valid and enforceable  license to use the Technology within the
scope of the rights granted under the Sublicense and has the right to sublicense
the  Technology  to HPC  within  the  scope  of the  rights  granted  under  the
Sublicense as set forth in this  Agreement and (ii)  EarthShell  has received no
actual notice any claim or threatened claim of a third party (A) that any of the
Licensed Patents are invalid or unenforceable or (B) the practice of the License
Patents or the use of the Licensed  Technology in connection  with the making or
selling  of  Products  in  the  Territory   constitutes   an   infringement   or
misappropriation of intellectual property rights of a third party.

                                       11
<PAGE>

            (b)  EXCEPT  AS  EXPRESSLY  SET  FORTH  IN  SECTION  11(a)  OF  THIS
AGREEMENT, EARTHSHELL DOES NOT MAKE OR GIVE, AND HEREBY EXPRESSLY DISCLAIMS, ANY
AND ALL WARRANTIES,  WHETHER EXPRESS OR IMPLIED,  WRITTEN OR ORAL, INCLUDING THE
IMPLIED WARRANTIES OF MERCHANTABILITY  OR FITNESS FOR A PARTICULAR  PURPOSE,  IN
REGARD TO (i) ANY PRODUCTS  WHICH MAY BE  MANUFACTURED,  USED OR SOLD BY HPC AND
WHICH ARE BASED UPON OR UTILIZE ANY OF THE TECHNOLOGY; AND (ii) IN REGARD TO ANY
SERVICES PROVIDED TO HPC BY EARTHSHELL HEREUNDER.

            (c) Nothing in this Agreement shall be construed as:

                  i.  a  warranty  or  representation  by  EarthShell  as to the
validity or scope of any Licensed Patents;

                  ii. a requirement that EarthShell file any patent application,
secure any patent or maintain any patent in force;

                  iii.  conferring a right to use in  advertising,  publicity or
otherwise any Trademark of EarthShell  except as and to the extent  specifically
provided herein,; or

                  iv.  granting  by  implication,  estoppel,  or  otherwise  any
license  or  rights  under  patent  or other  intellectual  property  rights  of
EarthShell  other than the Licensed  Patents and Trade  Secrets  included in the
Technology, to the extent sublicensed as provided in Section 2.

      12.   NO CONSEQUENTIAL DAMAGES; LIMITATION OF LIABILITY.

            (a) IN NO EVENT  SHALL  EITHER  PARTY BE LIABLE  TO THE OTHER  PARTY
UNDER,  OR IN  CONNECTION  WITH,  THIS  AGREEMENT  FOR  ANY  INDIRECT,  SPECIAL,
INCIDENTAL,  PUNITIVE OR CONSEQUENTIAL  LOSSES,  EXPENSES OR DAMAGE  WHATSOEVER,
INCLUDING,  BUT NOT LIMITED TO, LOSS OF REVENUE OR PROFITS,  INCREASED  COSTS OF
PRODUCTION,  DAMAGES OR LOSSES AS A RESULT OF SUCH OTHER  PARTY'S  INABILITY  TO
OPERATE,  INABILITY TO FULFILL CONTRACTS WITH THIRD PARTIES,  OR SIMILAR MATTERS
OR EVENTS  ARISING FROM THE USE OR INABILITY TO SELL THE PRODUCTS OR ANY FAILURE
TO FULFILL A  PURCHASE  ORDER IN A TIMELY  FASHION,  NOR SHALL  EITHER  PARTY BE
LIABLE FOR ANY LOSS,  EXPENSE OR DAMAGE  SUFFERED OR INCURRED BY THE OTHER PARTY
AS A RESULT OF CLAIMS, DEMANDS, SUITS OR OTHER PROCEEDINGS BY ANY OTHER PARTY OR
PERSONS,  WHETHER  PRIVATE,  PUBLIC OR GOVERNMENTAL IN NATURE.  The limitations,
exclusions and  disclaimers in this Agreement  shall apply  irrespective  of the
nature of the cause of the action or demand, including but not limited to breach
of contract,  negligence,  tort or any other legal theory and shall  survive any
breach or breaches and/or failure of the essential purpose of this Agreement, or
any remedy contained in this Agreement.

            (b) IN NO EVENT SHALL EARTHSHELL'S  CUMULATIVE  LIABILITY IN RESPECT
OF CLAIMS  ARISING  UNDER  THIS  AGREEMENT  OR  OTHERWISE  RELATING  TO THE USE,
MANUFACTURE OR SALE OF PRODUCTS  (WHETHER IN CONTRACT,  TORT OR ANY OTHER THEORY
OF  LIABILITY)  EXCEED THE  AGGREGATE  AMOUNT OF ROYALTIES  THERETOFORE  PAID TO
EARTHSHELL HEREUNDER.

                                       12
<PAGE>

      13.   TERM AND TERMINATION.

            (a) The term of this Agreement  shall commence on the Effective Date
and,  subject to earlier  termination as provided  herein,  shall continue for a
period of ten (10)  years;  provided  that,  at the  option of HPC upon 120 days
written  notice prior to the end of such term, the term of this Agreement may be
extended for a renewal term of an additional  period of ten (10) years,  subject
to HPC and  EarthShell  reaching  agreement on the amount of the Royalties  that
will be payable  during such renewal  term (it being agreed that such  Royalties
will  not  be  subject  to  increase  in a  fashion  that  is  not  commercially
reasonable).

            (b) Either Party may terminate this Agreement for a material  breach
by the other Party of the terms and  conditions of this  Agreement  upon written
notice to the  breaching  party,  which is given no less than  thirty  (30) days
prior to an effective  date of  termination,  and which  specifies in reasonable
detail the nature of such breach. If the breaching Party cures such breach prior
to the effective date of  termination,  this  Agreement  shall not terminate and
will continue in full force and effect.

            (c) Either  Party may, by giving the other Party  written  notice of
termination,  immediately  terminate  this Agreement if upon the occurrence of a
Bankruptcy  with  respect to the other Party is  adjudicated  bankrupt,  files a
voluntary petition of bankruptcy,  makes a general assignment for the benefit of
creditors, is unable to meet its obligations in the normal course of business as
they fall due or if a receiver  is  appointed  on  account of the other  Party's
insolvency.

            (d) EarthShell shall have the right to terminate this Agreement when
and as provided in Section 2(e) hereof.

            (e) From and after the effective  date of the expiration of the term
of this Agreement or the termination of this Agreement  pursuant to this Section
13 hereof,  HPC shall have no right,  whatsoever,  to utilize the  Technology or
Trademarks, and HPC shall promptly return to EarthShell all written materials or
other  tangible  media  containing  any  Trade  Secrets  which  are  then in the
possession of HPC.  Sections 4, 5, 6, 8, 10(g),  12, 13(e),  14, 15, 16, 17, 18,
19, and 21 shall survive termination of this Agreement. The obligation of HPC to
pay to EarthShell the Royalty for all Products actually sold by HPC prior to the
effective date of the expiration or termination of this Agreement  shall survive
the expiration or termination of this Agreement.

      14.   RELATIONSHIP OF THE PARTIES.

      This Agreement shall not create any partnership,  joint venture or similar
relationship  between HPC and EarthShell,  and no representation to the contrary
shall  be made by  either  party.  Neither  HPC nor  EarthShell  shall  have any
authority to act for or on behalf of or to bind the other in any fashion, and no
representation to the contrary shall be made by either such party.

                                       13
<PAGE>

      15.   NOTICES.

            (a) Any notice which is required or permitted to be given to a Party
pursuant  to this  Agreement  shall be deemed to have  been  given  only if such
notice is reduced  to writing  and (a)  delivered  personally,  or (b) sent by a
reputable  overnight  courier  service to the Person in  question to the address
given below:

            IF TO EARTHSHELL:            EarthShell Corporation
                                         6740 Cortona Drive
                                         Santa Barbara, CA 93117-3022
                                         Attention: Chief Executive Officer
                                         Telephone: (805) 571-8370-
                                         Facsimile 805-571-8292

            IF TO HPC:                   Hood Packaging Corporation
                                         2380 McDowell Road
                                         Burlington, Ontario L7R 4A1
                                         Canada
                                         Attn.: President
                                         Telephone:  905-637-5611
                                         Fax:  905-637-9954

or to such other  address as either  Party  shall  have  specified  by notice in
writing to the other Party at a later point of time.

            (b) If delivered personally, a notice shall be deemed delivered when
actually  received  at the  address  specified  above.  Any  notice  given  by a
reputable  overnight  courier shall be deemed delivered on the next business day
following the date it is placed in the possession of such courier.

      16.   CONFIDENTIALITY.

      Any information relating to this Agreement, the Technology or the business
of HPC or EarthShell is hereinafter  referred to as "CONFIDENTIAL  INFORMATION."
All  Confidential  Information  in tangible  form  (plans,  writings,  drawings,
computer  software  and  programs,  etc.) or provided  to or conveyed  orally or
visually,  shall be presumed to be proprietary  to the  disclosing  Party at the
time of delivery  to the other  party;  provided  that all such  information  or
material  relating  to  the  Technology  shall  be  deemed  to  be  Confidential
Information of EarthShell.  All Confidential Information of the disclosing Party
hall be protected by the receiving party from disclosure with the same degree of
care with which the receiving party protects its own Confidential Information of
the disclosing Party from disclosure but in no event with less than a reasonable
degree of care. The receiving party agrees (i) not to disclose such Confidential
Information  to any Person except to those of its  employees or  representatives
who need to know such Confidential Information in connection with the conduct of
its business and who have agreed in writing to maintain the  confidentiality  of
such Confidential Information, and (ii) that neither it nor any of its employees
or representatives will use such Confidential  Information for any purpose other

                                       14
<PAGE>

than in connection with the conduct of its business  pursuant to this Agreement;
provided that such restrictions shall not apply if such Confidential Information
(A) is or hereafter becomes public other than by a breach of this Agreement, (B)
was already in the receiving party's possession and not subject to an obligation
of  confidentiality  prior to any disclosure of the Confidential  Information to
the  receiving  party,  (C) has been or is hereafter  obtained by the  receiving
party from a third party which, to the knowledge of the receiving party, was not
bound  by any  confidentiality  obligation  with  respect  to  the  Confidential
Information,  (D) is required to be disclosed  pursuant to judicial  order,  but
only to the extent of such order and after  reasonable  notice to the disclosing
party so as to allow the  disclosing  party to  intervene  to seek  confidential
treatment or (E) is required to be disclosed by any government  authority  which
regulates  the business of the receiving  party,  but only to the extent of such
required disclosure and after reasonable notice to the disclosing party so as to
allow the disclosing party to intervene to seek confidential treatment.  Without
limiting the generality of the  foregoing,  HPC shall ensure that no third party
is given access to the Plant Facility unless such third party has entered into a
non-disclosure  agreement with each of HPC and  EarthShell (it being  understood
that  such  non-disclosure  agreements  will  not  be  required  from  couriers,
suppliers,  or other  third  parties  that have  limited  access only to loading
docks, mail rooms,  office reception areas and other areas in which Products are
not being  manufactured  and in which no Confidential  Information is visible or
accessible).

      17.   SAVINGS CLAUSE.

      Should any part or  provision  of this  Agreement  be rendered or declared
invalid by reason of any law or by decree of a court or competent  jurisdiction,
the  invalidation  of  such  part  or  provision  of this  Agreement  shall  not
invalidate the remaining parts or provisions hereof, and the remaining parts and
provisions of this Agreement shall remain in full force and effect.

      18.   WAIVER.

      Neither the failure or delay on the part of either  Party to exercise  any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or privilege preclude any other
or further exercise thereof or of any other right or privilege.

      19.   GOVERNING LAW.

      This Agreement  shall be governed by and construed in accordance  with the
laws of Delaware, without giving effect to the choice of law rules thereof.

      20.   AMENDMENT.

      This  Agreement  may be amended only by the consent of each of the Parties
expressed in writing, signed by their duly authorized representatives.

      21.   DISPUTE RESOLUTION.

            (a)  All  claims,  disputes,  controversies  and  other  matters  in
question arising out of or relating to this Agreement,  or to the alleged breach
hereof,  which  cannot be  resolved by the  Representatives  shall be settled by
negotiation  between the  executives of HPC and  EarthShell.  If such  executive

                                       15
<PAGE>

negotiation is unsuccessful  within ten business days, HPC and EarthShell  shall
submit the dispute to non-binding  mediation with an independent  party mutually
acceptable  to HPC and  EarthShell  (with the cost of the  mediation to be borne
equally by HPC and EarthShell). If HPC and EarthShell cannot mutually agree to a
resolution  within ten  business  days,  either  Party may refer the  dispute to
binding  arbitration in accordance with procedures set forth in this Section 21.
Each of HPC and  EarthShell (i) waives the right to bring an action in any court
of competent  jurisdiction  with respect to any such claims,  controversies  and
disputes  (other  than any such  action to  enforce  the  award or other  remedy
resulting from any arbitration pursuant to this Section 21), and (ii) waives the
right to trial by jury in any suit, action or other proceeding  brought on, with
respect to or in connection with this Agreement.

            (b) Upon  filing of a notice of demand for  binding  arbitration  by
either HPC or EarthShell, arbitration with the American Arbitration Association,
or comparable  association if the American Arbitration  Association is no longer
in existence, shall be commenced and conducted as follows:

                  i. All claims,  disputes,  controversies  and other matters in
            question  shall be referred to and decided and settled by a standing
            panel  of  three  arbitrators,  one  selected  by  each  of HPC  and
            EarthShell  and  the  third  by the  two  arbitrators  so  selected.
            Selection of arbitrators  shall be made within thirty days after the
            date of the first notice of demand given pursuant to this Section 21
            and within  thirty days after any  resignation,  disability or other
            removal of such arbitrator.  Following appointment,  each arbitrator
            shall remain a member of the standing panel,  subject to refusal for
            just cause or resignation or disability.

                  ii. The cost of each arbitration proceeding, including without
            limitation the arbitrators' compensation and expenses,  meeting room
            charges,  court  reporter  transcript  charges and similar  expenses
            shall be borne by the party whom the  arbitrators  determine has not
            prevailed in such proceeding, or borne equally by HPC and EarthShell
            if the arbitrators  determine that neither party has prevailed.  The
            arbitrators  shall also award the party that prevails  substantially
            in its pre-hearing position its reasonable attorneys' fees and costs
            incurred in connection  with the  arbitration.  The  arbitrators are
            specifically  instructed to award  attorneys'  fees for instances of
            abuse of the discovery process.

                  iii. The sites of the  arbitration  shall be in Santa Barbara,
            California unless HPC and EarthShell agree otherwise.

            (c) The  arbitrators  shall have the power and  authority to, and to
the fullest extent  practicable  shall,  abbreviate  arbitration  discovery in a
manner that is fair to HPC and EarthShell in order to expedite the conclusion of
each alternative dispute resolution proceeding.

