**SUBLEASE AGREEMENT**

 

 

                THIS SUBLEASE AGREEMENT(“Sublease”) is entered into as of this 2nd day of August, 2002, by and betweenThe Titan Corporation, a Delaware corporation (“Sublandlord”), and SureBeamCorporation, a Delaware corporation (“Subtenant”).

 

RECITALS

 

A.            Sublandlord is thetenant under that certain Lease by and between **B/G Management**, as landlord(“Master Landlord”), and Sublandlord, as tenant, dated July 26, 1999 and asmodified by Addendum dated July 26, 1999 (such lease, as it may be amended fromtime to time, the “Master Lease”), for certain space located at 6780 SierraCourt, Suite R, Q, L, and O, Dublin, CA (the “Premises”).

 

B.            Subtenant wishes tosublease the Premises from Sublandlord.

 

 

                Now, therefore, for good andvaluable consideration, the receipt and sufficiency of which are herebyacknowledged, the parties hereby agree as follows:

 

**1.             Basic Sublease Information.**

 

Theinformation set forth in this Section (the “Basic Sublease Information”) isintended to supplement and/or summarize the provisions set forth in the balanceof this Sublease.  Each reference inthis Sublease to any of the terms set forth below shall mean the respectiveinformation set forth next to such term as amplified, construed or supplementedby the particular Section(s) of the Sublease pertaining to suchinformation.  In the event of a conflictbetween the provisions of this Section and the balance of the Sublease, thebalance of the Sublease shall control.

 
| Sublandlord:                                   |   | The Titan  Corporation, a Delaware corporation                                                                |
|------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|
|                                           |   |                                                                                                          |
| Sublandlord’s  Address  for Notices: |   | The Titan  Corporation   3033 Science Park Road   San Diego, CA 92122   Attn: Real Estate 

(858) 552 -  9500 |
|                                           |   |                                                                                                          |
| Subtenant:                                     |   | SureBeam  Corporation, a Delaware corporation                                                                 |
|                                           |   |                                                                                                          |
| Subtenant’s Address  for  Notices:   |   | SureBeam Corporation9276 Scranton RoadSuite 600San Diego, CA 92121Attn: Jerry Nelson   (858) 795-6234         |

 

 

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|                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Subleased  Premises:         |   | Approximately  35,825 rentable square feet, known as Suites R, Q, L, and O of the Premises  as described on Exhibit A.                                                                                                                                                                                                                                                                                                                   |
|                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Building:                    |   | 6780 Sierra  Court, Dublin, CA                                                                                                                                                                                                                                                                                                                                                                                                           |
|                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Permitted  Use:              |   | As specified  in **Section  1.06** of the Master Lease as general office and light electronic  manufacturing.                                                                                                                                                                                                                                                                                                                            |
|                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Base Rent:                   |   | Twenty-five  Thousand Five Hundred Thirty-four Dollars and Fifty-seven Cents ($25,534.57)  per month (except for any partial month during the term of this Sublease, in  which case Base Rent for such month shall be pro-rated based on the number of  days in that month), escalating as follows:  8/1/03 —  $26,378.69 per month /  $316,544.28 per year   8/1/04 —  $27,350.65 per month /  $328,207.80 per year |
|                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Commencement  Date:          |   | The term of  the Sublease shall commence on August 2, 2002 (the “Commencement Date”).                                                                                                                                                                                                                                                                                                                                          |
|                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Expiration  Date:            |   | The Expiration  Date shall be January 31, 2005, or such earlier date, if any, on which the  Master Lease is terminated or expires or this Sublease is terminated pursuant  to the terms herein.                                                                                                                                                                                                                                          |
|                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Subtenant’s  Insurance: |   | Specified  and as required in **Section 4.04** of the Master Lease.                                                                                                                                                                                                                                                                                                                                                                      |
|                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Security  Deposit:           |   | As set forth  in Section 3.03 of the Master Lease and Section 14 herein.                                                                                                                                                                                                                                                                                                                                                                 |

 

**2.             Sublease.**

 

Sublandlordhereby subleases to Subtenant, and Subtenant hereby subleases from Sublandlord,the Subleased Premises upon all of the terms, covenants and conditions in thisSublease.

