Exhibit

4.3




 




NEITHER THESE SECURITIES

NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN

REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES

COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER

THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,

ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE

EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION

REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE

SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO

SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE

COMPANY.  THESE SECURITIES AND THE

SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN

CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH

SECURITIES.




SUREBEAM CORPORATION




 




WARRANT




 








	

  Warrant No. [ ]


  	

   


  	

  Date of Original

  Issuance: December 2, 2002


  










 




SureBeam Corporation, a

Delaware corporation (the “Company”), hereby certifies that, for value

received, [Name of Holder] or its registered assigns (the “Holder”), is

entitled to purchase from the Company up to a total of [ ] (1) shares of Class A common stock, $.001

par value (the “Common Stock”), of the Company (each such share, a

“Warrant Share” and all such shares, the “Warrant Shares”) at an

exercise price equal to $6.00 per share (as adjusted from time to time as

provided in Section 9, the “Exercise Price”), at any time

and from time to time from and after the date hereof and through and including

December 2, 2007 (the “Expiration Date”), and subject to the

following terms and conditions.






















(1)           Number of shares equal to 25% of the

shares of Common Stock to be issued to the original Holder at the Closing under

the Purchase Agreement.




1.             Definitions.  In addition to the terms defined elsewhere

in this Warrant, capitalized terms that are not otherwise defined herein shall

have the meanings given to such terms in the Securities Purchase Agreement, of

even date herewith to which the Company and the original Holder are parties

(the “Purchase Agreement”).




2.             Registration

of Warrant.  The Company shall

register this Warrant, upon records to be maintained by the Company for that

purpose (the “Warrant Register”), in the name of the record Holder

hereof from time to time.  The Company

may deem and treat the registered Holder of this Warrant as the absolute owner

hereof for the purpose of any exercise hereof or any distribution to the

Holder, and for all other purposes, absent actual notice to the contrary.




 




 





























 




3.             Registration of Transfers.  The Company shall register the transfer of

any portion of this Warrant in the Warrant Register, upon surrender of this

Warrant, with the Form of Assignment attached hereto duly completed and signed,

to the Company at its address specified herein.  Upon any such registration or transfer, a new Warrant to purchase

Common Stock, in substantially the form of this Warrant (any such new Warrant,

a “New Warrant”), evidencing the portion of this Warrant so transferred

shall be issued to the transferee and a New Warrant evidencing the remaining

portion of this Warrant not so transferred, if any, shall be issued to the

transferring Holder.  The acceptance of

the New Warrant by the transferee thereof shall be deemed the acceptance by

such transferee of all of the rights and obligations of a holder of a Warrant.




4.             Exercise and Duration of

Warrants.  This Warrant shall be

exercisable by the registered Holder at any time and from time to time on or

after the date hereof to and including the Expiration Date.  At 6:30 p.m., New York City time on the

Expiration Date, the portion of this Warrant not exercised prior thereto shall

be and become void and of no value.




5.             Delivery of Warrant Shares.




(a)           To effect conversions hereunder, the

Holder shall not be required to physically surrender this Warrant unless the

aggregate Warrant Shares represented by this Warrant is being exercised.  Upon delivery of the Form of Election to

Purchase to the Company (with the attached Warrant Shares Exercise Log) at its

address for notice set forth in Section 13 and upon payment of the Exercise

Price multiplied by the number of Warrant Shares that the Holder intends to

purchase hereunder, the Company shall promptly (but in no event later than

three Trading Days after the Date of Exercise (as defined herein)) issue and

deliver to the Holder, a certificate for the Warrant Shares issuable upon such

exercise, which, unless otherwise required by the Purchase Agreement, shall be

free of restrictive legends.  The

Company shall, upon request of the Holder and subsequent to the date on which a

registration statement covering the resale of the Warrant Shares has been

declared effective by the Securities and Exchange Commission, use its best

efforts to deliver Warrant Shares hereunder electronically through the

Depository Trust Corporation or another established clearing corporation

performing similar functions,  if

available, provided, that, the Company may, but will not be required to change

its transfer agent if its current transfer agent cannot deliver Warrant Shares

electronically through the Depository Trust Corporation.  A “Date of Exercise” means the date

on which the Company shall have received (or be deemed to have received

pursuant to the terms hereof) from the Holder: (i) the Form of Election to

Purchase attached hereto (with the Warrant Exercise Log attached to it),

appropriately completed and duly signed and (ii) payment of the Exercise

Price for the number of Warrant Shares so indicated by the Holder to be

purchased.




