EarthShell gets waiver on default of 2005 convertible debentures

By Sheri Kasprzak

New York, July 18 - EarthShell Corp. has received a waiver on events of default connected to convertible debentures first issued to Cornell Capital Partners, LP in December 2005.

Cornell agreed to waive the liquidation payments equal to 1% per debenture for every 30 days after May 31, 2006 that EarthShell has neglected to have the registration statement declared effective with the Securities and Exchange Commission.

For the waiver, Cornell received warrants for 250,000 shares. The full terms of the warrants could not be determined Tuesday evening.

Still, EarthShell must have the registration statement on the debentures declared effective by Sept. 30.

The company sold Cornell $4.5 million in principal of the 12% debentures on Dec. 30, 2005.

Based in Santa Barbara, Calif., EarthShell licenses technologies used in the manufacture of foodservice packaging.

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