**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 the tenant under that certain OfficeBuilding Lease by and between Embassy Tower Limited Partnership, as landlord(“Master Landlord”), and Sublandlord, as tenant, dated May 17, 2000 (suchlease, as it may be amended from time to time, the “Master Lease”), for certainspace located at 9300 Underwood Avenue, Omaha, Douglas County, Nebraska 68114(the “Premises”).

 

B.            Subtenant wishes to sublease a portion of the Premisesfrom Sublandlord.

 

 

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

 

**1.             BasicSublease 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    |
|                                           |   |                                                                                                        |
| Subdemised  Premises:                          |   | Approximately  3,947 aggregate square feet                                                                  |
|                                           |   |                                                                                                        |
| Building:                                      |   | Embassy Tower                                                                                               |

 

 

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|                        |   |                                                                                                                                                                                                                                                                                                      |
|-----------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Permitted Use:              |   | As specified in Section 3 of the Master Lease as general office.                                                                                                                                                                                                                                          |
|                        |   |                                                                                                                                                                                                                                                                                                      |
| Base Rent:                  |   | Six Thousand Four Hundred, Thirteen Dollars and  Eighty Cents ($6,413.80) 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), or $19.25 per rentable  square foot 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 May 31, 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 Sections 12 and 14 of  the Master Lease.                                                                                                                                                                                                                                     |
|                        |   |                                                                                                                                                                                                                                                                                                      |
| Security Deposit:           |   | Six Thousand Four Hundred, Thirteen Dollars and  Eighty Cents ($6,413.80) payable in accordance with Section 15 hereof.                                                                                                                                                                                   |

 

**2.             Sublease.**

 

Sublandlord hereby subleases to Subtenant, andSubtenant hereby subleases from Sublandlord, the Subdemised Premises upon allof the terms, covenants and conditions in this Sublease.

 

**3.             DeliveryCondition.**

 

Subtenantacknowledges that it takes possession of the Subdemised Premises in its “as is”condition, and further acknowledges that Sublandlord has made norepresentations or warranties of any kind or nature, whether express orimplied, with respect to the Subdemised Premises, the remainder of thePremises, the common areas, or the Building, nor has Sublandlord agreed toundertake or perform any modifications, alterations, or improvements to theSubdemised Premises, the remainder of the Premises, the common areas or theBuilding 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.

 

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 

 

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Date, all such itemsremaining on the Subdemised Premises after the Expiration Date shall be deemedabandoned and Sublandlord may dispose of such items as it sees fit, withoutliability to Subtenant.  Subtenant shallalso be responsible for the removal, on or before the Expiration Date, of allalterations as required under the Master Lease installed by Subtenant pursuantto this Sublease and shall be responsible for any associated repair orrestoration of the Subdemised Premises required under the Master Lease.  In all other respects, Subtenant shalldeliver the Subdemised Premises broom clean, in its condition as of theCommencement Date, reasonable wear and tear and casualty excepted.  In no event shall Subtenant remove any ofthe plumbing, electrical, data lines, and HVAC system(s), except as otherwiserequired pursuant to this Section 4.2.

 

Subtenant shallvacate and deliver possession of the Subdemised Premises free of all liens,charges or encumbrances resulting from any act or omission on Subtenant’s part,and free and clear of any and all violations of any law, rule or regulation ofany federal, state, municipal or other agency or authority by reason ofSubtenant’s actions or failures to fulfill any of its obligations under thisSublease (“Violations”).  Subtenant shallindemnify Sublandlord against any and all loss, expense, damage, costs orattorneys’ fees arising out of Violations occurring any time on or after theCommencement Date.  The voluntary orother surrender of this Sublease by Subtenant, or a mutual cancellationthereof, shall not automatically terminate any sub-subleases orsub-subtenancies or other agreements by which Subtenant has granted rights tothird parties to all or any part of the Subdemised Premises, but shall, at theoption of Sublandlord, either (1) terminate all or any existing sub-subleasesor sub-subtenancies or such other agreements, or (2) operate as an assignmentto Sublandlord of any or all such sub-subleases or sub-subtenancies or suchother agreements.

 

4.3           Holding Over.  If Subtenant remains in possession of theSubdemised Premises after the Expiration Date, such occupancy shall constitutea tenancy at sufferance, and Subtenant shall be obligated to pay 150% of therental installments as specified in Section 5 of this Sublease and Subtenantshall be liable to Sublandlord for any and all claims, damages, liabilities,costs and expenses (including attorneys’ fees and expenses) incurred bySublandlord and arising out of Subtenant’s failure to timely surrender theSubdemised Premises in accordance with the requirements of this Sublease,including, without limitation those incurred by Sublandlord arising under theMaster Lease.

 

**5.             Rent.**

 

Asused in this Sublease, the term “Rent” shall include (1) Base Rent and (2) allother amounts which Subtenant is obligated to pay under the terms of thisSublease.

