Exhibit 4.1




SECURITIES PURCHASE AGREEMENT




This Securities

Purchase Agreement (this “Agreement”) is dated as of December 2, 2002,

among SureBeam Corporation, a Delaware corporation (the “Company”), and

the purchasers identified on the signature pages hereto (each a “Purchaser”

and collectively the “Purchasers”).




WHEREAS, subject

to the terms and conditions set forth in this Agreement and pursuant to Section

4(2) of the Securities Act of 1933 (the “Securities Act”), and Rule 506

promulgated thereunder, the Company desires to issue and sell to the

Purchasers, and the Purchasers, severally and not jointly, desire to purchase

from the Company, shares of the Company’s Class A common stock, $.001 par

value, and certain Warrants (as defined below) for an aggregate purchase price

of up to $30,000,000 but not less than $20,000,000, as more fully described in

this Agreement.




NOW, THEREFORE, IN

CONSIDERATION of the mutual covenants contained in this Agreement, and for

other good and valuable consideration the receipt and adequacy of which are

hereby acknowledged, the Company and the Purchasers agree as follows:




ARTICLE I.


DEFINITIONS




1.1           Definitions.  In addition to the terms defined elsewhere

in this Agreement, the following terms have the meanings indicated:




“Affiliate” means

any Person that, directly or indirectly through one or more intermediaries,

controls or is controlled by or is under common control with a Person, as such

terms are used in and construed under Rule 144 under the Securities Act.  With respect to a Purchaser, any investment

fund or managed account that is managed on a discretionary basis by the same

investment manager as such Purchaser will be deemed to be an Affiliate of such

Purchaser.




“Business Day”

means any day except Saturday, Sunday and any day which shall be a federal

legal holiday or a day on which banking institutions in the State of New York

are authorized or required by law or other governmental action to close.




“Closing” means

the closing of the purchase and sale of the Securities pursuant to Section 2.1




“Closing Date”

means the date of the Closing.




“Commission” means

the Securities and Exchange Commission.




“Common Stock”

means the Class A common stock of the Company, $.001 par value, and any

securities into which such common stock may hereafter be converted.





























 




“Common Stock Equivalents” means

any securities of the Company or the Subsidiaries which would entitle the

holder thereof to acquire shares of Common Stock, including, without

limitation, any debt, preferred stock or other instrument that is at any time

convertible into or exchangeable for, or otherwise entitles the holder thereof

to receive, shares of Common Stock.




“Company Counsel”

means Luce, Forward, Hamilton & Scripps LLP, counsel to the Company.




“Effective Date”

means the date that the Registration Statement is first declared effective by

the Commission.




“Eligible Market”

means any of the New York Stock Exchange, the American Stock Exchange, the

Nasdaq National Market or the Nasdaq SmallCap Market.




“Exchange Act”

means the Securities Exchange Act of 1934, as amended.




“knowledge”  references to the Company’s “knowledge” when

used herein, shall mean the actual and/or constructive knowledge of Messrs.

Lawrence A. Okberfell, President and Chief Executive Officer and David A. Rane,

Senior Vice President and Chief Financial Officer as well as any other

executive officer of the Company.




“Nasdaq” means the

Nasdaq National Market.




“Per Unit Purchase

Price” shall be $4.75.




“Person” means an

individual or corporation, partnership, trust, incorporated or unincorporated

association, joint venture, limited liability company, joint stock company,

government (or an agency or subdivision thereof) or other entity of any kind.




“Proceeding” means

an action, claim, suit, investigation or proceeding (including, without

limitation, an investigation or partial proceeding, such as a deposition),

whether commenced or threatened.




“Registration

Statement” means a registration statement meeting the requirements set

forth in the Registration Rights Agreement and covering the resale by the

Purchasers of the Shares and the Warrant Shares.




“Registration Rights

Agreement” means the Registration Rights Agreement, dated as of the date of

this Agreement, among the Company and the Purchasers, in the form of Exhibit

B hereto.




“Rule 144,” means

Rule 144 promulgated by the Commission pursuant to the Securities Act, as such

Rules may be amended from time to time, or any similar rule or 




 




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regulation

hereafter adopted by the Commission having substantially the same effect as

such Rule.




“Securities” means

the Shares, the Warrants and Warrant Shares.




“Securities Act”

means the Securities Act of 1933, as amended.




“Shares” means the

shares of Common Stock issued to the Purchasers pursuant to this Agreement.




“Strategic Transaction”

means a transaction or relationship in which the Company issues shares of

Common Stock to a Person which is, itself or through its Subsidiaries, an

operating company in a business synergistic with the business of the Company

and in which the Company receives benefits in addition to the investment of

funds, but shall not include a transaction in which the Company is issuing

securities primarily for the purpose of raising capital or to an entity whose

primary business is investing in securities.




“Subsidiary” means

any subsidiary of the Company that is listed in the SEC Reports.




“Trading Day”

means: (a) a day on which the shares of Common Stock are traded on an

Eligible Market, or (b) if the shares of Common Stock are not listed on an

Eligible Market, a day on which the shares of Common Stock are traded in the

over–the–counter market, as reported by the OTC Bulletin Board, or

(c) if the shares of Common Stock are not quoted on the OTC Bulletin

Board, a day on which the shares of Common Stock are quoted in the over–the–counter

market as reported by the National Quotation Bureau Incorporated (or any

similar organization or agency succeeding its functions of reporting prices); provided,

that in the event that the shares of Common Stock are not listed or quoted as

set forth in (a), (b) and (c) hereof, then Trading Day shall mean a business

day.




“Transaction Documents”

means this Agreement, the Registration Rights Agreement, the Transfer Agent

Instructions, the Warrants and any other documents or agreements executed in

connection with the transactions contemplated hereunder.




“Transfer Agent

Instructions” means the Company’s 

Transfer Agent Instructions in the form of Exhibit C.




“Warrant” means a

Common Stock purchase warrant, in the form of Exhibit A.




“Warrant Shares”

means the shares of Common Stock issuable upon exercise of the Warrants.




 




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ARTICLE II.


