<SUBMISSION>
<ACCESSION-NUMBER>0001144204-05-031983
<TYPE>8-K
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<PERIOD>20051011
<ITEMS>1.01
<ITEMS>3.02
<ITEMS>9.01
<FILING-DATE>20051018
<DATE-OF-FILING-DATE-CHANGE>20051018
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>EARTHSHELL CORP
<CIK>0000911801
<ASSIGNED-SIC>2650
<IRS-NUMBER>770322379
<STATE-OF-INCORPORATION>DE
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<BUSINESS-ADDRESS>
<STREET1>3916 STATE STREET
<STREET2>SUITE 110
<CITY>SANTA BARBARA
<STATE>CA
<ZIP>93105
<PHONE>805.563.7590
</BUSINESS-ADDRESS>
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<STREET1>3916 STATE STREET
<STREET2>SUITE 110
<CITY>SANTA BARBARA
<STATE>CA
<ZIP>93105
</MAIL-ADDRESS>
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<FORMER-CONFORMED-NAME>EARTHSHELL CONTAINER CORP
<DATE-CHANGED>19960521
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>v027387_8k.txt
<TEXT>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                               ------------------

                                    FORM 8-K

                                 CURRENT REPORT

                     PURSUANT TO SECTION 13 OR 15(d) of the
                         SECURITIES EXCHANGE ACT OF 1934

                                October 11, 2005


                             EARTHSHELL CORPORATION
               (Exact Name of Registrant as Specified in Charter)


         Delaware                        333-13287                77-0322379
(State or other jurisdiction           (Commission              (IRS Employer
      of incorporation)                File Number)          Identification No.)


  1301 York Rd., Suite 200, Lutherville, Maryland                21093
     (Address of principal executive offices)                  (Zip code)


       Registrant's telephone number, including area code: (410) 847-9420


              3916 State St. #110, Santa Barbara, California 93105
          (Former Name or Former Address, If Changed Since Last Report)

Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions:

|_|   Written  communications  pursuant to Rule 425 under the Securities Act (17
      CFR 230.425)

|_|   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)

|_|   Pre-commencement  communications  pursuant  to  Rule  14d-2(b)  under  the
      Exchange Act (17 CFR 240.14d-2(b))

|_|   Pre-commencement  communications  pursuant  to  Rule  13e-4(c)  under  the
      Exchange Act (17 CFR 240.13e-4(c))

<PAGE>

Item 1.01. Entry into a Material Definitive Agreement.

      On October 11, 2005, EarthShell  Corporation,  a Delaware corporation (the
"Company")  issued a Promissory  Note (the "Note") to E.  Khashoggi  Industries,
Inc, LLC, a Delaware limited liability company ("EKI") in the principal amount o
$1,000,000.  Under the terms of the  Note,  EKI will  advance  the  Company  the
following  sums on the  following  dates,  or a  lesser  amount  as the  Company
requests in writing:

                        Amount            Date of Funding
                        ------            ---------------

                       $350,000           October 12, 2005
                       $250,000           October 31, 2005
                       $250,000           November 30, 2005
                       $150,999           December 31, 2005

      Notwithstanding the funding schedule described above, if, on or before any
of the above  funding  dates,  the  Company  receives  a total of $3  million in
aggregate  net cash  proceeds  from any  combination  of financing  transaction,
equity contribution,  sale, licensing or sublicensing of assets or the provision
of services (including, without limitation,  advanced royalty payments, proceeds
from the sale of the  Company's  common  stock and fees for  technical  services
rendered to third parties,  but excluding any proceeds advanced under the Note),
EKI is not obligated to advance any additional  funds to the Company,  including
the funds that were to be advanced at the next funding date.

      Interest  accrues on the  principal  balance of the Note at a variable per
annum rate, as of any date of determination, that is equal to the rate published
in the  "Money  Rates"  section of The Wall  Street  Journal as being the "Prime
Rate",  compounded  monthly.  All accrued but unpaid  interest  and  outstanding
principal is due and payable on the earliest to occur of the following:  (i) the
second (2nd)  anniversary of the date of the Note;  (ii) five (5) days following
the date the Company has  received  $3  milllion or more in  aggregate  net cash
proceeds from all financing transactions, equity contributions, and transactions
relating to the sale,  licensing,  sublicensing  or disposition of assets or the
provision of services  (including  advance royalty  payments,  proceeds from the
sale of the Company's common stock and fees for technological  services rendered
to third  parties),  measured  from the  date of the  Note and not  taking  into
account the proceeds  advanced  under the Note;  or (iii) the  occurrence  of an
Event of Default (as defined in the Note).