            (d) The  arbitration  shall  be  governed  by,  and all  rights  and
obligations   specifically  enforceable  under  and  pursuant  to,  the  Federal
Arbitration Act (9 U.S.C. ss. 1, et. seq.). (e) The arbitrators are empowered to
render an award of general compensatory damages and equitable relief (including,
without limitation,  injunctive relief), but are not empowered to award punitive
damages.  The award rendered by the arbitrators  (i) shall be final,  (ii) shall

                                       16
<PAGE>

not constitute a basis for collateral  estoppel as to any issue, and (iii) shall
not be subject to vacation or  modification.  The  arbitrators  shall render any
award or otherwise conclude the arbitration no later than one hundred and eighty
(180) days after the date notice is given pursuant to this Section 21.

      22.   COUNTERPARTS.

      This Agreement may be executed in two or more counterparts,  each of which
shall be deemed an original,  but all of which together shall constitute one and
the same instrument.

      23.   ASSIGNMENT.

      The  rights  and  obligations  in, to and under  this  Agreement  shall be
binding   upon  and  inure  to  the   benefit  of  the   Parties,   their  legal
representatives, successors and assigns. Neither Party may assign this Agreement
or any rights  hereunder  without the prior written  consent of the other Party;
provided  that  either  Party may assign this  Agreement  in  connection  with a
merger,  sale of all or  substantially  all of its  assets or other  acquisition
transaction with the written consent of the other Party, which consent shall not
be unreasonably withheld or delayed.

      24.   ENTIRE AGREEMENT.

      This Agreement supersedes any prior understandings or agreements,  whether
written or oral, and any  contemporaneous  oral agreements,  between the Parties
hereto in regard to the subject  matter  hereof  contains  the entire  agreement
between the Parties in regard to the subject matter hereof.

      IN WITNESS  WHEREOF,  the Parties have caused this  Technology  Sublicense
Agreement to be executed and delivered by their duly authorized  representatives
upon the date first herein written.

                                        EARTHSHELL CORPORATION

                                        By: /s/ Simon K. Hodson
                                            --------------------------
                                            Name:  Simon K. Hodson
                                            Title: CEO

                                        HOOD PACKAGING CORPORATION

                                        By: /s/ John J. McCabe
                                            --------------------------
                                            Name:  John J. McCabe
                                            Title: President and COO

                                       17
<PAGE>

                                    EXHIBIT A

                                Licensed Patents

U.S. Patent No.

U.S. Patent No. 6,573,340

The following Pending Patent Applications:

      o     Fibrous Sheets Coated or Impregnated with Biodegradeable Polymers or
            Polymer Blends - Workman  Nydegger Att'y Docket No.  11527.362 filed
            June 3, 2003. The PTO serial no. is: 10/453,318

      o     Biodegradable  Polymer Blends for Use in Making Films,  Sheets,  and
            Other  Articles of  Manufacture - Workman  Nydegger Att'y Docket No.
            11527.354 filed March 1, 2002. The PTO serial no. is: 10/087,256 The
            PTO Publication no. is US-2003-0166779

      o     Biodegradable  Films and Sheets Suitable for Use as Coatings,  Wraps
            and Packaging  Materials Workman Nydegger Att'y Docket No. 11527.355
            filed March 1, 2002. The PTO serial no. is: 10/087,718

                                       18
<PAGE>

                                    EXHIBIT B

                     DEFINITION OF FOOD SERVICE DISPOSABLE

             [EXCERPTS FROM AMENDED AND RESTATED LICENSE AGREEMENT,

            DATED FEBRUARY 28, 1995, BETWEEN EKI AND EC, AS AMENDED]

The term  "Food  Service  Disposables"  shall  mean any  disposable,  single use
product,  container,  apparatus,  device or equipment  for  packaging,  storing,
portioning,  serving or dispensing  food or beverages  intended for  consumption
within a short period of time (less than twenty four hours),  which  incorporate
in whole  or in part any  portion  of the  Technology  and,  to the  extent  not
otherwise  excepted or excluded,  are encompassed in those items included within
the scope of the Disposal Product Categories set forth in the Clinton Associates
1994 DISTRAK Five study of  Disposables  Utilization  in Food Services  Segments
(hereinafter  referred  to as the  "DISTRAK V Study"),  including  all  products
specifically  set forth  therein.  Any product that has  substantially  the same
shape,  composition,  mixture and functional  properties as a product within the
scope of the definition of Food Service  Disposables  shall be considered within
the scope of such definition no matter the manner in which that product is used,
unless  expressly  excepted below.  Notwithstanding  any other provision of this
Agreement,  the parties agree that the  following  items shall not be within the
scope of the  definition of "Food  Service  Disposables"  or otherwise  licensed
under this Agreement: (i) sealed containers for the long-term storage of liquids
whether for single or multiple  portions  (e.g.,  soft drink cans, milk cartons,
sealed juice or drink  containers),  except that single service (e.g., 16 ounces
or less)  milk-containing  cartons  shall be within  the  scope of Food  Service
Disposables;  (ii) boxes or containers  for the  long-term  storage of single or
multiple  servings  of foods or which are  designed  to extend the shelf life of
foods  beyond  same-day  consumption  (e.g.,  dry cereals  boxes,  egg  cartons,
prepackaged  frozen food  containers  and packaging,  dairy product  containers,
produce containers, condiment packaging, and meat and deli trays); (iii) aseptic
or sealed packaging;  (iv) all secondary packaging (e.g.,  corrugated containers
and  paper  bags);  and  (v)  wrapping  products  for  consumer  use.  By way of
illustration, Exhibit "F" hereto provides a noncomprehensive,  noninclusive list
of items within the definition of "Food Service Disposables"  hereunder and also
a noncomprehensive,  noninclusive list of items that fall outside the definition
of "Food Service Disposables" hereunder. Exhibit "F" hereto shall control in the
event of any  conflict  between it and the DISTRAK V Study.  In the event of any
disagreement between the parties whether a particular item not listed in Exhibit
"F" hereto is within or without the definition of Food Service Disposables,  the
parties  may submit the matter to  arbitration  pursuant  to the  provisions  of
paragraph 29. The parties  hereby agree that, if available,  Clinton  Associates
shall act as arbiter in any arbitration proceeding involving a dispute as to the
definition of Food Service Disposable.

                                       19
<PAGE>

                             [EXHIBIT B [CONTINUED]

                                   EXHIBIT "F"

      ILLUSTRATIVE LIST OF DISPOSABLE, SINGLE USE FOOD SERVICE DISPOSABLES

Examples of Items within the Definition of "Food Service Disposables":

Bags                               o   for carry out of food purchased in
                                       food service disposable packages,
                                       with or without handles

Beverage containers                o   Hot and/or cold beverage
                                   o   May or may not be insulating
                                   o   With or without handles.  Includes
                                       collectables that are disposable/
                                       reusable
                                   o   Malt mixing collars

                                   o   Single service milk-containing cartons
                                       (16 oz. or less)

Beverage Container Lids            All types, including

                                   o   no spill
                                   o   domed
                                   o   sippers

Bowls                              All shapes, sizes

Cutlery (including                 o   knife, fork, spoon
Sticks/Skewers)                    o   large serving utensils
                                   o   chopsticks
                                   o   hors d'ouvers picks
                                   o   popsicle sticks
                                   o   corndog sticks
                                   o   shish-kabob skewers
                                   o   tooth  picks
                                   o   steak markers

Food Containers                    tubs used for:
                                   o   popcorn
                                   o   deli salads
                                   o   takeout anything
                                   o   ice cream
                                   o   chicken buckets

                                       20
<PAGE>

                                   Portion cups (souffle cups)
                                   o   sauces
                                   o   condiments
                                   o   butter
                                   o   candies o side orders
                                   o   pills, medications

                                   Trays  used for:
                                   o   french  fries
                                   o   nachos
                                   o   tacos
                                   o   burritos
                                   o   snacks
                                   o   hot dogs
                                   o   meal service
                                   o   vending
                                   o   single or multi-compartments

                                   Boxes as used for:
                                   o   fry scoops
                                   o   popcorn
                                   o   chinese takeout
                                   o   kid's  fun  meal
                                   o   candy (vending)
                                   o   pie wedges
                                   o   bulky meals, pies, single compartment
                                   o   multi-compartment meals

                                   Boats as used  for:
                                   o   egg rolls
                                   o   ice cream sundaes
                                   o   hot dogs, chili dogs
                                   o   hoagies, sub sandwiches
                                   o   chicken  fingers
                                   o   baked potatoes

                                   Cones
                                   o   snow cones
                                   o   ice cream cone holders
                                   o   foods

Food Container Lids                All kinds

                                       21
<PAGE>

Hinged Lid Containers              Clamshells type boxes for specialty or
                                   general food portion or meal
                                   carryout such as:
                                   o   hamburgers
                                   o   chicken nuggets
                                   o   salads
                                   o   single or multi-portion meals
                                   o   with or without multiple compartments

Napkins                            All kinds

Plates/Platters                    o   All shapes, including round
                                   o   oval
                                   o   rectangular
                                   o   deep
                                   o   with or without compartments
                                   o   individual portion or serving sized
                                   o   cake/pie plates

Plates/Platters Lids               All types including domed, insulating, etc.

Placemats/Table Covers             o   placemats
                                   o   tray liners
                                   o   doilies
                                   o   menus
                                   o   table covers

Serving Dishes                     o   pitchers
                                   o   catering trays
                                   o   casserole dishes
                                   o   chafing/steam table dishes

Straws/Stirrers                    o   drinking straws
                                   o   puncture straws
                                   o   stirring straws/sticks

Wraps                              Wraps of all kinds, for all kinds of foods:
                                   o   burger/hot dog wraps
                                   o   pizza sheets
                                   o   doggie bags/wraps
                                   o   popcorn/snack bags
                                   o   french fry sleeves
                                   o   sandwich bags

                                       22
<PAGE>

Outside the Definition of "Food Service Disposables":

Baking                             o   pie/cake tins
                                   o   muffin/eclair tins
                                   o   muffin/eclair cups
                                   o   fluted pan liners
                                   o   cake circles/squares
                                   o   loaf pans
                                   o   bundt pans
                                   o   casseroles
                                   o   cookie/cake sheets
                                   o   cake decorating triangles

Single or Multiple Portion         o   cereal boxes/bowls
Packaged Foods                     o   sealed yogurt/desert cups
                                   o   sealed soups, stews, chili, pasta
                                   o   condiment packs (salt, pepper, catsup,
                                       salsa, relish, etc.)
                                   o   sealed frozen food containers
                                   o   egg cartons
                                   o   dairy product containers
                                   o   produce containers
                                   o   meat & deli trays

Wraps                              o   freezer papers
                                   o   bakery papers
                                   o   candy bar wrappers

Aeseptic or Sealed
Packaging

Secondary Packaging                o   corrugated containers
                                   o   paper bags

Sealed Containers for              o   soft drink cans
Long Term Storage                      milk cartons
of Liquids                         o    sealed juice or drink containers

                                       23
<PAGE>

                                    EXHIBIT C

                                    Products

The initial Product will be a Food Service Disposable designed primarily for use
as a sandwich or other food wrap that is (i)  comprised  of  printed,  laminated
paper that is less than 45 lbs. per 3,000  square  feet,  (ii) that will utilize
biopolymers   specified  by   EarthShell   and  (iii)  that  will  conform  with
specifications supplied by EarthShell. The initial Product will be 4 color, with
30%  coverage,  sandwich  wraps with paper  having a basis  weight of 15 lb. per
3,000 square feet and a resin component of 4 lbs. per 3,000 square feet.

                                       24
<PAGE>

                                    EXHIBIT D

                                  Royalty Rate

The Royalty to be paid to EarthShell will be based on the Net Sales of 1,000 12"
x 12" printed (4 color,  30% coverage)  sandwich wraps with paper having a basis
weight of 15 lb. per 3,000 square feet and a resin component of 4 lbs. per 3,000
square  feet.  The Royalty  will be a minimum of 5% of Net Sales with respect to
Net Sales  resulting  from  sales at a price of less than  $10.50  per  thousand
square feet and will be a maximum of 20% of Net Sales with  respect to Net Sales
resulting  from sales at a price of more than $13.40 per  thousand  square feet,
with the Royalty being calculated in accordance with the following  formula with
respect to Net Sales  resulting  from  sales at a price of more than  $10.50 per
thousand and less than $13.40 per thousand:

         Royalty % = Five times the price per 1,000 square feet minus 47

Notwithstanding  the  foregoing,  in no event will the Royalty  exceed $3.20 per
thousand square feet. The Royalty shall be proportionately adjusted based on the
extent to which the Product surface area is greater than or less than 12" x 12".

      For illustration, sample Royalty calculations are set forth in Exhibit D-1
hereto.

                                       25
<PAGE>

                                    EXHIBIT D-1

                                  HOOD    ROYALTY    RATE

<TABLE>
<CAPTION>
                                            Price per 1,000 units  12" x 12"  4# coating @ $1.25/lb resin
--------------------------------------------------------------------------------------------------------------------------
<S>                        <C>           <C>           <C>           <C>           <C>           <C>           <C>
SELLING PRICE              $    10.50    $    11.00    $    12.00    $    13.00    $    13.40    $    15.00    $    16.00

                           $     8.50    $     8.50    $     8.50    $     8.50    $     8.50    $     8.50    $     8.50
COST OF GOODS SOLD

ROYALTY %                        5.00%         8.00%        13.00%        18.00%        20.00%        20.00%        20.00%
EARTHSHELL ROYALTY         $    0.525    $    0.880    $    1.560    $    2.340    $    2.680    $    3.000    $    3.200

HOOD OPERATING PROFIT      $    1.475    $    1.620    $    1.940    $    2.160    $    2.220    $    3.500    $    4.300
OP %                            14.05%        14.73%        16.17%        16.62%        16.57%        23.33%        26.88%
HOOD SHARE OF TOTAL PROFIT      73.75%        64.80%        55.43%        48.00%        45.31%        53.85%        57.33%
SALES VOLUME M UNITS                     Hood Operating Profit
--------------------------------------------------------------------------------------------------------------------------
              70,000       $  103,250    $  113,400    $  135,800    $  151,200    $  155,400    $  245,000    $  301,000

             250,000       $  368,750    $  405,000    $  485,000    $  540,000    $  555,000    $  875,000    $1,075,000

             650,000       $  958,750    $1,053,000    $1,261,000    $1,404,000    $1,443,000    $2,275,000    $2,795,000

           1,065,000       $1,570,875    $1,725,300    $2,066,100    $2,300,400    $2,364,300    $3,727,500    $4,579,500
</TABLE>EXHIBIT 10.31

                       OPERATING AND SUBLICENSE AGREEMENT

      This OPERATING AND SUBLICENSE  AGREEMENT (this  "AGREEMENT"),  dated as of
October  3,  2002  (the  "EFFECTIVE   DATE"),  is  by  and  between   EARTHSHELL
CORPORATION,  a Delaware  corporation  formerly known as  "EarthShell  Container
Corporation"  ("EARTHSHELL"),  and  SWEETHEART  CUP  COMPANY  INC.,  a  Delaware
corporation ("SWEETHEART," and together with EarthShell,  individually a "PARTY"
and collectively the "PARTIES"), with reference to the following facts:

                                    RECITALS

      A Pursuant to that certain Amended and Restated License  Agreement,  dated
February  28,  1995,  as  amended  (the "EKI  LICENSE  AGREEMENT"),  between  E.
Khashoggi  Industries,  LLC, a Delaware limited liability  company ("EKI"),  and
EarthShell,  EarthShell has the exclusive,  worldwide  right to utilize,  and to
sublicense to others the right to utilize,  specified  technology to manufacture
and  sell  certain  food  service  disposables  ("EKI  PRODUCTS").  Concurrently
herewith, EKI, EarthShell and Sweetheart are entering into a EKI Recognition and
Non-Disturbance  Agreement  (the  "EKI  AGREEMENT")  pursuant  to  which  EKI is
providing  Sweetheart  certain  assurances  with  respect  to  the  EKI  License
Agreement,  the rights  granted  by  EarthShell  to  Sweetheart  hereunder,  the
maintenance of the Licensed Patents and related matters, all upon and subject to
the terms and conditions contained in the EKI Agreement.