 

**3.             Delivery Condition.**

 

Subtenant acknowledges that it takespossession of the Subleased Premises in its “as is” condition, and furtheracknowledges that Sublandlord has made no representations or warranties of anykind or nature, whether express or implied, with respect to the SubleasedPremises, the remainder of the Premises, the common areas, or the Building, norhas Sublandlord agreed to undertake or perform any modifications, alterations,or improvements to the Subleased Premises, the remainder of the Premises, thecommon areas or the Building which would inure to Subtenant’s benefit.

 

**                4.             Term.**

 

4.1           Term.  The term (the “Term”) of this Sublease**shallcommence on the Commencement Date, and shall end on the Expiration Date.

 

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4.2           Surrender.  Subtenant shall, on or before the ExpirationDate, remove all personal property, furniture, trade fixtures and otherequipment, provided that the removal of the same does not adversely affect theBuilding structure or any Building operating system or is not prohibited by theMaster Lease, and that Subtenant promptly repairs any damage to the Buildingstructure or its operating systems caused by such removal pursuant to therequirements of the Master Lease.  Inthe event that Subtenant fails to remove any such items as required by thisSection 4.2 by the Expiration Date, all such items remaining on the SubleasedPremises after the Expiration Date shall be deemed abandoned and Sublandlordmay dispose of such items as it sees fit, without liability to Subtenant.  Subtenant shall also be responsible for theremoval, on or before the Expiration Date, of all alterations as required underthe Master Lease installed by Subtenant pursuant to this Sublease and shall beresponsible for any associated repair or restoration of the Subleased Premisesrequired under the Master Lease.  In allother respects, Subtenant shall deliver the Subleased Premises broom clean, inits condition as of the Commencement Date, reasonable wear and tear andcasualty excepted.  In no event shallSubtenant remove any of the plumbing, electrical, data lines, and HVACsystem(s), except as otherwise required pursuant to this Section 4.2.

 

Subtenant shall vacate and deliver possessionof the Subleased Premises free of all liens, charges or encumbrances resultingfrom any act or omission on Subtenant’s part, and free and clear of any and allviolations of any law, rule or regulation of any federal, state, municipal orother agency or authority by reason of Subtenant’s actions or failures tofulfill any of its obligations under this Sublease (“Violations”).  Subtenant shall indemnify Sublandlordagainst any and all loss, expense, damage, costs or attorneys’ fees arising outof Violations occurring any time on or after the Commencement Date.  The voluntary or other surrender of thisSublease by Subtenant, or a mutual cancellation thereof, shall notautomatically terminate any sub-subleases or sub-subtenancies or otheragreements by which Subtenant has granted rights to third parties to all or anypart of the Subleased Premises, but shall, at the option of Sublandlord, either(1) terminate all or any existing sub-subleases or sub-subtenancies or suchother agreements, or (2) operate as an assignment to Sublandlord of any or allsuch sub-subleases or sub-subtenancies or such other agreements.

 

4.3           HoldingOver.  If Subtenant remains inpossession of the Subleased Premises after the Expiration Date, such occupancyshall constitute a tenancy at sufferance, and Subtenant shall be obligated topay 125% of the rental installments as specified in Section 5 of this Subleaseand Subtenant shall be liable to Sublandlord for any and all claims, damages,liabilities, costs and expenses (including attorneys’ fees and expenses)incurred by Sublandlord and arising out of Subtenant’s failure to timelysurrender the Subleased Premises in accordance with the requirements of thisSublease, including, without limitation those incurred by Sublandlord arisingunder the Master Lease.