      On October 11, 2005, the Company entered into a Debt Conversion and Mutual
Release Agreement (the  "Agreement")  with EKI.  Pursuant to the Agreement,  the
Company  and EKI agreed  that a  receivable  in an amount  equal to  $837,145.69
(previously  owed to  bio-Tec  Biologische  Naturverpackunger  GmbH &  Co.KG,  a
wholly-owned  subsidiary of EKI, but which was  subsequently assigned to EKI) be
converted  into 279,048  shares of common stock of the Company.  The  conversion
price equals $3.00 per share.  Pursuant to this  Agreement,  the Company and EKI
released each other from any and all claims in connection with the receivable.


                                      -2-
<PAGE>

Item 3.02. Unregistered Sales of Equity Securities.

      See Item 1.01 above.

Item 9.01. Financial Statements and Exhibits.

      (a) Not applicable

      (b) Not applicable

      (c) Exhibit No. Description

--------------------------------------------------------------------------------
Exhibit          Description                                   Location
--------------------------------------------------------------------------------
Exhibit 99.1     $1,000,000 Promissory Note dated as of        Provided herewith
                 October 11, 2005 and issued to
                 E. Khashoggi Industries, LLC

Exhibit 99.2     Debt Conversion and Mutual Release            Provided herewith
                 Agreement, dated October 11, 2005,
                 by and between EarthShell Corporation
                 and E. Khashoggi Industries, LLC


                                      -3-
<PAGE>

                                   SIGNATURES

      Pursuant to the  requirements of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

Date: October 18, 2005                   EARTHSHELL CORPORATION


                                         By:/s/ D. Scott Houston
                                            ------------------------------------
                                            Name:  D. Scott Houston
                                            Title: Chief Financial Officer


                                      -4-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>v027387_ex99-1.txt
<TEXT>

                                 PROMISSORY NOTE

$1,000,000.00                                                   October 11, 2005

      FOR VALUE RECEIVED, the undersigned,  EarthShell  Corporation,  a Delaware
corporation ("Maker"),  located at 3916 State Street, Santa Barbara, California,
unconditionally promises to pay to the order of E. Khashoggi Industries,  LLC, a
Delaware  limited  liability  company  ("Holder"),  at 3916 State Street,  Santa
Barbara,  California,  U.S.A., or at such other place as Holder may designate in
writing,  the principal  sum of: ONE MILLION  DOLLARS  ($1,000,000.00),  or such
lesser amount as is advanced from Holder to Maker from time to time.

      This Promissory Note (this "Note") evidences Maker's  obligation to pay to
Holder the sums  advanced by Holder to Maker  pursuant  to Section  2(a) of this
Note. All sums owing  hereunder are payable in lawful money of the United States
of America, in immediately available funds, pursuant to the following terms :

      1.  Definitions.  Terms  which  are used in this  Note  and not  otherwise
defined herein shall have the meanings set forth in this Paragraph.

            "Applicable Rate" means a variable per annum rate, as of any date of
determination,  equal to the rate  from  time to time  published  in the  "Money
Rates" section of The Wall Street Journal as being the "Prime Rate" (or, if more
than one rate is  published  as the Prime  Rate,  the  highest  of such  rates),
compounded monthly.  The Prime Rate will change as of the date of publication in
The Wall Street Journal of a Prime Rate that is different from that published on
the preceding business day. In the event that The Wall Street Journal shall, for
any  reason,  fail or cease to publish  the Prime  Rate,  Holder and Maker shall
choose a mutually agreeable comparable index or source to use as a basis for the
Prime Rate.

            "Default  Rate" means a rate of  interest  equal to 10.0% per annum,
compounded monthly.