      B. The Parties have previously  entered into a Confidentiality  Agreement,
dated as of October 16, 1997, as amended by that certain letter agreement, dated
October 1, 2002 (as so amended,  the "CONFIDENTIALITY  AGREEMENT").  The Parties
also contemplate entering into an agreement relating to the termination of their
prior business arrangement (the "TERMINATION  AGREEMENT," and, together with the
Confidentiality  Agreement, the EKI Agreement, and any agreements or instruments
now or  hereafter  executed and  delivered  by one or both Parties  hereunder or
thereunder, are collectively referred to herein as the "ANCILLARY AGREEMENTS").

      C. EarthShell has licensed and certified certain equipment  manufacturers,
and may hereafter license and certify  additional  equipment  manufacturers,  to
supply  equipment to its  sublicensees  for the manufacture of EKI Products (the
"CERTIFIED  EQUIPMENT  VENDORS"),  including Detroit Tool and Engineering,  Inc.
("DTE").

      D.  EarthShell is willing to grant,  and Sweetheart  desires to accept,  a
sublicense of the technology  licensed by EKI to EarthShell  pursuant to the EKI
License  Agreement  for use in  manufacturing  certain food  service  disposable
products to be sold and  distributed  within North  America,  upon the terms and
conditions set forth herein.

<PAGE>

                                    AGREEMENT

      In  consideration  of  the  foregoing   recitals  and  the  covenants  and
agreements   set  forth   herein,   together   with  other  good  and   valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:

1.    DEFINITIONS.

      Capitalized terms used herein shall have the meanings set forth below:

      (a) The term "AGREEMENT" shall have the meaning set forth in the preamble,
as the same may be amended from time to time.

      (b) The term  "ANCILLARY  AGREEMENTS"  shall have the meaning set forth in
Recital B.

      (c) The term "BANKRUPTCY" shall mean, with respect to any Person, (i) such
Person (A)  generally  fails to pay, or admits in writing its  inability to pay,
its debts as they come due,  or (B) makes an  assignment  for the benefit of, or
any composition or arrangement  with, its creditors,  (ii) a trustee,  receiver,
liquidator or other custodian is appointed for itself,  its business or all or a
substantial  part of its  property,  (iii)  any  case or  proceeding  under  any
bankruptcy,  insolvency or similar law of any  applicable  jurisdiction,  or any
dissolution,  winding up or liquidation case or proceeding shall be commenced in
respect of such  Person  and,  in the case of an  involuntary  proceeding,  such
proceeding  shall  not be  dismissed  within  ninety  (90)  days  following  the
commencement  of such  proceeding,  or (iv)  such  Person  takes  any  action to
authorize,  or in  furtherance  of, any of the events  described in clauses (i),
(ii) or (iii) above.

      (d) The term  "CERTIFIED  EQUIPMENT  VENDORS"  shall have the  meaning set
forth in  Recital C and shall  consist  of  equipment  vendors  meeting  certain
certification requirements prescribed by EarthShell.

      (e) The term  "CONFIDENTIAL  INFORMATION" shall have the meaning set forth
in Section 16.

      (f) The term "CONFIDENTIALITY  AGREEMENT" shall have the meaning set forth
in Recital B, as the same may be extended or modified.

      (g) The term "CUSTOMERS" shall have the meaning set forth in Section 2(e).

      (h) The term "DTE" shall have the meaning set forth in Recital C.

      (i) The  term  "EARTHSHELL"  shall  have  the  meaning  set  forth  in the
preamble.

      (j) The term "EARTHSHELL IMPROVEMENTS" shall have the meaning set forth in
Section 6(a).

      (k) The term "EARTHSHELL  INFRINGEMENT  ACTION" shall have the meaning set
forth in Section 8(c).

                                       2
<PAGE>

      (l) The term "EARTHSHELL  PURCHASE  OBLIGATION" shall have the meaning set
forth in Section 3(b).

      (m) The term "EC PROFIT  DISTRIBUTION" shall have the meaning set forth in
Section 4(a).

      (n) The term  "EFFECTIVE  DATE"  shall have the  meaning  set forth in the
preamble.

      (o) The term "EXCLUDED  MARKET  SEGMENTS"  shall mean the market  segments
shown on Exhibit B as not having been licensed to Sweetheart.

      (p) The term "EKI" shall have the meaning set forth in Recital A.

      (q) The term "EKI  AGREEMENT"  shall have the meaning set forth in Recital
A.

      (r) The term "EKI LICENSE  AGREEMENT"  shall have the meaning set forth in
Recital A.

      (s) The term "EKI PRODUCTS" shall have the meaning set forth in Recital A.

      (t) The term "EQUIPMENT" shall have the meaning set forth in Section 3(a).

      (u) The term  "EXCLUSIVITY  PERIOD"  shall have the  meaning  set forth in
Section 2(e).

      (v) The term  "FORCE  MAJEURE  EVENT"  shall have the meaning set forth in
Section 25.

      (w) The term "GROSS SALES" shall mean,  for any relevant  calendar  period
after the Effective Date, the gross invoice price of Products sold by Sweetheart
to Customers now or hereafter existing (but excluding discounts,  returns, taxes
and  freight  and  transportation  charges  payable  by  Sweetheart);  provided,
however,  that intercompany sales between Sweetheart and any of its subsidiaries
or affiliated companies shall not be included in Gross Sales.

      (x) The  term  "IMPROVEMENT"  shall  mean  any  improvement,  enhancement,
refinement,  modification or other invention or discovery, whether patentable or
unpatentable,  deriving from or otherwise  relating to, in whole or in part, any
of the claims of any of the Patents  described  in Exhibit A hereto,  any of the
Trade Secrets, the Products, the Raw Materials and/or the Equipment,  including,
without limitation, all process, product and design Improvements.

      (y) The term "INITIAL MODULES" shall have the meaning set forth in Section
13(d).

      (z) The term  "JOINT  IMPROVEMENTS"  shall have the  meaning  set forth in
Section 6(c).

      (aa)  The  term  "LICENSED   PATENTS"  shall  mean,  as  modified  by  the
penultimate  sentence  in  Section  11(a),  the  Patents  that are  directly  or
indirectly  licensed or otherwise  transferred  to EarthShell by EKI pursuant to
the EKI License  Agreement or  otherwise,  including,  without  limitation,  the
Patents  that are  described  on  Exhibit  A  hereto  and all  Patents  covering
Improvements  that  hereafter are acquired by or licensed to EarthShell  (in the
case of any such Patents that are hereafter  licensed to EarthShell,  subject to
EarthShell  having  the right to grant  sublicenses  thereunder  and  Sweetheart
agreeing to comply with all  applicable  terms of the  license  agreement  under
which such Patents are licensed to EarthShell,  including without limitation any
obligation  imposed  thereunder to pay any royalty in connection with exercising
rights under any such sublicense);  provided,  however,  that no such royalty or
other  compensation  shall  be  payable  with  respect  to  Joint  Improvements,
EarthShell Improvements or Improvements directly or indirectly acquired from EKI
(except  to  the  extent  EarthShell  is  required  to  reimburse  EKI  for  its
out-of-pocket costs in acquiring or purchasing any such Improvement from a third
party, as reasonably allocated to Sweetheart's right to use such Improvements).

                                       3
<PAGE>

      (bb) The term "LINE" shall mean  Equipment  capable of producing  finished
commercial  Products from the mixing of Raw  Materials  through the packaging of
finished Products in accordance with the applicable specifications.  A Line will
contain one or more Modules.

      (cc) The term "MARKET  SEGMENTS" shall mean the broad U.S. market segments
in all or any part of the Territory  for the  manufacture,  distribution  and/or
sale of any or all of the  Products  which are  depicted  on Exhibit B as having
been granted to  Sweetheart,  and any equivalent  market  segments in Canada and
Mexico.

      (dd) The term  "MCDONALD'S  CONTRIBUTION  MARGIN" shall mean the Net Sales
realized from the sale or  distribution  of Products  consisting of clamshell or
other hinged  sandwich  containers to McDonald's  Corporation  (or to Perseco or
another  purchasing  agent  for  sale to,  or use by,  customers  of  McDonald's
Corporation) for any calendar period,  less, for such Net Sales:: (i) all direct
costs  of  manufacturing,  including  any  direct  manufacturing  overhead,  raw
materials,  packaging,  direct line labor, energy, maintenance and repair parts,
and (ii) a reasonable  allocation of fixed  manufacturing  costs;  but excluding
depreciation, amortization, taxes, interest or other financing charges, selling,
general or administrative expenses,  research and development expenditures,  the
EC Profit Distribution and extraordinary items, determined pursuant to generally
accepted  accounting  principles,  consistently  applied,  and as  certified  by
Sweetheart's Chief Financial Officer.

      (ee) The term  "MILESTONES"  shall have the  meaning  set forth in Section
2(e).

      (ff) The term  "MILESTONE  FAILURE"  shall have the  meaning  set forth in
Section 3(d).

      (gg) The term "MINIMUM MARKET SEGMENT THRESHOLD PERCENTAGE" shall have the
meaning set forth in Exhibit B.

      (hh) The  term  "MODULES"  shall  mean a  manufacturing  unit  capable  of
forming,  trimming and laminating substrates for Products (such as, for example,
a DTE "Cobra" or comparable unit).

      (ii) The term "NET SALES"  shall mean,  for any relevant  calendar  period
with  respect  to the  Products,  the  Gross  Sales  for such  calendar  period,
increased by any uncollectible  receivables previously written off to the extent
ultimately  collected,  and  reduced  by (i)  actual  cash,  trade  or  quantity
discounts  or credits,  including  "off-invoice  discounts,"  actually  given or
allowed by Sweetheart; (ii) uncollectible receivables and bad debt expenses with
regard to  receivables  previously  included  as Net Sales  (as  written  off by
Sweetheart  for  financial  statement  reporting  purposes),  (iii) sales,  use,
value-added,  import,  export,  excise or similar  taxes to the  extent  paid by
Sweetheart,  and  (iv)  insurance,  freight  and  transportation  costs  paid by
Sweetheart in connection with the delivery and shipment of the Products, whether
or not included as a separate  item in the invoice (but  exclusive of discounts,
returns, taxes or freight and transportation charges deducted in computing Gross
Sales).

                                       4
<PAGE>

      (jj) The term "OFFERED RAW MATERIALS"  shall have the meaning set forth in
Section 10(h).

      (kk) The terms "PARTY" and  "PARTIES"  shall have the meaning set forth in
the preamble.

      (ll) The term "PATENTS"  shall mean  unexpired  patents,  utility  models,
industrial designs,  certificates of invention or similar grants of intellectual
property rights that are now or hereafter filed,  registered,  issued or granted
in  the  Territory  or any  part  thereof,  including  without  limitation,  any
divisionals,   reissues,   continuations,    continuations-in-part,    renewals,
reexaminations,  and  extensions of any of the foregoing,  and any  applications
therefor (and Patents which may issue on such applications).

      (mm) The term "PERSON" shall mean an individual, partnership, corporation,
limited liability company, trust,  governmental or political subdivision and any
other entity that has legal  capacity to own property in its own name and to sue
or be sued.

      (nn) The term  "PLANT  FACILITIES"  shall  have the  meaning  set forth in
Section 3(a).

      (oo) The term "PLATE LINE" shall mean the eight (8) Modules that  comprise
a part of the Initial Modules and used to manufacture plates.

      (pp) The term  "PRELIMINARY  VALIDATION  DATE"  shall have the meaning set
forth in Section 13(d).

      (qq)  The term  "PRODUCTS"  shall  mean  any and all of the  food  service
disposable foam laminate products incorporating the Technology and consisting of
plates, bowls (other than noodle bowls), hinged sandwich containers, and subject
to Section 2(h), cups for hot beverages.

      (rr) The term "Raw Materials"  shall have the meaning set forth in Section
10(h).

      (ss) The term "REPORT" shall have the meaning set forth in Section 4(e).

      (tt) The term "REPRESENTATIVE" shall have the meaning set forth in Section
5(a).

      (uu) The term "REQUIRED  SPECIFICATIONS"  shall have the meaning set forth
in Section 13(d).

      (vv) The term  "START  DATE"  shall have the  meaning set forth in Section
4(a).

      (ww) The term  "SUBLICENSE"  shall have the  meaning  set forth in Section
2(a).

                                       5
<PAGE>

      (xx) The term "SUBLICENSEE  IMPROVEMENTS" shall have the meaning set forth
in Section 6(a).

      (yy)  The  term  "SWEETHEART"  shall  have the  meaning  set  forth in the
preamble.

      (zz)  The  term  "SWEETHEART   IMPROVEMENT"  shall  mean  any  Improvement
developed by or for  Sweetheart  independently  of EarthShell or its  affiliated
companies or sublicensees.

      (aaa) The term "SUPPLEMENTAL MODULES" shall mean the Initial Modules other
than the Plate Line.

      (bbb) The term "TECHNOLOGY"  shall mean the Licensed Patents and the Trade
Secrets or any part thereof.

      (ccc) The term "TERRITORY" shall mean the United States, Mexico and Canada
and any part thereof.

      (ddd) The term "THIRD-PARTY SUBLICENSEES" shall have the meaning set forth
in Section 2(a)(iii).

      (eee) The term "TRADE SECRETS" shall mean (i) know-how, formulas, methods,
processes,  systems and other  proprietary  information  owned by  EarthShell or
licensed to EarthShell  pursuant to the EKI License  Agreement or otherwise that
are or  may be  useful  or  necessary  in  the  production,  distribution,  use,
marketing  or sale of any of the  Products,  and (ii)  subject to Section 6, any
non-patented Improvement or other proprietary information now or hereafter owned
by or  licensed  to  EarthShell  that is or may be  useful or  necessary  in the
production, distribution, use, marketing or sale of any of the Products.

      (fff) The term  "TRADEMARKS"  shall have the  meaning set forth in Section
2(d).

      (ggg) The term "UNFULFILLED CUSTOMER  REQUIREMENTS" shall have the meaning
set forth in Section 2(f).