 

**5.             Rent.**

 

As used in this Sublease, the term “Rent”shall include (1) Base Rent and (2) all other amounts which Subtenant isobligated to pay under the terms of this Sublease.

 

5.1           Rent.  Base Rent is as specified in Section 1(Basic Sublease Information).  Base Rentshall be paid by Subtenant to the Master Landlord for the Sublandlord as setforth in Sections 3 and 4 of the Master Lease and as subsequently amended or modified.

 

                Subtenant shall also be solely responsible for any and all increases inRent or any added cost or charge which has arisen solely because of Subtenant’stenancy in the Subleased Premises, 

 

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including, without limitation, any and all heat, water and sewercharges, electric and other utility charges, as well as any other servicecharges required by the Master Lease and relating to the Subleased Premisesand/or Subtenant’s occupation thereof that are not already then covered by theBase Rent (as defined in the Master Lease), Operating Expenses (as defined inthe Master Lease) or Tax Expenses (as defined in the Master Lease) passedthrough to Sublandlord under the Master Lease.

 

                                5.2            [INTENTIONALLY OMITTED]

 

5.3           Mannerof Payment.  All Rent or otherpayment due from Subtenant to Sublandlord hereunder shall be paid in lawfulmoney of the United States, without any prior demand therefor and without anydeduction or setoff whatsoever, at the Masterlandlord’s address pursuant toSection 3.01 of the Master Lease or such other place as Sublandlord and/orMaster Landlord shall from time to time designate (including, withoutlimitation, by wire transfer of immediately available funds to an accountspecified by Sublandlord) by written notice provided to Subtenant at least five(5) days prior to the date on which such Rent or other amount first becomespayable.

 

                **6.             Useand Compliance With Laws.**

 

Subtenant shall use theSubleased Premises for the Permitted Use (as specified in the Basic SubleaseInformation) during the Term of this Sublease, and for no other use oruses.  Subtenant shall not engage in anyactivities prohibited by the Master Lease. Subtenant shall not use or store flammable or hazardous materials on theSubleased Premises, except to the extent normally used in the ordinary courseof business with respect to the Permitted Use unless such materials arespecifically prohibited in the Lease. Subtenant shall not perform any act or carry on any practice which mayinjure the Subleased Premises or cause any offensive odors or noises thatconstitute a nuisance or menace to any other tenant or tenants of the Buildingor the Premises or other persons, and in no event shall any noises or odors beemitted from the Subleased Premises. Nothing shall be done upon or about the Subleased Premises which shallbe unlawful, improper, or contrary to any law, ordinance, regulation orrequirement of any public authority or insurance inspection or rating bureau orsimilar organization having jurisdiction and Subtenant shall be in complianceat all times with all such laws, ordinances, regulations and requirements.  Subtenant shall observe and comply with, andshall cause its employees, agents and invitees to observe and comply with therestrictions set forth in this Sublease. Subtenant agrees to comply with all rules and regulations that MasterLandlord has made or may hereafter from time to time make for the Buildingand/or the Premises.  Sublandlord shallnot be liable to Subtenant or any party claiming through Subtenant in any wayfor damage caused by the failure of any of the other tenants of the Building tocomply with such similar or other covenants in their leases or of such rulesand regulations.

 

                **7.             Insurance.**

**                               **Subtenantshall obtain at its sole expense the insurance required under Section 4.04 ofthe Master Lease effective as of the Commencement Date.  Additionally, Subtenant shall nameSublandlord and Master Landlord as additional insureds, in their capacity asMaster Landlord and Sublandlord, and shall furnish Sublandlord on or before theCommencement Date with certificates of insurance from its insurer, with respectto such insurance, which certificates shall state that such insurance shall notbe cancelled unless thirty (30) days prior written notice shall have been givento Master Landlord and Sublandlord.