(b)           If by the third Trading Day after a

Date of Exercise the Company fails to deliver the required number of Warrant Shares

in the manner required pursuant to Section 5(a), then the Holder will have

the right to rescind such exercise.




(c)           If

by the third Trading Day after a Date of Exercise the Company fails to deliver

the required number of Warrant Shares in the manner required pursuant to

Section 5(a), and if after such third Trading Day the Holder purchases (in

an open market transaction or otherwise) shares of Common Stock to deliver in

satisfaction of a sale by the Holder of the 




 




 




2





























 




Warrant Shares which the

Holder anticipated receiving upon such exercise (a “Buy-In”), then the

Company shall (1) pay in cash to the Holder the amount by which

(x) the Holder’s total purchase price (including brokerage commissions, if

any) for the shares of Common Stock so purchased exceeds (y) the amount

obtained by multiplying (A) the number of Warrant Shares that the Company was

required to deliver to the Holder in connection with the exercise at issue by

(B) the closing bid price of the Common Stock at the time of the obligation

giving rise to such purchase obligation and (2) at the option of the

Holder, either reinstate the portion of the Warrant and equivalent number of

Warrant Shares for which such exercise was not honored or deliver to the Holder

the number of shares of Common Stock that would have been issued had the

Company timely complied with its exercise and delivery obligations

hereunder.  The Holder shall provide the

Company written notice indicating the amounts payable to the Holder in respect

of the Buy-In.




(d)           The Company’s obligations to issue

and deliver Warrant Shares in accordance with the terms hereof are absolute and

unconditional, irrespective of any action or inaction by the Holder to enforce

the same, any waiver or consent with respect to any provision hereof, the

recovery of any judgment against any Person or any action to enforce the same,

or any setoff, counterclaim, recoupment, limitation or termination, or any

breach or alleged breach by the Holder or any other Person of any obligation to

the Company or any violation or alleged violation of law by the Holder or any

other Person, and irrespective of any other circumstance which might otherwise

limit such obligation of the Company to the Holder in connection with the

issuance of Warrant Shares.  Nothing

herein shall limit a Holder’s right to pursue any other remedies available to

it hereunder, at law or in equity including, without limitation, a decree of

specific performance and/or injunctive relief with respect to the Company’s

failure to timely deliver certificates representing shares of Common Stock upon

exercise of the Warrant  as required

pursuant to the terms hereof.




6.             Charges, Taxes and Expenses.  Issuance and delivery of certificates for

shares of Common Stock upon exercise of this Warrant shall be made without

charge to the Holder for any issue or transfer tax, withholding tax, transfer

agent fee or other incidental tax or expense in respect of the issuance of such

certificates, all of which taxes and expenses shall be paid by the Company;

provided, however, that the Company shall not be required to pay any tax which

may be payable in respect of any transfer involved in the registration of any

certificates for Warrant Shares or Warrants in a name other than that of the

Holder.  The Holder shall be responsible

for all other tax liability that may arise as a result of holding or

transferring this Warrant or receiving Warrant Shares upon exercise hereof.




7.             Replacement

of Warrant.  If this Warrant is

mutilated, lost, stolen or destroyed, the Company shall issue or cause to be

issued in exchange and substitution for and upon cancellation hereof, or in

lieu of and substitution for this Warrant, a New Warrant, but only upon receipt

of evidence reasonably satisfactory to the Company of such loss, theft or

destruction and customary and reasonable indemnity (which shall not include a

surety bond), if requested.  Applicants

for a New Warrant under such circumstances shall also comply with such other

reasonable regulations and procedures and pay such other reasonable third-party

costs as the Company may prescribe.




 




 




3





























 




8.             Reservation of Warrant Shares.  The Company covenants that it will at all

times reserve and keep available out of the aggregate of its authorized but

unissued and otherwise unreserved Common Stock, solely for the purpose of

enabling it to issue Warrant Shares upon exercise of this Warrant as herein

provided, the number of Warrant Shares which are then issuable and deliverable

upon the exercise of this entire Warrant, free from preemptive rights or any

other contingent purchase rights of persons other than the Holder (taking into

account the adjustments and restrictions of Section 9). The Company

covenants that all Warrant Shares so issuable and deliverable shall, upon

issuance and the payment of the applicable Exercise Price in accordance with

the terms hereof, be duly and validly authorized, issued and fully paid and

nonassessable.