2.    THE SUBLICENSE; CUSTOMER PRIORITY PERIOD; PRICE PROTECTION.

      (a)  Subject  to and upon the  terms  and  conditions  of this  Agreement,
including  the terms and  conditions  of  Sweetheart's  exclusive  rights to the
Technology  pursuant to Section 2(e),  EarthShell  hereby grants to Sweetheart a
non-exclusive, royalty-bearing sublicense to the Technology (the "SUBLICENSE"):

            (i) to make or have  made,  at the  Plant  Facilities  or  elsewhere
within the Territory, the Products;

            (ii) to use,  sell,  offer  to sell,  import  into,  distribute  and
otherwise  dispose of and  commercialize the Products within the Market Segments
and within the Territory; and

            (iii) to manufacture,  sell, distribute and otherwise dispose of the
Products  to  Persons  to  whom  EarthShell  now or  hereafter  sublicenses  the
Technology  to  manufacture,  sell,  distribute  and  otherwise  dispose  of the
Products  within  the  Territory,  but only  during  the term of the  sublicense
agreement   between   EarthShell   and  such   sublicensee   (the   "THIRD-PARTY
SUBLICENSEES").

                                       6
<PAGE>

      (b)  Sweetheart  shall  not  otherwise  have the  right to  sublicense  or
transfer the  Technology,  or any  interest in or rights  under the  Sublicense;
provided,  however,  that the rights and  obligations  of Sweetheart  in, to and
under this Agreement may be assigned to the extent provided by Sections 2(e) and
23. Any  purported  sublicense  or transfer by  Sweetheart  without such consent
shall be null and void and shall  constitute  a material  breach for purposes of
Section 13(b) hereof.

      (c)  Except as  permitted  under  Section  2(a)(iii)  and except for waste
materials,  Sweetheart shall not,  directly or indirectly,  market,  distribute,
sell or attempt to  dispose of any  Product to any Person  outside of the Market
Segments  or  outside  of the  Territory,  or to any  Person  within  the Market
Segments or within the Territory,  if Sweetheart  knows or has reason to believe
that such Person  intends to use such  Product  outside  the Market  Segments or
outside the  Territory.  A breach of the foregoing  shall  constitute a material
breach for purposes of Section 13(b) hereof.

      (d) Subject to Section  10(a),  Sweetheart is  authorized  and required to
use, in connection with the marketing,  distribution and sale of Products in the
Territory,  the trademarks and service marks  (collectively,  the  "TRADEMARKS")
owned  by or  licensed  to  EarthShell  that are  designated  to  Sweetheart  by
EarthShell prior to commercial  production of the Products by Sweetheart or from
time to time thereafter;  provided, however, that Sweetheart shall have received
not less than ninety (90) days'  advance  notice of the  effective  date of such
designation and provided,  further, however, that any such designation shall not
apply to work in progress,  finished goods or other  inventories  existing as of
the effective date of such designation.

      (e)  Notwithstanding  anything to the  contrary in Section  2(a),  whether
expressed or implied,  and subject to the provisions of Section 25, in the event
Sweetheart timely meets all applicable Net Sales milestones set forth in Exhibit
C hereto with respect to the sale or  distribution of Products within the Market
Segments and within the  Territory  (such  milestones  shall be  determined on a
cumulative  basis such that prior Net Sales  will be  aggregated  with prior and
current milestones  benchmarks to determine whether the applicable milestone has
been achieved),  and in the further event that  Sweetheart  timely complies with
its Equipment purchase obligation set forth in Sections 3(a) and 13(d) (such Net
Sales milestones and Equipment purchase obligations are collectively referred to
as the  "MILESTONES"),  then  until  the  earliest  to  occur  of (i)  the  date
Sweetheart  fails  to meet  one or more of the  Milestones,  as the  same may be
satisfied  by the  payment of  equivalent  EC Profit  Distributions  pursuant to
Section 4(f), (ii) the date this Agreement is terminated pursuant to Section 13,
(iii) the date  Sweetheart  achieves  $500 million in Net Sales for a continuous
twelve (12) month period,  (iv)  December 31, 2007,  or (v) the date  Sweetheart
notifies  EarthShell  pursuant  to  Section  3(b)  that  it  has  triggered  the
EarthShell  Purchase  Obligation  and  Sweetheart  has  been  released  from any
obligation  related thereto  pursuant to the terms of the contract with DTE (the
period commencing on the Effective Date and ending on the earliest of such dates
is  referred  to  herein  as  the  "EXCLUSIVITY  PERIOD"),  and  subject  to the
conditions  imposed by this Section 2(e) and Sections 2(f) and (h) and 3(a), and
subject  further  to  the  non-exclusive  rights,  if  any,  of  the  EarthShell
sublicensees  listed on Exhibit E, Sweetheart  shall have the exclusive right to
make, use, sell, offer to sell, import into, distribute and otherwise dispose of
and  commercialize  the Products to Persons within the Market Segment and within
the  Territory  (such  Persons are referred to herein as  "CUSTOMERS").  For the
avoidance of doubt, in accordance with Section 4(f),  Sweetheart may satisfy any
Milestone  relating  to  Net  Sales  by  payment  to  EarthShell  of  EC  Profit
Distributions,  and, if necessary,  supplemental payments, as shall equal the EC
Profit  Distributions  that would have been paid to EarthShell had the Net Sales
Milestone been achieved, and Sweetheart shall be deemed to have satisfied or met
the Net Sales Milestone in question by making such payments.

                                       7
<PAGE>

      (f)  Subject  to  Sections  2(e) and (h) and 3(a) and this  Section  2(f),
EarthShell   covenants  that,  during  the  Exclusivity  Period,  it  shall  not
sublicense,  license  or  otherwise  grant to or permit  any  Person  other than
Sweetheart  the  right to,  nor  shall it  utilize  the  Technology  or any part
thereof,  to make, have made, use, sell, offer to sell, import into or otherwise
commercialize  any Product  within the Market  Segments and within the Territory
(subject to the non-exclusive rights, if any, of EarthShell's sublicensees under
those  certain  sublicense  agreements  listed on Exhibit E),  provided  that if
Sweetheart  is unable to satisfy  fully the  requirements  of any  Customer  for
Products  because of  insufficient  plant capacity  within nine (9) months after
such Customer has given Sweetheart  notice of such  requirements in writing (the
amount  of such  unsatisfied  requirements  being  referred  to as  "UNFULFILLED
CUSTOMER  REQUIREMENTS"),   Sweetheart  agrees  that  the  Unfulfilled  Customer
Requirements  for Products,  or any portion  thereof,  may be satisfied by other
EarthShell sublicensees designated by Sweetheart without violating the exclusive
rights granted by EarthShell hereunder; provided, however, that Sweetheart shall
in such event  retain  its  Customer  exclusivity  with  respect to all  Product
requirements of such Customer that Sweetheart has sufficient capacity to fulfill
on a timely basis.

      (g)  Following  the  end  of  the  Exclusivity   Period,  the  exclusivity
restrictions  set  forth in  Sections  2(e) and (f) shall  cease to  apply,  and
EarthShell may itself,  or sublicense,  license or otherwise grant to any Person
the non-exclusive right to, or to utilize the Technology or any part thereof, to
make,  have  made,  use,  sell,   offer  to  sell,   import  into  or  otherwise
commercialize  any Product to any Person  within the Market  Segments and within
the Territory.  Notwithstanding  anything contained herein to the contrary,  if,
following  the  end of  the  Exclusivity  Period,  the  Net  Sales  realized  by
Sweetheart  for any  calendar  year  thereafter  for any  category of the Market
Segments  set  forth  on  Exhibit  B are  less  than  the  product  obtained  by
multiplying  (i) the lesser of (A) the total Net Sales  achieved  by  Sweetheart
during the twelve (12) month period ending with the calendar quarter immediately
preceding the end of the Exclusivity  Period,  and (B) $50 million,  by (ii) the
Minimum Market Segment Threshold  Percentage for such category of Market Segment
for the applicable  calendar year, as determined on a cumulative  basis for each
calendar year following the end of the Exclusivity Period, then EarthShell shall
have the right, upon thirty (30) days' prior notice to Sweetheart,  to terminate
Sweetheart's  rights under this  Agreement  with respect to such category of the
Market  Segment;  provided,  however,  that  Sweetheart  may continue to sell or
distribute  unlimited quantities of Products to Customers within such terminated
category of the Market Segment for whom it was actively selling and distributing
Products at the time it receives the termination  notice  (although it shall not
have any further  rights to sell or  distribute  Products to any other  Customer
within such terminated category of the Market Segment).

                                       8
<PAGE>

      (h) Notwithstanding  any provision of this Agreement to the contrary,  the
Sublicense  granted  Sweetheart   pursuant  to  Section  2(a)  and  Sweetheart's
exclusive  rights  pursuant to Section 2(e) shall terminate with respect to cups
for hot  beverages,  and such  "hot  cups"  will no longer  be  included  in the
definition of Products,  if Sweetheart fails to fund such amount and within such
a time frame as will reasonably enable Sweetheart to commercially operate, on or
before  December 31, 2003, a  commercially  effective  manufacturing  process or
production  capability  for such "hot  cups," and to have at least $2 million in
Net Sales by the end of the first calendar quarter of 2004.

3.    PLANT FACILITIES; EQUIPMENT PURCHASES

      (a) Subject to Section 3(b), from and after the Effective Date, Sweetheart
shall  be  responsible  for its  requirements  for  the  manufacture,  sale  and
distribution  of Products within the Market Segments and within the Territory at
such  facilities  within the  Territory as  Sweetheart  shall select in order to
manufacture  and distribute the Products  (separately,  a "PLANT  FACILITY" and,
collectively, the "PLANT FACILITIES"); provided, however, that it is anticipated
that the  initial  Plate  Line will be  installed  at  Sweetheart's  St.  Thomas
facility  in  Owings  Mills,  Maryland.  Subject  to  Sections  3(b) and  13(d),
Sweetheart shall order and purchase from Certified Equipment Vendors,  and shall
install and debug, such quantity of Modules and Lines as shall reasonably enable
it to meet the next  succeeding  Net Sales  Milestones  set  forth on  Exhibit C
(collectively,  the  "EQUIPMENT") on such terms and conditions as are acceptable
to  Sweetheart  in its  sole  discretion  (it is  understood  that  Sweetheart's
purchase  and  installation  of the Initial  Modules  will enable it to have the
capacity to meet the initial  Net Sales  Milestones  as set forth on Exhibit C).
Except as set forth in Section 13(d),  Sweetheart's  failure to achieve any such
Milestones will not allow EarthShell to terminate this Agreement,  but will, and
as its sole remedy, permit it to end the Exclusivity Period upon notice given by
EarthShell to  Sweetheart  (which notice shall be delivered not more than ninety
(90) days following  Sweetheart's  notification to EarthShell that it has failed
to meet the Milestone in question,  it being agreed that EarthShell's failure to
timely give such notice will automatically  result in the Milestone being deemed
to have been achieved). The purchase order for the Initial Modules in the manner
contemplated  in Section  13(d) shall take place on or before  October 31, 2002,
and the  installation  and  debugging  of the Plate Line and,  if  purchased  by
Sweetheart, the Supplemental Modules, shall take place at a Plant Facility on or
before May 15,  2003  (unless  such date is delayed by the  Certified  Equipment
Vendor through no fault of Sweetheart,  in which event either Party may elect to
terminate this Agreement under Section 13(d) if the Plate Line and, if purchased
by Sweetheart,  the Supplemental Modules meeting the Required Specifications are
not  installed  and  debugged  at a Plant  Facility by May 15,  2003;  provided,
however,  that a Force Majeure Event shall be deemed to occur if the Plate Line,
and if purchased by Sweetheart,  the Supplemental Modules,  meeting the Required
Specifications  are not installed and debugged at a Plant  Facility on or before
May 15, 2003 through no fault of Sweetheart. Except as provided in Section 3(b),
the cost of procuring  and  installing  the  Equipment  shall be borne solely by
Sweetheart.

                                       9
<PAGE>

      (b) In the event that Sweetheart  notifies EarthShell that it is unable or
unwilling  to secure  financing  for its  purchase of the  Supplemental  Modules
(which  notification  must be made prior to the installation of the Supplemental
Modules at a Plant Facility),  and assuming that the Preliminary Validation Date
has occurred (or if it has not occurred,  neither Party has elected to terminate
this  Agreement  pursuant to Section  13(e)),  then,  at  Sweetheart's  request,
EarthShell shall thereupon be deemed to have assumed Sweetheart's  obligation to
purchase  the  Supplemental  Modules  and shall  indemnify  and hold  Sweetheart
harmless for any amounts  payable,  and,  within (30) days following  receipt of
such notice, shall reimburse Sweetheart for any amounts paid, as applicable,  to
DTE (whether as a deposit or otherwise) in connection  with the purchase of such
Supplemental  Modules.  In connection  with such  assumption and  reimbursement,
Sweetheart shall assign to EarthShell or its assignees, without recourse, all of
its right, title and interest in and to the Supplemental  Modules (including any
rights under the purchase agreement with DTE for the Supplemental Modules), free
of all  liens,  encumbrances  and  adverse  claims  of any kind,  and  including
Sweetheart's right to enforce warranty  obligations and damage remedies relating
to the  Supplemental  Modules.  The  obligations  under this  Section 3(b) shall
survive any termination of this Agreement.

      (c) Sweetheart  shall keep  EarthShell  reasonably  apprised on a calendar
quarter basis of, and shall provide EarthShell with such documentation as it may
reasonably request  evidencing,  the number of Modules ordered and the number of
Modules and Lines installed by Sweetheart,  the cancellation or deferment of any
prior  purchase  orders for the  Modules  and the  reasons  therefor,  the Plant
Facilities  where the  Modules  had been  installed,  the  estimated  production
capability  of the  Modules  ordered  and not yet  delivered  and the  estimated
production capability of the Modules and Lines actually installed, the number of
Products  actually  manufactured  and  distributed  during the quarterly  period
covered by the  report  and the  approximate  purchase  price for the  Equipment
ordered as of the date of the report and the  purchase  price for the  Equipment
that had been installed as of the date of the report.

      (d)  Notwithstanding   anything  contained  in  this  Agreement,   whether
expressed or implied,  it is  unconditionally  and irrevocably  acknowledged and
agreed that (i)  Sweetheart  shall have no  liability  or  obligation  to order,
purchase,  install,  operate or use Modules,  Lines or other Equipment and/or to
manufacture and/or to promote, advertise, use, sell, offer to sell, import into,
distribute  or otherwise  dispose of the Products  within all or any part of the
Market  Segment or within the  Territory,  and  EarthShell's  sole and exclusive
remedy at law,  in  equity,  under  this  Agreement  or  otherwise  in the event
Sweetheart in its sole discretion, for any reason or for no reason elects not to
undertake  all or any of the  foregoing,  or  fails  to  meet  any or all of the
Milestones  is to  terminate  the  exclusivity  rights or, only in the case of a
failure to meet the  Milestones  set forth in Section  13(d),  to terminate this
Agreement  (in  each  case,  a  "MILESTONE  FAILURE").  In  furtherance  of  the
foregoing,  EarthShell hereby irrevocably waives and releases Sweetheart and its
affiliates and their  respective  shareholders,  officers and directors from any
and all claims,  causes of action or demands that arise solely with respect to a
Milestone  Failure,  whether  pursuant to breach of contract,  tort or any other
legal theory.  The  provisions of this Section 3(d) shall survive the expiration
or sooner termination of this Agreement.

      (e)  Sweetheart  shall  maintain  and  operate the lines of  Equipment  in
material compliance with all legal and administrative code standards  applicable
to the Equipment throughout the term of this Agreement.