 

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                **8.             Assignmentand Subletting.**

 

                                Subtenant shall not directly or indirectly,voluntarily or by operation of law, sell, assign, encumber, pledge or otherwisetransfer or hypothecate any of its interest in or rights with respect to theSubleased Premises or Subtenant’s leasehold estate hereunder (collectively,“Assignment”), or permit all or any portion of the Subleased Premises to beoccupied by anyone (whether pursuant to a license, concession or otherwise)other than Subtenant or sublet all or any portion of the Subleased Premises,without the prior written consent of Master Landlord and Sublandlord.

 

                **9.             Alterations.**

 

                                Subtenant shall not make or suffer tobe made any alterations, additions or improvements to the Subleased Premises,including, without limitation, those related to electrical cabling and/orsystems, plumbing, data cabling, HVAC systems, or modifications to existingfinishes, without the prior written consent of Master Landlord, as requiredunder the Master Lease, and of Sublandlord. Additionally, Subtenant shall be subject to the standards for repairsand alterations set forth in the Master Lease

 

**                10.          Repairsand Maintenance.**

 

10.1         Subtenant’sResponsibility.  Subtenant shall beresponsible for the maintenance and repair of the Subleased Premises inaccordance with the provisions of the Master Lease.

 

10.2         Sublandlord’sResponsibility.  As between theparties to this Sublease, Sublandlord shall have no responsibility or liabilityto the Subtenant or anyone claiming through Subtenant, for the SubleasedPremises including, without limitation, the roof, roof covering, foundation,subfloors, building structural components, major building systems (plumbing,electrical and heating, air conditioning and ventilation systems), and exteriorwalls of the Subleased Premises.

 

                **11.          Default.**

 

Subtenant shall be subject tothe same default provisions as specified in Article 10 of the Master Lease asif it were the tenant thereunder, and Sublandlord shall have all the remediesspecified therein, as if it were Master Landlord, including, withoutlimitation, the right to terminate the Sublease and right to performSubtenant’s obligations under this Sublease at Subtenant’s cost.  Notwithstanding the foregoing, Subtenantshall only be entitled to one-half (1/2) of the cure period for a default, ifany, provided for under the Master Lease.

 

                **12.          Indemnity.**

 

                                In addition tosuch indemnities as may be provided for in the Master Lease, Subtenant agreesto indemnify and hold Sublandlord and its affiliates, officers, agents,servants, employees and independent contractors (individually a “SublandlordParty” and collectively, “Sublandlord Parties”) harmless against all loss,damage, liability, or expense suffered or claimed against any SublandlordParty, by any person or entity (i) caused by or otherwise arising from, inwhole or in part, any breach or default by Subtenant of any covenant orobligation it has hereunder (including but not limited to all covenants orobligations of the tenant under the Master Lease assumed by Subtenant pursuantto the terms of this Sublease), or (ii) caused by or in connection withanything owned or controlled by 

 

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Subtenant, or(iii) resulting from any act, failure to act, or negligence of Subtenant or itsemployees, agents or invitees, or (iv) resulting from any nuisance suffered onthe Subleased Premises, except for damage or injury to third parties orproperty resulting from the proven gross negligence of Sublandlord, Landlord ortheir respective employees, agents, representatives, successors orassigns.  Subtenant further agrees to indemnifySublandlord and hold Sublandlord harmless from all losses, damages, liabilitiesand expenses which Sublandlord may incur, or for which Sublandlord may beliable to Master Landlord, arising from the acts or omissions of Subtenantwhich are or are alleged to be defaults of Sublandlord under the Master Leaseor are the subject matter of any indemnity or hold harmless of Sublandlord, astenant, to Master Landlord under the Master Lease.  The obligations of Subtenant to indemnify Sublandlord and/or the SublandlordParties and/or hold the Sublandlord and/or the Sublandlord Parties harmless inthis Section 12 and elsewhere herein shall survive the expiration or othertermination of this Sublease.

