THIS AGREEMENT

 

     THIS AGREEMENT is made upon and shall be effective as of ____________, 
199_, by and between EARTHSHELL CONTAINER CORPORATION, a Delaware corporation 
("ECC"), and MOBIL CHEMICAL COMPANY, an unincorporated division of MOBIL OIL 
CORPORATION, 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 utilize such 
technology in order to manufacture and sell certain designated food and 
beverage containers made from hydraulically reacting materials within a 
designated geographical area. 
 
     D.   ECC has engaged in discussions and made certain representations to 
the Sublicensee; based upon Sublicensee's independent evaluation, Sublicensee 
is willing to acquire necessary equipment and construct a pilot production 
line to use the Technology in the commercial manufacture of the Products 
(such production line is herein referred to as the "Pilot Production Line").  

     E.   The construction of this Pilot Production Line will benefit ECC as 
well as the Sublicenses, but will be constructed at the cost and expense of 
the Sublicensee. 
 
                                EXHIBIT 10.18

     F.   In light of the capital commitment of the Sublicensee pursuant to 
the terms of this Sublicense Agreement, ECC has granted the Sublicensee all 
rights and licenses necessary for the production of the Products utilizing the
Technology. 
 
     G.   ECC is willing to grant a sublicense to Sublicensee 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 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, 
governmental, 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. 
  
          (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 manufacture, 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 non-exclusive, 
royalty-bearing sublicense (the "Sublicense") to make, use, sell and 
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 manufacture 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, including but not 

limited to any 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 manufacture 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 
manufactured on the Pilot Production Line which Products are 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 principal 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 manufacture 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, manufacture, 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 (h) 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 
non-exclusive right to make, use, sell, sublicense and otherwise 
commercialize the Improvement (A) outside of the Territory and (B) within the 
Field of Use, within the Territory to ECC for an assignment fee of $1,000.00 
and (ii) 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 non-exclusive 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)  ECC, or the Assignee in case of a subsequent assignment, shall 
have the right to (i) affirmatively seek patent protection for the 
Improvement at ECC's or Assignee's sole cost and expense or (ii) maintain the 
Improvement as a Trade Secret. 

          (c)  In the event that Sublicensee does not seek patent protection 
for the Improvement ECC or Assignee may elect to seek patent protection 
either in the United States or in any foreign jurisdiction.  Sublicensee 
shall provide ECC or 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 Assignee will reimburse 
Sublicensee for any out-of-pocket fees and expenses reasonably incurred by 
Sublicensee in providing such assistance.  ECC or 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 Assignee. 
  
          (d)  If the Improvement is directed to a method of manufacture, 
handling, or processing of Food Packages, and if such manufacturing, 
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 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.  

     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 the entity identified in the 
New Use Notice 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 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 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 or consultative 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.  
      
          (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 and 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 incurred by 
Sublicensee in connection with such action by allowing a credit or offset 
against the Royalty due hereunder.  Sublicensee shall have the right to be 
represented in such suit or action by their own legal counsel, at their 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 make, 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 MANUFACTURED, 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 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 manufactured, used or sold by Sublicensee, except to the extent that 
the liability arises 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 or 
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 manufactured, used or sold by Sublicensee.  
Such product liability insurance policy shall name ECC and its licensor of 
the Technology as an 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. 
 
     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 commercially reasonable efforts to diligently exploit 
the Sublicense by developing a commercial manufacturing capacity for the 
Products and by actively manufacturing, 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 manufactured 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 manufactured 
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 no published reports 
then special report of sales of Products and Gross Sales Price of the same. 
      
     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 manufacture of 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 manufacture, 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.  ECC is not now in 
possession of and at no time has received any information which should 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 manufacture of the

Products pursuant to the terms of this Agreement will not constitute 
infringement of the proprietary rights of any third party. 
 

          (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 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. 
 
          (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 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. 
  
          (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 
proprietary 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).

          (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. 
 
          (c)  Each party specifically acknowledges that it would be 
difficult to fully compensate the other party in damages for the breach of 
the obligations of confidentiality set forth in paragraph 15(a) or 15(b) 
hereof and, accordingly, each party consents that the other party may obtain 
temporary and permanent injunctive relief to enforce confidentiality 
obligations and that such relief may be granted without the necessity of 
proving actual damages or irreparable harm.  The provisions of the paragraph 
15(c) with respect to injunctive relief shall not, however, diminish the 
right of the non-breaching party to claim and recover damages in any 
proceeding initiated pursuant to paragraph 26 hereof. 
 
     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.  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, upon 
sixty (60) days' prior written notice of such termination to ECC. 
 
          (d)  If Sublicensee is in breach of any of its material obligations 
hereunder, then ECC may give Sublicensee 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 Sublicensee has taken action to cure such default then if the default 
is not cured within one year from the date of such notice, ECC shall have the 
right to immediately terminate the Sublicense by written notice to the 
Sublicensee. 
  
          (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 EXPIRATION 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. 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. 

          (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; provided, however, that nothing 
contained herein shall prohibit or restrict the Sublicensee's right by 
administrative proceeding or otherwise to limit the inclusion of such patent 
numbers. 
      
          (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 
the direct or indirect export of any of the 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 manufacture, 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:             Mobil Chemical Company 
                              1159 Pittsford-Victor Road 
                              Pittsford, New York 14534-3876 
                              Attention: D. M. Davies 
                              Fax:   (716) 248-1309 
 
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 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. 
  
