AGREEMENT

 

                                      AGREEMENT

         THIS AGREEMENT is made upon and shall be effective as of October 21,
1993, by and between EARTHSHELL CONTAINER CORPORATION, a Delaware corporation
("ECC"), and International Paper Company, a Corporation formed and existing
under the laws of New York ("Sublicensee").

                                      RECITALS:

         A.   Pursuant to that certain License Agreement, dated February 24,
1993, (the "License Agreement") between E. Khashoggi Industries, a California
general partnership ("EKI") and ECC, ECC has the exclusive right to utilize
specified technology to manufacture and sell within a specified field of use
certain containers made from hydraulically reacting materials for the packaging,
storage, portioning, dispensing, carrying, presenting, serving and consumption
of food and beverages.

         B.   ECC has the right and authority to grant sublicenses which will
permit selected entities to utilize such technology in order to manufacture and
sell certain food and beverage containers made from hydraulically reacting
materials.

         C.   Sublicensee desires to obtain from ECC a sublicense to convert
materials made from such technology into designated food and beverage containers
and thereafter use, sell or otherwise commercialize such containers within a
designated geographical area.

         D.   ECC is willing to grant a sublicense to Sublicensee upon the
terms and conditions set forth herein.

                                 EXHIBIT 10.17

                                      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 is hereby acknowledged, the
parties agree as follows:

         1.   DEFINITIONS.  The capitalized terms used herein shall have the
meanings set forth below, or the meanings assigned to them elsewhere herein:

              (a)  The term "Affiliate" shall mean, with respect to any given
entity (which includes without limitation any company, organization, or person),
any other entity directly or indirectly controlling, controlled by, or under
direct or indirect common control with such given entity.  For purposes of this
definition, the ownership of a twenty-five percent (25%) or greater equity
interest in an entity shall be deemed control of such entity, and the ownership
of less than a twenty-five percent (25%) equity interest in an entity (absent
any other exercise of control) shall be deemed not to be control of such entity.

              (b)  The term "Field of Use" shall mean the use and sale of Food
Packages in the food service or fast-food and restaurant industry.  As used
herein, the term "food service" or "fast-food and restaurant industry" is
intended to include any facility (whether commercial, nonprofit, government, or
other) where food and beverages are (i) sold or provided for consumption on the
premises or (ii) packaged in single portions, or multiple portions, intended for
immediate consumption.  The term "Field of Use" shall also include the use and
sale of Food Packages in other retail establishments selling food or beverages
or Food Packages (e.g., grocery stores, convenience stores, and food 
warehouses -- hereinafter the "retail food selling industry"), but only with 
respect to Food Packages which are the same

or substantially similar to any Food Package which has been introduced into the
fast-food and restaurant industry or the retail food selling industry by an
entity (including any Affiliates) that operates retail establishments in the
fast-food and restaurant industry in at least six locations.  The sale of Food
Packages to distributors and wholesalers for resale and use in the food service
or fast food and restaurant industry is included within the Field of Use.
Notwithstanding the foregoing, the parties agree, as set forth in paragraph
1(e), that certain items shall not be within the definition of Field of Use.

              (c)  The term "Food Packages" shall mean any product, apparatus,
device, or equipment for packaging, storage, portioning, dispensing, carrying,
presenting, serving or consumption of food or beverages.

              (d)  The term "Gross Sales Price" shall mean the gross invoice
price charged by Sublicensee in the sale of a Product to a non-Affiliate reduced
by (i) any credit allowed by Sublicensee for the return of Product; (ii)
customary trade, quantity and cash discounts allowed by Sublicensee; (iii)
excise, value added and sales taxes actually paid by Sublicensee on the Product;
(iv) freight charges actually paid by Sublicensee for the shipment and delivery
of the Product; and (v) bad debts or uncollected accounts.  In the case of non-
cash consideration, "Gross Sales Price" shall be the fair market value of all
non-cash consideration actually received by Sublicensee or its Affiliate for
such Product.  The "Gross Sales Price" of Products sold or transferred to an
Affiliate shall be deemed to be the price then charged to unrelated parties in
arms-length transactions for such Products in similar quantities and under
similar terms of sale.

              (e)  The term "Products" shall mean only those Food Packages set
forth on Exhibit "B", attached hereto and incorporated herein by this reference,
which incorporate in whole or in part any portion of the Technology and which
are used or sold in the Field of Use.  Notwithstanding any other provision of
this Agreement, the parties agree that the following items shall not be within
the scope of the definition of "Products" or otherwise available for licensing
under this Agreement: 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), or boxes or sealed containers for the long-
term storage of single or multiple servings of foods (e.g., dry cereals, egg
cartons, and meat and deli trays) -- the right to license such items has been
retained by EKI.  Notwithstanding the foregoing, single service milk/juice
cartons are within the scope of definition of "Products".

              (f)  The term "Technology" shall mean all of the proprietary
technology involving hydraulically reacting materials which is (i) described or
claimed in any United States patent or patent application set forth in Exhibit
"A" attached hereto and incorporated herein, including without limitation, any
continuations, divisionals or continuations-in-part, reissues and extensions
thereto, and any patents issued therefrom, and (ii) the subject of any future
United States patents or patent applications to the extent that such patents or
patent applications are licensed to ECC and directly utilized in the conversion,
use or sale of Food Packages by the Sublicensee.  The Technology, to the extent
it exists upon the execution date of this Agreement, is further described on
Exhibit "A".  The term Technology shall also include the proprietary information
of ECC, or licensed to ECC, that is related to the Technology which is described
on Exhibit "A" as "Trade Secrets" and any other proprietary information

of ECC, or licensed to ECC, which is delivered, orally or in writing, to the
Sublicensee and designated, orally or in writing, as "Confidential".

              (g) The term "Territory" shall mean all fifty states of the
United States of America and any territories or possessions of the United
States.  The term "Territory" also shall include Canada, Mexico, Central
America, and the Caribbean islands and nations, subject to any foreign territory
being removed, all or in part, at ECC's option, if Sublicensee has not commenced
commercial production or sales of Products in such foreign territory prior to
January 1, 1996.

              (h)  If Sublicensee conducts business and wants to sell Products
outside of the Territory, ECC agrees that it will negotiate in good faith with
Sublicensee for a separate non-exclusive sublicense covering a specified
geographic area outside of the Territory.

         2.   THE SUBLICENSE.

              (a)  ECC hereby grants to Sublicensee a nonexclusive, royalty-
bearing sublicense (the "Sublicense") to convert materials made from the
Technology into Products and thereafter use, sell or otherwise commercialize the
Products solely within the Territory and solely within the Field of Use.  The
Sublicense shall be irrevocable except as specifically provided in this
Agreement

              (b) In the event that Sublicensee wishes to sell Food Packages
which do not fall within the definition of the Field of Use, and which
incorporate in whole or in part a portion of the Technology, Sublicensee must
obtain an appropriate license for the same from EKI.

              (c)  Sublicensee shall not have the right to further sublicense,
assign or transfer the Technology, or any interest in or rights under the
Sublicense (i) except to an Affiliate or (ii) except with the prior written
consent of ECC, which consent will not unreasonably be withheld (such assignee
referred to herein as a "Proper Assignee").  Any such purported sublicense or
transfer shall be void and shall constitute a breach of a material obligations
of Sublicensee within the meaning of paragraph 16, hereof.  The merger or
consolidation of Sublicensee or a Proper Assignee with, or the sale of
substantially all of Sublicensee's or a Proper Assignees' assets or equity
interest to, any other entity that is not, prior to such merger, consolidation
or sale, an Affiliate of Sublicensee, whether occurring by operation of law or
otherwise, shall not be deemed to be an assignment of the Technology and is
expressly permitted under the terms of this Agreement.

              (d)  As more fully set forth in paragraph 10(b) hereof,
Sublicensee is authorized and required to utilize, in connection with the
marketing, distribution and sale of the Products, those trade names, trademarks,
service marks, slogans and logo marks (collectively the "Trademarks") which are
designated by ECC to Sublicensee prior to commercial production of a Product by
Sublicensee or from time to time thereafter.

              (e)  From time to time during the term of this Agreement, the
parties may, by written agreement, amend Exhibit "B" hereto in order to add
thereto one or more additional Products or range of Products.  No amendment of
Exhibit "B" shall be effective unless it is in writing and signed by both of the
parties.  The conversion of materials made from the Technology or sale of any
Product not licensed hereunder shall be a breach of a material obligation of
Sublicensee within the meaning of paragraph 16 hereof.  If Sublicensee

requests that Exhibit "B" be amended in order to add an additional Product or
range of Products, ECC shall meet with representatives of Sublicensee at
reasonable times and at mutually agreeable locations and shall discuss, in good
faith, the amendment of Exhibit "B" requested by Sublicensee.  ECC shall have no
obligation to amend Exhibit "B" hereto in accordance with any request by
Sublicensee unless the terms and conditions of the proposed amendment are
satisfactory to ECC.