 

                **13.          MasterLease.**

 

                13.1         Master Lease.  Notwithstanding anything in this Sublease tothe contrary, the rights of Subtenant shall be subject to and limited by theterms and conditions contained in the Master Lease between Sublandlord andMaster Landlord as applicable to tenant thereunder, as they may be amended fromtime to time.  Sublandlord shall havethe right to amend the Master Lease from time to time without the consent ofSubtenant provided that any such amendment shall not adversely affectSubtenant’s ability to continue its then current operations in the SubleasedPremises, increase any of the rental or other payments required to be made bySubtenant hereunder or otherwise materially and adversely change Subtenant’srights and obligations hereunder. Sublandlord shall endeavor to give Subtenant notice of any amendment tothe Master Lease, but the failure to give such notice shall not affect thevalidity of such amendment or its applicability to Subtenant, except thatSubtenant shall have no obligation to comply with the terms of any suchamendment until it has received a copy. Any rights granted to Subtenant herein which are limited by the MasterLease shall be deemed to be so limited by this Sublease.

 

                13.2         No Violation.  Notwithstanding anything in this Sublease tothe contrary, Subtenant shall not commit or permit to be committed any act oromission which shall violate any term or condition of the Master Lease.  Subtenant shall indemnify and hold harmlessSublandlord from and against any loss, liability, claim, cost or expense(including reasonable attorneys’ fees) incurred by Sublandlord as a result ofany termination or attempted termination by Sublandlord or Master Landlord ofthe Master Lease resulting from any such act or omission by Subtenant.

                13.3         [INTENTIONALLYOMITTED]

 

                13.4         Termination ofMaster Lease.  If the Master Leaseterminates for any reason prior to the expiration or other termination of thisSublease, this Sublease shall terminate concurrently therewith without anyliability of Sublandlord to Subtenant and, except for any Subtenant obligationshereunder arising on or prior to the termination of this Sublease, followingSubtenant’s surrender in compliance with Section 4.2 hereof, Subtenant’sobligations hereunder shall terminate, except with respect to anyindemnification or hold harmless obligations of Subtenant, which shall survivesuch termination.

 

                13.5         Incorporation ofMaster Lease.  Notwithstanding anyother provision of this Sublease to the contrary, this Sublease and Subtenant’srights under this Sublease shall at all times be 

 

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subject to all of the terms, covenants, andconditions of the Master Lease (a copy of which agreement, as currently ineffect, Subtenant hereby represents that it has received), with the same forceand effect as if fully set forth herein, and except as otherwise expresslyprovided for herein, Subtenant shall keep, observe and perform or cause to bekept, observed and performed, faithfully all those terms, covenants andconditions of Sublandlord as tenant under the Master Lease with respect to theSubleased Premises.  Except as otherwiseprovided hereby, the terms, conditions, rights and responsibilities of theMaster Lease are incorporated herein by reference, and Sublandlord shall havethe rights and responsibilities with respect to the Subtenant that the MasterLandlord has with respect to Sublandlord pursuant to the Master Lease, andSubtenant shall have the rights and responsibilities with respect toSublandlord that Sublandlord has with respect to the Master Landlord pursuantto the Master Lease.  However, to theextent that the Master Lease requires or obligates Master Landlord to maintain,repair, restore, or otherwise expend any money or take any action to preserveand maintain all or any portion of the Subleased Premises or to furnish any servicesto the Subleased Premises, such obligation shall not pass to Sublandlord byreason of this Sublease and shall remain with the Master Landlord.  Subject to the first sentence of thisSection 13.5, with respect to the relationship between the Sublandlord and theSubtenant, the terms, covenants and conditions of this Sublease shall controlwith respect to any conflict or inconsistency between the terms, covenants andconditions contained herein and the terms, covenants and conditions of theMaster Lease.