PURCHASE AND SALE




2.1           Closing.  Subject to the terms and conditions set

forth in this Agreement, at the Closing the Company shall issue and sell to the

Purchasers, and the Purchasers shall, severally and not jointly, purchase from

the Company, the Shares and the Warrants, for the aggregate purchase price set

forth below such Purchaser’s address on the signature pages to this

Agreement.  The Closing shall take place

at the offices of the Company on the date hereof or at such other location or

time as the parties may agree, provided, that the Closing shall not take

place and this Agreement shall be null and void ab initio unless at least

$20,000,000 in immediately available funds has been deposited by some or all of

the Purchasers in an escrow account created pursuant to that certain escrow

agreement between the Company, Roth Capital Partners, LLC and Pacific

Mercantile Bank, prior to 5:00 p.m. eastern standard time on December 3, 2002.




2.2           Closing

Deliveries.  (a)  At the

Closing, the Company shall deliver or cause to be delivered to each Purchaser

the following:




(i)            a certificate evidencing a number of

Shares equal to the subscription amount indicated below such Purchaser’s name

on the signature page of this Agreement divided by the Per Unit Purchase Price,

registered in the name of such Purchaser;




(ii)           a Warrant, registered in the name of

such Purchaser, pursuant to which such Purchaser shall have the right to

acquire the number of shares of Common Stock equal to 25% of the Shares to be

issued to such Purchaser at the Closing;




(iii)          a legal opinion of Company Counsel, in

agreed form, addressed to the Purchasers;




(iv)          a Registration Rights Agreement duly

executed by the Company; and




(v)           the Transfer Agent Instructions

executed by the Company and delivered to and acknowledged by the Company’s

transfer agent.




(b)           At the Closing, each Purchaser shall

deliver or cause to be delivered to the Company the following:




(i)            the subscription amount indicated

below such Purchaser’s name on the signature page of this Agreement, in United

States dollars and in immediately available funds, by wire transfer to an

account designated in writing by the Company for such purpose; and




(ii)           a Registration Rights Agreement duly

executed by such Purchaser.




 




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ARTICLE III.


REPRESENTATIONS AND WARRANTIES




3.1           Representations

and Warranties of the Company.  The

Company hereby makes the following representations and warranties to the

Purchasers:




(a)           Subsidiaries.  The Company has no direct or indirect

subsidiaries other than those listed in the SEC Reports.  Except as disclosed in the SEC Reports, the

Company owns, directly or indirectly, all of the capital stock of each

Subsidiary free and clear of any lien, charge, security interest, encumbrance,

right of first refusal or other restriction (collectively, “Liens”), and

all the issued and outstanding shares of capital stock of each Subsidiary are

validly issued and are fully paid, non-assessable and free of preemptive and

similar rights.  If the Company has no

subsidiaries, then references in the Transaction Documents to the Subsidiaries

will be disregarded.




(b)           Organization and Qualification.  Each of the Company and the Subsidiaries is

an entity duly incorporated or otherwise organized, validly existing and in

good standing under the laws of the jurisdiction of its incorporation or

organization (as applicable), with the requisite power and authority to own and

use its properties and assets and to carry on its business as currently

conducted.  Neither the Company nor any

Subsidiary is in violation of any of the provisions of its respective

certificate or articles of incorporation, bylaws or other organizational or

charter documents.  Each of the Company

and the Subsidiaries is duly qualified to conduct business and is in good

standing as a foreign corporation or other entity in each jurisdiction in which

the nature of the business conducted or property owned by it makes such

qualification necessary, except where the failure to be so qualified or in good

standing, as the case may be, would not, individually or in the aggregate, have

or reasonably be expected to result in: (i) a material adverse effect on the

legality, validity or enforceability of any Transaction Document, (ii) a

material adverse effect on the results of operations, assets, prospects,

business or financial condition of the Company and the Subsidiaries, taken as a

whole, or (iii) a material adverse impairment to the Company’s ability to

perform fully on a timely basis its obligations under any Transaction Document

(any of (i), (ii) or (iii), a “Material Adverse Effect”).




(c)           Authorization; Enforcement.  The Company has the requisite corporate

power and corporate authority to enter into and to consummate the transactions

contemplated by each of the Transaction Documents and otherwise to carry out

its obligations thereunder.  The

execution and delivery of each of the Transaction Documents by the Company and

the consummation by it of the transactions contemplated thereby have been duly

authorized by all necessary action on the part of the Company and no further

action is required by the Company.  Each

Transaction Document has been (or upon delivery will have been) duly executed

by the Company and, when delivered in accordance with the terms hereof, will

constitute the valid and binding obligation of the Company enforceable against

the Company in accordance with its terms. 

Neither the Company nor any Subsidiary is in violation of any of the

provisions of its respective certificate or articles of incorporation, by–laws

or other organizational or charter documents.




 




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(d)           No Conflicts.  Except as set forth in Schedule 3.1(d),

the execution, delivery and performance of the Transaction Documents by the

Company and the consummation by the Company of the transactions contemplated

thereby do not and will not (i) conflict with or violate any provision of the

Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws

or other organizational or charter documents, or (ii) conflict with, or

constitute a default (or an event that with notice or lapse of time or both

would become a default) under, or give to others any rights of termination,

amendment, acceleration or cancellation (with or without notice, lapse of time

or both) of, any agreement, credit facility, debt or other instrument

(evidencing a Company or Subsidiary debt or otherwise) or other understanding

to which the Company or any Subsidiary is a party or by which any property or

asset of the Company or any Subsidiary is bound or affected, or (iii) result in

a violation of any law, rule, regulation, order, judgment, injunction, decree

or other restriction of any court or governmental authority to which the

Company or a Subsidiary is subject (including federal and state securities laws

and regulations), or by which any property or asset of the Company or a

Subsidiary is bound or affected; except as do not, individually or in the

aggregate, have or are reasonably be expected to result in a Material Adverse

Effect.




(e)           Filings, Consents and Approvals.  The Company is not required to obtain any

consent, waiver, authorization or order of, give any notice to, or make any

filing or registration with, any court or other federal, state, local or other

governmental authority or other Person in connection with the execution,

delivery and performance by the Company of the Transaction Documents, other

than the filing with the Commission of the Registration Statement, the

application(s) to the Nasdaq for the listing of the Shares and Warrant Shares

for trading thereon in the time and manner required thereby, and applicable

Blue Sky filings.