            "Event of Default"  means the  occurrence or happening,  at any time
and from time to time, of any one or more of the following:

            a. Payment of Indebtedness. If Maker fails to pay any portion of the
indebtedness  evidenced by this Note within ten (10) days following the date the
same shall become due and payable,  whether at the due date  stipulated  in this
Note or at a date fixed for acceleration or otherwise and such failure continues
for a period of five (5) days following written notice of such failure by Holder
to Maker.

            b. Voluntary Bankruptcy.  If Maker shall (a) seek entry of any order
for  relief  as a  debtor  in a  proceeding  under  the  bankruptcy  laws of any
competent jurisdiction; (b) file a petition seeking relief under the bankruptcy,
arrangement,  reorganization  or other debtor relief laws of any other competent
jurisdiction;  (c) call a meeting  of its  creditors  or any one of them for the
purpose of  requesting  a  rearrangement  or  restructuring  of its debts or any
concessions  with respect to such debt;  (d) make a general  assignment  for the
benefit of its creditors; or (e) admit in writing its inability to pay its debts
as they mature.

<PAGE>

            c.  Involuntary  Bankruptcy.  If a petition is filed  against  Maker
seeking relief under the bankruptcy, arrangement, reorganization or other debtor
relief laws of any  competent  jurisdiction  and such  petition is not dismissed
within ninety (90) days following the date of its filing.

            d. Appointment of a Receiver.  If a court of competent  jurisdiction
enters an order, judgment or decree appointing,  without the consent of Maker, a
receiver  for it,  or for all or any  material  part of its  property,  and such
order, judgment or decree shall not be and remain vacated, reversed or stayed or
such receiver shall not otherwise be removed within a period of thirty (30) days
following entry of such order.

            e. Use of Proceeds.  If Maker fails to use the proceeds of the loans
evidenced by this Note for its immediate operating purposes.

      2.  Advances,  Interest  Accrual;  Payments  of  Principal  and  Interest;
Prepayments.

            a. Advances.  Holder hereby agrees to advance to Maker the following
sums on the  following  dates,  or such  lesser  amount as Maker may  request in
writing:

            Amount                Date
            ------                ----
            $350,000              one day from the date hereof
            $250,000              October 31, 2005
            $250,000              November 30, 2005
            $150,000              December 31, 2005

            Notwithstanding  the foregoing,  if, on before any the above funding
dates,  Maker receives a total of $3,000,000 in aggregate net cash proceeds from
any combination of financing transaction,  equity contribution,  sale, licensing
or  sublicensing  of assets or the  provision  of services  (including,  without
limitation,  advanced royalty payments, proceeds from the sale of Maker's common
stock  and fees for  technological  services  rendered  to  third  parties,  but
excluding the proceeds advanced under this Note),  Holder shall not be obligated
to  advance  any  further  funds to Maker,  including  the funds that were to be
advanced at the next funding date. Maker shall keep Holder informed on a monthly
basis,  commencing October 30, 2005, of the net cash proceeds Maker has received
from all sources  (other than Holder) since the date of this Note.  Maker agrees
that the $350,000 advance above is predicated on Maker concurrently  repaying to
Holder the  $10,000  advance  that  Holder had made to Maker to satisfy  certain
patent fees and obligations.

            b. Interest  Accrual.  Interest shall accrue on the unpaid principal
balance  of this Note at the  Applicable  Rate from the date of this Note  shown
above until the same is paid to Holder.  Notwithstanding the foregoing, interest
shall accrue on the unpaid balance of this Note at the Default Rate following an
Event of Default until the same is paid to Holder.

            c.  Payments  of  Principal  and  Interest.  All  accrued but unpaid
interest and all outstanding  principal shall be due and payable on the earliest
to occur of the following:  (i) the second anniversary of the date of this Note,
(ii) five (5) days  following the date Maker has received  $3,000,000 or more in
aggregate   net  cash  proceeds   from  all   financing   transactions,   equity
contributions, and transactions relating to the sale, licensing, sublicensing or
disposition of assets or the provision of services  (including  advance  royalty
payments,  proceeds  from  the  sale  of  Maker's  common  stock  and  fees  for
technological  services  rendered to third  parties),  measured from the date of
this Note and not taking into account the proceeds advanced under this Note, and
(iii) the occurrence of an Event of Default.