9.             Certain Adjustments.  The Exercise Price and number of Warrant

Shares issuable upon exercise of this Warrant are subject to adjustment from

time to time as set forth in this Section 9.




(a)           Stock Dividends and Splits.  If the Company, at any time while this

Warrant is outstanding, (i) pays a stock dividend on its Common Stock or

otherwise makes a distribution on any class of capital stock that is payable in

shares of Common Stock, (ii) subdivides outstanding shares of Common Stock

into a larger number of shares, or (iii) combines outstanding shares of

Common Stock into a smaller number of shares, then in each such case the

Exercise Price shall be multiplied by a fraction of which the numerator shall

be the number of shares of Common Stock outstanding immediately before such

event and of which the denominator shall be the number of shares of Common

Stock outstanding immediately after such event.  Any adjustment made pursuant to clause (i) of this

paragraph shall become effective immediately after the record date for the

determination of stockholders entitled to receive such dividend or

distribution, and any adjustment pursuant to clause (ii) or (iii) of

this paragraph shall become effective immediately after the effective date

of such subdivision or combination. If any event requiring an adjustment under

this paragraph occurs during the period that an Exercise Price is

calculated hereunder, then the calculation of such Exercise Price shall be

adjusted appropriately to reflect such event.




(b)           Pro

Rata Distributions.  If the Company,

at any time while this Warrant is outstanding, distributes to all holders of

Common Stock (i) evidences of its indebtedness, (ii) any security

(other than a distribution of Common Stock covered by the preceding paragraph),

(iii) rights or warrants to subscribe for or purchase any security, or

(iv) any other asset (in each case, “Distributed Property”),  then, at the request of any Holder delivered

before the 90th day after the record date fixed for determination of

stockholders entitled to receive such distribution, the Company will deliver to

such Holder, within five Trading Days after such request (or, if later, on the

effective date of such distribution), the Distributed Property that such Holder

would have been entitled to receive in respect of the Warrant Shares for which

such Holder’s Warrant could have been exercised immediately prior to such

record date.  If such Distributed

Property is not delivered to a Holder pursuant to the preceding sentence, then

upon any exercise of the Warrant that occurs after such record date, such

Holder shall be entitled to receive, in addition to the Warrant Shares

otherwise issuable upon such conversion, the Distributed Property that such

Holder would have been entitled to receive in respect of such number of Warrant

Shares had the Holder been the record holder of such Warrant Shares immediately

prior to such record date.




 




 




4





























 




(c)           Fundamental Transactions.  If, at any time while this Warrant is

outstanding, (1) the Company effects any merger or consolidation of the

Company with or into another Person, (2) the Company effects any sale of

all or substantially all of its assets in one or a series of related

transactions, (3) any tender offer or exchange offer (whether by the

Company or another Person) is completed pursuant to which holders of Common

Stock are permitted to tender or exchange their shares for other securities,

cash or property, or (4) the Company effects any reclassification of the

Common Stock or any compulsory share exchange pursuant to which the Common

Stock is effectively converted into or exchanged for other securities, cash or

property (in any such case, a “Fundamental Transaction”), then the

Holder shall have the right thereafter to receive, upon exercise of this

Warrant, the same amount and kind of securities, cash or property as it would

have been entitled to receive upon the occurrence of such Fundamental

Transaction if it had been, immediately prior to such Fundamental Transaction,

the holder of the number of Warrant Shares then issuable upon exercise in full

of this Warrant (the “Alternate Consideration”).  For purposes of any such exercise, the

determination of the Exercise Price shall be appropriately adjusted to apply to

such Alternate Consideration based on the amount of Alternate Consideration

issuable in respect of one share of Common Stock in such Fundamental

Transaction, and the Company shall apportion the Exercise Price among the

Alternate Consideration in a reasonable manner reflecting the relative value of

any different components of the Alternate Consideration.  If holders of Common Stock are given any