 

**14.          Security Deposit.**

 

                                Sublandlord andSubtenant hereby acknowledge that Subtenant has tendered payment and shallcontinue to tender payment of the Security Deposit as set forth in Section3.03. of the Master Lease.  Uponexpiration of the Master Lease, Sublandlord shall forward payment to Subtenantwithin thirty (30) days of receipt from Masterlandlord any refunded SecurityDeposit amounts it has received pursuant to Section 3.03. of the Master Lease.

 

 

**15.          Brokers.**

 

                                Subtenantrepresents that it has dealt with no broker or agent in connection with thisSublease and Subtenant shall hold Sublandlord harmless from any and allliability, loss, damage, expense, claim action, demand, suit or obligationarising out of or relating to a breach by Subtenant of such representation.

 

**16.          Counterparts.**

 

                                This Subleasemay be executed in one or more counterparts, each of which shall constitute oneand the same instrument.

 

**17.          Governing Law.**

 

                                This Subleaseshall be governed by and construed and enforced in accordance with the laws ofthe State of California, except with respect to the choice-of-law provisionsthereof.

 

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**18.          Waivers; Amendments.**

 

                                No failure ordelay by any party hereto in exercising any right, power or privilege hereundershall operate as a waiver thereof, nor shall any single or partial exercisethereof preclude any other or further exercise thereof or the exercise of anyother right, power or privilege. The rights and remedies provided herein shallbe cumulative and not exclusive of any rights or remedies provided by law. Anyprovision of this Sublease may be waived if, but only if, such waiver is inwriting and is signed by the party against whom the enforcement of such waiveris sought. No waiver of any provision of this Sublease, in any one or moreinstances, shall be deemed to be, or construed as, a further or continuingwaiver of any such provision. This Sublease may not be amended, modified orsupplemented other than by a written instrument signed by each party hereto.

 

**19.          Entire Agreement.**

 

                                This Subleaseconstitutes the entire agreement and understanding among the parties hereto andsupercedes any and all prior agreements and understandings, written or oral,relating to the subject matter hereof.

 

**20.          Severability.**

 

                                Any term orprovision of this Sublease which is invalid or unenforceable in anyjurisdiction shall, as to such jurisdiction, be ineffective to the extent ofsuch invalidity or unenforceability without rendering invalid or unenforceablethe remaining terms and provisions of this Sublease or affecting the validityor enforceability of any of the terms or provisions of this Sublease in anyother jurisdictions, it being intended that all rights and obligations of theparties hereunder shall be enforceable to the fullest extent permitted by law.

 

 

 

[Signature page follows]

 

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INWITNESS WHEREOF, this Sublease shall be deemed to have been executed anddelivered as of the date first set forth above.

 
|   | **SUBLANDLORD:**                                 |
|--------|--------------------------------------------------|
|   |                                             |
|   | THE TITAN  CORPORATION,   a Delaware corporation |
|   |                                             |
|   | By:                                              |   |
|   | Name:                                            |   |
|   | Title:                                           |   |
|   |                                             |
|   |                                             |
|   | **SUBTENANT:**                                   |
|   |                                             |
|   | SureBeam  Corporation,   a Delaware corporation  |
|   |                                             |
|   | By:                                              |   |
|   | Name:                                            |   |
|   | Title:                                           |   |

 

 

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**LANDLORD’SCONSENT TO SUBLEASE**

 

The undersigned (“Landlord”), Landlord underthe Master Lease, hereby consents to the foregoing Sub-sublease without waiverof any restriction in the Master Lease concerning further assignment orsubletting. Landlord certifies that, as of the date of Landlord’s executionhereof, Sublessor is not in default or breach of any of the provisions of theMaster Lease, and that the Master Lease has not been amended or modified exceptas expressly set forth in the Sublease and foregoing Sub-sublease.

 
| Lessor: |   |
|---------|--------|
|    |   |
| By:     |   |
|    |   |
| Title:  |   |
|    |   |
| Date:   |   |

 

 

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EXHIBIT A

 

DESCRIPTION OF PREMISES

 

[See attached.]

 

 

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