                                       2
<PAGE>

            d.  Application of Payments.  All payments  hereunder shall be first
applied to Holder's costs and expenses which are reimbursable to Holder pursuant
to Section 4 below,  then to any unpaid  interest and finally to the outstanding
principal  balance.  If any payment  due date falls on a  Saturday,  Sunday or a
holiday generally  observed by banks in the City of Santa Barbara,  the due date
of the payment shall  automatically  be extended to the next following  business
day.

            e.  Computation  of  Interest.  All  interest  on this Note shall be
computed  on the basis of the actual  number of days  elapsed  divided by a year
assumed to consist of 360 days.

            f. Prepayment. Maker may prepay this Note in whole or in part at any
time without penalty or premium.

      3.  Default;   Remedies.  If  an  Event  of  Default  occurs,  the  entire
outstanding  principal  balance  of this  Note  shall  become  due  and  payable
effective upon written  notice of  acceleration  by Holder to Maker.  Failure to
deliver  such  notice  shall not  constitute  a waiver of the right to deliver a
subsequent notice upon the occurrence of any subsequent Event of Default.

      4. Holder's Costs. Maker shall reimburse Holder for all costs and expenses
incurred  in  collecting  any sums due and  payable  under this Note,  including
reasonable  attorneys fees and court costs. All such expenses and costs shall be
paid by Maker within ten (10) days after demand made by Holder.  Any amounts not
timely  paid  shall  constitute  an Event of  Default  hereunder  and shall bear
interest at the Default Rate thereafter.

      5.  Applicable Law. This Note shall be governed by construed in accordance
with  the  internal  laws of the  State  of  California  without  regard  to the
principles of conflicts of law.

      6. No Waiver by Holder.  No delay on the part of Holder in the exercise of
any power or right under this Note shall operate as a waiver thereof,  nor shall
a single or partial  exercise  of any power or right  preclude  other or further
exercise thereof or exercise of any other power or right.

      7. Successors and Assigns.  The terms "Holder" and "Maker" as used in this
Note shall  include not only the Holder and Maker  named  herein but also all of
Holder's and Maker's  successors and assigns to whom the benefits and burdens of
this Note shall inure.

      8.   Notices.   All   notices,   requests,   demands,   claims  and  other
communications   hereunder  shall  be  in  writing  and  sent  or  delivered  to
personally,  by  facsimile  transmission  so long as receipt is  confirmed or by
deposit with a reputable  overnight  courier and addressed to Maker or Holder at
their respective  principal  business offices located at the addresses set forth
in the first paragraph of this Note.


                                       3
<PAGE>

      9. Usury. It is the intent of Holder and Maker that all provisions of this
Note which call for the  payment of  interest  comply in all  respects  with all
applicable usury statutes and  regulations.  In the event that the terms of this
Note would require the payment of interest in excess of the amount  permitted by
any applicable  law or  regulation,  the terms of the Note shall be deemed to be
modified  to comply with all such  applicable  laws or  regulations  without any
action by either party. In the event that Holder has received interest in excess
of the amount permitted by any applicable law or regulation,  the excess portion
of the interest received shall be deemed to have been a prepayment of principal,
without premium, as of the date received.

      10. Waiver.  Maker waives  presentment,  demand,  presentment for payment,
notice of  protest  or  nonpayment,  notice of  dishonor,  notice of  default or
delinquency,  notice of acceleration, and diligence in bringing suit against any
party hereto or collecting any sums hereunder.

      11. Miscellaneous.

            a. This Note shall be binding on and shall  inure to the  benefit of
Maker, Holder, and their respective successors and assigns.

            b.  Headings are inserted  into this Note for  convenience  only and
shall not be considered in construing any provision.

            c.  The  terms  of  this  Note  may not be  changed,  nor any of its
provisions  waived,  without  the  written  consent of all the parties who would
benefit from the original terms.

            d. Time shall be of the essence with  respect to every  provision of
this Note,  but no delay in enforcing  any right or remedy under this Note shall
be construed to be a waiver of that or any other right or remedy.

            e. The provisions of this Note are severable,  and the invalidity or
illegality of any provision  shall not be a bar to the  enforcement of any other
provision.

            f. This Note is negotiable and fully recourse to Maker.

            g. The person  executing this Note on behalf of Maker represents and
warrants  that he has the full  authority  and power to execute and deliver this
Note on behalf of Maker,  and such execution and delivery has been authorized by
all appropriate action.

      12. Waiver of Jury Trial. TO THE EXTENT  PERMITTED BY APPLICABLE LAW, EACH
OF THE PARTIES HEREBY  IRREVOCABLY  WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE.