              (f)  Sublicensee shall not market, distribute or sell any Product
to any person, firm or entity outside the Territory, or to any person, firm or
entity within the Territory if Sublicensee knows or has reason to believe that
such person, firm or entity intends to use the Product in question outside the
Territory.  The sale or distribution of a Product outside the Territory by
Sublicensee shall constitute a breach of a material obligation of Sublicensee
within the meaning of paragraph 16 hereof.

         3.   ROYALTIES.

              (a)  As consideration for the grant of the Sublicense,
Sublicensee shall pay to ECC a royalty (the "Royalty") of twenty percent (20%)
of the Gross Sales Price for each Product which is sold by Sublicensee during
the term of this Agreement.

              (b)  Sublicensee shall be deemed to have "sold" a Product, and
ECC shall be deemed to have earned the Royalty, upon the earliest date that
Sublicensee actually ships, delivers, or invoices such Product to any person,
firm or entity other than an Affiliate of Sublicensee.  For Products transferred
to an Affiliate, Sublicensee shall be deemed to have "sold" a Product, and ECC
shall be deemed to have earned the Royalty, upon the earliest date that the
Affiliate to whom the Product was transferred either (i) consumes such Product

as an end-user of the Product; or (ii) ships, delivers or invoices such Product
to any person, firm or entity which is not an Affiliate of Sublicensee.
Provided, however, that the Sublicensee shall be entitled to a credit for all
bad debt or uncollected accounts associated with the computation of Royalty for
a given period.

              (c)  No Royalty shall be payable on Products which are used by
Sublicensee to convert into other Products which are sold and for which a
Royalty is paid to ECC.  No multiple Royalties shall be payable because a
Product is covered by more than one patent within the scope of the Technology.
No Royalty shall be due, owing or payable on Products used exclusively for
demonstration or market testing purposes.

              (d)  Failure to make payment when due of any Royalty hereunder is
a breach of a material obligation of Sublicensee and may result in the
termination of this Agreement pursuant to paragraph 16 hereof.

         4.   PAYMENT OF THE ROYALTY.

              (a)  Within thirty (30) days of the final day of each calendar
quarter (or fiscal quarter if Sublicensee is reporting on a fiscal basis) which
occurs during the term of this Agreement (a "Quarter"), Sublicensee shall pay to
ECC the Royalty earned on all Products sold by Sublicensee during such Quarter.
Each Royalty payment shall be accompanied by a written report (the "Royalty
Report") prepared by Sublicensee and certified as accurate by the appropriate
financial officer of Sublicensee.  Each Royalty Report shall set forth, for the
Quarter covered by the Royalty Report, (i) the number of each of the Products
sold by the Sublicensee, (ii) the gross invoice price for each of such Products,
and (iii) reductions

to the gross invoice price for applicable returns, discounts, freight charges,
bad debts/uncollected accounts and taxes with respect to Products sold.

              (b)  All payments called for by this Agreement shall be paid by
Sublicensee in United States dollars.

         5.   RIGHT TO AUDIT.

              (a)  Sublicensee shall keep and maintain complete and accurate
records concerning all aspects of the conversion of materials into, and sale of,
the Products.  ECC or its designee (the "Representative") shall have the right,
at ECC's expense, periodically to review those records and operations of
Sublicensee which deal with the design, conversion of materials into, shipment
and sale of Products.  Such reviews may take place only during the normal
business hours of Sublicensee and only upon written notice to Sublicensee given
at least three (3) business days prior to such review.  The Representative
conducting such review shall be required to execute a confidentiality agreement
pursuant to which the Representative shall agree that it will not disclose or
use the information obtained pursuant to such review to or for the benefit of
any person or entity except ECC unless required to do so in connection with the
resolution of any dispute concerning any payment required by this Agreement.

              (b)  If any such review reveals, in the opinion of ECC, that
Sublicensee has not paid to ECC the full amount of any payment due hereunder for
the period covered by such review, ECC shall give the Sublicensee written notice
(the "Review Notice") of such discrepancy.  The Review Notice shall be
accompanied by a written report prepared by ECC or the Representative setting
forth, in reasonable detail, the basis of the alleged underpayment.

If Sublicensee does not notify ECC that Sublicensee disputes the findings set
forth in such report, it shall pay to ECC the full amount of the underpayment in
question within 15 days of the date of receipt of the Review Notice.  All
underpaid amounts shall bear interest from the date upon which the payment in
question should have been made until it is actually paid at the lending interest
rate of prime (as published in the Wall Street Journal on the last previous
business day).  Additionally, if Sublicensee agrees to make the underpayment
specified in the Review Notice, Sublicensee shall also reimburse ECC for the
actual costs of the review if the underpayment amount is 5% or more of the
Royalty payment due during the period in question and such underpayment exceeds
$100,000 in amount.  In all other cases, ECC shall pay all expenses and fees of
the review, including all out-of-pocket expenses actually and reasonably
incurred by Sublicensee in connection therewith.

         (c)  If Sublicensee disputes the findings set forth in the Review
Notice, it shall so notify ECC in writing ("Dispute Notice") within fifteen (15)
days of the receipt of the Review Notice.  Representatives of ECC and
Sublicensee shall meet and, in good faith, seek to resolve the dispute through
negotiation; provided, however, that if such dispute is not resolved within ten
(10) days of the Dispute Notice, ECC and Sublicensee shall jointly agree to
either (i) immediately retain a nationally recognized independent accounting
firm (other than the firm which prepared the report which accompanied the Review
Notice), which is acceptable to both parties, to conduct an additional review of
the payments due to ECC, or (ii) submit the dispute to arbitration or mediation
in accordance with the provisions of paragraph 26 hereof.  In the event that ECC
and Sublicensee are unable to so jointly agree, the matter will be submitted to
arbitration pursuant to clause (ii) of the preceding sentence.

Sublicensee and ECC shall not unreasonably withhold their approval of the
accounting firm selected by either party pursuant to clause (i) above.  The
determination of such accountants or arbitrators (or mediators) in regard to the
accuracy of the payments made to ECC shall be final and binding upon the
parties, shall not be subject to appeal or review by any court or governmental
agency and shall be enforceable in the appropriate United States state and
federal courts.  If such review reveals that Sublicensee has failed to pay to
ECC the full amount of a Royalty payment actually due, Sublicensee shall pay the
full amount of such discrepancy to ECC within three (3) days of the date of the
report of such accountants or the decision of the arbitrators, as the case may
be.  The full amount of such underpayment shall bear interest at the lending
interest rate of prime (as published by the Wall Street Journal on the date of
the Dispute Notice or next business day) from the date the payment in question
should have been made until it is actually made.  Additionally, if it is
determined by the review conducted pursuant to this paragraph 5(c) that
Sublicensee underpaid ECC by 5% or more of the Royalty payment due during the
period in question, and such underpayment exceeds $100,000 in amount,
Sublicensee shall pay all fees and expenses of the reviews and arbitration (or
mediation) conducted pursuant to paragraphs 5(b) and(c).  In all other cases,
ECC shall pay all expenses and fees of both reviews and arbitration, including
all out-of-pocket expenses actually and reasonably incurred by Sublicensee in
connection therewith.

              (d)  The second failure within any two-year period by Sublicensee
to make timely payment of the correct Royalty amount due under this Agreement as
finally determined under paragraph 5(c) shall constitute a breach of a material
obligation of Sublicensee and may result in the termination of this Agreement
pursuant to paragraph 16 hereof, unless

Sublicensee has cured such failure within sixty (60) days from the date notice
of such failure is delivered to Sublicensee.

              6.   IMPROVEMENTS TO TECHNOLOGY.

              (a)  If, while the Sublicense remains in effect, Sublicensee
should develop any improvement, refinement or change, whether patentable or
unpatentable, relating in whole or in part to any portion of the Technology or
the Products (such improvement hereinafter referred to as an "Improvement"), to
the extent that the Improvement is directed to a composition, formulation or the
material (i.e., other than a method of manufacture, handling or processing of
Food Packages) Sublicensee shall notify ECC of such Improvement within a
reasonable time of and in no event more than ninety (90) days after its
development and shall provide ECC with access to all information concerning such
improvement as ECC shall reasonably request: provided, however, that all such
information shall be confidential and shall be subject to all restriction on
disclosure as set forth in this Agreement or otherwise arising.  Sublicensee (i)
shall assign the nonexclusive right to make, use, sell, sublicense and otherwise
commercialize the Improvement both within and outside of the Field of Use and
within and outside the Territory to ECC for an assignment fee of $1,000.00 and
(ii) notwithstanding whether ECC or its assignee files for patent protection,
Sublicensee shall retain a non-exclusive perpetual (i.e., to the fullest extent
it is legally empowered) license to make, use, sell or otherwise commercialize
the Improvement both within and outside of the Field of Use and within and
outside the Territory.  If ECC (i) obtains rights in and to an Improvement from
another sublicensee of the Technology, in whole or in part, or otherwise or (ii)
develops such Improvement, it shall within a reasonable time of and in no event
more

than ninety (90) days after it obtains such rights inform the Sublicensee of
such Improvement and at the request of the Sublicensee grant the Sublicensee a
nonexclusive perpetual (i.e., to the fullest extent it is legally empowered)
license to make, use, sell or assign (pursuant to the terms of this Sublicense
Agreement) the Improvement within the Field of Use within the Territory.  No
additional Royalty will be due by virtue of the addition of an Improvement to
the Technology.