      (f) Sweetheart,  upon reasonable advance notice from EarthShell and during
normal business hours, will permit EarthShell personnel or consultants access to
the Plant  Facilities  as is  reasonably  necessary in order for them to fulfill
EarthShell's  obligations or protect or enforce its rights under this Agreement.
Prospective  or  existing   licensee/sublicensee   joint  venture   partners  of
EarthShell will be permitted to have reasonable  access to the Plant Facilities,
upon  reasonable  advance notice by EarthShell and during normal business hours,
for the purpose of observing the Plant Facilities in operation.  Notwithstanding
the foregoing, Sweetheart will have no obligation to provide access to any Plant
Facility  to any  prospective  or  existing  licensee/joint  venture  partner of
EarthShell  that has not agreed to permit access to any plant  facility owned or
leased by it or a joint  venture  entity  that is being or in the future will be
used to manufacture the EarthShell products.

                                       10
<PAGE>

      (g) The list of the current Certified Equipment Vendors is attached hereto
as  Exhibit D.  EarthShell  shall  provide  Sweetheart  with an updated  list of
Certified Equipment Vendors from time to time and upon Sweetheart's  request. At
Sweetheart's  request,  EarthShell shall not unreasonably  withhold or delay its
consent  to  license  or  certify  other  equipment   vendors  on  licensing  or
certification  terms and conditions  that are not materially  different from the
terms and conditions  offered to the then existing  Certified  Equipment Vendors
(subject to any restrictions in the  certification or licensing  agreements with
the then existing Certified  Equipment  Vendors).  To the extent that EarthShell
can  do so  without  violating  any  confidentiality  undertakings  that  may be
applicable, EarthShell will cooperate in providing Sweetheart with copies of any
agreements into which EarthShell enters with any Certified Equipment Vendors.

4.    EC PROFIT DISTRIBUTION.

      (a) During the term of this Agreement,  Sweetheart shall pay to EarthShell
an amount (the "EC PROFIT  DISTRIBUTION")  equal to twenty  percent (20%) of the
Net Sales of Products by Sweetheart, if any (other than Net Sales of Products to
Third-Party  Sublicensees  for sale to  their  customers).  Notwithstanding  the
foregoing,  but subject to Section  4(d),  in view of  Sweetheart's  anticipated
start-up  costs,  the EC  Profit  Distribution  shall be (i)  adjusted  by fifty
percent  (50%) to ten percent  (10%) of Net Sales  during the twelve  (12)-month
period  following  the earlier of (A) June 30, 2003,  and (B) the date the Plate
Line is installed at a Plant Facility,  meets the Required Specifications and is
accepted by Sweetheart  (which  acceptance  shall not be unreasonably  declined)
(the "START DATE"),  and (ii) adjusted by  twenty-five  percent (25%) to fifteen
percent (15%) of Net Sales during the period commencing on the day following the
first anniversary of the Start Date and terminating on the second anniversary of
the Start Date.

      (b)  Following  the second  anniversary  of the Start Date,  the EC Profit
Distribution  will be restored to twenty  percent  (20%) of Net Sales;  provided
that the EC Profit Distribution shall be reduced to fifteen percent (15%) of Net
Sales if, by the end of the second  anniversary  of the Start  Date,  EarthShell
does not  provide  to  Sweetheart  at least one  qualified  vendor who agrees to
provide film for Sweetheart's reasonably projected volume of Products at a price
that is at least 25% less per pound than the quoted  price (FOB U.S.  vendor) of
film made from 100% virgin  materials.  Such price quotes shall be predicated on
(i) the film having 50%  recycled  content,  (ii) the recycled  materials  being
furnished at zero cost to the vendor,  and (iii) Sweetheart  agreeing to provide
to such  vendor,  and such vendor  agreeing to accept  from  Sweetheart,  all of
Sweetheart's  film scrap material,  and Sweetheart  further agreeing to purchase
from such vendor all or  substantially  all of the film to be used by Sweetheart
to manufacture the Products under a long-term supply contract.

                                       11
<PAGE>

      (c)  Notwithstanding  anything in Section 4(b) to the  contrary,  upon the
sale or distribution by any existing or future  sublicensee of EarthShell of any
Product   within  any  Market  Segment  within  the  Territory  and  during  the
Exclusivity  Period  under a right  to do so  granted  under  the  terms  of any
existing or future license or sublicense agreement to which EarthShell or any of
its  predecessor or successor  entities is a party,  then, upon the later of the
second  anniversary of the Start Date, or the date of such sale or distribution,
and until the end of the Exclusivity Period, the EC Profit Distribution shall be
reduced  to ten  percent  (10%)  of Net  Sales  (it  being  recognized  that the
reduction in the EC Profit  Distribution shall not limit the rights and remedies
Sweetheart may have, in law or equity,  under this Agreement or otherwise,  with
respect to  EarthShell's  intentional  misconduct in granting future licenses or
sublicensees to third parties in derogation of Sweetheart's  rights  hereunder).
In this regard, EarthShell covenants to use its reasonable best efforts (without
paying any sum) to terminate the rights of the sublicensees  listed in Exhibit E
to sell Products within the Market Segments and within the Territory  during the
Exclusivity Period.

      (d) Notwithstanding anything to the contrary in this Agreement, during the
Exclusivity Period, the total EC Profit Distribution  payable with regard to the
Net  Sales of  clamshell  or other  hinged  sandwich  containers  to  McDonald's
Corporation  (or to Perseco or any other  purchasing  agent which purchases such
Products for ultimate  sale or use by customers of McDonald's  Corporation)  for
all calendar  years  following  the  Effective  Date shall not exceed 50% of the
McDonald's  Contribution  Margin  achieved by Sweetheart with regard to such Net
Sales during such calendar years, determined on a cumulative basis.

      (e)  Within  thirty  (30) days of the last day of each  month,  Sweetheart
shall pay to EarthShell  the EC Profit  Distribution  in respect of all Products
shipped and invoiced by  Sweetheart  during such month,  if any. Each payment of
the EC  Profit  Distribution  shall be  accompanied  by a  written  report  (the
"REPORT")  prepared by Sweetheart  and  certified as materially  accurate by the
Chief Financial Officer or Treasurer of Sweetheart. Each Report shall set forth,
for the month  covered by the  Report,  (i) the  number of each of the  Products
shipped by  Sweetheart,  (ii) the gross invoice price for each of such Products,
and (iii) any  reductions to the gross invoice price for purposes of calculating
Net Sales.

      (f) Notwithstanding anything to the contrary in this Agreement, Sweetheart
shall have the right to meet a Net Sales  Milestone  for a  particular  calendar
quarter  or year (as is  specified  in Exhibit  C) by paying to  EarthShell  the
difference  between the total EC Profit  Distribution that EarthShell would have
received  had the Net  Sales  Milestone  been met and the  amount  of EC  Profit
Distribution  actually received by EarthShell for such calendar quarter or year,
such  amount  to be  paid  within  sixty  (60)  days  following  the  end of the
applicable  calendar  quarter  or year  (there  shall be no cure  period for the
failure to make this payment).

      (g) All payments of the EC Profit  Distribution  due under this  Agreement
shall be calculated and paid by Sweetheart in United States dollars.

      (h) If Sweetheart fails to make a timely payment due under this Section 4,
interest at an annual rate equal to twelve percent (12%),  compounded  annually,
shall  accrue on the amount of  payment  for each day such  payment is  overdue;
provided,  however, that such interest rate shall in no event exceed the maximum
rate permitted by applicable law.

                                       12
<PAGE>

      (i) Any failure to pay any EC Profit  Distribution within thirty (30) days
following the date  Sweetheart  receives  notice from  EarthShell that it is due
shall constitute a material breach for purposes of Section 13(b) hereof.

5.    RIGHT TO AUDIT.

      (a) Sweetheart shall keep and maintain at its principal  executive offices
or at such other  locations  as the Parties  shall agree  complete  and accurate
records  concerning  the purchase  and  installation  of the Modules  (including
copies of the monthly reports referred to in Section 3(b) and the  documentation
supporting the  information  contained in such report),  the Net Sales generated
from the sale or  distribution  of the  Products  within any  particular  Market
Segment,  and the  McDonald's  Contribution  Margin,  to the extent  applicable.
EarthShell or its designated  representative (the  "REPRESENTATIVE")  shall have
the right at  EarthShell's  cost and expense to review the  financial  and other
records of Sweetheart relating to such Net Sales on a quarterly basis during the
term of this Agreement  during normal business hours and upon  reasonable  prior
notice to Sweetheart.

      (b) If  Sweetheart  is  ultimately  determined  to have  failed  to pay to
EarthShell all of the EC Profit Distributions actually due hereunder, Sweetheart
shall  promptly  pay the full amount of such  discrepancy  to  EarthShell,  with
interest  thereon,  at an annual rate equal to twelve percent (12%),  compounded
annually;  provided,  however,  that such interest rate shall in no event exceed
the maximum rate permitted by applicable law. Furthermore, should the results of
an audit  reveal  an  underpayment  of an EC  Profit  Distribution  payment  due
hereunder in excess of five percent (5%), then all costs and expenses related to
such audit shall be reimbursed  to  EarthShell by Sweetheart  within thirty (30)
days of the completion of such credit.

      (c) If Sweetheart is ultimately  determined to have overpaid EarthShell an
EC Profit Distribution payment actually due hereunder, EarthShell shall promptly
pay the full amount of the overpayment to Sweetheart,  with interest thereon, at
an annual rate equal to twelve percent  (12%),  compounded  annually,  provided,
however,  that such  interest  rate shall in no event  exceed the  maximum  rate
permitted by applicable law.

6.    IMPROVEMENTS TO TECHNOLOGY.

      (a) EarthShell  will own all  Improvements  developed by or for EarthShell
(but, if developed for EarthShell,  only to the extent the third-party agreement
permits  EarthShell to sublicense the Improvement  without  restriction or cost)
(the "EARTHSHELL Improvements"), and, subject to any third-party agreements, all
Improvements developed by or for a licensee,  sublicensee,  or other contracting
party of EarthShell  ("SUBLICENSEE  IMPROVEMENTS").  All EarthShell Improvements
shall be included in the  Technology  licensed  hereunder to Sweetheart  without
additional  royalty or other obligation being imposed on Sweetheart.  Sweetheart
shall  have no right by virtue of this  Agreement  to  utilize  the  Sublicensee
Improvements  and the  Sublicensee  Improvements  shall not be  included  in the
Technology licensed hereunder to Sweetheart.

                                       13
<PAGE>

      (b)  Sweetheart  will own all  Sweetheart  Improvements  and  shall not be
obligated to allow EarthShell or any of its licensees or sublicensees to utilize
such Sweetheart Improvements. Sweetheart may utilize all Sweetheart Improvements
in any  commercial  activity,  except that during the term of this Agreement and
following the  termination  of this  Agreement,  Sweetheart  may not utilize the
Sweetheart   Improvements  to  manufacture   biodegradable   foam  food  service
disposable  packaging  that competes with the Products  sold or  distributed  by
EarthShell or its licensees or sublicensees.

      (c) Improvements  developed  jointly by EarthShell and Sweetheart  ("JOINT
IMPROVEMENTS")  shall be owned by EarthShell.  All Joint  Improvements  shall be
included in the Technology  licensed  hereunder to Sweetheart without additional
royalty or other obligation being imposed on Sweetheart. Sweetheart acknowledges
that  EarthShell  shall have the right to license  Joint  Improvements  to third
parties on such  terms and  conditions  as it shall  determine  which  shall not
conflict within this Agreement.

      (d) Each Party that develops or acquires a material Improvement during the
term hereof will disclose such Improvement to the other Party promptly after the
development or acquisition of such Improvement by such Party, and, to the extent
such  Improvement  is  not  licensed  to  Sweetheart  or  EarthShell  (or  their
respective  licensees or sublicensees)  pursuant to the terms of this Section 6,
then, at the request of the other Party, the developing or acquiring Party shall
enter into good faith negotiations to allow the other Party (or its licensees or
sublicensees)  to utilize  such  Improvement  under  such terms and  conditions,
including  royalty  obligations,   as  are  commercially  reasonable  under  the
circumstances and such other additional  restrictions and financial  obligations
as may be imposed by any third party developing the Improvement in question,  it
being  understood  that,  in the event the  Parties  cannot  come to terms  with
respect to the utilization of such Improvement  despite their good faith efforts
to negotiate commercially reasonable terms to do so, the acquiring or developing
Party shall have no further  obligation  to allow the other Party to utilize the
Improvement.

7.    PATENT MATTERS.

      (a)  EarthShell  shall  have the  right,  in its sole  discretion,  to (i)
affirmatively seek patent protection for any EarthShell Improvement, Sublicensee
Improvement  or Joint  Improvement at its sole cost and expense or (ii) maintain
any such Improvement as a trade secret;  provided that such Improvement shall be
maintained  as a trade  secret  during the  pendency of any patent  application.
Sweetheart  shall  provide  EarthShell,   at  EarthShell's  expense,  with  such
assistance as may be reasonably requested, from time to time, in connection with
efforts to seek patent  protection for any  Improvement in accordance  with this
Section 7(a),  including the execution of any documents  necessary to obtain and
maintain such patent protection.

      (b)  Sweetheart  shall  have the  right,  in its sole  discretion,  to (i)
affirmatively seek patent protection for any Sweetheart  Improvement at its sole
cost and expense or (ii)  maintain any such  Sweetheart  Improvement  as a trade
secret; provided that such Sweetheart Improvement shall be maintained as a trade
secret during the pendency of any patent  application.  EarthShell shall provide
Sweetheart,  at Sweetheart's  expense, with such assistance as may be reasonably
requested,  from  time to  time,  in  connection  with  efforts  to seek  patent
protection  for any  Sweetheart  Product  Improvement  in  accordance  with this
Section 7(b),  including the execution of any documents  necessary to obtain and
maintain such patent protection.

                                       14
<PAGE>

8.    INFRINGEMENT MATTERS.

      (a) Each of EarthShell  and  Sweetheart  will  promptly,  and in any event
within  thirty (30) days of actual  discovery,  notify the other of any apparent
infringement  of the  Technology in the  Territory  which comes to its attention
while this  Agreement  remains in effect.  Except with  respect to a  Sweetheart
Improvement,  EarthShell shall have the sole right, at its sole cost and expense
and in its absolute  discretion,  to bring any suit to enjoin such  infringement
and to  recover  damages  therefor  for its  sole  account;  provided  that,  if
Sweetheart  shall have requested that EarthShell  pursue an infringement  action
against an apparent  infringer of the  Technology  within the Market Segment and
within the Territory,  and EarthShell fails to notify  Sweetheart  within thirty
(30) days  following  such  request,  of its  election to pursue and  diligently
prosecute any action against such apparent infringer,  Sweetheart shall have the
right to bring such action  against such  infringer;  provided  that  Sweetheart
agrees that  EarthShell may intervene,  at its sole cost and expense at any time
in such action, and, if it does intervene,  EarthShell shall control such action
in  all  respects,   including,   without  limitation,  with  respect  to  claim
construction   issues  and  the  assertion  of  an  invalidity  defense  by  the
infringement defendant. Except in the case of an infringement action relating to
an EarthShell Improvement or a Joint Improvement,  to the extent Sweetheart does
pursue an action  against an apparent  infringer  pursuant to this Section 8(a),
Sweetheart  shall be entitled to withhold EC Profit  Distribution  payments from
EarthShell  under this Agreement to the extent necessary to reimburse it for all
reasonable,   third-party,   out-of-pocket  costs  (including  attorneys'  fees)
actually paid by Sweetheart and directly  related to the pursuit of such action.
Any such withheld EC Profit  Distribution  payments shall be deemed paid for the
purpose of determining whether Sweetheart has achieved its Milestones.