choice as to the securities, cash or property to be received in a Fundamental

Transaction, then the Holder shall be given the same choice as to the Alternate

Consideration it receives upon any exercise of this Warrant following such

Fundamental Transaction.  At the

Holder’s option and request, any successor to the Company or surviving entity

in such Fundamental Transaction shall, either (1) issue to the Holder a

new warrant substantially in the form of this Warrant and consistent with the

foregoing provisions and evidencing the Holder’s right to purchase the

Alternate Consideration for the aggregate Exercise Price upon exercise thereof,

or (2) purchase the Warrant from the Holder for a purchase price, payable

in cash within five Trading Days after such request (or, if later, on the

effective date of the Fundamental Transaction), equal to the Black Scholes

value of the remaining unexercised portion of this Warrant on the date of such

request. The terms of any agreement pursuant to which a Fundamental Transaction

is effected shall include terms requiring any such successor or surviving

entity to comply with the provisions of this paragraph (c) and

insuring that the Warrant (or any such replacement security) will be similarly

adjusted upon any subsequent transaction analogous to a Fundamental

Transaction.




(d)           Future Issuances.




(1)           If

the Company or any subsidiary thereof, as applicable with respect to Common Stock

Equivalents (as defined below), at any time while this Warrant is outstanding,

shall issue shares of Common Stock or rights, warrants, options or other

securities or debt that are convertible into or exchangeable for shares of

Common Stock (“Common Stock Equivalents”), entitling any Person to

acquire shares of Common Stock at a price per share less than the Per Unit

Purchase Price (subject to equitable adjustment for stock splits,

recombinations and similar transactions) (if the holder of the Common Stock or

Common Stock Equivalent so issued shall at any time, whether by operation of

purchase price adjustments, reset provisions, floating conversion, exercise or

exchange prices or otherwise, or due to warrants, options or rights issued in

connection with such issuance, be entitled to receive shares of Common Stock at






 




 




5





























 




a price less than the Per

Unit Purchase Price, such issuance shall be deemed to have occurred for less

than the Per Unit Purchase Price), then, at the option of the Holder: (A) if

such issuance shall take place during the period between the Closing Date and

the 180th day following the Record Date, for such exercises as the Holder shall

indicate, the Exercise Price shall be adjusted to mirror the conversion,

exchange or purchase price for such Common Stock or Common Stock Equivalents

(including any reset provisions thereof) at issue, or (B) if such issuance

shall occur at any time following the 180th day following the Record

Date, the Exercise Price shall be multiplied by a fraction, the numerator of

which shall be the number of shares of Common Stock outstanding immediately

prior to the issuance of such shares of Common Stock or such Common Stock

Equivalents plus the number of shares of Common Stock which the offering price

for such shares of Common Stock or Common Stock Equivalents would purchase at

the Exercise Price, and the denominator of which shall be the sum of the number

of shares of Common Stock outstanding immediately prior to such issuance plus

the number of  shares of Common Stock so

issued or issuable.  For purposes

hereof, all shares of Common Stock that are issuable upon conversion, exercise

or exchange of Common Stock Equivalents shall be deemed outstanding immediately

after the issuance of such Common Stock Equivalents.  Such adjustment shall be made whenever such shares of Common

Stock or Common Stock Equivalents are issued. 

However, upon not less than 20 days’ prior written notice delivered by

the Company to the Holder, indicating the future expiration of any Common Stock

Equivalents the issuance of which resulted in an adjustment in the Exercise

Price pursuant to this Section, if any such Common Stock Equivalents shall

expire and shall not have been exercised, the Exercise Price shall immediately

upon such expiration be recomputed and effective immediately upon such

expiration be increased to the price which it would have been (but reflecting

any other adjustments in the Exercise Price made pursuant to the provisions of

this Section after the issuance of such Common Stock Equivalents) had the

adjustment of the Exercise Price made upon the issuance of such Common Stock

Equivalents been made on the basis of offering for subscription or purchase

only that number of shares of Common Stock actually purchased upon the exercise

of such Common Stock Equivalents actually exercised.  The Company shall notify the Holder in writing, no later than the

Trading Day following the issuance of any Common Stock or Common Stock

Equivalent subject to this section, indicating therein the applicable issuance

price, or of applicable reset price, exchange price, conversion price and other

pricing terms.