                                       4
<PAGE>

      13. Submission to Forum and  Jurisdiction.  Any legal action or proceeding
with respect to this Note must be brought in the federal or state courts located
in the City of Santa Barbara, State of California, and by execution and delivery
of this Note, Maker and Holder each hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally,  the jurisdiction of the
aforesaid courts having proper venue.  Maker and Holder each hereby  irrevocably
waives any objection  which it may now or hereafter  have to the laying of venue
of any of the aforesaid  actions or proceedings  arising out of or in connection
with this Note brought in the  aforesaid  Santa Barbara  courts and  irrevocably
waives and  agrees not to plead or claim in any such court that any such  action
or  proceeding  brought  in any such court has been  brought in an  inconvenient
forum,  and also  consents to the service of process by any means  authorized by
the State of California.

                                     EARTHSHELL CORPORATION,
                                     a Delaware corporation


                                     /s/ D. Scott Houston
                                     -------------------------------------------
                                     By:  D. Scott Houston
                                     Its: Chief Financial Officer

Agreed to and Acknowledged By:

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


/s/ Essam Khashoggi
-------------------------------------------
By:  Essam Khashoggi
Its: Chairman and Chief Executive Officer


                                       5
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>v027387_ex99-2.txt
<TEXT>

                  DEBT CONVERSION AND MUTUAL RELEASE AGREEMENT

      This Debt  Conversion and Mutual Release  Agreement (the  "Agreement")  is
entered  into  as of the  11th  day of  October,  2005 by and  among  EarthShell
Corporation, a Delaware corporation ("EarthShell"), and E. Khashoggi Industries,
LLC, a  Delaware  limited  liability  company  ("EKI"),  with  reference  to the
following facts:

                                    RECITALS:

      A.  bio-tec  Biologische  Naturverpackungen  GmbH & Co.  KG, an  indirect,
wholly owned  subsidiary of EKI  ("Biotec")  was owed  $837,145.69 by EarthShell
(the  "Biotec  Receivable")  as a result of fees owed by  EarthShell  under that
certain License and Information  Transfer Agreement,  dated as of July 29, 2002,
between EarthShell,  Biotec, EKI and Biotec's affiliated entities (the "Original
Biotec License  Agreement").  The Biotec  Receivable has not heretofore  accrued
interest.

      B. Biotec has assigned the Biotec Receivable to EKI.

      C.  EarthShell  has  requested  that EKI convert the entire  amount of the
Biotec  Receivable into shares of EarthShell  common stock (the "Common Stock"),
and EKI is willing to convert the Biotec  Receivable into  EarthShell  shares of
common stock,  in full  satisfaction of the Biotec  Receivable,  pursuant to the
terms and conditions set forth herein.

      D. In  conjunction  with the sale of EKI's  indirect  interest  in Biotec,
EarthShell  and Biotec entered into an Amended and Restated  License  Agreement,
dated August 31, 2005 (the "Restated Biotec License Agreement").

      E. The parties also wish to resolve any outstanding issues between them as
to past transactions.

                                   AGREEMENT:

      1. Conversion. The parties hereby convert the entire balance of the Biotec
Receivable  into  shares of Common  Stock at the  conversion  price of $3.00 per
share. Upon the conversion,  EarthShell shall have no further  obligation to EKI
in  respect  of the  Biotec  Receivable  and it shall  be  deemed  to have  been
satisfied  in full  through  the  issuance  of the Common  Stock as set forth in
Section 2 below.

      2. Mechanics of the  Conversion.  The conversion of the Biotec  Receivable
shall take place upon (i) EarthShell's delivery to EKI of a stock certificate or
certificates  in the name of EKI  evidencing  its ownership of 279,048 shares of
Common Stock (the "Conversion  Shares"),  (ii) EarthShell's  payment of $1.69 to
EKI,  and (iii) EKI's  delivery to  EarthShell  of written  evidence  reasonably
satisfactory to EarthShell that the instrument  evidencing the Biotec Receivable
has been cancelled.