(f)            Issuance of the Securities.  The Securities are duly authorized and, when

issued and paid for in accordance with the Transaction Documents, will be duly

and validly issued, fully paid and nonassessable, free and clear of all

Liens.  The Company has reserved from

its duly authorized capital stock the maximum number of shares of Common Stock

issuable pursuant to this Agreement and the Warrants.




(g)           Capitalization.  The number of shares and type of all

authorized, issued and outstanding capital stock of the Company is set forth in

Schedule 3.1(g).  No securities

of the Company are entitled to preemptive or similar rights, and no Person has

any right of first refusal, preemptive right, right of participation, or any

similar right to participate in the transactions contemplated by the

Transaction Documents.  Except as a

result of the purchase and sale of the Securities and except as disclosed in Schedule

3.1(g), there are no outstanding options, warrants, scrip rights to

subscribe to, calls or commitments of any character whatsoever relating to, or

securities, rights or obligations convertible into or exchangeable for, or

giving any Person any right to subscribe for or acquire, any shares of Common

Stock, or contracts, commitments, understandings or arrangements by which the

Company or any Subsidiary is or may become bound to issue additional shares of

Common Stock, or securities or rights convertible or exchangeable into shares

of Common Stock.  The issue and sale of

the Securities will not, immediately or with the passage of time, obligate the

Company to issue shares of Common Stock




 




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or other securities to any Person (other than the Purchasers)

and will not result in a right of any holder of Company securities to adjust

the exercise, conversion, exchange or reset price under such securities.




(h)           SEC Reports; Financial Statements.  The Company has filed all reports required

to be filed by it under the Securities Act and the Exchange Act, including

pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the

date hereof (or such shorter period as the Company was required by law to file

such material) (the foregoing materials being collectively referred to herein

as the “SEC Reports” and, together with the Schedules to this Agreement,

the “Disclosure Materials”) on a timely basis or has received a valid

extension of such time of filing and has filed any such SEC Reports prior to

the expiration of any such extension. 

The Company has delivered to the Purchasers a copy of all SEC Reports

filed within the 10 days preceding the date hereof.  As of their respective dates, the SEC Reports complied in all

material respects with the requirements of the Securities Act and the Exchange

Act and the rules and regulations of the Commission promulgated thereunder, and

none of the SEC Reports, when filed, contained any untrue statement of a

material fact or omitted to state a material fact required to be stated therein

or necessary in order to make the statements therein, in light of the

circumstances under which they were made, not misleading.  The financial statements of the Company

included in the SEC Reports comply in all material respects with applicable

accounting requirements and the rules and regulations of the Commission with

respect thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with

generally accepted accounting principles applied on a consistent basis during

the periods involved (“GAAP”), except as may be otherwise specified in

such financial statements or the notes thereto, and fairly present in all

material respects the financial position of the Company and its consolidated subsidiaries

as of and for the dates thereof and the results of operations and cash flows

for the periods then ended, subject, in the case of unaudited statements, to

normal, immaterial, year-end audit adjustments.




(i)            Material Changes.  Since the date of the latest audited

financial statements included within the SEC Reports, except as specifically

disclosed in the SEC Reports, (i) there has been no event, occurrence or

development that has had or that could result in a Material Adverse Effect,

(ii) the Company has not incurred any liabilities (contingent or otherwise)

other than (A) trade payables and accrued expenses incurred in the ordinary

course of business consistent with past practice and (B) liabilities not

required to be reflected in the Company’s financial statements pursuant to GAAP

or required to be disclosed in filings made with the Commission, (iii) the

Company has not altered its method of accounting or the identity of its

auditors, (iv) the Company has not declared or made any dividend or distribution

of cash or other property to its stockholders or purchased, redeemed or made

any agreements to purchase or redeem any shares of its capital stock, and (v)

the Company has not issued any equity securities to any officer, director or

Affiliate, except pursuant to existing Company stock option plans. The Company

does not have pending before the Commission any request for confidential

treatment of information.




 




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(j)            Litigation.  There is no action, suit, inquiry, notice of

violation, proceeding or investigation pending or, to the knowledge of the

Company, threatened against or affecting the Company, any Subsidiary or any of

their respective properties before or by any court, arbitrator, governmental or

administrative agency or regulatory authority (federal, state, county, local or

foreign) (collectively, an “Action”) which (i) adversely affects or

challenges the legality, validity or enforceability of any of the Transaction

Documents or the Securities or (ii) would, if there were an unfavorable

decision, individually or in the aggregate, have or result in a Material

Adverse Effect.  Neither the Company nor

any Subsidiary, nor any director or officer thereof, is or has been the subject

of any Action involving a claim of violation of or liability under federal or

state securities laws or a claim of breach of fiduciary duty.  There has not been, and to the knowledge of

the Company, there is not pending or contemplated, any investigation by the

Commission involving the Company or any current or former director or officer

of the Company.  The Commission has not

issued any stop order or other order suspending the effectiveness of any

registration statement filed by the Company or any Subsidiary under the

Exchange Act or the Securities Act.




(k)           Labor Relations.  No material labor dispute exists or, to the

knowledge of the Company, is imminent with respect to any of the employees of

the Company.




(l)            Compliance.  Neither the Company nor any Subsidiary: (i)

is in default under or in violation of (and no event has occurred that has not

been waived that, with notice or lapse of time or both, would result in a

default by the Company or any Subsidiary under), nor has the Company or any

Subsidiary received notice of a claim that it is in default under or that it is

in violation of, any indenture, loan or credit agreement or any other agreement

or instrument to which it is a party or by which it or any of its properties is

bound (whether or not such default or violation has been waived), (ii) is in

violation of any order of any court, arbitrator or governmental body, or (iii)

is or has been in violation of any statute, rule or regulation of any

governmental authority, including without limitation all foreign, federal,

state and local laws relating to taxes, environmental protection, occupational

health and safety, product quality and safety and employment and labor matters,

except in each case as does not, individually or in the aggregate, have or

reasonably be expected to result in a Material Adverse Effect.