(2)           The

foregoing shall not apply to: (i) the issuance of securities upon the

exercise or conversion of the Company’s options, warrants or other convertible

securities outstanding as of the date hereof, (ii) the grant of options or

warrants, or the issuance of additional securities, under any duly authorized

Company stock option, restricted stock plan or stock purchase plan currently in

existence, (iii) Common Stock Equivalents issued in connection with the

Company’s acquisition of a business or assets, (iv) Common Stock

Equivalents issued in connection with capital equipment leasing transactions,

(v) Common Stock Equivalents issued to bona fide consultants to the

Company, (vi) Common Stock Equivalents issued in one or more instances for

any purpose so long as such issuance or the aggregate of such issuances does

not result in issuance by the Company of more than an aggregate of 100,000

shares of Common Stock on a fully diluted basis, while this Warrant is

outstanding, or (vii) the issuance of Common Stock Equivalents based on

an  aggregate market value of up to $5,000,000

pursuant to one or more Strategic Transactions, while this Warrant is

outstanding.




 




 




6





























 




(e)           Number of Warrant Shares.  Simultaneously with any adjustment to the

Exercise Price pursuant to paragraphs (a), (b) or (d) of this

Section, the number of Warrant Shares that may be purchased upon exercise of

this Warrant shall be increased or decreased proportionately, so that after

such adjustment the aggregate Exercise Price payable hereunder for the adjusted

number of Warrant Shares shall be the same as the aggregate Exercise Price in

effect immediately prior to such adjustment.




(f)            Calculations.  All calculations under this Section 9

shall be made to the nearest cent or the nearest 1/100th of a share,

as applicable.  The number of shares of

Common Stock outstanding at any given time shall not include shares owned or

held by or for the account of the Company, and the disposition of any such

shares shall be considered an issue or sale of Common Stock.




(g)           Notice of Adjustments.  Upon the occurrence of each adjustment

pursuant to this Section 9, the Company at its expense will

promptly compute such adjustment in accordance with the terms of this Warrant

and prepare a certificate setting forth such adjustment, including a statement

of the adjusted Exercise Price and adjusted number or type of Warrant Shares or

other securities issuable upon exercise of this Warrant (as applicable),

describing the transactions giving rise to such adjustments and showing in

detail the facts upon which such adjustment is based.  Upon written request, the Company will promptly deliver a copy of

each such certificate to the Holder and to the Company’s Transfer Agent.




(h)           Notice of Corporate Events.  If the Company (i) declares a dividend

or any other distribution of cash, securities or other property in respect of

its Common Stock, including without limitation any granting of rights or

warrants to subscribe for or purchase any capital stock of the Company or any

Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating

or solicits stockholder approval for any Fundamental Transaction or

(iii) authorizes the voluntary dissolution, liquidation or winding up of

the affairs of the Company, then the Company shall deliver to the Holder a

notice describing the material terms and conditions of such transaction, at

least 20 calendar days prior to the applicable record or effective date on

which a Person would need to hold Common Stock in order to participate in or

vote with respect to such transaction, and the Company will take all steps

reasonably necessary in order to insure that the Holder is given the practical

opportunity to exercise this Warrant prior to such time so as to participate in

or vote with respect to such transaction; provided, however, that the failure to

deliver such notice or any defect therein shall not affect the validity of the

corporate action required to be described in such notice.




10.           Payment of Exercise Price.  The Holder may pay the Exercise Price in one

of the following manners:




(a)           Cash Exercise.  The Holder may deliver immediately available

funds; or




(b)           Cashless

Exercise.  At any time after the

earlier to occur of: (x) the date the 

registration statement covering the resale of the Warrant Shares and

filed pursuant to the Registration Rights Agreement is declared effective by

the Commission and (y) the Effectiveness Date (as defined in the Registration

Rights Agreement) related to such registration statement, when a registration

statement covering the resale of the Warrant Shares and naming the Holder 




 




 




7





























 




as a selling stockholder

thereunder is not then effective, the Holder may surrender this Warrant to the

Company together with a notice of cashless exercise, in which event the Company

shall issue to the Holder the number of Warrant Shares determined as follows:




X = Y [(A-B)/A]




 




where:




 




X = the number of

Warrant Shares to be issued to the Holder.




 




Y = the number of

Warrant Shares with respect to which this Warrant is being exercised.




 




A = the average of

the closing prices for the five Trading Days immediately prior to (but not

including) the Exercise Date.