              (b)  With respect to an Improvement under paragraph 6(a), in the
event that Sublicensee does not seek patent protection for the Improvement, ECC
or its assignee may elect to seek patent protection either in the United States
or in any foreign jurisdiction.  Sublicensee shall provide ECC or its assignee
with such assistance as may be reasonably requested, from time to time, in
connection with such efforts, including the execution of any documents necessary
to obtain and maintain such patent protection; provided, however, that ECC or
its assignee will reimburse Sublicensee for any out-of-pocket fees and expenses
reasonably incurred by Sublicensee in providing such assistance.  ECC or its
assignee shall keep the Sublicensee informed of the status of the prosecution of
each patent application which it elects to pursue and shall consult with
Sublicensee on all material aspects of the prosecution of such application,
although all final decisions in regard to such patent application shall remain
within the sole discretion of ECC or its assignee.

              (c)  If the Improvement is directed to a method of converting,
handling, or processing of Food Packages, and if such converting, handling, or
processing Improvement has a substantial use with composition, formulation, and
materials within the scope of this Sublicense, then Sublicensee will notify
(within a reasonable time not to exceed ninety (90)

days) ECC of the development of the Improvement and grant to ECC the exclusive
right to negotiate, for a period of ninety (90) days after delivery of such
notice, for a license which will authorize ECC to use, license or otherwise
commercialize such Improvement Sublicensee and ECC will negotiate in good faith
the terms of the license for the Improvement.  Failure of ECC and Sublicensee to
agree on a license agreement shall not give rise to any right on the part of
either party to seek to resolve the impasse (i) through arbitration under this
Sublicense Agreement or (ii) otherwise.  It is expressly understood by the
parties hereto, that an Improvement in the manufacturing process is the sole and
exclusive right and property of the Sublicensee; disclosure of such information
is subject to the confidentiality provisions of this Sublicensee Agreement or as
may otherwise apply; and the licensing of the same to ECC is subject to
negotiation of an agreement on terms mutually acceptable to ECC and Sublicensee.

              (d)  Notwithstanding the above, the foregoing provisions of this
paragraph 6 shall not apply to any improvement, refinement or change, based on
whole or in part, on any technology, knowledge, information, or intellectual
property owned by Sublicensee prior to September 2, 1993.

         7.   "NEW USE" PRODUCTS.

              If, during the term of this Agreement, Sublicensee determines
that there exists a commercially feasible use, application, function, or purpose
for the compositions, formulations, or materials which are in whole or in part
disclosed (even though not claimed) in the Technology, whether patentable or
unpatentable, and which have no substantial use as Food Packages (hereinafter
"New Use"), Sublicensee shall give written notice of such New

Use to ECC (the "New Use Notice") within a reasonable time not to exceed ninety
(90) days of such a determination.  If ECC, or its Affiliates, does not have any
existing intellectual property protection (whether in the form of a patent
application, a trade secret, or the subject of previous or continuing research
and development) relating to the New Use, then ECC, or its assignee, shall have
the exclusive right to negotiate, for a period of ninety (90) days after the New
Use Notice, with Sublicensee for a license which will authorize ECC, or its
assignee, to manufacture, sell, and commercialize the New Use so long as the New
Use relates to materials, formulations, or compositions.  In any event
Sublicensee shall have the right to incorporate the New Use into Products
licensed hereunder and no additional Royalty will be due by virtue of the
incorporation of the New Use into Products licensed hereunder.  However, if the
New Use relates to machinery and equipment, the Sublicensee shall have the
option to negotiate, or to not negotiate, with ECC, or its assigns, for a
license to manufacture, sale and commercialize the New Use relating to machinery
and equipment.  However, if Sublicensee desires to sell the licensing rights of
such New Use relating to machinery and equipment, Sublicensee shall provide a
first right of refusal to ECC to acquire the such licensing rights on the same
terms and conditions as agreed to by a third party.  Sublicensee and ECC will
negotiate in good faith the terms of the license for the New Use.  In the event
that ECC, or its Affiliates, is seeking or has been granted patent protection on
the compositions, formulations, or materials to be incorporated into the New
Use, ECC, or its Affiliates will in good faith negotiate to grant Sublicensee a
license to incorporate such compositions, formulations or materials into the New
Use.  Failure of ECC and Sublicensee to agree on a license agreement shall not
give rise to any right on the part of either party

to seek to resolve the impasse (i) through arbitration under this Sublicense
Agreement or (ii) otherwise.  It is expressly understood by the parties hereto,
that an Improvement in the manufacturing process is the sole and exclusive right
and property of the Sublicensee; disclosure of such information is subject to
the confidentiality provisions of this Sublicensee Agreement or as may otherwise
apply; and the licensing of the same to ECC is subject to negotiation of an
agreement on terms mutually acceptable to ECC and Sublicensee.

         8.   INFRINGEMENT MATTERS.

              (a)  ECC and Sublicensee will promptly notify (within 30 days)
one another of any apparent infringement of the Technology (whether or not such
apparent infringement is within the Field of Use) or of the Trademarks which
comes to their attention while the Sublicense remains in effect, and if in ECC's
opinion the apparent infringement has substantial and adverse consequences ECC
shall, at its sole cost and expense, bring suit to enjoin such infringement and
to recover damages therefor. In any action brought by ECC pursuant to paragraph
8(a) hereof, ECC shall select and control counsel for the prosecution of such
suit.  Sublicensee shall (i) have the right to receive, from time to time, full
and complete information from ECC concerning the status of such suit, (ii) have
the right, at Sublicensee's own expense, to be represented therein by counsel in
an advisory capacity, and (iii) cooperate fully with ECC and provide whatever
assistance is reasonably requested by ECC in connection with such suit including
the preparation and signing of documents.  If ECC decides not to bring suit to
enjoin an alleged infringement either because it is deemed inadvisable or de
minimis, no such action will be required by ECC; however, in the event the
action taken by ECC is not satisfactory to Sublicensee, then Sublicensee shall
have the right, at its sole discretion,

and at its sole cost, to take whatever action it deems appropriate in its own
name against an alleged infringer.  If the rules of the jurisdiction in which
the claim or suit is brought require the naming of ECC or its licensor, then
Sublicensee may make such claim or bring such suit in the name of ECC or its
licensor after first obtaining ECC's written consent, which consent shall not be
unreasonably withheld, however, Sublicensee shall indemnify ECC or its licensor
for any claim or judgment entered against ECC or its licensor as a result of
Sublicensee bringing such claim or suit in the name of ECC or its licensor.
Additionally, ECC shall (i) have the right to consult with Sublicensee prior to
Sublicensee pursuing such legal action and thereafter shall have the right to
receive, from time to time, full and complete information from Sublicensee
concerning any actions Sublicensee has taken against an alleged infringer; and
(ii) have the right, at ECC's own expense, to be represented by counsel in an
advisory capacity in any legal proceedings initiated by Sublicensee.

         (b)  The parties shall notify (within 30 days) each other of any claim
by any person that the use of the Technology with respect to any Product by
Sublicensee in the Fields of Use infringes the rights of such person or of the
commencement of any lawsuit against ECC, Sublicensee, or any customers of the
foregoing, as the result of such alleged infringement.  ECC shall assume and
control the defense of any such lawsuit, at its sole cost and expense,
irrespective of whether ECC is named as a defendant in such litigation.
Sublicensee will assist ECC in the defense of such suit or action by providing
information and fact witnesses as needed; provided, however, that ECC shall
reimburse Sublicensee for all out-of-pocket costs, excluding attorney fees
except as pre-approved by ECC, incurred by Sublicensee in connection with such
action by allowing a credit or offset against the Royalty

due hereunder.  If Sublicensee is enjoined or otherwise precluded by law from
exercising its rights under this Agreement, then ECC shall directly reimburse
Sublicensee for all of Sublicensee's out-of-pocket costs incurred in the defense
of such suit.  Sublicensee shall have the right to be represented in such suit
or action by its own legal counsel, at its own expense, provided that such legal
counsel will act only in an advisory capacity.  If ECC decides to not assume the
defense of any infringement lawsuit described in this paragraph 8(b),
Sublicensee shall have the right, but not the obligation, to assume the defense
of such lawsuit utilizing legal counsel of its choice.  Additionally,
Sublicensee will indemnify and hold ECC and its licensor of the Technology
harmless from and against, and hereby assumes liability for the payment of any
and all loss, liability or damage, and for all costs and expenses, including
reasonable costs of investigation and reasonable attorneys, accountants and
expert witness fees (collectively "Losses") that may be imposed upon, suffered
or incurred by ECC and its licensor of the Technology as a consequence of or in
connection with any lawsuit described in this paragraph 8(b), but only to the
extent that such lawsuit and resulting liability is based on matters other than
the Technology licensed hereunder.