 

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 set forth in Section 4 of the MasterLease and as subsequently amended or modified. Subtenant shall also be solelyresponsible for any and all increases in Rent or any added cost or charge whichhas arisen solely because of Subtenant’s tenancy in the Subdemised Premises,including, without limitation, any and all heat, water and sewer charges,electric and other utility charges, as well as any other service chargesrequired by the Master Lease and relating to the Subdemised Premises and/orSubtenant’s occupation thereof that are not already then covered by the BaseRent (as defined in the Master Lease), or Operating Expenses (as defined in theMaster Lease) passed through to Sublandlord under the Master Lease.

 

                                5.2           [INTENTIONALLYOMITTED]

 

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5.3           Manner of Payment.  All Rent or other payment due from Subtenantto Sublandlord hereunder shall be paid in lawful money of the United States,without any prior demand therefor and without any deduction or setoffwhatsoever, at the Master Landlord’s address pursuant to Section 4 of the Master Lease or such other place asSublandlord and/or Master landlord shall from time to time designate(including, without limitation, by wire transfer of immediately available fundsto an account specified by Sublandlord) by written notice provided to Subtenantat least five (5) days prior to the date on which such Rent or other amountfirst becomes payable.

 

                **6.             Useand Compliance With Laws.**

 

Subtenant shall use the Subdemised Premises for the Permitted Use (as specifiedin the Basic Sublease Information) during the Term of this Sublease, and for noother use or uses.  Subtenant shall notengage in any activities prohibited by the Master Lease.  Subtenant shall not use or store flammableor hazardous materials on the Subdemised Premises, except to the extentnormally used in the ordinary course of business with respect to the PermittedUse unless such materials are specifically prohibited in the Lease.  Subtenant shall not perform any act or carryon any practice which may injure the Subdemised Premises or cause any offensiveodors or noises that constitute a nuisance or menace to any other tenant ortenants of the Building or the Premises or other persons, and in no event shallany noises or odors be emitted from the Subdemised Premises.  Nothing shall be done upon or about theSubdemised 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.**

**                               **Subtenant shall obtain at its sole expense theinsurance required under Section 14 of the Master Lease effective as of theCommencement Date.  Additionally,Subtenant shall name Sublandlord and Master Landlord as additional insureds, intheir capacity as Master Landlord and Sublandlord, and shall furnishSublandlord on or before the Commencement Date with certificates of insurancefrom its insurer, with respect to such insurance, which certificates shallstate that such insurance shall not be cancelled unless thirty (30) days priorwritten notice shall have been given to Master Landlord and Sublandlord.

 

                **8.             Assignmentand Subletting.**

 

                                Subtenant shallnot directly or indirectly, voluntarily or by operation of law, sell, assign,encumber, pledge or otherwise transfer or hypothecate any of its interest in orrights with respect to the Subdemised Premises or Subtenant’s leasehold estatehereunder (collectively, “Assignment”), or permit all or any portion of theSubdemised Premises to be occupied by anyone (whether pursuant to a license,concession or otherwise) other than Subtenant or sublet all or any portion ofthe Subdemised Premises, without the prior written consent of Master Landlordand Sublandlord.

 

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                **9.             Alterations.**

 

                                Subtenant shall not make or suffer tobe made any alterations, additions or improvements to the Subdemised 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.          Repairs and Maintenance.**

 

10.1         Subtenant’s Responsibility.  Subtenant shall be responsible for themaintenance and repair of the Subdemised Premises in accordance with theprovisions of the Master Lease.

 

10.2         Sublandlord’s Responsibility.  As between the parties to this Sublease,Sublandlord shall have no responsibility or liability to the Subtenant oranyone claiming through Subtenant, for the Subdemised Premises including,without limitation, the roof, roof covering, foundation, subfloors, buildingstructural components, major building systems (plumbing, electrical andheating, air conditioning and ventilation systems), and exterior walls of theSubdemised Premises.

 

                **11.          Default.**

 

Subtenant shall be subject to the same default provisions as specifiedin Sections 17 and 18 and the applicable portions of Exhibit C of the MasterLease as if it were the tenant thereunder, and Sublandlord shall have all theremedies specified 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 Subtenant, or (iii) resulting from any act,failure to act, or negligence of Subtenant or its employees, agents orinvitees, or (iv) resulting from any nuisance suffered on the SubdemisedPremises, except for damage or injury to third parties or property resultingfrom the proven gross negligence of Sublandlord, Landlord or their respectiveemployees, agents, representatives, successors or assigns.  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 

 

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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         MasterLease.  Notwithstanding anything inthis Sublease to the contrary, the rights of Subtenant shall be subject to andlimited by the terms and conditions contained in the Master Lease betweenSublandlord and Master Landlord as applicable to tenant thereunder, as they maybe amended from time to time. Sublandlord shall have the right to amend the Master Lease from time totime without the consent of Subtenant provided that any such amendment shallnot adversely affect Subtenant’s ability to continue its then currentoperations in the Subdemised Premises, increase any of the rental or otherpayments required to be made by Subtenant hereunder or otherwise materially andadversely change Subtenant’s rights and obligations hereunder.  Sublandlord shall endeavor to give Subtenantnotice of any amendment to the Master Lease, but the failure to give suchnotice shall not affect the validity of such amendment or its applicability toSubtenant, except that Subtenant shall have no obligation to comply with theterms of any such amendment until it has received a copy.  Any rights granted to Subtenant herein whichare limited by the Master Lease shall be deemed to be so limited by thisSublease.