 




B = the Exercise

Price.




 




For purposes of Rule 144

promulgated under the Securities Act, it is intended, understood and

acknowledged that the Warrant Shares issued in a cashless exercise transaction

shall be deemed to have been acquired by the Holder, and the holding period for

the Warrant Shares shall be deemed to have commenced, on the date this Warrant

was originally issued pursuant to the Purchase Agreement.




11.           Limitation on Exercise.




(a)           Notwithstanding anything to the

contrary contained herein, the number of shares of Common Stock that may be

acquired by the Holder upon any exercise of this Warrant (or otherwise in

respect hereof) shall be limited to the extent necessary to insure that,

following such exercise (or other issuance), the total number of shares of

Common Stock then beneficially owned by such Holder and its Affiliates and any

other Persons whose beneficial ownership of Common Stock would be aggregated

with the Holder’s for purposes of Section 13(d) of the Exchange Act,

does not exceed 4.999% of the total number of issued and outstanding shares of

Common Stock (including for such purpose the shares of Common Stock issuable

upon such exercise).  For such purposes,

beneficial ownership shall be determined in accordance with

Section 13(d) of the Exchange Act and the rules and regulations

promulgated thereunder.  Each delivery

of an Exercise Notice hereunder will constitute a representation by the Holder

that it has evaluated the limitation set forth in this paragraph and

determined that issuance of the full number of Warrant Shares requested in such

Exercise Notice is permitted under this paragraph.  By written notice to the Company, the Holder may waive the

provisions of this Section but (i) any such waiver will not be

effective until the 61st day after such notice is delivered to the Company, and

(ii) any such waiver will apply only to the Holder and not to any other

holder of Warrants.




(b)           Notwithstanding

anything to the contrary contained herein, the number of shares of Common Stock

that may be acquired by the Holder upon any exercise of this Warrant (or

otherwise in respect hereof) shall be limited to the extent necessary to insure

that, following 




 




 




8





























 




such exercise (or other

issuance), the total number of shares of Common Stock then beneficially owned

by such Holder and its Affiliates and any other Persons whose beneficial

ownership of Common Stock would be aggregated with the Holder’s for purposes of

Section 13(d) of the Exchange Act, does not exceed 9.999% of the

total number of issued and outstanding shares of Common Stock (including for

such purpose the shares of Common Stock issuable upon such exercise).  For such purposes, beneficial ownership

shall be determined in accordance with Section 13(d) of the Exchange

Act and the rules and regulations promulgated thereunder.  Each delivery of an Exercise Notice

hereunder will constitute a representation by the Holder that it has evaluated

the limitation set forth in this paragraph and determined that issuance of

the full number of Warrant Shares requested in such Exercise Notice is

permitted under this paragraph.    This

provision shall not restrict the number of shares of Common Stock which a

Holder may receive or beneficially own in order to determine the amount of

securities or other consideration that such Holder may receive in the event of

a merger or other business combination or reclassification involving the

Company as contemplated in Section 9 of this Warrant.




(c)           If the Company has not obtained the

Shareholder Approval (as defined below), then the Company may not issue in

excess of 8,402,632 shares of Common Stock upon exercise of the Warrants (as

defined in the Purchase Agreement) (such number of shares of Common Stock, the

“Issuable Maximum”).  Each holder

of Warrants shall be entitled to a portion of the Issuable Maximum equal to the

quotient obtained by dividing: (x) the purchase price paid by it pursuant

to the Purchase Agreement by (y) the purchase price paid by all holder pursuant

to the Purchase Agreement.  If a holder

of Warrants shall no longer hold its Warrant due to exercise or cancellation of

its Warrant, then such holder’s remaining portion of the Issuable Maximum shall

be allocated pro-rata among the remaining holders of the Warrants.  If on any Date of Exercise: (A) the

aggregate number of shares of Common Stock that would then be issuable upon

exercise in full of this Warrant would exceed the Issuable Maximum, and (B) the

Company shall not have previously obtained the vote of shareholders (the “Shareholder