(m)          Regulatory Permits.  The Company and the Subsidiaries possess all

certificates, authorizations and permits issued by the appropriate federal,

state, local or foreign regulatory authorities necessary to conduct their respective

businesses as described in the SEC Reports, except where the failure to possess

such permits would not, individually or in the aggregate, have or result in a

Material Adverse Effect (“Material Permits”), and neither the Company

nor any Subsidiary has received any notice of proceedings relating to the

revocation or modification of any Material Permit.




(n)           Title to Assets.  Except as otherwise set forth in the SEC

Reports, the Company and the Subsidiaries have good and marketable title in fee

simple to all real property owned by them that is material to the business of

the Company and the Subsidiaries and good and marketable title in all personal

property owned by them that is material to the business of the




 




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Company and the Subsidiaries, in each case free and

clear of all Liens, except for Liens created by the Titan Credit Facility (as

defined in Section 4.11) and as do not materially affect the value of such

property and do not materially interfere with the use made and proposed to be

made of such property by the Company and the Subsidiaries. Any real property

and facilities held under lease by the Company and the Subsidiaries are held by

them under valid, subsisting and enforceable leases of which the Company and

the Subsidiaries are in compliance.




(o)           Patents and Trademarks.  To the knowledge of the Company, the Company

and the Subsidiaries have, or have rights to use, all patents, patent

applications, trademarks, trademark applications, service marks, trade names,

copyrights, licenses and other similar rights that are necessary or material

for use in connection with their respective businesses as described in the SEC

Reports and which the failure to so have could have a Material Adverse Effect

(collectively, the “Intellectual Property Rights”).  Neither the Company nor any Subsidiary has

received a written notice that the Intellectual Property Rights used by the

Company or any Subsidiary violates or infringes upon the rights of any Person.

To the knowledge of the Company, all such Intellectual Property Rights are

enforceable and there is no existing infringement by another Person of any of

the Intellectual Property Rights.




(p)           Transactions With Affiliates and

Employees.  Except as set forth in

SEC Reports, none of the officers or directors of the Company and, to the

knowledge of the Company, none of the employees of the Company is presently a

party to any transaction with the Company or any Subsidiary (other than for

services as employees, officers and directors), including any contract,

agreement or other arrangement providing for the furnishing of services to or

by, providing for rental of real or personal property to or from, or otherwise

requiring payments to or from any officer, director or such employee or, to the

knowledge of the Company, any entity in which any officer, director, or any

such employee has a substantial interest or is an officer, director, trustee or

partner.




(q)           Certain Fees.  Except as described in Schedule 3.1(q),

no brokerage or finder’s fees or commissions are or will be payable by the

Company to any broker, financial advisor or consultant, finder, placement

agent, investment banker, bank or other Person with respect to the transactions

contemplated by this Agreement.  The

Purchasers shall have no obligation with respect to any fees or with respect to

any claims made by or on behalf of other Persons for fees of a type

contemplated in this Section that may be due in connection with the

transactions contemplated by this Agreement.  The Company shall indemnify and hold harmless the Purchasers,

their employees, officers, directors, agents, and partners, and their

respective Affiliates, from and against all claims, losses, damages, costs

(including the costs of preparation and attorney’s fees) and expenses suffered

in respect of any such claimed or existing fees, as such fees and expenses are

incurred.




(r)            Private Placement. Assuming

the accuracy of the Purchasers representations and warranties set forth in

Section 3.2(b)-(e), no registration under the Securities Act is required for

the offer and sale of the Securities by the Company to the Purchasers as

contemplated hereby.  The issuance and

sale of the Securities hereunder does not contravene the




 




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rules and regulations of the Nasdaq and no shareholder

approval is required for the Company to fulfill its obligations under the

Transaction Documents.




(s)           Form S-3 Eligibility. The

Company is eligible to register the resale of its  Common Stock for resale by the Purchasers under Form S-3

promulgated under the Securities Act.




(t)            Listing and Maintenance

Requirements.  The Company has not,

in the two years preceding the date hereof, received notice (written or oral)

from any Eligible Market on which the Common Stock is or has been listed or

quoted to the effect that the Company is not in compliance with the listing or

maintenance requirements of such Eligible Market. The Company is, and has no

reason to believe that it will not in the foreseeable future continue to be, in

compliance with all such listing and maintenance requirements.




(u)           Investment Company.  The Company is not, and is not an Affiliate

of, an “investment company” within the meaning of the Investment Company Act of

1940, as amended.




(v)           Registration Rights.  Except for the Company’s registration

obligations pursuant to the Registration Rights Agreement, the Company has not

granted or agreed to grant to any Person any rights (including “piggy–back”

registration rights) to have any securities of the Company registered with the

Commission or any other governmental authority that have not been satisfied in

full.




(w)          Application of Takeover Protections.  The Company has taken all necessary action,

if any, in order to render inapplicable any control share acquisition, business

combination, poison pill (including any distribution under a rights agreement)

or other similar anti–takeover provision under the Company’s Certificate

of Incorporation (or similar charter documents) or the laws of its state of

incorporation that is or could become applicable to the Purchasers as a result

of the Purchasers and the Company fulfilling their obligations or exercising

their rights under the Transaction Documents, including without limitation the

Company’s issuance of the Securities and the Purchasers’ ownership of the

Securities.




(x)            Disclosure.  The Company confirms that neither it nor any

other Person acting on its behalf has provided any of the Purchasers or their

agents or counsel with any information that constitutes or might constitute

material, non-public information.  The

Company understands and confirms that the Purchasers will rely on the foregoing

representations in effecting transactions in securities of the Company.  All disclosure provided to the Purchasers

regarding the Company, its business and the transactions contemplated hereby,

including the Schedules to this Agreement, furnished by or on behalf of the

Company are true and correct and do not contain any untrue statement of a

material fact or omit to state any material fact necessary in order to make the

statements made therein, in light of the circumstances under which they were

made, not misleading.




 




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3.2           Representations

and Warranties of the Purchasers. 