      (b) In any action  brought  pursuant to Section  8(a)  hereof,  each Party
shall cooperate  reasonably with the other Party and provide whatever assistance
is  reasonably  requested  by the other Party in  connection  with such  action,
including the preparation and signing of documents at the other Party's expense.

      (c) Sweetheart shall promptly notify EarthShell of (i) any claim or to its
knowledge  threatened  claim by any Person that the use of the Technology or any
part thereof by Sweetheart in connection  with the  manufacture,  use or sale of
any Product by  Sweetheart  or any  Customer  infringes  or violates the patent,
trade  secret  or other  intellectual  property  rights  of such  Person  in the
Territory or any part thereof and (ii) the  commencement  of any lawsuit against
Sweetheart,  or any of its  respective  Customers,  asserting any such claim (an
"EARTHSHELL  INFRINGEMENT  ACTION").  EarthShell  shall  assume and  control the
defense of any  EarthShell  Infringement  Action,  at its sole cost and expense,
irrespective of whether EarthShell is named as a defendant  therein.  Sweetheart
will assist EarthShell in the defense of any EarthShell  Infringement  Action by
providing such  information,  fact witnesses and other cooperation as EarthShell
may  reasonably  request  from  time to time;  provided  that  EarthShell  shall
reimburse  Sweetheart for any reasonable,  third-party,  out-of-pocket  expenses
incurred by Sweetheart in connection therewith.  Sweetheart shall have the right
to be represented in connection  with an EarthShell  Infringement  Action by its
own legal counsel, at its own expense, provided that such legal counsel will act
only in an advisory  capacity.  If EarthShell does not assume the defense of any
EarthShell  Infringement  Action,  Sweetheart  shall have the right, but not the
obligation,  to assume the defense of such lawsuit,  utilizing  legal counsel of
its choice.  EarthShell  shall bear the  reasonable  costs and  expenses of such
legal   counsel.   If  Sweetheart  so  assumes  the  defense  of  an  EarthShell
Infringement  Action,  Sweetheart  shall have no right to settle such EarthShell
Infringement  Action  unless  Sweetheart  shall have  received the prior written
consent of EarthShell which shall not be unreasonably withheld or delayed.

                                       15
<PAGE>

      (d) If the court, in any EarthShell  Infringement  Action,  enters a final
and non-appealable order finding that the Technology  infringes or violates,  in
whole or in part, the  intellectual  property rights of another Person in any of
the Market  Segments and within the Territory and  requiring  Sweetheart  (i) to
obtain a license under any third party's patent not licensed  hereunder in order
to continue make and sell in the Territory Products incorporating  Technology as
contemplated by this Agreement,  and to pay a royalty or fee under such license,
and the infringement of such patent cannot  reasonably be avoided by Sweetheart,
or (ii) to pay any  damages  on  account  of  such  infringement  or  violation,
EarthShell  shall pay the amount of any such fee or royalty payable and any such
damages to the extent that the  infringement  or  violation  found by such court
resulted from  Sweetheart's  use of Technology in the Territory within the scope
of  the  Sublicense  granted  hereunder;   provided  that,  in  no  event  shall
EarthShell's  liability  under this Section 8(d) exceed the specified  amount in
Section 12(b) hereof.

9.    DUTIES AND OBLIGATIONS OF EARTHSHELL.

      In addition to, and not in limitation of, the other duties and obligations
of  EarthShell,  as set  forth  in this  Agreement,  EarthShell  shall  have the
following obligations hereunder:

      (a)  EarthShell has heretofore  provided to  Sweetheart,  at  EarthShell's
cost, each of the following items as they existed as of September 15, 2002:

            (i) technical and engineering specifications and typical engineering
layouts for the manufacturing process for the Products;

            (ii) detailed  engineering  specifications for molds and tooling for
the Products;

            (iii)  detailed  specifications  for raw materials  required for the
manufacture of the Products and lists of approved vendors thereof; and

            (iv) detailed mix designs and process  parameters for  manufacturing
the Products.

      (b) EarthShell  shall, at Sweetheart's  reasonable  request and subject to
Sweetheart  reimbursing  EarthShell  for its  out-of-pocket  costs,  provide  to
Sweetheart  technical  support,  including  assisting  Sweetheart in revising or
modifying any of the items referred to in Section 9(a),  training the Sweetheart
employees to operate the  Equipment  and  manufacture  and package the Products,
installing  the  Equipment,  and  providing  direct  engineering,   design,  and
debugging  services to Sweetheart in connection  with the operation of the Plant
Facilities.  EarthShell's  reimbursable  costs shall  include  all direct  costs
incurred in performing the related services,  including the allocable portion of
the  standard  hourly  rates or  other  compensation  and  benefits  payable  to
personnel involved with the project, the cost of supplies and raw materials, and
a reasonably allocable share of EarthShell's indirect costs and overhead.

                                       16
<PAGE>

      (c)  During the term of this  Agreement,  EarthShell  shall,  at its cost,
timely  take all steps  reasonably  necessary,  including  the payment of patent
maintenance  fees, to maintain the existence of all Licensed  Patents within the
Market  Segments  and within  the  Territory,  but only to the  extent  that the
failure to maintain a Licensed Patent would materially  adversely affect the Net
Sales  Sweetheart is reasonably  anticipated  to achieve during the term of this
Agreement.

      (d)  EarthShell  shall satisfy the EarthShell  Purchase  Obligation to the
extent  required  under  Section  3(b),   which  obligation  shall  survive  the
expiration or sooner termination of this Agreement.

10.   OTHER DUTIES AND OBLIGATIONS OF SWEETHEART.

      In addition to, and not in limitation of, the other duties and obligations
of  Sweetheart,  as set  forth  in this  Agreement,  Sweetheart  shall  have the
following obligations hereunder:

      (a) Subject to Section  2(d),  Sweetheart  shall  prominently  display and
utilize such  Trademarks  (whether owned by or licensed to EarthShell) as may be
designated by EarthShell from time to time in connection with the advertisement,
marketing,  distribution  and  sale  of the  Products.  The  right  to use  such
Trademarks is included within the Sublicense herein granted. Except as otherwise
agreed by EarthShell,  Sweetheart shall use its reasonable efforts to cause each
Product  manufactured  by  Sweetheart  to bear at  least  one of the  Trademarks
designated  by  EarthShell.  The  specific  placement,  size,  and detail of any
Trademark on each Product must be approved by EarthShell  (which  approval shall
not be  unreasonably  withheld or delayed).  Sweetheart  shall not in any manner
represent that it has any ownership interest any Trademarks  licensed hereunder.
Sweetheart  acknowledges  that use of the Trademarks shall not create in its own
favor any right,  title, or interest in or to the Trademarks,  and that all uses
thereof by Sweetheart shall inure to the benefit of EarthShell. Sweetheart shall
reasonably  cooperate with  EarthShell in the execution of any  appropriate  and
necessary documents in connection with the registration of any Trademarks.

      (b) Upon termination of this Agreement,  Sweetheart shall cease and desist
from use of the  Trademarks  in any way,  including  any word or phrase  that is
similar to or likely to be confused with any of the Trademarks.  However, in the
event of  termination  of this  Agreement,  Sweetheart  shall  have the right to
utilize for the manufacture and/or sale of Products existing stock and inventory
of raw materials, work in progress and manufactured Products for a period of one
(1) year,  provided  Sweetheart disposes of such existing stock and inventory in
as expeditiously a manner as is commercially reasonable under the circumstances.

      (c) To the  best  of  its  knowledge,  Sweetheart  acknowledges  that  the
Technology  in  existence  on the date  hereof is novel  and  unique in the food
service  disposable  products  industry.  Subject to the provisions of Section 8
hereof  and  EarthShell's   compliance  with  its  obligations  hereunder,   (i)
Sweetheart  shall not  challenge  or question  the  validity or ownership of the
Trademarks  or,  subject to the  provisions  of  applicable  law,  any  Licensed
Patents;  and (ii) Sweetheart shall continue to make all required payments under
this Agreement to EarthShell  during any challenge of the validity of any of the
Licensed  Patents  (or claims  thereof)  included in the  Technology;  provided,
however,  that,  to the extent  EarthShell  does not take all  reasonable  steps
necessary to defend such action  following a written request by Sweetheart to do
so, or EarthShell  does not give  Sweetheart  adequate  assurances  that it will
comply with its  obligations  under Section 8(d) in the event it is unsuccessful
in the defense of such  action,  then  Sweetheart  shall have the right to place
that  amount  of  payments  into  escrow as shall  reasonably  be  necessary  to
discharge its obligations to the party  challenging the validity of the Licensed
Patents (or claims thereof),  based on Sweetheart's reasonable estimation of the
likely outcome of the action and the obligations  that it will reasonably  incur
in respect of such party based on such likely outcome. Except as provided in the
immediately  preceding  sentence,  in the event  Sweetheart fails to continue to
make any payments owed to EarthShell  hereunder based upon or in connection with
such a challenge,  EarthShell  may at its option  terminate  this Agreement upon
notice to Sweetheart and Sweetheart's  failure to cure such  non-payment  within
the applicable cure period.

                                       17
<PAGE>

      (d) Sweetheart represents,  warrants and covenants to EarthShell that from
and after the Effective Date, and except to the extent  attributable to a breach
of warranty  provided to Sweetheart  by  EarthShell  or the Certified  Equipment
Vendor, (i) the Products manufactured and commercially sold by Sweetheart to all
Persons  (other than  intercompany  sales which do not  constitute  Gross Sales)
shall conform to all of the  specifications  provided by EarthShell  pursuant to
Section  9(a) and (ii)  Sweetheart  shall  maintain  quality  standards  for the
Products in conformity  with  EarthShell's  standard  quality  control manual or
procedures, which EarthShell agrees shall be commercially reasonable.

      (e) Sweetheart shall obtain or provide, and maintain at all times, product
liability  insurance as is  reasonable  and customary for the industry with such
insurer as shall be reasonably  satisfactory to EarthShell;  provided,  however,
any  insurer  rated by AM Best (or a  comparable  agency) at a rating of A-10 or
better  (or a  comparable  rating)  shall at all  times be  deemed a  reasonably
satisfactory  insurer.  Each such insurance policy will require that the insurer
give  EarthShell  at  least  thirty  (30)  days'  prior  written  notice  of any
alteration  in or  cancellation  of the terms of such policy.  Sweetheart  shall
furnish to EarthShell a certificate or other evidence reasonably satisfactory to
EarthShell  that such insurance  coverage is in effect and that EarthShell is an
additional insured with respect to such policy.

      (f) Sweetheart  shall mark all of the Products and related  documents with
all applicable patent numbers, in accordance with EarthShell's  instructions and
as  required  by the patent  laws in effect in the  Territory  or as  reasonably
instructed by EarthShell.

      (g) Sweetheart shall retain, and train,  suitably  qualified  employees to
operate  the  Equipment  and  manufacture  the  Products  and  shall  be  solely
responsible for the payment and discharge of any taxes,  duties, or withholdings
relating to any  transaction of Sweetheart or its agents in connection  with the
manufacture, use, sale or commercialization of the Technology or the Products in
the Territory, excluding any tax or duty based on the income of EarthShell.

      (h) Subject to Section 4(b), Sweetheart grants EarthShell a right of first
offer to supply to Sweetheart all (but not less than all) of any category of raw
material  (e.g.,  starch)  necessary  to  manufacture  the  Products  (the  "RAW
MATERIALS").  Sweetheart shall regularly and routinely inform  EarthShell of all
of its  requirements for a category of Raw Material prior to purchasing the type
of Raw Material from any other Person, and, except for price, the material terms
on which Sweetheart proposes to purchase such Raw Materials, and EarthShell may,
at its option,  submit a bid or proposal  offer for the supply of the particular
Raw Material,  provided such bid or offer is submitted to Sweetheart  within ten
(10) days  following the request for same. If EarthShell  timely  submits such a
bid or offer to  supply  all (but not  less  than  all) of the  category  of Raw
Material  requested by Sweetheart  ("OFFERED RAW  MATERIALS"),  Sweetheart shall
have the right, exercisable in its sole discretion,  to (i) elect to accept such
bid or offer for Raw  Materials,  or (ii) pursue bids or offers from other third
parties in which event  Sweetheart  shall be free to enter into purchase  orders
for such Raw Materials,  provided such orders or other  agreements are on terms,
including  price,  quality  assurances  and  delivery  dates,  that  are no less
favorable to Sweetheart than those offered or proposed by EarthShell.

                                       18
<PAGE>

11.   REPRESENTATIONS AND WARRANTIES OF EARTHSHELL.

      (a)  EarthShell   hereby   represents  and  warrants  to  Sweetheart  that
EarthShell has a valid and enforceable  exclusive  license to use the Technology
to manufacture,  distribute and sell the Products in the Territory and the right
to sublicense  the  Technology to Sweetheart as set forth in this  Agreement and
that except as expressly set forth in this  Agreement,  there are no outstanding
assignments, security interests, licenses or agreements, either written or oral,
or implied, as would affect or be in derogation of the license granted hereunder
(except as set forth on Exhibit E and except for the EKI Agreement).  EarthShell
further warrants that it has no present knowledge that any Technology  infringes
or is claimed to infringe any patent or other proprietary  rights of others, and
that all of the Licensed Patents have been duly filed (or their applications are
pending),  and,  except for the pending  patent  applications,  are currently in
force.  EarthShell  covenants that any Patent owned or licensed to EarthShell as
of the  Effective  Date shall be deemed to  constitute a Licensed  Patent to the
extent such Patent is necessary to manufacture,  sell or distribute the Products
as contemplated under this Agreement. EarthShell further represents and warrants
that the only  sublicensees  that have previously been granted rights to utilize
the Technology to  manufacture,  sell or distribute  Products  within the Market
Segments and within the Territory, and whose sublicense agreements have not been
formally  terminated,  are the  Persons  listed  on  Exhibit E  attached  hereto
(although, view of the terms of the applicable sublicense agreements, EarthShell
does not believe  that such  Persons have any valid claims or rights to continue
to exploit the Technology to manufacture, sell or distribute Products within the
Territory).

      (b)  EXCEPT AS  EXPRESSLY  SET FORTH IN SECTION  11(a) OF THIS  AGREEMENT,
EARTHSHELL DOES NOT MAKE OR GIVE, AND HEREBY  EXPRESSLY  DISCLAIMS,  ANY AND ALL
WARRANTIES,  WHETHER EXPRESS OR IMPLIED,  WRITTEN OR ORAL, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR  PURPOSE, IN REGARD TO
(i) ANY PRODUCTS WHICH MAY BE MANUFACTURED, USED OR SOLD BY SWEETHEART AND WHICH
ARE  BASED  UPON OR  UTILIZE  ANY OF THE  TECHNOLOGY;  AND (ii) IN REGARD TO ANY
SERVICES PROVIDED TO SWEETHEART BY EARTHSHELL HEREUNDER.