              (c)  If, as the result of any lawsuit referred to in paragraph
8(b) hereof, Sublicensee is required by final court order from which no appeal
can be taken (or by a court order which ECC's legal counsel believes has no
reasonable likelihood of success for modification on appeal) to obtain a license
under any third party's patent not licensed hereunder in order to continue with
Sublicensee's activities as contemplated by this Agreement, and to pay a royalty
under such license, and the infringement of such patent cannot reasonably be
avoided by Sublicensee, the future payment of the Royalty shall

thereafter be reduced by an amount equal to 100% of any fee or royalty payable
by Sublicensee under such additional license (including all payments under such
agreement whether for periods prior to such agreement or order) as long as the
infringement was due to the Technology licensed hereunder.  In addition, if
Sublicensee settles an infringement action referred to in paragraph 8(b) hereof,
after obtaining the prior written consent of ECC (which shall not be
unreasonably withheld), and pursuant to such settlement Sublicensee obtains a
license under any patent not licensed hereunder, to convert materials into,
use or sell the Products in any manner contemplated by this Agreement, and
agrees to pay a royalty under such license, and the infringement of such patent
cannot reasonably be avoided by Sublicensee, the Royalty shall thereafter be
reduced by an amount equal to 100% of the sum payable by Sublicensee pursuant to
such settlement as long as the settlement was for claims of infringement due to
the Technology licensed hereunder.

         9.   PRODUCT LIABILITY INDEMNIFICATION.

              (a)  NEITHER ECC NOR ITS LICENSOR OF THE TECHNOLOGY MAKE OR GIVE,
AND THEY HEREBY EXPRESSLY DISCLAIM ANY AND ALL WARRANTIES, WHETHER EXPRESS OR
IMPLIED, WRITTEN OR ORAL, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF
MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE, IN REGARD TO ANY
PRODUCTS WHICH MAY BE CONVERTED, USED OR SOLD BY SUBLICENSEE AND WHICH ARE BASED
UPON OR UTILIZE THE TECHNOLOGY.  Sublicensee acknowledges and agrees that
neither ECC nor its licensor of the Technology have previously made or presently
make any of the foregoing warranties or representations.  Sublicensee will

indemnify and hold ECC and its licensor of the Technology harmless from and
against, and hereby assumes liability for the payment of any and all loss,
liability or damage, and for all costs and expenses (including reasonable costs
of investigations and reasonable attorneys, accountants, and expert witness
fees) that may be imposed upon, suffered or incurred by, or successfully
asserted against ECC or its licensor of the Technology as a consequence of or in
connection with any liability relating to any Product which is converted, used
or sold by Sublicensee, except to the extent that the liability arises from the
negligence of ECC or from the Technology licensed hereunder.  In the event any
action, suit or proceeding is brought against ECC or its licensor of the
Technology with respect to which there may be indemnity pursuant to this
paragraph 9, the defense of such action, suit or proceeding (including all
settlements and arbitrations, trials, appeals or other proceedings) shall be
conducted by Sublicensee at its sole cost and expense through legal counsel
selected by Sublicensee.  ECC and its licensor of the Technology shall have the
right to participate in such defense at their own expense through legal counsel
of their choice.  If Sublicensee fails to defend any such action, suit or
proceedings, for any reason, such failure shall constitute a material breach of
this Agreement by Sublicensee and ECC or its licensor of the Technology may
undertake defense of such action, suit or proceeding, through legal counsel of
their choice, at the sole cost and expense of Sublicensee.  The parties shall
make available to one another, their legal counsel and accountants, all
information and documents reasonably available to them which relate to such
action, suit or proceeding and shall render such other assistance as they may
reasonably require of one another in order to insure the proper and adequate
defense of any such action, suit or proceeding.

         (b)  In addition to the indemnification provided by paragraph 9(a)
hereof, Sublicensee shall obtain, and shall maintain during the entire term of
this Agreement, a product liability insurance policy with a reputable insurance
carrier reasonably acceptable to ECC.  Such policy shall provide Sublicensee
product liability coverage in an amount typical for the industry, for Products
which are converted, used or sold by Sublicensee.  Such product liability
insurance policy shall name ECC and its licensor of the Technology as additional
insureds and shall provide that ECC will be given thirty (30) days prior written
notice of any termination or cancellation of the policy.  Upon ECC's request,
Sublicensee shall provide ECC with a copy of such policy and of all amendments
or modifications thereto.  Sublicensee shall be required to obtain and maintain
the product liability insurance policy called for by the foregoing provisions of
this paragraph 9(b) only from and after the date of the first commercial sale of
a Product by Sublicensee, or the first public testing of a Product by
Sublicensee.  Notwithstanding the foregoing, due to Sublicensee's substantial
net worth, Sublicensee shall not be required to obtain and maintain the product
liability insurance required in paragraph 9(b) hereof, however, Sublicensee
shall be required to reimburse ECC or its licensor for any loss suffered by ECC
or its licensor which would have been covered under the product liability
insurance policy Sublicensee otherwise would have been required to obtain under
this paragraph 9(b) which would have listed ECC and its licensor of the
Technology as additional insureds.

         10.  ADDITIONAL DUTIES OF THE SUBLICENSEE.  In addition to, and not in
limitation of, the other duties and obligations of Sublicensee, as set forth in
this Agreement, Sublicensee shall:

              (a)  Use all reasonable commercial efforts to diligently exploit
the Sublicense by developing a commercial converting capacity for the Products
and by actively converting, marketing, advertising and selling the Products
within the Territory.

              (b)  Prominently display and utilize the principal Trademark or
Trademarks (whether owned by or licensed to ECC), as designated by ECC from time
to time, in connection with the advertisement, marketing, distribution and sale
of the Products.  The right to use such designated Trademark or Trademarks will
automatically be included within the Sublicense herein granted.  Sublicensee,
unless waived by ECC, shall use its best efforts to cause each Product converted
by Sublicensee to bear at least one of the Trademarks designated by ECC.  The
specific placement, size, and detail of the Trademark on each Product must be
approved by ECC, but shall not be required to be placed on a Product in such a
size, placement, detail or configuration so as to impair the marketability of
the Product.  In connection with the use of such licensed marks, Sublicensee
shall not in any manner represent that it has any ownership interest therein.
Sublicensee acknowledges that use of the Trademarks shall not create in its own
favor any right, title, or interest in or to the Trademarks, but that all uses
of these marks by Sublicensee shall inure to the benefit of ECC or its licensor
of the Trademarks.  Sublicensee shall cooperate with ECC or its licensor of the
Trademarks in the execution of any appropriate and necessary documents in
connection with the registration of any Trademarks.  Upon termination of this
Agreement, Sublicensee 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 such marks.  However, in the event of termination, Sublicensee shall have
the right to sell existing stock and inventory of converted

Products for a period of one hundred and eighty days and thereafter shall
deliver to ECC or its duly authorized representative all materials upon which
the Trademarks appear.

              (c)  Not challenge or impugn the validity or ownership of the
Trademarks.
              (d)  Continue to make all required payments under this Agreement
to ECC during any challenge of the validity of any of the patents (or claims
thereof) issued in connection with the Technology.  In the event Sublicensee
terminates such payments based upon or in connection with such a challenge, ECC
may at its option terminate this Agreement upon written notice to Sublicensee.

              (e)  If Sublicensee is a publicly traded corporation or is
otherwise required to publicly disseminate its financial statements, Sublicensee
shall provide ECC with annual financial reports of Sublicensee which are
published and detail Sublicensee's annual earnings and statement of net worth
for the preceding calendar or fiscal year.  If there are no published reports,
then Sublicensee shall provide special reports of sales of Products and Gross
Sales Price of the same.  If Sublicensee is required to file financial reports
with the S.E.C., then Sublicensee may provide ECC with copies of those financial
reports required to be filed with the SEC in lieu of the foregoing.