Each Purchaser hereby, for itself and for no other Purchaser, represents

and warrants to the Company as follows:




(a)           Organization; Authority.  Such Purchaser is an entity duly organized,

validly existing and in good standing under the laws of the jurisdiction of its

organization with the requisite corporate or partnership power and authority to

enter into and to consummate the transactions contemplated by the Transaction

Documents and otherwise to carry out its obligations thereunder. The execution,

delivery and performance by such Purchaser of the transactions contemplated by

this Agreement has been duly authorized by all necessary corporate action on

the part of such Purchaser.  Each of

this Agreement and the Registration Rights Agreement has been duly executed by

such Purchaser, and when delivered by such Purchaser in accordance with terms

hereof, will constitute the valid and legally binding obligation of such

Purchaser, enforceable against it in accordance with its terms.




(b)           Investment Intent.  Such Purchaser is acquiring the Securities

as principal for its own account for investment purposes only and not with a

view to or for distributing or reselling such Securities or any part thereof,

without prejudice, however, to such Purchaser’s right at all times to sell or

otherwise dispose of all or any part of such Securities in compliance with

applicable federal and state securities laws. 

Nothing contained herein shall be deemed a representation or warranty by

such Purchaser to hold Securities for any period of time.  Such Purchaser is acquiring the Securities

hereunder in the ordinary course of its business. Such Purchaser does not have

any agreement or understanding, directly or indirectly, with any Person to

distribute any of the Securities.




(c)           Purchaser Status.  At the time such Purchaser was offered the

Securities, it was, and at the date hereof it is, and on each date on which it

exercises the Warrants, it will be an “accredited investor” as defined in Rule

501(a) under the Securities Act.  Such

Purchaser is not a registered broker-dealer under Section 15 of the Exchange

Act.




(d)           Experience of such Purchaser.  Such Purchaser, either alone or together

with its representatives, has such knowledge, sophistication and experience in

business and financial matters so as to be capable of evaluating the merits and

risks of the prospective investment in the Securities, and has so evaluated the

merits and risks of such investment. 

Such Purchaser is able to bear the economic risk of an investment in the

Securities and, at the present time, is able to afford a complete loss of such

investment.




(e)           General Solicitation.  To the knowledge of such Purchaser, such

Purchaser is not purchasing the Securities as a result of any advertisement,

article, notice or other communication regarding the Securities published in

any newspaper, magazine or similar media or broadcast over television or radio

or presented at any seminar or any other general solicitation or general

advertisement.




(f)            Access to Information.  Such Purchaser acknowledges that it has

reviewed the Disclosure Materials and has been afforded (i) the opportunity to

ask such questions as it has




 




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deemed necessary of, and to receive answers from, representatives

of the Company concerning the terms and conditions of the offering of the

Securities and the merits and risks of investing in the Securities; (ii) access

to information about the Company and the Subsidiaries and their respective

financial condition, results of operations, business, properties, management

and prospects sufficient to enable it to evaluate its investment; and (iii) the

opportunity to obtain such additional information that the Company possesses or

can acquire without unreasonable effort or expense that is necessary to make an

informed investment decision with respect to the investment.  Neither such inquiries nor any other

investigation conducted by or on behalf of such Purchaser or its representatives

or counsel shall modify, amend or affect such Purchaser’s right to rely on the

truth, accuracy and completeness of the Disclosure Materials and the Company’s

representations and warranties contained in the Transaction Documents.




(g)           No Violations.  During the past ten (10) years, no federal

or state securities regulatory authority nor any self-regulatory organization

has, to the knowledge of such Purchaser: (i) found that such Purchaser or any

of its Affiliates has committed a violation of investment-related rules,

regulations or statutes, (other than a violation designated as a “minor rule

violation” under a plan approved by the Commission), or (ii) entered an order

against such Purchaser or any of its Affiliates as a result of, or in

connection with, an investment-related activity.




The Company

acknowledges and agrees that each Purchaser does not make or has not made any

representations or warranties with respect to the transactions contemplated

hereby other than those specifically set forth in this Section 3.2.




ARTICLE IV.


OTHER AGREEMENTS OF THE PARTIES




4.1           Transfer

Restrictions. 

(a)  Securities may only be disposed of in compliance with

state and federal securities laws.  In

connection with any transfer of Securities other than pursuant to an effective

registration statement, to the Company , to an Affiliate of a Purchaser or in

connection with a pledge as contemplated in Section 4.1(b), the Company may

require the transferor thereof to provide to the Company an opinion of counsel

selected by the transferor, the form and substance of which opinion shall be

reasonably satisfactory to the Company, to the effect that such transfer does

not require registration of such transferred Securities under the Securities

Act.  As a condition of transfer, any

such transferee shall agree in writing to be bound by the terms of this

Agreement and shall have the rights of a Purchaser under this Agreement and the

Registration Rights Agreement.




(b)           The Purchasers agree to the

imprinting, so long as is required by this Section 4.1(b), of the

following legend on any the Securities:




[NEITHER] THESE

SECURITIES [NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE]

HAVE [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION




 




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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.




The Company acknowledges and agrees that a Purchaser may from time to

time pledge pursuant to a bona fide margin agreement or grant a security

interest in some or all of the Securities and, if required under the terms of

such arrangement, such Purchaser may transfer pledged or secured Securities to

the pledgees or secured parties.  Such a

pledge or transfer would not be subject to approval of the Company and no legal

opinion of the pledgee, secured party or pledgor shall be required in

connection therewith.  Further, no

notice shall be required of such pledge. 

At the appropriate Purchaser’s expense, the Company will execute and

deliver such reasonable documentation as a pledgee or secured party of

Securities may reasonably request in connection with a pledge or transfer of

the Securities, including the preparation and filing of any required prospectus

supplement under Rule 424(b)(3) of the Securities Act or other applicable

provision of the Securities Act to appropriately amend the list of Selling

Stockholders thereunder.