      (c) Nothing in this Agreement shall be construed as:

            (i) a warranty or representation by EarthShell as to the validity or
scope of any Licensed Patents (except as set forth in Section 11(a));

                                       19
<PAGE>

            (ii)  except  as set  forth in  Section  9(c),  a  requirement  that
EarthShell file any patent application, secure any patent or maintain any patent
in force;

            (iii)  except as and to the  extent  specifically  provided  herein,
conferring a right to use in  advertising,  publicity or otherwise any Trademark
of EarthShell; or

            (iv) granting by implication,  estoppel, or otherwise any license or
rights under patent or other  intellectual  property rights of EarthShell  other
than the Licensed Patents and other intellectual property rights included in the
Technology, to the extent sublicensed as provided in Section 2.

12.   NO CONSEQUENTIAL DAMAGES; LIMITATION OF LIABILITY.

      (a) EXCEPT AS  EXPRESSLY  SET FORTH IN THIS  AGREEMENT,  IN NO EVENT SHALL
EITHER PARTY BE LIABLE TO THE OTHER PARTY UNDER,  OR IN  CONNECTION  WITH,  THIS
AGREEMENT  FOR ANY  INDIRECT,  SPECIAL,  INCIDENTAL,  PUNITIVE OR  CONSEQUENTIAL
LOSSES, EXPENSES OR DAMAGES WHATSOEVER,  INCLUDING,  BUT NOT LIMITED TO, LOSS OF
REVENUE OR PROFITS, INCREASED COSTS OF PRODUCTION, DAMAGES OR LOSSES AS A RESULT
OF SUCH OTHER PARTY'S INABILITY TO OPERATE,  INABILITY TO FULFILL CONTRACTS WITH
THIRD PARTIES, OR SIMILAR MATTERS OR EVENTS ARISING FROM THE USE OR INABILITY TO
SELL THE  PRODUCTS  OR ANY  FAILURE  TO  FULFILL  A  PURCHASE  ORDER IN A TIMELY
FASHION.  The  limitations,  exclusions and  disclaimers in this Agreement shall
apply irrespective of the nature of the cause of the action or demand, including
but not  limited  to breach of  contract,  negligence,  tort or any other  legal
theory and shall survive any breach or breaches  and/or failure of the essential
purpose of this Agreement, or any remedy contained in this Agreement.

      (b) EXCEPT IN THE CASE OF EARTHSHELL'S INTENTIONAL MISCONDUCT IN BREACHING
ITS OBLIGATIONS UNDER SECTION 2(F) OF THIS AGREEMENT (IN WHICH CASE SWEETHEART'S
DAMAGES  RESULTING  THEREFROM WILL BE REDUCED BY THE  DIFFERENCE  BETWEEN THE EC
PROFIT  DISTRIBUTION  THAT WOULD HAVE BEEN  PAYABLE  UNDER  SECTION 4(A) HAD THE
BREACH NOT OCCURRED AND THE EC PROFIT  DISTRIBUTION  THAT IS THEN PAYABLE  UNDER
CLAUSE  (ii) OF  SECTION  4(A) AS A RESULT OF SUCH  BREACH),  OR ITS  FAILURE TO
TIMELY PERFORM ITS EARTHSHELL  PURCHASE  OBLIGATION UNDER SECTION 3.1(B),  IN NO
EVENT SHALL EARTHSHELL'S CUMULATIVE LIABILITY IN RESPECT OF CLAIMS ARISING UNDER
THIS AGREEMENT OR OTHERWISE RELATING TO THE USE, MANUFACTURE OR SALE OF PRODUCTS
(WHETHER  IN  CONTRACT,  TORT OR ANY  OTHER  THEORY  OF  LIABILITY)  EXCEED  THE
AGGREGATE  AMOUNT OF EC  PROFIT  DISTRIBUTION  THERETOFORE  PAID OR  PAYABLE  TO
EARTHSHELL HEREUNDER.  NOTWITHSTANDING THE FOREGOING OR ANYTHING TO THE CONTRARY
IN THIS AGREEMENT,  IN THE EVENT ANY EXISTING  EARTHSHELL  SUBLICENSEE  SELLS OR
DISTRIBUTES  PRODUCTS  DURING THE  EXCLUSIVITY  PERIOD TO ANY PERSON  WITHIN THE
MARKET SEGMENT AND WITHIN THE TERRITORY  UNDER A RIGHT TO DO SO SET FORTH IN THE
SUBLICENSE (OR SIMILAR)  AGREEMENT,  SWEETHEART'S SOLE REMEDY SHALL BE TO REDUCE
THE EC PROFIT DISTRIBUTION FROM TWENTY PERCENT (20%) TO TEN PERCENT (10%) AS SET
FORTH IN SECTION 4(A).

                                       20
<PAGE>

13.   TERM AND TERMINATION.

      (a) The term of this  Agreement  shall commence on the Effective Date and,
subject to earlier  termination  or extension as provided  herein and in Section
30, shall continue for a period of ten (10) years (the "INITIAL TERM") following
the Effective Date; provided that, upon the mutual agreement of the Parties, the
term of this Agreement may extend for renewal terms of additional periods of two
(2) years.  Notwithstanding  the  foregoing,  Sweetheart  has the right,  at its
option,  to extend the term of this Agreement,  for renewal terms of twenty-four
(24) months, provided that Sweetheart has generated at least $100 million in Net
Sales (or, alternatively,  has paid EarthShell an equivalent amount of EC Profit
Distributions)  during  the last  12-month  period of the  Initial  Term of this
Agreement,  and  Sweetheart  continues  to generate at least $100 million in Net
Sales (or,  alternatively,  pays  EarthShell an  equivalent  amount of EC Profit
Distributions)  during each  12-month  period  following  the  extension  of the
Initial Term (as determined on a cumulative basis, commencing with the first day
of the extended term of this Agreement).  To the extent Sweetheart fails to meet
these Net  Sales (or EC Profit  Distribution)  Milestones  during  any  12-month
period  following  the  extension of the Initial  Term,  EarthShell  may, at its
option,  terminate this Agreement  upon thirty (30) days' written  notice,  such
termination  to take effect no sooner than the end of the extended  term of this
Agreement.  Following the expiration or sooner  termination  of this  Agreement,
other than by reason of a material breach by Sweetheart,  Sweetheart will become
a Certified  Equipment Vendor under  substantially the same conditions and terms
as are applied to other similarly situated Certified Equipment Vendors.

      (b) Either Party may terminate this Agreement for a material breach by the
other  Party of the terms and  conditions  of this  Agreement  or the  Ancillary
Agreements  upon written notice to the breaching  party,  which is given no less
than thirty (30) days prior to an effective date of termination in the case of a
monetary  breach,  and sixty (60) days prior to an effective date of termination
in the case of a non-monetary  breach,  and which specifies in reasonable detail
the nature of such breach. If the breaching Party cures such breach prior to the
effective date of termination, this Agreement and the Ancillary Agreements shall
not terminate and will continue in full force and effect.

      (c)  Either  Party  may,  by giving  the  other  Party  written  notice of
termination,  immediately  terminate this Agreement  following the Bankruptcy of
the other Party.

                                       21
<PAGE>

      (d) Notwithstanding any provision of this Agreement to the contrary,  this
Agreement  shall  terminate,  at  either  EarthShell's  or  Sweetheart's  option
evidenced by its delivery of notice of termination  to the other Party,  if: (i)
on or before October 31, 2002,  Sweetheart  and/or  EarthShell fail to execute a
purchase  order with DTE, in form and content  satisfactory  to  EarthShell  and
Sweetheart,  in their sole discretion (A) obligating  Sweetheart to purchase the
Plate Line, and, subject to Section 3(b),  obligating  Sweetheart or EarthShell,
as the case may be, to purchase the Supplemental Modules (the Plate Line and the
Supplemental  Modules are  referred  to herein as the  "INITIAL  MODULES"),  (B)
requiring DTE to install and debug at a Plant  Facility,  on or before April 15,
2003, the Plate Line and, if purchased by Sweetheart,  the Supplemental Modules,
meeting all of the material  terms,  conditions  and  specifications,  including
performance  and efficiency  criteria,  set forth in the purchase orders for the
Plate Line and, if  purchased  by  Sweetheart,  the  Supplemental  Modules  (the
"REQUIRED  SPECIFICATIONS"),  (C)  permitting  Sweetheart  and/or  EarthShell to
cancel their  purchase  orders  without  penalty (and  permitting  EarthShell to
cancel the EarthShell  Purchase  Obligation without penalty) if (aa) the Parties
terminate  this  Agreement  pursuant  to  Section  13(e) as a result  of DTE not
meeting the Preliminary  Validation Date, or (bb) DTE fails to install and debug
the Initial  Modules meeting the Required  Specifications  at the Plant Facility
designated by Sweetheart (or EarthShell, as applicable),  on or before April 15,
2003;  through no fault of  Sweetheart,  (D) allowing  Sweetheart  to assign and
delegate to EarthShell or to  EarthShell's  designee,  without  penalty,  all of
Sweetheart's  rights  and  obligations  under  the  DTE  purchase  agreement  to
purchase, install and debug the Supplemental Modules in the event the EarthShell
Purchase Obligation is triggered pursuant to Section 3(b), and for Sweetheart to
be released from all liability thereunder, (E) providing for waxing and stacking
capability for each Product to be produced by the Initial  Modules;  or (ii) the
purchase  order  for  the  Plate  Line  is  terminated  by  Sweetheart,  or  the
installation  or debugging of the Plate Line is delayed  beyond May 15, 2003; or
(iii) Sweetheart fails to deliver commercially  acceptable Products to Customers
on or before June 30, 2003  (subject to extension as a result of a Force Majeure
Event). The Initial Modules shall be comprised of (aa) eight (8) Modules for the
purpose of producing plates (the "PLATE LINE"),  and (bb) up to seven additional
Modules,  as mutually agreed by the Parties,  having the capability of producing
the  McDonald's  Big Mac  clamshell  and a range of bowls and plates  (the seven
Modules,  as ultimately agreed to by the Parties,  are referred to herein as the
"SUPPLEMENTAL  MODULES").  For the avoidance of doubt,  Sweetheart shall have no
obligation  to finance or complete the purchase of the  Supplemental  Modules in
the event the EarthShell  Purchase  Obligation is triggered  under Section 3(b),
and in the event it is triggered,  EarthShell shall have the right to direct DTE
as to the place or places where the  Supplemental  Modules will be delivered and
installed.

      (e) Either Party may terminate this Agreement in the event DTE shall fail,
on or before  January 31,  2003,  as such date may be  mutually  extended by the
Parties  (such date, as it may be extended,  is referred to as the  "PRELIMINARY
VALIDATION  DATE"),  to  demonstrate,  to  the  reasonable  satisfaction  of the
Parties,  that the Initial  Modules are  reasonably  likely to meet the Required
Specifications  through  performance  and  efficiency  tests  run  on  a  sample
Module(s)  under  conditions  that are  reasonably  expected  to  replicate  the
conditions at the St. Thomas facility with respect to a fully  integrated  Line,
such  termination to be effected by the one Party giving the other Party written
notice of  termination  within (30) days  following the  Preliminary  Validation
Date.

      (f) Except as  expressly  provided in this  Agreement,  from and after the
Effective  Date  of  the  expiration  of  the  term  of  this  Agreement  or the
termination  of this  Agreement  pursuant to this Section 13 hereof,  Sweetheart
shall have no right,  whatsoever,  to utilize the Technology or Trademarks,  and
Sweetheart  shall promptly  return to EarthShell all written  materials or other
tangible media  containing any Trade Secrets which are then in the possession of
Sweetheart.  Sections 3(b), 4, 5, 6, 8, 10(g),  12, 13(d),  (e) and (f), 14, 15,
16,  17,  18,  19,  and 21 shall  survive  termination  of this  Agreement.  The
obligation of Sweetheart to pay to EarthShell the EC Profit Distribution for all
Products  actually  sold  by  Sweetheart  prior  to the  Effective  Date  of the
expiration or  termination  of this  Agreement  shall survive the  expiration or
termination of this Agreement.

                                       22
<PAGE>

14.   RELATIONSHIP OF THE PARTIES.

      This Agreement shall not create any partnership,  joint venture or similar
relationship  between  Sweetheart and EarthShell (except for income tax purposes
and solely for the purpose of  characterizing  the EC Profit  Distribution  as a
profit  distribution  and without adverse  consequences  to Sweetheart),  and no
representation to the contrary shall be made by either Party. Neither Sweetheart
nor  EarthShell  shall have any  authority to act for or on behalf of or to bind
the other in any fashion, and no representation to the contrary shall be made by
either such party.

15.   NOTICES.

      (a)  Any  notice,   request,   consent,   election,   approval,  or  other
communication  (each a "NOTICE") which is required or permitted to be given to a
Party  pursuant  to this  Agreement  shall be  effective  only if such notice is
reduced to writing  and (a)  delivered  personally,  or (b) sent by a  reputable
overnight courier service to the Person in question to the address given below:

             IF TO EARTHSHELL:        EarthShell Corporation
                                      800 Miramonte Drive
                                      Santa Barbara, CA 93109-1419
                                      Attn:  Scott Houston
                                      Chief Financial Officer
                                      Telephone:  805-897-2294
                                      Fax:  805-899-3517

                                      with a copy to:
                                      Vince Truant
                                      President and Chief Operating Officer
                                      EarthShell Corporation
                                      1301 York Road, Suite 200
                                      Lutherville, MD  21093

             IF TO SWEETHEART:        Sweetheart Cup Company Inc.
                                      10100 Reisterstown Road
                                      Owings Mills, Maryland 21117
                                      Attn:  Tom Uleau
                                      Vice Chairman and Chief Operating Officer
                                      Telephone:  (410) 998-1270
                                      Fax:  (410) 998-1471

                                       23
<PAGE>

                                      with a copy to:
                                      Harvey L. Friedman
                                      General Counsel
                                      Sweetheart Cup Company
                                      115 Stevens Avenue
                                      Valhalla, NY  10595
                                      Telephone:  (914) 747-8095
                                      Fax:  (914) 747-9293

or to such other  address as either Party shall have  specified by notice to the
other Party at a later point of time.

      (b) If  delivered  personally,  a notice  shall be deemed  delivered  when
actually  received  at the  address  specified  above.  Any  notice  given  by a
reputable  overnight  courier shall be deemed delivered on the next business day
following the date it is placed in the possession of such courier.

16.   CONFIDENTIALITY.

      Any confidential and proprietary  information  relating to this Agreement,
the  Technology  or the business of  Sweetheart  or  EarthShell  is  hereinafter
referred to as "CONFIDENTIAL  INFORMATION."  The Parties'  respective rights and
obligations  concerning the use,  protection and disclosure of all  Confidential
Information shall be governed by the terms of the Confidentiality Agreement.