         11.  REPRESENTATIONS AND WARRANTIES of ECC.  ECC hereby represents and
warrants to Sublicensee that:

              (a)  ECC is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.  ECC has all requisite
power and authority to own, operate and lease its properties and to carry on its
business as now being conducted, and is duly qualified to do business in every
jurisdiction wherein the nature of the business

conducted or the assets owned or leased by it make such qualification material
to the conduct of its business.

              (b)    ECC has all requisite power and authority to enter into
this Agreement and to perform its obligations hereunder including but not
limited to the right to sublicense the Technology.  This Agreement has been duly
and validly authorized, executed and delivered by ECC and assuming the due
authorization, execution and delivery by Sublicensee is the legal, valid and
binding obligation of ECC, enforceable against it in accordance with its terms,
subject only to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and to general
principles of equity.

              (c)  ECC has made no assignments, grants, licenses, encumbrances,
obligations or agreements which are in conflict with this Agreement.

              (d)  To the best knowledge of ECC, no person, firm or entity has
made any claims or threatened, in writing or otherwise, that ECC is in violation
of or has infringed any patent, patent license, trade name, trademark, service
mark, brand mark, brand name, copyright, know-how, formula or other proprietary
or trade rights of such third party as they relate to the Technology.  ECC is
not now in possession of and at no time has received any information which would
render any claims essential to the commercial utilization of the Technology
invalid and/or unenforceable.  To the best of ECC's present knowledge and
belief, the use of the Technology in the conversion of materials into the
Products pursuant to the terms of this Agreement will not constitute
infringement of the proprietary rights of any third party.

              (e)  The execution, delivery and performance of this Agreement by
ECC and the consummation by it of the transactions contemplated hereunder, do
not and will not conflict with or result in a breach or termination of any term
or provision of, or constitute a default under any other agreement, or result in
the creation of any lien, charge or encumbrance upon any of its properties or
assets pursuant to any corporate charter, bylaw, mortgage, deed of trust,
indenture or other agreement or instrument, or any order, judgment, decree or
like restriction, statute or regulation by which it or any of its assets and
properties may be bound.  The representation and warranty given in this
paragraph 11(e) shall not be deemed or construed to expand or modify the
representation and warranty given by ECC in paragraph 11(d) hereof.

              (f)  The execution, delivery and performance of this Agreement by
ECC and the consummation by it of the transactions contemplated hereby will not
(i) constitute a violation (with or without the giving of notice or lapse of
time) of any provision of applicable law, (ii) require any consent, approval or
authorization of any person or governmental authority, (iii) result in a default
under, acceleration or termination of, or the creation in any party of the right
to accelerate, terminate, modify or cancel any agreement, lease, franchise,
permit, note or other restriction, encumbrance, obligation or liability to which
ECC is a party or by which it is bound or to which any of its assets are
subject, (iv) result in the creation of any lien or encumbrance upon ECC's
assets, (v) conflict with or result in the breach of or constitute a default
under any provision of ECC's certificate of incorporation or bylaws, or (vi)
conflict with, result in a tortious interference as a result of such conflict
with, or otherwise violate, any contract or arrangement between ECC and any
other person.

The representation and warranty given in this paragraph 11(f), shall not be
deemed or construed to expand or modify the representation and warranty given by
ECC in paragraph 11(d) hereof.

              (g)  Neither ECC, nor anyone acting on its behalf, has taken any
action relating to any broker, finder, consultant or other expert which could
result in the imposition upon the Sublicensee of any obligation to pay a fee to
any broker, finder, consultant or similar expert in connection with the
transactions contemplated hereby.

              (h)  ECC has the full right and power to grant to Sublicensee
this sublicense to use the Technology in the conversion of materials into
Products and the sale and distribution of the Products.

         12.  REPRESENTATIONS AND WARRANTIES OF SUBLICENSEE.  Sublicensee hereby
represents and warrant to ECC that:

              (a)  Sublicensee is a Corporation duly organized, validly
existing and in good standing under the laws of the State of New York.
Sublicensee has all requisite power and authority to own, operate and lease its
properties and to carry on its business as now being conducted, and is duly
qualified to do business in every jurisdiction wherein the nature of the
business conducted or the assets owned or leased by it make such qualification
material to the conduct of its business.

              (b)  Sublicensee has all requisite power and authority to enter
into this Agreement and to perform its obligations hereunder.  This Agreement
has been duly and validly authorized, executed and delivered by Sublicensee and
assuming the due authorization, execution and delivery by ECC, is a legal, valid
and binding obligation of Sublicensee,

enforceable against it in accordance with its terms, subject only to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and to general principles of equity.

              (c)  The execution, delivery and performance of this Agreement 
by Sublicensee, and the consummation by it of the transactions contemplated 
hereunder, do not and will not conflict with or result in a breach or 
termination of any term or provision of, or constitute a default under, any 
other agreement, or result in the creation of any lien, charge or encumbrance 
upon any of its properties or assets pursuant to any charter or similar 
document, mortgage, deed of trust, indenture or other agreement or 
instrument, or any order, judgment, decree or like restriction, statute or 
regulation by which it or any of its assets and properties may be bound.

              (d)  The execution, delivery and performance of this Agreement by
Sublicensee and the consummation by it of the transactions contemplated hereby
will not (i) constitute a violation (with or without the giving of notice or
lapse of time) of any provision of applicable law, (ii) require any consent,
approval or authorization of any person or governmental authority, (iii) result
in a default under, acceleration or termination of, or the creation in any party
of the right to accelerate, terminate, modify or cancel, any agreement, lease,
franchise, permit, note or other restriction, encumbrance, obligation or
liability to which Sublicensee is a party or by which it is bound or to which
any of its assets are subject, (iv) result in the creation of any lien or
encumbrance upon Sublicensee assets, (v) conflict with or result in the breach
of or constitute a default under any provision of Sublicensee's charter
documents, or (vi) conflict with, result in tortious interference as a result of
such conflict

with, or otherwise violate, any contract or arrangement between ECC and any
other person.

               (e) Neither Sublicensee, nor anyone acting on its behalf, has
taken any action relating to any broker, finder, consultant or other expert
which could result in the imposition upon ECC of any obligation to pay a fee to
any broker, finder, consultant or similar expert in connection with the
transactions contemplated hereby.

         13.  SURVIVAL OF REPRESENTATIONS AND WARRANTIES.  The representations
and warranties of the parties, as set forth herein, shall be true and accurate
as of the effective date of this Agreement, and shall survive the execution of
this Agreement

         14.  INDEMNIFICATION.  In addition to the indemnification provisions
provided elsewhere in this Agreement:

              (a)  ECC will indemnify and hold Sublicensee harmless from and
against, and hereby assumes liability for, the payment of any loss, liability or
damage, and for all costs and expenses (including reasonable costs of
investigation and reasonable attorneys, accountants and expert witness fees)
(collectively "Losses") of whatsoever kind and nature that may be imposed upon,
suffered or incurred by or successfully asserted against Sublicensee as a
consequence of or in connection with any misrepresentation or breach of any
warranty, covenant or agreement of ECC contained in this Agreement.  However,
ECC's liability to Sublicensee for (i) any matter arising under this Agreement,
or (ii) any claims asserted against Sublicensee which relate, in whole or in
part, to the Technology, shall be limited to the total amount of all Royalties
paid to ECC by Sublicensee under this Agreement.

              (b)  Sublicensee will indemnify and hold ECC harmless from and
against, and hereby assumes liability for, the payment of all Losses of
whatsoever kind and nature

that may be imposed upon, suffered or incurred by or successfully asserted
against ECC as a consequence of or in connection with any misrepresentation or
breach of any warranty, covenant or agreement of Sublicensee contained in this
Agreement.  However, Sublicensee's liability to ECC under this paragraph 14(b)
shall be limited to the total amount of all Royalties paid to ECC by Sublicensee
under this Agreement.

              (c)  Neither party shall have any liability to the other party
pursuant to an indemnity provided by this paragraph 14 unless and until the
aggregate amount of all indemnified Losses suffered or incurred by such
indemnified party after the effective date hereof equals or exceeds $100,000, at
which time the indemnifying party shall be obligated to pay the indemnified
party the full amount of all indemnified Losses, including such initial $100,000
in Losses.  The amount of indemnity payable pursuant to this paragraph 14 shall
be calculated after giving effect to any insurance proceeds actually received by
the indemnified party provided that neither party shall subrogate to any
insurance carrier any rights or claims which it may have against the other
party.
         15.  CONFIDENTIALITY.