(c)           Certificates evidencing Securities

shall not contain any legend (including the legend set forth in Section

4.1(b)): (i) while a registration statement (including the Registration

Statement) covering the resale of such security is effective under the

Securities Act, or (ii) following any sale of such Securities pursuant to Rule

144, or (iii) if such Securities are eligible for sale under Rule 144(k), or

(iv) if such legend is not required under applicable requirements of the

Securities Act (including judicial interpretations and pronouncements issued by

the Staff of the Commission).  The

Company shall cause its counsel to issue the legal opinion included in the

Transfer Agent Instructions to the Company’s transfer agent on the Effective

Date.  If all or any portion of a

Warrant is exercised at a time when there is a effective registration statement

to cover the resale of the Warrant Shares, such Warrant Shares shall be issued

free of all legends.  The Company agrees

that following the Effective Date or at such time as such legend is no longer

required under this Section 4.1(c), it will, no later than three Trading Days

following the delivery by a Purchaser to the Company or the Company’s transfer

agent of a certificate representing Securities issued with a restrictive

legend, deliver or cause to be delivered to such Purchaser a certificate

representing such Securities that is free from all




 




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restrictive and other legends.  The Company may not make any notation on its

records or give instructions to any transfer agent of the Company that enlarge

the restrictions on transfer set forth in this Section.




4.2           Furnishing

of Information.  As long as any

Purchaser owns Securities, the Company covenants to timely file (or obtain

extensions in respect thereof and file within the applicable grace period) all

reports required to be filed by the Company after the date hereof pursuant to

the Exchange Act.  Upon the request of

any such Person, the Company shall deliver to such Person a written

certification of a duly authorized officer as to whether it has complied with

the preceding sentence. As long as any Purchaser owns Securities, if the

Company is not required to file reports pursuant to such laws, it will prepare

and furnish to the Purchasers and make publicly available in accordance with

Rule 144(c) such information as is required for the Purchasers to sell the

Securities under Rule 144. The Company further covenants that it will take such

further action as any holder of Securities may reasonably request, all to the

extent required from time to time to enable such Person to sell such Securities

without registration under the Securities Act within the limitation of the

exemptions provided by Rule 144.




4.3           Integration.  The Company shall not, and shall use its

best efforts to ensure that no Affiliate of the Company shall, sell, offer for

sale or solicit offers to buy or otherwise negotiate in respect of any security

(as defined in Section 2 of the Securities Act) that would be integrated with

the offer or sale of the Securities in a manner that would require the

registration under the Securities Act of the sale of the Securities to the

Purchasers, or that would be integrated with the offer or sale of the

Securities for purposes of the rules and regulations of the Nasdaq.




4.4           No

Subsequent Issuances or Registrations. 

Prior to the 90th day following the Effective Date (such 90th

day, the “Record Date”), the Company will not, directly or indirectly:

(i) except pursuant to a Strategic Transaction, offer, sell, grant any option

to purchase, or otherwise dispose of (or announce any offer, sale, grant or any

option to purchase or other disposition of) shares of Common Stock or Common

Stock Equivalents, at a price per share less than $7.00 (the “Record 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 a price less than

the Record Price, such issuance shall be deemed to have occurred for less than

the Record Price) or (ii) file a registration statement with the Commission

(other than on Form S-8 or pursuant to the Registration Rights Agreement) with

respect to any securities of the Company. 

The foregoing issuance and registration restrictions 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




 




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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, or (vii) the issuance of Common Stock

Equivalents pursuant to a Strategic Transaction.




4.5           Right

of Participation.  During the period

from the date hereof until the first year anniversary of the Closing Date, in

the event that the Company, directly or indirectly and other than pursuant to a

Strategic Transaction, offers, sells, grants any option to purchase, or

otherwise disposes of (or announces any offer, sale, grant or any option to

purchase or other disposition of) shares of Common Stock or Common Stock

Equivalents (any such offer, sale, grant, disposition or announcement being

referred to as a “Subsequent Placement”), then Company shall deliver to

the Purchasers a written notice (a “Subsequent Placement Notice”) of its

intention to effect such Subsequent Placement. 

Each Purchaser or Affiliate thereof shall have the right to participate

on pro-rata basis (with respect to other participating Purchasers and the

number of Shares purchased by them on the Closing Date) in up to 50% of each

Subsequent Placement on the same terms and conditions as the other investor(s)

in the Subsequent Placement, up to a maximum of $15,000,000 for all

participating Purchasers in each Subsequent Placement.  The right of the Purchasers to participate

in a Subsequent Placement pursuant to this Section 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, (vii) the

issuance of Common Stock Equivalents pursuant to a Strategic Transaction, or

(viii) a bona fide underwritten public offering of securities of the Company

pursuant to which the Company receives net proceeds of at least $25 million,

other than an equity line of credit or similar financing transaction.




4.6           Securities

Laws Disclosure; Publicity.  The

Company shall (i) on the Closing Date, issue a press release reasonably

acceptable to the Purchasers disclosing the transactions contemplated hereby

and (ii) make such other filings and notices in the manner and time required by

the Commission.  The Company and the

Purchasers shall consult with each other in issuing any press releases with

respect to the transactions contemplated hereby, and neither party shall issue

any such press release or otherwise make any such public statement without the

prior consent of the other, which consent shall not unreasonably be withheld,

except if such disclosure is required by law, in which case the disclosing

party shall promptly provide the other party with prior notice of such public

statement or communication. 

Notwithstanding the foregoing, the Company shall not publicly disclose

the name of any Purchaser, or include the name of any




 




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Purchaser in any filing with the Commission or any regulatory

agency or the Nasdaq, without the prior written consent of such Purchaser,

except to the extent such disclosure (but not any disclosure as to the

controlling Persons thereof) is required by law or Nasdaq regulations, in which

case the Company shall provide the Purchasers with prior notice of such

disclosure.




4.7           Reimbursement.  If any Purchaser becomes involved in any

capacity in any Proceeding by or against any Person who is a stockholder of the

Company, solely as a result of such Purchaser’s acquisition of the Securities

under this Agreement and without causation by any other activity, obligation,

condition or liability pertaining to such Purchaser and not to the transactions

contemplated by this Agreement, the Company will reimburse such Purchaser for

its reasonable legal and other expenses (including the cost of any

investigation preparation and travel in connection therewith) incurred in

connection therewith, as such expenses are incurred.  The reimbursement obligations of the Company under this paragraph

shall be in addition to any liability which the Company may otherwise have,

shall extend upon the same terms and conditions to any Affiliates of the

Purchasers who are actually named in such action, proceeding or investigation,

and partners, directors, agents, employees and controlling persons (if any), as

the case may be, of the Purchasers and any such Affiliate, and shall be binding

upon and inure to the benefit of any successors, assigns, heirs and personal

representatives of the Company, the Purchasers and any such Affiliate and any

such Person.  The Company also agrees

that neither the Purchasers nor any such Affiliates, partners, directors,

agents, employees or controlling persons shall have any liability to the

Company or any Person asserting claims on behalf of or in right of the Company

solely as a result of acquiring the Securities under this Agreement.