     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.  ARBITRATION.  Except as otherwise provided in paragraphs 5(c) or 
15, any dispute or controversy which shall arise under or in connection with 
any aspect of this Agreement, including but not limited to any aspect of the 
Sublicense, the performance or nonperformance of any obligation set forth 
herein, or the interpretation hereof shall be resolved through binding 
arbitration conducted in accordance with the commercial arbitration rules of 
the American Arbitration Association, although the parties may, by 

agreement, elect to have such proceeding conducted by or through an entity or
individuals other than the American Arbitration Association itself.  Such 
arbitration shall be conducted in Santa Barbara, California before a panel 
of three arbitrators. The decision of the arbitrators 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.  The arbitrators in any arbitration 
proceeding shall have the right, in addition to any award of damages, to 
award the prevailing party all costs and expenses, including reasonable 
attorneys' fees and reasonable investigation costs, incurred by such party in 
connection with such arbitration and all aspects of the dispute which is the 
subject of such arbitration.  If at the time any dispute arises the parties 
agree to submit the dispute to binding mediation rather than arbitration they 
may do so. 
 
     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, strikes, 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)  To further promote the transfer of Technology licensed 
hereunder, Arthur D. Little, Inc. ("ADL") has agreed to act as an independent 
contractor and consultant to work with Sublicensee in implementing the 
transfer of the licensed Technology, assisting Sublicensee with the 
installation and modification of the requisite processing equipment and 
assisting Sublicensee with product design and quality control matters.  In 
all these areas Sublicensee may work directly with and through ADL.  In lieu 
of the foregoing, Sublicensee may use its internal professional staff, or 
another outside consultant, subject to the prior approval of ECC, which 
approval shall not be unreasonably withheld; provided, however, that any such 
outside consultant shall be required to execute a confidentiality agreement 
substantially as contemplated under paragraph 15 hereof with respect to any 
disclosed Technology or other proprietary information of ECC.  The specific 
scope, terms and conditions of the support services to be provided by ADL as 
contemplated hereunder shall be set forth in a Technology Transfer Agreement 
to be entered into within one hundred eighty (180) days following the date of 
execution of this Agreement by and between ECC, ADL and Sublicensee.  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 ADL.  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 this period, either party may 
terminate this Agreement upon written notice within 30 days after the 
expiration of the 180-day 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)  Within one hundred eighty (180) days after the execution of 
this Agreement, but not before execution of the Technology Transfer 
Agreement, ECC shall prepare a disclosure sufficient to teach one of ordinary 
skill in the art how to use the Technology in order to manufacture the 
Products.  It is contemplated that this disclosure shall include the 
formulas, procedures and research data necessary to implement the Technology 
for the manufacture of the Products. 

     32.  MATERIALS SUPPLY.  Within one hundred eighty (180) days following 
the execution of this Agreement, but not before execution of the Technology 
Transfer Agreement, ECC will submit to Sublicensee either a list of approved 
suppliers of the requisite materials or a list of one or more approved 
suppliers of prepackaged materials for use in the production of the licensed 
Products.  If Sublicensee desires to have other suppliers added to this list, 
Sublicensee shall submit the same to ECC who in turn will verify that such 
supplier or suppliers have the capability to furnish materials meeting ECC's 
specifications, and if said supplier or suppliers 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 requisite 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 
manufactured, 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.  DOMESTIC SUBLICENSES.  ECC agrees that all domestic sublicenses 
(within the United States of America) granted by it will contain 
substantially the same terms and conditions so that no domestic sublicensee 
will gain a material advantage over another domestic 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 manufactured, sold or 
otherwise commercialized by Sublicensee contain any material defect in its 
appearance or function, Sublicensee shall cease any further manufacture, 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. 

      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             Mobil Chemical Company 
 
 
 
By:  /s/ Mark A. Koob                        By:  /s/ D. M. Davies     10/4/93
     ----------------------------------           -----------------------------
     Mark A. Koob                                 D. M. Davies
 
Its: President                               Its: V.P. New Business Development,
                                                  -----------------------------
                                                  Resin and Environmental

                                    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). 
 
 
 
  
     1.   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." 

17.  U.S. Patent Application Serial No. 08/101,500 filed August 3, 1993, and
     entitled "Methods and Apparatus for Manufacturing Moldable Hydraulically
     Settable Sheets Used in Making Containers, Printed Materials, and Other
     Objects."  

18.  U.S. Patent Application Serial No. 08/105,352 filed August 10, 1993 and
     entitled "Methods and Systems for Manufacturing Containers and other
     Articles of Manufacture from Hydraulically Settable Mixtures."
 
 
II.  TRADE SECRETS

     The term "Trade Secrets" as used in this 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

                                     PRODUCT

                                PRIORITY PRODUCTS

1.   One and two-piece sandwich containers ("clam shells")

 

Basic Info X:

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

Other info:

Date:

  • February 24 , 1993
  • January 1 , 1996
  • 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
  • August 3 , 1993
  • August 10 , 1993

Organization:

  • E. Khashoggi Industries
  • definition of Field of Use
  • the State of Delaware
  • Sublicensee of Confidential Information
  • Sublicensee Confidential Information
  • United States Department of Commerce
  • EarthShell Container Corporation 800 Miramonte Drive Santa Barbara
  • Mobil Chemical Company
  • American Arbitration Association
  • Quality Control Audits
  • McDonald 's Corporation
  • Technology Transfer Agreement
  • EarthShell Container Corporation Mobil Chemical
  • Low Density Hydraulically Bonded Cement Compositions
  • Beverage Containers Made
  • Methods of Manufacturing Such Containers
  • Cementitious Structural Matrix
  • Manufacturing Moldable Hydraulically Settable Sheets Used in Making Containers
  • Systems for Manufacturing Containers

Location:

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

Money:

  • $ 1,000.00
  • $ 100,000

Person:

  • Arthur D. Little
  • Sublicensee
  • Mark A. Koob D. M. Davies

Percent:

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