**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 COOPERATIVE REAL ESTATEINVESTMENT COMPANY (CREIC), (Limited Liability Company) duly registered as perSAUDI LAW, as landlord (“Master Landlord”), and Sublandlord, as tenant, datedJanuary 15, 2001 corresponding to 20/10/1421 (such lease, as it may be amendedfrom time to time, the “Master Lease”), for certain space consisting ofapproximately 133 square meters and located at King Fahed Road, North to KingFahed Library, Olaya Area, Riyadh, Kingdom of Saudi Arabia, in the buildingcommonly known as Abraj Atta’awuneya (the “Premises”).

 

B.            Subtenant wishes tosublease a portion of 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 Road, Suite 600San Diego, CA 92121Attn: Jerry Nelson   (858) 795-6234      |

 

 

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|                         |   |                                                                                                                                                                                             |
|------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Premises:                    |   | Approximately  133 square meters.                                                                                                                                                                |
|                         |   |                                                                                                                                                                                             |
| Building:                    |   | Abraj  Atta’awuneya   King Fahed Road, North to King Fahed Library   Olaya Area, Riyadh   Kingdom of Saudi Arabia                                                                           |
|                         |   |                                                                                                                                                                                             |
| Permitted  Use:              |   | As specified  in **Clause I****1.** of the Master Lease as **private**  office.                                                                                                                  |
|                         |   |                                                                                                                                                                                             |
| Base Rent:                   |   | Ninety  Thousand Saudi Riyals (SR 90,000) annually in accordance with Section 5  hereof.                                                                                                         |
|                         |   |                                                                                                                                                                                             |
| Commencement  Date:          |   | The term of  the Sublease shall commence on August 2, 2002 (such later date, the  “Commencement Date”).                                                                           |
|                         |   |                                                                                                                                                                                             |
| Expiration  Date:            |   | The  Expiration Date shall be February 14, 2003, 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 **Clause XI**7. of the Master Lease.                                                                                                                               |
|                         |   |                                                                                                                                                                                             |
| Security  Deposit:           |   | Eighteen Thousand Saudi Riyals as set forth in Clause  IV of the Master Lease and Section 14 hereof.                                                                                             |

 

**2.             Sublease.**

 

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

 

**3.             Delivery Condition.**

 

Subtenant acknowledges that it takespossession of the Premises in its “as is” condition, and further acknowledgesthat Sublandlord has made no representations or warranties of any kind ornature, whether express or implied, with respect to the Premises, the remainderof the Premises, the common areas, or the Building, nor has Sublandlord agreedto undertake or perform any modifications, alterations, or improvements to thePremises, the remainder of the Premises, the common areas or the Building whichwould 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.

 

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 

 

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operating systems caused by such removal pursuant to the requirementsof the Master Lease.  In the event thatSubtenant fails to remove any such items as required by this Section 4.2 by theExpiration Date, all such items remaining on the Premises after the ExpirationDate shall be deemed abandoned and Sublandlord may dispose of such items as itsees fit, without liability to Subtenant. Subtenant shall also be responsible for the removal, on or before theExpiration Date, of all alterations as required under the Master Leaseinstalled by Subtenant pursuant to this Sublease and shall be responsible forany associated repair or restoration of the Premises required under the MasterLease.  In all other respects, Subtenantshall deliver the Premises broom clean, in its condition as of the CommencementDate, reasonable wear and tear and casualty excepted.  In no event shall Subtenant remove any of the plumbing,electrical, data lines, and HVAC system(s), except as otherwise requiredpursuant to this Section 4.2.

 

Subtenant shall vacate and deliver possessionof the Premises free of all liens, charges or encumbrances resulting from anyact 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 Premises, but shall, at the option of Sublandlord, either (1)terminate all or any existing sub-subleases or sub-subtenancies or such otheragreements, or (2) operate as an assignment to Sublandlord of any or all suchsub-subleases or sub-subtenancies or such other agreements.