17.   SAVINGS CLAUSE.

      Should any part or  provision  of this  Agreement  be rendered or declared
invalid by reason of any law or by decree of a court of competent  jurisdiction,
the  invalidation  of  such  part  or  provision  of this  Agreement  shall  not
invalidate the remaining parts or provisions hereof, and the remaining parts and
provisions of this Agreement shall remain in full force and effect.

18.   WAIVER.

      Neither the failure or delay on the part of either  Party to exercise  any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or privilege preclude any other
or further exercise thereof or of any other right or privilege.

19.   GOVERNING LAW.

      This Agreement  shall be governed by and construed in accordance  with the
laws of the State of Delaware,  without giving effect to the choice of law rules
thereof.

20.   AMENDMENT.

      This  Agreement  may be amended only by the consent of each of the Parties
expressed in writing, signed by their duly authorized representatives.

                                       24
<PAGE>

21.   VENUE; ATTORNEYS FEES.

      (a) Any action to enforce any provision of this Agreement shall be brought
only in the United States District Court for the Central  District of California
or any state  court  located in Santa  Barbara,  California.  Each Party  hereto
consents  to the in  personam  jurisdiction  of any such  court and  irrevocably
waives any right it may have to assert forum non conveniens as a defense to such
jurisdiction. Each Party hereby waives its right to a jury trial.

      (b) In the event of any  litigation  between  the Parties as to any matter
arising  under this  Agreement,  the  prevailing  party in such  litigation,  as
determined by the judicial or  administrative  body adjudicating such litigation
and resulting in a final  determination,  shall recover from the other Party its
reasonable attorneys fees and costs.

22.   COUNTERPARTS.

      This  Agreement  may  be  executed  in two or  more  counterparts,  and by
facsimile signature, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

23.   ASSIGNMENT.

      The  rights  and  obligations  in, to and under  this  Agreement  shall be
binding   upon  and  inure  to  the   benefit  of  the   Parties,   their  legal
representatives, successors and assigns. Neither Party may assign this Agreement
or any rights  hereunder  without  the prior  consent of the other  Party  (such
consent not to be unreasonably  withheld or delayed),  except in connection with
the sale,  exchange or transfer of all or substantially all of the assets of the
Party  to  a   non-affiliated   party   pursuant   to  a  merger,   combination,
reorganization, asset sale or similar event; provided that, in the event of such
merger,  combination,  etc. of Sweetheart,  EarthShell's  consent shall still be
required if the successor  party is not a major  packaging  manufacturer  with a
comparable reputation as Sweetheart.  Notwithstanding the foregoing,  Sweetheart
reserves  the  right to pledge  as  collateral  its  Equipment,  Raw  Materials,
finished and unfinished goods and inventory, the license to complete and/or sell
such goods and  inventory,  and any other  tangible  personal  property  used in
connection with the activities  contemplated  under this Agreement to any lender
who provides it with the funding  necessary to purchase the Equipment  and/or to
retrofit or improve the Plant  Facilities to comply with its  obligations  under
this  Agreement,  and  EarthShell  reserves the right to assign its rights under
this Agreement to EKI.

24.   ENTIRE AGREEMENT.

      This Agreement supersedes any prior understandings or agreements,  whether
written or oral, and any  contemporaneous  oral agreements,  between the Parties
hereto in regard to the subject  matter  hereof,  and,  except for the Ancillary
Agreements,  contains the entire agreement  between the Parties in regard to the
subject matter hereof.

                                       25
<PAGE>

25.   FORCE MAJEURE.

      Neither  Party  shall be liable to the other  for  delays or  failures  in
performance  (including,  in the case of Sweetheart,  a failure to achieve a Net
Sales  Milestone  or a  Milestone  relating  to the  purchase,  installation  or
debugging of Equipment)  resulting from causes beyond the reasonable  control of
that Party,  including,  without  limitation,  acts of God, riots,  acts of war,
governmental regulations, labor strikes, failure of a Certified Equipment Vendor
to  timely   deliver,   install  or  debug   Equipment   meeting  the   Required
Specifications (despite Sweetheart being in compliance with all applicable terms
under the related  purchase order or agreement),  or a communication  or utility
failures (a "FORCE MAJEURE EVENT");  provided  performance will be excused under
this Section 25 for not more ninety (90) days after the  occurrence of the Force
Majeure Event in question.  Each Party shall use commercially reasonable efforts
to mitigate the effects of any such delays and failures, and each Party affected
by such an event shall resume performance under this Agreement immediately after
the delaying  cause ceases.  For the  avoidance of doubt,  the failure of DTE to
install and debug the Initial Modules meeting the Required  Specifications  at a
Plant  Facility on or before May 15, 2003 (time being of the  essence)  shall be
considered a Force  Majeure Event and shall  automatically  extend all Net Sales
and other Milestones by ninety (90) days.

26.   PRESS RELEASES.

      Neither  Party shall issue any press  releases,  or public  announcements,
concerning this Agreement or the transactions contemplated hereunder without the
prior  consent  of the other  Party,  which  consent  shall not be  unreasonably
withheld  or  delayed,  and which shall be given in all events if the release or
announcement  is required in order to comply with  applicable  law.  The Parties
have agreed to the wording of the press  releases to be issued by Sweetheart and
EarthShell,  respectively, in connection with the execution and delivery of this
Agreement.

27.   FURTHER ASSURANCES.

      Each Party  agrees on behalf of itself  and its  successors  and  assigns,
without  additional  consideration,  to  prepare,  execute,  acknowledge,  file,
record,  publish  and  deliver  in  good  faith  such  documents,  certificates,
statements,  agreements and instruments  within a reasonable period from receipt
of written  request  therefor  which are  reasonably  necessary or convenient to
consummate  the  transactions  contemplated  by this  Agreement or the Ancillary
Agreements  or to more  effectively  carry out the  purposes of this  Agreement.
Except as specifically  provided herein,  all such documents,  etc. executed and
delivered  by  the  Parties   hereto  shall  contain  such  terms,   conditions,
representations,  warranties  and covenants as are standard and customary  under
Delaware law to consummate the transaction to which such documents, etc. relate.
No Party shall be required to execute or deliver  any  document,  etc.  which is
contrary  to the  terms  or  conditions  of  this  Agreement  or  the  Ancillary
Agreements.

28.   THIRD PARTY BENEFICIARIES.

      Except as specifically set forth herein, this Agreement is not intended to
create any rights or  remedies in favor of any Person who is not a Party to this
Agreement, or in any way create any third-party beneficiary rights or remedies.

                                       26
<PAGE>

29.   EFFECT OF BANKRUPTCY PROCEEDINGS.

      (a)  Sweetheart  agrees  that,  if for any reason it becomes a debtor in a
case  under the U.S.  Bankruptcy  Code,  this  Agreement,  pursuant  to  Section
365(c)(1) of the U.S. Bankruptcy Code, is not, and shall not be, assumable under
Section 365 of the U.S.  Bankruptcy Code, it being agreed and acknowledged  that
applicable patent law would excuse EarthShell from accepting performance from or
rendering  performance to any entity other than Sweetheart,  whether or not this
Agreement prohibited or restricted assignment of rights or delegation of duties.
Accordingly,  pursuant to Section  365(e)(2) of the U.S.  Bankruptcy  Code, this
Agreement will  automatically  terminate upon Sweetheart  becoming a debtor in a
case under the U.S.  Bankruptcy Code,  notwithstanding the provisions of Section
365(e)(1) of the U.S. Bankruptcy Code.

      (b) The  Parties  agree  that  the  Technology  constitutes  "intellectual
property" as defined in the U.S Bankruptcy Code, and that the Sublicense granted
to  Sweetheart  under this  Agreement  is  entitled  to the  benefits of Section
ss.365(n) of the U.S. Bankruptcy Code.

30.   EARTHSHELL BOARD APPROVAL.

      This Agreement requires the approval of the EarthShell Board of Directors,
which approval shall be obtained,  if at all, within ten (10) days following the
Effective Date,  failing which Sweetheart shall have the right to terminate this
Agreement upon notice to EarthShell.

      IN WITNESS WHEREOF,  the Parties have caused this Agreement to be executed
and  delivered  by their  duly  authorized  representatives  upon the date first
herein written.

                                      EARTHSHELL CORPORATION

                                      By: /s/  Vincent J. Truant
                                         -----------------------------------
                                         Name:  Vincent J. Truant
                                         Title: President & COO

                                      SWEETHEART CUP COMPANY INC.

                                      By: /s/ Thomas Uleau
                                         -----------------------------------
                                         Name:  Thomas Uleau
                                         Title: Vice Chairman, COO

                                       27
<PAGE>

                                    EXHIBIT A

                            LIST OF LICENSED PATENTS

                                  U.S. PATENTS

                                    5,376,320
                                    5,576,049
                                    5,580,624
                                    5,618,341
                                    5,660,900
                                    5,658,603
                                    5,683,772
                                    5,679,145
                                    5,705,239
                                    5,709,827
                                    5,753,308
                                    5,783,126
                                    5,830,305
                                    5,849,155
                                    5,868,824
                                    6,030,673
                                    6,090,195
                                    6,146,573

                            U.S. PENDING APPLICATION

                                   09/390,583

                           MEXICO PENDING APPLICATION

                                     94/1240

                           CANADA PENDING APPLICATIONS

                                    2,156,050
                                    2,202,869

                                       28

<PAGE>

                                    EXHIBIT B

                  U.S. MARKET SEGMENTATION FOR SWEETHEART CUP
                     COMPANY REGARDING EARTHSHELL PACKAGING

<TABLE>
<CAPTION>
U.S. MARKET SEGMENTS GRANTED                                                 U.S. MARKET SEGMENTS EXCLUDED
<S>                                                                          <C>
CATEGORY A:  (i) QUICK SERVICE RESTAURANTS--national, regional.              Mass Merchandisers - e.g. Wal-Mart, K-Mart,
local--e.g., McDonald's, Burger King, Wendy's; (ii) SPECIALTY COFFEE         Target, etc.
- National, regional, local. e.g. Starbucks, Java City, Brew Ha Ha,
Einstein Bros. Bagels; (iii) PIZZA - e.g. Pizza Hut, Domino's, Papa          Casual Dining - e.g. TGI Fridays, Ruby Tuesdays,
John's; and (iv) DONUTS - e.g. Dunkin Donuts, Krispy Kreme.                  Applebee's, etc.

                                                                             Drug Stores - e.g. Walgreen, CVS, Rite Aid, Eckerd,
                                                                             etc., and Health Food Stores

CATEGORY B:  (i) DISTRIBUTORS: Broadline, paper, system. e.g. Sysco,         Government - Federal, state, provincial, and local.
Bunzl, Acme, Martin-Brower; (ii) CONTRACT MANAGEMENT - e.g. Aramark,         e.g. Depart of the Interior, Department of Agriculture,
Sodexho, Compass/Eurest, Wood, Sports Service; (iii) SUBS - e.g.              Department of Energy, Department of Defense, etc.
Subway, Blimpie, Cousins; (iv) ICE CREAM - e.g. Baskin Robin, Ben &
Jerry's, Carvel; and (v) FAST CASUAL - e.g. Friendly's, Schlotsky's

CATEGORY C: (i) CONVENIENCE STORES - National, regional, local. e.g.
Southland, Circle K, AM/PM, Wawa, Shore Stop; (ii) CLUB STORES -
e.g. Sam's, Costco, BJ's; and (iii) ALL GROCERY:  e.g. Safeway,
Giant/Ahold, Kroger, Jewel.

CATEGORY D: Bottlers - e.g. Coca Cola, Pepsi.
</TABLE>

THE  MINIMUM  PERCENTAGE  OF TOTAL NET SALES FOR THE  TWELVE  (12)-MONTH  PERIOD
ENDING  PRIOR  TO  THE  EXPIRATION  OF  THE   EXCLUSIVITY   PERIOD  TO  MAINTAIN
NON-EXCLUSIVITY  IN THE RESPECTIVE  CATEGORIES OF THE MARKET  SEGMENTS SET FORTH
ABOVE ARE AS FOLLOWS:  CATEGORY A: 20% THROUGH  DECEMBER 31, 2004; 30% FOLLOWING
DECEMBER  31, 2004;  CATEGORY B: 25%;  CATEGORY C: 10%; AND CATEGORY D: 5%. SUCH
PERCENTAGES  ARE REFERRED TO IN THE  AGREEMENT AS THE  "MINIMUM  MARKET  SEGMENT
THRESHOLD PERCENTAGES."

                                       29
<PAGE>

                                    EXHIBIT C

                               REVENUE MILESTONES
                          TO RETAIN MARKET EXCLUSIVITY

----------------------------------- --------------------------------------------
      Calendar Quarter/Year                    Revenue Milestones
----------------------------------- --------------------------------------------
Q4  03                              $5 MM Net Sales
----------------------------------- --------------------------------------------
Q1  04                              $10 MM Net Sales
----------------------------------- --------------------------------------------
Q2  04                              $15 MM Net Sales
----------------------------------- --------------------------------------------
Q3  04                              $20 MM Net Sales
----------------------------------- --------------------------------------------
Q4  04                              $30 MM Net Sales
----------------------------------- --------------------------------------------
Calendar Year 2005                  $130 MM Net Sales
----------------------------------- --------------------------------------------
Calendar Year 2006                  $250 MM Net Sales
----------------------------------- --------------------------------------------
Calendar Year 2007 and thereafter   $500MM Net Sales
----------------------------------- --------------------------------------------

Pursuant to Section 25 of the Agreement to which this Exhibit C is attached, the
foregoing  calendar  quarters through the calendar year ending December 31, 2004
shall be extended by 90 days  following the occurrence of a Force Majeure Event.
Furthermore, pursuant to Section 25, if the Force Majeure Event occurs prior to,
or during, the 2005 calendar year or any succeeding calendar year, the Net Sales
Milestones  for such affected  calendar year and each  succeeding  year shall be
applied on a fiscal year basis  measured  from April 1 of the  calendar  year in
question through March 31 of the succeeding  calendar year. For the avoidance of
doubt,  DTE's failure to install and debug the Initial  Modules at  Sweetheart's
St.  Thomas  Facility on or before May 15, 2003 through no fault of  Sweetheart,
shall be deemed to be a Force  Majeure  Event and  shall  extend  the  foregoing
calendar quarters and years by 90 days.

                                       30
<PAGE>

                                    EXHIBIT D

                      [LIST OF CERTIFIED EQUIPMENT VENDORS]

                           DETROIT TOOL & ENGINEERING

                                   RTS WRIGHT

                                       ATS

                              DOERFFER ENGINEERING

                                       31
<PAGE>

                                    EXHIBIT E

                     LIST OF SUBLICENSES PREVIOUSLY GRANTED

      1. SUBLICENSE  AGREEMENT BETWEEN EARTHSHELL AND GENPAK CORPORATION,  DATED
NOVEMBER 9, 1994.

      2. LICENSE AGREEMENT BETWEEN EARTHSHELL AND MOBILE CHEMICAL COMPANY, DATED
JUNE, 1993.

      3. SUBLICENSE  AGREEMENT BETWEEN  EARTHSHELL AND DOPACO,  INC., DATED JUNE
19, 1995.

      4. AGREEMENT  BETWEEN  EARTHSHELL AND INTERNATIONAL  PAPER COMPANY,  DATED
OCTOBER 21, 1993.

                                       32

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