Approval”), if any, as may be required by the applicable rules and

regulations of the Nasdaq National Market (or any successor entity) applicable

to approve the issuance of shares of Common Stock in excess of the Issuable

Maximum pursuant to the terms hereof, then the Company shall issue to the

Holder a number of shares of Common Stock equal to the Issuable Maximum and,

with respect to the remainder of the Warrant Shares then issuable under the

Warrant for which an exercise in accordance with the applicable exercise price

would result in an issuance of shares of Common Stock in excess of the Issuable

Maximum (the “Excess Warrant Shares”), the Holder shall have the option

to require the Company to use its best efforts to obtain the Shareholder

Approval applicable to such issuance as soon as is possible, but in any event

not later than the 90th day after such request. The Company and the Holder

understand and agree that shares of Common Stock issued to and then held by the

Holder as a result of exercise of this Warrant shall not be entitled to cast

votes on any resolution to obtain Shareholder Approval pursuant hereto. If the

Company shall succeed in obtaining the Shareholder Approval, the Excess Warrant

Shares shall again become fully exercisable by the Holder.




12.           No

Fractional Shares.  No fractional

shares of Warrant Shares will be issued in connection with any exercise of this

Warrant.  In lieu of any fractional

shares which would, otherwise be issuable, the Company shall pay cash equal to

the product of such fraction multiplied by the closing price of one Warrant

Share as reported on the Nasdaq National Market on the date of exercise.




 




 




9





























 




13.           Notices.  Any and all notices or other communications

or deliveries hereunder (including without limitation any Exercise Notice)

shall be in writing and shall be deemed given and effective on the earliest of

(i) the date of transmission, if such notice or communication is delivered

via facsimile at the facsimile number specified in this Section prior to

6:30 p.m. (New York City time) on a Trading Day, (ii) the next

Trading Day after the date of transmission, if such notice or communication is

delivered via facsimile at the facsimile number specified in this

Section on a day that is not a Trading Day or later than 6:30 p.m.

(New York City time) on any Trading Day, (iii) the Trading Day

following the date of mailing, if sent by nationally recognized overnight

courier service, or (iv) upon actual receipt by the party to whom such

notice is required to be given.  The

addresses for such communications shall be: 

(i) if to the Company, to SureBeam Corporation, Facsimile No.:

(858) 795–6231, Attn: Chief Financial Officer, or (ii) if to

the Holder, to the address or facsimile number appearing on the Warrant

Register or such other address or facsimile number as the Holder may provide to

the Company in accordance with this Section.




14.           Warrant Agent.  The Company shall serve as warrant agent

under this Warrant.  Upon 30 days’

notice to the Holder, the Company may appoint a new warrant agent.  Any corporation into which the Company or

any new warrant agent may be merged or any corporation resulting from any

consolidation to which the Company or any new warrant agent shall be a party or

any corporation to which the Company or any new warrant agent transfers

substantially all of its corporate trust or shareholders services business

shall be a successor warrant agent under this Warrant without any further

act.  Any such successor warrant agent

shall promptly cause notice of its succession as warrant agent to be mailed (by

first class mail, postage prepaid) to the Holder at the Holder’s last address

as shown on the Warrant Register.




15.           Miscellaneous.




(a)           This Warrant shall be binding on and

inure to the benefit of the parties hereto and their respective successors and

assigns.  Subject to the preceding

sentence, nothing in this Warrant shall be construed to give to any Person

other than the Company and the Holder any legal or equitable right, remedy or

cause of action under this Warrant. 

This Warrant may be amended only in writing signed by the Company and

the Holder and their successors and assigns.




(b)           All

questions concerning the construction, validity, enforcement and interpretation

of this Warrant shall be governed by and construed and enforced in accordance

with the internal laws of the State of New York, without regard to the

principles of conflicts of law thereof. 

Each party agrees that all legal proceedings concerning the

interpretations, enforcement and defense of the transactions contemplated by this

Warrant (whether brought against a party hereto or its respective affiliates,

directors, officers, shareholders, employees or agents) shall be commenced in

the state and federal courts sitting in the City of New York, Borough of

Manhattan. Each party hereto hereby irrevocably submits to the exclusive

jurisdiction of the state and federal courts sitting in the City of

New York, Borough of Manhattan for the adjudication of any dispute

hereunder or in connection herewith or with any transaction contemplated hereby

or discussed herein (including with respect to the enforcement of this

Warrant), and hereby irrevocably waives, and agrees not to assert in any suit,

action or proceeding, any claim that it is not personally subject to the

jurisdiction of any such court, that 




 




 




10





























 




such suit, action or

proceeding is improper.  Each party

hereto hereby irrevocably waives personal service of process and consents to

process being served in any such suit, action or proceeding by mailing a copy

thereof via registered or certified mail or overnight delivery (with evidence

of delivery) to such party at the address in effect for notices to it under

this Warrant and agrees that such service shall constitute good and sufficient

service of process and notice thereof. 