<PAGE>

      3.  Registration;  Legends.  EKI  understands  that the Conversion  Shares
constitute  "restricted  securities"  inasmuch as they are being  acquired  from
EarthShell in a transaction not involving a public offering, and accordingly may
not be resold or transferred  without  registration  under the Securities Act of
1933, as amended or an applicable  exemption from such registration.  Unless the
Conversion Shares are subsequently  registered,  EKI may be required to bear the
economic risk of such investment  indefinitely.  EKI further  acknowledges  that
each  certificate  representing  the  Conversion  Shares  may be  endorsed  with
substantially the following legend:

            THE SECURITIES  EVIDENCED BY THIS  CERTIFICATE  HAVE NOT
            BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933, AS
            AMENDED  (THE  "SECURITIES  ACT"),  AND MAY NOT BE SOLD,
            TRANSFERRED, ASSIGNED OR HYPOTHECATED EXCEPT PURSUANT TO
            AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
            ACT COVERING SUCH SECURITIES OR IF SUCH SALE,  TRANSFER,
            ASSIGNMENT   OR   HYPOTHECATION   IS  EXEMPT   FROM  THE
            REGISTRATION AND PROSPECTUS DELIVERY  REQUIREMENTS UNDER
            THE SECURITIES ACT.

      4. Mutual Release.

            (a) Release. The parties hereto fully, finally, and forever release,
quit claim,  and  discharge  one another  from any and all claims,  liabilities,
demands, debts, accounts, obligations, actions, and causes of action ("Claims"),
known or unknown,  at law or in equity,  of whatever  character  in any way that
each party  hereto may have  against  the other  party  through the date of this
Agreement,  that  arise out of,  relate  to, or  otherwise  concern  the  Biotec
Receivable  or  the  Original  Biotec  License  Agreement,   including,  without
limitation,  the timely performance of any monetary or non-monetary  obligations
thereunder and the prior  conversion of a portion of the accrued payable owed to
Biotec into shares of  EarthShell  common  stock  (collectively,  the  "Released
Matters"),  excluding, however, any and all Claims pursuant to this Agreement or
that certain Promissory Note, dated of even date herewith, made by EarthShell in
favor of EKI (the "Excluded  Matters").  The Released Matters expressly include,
but are not limited to, any claims for indemnity, contribution,  subrogation, or
other similar principal of recovery that one of the parties may have against the
other party with regard to the Released Matters now or in the future. EarthShell
agrees  and  acknowledges  that EKI is not a party  to,  and has no  obligations
under, the Restated Agreement, and therefore EarthShell has no Claims thereunder
to be asserted against EKI.

            (b) Release of Unknown Claims. Except for the Excluded Matters, each
of the parties hereto  acknowledges  and agrees that this release extends to all
Claims  relating to the Released  Matters of every  nature and kind  whatsoever,
known or unknown,  suspected or  unsuspected,  that exist as of the date of this
Agreement.  Each party expressly  intends that this Agreement shall be effective
as a full and final accord and satisfaction,  and release,  of each and every of
the  Released  Matters.  The parties  acknowledge  that they are  familiar  with
Section 1542 of the California Civil Code, which provides as follows:

      A general  release does not extend to claims which the creditor does
      not know or suspect  to exist in his favor at the time of  executing
      this release,  which if known by him must have  materially  affected
      his settlement with debtor.


                                    2
<PAGE>

            The parties  waive and  relinquish  every right or benefit that they
have or may have under Section 1542 of the California  Civil Code or any similar
provision in any  jurisdiction,  to the full extent that lawfully they may waive
such a right or benefit.  The parties  acknowledge  that they may later discover
facts in addition to, or different from, those which they now know or believe to
be true, but that it is their  intention to fully,  finally,  and forever settle
and release all of the Released Matters, whether known or unknown,  suspected or
unsuspected,  which now  exist,  may  exist in the  future,  or have  previously
existed, between the persons or entities granted releases.

            (c)  Covenant  Not to Sue.  Each of the  parties  hereto  shall  not
initiate,  file,  institute,  maintain or proceed upon, or encourage,  advise or
voluntarily assist any other person or entity to initiate,  institute,  maintain
or proceed  upon,  any claim  against  the other party with regard to any of the
Released Matters.

            (d)  Third  Party  Beneficiaries.  . Each of the  parties  expressly
agrees  that this  release  shall  inure to the benefit of the parties and their
respective  officers,   directors,   managers,   agents,  servants,   employees,
attorneys,  affiliated and subsidiary  entities,  successors,  predecessors  and
assigns, past and present.