 

4.3           HoldingOver.  If Subtenant remains inpossession of the Premises after the Expiration Date, such occupancy shallconstitute a tenancy at sufferance, and Subtenant shall be obligated to pay200% of the rental installments as specified in Section 5 of this Sublease andSubtenant 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 Premises in accordance with the requirements of this Sublease,including, without limitation those incurred by Sublandlord arising under theMaster 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.  The current Base Rent is as specified inSection 1 (Basic Sublease Information), which Sublandlord and Subtenant herebyacknowledge that Subtenant has tendered payment and for the current “leaseperiod”.  Any rents or other chargespursuant to this Sublease shall be paid by Subtenant to the Master Landlord forthe Sublandlord as due, in advance, without offset or deductions, within oneweek of the Due Date.  Base Rent for anypartial calendar year of the Term, to the extent applicable, shall be pro-ratedbased on the number of days in that month falling within the Term.  Subtenant shall also be solely responsiblefor any and all increases in Rent or any added cost or charge which has arisensolely because of Subtenant’s tenancy in the Premises, including, withoutlimitation, any and all heat, water and sewer charges, electric and otherutility charges, as well as any other service charges required by the MasterLease and relating to the Premises and/or Subtenant’s 

 

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occupation thereof that are not already then covered by the Base Rent(as defined in the Master Lease), Operating Expenses (as defined in the MasterLease) or Tax Expenses (as defined in the Master Lease) passed through toSublandlord 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 Master Landlord’s address pursuant tothe Master Lease and Clause IX 15. thereof or such other place as Sublandlordand/or Master 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 thePremises for the Permitted Use (as specified in the Basic Sublease Information)during the Term of this Sublease, and for no other use or uses.  Subtenant shall not engage in any activitiesprohibited by the Master Lease. Subtenant shall not use or store flammable or hazardous materials on thePremises, except to the extent normally used in the ordinary course of businesswith respect to the Permitted Use unless such materials are specificallyprohibited in the Lease.  Subtenantshall not perform any act or carry on any practice which may injure thePremises or cause any offensive odors or noises that constitute a nuisance ormenace to any other tenant or tenants of the Building or the Premises or otherpersons, and in no event shall any noises or odors be emitted from thePremises.  Nothing shall be done upon orabout the Premises which shall be unlawful, improper, or contrary to any law,ordinance, regulation or requirement of any public authority or insuranceinspection or rating bureau or similar organization having jurisdiction andSubtenant shall be in compliance at all times with all such laws, ordinances,regulations and requirements.  Subtenantshall observe and comply with, and shall cause its employees, agents andinvitees to observe and comply with the restrictions set forth in thisSublease.  Subtenant agrees to complywith all rules and regulations that Master Landlord has made or may hereafterfrom time to time make for the Building and/or the Premises.  Sublandlord shall not be liable to Subtenantor any party claiming through Subtenant in any way for damage caused by thefailure of any of the other tenants of the Building to comply with such similaror other covenants in their leases or of such rules and regulations.

 

                **7.             Insurance.**

**                               **Subtenantshall obtain at its sole expense the insurance required under the Master Leaseeffective as of the Commencement Date. Additionally, Subtenant shall name Sublandlord and Master Landlord asadditional insureds, in their capacity as Master Landlord and Sublandlord, andshall furnish Sublandlord on or before the Commencement Date with certificatesof insurance from its insurer, with respect to such insurance, whichcertificates shall state that such insurance shall not be cancelled unlessthirty (30) days prior written notice shall have been given to Master Landlordand Sublandlord.

 

                **8.             Assignmentand Subletting.**

 

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                                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 thePremises or Subtenant’s leasehold estate hereunder (collectively,“Assignment”), or permit all or any portion of the Premises to be occupied byanyone (whether pursuant to a license, concession or otherwise) other thanSubtenant or sublet all or any portion of the Premises, without the priorwritten consent of Master Landlord and Sublandlord.

 

                **9.             Alterations.**

 

                                Subtenant shall not make or suffer tobe made any alterations, additions or improvements to the Premises, including,without limitation, those related to electrical cabling and/or systems,plumbing, data cabling, HVAC systems, or modifications to existing finishes,without the prior written consent of Master Landlord, as required under theMaster 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 Premises in accordance withthe 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 Premisesincluding, without limitation, the roof, roof covering, foundation, subfloors,building structural components, major building systems (plumbing, electricaland heating, air conditioning and ventilation systems), and exterior walls ofthe Premises.

 

                **11.          Default.**

 

Subtenant shall be subject tothe same default and termination provisions as specified in **Clause X**of the Master Lease as if it werethe tenant thereunder, and Sublandlord shall have all the remedies specifiedtherein, as if it were Master Landlord, including, without limitation, theright to terminate the Sublease and right to perform Subtenant’s obligationsunder this Sublease at Subtenant’s cost. Notwithstanding the foregoing, Subtenant shall only be entitled toone-half (1/2) of the cure period for a default, if any, provided for under theMaster 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 or obligationit has hereunder (including but not limited to all covenants or obligations ofthe tenant under the Master Lease assumed by Subtenant pursuant to the terms ofthis Sublease), or (ii) caused by or in connection with anything owned orcontrolled by Subtenant, or (iii) resulting from any act, failure to act, ornegligence of Subtenant or its employees, agents or invitees, or (iv) resultingfrom any nuisance suffered on the Premises, except for damage or 

 

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injury to thirdparties or property resulting from the proven gross negligence of Sublandlord,Landlord or their respective employees, agents, representatives, successors orassigns.  Subtenant further agrees toindemnify Sublandlord and hold Sublandlord harmless from all losses, damages,liabilities and expenses which Sublandlord may incur, or for which Sublandlordmay be liable to Master Landlord, arising from the acts or omissions ofSubtenant which are or are alleged to be defaults of Sublandlord under theMaster Lease or are the subject matter of any indemnity or hold harmless ofSublandlord, as tenant, to Master Landlord under the Master Lease.  The obligations of Subtenant to indemnifySublandlord and/or the Sublandlord Parties and/or hold the Sublandlord and/orthe Sublandlord Parties harmless in this Section 12 and elsewhere herein shallsurvive the expiration or other termination 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 Premises,increase any of the rental or other payments required to be made by Subtenanthereunder or otherwise materially and adversely change Subtenant’s rights andobligations hereunder.  Sublandlordshall endeavor to give Subtenant notice of any amendment to the Master Lease,but the failure to give such notice shall not affect the validity of suchamendment or its applicability to Subtenant, except that Subtenant shall haveno obligation to comply with the terms of any such amendment until it hasreceived a copy.  Any rights granted toSubtenant herein which are limited by the Master Lease shall be deemed to be solimited 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 subject to all of the terms,covenants, and conditions of the Master Lease (a copy of which agreement, ascurrently in effect, Subtenant hereby represents that it has received), withthe same force and effect 

 

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as if fully set forth herein, and except asotherwise expressly provided for herein, Subtenant shall keep, observe andperform or cause to be kept, observed and performed, faithfully all thoseterms, covenants and conditions of Sublandlord as tenant under the Master Leasewith respect to the Premises.  Except asotherwise provided hereby, the terms, conditions, rights and responsibilitiesof the Master Lease are incorporated herein by reference, and Sublandlord shallhave the rights and responsibilities with respect to the Subtenant that theMaster Landlord has with respect to Sublandlord pursuant to the Master Lease,and Subtenant 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 Premises or to furnish any services tothe Premises, such obligation shall not pass to Sublandlord by reason of thisSublease and shall remain with the Master Landlord.  Subject to the first sentence of this Section 13.5, with respectto the relationship between the Sublandlord and the Subtenant, the terms, covenantsand conditions of this Sublease shall control with respect to any conflict orinconsistency between the terms, covenants and conditions contained herein andthe terms, covenants and conditions of the Master Lease.  Notwithstanding the foregoing, the followingsections of the Master Lease are hereby excluded from application to orincorporation within this Sublease:  Theprovision for automatic renewal in Clause II. Subtenant shall NOT have the right to automatically renew this Subleasepursuant to the provisions set forth in Clause II of the Master Lease.

 

**15.          Security Deposit.**

 

                                 Sublandlord and Subtenant hereby acknowledge that Subtenant hastendered payment and shall continue to tender payment of the Security Depositas set forth in Clause IV of the Master Lease. Upon expiration of the Master Lease, Sublandlord shall forward paymentto Subtenant within thirty (30) days of receipt from Master Landlord anyrefunded Security Deposit amounts it has received pursuant to Clause IV of theMaster Lease.

 

 

**16.          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 obligation arisingout of or relating to a breach by Subtenant of such representation.

 

**17.          Counterparts.**

 

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

 

**18.          Governing Law.**

 

                                This Subleaseshall be governed by and construed and enforced in accordance with the laws ofthe **Kingdom**of **Saudi Arabia**, except withrespect to the choice-of-law provisions thereof.

 

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**19.          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.

 

**20.          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.

 

**21.          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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EXHIBIT A

 

DESCRIPTION OF PREMISES

 

[SEE ATTACHED.]

 

 

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