 

                                13.2         NoViolation.  Notwithstanding anythingin this Sublease to the contrary, Subtenant shall not commit or permit to becommitted any act or omission which shall violate any term or condition of theMaster Lease.  Subtenant shall indemnifyand hold harmless Sublandlord from and against any loss, liability, claim, costor expense (including reasonable attorneys’ fees) incurred by Sublandlord as aresult of any termination or attempted termination by Sublandlord or MasterLandlord of the Master Lease resulting from any such act or omission by Subtenant.

                13.3         [Intentionally Deleted]

 

                13.4         Termination of Master Lease.  If the Master Lease terminates for anyreason prior to the expiration or other termination of this Sublease, thisSublease shall terminate concurrently therewith without any liability of Sublandlordto Subtenant and, except for any Subtenant obligations hereunder arising on orprior to the termination of this Sublease, following Subtenant’s surrender incompliance with Section 4.2 hereof, Subtenant’s obligations hereunder shallterminate, except with respect to any indemnification or hold harmlessobligations of Subtenant, which shall survive such termination.

 

                13.5         Incorporation of Master Lease.  Notwithstanding any other provision of thisSublease to the contrary, this Sublease and Subtenant’s rights under thisSublease shall at all times be 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 theSubdemised 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 

 

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pursuant to theMaster Lease, and Subtenant shall have the rights and responsibilities withrespect to Sublandlord that Sublandlord has with respect to the Master Landlordpursuant to the Master Lease.  However,to the extent that the Master Lease requires or obligates Master Landlord tomaintain, repair, restore, or otherwise expend any money or take any action topreserve and maintain all or any portion of the Subdemised Premises or tofurnish any services to the Subdemised Premises, such obligation shall not passto Sublandlord by reason of this Sublease and shall remain with the MasterLandlord.  Subject to the first sentenceof this Section 13.5, with respect to the relationship between the Sublandlordand the Subtenant, the terms, covenants and conditions of this Sublease shallcontrol with respect to any conflict or inconsistency between the terms,covenants and conditions contained herein and the terms, covenants andconditions of the Master Lease. Notwithstanding the foregoing, the following sections of the MasterLease are hereby excluded from application to or incorporation within thisSublease:  Sections 4(a), 4(d), 4(e), 6,19, 21, 23(h), 23(j) and 24, as well as provisions contained in Exhibit C whichpertain to the matters dealt with in the referenced provisions.

 

**14.          Parking.**

 

                                Parking spaces(if any) shall be used in accordance with the terms of the Master Lease,particularly Section 25 to the Master Lease. Sublandlord makes no representation or warranty concerning theavailability of parking spaces, whether free of charge or otherwise.

 

**15.          SecurityDeposit.**

 

                                Upon execution of this Sublease,Subtenant shall deposit with Sublandlord the sum of Six Thousand Four Hundred,Thirteen Dollars and Eighty Cents ($6,413.80) as a security deposit either incash or in the form of a Letter of Credit acceptable to and approved bySublandlord, for the performance by Subtenant of the provisions of thisSublease (the “Security Deposit”). Sublandlord shall have the right but not the obligation to use theSecurity Deposit, or any portion thereof, to cure any breach or default ofSubtenant or to compensate Sublandlord for damages sustained as a result of anybreach or default by Subtenant hereunder. In the event Sublandlord in its sole discretion so utilizes all or aportion of the Security Deposit from time to time, Subtenant shall within five(5) days of notice from Sublandlord restore the Security Deposit to itsoriginal amount.  If no breach ordefault of Subtenant exists and no amounts are owing from Subtenant toSublandlord as of the expiration of the Term, Sublandlord shall return anySecurity Deposit then held by Sublandlord to Subtenant within sixty (60) daysof such expiration.

 

**16.          Brokers.**

 

                                Subtenant represents that it hasdealt with no broker or agent in connection with this Sublease and Subtenantshall hold Sublandlord harmless from any and all liability, loss, damage,expense, claim action, demand, suit or obligation arising out of or relating toa 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.

 

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**18.          GoverningLaw.**

 

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

 

**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.          EntireAgreement.**

 

                                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 pagefollows]

 

 

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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 OFSUBDEMISED PREMISES

 

[See attached.]

 

 

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