            (e) No  Admissions.  The  parties  acknowledge  and agree  that this
release is entered into as a compromise of doubtful and disputed claims,  and is
not to be construed  as an  admission of liability on the part of any party,  by
each of whom all liability is expressly denied.

            (f) No  Assignments.  Each  of the  parties  hereto  represents  and
warrants that it has not  heretofore  assigned or  transferred,  or purported to
have assigned or transferred, to any firm, corporation or person whatsoever, any
claim, debt, liability,  demand,  obligation,  cost, expense, action or cause of
action herein released and agrees to indemnify and hold harmless the other party
against any claim, debt, liability, demand, obligation, cost, expense, action or
cause of action based on, arising out of or in connection with any such transfer
or assignment or purported transfer or assignment.

      5. Miscellaneous.

            (a) Construction.  This Agreement shall be construed and enforced in
accordance  with and  governed by the laws of the State of  California,  without
regard to the conflicts of law provisions thereof.

            (b)  Entire   Agreement.   This   Agreement   contains   the  entire
understanding   of  the  parties  and  supersedes   all  prior   agreements  and
understandings relating to the subject matter hereof.

            (c)  Invalid  Provisions.  In the event that any  provision  of this
Agreement or any word, phrase, clause,  sentence or other portion thereof should
be held to be unenforceable or invalid for any reason, such provision or portion
thereof  shall  be  modified  or  deleted  in such a manner  so as to make  this
Agreement,  as modified,  legal and enforceable to the fullest extent  permitted
under applicable laws.


                                       3
<PAGE>

            (d)  Counterparts.  This Agreement may be executed by the parties in
separate counterparts,  each of which when so executed and delivered shall be an
original,  but all such counterparts  shall together  constitute but one and the
same instrument.

            (e) Successors and Assigns.  Subject to the following sentence, this
Agreement  will  be  binding  upon,  and  will  inure  to the  benefit  of,  the
successors, assigns, heirs, executors and estates of the parties hereto.

            (f) Opportunity to Consult  Counsel and Other Advisors.  Each of the
parties  hereto  acknowledges  and  understands  that  such  party  has  had  an
opportunity to consult with the legal,  tax, business and other advisors of such
party's choice regarding this Agreement and the transactions contemplated hereby
and that such party has read this Agreement  carefully and fully understands all
of the terms and provisions contained herein and their significance.

            (g) Further Assurances.  Each party hereto shall execute and deliver
such further instruments, and take such other actions, as any other party hereto
may  reasonably  request  in  order to carry  out  this  Agreement  and to fully
consummate the transactions contemplated hereby.

            (h) Arbitration and Litigation.  Any  controversy,  claim or dispute
arising  out of or  relating  to  this  Agreement  or the  breach,  termination,
enforcement,  interpretation or validity thereof, including the determination of
the scope or applicability  of this agreement to arbitrate,  shall be determined
by  arbitration  in Santa  Barbara,  California,  before a sole  arbitrator,  in
accordance  with the laws of the State of California for agreements  made in and
to be performed in California.  The  arbitration  shall be  administered  by the
American Arbitration  Association ("AAA").  Judgment on the award may be entered
in any court having jurisdiction.  Either party may, without  inconsistency with
this  Agreement,  seek from a court any  interim or  provisional  relief that is
necessary  to  protect  the  rights  or  property  of that  party,  pending  the
appointment of the arbitrator. The exclusive forum for such application shall be
the Los  Angeles  Superior  Court or the United  States  District  Court for the
Central District of California. Upon the request of any party, a mediation shall
be conducted  prior to the  arbitration  pursuant to the Mediation  Rules of the
AAA. In the event of any dispute under this Agreement,  the prevailing  party as
determined  by the  arbitrator  shall be  entitled  to  recover  its  reasonable
attorneys fees and expenses and arbitration costs.


                                       4
<PAGE>

      IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.

                                     EARTHSHELL CORPORATION


                                     By: /s/ Vincent J. Truant
                                         ---------------------------------------
                                     Name:  Vincent J. Truant
                                     Title: Chief Executive Officer

                                     E. KHASHOGGI INDUSTRIES, LLC


                                     By: /s/ Essam Khashoggi
                                         ---------------------------------------
                                     Name:  Essam Khashoggi
                                     Title: Chairman and Chief Executive Officer


                                       5
</TEXT>
</DOCUMENT>
</SUBMISSION>