4.8           Indemnification

of Purchasers.  The Company will

indemnify and hold the Purchasers and their directors, officers, shareholders,

partners, employees and agents (each, a “Purchaser Party”) harmless from

any and all losses, liabilities, obligations, claims, contingencies, damages,

costs and expenses, including all judgments, amounts paid in settlements, court

costs and reasonable attorneys’ fees and costs of investigation (collectively,

“Losses”) that any such Purchaser Party may suffer or incur as a result

of or relating to (a) any misrepresentation, breach or inaccuracy, or any

allegation by a third party that, if true, would constitute a breach or

inaccuracy, of any of the representations, warranties, covenants or agreements

made by the Company in the Transaction Documents; or (b) any cause of action,

suit or claim brought or made against such Purchaser Party and arising solely

out of or solely resulting from the execution, delivery, performance or

enforcement of this Agreement or any of the other Transaction Documents and

without causation by any other activity, obligation, condition or liability

pertaining to such Purchaser and not to the transactions contemplated by this

Agreement. The Company will reimburse such Purchaser for its reasonable legal

and other expenses (including the cost of any investigation, preparation and

travel in connection therewith) incurred in connection therewith, as such

expenses are incurred.  Notwithstanding

the foregoing, such indemnification shall not cover any liability of an

indemnified party arising solely out of such indemnified party’s gross

negligence, willful misconduct or fraudulent actions.




4.9           Shareholders

Rights Plan.  No claim will be made

or enforced by the Company or any other Person that any Purchaser is an

“Acquiring Person” under any shareholders rights plan




 




16





























 




or similar plan or arrangement in effect or hereafter adopted

by the Company, or that any Purchaser could be deemed to trigger the provisions

of any such plan or arrangement, by virtue of receiving Securities under the

Transaction Documents or under any other agreement between the Company and the

Purchasers.




4.10         Non-Public

Information.  The Company covenants

and agrees that neither it nor any other Person acting on its behalf will

provide any Purchaser or its agents or counsel with any information that the

Company believes constitutes material non-public information, unless prior

thereto such Purchaser shall have executed a written agreement regarding the

confidentiality and use of such information. 

The Company understands and confirms that each Purchaser shall be

relying on the foregoing representations in effecting transactions in

securities of the Company.




4.11         Use

of Proceeds.  The Company shall use

the net proceeds from the sale of the Securities hereunder for working capital

purposes or other proper corporate purposes and not for the satisfaction of any

portion of the Company’s debt (other than payment of trade receivables and

accrued expenses in the ordinary course of the Company’s business and prior

practices), to redeem any Company equity or equity-equivalent securities or to

settle any outstanding litigation. 

Notwithstanding the foregoing, the Purchasers acknowledge that any use

of proceeds described herein in excess of $25,000,000 shall be subject at all

times to the terms of that certain Senior

Secured Credit Agreement, dated as of August 2, 2002, between The Titan

Corporation, as the Lender, and the Company, as the Borrower (the “Titan

Credit Facility”).




4.12         Certain

Trading Limitations. Each Purchaser agrees that prior to the earlier to

occur of (x) the 90th day following the Closing Date and (y) the

Effective Date, it will not enter into any Short Sales.  For purposes of this Section 4.11, a “Short

Sale” by a Purchaser means a sale of Common Stock that is marked as a short

sale and occurs at a time when such Purchaser has no equivalent offsetting long

position in the Common Stock.  For

purposes of determining whether there is an equivalent offsetting long position

in the Common Stock held by a Purchaser on any date of computation, all Warrant

Shares issuable upon exercise in full of the Warrants issued to such Purchaser

shall be deemed to be held long by such Purchaser.




ARTICLE V.


MISCELLANEOUS




5.1           Fees

and Expenses.  At  the Closing, the Company shall, in addition

to any other fees due to Roth Capital Partners, LLC,  reimburse Roth Capital Partners, LLC for $20,000 of its legal

fees and due diligence expenses in connection with the preparation and

negotiation of the Transaction Documents. 

Except as specified in the immediately preceding sentence and as

contemplated in the Registration Rights Agreement, each party shall pay the

fees and expenses of its advisers, counsel, accountants and other experts, if

any, and all other expenses incurred by such party incident to the negotiation,

preparation, execution, delivery and performance of this Agreement.  The Company shall pay all stamp and other

taxes and duties levied in connection with the sale of the Shares.




 




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5.2           Entire

Agreement.  The Transaction

Documents, together with the Exhibits and Schedules thereto, contain the entire

understanding of the parties with respect to the subject matter hereof and

supersede all prior agreements and understandings, oral or written, with

respect to such matters, which the parties acknowledge have been merged into

such documents, exhibits and schedules.




5.3           Notices.  Any and all notices or other communications

or deliveries required or permitted to be provided hereunder shall be in

writing and shall be deemed given and effective on the earliest of (a) 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, (b) 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, (c) the

Trading Day following the date of mailing, if sent by U.S. nationally

recognized overnight courier service, or (d) upon actual receipt by the party

to whom such notice is required to be given. 

The address for such notices and communications shall be as follows:




If to the Company:                                                                                       SureBeam Corporation
9276 Scranton Road, Suite 600


San Diego, CA 92121


Attn: Chief Financial Officer


Fax No.: (858) 795-6231




With a copy to:                                                                                                       Luce, Forward,

Hamilton & Scripps LLP


11988 El Camino Real,

Suite 200


San Diego, CA 92130


Attn: Ed Arledge                    


Fax No.:  (858) 720-6306




If to a Purchaser:                                                                                                To the address set forth under such

Purchaser’s name


on the signature pages hereof.




With a copy to:                                                                                                       Bryan Cave LLP.




                                                                                                                                                                                          1290 Avenue of the Americas


New York, NY 10104


Attn: Eric L. Cohen, Esq.


Fax No.: 212-541-1432 and 212-541-4630




                or such other address as may be designated in writing

hereafter, in the same manner, by such Person.