Nothing contained herein shall be deemed to limit in any way any right

to serve process in any manner permitted by law. Each party hereto (including

its affiliates, agents, officers, directors and employees) hereby irrevocably

waives, to the fullest extent permitted by applicable law, any and all right to

trial by jury in any legal proceeding arising out of or relating to this

Warrant or the transactions contemplated hereby. If either party shall commence

an action or proceeding to enforce any provisions of this Warrant, then the

prevailing party in such action or proceeding shall be reimbursed by the other

party for its attorneys fees and other costs and expenses incurred with the

investigation, preparation and prosecution of such action or proceeding.




(c)           The headings herein are for

convenience only, do not constitute a part of this Warrant and shall not be

deemed to limit or affect any of the provisions hereof.




(d)           In case any one or more of the

provisions of this Warrant shall be invalid or unenforceable in any respect,

the validity and enforceability of the remaining terms and provisions of this

Warrant shall not in any way be affected or impaired thereby and the parties

will attempt in good faith to agree upon a valid and enforceable provision

which shall be a commercially reasonable substitute therefor, and upon so

agreeing, shall incorporate such substitute provision in this Warrant.




[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,




SIGNATURE PAGE FOLLOWS]




 




 




11





























 




IN WITNESS WHEREOF, the

Company has caused this Warrant to be duly executed by its authorized officer

as of the date first indicated above.








	

  SUREBEAM

  CORPORATION


  
	

   


  
	

  By:


  	

   


  
	

  Name:


  
	

  Title:


  










 




 




12





























 




FORM OF ELECTION TO PURCHASE




 




 




To SUREBEAM CORPORATION:




 




In accordance with the

Warrant enclosed with this Form of Election to Purchase, the undersigned hereby

irrevocably elects to purchase

                         

shares of common stock (“Common Stock”), $0.001 par value per share, of

SureBeam Corporation and, if such Holder is not utilizing the cashless exercise

provisions set forth in this Warrant, encloses herewith

$                   

in cash, certified or official bank check or checks or other immediately

available funds, which sum represents the aggregate Exercise Price (as defined

in the Warrant) for the number of shares of Common Stock to which this Form of

Election to Purchase relates, together with any applicable taxes payable by the

undersigned pursuant to the Warrant.




By its delivery of this

Form of Election To Purchase, the Holder represents and warrants to the Company

that in giving effect to the exercise evidenced hereby the Holder will not

beneficially own in excess of the number of shares of Common Stock (determined

in accordance with Section 13(d) of the Securities Exchange Act of

1934) permitted to be owned under Section 11 of this Warrant to which this

notice relates.




The undersigned requests

that certificates for the shares of Common Stock issuable upon this exercise be

issued in the name of




PLEASE INSERT SOCIAL SECURITY OR




TAX IDENTIFICATION NUMBER




 




 




(Please print name and address)




 




 





























 




Warrant Shares Exercise Log




 




	

  Date


  	

   


  	

  Number of

  Warrant


  Shares Available to be


  Exercised


  	

   


  	

  Number of

  Warrant


  Shares Exercised


  	

   


  	

  Number of

  Warrant


  Shares Remaining to


  be Exercised


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  





 




 





























 




FORM OF ASSIGNMENT




 




 




[To be completed and

signed only upon transfer of Warrant]




FOR VALUE RECEIVED, the

undersigned hereby sells, assigns and transfers unto                                          

the right represented by the within Warrant to purchase

                           shares

of Common Stock of SureBeam Corporation to which the within Warrant relates and

appoints

                           attorney

to transfer said right on the books of SureBeam Corporation with full power of

substitution in the premises.




Dated: 

                            ,

     




 




	

   


  
	

  (Signature must

  conform in all respects to name 


  of holder as specified on the face of the Warrant)


  
	

   


  
	

   


  
	

  Address of

  Transferee


  
	

   


  
	

   


  
	

   


  
	

   


  





 




In the presence of: