**Exhibit10.40**

**FORMOF**

**TAXSHARING AND DISAFFILIATION AGREEMENT**

**Tax Sharing And DisaffiliationAgreement**datedas of August 2, 2002, by and between **The Titan Corporation**,a Delaware corporation (***“Titan”***),and **SureBeam Corporation**, a Delaware corporation (***“SureBeam”***).

**Recitals**

**Whereas**, SureBeam is a first tier subsidiary ofTitan;

**Whereas**, Titan is the common parent of anaffiliated group of corporations within the meaning of Section 1504(a) of theCode, which currently files consolidated federal income Tax Returns and whichincludes SureBeam as a member of that consolidated group;

**Whereas**, pursuant to the Exchange Agreement datedas of December 31, 2001 and the Exchange Agreement dated February 1, 2002by and between Titan and SureBeam Titan has recapitalized its debt in SureBeaminto equity (the ***“Recapitalization”***),and it is contemplated that Titan will convert its Class B Common Stock intoClass A Common Stock (the ***“Conversion”***),and it is further contemplated that, following receipt of a favorable ruling fromthe Internal Revenue Service or tax opinions from Titan’s tax advisors, Titanwill distribute to the holders of Titan Common Stock all of the outstandingshares of SureBeam Common Stock owned by Titan, with cash distributed in lieuof fractional shares of SureBeam Common Stock (the ***“Distribution”***);

**Whereas**, Titan and SureBeam intend that theRecapitalization and the Conversion will qualify as one or more reorganizationswithin the meaning of Section 368(a) of the Code, and the Distribution willqualify as a distribution described in Section 355 of the Code, and none of theRecapitalization, the Conversion or the Distribution will result in therecognition of any taxable gain or income to Titan or any shareholder of Titan(except to the extent of cash received in lieu of any fractional shares ofSureBeam Common Stock);

**Whereas**, after the Distribution Date, SureBeamwill cease to be a member of the Titan Affiliated Group for federal income Taxpurposes;

**Whereas**, members of the SureBeam Group andmembers of the Titan Group desire on behalf of themselves and their successorsto set forth their rights and obligations with respect to Taxes for periods onand after the Distribution Date; and

**Whereas,** Titan and SureBeam are parties to a Tax AllocationAgreement dated August 4, 2002, that is not amended or modified in any respectby this Agreement.

**Now, Therefore**, for good and valuable consideration,the receipt and sufficiency of which are hereby acknowledged, the partieshereto agree as follows:

 

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**ARTICLE I****DEFINITIONS**

**1.1 **For the purposes of this Agreement:

**“Acquisition Proposal”**shall mean any proposal, plan, agreementor arrangement contemplating (i) any merger, consolidation, reorganization,recapitalization or similar transaction involving SureBeam, or (ii) anytransfer of or issuance of stock or other securities of SureBeam.  For the purposes of this paragraph, “stock”shall have the meaning given to that term in Section 355(e) of the Code.

**“Agreement”** shall mean this Tax Sharing andDisaffiliation Agreement as the same may be amended from time to time.

**“Applicable Federal Rate”** shall have the meaning set forth inSection 1274(d) of the Code, compounded quarterly.

**“Claim”** shall have the meaning set forth in Section5.3(a) of this Agreement.

**“Code”** shall mean the Internal Revenue Code of1986, as amended from time to time.

**“Controlling Party”** shall have the meaning set forth inSection 5.1 of this Agreement.

**“Conversion”**shall have the meaning set forth in the thirdrecital.

**“Distribution”** shall have the meaning set forth in thethird recital.

**“Distribution Date”** shall mean the date of the Distributionof SureBeam common stock to the holders of Titan common stock.

**“Equity Transaction”** shall mean (a) the grant, offer forsale, sale or issuance of (i) any stock of SureBeam, (ii) any debt security ofSureBeam convertible or exchangeable into stock of SureBeam, (iii) any option,warrant, or other right to subscribe for any stock of SureBeam, provided,however, that Equity Transaction shall not include the grant, offer, sale orissuance of compensatory equity arrangements that meet the criteria set forthin Temporary Treasury Regulation §1.355-7T(g)(3)(ii), or any successorregulation thereto; (b) any redemption, retirement, repurchase, cancellation orother transaction that reduces the number of shares of SureBeam Common Stockoutstanding; or (c) any consideration, discussions, negotiations, provision ofconfidential information relating to SureBeam or the SureBeam Business to anyparty regarding, or the solicitation of or encouragement of any AcquisitionProposal.  For the purposes of thisparagraph, “stock” shall have the meaning given to that term in Section 355(e)of the Code.

**“Filing Party”** shall have the meaning set forth inSection 4.1 of this Agreement.

 

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**“Final Determination”** shall mean with respect to any issue (i)a decision, judgment, decree or other order by any court of competentjurisdiction, which decision, judgment, decree or other order has become finaland not subject to further appeal, (ii) a closing agreement (whether or notentered into under Section 7121 of the Code) or any other binding settlementagreement (whether or not with the IRS) entered into in connection with or incontemplation of an administrative or judicial proceeding, or (iii) thecompletion of the highest level of administrative proceedings if a judicialcontest is not or is no longer available.

**“Indemnitor”** shall have the meaning set forth inSection 5.2 of this Agreement.

**“IRS”**shall mean the Internal Revenue Serviceof the United States.

**“Liable Party”** shall have the meaning set forth inSection 4.1 of this Agreement.

**“Post-Distribution Period”** shall mean any taxable year or other taxableperiod beginning after the Distribution Date and, in the case of any taxableyear or other taxable period that begins before and ends after the DistributionDate, that part of the taxable year or other taxable period that begins at thebeginning of the day after the Distribution Date.

**“Pre-Distribution Period”** shall mean any taxable year or othertaxable period that ends on or before the Distribution Date and, in the case ofany taxable year or other taxable period that begins before and ends after theDistribution Date, that part of the taxable year or other taxable periodthrough the close of the Distribution Date.

**“Recapitalization”** shall have the meaning set forth in thethird recital.

**“Representation Letters”** shall mean the representation letters andany other materials (including, without limitation, the ruling request and thesupplemental submissions to the IRS) delivered or deliverable by Titan andothers in connection with the issuance by the IRS of the Tax Rulings or inconnection with any tax opinions requested by Titan from its tax advisorsrelating to the Tax Rulings, the Recapitalization, the Conversion, theDistribution, or any event occurring during the period SureBeam was a member ofthe Titan Affiliated Group.

**“Restructuring Taxes”**shall mean any Taxes and otherliabilities, including, without limitation, liability to stockholders of Titanand the costs of defending against the imposition of such taxes and otherliabilities, imposed as a result of a Final Determination that (i) the Recapitalizationand/or the Conversion failed to qualify as a reorganization within the meaningof Section 368 (a) of the Code; (ii) the Distribution failed to qualify as adistribution described in Section 355 of the Code, or (iii) any stock orsecurities of SureBeam failed to qualify as “qualified property” within themeaning of Section 355(c)(2) of the Code because of the application of Section355(d) or Section 355(e) of the Code to the Distribution.

**“Retained Business”** shall mean the business conducted by Titan,excluding only the SureBeam Business.

**“SureBeam”** shall have the meaning set forth in thepreamble to this Agreement.

 

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**“SureBeam Business”** shall mean the business conducted bySureBeam and any direct or indirect subsidiary of SureBeam.

**“SureBeam Group”** shall mean, for any period, theaffiliated group of corporations as defined in Section 1504(a) of the Code, orsimilar group of entities as defined under corresponding provisions of the lawsof other jurisdictions, of which SureBeam would be the common parentcorporation if it were not a subsidiary of Titan, and any corporation or otherentity which may be, may have been or may become a member of such group fromtime to time.

**“SureBeam IndemnifiedParties”**shall mean each member of the SureBeam Group and their respective directors,officers and employees.

**“SureBeam Tainting Act”**shall mean:

**(a)          **any inaccuracy or breach of any representation,warranty, or covenant that is made by SureBeam pursuant to Section 2.1 of thisAgreement.

**(b)          **any action (or failure to take any reasonablyavailable action) by any member of the SureBeam Group; or

**(c)          **any acquisition or other transaction involving thecapital stock of SureBeam (other than the Recapitalization, Conversion orDistribution).

**“SureBeam Taxes”** shall mean (i) any Taxes that areattributable to the SureBeam Group, (ii) Restructuring Taxes allocable toSureBeam under Section 3.4, and (iii) an amount equal to the product of (x) anyRestructuring Taxes allocable to SureBeam payable under (ii) hereof plus anyamount payable by SureBeam under this (iii), and (y) the highest marginaleffective federal and California state income tax rates applicable to acorporation.

**“Tax”** (and with correlative meaning, “Taxes” and “Taxable”)shall mean any federal, state, local or foreign net income, gross income, grossreceipts, windfall profit, severance, property, production, sales, use,license, excise, franchise, employment, payroll, withholding, alternative oradd-on minimum, ad valorum, value-added, transfer, stamp, or environmental tax,or any other tax, custom, duty, governmental fee or other like assessment orcharge of any kind whatsoever, together with any interest or penalty, additionto tax or additional amount imposed by any governmental authority.

**“Tax Allocation Agreement”** shall mean the Tax Allocation Agreementdated as of August 4, 2000 by and between Titan and SureBeam.

**“Tax Benefits”** shall mean benefits taken into accountin computing the tax liability of a member of either the SureBeam Group or theTitan Group, including the benefit of the graduated tax rates of Section 11 ofthe Code, as well as any similar or corresponding benefits under state or localtax law.

**“Tax Item”**shall mean any item of income, gain, loss,deduction, credit, provisions for reserves, recapture of credit, receipt,proceeds or any other item or event that increases or 

 

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decreases Taxespaid or payable, including an adjustment under Section 481 of the Coderesulting from a change in accounting method.

**“Tax Return”** shall mean any return, report or similarstatement required to be filed with respect to any Tax (including any attachedschedules), including, without limitation, any information return, claim forrefund, amended return or declaration of estimated Tax.

**“Tax Rulings”** shall mean the rulings by the IRSrequested by Titan in connection with the Distribution.

**“Titan”** shall have the meaning set forth in thepreamble to this Agreement.

**“Titan Affiliated Group”**shall mean the corporations included inthe affiliated group, as defined in Section 1504 of the Code, of which Titan isthe common parent, and any successor group.

**“Titan Group”**shall mean, for any period, theaffiliated group of corporations as defined in Section 1504(a) of the Code, orsimilar groups of entities as defined under corresponding provisions of thelaws of other jurisdictions, of which Titan is the common parent corporation,and any corporation or other entity which may be, may have been or may become amember of such group from time to time, but excluding any member of theSureBeam Group.

**“Titan Indemnified Parties”** shall mean each member of the TitanGroup and their respective directors, officers and employees.

**“Titan Tainting Act”**shall mean:

**(a)          **any inaccuracy or breach of any representation,warranty, or covenant that is made by Titan pursuant to Section 2.2 of thisAgreement;

**(b)          **any action (or failure to take any reasonablyavailable action) by any member of the Titan Group;

**(c)          **any acquisition or other transaction involving thecapital stock of Titan (other than the Distribution).

**“Titan Taxes”** shall mean (i) any Taxes that areattributable to the Titan Group and (ii) Restructuring Taxes allocable to Titanunder Section 3.4.

**ARTICLEII****REPRESENTATIONSAND WARRANTIES**

**2.1  Surebeam.**SureBeamhereby represents and warrants that: (i) it has examined the Tax Rulings andthe Representation Letters, and (ii) the facts set forth therein, and therepresentations made therein, to the extent descriptive of the SureBeam Groupor the SureBeam Business and not descriptive of the Titan Group (including,without limitation, the facts and representations in the Representation Lettersand the Tax Rulings or tax opinions, as applicable, 

 

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to the extent thatthey relate to the SureBeam Group or the SureBeam Business, and the plans,proposals, intentions and policies of the SureBeam Group and the SureBeamBusiness) were true, correct and complete in all material respects when the TaxRulings were issued, and will be true, correct and complete in all materialrespects on the Distribution Date.

**2.2  Titan.** Titan hereby represents and warrantsthat (i) it has examined the Tax Rulings and the Representation Letters, and(ii) the facts set forth therein, and the representations made therein, to theextent descriptive of the Titan Group or the Retained Business and notdescriptive of the SureBeam Group or the SureBeam Business (including, without limitation,the facts and representations in the Representation Letters and the Tax Rulingsor tax opinions, as applicable, to the extent that they relate to the TitanGroup or the Retained Business and do not relate to the SureBeam Group or theSureBeam Business, and the plans, proposals, intentions and policies of theTitan Group and the Retained Business, and not of the SureBeam Group or theSureBeam Business) were true, correct and complete in all material respectswhen the Tax Rulings were issued, and will be true, correct and complete in allmaterial respects on the Distribution Date.

**ARTICLEIII****TAXRETURNS, TAX PAYMENTS AND TAX SHARING OBLIGATIONS**

**3.1  ObligationsTo File Tax Returns.**

**(a)          **Titan shall timely file or cause to be filed all TaxReturns with respect to the SureBeam Group that (i) are due on or before theDistribution Date or (ii) are for any Pre-Distribution Period and are filed ona consolidated, combined or unitary basis and include any member of theSureBeam Group, on one hand, and any member of the Titan Group, on the otherhand (except, in all cases, with respect to any member of the SureBeam Groupfor which Titan would not have filed or cause to be filed a Tax Return inaccordance with past practice). SureBeam shall timely file or cause to betimely filed any other Tax Return with respect to the SureBeam Group.

**(b)          **Titan shall timely file or cause to be timely filedall Tax Returns with respect to the Titan Group.

**3.2  ObligationTo Remit Taxes.** Titan and SureBeam shall each remit or cause to be remitted any Taxesdue in respect of any Tax Return it is required to file or cause to be filedpursuant to Section 3.1, and shall be entitled to reimbursement for suchpayments to the extent provided in Section 3.3.

**3.3  TaxSharing Obligations.**

**(a)          **SureBeam shall be liable for and pay, and shallindemnify, defend, and hold harmless Titan and the Titan Indemnified Partiesfrom and against, any and all loss, cost, damage or expense, includingreasonable attorneys’ fees and costs incurred or suffered by Titan or one ormore of the Titan Indemnified Parties in connection with, relating to, arisingout of or due to, directly or indirectly (i) any SureBeam Taxes and (ii) anyamount determined to be SureBeam’s liability under Section 3.4. SureBeam shall beentitled to any refund of or credit for Taxes for which SureBeam is responsibleunder this Section 3.3(a).

 

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**(b)          **Titan shall be liable for and pay, and shallindemnify, defend, and hold harmless SureBeam and the SureBeam IndemnifiedParties from and against, any and all loss, cost, damage or expense, includingreasonable attorneys’ fees and costs incurred or suffered by SureBeam or one ormore of the SureBeam Indemnified Parties in connection with, relating to,arising out of, or due to, directly or indirectly (i) any Titan Taxes andTitan shall be entitled to any refund of or credit for Taxes for which Titan isresponsible under this Section 3.3(b).

**(c)          **Except as set forth in this Agreement or the Tax AllocationAgreement and in consideration of the mutual indemnities and other obligationsof this Agreement, any and all prior Tax sharing agreements or practicesbetween any member of the Titan Group and any member of the SureBeam Groupshall be terminated with respect to the SureBeam Group as of the DistributionDate.

**3.4  RestructuringTaxes.**

**(a)          **SureBeam and Titan shall each be liable for 50% ofRestructuring Taxes that are imposed as a result of neither a SureBeam TaintingAct nor a Titan Tainting Act.  In thecase of the imposition of a Restructuring Tax where there is both a SureBeamTainting Act and a Titan Tainting Act, and each of the SureBeam Tainting Actand the Titan Tainting Act would alone be sufficient to result in theimposition of such Restructuring Tax, SureBeam and Titan shall each be liablefor 50% of such Restructuring Tax.  Inthe case of a Restructuring Tax that would not have been imposed but for theexistence of both a SureBeam Tainting Act and a Titan Tainting Act, SureBeamand Titan shall be liable for such Restructuring Tax to the extent the SureBeamTainting Act and the Titan Tainting Act, respectively, contributed to theimposition of such Restructuring Tax.

**(b)          **Except as described in Section 3.4(a), SureBeam shallbe liable for Restructuring Taxes imposed as a result of a SureBeam TaintingAct.

**(c)          **Except as described in Section 3.4(a), Titan shall beliable for Restructuring Taxes imposed as a result of a Titan Tainting Act.

**3.5  AdditionalSureBeam Equity Financing**. Notwithstanding Section 3.4, (a) any Equity Transaction by SureBeamduring the two year period following the Distribution Date and (b) anyshareholder vote contemplated by Section 6(b)(ii) of the Certificate ofIncorporation of SureBeam; shall be subject to the prior written consent ofTitan, which consent shall not be unreasonably withheld but which consent maybe conditioned upon the receipt by Titan of (i) a legal opinion or tax opinionin form and substance satisfactory to Titan of a reputable tax counsel or taxadviser of national reputation reasonably satisfactory to Titan which opinionhas been concurred in by Titan’s tax counsel or advisors or (ii) a favorableruling from the Internal Revenue Service, in each case to the effect that theproposed issuances of stock should not result in the imposition of anyRestructuring Taxes.

**3.6  PeriodThat Includes The Date Of Distribution.**

**(a)          **To the extent permitted by law or administrativepractice, the taxable year of the SureBeam Group shall be treated as closing atthe close of the Distribution Date.

 

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**(b)          **If it is necessary for purposes of this Agreement todetermine the SureBeam Taxes or Titan Taxes for a taxable year that begins onor before and ends after the Distribution Date and is not treated under Section3.6(a) as closing at the close of the Distribution Date, the determinationshall be made by assuming that such taxable year ended on a “closing of thebooks” basis at the close of the Distribution Date, except that exemptions,allowances or deductions that are calculated on an annual basis shall beapportioned on a time basis.

**ARTICLEIV****PAYMENTS**

**4.1  GeneralTax Payments.**With respect to any Taxes for which one party (the ***“Liable Party”***) isliable under Section 3.3 and that are to be remitted in connection with TaxReturns to be filed by the other party (the ***“Filing Party”***) after the DistributionDate pursuant to Sections 3.1 and 3.2, (i) upon the request of the FilingParty, the Liable Party shall promptly provide to the Filing Party allinformation necessary to enable the Filing Party to file such Tax Returns and(ii) assuming compliance by the Liable Party with the Liable Party’sobligations under clause (i) (or written waiver by the Filing Party of suchcompliance), the Filing Party shall, not later than ten (10) days prior to thedue date for remitting such Taxes (or, if the due date is within sixty (60)days after the Distribution Date, as promptly following the Distribution Dateas possible) provide the Liable Party with a written request showing inreasonable detail the calculation of the amount of such Liable Party’s Taxes(and any other amounts) owing by the Liable Party to the Filing Party pursuantto this Agreement.  Subject to Section4.2 which provides for payments due as a result of a Final Determination, theLiable Party shall have the right to object in writing to such calculation onor before sixty (60) days after the date on which such request is provided tothe Liable Party, on the grounds that there is substantial authority that suchcalculation is incorrect; provided that if the Liable Party so objects, (i) theFiling Party and the Liable Party shall promptly submit the dispute to anindependent accounting or law firm acceptable to both the Filing Party and theLiable Party for prompt resolution, whose decision shall be final and bindingon the Filing Party and the Liable Party, and (ii) the party that suchaccounting or law firm determines has lost the dispute shall pay all of thefees and expenses incurred in connection with submitting such dispute. TheLiable Party shall pay to the Filing Party any amount not in dispute on orbefore the thirtieth (30th) day following the receipt of such request by theLiable Party, with additional amounts to be paid by the Liable Party (togetherwith interest at the Applicable Federal Rate accruing from the date on whichsuch Return is filed) promptly upon resolution of any objection.

**4.2  OtherPayments.**Other payments due to a party under Section 3.3 shall be due not later thantwenty (20) days after the receipt or crediting of a refund or the receipt ofnotice of a Final Determination to the effect that the indemnified party isliable for an indemnified cost, together with interest at a rate equal to theApplicable Federal Rate from the date on which the indemnifying party receivessuch receipt, credit or notice.

**4.3  Notice.** Titan and SureBeam shall give each otherprompt written notice of any payment that may be due under this Agreement.

 

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**ARTICLEV****TAXAUDITS**

**5.1  General.** Except as otherwise provided in thisAgreement, each of SureBeam and Titan (as the case may be, the ***“Controlling Party”***)shall have sole responsibility for all audits or other proceedings with respectto Tax Returns that it is required to file under Section 3.1. Except asprovided in Section 5.3, the Controlling Party shall have the sole right tocontest the audit or proceeding and to employ advisors of its choice.

**5.2  IndemnifiedClaims In General.** Titan or SureBeam shall promptly notify the other in writing upon thereceipt of an actual oral or written notice from any relevant Taxing authorityof any proposed adjustment to a Tax Return that may result in liability of theother party (the ***“Indemnitor”***)under this Agreement. If the Indemnitor is not also the Controlling Party, theControlling Party shall provide the Indemnitor with information about thenature and amounts of the proposed adjustments and, subject to additionalrights of the Indemnitor in certain circumstances under Section 5.3 of thisAgreement, shall permit the Indemnitor to participate in the proceeding at theIndemnitor’s own expense; provided, however, that the Controlling Party shallnot be required to indemnify the Indemnitor if the Controlling Party fails tonotify or provide such information to the Indemnitor, unless the Indemnitor ismaterially prejudiced thereby. The Indemnitor shall pay all (or, in the case ofRestructuring Taxes for which liability is shared under Section 3.4(a) of thisAgreement, a portion based on the Indemnitor’s share of such RestructuringTaxes) reasonable expenses (including, but not limited to, legal and accountingfees) incurred by the Controlling Party in connection with the assessment oradjustment within seven (7) days after a written request by the ControllingParty.

**5.3  CertainFederal Income Tax Claims.**

**(a)          **Any issues (other than issues relating toRestructuring Taxes for which liability is shared under Section 3.4(a), whichshall be excluded from the provisions of this Section 5.3) raised by the IRS inany Tax inquiry, audit, examination, investigation, dispute, litigation orother proceeding that would result in liability to the Indemnitor under thisAgreement that in the aggregate would equal or exceed $250,000 with respect toany taxable year are defined as a Claim (a ***“Claim”***). Except as provided in Section5.3(d) and notwithstanding any other provision of this Agreement that may beconstrued to the contrary, the Controlling Party agrees to contest any Claimand not to settle any Claim without prior written consent of the Indemnitor,provided that (i) the Controlling Party shall provide notice to Indemnitorpursuant to Section 5.2 of any Claim, (ii) within thirty (30) days after suchnotice is received by the Indemnitor, the Indemnitor shall request in writingthat such Claim be contested and the Indemnitor shall provide an opinion ofindependent tax counsel, selected by the Indemnitor and reasonably acceptableto the Controlling Party, to the effect that it is more likely than not that aFinal Determination will be substantially consistent with the Indemnitor’sposition relating to such Claim, (iii) the Indemnitor shall agree to pay (andshall pay) on demand all out-of-pocket costs, losses and expenses (including,but not limited to, reasonable legal and accounting fees) paid or incurred bythe Controlling Party in connection with contesting such Claim, and (iv) theControlling Party, after reasonable consultation with the Indemnitor, shalldetermine in the Controlling Party’s sole discretion the nature of all actionsto be taken to contest 

 

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such Claim,including (x) whether any action to contest such Claim shall initially be byway of judicial or administrative proceeding, or both, (y) whether any suchClaim shall be contested by resisting payment thereof or by paying the same andseeking a refund thereof, and (z) the court or other judicial body before whichjudicial action, if any, shall be commenced. To the extent the Indemnitor isnot participating, the Controlling Party shall keep the Indemnitor (and, uponrequest by the Indemnitor, its counsel) informed as to the progress of thecontest.

**(b)          **If the Indemnitor requests that the Controlling Partyaccept a settlement of a Claim offered by the IRS and if such Claim may, in thereasonable discretion of the Controlling Party, be settled without prejudicingany claims the IRS may have with respect to matters unrelated to the Claim, theControlling Party shall either accept such settlement offer or agree with theIndemnitor that the Indemnitor’s liability with respect to such Claim shall belimited to the lesser of (i) an amount calculated on the basis of suchsettlement offer plus interest owed to the IRS on the date of eventual paymentor (ii) the amount calculated on the basis of a Final Determination.

**(c)          **If the Controlling Party shall elect to pay the Taxclaimed and seek a refund, the Indemnitor shall lend sufficient funds on aninterest-free basis to the Controlling Party (with no net after-tax cost to theControlling Party), to cover any applicable indemnity obligations of theIndemnitor. To the extent such refund claim is ultimately disallowed, the loanor portion thereof equal to the amount of the refund claim so disallowed shallbe applied against the Indemnitor’s obligation to make indemnity paymentspursuant to this Agreement. To the extent such refund claim is allowed, theControlling Party shall pay to the Indemnitor all amounts advanced to theControlling Party with respect to the indemnity obligation within ten (10) daysof the receipt of such refund (or if the Controlling Party would have receivedsuch refund but for the existence of a counterclaim or other claim notindemnified by the Indemnitor under this Agreement, within ten (10) days of thefinal resolution of the contest), plus an amount equal to any interest received(or that would have been received) from the IRS that is properly attributableto such amount.

**(d)          **Except as provided below, the Controlling Party shallnot settle a Claim that the Indemnitor is entitled to require the ControllingParty to contest under Section 5.3(a) without the prior written consent of theIndemnitor. At any time, whether before or after commencing to take any actionpursuant to this Section 5.3 with respect to any Claim, the Controlling Partymay decline to take action with respect to such Claim and may settle such Claimwithout the prior written consent of the Indemnitor by notifying the Indemnitorin writing that the Indemnitor is released from its obligations to indemnifythe Controlling Party with respect to such Claim (which notification shallrelease the Indemnitor from such obligations except to the extent theIndemnitor has agreed in writing that it would be willing to have its liabilitycalculated on the basis of a settlement offer, as provided in Section 5.3(b),at that point in the contest) and with respect to any Claim related to suchClaim or based on the outcome of such Claim. If the Controlling Party settlesany Claim or otherwise takes or declines to take any action pursuant to thisparagraph, the Controlling Party shall pay to the Indemnitor any amounts paidor advanced by the Indemnitor with respect to such Claim (other than amountspayable by the Indemnitor in connection with a settlement offer pursuant toSection 5.3(b)), plus interest attributable to such amounts.

 

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**ARTICLEVI****COOPERATION**

**6.1  General.** Titan and SureBeam shall cooperate witheach other in the filing of any Tax Returns and the conduct of any audit orother proceeding and each shall execute and deliver such powers of attorney andmake available such other documents as are reasonably necessary to carry outthe intent of this Agreement. Each party agrees to notify the other party inwriting of any audit adjustments that do not result in Tax liability but can bereasonably expected to affect Tax Returns of the other party, or any of itsSubsidiaries, for a Post-Distribution Period. Each party agrees to treat theRecapitalization , the Conversion and the Distribution for all income Taxpurposes as not causing the recognition of any income, gain or loss (exceptwith respect to the payment of cash in lieu of fractional shares).  Each party agrees to prepare and file theirTax Returns for all periods on a basis consistent with the positions taken onthe Tax Returns filed by Titan during the period SureBeam was a member of theTitan Affiliated Group.  Further, eachparty agrees to cooperate with the other to promptly provide suchRepresentation Letters as shall be reasonably requested.

**6.2  CooperationWith Respect To Tax Return Filings, Examinations And Tax Related Controversies.**

**(a)          **In addition to any obligations imposed pursuant to theReorganization Agreement, each member of the Titan Group shall fully cooperatewith SureBeam and its representatives, in a prompt and timely manner, inconnection with (i) the preparation and filing of and (ii) any inquiry, audit,examination, investigation, dispute, or litigation involving, any Tax Returnrequired to be filed by SureBeam pursuant to this Agreement, by or for anymember of the SureBeam Group.

**(b)          **SureBeam shall fully cooperate with Titan and itsrepresentatives, in a prompt and timely manner, in connection with (i) thepreparation and filing of and (ii) any inquiry, audit, examination,investigation, dispute, or litigation involving, any Tax Return required to befiled by Titan pursuant to this Agreement. Such cooperation shall include, butnot be limited to, (x) the execution and delivery to Titan by SureBeam of anypower of attorney required to allow Titan and its counsel to participate in orcontrol any inquiry, audit or other administrative proceeding and to assume thedefense or prosecution, as the case may be, of any suit, action or proceedingpursuant to the terms of and subject to the conditions set forth in Article Vof this Agreement, and (y) making available to Titan, during normal businesshours, and within fifteen (15) days of any written request therefor, all books,records and information, and the assistance of all officers and employees,necessary or useful in connection with any Tax inquiry, audit, examination,investigation, dispute, litigation or any other matter.

 

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**ARTICLEVII****RETENTIONOF RECORDS; ACCESS**

The Titan Group and the SureBeam Group shall:

**7.1 **retain (for a minimum of five (5) years) records,documents, accounting data and other information (including computer data)necessary for the preparation and filing of all Tax Returns in respect of Taxesof the Titan Group or the SureBeam Group or for the audit of such Tax Returns;and

**7.2 **give to the other reasonable access to such records,documents, accounting data and other information (including computer data) andto its personnel (insuring their cooperation) and premises, for the purpose ofthe current or potential review or audit of such Tax Returns to the extentrelevant to an obligation or liability of a party under this Agreement orapplicable law. At any time after the Distribution Date if either the SureBeamGroup or the Titan Group proposes to destroy such records, documents,accounting data or other information, the party proposing to destroy documentsshall first notify the other party in writing and such party shall be entitledto receive such records, documents, accounting data or other informationproposed to be destroyed.

**ARTICLEVIII****DISPUTES**

If Titan and SureBeamcannot agree on any calculation of any liabilities under this Agreement, suchcalculation shall be made by any independent public accounting firm acceptableto both Titan and SureBeam. The decision of such firm shall be final andbinding. The fees and expenses incurred in connection with such calculationshall be borne by the party that such independent public accounting firmdetermines has lost the dispute.

**ARTICLEIX****TERMINATIONOF LIABILITIES**

Notwithstanding any otherprovision in this Agreement, any liabilities determined under this Agreementshall survive indefinitely.

**ARTICLE XMISCELLANEOUS PROVISIONS**

**10.1                        Co-ordination WithExisting Agreement**.  It is acknowledged that, the Tax AllocationAgreement shall continue in effect with respect to any tax year for whichconsolidated federal income tax returns are filed by the Titan ConsolidatedGroup and for state income tax purposes with respect to any tax year for whichcombined, consolidated or unitary tax returns are filed by the TitanConsolidated Group, as those terms are defined in such Tax AllocationAgreement.

 

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**10.2        Governing Law.** This Agreement shall be governed by and construed in accordance with theinternal laws of the State of California as such laws are applied to agreementsbetween California residents entered into and performed entirely in California.

**10.3        Entire Agreement; Amendment.** This Agreement, including any and all attachments or exhibits hereto,constitutes the entire, final and exclusive understanding and agreement betweenthe parties with respect to the subject matter hereof.  This Agreement may be amended, waived,discharged or terminated only by written agreement of the parties.

**10.4        Severability** In case any provision of this Agreement shall be invalid, illegal or unenforceable,the parties intend that (a) in lieu of such provision there be added as part ofthis Agreement a provision as similar in terms to such invalid, illegal orunenforceable provision as may be possible and be valid, legal and enforceableand (b) the validity, legality and enforceability of the remaining provisions,or any subsequent applications thereof, shall not in any way be affected orimpaired thereby.

**10.5        Binding Effect, Assignment, Etc.** This Agreement shall be binding upon, and shall inure to the benefit of,the parties hereto and their permitted assigns and successors in interest.  No party may assign any right, or delegateany obligation hereunder without the express prior written consent of Titan.

**10.6        Delays or Omissions.** It is agreed that no delay or omission to exercise any right,power or remedy accruing to any party, upon any breach, default ornoncompliance by another party under this Agreement shall impair any suchright, power or remedy, nor shall it be construed to be a waiver of any breach,default or noncompliance, or any acquiescence therein, or of or in any similarbreach, default or noncompliance thereafter occurring.  All remedies, either under this Agreement,by law, or otherwise afforded to any party, shall be cumulative and notalternative.

**10.7        Captions.**  Titles orcaptions of Sections and paragraphs contained in this Agreement are insertedonly as a matter of convenience and for reference, and in no way define, limit,extend, or describe the scope of this Agreement or the intent of any provisionhereto.

**10.8        Number and Gender.** Whenever required by the context, the singular number shall include theplural, the plural number shall include the singular, and the gender of anypronoun shall include all genders.

**10.9        Notices.**  Unlessotherwise provided, any notice required or permitted under this Agreement shallbe given in writing and shall be deemed effectively given: (a) upon personaldelivery to the party to be notified; (b) when sent by confirmed telex orfacsimile if sent during normal business hours of the recipient, if not, thenon the next business day; or (c) upon deposit with the United States PostOffice, by registered or certified mail, postage prepaid and addressed to theparty to be notified parties; or (d) one (1) day after deposit with anationally recognized overnight courier, specifying next day delivery, withwritten verification of receipt at the address indicated for such party on thesignature page hereof, or at such other address as such party may designate byten (10) days’ advance written notice to the other.

 

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**10.10      Cooperation.** Each party hereby covenants and agrees that it shall execute and deliverall materials including, but not limited to, returns, supporting schedules,workpapers, correspondence and other documents relating to the consolidatedreturn to any party to this Agreement during regular business hours.

**10.11      Counterparts.** This Agreement may be executed in multiple copies, each of which shallfor all purposes constitute an Agreement, binding on the parties, and eachpartner hereby covenants and agrees to execute all duplicates or replacementcounterparts of this Agreement as may be required.

**10.12      Computation of Time.** Whenever the last day for the exercise of any privilege or the dischargeof any duty hereunder shall fall on a Saturday, Sunday or any public or legalholiday, whether local or national, the person having such privilege or dutyshall have until 5:00 p.m. Pacific Standard Time on the next business day toexercise such privilege, or to discharge such duty.

**10.13      Costs and Expenses.** Unless otherwise provided in this Agreement, each party shall bear allfees and expenses incurred in performing its obligations under this Agreement.

**10.14      Counterparts.** This Agreement may be executed in any number of counterparts, eachof which shall be an original, but all of which together shall constitute oneinstrument.

 

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**In Witness Whereof**, the parties hereto have duly executedthis Agreement as of the day and year first above written.

                                                                                                **The Titan Corporation**
| By     |   |
|--------|--------|
| Name:  |   |
| Title: |   |

**SureBeam Corporation**
| By     |   |
|--------|--------|
| Name:  |   |
| Title: |   |

 

 

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