5.4           Amendments;

Waivers.  No provision of this

Agreement may be waived or amended except in a written instrument signed, in

the case of an amendment, by the Company and each of the Purchasers or, in the

case of a waiver, by the party against whom enforcement of any such waiver is

sought.  No waiver of any default with

respect to any provision, condition or




 




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requirement of this Agreement shall be deemed to be a

continuing waiver in the future or a waiver of any subsequent default or a

waiver of any other provision, condition or requirement hereof, nor shall any

delay or omission of either party to exercise any right hereunder in any manner

impair the exercise of any such right.




5.5           Construction.  The headings herein are for convenience

only, do not constitute a part of this Agreement and shall not be deemed to

limit or affect any of the provisions hereof. 

The language used in this Agreement will be deemed to be the language

chosen by the parties to express their mutual intent, and no rules of strict

construction will be applied against any party.  This Agreement shall be construed as if drafted jointly by the

parties, and no presumption or burden of proof shall arise favoring or

disfavoring any party by virtue of the authorship of any provisions of this

Agreement or any of the Transaction Documents.




5.6           Successors

and Assigns.  This Agreement shall

be binding upon and inure to the benefit of the parties and their successors

and permitted assigns.  The Company may

not assign this Agreement or any rights or obligations hereunder without the

prior written consent of the Purchasers. Any Purchaser may assign any or all of

its rights under this Agreement to any Person to whom such Purchaser assigns or

transfers any Securities, provided such transferee agrees in writing to be

bound, with respect to the transferred Securities, by the provisions hereof

that apply to the “Purchasers.”




5.7           No

Third-Party Beneficiaries.  This

Agreement is intended for the benefit of the parties hereto and their

respective successors and permitted assigns and is not for the benefit of, nor

may any provision hereof be enforced by, any other Person, except as otherwise

set forth in Section 4.6 and 4.7.




5.8           Governing

Law.  All questions concerning the

construction, validity, enforcement and interpretation of the Transaction

Documents  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 Agreement and any other Transaction Documents (whether

brought against a party hereto or its respective affiliates, directors,

officers, shareholders, employees or agents) shall be commenced exclusively 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 the any of the Transaction Documents), 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

such suit, action or proceeding is improper. 

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 Agreement or the transactions contemplated

hereby.  If either party shall commence

an action or proceeding to




 




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enforce any provisions of a Transaction Document, 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.




5.9           Survival.  The representations, warranties, agreements

and covenants contained herein shall survive the Closing and the delivery and

exercise of the Warrants, as applicable.




5.10         Execution.  This Agreement may be executed in two or

more counterparts, all of which when taken together shall be considered one and

the same agreement and shall become effective when counterparts have been

signed by each party and delivered to the other party, it being understood that

both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile

transmission, such signature shall create a valid and binding obligation of the

party executing (or on whose behalf such signature is executed) with the same

force and effect as if such facsimile signature page were an original thereof.




5.11         Severability.  If any provision of this Agreement is held

to be invalid or unenforceable in any respect, the validity and enforceability

of the remaining terms and provisions of this Agreement shall not in any way be

affected or impaired thereby and the parties will attempt to agree upon a valid

and enforceable provision that is a reasonable substitute therefor, and upon so

agreeing, shall incorporate such substitute provision in this Agreement.




5.12         Rescission

and Withdrawal Right. 

Notwithstanding anything to the contrary contained in (and without

limiting any similar provisions of) the Transaction Documents, whenever any

Purchaser exercises a right, election, demand or option under a Transaction

Document and the Company does not timely perform its related obligations within

the periods therein provided, then such Purchaser may rescind or withdraw, in

its sole discretion from time to time upon written notice to the Company, any

relevant notice, demand or election in whole or in part without prejudice to

its future actions and rights.




5.13         Replacement

of Securities.  If any certificate

or instrument evidencing any Securities is mutilated, lost, stolen or

destroyed, the Company shall issue or cause to be issued in exchange and

substitution for and upon cancellation thereof, or in lieu of and substitution

therefor, a new certificate or instrument, but only upon receipt of evidence

reasonably satisfactory to the Company of such loss, theft or destruction and

customary and reasonable indemnity (which may include a reasonable surety

bond), if requested.  The applicants for

a new certificate or instrument under such circumstances shall also pay any

reasonable third-party costs associated with the issuance of such replacement

Securities.




5.14         Remedies.  In addition to being entitled to exercise

all rights provided herein or granted by law, including recovery of damages,

each of the Purchasers and the Company will be entitled to specific performance

under the Transaction Documents.  The

parties agree that monetary damages may not be adequate compensation for any

loss incurred by reason of any breach of obligations described in the foregoing

sentence and hereby agrees to waive in any




 




20





























 




action for specific performance of any such obligation the

defense that a remedy at law would be adequate.




5.15         Independent

Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under any Transaction Document

are several and not joint with the obligations of any other Purchaser, and no

Purchaser shall be responsible in any way for the performance of the

obligations of any other Purchaser under any Transaction Document.  Nothing contained herein or in any

Transaction Document, and no action taken by any Purchaser pursuant thereto,

shall be deemed to constitute the Purchasers as a partnership, an association,

a joint venture or any other kind of entity, or create a presumption that the

Purchasers are in any way acting in concert or as a group with respect to such

obligations or the transactions contemplated by the Transaction Document.  Each Purchaser shall be entitled to

independently protect and enforce its rights, including without limitation the

rights arising out of this Agreement or out of the other Transaction Documents,

and it shall not be necessary for any other Purchaser to be joined as an additional

party in any proceeding for such purpose.




[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE PAGE FOR PURCHASER FOLLOWS]




 




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IN WITNESS

WHEREOF, the parties hereto have caused this Securities Purchase Agreement to

be duly executed by their respective authorized signatories as of the date

first indicated above.




SUREBEAM

CORPORATION




______________________________________


Name:       


Title:         




[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE PAGES FOR PURCHASERS FOLLOW]




 




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IN WITNESS

WHEREOF, the parties have executed this Agreement as of the date first written

above.




PURCHASER:




 




 




 




By:_____________________________________




Name:




Title:




 




                                                                                                Subscription

Amount:  $[ ]




 




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