              (a)  Sublicensee acknowledges that ECC claims that the
Technology, as it may exist from time to time as well as the other confidential
or propriety information (including business and financial information) of ECC
(whether owned by ECC or acquired by license from third parties) are and shall
remain the valuable, special, unique and proprietary assets of ECC, and shall
constitute "Confidential Information" hereunder.  In order for any information
other than the Technology to be deemed to be "Confidential Information"
hereunder, whether disclosed orally or in writing, it must be identified, orally
or in writing,

to Sublicensee as "Confidential Information" at time of disclosure, or
reasonably thereafter, or be reasonably understood by Sublicensee to be
"Confidential Information."  Additionally, as used herein, "Confidential
Information" shall not include any information or data which Sublicensee can
show: (i) is in, or becomes a part of, the public domain by any means other than
the failure by Sublicensee to fulfill its obligations hereunder; or (ii) is
rightfully known to Sublicensee at the time of disclosure by ECC; or (iii) is,
at any time, disclosed to Sublicensee by a third party who has received and
disclosed such information without the breach of any obligation of
confidentiality to ECC or to any third party assignor of such Confidential
Information.  For purposes of this paragraph 15(a), information shall not be
deemed to be part of the public domain or in Sublicensee's knowledge merely
because it may be embraced in a more general disclosure or simply because it may
be derived from combinations of disclosures or information generally available
to the public or within Sublicensee's knowledge.  The parties acknowledge that
disclosure to Sublicensee of Confidential Information will be necessary in order
to enable Sublicensee to utilize the Sublicense in the manner contemplated by
this Agreement, and ECC will make such disclosures of the Confidential
Information to Sublicensee as is necessary, required or appropriate in that
regard.  To the extent that the disclosure of such Confidential Information is
deemed to be a transfer of the Technology licensed hereunder, such Technology
transfer shall be carried out pursuant to the provisions of paragraph 31 hereof.
The parties acknowledge that they have a confidential relationship with one
another and accordingly Sublicensee shall maintain all Confidential Information
disclosed to it pursuant to this Agreement in confidence and shall not disclose
the same to any third party (with the exception

of its employees, accountants, attorneys and other agents and professional
advisors) either during or after the term of this Agreement unless required to
do so by court order or by law, in which case Sublicensee shall notify ECC, in
writing, prior to making such disclosure and shall cooperate with ECC to
preserve and protect the confidentiality of the Confidential Information in
question to the fullest extent possible.  Additionally, except as specifically
contemplated by this Agreement, Sublicensee shall not utilize any Confidential
Information for its own benefit or for the benefit of any third party.  Prior to
making any permitted disclosure of any Confidential Information to its
employees, accountants, attorneys and other agents and professional advisors,
Sublicensee shall require such persons, firms, or entities to execute and
deliver written disclosure agreements which shall obligate such persons, firms
and entities to comply with the same obligations of confidentiality and non-use
as imposed upon Sublicensee in this paragraph 15(a).  The obligation of
confidentiality as it relates to the Confidential Information shall survive the
termination of this Agreement.

              (b)  From time to time during the term of this Agreement,
Sublicensee may disclose to ECC certain information which Sublicensee deems to
be proprietary and confidential, including but not limited to business plans,
marketing plans, financial information, and process technology (the "Sublicensee
Confidential Information").  The definition of "Sublicensee Confidential
Information," and ECC's use and disclosure thereof, shall be governed by terms
and conditions identical to those which govern Confidential Information, as set
forth in paragraph 15(a) hereof; provided that ECC shall have the right to
disclose Sublicensee Confidential Information to ECC's licensor of the
Technology subject to its accepting and treating it as Confidential Information.

         16.  TERM AND TERMINATION.

              (a)  The term of this Agreement shall commence upon the effective
date hereof.  Unless sooner terminated as hereinafter provided, this Agreement
shall continue in full force and effect until the expiration of the last
material and substantial United States patent covering the Technology which is
utilized by Sublicensee, or for so long as Sublicensee produces a Product which
utilizes material and substantial proprietary information or a material and
substantial Trade Secret of ECC.  Provided, however, that upon the expiration of
the last aforementioned patent, if Sublicensee desires to continue the Agreement
in force, it will be subject to an appropriate negotiated adjustment to the
Royalty Payments or License Fee.  Any dispute as to the term of this Agreement
shall be resolved by arbitration pursuant to paragraph 26 of this Agreement.

              (b)  The Sublicense may be terminated, at any time, by the mutual
written consent of the parties hereto.

              (c)  Sublicensee may terminate this Agreement, at any time, with
or without cause, upon sixty (60) days' prior written notice of such termination
to ECC.

              (d)  If Sublicensee or ECC is in breach of any of its material
obligations hereunder, then the non-breaching party may give the breaching party
written notice of such breach.  If such breach is not cured within ninety (90)
days from the date such written notice is delivered, or if such default can not
be cured within such ninety day period but the breaching party has taken action
to cure such default then if the default is not cured within one hundred eighty
(180) days from the date of the original notice, the non-breaching party

shall have the right to immediately terminate the Sublicense by written notice
to the breaching party.

              (e)  If a bankruptcy reorganization proceeding, not including a
voluntary proceeding under Chapter 7 of the U.S. Bankruptcy Code, shall be
commenced by or an involuntary proceeding be commenced against the Sublicensee,
this Sublicense shall terminate effective as of the date of such filing, unless
the Sublicensee shall assume such Sublicense in accordance with the provisions
of the U.S. Bankruptcy Code, including, but not limited to, Section 11 U.S.C.
365, and any applicable court order.

              (f)  Subject to the provisions of paragraph 27 (force majeure)
ECC shall have the right, at its sole discretion, to terminate the Sublicense,
upon thirty (30) days written notice to Sublicensee, in the event that the
amount of the Royalty payment for any calendar year is not at least 50% of the
Royalty payment amount for the preceding calendar year.

         17.  EFFECT OF TERMINATION OR TERMINATION.

              (a)  From and after the effective date of the expiration of the
term of this Agreement or the termination of the Sublicense pursuant to
paragraph 16 hereof Sublicensee shall have no right, whatsoever, to utilize the
Technology, (except for Improvements to which Sublicensee has the right to
continued use as provided in paragraph 6) or the Trademarks pertinent to this
Agreement, and shall return to ECC all copies of Confidential Information which
is then in the possession of Sublicensee or provide satisfactory assurances of
the destruction of all Confidential Information.  Provided, however, that
nothing contained herein shall or shall be deemed to restrict the Sublicensee's
ability or right to use, free of Royalty, any Technology, trade name, know-how
or confidential information which is or has come

into the Public Domain through no fault of Sublicensee and is not otherwise
deemed Confidential Information.  ECC shall also be required to return to
Sublicensee all copies of Confidential Information of Sublicensee which is then
in the possession of ECC or provide satisfactory assurances of the destruction
of all Confidential Information.

              (b)  The obligation of Sublicensee to pay to ECC the Royalty for
all Products actually sold by Sublicensee prior to the effective date of the
expiration or termination of this Agreement, as well as the obligations
concerning product liability set forth in paragraph 9 hereof and of
confidentiality set forth in paragraph 15 hereof, shall survive the expiration
or termination of the Sublicense and of this Agreement

         18.  MARKING AND UNITED STATES EXPORT CONTROL.

              (a)  Sublicensee shall mark all of the Products and related
documents with the applicable United States patent numbers, as required by
applicable law, or as instructed by ECC.

              (b)  Sublicensee shall comply with all applicable laws, rules and
regulations of the United States, including but not limited to the Export
Regulations of the United States Department of Commerce, in connection with
Technology or Products.  Sublicensee acknowledges that ECC has not made and does
not make any representation that any license is or is not required in connection
with such export or, if required, that such license will be issued by the United
States Department of Commerce, provided, however, that ECC shall apply for all
licenses required or necessary to enable the Sublicensee to export the Products
or Technology within the Territory without imposing any additional Royalty.

         19.  SPECIAL TAX PROVISIONS.  Sublicensee or its agents shall be
solely responsible for the payment and discharge of any taxes, duties, or
withholdings relating to any transaction of Sublicensee or its agents in
connection with the conversion, use, sale or commercialization of the Technology
or the Products; except that ECC shall be responsible for taxes, duties or
withholding relating to the payment to ECC of any Royalty payment under this
Agreement and Sublicensee shall be permitted to perform any withholding with
respect to such payments and fees required by law or regulation.

         20.  RELATIONSHIP OF THE PARTIES.  This Agreement shall not create any
partnership, joint venture or similar relationship between the parties hereto
(or ECC's Affiliates) and no representation to the contrary shall be made by
either party.  Neither party shall have any authority to act for or on behalf of
or to bind the other party in any fashion, and no representation to the contrary
shall be made by either party.

         21.  NOTICES.  Any notice which is required or permitted to be given
to ECC or Sublicensee pursuant to this Agreement shall be deemed to have been
given only if such notice is reduced to writing and delivered personally, or by
United States mail with postage prepaid and return receipt requested, or by
telecopier (FAX) transmission, confirmed by letter United States mail with
postage prepaid and return receipt requested, or by reputable overnight courier
(pursuant to instructions requiring next-day delivery) to the person in question
as set forth below:

         ECC:             EarthShell Container Corporation
                          800 Miramonte Drive
                          Santa Barbara, California 93109-1419
                          Attention: Mark A. Koob
                          Fax: (805) 897-2298

         Sublicensee:   International Paper Company
                        6400 Poplar Avenue
                        Memphis, TN 38197
                        Attention: Dennis J. Colley
                        Fax: (901) 763-6048

ECC or Sublicensee may change its address by giving notice of such change in the
manner set forth herein.  If delivered personally, a notice shall be deemed
delivered when actually received at the address specified herein.  Any notice
given by mail shall be deemed delivered three (3) days following the date upon
which it is deposited in the mail, with postage prepaid and return receipt
requested.  Any notice given by FAX shall be deemed delivered on the date it is
actually transmitted to the person in question at the FAX number specified
above.  Any notice given by overnight courier shall be deemed delivered on the
next business day following the date it is placed in the possession of such
courier.

         22.  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 contains the entire agreement between the parties in regard to the
subject matter hereof.  This Agreement may not be changed or modified orally,
but only by an agreement, in writing, signed by both the parties hereto.
Nothing contained in this Agreement shall be deemed or construed to supersede,
modify or amend the License Agreement.

         23.  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.

         24. WAIVER.  Neither the failure or delay on the part of either party
to exercise any right, power or privilege hereunder shall operate as a wavier
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.

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

         26.  RESOLUTION OF DISPUTES.

              (a)  In the event of a breach of this Agreement, or a dispute as
to the meaning of this Agreement, or any of its terms which the parties cannot
resolve by themselves amicably, the parties agree to submit such dispute to
resolution in the manner hereinafter described.  First, the parties shall
endeavor to resolve the dispute through the use of an acceptable alternative
dispute resolution procedure.  If within 30 days after one party notifies the
other in writing of the existence of a dispute which it desires to be resolved
under this paragraph the parties have not agreed upon an acceptable alternative
dispute resolution procedure, then the matter shall be resolved by arbitration
as set forth below and according to the rules of the American Arbitration
Association except as herein modified by the parties.  Unless otherwise agreed
to in writing, all alternative dispute resolutions or arbitration hearings will
be held in Santa Barbara, California.

              (b)  Within 10 days after the failure to agree to an acceptable
alternative dispute resolution procedure, each party will select an arbitrator,
and notify the other party

of its selection.  Within 15 days after such notice, the respective arbitrators
will select a third arbitrator as Chairman of the panel.  A hearing by the
arbitration panel must be held within 30 days after the selection of the
Chairman and a majority decision and resolution must be reached within 30 days
of such hearing.  Decisions of the panel must be in writing and will be final
and binding on the parties, and judgment may be entered thereon by any court
having jurisdiction of the parties.

              (c)  Each party shall bear its own cost of presenting its case in
an alternative dispute resolution procedure, or arbitration, as the case may be.

              (d)  The validity, construction and performance of this Agreement
shall be governed by and interpreted in accordance with the laws of the State of
California (as if all aspects of the Agreement were to be performed in
California).

         27.  FORCE  MAJEURE.

         (a)  The failure of either party to perform its obligations under this
Agreement (except the obligation to make payments) shall not subject such party
to any liability to the other or subject this Agreement to termination if such
failure is caused by acts such as, but not limited to, acts of God, work-
stoppage or slow-downs, fire, earthquake, explosion, flood, drought, war, riot,
sabotage, embargo, compliance with any order or regulation of any governmental
entity acting with color of right, intervention or delays created by any
regulatory authority, or by any other cause beyond the reasonable control of the
parties.  The party so affected shall promptly notify the other party of the
event of force majeure, and shall use all reasonable efforts to remove such
event as soon as reasonably practicable.

         28.  TIME OF ESSENCE.  The parties acknowledge that time is of the
essence in regard to every provision of this Agreement.

         29.  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.

         30.  TERMINOLOGY.  As used in this Agreement, the singular shall
include the plural and the plural shall include the singular.  Titles of
sections and paragraphs in this Agreement are for convenience only, and neither
limit or amplify the provisions of the Agreement, and all references in this
Agreement to a section or paragraph shall refer to the corresponding section or
paragraph of this Agreement unless specific reference is made to the sections of
another document or instrument.  The term Sublicensee shall include the
Sublicensee or its permitted Assignee(s) as applicable.

         31.  TECHNOLOGY TRANSFER, PRODUCT DESIGN AND QUALITY CONTROL.

              (a)  It is contemplated that within six (6) months from the
execution of this Agreement, ECC and Sublicensee shall enter into a mutually
agreeable Technology Transfer Agreement to provide for the transfer of the
Technology license hereunder.  The Technology Transfer Agreement shall also
provide for Quality Control Audits, as defined and agreed to in the Technology
Transfer Agreement, to be periodically performed by ECC or its agents.  If ECC
approves the internal professional staff of Sublicensee to carry out the
transfer of Technology and to supervise the required quality control procedures,
this will be set forth in the Technology Transfer Agreement between ECC and
Sublicensee.  If for any reason a mutually agreeable Technology Transfer
Agreement is not entered into within the six (6) month period, either party may
terminate this Agreement upon written notice within 30 days after the expiration
of the six (6) month period and the parties shall have no further liability or
obligation hereunder (including but not limited to any liability on the part of
ECC to

reimburse Sublicensee for any moneys, resources, or damages incurred or expended
before or after the execution of this Agreement), except that both parties shall
have a continuing duty and remain liable for damages related to the ongoing duty
regarding Confidential Information.

              (b)  Contemporaneous with the execution of the Technology
Transfer Agreement, ECC shall deliver a disclosure sufficient to teach one of
ordinary skill in the art how to use the Technology in order to convert
materials in the form of paper stock manufactured from the Technology into the
Products.  It is contemplated that this disclosure shall include the procedures
and research data necessary to implement the Technology for the conversion of
materials incorporating the Technology into the Products.

         32.  MATERIALS SUPPLY.  Within six (6) months following the execution
of this Agreement but not before execution of the Technology Transfer Agreement,
ECC will submit to Sublicensee a list of approved manufacturers of the Aliite
paper analog material, which manufacturers shall supply the material in the size
and dimensions satisfactory to Sublicensee.  If Sublicensee desires to have
other manufacturers added to this list, Sublicensee shall submit the same to ECC
who in turn will verify that such manufacturer or manufacturers have the
capability to furnish such Aliite paper analog materials meeting ECC's
specifications, and if said Manufacturer or manufacturers are able to do so,
then they will be added to the approved list.  If for any reason this
information is not sufficient to satisfy Sublicensee's need to establish
acceptable sources of the Aliite paper analog materials, Sublicensee may
terminate this Agreement and neither party will have any further liability or
obligation hereunder except for the ongoing duty regarding Confidential
Information.

         33.  MCDONALD'S CORPORATION.  Because of work jointly undertaken by
ECC and McDonald's Corporation ("McDonald's") (as used herein the term
"McDonald's" shall include franchisees thereof) with regards to studies of
market potential and Food Package design, it has been agreed that McDonald's is
to have a "lead time" or "priority" with regard to the distribution of certain
Products that are ordered by it and covered by this Sublicense Agreement.  Prior
to the execution of the Technology Transfer Agreement, ECC will deliver to
Sublicensee a list of these priority Products.  In compliance with this
arrangement, it is expressly understood and agreed that, for a period of two (2)
years from the date hereof, the license hereby granted is subject to Sublicensee
agreeing not to fill orders from, or deliver any priority Products to, on a
region by region basis, any entity in the food service or fast food industry
other than McDonald's until such time as all such priority Products ordered for
McDonald's in a specific region have been converted, shipped or otherwise set
aside for delivery to McDonald's by the Sublicensee.  A region shall be that
geographical area which is serviced by a specific "distribution center" which
supplies products solely or primarily to McDonald's in that geographical area.

         34.  SUBLICENSES.  ECC agrees that all sublicenses (within the
Territory) granted by it will contain substantially the same terms and
conditions so that no sublicensee will gain a material advantage over another
sublicensee by virtue of the sublicense agreement including any letter
agreements or letter of clarification issued or entered into in connection with
any such sublicense.

         35.  PRODUCT DEFECTS.  Should any Products converted, sold or
otherwise commercialized by Sublicensee contain any material defect in its
appearance or function,

Sublicensee shall cease any further conversion, sale or other commercialization
of such Products containing such material defect.  Unless Sublicensee corrects
such defect within a reasonable time following its discovery by or disclosure to
Sublicensee, Sublicensee shall be in breach of a material obligation of this
Agreement.

         36.  INTELLECTUAL PROPERTY RIGHTS.  In the absence of an express
written understanding to the contrary between Sublicensee and ECC, and other
than expressly as provided for in this Agreement, Sublicensee and ECC each shall
retain all property, trademarks, and other intellectual property rights which
each respective party may now posses or own, or for which each respective party
has made application, with respect to its businesses, and neither party shall
acquire any right, title, interest, or license in any of the rights or
properties belonging to the other as a result of this Agreement, or as a result
of any dealings between the parties pursuant to this Agreement.

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

ECC:                                         SUBLICENSEE:
EarthShell Container Corporation             International Paper Company

By: /s/ Mark A. Koob                        By: /s/ Dennis J. Colley
   -------------------------                   -------------------------
        Mark A. Koob                                Dennis J. Colley

Its:    President                            Its:    General Manager
                                                     Folding Carton Division

                                      EXHIBIT A

I.       TECHNOLOGY

         The term "Technology" as defined in paragraph 1(f), includes the
technology within the scope of the following issued patents and patent
applications which have been filed as of the execution date of this Agreement,
but only to the extent that such technology has been licensed to ECC and is
directly utilized in the "Field of Use".  The patents and patent applications
identified in this Exhibit "A" are merely to identify the proprietary technology
reference in paragraph 1(f); nothing in this Exhibit "A" is otherwise intended
to expand the scope of the definition of "Technology" as defined in paragraph
1(f).

         ISSUED UNITED STATES LETTERS PATENTS

1.       U.S. Letters Patent No. 4,225,247 issued September 30, 1980, and
         entitled "mixing and Agitating Device."

2.       U.S. Patent No. 4,552,463 issued November 12, 1983, and entitled
         "Methods and Apparatus for Producing a Colloidal Mixture."

3.       U.S. Letters Patent No. 4,889,428 issued December 26, 1989, and
         entitled "Rotary Mill for Increasing the Degree of Hydration."

4.       U.S. Letters Patent No. 4,944,595 issued July 31, 1990, and entitled
         "Apparatus for Producing Cement Building Material."

5.       U.S. Letters Patent No. 5,061,319 issued October 29, 1991, and
         entitled "The Process for Producing Cement Building Material."

6.       U.S. Letters Patent No. 5,169,566 issued December 8, 1992, and
         entitled "Engineered Cementitious Contaminant Barriers and Their
         Method of Manufacture."

         2.   PENDING UNITED STATES PATENT APPLICATIONS

7.       U.S. Patent Application Serial No. 07/418,027 filed October 10, 1989,
         and entitled "Process for Producing Improved Building Material and
         Product Thereof."

8.       U.S. Patent Application Serial No. 08/050,705 filed April 21, 1993,
         and entitled "Methods of Manufacture and Use For Low Density
         Hydraulically Bonded Cement Compositions."

9.       U.S. Patent Application Serial No. 07/929,898 filed August 11, 1992,
         and entitled "Cementitious Food and Beverage Storage, Dispensing, and
         Packaging Containers and the Methods of Manufacturing Same."

10.      U.S. Patent Application Serial No. 07/981,615 filed November 25, 1992,
         and entitled "Methods of Manufacture and Use For Hydraulically Bonded
         Cement."

11.      U.S. Patent Application Serial No. 07/982,383 filed November 25, 1992,
         and entitled "Food and Beverage Containers Made from Inorganic
         Aggregates and Polysaccharide, Protein, or Synthetic Organic Binders,
         and the Methods of Manufacturing Such Containers."

12.      U.S. Patent Application Serial No. 08/019,151 filed February 17, 1993,
         and entitled "Cementitious Materials for Use in Packaging Containers
         and their Methods of Manufacture."

13.      U.S. Patent Application Serial No. 08/018,773 filed February 17, 1993,
         and entitled "Cementitious Materials--for Use in Cushioning, Spacing,
         Partitioning, Portioning or Wrapping Objects and the Methods of
         Manufacturing Such Materials."

14.      U.S. Patent Application Serial No. 08/027,451 filed March 8, 1993, and
         entitled "Laminate Insulation Barriers Having a Cementitious
         Structural Matrix and Methods for Their Manufacturing."

15.      U.S. Patent Application Serial No. 08/027,404 filed March 8, 1993, and
         entitled "Highly Insulative Cementitious Matrices and Method For
         Their Manufacture."

16.      U.S. Patent Application Serial No. 08/095,662 filed July 21, 1993, and
         entitled "Hydraulically Settable Containers and other Articles for
         Storing, Dispensing, and Packaging Food and Beverages and Methods for
         their Manufacture."

II.      TRADE SECRETS

         The term "Trade Secrets" as used in the Agreement shall include any
technical or business information, any invention, equipment or apparatus, method
or process, technology, know-how, trade secret, drawing, data, evaluation,
specifications, quality and inspection standards, sales literature, report,
business plan, memorandum, market study, customer lists, training materials,
computer program or software (including both source and object code), or any
other document or thing which is in whole or in part confidential, proprietary,
or secret and which is owned or controlled by, licensed or assigned to ECC or
for which ECC has the

right to grant licenses thereon during the term of this Agreement and which
relates in whole or in part to any of the following:

         1.   The compositions, including the variable and preferred parameters
              for each component, used in Food Packages or the Technology based
              on hydraulically reacting materials.

         2.   The processing steps, including the variable and preferred
              parameters for each step, used in the Technology.

         3.   The equipment and apparatus used in the manufacture of the
              Technology.

         4.   Quality control, testing and research and development data,
              reports, and information, including patent applications in
              preparation.

         5.   Customers and suppliers of the components and equipment of the
              Technology, including any agreements.

                                      EXHIBIT B

                                       PRODUCTS

For purposes of paragraph 1(e) of this Agreement, the term "Products" shall mean
those Food Packages in Sublicensee's present product lines, or Food Packages
substantially similar in nature, as follows:

              cups
              trays
              plates and bowls
              2-piece containers
              hinged containers
              single service milk/juice cartons
              french fry scoops
              hinge cover packages such as "Happy Meal" packages
              cones
              tube style packaging
              tuck style packages
              hinged containers such as clamshell designed packages
              dessert containers such as pie containers
              hash brown containers

Notwithstanding paragraph 2(e) of the Agreement, the term "Products" shall also
include Food Packages outside of Sublicensee's present product lines upon ECC's
prior written approval, which approval shall not be unreasonably withheld.
Sublicensee shall notify ECC of the specific Products Sublicensee intends to
produce and provide to ECC the specifications of each Product.  The foregoing
notice and product specifications shall be delivered to ECC no later than
thirty (30) days prior to commercial production of a Product.  Sublicensee shall
use reasonable efforts, to the extent of information available to Sublicensee,
to identify and report to ECC the end use of each Product.

 

Basic Info X:

Name: AGREEMENT
Type: Agreement
Date: Oct. 2, 1996
Company: EARTHSHELL CORP
State: Delaware

Other info:

Date:

  • October 21 , 1993
  • February 24 , 1993
  • January 1 , 1996
  • September 2 , 1993
  • September 30 , 1980
  • November 12 , 1983
  • December 26 , 1989
  • July 31 , 1990
  • October 29 , 1991
  • December 8 , 1992
  • October 10 , 1989
  • April 21 , 1993
  • August 11 , 1992
  • November 25 , 1992
  • February 17 , 1993
  • March 8 , 1993
  • July 21 , 1993

Organization:

  • E. Khashoggi Industries
  • definition of Field of Use
  • Affiliate of Sublicensee
  • the State of Delaware
  • Sublicensee of Confidential Information
  • Sublicensee Confidential Information
  • Confidential Information of Sublicensee
  • United States Department of Commerce
  • EarthShell Container Corporation 800 Miramonte Drive Santa Barbara
  • International Paper Company 6400 Poplar Avenue Memphis
  • American Arbitration Association
  • the State of California
  • Quality Control Audits
  • McDonald 's Corporation
  • Technology Transfer Agreement
  • EarthShell Container Corporation International Paper Company
  • General Manager Folding Carton Division
  • Low Density Hydraulically Bonded Cement Compositions
  • Beverage Containers Made
  • Methods of Manufacturing Such Containers
  • Cementitious Structural Matrix

Location:

  • Delaware
  • United States of America
  • Canada
  • Mexico
  • Central America
  • Caribbean
  • New Use
  • New York
  • Santa Barbara
  • California
  • Cushioning
  • Spacing
  • Partitioning
  • U.S.
  • Sublicensee

Money:

  • $ 1,000.00
  • $ 100,000

Person:

  • Sublicensee
  • Mark A. Koob Dennis J. Colley

Percent:

  • twenty-five percent 25 %
  • twenty percent
  • 20 %
  • 100 %
  • 50 %